Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended MAY 1, 2004
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ____________ to ____________
Commission File Number: 000-20132
THE BUCKLE, INC.
(Exact name of Registrant as specified in its charter)
NEBRASKA 47-0366193
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2407 WEST 24TH STREET, KEARNEY, NEBRASKA 68845-4915
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (308) 236-8491
- -----------------------------------------------------------
(Former name, former address and former fiscal year if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |
The number of shares issued of the Registrant's Common Stock, outstanding as of
June 1, 2004 was 21,593,699 shares of Common Stock.
THE BUCKLE, INC.
FORM 10-Q
INDEX
Pages
Part I. Financial Information (unaudited)
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 13
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
THE BUCKLE, INC.
BALANCE SHEETS
(Columnar amounts in thousands)
(Unaudited)
ASSETS May 1, January 31,
CURRENT ASSETS 2004 2004
--------- -----------
Cash and cash equivalents $ 116,903 $ 119,976
Investments 19,143 23,346
Accounts receivable, net of
allowance of $82,000 and $181,000, respectively 2,411 3,585
Inventory 72,758 61,156
Prepaid expenses and other assets 9,876 9,563
--------- ---------
Total current assets 221,091 217,626
PROPERTY AND EQUIPMENT 143,520 139,434
Less accumulated depreciation and amortization 75,441 73,134
--------- ---------
68,079 66,300
LONG-TERM INVESTMENTS 52,200 52,647
OTHER ASSETS 1,115 1,307
--------- ---------
$ 342,485 $ 337,880
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 19,053 $ 14,207
Accrued employee compensation 4,872 12,171
Accrued store operating expenses 5,609 5,127
Gift certificates redeemable 2,186 3,102
Income taxes payable 4,237 2,760
--------- ---------
Total current liabilities 35,957 37,367
DEFERRED COMPENSATION 1,505 1,467
DEFERRED TAX LIABILITY 1,490 1,490
--------- ---------
Total liabilities 38,952 40,324
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock, authorized 100,000,000 shares
of $.01 par value; issued 21,583,859 and
21,484,316 shares, respectively 216 215
Additional paid-in capital 25,773 24,245
Retained earnings 279,599 275,836
Unearned compensation-- restricted stock (2,055) (2,740)
--------- ---------
Total stockholders' equity 303,533 297,556
--------- ---------
$ 342,485 $ 337,880
========= =========
See notes to financial statements.
3
THE BUCKLE, INC.
STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Thirteen Weeks Ended
--------------------
May 1, 2004 May 3, 2003
----------- -----------
SALES, net of returns and allowances $94,774 $81,713
COST OF SALES (including buying,
distribution and occupancy costs) 64,062 58,844
------- -------
Gross profit 30,712 22,869
OPERATING EXPENSES
Selling 18,334 16,531
General and administrative 3,897 2,753
------- -------
22,231 19,284
------- -------
Income from operations 8,481 3,585
OTHER INCOME, Net 918 1,140
------- -------
Income before income taxes 9,399 4,725
PROVISION FOR INCOME TAXES 3,478 1,734
------- -------
NET INCOME $ 5,921 $ 2,991
======= =======
Per share amounts:
Basic income per share $ 0.28 $ 0.14
Diluted income per share $ 0.27 $ 0.14
Basic weighted average shares 21,370 21,048
Diluted weighted average shares 22,175 21,594
See notes to financial statements.
4
THE BUCKLE, INC.
STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Thirteen Weeks Ended
--------------------
May 1, 2004 May 3, 2003
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,921 $ 2,991
Adjustments to reconcile net income to net cash
flows from operating activities
Depreciation 3,106 3,022
Loss on disposal of assets 96 220
Amortization of unearned compensation-restricted stock 685 --
Changes in operating assets and liabilities
Accounts receivable 1,174 (402)
Inventory (11,602) (1,738)
Prepaid expenses and other assets (313) (54)
Accounts payable 4,846 1,872
Accrued employee compensation (7,299) (7,125)
Accrued store operating expenses 482 70
Gift certificates redeemable (916) (684)
Income taxes payable 1,477 723
Deferred compensation 38 156
--------- ---------
Net cash flows from operating activities (2,305) (949)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (4,981) (3,775)
Change in other assets 192 (1,117)
Purchase of investments (3,527) (6,943)
Proceeds from sales and maturities of investments 8,177 2,216
--------- ---------
Net cash flows from investing activities (139) (9,619)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the exercise of stock options 1,529 133
Purchases of common stock -- (460)
Dividends paid to shareholders (2,158) --
--------- ---------
Net cash flows from financing activities (629) (327)
--------- ---------
Net decrease in cash and cash equivalents (3,073) (10,895)
Cash and cash equivalents, Beginning of period 119,976 92,976
--------- ---------
Cash and cash equivalents, End of period $ 116,903 $ 82,081
========= =========
See notes to financial statements
5
THE BUCKLE, INC.
NOTES TO FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED MAY 1, 2004 AND MAY 3, 2003
(Unaudited)
1. Management Representation - The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information.
Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States
of America for complete financial statements. In the opinion of management,
all adjustments necessary for a fair presentation of the results of
operations for the interim periods have been included. All such adjustments
are of a normal recurring nature. Because of the seasonal nature of the
business, results for interim periods are not necessarily indicative of a
full year's operations. The accounting policies followed by the Company and
additional footnotes are reflected in the financial statements for the
fiscal year ended January 31, 2004, included in The Buckle, Inc.'s 2003
Annual Report.
2. Description of the Business - The Company is a retailer of medium to better
priced casual apparel and footwear for fashion conscious young men and
women. The Company operates their business as one reportable industry
segment. The Company had 321 stores located in 38 states throughout the
central, northwestern and southern regions of the United States as of May
1, 2004, and 310 stores in 37 states as of May 3, 2003. During the first
quarter of fiscal 2004, the Company opened five new stores and
substantially renovated four stores. During the first quarter of fiscal
2003, the Company opened six new stores and substantially renovated three
stores.
The following is information regarding the Company's major product
lines, stated as a percentage of the Company's net sales:
Percentage of Net Sales
Thirteen Weeks Ended
--------------------
Merchandise Group May 1, 2004 May 3, 2003
----------- -----------
Denims 35.9% 32.6%
Tops (including sweaters) 30.8% 32.1%
Accessories 11.0% 9.1%
Footwear 9.1% 11.7%
Sportswear/Fashion clothes 9.5% 10.7%
Casual Bottoms 3.1% 3.0%
Outerwear 0.5% 0.7%
Other 0.1% 0.1%
----- -----
100.0% 100.0%
===== =====
3. Stock-Based Compensation-- The Company has several stock-based employee
compensation plans, which are described more fully in the footnotes
included in the Company's 2003 Annual Report. As of May 1, 2004, 108,581
shares were available for grant under the various plans, of which 14,150
were available to executive officers. The Company accounts for those plans
under the recognition and measurement principles of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations. No
stock-based compensation is reflected in net income, as all options granted
under these plans had an exercise price equal to the market value of the
common stock on the date of grant. The following table illustrates the
effect on net income and earnings per share if the Company had applied the
fair value recognition provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation.
6
THE BUCKLE, INC.
NOTES TO FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED MAY 1, 2004 AND MAY 3, 2003
(Unaudited)
Thirteen Weeks Ended
May 1, 2004 May 3, 2003
----------- -----------
Net income, as reported $ 5,921 $ 2,991
Add: Stock-based employee compensation
expense included in reported net
income, net of related tax effects 685 --
Deduct: Total stock-based employee
compensation expense determined
under fair value based method
for all awards, net of related tax effects (1,386) (1,052)
------- ---------
Pro forma net income $ 5,220 $ 1,939
======= =========
Earnings per share:
Basic - as reported $ .28 $ .14
======= =========
Basic - pro forma $ .24 $ .09
======= =========
Diluted - as reported $ .27 $ .14
======= =========
Diluted - pro forma $ .24 $ .09
======= =========
4. Net Income Per Share -- Basic earnings per share data are based on the
weighted average outstanding common shares during the period. Diluted
earnings per share data are based on the weighted average outstanding
common shares and the effect of all dilutive potential common shares,
including stock options. Options to purchase 84,090 and 2,041,060 shares of
common stock in the first quarter of fiscal 2004 and 2003, respectively,
are not included in the computation of diluted earnings per share because
they would have been anti-dilutive.
