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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 2000, or
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________________ to ______________________
Commission file number 0-16125
FASTENAL COMPANY
________________________________________________________________________
(Exact name of registrant as specified in its charter)
Minnesota 41-0948415
________________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 Theurer Boulevard
Winona, Minnesota 55987-1500
_________________________________________ ___________
(Address of principal executive offices) (Zip Code)
(507) 454-5374
____________________________________________________
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.01
par value
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No___
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the Common Stock held by non-affiliates of the
registrant as of February 21, 2001 was $1,657,177,034. For purposes of
determining this number, all executive officers and directors of the registrant
as of February 21, 2001 are considered to be affiliates of the registrant. This
number is provided only for the purposes of this report on Form 10-K and does
not represent an admission by either the registrant or any such person as to the
status of such person.
As of February 21, 2001, the registrant had 37,938,688 shares of Common Stock
issued and outstanding.
2
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 2000 are incorporated by reference in Part II. Portions of
the registrant's Proxy Statement for the annual meeting of shareholders to be
held April 17, 2001 are incorporated by reference in Part III.
FORWARD LOOKING STATEMENTS
This Form 10-K, including the sections in Part I hereof captioned "Item 1.
Business - Development of the Business", "Item 1. Business - Products", "Item 1.
Business - Manufacturing and Support Services Operations", and "Item 2.
Properties", and the sections in Part II hereof captioned "Item 5. Market for
Registrant's Common Equity and Related Stockholder Matters" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations", contains or incorporates by reference statements that are not
historical in nature and that are intended to be, and are hereby identified as,
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995, including statements regarding new store and distribution
center openings, markets for new stores, expansion of foreign operations,
technology conversions, introduction of new product lines, growth in
manufacturing and support services, completion of construction of distribution
centers, leasing of new stores, capital expenditures, funding of expansion
plans, and dividends. A discussion of certain risks and uncertainties that could
cause actual results to differ materially from those predicted in such forward-
looking statements is included in the registrant's Annual Report to Shareholders
for the fiscal year ended December 31, 2000 in the section thereof captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", which section has been incorporated in this Form 10-K by reference.
The registrant assumes no obligation to update either such forward-looking
statements or the discussion of such risks and uncertainties.
PART I
ITEM 1. BUSINESS
Fastenal Company ("Fastenal Company" and, together with its wholly owned
subsidiaries, Fastenal Company Services, Fastenal Company Purchasing, Fastenal
Company Leasing, Fastenal Canada Company, Fastenal Mexico, S. de R.L. de C.V.,
and Fastenal Mexico Services, S. de R.L. de C.V., collectively, "the Company")
began as a partnership in 1967, and was incorporated under the laws of Minnesota
in 1968. As of December 31, 2000, the Company had 897 store sites located in 48
states, Puerto Rico, and Canada and 4,356 people employed at these sites. Sixty-
nine of these sites were satellite stores of an existing site.
The Company sells industrial and construction supplies. These industrial and
construction supplies are grouped into nine product lines described further
below.
The Company operated eleven distribution centers as of December 31, 2000 from
which the Company distributes products to its store sites, and operates a
facility in Memphis, Tennessee to receive and package goods coming from
suppliers outside of the United States.
3
Development of the Business
Fastenal Company began in 1967 with a marketing strategy of supplying threaded
fasteners to customers in small to medium-sized cities. The Company believes its
success can be attributed to its ability to offer such customers a full line of
products at convenient locations, and to the high quality of the Company's
employees.
The Company opened its first store site in Winona, Minnesota, a city with a
population of approximately 25,000. The following table shows the number of
Company store sites during each of the last ten years and the related
consolidated net sales for each year during that period:
2000 1999 1998 1997 1996 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------
Number of
store sites
at year end/1/ 897 809 766 644 484 375 315 253 200 158
Net sales (in
thousands) $ 745,740 609,186 503,100 397,992 287,691 222,555 161,886 110,307 81,263 62,305
/1/ During 2000 two "in-plant" sites, previously included in the store sites
number, were reclassified to in-plant status. One of these "in-plant" sites
opened in 1996 and the other opened in 1997. The store numbers above reflect
the historical numbers and have not been reflected for the reclassification.
