Upcoming AWS Coverage on Anixter International

LONDON, UK / ACCESSWIRE / April 18, 2017 / Active Wall St. announces its post-earnings coverage on Fastenal Co. (NASDAQ: FAST). The Company reported its first quarter fiscal 2017 financial results on April 12, 2017. The producer of industrial and construction fasteners surpassed sales expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Fastenal's competitors within the Industrial Equipment Wholesale space, Anixter International Inc. (NYSE: AXE), is estimated to report earnings on April 25, 2017. AWS will be initiating a research report on Anixter International following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on FAST; touching on AXE. Get our free coverage by signing up to: http://www.activewallst.com/register/

Earnings Reviewed

For the three months ended March 31, 2017, Fastenal's net sales increased 6.2%, to $1.05 billion compared to $987 million in Q1 FY16. The increase in net sales was driven primarily by higher unit sales. The higher unit sales resulted primarily from increases in sales at existing store locations, growth in the Company's industrial vending business, and growth in new and existing Onsite locations. The Company's sales numbers exceeded analysts' consensus of $1.03 billion. Fastenal's sales of fastener products, which represented 35.6% of net sales in Q1 FY17, grew 0.8%, while sales of non-fastener products, which represented 64.4% of net sales, grew 9.4% in the reported quarter.

During Q1 FY17, Fastenal's gross profit, as a percentage of net sales, declined 40 basis points to 49.4% from 49.8% in Q1 FY16. The decline was attributed to a change in customer and product mix, as many of the Company's growth initiatives such as onsite locations, non-fastener products, national accounts tend to have lower gross profits. Higher freight expenses due to increased business activity and expenses related to the final stage of a new inventory tracking system also contributed towards the lower gross profit margin. These factors were partially offset by increased sales of Fastenal brands. For Q1 FY17, Fastenal's operating income, as a percentage of net sales, declined to 20.3% from 20.4% in Q1 FY16. This decline was caused entirely by the 40 basis point decline in gross profit margin.

Fastenal's net earnings during Q1 FY17 were $134.2 million, an increase of 6.3% compared to Q1 FY16 earnings of $126.2 million. The Company's diluted net earnings per share were $0.46 during the reported quarter compared to $0.44 during the year earlier same quarter. The Company's earnings numbers met market expectations of $0.46 per share.

Growth Driver Performance

During Q1 FY17, Fastenal signed 5,437 industrial vending machines, up 17.0% on a y-o-y basis. The Company installed device count on March 31, 2017 was 64,430, an increase of 13.3% over March 31, 2016. The Company signed 64 new Onsite locations during the reported quarter compared to 48 signings in Q1 FY16, an increase of 33.3%. Fastenal had 437 active sites on March 31, 2017, which represents an increase of 51.2% over March 31, 2016.

Fastenal signed 43 new national account contracts in Q1 FY17, and revenues attributable to national account customers represented 48.4% of the Company's total revenues in the period. Net sales from the Company's national account customers grew 9.2% in the reported quarter.

Acquisition

On March 31, 2017, Fastenal acquired certain assets and assumed certain liabilities of Manufacturers Supply Company ('Mansco'). The Company funded the cash purchase price for the Mansco's acquisition with the proceeds from a new series of senior unsecured promissory notes under the Company's master note agreement.

Balance Sheet and Cash Flow

Fastenal produced operating cash flow of $210.4 million in Q1 FY17, an increase of 26.4% on a y-o-y basis, representing 156.8% of the period's net earnings versus 131.9% in Q1 FY16. The Company invested $19.1 million for property and equipment, net of proceeds from sales, in Q1 FY17 compared to $28.8 in Q1 FY16. Fastenal also paid $92.6 million in dividends during Q1 FY17 compared to $86.5 million in Q1 FY16.

Total debt on Fastenal's balance sheet was $365.0 million at the end of Q1 FY17, or 15.6% of total capital compared to $370.0 million, or 16.9%, at the end of Q1 FY16.

Fastenal's accounts receivable were $574.7 million in Q1 FY17, an increase of 7.7%, over Q1 FY16. Inventories were $1.01 billion in Q1 FY17, an increase of 4.4%, on a y-o-y basis. In both cases, the increases were attributable primarily to improving business activity and the impact of the Mansco's acquisition. Accounts payable were $129.7 million in the reported quarter, a decrease of 18.2%, from the year earlier comparable period.

On April 11, 2017, Fastenal's board of directors declared a dividend of $0.32 per share to be paid in cash on May 24, 2017 to shareholders of record at the close of business on April 26, 2017.

Stock Performance

At the close of trading session on Monday, April 17, 2017, Fastenal's share price finished the trading session at $45.80, marginally up 0.57%. A total volume of 3.12 million shares exchanged hands, which was higher than the 3 months average volume of 2.48 million shares. The stock has surged 21.16% and 2.81% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 26.11 and has a dividend yield of 2.79%.

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