FAST - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Fastenal 2024 Annual and Q4 Earnings Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Taylor Ranta with the Fastenal Company. Please go ahead, Taylor.

Taylor Oborski

Welcome to the Fastenal Company 2024 Annual and Fourth Quarter Earnings Conference Call. Officer. hosted our Florness, Officer; President Lewis, Chief be Officer; Chief and will our Watts, Jeff and Financial call by our Dan Executive Holden This Chief Sales X by a The for answers. Today's hour recorded general call is questions of and the and operations, annual proprietary conference and results our for being time remainder will up of overview and start the Fastenal with last presentation will Fastenal. a and with is quarterly call to being open reproduction, recording, of call No or transmission today's is distribution consent. Fastenal's permitted without is This the homepage, audiosimulcast call Investor being via on the investor.fastenal.com. Fastenal Internet Relations replay March will X, A be until midnight at the Central Time. website webcast the XXXX available of on

and results prospects. Factors release statements on differ from reminder, and materially and undertake earnings you and anticipated. with company's current to based are those periodic today's latest we These factors expectations, anticipated call Exchange may our the from cause filings that those we that a important the carefully. duty actual It to statements is in conference results them. company's to encourage and plans results to regarding note update no Securities differ contained include are the Commission, As future may the actual review could company's

turn I Mr. Dan would over call to now Florness. like to the

Daniel Florness

on I'll book, if would foot -- you Thank you, to X. and earnings in good morning, everybody, the and -- Fastenal call. I'm welcome to the And QX -- going Page

X.X. and year. a a to extra Our frustrating challenging X.X% business day, so fourth grew Frankly, daily was the an in quarter start

EPS in so in quarter, our growth leverage, some when quickly evidence where Our or we down contracts. expands of leverage lost business saw gets relatively loses X%. $X.XX, came growth and And at about the you that our and

about then, months -- look But it's the And I we've talk on December down moved there. XXXX. at going to of there's December. frankly, X to already to a little from December, think worthwhile standpoint

I [ be we ]. when on number. trends, were growth, you of comparing X%, Christmas, have for days, think would we of sales X-plus Friday XX when growth. trending which listen roughly in percent so a X% towards excess but argued to were it first The daily felt you before voice could Depending We

we And you that then that XX that evaporate, and first of Day doing X days collapsed. Christmas -- month month, where in and And X% of we if what believe the between New the part me weigh more the probably the the last in don't we're the against be Year's last and first than of January believe to if going it and that that somewhere at last and is that week days, X% we're were And and February X% tells all week, negative, in XX%. where in last we indicative we to X growing means however, area. math, the saw we I'm having the -- days are

at look happening. you what's the If of data

look something asked that unique comes January team. planet. XX,XXX weekly with baseline. have that information calendar. and snapshots. really the we at And better. a just in I But We -- the of here I in the them lot And the lot look over anecdotal that down data. is have X calendar it a said, have at And of on understand our facilities vending get is sat we should I in let's we vending -- And we on machines we a

snapshot. Sunday Saturday, to type So

January, so and January week New of week Year's at that did prior clean week of the clean X at really the at then there. touches, were can week time and business that thereafter, the in you first week touches, what each look look happen Christmas so the and look something and that Christmas the week trends -- the different weeks said, second frame, I to at what And pace look touches the our our was

The customers. in other that companies. vending meaningful asked is industrial thing that biggest nonmanufacturing those I of Obviously, handful are represents a them a But the and component. our area is with with to customer of a we're do fortunate base entities, eCommerce range

So -- busy trends different holidays. completely around and would because the their be they're really

vending out So rest. me, take -- that, XX non-manufacturing excuse And that's vending and I top did analyze our top customers. customers. the XX We the said

-- we're that at number if on think facility we're going bright facility a a look of consider I shut the XX% transactions to determine if down. to as average goes conclusion came said is day to line the essentially where I the doing down, team and XXX you that or So shut that then and and less,

behind, don't up. And you because maintenance people an do running there like there's a back heat expensive maintenance. maybe only there Maybe because that it because -- treatment in the there's are are area or few are shut some maybe they're good start folks it's it's to time lines are production that because too down there, to a

about saw more facilities XX%. than sell activity vending, into the XX% we have of drop So in XXXX, that the about XX%

were less running of they than So XX% normal.

a XXXX, XX%. XX%. was XXXX, that In In that's

each 'XX, More in economy, this meaningful that and So a the the meaningful week uptick since uptick Year's. year. of years economy a the we really industrial was the of X New accentuated in telling was weakened saw

So This the percent Christmas, were week were down. XX% X% ] shut after year, were down. it's shut [ shut down, X%

before. day probably down or true to a they after January said, stayed were They in operations. X. that And and But that very shut plays saw number the we shut they day Christmas don't companies there And through down So Christmas. just the I numbers. of idling after Monday if open what the know we're tremendous Tuesday were our

looked very last there's -- at as number and that in We and of when The customers about just the increase is at if it's in X X, Christmas, that how also only Because did And to noteworthy activity number you'd many see expect the had weeks be after down to that a strong we X at shut as are week least you're workdays their week, far normalized at other were a XX%. Christmas X%. -- -- is down, item down. about was XX%. normally activity week down I look after so the

