Ken Newman

Matt said supply-demand dynamics support continued positive fleet productivity and rate, especially to offset inflation.

Matt confirmed prices locked for the year with flex-up ability contractually. Very disciplined about sticking to original deal on surcharges. Vendors' ability to flex capacity is an important part of supplier relationships.

Matt said pipeline hasn't changed over past couple of years ex-COVID. Challenge is finding willing partners at acceptable returns. Leaning toward specialty and new products but will do gen rent tuck-ins. Plenty of dry powder.

Ted explained shortfall was concentrated in Q4. Certain regions ran too busy with high-time assets (aerials, telehandlers) to pull them for sale. Full year OEC sold was $2.73B vs $2.8B guide.

Matt said cost benefits will build through the year. Repositioning mitigation works best in peak activity quarters (Q2/Q3). Some noise expected in Q1 before benefits materialize.

Matt acknowledged some equipment categories are running hand-to-mouth. Better customer communication on fleet needs could reduce emergency repositioning. Will embed learnings in 2026 guidance.

Ted confirmed core profitability performing as expected. Underlying business on track. Margin variability driven by customer responsiveness, not operational deterioration.

Matt said local accounts improved seasonally Q1 to Q2 but stabilized on YoY basis, not growing in aggregate. Stability of macro matters as much as rate cuts for local investment.

Ted noted renewables is a small fraction of power; core opportunity is conventional generation, transmission, distribution. No great insight on potential solar pull-forward.

Matt noted local accounts are smaller share so variability has limited impact. Ground-up field forecasting gives confidence in guidance ranges. National account alignment buffers downturns.

Matt said URI hasn't experienced significant lumber cost impact in their specific wood types. Comfortable Yac can maintain margins.

Matt confirmed 2025 gen rent growth profile expected similar to 2024. Ted added no appreciable shift in mix expected, 2025 likely to look similar to 2024.

Matt declined to break out rate/time/mix or customer segments, noting they put all components together in fleet productivity. Said national account leveraging is not as differentiated as outsiders think.

Dee estimated ~20 basis point annualized operating margin improvement from U.K. exit.

Dee attributed most of midsize acceleration to softer prior-year comps. DG added they see opportunity but not a huge inflection yet.

DG acknowledged inflation will weigh on market demand in back half; but Grainger not uniquely exposed, confident in price realization.

Dee confirmed EA back half moderation is mainly a comping dynamic from Zoro's stronger back half 2024.

Dee quantified hurricane benefit at 80bps and holiday timing at 50bps; normalizing takes Q4 daily growth from 4.7% to ~4.5%.

Burns confirmed no pull-forward. Q1 upside was broad-based across regions, verticals, and segments. Momentum continues into Q2. Unconstrained demand pushes toward high end of guidance. Winters added the Q1 upside was driven by asset visibility strength in manufacturing, which did not have price increases. Pricing benefit of 1pt offset by lower volume assumptions from memory constraints.

Winters said Elo's supply chain is similar to Zebra's with one key difference: an owned world-class manufacturing facility in China for touchscreens and monitors. Elo uses contract manufacturers in Southeast Asia for final assembly. Has tariff mitigation plan in place via pricing and production moves.

Winters quantified Q2 pricing at under $10M, below expectations. Higher list prices on mobile computing maintained but managed through concessions. Goal remains full tariff mitigation at some point in 2026. Waiting for more stability on rates, electronics exemptions, and semiconductor tariffs before next moves.

Winters attributed the beat to front-loading purchases ahead of effective dates and some inventory capitalization timing. Very little pricing benefit in Q1.

Winters said impact is fairly balanced with slightly heavier weighting to AIT since print faces full tariff rates while mobile computing benefits from electronics exemptions.

Ram said the bulk of the $12.4B funnel is greenfield; brownfield modernization is tracked separately and carries better pricing.

Karsanbhai clarified that sales accelerate in second half (not softer), from ~2% first half to ~4% full year, supported by order ramp.

Max noted November-to-December sequential decline was 9.3% vs 8.7% last year. Dan provided detailed vending analysis: Christmas week was slightly better than last year but New Year's week saw customer shutdowns double from ~10% to ~20%. First two weeks of January showed complete normalization back to low single-digit shutdowns.

Dan struggled to quantify the price-volume trade-off. Philosophically emphasized that Fastenal prioritizes growth and will take on new business even with short-term margin challenges. Max added that no aggressive pricing actions are needed right now.