Fastenal breaks silence, releases strong September sales figures
Industrial Distribution staff -- Industrial Distribution, 10/2/2008 11:43:00 AM
In an unprecedented move aimed at soothing shareholders, Fastenal Co. released comments on its strong September sales figures in response to a spate of dire economic news.The Winona, Minn.-based fastener and MRO distributor typically releases its monthly sales figures on the third business day following the end of the first two months of a quarter. In months when a quarterly sales and earnings report is due, Fastenal refrains from releasing the prior month’s sales figures.
“We plan to release our third-quarter earnings on Monday, October 13, 2008. We typically remain silent on information about the final month of the quarter until the earnings release; however, given the sharp drop in share price experienced by a number of industrial stocks on Wednesday, October 1st, and given the unexpected drop in the [Institute for Supply Management] index as reported on Wednesday, October 1st, we decided to release some commentary on trends for our shareholders,” the company said in a statement. “As indicated above, it is not our practice to release piecemeal financial information at quarter end. However, given the sharp movement in our stock price, we felt a need to share some preliminary trend information with our long-term shareholder base.”
Sales grew 26.4 percent during September, compared with the same period last year, which contained two fewer business days. Adjusted for that difference, sales grew 14.3 percent.
“This daily sales growth was above our internal expectation for the month,” Fastenal said in the statement, adding that despite the impact of “a weakened economic environment in North America over much of 2007 and 2008,” sales trends last month were in line with the third quarter and earlier in the year.
The company said the slide in the ISM’s Purchasing Managers Index, which hit a seven-year low and clocked the largest month-to-month decline since 1984, was shocking.
“We were surprised by the reported ISM index of 43.5 for September versus the 50.0 and 49.9 reported after July and August, respectively. It is inconsistent with our results in September,” the company said in the statement.
Fastenal’s shares opened Oct. 2 at $44.70, but trading was volatile, with a low of $41.93 and a high of $45.25 as of 2:30 p.m. Prices rebounded to $43.79 immediately following the company’s statement. The stock reached a high of $56.48 and a low of $32.27 over the past 52 weeks.
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