快扣 (FAST) 2018 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fastenal Company Fourth Quarter and Full Year 2018 Earnings Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

各位女士、先生，大家好，歡迎參加 Fastenal 公司 2018 年第四季及全年收益業績電話會議。（操作員說明）提醒各位，本次電話會議正在錄音。

I would now like to turn the conference over to Ellen Stolts of Investor Relations. You may begin.

現在我將把會議交給投資者關係部的艾倫·斯托爾茨。你可以開始了。

Welcome to the Fastenal Company 2018 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 1 hour and will start with a general overview of our quarterly results and operation, with the remainder of the time being open for questions and answers.

歡迎參加 Fastenal 公司 2018 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。電話會議時長最多為 1 小時，首先會對我們的季度業績和營運情況進行總體概述，剩餘時間將用於問答環節。

Today's conference call is a proprietary Fastenal presentation and is being recorded by Fastenal. No recording, reproduction, transmission or distribution of today's call is permitted without Fastenal's consent. This call is being audio simulcast on the Internet via the Fastenal Investor Relations homepage, investor.fastenal.com. A replay of the webcast will be available on the website until March 1, 2019, at midnight Central Time.

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2019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。

Thanks, Ellen, and good morning, everybody, and welcome to the fourth quarter conference call for Fastenal. The -- before we delve into Holden's flipbook, I just want to touch on a few things. And so if I go back in time to late 2015 or just 2015 in general, we'd seen a dramatic slowdown in the economy we sell into. We'd had a tough year. I was stepping into this role, and I remember the first comment I made to the team was, "Hey, folks, we have a ton of great things we can do for our customer, what we can do for our employees, our suppliers and our shareholders. Let's focus on the future and let's just get going."

謝謝艾倫，大家早安，歡迎參加 Fastenal 第四季電話會議。在我們深入探討霍爾頓的翻頁書之前，我想先談談幾件事。因此，如果我回到 2015 年末，或者說整個 2015 年，我們會發現我們所銷售產品的經濟體出現了急劇放緩。我們度過了艱難的一年。我當時走馬上任，記得我對團隊說的第一句話是：「嘿，夥伴們，我們可以為我們的客戶、員工、供應商和股東做很多很棒的事情。讓我們著眼未來，趕緊行動。

And in 2016, it was a year of investment. We invested in inventory to -- in our branch network to support our customer. We invested in growth drivers of the business and the infrastructure to support those growth drivers. And as all you'll recall, we had a tough year from the standpoint of nominal growth, but we really grew our expenses and our working capital because we were setting ourselves up to be a better supply chain partner for our customer.

2016年是投資之年。我們投資了庫存，以在我們的分公司網路中為客戶提供支援。我們投資於業務成長動力以及支持這些成長動力的基礎設施。如大家所知，從名目成長的角度來看，我們度過了艱難的一年，但我們的支出和營運資金卻大幅成長，因為我們正在努力成為客戶更好的供應鏈合作夥伴。

In 2017, we -- armed with an economy that was not kicking us in the face but was actually giving us a little bit of tailwind, we looked at the team and said, "You know what, let's grow our sales and our earnings this year." And when I talk about earnings, I'm not talking just about Fastenal, I'm talking about our people, too. And we did a nice job that year of doing all 3.

2017年，經濟狀況不僅沒有對我們造成衝擊，反而略有助益，我們審視團隊後說：「你們知道嗎，讓我們今年提高銷售額和利潤。」我所說的利潤，不僅僅是指Fastenal的利潤，也包括我們員工的利潤。那一年我們出色地完成了這三項任務。

In 2019, we've been -- we've improved that from the standpoint -- I think we found a better balance in growing the aspects of our business. And one thing that was really important to us was an incremental margin that started with a 2. And the second half of the year, we've been able to deliver that. It was good enough in the second half of the year that we produced it for the year. And that's an important component because it's not just about growth, but it's about profitable growth and creating opportunities for your customer and your employee in the process.

2019 年，我們在這方面有所改進——我認為我們在業務發展的各個方面找到了更好的平衡。對我們來說，真正重要的一點是利潤率從 2 開始成長。在下半年，我們已經實現了這個目標。下半年效果不錯，所以我們決定全年都會製作這部影片。這是一個重要的組成部分，因為它不僅關乎成長，而且關乎獲利成長，並在這過程中為你的客戶和員工創造機會。

In 2019, I think that mantra is, let's find a little bit more balance and let's extend what we're doing already, but let's extend it to the cash flow statement and really hit all pieces and reward all constituencies. And speaking of constituencies, we keep it really simple, here. There's 4: there's customers, there's employees, there's suppliers and there's shareholders. It has to work for all 4 for our business to be successful short term and long term. And we look at everything with a long-term perspective, but we try to have a short-term edge to it to have a sense of urgency.

我認為 2019 年的口號是，讓我們找到更多的平衡，讓我們擴展我們已經做的事情，但要將其擴展到現金流量表，真正做到面面俱到，並回報所有利益相關者。說到選區劃分，我們這裡的做法非常簡單。共有 4 個面向：有顧客、有員工、有供應商、有股東。它必須對這四個方面都有效，我們的業務才能在短期和長期內取得成功。我們以長遠的眼光看待一切，但我們也努力在短期內抓住機遇，營造緊迫感。

From a customer's perspective, the biggest thing that we do every day is we thank them for their business. Thank you for trusting and embracing our supply chain partnership. Supply chain is critical to each and every one of our customers. And I thought I'd share a few tidbits out of a recent customer letter that came in. I actually -- it was an unsolicited letter I received last week.

從客戶的角度來看，我們每天最重要的事情就是感謝他們的惠顧。感謝您對我們供應鏈夥伴關係的信任與支持。供應鏈對我們的每一位客戶都至關重要。我想和大家分享最近收到的一封客戶來信中的一些內容。其實——這是我上週收到的一封不請自來的信。

It was a customer where we had taken on -- we signed an Onsite earlier in the year. It's been a customer for years from an MRO perspective, but we took on their OEM fasteners. And as we've talked about in the past, OEM fasteners is a very intimate relationship because we're selling them not just the stuff they need in their facility, we're selling them the components of what they're representing and selling to their customer. We're part of their DNA in the OEM fastener world.

這是我們已經接手的一個客戶——我們在今年早些時候簽署了一份現場服務協議。從MRO（維護、維修和營運）的角度來看，他們一直是我們的客戶，但我們接手了他們的OEM（原始設備製造商）緊固件業務。正如我們過去所討論過的，OEM 緊固件是一種非常密切的關係，因為我們不僅向他們銷售他們在工廠中需要的東西，還向他們銷售他們所代表並銷售給客戶的產品的組件。在OEM緊固件領域，我們已成為他們DNA的一部分。

And the letter touched on a handful of bullets about the business. It first talked about the bidding process. The last sentence in the brief paragraph, "Fastenal, by far, presented the best with the most advantages for present and future growth. Fastenal is the best option." From a transition implementation, again, that's a scary place for a customer to be because your production line is dependent on hiccups that can occur in a transition.

信中也提及了一些與業務相關的要點。它首先談到了競標過程。這段簡短文字的最後一句話是：“迄今為止，Fastenal 表現最佳，對現在和未來的發展具有最大的優勢。”Fastenal 是最佳選擇。 」 從過渡實施的角度來看，這對客戶來說是一個令人擔憂的局面，因為你的生產線依賴於過渡期間可能出現的故障。

And second sentence in this paragraph, "Fastenal immediately brought an Onsite, a team of professionals with a lead implementation person that managed through each item of inventory with each group function within our company. Stockouts. Through the process, which started in March 2018, we have not seen a single stockout situation within our company. Communication was and is top-notch on all matters.

這段的第二句話是：「Fastenal 立即派出一支現場團隊，由一名首席實施人員帶領，負責管理我們公司內部每個部門的每項庫存。缺貨。自 2018 年 3 月開始實施以來，我們公司從未出現過一次缺貨情況。溝通在所有方面一直都非常出色。

Urgency. Fastenal communication and sense of urgency has been exceptional. Engineering support. Knowledge support and testing that we get now on all parts is exceptional. Sourcing. We have been able to keep current manufacturers as well as looking at other options for cost savings." The value we bring is a high level of service, but it's also an opportunity to challenge status quo and take costs out of supply chain. That's what we do for our customers. It's not just about fulfillment. That's an important component, but it's also about bringing the supply chain knowledge to lower your cost and improve yours and your customer's value proposition in the marketplace.

緊急。Fastenal 的溝通和緊迫感非常出色。工程支援。我們現在在各個方面獲得的知識支援和測試都非常出色。採購。我們既保留了現有製造商，也正在尋找其他降低成本的方案。我們帶來的價值在於高水準的服務，同時也提供了一個挑戰現狀、降低供應鏈成本的機會。這就是我們為客戶提供的服務。這不僅僅是關於成就感。這是一個重要組成部分，但更重要的是運用供應鏈知識來降低成本，提高你和你的客戶在市場上的價值主張。

"Service support. Fastenal Onsite management has been exceptional." And in our letter, it closes to say, "We look at Fastenal as an extension of our company. And with the Onsite service we have, our folks don't have any doubt on where to go." So thought I'd share that letter. It was really fun to receive it. I called the individual that sent it and personally thanked her. But it's really indicative of what our business and our Onsite strategy is about as it relates to engaging with our customer.

服務支援。Fastenal 的現場管理非常出色。 」 我們的信最後寫道：「我們把 Fastenal 視為我們公司的延伸。有了我們提供的現場服務，我們的員工就知道該去哪裡了。 「所以我想分享一下這封信。收到它真的太開心了。我打電話給寄信人，親自向她表示感謝。但這確實體現了我們的業務和現場策略的本質，即我們如何與客戶互動。

Secondly, employees. So we grew our business 13% in the last 12 months. Our FTE growth is up about 6%. Now it's no secret in the marketplace there's some inflation going on because it's a tight labor market. There's also, when you have advancements in your organization, folks that are stepping into leading a new Onsite, maybe you were the second or third person in the branch before.

其次是員工。因此，在過去的 12 個月裡，我們的業務成長了 13%。我們的全職員工人數增加了約 6%。現在市場上出現通貨膨脹已不是什麼秘密，因為勞動市場緊張。此外，當你的組織發展壯大時，有些人會接任領導新的現場團隊，而你之前可能是該部門的第二或第三人。

Getting added to our implementation team, our national account sales team, our industrial services teams, all the teams within Fastenal, our base pay we saw increase about 9%. So on a 6% increase in headcount, base pay is up about 9%. Some of that is inflation. Some of that is advancements in positions within the organization because of the opportunity our team and our customers are creating.

加入 Fastenal 的實施團隊、全國客戶銷售團隊、工業服務團隊以及所有團隊後，我們的基本薪資增加了約 9%。因此，在員工人數增加 6% 的情況下，基本薪資上漲了約 9%。部分原因是通貨膨脹。部分原因是由於我們團隊和客戶創造的機會，員工在公司內部獲得了職位晉升。

Incentive compensation. That's commissions at the branch. That's incentive to our leaders. That's incentive to the folks in the support areas of our organization. Despite the fact that it had grown handsomely in 2017, it grew again in 2018. It's up 20%.

激勵性薪酬。那是分行的佣金。這對我們的領導人來說是一種激勵。這能激勵我們組織後勤部門的員工。儘管它在 2017 年取得了不錯的成長，但在 2018 年又繼續成長。上漲了20%。

Profit sharing. We share the rewards of the business with everybody in the business. From 2017 to 2018, I'm proud to say our profit sharing contribution this year is up about 24%. Despite all that, we were able to leverage our employee cost, which meant we were able to leverage our SG&A. Our total employee costs were up about 11%.

