快扣 (FAST) 2017 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fastenal Company Q2 2017 Earnings Results Conference Call. (Operator Instructions) I would now like to introduce your host for this conference call, Ms. Ellen Trester, you may begin, ma'am.

各位女士、先生，大家好，歡迎參加 Fastenal 公司 2017 年第二季財報業績電話會議。（操作員指示）現在我向大家介紹本次電話會議的主持人，艾倫·特雷斯特女士，您可以開始了，女士。

Welcome to the Fastenal Company 2017 Second 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 will 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. 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 September 1, 2017, at midnight Central Time.

歡迎參加 Fastenal 公司 2017 年第二季財報電話會議。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。電話會議將持續最多 45 分鐘，首先將對我們的季度業績和營運情況進行總體概述，剩餘時間將用於提問和解答。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，不得對今天的通話進行任何錄音、複製、傳輸或分發。本次電話會議將透過 Fastenal 投資者關係主頁 investor.fastenal.com 在網路上進行音訊同步直播。網路直播的回放將在網站上提供，直至2017年9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。

Thank you, Ellen, and good morning, everybody, and thank you for joining our Second Quarter Earnings Call.

謝謝艾倫，大家早安，謝謝各位參加我們的第二季財報電話會議。

Before I turn to the flipbook, I'd just like to make a few general comments. One, a message to our team. And that is last December, we sat down, we talked about 3 simple concepts for 2017: One was grow our sales; second one was grow our earnings; and the third one is to think big. And on the gross sales front, it was all about focusing on our growth drivers and your team. And I'm pleased to say, in the first quarter, our internal goal of system, we came in at 100.7% of our internal sales goal. In the second quarter, we came in at 102.6%. So I'm very pleased and proud of the execution put forth by our team thus far in 2017.

在開始介紹翻頁書之前，我想做一些整體說明。第一，給我們的團隊一個訊息。去年十二月，我們坐下來，討論了 2017 年的三個簡單概念：一是提高銷售額；二是提高收入；三是放眼未來。在銷售總額方面，一切都圍繞著我們的成長動力和你們的團隊。我很高興地告訴大家，在第一季度，我們的內部系統銷售目標完成了 100.7%。第二季度，我們的業績為 102.6%。因此，我對我們團隊在 2017 年迄今所取得的成就感到非常滿意和自豪。

The second one was about grow earnings. Biggest message there is have a plan. Gross margin, know your levers, know the trends of our business, but more importantly, know the leverage you can pull in the short term to help your gross margin. I think we executed well on those in the current quarter.

第二個問題是關於提高收益。最重要的訊息就是：要有計劃。毛利率，了解你的槓桿，了解我們業務的趨勢，但更重要的是，了解你在短期內可以採取哪些措施來幫助提高你的毛利率。我認為我們在本季度很好地完成了這些任務。

The second one is our biggest component of operating expenses is payroll. 2017 is going to be a tough year for managing payroll from the standpoint. We were very bullish coming into the year on where our prospects could be. We had great momentum, I felt, coming from 2016. And one of our biggest expense growths in the current year would be incentive comp. I've talked about that in previous calls and at investor conferences that a high percentage of our payroll is incentive-based, whether that be at the branch level, at the distribution level or in the manufacturing or support areas. We reward our people based on our ability to accomplish goals. And I felt we'd have somewhat of a reloading of the incentive comp in the current year and we've seen that in the current quarter.

第二項是我們營運支出中最大的組成部分，即薪資。從薪資管理的角度來看，2017年將是充滿挑戰的一年。年初時，我們對公司的發展前景非常樂觀。我覺得，從 2016 年開始，我們勢頭很強勁。今年我們最大的支出成長之一就是激勵性薪酬。我曾在之前的電話會議和投資者會議上談過，我們工資總額的很大一部分是基於激勵的，無論是在分支機構層面、分銷層面還是在製造或支援領域。我們根據員工完成目標的能力給予獎勵。我當時覺得今年的激勵薪酬制度會有所調整，而我們在本季也看到了這一點。

Finally, on the aspect of occupancy. Frankly, it just can't grow outside of vending. Vending, we include in occupancy expense because it's just another shelf within our network of distribution, but being very mindful of where our costs can go, and I think we did a nice job of that in the current quarter as well.

最後，關於入住率方面。坦白說，它除了自動販賣機之外，根本無法成長。自動販賣機費用計入佔用費用，因為它只是我們分銷網絡中的另一個貨架，但我們非常注意成本的分配，我認為我們在本季度也做得很好。

Finally, think big. I think, Onsite is an example of us thinking big over the last 5 years of how we can grow the business faster. Vending is another over the last 10. And the challenge we put forth to our self is always looking for what's next in that think big category about growing the business, growing our service to our customers and growing the opportunities for our employees and our shareholders long term.

最後，要胸懷大志。我認為，Onsite 就是我們過去 5 年裡思考如何更快發展業務的一個例子。自動販賣機是過去 10 年的另一個成長點。我們給自己的挑戰是，始終在「大局觀」的範疇內尋找下一步的發展方向，即發展業務、提升客戶服務水平，並為員工和股東創造長期發展機會。

On the gross margin front, I believe it's been, and correct me if I'm wrong on this one, I believe it's been since the last time we had a gross profit improvement year-over-year on a relative basis was the third quarter of 2013. I believe we were up 2 basis points that quarter. So I would suspect in the last 14 earnings calls, 12 out of every 10 questions have centered on gross margin, why it's down. I'm thankful we won't get that question today, but maybe a variation of that. Holden will provide some more insight on that as he goes through his notes, but I would ask you to indulge me with a few thoughts here.

就毛利率而言，我認為，如果我沒記錯的話，自從我們上一次毛利率比去年同期有所提高以來，就是 2013 年第三季。我相信我們那個季度獲利了2個基點。因此，我懷疑在過去的 14 次財報電話會議上，每 10 個問題中就有 12 個問題集中在毛利率上，也就是為什麼毛利率下降。我很慶幸今天不會遇到這個問題，但可能會遇到類似的變體。霍爾頓在查閱筆記時會對此提供更多見解，但我想請您允許我在這裡分享幾點想法。

One is about human nature. When an organization is struggling to grow, within each of our customers, there's a universal spend that we typically play in. And that universe has the gross margins you've grown accustomed to. Oftentimes, we will step out of that portion of the spend and go deeper into their supply chain and not all that product has the same margin profile. I'm sure some of the improvement of our gross margin in the current quarter is the economy, and our growth drivers gave us more -- a little bit more lift and maybe we don't have to dig quite as deep. And -- but one aspect where we are digging deeper and continue to dig deeper is our Onsite strategy, that's the core strength of that, is you go into a broader range of products because you have a different cost structure.

一個是關於人性的。當一個組織難以發展壯大時，我們每個客戶都會面臨一個普遍的支出問題，而我們通常會參與其中。而那個領域的毛利率，正是你已經習以為常的那種。很多時候，我們會跳出這部分支出，深入到他們的供應鏈中去，而並非所有產品的利潤率都相同。我相信本季毛利率的改善部分歸功於經濟情勢，而我們的成長動力也為我們帶來了更多提振，或許我們不必再投入那麼多資金了。但是，我們正在深入研究並持續深入研究的一個方面是我們的現場策略，這是它的核心優勢，因為你的成本結構不同，所以你可以進入更廣泛的產品領域。

We have a better stocking plan. In 2016, we rolled out what we called CSP 16, that's our Customer Service Project. It's helped our in-brand sales, it's helped our construction business, both of which have helped our margin.

我們有更好的庫存計劃。2016 年，我們推出了我們稱為 CSP 16 的項目，也就是我們的客戶服務項目。它促進了我們的品牌銷售，也促進了我們的建築業務，這兩方面都提高了我們的利潤率。

We've also done a nice job with hub stocking. Nick Lundquist and his team have done a wonderful job balancing inventory dollars to advantages for our branch personnel and what to sell to drive their gross margin. And we've gained some traction on that. It took some inventory dollars to do it, but we're generating a great return on that investment.

我們在樞紐庫存方面也做得很好。Nick Lundquist 和他的團隊在平衡庫存成本與我們分公司員工的優勢以及銷售哪些產品以提高其毛利率方面做得非常出色。我們在這方面取得了一些進展。雖然為此投入了一些庫存資金，但我們從這項投資中獲得了豐厚的回報。

And frankly, better analytics. Again, Nick and his team have done I believe a better job supporting the branches, our district managers and our regional VPs on understanding their business, understanding the levers to pull in their gross profit, there's a whole bunch of them.

