-----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, KQVu3dgSOBqfEkiUh6hZ1dDy5RD9NWW49s+mhxte38IGkRq9ORPr2Rls4OrqPvPj MMixZzNvrIZakYA9H7fgiw== 0000950131-95-003045.txt : 19951103 0000950131-95-003045.hdr.sgml : 19951103 ACCESSION NUMBER: 0000950131-95-003045 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951102 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: 95586716 BUSINESS ADDRESS: STREET 1: 2001 THEURER BLVD CITY: WINONA STATE: MN ZIP: 55987 BUSINESS PHONE: 5074545374 10-Q 1 FORM 10-Q DATED 9/30/95 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 September 30, 1995 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 October 17, 1995 - ---------------------------- ------------------------------- Common stock, $.01 par value 37,938,688 FASTENAL COMPANY INDEX
Page No. -------- Part I Financial Information Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 1 Consolidated Statements of Earnings -nine months and three months ended September 30, 1995 and 1994 2 Consolidated Statements of Cash Flows - nine months ended September 30, 1995 and 1994 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) * September 30, December 31, Assets 1995 1994 - ------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 2,575,000 3,133,000 Trade accounts receivable, net of allowance for doubtful accounts of $420,000 and $300,000 as of September 30, 1995 and December 31, 1994, respectfully 33,235,000 23,606,000 Inventories 37,049,000 30,911,000 Deferred income tax benefit 729,000 729,000 Other current assets 1,229,000 1,108,000 - ------------------------------------------------------------------------------- Total current assets 74,817,000 59,487,000 Marketable securities 1,170,000 5,026,000 Property and equipment, less accumulated depreciation 24,955,000 16,988,000 Other assets, net 323,000 294,000 - ------------------------------------------------------------------------------- Total assets $101,265,000 81,795,000 - ------------------------------------------------------------------------------- Liabilities and Stockholders' Equity - ------------------------------------------------------------------------------- Current liabilities: Accounts payable $ 7,023,000 7,814,000 Accrued expenses 5,324,000 4,146,000 Income taxes payable 1,760,000 2,186,000 - ------------------------------------------------------------------------------- Total current liabilities 14,107,000 14,146,000 - ------------------------------------------------------------------------------- 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 82,345,000 62,914,000 Translation loss (25,000) (11,000) Unrealized holding gains (losses) on marketable securities 35,000 (57,000) - ------------------------------------------------------------------------------- Total stockholders' equity 87,158,000 67,649,000 - ------------------------------------------------------------------------------- Total liabilities and stockholders' equity $101,265,000 81,795,000 - -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. *From audited financial statements. - 1 - FASTENAL COMPANY AND SUBSIDIARY Consolidated Statements of Earnings (Unaudited)
Nine months ended Three months ended September 30, September 30, ------------------------- ---------------------- 1995 1994 1995 1994 - ------------------------------------------------------------------------------ Net sales $164,559,000 116,878,000 57,993,000 43,508,000 Cost of sales 77,054,000 54,962,000 26,972,000 20,514,000 - ------------------------------------------------------------------------------ Gross profit 87,505,000 61,916,000 31,021,000 22,994,000 Operating and administrative expenses 54,105,000 40,095,000 18,725,000 14,490,000 - ------------------------------------------------------------------------------ Operating income 33,400,000 21,821,000 12,296,000 8,504,000 Other income (expense): Interest income 124,000 151,000 21,000 61,000 Interest expense (68,000) 0 (22,000) 0 Gain on disposal of property and equipment 553,000 146,000 157,000 94,000 - ------------------------------------------------------------------------------ Total other income 609,000 297,000 156,000 155,000 - ------------------------------------------------------------------------------ Earnings before income taxes 34,009,000 22,118,000 12,452,000 8,659,000 Income tax expense 13,819,000 8,960,000 5,066,000 3,505,000 - ------------------------------------------------------------------------------ Net earnings $ 20,190,000 13,158,000 7,386,000 5,154,000 - ------------------------------------------------------------------------------ Earnings per share $ .53 .35 .19 .14 - ------------------------------------------------------------------------------ Weighted average shares outstanding 37,938,688 37,938,688 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 nine months ended September 30, 1995 and 1994 (Unaudited)
