filings.toolsItem 1. FINANCIAL STATEMENTS
46K characters. Original on sec.gov · Markdown
Item 1. FINANCIAL STATEMENTS
FASTENAL COMPANY
Condensed Consolidated Balance Sheets
(Amounts in millions except share and per share information)
(Unaudited)
| Assets | September 30, 2025 | December 31, 2024 | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 288.1 | 255.8 | ||||||||
| Trade accounts receivable, net of allowance for credit losses of $5.5 and $5.2, respectively | 1,347.3 | 1,108.6 | |||||||||
| Inventories | 1,722.8 | 1,645.0 | |||||||||
| Prepaid income taxes | 9.4 | 18.8 | |||||||||
| Other current assets | 178.5 | 183.7 | |||||||||
| Total current assets | 3,546.1 | 3,211.9 | |||||||||
| Property and equipment, net | 1,112.6 | 1,056.6 | |||||||||
| Operating lease right-of-use assets | 315.0 | 279.2 | |||||||||
| Other assets | 142.6 | 150.3 | |||||||||
| Total assets | $ | 5,116.3 | 4,698.0 | ||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of debt | $ | 95.0 | 75.0 | ||||||||
| Accounts payable | 344.8 | 287.7 | |||||||||
| Accrued expenses | 261.1 | 225.6 | |||||||||
| Current portion of operating lease liabilities | 106.8 | 98.8 | |||||||||
| Income taxes payable | 25.0 | — | |||||||||
| Total current liabilities | 832.7 | 687.1 | |||||||||
| Long-term debt | 100.0 | 125.0 | |||||||||
| Operating lease liabilities | 215.5 | 186.6 | |||||||||
| Deferred income taxes | 62.8 | 68.9 | |||||||||
| Other long-term liabilities | 10.8 | 14.1 | |||||||||
| Commitments and contingencies (Notes 3, 5, 6, and 8) | |||||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock: $0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding | — | — | |||||||||
| Common stock: $0.01 par value, 1,600,000,000 shares authorized, 1,148,033,521 and 1,146,640,904 shares issued and outstanding, respectively | 11.5 | 11.5 | |||||||||
| Additional paid-in capital | 112.9 | 82.8 | |||||||||
| Retained earnings | 3,826.3 | 3,613.5 | |||||||||
| Accumulated other comprehensive loss | (56.2) | (91.5) | |||||||||
| Total stockholders' equity | 3,894.5 | 3,616.3 | |||||||||
| Total liabilities and stockholders' equity | $ | 5,116.3 | 4,698.0 |
See accompanying Notes to Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Condensed Consolidated Statements of Income
(Amounts in millions except income per share)
(Unaudited)
| Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | 6,173.1 | 5,721.5 | $ | 2,133.3 | 1,910.2 | |||||||||||||||||
| Cost of sales | 3,380.6 | 3,137.8 | 1,167.5 | 1,051.6 | |||||||||||||||||||
| Gross profit | 2,792.5 | 2,583.7 | 965.8 | 858.6 | |||||||||||||||||||
| Selling, general, and administrative expenses | 1,521.1 | 1,418.5 | 524.3 | 470.5 | |||||||||||||||||||
| Operating income | 1,271.4 | 1,165.2 | 441.5 | 388.1 | |||||||||||||||||||
| Interest income | 4.3 | 4.2 | 0.7 | 1.3 | |||||||||||||||||||
| Interest expense | (5.3) | (5.6) | (1.6) | (1.8) | |||||||||||||||||||
| Income before income taxes | 1,270.4 | 1,163.8 | 440.6 | 387.6 | |||||||||||||||||||
| Income tax expense | 306.0 | 275.3 | 105.1 | 89.5 | |||||||||||||||||||
| Net income | $ | 964.4 | 888.5 | $ | 335.5 | 298.1 | |||||||||||||||||
| Basic net income per share | $ | 0.84 | 0.78 | $ | 0.29 | 0.26 | |||||||||||||||||
| Diluted net income per share | $ | 0.84 | 0.77 | $ | 0.29 | 0.26 | |||||||||||||||||
| Basic weighted average shares outstanding | 1,147.4 | 1,145.1 | 1,147.9 | 1,145.5 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 1,150.3 | 1,148.3 | 1,151.0 | 1,148.4 |
See accompanying Notes to Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Condensed Consolidated Statements of Comprehensive Income
(Amounts in millions)
(Unaudited)
| Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | 964.4 | 888.5 | $ | 335.5 | 298.1 | |||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | 35.3 | (2.3) | (4.6) | 17.4 | |||||||||||||||||||
| Comprehensive income | $ | 999.7 | 886.2 | $ | 330.9 | 315.5 |
See accompanying Notes to Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Condensed Consolidated Statements of Stockholders' Equity
(Amounts in millions except per share information)
(Unaudited)
| Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Common stock | |||||||||||||||||||||||
| Balance at beginning of period | $ | 11.5 | 11.5 | $ | 11.5 | 11.5 | |||||||||||||||||
| Balance at end of period | 11.5 | 11.5 | 11.5 | 11.5 | |||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||
| Balance at beginning of period | 82.8 | 35.2 | 104.2 | 57.8 | |||||||||||||||||||
| Stock options exercised | 23.9 | 26.3 | 6.6 | 7.7 | |||||||||||||||||||
| Stock-based compensation | 6.2 | 6.0 | 2.1 | 2.0 | |||||||||||||||||||
| Balance at end of period | 112.9 | 67.5 | 112.9 | 67.5 | |||||||||||||||||||
| Retained earnings | |||||||||||||||||||||||
| Balance at beginning of period | 3,613.5 | 3,356.9 | 3,743.3 | 3,500.8 | |||||||||||||||||||
| Net income | 964.4 | 888.5 | 335.5 | 298.1 | |||||||||||||||||||
| Cash dividends paid | (751.6) | (669.9) | (252.5) | (223.4) | |||||||||||||||||||
| Balance at end of period | 3,826.3 | 3,575.5 | 3,826.3 | 3,575.5 | |||||||||||||||||||
| Accumulated other comprehensive income (loss) | |||||||||||||||||||||||
| Balance at beginning of period | (91.5) | (54.8) | (51.6) | (74.5) | |||||||||||||||||||
| Other comprehensive income (loss) | 35.3 | (2.3) | (4.6) | 17.4 | |||||||||||||||||||
| Balance at end of period | (56.2) | (57.1) | (56.2) | (57.1) | |||||||||||||||||||
| Total stockholders' equity | $ | 3,894.5 | 3,597.4 | $ | 3,894.5 | 3,597.4 | |||||||||||||||||
| Cash dividends paid per share of common stock | $ | 0.655 | 0.585 | $ | 0.220 | 0.195 |
See accompanying Notes to Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Condensed Consolidated Statements of Cash Flows
(Amounts in millions)
(Unaudited)
| Nine Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net income | $ | 964.4 | 888.5 | $ | 335.5 | 298.1 | |||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation of property and equipment | 126.7 | 123.0 | 42.3 | 41.8 | |||||||||||||||||||
| Gain on sale of property and equipment | (2.6) | (3.0) | (1.0) | (1.3) | |||||||||||||||||||
| Bad debt expense (recoveries) | 3.5 | (0.2) | 1.6 | 0.4 | |||||||||||||||||||
| Deferred income taxes | (6.1) | 2.8 | (7.4) | 1.6 | |||||||||||||||||||
| Stock-based compensation | 6.2 | 6.0 | 2.1 | 2.0 | |||||||||||||||||||
| Amortization of intangible assets | 8.0 | 8.0 | 2.7 | 2.6 | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Trade accounts receivable, net | (233.2) | (113.5) | (26.8) | 7.4 | |||||||||||||||||||
| Inventories | (66.3) | (36.2) | 1.4 | (48.4) | |||||||||||||||||||
| Other current assets | 5.9 | (19.6) | (19.8) | (26.1) | |||||||||||||||||||
| Accounts payable | 50.3 | 40.3 | 25.6 | 9.6 | |||||||||||||||||||
| Accrued expenses | 35.4 | (14.8) | 5.4 | 7.7 | |||||||||||||||||||
| Income taxes | 34.8 | 0.7 | 22.3 | (0.3) | |||||||||||||||||||
| Other | 0.8 | 8.5 | 3.0 | 1.8 | |||||||||||||||||||
| Net cash provided by operating activities | 927.8 | 890.5 | 386.9 | 296.9 | |||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Purchases of property and equipment | (185.3) | (166.3) | (60.3) | (59.4) | |||||||||||||||||||
| Proceeds from sale of property and equipment | 12.5 | 9.6 | 5.6 | 3.6 | |||||||||||||||||||
| Other | (0.3) | (0.3) | (0.1) | (0.1) | |||||||||||||||||||
