What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-07 compared with 2021-02-08 · 78 added, 118 removed, 591 unchanged (25% of the section changed)

33 unchanged sentences

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over inventory quantities

Sufficiency of audit evidence over inventory quantities at in-market locations

As disclosed in the consolidated balance sheet, the Company held $1,523.6 million of inventory, the majority of which was held at 3,209 in-market locations, as of December 31, 2021.

The Company’s processes to track and determine consolidated inventory relies on a perpetual inventory system which involves the interaction of multiple information technology (IT) systems.

We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of inventory as a critical audit matter.

Evaluating the sufficiency of audit evidence over quantities of inventory required challenging auditor judgment to assess the number of in-market locations visited, and included the involvement of IT professionals with specialized skills and knowledge due to the interaction of multiple IT systems that track physical inventory quantities by location.

The Company's processes to track and determine consolidated inventory relies on a perpetual inventory system which involves the interaction of information technology (IT) systems.

We identified the evaluation of the sufficiency of audit evidence obtained related to the quantities of inventory at in-market locations as a critical audit matter.

Evaluating the sufficiency of audit evidence over quantities of inventory at in-market locations required challenging auditor judgment to assess the number of in-market locations visited and included the involvement of IT professionals with specialized skills and knowledge due to the interaction of IT systems that track physical inventory quantities by location.

The following are the primary procedures we performed to address this critical audit matter:

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included IT application controls, as well as certain controls related to access to programs and data, program changes, program development, and computer operations.

This included IT application controls, as well as certain controls related to access to programs and data, program changes, and computer operations.

It also included certain controls related to the Company's physical inventory cycle counts.

We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT controls, inclusive of the interface of multiple IT systems, which support the Company’s perpetual inventory system.

We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT controls, inclusive of the interface of IT systems, which support the Company's perpetual inventory system.

We applied auditor judgment in the determination of the locations to test the Company's inventory quantities by evaluating:

• Homogeneity of the locations;

• Historical inventory locations we have visited and results of prior physical counts;

• Inventory dollars by location;

• The Company's inventory cycle count results, including the results of monitoring and compliance with cycle count program by in-market location.

We tested the existence and completeness of inventory by counting inventory quantities on a sample basis through location visits during the year to evaluate the Company’s perpetual inventory records.

In addition, we evaluated the overall sufficiency of audit evidence obtained over the quantities of inventory.

• The Company's inventory cycle count results, including the results of monitoring and compliance with the cycle count program by in-market location.

We tested the existence and completeness of inventory by counting inventory quantities on a sample basis through in-market location visits during the year to evaluate the Company's perpetual inventory records.

In addition, we evaluated the overall sufficiency of audit evidence obtained over the quantities of inventory at in-market locations.

We have served as the Company's auditor since 1987.

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Operating and administrative expenses 1,559.8 1,426.0 1,458.2

Gain on sale of property and equipment ( 1.4 ) ( 1.2 ) ( 0.5 )

Operating income 1,217.4 1,141.8 1,057.2

15 unchanged sentences

Net earnings $ 925.0 859.1 790.9

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments (net of tax of $ 0.0 in 2021, 2020, and 2019)

7 unchanged sentences

Balance at beginning of year $ 5.7 5.7 5.7

Stock options exercised 0.1 0.0 0.0

Balance at end of year 5.8 5.7 5.7

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Dividends paid in cash ( 643.7 ) ( 803.4 ) ( 498.6 )

Purchases of common stock — — ( 79.0 )

Balance at end of year 2,970.9 2,689.6 2,633.9

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

Balance at beginning of year ( 21.2 ) ( 38.4 ) ( 44.8 )

Other comprehensive income (loss) 17.2 6.4 ( 19.7 )

Other comprehensive (loss) income ( 9.5 ) 17.2 6.4

Balance at end of year ( 30.7 ) ( 21.2 ) ( 38.4 )

9 unchanged sentences

Net earnings $ 925.0 859.1 790.9

Adjustments to reconcile net earnings to net cash provided by operating activities, net of acquisitions:

