快扣 (FAST) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fastenal fourth-quarter conference call.

女士們、先生們，大家好，歡迎參加 Fastenal 第四季電話會議。

I would now like to introduce your host for today's conference call, Ms. Ellen Trester. You may begin.

現在我謹向大家介紹今天電話會議的主持人，艾倫·特雷斯特女士。你可以開始了。

Welcome to the Fastenal Company 2016 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 45 minutes, and we'll start with a general overview of our 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.

歡迎參加 Fastenal 公司 2016 年年度及第四季財報電話會議。本次電話會議將由我們的總裁兼執行長丹·弗洛內斯和我們的財務長霍爾頓·劉易斯主持。本次電話會議將持續最多 45 分鐘，我們將首先概述我們的季度業績和營運情況，剩餘時間將用於問答環節。今天的電話會議是 Fastenal 的專有演示，並由 Fastenal 進行錄音。未經 Fastenal 同意，不得對今天的電話會議進行任何錄音、複製、傳輸或分發。

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, 2017, at midnight Central Time.

本次電話會議將透過 Fastenal 投資者關係主頁 investor 在網路上進行音訊同步廣播。Fastenal.com。網路直播的回放將在網站上提供，直至2017年3月1日中部時間午夜。

As a reminder, today's conference call may include statements regarding the Company's future plans and prospects. These statements are based on our current expectations and we undertake no duty to update them. It is important to 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.

提醒各位，今天的電話會議可能涉及公司未來的計劃和前景。這些聲明是基於我們目前的預期，我們不承擔更新這些聲明的義務。值得注意的是，公司的實際業績可能與預期業績有重大差異。可能導致實際結果與預期結果不同的因素已包含在公司最新的收益報告和定期向美國證券交易委員會提交的文件中，我們建議您仔細閱讀這些因素。

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

現在我將把電話交給丹‧弗洛內斯先生。

Good morning, everybody, and thank you for joining our call today. And I'll start by just apologizing for the state of my voice on today's call. I'm recovering from a bit of a cold, so I will try to speak clearly.

各位早安，感謝各位今天參加我們的電話會議。首先，我要為今天通話中我的聲音狀況道歉。我有點感冒，還在恢復中，所以我會盡量說清楚。

My comments this morning will be relatively brief. I just want to touch on five points. First off, we had an upbeat finish to a tough year. Secondly, I believe we've changed the trends of our business. Third, I believe we've improved the health of our business. The fourth and fifth aren't comments so much on 2016, but I think they are comments that we should always remind ourself of. One is we have great people close to the customer. And we have great people behind the scenes to support our local business. Those are structurally important components to the success of our business today; historically; and, I believe, going forward.

我今天早上的發言會比較簡短。我只想談五點。首先，我們以令人振奮的方式結束了這艱難的一年。其次，我相信我們改變了我們業務的發展趨勢。第三，我相信我們已經改善了公司的經營狀況。第四點和第五點與其說是 2016 年的評論，不如說是我們應該時時刻刻提醒自己的評論。第一，我們擁有與顧客關係密切的優秀員工。我們幕後還有許多優秀的人員支持本地企業。這些是構成我們業務當今、過去以及未來成功的重要組成部分。

In regards to the upbeat finish, our sales trends and our gross profit stabilized and/or improved, depending on if you are looking at a comparison to Q3 or a comparison to Q4 of a year ago. And we grew our earnings. And for a new CEO, you can appreciate the importance that comes with having a release that doesn't have some either parentheses or dashes in front of a number or two, after we've come through quite frankly a pretty tough 2015 and 2016 period.

就樂觀的業績收尾而言，我們的銷售趨勢和毛利趨於穩定和/或有所改善，具體取決於您是與第三季度進行比較還是與去年第四季進行比較。我們的獲利也成長了。對於一位新任執行長來說，在經歷了坦率地說相當艱難的 2015 年和 2016 年之後，發布一份沒有括號或破折號的數字的新聞稿是多麼重要。

Secondly, our trends have improved. In the last several years, primarily 2014 and 2015, we had significantly added people cost to our organization as we grew our headcount, primarily at the store but throughout the organization. These costs, when I look at the trends that come with it, had about peaked in the second quarter of 2016. And as we have gone through the year, those costs have cycled down a bit, and I believe we are poised quite well to manage that expense as we go into the new year.

其次，我們的趨勢有所改善。在過去的幾年裡，特別是 2014 年和 2015 年，隨著員工人數的增長，我們大幅增加了組織的人力成本，這主要體現在門市，但也遍及整個組織。從相關趨勢來看，這些成本在 2016 年第二季左右達到了高峰。隨著時間的推移，這些成本有所下降，我相信我們有能力在新的一年裡很好地控制這筆開支。

We also have added occupancy costs quite dramatically in the last several years. A piece of it relates to our vending platform. A piece of it relates to the automation we put into our distribution centers, and a piece of it relates to our store network. There's always some built-in inflation in the store network, and our job every day is to manage that well. But whether it might be property taxes or some other -- or CAM charges or some inflation in the lease, we have to be very mindful how we manage that in the long-term, especially as the business is evolving.

過去幾年，我們的入住成本也大幅增加。其中一部分與我們的自動販賣機平台有關。一部分與我們配送中心的自動化有關，一部分與我們的門市網路有關。商店網路中總是存在一些固有的通貨膨脹，而我們每天的工作就是好好管理這種通貨膨脹。但無論是房產稅或其他費用，或是公共區域維護費或租金上漲，我們都必須非常注意如何長期管理這些問題，尤其是在業務不斷發展的情況下。

And again, similar to the people costs, I believe we exit the year in a much better spot. But we still have some work ahead of us on the occupancy side of the equation, because we want to plan for and allow for growth there that comes from the continued expansion of our vending platform.

同樣，與人力成本類似，我相信我們今年的處境會好得多。但是，在入住率方面，我們還有一些工作要做，因為我們希望規劃並允許隨著自動販賣機平台的不斷擴張而帶來的成長。

In regards to business health, we upgraded around 2,100 stores to our CSP 16 format. And while we haven't talked about it a lot on calls, that's a tremendous undertaking when you look at our store base business. And this 2,100 upgrade was primarily in our US-based business. We have some upgrades for our Canadian business as we enter 2017. We also upgraded over 50 -- excuse me -- upgraded or optimized, if you will, over 50,000 vending machines. And that's more about improving our cost to serve than it is about a revenue enhancement. There are some revenue improvements because of it, but we had rapidly rolled out those 50,000 plus machines over the last five years.

在業務健康方面，我們已將約 2100 家門市升級至 CSP 16 格式。雖然我們在電話會議中很少談到這一點，但考慮到我們的門市業務，這確實是一項巨大的工程。而此次 2100 項升級主要集中在我們位於美國的業務領域。進入 2017 年，我們對加拿大業務進行了一些升級。我們還升級了超過 50,000 台自動販賣機——抱歉，應該說是升級或優化了超過 50,000 台自動販賣機。這更多的是為了降低服務成本，而不是為了增加收入。雖然這帶來了一些收入成長，但我們在過去五年迅速推出了超過 5 萬台機器。

And in 2016, we took the opportunity to go and visit each and every machine, and to challenge how we could be more efficient with that machine. And I believe that improves the health of that vending business and improves our ability to serve and grow the business in the future.

2016 年，我們抓住機會，逐一參觀了每一台機器，並探討如何才能更有效地利用這些機器。我相信這會改善自動販賣機業務的健康發展，並提高我們未來服務和發展該業務的能力。

We also changed our mindset over the last several years as it relates to Onsite. Our first Onsite occurred in 1992. And at the end of 2014, we had around 200 Onsites that we had slowly grown in our business. If I think of 2014, just under 5% of our district leaders -- and we have today roughly 255 district managers across the company -- just under 5% of them signed an Onsite. We signed -- I don't know the exact number, but it was around 14 Onsites that year.