As of December 31, 2000, the Company operated 897 store sites located in:
Alabama 16 Iowa 19 Nebraska 9 Rhode Island 3
Arizona 5 Kansas 19 Nevada 4 South Carolina 13
Arkansas 12 Kentucky 14 New Hampshire 9 South Dakota 6
California 39 Louisiana 13 New Jersey 10 Tennessee 20
Colorado 10 Maine 7 New Mexico 5 Texas 56
Connecticut 9 Maryland 9 New York 24 Utah 9
Delaware 3 Massachusetts 11 North Carolina 30 Vermont 3
Florida 22 Michigan 39 North Dakota 7 Virginia 21
Georgia 26 Minnesota 30 Ohio 47 Washington 20
Idaho 8 Mississippi 11 Oklahoma 14 West Virginia 10
Illinois 34 Missouri 17 Oregon 16 Wisconsin 39
Indiana 37 Montana 7 Pennsylvania 38 Wyoming 4
Puerto Rico 5 Canada 58
The Company has closed only four store sites in its history.
4
The Company selects new locations for its stores based on their proximity to the
Company's distribution network, population statistics, and employment data for
manufacturing and construction. The Company intends to continue opening new
store sites and currently expects the rate of new store openings to be
approximately 10 to 15% per year.
The Company stocks all new stores with an inventory drawn from all of its
product lines. Subsequent to a site's opening, the site personnel customize the
inventory offering to that site's customer base. The Company has two types of
stores: (1) the stand-alone store and (2) the satellite store. The stand-alone
store is typically located in cities with a population in excess of 8,000. The
Company believes approximately 1,000 markets in the United States and Canada
(including those in which existing stand-alone stores are already located) has
sufficient potential to justify this type of store. Many of the future potential
markets for stand-alone stores are located in smaller communities. The second
type, the satellite store, operates as a satellite of a stand-alone store. The
satellite store is usually located within 30 miles of the stand-alone (mother)
store and is typically managed by personnel at the mother store. The Company has
satellite stores located in communities with a population as small as 2,000. In
most cases, the Company was already doing business in this community from the
mother store, but the addition of a physical presence in the community provided
sales increases from that community. Of the 90 stores opened during 2000, three
opened as satellite stores. Although the Company cannot be sure of the success
of these stores, the Company believes that their success could lead to
approximately 500 satellite store sites in the United States and Canada. Some of
these satellite stores are expected to eventually become stand-alone stores. Of
the 897 store sites operating at December 31, 2000, 828 stores were operating as
stand-alone stores and 69 were operating as satellite stores.
In addition to the stand-alone and satellite stores discussed above, the Company
also operates "in-plant" sites. The "in-plant" site is a selling unit located in
or near a customer's facility. These sites are not included in the store count
numbers.
The Company opened nine store sites in Canada in 1998, five in 1999, and eleven
in 2000, and plans to open additional store sites in Canada in the future. The
Company opened three store sites in Puerto Rico in 1998, none in 1999, and one
in 2000, and plans to open additional store sites in Puerto Rico in the future.
The stores in Canada and Puerto Rico contributed less than 5% of the Company's
consolidated net sales in 2000. In 2000 the Company sold products into Mexico
from its existing stores along the border between the United States and Mexico.
The Company also established a Mexican subsidiary in 1998. This subsidiary
employs sales personnel who sell directly into Mexico. During 2001 the Company
intends to open a store site in Mexico.
No assurance can be given that any of the expansion plans described above will
be achieved, or that new stores, once opened, will be profitable.
It has been the Company's experience that near-term profitability has been
adversely affected by the opening of new store sites, due to the related start-
up costs and the time necessary to generate a customer base. A new store
generates its sales from direct sales calls, a slow process involving repeated
contacts. As a result of this process, sales volume builds slowly and it
typically requires nine to 12 months for a new store to achieve its first
profitable month. Of the twelve stores opened in the first quarter of 2000,
seven were profitable in the fourth quarter of 2000.
5
For 2000, annual sales volumes of store sites operating at least five years
ranged between approximately $200,000 and $5,400,000, with 75% of these store
sites having annual sales volumes within the range of approximately $500,000 to
$1,900,000. The data in the following table shows the growth in the average
sales of the Company's store sites from 1999 to 2000 based on each site's age.
The store sites opened in 2000 contributed approximately $8.5 million (or
approximately 1.1%) of the Company's consolidated net sales in 2000, with the
remainder coming from store sites opened prior to 2000.
