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Fastenal Company Reports 2010 Third Quarter Earnings

COMMENTS REGARDING MONTHLY SALES CHANGES, SEQUENTIAL TRENDS, AND END MARKET PERFORMANCE

Note – Daily sales are defined as the sales for the period divided by the number of business days in the period. 

This section focuses on three distinct views of our business – monthly sales changes, sequential trends, and end market performance.   The discussion of monthly sales changes provides a good mechanical view of our business based on the age of our stores. The discussion of sales trends provides a framework for understanding the sequential trends (that is, comparing a period to the immediately preceding period) in our business since the market declined late in 2008. Finally, we believe the discussion regarding end market performance provides insight into activities with our various types of customers.

MONTHLY SALES CHANGES:

Stores opened greater than five years – The impact of the economy, over time, is best reflected in the growth performance of our stores opened greater than five years (store sites opened as follows: 2010 group – opened 2005 and earlier, 2009 group – opened 2004 and earlier, and 2008 group – opened 2003 and earlier). This store group is more cyclical due to the increased market share these stores enjoy in their local markets. During each of the first nine months in 2010 and each of the twelve months in 2009 and 2008, the stores opened greater than five years had daily sales growth rates of (compared to the comparable month in the preceding year):

  Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
2010 -2.1% -0.5% 7.4% 14.9% 17.3% 16.2% 19.8% 18.2% 18.9%      
2009 -12.4% -14.3% -21.5% -25.2% -25.2% -26.3% -26.6% -24.7% -24.2% -21.7% -15.0% -12.1%
2008 8.9% 8.8% 9.9% 10.5% 10.4% 11.2% 9.7% 11.3% 8.5% 6.8% 0.9% -5.1%

Stores opened greater than two years – Our stores opened greater than two years (store sites opened as follows: 2010 group – opened 2008 and earlier, 2009 group – opened 2007 and earlier, and 2008 group – opened 2006 and earlier) represent a consistent same-store view of our business. During each of the first nine months in 2010 and each of the twelve months in 2009 and 2008, the stores opened greater than two years had daily sales growth rates of (compared to the comparable month in the preceding year):

  Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
2010 0.6% 2.3% 9.6% 16.3% 18.5% 18.3% 21.3% 19.2% 19.8%      
2009 -11.2% -13.8% -20.1% -24.0% -23.7% -25.1% -25.4% -24.0% -23.1% -20.9% -13.7% -10.6%
2008 12.0% 11.1% 12.5% 13.1% 12.0% 12.0% 10.9% 12.8% 10.5% 8.1% 2.3% -3.9%

All company sales – During each of the first nine months in 2010 and each of the twelve months in 2009 and 2008, all of our selling locations combined had daily sales growth rates of (compared to the comparable month in the preceding year):

  Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
2010 2.4% 4.4% 12.1% 18.6% 21.1% 21.1% 24.4% 22.1% 23.5%      
2009 -8.5% -10.5% -17.4% -21.0% -20.7% -22.5% -22.9% -21.4% -20.8% -18.7% -12.0% -8.6%
2008 15.6% 15.0% 16.9% 17.1% 16.0% 15.9% 14.8% 16.4% 14.3% 11.9% 6.8% 0.0%

The improvement in the first nine months of 2010 continues the trend we saw in the latter half of 2009. The slow-down in the final three months of 2008 and all of 2009 relate to the general economic weakness in the global marketplace. 

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