1995 1994 - ----------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net earnings $ 20,190,000 13,158,000 Adjustments to reconcile net earnings to net cash provided by (used for) operating activities: Depreciation of property and equipment 3,900,000 2,495,000 Gain on disposal of property and equipment (553,000) (146,000) Amortization of premium on marketable securities 15,000 25,000 Changes in operating assets and liabilities: Trade accounts receivable (9,629,000) (8,061,000) Inventories (6,138,000) (3,438,000) Other current assets (121,000) (89,000) Accounts payable (791,000) 1,155,000 Accrued expenses 1,179,000 1,665,000 Income taxes payable (427,000) 1,182,000 - ----------------------------------------------------------------------------------------------------- Net cash provided by operating activities 7,625,000 7,946,000 - ----------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchases of marketable securities 0 (685,000) Sale of marketable securities 3,933,000 324,000 Additions of property and equipment, net (12,543,000) (5,186,000) Proceeds from sale of property and equipment 1,229,000 306,000 Translation adjustment (14,000) 0 Increase in other assets (29,000) (73,000) - ----------------------------------------------------------------------------------------------------- Net cash used in investing activities (7,424,000) (5,314,000) - ----------------------------------------------------------------------------------------------------- Cash flows from financing activities: Increase in payable to bank 0 0 Payment of dividends (759,000) (758,000) - ----------------------------------------------------------------------------------------------------- Net cash used in financing activities (759,000) (758,000) - ----------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (558,000) 1,874,000 Cash and cash equivalents at beginning of period 3,133,000 1,976,000 - ----------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 2,575,000 3,850,000 - ----------------------------------------------------------------------------------------------------- Supplemental disclosure of cash flow information: Cash paid during each period for: Income taxes $ 14,245,000 7,778,000 - ----------------------------------------------------------------------------------------------------- Interest $ 68,000 0 - -----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. -3- FASTENAL COMPANY AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS September 30, 1995 and 1994 (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, 1994. 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. Nine months 1995 vs. 1994 - ------------------------- Net sales for the nine months ended September 30, 1995 increased 40.8% to $164,559,000 versus the $116,878,000 recorded during the comparable 1994 period. The increase came primarily from higher unit sales, although prices were about 4% higher in the 1995 period. Higher unit sales came from increases in same store sales and from the addition of new stores. Stores opened in 1993 or earlier had average sales increases of 27.5%. The remainder of the 40. 8% sales growth came from stores opened in 1994 and during the first nine months of 1995. Eighty-three new stores were added from October, 1994 through September, 1995. Fifty-five of the added stores were Fastenal stores, twenty-three were FastTool stores, and five were combination Fastenal/FastTool stores in smaller communities. FastTool stores are located adjacent to existing Fastenal stores and sell power and hand tools and safety supplies to the same customer base. Net earnings for the first nine months grew from $13,158,000 in 1994 to $20,190,000 in 1995, an increase of 53.4%. Net earnings increased at a faster rate than net sales because gross profits increased 41.3% (commensurate with the increase in net sales), while the operating and administrative expenses increased only 34.9%. The Company's fixed costs increase at a rate similar to the rate of increase in the number of stores. The 83 stores added since September 30, 1994 represent a 27% increase in the number of stores since the end of the third quarter of 1994. Third quarter 1995 vs. 1994 - --------------------------- Net sales for the three months ended September 30, 1995 increased 33.3% to $57,993,000 versus the $43,508,000 recorded during the comparable 1994 period. Reasons for the increase were the same as those mentioned in the nine months comparison. The same store sales increases are due primarily to strength in the industrial construction segment of the economy, with a lesser effect from strength in the maintenance and repair segment of the economy. Twelve new Fastenal stores, seven new FastTool stores, and one new combination store were opened in the quarter, bringing the opened store totals to 356 Fastenal stores, 29 FastTool stores, and 5 combination stores. Net earnings for the third quarter grew from $5,154,000 in 1994 to $7,386,000 in 1995, an increase of 43.3%. Net earnings increased at a faster rate than net sales because operating and administrative expenses increased 29.2%, or less than the rate of increase for net sales. Operating and administrative expenses increase primarily because of the opening of new stores. At the end of the 1995 period the Company had 27% more stores than at the end of the 1994 period. 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 the completion of new manufacturing facilities in Winona, Minnesota, and the addition of trucks and data processing equipment. Cash requirements for these asset changes were satisfied from net earnings and the use of available cash. The Company expects to generate sufficient excess cash flow in the fourth quarter of 1995 to maintain current expansion plans. - 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 September 30, 1995. - 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 November 2, 1995 /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 nine months ended, September 30, 1995 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 2,575,000 0 33,655,000 420,000 37,049,000 74,817,000 38,846,000 13,891,000 101,265,000 14,107,000 0 379,000 0 0 86,779,000 101,265,000 164,559,000 164,559,000 77,054,000 77,054,000 0 386,000 68,000 34,009,000 13,819,000 20,190,000 0 0 0 20,190,000 .53 .53 Marketable securities in the amount of $1,170,000 have been classified as non-current assets on the Consolidated Balance Sheet of Fastenal Company and Subsidiary as of September 30, 1995.
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