利潤分成。我們與公司裡的每一個人分享業務成果。我很自豪地說，從 2017 年到 2018 年，我們今年的利潤分成貢獻增加了約 24%。儘管如此，我們還是能夠有效利用員工成本，這意味著我們能夠有效利用銷售、一般及行政費用。我們的員工總成本上漲了約 11%。

Another way to think about it, there's a lot of ways to think about productivity, and productivity is key to our current and future success because it's bringing greater value to the customer but doing it in a more cost-efficient manner. Every $1 we spent in payroll in 2017 translated into $1.02 of profit. So we had $881 million of profit last year, we spent $862 million in total payroll. Holden is probably cringing right now that I'm sharing that number because people will want it again and again and again. Sorry, Holden. But I think that's an important component of our business.

換個角度想，生產力有很多種思考方式，而生產力是我們現在和未來成功的關鍵，因為它能以更具成本效益的方式為客戶帶來更大的價值。2017 年，我們每花費 1 美元用於工資，就產生了 1.02 美元的利潤。所以去年我們獲利8.81億美元，薪資總額支出8.62億美元。霍爾頓現在可能很尷尬，因為我把這個數字分享出來，因為人們會一遍又一遍地想要知道它。抱歉了，霍爾頓。但我認為這是我們業務的重要組成部分。

But despite all the investments we made in people and resources in the last year, the last 3 years, in 2018, we spent $962 million in total payroll costs. That's everything in there, base pay, incentives, profit sharing, social security taxes, workers comp, health insurance, everything added up. We spent $962 million, but it didn't generate 102 -- $1.02 of profit, it generated $1.04. We generated $999 million, essentially $1 billion in profit in the last 12 months. That's productivity and I'm really excited what that means for our team, and I think there's a lot of opportunities to expand that in the future.

儘管我們在過去一年、過去三年對人員和資源進行了大量投資，但在 2018 年，我們的總薪資成本仍高達 9.62 億美元。裡麵包含了所有東西：基本工資、獎金、利潤分成、社會安全稅、工傷賠償、醫療保險，所有加起來就是這些。我們花了 9.62 億美元，但並沒有產生 1.02 美元的利潤，而是產生了 1.04 美元的利潤。過去 12 個月，我們創造了 9.99 億美元，相當於 10 億美元的利潤。這就是生產力，我對此感到非常興奮，因為這對我們團隊來說意義重大，而且我認為未來還有很多機會可以拓展這方面的能力。

Our suppliers, that third constituent, had a -- really successful years with us. Suppliers have been -- that have been willing to evolve and change to support our vending business in the last 10 years, our Onsite business in the last 3, 4 years, our Construction business, our national account business, our local business, the Fastenal model, have had really successful years. I've met with a lot of them over the last 2 months and really excited about what 2019 can mean and what they're seeing downstream in their business.

我們的供應商，也就是第三個組成部分，與我們合作度過了非常成功的幾年。在過去的 10 年裡，供應商們一直願意不斷發展和改變，以支持我們的自動販賣機業務；在過去的 3、4 年裡，他們支持我們的現場業務；在過去的幾年裡，他們支持我們的建築業務、全國客戶業務、本地業務以及 Fastenal 模式，這些供應商都取得了非常成功的成就。在過去的兩個月裡，我與他們中的許多人進行了會面，我對 2019 年的前景以及他們在業務發展中看到的前景感到非常興奮。

Finally, shareholders. Our shareholders haven't been rewarded as well. Our stock has been -- it's been a little bit in purgatory, it feels like for a period of years. We've started to move out of it though and we were seeing that some in '17, some in '18. Our sector is -- no secret to the folks on this call, has seen a bit of a multiple compression. And we've tried to offset some of that by strong dividends and buyback aspects.

最後，是股東們。我們的股東並沒有獲得相應的回報。我們的股票一直——感覺像是處於一種停滯狀態，好像已經持續好幾年了。不過我們已經開始擺脫這種局面，我們在 2017 年和 2018 年都看到了這種情況。對於在座各位來說，我們所處的行業——這已不是什麼秘密——經歷了一定的估值倍數壓縮。我們已嘗試透過高分紅和股票回購來抵銷部分損失。

And I'm pleased to say when I look at that press release we just put out -- or last night, on our dividend and our stock buybacks. If I take the dividend we just declared for the first quarter of 2019 and extend it to the year, assuming we pay about the same each quarter and look at the last 9 years and add the $600 million of buybacks we've done, we have returned almost $4 billion, $3.85 billion to be exact, to our shareholders.

我很高興地說，當我看到我們剛剛發布的——或者說是昨晚發布的——關於我們分紅和股票回購的新聞稿時，我感到非常欣慰。如果我把我們剛剛宣布的 2019 年第一季的股息乘以全年，假設我們每季支付的股息大致相同，再看看過去 9 年，加上我們進行的 6 億美元股票回購，我們已經向股東返還了近 40 億美元，確切地說是 38.5 億美元。

In a business that's thrived and grown in that time frame, and we've essentially doubled in size in that 10-year time frame from a little over $2 billion to about $5 billion in revenue. In the last 5 years, we've returned about 65% of that number, about $2.5 billion. And on a $15.5 billion market cap, we've returned about 16% of that number over the last 5 years. We're proud of that number, and we believe we have the ability to grow that in the future. We just need to work on our cash flow statement a little bit better to be able to juice that even further.

在這段時間裡，我們的業務蓬勃發展，規模也幾乎翻了一番，營收從略高於 20 億美元成長到約 50 億美元。在過去 5 年裡，我們已經收回了其中約 65% 的金額，約 25 億美元。公司市值達 155 億美元，過去 5 年我們獲得了約 16% 的回報。我們為這個數字感到自豪，並相信我們未來有能力實現這一目標。我們只需要稍微改善一下現金流量表，就能進一步提高獲利能力。

Turning to the flipbook, and before we start in on that, I do want to cite, I mentioned the aspect of employees within Fastenal are part of our Blue Team. There's a few Blue Team members I want to cite right now. First is, we have 2 employees that are going to hit a really big milestone, and we believe in service and milestones, and every year at our Florida event, we recognize our 25-year employees.

接下來我們來看看翻頁書，在開始之前，我想引用我之前提到的，Fastenal 的員工是我們藍隊的一部分。現在我想特別提及幾位藍隊成員。首先，我們有 2 名員工即將達到一個非常重要的里程碑，我們重視服務和里程碑，每年在佛羅裡達州的活動中，我們都會表彰服務滿 25 年的員工。

We actually have 2 employees here in 2019 that are going to recognize 40 years of service within Fastenal. The first one is Nick Lundquist. In March -- he joined us in 1979. In March, he will hit 40 years with the company. He must have started when he was about 10 -- 10, 11 years old because he's got -- the spunk he has in him and the dedication he brings to the organization every day is impressive and he continues to develop people around him, which is a sign of a great leader.

2019 年，我們公司有 2 名員工將迎來在 Fastenal 服務滿 40 週年的紀念日。第一個是尼克·倫德奎斯特。三月——他於 1979 年加入我們。今年三月，他將在該公司工作滿 40 年。他大概從 10 歲、11 歲就開始工作了，因為他身上那種幹勁和每天對組織的奉獻精神令人印象深刻，而且他還在不斷培養身邊的人，這是優秀領導者的標誌。

The second person is Dana Johnson. In August, Dana will celebrate 40 years with the organization. Dana might not be as well known to this group. Dana leads our property area. And over the years, Dana has had a multitude of roles within the organization, and the professionalism and the talent he brings to every role he serves is impressive. So I congratulate both of them on the 40-year milestone this year.

第二位是達娜·約翰遜。今年八月，達娜將慶祝她在該組織工作 40 週年。達娜可能在這個群體中不太為人所知。Dana負責我們的房地產領域。多年來，達納在公司擔任過多種職務，他在每個職位上展現出的專業精神和才能都令人印象深刻。因此，我祝賀他們兩人今年迎來了40週年紀念日。

Speaking of Blue Team, 2 people that are particularly close to me within Fastenal recently lost a parent. In December, Reyne Wisecup lost her father. And here or several weeks ago, Nick Lundquist lost his mother. Both of those individuals enjoyed long lives. They had great families. But for Nick and Maria and for Reyne and John, you're an important part of our Blue Team family and our condolences and prayers are with you.

說到藍隊，Fastenal 公司裡有兩位與我關係特別親近的人最近失去了父母。12月，雷恩·懷斯卡普失去了父親。就在幾週前，尼克·倫德奎斯特失去了他的母親。這兩個人都活得很長壽。他們擁有美滿的家庭。但對尼克和瑪麗亞，以及雷恩和約翰來說，你們是我們藍隊大家庭的重要成員，我們向你們致以最深切的慰問和祈禱。

Now let's flip to the book. Fourth quarter of 2018, it came in at $0.59. There's a discrete tax item in there, a little bit of noise in tax items in the last 4 or 5 quarters, something about a new tax law signed in the U.S. creates a little bit of noise. Absent this, our EPS would have been $0.60 for the quarter. Adjusting for discrete items in both years, EPS grew about 14%.

現在讓我們翻到書裡來看。2018 年第四季度，該股股價為 0.59 美元。其中有一項單獨的稅務項目，過去 4 或 5 個季度的稅務項目出現了一些波動，這與美國簽署的一項新稅法有關，造成了一些波動。如果沒有這項因素，我們本季的每股盈餘將為 0.60 美元。剔除兩年中的個別項目後，每股收益成長約 14%。

Demand is strong, 13.2% sales growth in the fourth quarter. That's our sixth quarter of at least 13% growth. We continued to execute really well on our growth drivers, and I'll touch on that in a few minutes. Operating leverage remains strong. We have gross margin pressure. Some of that's self-imposed because our growth drivers naturally lower our gross margin. But inflation and more recently, tariffs, are creating some ripples in our business. Despite that, we had incremental margin of 21% in the quarter.

需求強勁，第四季銷售額成長13.2%。這已經是我們連續第六個季度實現至少13%的成長了。我們在推動成長的各項措施上繼續取得了非常好的成效，我稍後會詳細介紹這一點。經營槓桿依然強勁。我們面臨毛利率壓力。部分原因是我們自己造成的，因為我們的成長動力自然會降低我們的毛利率。但通貨膨脹，以及最近的關稅，正在為我們的業務帶來一些影響。儘管如此，我們本季仍實現了 21% 的增量利潤率。

Prices are trending favorably. And when I talk about price and cost in these discussions, price is our sell price to our customer; cost is the inbound, whether that is a cost to goods cost, a freight cost or an OpEx cost. But I'll try to use those terminologies to be more concise in how we describe things.

價格走勢良好。在這些討論中，當我談到價格和成本時，價格是我們向客戶銷售的價格；成本是入庫成本，無論是商品成本、運費或營運成本。但我會盡量使用這些術語，以便更簡潔地描述事物。

Price trended favorably, but it's still lagging cost inflation a bit. And that is pressurizing our gross margin more than just pure mix, and Holden will touch on that in greater detail. As you all know, List 3 of the tariffs did impact Fastenal, and -- but most of the impacts on the working capital that added to inventory late in the year. And again, Holden will touch on that.