| Net cash used in investing activities | (173.1) | (157.0) | (54.8) | (55.9) | |||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Proceeds from debt obligations | 1,040.0 | 590.0 | 365.0 | 205.0 | |||||||||||||||||||
| Payments against debt obligations | (1,045.0) | (610.0) | (400.0) | (200.0) | |||||||||||||||||||
| Proceeds from exercise of stock options | 23.9 | 26.3 | 6.6 | 7.7 | |||||||||||||||||||
| Cash dividends paid | (751.6) | (669.9) | (252.5) | (223.4) | |||||||||||||||||||
| Net cash used in financing activities | (732.7) | (663.6) | (280.9) | (210.7) | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 10.3 | 1.0 | (0.9) | 6.4 | |||||||||||||||||||
| Net increase in cash and cash equivalents | 32.3 | 70.9 | 50.3 | 36.7 | |||||||||||||||||||
| Cash and cash equivalents at beginning of period | 255.8 | 221.3 | 237.8 | 255.5 | |||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 288.1 | 292.2 | $ | 288.1 | 292.2 | |||||||||||||||||
| Supplemental information: | |||||||||||||||||||||||
| Cash paid for interest | $ | 5.7 | 6.0 | $ | 1.5 | 1.8 | |||||||||||||||||
| Net cash paid for income taxes | $ | 274.4 | 269.4 | $ | 89.1 | 87.6 | |||||||||||||||||
| Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ | 109.5 | 75.5 | $ | 36.4 | 26.1 |
See accompanying Notes to Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Fastenal Company and subsidiaries (the 'Company,' 'Fastenal,' 'we,' 'our,' or 'us') have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. They do not include all information and footnotes required by U.S. GAAP for a complete set of financial statements. However, except as described herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in our consolidated financial statements as of and for the year ended December 31, 2024. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement have been included.
Stock Split
On April 23, 2025, the Company announced a two-for-one stock split of its outstanding common stock. Holders of the Company's common stock, par value $0.01 per share, at the close of business on May 5, 2025, 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 21, 2025. All historical common stock share, per share information, stock option awards, and stockholders' equity balances for all periods presented in the accompanying Condensed Consolidated Financial Statements and Notes thereto in this quarterly report on Form 10-Q have been retroactively adjusted to reflect the two-for-one stock split.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. This change will apply on a prospective basis to annual financial statements for periods beginning after the effective date. However, retrospective application in all prior periods presented is permitted. ASU 2023-09 is expected to impact our income tax disclosures beginning with the consolidated financial statements included in the annual report on Form 10-K for the fiscal year ending December 31, 2025, but will have no impact on our results of operations, cash flows, or financial condition.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), which adds new disclosure requirements including the composition of certain income statement expense line items (such as purchases of inventory, employee compensation, and 'other expenses') and a separate disclosure for selling expenses. This change is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, however, early adoption is permitted. We are currently evaluating the impact that the adoption of ASU 2024-03 will have on our consolidated financial statements and disclosures and anticipate adoption in our annual report on Form 10-K for the fiscal year ending December 31, 2027.
