Fastenal Company (NASDAQ:FAST) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Ryan Merkel – William Blair: So I want to start with March. It looks like the seasonal lift was little less than usual. I’m just wondering how much of that was macro and then how much do you estimate that Good Friday hurt, if at all?
Willard D. Oberton – CEO: Ryan, we look at Good Friday as probably – it’s more than a half a day. So, if you say it’s 60% we would have lost about $5 million which would be 2 percentage points. I haven’t looked at it that way, but I mean that’s what the math would be. It was a slow finish, Good Friday was. But it was also a slow month.
Ryan Merkel – William Blair: Then on gross margin, I guess a two-part question. Where do you think margins can go once the other third of stores have the price guidance (system)? Secondly, do you think that better price discipline has impacted sales at all?
Willard D. Oberton – CEO: To answer the first part, all of the stores have the price guidance. So, we just haven’t deployed it to all customer groups. So, just it might be clear on that. Where the margin can go, we’re not sure. We’re not going to speculate on the margin. We believe there’s still upside improvement. And the second question, do we think it’s affecting sales? No, we really – and Lee is here too, I’ll let him jump in, but I have heard no anecdotal – any stories about losing business because of price guidance. Could there be some? Of course, but that’s not what we’re hearing back.
Leland J. Hein – President: Yeah, I would only add, Ryan, that it would only be true if the system was so rigid that we (didn’t opt) for the flexibility of our folks to look at in order and take it if it makes sense to our business. And that is again a culture – a piece of the culture within our Company that we’ve always been flexible to the point to be wise and take orders when it makes sense.
Derek Jose – Longbow Research: Yeah, I was wondering how vending customers, given that you guys are signing so many more contracts this year than last year, how the customer is changing in terms of size and market? And, given that there is a higher percent of non-FAST 5000 machines, how many of the new contracts are going to current customers who already have it versus new customers?
Willard D. Oberton – CEO: To answer your last question first, I don’t know the percentage of current customers versus new customers. And I have stated this many times that most of the customers that sign up for vending are current customers at some level. It might be a customer doing 5000 and they go to 10000. So, we don’t keep good track of that; we signing the customers. But as far as the mix of new machines, that’s more about producing new equipment than anything else. Our locker systems – in the past; two years ago or a year ago, when we signed a locker, you had to have a FAST 5000 to drive that machine electronically. The new locker systems that we have their own controller unit on it, so I can put in just lockers or I can put in as a combination of the FAST 5000. So, a big part of the reason we’re signing more of the other machines; the new machines, is because they’re standalone machines that they never used to be. It was always the FAST 5000 with the lockers. Now, some – many times it’s just the lockers for larger items where they have a different need.
Derek Jose – Longbow Research: Will, in terms of just the targeting; in other words, who you are targeting now in terms of…?
Willard D. Oberton – CEO: That has not changed one bit. The stores determine the targets. We’re targeting every customer that we believe can use this system, and there are just thousands and thousands – I mean it’s endless; the opportunities, but it starts with our current customers within our current market base within each store. And so, it’s not a targeting, it’s the stores are going out knocking on doors and deploying the technology…
Derek Jose – Longbow Research: And then just lastly, in terms of the project activity, one of the things we saw in fourth quarter is that a lot of projects either got canceled or delayed. Having that now into April, what are you seeing in terms of some of these projects that were delayed or the larger projects that could have been put in place a year ago? What kind of changes are you seeing in terms of demand from those areas?
Daniel L. Florness – EVP and CFO: I think you’re referring to the slowdown we saw in construction activity; just want to clarify. I guess, I can’t say that we’ve seen a rebound in that, but you also have to remember that lot of that business is very seasonal in nature and you wouldn’t really see the rebound in the January, February even March timeframe, because we did have a more severe winter this year than last winter. In fact, you saw it in our February numbers. If I think of the middle – the Midwest – the middle Midwest, so the Nebraska, Iowa down to Oklahoma, Arkansas area, that zone there, we were pounded with snow in February. We’re probably impacted, I’m going to say, $1.5 million in sales in that timeframe because of snow. And so, if you just think of that in general and where most of our sales dollars are, they tend to be heavily influenced by northern climate in North America. And so, I guess, I didn’t hear any commentary from the folks I talked to last week that construction had picked up, per se, from the level of activity and projects. Will, maybe you can add to that?
Willard D. Oberton – CEO: No, I haven’t either, but it’s not just the late spring, it’s the fact that last year we had a very early spring. And I was talking to one of our district managers in the Northern region, and in March he said his business was down 15% over last year, lost business, because the construction hadn’t started up, and last year it rolled in six weeks early. So, March, there is an impact, and if you look at the weather this week, major winter storm coming all the way from Colorado. I mean, we have store shutdown all over the place in Nebraska today. Minnesota is going to be shut down this afternoon. We were supposed to get 14 inches of snow in Minneapolis. So, it’s just a different weather pattern and construction is greatly affected by that, but it should all work out as time goes on.