價格走勢良好，但仍略低於成本通膨水準。而這比單純的產品組合對我們的毛利率造成了更大的壓力，霍爾頓將對此進行更詳細的闡述。如大家所知，關稅清單 3 確實對 Fastenal 造成了影響，而且——但大部分影響都集中在營運資金上，導致年底庫存增加。霍爾頓還會再談到這一點。

One thing that's positive, we have a supply chain relationship with our customers. Tariffs and inflation are not a foreign concept, no pun intended, to our customers. And those discussions are going well and I'm encouraged about what we saw in the month of December, what we're seeing in January, February and March -- what we expect to see in February and March as it relates to our ability to pass through those tariffs, or better yet, find better cost options for our customer. In many cases, that involves substitution.

積極的一點是，我們與客戶建立了供應鏈關係。關稅和通貨膨脹對我們的客戶來說並不陌生，我這麼說絕無雙關之意。這些討論進展順利，我對我們在 12 月、1 月、2 月和 3 月份看到的情況感到鼓舞——我們預計在 2 月和 3 月會看到的情況，這關係到我們能否將這些關稅轉嫁出去，或者更好的是，能否為我們的客戶找到更好的成本選擇。在很多情況下，這涉及到替換。

Q4 cash generation continues to be impacted by the working capital trends. However, we were still able to return $177 million to our shareholders via repurchase and dividends while retaining what I would consider a pretty flexible capital structure.

第四季現金流持續受到營運資本趨勢的影響。然而，我們仍然能夠透過股票回購和分紅向股東返還 1.77 億美元，同時保持我認為相當靈活的資本結構。

Now let's go to the growth drivers, Page 4. Onsites. The team really is making progress there. When I think about -- back in 2014, we had a couple of hundred of Onsites. We were adding 10 a year, which meant 3% to 5% of our district managers were really engaged in this game. The rest of the folks were really engaged in the more traditional side of our business plus the vending that we've introduced in the last 10 years.

現在讓我們來看成長驅動因素，第 4 頁。網站。團隊在那方面確實取得了進展。回想2014年，我們有幾百個現場服務點。我們每年新增 10 個，這意味著我們 3% 到 5% 的區域經理真正參與這個遊戲。其餘員工則真正投入我們業務的傳統方面，以及我們在過去 10 年中引入的自動販賣機業務中。

We started to change that in 2015. We went into high gear in '16, '17 and '18. In 2015, about 25% of our district managers signed an Onsite. Next year, that went to 50%. Last year, it was in the low 70s. And we always talked about, let's drive that to 80%. If we drive that to 80%, we are an Onsite company because we're engaged in it throughout the business, not in a subset of our business. In 2018, 79% of our district managers signed an Onsite. We will pierce that number of 80% in 2019, and I'm really excited about what that means for our ability to keep growing and manage the business.

我們從2015年開始改變這種狀況。我們在 2016 年、2017 年和 2018 年全力以赴。2015 年，我們約有 25% 的區域經理簽署了現場培訓協議。第二年，這個比例上升到了 50%。去年，氣溫在華氏70度左右。我們一直在討論，要把這個數字提高到 80%。如果我們把這個比例提高到 80%，我們就成為一家現場服務公司，因為我們在整個業務中都參與其中，而不是只參與我們業務的某個子集。2018 年，我們 79% 的區域經理簽署了現場服務協議。我們將在 2019 年突破 80% 的里程碑，我對這將對我們持續成長和管理業務的能力產生怎樣的影響感到非常興奮。

However, when you go from 200 Onsites to 900 Onsites in a few short years, you do deleverage that business quite dramatically. And so our average Onsite back in 2014 did $150,000 a month. Today, our average Onsite does $120,000 a month. And it isn't because we're lowering the bar on opportunity. It's because we have a whole bunch of really young Onsites and that's deleveraging the business.

然而，如果短短幾年內將現場服務數量從 200 個增加到 900 個，那麼該業務的槓桿效應就會大幅下降。因此，我們在 2014 年的平均現場服務月收入為 15 萬美元。目前，我們平均每個現場服務項目每月收入為 12 萬美元。這並不是因為我們降低了機會的標準。這是因為我們有很多非常年輕的現場服務人員，這導致業務槓桿率下降。

But on the flip side of that coin, our branch network has been leveraging like crazy, and that's what allowed us to maintain an incremental margin in the last 2 years of a low 20%. But on Onsites, we signed 336 for the year, not quite our goal. Our goal was pretty aggressive, but well above the 270 of last year. We have 48% more active sites today than we did just a year ago. And our goal for next year is 375 to 400.

但另一方面，我們的分公司網絡一直在瘋狂擴張，這使得我們在過去兩年中保持了 20% 的增量利潤率。但就現場服務而言，我們今年只簽了 336 份合同，沒有達到我們的目標。我們的目標相當激進，但遠高於去年的 270 人。如今我們的活躍站點數量比一年前增加了 48%。我們明年的目標是達到 375 到 400。

Vending. We have really breathed new life into vending. The team has done a wonderful job in the last few years. We met our goal for the year. We signed 22,073. We signed over 90 a day in the third quarter, incredible milestone in my mind. And our installed base ended the year at just over 81,000, about a 14% increase from last year.

自動販賣機。我們確實為自動販賣機注入了新的活力。過去幾年，團隊的工作非常出色。我們實現了年度目標。我們簽了22073份。第三季我們每天簽下超過 90 名球員，在我看來，這是一個了不起的里程碑。到年底，我們的裝機量略高於 81,000 台，比去年增長了約 14%。

Product sales through those devices is up more than 20%. For next year, our goal is 23,000 to 25,000. I told the team, there's 254 days next year, if we hit 100 a day, that's 25,400. It's a really nice number. But our goal -- our stated goal is 23,000 to 25,000.

透過這些設備銷售的產品銷售量成長超過 20%。明年我們的目標是23000到25000人。我告訴團隊，明年有 254 天，如果我們每天達到 100 個，那就是 25400 個。這是一個非常漂亮的數字。但我們的目標——我們明確的目標是 23,000 到 25,000。

One thing that isn't mentioned in this list of bullets is construction. When we were making these investments back in '16, '17 and '18, a big one was inventory in our branch network. We had languished in the construction market for a better part of the decade with growth between 3% and 4%, very un-Fastenal-like. We were focused on other things and we lost our sight on construction.

這份清單中沒有提到的一點是施工。我們在 2016 年、2017 年和 2018 年進行這些投資時，其中一項重要的投資就是我們分公司網路的庫存。在過去十年的大部分時間裡，我們在建築市場一直處於低迷狀態，成長率在 3% 到 4% 之間，這非常不像 Fastenal 的風格。我們當時把精力放在了其他事情上，忽略了施工。

Between putting inventory in our branch, opening the door to our customer in that we had a great local plan and, in the process, beginning the development of a good national and international plan, our Construction business is now not growing 3% or 4%, it's growing 15% as we exit the year. The construction market itself is growing about 5%, the end market. We're tripling that, that's market share gains and it's about a great team going after that market being prepared.

從我們在分公司儲備庫存，到為客戶敞開大門，我們制定了一項出色的本地計劃，並在此過程中開始製定一項良好的國內和國際計劃，我們的建築業務現在的增長率不是 3% 或 4%，而是 15%，到年底時這一數字還在增長。建築市場本身（即終端市場）成長約 5%。我們實現了三倍成長，這意味著市場份額的提升，而這離不開一支優秀的團隊為開拓市場所做的準備。

We ended the year with just over 3,100 locations versus 2,988 a year ago, despite the fact we closed 157 branches. So that leveraging we're getting in our system is coming from people leverage and occupancy leverage, and we're converting those closed locations into ever more customer-serving locations by moving Onsite, by moving in and lowering our cost structure and improving our value proposition to our customer.

儘管我們關閉了 157 家分店，但截至年底，我們的門市數量略高於 3100 家，而一年前為 2988 家。因此，我們在系統中獲得的槓桿作用來自人員槓桿作用和占用率槓桿作用，我們正在透過搬遷到現場、搬遷到新址、降低成本結構和提高對客戶的價值主張，將這些關閉的地點轉變為服務客戶更多的地點。

National Accounts, they had an outstanding year, 18% growth in the fourth quarter. Large customer growth was also 18% for the entire year. Our non-U. S. daily sales, it's about 14% of sales, grew at mid- to high-teens rate. And slightly below in the latter part of the year, Europe and Asia have slowed a little bit and currency has given us some headwind.

國民帳戶方面，他們取得了優異的成績，第四季度增加了 18%。全年大客戶成長率也達到了 18%。我們的非美國。S. 日銷售額約佔銷售額的 14%，成長率達到 15% 到 10% 以上。今年下半年，歐洲和亞洲經濟成長略有放緩，匯率波動也為我們帶來了一些不利影響，整體經濟成長略低於預期。

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. Good morning. I'm going to begin with a quick recap of our 2018 results before moving on to the quarter. In 2018, Fastenal generated a record $4.97 billion in sales, which is up 13.1% from 2017. We generated at least 13% growth in each quarter of the year, reflecting what have been stable and sustained macro tailwinds as well as effective execution of our growth drivers.

偉大的。謝謝你，丹。早安.在進入本季度報告之前，我將先快速回顧我們 2018 年的業績。2018 年，Fastenal 創造了 49.7 億美元的銷售額，創歷史新高，比 2017 年成長了 13.1%。我們每季都實現了至少 13% 的成長，這反映了穩定且持續的宏觀利好因素以及我們成長驅動因素的有效執行。

To touch on those growth drivers. For Onsites, we signed 336 new agreements in 2018. That was shy of our 360 to 385 goal, but it's well above last year's 270 signings. If I exclude the branch transfer revenues, sales through Onsites grew more than 20% for the full year. We're targeting 375 to 400 signings in 2019.

探討這些成長驅動因素。2018 年，我們為現場服務簽署了 336 份新協議。雖然距離我們 360 到 385 人的目標還有一段距離，但遠高於去年的 270 人簽約人數。如果排除分行轉帳收入，透過 Onsites 實現的銷售額全年成長超過 20%。我們的目標是在 2019 年簽約 375 至 400 名球員。

For vending, we finished 2018 with more than 81,000 installed product dispensing machines, which is up 13.6% over 2017. Our 2018 signings of 22,073 machines were up 14% and around the midpoint of our 21,000 to 23,000 signing goal for the year. Sales through our machines rose more than 20% in 2018, and we're targeting 23,000 to 25,000 signings in 2019.

在自動販賣機方面，截至 2018 年末，我們已安裝了超過 81,000 台產品分發機，比 2017 年增長了 13.6%。2018 年，我們簽約了 22,073 台機器，成長了 14%，接近我們當年 21,000 至 23,000 台簽約目標的中點。2018 年，透過我們的機器實現的銷售額成長超過 20%，我們的目標是 2019 年達到 23,000 至 25,000 個簽約量。

Lastly, National Accounts paced the overall business with sales growth through our largest customers in 2018 accelerating to up 18.1%. We were active with new signings, but this acceleration also reflects success in expanding our sales to existing customers. Though today, they represent a relatively small part of our business, we also continue to see healthy growth in our non-North American revenues as well as sales through our e-commerce channel.

最後，全國客戶業務帶動了整體業務的成長，2018 年我們最大的客戶的銷售成長加速至 18.1%。我們在新客戶簽約方面表現活躍，但這種加速成長也反映出我們在擴大現有客戶的銷售額方面取得了成功。儘管目前它們在我們業務中所佔比例相對較小，但我們仍然看到北美以外的收入以及透過電子商務管道的銷售額持續健康成長。

Our operating margin was flat year-to-year at 20.1% in 2018. This stability does mask improved leverage as the year progressed, with our operating margin expanding by about 30 basis points in the second half of 2018. Our gross margin finished 2018 at 48.3%, down 100 basis points, largely from product and customer mix, freight costs, negative price-cost and growth allowances.

