Winona, MN-based Fastenal — No. 7 on Industrial Distribution's Big 50 List — reported its 2017 third quarter fiscal results on Wednesday, which showed continued strong growth across the board.
The company posted Q3 total sales of $1.13 billion, up 11.8 percent year-over-year (YoY), with daily sales up by 13.6 percent. Omitting the 1.3 percentage point sales increase from the company's March 31 acquisition of Manufacturers Supply Company (Mansco), Fastenal's Q3 organic sales increased 12.3 percent YoY. Q3 total profit of $143.1 million increased 12.7 percent YoY, gross profit increased 11.2 percent and operating profit increased 12.6 percent.
Fastenal's Q2 total and daily sales increased 10.6 percent year-over-year.
"The third quarter of 2017 ended with September daily sales growing 15.3 percent — we have not seen daily sales growth above 15 percent for almost three years (December 2014 - 17.4 percent)," said Fastenal president and CEO Dan Florness. "We are pleased with the trust our customers place in Fastenal, and I am proud of the success realized by each member of the 'Blue Team'. Our growth drivers, combined with a solid economy, are resulting in great growth."
In Q3, fastener products represented 35.6 percent of total sales — down from 36.1 percent in Q2. Daily sales of fastener products grew 12.1 percent YoY in Q3, in which 3.8 percentage points were attributed to the Mansco acquisition. Non-fastener products — representing 64.4 percent of total Q3 sales — grew 14.6 percent on a daily basis.
Fastenal's employee-related expenses increased 12.3 percent in Q3 YoY, reflecting higher bonuses and commissions from increased sales, a modest increase in full-time headcount, increased healthcare costs and the inclusion of Mansco personnel.
Fastenal Onsite & Vending
Fastenal's Onsite and vending machine sales were key drivers of the company's sales growth in Q3. Fastenal signed 4,771 industrial vending machines in Q3 — comparable to a year earlier — and the company now has an installed device count of 69,058 as of Sept. 30, up 14.3 percent YoY.
"Sales through our vending machines continued to grow at a double-digit pace in the third quarter of 2017, primarily due to the increase in the installed base," the company said Wednesday.
- The company signed 81 new Onsite locations during Q3, essentially doubling the 41 it had a year earlier. Fastenal had 555 active sites as of Sept. 30, up 47.6 percent YoY.
- Fastenal also signed 42 new national account contracts in Q3 and said sales from national accounts accounted for 48.7 percent of total company sales in Q3. Daily sales from national accounts grew 17.3 percent.
Headcount & Branch Count
Fastenal ended Q3 with a total branch and Onsite combined headcount of 11,480, up 2.7 percent YoY and up 6.3 percent since Q4 2016. The company's total absolute headcount of 20,242 is up 1.9 percent YoY, with selling personnel up 3.1 percent.
Fastenal opened five branches in Q3 and closed 36, bringing its total branch count to 2,418 at the end of Q3 — that's down 127, or 5.0 percent YoY. Year-to-date, Fastenal has opened 15 branches, closed 93 branches and converted another seven.
"Occupancy-related expenses, which represent 15 to 20 percent of operating and administrative expenses, increased 1.5 percent as a decline in our number of public branches was more than offset by increases related to growth of vending equipment and an increase in automation at our distribution centers," the company said. "Our branch network forms the foundation of our business strategy, and we will continue to open or close branches in 2017 as is deemed necessary to sustain and improve our network and support our growth drivers."
September
In September, Fastenal did $371.3 million in sales, up 9.8 year-over-year, with daily sales up by 15.3. As noted earlier, it was the company's best month for daily sales growth since December of 2014 (+13.5).
Here's how Fastenal's monthly daily sales have fared since the start of 2014:
|
|
Jan. |
Feb. |
Mar. |
Apr. |
May |
June |
July |
Aug. |
Sept. |
Oct. |
Nov. |
Dec. |
|
2017 |
3.8 |
6.1 |
8.4 |
8.9 |
9.7 |
13.0 |
12.9 |
12.8 |
15.3 |
|
|
|
|
2016 |
3.3 |
2.6 |
0.0 |
3.8 |
1.1 |
0.0 |
2.1 |
0.3 |
2.8 |
3.9 |
1.2 |
3.2 |
|
2015 |
12.0 |
8.6 |
5.6 |
6.1 |
5.3 |
3.7 |
3.2 |
1.6 |
-0.3 |
-0.8 |
-1.1 |
-3.8 |
|
2014 |
6.7 |
7.7 |
11.6 |
10.0 |
13.5 |
12.7 |
14.7 |
15.0 |
12.9 |
14.6 |
15.3 |
17.4 |
Other notable figures:
- September daily sales to manufacturing customers grew 16.9 percent YoY, up from 14.6 percent in August. The Mansco acquisition added 2 percentage points of growth.
- September daily sales to non-residential construction customers grew 4.9 percent YoY, down from 6.4 percent in August
- September fastener sales grew 13.0 percent YoY, up from 12.2 percent in August. The Mansco acquisition added 3.6 percentage points of growth.
- September non-fastener sales grew 16.7 percent YoY, up from 11.3 percent in August.