坦白說，還需要更好的分析能力。我認為，Nick 和他的團隊在支持各分公司、區域經理和區域副總裁方面做得更好，幫助他們了解業務，並了解如何提高毛利，這其中有許多因素。

And finally, I'll touch on about greater execution. The one thing that I think's really great about our gross margin this quarter isn't the fact that it's up, it's the fact that the improvement came in 5 basis points here and 5 basis points there from about a dozen different places. That gives me more comfort in our ability to execute and our ability to hang on to some of that because the long-term trends that Holden has talked about in previous calls are intact, and that is our growth drivers related to non-fasteners, related to Onsite, related to vending, don't raise our gross margin. And so execution steps is what we need to do to offset some of that impact over time.

最後，我再談如何提升執行力。我認為本季我們毛利率真正令人稱道的一點，不是它提高了，而是它從十幾個不同的方面一點一點地提高了 5 個基點。這讓我對我們的執行能力和保持某些成果的能力更有信心，因為霍爾頓在之前的電話會議中談到的長期趨勢依然存在，那就是我們與非緊固件、現場服務和自動售貨相關的增長動力並沒有提高我們的毛利率。因此，我們需要採取執行措施來抵消這些影響，以期隨著時間的推移而減輕這些影響。

Now switching to the prepared flipbook. Sales growth returned to double digits in the second quarter of 2017. Underlying demand improved, but we outpaced the market due to the continual momentum in our key growth drivers. One other item I'll point out is that we did see some improvements in the underlying economy, and again, Holden will touch deeper on that in a few minutes.

現在切換到準備好的翻頁書。2017年第二季度，銷售額恢復兩位數成長。潛在需求有所改善，但由於我們關鍵成長驅動因素的持續勢頭，我們仍然超越了市場。我還要指出一點，我們確實看到經濟基本面有所改善，霍爾頓稍後會更詳細地談到這一點。

One point that jumped out for me, in previous calls, I've talked about our national account business representing just under 50% of our revenue. And that our top 100 customers represent about half of that number. Both of those groups, our overall national account and our top 100, have been performing well for us with one exception. Our top 10 customers have been negative for us all year long and, in June, flipped to positive. That improvement from May to June represented -- from those top 10 customers, represented about 20% of our improvement in the growth numbers from May to June. So that's a sign of what the economy did when I look at the May to June numbers that I can tangibly put my finger on. A piece of that 20% obviously came from things we're doing with that customer group, but their activity has improved. The other 80% I'm sure has elements of the economy in it, too, but a lot of elements of just pure execution by the Fastenal team, and I'm proud of them for their efforts.

讓我印象深刻的一點是，在先前的電話會議中，我曾談到我們的全國客戶業務占我們收入的近 50%。而我們前 100 名的客戶約佔這個數字的一半。這兩個群體，即我們的全國客戶群和前 100 名客戶群，除了一個例外，都表現良好。我們前十大客戶全年都為我們帶來了負面影響，但在六月，情況發生了轉變，轉為正面影響。從 5 月到 6 月的這一成長，代表了前 10 位客戶的約 20%，占我們 5 月到 6 月成長數位成長的 20%。所以，從五月到六月的數據來看，這就是我能實際感受到的經濟狀況的一個跡象。這 20% 的成長顯然一部分來自於我們與該客戶群開展的活動，但他們的活躍度確實有所提高。我相信剩下的 80% 也包含一些經濟因素，但更多的是 Fastenal 團隊的純粹執行力，我為他們的努力感到自豪。

We continue to control our operating costs despite having the growth-related compensations or opportunities, depending on how you want to look at it. As a result, our incremental margins topped 25% this quarter. That number was reduced by somewhere between 25% and 30% because of the expansion of incentive comp. We're -- earlier, I touched on thinking big, and we can't emphasize that enough, we're encouraging all of our leaders, and we have 20,000 of them within Fastenal. We're encouraging all of our leaders to think big about our long-term planning and our future.

儘管我們擁有與成長相關的補償或機會（取決於你怎麼看待這個問題），但我們仍然控制著營運成本。因此，本季我們的增量利潤率超過了 25%。由於激勵性薪酬的擴大，這一數字減少了 25% 到 30% 左右。我們——之前我提到過要胸懷大志，這一點我們怎麼強調都不為過，我們正在鼓勵我們所有的領導者，而 Fastenal 內部有 20,000 名領導者。我們鼓勵所有領導者對我們的長期規劃和未來進行長遠思考。

Finally, as we mentioned in last quarter's call, we acquired a company in Michigan, Mansco. I'm very pleased to say have exceeded our expectations in the first 3 months. We're learning quickly and really well how to play in the sandbox together. And we don't do a lot of acquisitions, that's a learning curve for us. And they haven't been acquired a lot, so that's a learning curve for them. And -- but I'm pleased to say both teams have gelled really well, and I want to say thanks to the Mansco team for pushing us over the 10% mark and into double-digit territory for sales growth for the quarter.

最後，正如我們在上個季度電話會議中提到的，我們收購了密西根州的一家公司，Mansco。我很高興地說，前三個月的業績已經超出了我們的預期。我們很快就學會瞭如何一起在沙盒裡玩耍，玩得非常好。我們很少進行收購，這對我們來說是一個學習的過程。而且他們還沒有獲得很多收購，所以對他們來說這是一個學習的過程。而且——但我很高興地說，兩個團隊的合作都非常順利，我要感謝 Mansco 團隊，是他們幫助我們突破了 10% 的銷售增長大關，使本季度的銷售增長達到了兩位數。

On Page 4 of the flipbook, we signed 68 Onsites in the quarter. We have 486 active Onsites today. We've stated earlier that our goal, it's a lofty one, our goal is to add 275 to 300 signings this year versus the 176 we did last year.

在翻頁手冊的第 4 頁，我們本季簽署了 68 份現場服務協議。我們目前有 486 個活躍的現場服務點。我們之前說過，我們的目標是一個遠大的目標，我們的目標是今年新增 275 至 300 名簽約球員，而去年我們只簽了 176 名。

I'm pleased with the 68 because, in the quarter, we had a very slow April on signings. We have our big customer show. I'm pleased to say we had in excess of 500 Onsite candidates at that show, so a very good showing from our team of inviting great customer opportunities. But when you take your entire group out of commission for a week of the month, you have a weak month. And despite that, we still signed 68.

我對68這個數字感到滿意，因為本季我們在4月的簽約情況非常緩慢。我們即將舉辦大型客戶見面會。我很高興地告訴大家，我們在那次展會上接待了超過 500 名現場候選人，這充分證明了我們團隊在吸引優質客戶方面取得了非常好的成績。但是，如果你讓整個團隊停工一周，那麼這個月的業績就會很差。儘管如此，我們還是簽了68份合約。

So year-to-date 2 years ago, we had 30 signings. Year-to-date 2016, we had 92 signings. Year-to-date in 2017, we have 132. That's 4x our 2015 number and a 43% increase over prior year. So very good, very pleased with the trends we're seeing there.

所以兩年前的年初至今，我們一共簽了 30 名球員。截至 2016 年，我們共簽下了 92 名球員。截至 2017 年，我們共有 132 例。這相當於 2015 年數據的 4 倍，比前一年增長了 43%。非常好，我們對目前看到的趨勢非常滿意。

Because of the expansion of Onsites, one thing you will probably notice reading through our release is we've removed a term from our release, that term is store. We've replaced that with the term branch. A term that we would have used prior to 15 years ago, we did for CSP because we thought it described our business well. And we also talked about Onsites in in-market units. Holden's better with words than I am and I like the way he's presenting the data. But it's really talking about our market presence and the fact that our branches and Onsites are an extension of our distribution network. We're not a store, we're not a retailer. We're a service organization that's part of our customers' supply chain.

由於 Onsites 的擴展，您在閱讀我們的版本說明時可能會注意到，我們從版本說明中刪除了一個術語，那就是 store。我們已將其替換為“分支”一詞。15 年前我們會使用這個術語，我們之所以用它來指稱 CSP，是因為我們認為它能很好地描述我們的業務。我們也討論了市場單元的現場服務。霍爾頓比我更擅長用語言表達，我喜歡他呈現數據的方式。但這實際上是在談論我們的市場地位，以及我們的分支機構和現場服務點是我們分銷網絡的延伸這一事實。我們不是商店，也不是零售商。我們是一家服務型組織，也是客戶供應鏈的一部分。

We signed 4,881 vending devices. Frankly, a little disappointing from my perspective. We didn't break 5,000 like we did in the first quarter. Similar to the Onsites, we saw a slowdown in April around the show. The May and June numbers snapped back nicely, and I feel really good about that. Our goal remains 22,000. That's a lofty goal similar to our Onsite goal, but that's part about thinking big.