But we saw an the have in Southeast, of impact week's don't the yet. we and data weather this

that is that, that week. like at Our and of And we he on touch that, looks canceled routes a during bit anticipation things that Holden will normalized. little truck when last

My lot follow-up few the a of made Holden So his sense. waiting guess the of -- for after a that weeds on there. will I have call. is hope questions into you

thought we'd piece, Day And get I'll had information little on The and X. deeper in preparation Investor to dive -- But next a going we're I'll Day, be thought some on touch about, we new March. when for Page talking view. Investor we share and planning shared we we a we're in

account So dollars when active. the organization I all back joined numbers in and was it per about XXXX,

how many how and growing and -- from customers active time. many those you bought accounts both dollars over So accounts, of per customer,

branch, always of of had active a XX% And represented accounts, those typical in XXX say sales. about we XX used to you

a an is selling we're to selling as building area, and line, mean a would selling it numbers what in the one second you touch so might at to production that we're we're the customer, not that X I'll as in on as maybe Page have X If to maintenance have the I we looked because base, the account a but account at accounts by at have track looked and area you or X. activity. time. second but numbers X customer, a production account we That's it X, on

Finally, on XX%. roughly raised we by Page dividend our X, quarterly

it's We flow very our annualize generation, years. ability to on the you strong many our model confident If very for about dividend continue just the we cash of indicative many, feel business $X.XX. declared,

an letter I to I grab probably what So here, I our for in some new this, you business. way to at my and our paper the to And it. go seeing to letter to of describe desk they're a not the But sorry, a is did information. this my I address had back felt -- see employees. seat address in unfortunately, that unfamiliar look looking -- to chart to best I'm here, employees

Each a to dock at site into XXX,XXX individual a a It unique during is site the the from information of customer customer's rolls analysis Onsite. roll-up it's we of also the to going a picked branch the slide all whether that uses our unique and together party build customer at into sites a for revenue up supplied supply quick summarize local a on dropped or device, location. on we provide, products or using site via shipped The definition. includes MI Some roughly third desk, provide. and services team accounts or everything customer a XXXX. based we products an facility is Each Fastenal

it a about simple-looking it's subset a month; customers that, of they X story doing Again, $XX,XXX but The more then more are our do business. $XX,XXX. graphic, than and that buckets the top summarize powerful a than tells

at the X% customer revenue XX%. has So total through sales. a XXXX, about the but rate of customer these Since sites grown $XX,XXX-plus of annual includes serve, represents XX% sites about our we compound growth of

which year into group, in per about average translates number When we in across there increased spends month, the what the sites XX,XXX business. bring again, In the and sites customer The have these are site and really about X% has our a value XX about to at incredibly customer I X% sites successful. $XX,XXX of look $XX,XXX districts, XXX marketplace, average about been customers, this XXX,XXX, There's they we district. XXXX, about XXXX. since customer of

where a the least compound has group our XXXX, spend at grown strength Thanks at Onsite allows this the month. The even subset the of for the customer effectively, XX%. customer customer sites sites this economics. the program. us Since cost customer a the resources to operate and of can per revenue for annual there's of improve Fastenal. that rate through to expands of has growth this grown more site in the subset hence, scale is $XX,XXX we opportunity program, faster, It business turn, of provide, This, changes Onsite

XXXX, has per about district. number customer X,XXX there about Since of the XXXX, average customers X% sites In the an bucket, translates we in to year. were in XX $XX,XXX-plus this sites sites XX% grown of customer serve, which total

talking that clear the we're of make to to and successful And how X,XXX, positions what about in about customers. Onsite it that this physically deemphasize business see, we We'll talked we talk X,XXX Onsite in it of March acquisition. are intend at heavily We an So about are striving telling change Onsite. endeavor. how the believe $XX,XXX-plus best as numbers accomplish to of and we've story them to you about

us to the On successful. the appear lower slide, customer X are buckets where there sites half of of we

thoughts some District, in these. roughly are between we XX per X% of XXXX, represent the in bucket, are XXXX. Nava there sites month bucket and to year this sites and per spending customer Here $XX,XXX customer about In on the added about Customer X% this we've about more since sites $X,XXX sites serve. XX,XXX

one been would with sites We've on incredibly formerly this the This group. fact. of customer mediocre successful in be expect many

have to X efforts your In success supply many fact, years. sites capabilities This by transformational many last has become and the FMI, services. parts, over MRO chain, customer introduce Onsite, production products our $XX,XXX-plus using been industrial driven

here, in $XXX million fact, the Services in In first broke time a for revenue sidebar XXXX. Industrial

mediocre. It's for our for this In our employees, for our shareholders those isn't our and been slide, suppliers. for customers, performance great

probably great per COVID-XX the stocked past our centers, and the be less if customer not should purchase customers locations, the how this on reversed eCommerce, single several either. XXXX. sites, in month, decade our CAGR products of brunt in business its $X,XXX A XX%. years. it's distribution the in over borne not than our strategically bucket of has previously in removable products, That world changes thank However, of upper final we X% The from impact closing digits,

does, and as The critical special A slippage we're customer you than make on every harder -- that spend, this we're see sales off. strategic aspect allocation of I special, that do you by is the need. benefits page, you everything execution is some spend. this you what it us of what a it means convenient, on way regarding because for group business bucket falls they organization. but your that lot planned in eCommerce capabilities push that more customer unplanned not time believe decision maybe and locations, closed Fastenal Because sees the that

