Daniel L. Florness
President & Chief Executive Officer at Fastenal
Good morning, everybody, and thank you for joining us for our third quarter earnings call. We had a good quarter. We -- when I look at the performance of the team, I'm proud to be a member of the Blue Team. The 16% daily sales growth that we experienced in the quarter, we were able to translate that into 19% operating profit growth. And ultimately, we are also able to translate it into strong operating cash flow growth.
We grew our cash flow 54% from the third quarter of 2021 to third quarter of 2022. And an expansion of our ability to generate operating cash relative to our level of earnings, we haven't been able to lay claim to that for over a year-and-a-half, I believe, you have to go back to prior to 2021 where you can see that. And it was really great execution throughout the organization, and the fact that supply chains have become a bit more stable. And that doesn't mean they've become easier, it just means they've become more stable and you can rely on what you're seeing in your level of safety stock, it doesn't need to be quite as deep.
As far as customer demand, that was stable throughout the quarter. Now, September's 2.7% sequential growth versus August does lag the way we look at the historic pattern and history would say we should be up 3.4%. The real driver of that is, if you look at the storms that hit the Southeastern United States, Hurricane Ian and -- late in the quarter and essentially pushed some business out of September and into October. The storms likely reduced our sequential DSR by about 0.5%, and so you can do the math on what it would be if that's added back in, but we see it as stable demand.
And the next bullet touch on the fact that we are preparing for a softer 2023. So I thought I'd share some thoughts on what does that mean. Now, first off, I remember back in the fall of 2015, I believe that it was a Tuesday morning, don't quote me on it, but the day before we'd had our Board meeting and I learned after that Board meaning that I've been selected as the next President and CEO of Fastenal, and it was a pretty tough environment for, not just the organization, but for industrial entities in general.
And the next day, I -- during the Q&A session, I was probably a little more animated than I typically am and I commented on what I thought the state of the economy. And the next day, my wife informed me that I was on the front page of The Wall Street Journal, because I opened my mouth. So we're not in that kind of environment. We're not in something where I'm going to proclaim something, but we are preparing for a softer 2023 and a lot of that centers on two things.
One is something that has nothing to do with 2023. If you had been on the call I had an hour -- two hours ago with our leadership around the planet, I talked -- I gave them the typical October talk, and that is, we are a seasonal business. And if you look at history, history says, between September and December, our daily sales typically drop off 12%, 13%. And I'm going back to the time before COVID and even before some of the tariff period.
I'm going back to the 2017 and 2016 and 2018 numbers, and just looking at sequential patterns and that should not be a surprise to anybody listening to this that a business that operates in Northern North America, a big chunk of revenue of Northern North America, after you get past Canadian Thanksgiving and get to the U.S. Thanksgiving, get to Christmas, the business slows down. We're preparing ourselves for that.
When we're talking about 2023, it's really about a lot of the numbers we're seeing, and again, they're not numbers that are unique to our lens, I'm looking at industrial production and Holden will touch on some of that here later, but looking at industrial production and what some of the forecasters are predicting.
But the most important feedback that we focus on is what are our regional and district leaders hearing from their customers as far as their confidence going into 2023, and I have to be honest with the group, that confidence isn't strong. It's not, "Hey, the sky is falling," but the confidence is very, very cautious, and we're preparing for that type of environment. And that means that you're very thoughtful about where you invest. You're very thoughtful about not getting ahead of yourself.
Now, we've signed a lot of Onsites this year and that gives us resiliency going into next year, and I'll touch on that in a second. But what it means is, you staff for the things you know, but you don't get ahead of yourself on staff and for the things you don't know. And that's the mind-set we have going into 2023, whereas a year ago and two years ago, we were staffing for both, and it's just a bit of caution in the year.
Last week, I was traveling in Europe, my first trip outside North America since before the pandemic, you know it's -- there is something about you know human beings -- even this human being is a social creature, and there is a certain energy you get and a certain rapport you can get and a level of communication and intimacy you can get by meeting people in person. And it was a wonderful trip. I spent some time with our folks that, what we call EHUB, which is our distribution facility up in The Netherlands. And most of our European leadership were there for that discussion.
And then I travelled down to Northern Italy, primarily Lombardy area of Northern Italy, and met with our team there. And what stands out is, the last time I was -- visited this group was in fall 2017. How the group has grown, just -- it's in your [Phonetic] numbers, but grown in talent and business acumen was really impressive.
And despite all the stuff that's going on in Europe over the last three year -- actually the globe, but then more specifically Europe in the last 12 months, that business is 80% bigger than what it was in 2019, and that's telling the story in U.S. dollars. If I left it in local currency, it'd be closer to 90%. And I think back to when I was there, which was two years earlier, we haven't tripled in size, but we're pretty close to it. And so, it's really a powerful story about the marketplace around the planet has identified in Fastenal what is best [Phonetic] about Fastenal over the years, and I'm glad to say that we're replicating that with our team in Europe.
