Investor Teleconference Presentation
Fourth Quarter 2021
Fastenal Company
January 19, 2022
1
Safe Harbor Statement
All statements made herein that are not historical facts (e.g., future operating results and business activity in light of inflation, supply chain constraints, labor shortages, and the COVID-19 pandemic, as well as expectations regarding operations, including gross margin, future inventory levels, pricing, Onsite and weighted FMI device signings, the size of our U.S./Canada network of traditional branches, operating costs, and capital expenditures) 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 our 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 a discussion of certain non-GAAP financial measures. Information required by Regulation G with respect to such non-GAAP financial measures can be found in the appendix.
2
CEO Messages on 4Q21
Daily Sales Rate (DSR) Growth
18% | ||||||||||||
16% | 14.6% | |||||||||||
14% | 12.2% | |||||||||||
12% | ||||||||||||
10.3% | 10.0% | |||||||||||
10% | ||||||||||||
7.9% | ||||||||||||
8% | ||||||||||||
6.1% | 6.4% | |||||||||||
6% | 5.3% | |||||||||||
3.7% | ||||||||||||
4% | 2.8% | 2.5% | ||||||||||
2% | (0.1%) | |||||||||||
0% | ||||||||||||
1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |
EPS |
(Fully Diluted)
$0.50 | |
$0.45 | |
$0.40 | |
$0.40 | |
$0.34 | |
$0.35 | |
$0.31 | |
$0.30 | |
$0.25 | |
$0.20 | |
$0.15 | |
$0.10 | |
$0.05 | |
$0.00 | |
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21
- Net sales grew 12.8% in 4Q21 (up 14.6% on a daily basis; up 16.5% in December on a daily basis). This reflects strong demand, good pricing, improved product availability, and fewer holiday-related shutdowns than is typical. Operating margin grew 13.8%.
- The 2020 distortions make comparisons of 2021 to 2019 relevant (see table on page 4). A few things stand out:
- Our two-year net sales growth accelerated through the year, from up 8.2% in 1Q21 to up 20.0% in 4Q21.
- Gross profit margin recovered from 2020, as expected, but was still down 40 bps from 4Q19. This reflects neutral price/cost - with progress still to be made in spots - and mix impact.
- Operating profit grew faster than sales, speaking to greater productivity and effective cost control.
- We consider COVID-19 to be an ongoing element of our global business environment.
- Growth driver details follow on page 5, but we continue to see expansion in sales through our Digital Footprint, which was 46.4% in 4Q21, versus an estimated 37.2% in 4Q20.
3
Performance Summary
(Comparison to 2019 Periods)
Twelve-month Period | Three-month Period | |||||||
2021 | 2019 | Change | 2021 | 2019 | Change | |||
Net sales | $ | 6,010.9 | 5,333.7 | 12.7% | $ | 1,531.8 | 1,276.9 | 20.0% |
Business days | 253 | 254 | 62 | 63 | ||||
Daily sales | $ | 23.8 | 21.0 | 13.1% | $ | 24.7 | 20.3 | 21.9% |
Gross profit | $ | 2,777.2 | 2,515.4 | 10.4% | $ | 712.9 | 598.4 | 19.1% |
% of net sales | 46.2% | 47.2% | 46.5% | 46.9% | ||||
Operating and administrative expenses | $ | 1,559.8 | 1,458.2 | 7.0% | $ | 412.0 | 359.5 | 14.6% |
% of net sales | 26.0% | 27.3% | 26.9% | 28.2% | ||||
Operating income | $ | 1,217.4 | 1,057.2 | 15.2% | $ | 300.9 | 238.9 | 25.9% |
% of net sales | 20.3% | 19.8% | 19.6% | 18.7% | ||||
Earnings before income taxes | $ | 1,207.8 | 1,043.7 | 15.7% | $ | 298.5 | 236.4 | 26.3% |
% of net sales | 20.1% | 19.6% | 19.5% | 18.5% | ||||
Net earnings | $ | 925.0 | 790.9 | 17.0% | $ | 231.2 | 178.7 | 29.4% |
Diluted net earnings per share | $ | 1.60 | 1.38 | 16.4% | $ | 0.40 | 0.31 | 28.9% |
4
4Q21 Growth Driver Update | |||||
Onsite Signings and Active Locations | • Onsites: We had 44 signings in 4Q21 (274 YTD) and finished | ||||
150 | 1,500 | with 1,416 active sites, +11.9% from 4Q20. Daily sales, | |||
120 | 1,114 | 1,416 | 1,200 | excluding transferred branch sales, grew more than 20% from | |
1,265 | 4Q20. Our goal is 375 to 400 signings in 2022. | ||||
90 | 79 | 900 | • FMI Technology: We signed 3,972 weighted devices in 4Q21 | ||
60 | 44 | 600 | (19,311 YTD), versus 3,548 in 4Q20, with an ending installed | ||
36 | base of 92,874 weighted devices, +10.6% from 4Q20. FMI | ||||
30 | 300 | devices were 35.1% of sales in 4Q21, versus 27.2% of sales in | |||
0 | 0 | 4Q20 and an estimated 27.5% of sales in 4Q19. Our goal is | |||
23,000 to 25,000 MEU signings of FASTBin and FASTVend | |||||
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 | |||||
devices in 2022. | |||||
Signings | Active Locations | ||||
Weighted FMI Device Signings and Installations1
8 | 100 | |||
76,733 | 83,951 | 92,874 | 80 | |
6 | 4,929 | |||
4 | 3,548 | 3,972 | 60 | |
40 | ||||
2 | 20 | |||
0 | 0 | |||
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 | ||||
Signings | Installations |
- Conditions for signings remain challenging, and achieving our goals will likely require some easing of the stresses related to inflation, the supply chain, labor shortages, and the pandemic.
- eCommerce: daily sales rose 48.2% in 4Q21. Large customer- oriented EDI was up 47.8%, while web sales were up 49.5%.
- Sales through our Digital Footprint (FMI technology plus non- FMI-related eCommerce) was 46.4% of sales in 4Q21, versus an estimated 37.2% in 4Q20 and an estimated 35.5% in 4Q19. Our goal is to hit 55% in 2022, but we believe this could ultimately grow to approximately 85% of our sales.
- Data excludes ~12.0K non-weighted vending devices related to a locker lease program
5
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Fastenal Company published this content on 19 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2022 12:01:05 UTC.