Daniel L. Florness
Chief Executive Officer at Fastenal
Thanks, Taylor, and good morning, everybody, and welcome to the Q3 2024 earnings call for Fastenal.
Before I start, I just thought I'd share a couple of things. First off, as everybody's painfully aware of, there's been several hurricanes that have hit the Southeastern United States in recent weeks, and our hearts go out to all those affected. And each month when we put out our sales release, either I send out a video to our organization or Jeff Watts, our President, sends one out. By the way, in addition to Holden and me being on the call today, jeff Watts is sitting in and just to get a feel for what it feels like the call on this end. And I told him if we get a really tough question, I'll send it his way.
But all kidding aside, when a hurricane is coming, or any type of weather event or catastrophic situation occurs, we created a Team's page internally, and it's really meant to be a very agile way of communicating. We honed the skill incredibly during COVID. But it's a way of providing information to our team in the field who can get a lot of requests from customers that need help, maybe employees that need help, but people that need help and sometimes locating things when it's a little chaotic. It's nice to have one point to go to.
There's two individuals that I mentioned on the video this month. Zach Wise and DaNae Behrens who, in my mind, have gone above and beyond the call in keeping things updated on our system. And I recognize them on the video, and Bob Hopper who leads our business down in Florida, lives in Orlando personally and has been spending the last few days making sure his family is okay, his Fastenal family is okay, and our customers are okay. He sent me an e-mail this morning, thanked me for mentioning those two and in echoing the sentiment that they've been crucial in our ability to react in this event. So my thanks to them.
I'd also like to announce that -- and there'll be an 8-K that gets filed or something that goes out on this. I'm not sure the details but yesterday, our Board elected a new officer at Fastenal. Donnalee Papenfuss, she joined us back in July of 1999. So she just hit 25 years with Fastenal. In February of 2014, she became our VP of Contract Development. I've worked with her quite a bit over the years and her role has been slowly expanding.
As Jeff has stepped into the Chief Sales Officer role, we really took a hard look at our strategy as an organization, defining who we are and where we think the business is going and what does that mean for priorities in the future and getting everybody aligned to that. Donnalee has been an incredible asset in that. And one of her recent things she worked on was our sharing with the world our approach to ESG. And my congratulations to Donnalee and to everybody that helped Donnalee develop her skill set over the last 25 years and to the team that she leads.
Getting to the quarter. Third quarter net sales, plus 3.5%, produced earnings per share of $0.52, up about 1% over a year ago. If you take out the fact that we had an extra business today, our daily sales rate grew 1.9%.
Some things that stand out on the quarter for me, and one of them is a welcome sign. The quarter finished stronger than it started, especially considering that the hurricane impacted the last few days of the month. And I called out a couple of individuals for communicating. I also want to call out our transportation and distribution groups. The amount of flexibility they exhibited in that Thursday, Friday, Saturday, Sunday, Monday period, the last four or five days of September of changing truck routes, running truck routes on Friday evening, Saturday evening to get the product moved for our customers' needs was nothing but incredible to witness and so my compliments to them.
But the quarter -- I thought September would weaken. And we were impacted by it, but we finished the quarter stronger than we started it. Our -- when I look at the daily sales rate for September, it really, I believe, points to some very good changes and alignment and some personnel moves that we've made in the last 12 to 18 months, and I credit Jeff Watts and his team for some really smart moves. And I believe it's starting to show through in our numbers.
We continue to manage both current conditions and future growth. And the way we thought about it in the July call is we talked about in a period like this, we manage expenses very tightly, but we still build for the future. Because we don't think our shareholders want us to be focused on managing sales growth in the low single digits and the expenses around it. They want us to be thoughtful about it. But the real goal is to not be growing in the lower single digits. And I think we're doing a nice job of balancing things.
If you look at the headcount that we added, it's really about the fact that we're signing onsites, which really means we're engaging with customers, onsite is just one way of measuring that. Our IT group continues to build, and our business analytics continues to build. We're doing millions of transactions now through our FMI platform. It provides incredible data to be thoughtfully analyzed to provide insight for our customers and for our business.
The asset efficiency improvements we made in the last few years allow us to be very flexible and strategic in what we're doing. During the quarter, and Holden will touch on this a bit in his part of the talk, we added inventory into our distribution network, and we'll continue to add inventory in Q4 and Q1 into distribution to make -- to remove some sourcing activity that occurs at the branch, to improve our cost on that because sometimes that could be a lower-margin business, and to improve our efficiency of supply chain for our customer.