Thirteen Weeks Ended Thirteen Weeks Ended
May 1, 2004 May 3, 2003
---------------------------------- ----------------------------------
Per Per
Share Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
Basic EPS
Net Income $5,921 21,370 $0.28 $2,991 21,048 $0.14
Effect of Dilutive Securities
Stock Options -- 805 .01 -- 546 --
------ ------ ----- ------ ------ -----
Diluted EPS $5,921 22,175 $0.27 $2,991 21,594 $0.14
====== ====== ===== ====== ====== =====
7
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Financial
Statements and notes thereto of the Company included in this Form 10-Q. The
following is management's discussion and analysis of certain significant factors
which have affected the Company's financial condition and results of operations
during the periods included in the accompanying financial statements.
EXECUTIVE OVERVIEW
Company management considers the following items to be key performance
indicators in evaluating Company performance.
Comparable Store Sales -- Stores are deemed to be comparable stores if there
were open in the prior year on the first day of the fiscal period being
measured. Management considers comparable store sales to be an important
indicator of current company performance, helping provide positive operating
leverage for certain fixed costs when results are positive. Negative comparable
store sales results could have a negative impact on operating leverage.
Net Merchandise Margins -- Management evaluates the components of merchandise
margin including initial markup and the amount of markdowns during a period. Any
inability to obtain acceptable levels of initial markups or any significant
increase in the Company's use of markdowns, could have an adverse effect on the
Company's gross margin and results of operations.
Operating Margin -- Operating margin is a good indicator for Management of the
Company's success. Operating margin can be positively or negatively affected by
comparable store sales, merchandise margins, occupancy costs and the Company's
ability to control operating costs.
Cash Flow and Liquidity (working capital) - Management reviews current cash and
short-term investments along with cash flow from operating, investing and
financing activities to determine the Company's short-term cash needs for
operations and expansion. The Company believes that existing cash and cash flow
from operations will be sufficient to fund current and long-term anticipated
capital expenditures and working capital requirements for the next several
years.
8
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The table below sets forth the percentage relationships of sales and various
expense categories in the Statements of Income for the thirteen-week periods
ended May 1, 2004, and May 3, 2003:
Percentage of Net Sales
-----------------------
Thirteen weeks ended Percentage
May 1, May 3, increase
2004 2003 (decrease)
---- ---- ----------
Net sales 100.0% 100.0% 16.0%
Cost of sales (including
buying, distribution and
occupancy costs) 67.6% 72.0% 8.9%
----- ----- -----
Gross profit 32.4% 28.0% 34.3%
Selling expenses 19.4% 20.2% 10.9%
General and
administrative expenses 4.1% 3.4% 41.6%
----- ----- -----
Income from operations 8.9% 4.4% 136.6%
Other income, net 1.0% 1.4% (19.5)%
----- ----- -----
Income before income taxes 9.9% 5.8% 98.9%
Provision for income taxes 3.7% 2.1% 100.6%
----- ----- -----
Net income 6.2% 3.7% 98.0%
===== ===== =====
Net sales increased from $81.7 million in the first quarter of fiscal 2003 to
$94.8 million in the first quarter of fiscal 2004, a 16.0% increase. Comparable
store sales increased from the first quarter of fiscal 2003 to the first quarter
of fiscal 2004 by $9.3 million or 11.6%. Sales growth of 4.4% for this thirteen
week period was attributable to the inclusion of a full three months of
operating results for the 16 stores opened in 2003 and the opening of five new
stores in the first thirteen weeks of fiscal 2004. Average sales per square foot
increased 10.3% from $53.93 to $59.47.
