Net sales, pre-tax earnings, net earnings, and net earnings per share were as follows for the three month periods ended March 31:
|% of sales||21.0%||20.1%|
|Net earnings per share (basic)||
Similar to previous quarters, we have included comments regarding several aspects of our business:
While reading these items, it is helpful to appreciate several aspects of our marketplace: (1) it's big, the North American marketplace for industrial supplies is estimated to be in excess of
Our motto is Growth through Customer Service. This is important given the points noted above. We believe in efficient markets — to us, this means we can grow our market share if we provide the greatest value to the customer. We believe our ability to grow is amplified if we can service our customer at the closest economic point of contact.
The concept of growth is simple, find more customers every day and increase your activity with them. However, execution is hard work. First, we recruit service minded individuals to support our customers and their business. Second, we operate in a decentralized fashion to help identify the greatest value for our customers. Third, we build a great machine behind the store to operate efficiently and to help identify new business solutions. Fourth, we do these things every day. Finally, we strive to generate strong profits; these profits produce the cash flow necessary to fund the growth and to support the needs of our customers.
MONTHLY SALES CHANGES, SEQUENTIAL TRENDS, AND END MARKET PERFORMANCE
Note — Daily sales are defined as the sales for the period divided by the number of business days in the period.
This section focuses on three distinct views of our business — monthly sales changes, sequential trends, and end market performance. The first discussion regarding monthly sales changes provides a good mechanical view of our business based on the age of our stores. The second discussion provides a framework for understanding the sequential trends (that is, comparing a period to the immediately preceding period) in our business. Finally, we believe the third discussion regarding end market performance provides insight into activities with our various types of customers.
MONTHLY SALES CHANGES:
All company sales — During the months in 2012, 2011, and 2010, all of our selling locations, when combined, had daily sales growth rates of (compared to the comparable month in the preceding year):
The growth in the first quarter of 2012 generally continues the relative strength we saw in 2011 and in most of 2010. The change in currencies in foreign countries (primarily
Stores opened greater than two years — Our stores opened greater than two years (store sites opened as follows: 2012 group — opened 2010 and earlier, 2011 group — opened 2009 and earlier, and 2010 group — opened 2008 and earlier) represent a consistent 'same-store' view of our business. During the months in 2012, 2011, and 2010, the stores opened greater than two years had daily sales growth rates of (compared to the comparable month in the preceding year):
Stores opened greater than five years — The impact of the economy, over time, is best reflected in the growth performance of our stores opened greater than five years (store sites opened as follows: 2012 group — opened 2007 and earlier, 2011 group — opened 2006 and earlier, and 2010 group — opened 2005 and earlier). This group is more cyclical due to the increased market share they enjoy in their local markets. During the months in 2012, 2011, and 2010, the stores opened greater than five years had daily sales growth rates of (compared to the comparable month in the preceding year):
We find it helpful to think about the monthly sequential changes in our business using the analogy of climbing a stairway — This stairway has several predictable landings where there is a pause in the sequential gain (i.e. April, July, and October to December), but generally speaking, climbs from January to October. The October landing then establishes the benchmark for the start of the next year.
History has identified these landings in our business cycle. They generally relate to months with impaired business days (certain holidays). The first landing centers on Easter, which alternates between March and April (Easter occurred in April in both 2012 and 2011), the second landing centers on
The table below shows the pattern to our sequential change in our daily sales. The line labeled 'Past' is an historical average of our sequential daily sales change for the period 1998 to 2003. We chose this time frame because it had similar characteristics, a weaker industrial economy in
|(1) The January figures represent the percentage change from the previous October, whereas the remaining figures represent the percentage change from the previous month.|
A graph of the sequential daily sales change pattern discussed above, starting with a base of '100' in the previous October and ending with the next October, would be as follows: http://media.globenewswire.com/cache/11647/file/13267.pdf
During the last several years, our business has started with a weaker sequential pattern in the period from January to February. This was then followed by a very strong February to March pattern, a trend that continued in 2012.
