Fastenal Company (FAST)’s Q4 and FY2014 Earnings Results Conference Call Transcript

Daniel L. Florness– Chief Financial Officer

Yes.

Garden Peter- Lambo Security

Can I ask another question, you had an initiative in metal working that was started several years ago, which really hasn’t done very much, the relationship with keta metal really just seems to be plotting along, is that still a focus of the company or future growth whatever, or is that sorta just been put on the back burner ?

Willard D. Oberton – Chairman

Oh I’ll jump in on that, metal working continues to do well. Our relationship with keta metal is good, you know. People, I think have too high of an expectation going in thinking that we are gonna be as big as MSE overnight and that doesn’t happen. Our metal working business has grown, not doubled, but almost double-digit above the fast growth in 2014. We even got better than in 2013. We’ve grown a very nice sized business, we’re doing well with it, we think the upside is great. It gets hard to grow a business, at this rate now we’re just at ten percent of our total revenue. So it’s a meaningful sized business. And it’s hard to grow at more than twenty plus per cent, year over year with a business that big.

We’re very committed, we think we’re gonna continue to do well at it for a long time and part of it, of what we learned is that although keta metal is a very good supplier, they don’t have full spectrum of what the customers need and neither does any of the other suppliers so we developed relationships with a wide range of suppliers and mostly we’re enjoying very good growth through Fastenal and we’re also very committed in Blade, it’s a great opportunity for the future. The main thing that makes sense is our Fastenal and M.R.O customers, most of those are using metal working products. We’ve already developed relationships, now we have to develop the product relationship in this specific area.

Garden Peter- Lambo Security

Alright, thank you very much.

Operator

Our next question comes from the line of our marketal with William Blair. Your line is open.

William Blair

Thanks, wanna clarify that ten to twelve per cent you said was tied owing gas. Is that direct to energy customers, or were you saying that ten to twelve per cent of our stores are in energy levered states?

Daniel L. Florness – Chief Financial Officer

Um, ten to twelve percent of our sales are in those geographic areas and I would say only half of that would be closer to the energy piece. But that’s angled at someone talking to our regional leaders in those geographic areas, but it’s really looking at the Gulf Coast, the Texas market, Western Pennsylvania, Western North Dakota, up in Oklahoma and Western Canada and looking at those and engaging it.