(2) Revenue
Revenue Recognition
Net sales include products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when or as we satisfy our performance obligations under the contract. We recognize revenue by transferring control of the promised products to the customer, which primarily occurs when products are delivered or picked up by the customer. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. We estimate product returns based on historical return rates. Using probability assessments, we estimate sales incentives expected to be paid over the term of the contract. The majority of our contracts have a single performance obligation and are short-term in nature. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
Disaggregation of Revenue
Revenues are attributable to countries based on the selling location from which the sale occurred. Our revenues related to the following geographic areas were as follows for the periods ended September 30:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| United States | $ | 5,140.1 | 4,760.2 | $ | 1,777.9 | 1,587.2 | |||||||||||||||||
| % of revenues | 83.3 | % | 83.2 | % | 83.3 | % | 83.1 | % | |||||||||||||||
| Canada and Mexico | 835.1 | 783.7 | 284.8 | 264.1 | |||||||||||||||||||
| % of revenues | 13.5 | % | 13.7 | % | 13.4 | % | 13.8 | % | |||||||||||||||
| All other foreign countries | 197.9 | 177.6 | 70.6 | 58.9 | |||||||||||||||||||
| % of revenues | 3.2 | % | 3.1 | % | 3.3 | % | 3.1 | % | |||||||||||||||
| Total revenues | $ | 6,173.1 | 5,721.5 | $ | 2,133.3 | 1,910.2 |
The percentages of our sales by end market were as follows for the periods ended September 30:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Manufacturing | 76.0 | % | 75.2 | % | 75.9 | % | 75.1 | % | |||||||||||||||
| Non-residential construction | 8.1 | % | 8.6 | % | 8.3 | % | 8.6 | % | |||||||||||||||
| Other | 15.9 | % | 16.2 | % | 15.8 | % | 16.3 | % | |||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
The percentages of our sales by product line were as follows for the periods ended September 30:
| Nine-month Period | Three-month Period | |||||||||||||||||||||||||
| Type | Introduced | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||
| Fasteners (1) | 1967 | 30.6 | % | 30.9 | % | 31.0 | % | 30.2 | % | |||||||||||||||||
| Tools | 1993 | 8.3 | % | 8.5 | % | 8.2 | % | 8.4 | % | |||||||||||||||||
| Cutting tools | 1996 | 5.2 | % | 5.3 | % | 5.1 | % | 5.3 | % | |||||||||||||||||
| Hydraulics & pneumatics | 1996 | 6.9 | % | 6.8 | % | 6.9 | % | 6.8 | % | |||||||||||||||||
| Material handling | 1996 | 5.7 | % | 5.6 | % | 5.7 | % | 5.7 | % | |||||||||||||||||
| Janitorial supplies | 1996 | 9.1 | % | 8.7 | % | 9.0 | % | 9.0 | % | |||||||||||||||||
| Electrical supplies | 1997 | 4.7 | % | 4.6 | % | 4.6 | % | 4.8 | % | |||||||||||||||||
| Welding supplies | 1997 | 4.2 | % | 4.2 | % | 4.3 | % | 4.2 | % | |||||||||||||||||
| Safety supplies | 1999 | 22.1 | % | 22.0 | % | 22.1 | % | 22.5 | % | |||||||||||||||||
| Other | 3.2 | % | 3.4 | % | 3.1 | % | 3.1 | % | ||||||||||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(1) The fastener product line represents fasteners and miscellaneous supplies.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
(3) Stockholders' Equity
Dividends
On October 10, 2025, our board of directors declared a quarterly dividend of $0.22 per share of common stock to be paid in cash on November 25, 2025 to shareholders of record at the close of business on October 28, 2025.
The following table presents the cash dividends either paid previously or declared by our board of directors for future payment on a per share basis during 2025 and 2024:
| 2025 | 2024 | ||||||||||
| First quarter | $ | 0.215 | $ | 0.195 | |||||||
| Second quarter | 0.220 | 0.195 | |||||||||
| Third quarter | 0.220 | 0.195 | |||||||||
| Fourth quarter | 0.220 | 0.195 | |||||||||
| Total | $ | 0.875 | $ | 0.780 |
Stock Options
The following tables summarize the details of options granted under our stock option plans that were outstanding as of September 30, 2025, and the assumptions used to value those grants. All such grants were effective at the close of business on the grant date.
