falsedesktopFAST2020-09-30000081555620000067{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "\t\tPage\nPART I\tFINANCIAL INFORMATION\t\nITEM 1.\tFINANCIAL STATEMENTS\t\n\tCondensed Consolidated Balance Sheets\t1\n\tCondensed Consolidated Statements of Earnings\t2\n\tCondensed Consolidated Statements of Comprehensive Income\t3\n\tCondensed Consolidated Statements of Stockholders' Equity\t4\n\tCondensed Consolidated Statements of Cash Flows\t5\n\tNotes to Condensed Consolidated Financial Statements\t6\nITEM 2.\tMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\t13\nITEM 3.\tQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS\t22\nITEM 4.\tCONTROLS AND PROCEDURES\t22\nPART II\tOTHER INFORMATION\t\nITEM 1.\tLEGAL PROCEEDINGS\t23\nITEM 1A.\tRISK FACTORS\t23\nITEM 2.\tUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS\t23\nITEM 6.\tEXHIBITS\t24\n", "q10k_tbl_1": "\t(Unaudited)\t\nAssets\tSeptember 30 2020\tDecember 31 2019\nCurrent assets:\t\t\nCash and cash equivalents\t331.8\t174.9\nTrade accounts receivable net of allowance for credit losses of $11.8 and $10.9 respectively\t834.5\t741.8\nInventories\t1342.6\t1366.4\nPrepaid income taxes\t14.6\t16.7\nOther current assets\t123.2\t157.4\nTotal current assets\t2646.7\t2457.2\nProperty and equipment net\t1023.7\t1023.2\nOperating lease right-of-use assets\t244.4\t243.2\nOther assets\t193.8\t76.3\nTotal assets\t4108.6\t3799.9\nLiabilities and Stockholders' Equity\t\t\nCurrent liabilities:\t\t\nCurrent portion of debt\t40.0\t3.0\nAccounts payable\t210.4\t192.8\nAccrued expenses\t258.2\t251.5\nCurrent portion of operating lease liabilities\t94.4\t97.4\nTotal current liabilities\t603.0\t544.7\nLong-term debt\t365.0\t342.0\nOperating lease liabilities\t152.1\t148.2\nDeferred income taxes\t102.9\t99.4\nStockholders' equity:\t\t\nPreferred stock: $0.01 par value 5000000 shares authorized no shares issued or outstanding\t0\t0\nCommon stock: $0.01 par value 800000000 shares authorized 574049821 and 574128911 shares issued and outstanding respectively\t2.9\t2.9\nAdditional paid-in capital\t57.8\t67.2\nRetained earnings\t2866.7\t2633.9\nAccumulated other comprehensive loss\t(41.8)\t(38.4)\nTotal stockholders' equity\t2885.6\t2665.6\nTotal liabilities and stockholders' equity\t4108.6\t3799.9\n", "q10k_tbl_2": "\t(Unaudited)\t\t\t(Unaudited)\n\tNine Months Ended September 30\t\t\tThree Months Ended September 30\n\t2020\t2019\t2020\t2019\nNet sales\t4289.3\t4056.8\t1413.3\t1379.1\nCost of sales\t2340.3\t2139.8\t772.7\t728.0\nGross profit\t1949.0\t1917.0\t640.6\t651.1\nOperating and administrative expenses\t1072.7\t1099.5\t351.5\t369.2\nGain on sale of property and equipment\t(1.1)\t(0.8)\t(1.0)\t0\nOperating income\t877.4\t818.3\t290.1\t281.9\nInterest income\t0.3\t0.3\t0.1\t0.1\nInterest expense\t(7.2)\t(11.3)\t(2.6)\t(3.6)\nEarnings before income taxes\t870.5\t807.3\t287.6\t278.4\nIncome tax expense\t207.5\t195.1\t66.1\t64.9\nNet earnings\t663.0\t612.2\t221.5\t213.5\nBasic net earnings per share\t1.16\t1.07\t0.39\t0.37\nDiluted net earnings per share\t1.15\t1.07\t0.38\t0.37\nBasic weighted average shares