過去幾年，我們對現場服務的看法也改變了。我們的第一次現場活動是在 1992 年。到 2014 年底，我們擁有大約 200 個現場服務點，這是我們業務中逐步發展的。如果我回顧 2014 年，我們公司大約有 255 位地區經理，其中只有不到 5% 的地區領導層簽署了現場培訓協議。我們簽了約——我不知道確切的數字，但那一年大約有 14 個現場考察點。

In 2015, we took a big step forward, and around 25% of our district leaders signed an Onsite that year, and we signed around 80 Onsites. In 2016 -- Fastenal has a hallmark of finding great people, challenging them to be successful but not micromanaging. In 2016, over 50% -- I believe 54% is the exact number -- but over 50% of our district leaders had an Onsite signed in their business. And that translated into 176 signings during the year.

2015 年，我們向前邁出了一大步，當年我們地區約有 25% 的領導層簽署了現場培訓協議，我們共簽署了約 80 份現場培訓協議。2016 年－Fastenal 的標誌是找到優秀的人才，激勵他們取得成功，但不會進行微觀管理。2016 年，超過 50%（我相信確切數字是 54%）的地區領導層在其公司簽署了現場辦公協議。這一年共簽下了 176 名球員。

Our goal going into 2017 is quite simple: to keep moving that participation up, and for 80% of our district managers or district leaders to have an Onsite signed in their district. If we are able to accomplish that, we believe we could sign somewhere between 275 and 300 Onsites. We believe that's an achievable number from a signings perspective. It's an absorbable number from an execution standpoint because very much of the work is spread across 255 business units, 2,600 stores, not concentrated in one small support group. So, we are very excited about that.

2017 年我們的目標很簡單：繼續提高參與率，讓 80% 的區域經理或地區領導在其轄區內簽署現場培訓協議。如果我們能夠實現這一點，我們相信我們可以簽下 275 到 300 個現場服務合約。我們認為從簽約的角度來看，這是一個可以實現的數字。從執行的角度來看，這是一個可以消化的數字，因為大部分工作分散在 255 個業務部門、2600 家門市，而不是集中在一個小的支持小組。所以，我們對此感到非常興奮。

And we also believe, with the CSP 16 in place, the team that helped rolled out is there to also help with the implementation of our Onsite. So we believe we've improved our capacity to implement.

我們也相信，隨著 CSP 16 的推出，幫助其部署的團隊也將幫助我們實施 Onsite。因此，我們相信我們的執行能力已經有所提升。

Finally, we talked about -- excuse me -- fourth, we talked about great people, close to the customer. 75% of our employees know our customers on a first-name basis. And yet we have a very efficient cost structure. I don't believe any other nationwide distributor can lay claim to that, and we're proud of that fact.

最後，我們談到了——抱歉——第四點，我們談到了優秀的人才，他們與客戶關係密切。我們75%的員工都能直呼客戶的名字。然而，我們的成本結構卻非常有效率。我不認為其他任何全國性經銷商能做到這一點，我們為此感到自豪。

Finally, the team behind the scenes. Our team is strong. We are wired for change and we're frugal. All of these things help us serve our customer well.

最後，是幕後團隊。我們的團隊實力很強。我們天生樂於接受變化，而且我們節儉。所有這些都有助於我們更好地服務客戶。

I'll close with one thought. We believe in our people. We challenge each other to improve and we challenge each other to grow each day.

最後，我想補充一點。我們相信我們的人民。我們互相激勵，力求進步，每天都不斷成長。

With that, I'm going to turn over to Holden. But before Holden starts in, I just want to -- this is Holden's second earnings call. Many of you know Holden Lewis from his previous career as a sell-side analyst. He had covered us for quite a few years. We knew Holden well. We are not quick to bring in somebody from the outside into our organization and in this senior of a role. But we really liked Holden's ability, we felt, to culturally fit with us; and the fact that he could bring a new set of eyes, a new critique, and a tremendous skill set to our organization.

接下來，我將把鏡頭交給霍爾頓。但在霍爾頓開始發言之前，我想先說明一下──這是霍爾頓的第二次財報電話會議。你們中的許多人可能都認識霍爾頓·劉易斯，他之前曾擔任賣方分析師。他曾報道我們好幾年。我們很了解霍爾頓。我們不會輕易從外部引進人員進入我們的組織，更不會讓他們擔任如此高階的職位。但我們真的很喜歡霍爾頓，我們覺得他能夠很好地融入我們的文化；而且他能夠為我們的組織帶來全新的視角、全新的批評和卓越的技能。

So, with that, I'll turn it over to Holden.

那麼，接下來就交給霍爾頓了。

All right. Thank you, Dan. Good morning, and thanks for joining the Fastenal fourth-quarter call. I'm going to begin with a quick recap of our full-year 2016 results, and then I'll move on to a discussion of the quarterly performance.

好的。謝謝你，丹。早安，感謝各位參加 Fastenal 第四季電話會議。我先快速回顧一下我們 2016 年全年的業績，然後我將討論一下季度業績。

So, in 2016, Fastenal generated $3.96 billion in sales. That's up 2.4% from 2015. We did have an extra day in the year. So on a days basis, we were up about 2%. I'm not going to belabor the tough conditions that persisted through the year. I feel like that's well understood by you. But I would like to highlight some of the drivers that allowed us to grow despite it.

因此，2016 年 Fastenal 的銷售額為 39.6 億美元。與 2015 年相比成長了 2.4%。我們一年中確實多了一天。所以以日計算，我們上漲了約 2%。我不想贅述這一年來持續存在的艱難狀況。我覺得你很清楚這一點。但我想重點介紹一些促使我們克服困難並實現成長的因素。

First, on vending. We finished 2016 with 62,822 machines. That's about up 7,300 units, or 13% over 2015. So at this point, 46.1% of our sales now go to customers that use vending. So it's fairly well represented in the field. Revenues to our machines increased by more than 10% in the fourth quarter. Signings of 18,059 machines were up 1% year-over-year. Note that these figures exclude the nearly 15,000 units that we installed related to our lease locker program.

首先，我們來談談自動販賣機。截至 2016 年底，我們擁有 62,822 台機器。這比 2015 年增加了約 7,300 台，增幅達 13%。所以目前，我們46.1%的銷售額來自使用自動販賣機的客戶。因此，它在該領域得到了相當充分的體現。第四季度，我們機器的營收成長超過 10%。簽約量為 18,059 台，較去年同期成長 1%。請注意，這些數字不包括我們為租賃儲物櫃計畫安裝的近 15,000 個單位。

Despite all those successes, vending did not quite reach the goals we had set for it in 2016. But note that signings were at a three-year high. And we think that with the distractions related to our optimization efforts in the lease locker initiative now passed us, we are targeting more than 20,000 signings in 2017.

儘管取得了這些成功，但自動販賣機業務並沒有完全達到我們在 2016 年設定的目標。但值得注意的是，簽約人數達到了三年來的最高水準。我們認為，隨著與租賃儲物櫃計劃優化工作相關的干擾因素的消除，我們的目標是在 2017 年實現超過 20,000 次簽約。

Secondly, on our Onsites. We signed 176 new agreements in 2016, a little shy of our goal of 200, but substantially above the 80 that we signed last year. And this, frankly, contributed to driving sales through these sites up at a better than 25% rate for the year. We are gaining momentum here, and we are targeting 275 to 300 signings in 2017.

其次，在我們的現場服務中。2016 年我們簽署了 176 項新協議，雖然距離 200 項的目標略有差距，但比去年簽署的 80 項大幅增加。坦白說，這促使這些網站的銷售額在一年內成長了超過 25%。我們正逐步取得進展，目標是在 2017 年簽約 275 至 300 名球員。

With respect to national accounts, we signed 190 new agreements. That's up 14% from 2015. Even with softness among our largest 100 customers, these signings contributed to our total national accounts revenues being up by a bit more than 4% on the year. We still see significant opportunity with new and existing customers, and even with national accounts now being about 47% of our total sales.

在國民帳戶方面，我們簽署了190項新協議。與 2015 年相比成長了 14%。即使我們最大的 100 位客戶的需求有所疲軟，這些簽約仍然使我們的全國客戶總收入比上年增長了 4% 以上。我們仍然看到來自新舊客戶的巨大機遇，甚至全國性客戶目前約占我們總銷售額的 47%。

Lastly, the SKUs related to our CSP 16 initiative -- they also grew at a little bit better than a 4% rate in 2016. So we feel good overall about the strides that we're making in our growth drivers. We remain convinced of their effectiveness in driving share gains, and we look forward to further progress in 2017.