| Options Granted | Option Exercise Price | Closing Stock Price on Grant Date | September 30, 2025 | ||||||||||||||||||||||||||
| Date of Grant | Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||
| January 2, 2025 | 1,366,636 | $ | 36.00 | $ | 35.555 | 1,281,038 | 88,028 | ||||||||||||||||||||||
| January 2, 2024 | 1,629,824 | $ | 32.00 | $ | 31.775 | 1,392,342 | 300,986 | ||||||||||||||||||||||
| January 3, 2023 | 2,143,886 | $ | 24.00 | $ | 23.700 | 1,550,945 | 536,287 | ||||||||||||||||||||||
| January 3, 2022 | 1,426,876 | $ | 31.00 | $ | 30.990 | 941,828 | 495,346 | ||||||||||||||||||||||
| January 4, 2021 | 1,483,020 | $ | 24.00 | $ | 23.825 | 828,030 | 537,944 | ||||||||||||||||||||||
| January 2, 2020 | 1,804,526 | $ | 19.00 | $ | 18.615 | 808,286 | 646,308 | ||||||||||||||||||||||
| January 2, 2019 | 2,633,848 | $ | 13.00 | $ | 12.853 | 711,606 | 565,046 | ||||||||||||||||||||||
| January 2, 2018 | 2,175,872 | $ | 13.75 | $ | 13.635 | 350,098 | 284,918 | ||||||||||||||||||||||
| January 3, 2017 | 3,059,156 | $ | 11.75 | $ | 11.738 | 161,302 | 161,302 | ||||||||||||||||||||||
| Total | 17,723,644 | 8,025,475 | 3,616,165 |
| Date of Grant | Risk-free Interest Rate | Expected Life of Option in Years | Expected Dividend Yield | Expected Stock Volatility | Estimated Fair Value of Stock Option | ||||||||||||||||||||||||
| January 2, 2025 | 4.3 | % | 5.00 | 2.2 | % | 27.36 | % | $ | 8.86 | ||||||||||||||||||||
| January 2, 2024 | 3.8 | % | 5.00 | 2.2 | % | 28.44 | % | $ | 7.94 | ||||||||||||||||||||
| January 3, 2023 | 4.0 | % | 5.00 | 2.6 | % | 29.58 | % | $ | 5.81 | ||||||||||||||||||||
| January 3, 2022 | 1.3 | % | 5.00 | 1.7 | % | 28.52 | % | $ | 6.84 | ||||||||||||||||||||
| January 4, 2021 | 0.4 | % | 5.00 | 2.0 | % | 29.17 | % | $ | 4.79 | ||||||||||||||||||||
| January 2, 2020 | 1.7 | % | 5.00 | 2.4 | % | 25.70 | % | $ | 3.41 | ||||||||||||||||||||
| January 2, 2019 | 2.5 | % | 5.00 | 2.9 | % | 23.96 | % | $ | 2.20 | ||||||||||||||||||||
| January 2, 2018 | 2.2 | % | 5.00 | 2.3 | % | 23.45 | % | $ | 2.51 | ||||||||||||||||||||
| January 3, 2017 | 1.9 | % | 5.00 | 2.6 | % | 24.49 | % | $ | 2.10 |
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
All of the options in the tables above vest and become exercisable over a period of up to eight years. Each option will terminate approximately 10 years after the grant date.
The fair value of each share-based option is estimated on the grant date using a Black-Scholes valuation method that uses the assumptions listed above. The risk-free interest rate is based on the United States (U.S.) Treasury rate over the expected life of the option at the time of grant. The expected life is the average length of time over which we expect the employee groups will exercise their options, net of cancellations, which is based on historical experience with similar grants. The dividend yield is estimated over the expected life of the option based on our current dividend payout, historical dividends paid, and expected future cash dividends. Expected stock volatility is based on the movement of our stock price over the most recent historical period equivalent to the expected life of the option.
Compensation expense equal to the grant date fair value is recognized for all of these awards over the vesting period. The stock-based compensation expense for the nine-month periods ended September 30, 2025 and 2024 was $6.2 and $6.0, respectively, while the third quarter of 2025 and 2024 was $2.1 and $2.0, respectively. There is no incremental stock-based compensation expense as a result of the stock split described in Note 1. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of September 30, 2025 was $21.7 and is expected to be recognized over a weighted average period of 4.12 years. Any future changes in estimated forfeitures will impact this amount.