Adjustments to reconcile net earnings to net cash provided by operating activities, net of acquisition:

Depreciation of property and equipment 159.9 153.3 144.6

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Amortization of intangible assets 10.8 9.1 4.1

Changes in operating assets and liabilities, net of acquisitions:

Changes in operating assets and liabilities, net of acquisition:

Trade accounts receivable ( 135.2 ) ( 29.7 ) ( 30.4 )

9 unchanged sentences

Proceeds from sale of property and equipment 8.4 10.6 6.6

Cash paid for acquisitions ( 125.0 ) — ( 3.7 )

Cash paid for acquisition — ( 125.0 ) —

Other ( 0.3 ) 0.8 0.1

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Effect of exchange rate changes on cash and cash equivalents ( 4.0 ) 5.1 ( 0.2 )

Net increase in cash and cash equivalents 70.8 7.7 50.3

Net (decrease) increase in cash and cash equivalents ( 9.5 ) 70.8 7.7

Cash and cash equivalents at beginning of year 245.7 174.9 167.2

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Business Overview

Fastenal is a leader in the wholesale distribution of industrial and construction supplies operating a branch-based business (with an increasing number of Onsite locations).

Fastenal is a leader in the wholesale distribution of industrial and construction supplies.

We distribute these supplies through a network of branches and Onsite locations.

Collectively we refer to our branches and Onsite locations as in-market locations.

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Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

There w ere no imp airments recorded during any of the three years reported in these consolidated financial statements.

There were no impairments recorded during any of the three years reported in these consolidated financial statements.

We determine if an arrangement contains a lease at inception.

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Many of our leases include both lease (e.g., fixed payments including rent, taxes, and insurance costs) and nonlease components (e.g., common-area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and nonlease components for all leases.

Our pick-up truck leases typically have a non-cancelable lease term of less tha n one year and therefore, we have elected the practical expedient to exclude these short-term leases from our ROU assets and lease liabilities.

Our pick-up truck leases typically have a non-cancelable lease term of less than one year and therefore, we have elected the practical expedient to exclude these short-term leases from our ROU assets and lease liabilities.

Most leases include one or more options to renew.

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The identifiable intangible assets are amortized on a straight-line basis over their estimated life.

On March 30, 2020 we purchased certain assets of Apex for $ 125.0 , including identifiable intangible assets totaling $ 123.8 , with a weighted average amortization period of approximately 19.4 years.

Accounting Estimates

The preparation of the consolidated financial statements in conformity with U.S.

generally accepted accounting principles ('GAAP') requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities.

GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent liabilities.

Actual results could differ from those estimates.

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Impact of COVID-19

The COVID-19 pandemic has impacted and could further impact our operations and the operations of our suppliers and customers as a result of quarantines, facility closures, and travel and logistics restrictions.

We recently experienced an increase in sales volume of safety related products.

However, we may realize lower product margins as well as inventory write-downs as a result of the improved supply and the potential inability to sell excess safety related products ordered from suppliers.

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 and suppliers, and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume.

Therefore, we cannot reasonably estimate the impact at this time.

The COVID-19 pandemic has likely influenced various trends the company is currently experiencing.

These include supply chain disruptions and labor shortages, and a modest shift in our mix to include more safety products.

Evaluating 2021 is challenging given the impacts of the pandemic on the company in the year-earlier period.

However, in contrast to much of the preceding one to two years, we are currently seeing a narrower impact on our business related directly to the COVID-19 pandemic, as economic activity has recovered and customer and product mix has reverted back to close to pre-pandemic levels.

We believe current financial results are more reflective of traditional economic and marketplace dynamics than of pandemic-related issues such as facility restrictions, labor force illness, and personal protective equipment (PPE) demand.

The primary exception to this normalization trend is in the signings of our Onsite and Fastenal Managed Inventory (FMI), which have yet to recover to pre-pandemic levels.