我們簽署了 4881 台自動販賣機。坦白說，從我的角度來看，有點令人失望。我們沒能像第一季那樣突破5000分大關。與現場銷售情況類似，我們在 4 月展會期間也看到了銷售放緩的趨勢。五月和六月的數據都出現了不錯的反彈，我對此感到非常滿意。我們的目標仍然是 22,000。這是一個遠大的目標，類似我們的現場目標，但這正是要有遠大抱負的一部分。

And the final piece is we still are removing a few more machines than I'd like to see. We removed quite a few in 2016 because of our optimization process. I think that's the right move. In the first 2 quarters of this year, we still are removing some underperforming machines. Our average revenue per machine continues to improve. And but we still challenged ourselves on how to get better at the signings, the installs and identifying on day 1 that 10 is the right number versus 8, versus finding that out a year or 2 years later and reducing to 8. 8 is the right number, it's just knowing that sooner is key. And that ties back to our letter to shareholders where we talked about recognizing the facts of our business and figuring out how to improve the business going forward.

最後一點是，我們移除的機器數量仍然比我希望看到的要多一些。由於我們的優化流程，我們在 2016 年刪除了相當多的內容。我認為這是正確的做法。今年前兩個季度，我們仍在淘汰一些性能不佳的機器。我們每台機器的平均收入持續提高。但我們仍然不斷挑戰自己，思考如何在簽約、安裝等方面做得更好，以及在第一天就確定 10 人才是正確的數字，而不是 8 人，而不是一年或兩年後才發現這一點並減少到 8 人。 8 人才是正確的數字，關鍵在於儘早知道這一點。這與我們在致股東的信中談到的認識我們業務的實際情況以及思考如何改善業務的未來發展息息相關。

National Accounts rose 13% in the second quarter versus second quarter of '16, a wonderful job of growing our business and making promises, and our branch personnel, our district personnel and our regional personnel are doing a great job of honoring those promises we've made.

與 2016 年第二季相比，全國帳戶在第二季度成長了 13%，這充分體現了我們在業務成長和兌現承諾方面所做的出色工作，我們的分行人員、地區人員和區域人員在履行我們所做的承諾方面也做得非常出色。

Finally, the CSP products that we rolled out (inaudible) product continues to grow nicely faster than the company and has brought new life to our construction business.

最後，我們推出的 CSP 產品（聽不清楚）產品繼續以比公司更快的速度穩定成長，並為我們的建築業務帶來了新的活力。

With that, I'll turn it over to Holden.

這樣，我就把麥克風交給霍爾頓了。

Great. Thank you, Dan, and good morning, everybody. Thanks for joining the call.

偉大的。謝謝你，丹，大家早安。感謝您參加通話。

So just to hit on what Dan covered on Slide 3, our total and daily sales in the second quarter were up 10.6%, that's an acceleration from up 6.2% in the first quarter. The timing of the Good Friday shift into April from March this year did cost the quarter about 50 basis points. But on the other hand, we included Mansco this quarter, which we acquired on March 31, and that added about 130 basis points. If you adjust those 2 factors, the second quarter daily sales rate was around 9.7%. Either way, growth accelerated through the quarter. And even better than that, in June, the daily sales were up 13% or up 11.6%, excluding Mansco.

所以，正如丹在第 3 張投影片中提到的，我們第二季的總銷售額和日銷售額成長了 10.6%，比第一季的 6.2% 成長了 10.6%。今年耶穌受難日從三月推遲到四月，導致該季度損失了約 50 個基點。但另一方面，我們本季納入了 Mansco，該公司是我們於 3 月 31 日收購的，這增加了約 130 個基點。如果調整這兩個因素，第二季的每日銷售額約為 9.7%。總之，本季成長速度加快。更令人欣喜的是，6 月的每日銷售額成長了 13%，如果不包括 Mansco，則成長了 11.6%。

As Dan covered on Page 4, our growth in the quarter results significantly from customer adoption of our services and growth drivers. However, as demonstrated on Page 5 of the book, some of our improvement clearly reflects a favorable macro backdrop. The Purchasing Managers Index in the U.S., which represents 88% of our revenue, that averaged a healthy 55.8 reading. Industrial production growth was still modest in the quarter, but did speed up a bit over the prior quarter. These metrics underpinned improvement in our industrial and construction end markets in the second quarter as well as acceleration in both our fastener and non-fastener lines, as you can see from the charts in the presentation. In fact, it's difficult to identify a major market that is acting particularly poorly at this point. And the feedback that we're getting from our RVPs remains overall very favorable.

正如丹在第 4 頁所報導的那樣，本季我們的成長主要得益於客戶對我們服務的接受度以及成長動力。然而，如本書第 5 頁所示，我們的一些進步明顯反映了有利的宏觀環境。美國採購經理人指數（占我們收入的 88%）平均讀數為健康的 55.8。本季工業生產成長依然溫和，但比上一季略有加快。這些指標支撐了我們在第二季度工業和建築終端市場的改善，以及緊固件和非緊固件產品線的加速增長，正如您在簡報中的圖表中所看到的。事實上，目前很難指出哪個主要市場表現特別糟糕。我們從區域副總裁那裡得到的回饋總體上仍然非常積極。

Our National Accounts growth accelerated up 13.1% in the quarter with 68 of our top 100 accounts growing. And we saw a similar pattern in our branches, with 62% of our locations growing in the second quarter, which is up from 58% in the first quarter and from the 54% level that we saw through much of 2016. So the market improvement that began in the first quarter solidified in the second, and momentum in our growth drivers remains healthy, so we feel pretty good about our top line entering the third quarter.

本季度，我們的全國客戶成長加速，增幅達 13.1%，前 100 名客戶中有 68 名實現了成長。我們在分公司也看到了類似的趨勢，第二季有 62% 的分公司實現了成長，高於第一季的 58%，也高於 2016 年大部分時間的 54%。因此，第一季開始的市場改善在第二季得到鞏固，我們的成長動力依然強勁，所以我們對進入第三季的營收前景感到非常樂觀。

Flipping over to Slide 6. Our gross margin was 49.8% in the second quarter. That's up 30 basis points versus the second quarter last year. Again, we're pleased to point out that this breaks a significant string of consecutive annual declines in this measure. It really -- the combination of product and customer mix, as well as the inclusion of Mansco in our results, that still had a 30 to 40 basis point negative impact on the number. But this quarter, that was more than offset by a basket of positive variables. For instance, we did leverage our asset-heavy parts of our business like manufacturing and freight. Our sales of private-label brands grew by 30 basis points in the mix versus last year. And efforts to put more product into the field such as the CSP initiative has improved the product decisions and sourcing of both our purchasing operation and our field personnel. None of these variables were individually particularly large, but they did combine to push our margin up for the quarter. In a nutshell, organizational factors skewed heavily in favor of gross margin in the second quarter, though none of those factors would seem to be onetime or unsustainable in nature to us.

翻到第 6 張投影片。我們第二季的毛利率為 49.8%。比去年第二季上升了30個基點。再次，我們很高興地指出，這打破了該指標連續多年大幅下降的局面。確實，產品和客戶組合的組合，以及將 Mansco 納入我們的業績，仍然對數字產生了 30 到 40 個基點的負面影響。但本季度，一系列積極因素足以抵消這些不利影響。例如，我們充分利用了我們業務中資產密集的部分，如製造業和貨運業。與去年相比，我們自有品牌產品的銷售額成長了 30 個基點。而像 CSP 計劃這樣的將更多產品投入實際應用的努力，改善了我們採購營運和現場人員的產品決策和採購。這些變數單獨來看都不算特別大，但它們結合起來確實提高了我們本季的利潤率。簡而言之，第二季的組織因素嚴重有利於毛利率，儘管在我們看來，這些因素都不是一次性的或不可持續的。

As it relates to pricing, the combination of good demand and an inflationary environment did provide the branches with some modest pricing lift in the second quarter. On a year-over-year basis, this did not meaningfully add to sales and was only a modest contributor to gross margin. Price in excess of cost was a bit more of a factor behind the sequential improvement in gross margin, however. We expect favorable price and cost dynamics in the third quarter as well before costs begin to catch up in the fourth quarter.