END MARKET PERFORMANCE:
Fluctuations in end market business — The sequential trends noted above were directly linked to fluctuations in our end markets. To place this in perspective — approximately 50% of our business has historically been with customers engaged in some type of manufacturing. The daily sales to these customers grew in the first, second, third, and fourth quarters (when compared to the same quarter in the previous year), and for the year, as follows:
The growth was more pronounced in our industrial production business (this is business where we supply products that become part of the finished goods produced by our customers) and less pronounced in the maintenance portion of our manufacturing business (this is business where we supply products that maintain the facility or the equipment of our customers engaged in manufacturing). This corresponds to the 2009 contraction, which was more severe in our industrial production business and less severe in the maintenance portion of our manufacturing business. These patterns are influenced by the movements noted in the Purchasing Manufacturers Index ('PMI') published by the
Our non-residential construction customers have historically represented 20% to 25% of our business. The daily sales to these customers grew or contracted in the first, second, third, and fourth quarters (when compared to the same quarter in the previous year), and for the year, as follows:
A graph of the sequential daily sales trends to these two end markets in 2012, 2011, and 2010, starting with a base of '100' in the previous October and ending with the next October, would be as follows: http://media.globenewswire.com/cache/11647/file/13268.pdf
GROWTH DRIVERS OF OUR BUSINESS
We grow by continuously adding customers and by increasing the activity with each customer. We believe this growth is enhanced by our close proximity to our customers, which allows us to provide a range of services and product availability that our competitors can't easily match. Historically, we expanded our reach by opening stores at a very fast pace. These openings were initially in
In our first ten years of being public (1987 to 1997), we opened stores at a rate approaching 30% per year. Subsequent to this, we opened stores at a rate closer to 10% to 15%, and, over the last five years, at a rate of approximately 3% to 8% (we currently expect 4% to 6% for 2012). As we gained proximity to more customers, we continued to diversify our growth drivers — this was done to provide existing store personnel with more tools to grow their business organically — the results of this are reflected in our earlier discussion on sales growth at stores opened greater than five years. In the early 1990's, we began to expand our product lines, and we added new product knowledge to our bench. This was our first big effort to diversify our growth drivers. The next big item began in the mid to late 1990's when we began to add sales personnel with certain specialties or focus. This began with our National Accounts group in 1995, and, over time, has expanded to include individuals dedicated to: (1) government sales, (2) internet sales, (3) specific products (most recently metal working), and (4) FAST SolutionsSM (industrial vending).
We believe our FAST SolutionsSM (industrial vending) have the potential to be transformative to industrial distribution. We also believe we have a 'first mover' advantage, and are investing to maximize the advantage. At our investor day in
|Number of vending machines in||2012||4,568|
|contracts signed during the period1||2011||1,405||2,107||2,246||2,084|
|Cumulative machines installed2||2012||9,798|
|Percent of total net sales to||2012||17.8%|
|customers with vending machines3||2011||8.9%||10.5%||13.1%||15.7%|
|Daily sales growth to customers||2012||33.9%|
|with vending machines4||2011||50.6%||43.9%||42.5%||40.7%|
1 This represents the gross number of machines signed during the quarter, not the number of contracts.
2 This represents the number of machines installed and producing revenue on the last day of the quarter.
3 The percentage of total sales (vended and traditional) to customers currently using a vending solution.
4 The growth in total sales (vended and traditional) to customers currently using a vending solution compared to the comparable
period in the preceding year.
We are pleased with the increases in the number of vending machine contracts signed, and with our ability to install machines. We increased our installed machine base by 2,345 machines (9,798 versus 7,453) in the first quarter of 2012, by 734 machines (2,659 versus 1,925) in the first quarter of 2011, and by 325 machines (892 versus 567) in the first quarter of 2010.
