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

John Milani – John Capital Market

I mean the other distributors have said the same thing, it’s not unusual as administrator that the larger customers are are contributing more but, to the point earlier I think Leland J. Hein – President & CEO brought up the adding up the heads and putting in your release adding more in 15. As you said you did a nice job of controlling your SGNA cost. Do you see that as percentage sales more level with 14 this year given that you are gonna add more heads, but maybe all set with some further focus on cost or how do see that shaping up.

Daniel L. Florness – Chief Financial Officer

I don’t follow your question.

John Milani – John Capital Market

SGNA is a percentage of sales which was down about 54 base points this year are just under 30 percent. And you pointed out that you had pretty tight controls on expenses, especially in the fourth quarter. You also said that you’re gonna add smart heads in 15 to kind of resume what you were doing in 14, i was just curious how you see those two in aggregate, focus on cost control but also adding head, how do you see that aggregating into your SGNA’s or percentage sales.

Daniel L. Florness – Chief Financial Officer

When you think about the pathway to profit, everything about that including adding heads is about leveraging your SGNA. In order to get 28 or 30, low 30s from our perspective that’s all coming from SGNA, the position we’re is that when you look at the labor growth for next year SGNA growth for next year, a lot of the incentive pieces like I touched on what we gave up in the fourth quarter of the year because there is actually bonuses paid out again. That’s in our numbers now, that’s been growing into our numbers as we’ve gone through the year into the stepping up a little bit every quarter. It really puts us in a position to make investments but the rest of the expense pool isn’t growing that fast. So, we think we’re in agreat position to manage the SGNA going into 2015.

John Milani – John Capital Market

Thanks and Lee congratulations on your new position.

Leland J. Hein – President & CEO- CEO

Well, Thank you!