最後，與我們的 CSP 16 計畫相關的 SKU——它們在 2016 年的成長率也略高於 4%。因此，我們對自身在成長驅動因素方面所取得的進展總體上感到滿意。我們仍然堅信它們在提升市場份額方面的有效性，並期待在 2017 年取得進一步進展。

Margins in 2016 were a challenge. Our gross margin finished the year at 49.6%. That's down 80 basis points, which is primarily from mix and pressure on product margins, the latter being particularly early in the year. Our operating margin finished 2016 at 20.1. That was down about 130 basis points.

2016年的利潤率是一項挑戰。本年度毛利率為 49.6%。這比去年同期下降了 80 個基點，主要原因是產品組合變化和產品利潤率承壓，尤其是年初時產品利潤率承壓的情況。2016 年，我們的營業利益率為 20.1%。那比之前下降了約130個基點。

In addition to the gross margin decline, occupancy was up as we continue to invest in our vending initiative. We are likely to remain challenged by mix and vending-related occupancy, but some of the product pressures that we experienced in the first half of this year have eased at this point. We've been tighter with costs in the second half of 2016, and some of the minor expenses for things like store closures or CSP 16 roll-out hopefully don't recur. So, as a result, we think we are better equipped to defend our margin in a slow growth environment or even expand it, if growth accelerates from here than was the case in 2016.

儘管毛利率有所下降，但由於我們持續投資於自動販賣機項目，入住率上升。我們可能仍將面臨產品組合和自動販賣機相關佔用率的挑戰，但今年上半年我們遇到的一些產品壓力目前已經有所緩解。2016 年下半年，我們嚴格控制了成本，希望像關店或 CSP 16 推廣等一些小額支出不會再發生。因此，我們認為，與 2016 年相比，我們現在更有能力在成長緩慢的環境中捍衛我們的利潤率，甚至在成長加速的情況下擴大利潤率。

Our interest expense on the year roughly doubled, while our average share count was down 1%. Both those facts reflect our share buyback activity over the last eight quarters. Our tax rate was down from 37.5% to 36.8% in the year which really just owes to some jurisdictional shifts as well as the resolution of certain state tax matters. It all blended into a 2016 EPS figure of $1.73 which was down about 2.3% for the year.

今年我們的利息支出大約翻了一番，而我們的平均股份數量下降了 1%。這兩個事實都反映了我們過去八個季度的股票回購活動。這一年，我們的稅率從 37.5% 降至 36.8%，這主要歸功於一些管轄權的變更以及某些州稅問題的解決。所有這些因素綜合起來，使得 2016 年每股收益為 1.73 美元，比上年下降了約 2.3%。

Now moving on to the fourth-quarter results, total and daily sales in the fourth quarter were up 2.7%. That's a modest acceleration from the prior nine months. We can't ignore the easier comparison relative to last year's fourth quarter, when our daily sales rate was actually down 2%. Still, the December daily sales were up 3.2%, and that was likely understated because of holiday timing. So, in contrast to a poor November, frankly, we consider December to have been as expected.

現在來看第四季業績，第四季總銷售額和日銷售額均成長了 2.7%。與前九個月相比，這是一個小幅加速。我們不能忽視與去年第四季相比更容易進行的比較，當時我們的每日銷售額實際上下降了 2%。不過，12 月的日銷售額成長了 3.2%，但由於假日的影響，這個數字可能被低估了。所以，坦白說，與糟糕的 11 月相比，我們認為 12 月的情況符合預期。

Now, the details of the quarter remain a bit of a mixed bag. Growth from our top 100 accounts remained flattish, on weakness among general industrial companies. The proportion of stores and national accounts that were growing in the fourth quarter was largely unchanged from the third quarter, and construction fasteners actually weakened in the period. So in the end, growth of 1.6% in North America really wasn't much changed from the prior period.

目前來看，本季的具體情況還比較複雜。由於一般工業公司業績疲軟，我們前 100 名客戶的成長保持穩定。第四季成長的門市和全國性客戶的比例與第三季基本持平，而建築緊固件在這段期間實際上有所疲軟。因此，最終北美1.6%的成長率與前一期相比並沒有太大變化。

On the other hand, it is notable that heavy manufacturing was up 2.3% in the fourth quarter. That's the first time that's been up since the second quarter of 2015. Similarly, OEM fasteners were weak, but the down 2.8% was also the narrowest decline we've seen since the second quarter of 2015.

另一方面，值得注意的是，第四季重工業成長了 2.3%。這是自 2015 年第二季以來首次上漲。同樣，OEM緊固件表現疲軟，但2.8%的跌幅也是自2015年第二季以來我們所見到的最小跌幅。

Further, I would note that there is a more favorable tone surrounding process industries as we enter 2017. We're going to continue to assume the sluggish business conditions that have prevailed through 2016 are going to continue into 2017. But there does remain -- and there remains a great deal of uncertainty on a number of fronts. But, that said, the environment has become more optimistic.

此外，我想指出，隨著我們進入 2017 年，圍繞流程工業的氛圍更加積極。我們將繼續假設2016年持續低迷的商業環境將延續到2017年。但是，在許多方面仍然存在很大的不確定性。但即便如此，環境也變得更樂觀了。

Our gross margin was 49.8% in the fourth quarter. That's down 10 basis points versus the prior year, but it's up 50 basis points against the third quarter. With respect to the year-over-year change, mix continues to weigh as the fasteners fell 180 basis points to now represent 35.6% of our sales. Given this, we view the stability in the period favorably. There was no single meaningful offset. Rather, it was small improvements in areas like purchase discounts and freight that benefited the quarter, relative to the prior year.

第四季我們的毛利率為49.8%。與去年同期相比下降了 10 個基點，但與第三季相比上升了 50 個基點。就同​​比變化而言，產品組合繼續構成拖累，緊固件銷售額下降 180 個基點，目前占我們銷售額的 35.6%。有鑑於此，我們對這段時期的穩定性持樂觀態度。沒有一個有意義的單一偏移量。與上年同期相比，本季受益的是採購折扣和運費等方面的微小改善。

As it relates to the fourth quarter, we were pleased to see the margin rebound from the third quarter of 2016. Similar to the annual result, this is less from a single item than it is from the accumulation of many small but favorable improvements including better margins on non-fasteners, a higher mix of exclusive brands, building revenue associated with our lease locker program, better purchasing, and other variables like that.

就第四季而言，我們很高興看到利潤率從 2016 年第三季開始反彈。與年度業績類似，這與其說是單一項目帶來的，不如說是許多雖小但有利的改進累積的結果，包括非緊固件利潤率的提高、獨家品牌組合的增加、租賃儲物櫃計劃相關收入的增長、採購的改善以及其他類似因素。

A lot of these things worked in our favor at the gross margin in fourth quarter, but there is nothing in this improvement that strikes us as one-time or temporary in nature. And, at this point, we would characterize the margin environment as stable.

第四季毛利率的提高得益於許多因素，但我們並不認為這種改善是一次性的或暫時的。因此，目前我們認為邊際環境穩定。

Our operating margin was 19.3% in the fourth quarter, also down 10 basis points on a year-over-year basis. SG&A as a percentage of sales was unchanged at 30.6% of revenues. Payroll, which is 65% to 70% of our SG&A, was down 30 basis points as a percentage of sales.

第四季我們的營業利潤率為 19.3%，年減 10 個基點。銷售、一般及行政費用佔銷售額的比例保持不變，為收入的 30.6%。薪資支出佔銷售、一般及行政費用的 65% 至 70%，佔銷售額的百分比下降了 30 個基點。

Persistently sluggish demand has had two effects here: first, it continued to temper the incentive pay in the fourth quarter; second, we spent much of 2016 letting attrition unwind the rise in staffing we experienced in 2015. We finished 2016 with headcount being down 5.4%, or down 4.1% on an FTE basis. These variables more than offset the effect of higher health insurance costs.