XX the X. to Flipping quarter. Page Onsite, we in signed

customers we We what mid-single we go year. to the contingents saw digits. with a X in increase a district So call in of year economy business was And it's or it did on of year year or XX% grew world XX%, during learn away. is ago, a XX% industrial about XX%, X ago. a the finished their X,XXX, the XXXX, a about Onsite Onsite we of similar uncommon of down what see where Customers is X negative taking manager to XX%, what not the with that's sign saw where older

Our our how to do ability is back. execution share we and a market fight and of sign take self-help

peaks out. signed we so We an XXX first we in came are goal, meaningful XXXX. And before year, the XXXX, XXXX, XXX Onsites told, at but year in in consistent All increase. signed Not signings a last year with previous our increase. COVID that the

of revenue XX% a year XXXX. very in of feel the for that established XX,XXX touched FMI for last touches broke what versus And about our versus FMI Holden MAU bit the just Technology a in and Technology, first huge CapEx fourth and aspect success. years. that expectations. XX% signings X we We XXXX XX,XXX And of our how the XXX day on XX% we And here signed. the exit XX,XXX for in We about MAUs we to and goal per means time. good the strong the business quarter,

grow story, good about a have continues we established It relations, great XX%. eCommerce, almost where not to story. a common XX.X%. XX%, grew eProcurement,

relevant XX%, double take and efforts a of told, FMI some that digital you and However, over our Technology, piece just the We eBusiness of All our sales, to footprint. into web, teams still business. eCommerce our touched we're contains that. XX% struggle we there make more realigned that putting about down part

to shy get XXXX, goal was so of in Our that XX% to just number. that

Our goal for next XX%. XX%, year is

it want to just turn I on over I couple touch before to Holden, of a And things.

will stronger in the challenge comments incremental them year to group, effectively time I VPs He made First through this was our will our what managed. believe some economy I us is a to the made morning. momentum tell And momentum one shine cost leaders as. the that Holden and about be margin our as regional in XXXX. that the to XXXX, off, that and And structure takes allows talked our challenge through -- to

XXXX, But there's years. squeezing expenses the as into our momentum takes of a been that in last lot tightly really us on we've of couple

position that, maintain the to puts for it of in reload because We us have allow a bonuses. to

of for way X.X inherent to our years haven't profit group bonuses capture years, the close reload and that. large growth, expenses least, to folks do a get that have need best X the well. and We within allow gross we at Fastenal that is seen to the to to Fastenal the capabilities incredibly manage And revenue of

touched the his I with all Fastenal The leave announced other was, saw Holden December, as thing this in on effective morning to you decision April. of group

what was I our was. I conversation had it Holden organization, me conversation for I And back he think him, at back think Holden when -- for a and didn't this it in new back a in of looking a the maybe very apart a CFO could years set ways pick look it we eyes. was fresh give the a who ago, somebody CFO to number of analytical were of is the least told when he to -- hope to a joined organization probably business that joined and do with when I think perspective, hard in that me previous bring

and analysis. I from he the that, of the brought Holden about but from keen that didn't to grow a want what a lot in mind somebody And standpoint knew organization, thank the organization also to up had towards for industry our

serve who what at our CFO Holden, billion the here out fall, set was our last billion. -- allows opportunity $X saying it into versus stepped skill the ago business years, The it the around $X should we and be -- figure the Jeff, years for that role business to to are XX next for close today at Jeff think, to Jeff is President opportunity Jeff looking to the other I Watts, X thing will

future. I Holden that to so in wish And applaud the different I the a needs CFO and recognize Jeff well move maybe

what mean now. what asked people, late said, they the year. it XX XXs sounds Hey to my I teens their like that being or CEO And finally, I'd a kids Florness with is is dad, do comment family president? We me, vacation I And our XX kids And thought does conversation And answers. I it ask in before had -- every in are share August. out versus going a you're different door, you get

Here's what it means to me.

should where think strategy that people of keenly and focused the what Whereas and very means quarter, executing much more what for every it's focused the you're the business I organization on month, about year. every every you're president and the on what development, doing as itself become. the going be CEO day, you're you're on for position going how side to every is

said, piece, even piece. that's Chief but get I first has into long we has is his that he title the when to the business. and -- we he's of deal title But he up, that And still that growing Sales When but his stepping and That's also as he his strategy for is -- training he's Jeff to that XX%, can And the focus. grow President focus. stepping gives as Officer. is we're business #X and change priority executing about part our how that

to I'll Anyway, Holden. it over turn

Holden Lewis

this -- organization go been been a a is different. know. understand Great. to to to opportunity. honor I an -- it it's has opportunity. all conversation, it's and a this a a want for Dan. just great investors I this has have was tremendous Yes, difficult try But opportunity and very Fastenal, But unique so you work Thanks, just been sure something make great

X.X% going Daily to what's X. with is 'XX the investors Slide up consistency the what quarter. growth range X.X%. context the most of that X.X%. were want to I of the year, makes fourth Daily the manufacturing. X.X% a a year contraction So sales sales throughout jumping up quarter in in hear Sales signaling in on know were in modest into the that PMI from sense spent