Gross profit after buying, occupancy, and distribution expenses increased $7.8
million in the first quarter of fiscal 2004 to $30.7 million, a 34.3% increase.
As a percentage of net sales, gross profit increased from 28.0% in the first
quarter of fiscal 2003 to 32.4% in the first quarter of fiscal 2004. This
increase was attributable primarily to an improvement in the actual merchandise
margins and lower occupancy costs as a percentage of net sales.
Selling expenses increased from $16.5 million for the first quarter of fiscal
2003 to $18.3 million for the first quarter of fiscal 2004, a 10.9% increase.
Selling expenses as a percentage of net sales for the first quarter of fiscal
2004 decreased to 19.4% compared to 20.2% for the first quarter of fiscal 2003.
The decrease was primarily attributable to lower sales salaries and partially
due to an improvement in leverage provided by comparable store sales.
9
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General and administrative expenses increased from $2.8 million in the first
quarter of fiscal 2003 to $3.9 million in the first quarter of fiscal 2004, a
41.6% increase. As a percentage of net sales, general and administrative
expenses for the first quarter of fiscal 2004 increased from 3.4% in fiscal 2003
to 4.1% in fiscal 2004. The increase in general and administrative expense, as a
percentage of net sales, resulted primarily from higher bonus accruals for
incentives based upon net income.
As a result of the above changes, the Company's income from operations increased
to $8.5 million for the first quarter of fiscal 2004 compared to $3.6 million
for the first quarter of fiscal 2003, a 136.6% increase. Income from operations
was 8.9% of net sales in the first quarter of fiscal 2004 compared to 4.4% in
the first quarter of fiscal 2003.
For the quarter ended May 1, 2004, other income decreased 19.5% from the first
quarter of fiscal 2003. Other income decreased in the first quarter of fiscal
2004 due to a reduction in interest income as rates continued to be lower than
the prior year.
Income tax expense as a percentage of pre-tax income was 37.0% in the first
quarter of fiscal 2004 compared to 36.7% in the first quarter of fiscal 2003.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary ongoing cash requirements are for inventory, payroll,
store expansion and remodeling. Historically, the Company's primary source of
working capital has been cash flow from operations. The first quarter of each
fiscal year is typically a period of decreasing cash flows created by various
operating, investing and financing activities. During the first quarter of
fiscal 2004, the Company's operating activities used $2.3 million in net cash
flow compared to the first quarter of fiscal 2003, when the Company's operating
activities used $0.9 million in net cash flow.
The uses of cash for both thirteen week periods include payment of annual
bonuses accrued at fiscal year end, changes in inventory and accounts payable
for build up of inventory levels, and construction costs for new and remodeled
stores. The differences in cash flow for the first three months of fiscal 2004
compared to the first three months of fiscal 2003 were primarily due to a
greater build-up of inventory, greater maturities in investments, and a
quarterly dividend payment to shareholders which began in the third quarter of
fiscal 2003.
The Company has available an unsecured line of credit of $17.5 million with
Wells Fargo Bank, N.A. for operating needs and letters of credit. The note
provides that outstanding letters of credit cannot exceed $10 million.
Borrowings under the line of credit note provides for interest to be paid at a
rate equal to the prime rate established by the Bank. As of May 1, 2004, the
Company had working capital of $185.1 million, including $116.9 million of cash
and cash equivalents, and short-term investments of $19.1 million. The Company
has, from time to time, borrowed against these lines during periods of peak
inventory build-up. There were no bank borrowings during the first quarter of
fiscal 2004 or 2003.
During the first quarter of fiscal 2004 and 2003, the Company invested $5.0
million and $3.4 million, respectively, in new store construction, store
renovation and upgrading store technology, net of any construction allowances
received from landlords. The Company also spent approximately $.4 million in the
first quarter of fiscal 2003 in capital expenditures for the corporate
headquarters.