PROFIT DRIVERS OF OUR BUSINESS
We grow our profits by continuously looking for ways to grow sales, and by improving our relative profitability. We also grow our profits by allowing our inherent profitability to shine through — we refer to this as the 'pathway to profit'. The distinction is important.
We achieve improvements in our relative profitability by increasing our gross margin, by structurally lowering our operating expenses, or both. We advance on the 'pathway to profit' by increasing the average store size (measured in terms of monthly sales), and allowing the store mix to improve our profits. This is best explained by comparing the varying profitability of our 'traditional' stores in the table below. The average store size for the group, and the average age, number of stores, and pre-tax earnings data by store size for the first quarter of 2012, 2011, and 2010, respectively, were as follows:
|Sales per Month||
Three months ended
Average store sales =
Three months ended
Average store sales =
Three months ended
Average store sales =
Note — Amounts may not foot due to rounding difference.
There are two aspects of our business that can be noted. First, by improving our relative profitability of the various store categories, we amplified the 'pathway to profit'. Second, as our stores grow their sales, the level of profitability improves due to the natural leverage of the business. This creates what we call the 'pathway to profit'. When we originally announced the 'pathway to profit' strategy in 2007, our goal was to increase our pre-tax earnings, as a percentage of sales, from 18% to 23%. This goal was to be accomplished by slowly moving the mix from the first three categories (
Note — Dollar amounts in this section are presented in whole dollars, not thousands.
Store Count and Full-Time Equivalent (FTE) Headcount — The table that follows highlights certain impacts on our business of the 'pathway to profit' since its introduction in 2007. Under the 'pathway to profit' we increased both our store count and our store FTE headcount during 2007 and 2008. However, the rate of increase in store locations slowed and our FTE headcount for all types of personnel was reduced when the economy weakened late in 2008. In the table that follows, we refer to our 'store' net sales, locations, and personnel. When we discuss 'store' net sales, locations, and personnel, we are referring to (1) '
The breakdown of our sales, the average monthly sales per store, the number of stores at quarter end, the average headcount at our stores during a quarter, the average FTE headcount during a quarter, and the percentage change were as follows for the first quarter of 2007 (the last completed quarter before we began the 'pathway to profit'), for the third quarter of 2008 (our peak quarter before the economy weakened), and for each of the last five quarters:
|Total net sales reported||
|Less: Non-store sales (approximate)||40,891||57,267||78,021||85,535||88,500||86,737||92,459|
|Store net sales (approximate)||
|% change since Q1 2007||26.7%||25.5%||37.5%||42.4%||36.3%||50.9%|
|% change (twelve months)||17.5%||25.2%||23.6%||21.1%||21.0%||20.2%|
|Percentage of sales through a store||92%||91%||88%||88%||88%||88%||88%|
|Average monthly sales per store||
|(using ending store count)|
|% change since Q1 2007||13.9%||2.8%||11.1%||15.3%||9.7%||19.4%|
|% change (twelve months)||9.3%||17.5%||15.9%||15.3%||16.2%||16.2%|
|Store locations - quarter end count||2,073||2,300||2,522||2,558||2,566||2,585||2,611|
|% change since Q1 2007||11.0%||21.7%||23.4%||23.8%||24.7%||26.0%|
|% change (twelve months)||7.2%||5.4%||6.3%||4.6%||3.8%||3.5%|
|Store personnel - absolute headcount||6,849||9,123||9,344||9,734||10,057||10,328||10,486|
|% change since Q1 2007||33.2%||36.4%||42.1%||46.8%||50.8%||53.1%|
|% change (twelve months)||17.9%||11.2%||15.9%||16.4%||14.1%||12.2%|
|Store personnel - FTE||6,383||8,280||7,825||8,254||8,629||8,684||8,900|
|Non-store selling personnel - FTE||616||599||779||850||920||953||998|