就定價而言，良好的需求和通膨環境確實在第二季為各分支機構帶來了一些適度的價格上漲。與去年同期相比，這並沒有顯著增加銷售額，對毛利率的貢獻也十分有限。然而，價格高於成本是毛利率環比改善的一個更重要的因素。我們預計第三季價格和成本動態也將保持有利，但成本將在第四季開始上升。

Our operating margin was 21.2%, up 60 basis points year-over-year. 30 basis points of this improvement relates to the gross margin increase. The other 30 basis points reflects our organization again doing a nice job leveraging total operating expenses.

我們的營業利益率為 21.2%，較去年同期成長 60 個基點。這其中 30 個基點的改善與毛利率的增加有關。另外 30 個基點反映出我們公司再次在有效利用總營運費用方面做得很好。

If I look at the employee-related costs, they were up 9.3% in the quarter. Roughly 3/4 of this increase can be attributed to Mansco's headcount as well as incentive-related expenses stemming from our return to growth, such as profit sharing and even more significantly, as Dan alluded to, bonuses. Absent these impacts, we believe the subdued growth better reflects the fact that our headcount is down slightly year over year. We did add 352 new employees in the second quarter over the first quarter. And if demand remains strong, we would expect our headcount to rise. However, we're still committed to leveraging the employee-related cost line.

如果只看員工相關成本，該季度成長了 9.3%。大約 3/4 的成長可歸因於 Mansco 的員工人數，以及我們恢復成長帶來的激勵相關支出，例如利潤分成，更重要的是，正如 Dan 所提到的，獎金。撇開這些影響不談，我們認為成長放緩更能反映出我們的員工人數比去年同期略有下降的事實。第二季我們比第一季新增了 352 名員工。如果需求持續強勁，我們預期員工人數將會增加。但是，我們仍然致力於利用與員工相關的成本項。

Occupancy-related expenses were up 3.4%, reflecting the impact of 29 net branch closures, offset by growth in vending. And selling, transportation-related expenses were up 3.2%. That this line grew reflects growth in our business, while the tapering off of that growth rate from the first quarter reflects stabilization of fuel prices and easier year-over-year comparisons. It all rolled into an incremental margin in the second quarter that was at 26.4%. If you exclude Mansco, the organic incremental margin would have been 27.5%. And we view this as being consistent with past statements we've made with respect to incremental margin potential.

與營業場所相關的支出成長了 3.4%，反映了 29 家淨分行關閉的影響，但自動販賣機業務的成長抵消了這一影響。銷售和運輸相關費用增加了 3.2%。此指標的成長反映了我們業務的成長，而成長率從第一季開始逐漸放緩，則反映了燃料價格的穩定以及同比比較的難度降低。第二季利潤率成長了 26.4%。如果排除 Mansco，有機增量利潤率將為 27.5%。我們認為這與我們過去就增量利潤潛力所作的聲明是一致的。

Shifting over to Slide 7. We generated $83 million in operating cash in the second quarter, which is 55.7% of net income for the period. Bear in mind, the second quarters are typically poor for cash generation as we typically have 2 tax payments in the period. In the first half, in total, we generated $293 million, which represents 103.6% of net income, an improvement on the 98.4% that we had in the first half of 2016, primarily as a result of better earnings.

切換到第 7 張投影片。我們在第二季產生了 8,300 萬美元的經營現金，佔該季度淨收入的 55.7%。請注意，第二季度通常現金流較差，因為該季度我們通常有兩筆稅款需要支付。上半年，我們總共創造了 2.93 億美元的收入，佔淨收入的 103.6%，比 2016 年上半年的 98.4% 有所提高，這主要是由於盈利能力的提高。

Net CapEx in the second quarter was $33.7 million, down 41% due in large part to the absence of spending on vending machines related to the leased locker program that was ramping up in Q2 last year. We did increase our anticipated capital spending target for 2017 to $127 million, that's from $119 million last quarter, which reflects some investment we're opting to make on the IT and logistics sides of our business. Our free cash flow for the quarter and year-to-date, then, was $49 million and $249 million, up a healthy 43% and 64%, respectively.

第二季淨資本支出為 3,370 萬美元，下降了 41%，這主要是由於去年第二季正在加速推進的租賃儲物櫃計畫相關的自動販賣機支出減少所致。我們將 2017 年的預期資本支出目標提高到 1.27 億美元，高於上一季的 1.19 億美元，這反映了我們選擇在業務的 IT 和物流方面進行的一些投資。因此，本季和年初至今的自由現金流分別為 4,900 萬美元和 2.49 億美元，分別成長了 43% 和 64%。

In the second quarter, we spent $92.5 million in dividends. We also spent $56.7 million to repurchase 1.3 million shares of Fastenal's' stock, which closed out our most recent authorization. We had an announcement last night noting that our board approved the company to buy back up to 5 million in additional shares at our discretion. This spending in the quarter, combined with low seasonal free cash flow, pushed our debt up to $445 million as compared to $365 million in the first quarter and $430 million in the second quarter last year. But at 18.3% of total capital, we view our balance sheet as conservatively capitalized with ample liquidity to continue to invest in our business and pay our dividend.

第二季度，我們支付了9,250萬美元的股利。我們還花了 5,670 萬美元回購了 Fastenal 的 130 萬股股票，完成了我們最近一次的授權。昨晚我們發佈公告稱，董事會已批准公司酌情回購至多 500 萬股額外股份。本季支出加上季節性自由現金流較低，導致我們的債務增加至 4.45 億美元，而第一季為 3.65 億美元，去年第二季為 4.3 億美元。但我們認為，以總資本的 18.3% 來看，我們的資產負債表資本充足，流動性充裕，可以繼續投資於我們的業務並支付股息。

In terms of working capital, we were comfortable with where the numbers came out. Receivables growth excluding Mansco, was up 13% in the second quarter. That it grew faster than sales really just reflects the acceleration in growth that we experienced as the quarter advanced.

就營運資金而言，我們對計算結果感到滿意。剔除曼斯科公司後，第二季應收帳款成長了13%。它增速超過銷售額，實際上只是反映了隨著季度推進，我們所經歷的成長加速。

Inventory, excluding Mansco, was up 4.5% in the second quarter. And that reflects the ability of the field to leverage the heavy investment in branch inventory in 2016 and more energy enterprise-wide on this line.

不計曼斯科公司，第二季庫存成長4.5%。這反映了該領域能夠利用 2016 年對分公司庫存的大量投資，以及整個企業在該領域投入的更多精力。

Payables, excluding Mansco, were down 12.5%. Last year's high payables reflected the aggressive inventory investment we were making for CSP 16.

不計入 Mansco 的應付帳款，下降了 12.5%。去年的高額應付帳款反映了我們為 CSP 16 進行的積極的庫存投資。

That's all that we have for the formal presentation. So with that, we'll turn it over for questions.

正式報告的內容就這些了。那麼，接下來我們將進入問答環節。

(Operator Instructions) Our first question comes from Robert McCarthy with Stifel.

（操作說明）我們的第一個問題來自 Stifel 公司的 Robert McCarthy。

So I guess the first question I'd have is maybe you just can walk through and give a little bit more complexion around the pricing environment, what you're seeing, a little maybe color around fasteners and then MRO and how you're approaching that.

所以我想我的第一個問題是，您能否詳細介紹一下定價環境，您目前看到的情況，以及緊固件和MRO（維護、維修和運營）方面的情況，並說明您是如何應對的。

Yes. So I think what we said in the past is if we continue to see demand get better and the environment remains somewhat inflationary, then a window would probably open for us to take advantage of a little bit of pricing that the market affords. And we sort of deemed the second quarter to be consistent with those themes. And so we saw the opportunity out to be a little bit more prudent with price, knowing that we were going to see costs coming down the pike in the latter half of the year and so we went forward with that. The environment remains consistent, I think, with that sort of take on it. And we would expect -- we've seen the pricing that has come into the market stick in the market at this point. I would expect that you'd probably see a little bit more incremental benefit in the third quarter before you get into the fourth quarter when some of the costs are starting to step up. I will tell you that, initially, I think that the market was more supportive on the non-fastener products. I think going forward, you'll see it become more supportive on the fastener products given what we've seen out of steel. But as I said, it's just the market opened up a little bit in the second quarter It should remain open a little in the third quarter. And by the time you get into the fourth quarter, you'll probably start to see the costs move through our supply chain to begin to catch up a little bit with the -- with what the market has allowed from pricing.

