October 11, 2007

Fastenal Company Reports 2007 Third Quarter Earnings

WINONA, Minn., Oct 11, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- The Fastenal Company of Winona, MN (Nasdaq: FAST) reported the results of the quarter ended September 30, 2007. Dollar amounts are in thousands.

Net sales for the three-month period ended September 30, 2007 totaled $533,750, an increase of 13.5% over net sales of $470,088 in the third quarter of 2006. Net earnings increased from $54,101 in the third quarter of 2006 to $62,142 in the third quarter of 2007, an increase of 14.9%. Basic and diluted earnings per share increased from $.36 to $.41 for the comparable periods.

Net sales for the nine-month period ended September 30, 2007 totaled $1,542,613, an increase of 13.4% over net sales of $1,360,608 in the first nine months of 2006. Net earnings increased from $153,468 in the first nine months of 2006 to $176,431 in the first nine months of 2007, an increase of 15.0%. Basic and diluted earnings per share increased from $1.02 to $1.17 for the comparable periods.

During the first nine months of 2007, Fastenal opened 147 new sites (Fastenal opened 201 new sites in the first nine months of 2006). These 147 new sites represent an increase in stores since December 31, 2006 of 7.4%. There were 2,000 sites on December 31, 2006. There were 11,916 total employees as of September 30, 2007, an increase of 14.4% from December 31, 2006 and 16.6% from September 30, 2006.

SALES GROWTH:

Note -- Daily sales are defined as the sales for the month divided by the number of business days in the month.

Stores more than five years old -- The strength of the economy, over time, is best reflected in our subset of stores more than five years old (store sites opened as follows: 2007 group -- opened 2002 and earlier, 2006 group -- opened 2001 and earlier, and 2005 group -- opened 2000 and earlier). These stores are more cyclical due to the increased market share they enjoy in their local markets. During the twelve months of 2005 and 2006 and the first nine months of 2007, the stores more than five years old had daily sales growth rates of (compared to the comparable month in the preceding year):


            Jan.    Feb.    Mar.    Apr.    May    June

    2005   15.8%    13.7%   12.1%   15.7%  12.3%   9.5%
    2006   13.9%    11.9%   10.8%    9.1%   9.6%  10.7%
    2007    4.8%     3.8%    7.8%    4.5%   5.4%   6.2%

            July    Aug.   Sept.    Oct.    Nov.   Dec.

    2005    11.7%   11.9%   14.7%   12.0%  11.1%   7.7%
    2006     9.9%   11.2%    8.1%    8.5%   8.0%   9.6%
    2007     6.1%    5.3%    6.3%


Stores more than two years old -- Our stores more than two years old (store sites opened as follows: 2007 group -- opened 2005 and earlier, 2006 group -- opened 2004 and earlier, and 2005 group -- opened 2003 and earlier) represent a consistent same-store view of our business. During the twelve months of 2005 and 2006 and the first nine months of 2007, the stores more than two years old had daily sales growth rates of (compared to the comparable month in the preceding year):


            Jan.     Feb.    Mar.    Apr.    May    June
    2005    19.2%   17.1%   14.1%   18.0%   14.0%   12.1%
    2006    17.8%   15.0%   14.6%   12.3%   12.5%   14.0%
    2007     7.3%    6.0%    9.4%    5.5%    6.7%    7.2%

            July     Aug.   Sept.    Oct.    Nov.    Dec.
    2005    13.3%   13.3%   16.7%   13.3%   13.0%    9.0%
    2006    12.8%   13.9%    9.2%    9.0%    9.4%   10.9%
    2007     6.5%    5.9%    6.8%


All company sales -- During the twelve months of 2005 and 2006 and the first nine months of 2007, all the selling locations combined had daily sales growth rates of (compared to the comparable month in the preceding year):


            Jan.     Feb.     Mar.    Apr.      May     June
    2005   26.2%     25.1%   22.5%    26.6%    22.9%    21.2%
    2006   23.9%     21.3%   21.1%    19.1%    19.2%    20.6%
    2007   12.6%     11.8%   15.5%    12.0%    13.2%    14.8%