2018 年，我們的營業利潤率與前一年持平，為 20.1%。這種穩定性掩蓋了隨著年內進展而改善的槓桿率，我們的營業利潤率在 2018 年下半年增長了約 30 個基點。2018 年，我們的毛利率為 48.3%，下降了 100 個基點，主要原因是產品和客戶組合、運費、負價格成本和成長準備金。

Our ability to narrow our gross margin declines going forward will rest heavily on our ability to close the gap between rising prices and rising costs. We generated an offsetting 100 basis points of SG&A leverage, 30 to 40 basis of this was from employee-related expenses as we cleared our incentive reset in the second quarter of '18 and grew headcount more slowly than sales. 30 to 40 basis points is from leveraging occupancy as the closure of 157 branches in 2018 mitigated growth in our base of vending machines. Finally, we leveraged our remaining operating cost by 30 to 40 basis points.

未來我們能否縮小毛利率下滑幅度，很大程度取決於我們能否縮小物價上漲與成本上漲之間的差距。我們產生了 100 個基點的抵銷的銷售、一般及行政費用槓桿，其中 30 到 40 個基點來自員工相關費用，因為我們在 2018 年第二季度完成了激勵重置，並且員工人數增長速度慢於銷售額增長速度。30 至 40 個基點來自利用入住率，因為 2018 年關閉的 157 家分行減緩了我們自動販賣機基礎的成長。最後，我們將剩餘的營運成本提高了 30 至 40 個基點。

Given continued growth in our business, there remains further room to leverage our operating expenses. Given continued healthy growth, our overall goal for operating margins entering 2019 is unchanged, achieving incremental margin between 20% and 25% and deliver some margin expansion.

鑑於我們業務的持續成長，我們仍有進一步降低營運成本的空間。鑑於持續的健康成長，我們2019年的整體營業利潤率目標保持不變，即實現20%至25%的增量利潤率，並實現一定的利潤率擴張。

Below the operating line, interest expense is up 39% on higher average debt balances, largely from share repurchase activity. Our tax rate fell to 23.8% in 2018 from 33.7% in 2017. Excluding discrete items from both periods, our tax rate fell to 24.5% in 2018 from 36.5% in 2017, reflecting the Tax Act, which had the effect of lowering our tax rate beginning in the first quarter. It all blended to a full year 2018 EPS figure of $2.62 versus $2.01 in 2017.

在營運成本線以下，由於平均債務餘額增加，利息支出增加了 39%，這主要是由於股票回購活動造成的。我們的稅率從 2017 年的 33.7% 降至 2018 年的 23.8%。在剔除兩個期間中的個別項目後，我們的稅率從 2017 年的 36.5% 降至 2018 年的 24.5%，這反映了稅法的影響，該稅法從第一季開始降低了我們的稅率。所有這些因素綜合起來，使得 2018 年全年每股收益達到 2.62 美元，而 2017 年為 2.01 美元。

If I exclude the discrete tax items, however, our EPS would have been $2.59, a 35% increase from $1.92 in 2017. If I further adjust for the differing tax rates that apply between 2017 and '18 as a result of U.S. tax reform, our EPS grew 13.4%.

但如果排除個別稅收項目，我們的每股收益將為 2.59 美元，比 2017 年的 1.92 美元增加 35%。如果我進一步調整因美國稅務改革而導致的 2017 年和 2018 年適用的不同稅率，我們的每股盈餘成長了 13.4%。

Moving to Slide 5 and our review of the fourth quarter. As Dan covered, sales were up 13.2% in the fourth quarter of 2018, which included daily sales growth of 14.5% in December. We have now grown our organic daily sales at a 10%-plus rate for 19 consecutive months. We continue to see good contribution from our growth drivers. We also saw continued favorable macro trends as illustrated by fourth quarter '18 Purchasing Managers Index and industrial production ratings.

接下來是第 5 張投影片，我們將回顧第四季。正如丹所報導的，2018 年第四季銷售額成長了 13.2%，其中包括 12 月的日銷售額成長了 14.5%。我們的有機日銷售額已連續 19 個月維持 10% 以上的成長率。我們持續看到成長動力做出良好貢獻。我們也看到宏觀經濟趨勢持續向好，2018 年第四季採購經理人指數和工業生產評級就反映了這一點。

Still, sentiment was a bit choppier in the period with rising cautiousness in November seeming to dissipate a bit in December. Our business does not provide much visibility to future trends, and so we cannot speculate as to whether this choppier tone will persist. However, it did not affect performance in the fourth quarter as you can see by the growth of our end markets, our products and our channels provided in Slide 5.

不過，這段時期市場情緒略顯波動，11 月上升的謹慎情緒似乎在 12 月有所消退。我們的業務對未來趨勢的可見度不高，因此我們無法推測這種波動較大的情況是否會持續下去。然而，正如您在投影片 5 中所看到的，我們的終端市場、產品和通路的成長並沒有影響第四季的業績。

As it relates to pricing, during the quarter, we put in place focused resources to evaluate and execute our pricing strategies. This is appropriate in light of the prevalence of inflation and tariffs as well as the growth of our National Accounts business, all of which makes the pricing environment more complex than we have seen in many years.

在定價方面，本季我們投入了專案資源來評估和執行我們的定價策略。鑑於通貨膨脹和關稅的普遍存在，以及我們國民帳戶業務的增長，所有這些都使得定價環境比我們多年來所看到的更加複雜，因此這樣做是恰當的。

In addition to this group's strategic objectives, it has also taken a fresh look at how we measure pricing cost, with 2 observations resulting: first, as we reported before, we have achieved improved price realization throughout 2018 with a notable step-up in the third quarter as is necessary because our costs have also risen throughout 2018; second, the impact of price on our results is slightly below what we had previously modeled. As a result, we realized between 110 and 140 basis points of price in the fourth quarter of 2018, which is improved on the 85 to 150 basis points of price that we realized in the third quarter of '18.

除了該集團的戰略目標外，它還重新審視了我們如何衡量定價成本，並得出了兩個觀察結果：首先，正如我們之前報告的那樣，我們在 2018 年全年實現了價格實現的改善，並在第三季度取得了顯著的進步，這是必要的，因為我們的成本在 2018 年全年也在上升；其次，略對我們業績的影響力。因此，我們在 2018 年第四季實現了 110 至 140 個基點的價格成長，比 2018 年第三季實現的 85 至 150 個基點的價格成長有所改善。

As it relates to tariffs, there was minimal impact on the P&L in the fourth quarter of '18, but that will grow in the first quarter and full year of 2019. The impact on the balance sheet is also modest at this point with one exception. While we did not buy any excess inventory in anticipation of higher tariffs, we did accelerate the shipping of planned spend to arise before the potential 25% tariffs kicked in, which was originally expected on January 1. This pulled roughly $12 million in inventory that would have otherwise gone into the first quarter of 2019 into the fourth quarter of 2018.

就關稅而言，2018 年第四季對損益表的影響微乎其微，但 2019 年第一季和全年影響將會擴大。目前來看，對資產負債表的影響也比較小，只有一個例外。雖然我們沒有因為預期關稅上漲而購買任何過剩庫存，但我們確實加快了計劃支出的發貨速度，以便在潛在的 25% 關稅生效之前完成，該關稅原定於 1 月 1 日生效。這使得原本應在 2019 年第一季入庫的價值約 1,200 萬美元的庫存提前到了 2018 年第四季。

Now to Slide 6. Our gross margin was 47.7% in the fourth quarter of 2018, down 110 basis points versus the fourth quarter 2017. This decline was slightly more than we expected. Relative to prior periods, we did see the negative effects of freight and net rebates moderate in the fourth quarter, primarily as a result of easier comparisons. However, product margin was below where we thought it would be. The negative impact of price-cost widened as product cost increases outpaced our price increases. The negative impact of customer and product mix similarly widened as an increasing proportion of our gross derived from our growth drivers. Our operating margin was 19% in the fourth quarter 2018, up 30 basis points year-over-year. Continued healthy growth drove 130 basis points of cost leverage and generated an incremental margin of 21%.

現在來看第 6 張投影片。 2018 年第四季度，我們的毛利率為 47.7%，比 2017 年第四季下降了 110 個基點。這一跌幅略高於我們的預期。與前期相比，第四季運費和淨返利帶來的負面影響有所緩和，這主要是由於基數較低所致。然而，產品利潤率低於我們的預期。由於產品成本上漲速度超過了我們的價格上漲速度，價格成本的負面影響進一步擴大。隨著我們毛利中來自成長驅動因素的比例不斷增加，客戶和產品組合的負面影響也隨之擴大。2018 年第四季，我們的營業利潤率為 19%，較去年同期成長 30 個基點。持續健康的成長推動成本槓桿率提高了 130 個基點，並產生了 21% 的增量利潤率。

Looking at the pieces, we achieved 60 basis points of leverage over employee-related costs, which were up 10%. Growth in headcount was below growth in sales, and growth in incentive compensation, though healthy, moderated versus last year. Occupancy-related costs were up 7.2%, generating 25 basis points of leverage. Total occupancy costs grew very slightly, with higher expenses at non-branch facilities more than offsetting a decline in branch facilities. As a result, most of the growth in costs related to higher vending expenses to support the growth in our installed base. We realized an additional 55 basis points of leverage of other and operating administrative expenses.

從各項數據來看，我們在員工相關成本方面實現了 60 個基點的槓桿效應，而員工相關成本卻上漲了 10%。員工人數成長低於銷售額成長，激勵性薪資成長雖然健康，但與去年相比有所放緩。與入住率相關的成本上漲了 7.2%，產生了 25 個基點的槓桿效應。總佔用成本略有成長，非分公司設施的支出增加足以抵銷分公司設施的支出減少。因此，大部分成本增長與為支持我們現有設備數量的增長而增加的自動販賣機費用有關。我們實現了對其他營運管理費用額外 55 個基點的槓桿作用。

Putting it all together, reported fourth quarter EPS were $0.59 versus $0.53 in fourth quarter 2017. However, the current year does include a $3.2 million discrete tax charge while the prior year period includes a $24.4 million discrete tax benefit, both related to the effects of the Tax Act. Excluding these discrete items, fourth quarter '18 EPS would have been $0.60 or up 34.2% from the fourth quarter of 2017, boosted by a lower tax rate as a result of the Tax Act. Absent tax reform, EPS growth would have been 13.9%.

綜合來看，第四季每股收益為 0.59 美元，而 2017 年第四季為 0.53 美元。然而，本年度包含 320 萬美元的單獨稅收支出，而上年度包含 2,440 萬美元的單獨稅收收益，這兩項支出均與稅收法案的影響有關。在剔除這些特殊項目後，2018 年第四季每股盈餘將達到 0.60 美元，比 2017 年第四季成長 34.2%，這得益於稅法帶來的較低稅率。如果沒有稅制改革，每股盈餘成長率將達到 13.9%。

Turning to Slide 7. We generated $178 million in operating cash in the fourth quarter of 2018 or 106% of net income. This is slightly below the conversion we typically see in fourth quarters, again relating to working capital. I'll cover that in a moment. Net capital spending in the fourth quarter of 2018 were $78 million, bringing our year-to-date outlays to $167 million, an increase of 48.3% over 2017. We expected an uptick in spending in the fourth quarter just based on project timing related to hub investments, but we also had an opportunity to purchase property in North Carolina for future hub expansion that was unanticipated and added nearly $20 million to this total.