outstanding\t573.7\t572.9\t573.9\t573.5\nDiluted weighted average shares outstanding\t575.5\t574.0\t576.1\t574.4\n", "q10k_tbl_3": "\t(Unaudited)\t\t\t(Unaudited)\n\tNine Months Ended September 30\t\t\tThree Months Ended September 30\n\t2020\t2019\t2020\t2019\nNet earnings\t663.0\t612.2\t221.5\t213.5\nOther comprehensive (loss) income net of tax:\t\t\t\t\nForeign currency translation adjustments (net of tax of $0.0 in 2020 and 2019)\t(3.4)\t(4.2)\t11.1\t(9.6)\nComprehensive income\t659.6\t608.0\t232.6\t203.9\n", "q10k_tbl_4": "\t(Unaudited)\t\t\t(Unaudited)\n\tNine Months Ended September 30\t\t\tThree Months Ended September 30\n\t2020\t2019\t2020\t2019\nCommon stock\t\t\t\t\nBalance at beginning of period\t2.9\t2.9\t2.9\t2.9\nBalance at end of period\t2.9\t2.9\t2.9\t2.9\nAdditional paid-in capital\t\t\t\t\nBalance at beginning of period\t67.2\t3.0\t44.4\t46.0\nStock options exercised\t38.3\t43.0\t12.0\t2.9\nPurchases of common stock\t(52.0)\t0\t0\t0\nStock-based compensation\t4.3\t4.3\t1.4\t1.4\nBalance at end of period\t57.8\t50.3\t57.8\t50.3\nRetained earnings\t\t\t\t\nBalance at beginning of period\t2633.9\t2341.6\t2788.6\t2494.2\nNet earnings\t663.0\t612.2\t221.5\t213.5\nDividends paid in cash\t(430.2)\t(372.3)\t(143.4)\t(126.2)\nBalance at end of period\t2866.7\t2581.5\t2866.7\t2581.5\nAccumulated other comprehensive (loss) income\t\t\t\t\nBalance at beginning of period\t(38.4)\t(44.8)\t(52.9)\t(39.4)\nOther comprehensive (loss) income\t(3.4)\t(4.2)\t11.1\t(9.6)\nBalance at end of period\t(41.8)\t(49.0)\t(41.8)\t(49.0)\nTotal stockholders' equity\t2885.6\t2585.7\t2885.6\t2585.7\nCash dividends paid per share of common stock\t0.750\t0.650\t0.250\t0.220\n", "q10k_tbl_5": "\t(Unaudited)\t\n\tNine Months Ended September 30\t\n\t2020\t2019\nCash flows from operating activities:\t\t\nNet earnings\t663.0\t612.2\nAdjustments to reconcile net earnings to net cash provided by operating activities net of acquisition:\t\t\nDepreciation of property and equipment\t114.0\t107.8\nGain on sale of property and equipment\t(1.1)\t(0.8)\nBad debt expense\t5.8\t4.9\nDeferred income taxes\t3.5\t2.2\nStock-based compensation\t4.3\t4.3\nAmortization of intangible assets\t6.4\t3.0\nChanges in operating assets and liabilities net of acquisition:\t\t\nTrade accounts receivable\t(98.8)\t(108.0)\nInventories\t22.8\t(76.9)\nOther current assets\t34.2\t9.8\nAccounts payable\t17.6\t21.6\nAccrued expenses\t6.7\t0.5\nIncome taxes\t2.1\t8.6\nOther\t0.3\t1.1\nNet cash provided by operating activities\t780.8\t590.3\nCash flows from investing activities:\t\t\nPurchases of property and equipment\t(123.5)\t(184.3)\nProceeds from sale of property and equipment\t8.6\t5.0\nCash paid for acquisition\t(125.0)\t0\nOther\t1.1\t0.2\nNet cash used in investing activities\t(238.8)\t(179.1)\nCash flows from financing activities:\t\t\nProceeds from debt obligations\t910.0\t745.0\nPayments against debt obligations\t(850.0)\t(800.0)\nProceeds from exercise of stock options\t38.3\t43.0\nPurchases of common stock\t(52.0)\t0\nPayments of dividends\t(430.2)\t(372.3)\nNet cash used in financing