Fastenal Company (FAST) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

January 19, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Fastenal 2022 Annual and Fourth Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded.

I would now like to turn the call over to Taylor Ranta of Fastenal Company. Thank you. You may begin.

Taylor Ranta - Financial Reporting, Regulatory Compliance Manager

Welcome to the Fastenal Company 2022 annual and fourth quarter earnings conference call.

This call will be hosted by Dan Florness, our President and Chief Executive Officer; and Holden Lewis, our Chief Financial Officer. The call will last for up to one hour, and we'll start with a general overview of our annual and quarterly results and operations, with the remainder of the time being open for questions and answers.

Today's conference call is a proprietary Fastenal presentation and is being recorded by Fastenal. No recording, reproduction, transmission or distribution of today's call is permitted without Fastenal's consent. This call is being audio simulcast on the Internet via the Fastenal Investor Relations homepage, investor.fastenal.com. A replay of the webcast will be available on the website until March 1, 2023, at midnight Central Time.

As a reminder, today's conference call may include statements regarding the company's future plans and products. These statements are based on our current expectations and we undertake no duty to update them. It is important note that the company's actual results may differ materially from those anticipated. Factors that could cause actual results to differ from anticipated results are contained in the company's latest earnings release and periodic filings with the Securities and Exchange Commission, and we encourage you to review those factors carefully.

I would now like to turn the call over to Mr. Dan Florness.

Dan Florness - President and CEO

Thank you, and good morning, everybody, and welcome to our fourth quarter earnings call, and Happy New Year.

If you -- some highlights on the quarter. I'm on Page 3 of the flip -- of the flipbook. So, our daily sales grew 10.7% in the quarter, eased a bit from what we've seen in recent quarters, primarily because of tougher comparisons to what we were seeing in the fourth quarter last year, but also some moderating demand.

I'm pleased to say that our fourth quarter operating margin remained stable at 19.6% and our ability to generate cash. So, we're looking at our cash conversion, it returned to historic levels. And that's really a sign of moderation and the level of inflation that we're seeing in the marketplace. But also, a more stable supply chain and the ability to not need -- that for a double negative, not need to expand our stocking levels to ensure a reliable supply line for our customers. So, it gives us some flexibility as we go into 2023. We're very pleased to see that.