是的。所以我認為我們過去說過的是，如果我們繼續看到需求好轉，並且市場環境保持一定的通膨水平，那麼市場可能會給我們一個機會，讓我們利用市場提供的定價空間。我們認為第二季也與這些主題相符。因此，我們看到了在價格方面更加謹慎的機會，因為我們知道下半年成本將會上升，所以我們採取了這種做法。我認為，這種觀點與環境的現狀是一致的。我們預計—我們已經看到目前市場上的價格會維持在市場上。我預期在第三季你可能會看到更多逐步成長的收益，但在第四季一些成本開始上升時，收益就會減少。我想說的是，最初我認為市場對非緊固件產品的支援力度更大。我認為，鑑於我們在鋼材領域看到的情況，未來你會看到它對緊固件產品的支撐力度更大。但正如我所說，第二季市場略微開放了一些，第三季應該會繼續保持這種開放。到了第四季度，你可能會開始看到成本沿著我們的供應鏈轉移，並開始慢慢趕上市場定價所允許的水平。

I mean, so the second question is on the oil and gas side. Maybe you could talk through with the Gulf regions, the Dakotas, what you're seeing there, maybe Canada as well, and just give us some sense of how you're thinking about ring fencing exposure as we're seeing another oil swoon and we could see a repeat of '14, '15.

我的意思是，第二個問題是關於石油和天然氣方面的。或許您可以和墨西哥灣沿岸地區、達科他州談談您在那裡看到的情況，或許也可以談談加拿大，讓我們了解一下您是如何考慮隔離風險敞口的，因為我們正面臨另一次石油價格暴跌，我們可能會看到 2014 年、2015 年的情況重演。

Yes, I mean, I can tell you that those regions of our business that we typically associate with oil and gas, they continued through June to outgrow the business as a whole. So those regions still, certainly, the facts on the ground are favorable. And I think in terms of the tone, talking to the RVPs in those regions, the tone is still fairly encouraged as well. So that's an area that's been strengthening over the past, call it, 5 to 6 months. And I didn't, at this stage, I didn't really note any real change in sentiment from folks internally around that end market.

是的，我的意思是，我可以告訴你，我們業務中那些通常與石油和天然氣相關的領域，在六月繼續保持成長，超過了整個業務的成長速度。所以，就目前而言，這些地區的實際情況無疑是有利的。而且我認為，就語氣而言，與這些地區的區域副總裁交談後，語氣仍然相當積極向上。所以，在過去的五、六個月裡，這領域一直在加強。而在這個階段，我並沒有真正注意到來自公司內部、圍繞終端市場的各種情緒有任何真正的改變。

The final question is just on Onsite deployment. Have you gained any incremental knowledge about how -- yes.

最後一個問題是關於現場部署的。你是否對如何做到這一點有了任何新的認識？ ——是的。

(inaudible) we try to limit it to one and maybe a related follow-on. Otherwise, we won't get to quite a few people in queue.

（聽不清楚）我們盡量將其限制為一個，或許還有一個相關的後續。否則，我們就無法服務到排隊的許多人。

Our next question comes from Andrew Buscaglia with Credit Suisse.

下一個問題來自瑞士信貸的安德魯·布斯卡利亞。

Just looking at those, your gross margin, it was a great quarter there, and things are pretty good now on that front. How sustainable are some of the initiatives that you -- or that you called out that helped that line item? And then going forward, do you see a path back to 50% if -- especially if we get some pricing at some point down the road?

單看這些數據，你們的毛利率，上季表現非常出色，目前這方面的情況也相當不錯。您提出的或您提及的有助於改善該項支出的一些舉措，其可持續性如何？那麼展望未來，如果——特別是如果我們在未來的某個時候獲得一些定價資訊——你認為有可能恢復到 50% 嗎？

The -- I mean, so what we'll say about the gross margin is it can be hard to say quarter-to-quarter what's going to happen. I mean, the mix elements that we've called out before are still very much there. I mean, to the extent that we are successful with our Onsites and safety and things of that nature, the mix elements you called out are still there. They're not going away if we're successful with our growth drivers. If you think about the second quarter, it's not unusual for there to be a little bit of seasonality, to keep margins flat, maybe slightly down. And frankly, I think this quarter, everything just kind of went our way. That's not necessarily the norm, if you will. So we'll just have to kind of see what Q3 and Q4 look like in that regard. But I mean, that said, I guess, there's 2 things that are working in our favor. And one is I do think in Q3, you might get a little bit of an incremental contribution from price that you didn't in Q2, again, before that begins to get worked off in Q4 from costs. But the other thing is there was really nothing unsustainable in the pieces that pushed up the gross margin, right? When you think about the shop leverage, when you think about the success that we're having with the CSP and the exclusive brands and things of that nature, there's nothing that's unsustainable in there. And so will they all move in the same direction in Q3 as they seem to in Q2? I mean, we'll have to wait and see. But we think that the fact that we have an opportunity to have a quarter like this, really reflects a lot of good things that we're doing in the field with a lot of initiatives. And we think that those things will certainly carry forward not just into the next quarter, but sort of beyond that. So that's how I'd characterize the gross margin environment.

我的意思是，關於毛利率，我們很難預測每季會發生什麼事。我的意思是，我們之前提到的那些混合元素仍然存在。我的意思是，只要我們在現場工作、安全等方面取得成功，你提到的那些混合因素仍然存在。如果我們能夠成功推動成長，它們就不會消失。如果你考慮第二季度，你會發現存在一些季節性因素，導致利潤率保持平穩，甚至略有下降，這並不罕見。坦白說，我覺得這個季度一切都對我們有利。這並非普遍現象。所以，我們只能拭目以待，看看第三季和第四季的情況如何。但我的意思是，也就是說，我想，有兩件事對我們有利。其一是，我認為在第三季度，價格可能會帶來一些第二季度沒有帶來的增量貢獻，但這些貢獻會在第四季被成本抵消掉。但另一方面，推高毛利率的那些部分其實也沒有什麼不可持續的地方，對吧？當你考慮到店舖的槓桿作用，當你考慮到我們在 CSP 和獨家品牌等方面取得的成功，你會發現其中沒有任何不可持續的東西。那麼，它們在第三季是否會像第二季一樣朝著同一個方向發展呢？我的意思是，我們只能拭目以待了。但我們認為，我們有機會取得這樣的季度業績，真正反映了我們在該領域透過眾多舉措所做的許多好事。我們認為這些趨勢不僅會延續到下一個季度，而且會持續更久。這就是我對毛利率環境的描述。

I'll just add a piece to that, and that is a fundamental thought about how we think about the business, and I'll go back to how we started the call: Grow your sales, grow your earnings, think big. And from what you know about Fastenal for the last 50 years or actually last 30 years that we've been public, gross margin's an important part of our business because it's the -- it funds our ability to do the things we do and to grow the business. And so it's very important. For that matter, during the start of April, even tweaked the way our regional leaders are paid to include a component for gross margin, dollar growth, not percentage, dollar growth, because it's about our growth drivers really center on helping us grow the business faster, knowing that some of the offshoot of that is the gross margin environment over time is challenging. So we'd look at it and say, "Where do our cost structure need to be 2 and 5 years from now?" and that's what we're obsessing about. But day-to-day, we're working on all the levers, and as Holden mentioned, those levers went in our direction. What makes me feel better about sustainability is the fact that we picked up 5 or 7 or 8 basis points from a bunch of different places and that makes it a little stickier. It's still a challenging environment, and our growth drivers are still going to have the drag on our gross margin that we've talked about for the last 1.5 years, 2 years, and that reality hasn't changed. As far as the last part where it starts with a number that I'm not going to mention out loud. Kind of like Voldemort in Harry Potter, I'm not going to mention it out loud because that's not where our head's at. Our head is at growing sales, growing earnings and thinking big.

