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Fastenal Company Reports 2010 Fourth Quarter And Annual Earnings

Our original goal under the 'pathway to profit' was to increase the sales of our average store to approximately $125,000 per month (see earlier discussion). This will shift the store mix emphasis from the first three categories ($0 to $30,000, $30,001 to $60,000, and $60,001 to $100,000) to the last three categories ($60,001 to $100,000, $100,001 to $150,000, and over $150,000), and we believe will allow us to leverage our fixed cost and increase our overall productivity. Our goal today is to continue (1) to grow the business and (2) to grow our pre-tax earnings as a percent of net sales. As stated earlier, we now believe, based on the profitability improvements noted in the previous table, that we can hit our pre-tax earnings percent goal of 23% before the sales of our average store hits $125,000 per month.

Note – Dollar amounts in this section are presented in whole dollars, not thousands.

STATEMENT OF EARNINGS INFORMATION (percentage of net sales) for the years ended December 31:

  Twelve-month period
  2010 2009 2008
       
Net sales 100.0% 100.0% 100.0%
Gross profit 51.8% 50.9% 52.8%
       
Operating and administrative expenses 32.8% 35.6% 33.6%
Loss (gain) on sale of property and equipment 0.0% 0.0% 0.0%
Operating income 19.0% 15.3% 19.2%
       
Interest income 0.1% 0.1% 0.0%
Earnings before income taxes 19.1% 15.4% 19.2%
       

Note – Amounts may not foot due to rounding difference.

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