Global Fastener News

Fastenal Q2 Earnings Jump 58.9%

John Wolz

Fastenal Company reported second quarter 2004 earnings rose 58.9%, beating analyst”s projections.
Fastenal attributed the earnings jump to increased selling prices, vendor incentive program and improved freight costs.
Q2 sales rose 24.5% to $310.1 million and profits increased to $34.8 million.
Fastenal, which had 1,314 stores at the end of 2003, expects to open 170 to 240 stores this year. The company opened 127 stores during the first half of 2004. Fastenal open 151 stores during the full year of 2003 and 144 during 2002.
The number of employees increased 9.6% from the end of 2003 to 5,297 at mid-way through 2004.
Net sales for the first half of 2004 totaled $594 million, an increase of 22.6% over the same period of 2003. Net earnings increased 53.7% to $62,979 in the first six months of 2004.
Fastenal reported gross profit margins in the first half of 2004 and 2003 were 50.5% and 49.5%, respectively.
“The largest impact to Fastenal’s gross profit margin relates to the impact of rising steel prices,” according to a company statement. “As a reseller of industrial products, primarily steel-based industrial products, Fastenal has been forced to increase its selling prices.” The price increases resulted in about 2.5% of additional sales dollars in the first half of 2004.
Fastenal’s “ability to continue raising its prices in reaction to inbound cost increases should allow us to retain some of the increased gross profit margin,” the company projected. Fastenal.com �2004 FastenerNews.com