activities\t(383.9)\t(384.3)\nEffect of exchange rate changes on cash and cash equivalents\t(1.2)\t(2.9)\nNet increase in cash and cash equivalents\t156.9\t24.0\nCash and cash equivalents at beginning of period\t174.9\t167.2\nCash and cash equivalents at end of period\t331.8\t191.2\nSupplemental information:\t\t\nCash paid for interest\t5.9\t11.3\nNet cash paid for income taxes\t201.4\t182.6\nLeased assets obtained in exchange for new operating lease liabilities\t76.1\t87.6\n", "q10k_tbl_6": "\tNine-month Period\t\t\tThree-month Period\n\t2020\t2019\t2020\t2019\nUnited States\t3681.6\t3479.7\t1205.8\t1182.0\nCanada and Mexico\t462.3\t458.4\t160.5\t157.2\nNorth America\t4143.9\t3938.1\t1366.3\t1339.2\nAll other foreign countries\t145.4\t118.7\t47.0\t39.9\nTotal revenues\t4289.3\t4056.8\t1413.3\t1379.1\n", "q10k_tbl_7": "\tNine-month Period\t\t\tThree-month Period\n\t2020\t2019\t2020\t2019\nManufacturing\t61.7%\t67.5%\t62.7%\t67.5%\nNon-residential construction\t11.4%\t12.9%\t11.2%\t13.0%\nOther\t26.9%\t19.6%\t26.1%\t19.5%\n\t100.0%\t100.0%\t100.0%\t100.0%\n", "q10k_tbl_8": "\t\tNine-month Period\t\t\tThree-month Period\nType\tIntroduced\t2020\t2019\t2020\t2019\nFasteners(1)\t1967\t29.7%\t34.3%\t30.5%\t33.7%\nTools\t1993\t8.1%\t10.0%\t8.5%\t10.2%\nCutting tools\t1996\t4.6%\t5.8%\t4.7%\t5.7%\nHydraulics & pneumatics\t1996\t5.9%\t6.9%\t6.1%\t6.8%\nMaterial handling\t1996\t5.1%\t5.9%\t5.1%\t5.9%\nJanitorial supplies\t1996\t9.9%\t7.7%\t10.7%\t8.0%\nElectrical supplies\t1997\t4.1%\t4.7%\t3.9%\t4.6%\nWelding supplies\t1997\t3.5%\t4.2%\t3.5%\t4.2%\nSafety supplies\t1999\t26.1%\t17.6%\t23.8%\t18.2%\nOther\t\t3.0%\t2.9%\t3.2%\t2.7%\n\t\t100.0%\t100.0%\t100.0%\t100.0%\n", "q10k_tbl_9": "\t2020\t2019\nFirst quarter\t0.250\t0.215\nSecond quarter\t0.250\t0.215\nThird quarter\t0.250\t0.220\nFourth quarter\t0.250\t0.220\nTotal\t1.000\t0.870\n", "q10k_tbl_10": "\tOptions Granted\tOption Exercise (Strike) Price\tClosing Stock Price on Date of Grant\tSeptember 30 2020\t\nDate of Grant\t\t\t\tOptions Outstanding\tOptions Exercisable\nJanuary 2 2020\t902263\t38.00\t37.230\t878190\t24964\nJanuary 2 2019\t1316924\t26.00\t25.705\t1222784\t25010\nJanuary 2 2018\t1087936\t27.50\t27.270\t898184\t281144\nJanuary 3 2017\t1529578\t23.50\t23.475\t996285\t385821\nApril 19 2016\t1690880\t23.00\t22.870\t957561\t460857\nApril 21 2015\t1786440\t21.00\t20.630\t607209\t360577\nApril 22 2014\t1910000\t28.00\t25.265\t342000\t187000\nApril 16 2013\t410000\t27.00\t24.625\t40466\t21728\nApril 17 2012\t2470000\t27.00\t24.505\t92748\t92748\nTotal\t13104021\t\t\t6035427\t1839849\n", "q10k_tbl_11": "Date of Grant\tRisk-free Interest Rate\tExpected Life of Option in Years\tExpected Dividend Yield\tExpected Stock Volatility\tEstimated Fair Value of Stock Option\nJanuary 2 2020\t1.7%\t5.00\t2.4%\t25.70%\t6.81\nJanuary 2 2019\t2.5%\t5.00\t2.9%\t23.96%\t4.40\nJanuary 2 2018\t2.2%\t5.00\t2.3%\t23.45%\t5.02\nJanuary 3 2017\t1.9%\t5.00\t2.6%\t24.49%\t4.20\nApril 19 2016\t1.3%\t5.00\t2.6%\t26.34%\t4.09\nApril 21 2015\t1.3%\t5.00\t2.7%\t26.84%\t3.68\nApril 22 2014\t1.8%\t5.00\t2.0%\t28.55%\t4.79\nApril 16 