The one thing that is a positive -- despite what it looks like in the numbers, it's a positive and that is the pre-pandemic margin profile of the business has re-emerged. And back in 2016 and '17 and '18, when we were really telling the story of how we thought our growth was going to change in the future and it used to be much more onsite driven, it changes the profile of your gross margin, but it also changes the profile of your operating expenses. And we felt, over time, that was a great trade-off because ultimately it's about the level of profit and return you can generate, and this is faster way to grow and a better way to build your talent and be special in the marketplace.
We thought it was, but it was explaining how those dynamics have worked, mix-driven lower gross margin did occur in the quarter, strong expense leverage also occurred, very much in line with the story we were telling five years ago. And I'm pleased to say that after a period of time where our operating margin was kind of stuck within 20 basis points or 30 basis points of 20% for a number of years; year-to-date, we've been able to break out of that and move it up to 21% or actually slightly better. So very, very pleased with that.
And then finally, I touched on it earlier, really impressed -- I'm the former CFO, so looking at our cash flow statement for the last couple of years, it was tough for Holden, it was tough for Dan too. And I'm really pleased to say when I look at the cash flow statement that, for the first time in quite a few quarters, six, seven quarters, I can look at the year-over-year numbers and say, it's improving, our cash flow is improving. And I believe it has staying power because I look at the things we're doing to create it, the environment that's allowing us to create it and the tools we're deploying to maintain it and elevate it even more, we've never been in a better position to improve our ability to generate cash.
Flipping to Page 4 of the flip book, Onsite signings softened a little bit during the quarter, 86. So total active Onsites is 1,567, up about 15% from a year ago. Our goal for the year of 375 to 400 remains intact. Given where we are and it's in the early part of October, we expect to be in the lower end of that range.
FMI Technology, we signed 5,187 weighted devices, that's about 81 per day. A year ago, we signed 75. I'd be lying to you if I didn't say I'd like that number to be closer to 100, and at least starting with a nine, but we're getting good execution. What really stands out is the -- what's happening with that business from the standpoint of the revenue per device, how it's expanding, nicely.
Form what we've seen, the FASTBin element of it, we're putting up really impressive numbers. One of the things that I shared with our Board yesterday is, if you look at that discrete number of signings per day, couple of years ago, one of those signings was a FASTBin. Today, it's 15. And so it's rapidly expanding throughout the organization.
And really impressed with the way our teams in the field have embraced the technology and the way our customers like the technology, too. You look at eCommerce, daily sales through -- excuse me, and our goal for the year of 21,000 to 23,000 unit equivalents for FASTBin and FASTVend signings remains intact.
Finally, daily sales for eCommerce rose 50%. And eCommerce is an interesting one because, for years, I think back to, when I stepped into this role, eCommerce was about 5.5% of our sales and it has been stuck there and it was stuck in purgatory. And because it wasn't how we went to market, we're a service organization, we're not a catalog-centered organization or an ecomm company. We're a supply chain partner, and part of it was we had to admit to ourself that's what we are, and that's a beautiful thing. And then how do we play to those strengths? And so, we've really, I believe, found a way to make this part of our business. In the quarter, we hit $5 million a day going through eCommerce and it wasn't too many years ago that we were starting out in that journey. So really impressed with the team.
Then finally, our Digital Footprint. We've talked about that. It's really about widening the moat, illuminating supply chain for our customer, and making supply chain more efficient for both ourselves and our customer. I'm pleased to say that we've grown that to 49.5% of sales in the third quarter versus 43.7% a year ago. And we've talked about our plan, our goal to hit 52% of our sales running through the Digital Footprint sometime in 2022. That's still our goal.
In fact, in the month of September, we came in at 49.9%. So if you would excuse me a second, I'll just round it up and say, 50% of our business is now on the Digital Footprint and we see that continuing to grow as we move forward.
The other piece -- and this is touching back and I didn't touch on it with the eCommerce a second ago is, not just have our numbers improved, but one thing we always look at internally is our level of participation. In other words, how much is everybody doing, not just a few leaders in the organization. So, if I go back to 2018, 17% of our branches had more than 10% of their sales in eCommerce.
Two years later in 2020, that number had grown to 25% of our branches had more than 10% of their sales in eCommerce. I'm pleased to say, in the third quarter of 2022, 52% of our branch and Onsite locations -- excuse me, of our branch locations had over 10% of their revenue in eCommerce. So this 18% that we had in the third quarter isn't coming from a few, it's coming from a lot of activity throughout the organization, which means it's becoming part of our DNA and that's how we found success in vending a decade ago, how we found success in Onsite over the last five, six years, and what we're seeing in eCommerce today.
With that, I'll turn it over to Holden.