To the extent that COVID-19 infections and/or interventions continue to meaningfully influence the marketplace, on a national, local, or business-specific basis, this can either directly impact or indirectly influence access to customer facilities and decision-makers, and lengthen the sales cycle for certain of our solutions.

However, it is possible the COVID-19 pandemic, particularly in light of variant strains of the virus, 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 resumption of high levels of infection and hospitalization, the resulting impact on our customers, suppliers, and vendors, the remedial actions and stimulus measures adopted by federal, state, and local governments, and to what extent normal economic and operating conditions are impacted.

We cannot reasonably estimate the future impact at this time.

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 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

Holders of the company's common stock, par value $ 0.01 per share, at the close of business on May 2, 2019, received one

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

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 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 bus iness, an acquired set of assets and activities 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' .

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.

Immaterial Revision

The prior period balances for additional paid-in capital and common stock have been updated in both the Consolidated Balance Sheets and Consolidated Statements of Stockholders' Equity to reflect the impact of an immaterial correction which reclassified $ 2.9 from additional paid-in capital to common stock in connection with the 2019 stock split.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions to U.S.

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The guidance was effective upon issuance and may be applied prospectively to contract modifications made, hedging relationships entered into, and other transactions affected by reference rate reform, evaluated on or before December 31, 2022, beginning during the reporting period in which the guidance has been elected.

We do not have any receivables, hedging relationships, or lease agreements that reference LIBOR or another reference rate expected to be discontinued.

We are currently evaluating the impact of the new guidance on our consolidated financial statements;

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 .

The majority of this was paid in cash at closing, though a small portion of the purchase price is held in escrow with final payment dependent on certain performance obligations of the seller.

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.

however, we have determined that, of our current debt commitments as outlined in detail in Note 9 'Debt Commitments', only the obligations described under Unsecured Revolving Credit Facility in Note 9 would be impacted by ASU 2020-04.

Our Senior Unsecured Promissory Notes Payable described in Note 9 each have fixed interest rates.

Disaggregation of Revenue

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Revenues are attributed to countries based on the selling location from which the sale occurred.

During 2021, no single customer represented 5% or more of our consolidated net sales.

During 2020, we had a single customer that represented 5 % of our consolidated net sales, whereas all remaining customers fell below that threshold.

During both 2019 and 2018, no single customer represented 5% or more of our consolidated net sales.

During 2019, no single customer represented 5% or more of our consolidated net sales.

Our revenues related to the following geographic areas were as follows for the periods ended December 31:

6 unchanged sentences

Total revenues $ 6,010.9 5,647.3 5,333.7

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

The percentages of our sales by end market were as follows for the periods ended December 31:

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100.0 % 100.0 % 100.0 %

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

The percentages of our sales by product line were as follows for the periods ended December 31:

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(1) The fastener product line represents fasteners and miscellaneous supplies.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Long-Lived Assets

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Our long-lived assets related to the following geographic areas at year end:

2020 2019 2018

United States $ 1,322.9 1,344.9

3 unchanged sentences

Total long-lived assets $ 1,442.4 1,465.1

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Accrued Expenses

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We paid aggregate annual cash dividends per share of $ 1.12 , $ 1.40 , and $ 0.87 in 2021, 2020, and 2019, respectively.

Stock Options

Effective January 3, 2022, the compensation committee of our board of directors granted to our employees options to purchase a total of 660,083 shares of our common stock at an exercise strike price of $ 62.00 per share.

On the same date, certain of our non-employee directors received options to acquire a total of 53,355 shares of our common stock at an exercise price of $ 62.00 per share.

The closing stock price on the effective date of the grants was $ 61.98 per share.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Stock Options

E ffective January 4, 2021, t he compensation committee of our board of directors granted to our employees options to purchase a total of 714,867 shares of our common stock at an exercise strike price of $ 48.00 per share.

The closing stock price on the effective date of the grant was $ 47.65 per share.

On the same date, certain of our non-employee directors elected to forgo all or a portion of the 2021 annual cash retainer in exchange for options to acquire a total of 26,643 shares of our common stock at an exercise price of $ 48.00 per share.