10
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the remainder of fiscal 2004, the Company anticipates completing
approximately eleven additional store construction projects, including
approximately seven new stores and approximately four stores to be remodeled
and/or relocated. As of May 1, 2004, six additional lease contracts have been
signed, and additional leases are in various stages of negotiation. Management
now estimates that total capital expenditures during fiscal 2004 will be
approximately $25.1 million before any landlord allowances estimated to be $3.1
million.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of
Operations are based upon The Buckle, Inc.'s financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
that management make estimates and judgments that affect the reported amounts of
assets and liabilities, and disclosure of contingent assets and liabilities, at
the financial statement date, and the reported amounts of sales and expenses
during the reporting period. The Company regularly evaluates its estimates,
including those related to merchandise returns, inventory, health care costs and
income taxes. Management bases its estimates on past experience and on various
other factors that are thought to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. The Company's certain critical accounting policies are listed below.
1. Revenue Recognition. Sales are recorded upon the purchase of merchandise by
customers. Revenue is not recorded when gift cards and gift certificates
are sold, but rather when a card is redeemed for merchandise. A current
liability is recorded at the time of card purchases. The Company
establishes a liability for estimated merchandise returns based upon
historical sales return results. Customer returns could potentially exceed
those reserved for, reducing future net sales results.
2. Inventory. Inventory is valued at the lower of cost or market. Cost is
determined using the average cost method that approximates the first-in,
first-out (FIFO) method. Management makes adjustments to inventory and cost
of goods sold based upon estimates to reserve for merchandise obsolescence
and markdowns that could affect market value, based on assumptions
regarding current inventory levels versus future demand and market
conditions. Such judgments could vary significantly from actual results,
either favorably or unfavorably, due to fluctuations in future economic
conditions, consumer demand and the competitive environment. We are not
aware of any events, conditions or changes in demand or price that would
indicate to us that our inventory valuation may be materially inaccurate at
this time.
3. Health Care Costs. The Company is self-funded for health and dental claims
up to $80,000 per individual per plan year. This plan covers eligible
employees and management makes estimates at period end to record a reserve
for future claims. The number and amount of claims submitted could vary
from the amounts reserved, effecting current and future net earnings
results.
4. Income Taxes. Current income tax expense is the amount of income taxes
expected to be payable for the current fiscal year. The Company records a
deferred tax asset and liability for expected future tax consequences
resulting from temporary differences between financial reporting and tax
bases of assets and liabilities. The Company considers future taxable
income and ongoing tax planning in assessing the value of its deferred tax
assets. If the Company determines that it is more than likely that these
assets will not be realized, the Company would reduce the value of these
assets to their expected realizable value, thereby decreasing net income.
Estimating the value of these assets is based upon the Company's judgment.
If the Company subsequently determined that the deferred
11
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
tax assets, which had been written down, would be realized in the future, such
value would be increased. Adjustment would be made to increase net income in the
period such determination was made.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
As referenced in the tables below, the Company has contractual obligations and
commercial commitments that may affect the financial condition of the Company.
Based on management's review of the terms and conditions of its contractual
obligations and commercial commitments, there is no known trend, demand,
commitment, event or uncertainty that is reasonably likely to occur which would
have a material effect on the Company's financial condition or results of
operations. In addition, the commercial obligations and commitments made by the
Company are customary transactions which are similar to those of other
comparable retail companies.
