-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BoNPQaOyKaBu0uuzsdGw6/vhjWyP2XfbkxNr741Fe9JyyeuvZcYQ2VEZTcFsbGnV vZv0HIV5tB3TZ0kG6VRfYA== 0000950131-96-001758.txt : 19960430 0000950131-96-001758.hdr.sgml : 19960430 ACCESSION NUMBER: 0000950131-96-001758 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960429 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FASTENAL COMPANY CENTRAL INDEX KEY: 0000815556 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY [5200] IRS NUMBER: 410948415 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16125 FILM NUMBER: 96552953 BUSINESS ADDRESS: STREET 1: 2001 THEURER BLVD CITY: WINONA STATE: MN ZIP: 55987 BUSINESS PHONE: 5074545374 10-Q 1 FORM 10-Q DATED 03-31-96 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1996 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 (I.R.S. Employer incorporation or organization) Identification No.) 2001 Theurer Blvd., Winona MN 55987 - ------------------------------------------ ---------- (Address of principal executive offices) (Zip Code) (507) 454-5374 ---------------------------------------------------- (Registrant's telephone number, including area code) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Class Outstanding at April 15, 1996 - ---------------------------- ----------------------------- Common stock, $.01 par value 37,938,688 FASTENAL COMPANY INDEX
Page No. --------- Part I Financial Information Consolidated Balance Sheets - March 31, 1996 and December 31, 1995 1 Consolidated Statements of Earnings - three months ended March 31, 1996 and 1995 2 Consolidated Statements of Cash Flows - three months ended March 31, 1996 and 1995 3 Notes to financial statements 4 Management's discussion and analysis of financial condition and results of operations 5 Part II Other Information Item 6 Exhibits and reports on Form 8-K 6
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FASTENAL COMPANY AND SUBSIDIARY Consolidated Balance Sheets
(unaudited) March 31, December 31, Assets 1996 1995 - ------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 8,187,000 6,583,000 Trade accounts receivable, net of allowance for doubtful accounts of $480,000 and $460,000 as of March 31, 1996 and December 31, 1995, respectively 36,287,000 31,866,000 Inventories 42,810,000 40,178,000 Deferred tax asset 947,000 947,000 Other current assets 1,563,000 1,523,000 - ------------------------------------------------------------------------------- Total current assets 89,794,000 81,097,000 Marketable securities 759,000 784,000 Property and equipment, less accumulated depreciation 30,203,000 27,090,000 Other assets, net 364,000 349,000 - ------------------------------------------------------------------------------- Total assets $121,120,000 109,320,000 =============================================================================== Liabilities and Stockholders' Equity - ------------------------------------------------------------------------------- Current liabilities: Accounts payable $ 9,093,000 7,882,000 Accrued expenses 5,793,000 4,974,000 Income taxes payable 5,233,000 2,141,000 - ------------------------------------------------------------------------------- Total current liabilities 20,119,000 14,997,000 - ------------------------------------------------------------------------------- Stockholders' equity: Preferred stock of $.01 par value per share. Authorized 5,000,000 shares; none issued 0 0 Common stock of $.01 par value per share. Authorized 50,000,000 shares; issued and outstanding 37,938,688 shares 379,000 379,000 Additional paid-in capital 4,424,000 4,424,000 Retained earnings 96,240,000 89,566,000 Translation loss (60,000) (52,000) Unrealized holding gains on marketable securities 18,000 6,000 - ------------------------------------------------------------------------------- Total stockholders' equity 101,001,000 94,323,000 - ------------------------------------------------------------------------------- Total liabilities and stockholders' equity $121,120,000 109,320,000 ===============================================================================
The accompanying notes are an integral part of the financial statements. - 1 - FASTENAL COMPANY AND SUBSIDIARY Consolidated Statements of Earnings For the three months ended March 31, 1996 and 1995 (Unaudited)
1996 1995 - ---------------------------------------------------------------------------- Net sales $ 63,061,000 51,091,000 Cost of sales 29,636,000 24,036,000 - ---------------------------------------------------------------------------- Gross profit 33,425,000 27,055,000 Operating and administrative expenses 21,540,000 17,192,000 - ---------------------------------------------------------------------------- Operating income 11,885,000 9,863,000 Other income: Interest income 63,000 68,000 Gain on disposal of property and equipment 523,000 313,000 - ---------------------------------------------------------------------------- Total other income 586,000 381,000 - ---------------------------------------------------------------------------- Earnings before income taxes 12,471,000 10,244,000 Income tax expense 5,038,000 4,160,000 - ---------------------------------------------------------------------------- Net earnings $ 7,433,000 6,084,000 ============================================================================ Earnings per share $ .20 .16 ============================================================================ Weighted average shares outstanding 37,938,688 37,938,688 ============================================================================
The accompanying notes are an integral part of the financial statements. -2- FASTENAL COMPANY AND SUBSIDIARY Consolidated Statements of Cash Flows For the three months ended March 31, 1996 and 1995 (Unaudited)
1996 1995 - --------------------------------------------------------------------------------- Cash flows from operating activities: Net earnings $ 7,433,000 6,084,000 Adjustments to reconcile net earnings to net cash provided by (used for) operating activities: Depreciation of property and equipment 1,628,000 1,300,000 Gain on disposal of property and equipment (523,000) (313,000) Amortization of premium on marketable securities 2,000 0 Changes in operating assets and liabilities: Trade accounts receivable (4,421,000) (3,989,000) Inventories (2,632,000) (4,663,000) Other current assets (40,000) 94,000 Accounts payable 1,211,000 (453,000) Accrued expenses 819,000 925,000 Income taxes payable 3,092,000 1,937,000 - --------------------------------------------------------------------------------- Net cash provided by operating activities 6,569,000 922,000 - --------------------------------------------------------------------------------- Cash flows from investing activities: Purchases of marketable securities 0 0 Sale of marketable securities 35,000 2,189,000 