X.X%, and in down down our outperformed accounts products, comparable end attributes customers, of by manufacturing XXXX The not safety which nonresidential And variation decline and national were was and up in to quarters. in top X%. were of fourth nonnational down X.X% reseller. of with markets, X.X% MRO-oriented outperformed XX.X% in There smaller up a construction high-level fasteners sales markets outperforming with [ prior X.X% headlined Larger products quarter end ] X.X%, nonmanufacturing the were an a decline accounts our X.X%. line through similarly trends up XXXX. accounts OEM-oriented lot

top our XX to sales That can't days. Dan in XXXX first made the than the We XXX activity daily customers, said, XX% but to review. grew evaluated same cadence the days of through of his which addressing this in mid-single X final without in see thing digits quarter of point the transactions fourth the December, December. in in more vending low fully be declined

years, days trending holiday-related we the marketplace weakness December downs And finishing from business cuts X% the of flat. the towards in and occur sustained of sharp produced December last productions to growth and swung X While plus believe month New most uncommonly that of Years midweek timing Christmas XXXX.

Year's business start needing storms. remains regions the The PMI impacted truck of January and remain slow by U.S. XX. our our latter winter routes business cancel in is our still XXXX. underlying heading Now in out, into disrupted sub-XX, reflected and to activity January of through Southern X% activity zooming The back encouraged New we was

regional other post-election for XXXX. broadening leadership optimism the On hand, sites customer

in contract sign a to in believe wins including our digits, growing these up business sales. reflected are be We continue strong XX% December. rate new double to base beginning at We with

X Our monthly December daily in historical been how X and we the it of exceeded last X the last sequential finished. rate sales X but believe months, would the for of have

from we signings continue customer we forward, see anticipate move will to these we build. revenue As

On fourth Now the was Gross X. basis XXX in our as that, top fourth expected. SG&A of in to down of was of quarter points the investments and costs. were dollars XXXX first margin Slide data margin XX.X%, more Operating control Onsite the with quarter with X largely line as greater XXXX of in over offset were XXXX staffing, discretionary technology travel in and quarters sales year-to-year.

managing are continue We effectively. believe to costs we

volume seen in to We operating expected effects first due in shutdown current the the the was our That of of X growth year. period impacts. sharper the all quarters 'XX than lowest and to quarter margin decline we've deleverage the reflects slow experienced as seasonally

in positive the quarter XXXX Gross points primarily year period, the was customer down mix. from ago margin XX.X%, of XX from fourth basis

was affecting during to also product products. in offset suppliers pressure, partly higher fasteners experienced inventory. margin was season leaning to assist holiday We expedited shipping, their higher opportunities with by reflecting product pressure affecting warehousing The margin year-end container which rebates out customers the due and to safety cost largely shipments

dollar. fourth the quarter relates as a ago have fourth container price We certain impacts most from into should SG&A meaning the assets refresh up the margin XXXX, of of currency adjustments not first year made was our and higher expedited higher product that fleet the costs from on to field stronger we costs the in the XX.X% revaluation pressure recur, in to The XX.X% of sales XXXX. not the quarter pickup offset and of lease from shipments period. the should are largest of carry XXXX quarter

areas negative. such of expense were and loss insurance as effects general The IT marginally

together, the fourth believe we XXXX. to with $X.XX, XXXX reported continue that will growth of the picks quarter as fourth We all Putting EPS up, P&L. it leverage quarter we flat of

full the to $XXX.X quarter in income. of in Slide X. $X.X XXX% net We turning or XXX% million fourth or the for XXXX of of of income. operating net operating billion year XXXX We generated cash in generated Now cash

the being largely the and XXXX in of tight was comparable periods mostly subsequent expectations. chains below buildup effects being in related inventory Our reflects we rates wind-down however, this as view the conversion consistent and cash with both supply periods conversion XXXX, past fully in to us,

balance X.X% capitalized being sheet with conservatively year-end of a total carry debt capital. to continue We

we and primarily We product our current our million the X.X%, cash-generating sales our by strong initiatives increased to X%. availability up up XX%. $XX Accounts confidence receivable position model, capital of driven were related by to Inventories future added to capability million were dividend $XX improve in added support million, some in and our improve our into customer to growth we ceded And including buys and warehousing locations periods stock in-market we growth, anticipated hubs. $XX for ahead Opportunistic current efficiencies potential delivery tariffs. inventory new of picking roughly year-end in in Given our the space. growth. accelerated added future incremental

were inventories. but up our the FMI was X.X%, spending our bins units payable in-market versus related This up inflations picking of in in modular Accounts in reflecting locations. million million, increasing $XXX and million $XXX Net projected $XXX lower XXXX to capital of purchases $XXX of fewer below to XXXX, million. range

million. XXXX, aimed XXXX, moved XXXX require projects to net to spending spend. that of We're reflect additional in an spend $XXX signings, we IT step-up anticipate We're projects anticipating increasing from FMI to $XXX of additional capabilities. at to Looking and capital another million developing which will expansion [indiscernible] digital