|Sub-total of all sales personnel - FTE||6,999||8,879||8,604||9,104||9,549||9,637||9,898|
|Distribution and manufacturing personnel-FTE 1||1,962||2,244||2,069||2,249||2,343||2,336||2,342|
|Sub-total of non-sales personnel - FTE||2,729||3,049||2,829||3,032||3,154||3,132||3,138|
|Total - average FTE headcount||9,728||11,928||11,433||12,136||12,703||12,769||13,036|
|% change since Q1 2007|
|Store personnel - FTE||29.7%||22.6%||29.3%||35.2%||36.0%||39.4%|
|Non-store selling personnel - FTE||-2.8%||26.5%||38.0%||49.4%||54.7%||62.0%|
|Sub-total of all sales personnel - FTE||26.9%||22.9%||30.1%||36.4%||37.7%||41.4%|
|Distribution and manufacturing personnel-FTE 1||14.4%||5.5%||14.6%||19.4%||19.1%||19.4%|
|Sub-total of non-sales personnel - FTE||11.7%||3.7%||11.1%||15.6%||14.8%||15.0%|
|Total - average FTE headcount||22.6%||17.5%||24.8%||30.6%||31.3%||34.0%|
|% change (twelve months)|
|Store personnel - FTE||15.2%||11.7%||16.0%||15.8%||14.1%||13.7%|
|Non-store selling personnel - FTE||-2.4%||31.1%||43.8%||44.0%||33.8%||28.1%|
|Sub-total of all sales personnel - FTE||13.8%||13.2%||18.1%||18.0%||15.8%||15.0%|
|Distribution and manufacturing personnel-FTE 1||5.4%||14.9%||19.4%||16.7%||14.5%||13.2%|
|Administrative personnel - FTE||7.9%||7.6%||10.7%||11.7%||7.0%||4.7%|
|Sub-total of non-sales personnel - FTE||6.0%||12.9%||17.0%||15.4%||12.5%||10.9%|
|Total - average FTE headcount||11.7%||13.2%||17.8%||17.4%||15.0%||14.0%|
1 The distribution and manufacturing headcount was impacted by the addition of 92 employees with the acquisition of Holo-Krome in
STATEMENT OF EARNINGS INFORMATION (percentage of net sales) for the periods ended
|Operating and administrative expenses||30.3%||32.0%|
|Loss on sale of property and equipment||0.0%||0.0%|
|Earnings before income taxes||21.0%||20.1%|
Note — Amounts may not foot due to rounding difference.
Gross profit — percentage for the first quarter of 2012 decreased from the same period in 2011. Sequentially, the gross profit increased from the fourth quarter of 2011.
The gross profit percentage in the first, second, third and fourth quarters was as follows:
The fluctuations in our gross profit percentages are typically driven by changes in: (1) transactional gross profit, (2) organizational gross profit, and (3) vendor incentive gross profit. The transactional gross profit represents the gross profit realized from the day-to-day fluctuations in customer pricing relative to product and freight costs. The organizational gross profit represents the component of gross profit we attribute to buying scale and efficiency gains. The third component relates to vendor volume allowances. In the short-term, periods of inflation or deflation can influence the first two categories, while sudden changes in business volume can influence the third.
We believe a normal gross profit percentage range for our business is 51% to 53%. This is based on our current mix of products, geographies, end markets, and end market uses (such as industrial production business versus maintenance business). Our business operated below our expected gross profit range at the end of 2009, and expanded into the low end of this range during 2010. In the second quarter of 2010, we moved into the middle of the range as the three components of gross profit improved, the contribution being split fairly evenly between the three components. We remained in the middle of the range until the fourth quarter of 2011. In the fourth quarter of 2011, our gross margin felt pressure and dropped to the lower end of the range. This drop was primarily due to changes in our transactional margin (primarily due to changes in product and customer mix), lower vendor incentive gross profit, and lower freight utilization. The latter two items created half of the gross margin drop and are more of a seasonal issue. In the first quarter of 2012, our gross margin improved nominally over the previous quarter. This was primarily caused by the seasonal improvement of vendor volume allowances as rising fuel prices offset our improvements in freight utilization.