2013\t0.7%\t5.00\t1.6%\t37.42%\t6.33\nApril 17 2012\t0.9%\t5.00\t1.4%\t39.25%\t6.85\n", "q10k_tbl_12": "\tNine-month Period\t\t\tThree-month Period\nReconciliation\t2020\t2019\t2020\t2019\nBasic weighted average shares outstanding\t573673031\t572934475\t573913929\t573452002\nWeighted shares assumed upon exercise of stock options\t1797201\t1042830\t2203402\t914771\nDiluted weighted average shares outstanding\t575470232\t573977305\t576117331\t574366773\n", "q10k_tbl_13": "\tNine-month Period\t\t\tThree-month Period\nSummary of Anti-dilutive Options Excluded\t2020\t2019\t2020\t2019\nOptions to purchase shares of common stock\t852728\t460824\t0\t553366\nWeighted average exercise prices of options\t38.00\t27.55\t0\t27.59\n", "q10k_tbl_14": "\tAverage Interest Rate at September 30 2020\t\tDebt Outstanding\t\n\t\tMaturity Date\tSeptember 30 2020\tDecember 31 2019\nUnsecured revolving credit facility\t1.10%\tNovember 30 2023\t0\t210.0\nSenior unsecured promissory notes payable Series A\t2.00%\tJuly 20 2021\t40.0\t40.0\nSenior unsecured promissory notes payable Series B\t2.45%\tJuly 20 2022\t35.0\t35.0\nSenior unsecured promissory notes payable Series C\t3.22%\tMarch 1 2024\t60.0\t60.0\nSenior unsecured promissory notes payable Series D\t2.66%\tMay 15 2025\t75.0\t0\nSenior unsecured promissory notes payable Series E\t2.72%\tMay 15 2027\t50.0\t0\nSenior unsecured promissory notes payable Series F\t1.69%\tJune 24 2023\t70.0\t0\nSenior unsecured promissory notes payable Series G\t2.13%\tJune 24 2026\t25.0\t0\nSenior unsecured promissory notes payable Series H\t2.50%\tJune 24 2030\t50.0\t0\nTotal\t\t\t405.0\t345.0\nLess: Current portion of debt\t\t\t(40.0)\t(3.0)\nLong-term debt\t\t\t365.0\t342.0\nOutstanding letters of credit under unsecured revolving credit facility - contingent obligation\t\t\t36.3\t36.3\n", "q10k_tbl_15": "\t\t\tChange Since:\t\tChange Since:\t\tChange Since:\n\tQ3 2020\tQ2 2020\tQ2 2020\tQ4 2019\tQ4 2019\tQ3 2019\tQ3 2019\nIn-market locations - absolute employee headcount\t12708\t12982\t-2.1%\t13977\t-9.1%\t14128\t-10.1%\nTotal absolute employee headcount\t20336\t20667\t-1.6%\t21948\t-7.3%\t21938\t-7.3%\nNumber of public branch locations\t2033\t2060\t-1.3%\t2114\t-3.8%\t2146\t-5.3%\nNumber of active Onsite locations\t1236\t1212\t2.0%\t1114\t11.0%\t1076\t14.9%\nNumber of in-market locations\t3269\t3272\t-0.1%\t3228\t1.3%\t3222\t1.5%\nIndustrial vending devices (installed count) (1)\t94395\t92615\t1.9%\t89937\t5.0%\t88327\t6.9%\nRatio of industrial vending devices to in-market locations\t29:1\t28:1\t\t28:1\t\t27:1\t\n", "q10k_tbl_16": "\tNine-month Period\t\t\tThree-month Period\n\t2020\t2019\t2020\t2019\nNet sales\t100.0%\t100.0%\t100.0%\t100.0%\nGross profit\t45.4%\t47.3%\t45.3%\t47.2%\nOperating and administrative expenses\t25.0%\t27.1%\t24.9%\t26.8%\nGain on sale of property and equipment\t0.0%\t0.0%\t-0.1%\t0.0%\nOperating income\t20.5%\t20.2%\t20.5%\t20.4%\nNet interest expense\t-0.2%\t-0.3%\t-0.2%\t-0.3%\nEarnings before income taxes\t20.3%\t19.9%\t20.4%\t20.2%\nNote - Amounts may not foot due to rounding difference.