beginning capacity incremental X% Atlanta to largely spending few to construction our distribution our Lastly, reflect picking believe X.X% over the up center be an distribution across of hub, CapEx completion related on X.X%, center We across to new to net incremental greater years, X.X% the is our increase network. sales of likely from Utah next upgrades hub to our network. new of additions automated hub is and

on Now to of of Q&A, couple a housekeeping. before moving items

sales nearly strategy in sign Onsite When color beginning the participation into to our we customers. represent integrated were XXXX. on the unveiled provide scale fully proposition driving investment Onsite First, initiative. of to building the we XXXX are our to not Today, the in decision targets and justify a offer XX% internal in first 'XX, we with Onsite value challenged and little

sign things. Getting over time, provide X to seek this existing wallet new to market customers. balance has at customers appropriate it's And Onsites will continue we'll this greater winning Fastenal, a to prioritized between and for to continue advantage point with them. share those

doing defined a do sign. an by is more by that branch. success solely customers we that's Onsites through how $XX,XXX defined how not whether per sales is through we or can or are However, our many in month, signed many It Onsite or

To stakeholders this begin of ensure along quarter the and external discussed Dan will providing internal call. the start lines we customer organizationally data data, at XXXX, meaningful focusing first of the of are what in on

host in the tour Minneapolis remains an on Day market branch Second, a great March plan which on our update providing This a We XX. critical planning we on has success, profile. to in our account are for network, reinforced evolved to last to an end local years Investor supply our industrial strategy. of key support that representation house a few will as of the be but

the cost, will plan into we've out not we a which to tools and capabilities, We'll the our And centered and to market. fashion next sending will event improve strategic AI, is tools be discuss our on digitization throughout scalability. week. them supply do heavily risk the last, and We service parallel dive of a the addressable only integrated developed to over in XXXX, deeper but how including invites value provide chain truly customers a we and capabilities, deploy to our in terms of

over the With that, turn begin it operator, to we'll Q&A.

Operator

Merkel [Operator Instructions] Ryan question is from from William first Our Blair. coming

Ryan Merkel

you congratulations. I Holden, great you and It's been the working with wish all best.

Holden Lewis

you. Thank

Ryan Merkel

want So customer optimistic. more and the that about my sentiment first the I is sort question, of shutdowns I to guess ask comment then

think can on I you do improve how more And you hearing you you that? expect what if comments? sentiment, specific? think intense? marry in why the guess do then were X trends you do do to Like So you are so shutdowns year this be customer Why and those 'XX

Daniel Florness

touch the counters I'll then the that for question. sentiment. piece, how Ryan, the on shutdowns thanks and

gets improve did, organization a every it's year think That's -- a we I it's it's I great think a either just you new weak to year. had and always are what X. on what do many we wired. year, can to January -- And and whether people or just just

just mediocre but of they're look And up year. whatever through and that's new leaning been got to I XXXX And not been be. that some to. maybe we've it the get didn't year, I it a over and leaning just stay also there our that a holidays, might of shut fixed and be the batteries -- kind up get like And have stage everybody's down, say, recharged. balance So ready equipment folks for the up been inventory, our and at it's they we've reason had open chose might I sheet, so a folks lot it's think

customer might think our add But the I Holden, does trends The make a a election a folks of standpoint, for and want our from part, what their regionals. of at better. that from regulation sentiment if feel the lot the burden talked of Holden? and lift looking -- lot on a probably are a is marketplace. to mean in customers you of them recent you that to lot

Holden Lewis

when little is step-up feeling say are to postelection Yes. I what People I about when we improving clearly me bit talk RVPs back about. in -- I'll mean a better the what things. in mean, there's reported November, about of feeding are sales, the I sentiment, the terms

tone was better got say through lot get there's value fairly I I we RVPs of about next and perhaps uncertainty continuing And will election. I think was that that think the the there's into to sentiment just knowing. the dissipated universal from -- the once year. that heading a

what's respect fairly do in that's really so I've nonetheless, RVPs on intimately. a pretty marketplace And on of over feedback going because real and time learned things. the But feel time in to qualitative the the they really read

value in think So that. I there's

as were relationship better looking as something an would half comes XXXX inconsistency second aggressively next. decks And to But of to I'm move XX/XX that feeling And January, lot moving about Again, I the probably December little clear that and about from I as they inventory what face customers what about of and of think argue December and X/X. year can. beginning the of better into in nature half things between with that happened think exactly indicated, overhang of back I of a shutting the and a very from sure the between a that in the down also in there's and Dan there's companies back magical feeling not XXXX. challenging

Ryan Merkel

sites I I thanks it concentrated thought. second And a and by makes your and want It's little to sense. like, for the No, I think this then Yes. X% more surprised sites right. of think, my I of sales those is question, are to makes XX% That's are. I'm that than how disclosure sales, just think sense. And said. tend Onsite sure understanding be make I you roughly I'm what helpful.

we of understanding should X% sales, Onsites like be as Onsite, XX% reading is am So right? XX that which is that I

