Unassociated Document
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 August
4, 2007
o
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: 001-12951
THE
BUCKLE, INC.
(Exact
name of Registrant as specified in its charter)
Nebraska
|
47-0366193
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
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
Securities
registered pursuant to Section 12(b) of the Act:
Title
of class
|
|
Name
of Each Exchange on Which Registered
|
Common
Stock, $.01 par value
|
|
New
York Stock Exchange
|
Securities
registered pursuant to Section 12(g) of the Act: None
(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 þ
No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. (See definition of “accelerated
filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act). Check
one.
o
Large accelerated filer; þ
Accelerated filer; o
Non-accelerated filer
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes
oNo
þ
The
number of shares outstanding of the Registrant's Common Stock, as of August
31,
2007, was 30,193,991.
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
|
14
|
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
22
|
|
|
|
Item
4.
|
Controls
and Procedures
|
22
|
|
|
|
|
|
|
Part
II. Other
Information
|
|
|
|
Item
1.
|
Legal
Proceedings
|
23
|
|
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
|
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
23
|
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
23
|
|
|
|
Item
5.
|
Other
Information
|
24
|
|
|
|
Item
6.
|
Exhibits
|
24
|
|
|
|
Signatures
|
|
25
|
THE
BUCKLE, INC.
BALANCE
SHEETS
(Amounts
in Thousands Except Share and Per Share Amounts)
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
25,578
|
|
$
|
35,752
|
|
Short-term
investments
|
|
|
132,095
|
|
|
115,721
|
|
Accounts
receivable, net of allowance of $42 and $72, respectively
|
|
|
3,841
|
|
|
4,046
|
|
Inventory
|
|
|
96,021
|
|
|
70,306
|
|
Prepaid
expenses and other assets
|
|
|
14,582
|
|
|
12,401
|
|
Total
current assets
|
|
|
272,117
|
|
|
238,226
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT:
|
|
|
228,693
|
|
|
215,630
|
|
Less
accumulated depreciation and amortization
|
|
|
(128,896
|
)
|
|
(121,811
|
)
|
|
|
|
99,797
|
|
|
93,819
|
|
|
|
|
|
|
|
|
|
LONG-TERM
INVESTMENTS
|
|
|
29,387
|
|
|
31,958
|
|
OTHER
ASSETS
|
|
|
4,044
|
|
|
4,195
|
|
|
|
|
|
|
|
|
|
|
|
$
|
405,345
|
|
$
|
368,198
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
35,003
|
|
$
|
14,670
|
|
Accrued
employee compensation
|
|
|
9,705
|
|
|
17,800
|
|
Accrued
store operating expenses
|
|
|
5,461
|
|
|
4,468
|
|
Gift
certificates redeemable
|
|
|
4,311
|
|
|
6,709
|
|
Income
taxes payable
|
|
|
1,466
|
|
|
5,562
|
|
Total
current liabilities
|
|
|
55,946
|
|
|
49,209
|
|
|
|
|
|
|
|
|
|
DEFERRED
COMPENSATION
|
|
|
3,845
|
|
|
3,368
|
|
DEFERRED
RENT LIABILITY
|
|
|
30,657
|
|
|
29,034
|
|
Total
liabilities
|
|
|
90,448
|
|
|
81,611
|
|
|
|
|
|
|
|
|
|
COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY:
|
|
|
|
|
|
|
|
Common
stock, authorized 100,000,000 shares of $.01 par value; 30,192,753
and
29,408,576 shares
issued and outstanding at August 4, 2007 and February 3, 2007,
respectively
|
|
|
302
|
|
|
294
|
|
Additional
paid-in capital
|
|
|
59,823
|
|
|
43,493
|
|
Retained
earnings
|
|
|
254,772
|
|
|
242,800
|
|
Total
stockholders’ equity
|
|
|
314,897
|
|
|
286,587
|
|
|
|
$
|
405,345
|
|
$
|
368,198
|
|
See
notes
to unaudited condensed financial statements.
THE
BUCKLE, INC.
