Fastenal Company · NASDAQ:FAST
Fastenal — Q3 2023 Earnings Presentation
14 slides from Fastenal's earnings presentation, Oct 12, 2023
Slide 1: Third Quarter
THIRD QUARTER OCTOBER 12, 2023 1
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All statements made herein that are not historical facts (e.g., future operating results, long-term share gains, and business activity, as well as expectations regarding operations, including gross margin, future inventory levels, pricing, Onsite and weighted FMI device signing
Slide 3: CEO Messages on 3Q23
CEO MESSAGES ON 3Q23 • Conditions remained challenging in 3Q23, reflected in Daily Sales Rate (DSR) Growth daily sales growth of +4.0%. Still, the period hit a 20% 18.4% 18.0% milestone: September was the first month in our history 18% 16.0% to generate $30M in sales per day. We translated this 16%
Slide 4: 3Q23 Growth Driver Update
3Q23 GROWTH DRIVER UPDATE • Onsites: We had 93 signings in 3Q23. Active sites Onsite Signings and Active Locations 160 2,000 finished at 1,778, +13.5% from 3Q22. Daily sales, 1,778 140 1,800 excluding transferred branch sales, grew at a low double- 1,567 120 1,367 1,600 digit rate from 3Q22. Based o
Slide 5: 3Q23 Business Cadence
3Q23 BUSINESS CADENCE • U.S. Industrial Production was flat in Jul./Aug. 2023 over End Market Daily Sales Rate (DSR) Growth 3Q22, although heavier manufacturing components 40% continue to modestly decline, a pattern captured by relative 30% weakness of our OEM-heavy fastener product line. U.S. 20% P
Slide 6: 3Q23 Margin Summary
3Q23 MARGIN SUMMARY • 3Q23 gross margin was 45.9%, unchanged from 45.9% in Gross Profit Margin 50% 3Q22. Negative mix was offset by better freight costs, the absence of last year's glove write-down, and slightly positive 46.3% price-cost. The impact of mix was slightly less negative and 45.9% 45.9%
Slide 7: 3Q23 Cash Flow Profile
3Q23 CASH FLOW PROFILE • 3Q23 operating cash flow was $388.1, or 131.3% of net Operating Cash Flow earnings. Working capital was a source of cash in the (in millions) period, contrasting to a use of cash in 3Q22. The absence 131.3% 400 350 of last year's supply chain constraints and, to a lesser 300
Slide 8: Appendix
APPENDIX Non-GAAP Financial Measures The appendix includes information on our Return on Invested Capital ('ROIC'), which is a non- GAAP financial measure. We define ROIC as net operating profit less income tax expense divided by average invested capital over the trailing 12 months. We believe ROIC i
Slide 9: Return on Invested Capital
RETURN ON INVESTED CAPITAL* Calculation of Return on Invested Capital Reconciliation of ROIC to Return on Assets (ROA) TTM TTM TTM TTM (Amounts in millions) 3Q23 3Q22 (Amounts in millions) 3Q23 3Q22 Operating Income $ 1,507.8 1,421.5 Net Earnings $ 1,134.2 1,072.5 Income Tax Expense (361.7) (337.8)
Slide 10: Sequential Trends
SEQUENTIAL TRENDS* Cum. Cum. Cum. Cum. Chg., Chg., Chg., Chg., Jan. Jan. Jan. Jan. Daily Sales Rate (DSR) to to to to BENCHMARKS Jan.* Feb. Mar. Mar. Apr. May Jun. Jun. Jul. Aug. Sep. Sep. Oct. Oct. Nov. Dec. BENCHMARK** 0.2% 1.5% 3.8% 5.4% (0.5%) 2.7% 2.0% 9.8% (3.1%) 2.9% 3.6% 13.4% (1.9%) 11.2% (
Slide 11: Employee Statistics
EMPLOYEE STATISTICS Absolute Count FTE Count (1) Change Change Change Change Change Change HEADCOUNT Since Since Since Since Since Since STATISTICS 3Q23 2Q23 2Q23 4Q22 4Q22 3Q22 3Q22 3Q23 2Q23 2Q23 4Q22 4Q22 3Q22 3Q22 (2) Total selling personnel 16,261 16,302 (0.3%) 15,898 2.3% 15,662 3.8% 14,750 14
Slide 12: In-Market Location Statistics
IN-MARKET LOCATION STATISTICS Quarterly 2017 2018 2019 2020 2021 2022 1Q23 2Q23 3Q23 4Q23 Starting Branches 2,503 2,383 2,227 2,114 2,003 1,793 1,683 1,660 1,635 Opened Branches 18 11 12 12 10 12 2 3 3 Closed/ Converted Branches (1) (138) (167) (125) (123) (220) (122) (25) (28) (23) Ending Branches
Slide 13: End Market Profile
END MARKET PROFILE End Market Mix - Full Year 2022 Transportation/ Other, 2.6% Warehousing, 4.4% Gov't/Education, 3.9% Heavy Manufacturing, 40.9% Reseller, 6.6% Non-Residential Construction, 10.3% All Other Manufacturing, 31.3% MAJOR SEGMENT GROWTH Year- Full (Daily Sales rates) Jan. Feb. Mar. Apr.
Slide 14: Where Industry Meets Innovation...
WHERE INDUSTRY MEETS INNOVATION... 14