請看第 7 張投影片。 2018 年第四季度，我們產生了 1.78 億美元的經營現金，佔淨收入的 106%。這比我們通常在第四季看到的轉換率略低，同樣與營運資本有關。我稍後會談到這一點。2018 年第四季淨資本支出為 7,800 萬美元，使我們年初至今的支出達到 1.67 億美元，比 2017 年成長了 48.3%。我們預計第四季度支出將因與樞紐投資相關的專案進度而增加，但我們也意​​外地獲得了在北卡羅來納州購買房產以備未來樞紐擴張的機會，這使得總支出增加了近 2000 萬美元。

Our current growth and growth drivers require additional investments in 2019, and we expect net capital spending to be in a range of $195 million to $225 million, largely for investments in hub, property and equipment, vending devices to support our rising success in this initiative and vehicles.

我們目前的成長和成長動力需要在 2019 年進行額外投資，我們預計淨資本支出將在 1.95 億美元至 2.25 億美元之間，主要用於樞紐、房產和設備、自動販賣設備以及車輛的投資，以支持我們在這項計劃中取得的日益成功。

We paid $114 million in dividends in the quarter and $442 million for the year. We also repurchased $63 million in stock in the quarter and $103 million for the year, the second most active year in our history. We finished the quarter with debt at 17.8% of total capital, a little above last year's 16.5% but still at levels that provide ample liquidity to take advantage of opportunities to invest in our business.

本季我們支付了 1.14 億美元的股息，全年支付了 4.42 億美元的股息。本季我們也回購了價值 6,300 萬美元的股票，全年回購了 1.03 億美元，這是我們歷史上第二活躍的一年。本季末，我們的債務佔總資本的 17.8%，略高於去年的 16.5%，但仍處於能夠提供充足流動性以抓住投資業務機會的水平。

The working capital picture remained challenging. Inventories were up 17% in the fourth quarter and days on hand ticked up slightly for the first time in 2018. Some of the growth related to supporting demand in our growth drivers and some was related to the accelerated shipments mentioned above. However, a third major element was simply the growing impact of inflation.

營運資金狀況依然嚴峻。第四季庫存成長了 17%，庫存週轉天數在 2018 年首次略有上升。部分成長與滿足成長動力方面的需求有關，部分成長與上述加速出貨有關。然而，第三個主要因素是通貨膨脹日益加劇的影響。

Receivables grew 17.5% in the fourth quarter and is up more than 3 days. Sustained strong growth in National Accounts and international businesses matter, but the biggest factor remains customers pushing payments past quarter end, which intensified further in the fourth quarter of 2018. Receivables quality remains good with no deterioration in past due balances.

第四季應收帳款成長了 17.5%，並且已經上漲了 3 天多。國民帳戶和國際業務的持續強勁成長固然重要，但最大的因素仍然是客戶將付款推遲到季度末之後，這種情況在 2018 年第四季進一步加劇。應收帳款品質維持良好，逾期餘額沒有惡化。

That's all for our formal presentation, so with that, operator, we'll take questions.

我們的正式介紹就到這裡，那麼，操作員，接下來我們將接受提問。

(Operator Instructions) Our first question comes from Chris Dankert of Longbow Research.

（操作說明）我們的第一個問題來自 Longbow Research 的 Chris Dankert。

I guess first off, and I know visibility is limited, but we're going into the new year here. Obviously, price-cost was a headwind last year. We're kind of comping on that. Given that you're going to be pushing some more pricing in a more focused way, given that volumes are going to be up, is it fair to assume that gross margin in the first quarter should be up a little bit sequentially? Or are we still kind of fighting sideways here?

我想首先，我知道現在能見度有限，但我們即將迎來新的一年。顯然，去年的價格成本是一個不利因素。我們算是在這方面做了補償。鑑於你們將更有針對性地推進定價策略，並且銷售量也將上升，那麼是否可以合理地假設第一季的毛利率會較上季略有上升？還是我們其實還在進行某種迂迴的鬥爭？

Well, I think if you look sort of sequentially at how things usually play out with gross margin, historically, we've seen an uptick in Q1 over Q4. But over the last 3 years, really, the Q4 to Q1 cadence has been more flattish. And I think a lot of that has to do with sort of the inherent volatility in gross margin in Q4. So it can be difficult to predict. We're moving into a quarter where we're going to see how the tariff price-cost dynamic plays out. We still have an inflation price-cost dynamic playing out. I think if what you're asking about is what you should think about in terms of sequential gross margin, I would think about Q1 looking somewhat similar to where Q4 comes in.

嗯，我認為如果你按時間順序觀察毛利率的歷史走勢，你會發現第一季的毛利率通常比第四季有所上升。但實際上，過去 3 年裡，第四季到第一季的節奏已經變得比較平緩了。我認為這很大程度上與第四季度毛利率固有的波動性有關。所以很難預測。我們即將進入一個季度，我們將觀察關稅價格成本動態將如何發展。我們仍然面臨通貨膨脹導致的價格成本動態變化。我認為，如果你問的是應該如何看待連續毛利率，那麼第一季的情況應該與第四季的情況有些類似。

Got it. Got it. That's helpful. And just a quick follow-up, thinking about the full year price-cost. With the team in place, should we -- is it fair to expect that by 2Q, we're starting to claw back some of that price-cost? Or is this more of a probably back half type of dynamic?

知道了。知道了。那很有幫助。最後再補充一點，考慮一下全年的價格成本。團隊到位後，我們是否可以合理預期，到第二季度，我們將開始收回一些成本？或者這更像是下半場的動態？

Well, the -- what I'll emphasize is we have improved our price realization each quarter this year. And setting aside the question of tariffs, just looking at generalized inflation, I would expect that that's going to continue as we enter 2019. So given that, the question really comes down to what do we expect out of costs as we go into 2019? I'll tell you that as much as we've realized the incremental pricing, we've also realized incremental cost each quarter this year as well. So we still see pressure there quite frankly. But that said, we are making a lot of progress in terms of our ability to realize price. We talked a little bit about the pricing tools that went in, in midyear 2018. We talked a little bit here about how we've sort of rejiggered the group a little bit to give us a bit more focused information, et cetera, and I think that's going to continue to provide us some additional incremental benefits. The -- so our expectation in 2019 is that we're going to continue to narrow and, frankly, get rid of the gap that exists today between price and cost.

嗯，我要強調的是，今年我們每季的價格實現率都有所提高。撇開關稅問題不談，單就整體通膨而言，我預計這種情況在 2019 年還會持續下去。因此，有鑑於此，真正的問題歸根結底是：進入 2019 年，我們對成本有何預期？我可以告訴你，儘管我們意識到了價格上漲，但今年每季我們的成本也隨之增加了。坦白說，我們仍然看到那裡存在壓力。但即便如此，我們在實現價格方面也取得了很大進展。我們在 2018 年中討論了一下引入的定價工具。我們剛才稍微談到了我們如何對團隊進行了一些調整，以便獲得更集中的資訊等等，我認為這將繼續為我們帶來一些額外的收益。因此，我們預計在 2019 年，我們將繼續縮小，坦白說，最終消除目前價格和成本之間的差距。

Got it. Got it. That's so helpful. Congrats on '18, and good luck in the new year...

知道了。知道了。這太有幫助了。恭喜你度過了2018年，祝福你在新的一年一切順利！

Thanks, Chris. Just one item I'll add to Holden's commentary. When I think of the dynamic that's going on right now with whether it's inflation or tariff in general, I think this is a huge opportunity for the Fastenal supply chain capabilities where we can flex our skill set. And I mean that from the standpoint, we're not a fulfillment company. We don't just supply you what you ordered. We also challenge in the process of saying, "The item you're ordering, we don't know that -- based on what we know about your business, we would question if that's optimal for your business." Sometimes, it's substituting the product from the standpoint of the durability of that product. Does it fit, either is it adequate or too adequate to the demand of the use? But also, we have great partner brands, we have great exclusive brands. And sometimes, it's coming to your customer and saying, "You know, you've used this same brand for years. We have this brand that we actively support and we have a better price point on, a better cost point, which translates into a better price point." And we can offset inflation and/or tariffs by actively substituting. And that comes from an active engagement with knowing how the customer is using it and where their pain points are, where they're willing to be flexible and where they can't be flexible. And I think that's an important component of Fastenal's supply chain.

謝謝你，克里斯。我只想補充一點霍爾頓的評論。考慮到目前通貨膨脹或關稅等各種因素帶來的動態變化，我認為這對 Fastenal 的供應鏈能力來說是一個巨大的機遇，我們可以充分發揮我們的技能。我的意思是，從這個角度來看，我們不是一家物流公司。我們不僅僅提供您訂購的商品。我們也會在這個過程中提出質疑，例如：「您訂購的商品，我們並不清楚—根據我們對您業務的了解，我們會質疑它是否最適合您的業務。」 有時，我們會從產品的耐用性角度考慮，提出產品替代方案。它是否合適？是剛好滿足使用需求，還是過度滿足需求？此外，我們還有優秀的合作夥伴品牌和優秀的獨家品牌。有時，你會走到客戶面前說：“你知道嗎，你已經使用這個品牌很多年了。”我們積極支持這個品牌，我們擁有更優惠的價格，更低的成本，這最終會帶來更優的價格優勢。我們可以透過積極替代來抵消通貨膨脹和/或關稅的影響。這源自於積極了解客戶如何使用產品，他們的痛點在哪裡，他們在哪些方面願意靈活變通，在哪些方面不能靈活變通。我認為這是 Fastenal 供應鏈的重要組成部分。

And our next question comes from David Manthey of Baird.

下一個問題來自 Baird 公司的 David Manthey。

First of all, I'm hoping I can get a little bit of color on these large customer pricing conversations. Are you through all of them? When do the changes start taking effect? And I assume you've outlined agreements for the 10% and 25% tariff environments, but have you also reached contractual agreements as it relates to when the tariffs are eventually rolled back?

首先，我希望能了解一些關於大客戶定價談判的細節。你已經全部看完了嗎？這些變更何時開始生效？我假設你們已經就 10% 和 25% 的關稅環境制定了協議，但是你們是否也就最終何時取消關稅達成了合約協議？

The agreements we have allow for windows for discussions. We've talked about this in the past of when pricing can change. There's -- legally, you can do things beyond that from the standpoint of there's always force majeure elements of contracts. We're not a fan of that on the up or down because we don't think that's part of a supply chain partnership. So we're having active discussions with the customers. The discussions are going quite well. Are some more successful than others? Yes, a lot of times, it depends on what -- where we find success in the things I just mentioned, the ability to substitute, the alternative sources of supply, the level of service trade-offs, the are we growing our business with, et cetera? But we've been largely successful. We're seeing some price increases that are going into place as we speak and will be going in place over the upcoming months. In regard to the specifics of what happens when it goes from 10% to 25% or what happens when it unwinds, you can talk through scenarios, but there's no agreement that contemplates the -- I don't know if I want to use the word craziness or the noise or just the all the stuff that's going on in the marketplace. And so it's going to be a fluid environment on all regards. The one thing, we did put through some price increases that took effect in the middle of -- mid-December. And in those, we just -- we really had a discussion with our customers saying, "You know what, the tariff started on September 24. Here's the latency we're putting in. These tariffs unwind. Here's how we'll unwind the tariffs in those discussions." And really having the same kind of latency, and the idea was trying to match up best you can where it's impacting your P&L, where it's impacting your business and having a fair trade-off on the in and out because there are going to be distinct lines in the sand. But it's not a foregone conclusion that the 10% or 25%, what's going to happen when or if some or all of it remains there essentially and perpetually.

