Daniel L. Florness
President and Chief Executive Officer at Fastenal
Thank you Taylor, and good morning everybody and welcome to the Q4 Fastenal earnings call. I'm going to -- go right to the flip book and on page three, we have a handful of slides here. So 2023 has seen two struggles in our organization. One, since November of 2022, so for 14 consecutive months, we've seen sub-50 PMI that when you operate very heavily in the industrial space, that's a big deal for you and what -- there's many benefits to having Holden part of organization, one is, his -- his career before joining Fastenal he has accessed -- he has forgotten things about stuff that I don't even know, and so I asked him, I said, hey how often does a period like this happen? And he said, well, back to 1970, it's happened six times that it's been sub-50 for an extended period of time, most recent being the -- the great recession in the '08/'09 timeframe, but it's a pretty tough period, and I said okay. And so it's been -- it's been pretty tough and you can look at that, but the second item, the second struggle is we've executed better. And in 2022, we've put up a good -- put up good numbers inflation helps storm the -- the rebounding economy from, COVID helps some. The fact that we're pretty good at supply-chain and we were able to find stuff and keep people supplied helped because if you can't get anywhere else, you come and get it from us.
And but -- but there was some stuff under the under the hood that we weren't executing as well as we'd like to see and we made some leadership changes earlier in the year, and I think we're poised really well as we go on 2024 but those a couple of things that -- that challenged the year. Despite all that, in the fourth quarter, we grew our daily sales 3.7%. The team did a really nice job of managing expenses. We had a few things that, you know, sometimes you get a few things that go your way, sometimes a few things that go against you. On par, things were generally favorable, and we grew our EPS 8.5% to $0.46.
If I think about our growth initiatives, kind of uneven. We continue to see nice development in our -- in our installed base of Onsite locations, maybe not as fast as we'd like. FMI devices, we did a really nice job and we continue to increase our digital footprint that we've talked about in recent years. Operating cash flow was a record, at over $1.4 billion of operating cash that we generated. And it was a 52% increase to what we did in 2022. Now on the surface that's a little bit misleading because 2022, and I'll touch on that in a second, consumed a lot of working capital, because we were ensuring a reliable supply chain for our customers.
That brings us to the final bullet on the page and we paid out a fifth dividend. Paid out $0.38 per share here in December. It's the fourth time that we've done a supplemental dividend like that since going public back in the late 1980s. The first time was in December of 2008, the world was in free fall, we had cash available. We looked at that cash as being this is owned by our shareholders, we don't know what needs they have for liquidity. We do know we won't need this in 2009, if the economy is doing what it does, because our business is countercyclical. And we knew we'd throw off a lot of cash. And we -- and so we paid out a sizable dividend in December of 2008.
December of 2012, there was a lot of uncertainty in United States, the federal government was having a fight amongst itself about what tax rates to be on dividends. We didn't know if tax rates were going to go up in 2013 and figured, we're sitting on a bunch of cash, let's pay out to our shareholders and we don't need it. We generate a lot of cash in the future, we'll pay it out and let the folks in Washington DC figure things out. It's nice to know that in today's Washington DC, things are much more calmer. Sorry, for sarcasm, I'm Midwestern.
December of 2020, we pay -- the world was in COVID. We had more cash than we needed and we paid out a supplemental dividend. This one is different than the other three. We invested a tremendous amount of cash into inventory in 2021 and 2022, an incredible amount because supply chains became erratic. You can't count -- it was not a reliable timeframe of getting containers through ports and getting product and we're not a sorry company, we don't say to our customer, sorry, couldn't get it. We're a supply chain company. And if we feel that it's going to take an extra 40 or 45 days to get a container, we'll add 50 days of inventory, 60 [Phonetic] days of inventories so we consumed a tremendous amount of cash. Fortunately, things have become more stable and we harvested that cash in 2023. And we will generate ample cash, as we move into '24 and beyond. We didn't need it, we send it to our shareholders. We feel we have a really conservative balance sheet and we have plenty of gunpowder for anything that we need to do as we move into 2024.
Flipping to page four. 58 signings in the fourth quarter of '23, not a particularly impressive number. Perhaps the environment came a little bit tougher, late in the year. Presently Onsites, it's not the strongest of the year for many of our customers. Perhaps we had some district managers that are looking at their expectations for 2024 and maybe some Onsite signings split into 2024. We're up 12.3%, we finished the year with 1822 locations. Our older Onsites had a pretty tough a year. That speaks more I believe to the PMI index and everything else. And -- but we still anticipate 370 to 400 signings next year. We think -- we think we're poised to do that. We think the energy is behind it and we think the team is really focused on it and that speaks back to some of our execution issues I mentioned on the prior page.