Operating and administrative expenses - improved relative to sales in the first quarter of 2012 versus the first quarter of 2011.
Historically, our two largest components to operating and administrative expenses have consisted of employee related expenses (approximately 65% to 70%) and occupancy related expenses (approximately 15% to 20%). The remaining expenses cover a variety of items with selling transportation typically being the largest.
The three largest components of operating and administrative expenses grew as follows for the periods ended
|Employee related expenses||14.9%||26.5%|
|Occupancy related expenses||0.3%||7.9%|
|Selling transportation costs||19.3%||12.7%|
Employee related expenses include: (1) payroll (which includes cash compensation, stock option expense, and profit sharing), (2) health care, (3) personnel development, and (4) social taxes. The increase in the first quarter of 2012 was driven by the following factors: (1) employee headcount grew, (2) sales commissions grew, (3) bonus amounts related to our growth drivers grew (this includes items such as industrial vending bonuses and manager minimum pay adjustments), and (4) our profit sharing contribution grew. The increase in the first quarter of 2011 was driven by the following factors: (1) employee headcount grew, (2) sales commissions grew (this increase was amplified by stronger sales growth, relative to 2010, which had a meaningful impact on the commission earned and higher gross profit margins), (3) total bonuses earned increased due to our profit growth, (4) hours worked per employee grew, and (5) our profit sharing contribution grew.
Occupancy related expenses include: (1) building rent and depreciation, (2) building utility costs, (3) equipment related to our stores and distribution locations, and (4) FAST SolutionsSM (industrial vending) equipment (we consider the vending equipment to be a logical extension of our store operation and classify the expense as occupancy). The increase in the first quarter of 2012 was driven by (1) a dramatic increase in the amount of FAST SolutionsSM (industrial vending) equipment as discussed earlier in this document, (2) an increase in the number of locations, and (3) increased investment in our distribution infrastructure over the last several years. This increase was partially offset by an absolute drop in the utilities expense due to a drop in natural gas prices during the heating season, a mild winter, and due to our efforts to lower energy consumption. The increase in the first quarter of 2011 was driven by the same factors noted above with one exception, in 2011 approximately 50% of the increase was due to rising utility costs.
Our selling transportation costs consist primarily of our store fleet as most of the distribution fleet costs are included in cost of sales. Selling transportation costs included in operating and administrative expenses increased in the first quarter of 2012. Most of the components of selling transportation costs increased at a rate less than sales growth, with two exceptions, the fuel component and the vehicle expense components increased more than sales growth. This was primarily related to the increase in per gallon fuel costs discussed below and the expansion of our fleet related to additions to our non-store sales personnel, particularly FAST SolutionsSM (industrial vending) vehicles. The increase in the first quarter of 2011 was primarily related to the increase in fuel costs due to the improving sales patterns and due to increases in energy costs.
The last several years have seen meaningful swings in the cost of diesel fuel and gasoline — During the first quarter of 2012, our total vehicle fuel costs were approximately
The average per gallon fuel costs (in actual dollars) and the percentage change (on a year-over-year basis) for the last three years was as follows:
|Per gallon average price||Q1||Q2||Q3||Q4||Annual Average1|
|Per gallon price change||Q1||Q2||Q3||Q4||Annual|
1 Average of the four quarterly figures contained in the table.
Income taxes — Incomes taxes, as a percentage of earnings before income taxes, were approximately 37.8% and 38.2% for the first quarter of 2012 and 2011, respectively. As our international business and profits grow over time, the lower income tax rates in those jurisdictions, relative to
OPERATIONAL WORKING CAPITAL:
The year-over-year comparison and the related dollar and percentage changes related to accounts receivable and inventories were as follows:
Twelve Month Dollar
|Accounts receivable, net||$||386,882||325,685||262,463||61,197||63,222||18.8%||24.1%|
|Operational working capital1||$||1,034,768||902,136||769,706||132,632||132,430||14.7%||17.2%|
|Sales in last two months||$||522,905||437,773||358,111||85,132||79,662||19.4%||22.2%|
The growth in accounts receivable noted above was driven by our sales growth in the final two months of the period. The strong growth in recent years with our international business and with large customer accounts has created some difficulty with managing the growth of accounts receivable relative to the growth in sales.
