Fastenal Posts Best Vending Quarter in 4 Years

Company also escalating onsite strategy with 50 percent growth.
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Fastenal Co. surpassed 5,000 contracts for new vending machines in a quarter for the first time since early 2013 – when vending "initially exploded" for the Winona, MN-based company, CEO Dan Florness told analysts on last week's earnings call to discuss 1Q results.

The company signed 5,437 industrial vending machines during the first quarter, an increase of 17 percent from the same period a year ago. The total count of installed FAST Solutions machines grew 13.3 percent to 64,430 vending machines in the quarter.

Fastenal's goal is signing 22,000 to 24,000 vending machines for the year, so Florness said the company is "very pleased" with the first-quarter performance and its chance of meeting that lofty goal, even with the ongoing challenge of pulling a number of machines each quarter.

The company also signed 64 new onsite locations (a dedicated sales and service operation within a customer's facility) during the first quarter, up 33.3 percent from 1Q 2016. Fastenal's 437 active sites on March 31 represent a 51.2 percent bump from a year ago.

These increases come as Fastenal's store count dips. The number of stores open in the first quarter was down 5.6 percent year-over-year to 2,480. But the mix of onsite and vending is what's driving the company's recent sales boosts, including 6.2 percent growth in the first quarter.

"If you look at our the $60 million in growth we’ve had in the last 12 months, 50 percent of that came from either onsite or vending," CFO Holden Lewis said.

The company is enjoying some other tailwinds heading into the second quarter, including the recent acquisition of industrial and fastener distributor Manufacturer's Supply Co., Hudsonville, MI, which reported sales of $50 million in 2016.

And Fastenal's customers are emerging from the recession, something that stunted growth for the last couple of years. "National accounts grew over 9 percent during the quarter," said Florness, who added that 64 of Fastenal's top 100 customers grew during 1Q, almost back to early 2015 levels.

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