The real way of paying for it is we believe we're more efficient, and we believe we can lower our costs and realize that in margin, and it pays for a return on inventory. I also believe that will help us grow a little bit faster because that inventory will be more readily available. And we can say yes more often and say it easily.
Flipping to Page 4. Onsites, we signed 93 in the quarter. Active sites are up about 12% from the end of third quarter '23. Our goal remains to be in that 375 to 400, based on where we are right now, probably at the lower end of that range. And we've had that range for a number of years. We've struggled to make it, and it's not about the range. It's about the mindset of the organization that I joined back in 1996, the mantra was always about we're adding actives and we're adding dollars per active. It was really about we're adding account numbers, we're adding customers with accounts and how much of those customers spending. And we were opening 25%, 30% more branches a year.
Over time, that math started to change. And I was talking to a group of -- excuse me, district managers, so our leaders in our -- what we call our Winona-based region. And I was talking to them earlier in the week. And I shared some perspective with them that I shared with the -- with our Board back in April. And it talks to this Onsite, FMI key account acquisition strategy and what drives our growth over time. And I said to them, I said, we've added a little over $5 billion since -- in the last 16 years. In 2007, we came out and said we're going to stop opening 14% more branches a year. We're going to 7%.
Six years later, that 7% has slowly trickled down to 1% or 2%, and we actually said we're going to start consolidating some of our branches because we don't know that that's the right strategy going forward. And as we've shared in previous calls, we closed about 1,000 locations in that decade. But in that whole time frame that we were slowing the openings and eventually stopping the openings, we had, back in 2007, roughly 2,500, 2,600 customer sites that we supplied to where the customer was sourcing more than $10,000 a month from us.
Between 2007 and 2023, we added about 9,400, 9,500 sites. That's on the map, where we're doing more than $10,000 a month. That was 93% of our growth in that 16-year period. The other 7% came from customers doing between $5,000 and $10,000 a month. And all the buckets below that, we keep pulling people up into those additional groups. And that's what really drives.
Now we put it on hyperdrive in the last decade with the Onsite expansion that you see here. Because today, about 78% of our sales go to those customer sites doing more than $10,000 a month. Half that business is in an Onsite. But it's about -- we're not adding account numbers, we're adding customer sites and then what's our wallet share. One real effective way to add wallet share is a great OEM fastener program. Reason fasteners are still 30% of our sales is because two-thirds of that is an OEM fastener.
Then we have FMI Technology. We signed 7,281 weighted devices in the third quarter, that's 114 a day. I remember when we were doing two a day. And then 10 a day and 20 a day. And we always talked about, hey, could we get that -- we should build the infrastructure to do 100 a day. The Blue Team, when it comes to FMI Technology, I believe, were crushing it.
There's some challenging aspects. If we're established in a customer location and their business is off, we feel it directly because we are their supply chain partner. And so that's created some challenges for us in the current environment. But we're taking market share at a faster pace as I've ever seen in this organization. And I think the FMI Technology is a great proxy for that. And to Jeff Hicks and the team within our Solutions group, my compliments for you for supporting this great Blue Team organization.
One realignment we made during the quarter is all of our digital strategy, whether it be the e-commerce, our FMI or what we call FASTCrib, which is essentially a software program that we've created, a couple of hundred customers use it today, but a software program that we've created for managing the tool crib that customer facing. And those three pieces are under the umbrella now of our FMI digital solutions within Fastenal and Jeff Hicks, along -- a 30-plus year employee leads that charge.
Speaking of eBusiness, so e-commerce grew about 25.5%. It's a good news/bad news. Our e-procurement, where supply chain customers are using technology to tell us what they need, that continues to grow 30-some percent. Our e-commerce, which is much more web-centric, that was single digits. And those trends are part of the reason for realigning that umbrella because when we really study how customers use our web, it's a very fastener-centered proposition. And we're trying to get that -- we're really trying to get that better and better aligned to the business.
Finally, our digital footprint. 61.1% of our sales went through a digital footprint this quarter, and that was 57% a year ago. 49%, the year before that.
With that, I'll shut up and let Holden take a spin.