           July      Aug.    Sept.    Oct.      Nov.     Dec.
    2005   21.8%     21.7%   26.8%    22.7%    21.7%    17.0%
    2006   19.7%     20.7%   16.1%    15.9%    16.3%    17.7%
    2007   13.9%     13.4%   13.7%


The January 2005 to November 2005 time frame generally represents improvement followed by stabilization in our daily sales trends. The January 2005 to November 2005 general improvement and stabilization reflects a continuation of the improvements we saw beginning in 2003 in the economy as it relates to the customers we sell to in North America and the impact of the Fastenal standard inventory stocking model (see reference below regarding the Customer Service Project, or CSP). The December 2005 daily sales growth rate was weaker than we expected; however, we believe this was an abnormality due to the following reasons (1) historically we have seen fluctuations in December's daily sales growth rates due to the presence of the various holidays and their impact on our customers' buying patterns and (2) December 2004 experienced strong growth, which creates a more difficult comparison in the next year. In 2005, item (2) is also noticeable in months such as May, June, July, and, to a lesser degree, October. The noticeable exception to item (2) is the month of September, which experienced stronger growth due to the demand generated by Hurricane Katrina. The continued strong growth in the January 2006 to March 2006 time frame generally represents a continuation of the strong environments experienced in 2004 and 2005. The first two months of the second quarter of 2006 experienced weaker sales growth than we expected. The April 2006 growth was negatively impacted by Easter (which occurred in March during 2005), but was still weaker than we expected. The June to August 2006 time frame represents stronger sales activity than the preceding two to three month period. The daily sales growth amount in September 2006 appears weaker due to the difficult comparison with Hurricane Katrina's added sales in September 2005 (approximately $4,000 impact); however, the increase in our daily sales number from August 2006 to September 2006, of 4.1%, is consistent with historical norms. The final three months of 2006 continued in the same variable fashion as the previous six months. The October growth number was negatively impacted by the difficult comparison with Hurricane Katrina's added sales in October 2005 (approximately $1,500 impact). The months of November and December, like the months of April and May, were weaker than expected. The first five months of 2007 continued the trend of a weak economic environment as experienced during 2006 (as described above). The month of March 2007 improved relative to January and February 2007. The month of June 2007 improved relative to April and May 2007. The June improvement was meaningful as it came in a month with fairly challenging comparisons from 2006. Unfortunately, the strength in June moderated in the third quarter. This pulled our daily sales growth rate from the 14.8% in June to 13.5% in the third quarter of 2007. This moderation reflected a continuation of the weaker economic environment experienced in four of the first five months of the year.

IMPACT OF CURRENT INITIATIVES:

During the last several years, Fastenal has been actively pursuing several initiatives to improve its operational performance. These include: (1) a new freight model, (2) tactical changes to our working capital model, (3) an expanded store model called CSP2, and (4) a 'master stocking hub' distribution model. Note: See introduction of our 'pathway to profit' initiative discussion later in this release.

The freight model represents a focused effort to haul a higher percentage of our products utilizing the Fastenal trucking network (which operates at a substantial savings to external service providers because of our ability to leverage our existing routes) and to charge freight more consistently in our various operating units. This initiative positively impacted the latter two-thirds of 2005, all of 2006, and the first nine months of 2007 despite the fact we experienced year-over-year increases of approximately 31.7% and 5.3%, respectively, in per gallon diesel fuel costs during the first two periods. The diesel fuel cost per gallon did soften in the last four months of 2006 as our average price per gallon dropped below $2.90. The average price per gallon dropped to $2.59 in the first three months of 2007, increased to an average of $2.85 per gallon during the second quarter of 2007 and increased again to an average of $2.94 per gallon during the third quarter of 2007. Given the nature of our distribution business, the lower fuel prices did translate into cost savings in our business during the first quarter of 2007 but started to have a negative impact during the latter part of the second quarter and during all of the third quarter of 2007.

