Buried deep within its first-quarter 2003 financial statement were a few paragraphs outlining a major growth initiative underway at Fastenal Co., Winona, Minn.

The company had a strong first quarter, with sales rising 9.9 percent to $235.8 million and gross margins of 49.5 percent, compared to first-quarter 2002.

But the real story is in the company's 2003 expansion plans. During the first quarter of 2003, Fastenal opened 36 new sites, bringing its total number of sites to 1,205. Fastenal expects to open an astounding 150 to 185 new stores in 2003, after opening 144 new stores in 2002, and 128 new branches in 2001.

A company press release said while the new stores continue to build the infrastructure for future growth, first-year sales are low, and the added expenses related to payroll, occupancy, and transportation costs impact the company's ability to leverage earnings in a weakened industrial economy. New Fastenal stores take approximately 10 to 12 months to achieve profitability.

In addition to the planned store expansion, Fastenal expanded the product selection stocked at each store site and strived to develop a more consistent display theme at its branches.

Fastenal stocks approximately 356,000 stock-keeping units (SKUs) in industrial and construction supplies. While threaded fasteners and related supplies account for 169,000 SKUs, the company also stocks 10,000 SKUs in electrical supplies and 67,000 SKUs in tools. The rest of the company's stock is in metal-cutting tool blades, fluid transfer components and accessories for hydraulic and pneumatic power, material handling and storage products, janitorial and paper products, welding supplies and safety supplies. As of Dec. 31, 2002, Fastenal had 1,169 store sites located in 50 states, Puerto Rico, Canada, Mexico and Singapore.