Fastenal : Earnings Document

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

• Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021, or

• Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________

Commission file number 0-16125

FASTENAL COMPANY

(Exact name of registrant as specified in its charter)

Minnesota	41-0948415
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2001 Theurer Boulevard, Winona, Minnesota	55987-1500
(Address of principal executive offices)	(Zip Code)

[phone]

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.01 per share	FAST	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	ý	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý As of October 11, 2021, there were approximately 575,163,354 shares of the registrant's common stock outstanding.

Table of Contents

FASTENAL COMPANY

INDEX

		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Earnings	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Stockholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS	12
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 4.	CONTROLS AND PROCEDURES	22
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	24
ITEM 1A.	RISK FACTORS	24
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 6.	EXHIBITS	24

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

FASTENAL COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Amounts in millions except share information)

		(Unaudited)
Assets	September 30,	December 31,
	2021	2020
Current assets:
Cash and cash equivalents	$	250.5	245.7
Trade accounts receivable, net of allowance for credit losses of $11.1 and $12.3,		949.4	769.4
respectively
Inventories		1,401.1	1,337.5
Prepaid income taxes		6.7	6.7
Other current assets		162.6	140.3
Total current assets		2,770.3	2,499.6
Property and equipment, net		1,019.2	1,030.7
Operating lease right-of-use assets		249.7	243.0
Other assets		183.3	191.4
Total assets	$	4,222.5	3,964.7
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt	$	35.0	40.0
Accounts payable		256.9	207.0
Accrued expenses		278.0	272.1
Current portion of operating lease liabilities		92.6	93.6
Total current liabilities		662.5	612.7
Long-term debt		330.0	365.0
Operating lease liabilities		160.7	151.5
Deferred income taxes		104.6	102.3

Stockholders' equity:

Preferred stock: $0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding

Common stock: $0.01 par value, 800,000,000 shares authorized, 575,163,289 and 574,159,575 shares issued and outstanding, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

--

2.9 2.9

90.6 61.9

2,900.8 2,689.6

(29.6) (21.2)

Total stockholders' equity		2,964.7	2,733.2
Total liabilities and stockholders' equity	$	4,222.5	3,964.7

See accompanying Notes to Condensed Consolidated Financial Statements.

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FASTENAL COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings (Amounts in millions except earnings per share)

		(Unaudited)			(Unaudited)
		Nine Months Ended		Three Months Ended
		September 30,		September 30,
		2021	2020		2021	2020
Net sales	$	4,479.0	4,289.3	$	1,554.2	1,413.3
Cost of sales		2,414.7	2,340.3		834.0	772.7
Gross profit		2,064.3	1,949.0		720.2	640.6
Operating and administrative expenses		1,147.8	1,071.6		401.8	350.5
Operating income		916.5	877.4		318.4	290.1
Interest income		0.1	0.3		0.1	0.1
Interest expense		(7.3)	(7.2)		(2.4)	(2.6)
Earnings before income taxes		909.3	870.5		316.1	287.6
Income tax expense		215.5	207.5		72.6	66.1
Net earnings	$	693.8	663.0	$	243.5	221.5
Basic net earnings per share	$	1.21	1.16	$	0.42	0.39
Diluted net earnings per share	$	1.20	1.15	$	0.42	0.38
Basic weighted average shares outstanding		574.6	573.7		575.0	573.9
Diluted weighted average shares outstanding		576.9	575.5		577.3	576.1

See accompanying Notes to Condensed Consolidated Financial Statements.

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Table of Contents

FASTENAL COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Amounts in millions)

		(Unaudited)			(Unaudited)
		Nine Months Ended		Three Months Ended
		September 30,		September 30,
		2021	2020		2021	2020
Net earnings	$	693.8	663.0	$	243.5	221.5
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments (net of tax of $0.0		(8.4)	(3.4)		(10.8)	11.1
in 2021 and 2020)
Comprehensive income	$	685.4	659.6	$	232.7	232.6

See accompanying Notes to Condensed Consolidated Financial Statements.

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