The tactical changes to our working capital model include the establishment of a central call center for accounts receivable collection, the establishment of financial business rules for the purchasing of products outside the standard stocking model (formerly referred to as CSP) at the store, and the continuous rebalancing of store inventory based on our expected short-term needs. The latter is accomplished through a process we call 'inventory re-distribution.' The balance sheet impacts of these changes are described below in the working capital discussion.

The CSP2 store model represented an expansion of the core stocking items and sales personnel in an existing store with the goal of driving additional product sales to existing customers, target customers, and specific geographic areas within established markets. During the first nine months of 2007, 81 stores were converted to the CSP2 format. This resulted in 274 stores converted to the CSP2 format since the third quarter of 2005, plus six new stores opened with the CSP2 format. During the third quarter of 2007 we chose to modify the CSP2 expansion from a 'one size fits all' approach to an 'a la carte' approach. This will emphasize inventory expansion based on local customer demographics and based on local product knowledge within our sales force. We believe this is a logical compliment to our 'pathway to profit' initiative discussed later.

The 'master stocking hub' distribution model represents our 'everything in the catalog' location. Historically, we have stocked a core selection of products (approximately 6,500 stock keeping units, or SKU's) plus customer specific products at each of our store locations. Our distribution centers would stock the core selection, plus other products with sufficient sales history to warrant stocking in a distribution center. Our stores would utilize their local or distribution center inventory to satisfy most of their customers' needs and would then directly purchase additional items to satisfy the rest of their customers' needs. When analyzing this local (or store) spending we noted the following: (1) this is an inefficient transaction for our store, (2) we don't always benefit from good price negotiation because it is a 'one off' purchase, (3) our freight costs on these transactions are meaningfully higher than our average transaction, and (4) in many cases, we have sufficient volume at the 'company-wide' level to warrant stocking it somewhere. These and other factors convinced us to turn our Indianapolis, IN distribution center (DC) from a regional DC into both a regional DC and a North American 'master stocking hub.' This will allow all of our locations easy access to a wide variety of product already in the network. This will also allow us to turn the four points noted above into a competitive advantage at the store level. In the future, as volume justifies it, we anticipate our Modesto, CA distribution center will assume a similar role for our stores west of the Rocky Mountains.

IMPACT OF FUEL PRICES DURING THE QUARTER:

Rising fuel prices did take a toll on the year ended December 31, 2006, but there was some relief in the final four months that continued into the first quarter of 2007. During the second and third quarters of 2007, we began to see significant increases in per gallon fuel costs again. During the first, second, and third quarters of 2006, our total vehicle fuel costs averaged approximately $1.9 million, $2.1 million, and $2.2 million per month, respectively. During the first, second, and third quarters of 2007, total vehicle fuel costs averaged approximately $2.1 million, $2.5 million, and $2.4 million per month, respectively. The increase resulted from variations in fuel costs, the freight initiative discussed earlier, and the increase in sales and store locations. These fuel costs include the fuel utilized in our distribution vehicles (semi-tractors, straight trucks, and sprinter trucks) which is recorded in cost of goods and the fuel utilized in our store delivery vehicles which is included in operating and administrative expenses.


    STATEMENT OF EARNINGS INFORMATION (percentage of net sales):

                              Nine Months Ended         Three Months Ended
                                 September 30,            September 30,
                             2007         2006          2007         2006

    Net sales               100.0%       100.0%       100.0%       100.0%
    Gross profit margin      50.8%        50.3%        51.0%        50.5%

    Operating and
     administrative
     expenses                32.3%        32.1%        32.4%        31.9%
    Gain (loss) on sale of
     property and equipment   0.0%        (0.0)%        0.0%        (0.0)%
    Operating income         18.5%        18.1%        18.5%        18.5%

    Interest income           0.1%         0.1%         0.1%         0.1%
    Earnings before income
     taxes                   18.5%        18.2%        18.6%        18.6%

    Note - Amounts may not foot due to rounding difference.