Daniel Florness

might that them number the a other of There's didn't came we hundred there's no. economics No, ago, Onsite lot a were always is a of we XX% a in We've our Onsite XXs. was in times program XX%, because was might branch our said, business Because -- business paid. that no, the revenue didn't a facility about not of Onsites. after we on go of production the years the work in with they said personnel, XXs. they business at from what when bunch for saw time, be started how the be And spend all there few that

it, way our XX% our XX% want in the And was the of cost the XX% didn't you in sales. XX% But expenses upper works, of structure talking in structure if sales, average time the margins margin back branch and shy when to an And think in Onsite, -- you gross cost were operating But XX%. we business. of teens. between the just Onsite started about our had

a it return standpoint, and differently But So think to you everything. from business. rejigger a had it about to pretax nice have and a was

so And XX% over little a of that's bit roughly X,XXX revenue. Onsites, have and we

the roughly, out hurt said, $XX,XXX manager month, addition to good do team. customers business good do a and but for month, a -- And me this you $XX,XXX Onsites, and $XX,XXX good it's the this about we a at another we -- plan, pay and person. month, in I this it's business branch X,XXX a where we branch as business get my a it of and looks -- it but XXX is those And on In general think just have that is business for a branch. might the us the

that Ryan, sales. XX% more do sales, about But do But they bunch and a our active represent month X,XXX but $XX,XXX way customers make that represent more years so of month. and this multiple sales, about of it than that sense? have of it of a like probably a branch a there because than more of we XX% that's think to XX% in And of account set was over customers XXX no ago, are if all hey, than those represent XX% there at $XX,XXX locations we XX different you customers measure Does that numbers. -- of them XX% was And sales. didn't it that

Ryan Merkel

Right. It does, yes.

Holden Lewis

genuinely know not Yes. out color that else's sure complex very is the like most to that unique I'm the to but XX/XX. But multinational, would I the larger, think or very business. add may marketplace grant don't there. businesses. XX/XX are large, Fastenal's that you, there's And where element thing, about I we're I'll engaging everybody chains. that other in with an think, special of be first global supply to we're businesses suspect have XX/XX more customers businesses, off, to that national Those is in I tend I is, is in

toolbox the tend get and services types there's a to of that's to which our the in to our so of fairly of to as So those ability lot might because complexity, of have, simply because customers come breadth element business there sales, that affect our perhaps organically transactional And right? our that uniquely model a customers, of purely we that fewer an model capability but more well. contrast to of

Daniel Florness

you energy I'll things saturation time, of to go there more we going turning like into them sales. nugget pathway it to said, of added down next about here's were when $XX,XXX if back were we month, we we vending, point of received location you and the a we X,XXX in XXXX, our warehouse, to that call give the the like business. we is were profit, and this announced doing customers our were than and comp. And in step XX% slowing -- automating But what At we represented things about

as nonfasteners. years we're rolling number fast, were years later, rolling the locations of out vending but since weren't better we're out we we in so getting And A Onsite. opening devices. and at And better XXXX,

fasteners so our keep of a business. dropping And percentage as

to blossomed we as and business accelerated. ability deeper that actually grow Our into our

And so the concentration, if customers. you will, is a sign group of success with that of

look the if $X,XXX month say, the wouldn't month, benefit benefits less to a when more. if they the be $X,XXX because customers they they'd table because a bending they be month from a -- bring a have we customer, they Because business supply $X,XXX you doing -- customer don't things and at did, necessarily than, enough chain, to the

Operator

question is from Next from David Baird. Manthey coming

David Manthey

Investor Yes. on look at Clearly, and Fastenal. we rule and the a the been X Slide about but that -- sites XX% opportunity? is? the XX% there's just picture big it XX-XX elucidate Day, maybe of always Or is at -- do as at think that? But customer you'll this generating an way is sales, is you of that the the How view

Daniel Florness

managers. with district have handful of every the And I course opportunity. of opportunity. Onsites me in But per about talk there, around have X the or on discussions year potential And XX for X average we've along that what's throughout Jeff have with It's always we Onsites we history DM. approaching leaders, has our the identified Holden and It's of DM. a When one -- per on told average their we an XX. our and

it's And the with spend. opportunity in really supply at chain. at And marketplace, good incredible helping so good really, we're planned we're because an really really,

think the you going things about on what the some in And are of marketplace right now. macro

jobs XX from is not for people X things enough macro this the now. years year, from of One the there's now, years

hey, might help product facility. our them productivity their good at Fastenal creates They're incredibly chain. manufacturer move in it the bring that? solve with does a closer how and platform, that supply to of So let's with point they Well, one be, the vending use, of in

way, And we manner, they a and the more chain XX my see by that's in we're supply going was Dave, can an at things the well. we're XX next or the do Investor invest X to level and in people a effectively. operate facility, it our of years on about service inefficient very in what continue than doing. we're opportunity, doing as with actually Fastenalcan incredible to and increase X as And excited we to our maybe bunch years with opportunity touch of ago. I XX I'm more in grow Day why the that, But whole I

Holden Lewis

we the we're not to to let's that think down successful I the but successful right because opportunity, add in narrow either. as are type that, special that We too -- we that buckets in of something would you're measure customer. much probably it Yes. And to about bring

the of we that that special to of vending that to what way think continue brought safety. I We be use that the We didn't it special realm broaden have. scale not is we're in Fastenal to at. into But at have specialist for introduction a others

are planned out same opportunity these to down move in world. the exist X or effectively years, and product, customers that XX opportunities, -- get not service to there X ways figuring next whatever those that Is over geographically, world. that over special you, think I but by there are but buckets, necessarily that Onsite more true the different within months next by and good, special want we're time. for what ways. exists opportunity very time, tremendous we're so is opportunities these an in have There's Those the buckets think opportunity whether Is years' for an you you. to,

