Industrial and construction supplies distributor The Fastenal Company (Nasdaq: FAST), Winona, MN, reported sales for the third quarter ended Sept. 30, 2009, were $489.3 million, a decrease of 21.7% from the third quarter 2008. Profit was $47.5 million, down 34.7%.
Sales for the first nine months were $1.45 billion, a decrease of 19% from the prior-year period. Profit fell 35.6% to $139.8 million.
During the first nine months of 2009, Fastenal opened 45 new stores, compared with 140 new stores in the prior-year period. These 45 new stores represent an increase of 2% since December 31, 2008. There were 12,076 total employees as of Sept. 30, 2009, a decrease of 11.4% from Dec. 31, 2008 and a decrease of 10% from the 13,417 total employees on Sept. 30, 2008.
Fastenal reported that the weakened economy has hurt its industrial product business and more recently its nonresidential construction business.
Sales to manufacturing customers fell 23% in the third quarter from the year before. The contraction was less severe in the maintenance portion of its manufacturing sales.
The nonresidential construction business contracted about 25% from the prior year.
Its remaining business – sales to other resellers, government, other industries, and in-store retail sales) is doing better, but not enough so to offset manufacturing (50% of business) and construction (25%).
On a sequential basis, Fastenal’s daily average sales to our manufacturing customers has improved each month since May 2009 (with the exception of July 2009 due to the holiday impact) versus the previous month. However, Fastenal reported that this improvement was offset by continued weakening in our non-residential construction business.
Fastenal has slowed its store openings to a range of 2% to 5% new stores for 2009, and has stopped adding headcount except for store openings or for stores that are growing. Fastenal will increase its annual store openings to 7% to 10% in January 2010, "assuming the economy remains stable."
Capital expenditures were down in the first nine months of 2009 from the year-ago period. This is due to the mostly complete Indianapolis, IN, distribution expansion and the new distribution center near Dallas, TX.