我再補充一點，這是我們思考業務的一個基本思路，我會回到我們通話開始時說的：提高銷售額，提高收入，要有遠大的目標。根據你對 Fastenal 過去 50 年，或者更確切地說，過去 30 年（我們上市以來）的了解，毛利率是我們業務的重要組成部分，因為它為我們開展業務和發展業務提供了資金。所以這非常重要。就此而言，在 4 月初，我們甚至調整了區域領導的薪酬方式，將毛利率（美元增長）而非百分比（美元增長）納入其中，因為我們的增長動力真正以幫助我們更快地發展業務為中心，我們也知道，隨著時間的推移，毛利率環境將面臨挑戰。所以我們會審視這個問題，然後問自己：「未來 2 年和 5 年，我們的成本結構應該達到什麼程度？」這就是我們一直關注的重點。但就日常工作而言，我們一直在努力調整所有環節，正如霍爾頓所說，這些環節都朝著我們預期的方向發展了。讓我對永續發展感到欣慰的是，我們從許多不同的地方獲得了 5、7 或 8 個基點，這使得它更有說服力。市場環境依然充滿挑戰，我們的成長動力仍然會像過去 1.5 年、2 年裡我們一直討論的那樣拖累我們的毛利率，而這種情況並沒有改變。至於最後一部分，它以一個數字開頭，我就不公開說出來了。就像《哈利波特》裡的佛地魔一樣，我不會大聲說出來，因為我們現在想的不是這個。我們的目標是提高銷售額、增加利潤，並著眼於遠大目標。

Yes. Yes, and then just as a follow-up, I mean, you really saw a nice bump in your operating margin line. I mean a lot of it, a lot of this gross margin stuff is somewhat self-inflicted with your positioning in vending and Onsite. Would you say this quarter is kind of the start of us seeing some of that stuff finally flow through on that EBIT line where it is accretive?

是的。是的，另外補充一點，你們的營業利潤率確實有了顯著提升。我的意思是，很多毛利率問題都是你自己造成的，這與你在自動販賣機和現場銷售領域的定位有關。您認為本季是否標誌著一些因素終於開始對息稅前利潤產生正面影響？

Well, I think, frankly, you saw that in Q1, right? I mean, in Q1, I think there were a lot of questions around gross margin not being where everyone would have hoped that they would be. But we levered our payroll. We levered our occupancy. We didn't lever the freight within SG&A simply because the fuel costs were up as significantly as they were. And that stabilized this quarter, and this quarter we leveraged freight. So when you (inaudible) an occupancy and selling related transportation expense, that collectively is 85% to 90% of our SG&A. And we leveraged those pieces nicely in the first quarter. And we leveraged those pieces nicely in the second quarter. And one of the reasons why we're not obsessing over the fact that over a period of time our gross margins are likely to be down is because we do think that the growth initiatives that we have, they may be lower gross margin, but we think they're also inherently easier to leverage. And again, I think we saw that in Q1. I think we saw that in Q2. We have certainly emphasized to everybody within the organization that we need to continue to focus on leveraging that SG&A line. And yes, that remains a focus of ours. It's certainly not something that has just emerged this quarter.

坦白說，我覺得你在第一季已經看到了這一點，對吧？我的意思是，在第一季度，毛利率沒有達到大家預期的水平，這引起了很多疑問。但我們利用槓桿提高了工資總額。我們利用了入住率。我們沒有將貨運成本計入銷售、管理及行政費用中，僅是因為燃油成本上漲幅度如此之大。本季情況趨於穩定，本季我們充分利用了貨運。所以，當你（聽不清楚）佔用和銷售相關的運輸費用時，這些費用加起來占我們銷售、一般及行政費用的 85% 到 90%。我們在第一季很好地利用了這些優勢。我們在第二季度很好地利用了這些優勢。我們並不執著於毛利率在一段時間內可能會下降這一事實，其中一個原因是我們認為，我們採取的成長舉措雖然毛利率可能較低，但我們認為它們本質上也更容易被利用。而且，我認為我們在第一季也看到了這一點。我認為我們在第二季度已經看到了這一點。我們已經向公司內部所有人強調，我們需要繼續專注於充分利用銷售、管理及行政費用項下的收入。是的，這仍然是我們關注的重點。這當然不是本季才出現的問題。

Our next question comes from Hamzah Mazari with Macquarie Capital.

我們的下一個問題來自麥格理資本的Hamzah Mazari。

Just a question on the branch network. A few years ago, you guys had said there could be 3,200 or so potential locations in the U.S. Since then, vending has picked up, Onsite has picked up. You're closing a ton of stores, you're opening a few -- or branches, I guess. Could you give us a sense of what your updated view is on how you think about the branch network here? And when do you cycle through these closures so that occupancy expenses actually start going down longer-term?

關於分支機構網絡，我有個問題。幾年前，你們曾說過美國可能有大約 3200 個潛在地點。從那時起，自動販賣機市場發展起來了，現場服務市場也發展起來了。你們關閉了很多門市，只開了少數幾家——或者說是分店。您能否簡要介紹一下您對本地分公司網路的最新看法？那麼，何時才能輪流關閉這些場所，讓長期入住成本真正開始下降呢？

Yes, first off, on the underlying question of the 3,200 or 3,500 potential locations that we've talked about. That was always predicated on the fact that we saw a certain size of market. And that size of market changed as our product lines have changed. So if you'd have been looking at that company that went public back in 1987 that was basically in selling fasteners, we looked at our market as $15 billion, maybe a $20 billion opportunity. And someday, we'd have 500 Fastenal locations across North America selling nuts and bolts. As we moved into the mid-1990s, we were expanding our product lines, we were -- our decentralized nature, we had a chunk of business that was outside that fastener product line. And we looked at that and said, "Boy, if we can really be successful in the non-fastener products." The market's a lot bigger, and over time, that number grew to 1,000 potential and 2,000, and ultimately, about 3,500 locations in North America. And as I said, included U.S., Canada and Mexico. I'm not intelligent nor informed enough to give a comment on outside of North America at this time. That number is intact from the standpoint of there's this $150 billion, $160 billion market out there, and we think we can continue to enjoy an ever larger piece of that market. I think the 3,500 number is potentially overstated to our branch network, understated to our -- Holden's new term is in-market network. Because the Onsite strategy really changes that, so I believe, ultimately, we go well above that number. But it's not exclusively branches. Its branches and Onsites over time, and the vending. The wildcard on your second part of the question about occupancy, we categorize both our vending platform and our FMI, which is Fastenal Managed Inventory platform as part of occupancy. That's principally what's driving it to grow now. And that will continue to be the principal wildcard in there. And we're going to keep investing and growing our vending business.

是的，首先，關於我們討論過的 3200 或 3500 個潛在地點的根本問題。這始終基於我們看到了一定規模的市場。隨著我們的產品線發生變化，市場規模也隨之改變。所以，如果你當時關注的是那家在 1987 年上市、主要銷售緊固件的公司，我們當時認為我們的市場規模為 150 億美元，也許是 200 億美元的機會。有朝一日，我們將在北美擁有 500 家 Fastenal 門市，銷售螺母和螺栓。進入 20 世紀 90 年代中期，我們不斷擴展產品線，由於我們分散的性質，我們有一部分業務不在緊固件產品線之內。我們研究了這個問題，然後說：「如果我們真的能在非緊固件產品領域取得成功就好了。」這個市場要大得多，隨著時間的推移，潛在門市數量增長到 1000 家，然後是 2000 家，最終在北美達到了約 3500 家。正如我所說，其中包括美國、加拿大和墨西哥。我目前既沒有足夠的智力，也沒有足夠的資訊來對北美以外的地區發表評論。從目前1500億美元、1600億美元的市場規模來看，這個數字仍然保持不變，我們認為我們可以繼續在這個市場中佔據越來越大的份額。我認為對於我們的分支機構網路而言，3500 這個數字可能被高估了，而對於我們的——霍頓的新術語是「市場內網路」而言，這個數字則被低估了。因為現場策略確實改變了這一點，所以我相信，最終我們會遠遠超過這個數字。但這不僅限於分支機構。隨著時間的推移，它的分支機構和現場銷售點以及自動販賣機。關於您第二個問題中提到的「佔用率」問題，我們將自動販賣機平台和 FMI（即 Fastenal 管理庫存平台）都歸類為佔用率的一部分。這正是它目前發展壯大的主要原因。而這仍將是其中最大的變數。我們將繼續投資並發展我們的自動販賣機業務。

The other thing I wanted to add to that is bear in mind that what you're seeing in terms of the public branches is those are really decisions that are being made in the field, right? Our people have the ability to decide if they want to open a store or a branch, then -- and there's a good economic reason to do so, then we've done some of that. If they decide that it's more prudent to close a branch either because they're pursuing other initiatives, then they can decide to do that as well. But the decisions with regards to the stores at this point or the branches are really much more -- much more being made in the field then they are any sort of corporate initiative, be aware of that as well.

我還要補充一點，請記住，您在公共部門看到的那些實際上是在一線做出的決定，對吧？我們的員工可以自行決定是否要開設商店或分店，如果這樣做有好的經濟理由，那麼我們就做了一些這樣的事。如果他們認為關閉某個分支機構會更為謹慎，例如因為他們正在推進其他項目，那麼他們也可以做出這樣的決定。但目前關於門市或分店的決策，更多的是在一線做出的，而不是任何形式的公司倡議，這一點也要注意。

Very helpful. I just have a follow-up; I'll turn it over. Just looking at your gross margins improvements that you've made around execution, could you give us a sense of where the low-hanging fruit is here? Is it private label? Is it better purchasing? Is it the supply chain? As you look longer term, is there any one bucket where there's more low-hanging fruit where you can sort of offset any mix or pricing headwinds?

很有幫助。我還有一個後續問題，我這就轉過去。僅從你們在執行上所取得的毛利率提升來看，你們能否指出哪些方面最容易改進？這是自有品牌嗎？這樣做更好嗎？是供應鏈的問題嗎？長遠來看，有沒有哪個領域更容易取得突破，進而抵銷產品組合或價格上的不利因素？

The -- I think, exclusive brands is certainly one of those. Right now, I think exclusive brands is probably about 12%, 13% of our total company sales. And frankly, we think that over some period of time, that should probably approach 20%. So we think that there's significant opportunity still in exclusive brands. We've been very pleased with how CSP has played out for us. And that basically is taking product, putting it into the marketplace and making it available. It's one reason why construction is trending the way it is, and it's one reason why our margins are trending the way it is. So but what those really come down to is just us managing our supply chain really well. And I think that we'll continue to find ways to do that. And absolutely, exclusive brands are going to be a part of the equation. I think that we're going to do, not CSPs of the same size that we did last year, but there are ongoing CSPs to continue to tweak and improve the inventory in the field, to make it available. And I think that's going to continue to improve the market -- the market space as well as the margin. Those are sort of the 2 that come to mind, frankly, as being -- having tremendous opportunity going forward.

我認為，獨家品牌肯定是其中之一。目前，我認為獨家品牌銷售額大概占公司總銷售額的 12% 到 13%。坦白說，我們認為從長遠來看，這個數字應該會接近 20%。所以我們認為，高端品牌領域仍蘊藏著巨大的發展機會。我們對CSP為我們帶來的效果非常滿意。基本上就是把產品推向市場，使其可供銷售。這也是建築業發展趨勢如此的原因之一，也是我們利潤率發展趨勢如此的原因之一。所以，歸根究底，關鍵在於我們能否很好地管理好供應鏈。我認為我們會繼續找到實現這一目標的方法。當然，獨家品牌也將成為其中的一部分。我認為我們不會像去年那樣舉辦規模龐大的 CSP 活動，但我們會持續舉辦 CSP 活動，以不斷調整和改進現場庫存，使其可用。我認為這將繼續改善市場——包括市場空間和利潤率。坦白說，我首先想到的就是這兩點——它們在未來擁有巨大的發展機會。

Our next question comes from David Manthey with Baird.

下一個問題來自 Baird 公司的 David Manthey。

Yes, first question is on Onsites and the progression. So I think that the perception out there is that Onsites are massively dilutive to the overall company forever. And I'm hoping you could discuss the margin progression of the Onsites as they mature. And reason for the question, I noticed you say you have 486 open today, you're opening 68 in the current quarter. At what point does the improvement of the base start to outweigh the dilutive impact of the lower-margin relationship at the front end of the pipe?

是的，第一個問題是關於現場面試和晉升流程。所以我認為，外界普遍認為現場服務會對公司的整體利益造成永久性的巨大稀釋。我希望您能討論一下隨著現場服務的發展成熟，其利潤率的變化。我之所以問這個問題，是因為我注意到您說您今天開了 486 家店，本季開了 68 家。基礎利潤的改善何時才能超過管道前端低利潤率關係帶來的稀釋影響？

Yes. And so with regard to the 68, just a one correction, those are signings, those aren't necessarily openings in the quarter. Once you sign one of these things up, it does -- there is a process that you need to go down before it's sort of open for business, if you will. So that's a short period and a technicality perhaps, but just to sort of clarify that. But the idea that these will be dilutive forever, we don't believe that, right? We're in the early stage of expanding the signings, expanding the openings and growing this within our revenue base. It began in 2015, it picked up speed in '16, and it's picking up further speed in '17. You're certainly right to say that when you first open these things up, they tend to be a little bit less profitable. As they age, they become somewhat more profitable. And by the way, that speed to profitability is probably faster than people give credit for. But this is a business model that today, sits in sort of the high-teens in terms of an operating margin. And it'll be as I see it, as time goes on, as the pathway to profit perhaps applies to this as it has our branches in the past, can these margins exceed where they sit today. And that's -- we're working very hard to kind of go there. But I think in terms of this sort of emerging bump, if you will, right, I mean as we have a high concentration of very new sites today, I think in 2017 and 2018, you probably have -- you probably have the fact that the initiative is so new dampening the margin, by the time you get into 2019, 2020, 2021, these -- ones you are opening today begin to age, I think they begin to work against that. And so I think you're sort of -- you're going down into the valley of this initiative in '17 and perhaps a good part of '18, but by the time you get to '19 and '20, I think there's certainly the potential for the margins to stabilize and improve on this initiative.

是的。所以關於這 68 個職位，需要更正一點，這些是簽約，不一定是季度空缺。一旦你註冊了其中一項服務，它就會開始運作——你需要完成一個流程，然後它才能真正開始營業。所以這只是很短的時間，也可能是技術性的問題，但為了澄清一下。但是，我們並不認為這些會永遠起到稀釋作用，對吧？我們正處於擴大簽約規模、增加招募機會並提升收入基礎的早期階段。它始於 2015 年，在 2016 年加速發展，並在 2017 年進一步加速發展。你說的沒錯，這些東西剛開始做的時候，利潤往往會稍微低一點。隨著年齡增長，它們的獲利能力會略有提高。順便說一句，實現盈利的速度可能比人們想像的要快。但就目前的營業利益率而言，這種商業模式的利潤率大約在十幾個百分點點左右。依我看來，隨著時間的推移，獲利之路或許也適用於這裡，就像它過去適用於我們的分行一樣，這些利潤率能否超過目前的水平呢？而這正是——我們正在努力實現的目標。但我認為，就這種新興的成長勢頭而言，沒錯，我的意思是，鑑於我們今天有很多非常新的站點，我認為在 2017 年和 2018 年，你可能會發現——你可能會發現，由於這項舉措非常新，利潤空間被削弱了，到了 2019 年、2020 年、2021 年，這些網站開始產生不利的所以我覺得你們在 2017 年以及 2018 年的大部分時間裡都處於這項計劃的低谷期，但到了 2019 年和 2020 年，我認為這項計劃的利潤率肯定會趨於穩定並有所提高。

Dave, I'm just going to chime in on that just to think out loud for a second. We've talked about the Onsite model and the fact that operating margin-wise, it does have lower operating margins than our business today. And -- but when I look at the business and the regional business units within Fastenal that have the greatest concentration of Onsite business within their business unit, they also have the highest operating margins in the company. Because if you look at it in a static sense, if we just plopped a bunch of Onsites in our business today and our store network is static, in short, yes, it'd be dilutive to our operating margins. Our returns would be just fine because it requires less working capital to support, but it would be dilutive. But the pathway to profit that we talked about for the last decade is still intact, and our store network -- excuse me, our branch network is improving every day as the average store -- branch size increases. And so while it is dilutive, it's no less -- or no more dilutive than non-fasteners and National Accounts have been to our business over the last 20 years. You -- the business continues to evolve. Your average location revenue continues to go up. And that's probably the strongest anti-dilutive or profit-enhancing component we have within the model is that pathway to profit, it's still there.

戴夫，我只是想插一句，把想法說出來。我們已經討論過現場營運模式，以及從營運利潤率來看，該模式的營運利潤率確實低於我們目前的業務。但是－當我觀察 Fastenal 內部業務和區域業務部門時，發現那些在其業務部門內現場業務集中度最高的部門，其營業利潤率也是公司最高的。因為如果你從靜態的角度來看，如果我們今天只是在我們的業務中隨意增加一些 Onsites，而我們的門店網絡保持不變，簡而言之，是的，這將稀釋我們的營業利潤率。我們的收益不會有太大問題，因為所需的營運資金較少，但這會稀釋股權。但是，我們過去十年一直在討論的盈利之路仍然完好無損，而且我們的門店網絡——抱歉，是我們的分支機構網絡——隨著平均門店規模的擴大，每天都在不斷改進。因此，雖然這會稀釋利潤，但它對我們業務的稀釋作用並不比過去 20 年非緊固件業務和全國性客戶業務的稀釋作用更大。你——企業不斷發展。您的平均門市收入持續成長。而我們模型中最強的反稀釋或利潤增強成分可能就是這條獲利途徑，它仍然存在。

Our next question comes from Adam Uhlman with Cleveland Research.

