Fastenal : Fourth Quarter 2024 Presentation

Published: 2025-01-17 07:06:06 ET FAST

FOURTH2024QUARTER

INVESTOR

TELECONFERENCE

JANUARY 17, 2025

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 and operating income margin, future inventory levels, pricing, Onsite and weighted FMI device signings, operating costs (including SG&A), capital expenditures, sales through our digital footprint, cash flow generation, the potential impact of our growth drivers and sales trends with customers, and supply chain matters) are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. More information regarding such risks can be found in Fastenal Company's (collectively referred to as 'Fastenal' or by terms such as 'we', 'our', or 'us') most recent annual and quarterly reports filed with the Securities and Exchange Commission. Any numerical or other representations in this presentation do not represent guidance by management and should not be construed as such. The appendix to the following presentation includes non-GAAP financial measures. Information required by Regulation G with respect to such non-GAAP financial measures can be found in the appendix including a comparison and reconciliation to the comparable GAAP measures.

CEO MESSAGES ON 4Q24

20%

18%

16%

14%

12%

10%

$0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00

Daily Sales Rate (DSR) Growth

18.4% 18.0%

16.0%

10.7%

9.1%

5.9%

4.0% 3.7%

1.9% 1.8% 1.9% 2.1%

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24

Net Income Per Share

(Fully Diluted)

$0.46$0.46

$0.43

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24

CUSTOMER SITE BUCKET PERFORMANCE

4Q24 GROWTH DRIVER UPDATE

•

Onsite Signings and Active Locations

180

2,031

2,200

1,822

2,000

160

140

1,623

1,800

1,600

120

1,400

100

1,200

1,000

800

600

•

400

200

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24

Signings

Active Locations

Weighted FMI Device Signings and Installations (MEUs) (1)

Onsites: We signed 56 Onsites in 4Q24. Active sites were 2,031, +11.5% from 4Q23. Daily sales, excluding transferred branch sales, grew mid single-digits from 4Q23. Sales from sites opened in 2023-24 outpaced closed units and lower sales at mature sites.

We signed 358 Onsites in 2024. While below our goal of 375 to 400 signings, signings rose from 2023 (326 signings) and were consistent with previous peak signing years in 2019 and 2022.

FMI Technology: We signed 6,790 weighted devices (108/day) in 4Q24, versus 5,462 (88/day) in 4Q23. Our installed base was 126,957 weighted devices, +12.2% from 4Q23. Activity through our FMI technology platform represented 43.9% of sales in 4Q24, versus 41.5% and 38.7% in 4Q23 and 4Q22, respectively.

10K

126,957

140K

113,138

120K

102,151

•

6,790

100K

5,462

80K

4,730

60K

•

40K

20K

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24

SigningsInstallations

We signed 27,984 weighted devices (110/day) in 2024. Our signings goal in 2025 is 28,000 to 30,000 MEUs.

eBusiness: Daily sales rose 27.6% in 4Q24. Daily sales through eProcurement and eCommerce were up 37.6% and 2.0%, respectively.

Sales through our Digital Footprint (FMI technology plus non- FMI-related eBusiness) was 62.2% of total sales in 4Q24, versus 58.1% and 52.6% in 4Q23 and 4Q22, respectively. This was just shy of our 63% goal in 2024 as economic activity resulted in lower volume through our digital tools than expected. Our Digital Footprint goal in 2025 is 66%-68%.

4Q24 BUSINESS CADENCE

End Market Daily Sales Rate (DSR) Growth

40%

30%

20%

10%

5.4%

1.7%

(0.3)%

-10%

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

Heavy Mfg

All Other Mfg

All Other End Markets

(42.3% of Sales)

(32.0% of Sales)

(25.7% of Sales)

Product Category Daily Sales Rate (DSR) Growth

40%

30%

20%

10%

4.8%

4.0%

(1.4)%

-10%

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

Fasteners

Safety Supplies

Remaining Products

(29.9% of Sales)

(23.0% of Sales)

(47.1% of Sales)

4Q24 MARGIN SUMMARY

50%

45%

40%

35%

24%

22%

20%

18%

16%

Gross Profit Margin

45.3%

45.5%

44.8%

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24

Operating Income Margin

20.1%

19.6%

18.9%

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

4Q24 CASH FLOW PROFILE

400

350

300

250

200

150

100

Operating Cash Flow

(in millions)

132.9%

122.9%

107.9%

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

1Q24

2Q24

3Q24

4Q24

Percentages above the bar represent OCF as a % of Net Income

Net Capital Expenditures

(in millions)

$57.4

$41.5

$32.9

1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Net Capital Expenditures = Property & Equipment, net of Proceeds from Sales

2025(E) Net CapEx: $265.0 to $285.0; 2024(A) Net CapEx: $214.1

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 is a useful financial measure for evaluating the efficiency and effectiveness of our use of capital and believe ROIC is an important driver of shareholder return over the long-term. Our method of determining ROIC may differ from the methods of other companies, and therefore may not be comparable to those used by other companies. Management does not use ROIC for any purpose other than the reasons stated above. ROIC is a measure of performance not defined by accounting principles generally accepted in the United States, and should be considered in addition to, not in lieu of, GAAP reported measures.

The tables that follow on page 10 include a reconciliation of the calculation of our return on total assets ('ROA') (which is the most closely comparable GAAP financial measure) to the calculation of our ROIC for the periods presented.

RETURN ON INVESTED CAPITAL*

Calculation of Return on Invested Capital (ROIC)

Reconciliation of ROIC to Return on Assets (ROA)

(Amounts in millions)

TTM

4Q24

4Q23

Operating Income

1,510.0

1,528.7

Income Tax Expense

(357.5)

(367.0)

Net Operating Profit After Tax (NOPAT)

1,152.5

1,161.7

Total Current Assets

3,116.4

3,072.9

Cash and Cash Equivalents

(238.6)

(225.7)

Accounts Payable

(275.9)

(259.6)

Accrued Expenses

(233.3)

(241.1)

Property & Equipment, Net

1,033.9

1,010.6

Other Assets

430.2

422.4

Invested Capital

3,832.7

3,779.5

ROIC

30.1%

30.7%

(Amounts in millions)

TTM

4Q24

4Q23

Net Income

1,150.6

1,155.0

Total Assets

4,580.5

4,505.8

ROA

25.1%

25.6%

NOPAT

1,152.5

1,161.7

Add: Income Tax Expense

357.5

367.0

Operating Income

1,510.0

1,528.7

Add: Interest Income

5.4

4.1

Subtract: Interest Expense

(7.3)

(10.8)

Subtract: Income Tax Expense

(357.5)

(367.0)

Net Income

1,150.6

1,155.0

Invested Capital

3,832.7

3,779.5

Add: Cash and Cash Equivalents

238.6

225.7

Add: Accounts Payable

275.9

259.6

Add: Accrued Expenses

233.3

241.1

Total Assets

4,580.5

4,505.8

* Amounts may not foot due to rounding differences.

Disclaimer

Fastenal Company published this content on January 17, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 17, 2025 at 12:05:07.610.