Gross profit margins for the first nine months and third quarter of 2007 increased over the same period in 2006. The improvement was driven by our freight initiative (discussed earlier) and by improvements in our direct sourcing operations.

Operating and administrative expenses grew faster than the net sales growth rate during the first nine months and third quarter of 2007. This was primarily due to increases in payroll and related expenses associated with the additional outside sales personnel for our 'pathway to profit' (discussed later), and to a lesser extent, the previously mentioned initiatives (most notably the CSP2 conversions). Similar to the last several years, we

experienced negative leverage in occupancy costs (primarily due to store openings and, to a lesser degree, store relocations).

The operating and administrative expenses for the first nine months of 2007 and 2006 include $1,234 and $279, respectively, of additional compensation expense related to the adoption of new stock option accounting rules. The 2007 expense relates to options granted in April 2007. We anticipate these options, which span five to seven years, will result in compensation expense of approximately $227 per month for the next five years; and dropping slightly in the remaining period. The 2006 expense occurred in the first five months of 2006, but ceased on June 1, 2006 as those outstanding options, which were granted in January 2003, became vested. No other stock based compensation was outstanding during these periods.

Income taxes, as a percentage of earnings before income taxes were approximately 38.3% and 38.1% for the first nine months of 2007 and 2006, respectively. During the first quarter of 2007, we implemented FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN No. 48). As defined in FIN No. 48, we had a discrete event in each of the first, second, and third quarters of 2007. The first and second quarter of 2007 resulted in recognition of approximately $827 and $124 of additional tax, respectively, and the event in the third quarter of 2007 resulted in a reduction of income tax expense of $767. Absent these events, our core income tax rate would have been approximately 38.2% for the first nine months of 2007. This rate fluctuates over time based on the income tax rates in the various jurisdictions in which we operate, and based on the level of profits in those jurisdictions.

WORKING CAPITAL:

The year-over-year and year-to-date dollar and percentage growth related to accounts receivable and inventories were as follows:


                                       Twelve Month        Twelve Month
    Year-over-year    Balance at       Dollar Change     Percentage Change
     change          September 30,     September 30,      September 30,
                    2007      2006    2007       2006    2007       2006
    Accounts
     receivable,
     net         $258,738   232,091  $26,647    27,751   11.5%      13.6%
    Inventories  $488,824   418,695  $70,129    66,609   16.7%      18.9%


                                        Nine Month          Nine Month
    Year-to-date                      Dollar Change      Percentage Change
     change                            September 30,       September 30,
                                      2007       2006    2007        2006

    Accounts
     receivable,
     net                             $49,206    48,535   23.5%      26.4%
    Inventories                      $32,827    57,134    7.2%      15.8%


These two assets were impacted by our initiatives to improve working capital. These initiatives include (1) the establishment of a centralized call center to facilitate accounts receivable management (this facility became operational early in 2005) and (2) the tight management of all inventory amounts not identified as either expected store inventory (see reference below regarding CSP), new expanded inventory, inventory necessary for upcoming store openings, or inventory necessary for our 'master stocking hub.'

The accounts receivable increase of 13.6% from September 30, 2005 to September 30, 2006 represents a lag behind the 16.1% daily sales increase in September 2006. The accounts receivable increase of 11.5% from September 30, 2006 to September 30, 2007 represents a lag behind the 13.7% daily sales increase in September 2007. We continue to be pleased with the improvements in accounts receivable during 2006 and 2007, and with the related reduction in bad debt expense when compared to historical amounts.

The inventory increase from September 30, 2006 to September 30, 2007 of 16.7% is greater than sales growth from the first nine months of 2006 to the first nine months of 2007 of 13.4%. The year-to-date inventory increase of 7.2% since December 2006 represents a meaningful improvement from the 15.8% increase in the first nine months of 2006. This improvement relates to our conscious decision to limit the growth of inventory in the future, to halt growth or decrease inventory in the short-term, and to get everybody on the same page related to execution of this decision. We were pleased with the progress in inventory, but still have much work ahead of us.