\t\t\t\t\n", "q10k_tbl_17": "\tNine-month Period\t\t\tThree-month Period\n\t2020\t2019\t2020\t2019\nNet sales\t4289.3\t4056.8\t1413.3\t1379.1\nPercentage change\t5.7%\t8.7%\t2.5%\t7.8%\nBusiness days\t192\t191\t64\t64\nDaily sales\t22.3\t21.2\t22.1\t21.5\nPercentage change\t5.2%\t8.7%\t2.5%\t6.1%\nDaily sales impact of currency fluctuations\t-0.2%\t-0.4%\t0.0%\t-0.2%\nDaily sales impact of acquisitions\t0.0%\t0.1%\t0.0%\t0.0%\nNote - Daily sales are defined as the total net sales for the period divided by the number of business days (in the United States) in the period.\t\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_18": "\tNine-month Period\t\t\tThree-month Period\n\t2020\t2019\t2020\t2019\nFasteners\t29.7%\t34.3%\t30.5%\t33.7%\nSafety supplies\t26.1%\t17.6%\t23.8%\t18.2%\nOther product lines\t44.2%\t48.1%\t45.7%\t48.1%\n\t100.0%\t100.0%\t100.0%\t100.0%\n", "q10k_tbl_19": "\tApproximate Percentage of Total Operating and Administrative Expenses\tNine-month Period\tThree-month Period\n\t\t2020\t2020\nEmployee-related expenses\t65% to 70%\t-2.9%\t-4.9%\nOccupancy-related expenses\t15% to 20%\t0.6%\t0.7%\nAll other operating and administrative expenses\t10% to 15%\t-4.5%\t-13.6%\n", "q10k_tbl_20": "\t\t\tChange Since:\t\tChange Since:\t\tChange Since:\n\tQ3 2020\tQ2 2020\tQ2 2020\tQ4 2019\tQ4 2019\tQ3 2019\tQ3 2019\nIn-market locations\t11302\t11310\t-0.1%\t12236\t-7.6%\t12417\t-9.0%\nTotal selling (includes in-market locations)\t13197\t13186\t0.1%\t14060\t-6.1%\t14226\t-7.2%\nDistribution\t2638\t2615\t0.9%\t2895\t-8.9%\t2821\t-6.5%\nManufacturing\t618\t625\t-1.1%\t674\t-8.3%\t684\t-9.6%\nAdministrative\t1409\t1388\t1.5%\t1339\t5.2%\t1329\t6.0%\nTotal\t17862\t17814\t0.3%\t18968\t-5.8%\t19060\t-6.3%\n", "q10k_tbl_21": "\tNine-month Period\t\n\t2020\t2019\nNet cash provided by operating activities\t780.8\t590.3\nPercentage of net earnings\t117.8%\t96.4%\nNet cash used in investing activities\t238.8\t179.1\nPercentage of net earnings\t36.0%\t29.3%\nNet cash used in financing activities\t383.9\t384.3\nPercentage of net earnings\t57.9%\t62.8%\n", "q10k_tbl_22": "\tSeptember 30\t\t\t\tTwelve-month Dollar Change\tTwelve-month Percentage Change\n\t2020\t2019\t2020\t2020\nAccounts receivable net\t834.5\t817.3\t17.3\t2.1%\nInventories\t1342.6\t1354.7\t(12.1)\t-0.9%\nTrade working capital\t2177.1\t2172.0\t5.2\t0.2%\nAccounts payable\t210.4\t215.2\t(4.8)\t-2.2%\nTrade working capital net\t1966.7\t1956.7\t10.0\t0.5%\nNet sales in last two months\t943.8\t921.5\t22.3\t2.4%\n", "q10k_tbl_23": "\t(a)\t\t\t(b)\t\t(c)\t(d)\nPeriod\tTotal Number of Shares Purchased\t\t\tAverage Price Paid per Share\t\tTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)\tMaximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)\nJuly 1-31 2020\t\t0\t0.00\t\t0\t3200000\nAugust 1-31 2020\t\t0\t0.00\t\t0\t3200000\nSeptember 1-30 2020\t\t0\t0.00\t\t0\t3200000\nTotal\t\t0\t0.00\t\t0\t3200000\n", "q10k_tbl_24": "Exhibit Number\tDescription of Document\n3.1\tRestated Articles of Incorporation of Fastenal Company as amended (incorporated by reference to Exhibit 3.1 to Fastenal Company's Form 8-K dated as of April 22 2019 (file no. 000-16125))\n3.2\tRestated By-Laws of Fastenal Company (incorporated by reference to Exhibit 3.2 to Fastenal Company's Form 8-K dated as of January 17 2019 (file no. 000-16125))\n31\tCertifications under Section 302 of the Sarbanes-Oxley Act of 2002\n32\tCertification under Section 906 of the Sarbanes-Oxley Act of 2002\n101\tThe following financial statements from the Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets (ii) Condensed Consolidated Statements of Earnings (iii) Condensed Consolidated Statements of Comprehensive Income (iv) Condensed Consolidated Statements of Stockholders' Equity (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements.\n104\tThe cover page from the Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in Inline XBRL.\n"}{"bs": "q10k_tbl_1", "is": "q10k_tbl_2", "cf": "q10k_tbl_5"}None
(Address of principal executive offices)(Zip Code)
(507) 454-5374
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $.01 per share
FAST
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yesý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
ý
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller Reporting Company
☐
Emerging Growth Company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of October 12, 2020, there were approximately 574,053,293 shares of the registrants common stock outstanding.
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2020 and 2019
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Fastenal Company and subsidiaries (collectively referred to as the company, Fastenal, or by terms such as we, our, or us) have been prepared in accordance with U.S. generally accepted accounting principles ('GAAP') for interim financial information. They do not include all information and footnotes required by U.S. GAAP for complete financial statements. However, except as described herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in our consolidated financial statements as of and for the year ended December 31, 2019. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Impact of COVID-19
The COVID-19 pandemic has impacted and could further impact our operations and the operations of our suppliers and vendors as a result of quarantines, facility closures, illnesses, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on our customers, suppliers, and vendors and the remedial actions and stimulus measures adopted by federal, state, and local governments, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the future impact at this time.
Stock Split
On April 17, 2019, the board of directors approved a two-for-one stock split of the company's outstanding common stock. Holders of the company's common stock, par value $0.01 per share, at the close of business on May 2, 2019, received one additional share of common stock for every share of common stock they owned. The stock split took effect at the close of business on May 22, 2019. All historical common stock share and per share information for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been retroactively adjusted to reflect the stock split.