Number of store
Age of store sites as of Year sites in group as of Average Average Percent
December 31, 2000 Opened December 31, 2000 sales 1999 sales 2000 Change
-----------------------------------------------------------------------------------------------------
0-1 year old 2000 90 $ -- $ 95,000/1/ -- %
1-2 years old 1999 44 44,000/1/ 407,000 --
2-3 years old 1998 121/2/ 393,000/2/ 554,000/2/ 41.0
3-4 years old 1997 159/3/ 470,000/3/ 613,000/3/ 30.4
4-5 years old 1996 108/3/ 603,000/3/ 742,000/3/ 23.1
5-6 years old 1995 60 666,000 800,000 20.1
6-7 years old 1994 62 678,000 799,000 17.8
7-8 years old 1993 53 836,000 942,000 12.7
8-9 years old 1992 42 1,007,000 1,199,000 19.1
9-10 years old 1991 32 1,102,000 1,197,000 8.6
10-11 years old 1990 28 1,361,000 1,518,000 11.5
11-14 years old 1987-1989 53 1,628,000 1,734,000 6.5
14+ years old 1967-1986 45 2,037,000 2,315,000 13.6
/1/ Average sales include sales of store sites open for less than the full
fiscal year.
/2/ During 1999 one store site in this group closed. The 1999 average reflects
121.5 store sites and the 2000 average reflects 121 store sites.
/3/ During 2000 two "in-plant" sites, previously included in the store sites
number, were reclassified to in-plant status. The new 1999 and 2000
averages reflect the number of store sites after giving effect to such
reclassification.
As of December 31, 2000, the Company operated distribution centers in or near
Winona, Minnesota; Indianapolis, Indiana; Dallas, Texas; Atlanta, Georgia;
Scranton, Pennsylvania; Fresno, California; Lakewood, Washington; Akron, Ohio;
Salt Lake City, Utah; Winston-Salem, North Carolina; and Kansas City, Missouri.
Distribution centers are located so as to permit twice-a-week to five times-a-
week deliveries to Company stores using Company trucks and overnight delivery by
surface common carrier. As the number of stores increases, the Company intends
to add new distribution centers. The Company also operates a packaging facility
in Memphis, Tennessee. This facility receives freight containers from foreign
suppliers and repackages the items in standard packages using high-speed
equipment.
The Company operates a central UNIX/terminal-based computer system allowing
automatic data exchange between the stores and the distribution centers. The use
of client/server technology allows the Company's network of UNIX-based machines
to serve networked personal computers and workstations. The Company converted a
portion of this central processing system in both 1999 and 2000 to a new
computer software and operating system and plans to convert additional modules
during 2001 and 2002. At the store level, the Company operates a proprietary
point-of-sale system. This system operates on a Microsoft Windows NT system.
6
Trademarks
The Company conducts its business in the United States, Canada, and Puerto Rico
under various trademarks and service marks, including Fastenal(R), FastTool(R),
SharpCut(R), EquipRite(R), CleanChoice(R), PowerPhase(TM) and FastArc(TM).
Although the Company does not believe its operations are substantially dependent
upon any of its trademarks or service marks, the Company considers its
"Fastenal" name and other trademarks and service marks to be valuable to its
business.
Products
The Company's original product offering in 1967 was fasteners and other
industrial and construction supplies, many of which are sold under the
Fastenal(R) product name. Today, this product line consists of approximately
68,000 different stock items. This product line may be divided into two broad
categories: threaded fasteners, such as bolts, nuts, screws, studs, and related
washers; and other industrial and construction supplies, such as paints, various
pins and machinery keys, concrete anchors, batteries, sealants, metal framing
systems, wire rope, stainless strut, private label stud anchors, rivets, and
related accessories.
Threaded fasteners are used in most manufactured products and building projects,
and in the maintenance and repair of machines and structures. Although some
aspects of the threaded fastener market are common to all cities, the Company
feels that each city's market is to some extent unique. Therefore, the Company
opens each store with minimal base stocks of inventory and then tailors the
growing inventory to the local market demand as it develops. Threaded fasteners
accounted for approximately 51%, 51%, and 55% of the Company's consolidated net
sales in 2000, 1999 and 1998, respectively.
Concrete anchors make up the largest portion of the other supply items included
in the Fastenal(R) product line. Most concrete anchors use threaded fasteners as
part of the completed anchor assembly.