Our growth in inventory balances over time does not have as direct a relationship to our monthly sales patterns as does our growth in accounts receivable. This is impacted by other aspects of our business. For example, the dramatic economic slowdown in late 2008 and early 2009 caused our inventory to spike. This occurred because the lead time for inventory procurement is typically longer than the visibility we have into future monthly sales patterns. Over the last decade, we increased our relative inventory levels due to the following: (1) new store openings, (2) expanded stocking breadth at individual stores, (3) expanded stocking breadth at our distributions centers (for example, our master stocking hub in
Our operational working capital improved relative to sales in the first quarter of both 2012 and 2011.
1 For purposes of this discussion, we are defining operational working capital as accounts receivable, net and inventory.
BALANCE SHEET AND CASH FLOW:
Our balance sheet continues to be very strong and our operations have good cash generating characteristics. During the first quarter of 2012, we generated
We did not purchase any stock in the first quarter of 2012. We currently have authority to purchase up to 1,800,000 shares.
CONFERENCE CALL TO DISCUSS QUARTERLY EARNINGS:
As we previously disclosed, we will host a conference call today to review the quarterly results, as well as current operations. This conference call will be broadcast live over the Internet at 9:00 a.m., central time. To access the webcast, please go to the Fastenal Company Investor Relations Website at http://investor.fastenal.com/events.cfm.
ANNUAL MEETING OF SHAREHOLDERS PRESENTATION:
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 (1) the goals of our long‑term growth strategy, 'pathway to profit', including the growth in average store sales and profitability expected to result from that strategy (including our belief that we can achieve targeted profitability due to an improvement in our gross margins and a lowering of our operating expenses even if our average store sales do not grow as originally expected), (2) the expected rate of new store openings, (3) our belief in the transformative nature of FAST SolutionsSM (industrial vending) and our advantage as a first mover in this area, and our goals regarding expansion of that business, and
(4) our expected gross profit range. The following factors are among those that could cause our actual results to differ materially from those predicted in such forward looking statements: (1) a downturn or continued weakness in the economy or in the manufacturing or commercial construction industries, changes in the expected rate of new store openings, difficulties in successfully attracting and retaining additional qualified sales personnel, an inability to realize or sustain improvements in our gross margins and savings from lowering our operating expenses, and difficulties in changing our sales process could adversely impact our ability to achieve the goals of our 'pathway to profit' initiative and the expected time frame for achieving those goals, (2) a downturn or continued weakness in the economy or in the manufacturing or commercial construction industries, a change from that
projected in the number of North American markets able to support stores, or an inability to recruit and retain qualified employees could cause the rate of new store openings to change from that expected, (3) a weaker level of industry acceptance or adoption of the vending technology from what we are currently experiencing could cause us to alter our plans to introduce new vending machines or cause industrial vending to be less transformative than expected, (4) our competitors could choose, over time, to open additional locations and to develop their own vending platform which could allow our competitors to replicate our local storefront combined with industrial vending business model mitigating our first mover advantage, and (5) changes in our current mix of products, geographies, end markets, and end market uses could impact our expected gross profit range. We assume no obligation to
