Dynamic CEO continuously reinvests in business, keeps customers and investors top of mind
Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today named Will Oberton of Fastenal (NASDAQ: FAST) as its 2006 CEO of the Year. Morningstar's annual award recognizes a chief executive who exhibits exemplary corporate stewardship, demonstrates independent thinking, creates lasting value for shareholders, and has put his or her stamp on an industry. Fastenal, based in Winona, Minn., is the largest distributor of industrial fasteners in the nation.
"Oberton and Fastenal may not be as well-known as our other nominees this year, but they are no less impressive,"¯ said Patrick Dorsey, director of stock analysis for Morningstar. "Under Oberton`s stewardship, the company has produced a superior financial track record and a remarkable history of shareholder value, and it still holds a great deal of growth potential."¯
Fastenal built its strong track record by recognizing a simple insight"”time really is money in industrial America. Because industrial employees are paid by the hour, manufacturers and commercial contractors are happy to pay a bit more for a bolt or screw if they get the right one, and at the right time and location. As a distributor of industrial products, Fastenal supplies customers with more than 270,000 varieties of fasteners and upward of 300,000 general-purpose maintenance, repair, and operations products. The company has approximately 2,000 stores located across North America. As CEO, Oberton has continuously reinvested in the business, adding more stores every year.
Under Oberton's leadership, the company has continually made improvements:
"¢Just after Oberton took the helm, he instituted a store overhaul program to increase store traffic and sales growth, resulting in a 30 percent increase in sales per employee.
"¢Another round of Oberton's improvements included adding more delivery vehicles, extending hours at certain stores, and pulling inventory from distribution centers to stores for larger customer selection.
"¢Over the past five years, Fastenal has increased sales 15 percent annually, despite an industrial downturn early in the period.
"¢The company has averaged 20 percent returns on invested capital over the past five years.
Oberton joined the company in 1980 as a trainee and then quickly moved on to manage stores throughout the Midwest. He became chief operating officer in 1997, serving in that capacity through 2002 when he took over the leadership of Fastenal from founder Bob Kierlin. Oberton has been a director since 1999 and president since 2001.
The company's vast inventory and fast service have allowed it to boast a consistent record of financial success over the past few decades. Without acquisitions or external capital, Fastenal has compounded earnings at almost 30 percent annually over the past 20 years. Since its initial public offering in 1987, Fastenal's share price has also compounded by approximately 30 percent annually.
Morningstar has a five-star rating on Fastenal, the highest rating of a stock`s value relative to its market price on a risk-adjusted basis. Morningstar also considers it to be a "wide-moat"¯ stock"”its breadth of inventory and expansive store network create an unbeatable competitive advantage. The shareholder-friendly company currently holds a Morningstar Stewardship Grade of "A"¯"”one of the few companies to which Morningstar gives a high grade.