During the 1990's, the Company added eight additional product lines. These
product lines are sold through the same distribution channel as the original
Fastenal(R) product line and include the following:
Approximate
Year number of Private label
Product line: introduced stock items product name
- -------------------------------------------------------------------
Tools 1993 51,000 FastTool(R)
Cutting Tools 1996 24,000 SharpCut(R)
Hydraulics and
Pneumatics 1996 23,000
Material Handling 1996 8,000 EquipRite(R)
Janitorial Supplies 1996 4,000 CleanChoice(R)
Electrical Supplies 1997 7,000 PowerPhase(TM)
Welding Supplies/1/ 1997 7,000 FastArc(TM)
Safety supplies 1999 3,000
/1/ Excluding gas and welding machines.
The Company plans to add other industrial product lines in the future.
7
Inventory Control
The Company controls inventory by using computer systems to determine desired
stock levels. The data used for this purpose is derived from reports showing
sales activity by stock item for the previous three years. Computers then
convert this data to typical store maximum-minimum inventory levels for each
stock item. Stores can deviate from preset inventory levels as deemed
appropriate by their district managers. Inventories in distribution centers are
established from computerized sales data for the stores served by the respective
centers.
Manufacturing and Support Services Operations
In 2000 approximately 95.3% of the Company's consolidated net sales were
attributable to products manufactured by other companies to industry standards.
The remaining amount of approximately 4.7% of the Company's consolidated net
sales for 2000 related to products manufactured, modified or repaired by either
the Company's Manufacturing Division or its Support Services. The manufactured
products consist primarily of non-standard sizes of threaded fasteners made to
customers' specifications. The services provided by the Support Services group
include, but are not limited to, items such as tool repair, band saw blade
welding and light manufacturing. The Company engages in these activities
primarily as a service to its customers and expects these activities in the
future to continue to contribute in the range of 5% to 10% of the Company's
consolidated net sales.
Sources of Supply
The Company uses a large number of suppliers for the approximately 195,000
standard stock items it distributes. Most items distributed by the Company can
be purchased from several sources, although preferred sourcing is used for some
stock items to facilitate quality control. No single supplier accounted for more
than 5.0% of the Company's purchases in 2000.
8
Customers and Marketing
The Company believes its success can be attributed to its ability to offer
customers in small to medium-sized cities a full line of products at convenient
locations, and to the high quality of the Company's employees. Most of the
Company's customers are in the construction and manufacturing markets. The
construction market includes general, electrical, plumbing, sheet metal, and
road contractors. The manufacturing market includes both original equipment
manufacturers and maintenance and repair operations. Other users of the
Company's products include farmers, truckers, railroads, mining companies,
municipalities, schools, and certain retail trades. As of December 31, 2000, the
Company's total number of active customer accounts (defined as accounts having
purchase activity within the last 90 days) was approximately 120,000.
During each of the three years ended December 31, 2000, no one customer
accounted for a significant portion of the Company's sales. The Company believes
that the large number of its customers together with the varied markets that
they represent provide some protection to the Company from economic downturns in
a particular market.
A significant portion of the Company's sales is generated through direct calls
on customers by store personnel. Because of the nature of the Company's
business, the Company does not use the more expensive forms of mass media
advertising such as television, radio, and newspapers. Forms of advertising used
by the Company include signs, catalogs, and direct mailings.
Competition
The Company's business is highly competitive. Competitors include both large
distributors located primarily in large cities and smaller distributors located
in many of the same cities in which the Company has stores. The Company believes
that the principal competitive factors affecting the markets for the Company's
products are customer service and convenience.
Some competitors use vans to sell their products in communities away from their
main warehouses, while others rely on mail order or telemarketing sales. The
Company, however, believes that the convenience provided to customers by
actually operating a number of stores in smaller markets, each offering a wide
variety of products, is a competitive selling advantage and that the large
number of stores in a given area, taken together with the Company's ability to
provide frequent deliveries to such stores from centrally located distribution
centers, makes possible the prompt and efficient distribution of products.
Having trained personnel at each store also enhances the Company's ability to
compete (see "Employees" below).
Employees
As of December 31, 2000, the Company employed a total of 6,477 full and part-
time employees, 4,356 being store managers and store employees, and the balance
being employed in the Company's distribution centers, packaging facility,
manufacturing operations, service operations and home office.
9
The Company believes that the quality of its employees is critical to its
ability to compete successfully in the markets it currently serves and to its
ability to open new stores in new markets. The Company fosters the growth and
education of skilled employees throughout the organization by operating training
programs and by decentralizing decision making. Wherever possible, promotions
are from within the Company. For example, most new store managers are promoted
from an assistant manager's position at another store and district managers (who
supervise a number of stores) are usually former store managers.