STATEMENTS
OF INCOME
(Amounts
in Thousands Except Per Share Amounts)
(Unaudited)
|
|
Thirteen
Weeks Ended
|
|
Twenty-six
Weeks Ended
|
|
|
|
August
4,
|
|
July
29,
|
|
August
4,
|
|
July
29,
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
SALES,
Net of returns and allowances
|
|
$
|
124,257
|
|
$
|
102,398
|
|
$
|
245,368
|
|
$
|
212,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF SALES (Including buying, distribution, and occupancy
costs)
|
|
|
77,844
|
|
|
68,330
|
|
|
153,452
|
|
|
138,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
46,413
|
|
|
34,068
|
|
|
91,916
|
|
|
73,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
|
|
|
25,065
|
|
|
22,102
|
|
|
48,489
|
|
|
44,007
|
|
General
and administrative
|
|
|
4,891
|
|
|
3,677
|
|
|
9,871
|
|
|
7,541
|
|
|
|
|
29,956
|
|
|
25,779
|
|
|
58,360
|
|
|
51,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
16,457
|
|
|
8,289
|
|
|
33,556
|
|
|
21,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME, Net
|
|
|
2,260
|
|
|
2,282
|
|
|
4,383
|
|
|
3,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
BEFORE INCOME TAXES
|
|
|
18,717
|
|
|
10,571
|
|
|
37,939
|
|
|
25,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION
FOR INCOME TAXES
|
|
|
6,925
|
|
|
3,932
|
|
|
13,954
|
|
|
9,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
$
|
11,792
|
|
$
|
6,639
|
|
$
|
23,985
|
|
$
|
15,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.40
|
|
$
|
0.23
|
|
$
|
0.81
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.38
|
|
$
|
0.22
|
|
$
|
0.78
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares
|
|
|
29,776
|
|
|
29,050
|
|
|
29,622
|
|
|
29,006
|
|
Diluted
weighted average shares
|
|
|
30,924
|
|
|
30,111
|
|
|
30,806
|
|
|
30,062
|
|
See
notes
to unaudited condensed financial statements.
THE
BUCKLE, INC.
STATEMENTS
OF STOCKHOLDERS' EQUITY
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
|
|
Number of
Shares
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Unearned Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FISCAL
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
February 3, 2007
|
|
|
29,408,576
|
|
$
|
294
|
|
$
|
43,493
|
|
$
|
242,800
|
|
$
|
-
|
|
$
|
286,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23,985
|
|
|
-
|
|
|
23,985
|
|
Dividends
paid on common stock, ($0.20
per share)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,013
|
)
|
|
-
|
|
|
(12,013
|
)
|
Common
stock issued on exercise of
stock options
|
|
|
645,832
|
|
|
7
|
|
|
8,495
|
|
|
-
|
|
|
-
|
|
|
8,502
|
|
Issuance
of non-vested stock, net of forfeitures
|
|
|
138,345
|
|
|
1
|
|
|
(1
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
Amortization
of non-vested stock grants
|
|
|
-
|
|
|
-
|
|
|
1,941
|
|
|
-
|
|
|
-
|
|
|
1,941
|
|
Stock
option compensation expense
|
|
|
-
|
|
|
-
|
|
|
202
|
|
|
-
|
|
|
-
|
|
|
202
|
|
Income
tax benefit related to exercise of
employee stock options
|
|
|
-
|
|
|
-
|
|
|
5,693
|
|
|
-
|
|
|
-
|
|
|
5,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
August 4, 2007
|
|
|
30,192,753
|
|
$
|
302
|
|
$
|
59,823
|
|
$
|
254,772
|
|
$
|
-
|
|
$
|
314,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FISCAL
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
January 28, 2006
|
|
|
19,339,153
|
|
$
|
193
|
|
$
|
39,651
|
|
$
|
261,948
|
|
$
|
(1,999
|
) |
$
|
299,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassify
unearned compensation
|
|
|
-
|
|
|
-
|
|
|
(1,999
|
)
|
|
-
|
|
|
1,999
|
|
|
-
|
|
Net
income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,993
|
|
|
-
|
|
|
15,993
|
|
Dividends
paid on common stock, ($0.1133
per share)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(6,647
|
)
|
|
-
|
|
|
(6,647
|
)
|
Common
stock issued on exercise of
stock options
|
|
|
162,896
|
|
|
1
|
|
|
3,044
|
|
|
-
|
|
|
-
|
|
|
3,045
|
|
Issuance
of non-vested stock, net of forfeitures
|
|
|
135,850
|
|
|
2
|
|
|
(2
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
Amortization
of non-vested stock grants
|
|
|
-
|
|
|
-
|
|
|
554
|
|
|
-
|
|
|
-
|
|
|
554
|
|
Stock
option compensation expense
|
|
|
-
|
|
|
-
|
|
|
782
|
|
|
-
|
|
|
-
|
|
|
782
|
|
Common
stock purchased and retired
|
|
|
(93,500
|
)
|
|
(1
|
)
|
|
(3,751
|
)
|
|
-
|
|
|
-
|
|
|
(3,752
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE,
July 29, 2006
|
|
|
19,544,399
|
|
$
|
195
|
|
$
|
38,279
|
|
$
|
271,294
|
|
$
|
-
|
|
$
|
309,768
|
|
See
notes
to unaudited condensed financial statements.
THE
BUCKLE, INC.