Recently Adopted Accounting Pronouncements
Effective January 1, 2020, we adopted Financial Accounting Standard Board ('FASB') Accounting Standards Update ('ASU') 2016-13, Measurement of Credit Losses on Financial Instruments, which changed the way entities recognize impairment of most financial assets. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. The adoption of this standard had an immaterial impact on our condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 requires that, to be a business, an acquired set must include, at a minimum, an input and a substantive process that together significantly contributes to the ability to create outputs. The company adopted this guidance during the first quarter of 2020 when evaluating the transaction discussed further in Note 2, 'Asset Acquisition'.
(2) Asset Acquisition
On March 30, 2020, we purchased certain assets of Apex Industrial Technologies LLC ('Apex') that have contributed to the development, design, and scalability of the vending delivery platform utilized since 2008 within our industrial vending business to dispense product and lease devices to our customers. In connection with this transaction, we purchased a perpetual and unfettered use of key patents, designs, software and licenses, as well as direct access to the vending equipment supply chain.
The total purchase price of the assets acquired consisted of $125.0 paid in cash at closing. We funded the purchase price with available cash and proceeds from borrowings on our unsecured revolving credit facility. We accounted for the purchase as an asset acquisition as substantially all of the fair value of the gross assets acquired is concentrated in the identifiable intangible assets used in the vending delivery platform for our industrial vending business. On a relative fair value basis, the allocated identifiable intangible assets total $123.8 and tangible property and equipment total $1.2. The weighted average amortization period of the identifiable intangible assets is approximately 19.4 years.
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2020 and 2019
(Unaudited)
(3) Revenue
Revenue Recognition
Net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue by transferring the promised products to the customer, with the majority of revenue recognized at the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. We estimate product returns based on historical return rates. Using probability assessments, we estimate sales incentives expected to be paid over the term of the contract. The majority of our contracts have a single performance obligation and are short term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Revenues are attributable to countries based on the selling location from which the sale occurred.
Disaggregation of Revenue
Our revenues related to the following geographic areas were as follows for the periods ended September 30:
Nine-month Period
Three-month Period
2020
2019
2020
2019
United States
$
3,681.6
3,479.7
$
1,205.8
1,182.0
Canada and Mexico
462.3
458.4
160.5
157.2
North America
4,143.9
3,938.1
1,366.3
1,339.2
All other foreign countries
145.4
118.7
47.0
39.9
Total revenues
$
4,289.3
4,056.8
$
1,413.3
1,379.1
The percentages of our sales by end market were as follows for the periods ended September 30:
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2020 and 2019
(Unaudited)
The percentages of our sales by product line were as follows for the periods ended September 30:
Nine-month Period
Three-month Period
Type
Introduced
2020
2019
2020
2019
Fasteners(1)
1967
29.7
%
34.3
%
30.5
%
33.7
%
Tools
1993
8.1
%
10.0
%
8.5
%
10.2
%
Cutting tools
1996
4.6
%
5.8
%
4.7
%
5.7
%
Hydraulics & pneumatics
1996
5.9
%
6.9
%
6.1
%
6.8
%
Material handling
1996
5.1
%
5.9
%
5.1
%
5.9
%
Janitorial supplies
1996
9.9
%
7.7
%
10.7
%
8.0
%
Electrical supplies
1997
4.1
%
4.7
%
3.9
%
4.6
%
Welding supplies
1997
3.5
%
4.2
%
3.5
%
4.2
%
Safety supplies
1999
26.1
%
17.6
%
23.8
%
18.2
%
Other
3.0
%
2.9
%
3.2
%
2.7
%
100.0
%
100.0
%
100.0
%
100.0
%
(1) The fasteners product line represents fasteners and miscellaneous supplies.
(4) Stockholders' Equity
Dividends
On October 12, 2020, our board of directors declared a dividend of $0.25 per share of common stock to be paid in cash on November 24, 2020 to shareholders of record at the close of business on October 27, 2020. Since 2011, we have paid quarterly dividends. Our board of directors currently intends to continue paying quarterly dividends, provided that any future determination as to payment of dividends will depend on the financial condition and results of operations of the company and such other factors as are deemed relevant by the board of directors.