持續疲軟的需求在這裡產生了兩個影響：首先，它繼續抑制了第四季度的激勵性薪酬；其次，我們在 2016 年的大部分時間裡都在讓人員自然流失抵消我們在 2015 年經歷的員工人數增長。2016 年末，我們的員工人數下降了 5.4%，以全職員工人數計算下降了 4.1%。這些因素足以抵銷醫療保險費用上漲的影響。

Occupancy, which is 15% to 20% of total SG&A, was up 30 basis points as a percentage of sales. Vending was the primary catalyst behind this, and we don't expect that dynamic to change in 2017. We did expect efforts to rationalize our store base in the second half of 2016 would provide a larger benefit than wound up being the case, and that's going to be a point of emphasis for our Company in 2017.

入住率佔銷售、一般及行政費用總額的 15% 至 20%，佔銷售額的百分比上升了 30 個基點。自動販賣機是造成這種現象的主要催化劑，我們預期這種趨勢在 2017 年不會改變。我們原本預期在 2016 年下半年對門市進行合理化調整會帶來比實際更大的收益，而這將是我們公司 2017 年的工作重點。

In 2016, we trimmed staffing and stores; we invested in growth drivers and technology; and used our balance sheet to invest strategically in inventory. We like where our cost structure sits as we exit the fourth quarter. We're going to continue to invest in our growth drivers. But given the investments and rationalization we've already made, we believe that with a little faster growth, we can leverage the income statement in 2017.

2016年，我們裁減了員工和門市；我們投資於成長動力和技術；並利用我們的資產負債表對庫存進行了策略性投資。我們對第四季末的成本結構感到滿意。我們將繼續投資於我們的成長驅動因素。但鑑於我們已經進行的投資和合理化，我們相信，只要成長速度稍快一些，我們就能在 2017 年提高損益表的收益。

Finally, we generated $133 million in operating cash in the fourth quarter. That's down 8.5% versus last year. It also represents 116% of the quarter's net income, which is below last year. This decline year-over-year reflects three things. First, in the fourth quarter of 2016, we took advantage of favorable year-end buys. Second, payables were much higher in the fourth quarter of 2015 related to adding CSP 16 inventory in that period. And then, third, our receivables fell at a faster rate in the fourth quarter of 2015 due to the relatively sharper pullback in demand in that period. These factors all serve to inflate the cash flow in fourth quarter of 2015 relative to fourth quarter of 2016.

最後，我們在第四季產生了 1.33 億美元的營運現金流。與去年相比下降了8.5%。這相當於本季淨收入的 116%，低於去年同期水準。這一同比下降反映了三件事。首先，在 2016 年第四季度，我們利用了年底的有利買入時機。其次，2015 年第四季應付帳款大幅增加，這與該期間新增 CSP 16 庫存有關。第三，由於 2015 年第四季需求相對大幅回落，我們的應收帳款下降速度也更快。所有這些因素都導致 2015 年第四季的現金流量相對於 2016 年第四季增加。

That said, we generated free cash flow after dividends of $18.5 million. Our capital expenditures were down 23% year-over-year, and down 63% sequentially as we wind up the roll-out of our lease locker program. As a result, we reduced our net debt by roughly $21 million, and retained flexible leverage of net debt being 12.5% of total capital. We expect cash generation to be improved, and free cash flow after dividends to be positive in 2017. We don't anticipate a CSP program of the sort that we had in 2016, and we expect capital spending to come in around $120 million.

也就是說，我們在支付股息後產生了 1850 萬美元的自由現金流。由於我們即將完成租賃儲物櫃計畫的推廣，我們的資本支出較去年同期下降了 23%，較上季下降了 63%。因此，我們減少了約 2,100 萬美元的淨債務，並保持了靈活的槓桿率，淨債務佔總資本的 12.5%。我們預計 2017 年現金流產生能力將有所改善，扣除股利後的自由現金流將為正值。我們預計不會再有像 2016 年那樣的 CSP 項目，預計資本支出約為 1.2 億美元。

With that, we'll turn it over to Kevin to take your questions.

接下來，我們將把發言權交給凱文，讓他來回答大家的問題。

(Operator Instructions). Robert Barry, Susquehanna.

（操作說明）羅伯特·巴里，薩斯奎哈納。

So I guess the broader question is just to provide a little bit more color about what you are seeing in some of the key end markets, in particular heavy and light manufacturing, and oil and gas. But also more specifically, I noticed you updated the monthly sequentials. And I think if you plug those into the model, it implies 1Q growth would be just over 5%. I know that's not meant as an outlook, but is that how you're thinking that growth could track in 1Q?

所以，我想更廣泛的問題是，能否更詳細地介紹一下您在一些關鍵終端市場，特別是重型和輕型製造業以及石油和天然氣行業所看到的情況。但更具體地說，我注意到您更新了月度序列圖。我認為，如果把這些數據代入模型，就會發現第一季的成長率將略高於 5%。我知道這並非預測，但您認為第一季的成長情況會是這樣嗎？

Sure. To address your second question first, we all know how the math works. We've updated the sequentials. As we go into 2017, we're going to begin discussing those sequential rates of change in terms of the prior five-year averages as opposed to what we've done historically with 1998 -- going from 1998 forward. So the numbers are what the numbers are. I'll let you plug them in and kind of figure out where it is. But I think that you are on the right track in terms of how that should fall out, given those sequential rates of change.

當然。先回答你的第二個問題，我們都知道數學是如何運作的。我們已更新序列。進入 2017 年，我們將開始討論過去五年平均變化率的連續變化率，而不是像過去那樣從 1998 年開始討論。所以，數字就是數字。我會讓你把它們插上，自己摸索一下看看它在哪裡。但我認為，考慮到這些連續的變化率，你對最終結果的判斷是正確的。

On the second question, where we saw most encouraging signs, I would say, would have been in the process industries. And we go about this a couple of ways. We listen to our regional Vice Presidents and what they are seeing in the marketplace. And then we look at our top 100 accounts to get a sense of which areas are doing well, which ones are not. What I would tell you is the general industrial companies in our lists, they are still challenged. That's been the case most of the year. I'm not sure that I saw or have heard any meaningful difference in the fourth quarter as it relates to general industrial firms.

關於第二個問題，我們看到最令人鼓舞的跡象的地方，我認為是在流程工業領域。我們可以透過以下幾種方式來實現這一點。我們會聽取各區域副總裁的意見，了解他們在市場上觀察到的情況。然後我們查看前 100 個帳戶，以了解哪些領域表現良好，哪些領域表現不佳。我想告訴大家的是，我們名單上的那些普通工業企業，它們仍然面臨挑戰。今年大部分時間都是這種情況。我不確定在第四季度，就一般工業企業而言，我是否看到或聽到任何實質的變化。

As it relates to the process industries, I would tell you that a lot of those, including oil and gas, looked better among our top 100. And then if you sort of listen to some of our RVPs talk about energy, there definitely is more of an enthusiasm and some more encouraging facts on the ground in those regions that are heavier in oil and gas.

就流程工業而言，我會告訴你，包括石油和天然氣在內的許多產業，在我們選出的前 100 名中表現得更好。如果你聽聽我們的一些區域副總裁談論能源，你會發現，在石油和天然氣資源更豐富的地區，人們的熱情更高，而且也有一些令人鼓舞的事實。

So I would tell you is I don't feel like the fourth quarter felt a lot different in a lot of places than what we saw in the third quarter. But the notable exception would've been in those process industries in that oil and gas space. As you know, we were surprised about how impactful the decline in oil and gas was to us when it began to head south couple years ago. We would consider it a positive if, in fact, oil and gas had some legs and did better from here. But we'll see how that plays out.

所以我想說的是，我覺得第四節在很多方面與第三節並沒有太大的不同。但值得注意的是，石油和天然氣領域的加工工業是個例外。如你所知，幾年前石油和天然氣價格開始下滑時，我們驚訝地發現它對我們的影響如此之大。如果石油和天然氣產業確實還有上漲空間，並且未來發展會更好，我們會認為這是一個正面的訊號。但我們會看看事情會如何發展。

Right. Maybe just for my second question just on the gross margin, nice sequential rise. You listed a number of reasons for the improvement, but one of them was not price. And I was just wondering if you can comment on what's happening in the pricing environment. And in particular, given we've started to see some inflation -- and, in fact, I think we've seen inflation for several quarters now -- how do you feel about the ability to start getting price, especially if some of these end markets are still a little sluggish?