The following tables summarize the details of options granted under our stock option plans that were still outstanding as of December 31, 2021, and the assumptions used to value those grants.

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January 2, 2018 1,087,936 $ 27.50 $ 27.270 743,788 318,052

April 19, 2016 1,690,880 $ 23.00 $ 22.870 930,043 589,137

January 3, 2017 1,529,578 $ 23.50 $ 23.475 732,180 363,406

April 19, 2016 1,690,880 $ 23.00 $ 22.870 524,119 331,739

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January 2, 2018 2.2 % 5.00 2.3 % 23.45 % $ 5.02

April 19, 2016 1.3 % 5.00 2.6 % 26.34 % $ 4.09

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

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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.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

A summary of activities under our stock option plans consisted of the following:

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Exercisable as of December 31, 2021 1,693,805 $ 25.11 4.68

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Outstanding Exercise

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Balance at end of year 575,464,682 574,159,575 574,128,911

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Earnings Per Share

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Our employees in Canada may participate in a Registered Retirement Savings Plan.

The general purpose of both of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular savings contributions.

The general purpose of both of these plans is to provide additional financial security during retirement by providing employees with an incentive to make regular

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

savings contributions.

In addition to the participation of our employees, we make annual profit sharing contributions based on an established formula.

The expense recorded under this profit sharing formula was approximatel y $ 16.2 , $ 13.8 , and $ 13.0 for 2020, 2019, and 2018, respectively.

The expense recorded under this profit sharing formula was approximately $ 17.4 , $ 16.2 , and $ 13.8 for 2021, 2020, and 2019, respectively.

Earnings before income taxes were derived from the following sources:

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Earnings before income taxes $ 1,207.8 1,132.7 1,043.7

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Components of income tax expense (benefit) were as follows:

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State income taxes, net of federal benefit 34.9 36.3 32.8

Transition tax — — 1.2

Remeasurement of deferred taxes for Tax Act — — ( 11.5 )

Other, net ( 5.7 ) ( 0.6 ) 0.8

14 unchanged sentences

Foreign valuation allowances ( 1.7 ) ( 2.2 )

Prepaid royalty 5.9 —

Other, net 0.2 ( 0.3 )

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Decrease related to statute of limitation lapses ( 2.6 ) ( 0.7 )

Settlements — —

Balance at end of year:

Included in the liability for gross unrecognized tax benefits is an immaterial amount for interest and penalties, both of which we classify as a component of income tax expense.

The amount of gross unrecognized tax benefits that would favorably impact the effective tax rate, if recognized, is not material.

The amount of gross unrecognized tax benefits that would favorably impact the eff ective tax rate, if recognized, is not material.

We do not anticipate significant changes in total unrecognized tax benefits during the next twelve months.

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as those earnings continue to be permanently reinvested.

On December 22, 2017, the Tax Act was signed into law.

The Tax Act made broad and complex changes to the U.S.

tax code which include:

a lowering of the U.S.

federal corporate income tax rate from 35% to 21% effective January 1, 2018, accelerated expensing of qualified capital investments for a specific period, and a transition from a worldwide to a territorial tax system which requires companies to pay a one-time transition tax on certain unrepatriated earnings from foreign subsidiaries.

ASC 740 requires a company to record the effects of a tax law change in the period of enactment which, for us, was fiscal 2017.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

ASU 2018-05 provides guidance on the application of the Tax Act which includes allowing a company to record a provisional amount during the measurement period for the impacts when the necessary information is not available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law.

The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year.

The accounting for the income tax effects of the Tax Act was complete in 2018 when the final impact of the transition tax and impacts of accelerating depreciation for certain physical assets were recorded.

Operating Leases

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Certain operating leases for pick-up trucks contain residual value guarantee provisions which would generally become due at the expiration of the operating lease agreement if the fair value of the leased vehicles is less than the guaranteed residual value.

The aggregate residual value guarantee related to these leases was approximately $ 83.1 .