Net Income Per Share
The following tables present a reconciliation of the denominators used in the computation of basic and diluted net income per share and a summary of the options to purchase shares of common stock which were excluded from the diluted net income per share calculation because they were anti-dilutive:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| Reconciliation | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Basic weighted average shares outstanding | 1,147,437,856 | 1,145,102,552 | 1,147,871,234 | 1,145,470,410 | |||||||||||||||||||
| Weighted shares assumed upon exercise of stock options | 2,814,160 | 3,169,300 | 3,165,397 | 2,896,912 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 1,150,252,016 | 1,148,271,852 | 1,151,036,631 | 1,148,367,322 |
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| Summary of Anti-dilutive Options Excluded | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Options to purchase shares of common stock | 1,188,640 | 2,461,662 | — | 2,455,992 | |||||||||||||||||||
| Weighted average exercise prices of options | $ | 36.00 | 31.59 | $ | — | 31.60 |
Any dilutive impact summarized above related to periods when the average market price of our stock exceeded the exercise price of the potentially dilutive stock options then outstanding.
(4) Income Taxes
We file income tax returns in the U.S. federal jurisdiction, all states, and various local and foreign jurisdictions. We are no longer subject to income tax examinations by taxing authorities for taxable years before 2022 in the case of U.S. federal examinations, and with limited exceptions, before 2019 in the case of foreign, state, and local examinations. During the first six months of 2025, there were no material changes in unrecognized tax benefits. During the third quarter of 2025, the liability for unrecognized tax benefits decreased by $6.1 due to new information impacting prior year positions.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (OBBBA). The impact of the OBBBA enactment is immaterial to our Condensed Consolidated Financial Statements.
(5) Operating Leases
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 $133.0. We believe the likelihood of funding the guarantee obligation under any provision of the operating lease agreements is remote.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
(6) Debt Commitments
Credit Facility, Notes Payable, and Commitments
Debt obligations and letters of credit outstanding at the end of each period consisted of the following:
| Average Interest Rate at September 30, 2025 | Debt Outstanding | ||||||||||||||||||||||
| Maturity Date | September 30, 2025 | December 31, 2024 | |||||||||||||||||||||
| Unsecured revolving credit facility | 5.19 | % | September 28, 2027 | $ | 70.0 | — | |||||||||||||||||
| Senior unsecured promissory notes payable, Series D | 2.66 | % | May 15, 2025 | — | 75.0 | ||||||||||||||||||
| Senior unsecured promissory notes payable, Series E | 2.72 | % | May 15, 2027 | 50.0 | 50.0 | ||||||||||||||||||
| Senior unsecured promissory notes payable, Series G | 2.13 | % | June 24, 2026 | 25.0 | 25.0 | ||||||||||||||||||
| Senior unsecured promissory notes payable, Series H | 2.50 | % | June 24, 2030 | 50.0 | 50.0 | ||||||||||||||||||
| Total | 195.0 | 200.0 | |||||||||||||||||||||
| Less: Current portion of debt | (95.0) | (75.0) | |||||||||||||||||||||
| Long-term debt | $ | 100.0 | 125.0 | ||||||||||||||||||||
| Outstanding letters of credit under unsecured revolving credit facility - contingent obligation | $ | 29.7 | 31.2 |
Unsecured Revolving Credit Facility
We have an $835.0 committed unsecured revolving credit facility (the Credit Facility) with an uncommitted accordion option to increase the aggregate revolving commitment by an additional $365.0 for a total of $1,200.0. The Credit Facility includes a committed letter of credit subfacility of $55.0. Any borrowings outstanding under the Credit Facility for which we have the ability and intent to pay using cash within the next 12 months will be classified as a current liability. The Credit Facility contains certain financial and other covenants, and our right to borrow under the Credit Facility is conditioned upon, among other things, our compliance with these covenants. We are currently in compliance with these covenants.
Borrowings under the Credit Facility generally bear interest at a rate per annum equal to Daily Simple SOFR plus a 0.10% spread adjustment 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 use of the Credit Facility.
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 $125.0 as of September 30, 2025. Our aggregate borrowing capacity under the Master Note Agreement is $900.0; however, none of the institutional investors party to that agreement are committed to purchase notes thereunder. There is no amortization of these notes prior to their maturity date and interest is payable quarterly. The notes currently issued under our Master Note Agreement, including the maturity date and fixed interest rate per annum of each series of note, are contained in the table above. The Master Note Agreement contains certain financial and other covenants and we are currently in compliance with these covenants.