The following tables identify the material obligations and commitments as of May
1, 2004:
Payments Due by Period
-----------------------------------------------------------------------
Contractual obligations Total Less than 1-3 years 4-5 years After 5
(dollar amounts in 1 year years
thousands)
----- --------- --------- --------- --------
Long term debt and purchase $ - $ - $ - $ - $ -
obligations
Deferred Compensation $ 1,505 $ 1,505 $ - $ - $ -
Operating leases $195,376 $ 30,974 $ 55,167 $ 48,393 $ 60,842
Total contractual $196,881 $ 32,479 $ 55,167 $ 48,393 $ 60,842
obligations
Amount of Commitment Expiration Per Period
--------------------------------------------------------
Other Commercial Total Amounts Less than 1-3 years 4-5 years After 5
Commitments (dollar amounts Committed 1 year years
in thousands)
------------- --------- --------- --------- --------
Lines of Credit $17,500 $17,500 $ - $ - $ -
Total Commercial Commitments $17,500 $17,500 $ - $ - $ -
SEASONALITY AND INFLATION
The Company's business is seasonal, with the Christmas season (from
approximately November 15 to December 30) and the back-to-school season (from
approximately July 15 to September 1)
12
historically contributing the greatest volume of net sales. For fiscal years
2001, 2002, and 2003, the Christmas and back-to-school seasons accounted for
approximately 40% of the Company's
13
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
fiscal year net sales. Although the operations of the Company are influenced by
general economic conditions, the Company does not believe that inflation has had
a material effect on the results of operations during the thirteen-week periods
ended May 1, 2004, and May 3, 2003.
FORWARD LOOKING STATEMENTS
Information in this report, other than historical information, may be considered
to be forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "1995 Act"). Such statements are made in good
faith by the Company pursuant to the safe-harbor provisions of the 1995 Act. In
connection with these safe-harbor provisions, this management's discussion and
analysis contains certain forward-looking statements, which reflect management's
current views and estimates of future economic conditions, company performance
and financial results. The statements are based on many assumptions and factors
that could cause future results to differ materially. Such factors include, but
are not limited to, changes in product mix, changes in fashion trends,
competitive factors and general economic conditions, economic conditions in the
retail apparel industry, as well as other risks and uncertainties inherent in
the Company's business and the retail industry in general. Any changes in these
factors could result in significantly different results for the Company. The
Company further cautions that the forward-looking information contained herein
is not exhaustive or exclusive. The Company does not undertake to update any
forward-looking statements, which may be made from time to time by or on behalf
of the Company.
ITEM 3 -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has evaluated the disclosure requirements of Item 305 of S-K
"Quantitative and Qualitative Disclosures about Market Risk," and has concluded
that the Company has no market risk sensitive instruments for which these
additional disclosures are required.
ITEM 4 -- CONTROLS AND PROCEDURES
Internal controls are procedures, effected by a company's board of directors,
management and other personnel, designed to provide reasonable assurance
regarding the achievement of reliability of financial reporting, effectiveness
and efficiency of operations, and compliance with applicable laws and
regulations. Disclosure controls and procedures are internal controls and other
procedures that are designed to ensure that information required to be disclosed
in the reports filed or submitted under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in the reports filed or
submitted under the Securities Exchange Act of 1934 is accumulated and
communicated to management, including the principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding
required disclosure. As reported in the "Certifications" Section of this
Quarterly Report on Form 10-Q, the Company's principal executive officer and
principal financial officer evaluated the Company's disclosure controls and
procedures as of May 1, 2004, concluding that the Company's disclosure controls
and procedures were effective. There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the May 1, 2004 evaluation.
14
THE BUCKLE, INC.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities: None
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders: None
(a) None
(b) None
(c) None
(d) None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits 31.1 and 31.2 certifications, as well as Exhibits
32.1 and 32.2 Certifications Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) On March 4, 2004, we issued a press release announcing our
February 2004 sales and fourth quarter 2003 earnings, filed on
Form 8-K with the SEC on March 8, 2004. On March 16, 2004, we
issued a press release announcing the Board of Director's
approval of a $0.10 per share quarterly dividend, filed on
Form 8-K with the SEC on March 16, 2004.
15
THE BUCKLE, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE BUCKLE, INC.
Dated: June 9, 2004 /s/ DENNIS H. NELSON .
-------- -------------------------------------------------
DENNIS H. NELSON, President and CEO
Dated: June 9, 2004 /s/ KAREN B. RHOADS .
-------- -------------------------------------------------
KAREN B. RHOADS, Vice President
of Finance and CFO
16