我們達成的協議為討論留出了空間。我們之前討論過價格何時會改變。從法律角度來說，你可以做一些超出這個範圍的事情，因為合約中總是包含不可抗力條款。我們不喜歡這種漲跌互現的做法，因為我們認為這不符合供應鏈夥伴關係的原則。所以我們正在與客戶積極溝通。討論進展順利。有些成功的人比其他人更成功嗎？是的，很多時候，這取決於什麼——我們在我剛才提到的方面取得成功的途徑、替代能力、替代供應來源、服務水平的權衡、我們正在用什麼來發展業務等等？但我們總體上取得了成功。我們看到一些價格上漲措施正在實施，並將持續到未來幾個月。至於當漲幅從 10% 漲到 25% 時會發生什麼，或者當漲幅收窄時會發生什麼，你可以討論各種情況，但目前還沒有任何協議考慮到——我不知道該用“瘋狂”還是“喧囂”或者“市場上正在發生的一切”來形容這種情況。因此，各方面都將是一個不斷變化的環境。有一件事，我們確實進行了一些價格上漲，這些上漲在 12 月中旬生效。在這些情況下，我們確實與客戶進行了討論，並表示：「你知道嗎，關稅從 9 月 24 日開始生效。這是我們設定的延遲。這些關稅將逐步取消。這就是我們將在討論中逐步取消關稅的方式。 「 實際上，延遲也是同樣的問題，我們的想法是盡可能地找出它對你的損益表和業務的影響，並在投入和產出之間做出公平的權衡，因為其中必有明確的界限。但10%或25%的份額最終會發生什麼，目前還不能斷定，如果其中一部分或全部份額永久地留在那裡，又會發生什麼？

What I'll add to that, David, is yes, I do believe that the vast majority of conversations have been had. In fact, when I asked why our signings of Onsites were perhaps a little bit lower in Q4 than we've seen the rest of the year, one of the answers I got was because of all the time and attention that we diverted to having those conversations. So those groups, both locally and in national accounts, have worked really hard to have those conversations in a compressed period of time. And they came to those conversations with a great plan and every bit as important with great data, which allowed us to define the issue fairly precisely, and it's a known issue. And I think those are the elements that have given -- that make us be very encouraged about how those conversations have gone down. We do believe that those conversations have been generally successful. The costs related to the 10% tariff will begin to roll into the P&L in the first quarter. But frankly, I think that most of the agreements that we've reached with many of our customers will also begin to roll in, in that January and February window as well. So what that means in terms of the incremental price-cost in sort of the January, February time frame, time will tell but that's just a timing issue. Like I said, we're encouraged about how those conversations went, and we're sort of expecting that we're going to largely be able to neutralize the tariff impact.

大衛，我還要補充一點，是的，我相信絕大多數的對話已經進行過了。事實上，當我問到為什麼我們在第四季度的現場簽約量可能比今年其他季度略低時，我得到的其中一個答案是，因為我們把所有的時間和精力都投入到了這些對話中。因此，無論是地方層面或國家層面，這些團體都在短時間內努力進行這些對話。他們帶著周密的計劃和同樣重要的寶貴數據參與了這些對話，這使我們能夠相當精確地定義問題，而這是一個眾所周知的問題。我認為正是這些因素讓我們對這些對話的進展感到非常鼓舞。我們認為這些對話總體上是成功的。與 10% 關稅相關的成本將從第一季開始計入損益表。但坦白說，我認為我們與許多客戶達成的大部分協議也將在一月和二月期間陸續生效。所以，就一月、二月期間的增量價格成本而言，這意味著什麼，時間會證明一切，但這只是時間問題。正如我所說，我們對這些對話的進展感到鼓舞，並且我們預計我們將能夠基本抵消關稅的影響。

And our next question comes from Ryan Merkel of William Blair.

下一個問題來自威廉·布萊爾的瑞安·默克爾。

A couple of questions for me. So first, I'm getting a lot of questions about tariffs and FIFO accounting. So how should we think about gross margins sort of first half '19 to second half '19 as it relates to FIFO?

我有幾個問題想問一下。首先，我收到了很多關於關稅和先進先出會計法的問題。那麼，我們該如何看待 2019 年上半年到下半年的毛利率與先進先出法 (FIFO) 的關係呢？

Well, that's why we began to build some cost in the inventory in the fourth quarter based on when the containers began to sort of hit the shores at the end of September. And we expect that we will begin to see that inventory that is currently sitting there, roll into cost of goods as we get into the first quarter. So that was all expected, Ryan, right? We knew that there would be some impact on the inventory side of the ledger but that -- it will take some time for that to roll through, but the nature of the tariffs as opposed to our usual purchasing was going to compress that window. That's why we spent so much time talking to investors in a very tight window is because we knew how that was going to roll out in Q1 so I think the effects you're alluding to are certainly playing out. But our original goal was to have pricing conversations ready to roll out as we began to see the costs shift off the balance sheet and into the income statement. And we think that we have largely achieved that goal. And so going forward, we're going to continue to see that -- the containers move through the inventory and into the COGS at sort of a comparable rate, and we should begin to see the pricing in Q1 and then Q2 related to that specifically, and that's how we tend to view it. So I'm not sure that I see a huge difference between the first half and the second half as it relates to the tariffs.

這就是為什麼我們在第四季開始在庫存中提列一些成本的原因，因為貨櫃在9月底開始陸續抵達海岸。我們預計，隨著第一季的到來，目前積壓的庫存將開始計入商品成本。所以這一切都在意料之中，瑞恩，對吧？我們知道這會對帳簿上的庫存產生一些影響，但這需要一段時間才能顯現出來，但關稅的性質與我們通常的採購方式不同，這將縮短這個時間窗口。這就是為什麼我們在很短的時間內花這麼多時間與投資者溝通，因為我們知道第一季會如何發展，所以我認為你所暗示的影響肯定會顯現出來。但我們最初的目標是，隨著成本從資產負債表轉移到損益表，制定定價策略並展開討論。我們認為我們已經基本實現了這個目標。因此，展望未來，我們將繼續看到這種情況——貨櫃以大致相當的速度流經庫存併計入銷售成本，我們應該會在第一季和第二季開始看到與此相關的定價，而這正是我們通常的看法。因此，就關稅而言，我不太確定前半部分和後半部分之間是否存在巨大差異。

The only thing I'll add to Holden's commentary and this is putting my old hat on for a second is when I think of our business just holistically, and I think about over the years, we've had roughly 160 days of inventory, plus or minus a handful, and I'm not going to get into exacts but just holistically. About 100 of those days were physically at the branch, and about 60 of those days were physically at the distribution center. Now in the case of a lot of our products, the -- and I'm setting vending aside and I'm setting OEM Fasteners aside. In the case of a lot of our products, that kind of mirrors where the replenishment cycle is coming in and really what put us in a position of having these discussions and having a little bit of a window to react to them. But that product that was in the branches is, now we're 3 months away from -- a little over 3 months away from the start of tariffs where that product that's going into the branches is starting to get replaced with stuff that was coming in. And so you'll see bits and pieces of it coming in, in January and February and March and it will be building as well through the quarter. The full steam will really hit in Q2.

我唯一想補充的是霍爾頓的評論，而且我還要稍微扮演一下老派角色，那就是當我從整體上考慮我們的業務，並回顧這些年來，我們的庫存大約有 160 天，上下浮動幾天，我不會具體說明，只是從整體上來說。其中約 100 天是在分公司實際工作，約有 60 天是在配送中心實際工作。現在，就我們許多產品而言——我先把自動販賣機和OEM緊固件放在一邊。就我們許多產品而言，這在某種程度上反映了補貨週期的到來，也正是這些因素讓我們有機會進行這些討論，並給我們一些時間來應對。但是，現在距離關稅生效還有 3 個月多一點的時間，之前在各大商店銷售的商品將開始被進口商品所取代。因此，你會看到它在1月、2月和3月陸續出現，並且在整個季度內不斷增加。第二季將真正進入全面成長階段。

And then I think maybe another way to think about it is when -- traditionally, when we buy a product from overseas, it might take 6 months or 2 quarters or whatever to move into our -- to sort of move into our system. That's -- but the tariffs were not applied at the point that you purchased the product. The tariffs were applied at the point that it hit the shores. So when the tariffs went in place on September 24, I think it was, any container that hit on September 25, we might have bought the product 3 months earlier, but that tariff hit right then. And so that's why when you talk about the timing, the timing as it relates to tariffs and how it moves through our system is compressed compared to our normal purchasing -- sort of our normal purchasing period. Does that make sense?

然後我想，或許還可以換個角度來思考這個問題——傳統上，當我們從海外購買產品時，可能需要 6 個月或 2 個季度或其他時間才能將其納入我們的系統。也就是說——但是關稅並非在您購買產品時徵收的。關稅在貨物抵達海岸時徵收。所以，當關稅於 9 月 24 日生效時（我想應該是這樣），任何在 9 月 25 日到達的貨櫃，我們可能在 3 個月前就購買了產品，但關稅是從那時起生效的。所以這就是為什麼，當我們談到時間安排時，與關稅相關的時間安排以及它如何通過我們的系統進行時，與我們正常的採購週期相比，時間安排會更加緊湊。這樣說得通嗎？

Yes. Okay. That's helpful, guys. And then secondly, Holden, I think you mentioned the goal for incremental margins in 2019 was that 20%, 25% range. So just 2 questions on that. First, what level of sales growth do you need to achieve that? And then secondly, it sounds like you're assuming that you can neutralize tariffs and product cost inflation with price.

是的。好的。這很有幫助，夥計們。其次，霍爾頓，我想你提到 2019 年的增量利潤目標是 20% 到 25% 的區間。關於這一點，我只有兩個問題。首先，你需要達到怎樣的銷售成長水準才能實現這個目標？其次，聽起來你似乎認為可以透過價格來抵銷關稅和產品成本上漲的影響。

Well, the -- currently, we're assuming that we continue to grow double digits now. However, the cycle plays out, we'll have a lot to say about that, but we believe that the momentum that we have in our growth drivers is going to continue. We think that we'll continue in the current environment to improve the price profile. And so the real question is what does the cycle do? But at least through Q4, demand is still fairly healthy. So we're assuming we're going to grow double digits in order to achieve that.

嗯，目前我們假設我們將繼續保持兩位數的成長。然而，當經濟週期最終走向如何發展時，我們有很多話要說，但我們相信，我們目前在成長驅動力方面所擁有的勢頭將會持續下去。我們認為在當前環境下，我們將繼續改善價格狀況。所以真正的問題是，這個循環究竟扮演了什麼角色？但至少在第四季度，需求仍然相當健康。所以我們假設為了實現這個目標，我們將實現兩位數的成長。

The one thing I'll add to that, Ryan, is if you looked at it in the last couple of years, so -- Terry Owen had -- we had our board meeting yesterday and Terry Owen came in and talked to the board about -- Terry oversees a big chunk of our behind the scenes business, so all of our National Accounts team, our solutions people, which is Onsite, which is vending, our government, our marketing folks, our finance that support National Accounts, all those things rolled into one. Those are the bedrock of our growth drivers. We've added 30% more people into his team or teams over the last 3 years. And so when you look at that non-branch, the sales headcount that's non-branch, that's the part I'm talking about. And we plan to keep adding aggressively into that area because that customer letter I talked about, that's reflective of what that group does as well as our local team and the district manager, of bringing that type of execution to our customer. And so in double-digit environment, we're going to keep growing that group aggressively to support what we're doing. Obviously, if we weren't in a double-digit environment, I'd have to go to Terry and I'd have to go to a bunch of folks in the organization and say, "Hey, folks, tighten the belt because we don't have the luxury to add that." But before I stepped into this role, one thing I learned from this population quite aggressive -- acutely is great incremental margin if you're not growing doesn't matter. Now it's changed a little bit. Great growth where you don't have great incremental margin doesn't matter either. And I agree with both statements. And -- but we want to be very mindful of growing the infrastructure to be great at Onsite because this is, just like vending, it's incredibly disruptive to the space, and we are designed to be the best at this. And so let's go after it with a vengeance.