The Company's sales personnel participate in incentive bonus arrangements that
place emphasis on achieving increased sales on a store and regional basis, while
still attaining targeted levels of gross profit. As a result, a significant
portion of the Company's total employment cost varies with sales volume. The
Company also pays incentive bonuses to other personnel for achieving pre-
determined cost containment goals.
None of the Company's employees is subject to a collective bargaining agreement
and the Company has experienced no work stoppages. The Company believes its
employee relations are excellent.
ITEM 2. PROPERTIES
The Company owns six facilities in Winona, Minnesota. These facilities are as
follows:
Approximate
Purpose Square Feet
- -------------------------------------------------------------------------------------------
Distribution center and home office 213,000
Manufacturing facility 100,000
Winona store and regional training center 13,000
Winona product support and support services 55,000
Rack and shelving storage 42,000
Multi-building complex which houses certain operations of its
Manufacturing Division and its Support Services group 30,000
The Company also owns the following facilities, excluding store locations,
outside of Winona, Minnesota:
Approximate
Purpose Location Square Feet
- ---------------------------------------------------------------------------------------------
Distribution center Indianapolis, Indiana 414,000
Distribution center Indianapolis, Indiana 76,000
Distribution center Atlanta, Georgia 54,000
Distribution center Dallas, Texas 95,000
Distribution center Scranton, Pennsylvania 80,000/1/
Distribution center Akron, Ohio 102,000
Distribution center Kansas City, Kansas ------/2/
/1/ An 80,000 square foot addition to the Scranton, Pennsylvania distribution
center is currently being built. The Company expects to complete
construction late in the second quarter or early in the third quarter of
2001.
/2/ A new distribution center in Kansas City is currently being built. The
Company expects to complete construction in third quarter of 2001.
10
In addition, the Company owns 31 buildings that house the Company's store
locations in various cities throughout the United States.
All other buildings occupied by the Company are leased. Leased stores range from
approximately 1,200 to 8,000 square feet, with lease terms of up to 48 months.
The Company also leases the following distribution centers and packaging
facility:
Approximate Lease Expiration Remaining Lease Renewal
Purpose Location Square Feet Date Options
- ------------------------------------------------------------------------------------------------------------------------
Distribution center Lakewood, Washington 40,000 February 2002 None
Distribution center Fresno, California 52,500 February 2002 Three one-year periods/1/
Distribution center Salt Lake City, Utah 22,000 October 2002 None
Distribution center Winston-Salem, North Carolina 58,400 October 2002 None
Packaging facility Memphis, Tennessee 115,000 December 2001 None
Distribution center Kansas City, Missouri 40,000 April 2001 One two-year period/1,2/
/1/ The lease renewals can be exercised at the Company's option.
/2/ As previously discussed, the Company is currently in the process of
building a new distribution center in Kansas City, Kansas.
If economic conditions are suitable, the Company will, in the future, consider
purchasing store sites to house its older stores. It is anticipated that all
sites for new stores will continue to be leased. It is the Company's policy to
negotiate relatively short lease terms to facilitate relocation of particular
store operations if deemed desirable by management. It has been the Company's
experience that space suitable for its needs and available for leasing is more
than sufficient.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
11
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Fastenal Company are:
Name Age Position
- -------------------------------------------------------------------------------------------------------------
Robert A. Kierlin 61 Chairman of the Board, President,
Chief Executive Officer and
Director
Willard D. Oberton 42 Executive Vice President, Chief
Operating Officer and Director
Nicholas J. Lundquist 43 Vice President of Sales
Daniel L. Florness 37 Treasurer, Chief Financial Officer
and Chief Accounting Officer
Stephen M. Slaggie 61 Secretary and Director
Mr. Kierlin has been the Chairman of the Board, President and Chief Executive
Officer of Fastenal Company and has served as a director of Fastenal Company
since Fastenal Company's incorporation in 1968.
Mr. Oberton has been the Executive Vice President and Chief Operating Officer of
Fastenal Company since June 2000 and has served as a director of Fastenal
Company since June 1999. From March 1997 through June 2000, Mr. Oberton held
the position of Vice President and Chief Operating Officer of Fastenal Company.