As we indicated in earlier communications, our goals center on our ability to move the ratio of annual sales to accounts receivable and inventory (Annual Sales: AR&I) back to better than a 3.0:1 ratio (on December 31, 2006 and 2005, we had a ratio of 2.7:1 and 2.8:1, respectively). Historically, we have been able to achieve a 20% after tax return on total assets (our historical internal goal) when our Annual Sales: AR&I ratio is at or above 3.0:1. While the incremental investments in 2006 did not allow us to improve our ratio (these investments include CSP2 conversions and our master stocking hub model); we believe our initiatives are having a positive impact on accounts receivable and inventory. In the first nine months of 2007, we have made considerable improvement as detailed above. We need to continue executing better on the inventory portion of these working capital initiatives for all of 2007 and into 2008. As discussed in prior releases, this need has been communicated throughout our organization. Please also refer to our discussion on 'pathway to profit' contained later in this release.

STORE FORMAT:

In June 2002, we began our 'customer service project' (or CSP). This project centered on stocking all of our stores with a consistent base of product and with a consistent merchandising scheme. Since this CSP format represents the stocking model in substantially all of our locations, during the first quarter of 2005 we began to refer to these converted locations simply as stores with our expected inventory stocking model, versus the CSP designation. Consistent with our operating philosophy, we intend to continue identifying products and store display themes to position our stores to the Fastenal goal of being 'the best industrial and construction supplier in each local market in which we operate.' In June 2005 we disclosed our intention to convert locations to the CSP2 format. The CSP2 format represented a further expansion of the Fastenal standard inventory stocking model at the store level. As of September 30, 2007, 280 stores were operating under the CSP2 format. Of these stores, 81 were converted during the first nine months of 2007, 163 were converted during 2006, 30 were converted in the latter half of 2005, and another six were opened with the CSP2 format (one in 2005 and five in 2006). In our 2006 Annual Report, we discussed our CSP3 format. The CSP3 format represents a 'test' expansion of the store format. At September 30, 2007 we have eight stores with this format. Seven were converted in the first nine months of 2007 and one was converted in 2006. As indicated earlier in this release, we have modified our CSP2 expansion from a 'one size fits all' to an 'a la carte' approach. In the future, we will discontinue our practice of disclosing CSP2 and CSP3 store conversions and/or openings information. We feel the 'pathway to profit' process of disclosing store FTE personnel is a better indicator of the progress of this initiative.

PATHWAY TO PROFIT:

During April 2007 we disclosed our intention to alter the growth drivers of our business. For most of the last decade, we have used store openings as the primary growth driver of our business (opening approximately 14% new stores each year). In the future, we intend to add outside sales personnel into existing stores at a faster rate than historical patterns. We intend to fund this sales force expansion with the occupancy savings generated by opening stores at the rate of 7% to 10% per year (we expect to open approximately 8% new stores in 2007 or approximately 160 stores) versus the historical rate of approximately 14%. Our goal is four-fold: (1) to continue growing our business at a similar rate with the new sales investment model, (2) to grow the sales of our average store from $80 thousand per month (Spring 2007) to $130 thousand per month (five years or 2012), (3) to enhance the profitability of the overall business by capturing the natural expense leverage that has historically occurred in our existing stores as their sales grow, and (4) to increase the returns of our business due to the enhanced profitability described in (3) above and due to the more efficient use of working capital (primarily inventory) as our average store size increases.