FMI Technology, we had a good year with FMI. Did a nice job of signing. If I look at just below the bullet, where we stay we signed 24,126 MEUs. You divide that by 253 days, that's 95 per day over the span of the year. One thing we've talked about a number of years ago was building our infrastructure to support signing 100 devices a day. And that was a long way away from what we were doing at the time, but that was kind of number we had in our head and I'm pleased to say that the team has essentially gotten there and came in at 95 per day for the year. Our intention for next year is to sign and 26,000 to 28,000, it's a big number. I believe the team is up to it.
E-commerce, continues to grow well. A lot of that, obviously, we're not -- we're not grown 28%, so lot of that is customers are changing how they engage with us. And we're not unique to that and so I believe e-commerce as a percentage of our business is about 25% of sales now. If I go back not too many years ago, it was 5% of sales. So it continues to grow.
And then finally, our Digital Footprint, that's where we engage electronically with our customer. It might be we deploy FMI. So a vending device, a bin with technology embedded, a mobility scanned bin, whatever it might be, but we engage with our customer and then we added the e-commerce on top of that, removed the double coning. And in January of 2020, that was 36% of sales. A year later, it was 38%. A year later, it was 46%. A year later, it was 53%, and now we ended this year at 58%, 59% type of neighborhood.
Flipping to page five, this is the last time you're going to see this chart. We started it a number of years ago, you know back in -- so we have about 3,419 in-market locations. It's up 3.5% from where we were a year ago. Back in 2015, about 9% of our in-market locations were what we call an Onsite. Now an Onsite might be we're physically inside the customer's facility, we are operating in a facility down the street from the customer that's dedicated to that customer. We might be operating a facility that's in the back of a branch because the customer doesn't have enough room for us to put everything in there, and we only put some stuff in there and we backfill -- our backroom is the back of the branch, but it's where we engage in a discrete business with the customer and it ramps up our ability to grow. As we really look at this as being not just something that had happened once or twice back in the '90s. And the first one was, frankly, we couldn't find a building to rent in town and the customer said, I have some room, and we moved in. So it was more born out of necessity. But as we realized this was really a business model that could help us grow, it prompted us to revisit our branch network.
And so we peaked out in 2013, at that point in time, we estimated we were within a 30-minute drive of 95% of the manufacturing base in the United States with our 2,600-or-so stores or branches, and that included our US and Canadian network. But we looked at it and said, if we pulled that back a bit because some of the business that would be in a branch is going to be an Onsite over time, what would it look like. And we settled on a number of about 1,450. At 1,450 locations, that 95% access to the manufacturing base drops to about 93.5%. And we know if there's customers that are outside that 30-minute window and they're Onsite customers, the fact that our branch is 45 [Phonetic] minutes away doesn't matter. So we saw this as the right density. And I'll use some -- I'm always -- one beauty about being an organic grower of the year is all of our systems are in one system. You have access to a tremendous amount of information. And I did look at our oldest four states in the company. And if I go back to 2007, in Minnesota, Iowa, Wisconsin, and Illinois, we did just under $400 million in revenues, about 19% of our sales. We had 236 branch locations in those four states. We had 20 Onsites. In the next decade, that business -- those four states, we grew -- our CAGR was about 5.7% a year. And as you can appreciate, it's a nicely profitable business. It's above the company average by a few hundred basis points and about 18% of our revenue was Onsite.
Since 2017, we've closed -- since 2013, we closed a bunch of locations, but we opened a bunch of Onsites. In fact, we've gone from 200 -- we peaked out at 263 branches. Currently, we have 191 so we're down about 30% from our peak. Our Onsite count stays over -- is 221, so we have more Onsites than we have branches. In the last -- since 2017, that area has a CAGR of not 5.7%, it has a CAGR of 8.2%. So we took an old, mature, profitable part of the Fastenal business and grew it faster. Today, it's about a $1.1 billion business. It's about 15% of our sales and about 46% of our sales run through an Onsite. Sorry for taking us down memory lane there, but I thought I'd give a little insight on why we're excited about the rationalization of the branch network and the Onsite and the potential to expand our ability to grow.
With that, I'll turn it over to Holden.