From June 1986 through March 1997, Mr. Oberton held the position of General
Operations Manager of Fastenal Company.
Mr. Lundquist has been Vice President of Sales of Fastenal Company since June
2000. From April 1997 through June 2000, Mr. Lundquist held the position of
National Sales Manager of Fastenal Company. From January 1991 through March
1997, Mr. Lundquist was a Regional Manager of Fastenal Company.
Mr. Florness has been the Treasurer, Chief Financial Officer and Chief
Accounting Officer of Fastenal Company since June 1996. From January 1987
through May 1996, Mr. Florness was employed by KPMG LLP, a public accounting
firm. Mr. Florness served in the capacity of senior manager from July 1992
through May 1996 with that firm.
Mr. Slaggie has been the Secretary of Fastenal Company and has served as a
director of Fastenal Company since 1970. He became a full-time employee of
Fastenal Company in December 1987, at which time he assumed the additional
duties of Shareholder Relations Director and Insurance Risk Manager. From 1970
through June 1996, Mr. Slaggie also served as the Treasurer of Fastenal Company.
The executive officers are elected by the Board of Directors, generally for a
term of one year, and serve until their successors are elected and qualified.
None of the above executive officers is related to any other such executive
officer or to any other director of Fastenal Company.
12
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Incorporated herein by reference is Fastenal Company's Annual Report to
Shareholders for the fiscal year ended December 31, 2000, Common Stock Data on
page 8.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated herein by reference is Fastenal Company's Annual Report to
Shareholders for the fiscal year ended December 31, 2000, Six-Year Selected
Financial Data on page 4.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Incorporated herein by reference is Fastenal Company's Annual Report to
Shareholders for the fiscal year ended December 31, 2000, Management's
Discussion & Analysis of Financial Condition & Results of Operations on pages
5-7.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Incorporated herein by reference is Fastenal Company's Annual Report to
Shareholders for the fiscal year ended December 31, 2000, Market Risk Management
on page 7.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated herein by reference is Fastenal Company's Annual Report to
Shareholders for the fiscal year ended December 31, 2000, Selected Quarterly
Financial Data (Unaudited) on page 8, and Consolidated Financial Statements,
Notes to Consolidated Financial Statements, and Independent Auditors' Report on
pages 9-19.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference is the information appearing under the headings
"Election of Directors--Nominees and Required Vote", pages 4 and 5, and "Section
16(a) Beneficial Ownership Reporting Compliance", page 13, in Fastenal Company's
Proxy Statement dated March 6, 2001. See also Part I hereof under the heading
"Item X. Executive Officers of the Registrant".
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference is the information appearing under the headings
"Election of Directors--Compensation of Directors", page 6, "Executive
Compensation--Summary of Compensation", page 7, "Executive Compensation--
Option/SAR Grants", pages 8 and 9, and "Executive Compensation--Compensation
Committee Interlocks and Insider Participation", page 9, in Fastenal Company's
Proxy Statement dated March 6, 2001.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference is the information appearing under the heading
"Security Ownership of Principal Shareholders and Management", pages 2-4, in
Fastenal Company's Proxy Statement dated March 6, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
a) 1. Financial Statements:
Consolidated Balance Sheets as of December 31, 2000 and 1999
Consolidated Statements of Earnings for the years ended
December 31, 2000, 1999, and 1998
Consolidated Statements of Stockholders' Equity and Comprehensive
Income for the years ended
December 31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows for the years ended December 31,
2000, 1999, and 1998
Notes to Consolidated Financial Statements
Independent Auditors' Report
(Incorporated by reference to pages 9-19 of Fastenal Company's Annual
Report to Shareholders for the fiscal year ended December 31, 2000)
2. Financial Statement Schedules:
Schedule II--Valuation and Qualifying Accounts
3. Exhibits:
3.1 Restated Articles of Incorporation of Fastenal Company, as
amended (incorporated by reference to Exhibit 3.1 to Fastenal
Company's Form 10-Q for the quarter ended September 30, 1993)
3.2 Restated By-Laws of Fastenal Company (incorporated by reference
to Exhibit 3.2 to Registration Statement No. 33-14923)
10.1 Description of bonus arrangement for Executive Vice President
(incorporated by reference to Exhibit 10 to Fastenal Company's
Form 10-K for the year ended December 31, 1997)
10.2 Description of bonus arrangement for Treasurer (incorporated by
reference to Exhibit 10.2 to Fastenal Company's Form 10-K for the
year ended December 31, 1998)
10.3 Description of bonus arrangement for Vice President of Sales
10.4 Fastenal Company and Subsidiaries Stock Appreciation Rights Plan
13 Annual Report to Shareholders for the fiscal year ended December
31, 2000 (only those portions specifically incorporated by
reference herein shall be deemed filed with the Commission)
21 List of Subsidiaries (incorporated by reference to Exhibit 21 to
Fastenal Company's Form 10-K for the year ended December 31,
1999)
23 Consent of KPMG LLP
Copies of Exhibits will be furnished upon request and payment of the
Company's reasonable expenses in furnishing the Exhibits.
