Fastenal Company (Nasdaq: FAST), sells industrial and construction supplies in a wholesale and retail fashion and recorded $1.93 billion in 2009 revenues. Fast had 2,369 store locations located in 50 states, Puerto Rico, Canada, Mexico, Singapore, China and the Netherlands as of December 31, 2009. Fastenal's main products are fasteners but the company also sells tools, abrasives and other industrial and construction supplies.
Natural disaster such as Hurricane Katrina can benefit FAST, as more homes need to be rebuilt; in 2005 Hurricane Katrina resulted in $60 billion dollars worth of insured damage in 2005. Fastenal competes with other construction and industrial supplies retailers like W.W. Grainger (GWW), MSC Industrial Direct Company (MSM) and Anixter International (AXE).
Fastenal sells threaded fasteners and construction products through wholesale leads and through the company's stores. The company's main products include bolts, nuts, screws, washers, studs and other fasteners. Fastenal's other products include tools, cutting tools, abrasives, janitorial supplies and electrical supplies as well as accessories for pneumatic, hydraulic, plumbing and air conditioning systems. 50% of the company's sales come from fasteners and the company's stores each carry 349,000 different kinds of fasteners.
About 95% of the company's products are manufactured by third parties, some of which are branded with Fastenal names. The other 5% are manufactured by Fastenal. Fastenal's brand names include Fastenal, Blackstone and Rock River Anchors. Fastenal competes with other construction and industrial supplies retailers like W.W. Grainger (GWW), MSC Industrial Direct Company (MSM) and Anixter International (AXE).
Between 2008 and 2009, FAST increased the total number of stores it operated by 68, bringing its total number of stores up to 2,369. Among the new stores, it opened stores for the first time in Hungary and Malaysia.
In 2009, FAST's revenues declined for the first time since 1994, as it earned $1.93 billion in total revenues, as opposed its 2008 revenues of $2.34 billion. Unsurprisingly, its net income was negatively impacted by this decrease in revenues. Between 2008 and 2009, FAST's net income declined from $280 million in 2008 to $184.4 million in 2009.
When the price of fuel rises, Fastenal has to spend more money to power its fleet of distribution and delivery vehicles. On the other hand, when the price of fuel falls, Fastenal spends less money to power its fleet of distribution and delivery vehicles. Since FAST has a large fleet of distribution vehicles, this scales quickly. In other words, small changes in the price of fuel can have a large impact on the overall cost of FAST's transportation of goods.
When spending on new home construction drops, so does spending on construction equipment and supplies resulting in slowed revenue growth for Fastenal. On the other hand, when spending on new home construction increases, spending on construction supplies increases resulting in faster revenue growth for Fastenal. Since 2007, the U.S. Housing Market has been moving at an incredibly slow pace. As a result of the decrease in new home construction spending, Fastenal's revenue growth has been slowing and declined in 2009.
When natural disasters occur, people buy supplies and tools to repair the damages from stores like Fastenal, increasing Fastenal's sales. In late August 2005 Hurricane Katrina caused nearly $60 billion worth of damage to insured belongings including houses and other buildings. This helps spurs FAST's sales, as there are many homes to be built in a short amount of time, and these require goods that FAST sells.