正確的。或許就我第二個問題而言，關於毛利率，環比成長不錯。你列舉了改進的幾個原因，但其中不包括價格。我想請您談談當前的定價環境。特別是考慮到我們已經開始看到一些通貨膨脹——事實上，我認為我們已經看到通貨膨脹好幾個季度了——您對開始獲得價格的能力有何看法，尤其是一些終端市場仍然有點疲軟的情況下？

Sure. We've seen the same thing that you have with respect to commodity prices. I would tell you that those increases are relatively new. We've seen it happen before, only to sort of retrace, if you will. So I think it's probably premature to be saying that we have clearly entered a reflation period, if you will.

當然。我們也看到了和你們一樣的商品價格走勢。我可以告訴你，這些成長是相對較新的現象。我們以前也見過這種情況，但最終都會重蹈覆轍。所以我覺得現在就斷言我們已經明顯進入了通貨再膨脹期可能還為時過早。

But that said, we are watching it. And we believe that if those raw material increases prove to be durable, we believe that as we have in the past we will be able to pass that through, through price increases. We don't have any reason at this point to think that that would not be a part of the equation. However, we have not at this point taken significant strides to begin that process yet.

但即便如此，我們仍在關注此事。我們相信，如果原物料價格上漲能夠持續，我們將像過去一樣，透過提價將成本轉嫁出去。目前我們沒有任何理由認為這不會是考慮因素的一部分。然而，到目前為止，我們還沒有採取實質措施來啟動這項進程。

Yes. I mean how much of the lag historically would there be, like several quarters? Or how do you think about it?

是的。我的意思是，從歷史數據來看，這種延遲會持續多久，例如好幾季？還是你是怎麼看待這件事的？

Rob, I'm going to chime in, so we can keep going through the roster here of questions. Sorry.

羅布，我也要插一句，這樣我們就可以繼續逐一解答這裡的問題了。對不起。

Okay. Yes, of course; sorry. Thanks.

好的。是的，當然；抱歉。謝謝。

Andrew Buscaglia, Credit Suisse.

安德魯·巴斯卡利亞，瑞士信貸。

Congrats on a good quarter. Can you touch on -- it sounds like you didn't have a ton of commentary in the press release or your prepared remarks, just on trends improving. Can you comment maybe what you're seeing through January? And just it sounds like December was a little bit muddled with timing and stuff like that, but just any recent update would be great.

恭喜你本季業績出色。您能否談談——聽起來您在新聞稿或準備好的發言稿中並沒有太多評論，只是談到了趨勢的改善。您能否談談您在一月觀察到的情況？聽起來12月份的時間安排之類的有點混亂，不過任何最近的更新資訊都非常感謝。

I'm going to just interject one thing and then I will shut up and let Holden talk. In regards to January, we've learned over the years there are certain places you don't go because invariably what we talk about, we are always wrong. And the question is, how wrong? So I'll stop Holden before he starts on [gen receipts].

我只想插一句，然後就閉嘴讓霍爾頓說。關於一月份，多年來我們了解到，有些地方最好不要去，因為我們談論的事情總是錯的。問題是，錯得有多離譜？所以我會阻止霍爾頓開始[gen receipts]。

But with that, I'll -- what Holden has to say.

但是，接下來，我將會——聽聽霍爾頓怎麼說。

I don't think there's a whole lot to add. We're not going to comment on January. We put out the sequential rate of change that we are sort of looking at; and beyond that, we are not going to go there. I'll just reiterate again: fourth quarter was a lot richer on optimism than it was real progress. But you have to -- we've listened to the people in the field. We looked at the same data that you guys tend to look at. And it hopefully will translate into better results as we go through 2017.

我覺得沒什麼好補充的了。我們不會對一月份的情況發表評論。我們公佈了我們正在關注的連續變化率；除此之外，我們不會再深入探討這個問題。我再重申一次：第四季樂觀情緒遠多於實際進展。但你必須這樣做——我們已經聽取了現場人員的意見。我們查看了你們通常查看的相同數據。希望這能在2017年轉化為更好的結果。

But I'll just leave it as in fourth quarter, general industrial companies were still fairly slow. And if there was a favorable inflection, it was in the process in the oil and gas industries. And that's very early, so let's see how that plays out. And I don't think that I noted anything that inflected negatively.

但我還是就此打住吧，第四季一般工業企業的業務仍然相當低迷。如果有什麼有利的轉捩點，那就是石油和天然氣產業的發展進程。現在下結論還為時過早，讓我們看看結果如何。而且我覺得我沒有註意到任何負面的事情。

Okay. All right, got it. And then just switching on to the gross margins, some of the things you had been experiencing with regards to the customer -- negative customer mix, product mix -- how are you feeling about gross margins in 2017 versus 2016, just relative to some of those sort of longer-term headwinds we had been experiencing?

好的。好的，明白了。然後，讓我們來談談毛利率，以及您在客戶方面遇到的一些問題——負面的客戶組合、產品組合——相對於我們之前遇到的一些長期不利因素，您對 2017 年的毛利率與 2016 年相比有何看法？

If you think of the growth drivers we've talked about for a number of years, and again growth drivers are -- I always want to caution. Our sales plan at the local level is what drives our business. The growth drivers that we talk about serves as the means to the end of how you serve your customer. The impact of -- we had -- I believe we had a very successful year on taking some first steps: steps that started one and two years ago of expanding our Onsite presence.

如果你想想我們多年來一直在討論的成長驅動因素，再次強調，成長驅動因素是──我總是想提醒大家。我們的本地銷售計劃是推動我們業務發展的動力。我們所談論的成長驅動因素，是實現您服務客戶這一最終目標的手段。我相信，在過去一年裡，我們在邁出一些第一步方面取得了非常成功的成就：這些步驟始於一兩年前，旨在擴大我們的現場業務。

All those things continue a pattern that's been in place for 20 years, and that is our mix of customers is continually changing. Our product mix continues to move a bit away from fasteners. Perhaps we can slow that down a little bit if there is recovery that helps our fastener business in calendar 2017, but the underlying long-term pattern is still what it is. And what we need to be smart about every day is identifying those pieces we can grab onto and make a little better.

所有這些都延續了過去 20 年來的模式，那就是我們的客戶群不斷變化。我們的產品組合持續逐漸減少對緊固件的依賴。如果 2017 年我們的緊固件業務出現復甦，或許我們可以稍微放慢速度，但長期的基本趨勢依然不變。我們每天都需要聰明地去發現那些我們可以抓住並加以改進的地方。

A decade ago, a piece we grabbed onto was freight. In the last 5 to 7 years, a piece we've grabbed onto is our exclusive brands, our private labels; and making sure we have a great strategy to support our supplier base and our product mix in serving our customers. But the underlying trends are still there. We just need to defend the position every day. And I think we gained some footing on that as we went through 2016. But it was still a tough year to go through. 2015 and 2016, I should say, because the trend has been going on for several years.

十年前，我們抓到的重點是貨物運輸。在過去的 5 到 7 年裡，我們重點關注的是我們自己的獨家品牌和自有品牌；並確保我們擁有良好的策略來支持我們的供應商基礎和產品組合，從而更好地服務我們的客戶。但潛在的趨勢依然存在。我們只需要每天捍衛好自己的位置。我認為，在 2016 年，我們在這方面取得了一些進展。但即便如此，這一年仍然過得很艱難。應該說是 2015 年和 2016 年，因為這種趨勢已經持續好幾年了。

Okay. All right, thank you guys.

好的。好的，謝謝大家。

Hamzah Mazari, Macquarie.

Hamzah Mazari，麥考瑞大學。

I just had a big-picture question around the store network. How should we be thinking about the store network longer-term, given the aggressive push on Onsite? Does Onsite cannibalize any of the store revenues? Just any color on that piece. And then you talked about participation rate going up with district managers and Onsite, but could you give some color on the sales cycle as well? Does it take a year or six months? Any color around the Onsite business would be helpful.