The following table presents the dividends either paid previously or declared by our board of directors for future payment on a per share basis:
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2020 and 2019
(Unaudited)
Stock Options
The following tables summarize the details of options granted under our stock option plans that were outstanding as of September 30, 2020, and the assumptions used to value these grants. All such grants were effective at the close of business on the date of grant.
Options Granted
Option Exercise (Strike) Price
Closing Stock Price on Date of Grant
September 30, 2020
Date of Grant
Options Outstanding
Options Exercisable
January 2, 2020
902,263
$
38.00
$
37.230
878,190
24,964
January 2, 2019
1,316,924
$
26.00
$
25.705
1,222,784
25,010
January 2, 2018
1,087,936
$
27.50
$
27.270
898,184
281,144
January 3, 2017
1,529,578
$
23.50
$
23.475
996,285
385,821
April 19, 2016
1,690,880
$
23.00
$
22.870
957,561
460,857
April 21, 2015
1,786,440
$
21.00
$
20.630
607,209
360,577
April 22, 2014
1,910,000
$
28.00
$
25.265
342,000
187,000
April 16, 2013
410,000
$
27.00
$
24.625
40,466
21,728
April 17, 2012
2,470,000
$
27.00
$
24.505
92,748
92,748
Total
13,104,021
6,035,427
1,839,849
Date of Grant
Risk-free Interest Rate
Expected Life of Option in Years
Expected Dividend Yield
Expected Stock Volatility
Estimated Fair Value of Stock Option
January 2, 2020
1.7
%
5.00
2.4
%
25.70
%
$
6.81
January 2, 2019
2.5
%
5.00
2.9
%
23.96
%
$
4.40
January 2, 2018
2.2
%
5.00
2.3
%
23.45
%
$
5.02
January 3, 2017
1.9
%
5.00
2.6
%
24.49
%
$
4.20
April 19, 2016
1.3
%
5.00
2.6
%
26.34
%
$
4.09
April 21, 2015
1.3
%
5.00
2.7
%
26.84
%
$
3.68
April 22, 2014
1.8
%
5.00
2.0
%
28.55
%
$
4.79
April 16, 2013
0.7
%
5.00
1.6
%
37.42
%
$
6.33
April 17, 2012
0.9
%
5.00
1.4
%
39.25
%
$
6.85
All of the options in the tables above vest and become exercisable over a period of up to eight years. Generally, each option will terminate approximately ten years after the grant date.
The fair value of each share-based option is estimated on the date of grant using a Black-Scholes valuation method that uses the assumptions listed above. The risk-free interest rate is based on the U.S. Treasury rate over the expected life of the option at the time of grant. The expected life is the average length of time over which we expect the employee groups will exercise their options, which is based on historical experience with similar grants. The dividend yield is estimated over the expected life of the option based on our current dividend payout, historical dividends paid, and expected future cash dividends. Expected stock volatilities are based on the movement of our stock price over the most recent historical period equivalent to the expected life of the option.
Compensation expense equal to the grant date fair value is recognized for all of these awards over the vesting period. The stock-based compensation expense for the nine-month periods ended September 30, 2020 and 2019 was $4.3 and $4.3, respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of September 30, 2020 was $13.8 and is expected to be recognized over a weighted average period of 4.01 years. Any future changes in estimated forfeitures will impact this amount.
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2020 and 2019
(Unaudited)
Earnings Per Share
The following tables present a reconciliation of the denominators used in the computation of basic and diluted earnings per share and a summary of the options to purchase shares of common stock which were excluded from the diluted earnings per share calculation because they were anti-dilutive:
Nine-month Period
Three-month Period
Reconciliation
2020
2019
2020
2019
Basic weighted average shares outstanding
573,673,031
572,934,475
573,913,929
573,452,002
Weighted shares assumed upon exercise of stock options