    In response to the 'pathway to profit', we have increased our
year-over-year store count and full-time equivalent (FTE) head count as
follows:


                                    September         June          March
                                       2007           2007           2007

    Store count                        9.7%           12.5%         13.4%

    Store personnel - FTE             18.4%           13.7%         13.0%
    Distribution and manufacturing
     personnel- FTE                   12.8%            9.2%          8.9%
    Administrative and sales support
     personnel- FTE                    2.1%            4.4%         15.2%
    Total - FTE                       15.0%           11.5%         12.5%


STOCK REPURCHASE AND DIVIDENDS:

On January 18, 2007, we issued a press release announcing our Board of Directors had authorized purchases by us of up to an additional 1,000,000 shares of our common stock (over and above previously authorized amounts). On July 11, 2007, we issued a press release announcing our Board of Directors had authorized us to purchase up to an additional 1,000,000 shares of our common stock (over and above previously authorized amounts). During the first nine months of 2007, we purchased 884,200 shares of our outstanding stock at an average price of approximately $41.94 per share. With the new authorizations in 2007, we have remaining authority to purchase up to approximately 1,200,000 additional shares of our common stock.

During the first nine months of 2007 and 2006 we paid dividends totaling $66,216 (or $0.44 per share) and $60,548 (or $0.40 per share), respectively, to our shareholders.

Additional information regarding certain Fastenal Company statistics for the current quarter is available on the Fastenal Company World Wide Web site at www.fastenal.com. The Company discloses sales and store information on a monthly basis. This information is posted at www.fastenal.com on the third business day following the end of the first two months of a quarter and simultaneous with the earnings release following the third month of a quarter. This press release contains statements that are not historical in nature and that are intended to be, and are hereby identified as, "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding working capital goals and returns on total assets when working capital is appropriately managed, the addition of outside sales personnel at existing stores and the funding of that expansion, the rate of new store openings, the ability to grow average store sales and capture resulting leverage, the expected amount of future compensation expense resulting from stock options, and the expected future change in Modesto, California regarding its proposed status as a 'master stocking hub.' A change in the economy, from that currently being experienced, could cause the store openings to change from that expected, and could impact the rate at which additional outside sales personnel are added and our ability to grow average store sales. A change from that projected in the number of markets able to support future store sites, the success of the additional outside sales personnel, and our ability to attract and retain qualified sales personnel could impact the rate of store openings. A change in our growth west of the Rocky Mountains, or a change in need, could alter our plans regarding Modesto, California. A change in accounting for stock based compensation or the assumptions used could change the amount of stock based compensation recognized. A change in accounts receivable collections, a change in the economy from that currently being experienced, a change in buying patterns, or a change in vendor production lead times could cause us to fail to attain our goals regarding working capital (including inventory) and rates of return on assets. A discussion of other risks and uncertainties is included in the Company's 2006 annual report on Form 10-K under the section captioned "Risk Factors" and the Company's 2006 annual report to shareholders under the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations." FAST-E


                        FASTENAL COMPANY AND SUBSIDIARIES

                           Consolidated Balance Sheets
                 (Amounts in thousands except share information)


                                                  (Unaudited)
                                                  September 30,   December 31,
                   Assets                            2007             2006


    Current assets:
      Cash and cash equivalents                     $54,145            19,346
      Marketable securities                           4,460            10,835
      Trade accounts receivable, net of
       allowance for doubtful
        accounts of $2,308 and $2,119,
         respectively                               258,738           209,532
      Inventories                                   488,824           455,997
      Deferred income tax assets                     11,427            11,709
      Other current assets                           59,110            60,357
            Total current assets                    876,704           767,776

    Marketable securities                             2,064             3,695
    Property and equipment, less
     accumulated depreciation                       267,288           264,030
    Other assets, less accumulated
     amortization                                     3,721             3,515

            Total assets                         $1,149,777         1,039,016


        Liabilities and Stockholders' Equity

    Current liabilities:
      Accounts payable                              $54,969            41,371
      Accrued expenses                               69,231            61,544
      Income taxes payable                            3,962               981
            Total current liabilities               128,162           103,896

    Deferred income tax liabilities                  14,001            13,027

    Stockholders' equity:
      Preferred stock, 5,000,000 shares
       authorized                                         -                 -
      Common stock, 200,000,000 shares
       authorized, 150,322,512 and 151,206,712
       shares issued and outstanding, respectively    1,503             1,512
      Additional paid-in capital                        227            12,697
      Retained earnings                             989,401           902,550
      Accumulated other comprehensive
       income                                        16,483             5,334
            Total stockholders' equity            1,007,614           922,093