update any forward looking statement or any discussion of risks and uncertainties related to such forward looking statements. A discussion of other risks and uncertainties which could cause our operating results to vary from anticipated results or which could materially adversely effect our business, financial condition, or operating results is included in our 2011 annual report on Form 10-K under the sections captioned Certain Risks and Uncertainties and Item 1A — Risk Factors. FAST-E
|FASTENAL COMPANY AND SUBSIDIARIES|
|Consolidated Balance Sheets|
|(Amounts in thousands except share information)|
|March 31,||December 31,|
|Cash and cash equivalents||$ 198,878||117,676|
|Trade accounts receivable, net of allowance for doubtful|
|Deferred income tax assets||14,838||16,718|
|Other current assets||74,297||89,833|
|Total current assets||1,349,975||1,236,138|
|Property and equipment, less accumulated depreciation||450,239||435,601|
|Other assets, net||13,118||13,209|
|Total assets||$ 1,813,332||1,684,948|
|Liabilities and Stockholders' Equity|
|Accounts payable||$ 76,113||73,779|
|Income taxes payable||47,018||2,077|
|Total current liabilities||236,227||187,818|
|Deferred income tax liabilities||38,137||38,154|
|Preferred stock, 5,000,000 shares authorized||0||0|
|Common stock, 400,000,000 shares authorized,|
|296,071,374 and 295,258,674 shares|
|issued and outstanding, respectively||2,961||2,953|
|Additional paid-in capital||43,880||16,856|
|Accumulated other comprehensive income||17,759||14,796|
|Total stockholders' equity||1,538,968||1,458,976|
|Total liabilities and stockholders' equity||$ 1,813,332||1,684,948|
|FASTENAL COMPANY AND SUBSIDIARIES|
|Consolidated Statements of Earnings|
|(Amounts in thousands except earnings per share)|
|Three months ended|
|Cost of sales||374,698||307,203|
|Operating and administrative expenses||232,970||204,692|
|Loss on sale of property and equipment||174||25|
|Earnings before income taxes||161,129||128,811|
|Income tax expense||60,935||49,264|
|Net earnings||$ 100,194||79,547|
|Diluted net earnings per share||$ 0.34||0.27|
|Diluted weighted average shares outstanding||296,927||295,429|
|FASTENAL COMPANY AND SUBSIDIARIES|
|Consolidated Statements of Cash Flows|
|(Amounts in thousands)|
|Three months ended|
|Cash flows from operating activities:|
|Net earnings||$ 100,194||79,547|
|Adjustments to reconcile net earnings to net cash|
|provided by operating activities:|
|Depreciation of property and equipment||12,415||10,481|
|Loss on sale of property and equipment||174||25|
|Bad debt expense||2,329||2,267|
|Deferred income taxes||1,863||(56)|
|Stock based compensation||1,050||900|
|Amortization of non-compete agreements||148||148|
|Changes in operating assets and liabilities:|
|Trade accounts receivable||(50,617)||(57,819)|
|Other current assets||15,536||8,757|
|Net cash provided by operating activities||132,188||74,284|
|Cash flows from investing activities:|
|Purchase of property and equipment||(28,212)||(21,206)|
|Proceeds from sale of property and equipment||985||621|
|Net (increase) decrease in marketable securities||(29)||463|
|(Increase) decrease in other assets||(57)||220|
|Net cash used in investing activities||(27,313)||(19,902)|
|Cash flows from financing activities:|
|Proceeds from exercise of stock options||18,285||0|
|Tax benefits from exercise of stock options||7,697||0|
|Payment of dividends||(50,197)||(73,715)|
|Net cash used in financing activities||(24,215)||(73,715)|
|Effect of exchange rate changes on cash||542||488|
|Net increase (decrease) in cash and cash equivalents||81,202||(18,845)|
|Cash and cash equivalents at beginning of period||117,676||143,693|
|Cash and cash equivalents at end of period||$ 198,878||124,848|
|Supplemental disclosure of cash flow information:|
|Cash paid during each period for income taxes||$ 21,828||6,100|
Sheryl LisowskiController 507-453-8550
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