Fastenal(FAST) - 2024 Q4 - Annual Report

Share Repurchase and Stock Options - As of December 31, 2024, the company had remaining authority to repurchase 6,200,000 shares of common stock under the July 12, 2022 authorization, which originally allowed for the repurchase of up to 8,000,000 shares[179] - The company did not purchase any shares of common stock in the last three months of 2024[179] - Stock options granted in January 2025 included 639,304 shares at an exercise price of $72.00 per share[367] - As of December 31, 2024, there were 4,227,927 stock options outstanding with a weighted average exercise price of$45.93 and a remaining life of 6.28 years[372] - The company granted 814,912 stock options in 2024 with an exercise price of $64.00[372] - The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023, and 2022 was$57.6 million, $38.1 million, and$10.2 million, respectively[372] - The total grant date fair value of stock options vested under the employee stock option plan during 2024 was $7.6 million[373] - The company reported a total of 913,296 anti-dilutive options excluded from the diluted net income per share calculation for 2024[377] Financial Performance - Net sales for 2024 reached$7,546.0 million, an increase of 2.7% from $7,346.7 million in 2023[320] - Gross profit for 2024 was$3,401.9 million, up from $3,354.5 million in 2023, reflecting a gross margin of approximately 45$1,150.6 million, slightly down from $1,155.0 million in 2023, resulting in a basic net income per share of$2.01[320] - Operating income for 2024 was $1,510.0 million, slightly down from$1,528.7 million in 2023, indicating stable operational performance[320] - The company reported a comprehensive income of $1,113.9 million for 2024, compared to$1,165.0 million in 2023, reflecting foreign currency translation adjustments[323] - Total revenues for 2024 reached $7,546.0 million, a 2.7$7,346.7 million in 2023[360] - U.S. net sales from external customers reached $6,273.1 million in 2024, up from$6,139.8 million in 2023, indicating a growth of 2.2%[400] Assets and Inventory - The company held $1,645.0 million in inventory as of December 31, 2024, with the majority located at 3,628 in-market locations[313] - Total current assets increased to$3,211.9 million in 2024 from $3,020.9 million in 2023, driven by higher inventories and trade accounts receivable[318] - Total assets grew to$4,698.0 million in 2024, compared to $4,462.9 million in 2023, indicating a solid asset base for future operations[318] - Long-lived assets totaled$1,486.1 million at the end of 2024, an increase from $1,442.0 million in 2023[362] Cash Flow and Dividends - Cash and cash equivalents at the end of 2024 were$255.8 million, up from $221.3 million in 2023, showing improved liquidity[328] - The company paid cash dividends of$893.3 million in 2024, down from $1,016.8 million in 2023, with a dividend per share of$1.56[326] - The company paid an aggregate annual cash dividend of $1.56 per share in 2024, compared to$1.78 in 2023[366] Debt and Interest - The company has a total debt outstanding of $200.0 million as of December 31, 2024, down from$260.0 million in 2023, indicating a reduction of 23.1%[391] - The average interest rate on the company's unsecured revolving credit facility is 5.36% as of December 31, 2024[391] - A one percentage point increase in floating rate debt in 2024 would have resulted in approximately $0.3 million of additional interest expense[302] Internal Controls and Compliance - The company maintained effective internal control over financial reporting as of December 31, 2024, in accordance with U.S. generally accepted accounting principles[306] - The company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting[310] - There were no changes or disagreements with accountants on accounting and financial disclosure[408] Taxation - The effective income tax rate for 2024 was 23.7$1,508.1 million, a slight decrease from $1,522.0 million in 2023[379] - As of December 31, 2024, the total net deferred income tax assets were$107.3 million, compared to $104.8 million in 2023[381] - The company has approximately$539.6 million of undistributed income from foreign subsidiaries, which continues to be permanently reinvested, resulting in no deferred taxes for withholding taxes upon repatriation[383] Operating Leases - Operating lease costs for 2024 totaled $171.1 million, an increase from$153.4 million in 2023, reflecting a year-over-year growth of 11.5%[387] - The total lease payments due for operating leases amount to $309.9 million as of December 31, 2024, with a present value of lease liabilities at$285.4 million[388] - The company recorded cash paid for operating leases of $119.0 million in 2024, compared to$115.7 million in 2023, reflecting an increase of 2.9%[390] Market Presence - Fastenal operates over 3,600 in-market locations primarily in North America, supporting its distribution network for industrial and construction supplies[331] - Revenue from the United States accounted for 83.1% of total revenues in 2024, slightly down from 83.6% in 2023[360] - The manufacturing sector represented 75.0% of total sales in 2024, up from 74.3% in 2023[360] - The fastener product line accounted for 30.7% of total sales in 2024, down from 32.4% in 2023[360]