Fastenal(FAST)2024-02-05 16:00Financial Performance - Net sales for 2023 reached $7,346.7 million, a 5.3% increase from $6,980.6 million in 2022[306]. - Gross profit increased to $3,354.5 million in 2023, up 4.3% from $3,215.8 million in 2022[306]. - Operating income rose to $1,528.7 million, reflecting a 5.2% increase compared to $1,453.6 million in 2022[306]. - Net earnings for 2023 were $1,155.0 million, a 6.3% increase from $1,086.9 million in 2022[309]. - Basic net earnings per share increased to $2.02 in 2023, up from $1.89 in 2022, representing a 6.9% growth[306]. - Fastenal Company's cumulative total shareholder return increased from $100.00 in 2018 to $283.77 in 2023, representing a 183.77% growth over five years[171]. - Fastenal reported a comprehensive income of $1,165.0 million in 2023, an increase from $1,052.8 million in 2022[309]. Assets and Liabilities - The company held $1,522.7 million in inventory as of December 31, 2023, a decrease from $1,708.0 million in 2022[304]. - Fastenal's total current assets decreased from $3,124.8 million in 2022 to $3,020.9 million in 2023[304]. - The company's retained earnings increased from $3,218.7 million in 2022 to $3,356.9 million in 2023, reflecting a growth of 4.3%[304]. - Fastenal's total liabilities decreased from $1,385.0 million in 2022 to $1,113.1 million in 2023, indicating a reduction in financial obligations[304]. - Long-lived assets totaled $1,442.0 million at the end of 2023, compared to $1,423.8 million in 2022[348]. Cash Flow and Dividends - Cash flows from operating activities improved significantly to $1,432.7 million in 2023, compared to $941.0 million in 2022[315]. - Cash dividends paid per share rose to $1.78 in 2023, compared to $1.24 in 2022, marking a 43.5% increase[312]. - The company declared a quarterly dividend of $0.39 per share to be paid on February 29, 2024, following an annual cash dividend of $1.78 per share in 2023[352]. Stock Options and Compensation - The total outstanding stock options as of December 31, 2023, amounted to 10,840,912 shares[355]. - The total intrinsic value of stock options exercised in 2023 was $38.1 million, compared to $10.2 million in 2022 and $38.8 million in 2021[358]. - Total stock-based compensation expense related to the employee stock option plan was $7.3 million in 2023, up from $7.2 million in 2022 and $5.6 million in 2021[360]. - The total grant date fair value of stock options vested in 2023 was $5.3 million, slightly up from $5.2 million in 2022[359]. Debt and Financing - The average interest rate for the unsecured revolving credit facility is 6.36%, with total debt outstanding at $260.0 million as of December 31, 2023[377]. - The company has a total borrowing capacity of $900.0 million under the Master Note Agreement, with $260.0 million currently issued[380]. - Principal payments required on outstanding indebtedness total $260.0 million over the next five years, with $60.0 million due in 2024[382]. - The company is currently in compliance with all financial covenants related to its credit facilities[378]. Operational Insights - The company maintained over 3,400 in-market locations primarily in North America, supporting its distribution network[317]. - Revenue from the United States accounted for 83.6% of total revenues in 2023, totaling $6,139.8 million, compared to 84.0% in 2022[346]. - Manufacturing sector sales increased to 74.3% of total sales in 2023, up from 72.2% in 2022[346]. - The fastener product line represented 32.4% of total sales in 2023, a decrease from 34.0% in 2022[346]. Tax and Legal Matters - Earnings before income taxes for 2023 were $1,522.0 million, an increase from $1,440.0 million in 2022[365]. - The effective income tax rate for 2023 was 24.1%, compared to 24.5% in 2022 and 23.4% in 2021[365]. - There are no legal actions considered probable or reasonably possible to have a material adverse outcome as of December 31, 2023[383]. - No subsequent events requiring recognition in the financial statements have occurred, except for dividend declaration and stock option activities[384].