Daniel Florness

represent both in in bottom what customers a of and by the the to about from revenue, by actually and better COVID month they of about branches, represent There's slow between with ago that buckets impacted down average, of those a I down bucket, consolidate -- there's Clearly, decade bucket. list tell on majority can touch you $X,XXX Just came that were When a you $XXX and down throw $XX that they, X us. The to spend or to populations standpoint with that that XX% bucket, decline in that this double the holding a a opening little month us. about branches. the customers get customers our we on, of from XX% $X,XXX spend question. decision too. than and just but being not XX% sizes. and of $X,XXX on -- less is In -- that bucket the dollars bucket, average that in X the there's doubling bucket down and I'll tidbit

successful is we And being of better spend, X at the become over I so really buckets about all these that percent sales them. But group that of planned because, under of it's is look of buckets a like case $XXX, unplanned smallest all a a of believe, spend. all spend it's as grow them. more ] but customers, [ about big bucket, in But time, you're sales. it's and customer bottom then special better on unplanned than And

than with putting focus your of gone grab local it's chain group could so else conveyor our a we energy or great And really footprint, and out box partner this can on we're And being off have that better it. America, customers, to -- but we there anybody across be. supply North anybody

David Manthey

topic That's right had about those you you're touch Okay. on a now. asked just this, and contracts pipe talk happen, planning those someone obviously it's tariffs. too, the but how through on your assuming how you Could helpful. sure else making I'm pass Maybe comes that could hot here? down

Daniel Florness

last But the on business United -- States. always had we past, tariffs. A mean, calls, We in talked been been the we chain, that's into XXXX supply frame. think I into XXXX good time good previous frame, at have going not to we've get coming through the I in years. to States. our back in As were been tariffs years are had that were on United -- of we've leading for Mexico we times, but unique excellent to that -- focus we get tariffs Jeff, at lot time the we've X.X international in something tariffs come tariffs

to American had -- or going we've been as it other non-North We've Canadian tariffs relates businesses. market our

skill The that -- to our manage that. dull surgical. So be have to great isn't knife we in isn't -- tools that ability

just don't -- important make in We to have What's about get it's me give allow how customers. P&L. our to our decisions, our to on both what make is Because That's call, partner. then we're just us, not give to visibility do sure this great everybody and that it to we to ability to to special important really not our ability great wrong. chain we're us because customers our supply of manage and We're special on to we a customer, them. visibility that's special

a And year late coming we We a lot of conversations And because -- had our we're really, chunk strike. really port had of with there in unrelated a was good to with in of all at of we that. a the able tariffs, had diverted study containers we to lot customers, conversations were containers the and a risk conversations. and

and I with think a is the bringing containers, bringing avoidance business it had was -- Coast, we're we your the America, bit have XX we'll spend best the little we it for risk XX, instead and it of about North believe East West XX said into we conversations to across We'll bring extra customers that money. Coast. containers

want do you your business we not item a in you that's shuts to XX Because that that's -- put diverted in something And we production down or that at need February risk. March, and XX, need containers.

going an January happens, great it's does. and As didn't it on to partner communicate world it to But what but an XXth the starting out, XX react are years. unpredictable been -- over whatever be be, world side frankly, last we turned chain need and a to that's unpredictable to poised well it's

that that's too. It's of the change, just how happens might quickly, intensity new. So maybe

Operator

coming question is Stephens. from from Moll next Tommy The

Thomas Moll

in about unplanned maybe and Can what's there you a improve. just nexus I made give unpack bit comment opportunity coming us, that early spend of teaser you with us to March? a for a Dan, a here think eCommerce, and little

Daniel Florness

Yes.

that common. levels stuff pulled So SKUs some less hindsight, mistake stocking distribution centers. of that was talked XXXX, about And stuff and reversed aspects to some There's back the X We've we've in certain that. our we In we that's a we expanded in about. talked fact the it.

shelf for the source go pull product to distribution, One aspect to they lot team it from a that and work you is have more the when because that create you in down. local

is product we is planned there stuff can and get And be for than the in customer, you're The you thing we delay a third rush, when result. second you a might buy buying better don't sales the when when the as a fashion. you buy lost some in

into we so that margin the inventory believe move sheet XXXX. all to opportunities balance that there's we're And we some to adding as

generate that we branch. and Think that on they fairly than And think unavailable to will but the to of opportunities And shows that's look. And that the say yes give up and ability or time is return freeing me given order purchased, margin more -- of eye importantly, our a need CFO eCom stink our important. more and to it a website not something it's something smaller that -- $X,XXX, common infrequently but or it's the the hop maybe an maybe customer, contact less uncommon and faster.