我只是想問一個關於門市網路的大方向性問題。鑑於 Onsite 模式的大力推廣，我們應該如何從長遠角度考慮門市網路？Onsite服務是否會蠶食實體店的收入？那件作品上的任何顏色都可以。然後您談到了區域經理和現場參與率的提高，但您能否也詳細介紹一下銷售週期？需要一年還是六個月？在現場業務區域周圍添加一些顏色會很有幫助。

Sure. Probably the best way to think about the big picture from a store network standpoint is over the last 20 years, we've been quietly growing Onsite in some of our Midwestern business units. So last week, I was in southern Wisconsin and all of our general managers were in. And in that discussion, one of the things that stands out when I think of our business in Wisconsin and Illinois, close -- over one-third of our revenue in that business unit, about 35% comes through the Onsite type of strategy where we've been incredibly successful over time on developing our business in a broader fashion.

當然。從門市網路角度來看，理解全局的最佳方式可能是，在過去的 20 年裡，我們一直在中西部的一些業務部門悄悄發展 Onsite 服務。上週，我在威斯康辛州南部，我們所有的總經理都在那裡。在討論中，當我想到我們在威斯康辛州和伊利諾伊州的業務時，有一件事讓我印象深刻——我們該業務部門超過三分之一的收入（約 35%）來自現場服務策略，隨著時間的推移，我們在更廣泛地發展業務方面取得了巨大的成功。

But if I think of that business over the last 20 years, we continued to open stores. We continued to grow our footprint. And some of that stemmed from the fact that we had things going on. We had non-fasteners growing in our business, so a lot of markets that traditionally weren't viable became viable. In more recent years, we made improvements from the vending side of the equation. But we believe long-term it's a huge market out there, number one; and we espouse that often.

但回顧過去 20 年的業務，我們一直在不斷開設新店。我們持續擴大業務版圖。部分原因是由於我們當時有很多事情要處理。我們的業務中非緊固件產品不斷成長，因此許多傳統上不可行市場變得可行了。近年來，我們在自動販賣機方面做出了改進。但我們相信，從長遠來看，這是一個巨大的市場，這是第一點；我們也經常表達這種觀點。

We are not wed to one strategy. We are wed to getting close to our customer where it economically works, and providing them a level of service that our competitors either can't or are unwilling to do. And we believe it's a complement of both. Only time will tell if structurally the fact patterns of our industry change, and it prompts our ultimate store count to go up or go down. But the market is still there and we need to evolve to serve that market. But history has shown they are very complementary to each other: Onsite and store.

我們並非固守一種策略。我們致力於在經濟可行的情況下盡可能貼近客戶，並為他們提供競爭對手無法或不願提供的服務水準。我們認為它是兩者的互補關係。只有時間才能證明，我們行業的結構性事實模式是否會發生變化，以及這最終會導致我們的門市數量增加還是減少。但市場依然存在，我們需要不斷發展以服務這個市場。但歷史表明，現場和門市是相輔相成的。

In relation to Onsite, it's typically a multiyear endeavor. Part of it is us getting -- it's like anything. It's incremental. So when we move in, if you will, in the case of an Onsite, it depends sometimes on the product lines we are starting with. It might move faster if we are moving in with an OEM relationship or a broad vending platform relationship. It might move a little slower if it's a broader mix of products and we are picking up particular commodities as we go along.

就現場施工而言，這通常是一個多年過程。一部分原因是我們自己獲得的——就像任何事情一樣。這是漸進式的。所以，當我們著手進行現場施工時，有時取決於我們最初採用的產品線。如果我們與 OEM 廠商或大型自動販賣機平台建立合作關係，進展可能會更快。如果產品種類繁多，而且我們是在逐步採購特定商品的情況下，那麼採購速度可能會慢一些。

I believe it's probably, in many cases, a two- to four-year endeavor to get in deeper. Maybe it's one to five. But it takes time. And that's one of the points that we stressed earlier in the year is we want to build momentum back into our business. And getting traction in the Onsite is a big piece of that.

我認為，在很多情況下，要深入了解可能需要兩到四年的時間。可能是一到五。但這需要時間。而這正是我們今年稍早強調的一點，那就是我們希望重振業務發展動能。而獲得現場推廣的認可，是其中的關鍵一環。

Hamzah, you also asked something about cannibalization. And in fact we do, generally speaking, take some sales out of the store and that becomes the seed revenue for that Onsite. And what we find is that inside 12 to 24 months that seed revenue has grown dramatically from its original number.

哈姆札，你也問了一些關於同類相食的問題。事實上，一般來說，我們會從實體店抽取一些銷售額，作為現場銷售的種子收入。我們發現，在 12 到 24 個月內，種子收入從最初的數字大幅增加。

As it relates to the store, our expectation generally is that that store, which now doesn't have to provide a disproportionate service to a single customer, can sort of have its sort of selling energy reinvigorated; and then they can go out, from an admittedly lower base, begin to grow that business again. And we have sort of altered the compensation with the Onsite business to make it neutral from that standpoint. But the expectation is that the store, sort of no longer responsible for that piece of revenue, will go out and find new active accounts and just begin to grow that business again from that new level.

就商店而言，我們通常的預期是，這家商店現在不必為單一客戶提供不成比例的服務，其銷售活力可以獲得某種程度的重新激發；然後，他們可以從一個較低的起點出發，再次開始發展業務。我們已經對現場業務的補償方式進行了一些調整，使其從這個角度來看是中立的。但人們預期，這家商店不再需要承擔這部分收入，它將去尋找新的活躍客戶，並從新的層面重新開始發展業務。

I'll just throw one additional piece in. When I think of the cannibalization, that comment would have been true of store openings for the last 30 years as well. So Onsite isn't a new piece of the equation. Really what we are doing -- and I think Holden described it best -- we are taking some seed dollars where we have a great relationship. And we're going after business that historically our store network wouldn't go after because it wasn't geared to service that business, given the profile of the gross margin in that business. And we need to structurally change our cost components to go after that business.

我再加一塊進去。想到這種蠶食效應，我覺得這句話同樣適用於過去 30 年的商店開幕情況。所以現場服務不是一個新要素。實際上我們正在做的——我認為霍爾頓描述得最好——是，我們用一些種子資金與我們關係良好的人合作。我們正在開拓一些我們門市網路過去不會涉足的業務，因為考慮到這類業務的毛利率特點，我們的門市網路並不適合服務這類業務。我們需要從結構上改變成本組成，才能贏得這項業務。

That's very helpful color. I appreciate it. Just a follow-up, and I'll turn it over. How much of your cost of goods sold is foreign sourcing? A competitor of yours mentioned that theirs is 15%. Just trying to get a sense of what you guys run at. Thank you.

那是一個非常有用的顏色。謝謝。還有一個後續問題，我這就把它翻過來。你們的銷售成本有多少是來自國外採購的？你的一個競爭對手提到他們的比率是 15%。我只是想了解一下你們的營運目標是什麼。謝謝。

So, what we have said is that we think that 40% to 45% of our COGS probably derives from overseas. I don't know what the competitor -- how he was defining the number. I will tell you that of that 40% to 45%, not all of that is directly sourced. Obviously we have a significant operation with Fasco that directly sources product. But that does not rise to near the level of 40% to 45%.

所以，我們之前說過，我們認為我們銷售成本的 40% 到 45% 可能來自海外。我不知道競爭對手是如何定義這個數字的。我可以告訴你，在這 40% 到 45% 中，並非全部都是直接採購的。顯然，我們與Fasco有著重要的業務往來，Fasco直接向我們購買產品。但這遠未達到 40% 到 45% 的水平。

So the number that we use includes not only the directly sourced, but also that product that we may buy domestically but ultimately is sourced from an overseas customer. But we talk about it in terms of 40% to 45% of our COGS, and that's kind of how we've discussed it.

因此，我們使用的數字不僅包括直接採購的，還包括我們可能在國內購買但最終是從海外客戶採購的產品。但我們通常以佔銷售成本的 40% 到 45% 來談論它，我們也一直這樣討論它。

Got it. Makes sense. Thank you.

知道了。有道理。謝謝。

I'll add on one piece there, as well. The fastener production moved offshore of North America. So, Fastenal in 2017, we are celebrating our 50th year in business. Largely, the trends within fasteners were moving offshore well before we even became a company. And a lot of that was driven by the automotive sector back in the late 50s and early 60s. So our percentage is a little bit higher because of the fastener concentration in our business.