(7) Segment Reporting
Each of our geographic regions (U.S., Canada, Mexico, Central & South America, Europe, Asia, and SE Asia) is engaged in business activities for which it may earn sales and incur expenses. Discrete financial information is available at the geographic region level through our internal Return on Asset (ROA) reporting. The ROA reporting is ultimately a selling location income statement with an ROA calculation and the results are compiled by geographic region. ROA pre-tax profit measures financial performance and drives compensation programs.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
Our Chief Operating Decision Maker (CODM) is a group consisting of our Chief Executive Officer and President/Chief Sales Officer. We consider each geographic region to be an operating segment. The CODM regularly reviews ROA pre-tax profit to make decisions about the allocation of resources at the geographic region level. Operating segment significant expense categories and amounts are not regularly reviewed by or provided to our CODM. Segment expenses represent the difference between net sales and ROA pre-tax profit and consist of cost of sales and selling, general, and administrative (SG&A) expenses. However, our CODM reviews consolidated expense information to manage the operations of the business.
Considering our operating segments outside of the U.S. individually represent less than 10% of our total operating segment net sales, ROA pre-tax profit, and ROA assets, we do not consider them reportable segments. Therefore, we report the results of our one reportable segment (U.S.) below. Further details on our significant accounting policies can be found in Note 1 of our most recently filed annual report on Form 10-K, which are applied company wide.
Our measure of profit or loss is ROA pre-tax profit and our measure of assets is ROA assets. ROA pre-tax profit is not a financial measure calculated in accordance with GAAP and excludes inter-company transactions.
The following table presents reportable segment net sales from external customers for the periods ended September 30:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| U.S. net sales from external customers | $ | 5,140.1 | 4,760.2 | $ | 1,777.9 | 1,587.2 |
The following table presents a reconciliation of reportable segment ROA pre-tax profit to consolidated income before income taxes for the periods ended September 30:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| U.S. ROA pre-tax profit | $ | 1,100.2 | 1,007.1 | $ | 380.5 | 333.8 | |||||||||||||||||
| Other operating segment pre-tax profit (1) | 170.2 | 156.7 | 60.1 | 53.8 | |||||||||||||||||||
| Income before income taxes | $ | 1,270.4 | 1,163.8 | $ | 440.6 | 387.6 |
(1) Other operating segment pre-tax profit includes ROA pre-tax profit for all other operating segments that are below the reportable segment quantitative threshold and immaterial allocations excluded from ROA pre-tax profit.
The following table presents reportable segment ROA assets for the periods ended:
| September 30, 2025 | December 31, 2024 | ||||||||||
| U.S. ROA assets (1) | $ | 2,531.6 | 2,189.6 |
(1) Operating segment ROA assets primarily include accounts receivable, inventory, and in-market location vehicles, and exclude certain centrally managed assets.
Other Segment Disclosures
Interest revenue and interest expense included in the ROA pre-tax profit are not material. The following table presents reportable segment ROA pre-tax profit depreciation and amortization expense for the periods ended September 30:
| Nine-month Period | Three-month Period | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| U.S. ROA pre-tax profit depreciation and amortization expense | $ | 121.8 | 110.5 | $ | 41.1 | 37.8 |
(8) Legal Contingencies
The nature of our potential exposure to legal contingencies is described in our 2024 annual report on Form 10-K in Note 11 of the Notes to Consolidated Financial Statements. As of September 30, 2025, there were no litigation matters that we consider to be probable or reasonably possible to have a material adverse impact on our Condensed Consolidated Financial Statements.
FASTENAL COMPANY
Notes to Condensed Consolidated Financial Statements
(Amounts in millions except share and per share information and where otherwise noted)
September 30, 2025 and 2024
(Unaudited)
(9) Subsequent Events
We evaluated all subsequent event activity and concluded that no subsequent events have occurred that would require recognition in the Condensed Consolidated Financial Statements or disclosure in the Notes to Condensed Consolidated Financial Statements, with the exception of the dividend declaration disclosed in Note 3 'Stockholders' Equity'.
Previous: Cover and table of contents · Next: Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS