On December 31, 2012, we had 2,652 stores. During 2012, we opened 80 new stores, an increase of 3.1% since December 2011 (we opened 122 new stores in 2011). On December 31, 2012, we operated 21,095 FAST Solutions SM (industrial vending) machines. During 2012, we installed 13,642 new machines, an increase of 183.0% since December 2011 (we installed 5,528 machines in 2011). On December 31, 2012, we had 15,145 employees, a decrease of 0.2% since December 2011; however, our average full-time equivalent employee number increased by 4.4% from the fourth quarter of 2011 to 2012 (as discussed later in this document).
Similar to previous quarters, we have included comments regarding several aspects of our business:
- Monthly sales changes, sequential trends, and end market performance – a recap of our recent sales trends and some insight into the activities with different end markets.
- Growth drivers of our business – a recap of how we grow our business.
- Profit drivers of our business – a recap of how we increase our profits.
- Statement of earnings information – a recap of the components of our income statement.
- Operational working capital, balance sheet, and cash flow – a recap of the operational working capital utilized in our business, and the related cash flow.
While reading these items, it is helpful to appreciate several aspects of our marketplace: (1) it's big, the North American marketplace for industrial supplies is estimated to be in excess of $160 billion per year (and we have expanded beyond North America), (2) no company has a significant portion of this market, (3) many of the products we sell are individually inexpensive, (4) when our customer needs something quickly or unexpectedly our local store is a quick source, (5) the cost to manage and procure these products can be significant, and (6) the cost to move these products, many of which are bulky, can also be significant.