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Fastenal Reports Plunging Net Income

The company's first quarter net income dropped 29% due to a decline in net sales.

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reported on April 14, 2009 that its Q1 FY09 net income plunged 28.5% year-over-year to $48.69 million or $0.33 per share from $68.09 million or $0.46 per share in Q1 FY08, hurt by a double-digit decline in sales. The latest quarterly earnings missed the consensus estimate of $0.34 per share.

Total revenue dropped 13.6% to $489.35 million from $566.21 million due to weak economic conditions. The number of new stores opened decreased to 33 from 53. The cost of sales dropped 14.4% to $230.70 million from $269.58 million, improving gross margin 47 basis points to 52.86% from 52.39%. Operating and administrative expenses dipped 3.6% to $179.91 million from $186.56 million. Operating income plummeted 28.7% to $78.41 million from $109.96 million. Operating margin contracted 340 basis points to 16.02% from 19.42%.

Fastenal did not purchase any outstanding common stock under its share repurchase program during the quarter. The company generated net cash flow from operating activities of $93.53 million, a 7.8% increase from the $86.74 million generated in the prior year's quarter. The company paid a cash dividend of $0.35 per share.

The company expects to incur FY09 capital expenditure of approximately $65.00 million.