下一個問題來自克里夫蘭研究公司的亞當·烏爾曼。

I guess, first, a clarification, Holden. I think you were mentioning earlier your price/cost trends that you expect the rest of the year. Should we read into that, that's a good directional read on just the gross margin level overall that we step up in the third quarter and then step down in the fourth quarter? Or you're just explaining a component of the total gross margin and there should be other things that we should keep in mind?

我想，首先，霍爾頓，我需要澄清一下。我想你之前提到過你對今年剩餘時間的價格/成本趨勢的預期。我們是否可以由此解讀，這是否預示著整體毛利率水準將在第三季上升，然後在第四季下降？還是你只是在解釋總毛利率的一部分，而我們還需要注意其他因素？

Yes, I'm really explaining sort of a component, if you will. Because again we would still expect the mix to be a drag. Seasonality can sort of historically suggest that Q3 margins are flat to maybe slightly down. And then we did have everything kind of move our way this quarter. And so as you move into Q3, yes, I think that there could be some incremental pricing that slips into Q3 before the costs catch up as you get into Q4. But how does that seasonality play out this year? Do some of these things that went our way this quarter, is it more of a balanced mix of pros and cons in the next quarter? It's really difficult for us to say. I don't see anything that is not sustainable over time with respect to what we're doing with the gross margin, but it's really hard for me to look at Q2 and understand the pieces with so much depth at this point to be able to give you a real, real concrete indication of where the quarter is going exactly.

是的，我其實是在解釋一個組成部分。因為我們還是會預期混音效果會很差。從歷史數據來看，季節性因素可能顯示第三季利潤率持平或略有下降。然後，這季度一切都朝著我們有利的方向發展了。因此，隨著進入第三季度，我認為可能會有一些增量定價在第三季度出現，然後在第四季度成本趕上來。但今年的季節性因素會如何表現呢？本季我們取得的一些進展，在下個季度是否會呈現出利弊平衡的局面？這真的很難說。就我們目前的毛利率策略而言，我認為沒有任何不可持續的地方，但要讓我深入了解第二季度的各個組成部分，並給出關於本季度具體走向的切實明確的指示，我真的很難。

Okay. Okay, good. And then could you speak through the investment plan for the second half of the year in terms of sales people and the like? We've seen the sales growth rates accelerate a good deal and the headcount's remained low for some time. And I know the local folks are going to be adding headcount as they need to. When would we really see that big inflection point? Or is there a belief that maybe we don't need to ramp up headcount all that much to sustain the higher level of activity?

好的。好的。那麼，您能否談談下半年在銷售人員等方面的投資計畫？我們看到銷售成長率大幅加快，而員工人數在一段時間內一直保持在較低水準。我知道當地政府會根據需要增加人手。我們究竟何時才能真正看到那個重大轉折點？或者，是否有人認為，為了維持較高的業務水平，我們或許不需要大幅增加員工人數？

I'll chime in on that for Holden's benefit. To me, the biggest component, and Holden touched on it a second ago when he talked about the signings of the Onsites and what that means. So those 68 Onsites we signed in the quarter, those will largely turn on in the next 3 to 4 -- 3 to 5 months. And some of the signings from the first quarter have yet to turn on. And I think it's safe to say you're probably going to see, and I hope you see this because it tells me the Onsite is taking off, you're probably going to see in the short term, 1 to 3 employees. So let's just say it's a couple. That would imply we'd probably be adding 150 people, 140 people just from the impact of the Onsite. The remainder will be more of a function of what our business is doing from the standpoint of growth. And the improvement we saw in the last 30 days in the underlying economy, I believe can continue to enhance the revenue on a per location basis and will potentially cause that number to be higher possibly between 200 and 300. Beyond that, I probably wouldn't go too deep into it because a lot of it's going to depend on the needs. We manage that not centrally, we manage that locally. What we do centrally is we challenge folks with the facts. We point out our expense patterns. We point out the seasonal patterns of our business. It's really a reminder exercise. But just the fact that we have close to 70 Onsites that we'll be turning on, that's going to cause some headcount increase.

為了霍爾頓的利益，我再補充幾句。對我來說，最重要的部分是，霍爾頓剛才在談到 Onsites 的簽約及其意義時也提到了這一點。因此，我們本季簽署的 68 個現場服務項目，大部分將在未來 3 到 4 個月內啟動——也就是 3 到 5 個月內啟動。第一季簽下的一些球員至今還沒有發揮作用。我認為可以肯定地說，你很可能會看到，而且我希望你會看到這一點，因為它告訴我現場辦公模式正在蓬勃發展，你可能在短期內會看到 1 到 3 名員工。我們就假設他們是一對情侶吧。這意味著，僅現場活動的影響就可能增加 140 到 150 人。其餘部分將更多地取決於我們業務的成長。我認為，過去 30 天我們看到的經濟基礎有所改善，這可以繼續提高每個地點的收入，並有可能使該數字更高，可能在 200 到 300 之間。除此之外，我可能不會深入探討這個問題，因為很多事情都取決於具體需求。我們不採用集中管理，而是採用本地管理。我們的核心做法是用事實挑戰人們。我們指出了我們的支出模式。我們指出了我們業務的季節性規律。這其實是一項提醒練習。但僅僅是我們即將啟用近 70 個現場服務點這一事實，就會導致人員數量增加。

And another thing to bear in mind is we've actually added heads every month this year. It was low initially, in January, it was 13 heads, but in June, we added 178, right? And so you're already seeing the headcount react to the trend in the marketplace and that sort of thing. And I would expect that you would continue to see that sort of thing. We have emphasized that we still need to leverage this line, and then that is our intention. Bear in mind that last year at this time, when the marketplace looked significantly weaker, we were actually letting attrition work our headcount down in the back half of 2016. What you're going to be entering into in the second half of this year is you're going to be coming up against that sort of attrition in the back half of '16 even as we're adding now because of better heads. So I think that what we've been seeing is addition of heads all year. I think we'll continue to see that. But you will see the year-over-year numbers flip from negatives in the first half of this year to positives just because of the sort of the cadence of how we've treated heads over the last 1.5 years.

還有一點要注意的是，今年我們每個月都在增加人手。最初數量很少，1 月只有 13 頭，但 6 月我們增加了 178 頭，對吧？所以你已經可以看到員工人數對市場趨勢等因素做出了反應。我預計你還會看到這類事情繼續發生。我們已經強調，我們仍然需要利用這條線路，而這正是我們的意圖。請記住，去年這個時候，市場情況明顯疲軟，我們在 2016 年下半年實際上透過自然減員減少了員工人數。今年下半年，你將面臨人員流失的問題，即便我們現在因為引進了更優秀的人才而不斷補充人員。所以我認為我們看到的是全年都在增加人手。我認為這種情況還會繼續出現。但你會看到，由於過去 1.5 年我們對待高階主管的方式，年比數字從今年上半年的負值轉為正值。

We're up at 9:45, and so I would just thank everybody again for your participation on today's calls -- or today's call. Say thank you to the Fastenal team. You put up a great quarter. And I'll close with 2 thoughts, and they really come from learning some lessons from my predecessors in this role.

現在是9點45分，所以我再次感謝大家參加今天的電話會議。向 Fastenal 團隊表示感謝。你打出了一局精彩的四分之一。最後，我想分享兩點想法，這兩點都源自於我從擔任這個職位的前任身上學到的一些經驗教訓。

One is the power of having a fundamental belief in people and their ability to do great things and the value of having a business with structural advantages, and I'll keep building on those. Thanks, everybody.

其一是堅信人及其創造偉大成就的能力，以及擁有結構優勢的企業的價值，我將繼續在此基礎上發展。謝謝大家。

Thank you.

謝謝。

Ladies and gentlemen, that concludes today's presentation. You may now disconnect. Have a wonderful day.

女士們、先生們，今天的演講到此結束。您現在可以斷開連線了。祝您有美好的一天。