            Total liabilities and
             stockholders' equity                $1,149,777         1,039,016



                        FASTENAL COMPANY AND SUBSIDIARIES

                       Consolidated Statements of Earnings
                 (Amounts in thousands except earnings per share)


                                           (Unaudited)         (Unaudited)
                                        Nine months ended   Three months ended
                                          September 30,       September 30,
                                         2007       2006      2007     2006


    Net sales                         $1,542,613  1,360,608  533,750  470,088

    Cost of sales                        759,605    676,881  261,726  232,853
            Gross profit                 783,008    683,727  272,024  237,235


    Operating and administrative
     expenses                            498,290    436,628  173,178  150,035
    Gain (loss) on sale of property
     and equipment                            85       (176)       2      (26)
            Operating income             284,803    246,923   98,848   87,174

    Interest income                        1,140      1,024      464      226

            Earnings before income
             taxes                       285,943    247,947   99,312   87,400

    Income tax expense                   109,512     94,479   37,170   33,299

            Net earnings                $176,431    153,468   62,142   54,101

    Basic and diluted net earnings
     per share                             $1.17       1.02     0.41     0.36

    Basic weighted average shares
     outstanding                         150,878    151,055  150,462  150,907

    Diluted weighted average shares
     outstanding                         150,878    151,172  150,462  151,007



                        FASTENAL COMPANY AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                             (Amounts in thousands)

                                                        (Unaudited)
                                                      Nine Months ended
                                                        September 30,
                                                   2007               2006

    Cash flows from operating
     activities:
      Net earnings                               $176,431            153,468
      Adjustments to reconcile net
       earnings to net cash
        provided by operating
         activities:
          Depreciation of property and
           equipment                               27,959             24,512
          (Gain) loss on sale of
           property and equipment                     (85)               176
          Bad debt expense                          4,313              2,708
          Deferred income taxes                     1,256              2,472
          Stock based compensation                  1,234                279
          Amortization of non-compete
           agreement                                   50                 50
          Changes in operating assets
           and liabilities:
            Trade accounts receivable             (53,519)           (51,243)
            Inventories                           (32,827)           (57,134)
            Other current assets                    1,247            (12,933)
            Accounts payable                       13,598              9,942
            Accrued expenses                        7,687              9,008
            Income taxes payable                    2,981             (2,649)
            Other                                  10,103              2,584
              Net cash provided by
               operating activities               160,428             81,240

    Cash flows from investing
     activities:
      Purchase of property and
       equipment                                  (36,592)           (65,146)
      Proceeds from sale of property
       and equipment                                5,460              3,174
      Net decrease (increase) in
       marketable securities                        8,006               (361)
      Increase in other assets                       (256)              (195)
              Net cash used in
               investing activities               (23,382)           (62,528)

    Cash flows from financing
     activities:
      Proceeds from exercise of stock
       options                                          -              7,460
      Tax benefits from exercise of
       stock options                                    -              2,815
      Purchase of common stock                    (37,078)           (17,289)
      Payment of dividends                        (66,216)           (60,548)
              Net cash used in
               financing activities              (103,294)           (67,562)

    Effect of exchange rate changes on cash         1,047                 84

              Net increase (decrease)
               in cash and cash
               equivalents                         34,799            (48,766)

    Cash and cash equivalents at
     beginning of period                           19,346             56,204
    Cash and cash equivalents at end
     of period                                    $54,145              7,438

    Supplemental disclosure of cash
     flow information:
      Cash paid during each period for:
        Income taxes                             $106,531             97,128

SOURCE Fastenal Company

http://www.fastenal.com

Copyright (C) 2007 PR Newswire. All rights reserved

News Provided by COMTEX


Close window | Back to top


Copyright 2017 Fastenal Company