Additions of property and equipment, net (5,164,000) (4,864,000) Proceeds from sale of property and equipment 946,000 496,000 Translation adjustment (8,000) (2,000) Increase in other assets (15,000) (14,000) - --------------------------------------------------------------------------------- Net cash used in investing activities (4,206,000) (2,195,000) - --------------------------------------------------------------------------------- Cash flows from financing activities: Increase in payable to bank 0 0 Payment of dividends (759,000) (759,000) - --------------------------------------------------------------------------------- Net cash used in financing activities (759,000) (759,000) - --------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 1,604,000 (2,032,000) Cash and cash equivalents at beginning of period 6,583,000 3,133,000 - --------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 8,187,000 1,101,000 ================================================================================= Supplemental disclosure of cash flow information: Cash paid during each period for: Income taxes $ 1,776,971 2,223,000 =================================================================================
The accompanying notes are an integral part of the financial statements. -3- FASTENAL COMPANY AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS March 31, 1996 and 1995 (Unaudited) (1) Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, there has been no material change in the information disclosed in the notes to financial statements included in the Company's financial statements as of and for the year ended December 31, 1995. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. -4- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's financial position and operating results during the periods included in the accompanying financial statements. First quarter 1996 vs. 1995 - --------------------------- Net sales for the three months ended March 31, 1996 increased 23.4% to $63,061,000 versus the $51,091,000 recorded during the comparable 1995 period. The increase came primarily from higher unit sales as prices were generally stable over the period. Higher unit sales came from increases in sales at existing store sites and from the addition of new store sites. Sites opened in 1994 or earlier had average sales increases of 16.5%. The remainder of the 23.4% sales growth came from store sites opened in 1995 and during the first three months of 1996. Sixty new store sites were added from April, 1995 through March, 1996. Forty-seven of the new sites were traditional Fastenal stores featuring the fastener product line. The remaining thirteen new sites were combination stores with multiple product lines in smaller communities. During the first quarter of 1996, 4.9% of the net sales came from sales of the Company's FastTool product line and less than 1% of the net sales came from sales of the Company's SharpCut product line. Net earnings for the first three months grew from $6,084,000 in 1995 to $7,433,000 in 1996, an increase of 22.2%. Net earnings increased at a slower rate than net sales because operating and administrative expenses increased at a 25.3% rate between the comparable periods, a rate higher than the rate of increase in net sales. The largest increase in operating and administrative expense came from employment costs in the store sites. The Company increased its site personnel from 1,310 on December 31, 1995, to 1,477 on March 31, 1996. Severe weather impacted the Company's operations in the first quarter of 1996 through lost sales at construction sites and from higher operating costs for the Company's truck fleet. Liquidity and Capital Resources - ------------------------------- The higher level of sales during the period resulted in the growth of trade accounts receivable. Property and equipment increased because of work in progress on the Company's addition to its Winona distribution center and corporate offices, additions to its truck fleet, additions of manufacturing equipment, and additions of data processing equipment. Cash requirements for these asset changes were satisfied primarily from net earnings and depreciation on plant and equipment. As of March 31, 1996, the Company had outstanding commitments of approximately $1,500,000 to purchase a building for a new distribution center in Ohio, and approximately $1,000,000 to complete the addition to the Company's corporate offices and distribution center in Winona, Minnesota. In the first quarter of 1996 the Company was successful in recruiting enough new marketing personnel to allow for a short-term increase in both the rate of new site openings and the rate of product line additions to existing sites. This increased activity will require additional inventory and marketing expenses, but the Company believes it has sufficient liquidity to implement the increased activity. Although cash and cash equivalents at the end of the period are believed sufficient to finance the Company's current expansion plans and fulfill its commitments for capital expenditures, the Company believes it will be able to secure bank loans for any unexpected shortfall. -5- PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 3.1 Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993). 3.2 Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to Registration Statement No. 33 - 14293). 27 Financial Data Schedule (b) No reports on Form 8-K have been filed during the quarter ended March 31, 1996. -6- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FASTENAL COMPANY /s/ Robert A. Kierlin ------------------------------- (Robert A. Kierlin, President) (Duly Authorized Officer) Date April 29, 1996 /s/ Stephen M. Slaggie ---------------- ------------------------------- (Stephen M. Slaggie, Treasurer) (Principal Financial Officer) INDEX TO EXHIBITS 3.1 Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993). 3.2 Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 to Registration Statement No. 33-14293). 27 Financial Data Schedule........................Electronically Filed EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Consolidated Balance Sheet and Consolidated Statement of Earnings of Fastenal Company and Subsidiary as of, and for the three months ended, March 31, 1996 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 8,187,000 0 36,767,000 480,000 42,810,000 89,794,000 46,161,000 15,958,000 121,120,000 20,119,000 0 379,000 0 0 100,622,000 121,120,000 63,061,000 63,061,000 29,636,000 29,636,000 0 167,000 0 12,471,000 5,038,000 7,433,000 0 0 0 7,433,000 .20 .20 Marketable securities in the amount of $759,000 have been classified as non-current assets on the Consolidated Balance Sheet of Fastenal Company and Subsidiary as of March 31, 1996.
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