Hardware

Higher safety product sales boost Fastenal’s Q4 2020 results

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January 20, 2021

Fastenal Co., a provider in the wholesale distribution of industrial and construction supplies and industrial vending services, reported net sales increased 6.4% from $1.27 billion in the fourth quarter of 2019 to $1.35 billion in the fourth quarter of 2020 ended Dec. 31, 2020, due to higher unit sales of safety and janitorial products, according to an earnings release. Demand for these products was elevated relative to the fourth quarter of 2019 due to continued demand for personal protective equipment and sanitizer products to mitigate the impact of the pandemic.

Earnings before income taxes increased 10.6% from $236.4 million in Q4 2019 to $262.2 million in Q4 2020, while diluted earnings per share rose from 31 cents to 34 cents, respectively.

The company raised its quarterly dividend from 25 cents per share to 28 cents per share to be paid in cash on March 3, 2021 to shareholders at the close of business on Feb. 3, 2021.

Shares rose 0.7% in premarket trading due to the better-than-expected results, according to Seeking Alpha. Shares traded at $48.98 today against a 52-week range of $27.45-$51.62.

Growth of product lines other than safety and janitorial, including fasteners, remained negative relative to the fourth quarter of 2019, but improved versus the third quarter of 2020 and through the fourth quarter of 2020.

Daily sales of safety products grew 34.6% over the fourth quarter of 2019 and represented 23.5% of net sales in the fourth quarter of 2020; safety products represented 18.7% of net sales in the fourth quarter of 2019. Daily sales of other products grew 2.1% over the fourth quarter of 2019 and represented 45.7% of net sales in the fourth quarter of 2020.

The company signed 16,417 industrial vending devices during 2020, including 3,456 devices during the fourth quarter of 2020. The installed device count on Dec. 31, 2020 was 95,733, an increase of 6.4% over Dec. 31, 2019

Daily sales through vending devices increased at a low-to-mid single-digit pace in the fourth quarter of 2020 over the fourth quarter of 2019. The higher installed base was partly offset by reduced device throughput owing to the soft economic activity in the period. Device counts do not include slightly more than 15,000 vending devices deployed as part of the company's lease locker program.

The company signed 223 new onsite locations (defined as dedicated sales and service provided from within, or in close proximity to, the customer's facility) during 2020. The company had 1,265 active sites on Dec. 31, 2020, which represented an increase of 13.6% from Dec. 31, 2019.

Daily sales through onsite locations, excluding sales transferred from branches to new onsites, increased at a low single-digit rate in the fourth quarter of 2020 over the fourth quarter of 2019.

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