Fastenal Earnings Call Insights: The Gross Margin and Vending Adoption
The Gross Margin
Holden Lewis – BB&T Capital Markets: Wanted you to expand a little bit on the gross margin if you could, and it sounds like you’re kind of assuming that the momentum you experienced in November and perhaps December is getting carried forward. So, can you give us a sense of – I mean, November, December, we are already in between 52% and 53% range, kind of what drove the number perhaps up there. You said that you may need to improve it further. What do you expect to do in 2013 to achieve that, I don’t know if it’s pricing getting better or how you’re going to do that?
Willard D. Oberton – President and CEO: Well, there are several things we’re working on Holden. One is pushing fasteners harder, hopefully get some help there. But another initiative that we’ve been working hard on for the last few quarters is we’ve developed some new pricing system for our stores, and although it’s early we’ve been seeing some positive results there, using better data on guiding the stores and where to price the product. So, we’re working hard on that. We really believe that we’re going to pick up some improved margins, I mentioned the vending we’re working very hard, we’ve actually installed a team within the vending group to work on underperforming machines. What we’ve identified in some of the vending areas is our – we put a lot of pressure for people to sign these sign machines and sometimes we give the product away, that sort of what it almost look like. So, we’re going in and we’re reconfiguring some of the machines that’s more profitable product. So, there is several initiatives that we’re working on, but as Dan said, from October to December we’ve seen a nice steady uptick, and typically December is the worst month of the year for margin, I don’t know why, but that’s the way it’s always. This year actually was the exception to that, so it’s all about focus, but the biggest piece would be the new system that we’re working on at the store.
Holden Lewis – BB&T Capital Markets: Could you just comment. As a follow-up on the pricing environment. I think alluded that you had some pressure in international market, but what do you see in terms of this core pricing in your domestic market and maybe also any discounting rates that you might be seeing in the market?