The aggregate residual value guarantee related to these leases was appro ximately $ 83.4 .

We believe the likelihood of funding the guarantee obligation under any provision of the operating lease agreements is remote.

The cost components of our operating leases were as follows for the periods ended December 31:

2021 2020 2019

Facilities and

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Equipment Leased

Vehicles Total Leased

Facilities and

Equipment Leased

Vehicles Total

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Present value of lease liabilities $ 227.3 19.5 246.8

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

The weighted average remaining lease terms and discount rates for all of our operating leases were as follows for the periods ended December 31:

6 unchanged sentences

Leased vehicles 1.79 % 2.39 %

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Supplemental cash flow information related to our operating leases was as follows for the periods ended December 31:

2021 2020 2019

Cash paid for amounts included in the measurement of lease liabilities:

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We are currently in compliance with these covenants.

Borrowings under the Credit Facility generally bear interest at a rate per annum equal to the London Interbank Offered Rate ('LIBOR') for interest periods of various lengths selected by us, plus 0.95 %.

Borrowings under the Credit Facility generally bear interest at a rate per annum equal to LIBOR for interest periods of various lengths selected by us, plus 0.95 %.

We pay a commitment fee for the unused portion of the Credit Facility.

This fee is either 0.10 % or 0.125 % per annum based on our usage of the Credit Facility.

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Senior Unsecured Promissory Notes Payable

We have issued senior unsecured promissory notes under our master note agreement (the 'Master Note Agreement') in the aggregate principal amount of $ 405.0 .

We have issued senior unsecured promissory notes under our master note agreement (the Master Note Agreement) in the aggregate principal amount of $ 365.0 as of December 31, 2021.

Our aggregate borrowing capacity under the Master Note Agreement is $ 600.0 ;

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The Master Note Agreement contains certain financial and other covenants and we are in compliance with these covenants.

Principal payments required on our outstanding indebtedness, based on the maturity dates defined within our debt arrangements, for the succeeding five years, are displayed in the table below, as of December 31, 2020:

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Principal payments required on our outstanding indebtedness, based on the maturity dates defined within our long-term debt arrangements, for the succeeding five years, are displayed in the table below, as of December 31, 2021:

Principal Payments

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We evaluated all subsequent event activity and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the Notes to Consolidated Financial Statements, with the exception of the dividend declaration and stock option activities disclosed in Note 5.

Selected Quarterly Financial Data (Unaudited)

(Amounts in millions except per share information)

Net Sales Gross

Profit Pre-tax

Earnings Basic Net

Earnings per Share (1)

Diluted Net Earnings per Share (1)

Cash Dividends

Paid per Share of Common Stock

First quarter $ 1,367.0 636.8 269.2 202.6 0.35 0.35 0.250

Second quarter 1,509.0 671.6 313.7 238.9 0.42 0.42 0.250

Third quarter 1,413.3 640.6 287.6 221.5 0.39 0.38 0.250

Fourth quarter 1,358.0 618.8 262.2 196.1 0.34 0.34 0.650

Total $ 5,647.3 2,567.8 1,132.7 859.1 1.50 1.49 1.400

Fastenal Company and Subsidiaries

Notes to Consolidated Financial Statements—Continued

Net Sales Gross

Profit Pre-tax

Earnings per Share (1)

Diluted Net Earnings per Share (1)

Cash Dividends

Paid per Share of Common Stock

First quarter $ 1,309.3 624.7 257.5 194.1 0.34 0.34 0.215

Second quarter 1,368.4 641.2 271.4 204.6 0.36 0.36 0.215

Third quarter 1,379.1 651.1 278.4 213.5 0.37 0.37 0.220

Fourth quarter 1,276.9 598.4 236.4 178.7 0.31 0.31 0.220

Total $ 5,333.7 2,515.4 1,043.7 790.9 1.38 1.38 0.870

(1) Amounts may not foot due to rounding difference.

***End of Notes to Consolidated Financial Statements***

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data