Fastenal Co.'s vending machine count grew in 2016 – as did the company's sales for the fourth quarter and full year – but the Winona, MN-based distributor still fell short of the expectations it had for FAST Solutions machines, the company told analysts on last week's earnings call.

Vending machines increased 13.2 percent to 62,822 vending machines from year-end 2015, while revenue from the machines increased by more than 10 percent in the fourth quarter. Almost half of Fastenal sales – 46.1 percent – now come from customers that use vending (though not all of that is through vending).

"Despite all those successes, vending did not quite reach the goals we'd set for it in 2016," CFO Holden Lewis said. "But signings were a three-year high … (and) we're targeting more than 20,000 signings in 2017."

Not only is Fastenal looking to grow its vending footprint, but the company is making upgrades to existing machines, CEO Dan Florness said. The company "optimized" more than 50,000 machines in an effort to improve cost-to-serve and has seen revenue improvements as a result.

"In 2016 we took the opportunity to go and visit each and every machine and to challenge how we could be more efficient with that machine," he said. "And I believe that improves the health of that vending business and improves our ability to serve and grow the business in the future."

In addition to vending, Fastenal spent last year focused on its on-site business, which it defines "as dedicated sales and service provided from within the customer's facility." The company grew that business 51.9 percent in 2016. And while the 176 signed agreements fell short of its goal of 200, Fastenal is happy with the growth and expects this side of the business to flourish in the coming year.

"We're gaining momentum here and we are targeting 275 to 300 signings in 2017," Lewis said.