b) Reports on Form 8-K
Fastenal Company filed no reports on Form 8-K during the fourth quarter of
the fiscal year ended December 31, 2000.
15
Independent Auditors' Report on Schedule
The Board of Directors and Stockholders
Fastenal Company:
Under date of January 16, 2001 we reported on the consolidated balance sheets of
Fastenal Company and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of earnings, stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended December 31, 2000, as contained in the 2000 annual report to
shareholders. These consolidated financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for the year 2000.
In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedule as listed
in the accompanying index. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
January 16, 2001
16
FASTENAL COMPANY
Schedule II--Valuation and Qualifying Accounts
Years ended December 31, 2000, 1999, and 1998
"Additions"
Balance at charged to Balance
beginning costs and "Less" at end
Description of year expenses deductions of year
- --------------------------------------------------------------------------------
Year ended December 31,
2000 allowance for
doubtful accounts $ 1,400,000 $ 4,496,000 $ 3,658,000 $ 2,238,000
Year ended December 31,
1999 allowance for
doubtful accounts $ 740,000 $ 3,566,000 $ 2,906,000 $ 1,400,000
Year ended December 31,
1998 allowance for
doubtful accounts $ 660,000 $ 3,493,000 $ 3,413,000 $ 740,000
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: March 5, 2001
FASTENAL COMPANY
By /s/Robert A. Kierlin
____________________________________________________
Robert A. Kierlin, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.
Date: March 5, 2001
By /s/Robert A. Kierlin By /s/Daniel L. Florness
----------------------------------- ---------------------------------
Robert A. Kierlin, President Daniel L. Florness, Treasurer
(Principal Executive Officer) and (Principal Financial Officer and
Director Principal Accounting Officer)
By /s/Stephen M. Slaggie By /s/Michael M. Gostomski
----------------------------------- ---------------------------------
Stephen M. Slaggie, Director Michael M. Gostomski, Director
By /s/Henry K. McConnon By /s/John D. Remick
----------------------------------- ---------------------------------
Henry K. McConnon, Director John D. Remick, Director
By /s/Robert A. Hansen By /s/Willard D. Oberton
----------------------------------- -------------------------------------
Robert A. Hansen, Director Willard D. Oberton, Director
By /s/Reyne K. Wisecup By /s/Michael J. Dolan
----------------------------------- ---------------------------------
Reyne K. Wisecup, Director Michael J. Dolan, Director
INDEX TO EXHIBITS
3.1 Restated Articles of Incorporation of Fastenal
Company, as amended (incorporated by reference
to Exhibit 3.1 to Fastenal Company's Form 10-Q
for the quarter ended September 30, 1993).
3.2 Restated By-Laws of Fastenal Company
(incorporated by reference to Exhibit 3.2
to Registration Statement No. 33-14923).
10.1 Description of bonus arrangement for Executive Vice President
(incorporated by reference to Exhibit 10
to Fastenal Company's Form 10-K for the year
ended December 31, 1997)
10.2 Description of bonus arrangement for Treasurer
(incorporated by reference to Exhibit 10.2
to Fastenal Company's Form 10-K for the year
ended December 31, 1998)
10.3 Description of bonus arrangement for Vice
President of Sales................................... Electronically Filed
10.4 Fastenal Company and Subsidiaries Stock
Appreciation Rights Plan............................. Electronically Filed
13 Annual Report to Shareholders for the fiscal
year ended December 31, 2000 (only those
portions specifically incorporated by reference
herein shall be deemed filed with the Commission).... Electronically Filed
21 List of Subsidiaries
(incorporated by reference to Exhibit 21
to Fastenal Company's Form 10-K for the year
ended December 31, 1999)
23 Consent of KPMG LLP.................................. Electronically Filed