Ryan，我還要補充一點，如果你回顧一下過去幾年的情況，你會發現——Terry Owen——我們昨天召開了董事會，Terry Owen 來和董事會談了談——Terry 負責我們幕後業務的很大一部分，包括我們所有的全國客戶團隊、我們的解決方案人員（包括 Onsite、自動售貨機）、我們的政府業務、我們的營銷人員、所有全國的財務人員，這些是我們成長動力的基石。過去三年，我們為他的團隊增加了 30% 的人員。所以，當你查看非分支機構的銷售人員數量時，那就是我所說的部分。我們計劃繼續大力拓展該領域，因為我提到的那封客戶來信，反映了該團隊以及我們當地團隊和區域經理的工作成果，即為我們的客戶提供這種執行力。因此，在兩位數成長的環境下，我們將繼續積極發展團隊，以支持我們正在做的事情。顯然，如果我們沒有達到兩位數的增長，我就得去找特里，還得去找公司裡的其他人，跟他們說：“嘿，夥計們，勒緊褲腰帶，因為我們沒有餘力再增加開支了。” 但在我擔任這個職位之前，我從這個群體身上學到了一點，而且學得很透徹——那就是，如果你沒有增長，再大增量的增量毫無意義。現在情況略有變化。即使成長迅猛，但如果利潤率沒有顯著提高，那也毫無意義。我同意這兩種說法。但是——但我們希望非常注意發展基礎設施，以便在 Onsite 領域做到卓越，因為這就像自動販賣機一樣，對這個領域產生了巨大的顛覆性影響，而我們的目標是成為這方面的佼佼者。所以，讓我們全力以赴，爭取拿下它。

And so just to finish off the last part of that. So yes, with regards to tariffs, we do expect that the success we've had will allow us to neutralize that. That's a different conversation from price-cost. Price-cost, I think, was about a 30 basis point drag to our business for the year. Our intention is to eliminate that drag. And we'll see how that plays out over the course of the year but our expectation is to eliminate that drag.

最後，我想把最後一部分也總結一下。所以，是的，關於關稅問題，我們預期我們的成功將使我們能夠抵消其影響。這與價格成本是不同的話題。我認為，價格成本對我們當年的業務造成了大約 30 個基點的拖累。我們的目標是消除這種阻礙。我們將看看這一年裡情況會如何發展，但我們的目標是消除這種拖累。

We think we have a good plan to do it.

我們認為我們有一個很好的計劃來實現它。

Yes. And that would be part of achieving that incremental margin.

是的。而這將是實現利潤成長的一部分。

And our next question comes from Scott Graham of BMO Capital Markets.

下一個問題來自 BMO 資本市場的 Scott Graham。

So I want to go back to what your just now comment was, Holden, on price-cost and kind of looping your earlier comment that the key to gross margin in 2019 will be to sort of get to this, call it, price-cost neutrality. Price-cost broadly defined as being your entire P&L as opposed to just materials, I assume. I guess as we look at the trends of your sales, recognizing that on a longer-term basis the Onsite stuff does start to even out a little bit, but the mix is still kind of running negative. So you have, in the past, said you have to look to backfill something like 20 to 30 basis points to just keep your gross margin flat due to mix. I guess, is that number still applicable? And maybe connect the dots here for me that why is that not as important as managing price-cost to get to your gross margin, to improve the -- gross margin.

所以我想回到你剛才的評論，霍爾頓，關於價格成本，並呼應你之前的評論，即 2019 年毛利率的關鍵在於實現所謂的價格成本中立。我猜想，價格成本的定義比較廣泛，指的是你的整個損益表，而不僅僅是材料成本。我想，當我們觀察你們的銷售趨勢時，會發現從長遠來看，現場銷售的情況確實開始有所好轉，但整體而言，線上線下銷售仍然略微下滑。所以你過去曾說過，由於產品組合的原因，你必須想辦法彌補大約 20 到 30 個基點的缺口，才能保持毛利率不變。我想問一下，這個數字現在還適用嗎？也許你能幫我理清思路，為什麼管理價格成本來提高毛利率不如管理價格成本來提高毛利率重要。

Yes. Sure. So I don't want to give the impression that mix is not important as something that we need to mitigate, right, because we do need to find ways to improve our profitability. And to the extent that whatever the mix number is, we should be able to reduce it just through other activities. But let's not lose sight of the fact that the mix is going down -- or the mix is a drag on gross margin because we're getting tremendous growth in our growth drivers. And so I don't think I've ever asserted to you that our gross margin was unlikely to decline, provided we are successful with our growth drivers. But it is still incumbent upon us as an organization to do everything we can to maximize our gross margin and mitigate the impacts of that. But you shouldn't have any expectation that our gross margins are going to be flat to going up as long as we are successful with these growth drivers. Look, Onsites have a gross margin in the neighborhood of 35%, give or take. It's just math, right? I mean, if we're going to grow that business 40%, take out the transferred sales of 20%, the math is going to tell you it's going to be difficult for us to expand our gross margin in that environment. But it's a real big reason why we're outgrowing everybody else in the space. So we're not as hung up with the idea of offsetting mix fully as perhaps your question suggests that we should. So -- but that said, price-cost, that is something where -- that is -- that should be in our control. We know when our costs are rising. We know what we need to offset. The markets should allow it and we should be able to go to our customers and say, look, we're not trying to take advantage here. This is what the marketplace is doing, this is what we need to be doing. That's something that's about our discipline as an organization. That's a very different conversation than the one about mix.

是的。當然。所以我不想給人留下這樣的印象：產品組合並不重要，我們不需要對此加以緩解，對吧？因為我們確實需要找到提高獲利能力的方法。無論混合比例是多少，我們都應該能夠透過其他活動來降低它。但我們不能忽視這樣一個事實：產品組合正在下降——或者說，產品組合正在拖累毛利率，因為我們的成長動力正在取得巨大的成長。因此，我認為我從未向你們斷言過，只要我們的成長動力得到有效發揮，我們的毛利率就不太可能下降。但作為一家企業，我們仍然有責任盡一切努力提高毛利率，並減輕其影響。但只要我們能夠成功利用這些成長動力，你就不應該期望我們的毛利率會維持不變或上升。你看，現場服務的毛利率大約在 35% 左右。這只是數學問題，對吧？我的意思是，如果我們要讓這項業務成長 40%，扣除 20% 的轉移銷售額，那麼數學計算會告訴你，在這種環境下，我們很難擴大毛利率。但這正是我們在這個領域超越其他所有競爭對手的一個重要原因。所以，我們並不像你的問題所暗示的那樣，執著於完全抵消混合比例的想法。所以——但是話雖如此，價格成本，那是——也就是說——應該在我們控制範圍內的事情。我們知道成本何時會上漲。我們知道需要抵消什麼。市場應該允許這樣做，我們也應該能夠對客戶說，我們不是想佔他們的便宜。這就是市場正在做的事情，也是我們該做的事情。這體現了我們組織自身的紀律性。這和關於混音的討論完全是兩碼事。

Understood. I was under the impression that if you were able to backfill the 20 to 30, that the gross margin would be flat for the year. But it sounds to me like you're not saying that.

明白了。我原以為，如果能彌補 20 到 30 的缺口，那麼全年的毛利率就會維持不變。但聽起來你好像不是這個意思。

Yes. I mean, if we -- whatever the number is, if we could backfill it, obviously, it would be flat, and we always try to backfill. But the fact is, it's difficult to find those in any given period. So no, I think we've been fairly open that if we're going to be this successful with our vending and our non-fasteners and our Onsites, in all likelihood over a period of time, our gross margin will go down. That doesn't mean, by the way, that our operating margin needs to go down. We get tremendous leverage from the growth that we're seeing. We saw that this year as well. I think the dynamic you saw this year is very comparable to the dynamic we expect to continue to see. Now I'll tell you, mix expanded beyond that 20, 30 in 2018 and it did so because if you think about it, National Accounts in 2017 grew 14.5%. It grew 18% in '18. Onsites grew 35% including transferred revenues in 2017. It grew 42% in '18. Non-fastener accelerated. With those accelerations, we did see an expansion in the impact from customer -- from customer mix. But again, we can't lose sight of the fact that growth in National Accounts going from 14.5% to 18% also drives more dollars to the revenue line that we then have leveraged at the operating expense line. That's how our model works at this point.

是的。我的意思是，無論數字是多少，如果我們能夠回填它，顯然，它將是平坦的，而我們總是嘗試回填。但事實上，在任何特定時期都很難找到這樣的人。所以，不，我認為我們已經相當坦誠地表示，如果我們的自動販賣機、非緊固件產品和現場服務能夠如此成功，那麼隨著時間的推移，我們的毛利率很可能會下降。順便說一句，這並不意味著我們的營業利潤率需要下降。我們從目前的成長中獲得了巨大的優勢。今年我們也看到了這種情況。我認為今年出現的這種動態與我們預期將繼續看到的動態非常相似。現在我要告訴你，混合消費在 2018 年超過了 20、30%，這是因為，如果你仔細想想，2017 年國民帳戶增加了 14.5%。2018年增長了18%。2017 年，包括轉移收入在內，現場收入成長了 35%。2018年成長了42%。無緊固件加速。隨著這些加速發展，我們確實看到了客戶（尤其是客戶組合）影響的擴大。但是，我們不能忽視這樣一個事實：國民帳戶的成長從 14.5% 增加到 18%，也為收入線帶來了更多的資金，然後我們將這些資金用於營運支出。這就是我們目前模型的運作方式。

Yes. Understood. My -- just the quick follow-up would be, in the past, you've talked about sort of in-product line and in-channel mix. So products, fasteners versus non-fasteners, markets, manufacturing versus nonresidential. Could you -- did you see anything in the mix in any of these 4 groups that went with you or went against you?

是的。明白了。我的－我只想快速跟進一下，過去您曾談到過產品線內和通路內的組合。因此，產品分為緊固件與非緊固件，市場分為製造業與非住宅業。你能不能－你在這四個群體中，有沒有看到任何與你觀點一致或與你觀點相悖的人或事？

You mean within the group itself as opposed to the changing mix of the individual groups?

你指的是群體內部的變化，而不是各群體成員組成的改變嗎？

That's correct.

沒錯。

Yes. I mean, where products are concerned, our non-fasteners grew faster than our fasteners this year.

是的。我的意思是，就產品而言，今年我們的非緊固件產品成長速度超過了緊固件產品。

I think he's talking about within the individual components, the dynamic of margin.

我認為他指的是各個組成部分內部的利潤動態。

Yes.

