Fastenal Makes Third CEO Change In 11 Months, Reports Flat Q3

Along with another leadership change, the company offset a relatively flat third quarter by promoting a push on hiring, vending, and increasing store count.

Id 6558 Fastenal Store

Fastenal – No. 12 on Industrial Distribution's 2015 Big 50 List – continued a string of recent big company news Tuesday by naming a new CEO and releasing its fiscal third quarter financials for the period ended Sept. 30.

ObertonFlorness

The company announced that Dan Florness, Fastenal's chief financial officer since 1996, will become president and CEO effective Jan. 1, 2016. The leadership change comes less than three months after Fastenal reappointed former CEO Will Oberton to the position. Oberton, 57, had replaced Leland Hein, 54, who stepped down into the role of COO. Oberton had been Fastenal CEO from 2002 through last year, and will continue to be chairman after Florness takes the CEO position.

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The company, which last week announced the acquisition of Spokane, WA-based Fasteners Inc., reported Q3 2015 sales of $995.3 million, a 1.5 percent year-over-year increase, essentially flat compared to Q2's $997.8 million. A Q3 profit of $136.5 million was a 2.4 percent increase from last year, and a 2.8 percent decrease from Q2.

Read more: Fastenal To Pay $1.25 Million To Settle Hiring Discrimination Lawsuit

For the month of September, sales of $329.2 million were down 0.3 percent from last year, and 1 percent from August. September daily sales decreased by 0.3 percent, continuing a downward trend as 2015 daily sales growth has decreased in eight out of nine months this year, starting with 12.0 percent growth in January. Likewise, Fastenal's product line sales continued its long-standing decrease, falling to 37.9 percent of total net sales in Q3, down from 38.7 percent in Q2. That percentage has steadily decreased nearly every quarter since reading 52.3 percent in Q1 2006, the first quarter that data is available.

September sales to manufacturing customers decreased by 1 percent, opposed to a 12.0 percent growth last year. Sales to non-residential construction customers decreased by 2.6 percent, opposed to a 7.9 percent growth last year.

The company noted it was hit hard in the first nine months of 2015 by a slowdown in business with customers tied to the oil and gas industry, as well as the negative impact from the strong U.S. dollar relative to other currencies – hurting Fastenal's U.S. customer base.

"Our end markets remain choppy, as demonstrated by our weak sequential patterns," the company said in a release.

Hiring, Vending, Store Count

Fastenal ended Q3 with a total headcount of 19,979, an 8.5 percent increase over last year. The company added 1,315 people over the last 12 months, with 94 percent of them added since Jan. 1. "We stated in January 2015 we would add people in an aggressive fashion during 2015," Fastenal said. "This is the result." It ended Q3 with 12,612 selling personnel, a 5.2 percent increase from last year, and a net gain of 30 selling personnel from August.

Fastenal ended Q3 with 53,547 installed FAST Solutions industrial vending machines, a 14.3 percent increase from last year.

The company closed 11 stores in September, ending Q3 with a store count of 2,609, down 28 from last year. However, Fastenal commented on a plan to grow store count. "After several years of holding back on store openings and even contracting our total store base, we plan to expand our pace of store openings in 2016 with a goal of opening 60 to 75 new stores."

View our September/October Distributor Profile on Fastenal here

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