that they use. safety. at have at this Monona, in a.m. because to are of should hits as easy it can depth on mindset time look yes, you they at is their for say, need we'll their What it sitting our the website incredible, distribution is all X it's and awesome When $X,XXX, in I it's easy these in hop in center And base morning. our In customer, fasteners. truck green to do and awesome folks something, at the website order the -- Fastenal They're

call And on different and that's branch so Bay. than the at hopping seeing Green

by it shows inventory, of of that availability. is part so it kind different adding a And

doing step your with our us show been level increasing base, connection your of service. of other supplier availability better The we've is and

website in St. at in we in if don't have to get X the Paul even So days. sitting show can hey, it it's the individual, and can supplier we you the our we on hub, to

faster it supply gets but We want that can expensive. their their we of than it, need the costs. cost manage chain. ship you want minimize to And that, If we to

And so we give them optionality.

it's other it's up the in been and other it's in St. much that we've Bay. it get it visibility and year going much does Green But is it's fan, truck to at words, our -- truck different going experience. available tracking. Paul, to our to it's picked examples. The the the supplier Packer and using Winona My is that's transfer why other Bay piece incorporated just isn't Green piece, to that late a in In going these wife I'm all better

are of a the the But us their they engage intra we or a area facing it hop that way both be example But and pieces have customer you list have their month customer. to Does for the my on maintenance on smaller the those you built it a it punch-out the out pieces. rapidly what Tommy? they is behind And in it's web. first is, with customer, portal $XXX,XXX of that to they roll sense, regardless rolling until But make pieces exists can't scenes, place. eBusiness the of could had functionality those out -- of versus so and available

Thomas Moll

margins. for you on gross question Holden, look we the a and furthering Yes, forward in to March. discussion

the called there should the QX? impacts is us of you terms already that this frame You your in for product, to some how in fourth what other out to you for out the QX And in quarter. of in here I first the can highlighted view do just typical mentioned, other factor moving moderate as year cost call particular? any than of the quarter What

Holden Lewis

QX the QX fairly volatile. usually be to mean can I Yes.

the year, But is So in is, I at the I'm wide was What sorry, year-over-year over and when think you're range see we going in more QX increasing a think color I on would a typically QX think of of than at shot XXXX, year I margin XXXX. you in typically, bit pretty margin quarter, gross QX it outcomes. noticeably. -- maybe where next flattish a to give have tell full this point having about gross a I the

in But Now a have period that. to very fasteners had -- market weak we're some will the where extent, strong and say the we've very a safety. getting

could get narrow. marketplace, gap bit a meaningfully, fairly reverse is little gap going you see little not that think if you And a of improvement if narrow bit. to that the in I

think been So not that may XXXX. in the XXXX mix in be the drag it has I

a a quarters of I talked us of year, warehousing through couple we've this easy that comp about I in think impacted relatively there's that things particularly think a space, there. couple

we that's moderated to think in I think pressures, what I -- you it. had usual the in you -- but that be going slightly I And is. negative out. the various typically walk sort we But I how build be the And So think where XXXX will through probably can around QX yes, to have typically, in XXXX. versus above how QX very the XXXX flat work, through how think they're think you when it seasonalities is of something

Thomas Moll

we'll not bar but that too luck Best to successor. the Holden, a high, high for individual. setting call the your of

Daniel Florness

quick a minutes it's see couple there's I it. before of take a we'll question, hour. the If

So second. a it I'll hold

Operator

from is question next Jefferies. coming Our Stephen from Volkmann

Stephen Volkmann

quick I'll normal in the about ask Holden, increase just about? follow-on. I you'll anything right. employee All we operating to should think the costs, assume expenses? How think last have you else

Holden Lewis

of course, is expenses, mean XX% I labor. operating Yes. OpEx, of our

big always growth, dynamic leverageable. of about changed. being think I the a other part able we when be labor don't so still leverage has should to that. And -- that against plays But I've talk the XX%

that mid-single-digit this to or we to when think able defend growth. profile be we we able growth digits I to them above that mid-single-digit see should change And mid-single and digits, a any I be at expand don't point. get to above should mid-single

If itself, in we growth end upside and get little absorber of when it And on and year more that and than the so reasserts We a will that is the of to asked less better in business haven't And in recovery, gets effect reassert this more sort the be and have of that of it's not year, preamble, Oftentimes, high his both volatility, this first Bear incremental XX% XX% that. bonuses hope at themselves. right? shock would wages, why we paying growing us mind, should margin downside. does lot to alluded as gives in the expectation. next bonuses as the we year. a strongly, been our I Dan be pretax

expectation where single-digit high getting And what to the kind XX% so would we XX% to in the think of world incremental that high see that's growth, year, why of in a first end the mid- that's to be. can I

Operator

to any or That our session. I'd back comments. further over question-and-answer closing floor concludes turn like the for

Daniel Florness

thank call our today. to in everybody want Just for participating

and on. My other lot to always, did team Fastenal you to and thank XXXX. hop on we'd how shareholders, you prepared Fastenal. thank calls for to team to like support. your as always, frankly, look As rest the listening the you We lot continuing this you business you the a cover stop, other hour companies call the our of you, everybody. the forward a yourself, Thanks, as and And customers of enter for in Blue for for we of of share 'XX because for the to story to realize we to have what your

Operator

you. does and conclude webcast. Thank That today's teleconference

We you your today. You for thank day. line may participation have disconnect at this wonderful your time, and a

Fastenal (FAST) 17 Jan 252024 Q4 Earnings call transcript