The company signed 358 new Onsite locations, below the target of 375 to 400, but still representing growth compared to 326 signings in the previous year. The installed base of Onsites increased by 11.5% YoY to 2,031 locations.

FMI signings increased significantly to 27,984 MEUs, exceeding the initial goal of 26,000 to 28,000 MEUs. However, weaker business activity resulted in lower volume through FMI devices.

The company expanded the proportion of sales running through its Digital Footprint to 60.4%, below the initial goal of 66.0%. This expansion reflects increasing adoption of digital resources, but was impacted by lower volume through FMI devices due to weaker business activity.

SG&A expenses increased to 25.1% of net sales from 24.9% in the prior year, reflecting increased investments in areas such as Onsite, technology, and analytics personnel. This indicates a challenge in leveraging sales growth into higher net income.

The company actively manages its supply chain and inventory levels, with inventory at selling locations accounting for 59% of total inventory. The company is focused on optimizing inventory to support customer needs and improve service.

The company emphasizes improving customer service, reducing costs, lowering risks, and increasing the scalability of customer supply chains. This value proposition is focused on improving operating effectiveness and reducing the total cost of ownership.

The company acknowledges the risk of material liability for property damage, environmental damage, personal injury, or death linked to the use of its products by customers, particularly in challenging industries.

The company recognizes the risk of cybersecurity incidents and data privacy violations, which could interrupt operations, subject the company to additional costs, and damage its reputation.

The company acknowledges the risk that changes in trade policies could affect sourcing operations, ability to secure sufficient product, and the cost or price of products, with potentially adverse impacts on gross and operating profit percentages.

The company operates in a highly competitive industry with large national distributors and smaller regional/local distributors. The principal competitive factors are customer service, price, convenience, product availability, and cost-saving solutions.

The company believes its FMI solutions, supported by an in-market location, provide a unique way to serve customers with convenient access to products and cost-saving solutions using a business model not easily replicated by competitors.

The Onsite service model provides value to customers through customized service while giving the company a competitive advantage through stronger relationships, all with a relatively low incremental investment given the existing branch and distribution structure.

The company operates 15 regional distribution centers in North America, allowing deliveries of two to five times per week to in-market locations. Automated storage and retrieval systems (ASRS) are utilized in 11 distribution centers, handling approximately 94% of picking activity.

The company utilizes LIFTs to support areas with a dense population of FMI devices, improving inventory and accuracy benefits. Approximately 10% of FMI sales were supported through a LIFT in 2024, with a target of 40% over time.

The company utilizes multiple modes of transportation, including its own fleet of trucks, to move product from global manufacturing and supplier partners to distribution centers and in-market locations.

The company invests in digital solutions that aim to deliver strategic value for customers, leverage local inventory for same-day solutions, and provide efficient service. These solutions include eBusiness, data analytics (FAST360°), and digital visibility applications.

The company has invested in and developed various technologies that allow putting physical product closer to the point of use, increase the visibility of a customer's supply chain, and improve the ability to monitor or control usage. These tools comprise the FMI Technology suite.

FASTBin is the evolution of FASTStock into a set of electronic inventory management solutions that automate process controls by providing 24/7 continuous inventory monitoring, real-time inventory visibility, and automatic replenishment of bin stock parts.

The company's capital expenditures are primarily focused on expanding and automating its distribution network, including investments in ASRS systems and FMI hardware.

The company returns cash to shareholders primarily through dividends. In 2024, the aggregate annual dividends per share were $1.56.

The company did not repurchase any shares of its common stock in 2024. As of December 31, 2024, the company had remaining authority to repurchase 6,200,000 shares.

The company is committed to building supply chain relationships with small businesses and businesses with diverse ownership. In 2024, approximately 26% of the company-wide inventory spend was with small and/or diverse businesses.

The company emphasizes employee health and safety, with programs spanning all operations. In 2024, there were over 247,000 completed health and safety engagements, a 16% increase compared to 2023.

The company has an EMR of 0.46, which is 54% better than the average performance rate for the industry, reflecting the organization's ability to implement superior safety procedures and protocols.

The Institute for Supply Management's Purchasing Manager's Index (PMI) for the U.S. averaged 48.3 for the full year and remained below 50 in 11 out of 12 months, indicating economic contraction.

Changes in trade policies could affect the company's sourcing operations, ability to secure sufficient product, and the cost or price of products, with potentially adverse impacts on gross and operating profit percentages.

The industrial, construction, and maintenance supply industry is consolidating, which could make it more difficult to differentiate the company's product and service offering from that of competitors.