我也會在那裡補充一點。緊固件生產轉移到了北美以外的地區。所以，Fastenal 在 2017 年慶祝公司成立 50 週年。在我們公司成立之前，緊固件產業的趨勢就已經開始向海外轉移了。而這一切很大程度上是由 1950 年代末和 1960 年代初的汽車產業所推動的。因此，由於我們業務中緊固件的集中度較高，我們的百分比略高一些。

With that said, our concentration wouldn't be any different than any of our peers in the industry, given similar product mix. So I see us as being in a similar boat, if you will, with everybody else, with a lower cost structure in our underlying business.

也就是說，考慮到類似的產品組合，我們的業務集中度與業內其他公司並無二致。所以我覺得我們和其他公司處境差不多，只是我們的基礎業務成本結構較低。

Got it. Thank you.

知道了。謝謝。

Ryan Merkel, William Blair.

瑞安·默克爾，威廉·布萊爾。

First, Holden, you said with a little faster growth, you could leverage the income statement in 2017. So two questions: what level of sales growth do you think you need to see SG&A leverage? And then, secondly, is SG&A growing half the rate of sales a reasonable goal in 2017?

首先，霍爾頓，你說過如果成長速度再快一些，你就可以在 2017 年提高損益表。所以有兩個問題：您認為需要達到怎樣的銷售成長水準才能達到銷售、管理及行政費用槓桿？其次，2017 年銷售、一般及行政費用成長率達到銷售額成長率的一半是否是合理的目標？

So, I don't think that our original guidance was changed. I think that we said that at sort of low- to mid-type of revenue growth that we'll look to sustain the margin. And if we can get mid- to high-type of growth, we can expand it. I still think that that is, generally speaking, where we see the model.

所以，我認為我們最初的指導方針並沒有改變。我認為我們說過，在收入成長處於中低水平的情況下，我們將努力維持利潤率。如果我們能獲得中等到較高的成長，我們就可以擴大規模。我仍然認為，總的來說，這就是我們看到的模型。

In terms of the rate of growth of SG&A, bear in mind that if we do in fact get better growth, then we would expect to see our incentive comp go up. We're going to continue to invest in vending. And so we have talked about achieving 20%, 25% type incrementals in sort of a low- to mid-type single-digit growth environment, and maybe 25% to 30% type incrementals if you get into mid to high.

就銷售、一般及行政費用 (SG&A) 的成長率而言，請記住，如果我們確實獲得了更好的成長，那麼我們預計我們的激勵薪酬也會增加。我們將繼續投資自動販賣機產業。因此，我們討論過在個位數低到中等的成長環境下實現 20%、25% 的成長，如果進入中高成長環境，則可能實現 25% 到 30% 的成長。

That was sort of where we were, I think, in third quarter. And we haven't seen anything that necessarily changes that.

我認為，我們在第三節的時候大概就是這種情況。我們還沒有看到任何必然會改變這種情況的因素。

Perfect. Got it, okay. And then second, back to the Onsites, how are the installations you've done working? How much did Onsite add to growth in 2016, if you have that number handy? Because I think you were hoping for maybe 300, 400 basis points of growth from Onsite this year.

完美的。明白了，好的。其次，回到現場安裝方面，你們已經完成的安裝工作進度如何？如果您手頭上有相關數據，請問 Onsite 在 2016 年為成長貢獻了多少？因為我認為你原本希望今年 Onsite 能達到 300 到 400 個基點的成長。

The Onsites grew as a category about 25% for the year.

現場服務類別在這一年中增長了約 25%。

That's including the transferred -- cannibalized dollars.

這其中也包括轉移過來的——被蠶食的美元。

Correct. Yes and that's the challenge, right? So we are up -- 120 -- I'll tell you what. Why don't we talk about the specific numbers off-line? We have them, but I'm not going to do the math on this forum. So why don't we touch base on it off-line?

正確的。沒錯，這就是挑戰所在，對吧？所以我們領先了——120——我告訴你。我們為什麼不私下討論具體數字呢？我們有這些數據，但我不會在這個論壇上進行計算。那我們為什麼不在線下談談這件事呢？

No worries. But just -- you signed up a lot of Onsites; are they working as you expected? And are the stores starting to add new active accounts with the freed-up selling energy?

不用擔心。但是——你註冊了很多現場培訓；它們是否按預期運行？商店是否開始利用釋放的銷售能量增加新的活躍帳戶？

I'll answer that from the standpoint -- we took a deep-dive look at the Onsites that had been turned on and had sufficient history. And, for us, sufficient history meant they had to be operating at least nine months. And so we looked at that to see what's happening in that group, and we liked what we saw, and we weren't surprised by what we saw.

我將從以下角度來回答這個問題——我們深入研究了已啟用且具有足夠歷史記錄的 Onsites。對我們來說，足夠的歷史記錄意味著它們必須至少運作九個月。因此，我們觀察了那個群體的情況，我們對所看到的東西感到滿意，並且對所看到的並不感到驚訝。

We saw a group of accounts. And the numbers that we really analyze, it was just over 50 of our Onsites that had been operating long enough that we could really get a feel for it. The trends were solid. And it wasn't driven by a few that were pulling it up or pulling it down, which is good to see. It was a good performance, generally speaking, across the group.

我們看到了一組帳戶。我們真正分析的數據，是在我們運作時間足夠長的 50 多個現場服務點中，我們能夠真正了解其運作情況的。趨勢穩定。而且，這件事的進展並非由少數人推動或阻礙，這令人欣慰。總的來說，整個團隊表現都不錯。

We saw that the gross margin of the store that spawned -- I don't know if that's the right word -- but that spawned the Onsite business, their gross margin went up, post-separating the business, which is what we would expect because typically you are taking a larger customer -- it might be a $10,000, a $20,000, a $30,000 a month customer, and you are extracting it from a $100,000, a $120,000, a $150,000 store. And the remaining business actually has a slightly higher gross margin. So we saw that, as we expected.

我們看到，衍生出 Onsite 業務的門市的毛利率——我不知道用這個詞是否合適——在業務分離後有所上升，這符合我們的預期，因為通常情況下，你會從一個年消費 10 萬美元、2 萬美元、3 萬美元的門店中剝離出一個更大的客戶——這個客戶可能是每月消費 1 萬美元、2 萬美元、3 萬美元。而剩餘業務的毛利率實際上略高一些。正如我們所預料的那樣，我們看到了這一點。

We saw that business with a lower gross margin than our average Onsite. But that is very typical, because oftentimes when you're stepping into a new Onsite, you are stepping into some products that you might be not sourcing optimally yet. You might not truly understand some of the products from the standpoint of -- and it gets back to that optimal sourcing component. You might have product where you know the optimal source, but you aren't going to get the product in for three, four, five, six months. And so you have some lower-margin sales that are going out.

我們發現該業務的毛利率低於我們平均的現場服務業務。但這很常見，因為通常情況下，當你進入一個新的現場銷售點時，你會接觸到一些你可能還沒有找到最佳採購方式的產品。您可能並不真正了解某些產品——而這又回到了最佳採購環節的問題上。你可能知道某個產品的最佳來源，但你可能需要三、四、五、六個月才能拿到產品。因此，有些低利潤的商品會被賣出去。

You might have some product that the customer had a meaningful supply on, and you don't pick up that business for a period time. But when I look at those Onsites that we've studied, again we were pleased with the results and weren't surprised by the results. I suspect when Holden runs his numbers, he's going to find a low-single-digit -- probably a 1 to 2 kind of number, given the fact that so much of our business was ramping up in the latter half of the year.

你可能會有一些客戶大量訂購的產品，但你有一段時間沒有接到這筆訂單。但是，當我查看我們研究過的那些現場考察案例時，我們對結果感到滿意，並沒有感到驚訝。我懷疑霍爾頓在計算數據時會發現一個很低的個位數——考慮到我們許多業務在下半年都在加速成長，可能只有 1 到 2 個數字。

But I'll see if Holden has (multiple speakers).

但我會看看霍頓有沒有（多個揚聲器）。

The incremental revenues through Onsite would have increased our revenue probably a little bit over 3% for the year. Now, do remember that does include some cannibalization that would take that down a little bit. That's a total number. But the Onsite revenue did, in fact, contribute a little more than 3% of our growth for the year.