是的。

So okay, I got it. Yes, I mean, the element of price-cost was a drag in a lot of these areas, right? I mean, I think I indicated price-cost was about a 30 basis point drag to margin for the full year. And the -- I think that, that affected the margin in most of the channels and products that we are in. Now it affected fasteners more than non-fasteners without a doubt. It was probably more significant in the local business than it was on the Onsites and the National Accounts, et cetera. So there was some differential, but price-cost was a challenge across the business.

好的，我明白了。是的，我的意思是，價格成本因素在許多領域都是一個阻礙因素，對吧？我的意思是，我認為我之前說過，價格成本對全年利潤率的影響約為 30 個基點。我認為這影響了我們所涉足的大多數通路和產品的利潤率。毫無疑問，現在它對緊固件的影響比對非緊固件的影響更大。這可能對本地業務的影響比對現場服務和全國客戶等的影響更大。所以雖然有些差異，但價格成本對整個企業來說都是一個挑戰。

And our next question comes from Adam Uhlman of Cleveland Research.

下一個問題來自克里夫蘭研究公司的亞當·烏爾曼。

I was wondering if, Holden, we can go back to the cash flow outlook for this year. How should I be thinking about working capital kind of in your plan right now for 2019 as we'll get rid of some of the onetime pull-forward impacts that you outlined on inventory? So just directionally, should we see your cash days improve? And then could you just talk about like your downturn scenario planning, if you've done any? What if the business kind of ground to a halt? It's a lot different than several years ago at the last downturn. How would you expect working capital to perform with the change in the mix of the business?

霍爾頓，我想知道我們是否可以再討論今年的現金流展望。鑑於我們將消除您概述的對庫存的一些一次性提前影響，我現在應該如何考慮您 2019 年計劃中的營運資金問題？那麼從趨勢來看，您的現金週轉天數是否會有所改善？那麼，您能否談談您所製定的經濟衰退情境因應計畫（如果有的話）？如果業務幾乎完全停滯不前怎麼辦？這與幾年前上次經濟衰退時的情況大不相同。隨著業務結構的變化，您預計營運資金將如何變化？

Sure. So frankly, my rule of thumb model for our balance sheet would be a slight increase in days on the AR simply because of the growth in National Accounts and growth in international businesses. But a meaningful multi-day decrease in days of inventory. That's how we would like to build it out. Now the reality is, right now, there are some challenges that by the back half of 2018, it was very difficult for us to achieve those. We have to take steps in 2019 to get back on the track that I just laid out. We're not there right now but we have plans to begin to try to address that. Normally, what I would tell you is for the full year, we should convert more than 100% of our net income into operating cash flow. And this year, the biggest reason why we did not was because of working capital. And the expectation is that as we go into 2019, we should be able to deliver that. The challenges, obviously, are related to the inflation and tariffs and things like that -- what impact that might have on inventory. So that's sort of the rule of thumb that I look at when I think about the balance sheet. We have to show that we can deliver to that again in 2019 because 2018 was a struggle, and the variables that caused it to be a struggle in 2018 have not gone away. As it relates to a downturn scenario, traditionally, if it's a short relatively normal downturn, we need less working capital in that environment and our cash flow is traditionally pretty stable and steady.

當然。坦白說，根據我的經驗法則，由於國民帳和國際業務的成長，我們的資產負債表應收帳款週轉天數會略有增加。但庫存週轉天數卻出現了顯著的多日下降。這就是我們希望的建設方式。現在的現實是，目前我們面臨一些挑戰，而到了 2018 年下半年，我們很難實現這些目標。我們必須在 2019 年採取措施，重回我剛才闡述的軌道上。我們目前還沒有達到目標，但我們計劃開始著手解決這個問題。通常情況下，我會告訴你們，全年我們應該將超過 100% 的淨收入轉化為經營現金流。而今年，我們未能實現這一目標的最大原因是營運資金不足。預計進入 2019 年，我們應該能夠實現這一目標。顯然，挑戰在於通貨膨脹、關稅等等——這些因素可能會對庫存產生什麼影響。所以，這大概就是我在考慮資產負債表時會參考的經驗法則。我們必須證明我們能夠在 2019 年再次做到這一點，因為 2018 年很艱難，而導致 2018 年艱難的各種因素並沒有消失。就經濟衰退情境而言，傳統上，如果是短暫且相對正常的衰退，我們在這種環境下所需的營運資金較少，現金流通常也相當穩定。

I'll just throw in a couple of thoughts just after being here for 20-plus years. I'm the old guy so I can give a little perspective. The interesting thing about a distribution business, it's a working capital business. We have a little more fixed cap in our business now because of things like vending and automation in our warehouse and the fact that we have our own trucking network. But it's really a working capital business. And when we put up good growth, the number Holden just cited, that 100%, that becomes more challenging. And historically, I would expect our number, if we're putting up a good growth, to pull down into the mid-90s as a percentage of earnings because your AR and your inventory have grown faster because you're supporting an ever-growing business. And that's considered a good problem. The dynamics have changed a little bit on that math because our tax rates are lower now. So we produced a higher -- the 100% isn't 100% -- the 100% of earnings isn't 100% of earnings anymore. It's a little bit higher. And so you can -- it raises that relationship. If I look at when growth really stalls, I mean, the best year we've had for operating cash to earnings as a percentage, the best year that I've ever seen was 2009. I hope that never repeats itself. We threw off more cash than you can imagine because the business slowed down. And our -- if you don't have more sales, you don't have more receivables. If you don't have sales growing in the future, you don't need to be beefing up your inventory. The only dynamic that can muck that up is if it slows down quickly because we can't shut off the inbound inventory fast, but the receivables would drop off as the sales drop off.

我在這裡生活了二十多年，想分享幾個想法。我年紀大了，所以可以提供一些不同的視角。分銷業務的有趣之處在於，它本質上是一個營運資金業務。由於倉庫中的自動販賣機和自動化，以及我們擁有自己的運輸網路等因素，我們現在的業務規模有了更大的固定上限。但這其實是一項營運資金業務。當我們實現良好的成長，就像霍爾頓剛才提到的 100% 一樣，那就更具挑戰性了。從歷史數據來看，如果我們保持良好的成長勢頭，我預計我們的數字佔收益的百分比會降至 90% 左右，因為你們的應收帳款和庫存增長更快，因為你們在支持一個不斷增長的業務。這被認為是一個好問題。由於我們現在的稅率較低，所以這方面的計算方式略有變動。所以我們產生了更高的——100%不再是100%——100%的收益不再是100%的收益了。稍微高一點。所以你可以──它能增進這種關係。如果我觀察成長真正停滯的時間，我的意思是，就經營現金流與收益的百分比而言，我們取得的最佳年份，也是我見過的最佳年份，是 2009 年。我希望這樣的事情永遠不會再發生。由於業務下滑，我們損失的現金比你想像的還要多。而且—如果沒有更多銷售額，就不會有更多應收帳款。如果未來銷售額沒有成長，就不需要增加庫存。唯一可能破壞這種局面的因素是，如果銷售速度迅速放緩，因為我們無法快速關閉入庫庫存，但隨著銷售額的下降，應收帳款也會下降。

With that, I see we're at 9:59. I just want to close the call with a few final thoughts. First off, thank you for participating in our call today. Thanks for your interest in Fastenal and for being a shareholder in Fastenal.

這樣看來，現在是9點59分。最後，我想補充幾點。首先，感謝您今天參加我們的電話會議。感謝您對 Fastenal 的關注以及您成為 Fastenal 的股東。

One thing for us to think about is we're moving from a $5 billion to a $10 billion company. And you start thinking about gross profit, operating expenses and operating margin. The message internally is quite clear for our employees. As our business evolves, if I looked out to that $10 billion company and I was just putting a guess of where I think the numbers are, I think gross margin, if the mix ends up where I think it's going to be, I think the gross margin is around 46%.

我們需要考慮的一點是，我們正在從一家市值 50 億美元的公司轉型為市值 100 億美元的公司。然後你就會開始考慮毛利、營運費用和營業利益率。我們內部向員工傳達的訊息非常明確。隨著我們業務的發展，如果我展望那家市值 100 億美元的公司，並猜測我認為的數字會是多少，我認為毛利率，如果最終的組合正如我所料，我認為毛利率會在 46% 左右。

And I think there are some things we have to do to get better at to be at 46%. Is there upside to that? Sure. But in planning for that 46%, I also tell our team we need to plan on operating expenses being in the lower half of the 20s. 24 is a number I always think of, and that allows us to be in a position where we could throw off operating margins of 22%. I think that's very realistic. If I look at regions where we have a lot of Onsites and a mature business, the Midwestern U.S. as an example, we're above those numbers. This is a conservative view of the future.

我認為我們還有一些事情要做才能做得更好，達到 46% 的水平。這樣做有什麼好處嗎？當然。但在規劃這 46% 的成長時，我也告訴我們的團隊，我們需要規劃營運費用維持在 20% 左右的低點。24 是我一直念念不忘的數字，它使我們能夠實現 22% 的營業利潤率。我認為這非常現實。如果我看一下我們有很多現場服務點且業務成熟的地區，例如美國中西部地區，我們的業績就高於這些數字。這是對未來較保守的看法。

But I look at it and say, if I look at Page 9 of Holden's flipbook, the question a shareholder needs to ask themselves is -- Fastenal is investing to grow rapidly, we've added 30% to our key account teams in the last 3 years. Technology, we decided 3 years ago, to spend 50 basis points more every year to become a leader in technology in our industry, not a follower of technology in our industry. We saw with great partnerships over the years, our vending partnership for the last 10, our mobility partnership we put in place next year, we think we're a different organization now.

但我看了之後會說，如果我看看霍爾頓的翻頁書第 9 頁，股東需要問自己的問題是——Fastenal 正在投資以實現快速增長，在過去的 3 年裡，我們重點客戶團隊的人員增加了 30%。三年前，我們決定每年在科技方面多投入 50 個基點，力求成為我們產業科技領域的領導者，而不是我們產業科技的追隨者。多年來，我們透過建立良好的合作夥伴關係，例如過去 10 年的自動販賣機合作夥伴關係，以及我們明年即將實施的出行合作夥伴關係，我們認為我們現在已經是一個不同的組織了。

Fastenal Express, as I touched on in the last call, is not a train, it's a rocket, and it's growing nicely in our business. It's not about the revenue growth it can produce, which I think it can, it's about the efficiency it can bring to our team. But looking at all those things and are you interested being a shareholder in Fastenal, looking at the return on invested capital that we throw off that Holden details out on Page 9, I think we're a great proposition to own. And I would challenge our shareholders to step up and buy some more, just like I challenge our employees to be willing to learn and change, and we challenge our customers to be open-minded about their supply chain. That's how we all get better.

正如我在上次通話中提到的，Fastenal Express 不是火車，而是火箭，它在我們業務中發展得很好。關鍵不在於它能帶來多少營收成長（我認為它能做到），而是它能為我們的團隊帶來多少效率。但綜合考慮所有這些因素，如果您有興趣成為 Fastenal 的股東，並考慮到 Holden 在第 9 頁詳細說明的投資回報率，我認為我們是一個非常值得擁有的投資標的。我會鼓勵我們的股東加大投入，購買更多股票，就像我會鼓勵我們的員工勇於學習和改變一樣，我們也會鼓勵我們的客戶以開放的心態看待他們的供應鏈。我們都是這樣進步的。

Thanks and have a good week, everybody.

謝謝大家，祝大家一週愉快。

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.

女士們、先生們，感謝各位參加今天的會議。今天的節目到此結束。你們可以斷開連結了。祝大家今天過得愉快。