透過 Onsite 獲得的增量收入可能會使我們全年的收入增加 3% 以上。不過，請記住，這其中也包含一些蠶食效應，會稍微降低產量。這是總數。但事實上，現場收入確實為我們當年的成長貢獻了略高於 3% 的份額。

I would suspect it would probably cut it by one-third to one-half.

我估計大概會減少三分之一到一半。

Yes. That is probably right.

是的。這很可能是對的。

Okay. That's very helpful, thank you.

好的。非常感謝，這很有幫助。

Robert McCarthy, Stifel.

Robert McCarthy，Stifel。

Just following up on a couple of issues. I suppose first, maybe Holden, you could talk about the process industries and oil and gas, and maybe give us some sense of what you think exposure is. Maybe walk us through the number of stores in the right regions. Give us a sense beyond kind of the SIC codes of how big the overall exposure could be to your network for sales.

我來跟進幾個問題。我想首先，霍爾頓，也許你可以談談流程工業、石油和天然氣，也許可以給我們一些關於你認為風險敞口是什麼的看法。或許可以跟我們介紹一下相關地區門市的數量。除了 SIC 代碼之外，請您大致了解您的銷售網絡可能面臨的整體風險有多大。

The direct impact is fairly light. I think we've talked about sort of low-, mid-single-digit direct impact from the oil and gas industry. So you are right to say that the impact is really more indirect. I'm not sure that we've really sort of come down exactly on sort of a number we think it is. It clearly does matter. And perhaps Dan can give more historical perspective in terms of what the full-year impact is.

直接影響相當輕微。我認為我們已經討論過石油和天然氣行業帶來的直接影響，大概在個位數低到中等水平。所以你說得對，這種影響確實更間接。我不太確定我們是否真的已經確定了一個我們認為比較準確的數字。這顯然很重要。或許丹可以從歷史角度出發，分析全年的影響。

But bear in mind that where that full-year impact comes from, companies like Flowserve or Ware Group that are not oil and gas companies, if you will; they are pump companies or engineering companies, but they have significant exposure to the oil and gas within their overall customer mix. That's where our exposure comes from. So there's a challenge in figuring out the full exposure comes from that fact.

但請記住，這種全年影響來自像 Flowserve 或 Ware Group 這樣的公司，它們雖然不是石油和天然氣公司，但它們是泵公司或工程公司，不過它們的整體客戶組合中石油和天然氣業務佔比很高。這就是我們接觸到這些資訊的來源。因此，要弄清楚全部曝光量就存在著一個挑戰，而這正是源自於此。

And, Dan, do you know kind of what a full-year indirect impact might be?

丹，你知道一整年的間接影響大概會是多少嗎？

You know, I don't. In the past, I think we've talked about a number of somewhere between 10% and 12%. But it's really difficult to pinpoint it, because there's so much indirect impact.

你知道，我不知道。過去，我們討論過的數字大概在 10% 到 12% 之間。但要準確指出原因真的很難，因為間接影響太多了。

But to the example I've often cited is if I travel an hour and a half upriver to visit my mom, there's a sand line -- there's two sand lines within 2 miles of the farm I grew up on. One was -- they both were operating two years ago. The one was operating 24 hours a day. The other one was operating 16 hours a day. One of them has shut down. The other one has one shift. So our Red Wing store was impacted by oil and gas, but I wouldn't have thought of our Red Wing, Minnesota, stores having an impact of oil and gas. So it's very hard to sift it out.

但以我常舉的例子來說，如果我乘車沿河逆流而上一個半小時​​去看望我的母親，就會看到一條沙線——在我長大的農場方圓 2 英里內就有兩條沙線。其中之一是——他們倆兩年前都在運作。那家店24小時營業。另一台每天運轉16小時。其中一家已經關門了。另一個人只有一個班次。所以，我們位於明尼蘇達州紅翼市的門市受到了石油和天然氣的影響，但我之前從未想到我們位於明尼蘇達州紅翼市的門市會受到石油和天然氣的影響。所以很難將其篩選出來。

Okay. And Holden, perhaps, we'll table that for a little probing off-line. The second major question for this call is maybe you can just talk about Onsite. Obviously people have been talking about the opportunities there in terms of what's going on. But maybe just talk about really how important it is from an optimization of network potential. I think you cited in the past, at least anecdotally, how high the margin is in your legacy stores; and kind of your [Berktusgate] which is the Upper Peninsula of the Midwest, in Minnesota, in terms of where the margins are. And could you just talk about really what you think the margin opportunity long-term could be for the Company, at least qualitatively, given Onsite?

好的。至於霍爾頓，或許我們可以先擱置一下，在線下再進行一些討論。本次通話的第二個主要問題是，您能否談談現場服務？顯然，人們一直在談論那裡正在發生的事情所帶來的機會。但或許應該談談從網路潛力優化的角度來看，這到底有多重要。我認為你過去至少在軼事中提到過，你的傳統門市利潤率有多高；還有你的[Berktusgate]，位於中西部上半島的明尼蘇達州，就利潤率而言也是如此。那麼，您能否談談您認為考慮到 Onsite 的情況，公司長期的利潤機會究竟如何？至少從定性角度來說是這樣？

I'll throw out a few pieces and then we'll wrap the call, because we are running up against 45 minutes. For us, profitability really stems from where is our average store size in that region and how well are we doing managing our operating -- the growth of our business over time?

我簡單說幾句，然後我們就結束通話，因為時間只剩 45 分鐘了。對我們來說，獲利能力真正取決於我們在該地區的平均門市規模，以及我們營運管理的成效——也就是我們業務隨時間推移的成長。

So if I look at the Midwest where we have the greatest concentration of Onsite, it's also an area of the country where we have the largest average store size because it's grown over time. Because they have -- our West Coast opened up -- started opening up 20 years ago. Our Midwest started opening up 50 years ago. So we have a 20- to 30-year head start. And our highest operating margin business is in the Midwest.

所以，如果我看看中西部地區，那裡是 Onsite 最集中的地區，也是全國平均門市規模最大的地區，因為隨著時間的推移，門市規模一直在增長。因為他們——我們的西海岸——20年前就開始開放了。我們的中西部地區在50年前就開始開放了。因此，我們擁有20到30年的領先優勢。我們利潤率最高的業務位於中西部地區。

With that said, one thing Bob Kierlin has always reminded us in the 20 years that I've been here, and probably in the 50 years that he's been here, is that at the end of the day, gross margin is a marker we look at to understand our business. Operating margin is a marker we look at to understand our business. But great organizations, long-term, focus on where they can provide their shareholders -- their employees with an opportunity, their customer with a service, and their shareholders with a return on investment.

話雖如此，在我在這裡的 20 年裡，以及可能在這裡的 50 年裡，鮑勃·基爾林一直提醒我們，歸根結底，毛利率是我們了解自身業務的一個指標。營業利益率是我們用來了解公司業務的指標。但從長遠來看，偉大的組織會專注於如何為股東創造價值——為員工提供機會，為客戶提供服務，為股東帶來投資回報。

And we like the various businesses within Fastenal because they all provide a very attractive return. And that is, at the end of the day, the ultimate test of a business. And if you are providing opportunities to your employees, you have a great organization to serve your customer long-term. We believe we have all those components in our store network and in Onsite.

我們喜歡 Fastenal 旗下的各個業務，因為它們都能帶來非常可觀的回報。歸根究底，這才是對一個企業最終的考驗。如果你能為員工提供發展機會，你就能打造出一個能長期服務客戶的優秀企業。我們相信我們的門市網路和 Onsite 平台都具備所有這些要素。

With that, I see we are at 45 minutes. And similar to prior quarters, we realize we are in the thick of earnings season, and everybody has a pretty busy plate. We'll sign off for now. Again, thank you for your support of Fastenal, and thank you for welcoming Holden to the team.

這樣看來，時間已經過了45分鐘。與前幾季類似，我們意識到我們正處於財報季的高峰期，每個人都非常忙碌。我們暫時就此結束。再次感謝您對 Fastenal 的支持，也感謝您歡迎 Holden 加入團隊。

Thank you.

謝謝。

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

女士們、先生們，今天的演講到此結束。現在您可以斷開連接，祝您度過美好的一天。