STATEMENTS
OF CASH FLOWS
(Dollar
Amounts in Thousands)
(Unaudited)
|
|
Twenty-six
Weeks Ended
|
|
|
|
August
4,
|
|
July
29,
|
|
|
|
2007
|
|
2006
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net
income
|
|
$
|
23,985
|
|
$
|
15,993
|
|
Adjustments
to reconcile net income to net cash flows from
operating activities:
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
9,485
|
|
|
8,975
|
|
Amortization
of non-vested stock grants
|
|
|
1,941
|
|
|
554
|
|
Stock
option compensation expense
|
|
|
202
|
|
|
782
|
|
Other
|
|
|
67
|
|
|
23
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
205
|
|
|
757
|
|
Inventory
|
|
|
(25,715
|
)
|
|
(22,162
|
)
|
Prepaid
expenses
|
|
|
(2,181
|
)
|
|
(1,150
|
)
|
Accounts
payable
|
|
|
19,723
|
|
|
15,829
|
|
Accrued
employee compensation
|
|
|
(8,095
|
)
|
|
(11,698
|
)
|
Accrued
store operating expenses
|
|
|
993
|
|
|
462
|
|
Gift
certificates redeemable
|
|
|
(2,398
|
)
|
|
(1,922
|
)
|
Long-term
liabilities and deferred compensation
|
|
|
2,100
|
|
|
1,587
|
|
Income
taxes payable
|
|
|
(3,451
|
)
|
|
(5,832
|
)
|
|
|
|
|
|
|
|
|
Net
cash flows from operating activities
|
|
|
16,861
|
|
|
2,198
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchase
of property and equipment
|
|
|
(14,938
|
)
|
|
(10,910
|
)
|
Proceeds
from sale of property and equipment
|
|
|
18
|
|
|
3
|
|
Change
in other assets
|
|
|
151
|
|
|
32
|
|
Purchases
of investments
|
|
|
(39,366
|
)
|
|
(30,688
|
)
|
Proceeds
from sales/maturities of investments
|
|
|
25,563
|
|
|
30,627
|
|
|
|
|
|
|
|
|
|
Net
cash flows from investing activities
|
|
|
(28,572
|
)
|
|
(10,936
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds
from the exercise of stock options
|
|
|
8,502
|
|
|
3,045
|
|
Excess
tax benefit from employee stock option exercises
|
|
|
5,048
|
|
|
1,136
|
|
Purchases
of common stock
|
|
|
-
|
|
|
(3,752
|
)
|
Payment
of dividends
|
|
|
(12,013
|
)
|
|
(6,647
|
)
|
|
|
|
|
|
|
|
|
Net
cash flows from financing activities
|
|
|
1,537
|
|
|
(6,218
|
)
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
|
|
(10,174
|
)
|
|
(14,956
|
)
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, Beginning of period
|
|
|
35,752
|
|
|
23,438
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, End of period
|
|
$
|
25,578
|
|
$
|
8,482
|
|
See
notes
to unaudited condensed financial statements.
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(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 the 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 February 3, 2007, included in The Buckle, Inc.'s 2006 Form
10-K.
|
2.
|
Stock-Based
Compensation
-
The Company has several stock option plans which allow for granting
of
stock options to employees, executives, and directors; as described
more
fully in the notes included in the Company’s 2006 Annual Report. The
options may be in the form of incentive stock options or non-qualified
stock options and are granted with an exercise price equal to the
market
value of the Company’s common stock on the date of grant. The options
generally expire ten years from the date of grant. The Company also
has a
restricted stock plan that allows for the granting of non-vested
shares of
common stock to employees and
executives.
|
During
fiscal 2007, the Company granted 139,800 shares of non-vested common stock
under
its 2005 Restricted Stock Plan. These grants resulted in $527 and $1,055 of
compensation expense recognized on a graded vesting basis during the thirteen
and twenty-six week periods ended August 4, 2007, respectively. Due to
participants terminating their employment prior to the vesting date, 300 of
these shares were forfeited during the quarter ended August 4, 2007. The
non-forfeited shares will vest over a period of four years only upon
certification by the Compensation Committee of the Board of Directors that
the
Company has achieved its pre-established performance target based on growth
in
fiscal 2007 pre-bonus, pre-tax net income.
During
fiscal 2006, the Company granted 204,000 shares of non-vested common stock
under
its 2005 Restricted Stock Plan. These grants resulted in $293 and $593 of
compensation expense recognized on a graded vesting basis during the thirteen
and twenty-six week periods ended August 4, 2007, respectively. The same grants
resulted in $0 and $282 of compensation expense during the thirteen and
twenty-six week periods ended July 29, 2006. Due to participants terminating
their employment prior to the vesting date, 8,610 of these shares were forfeited
to date. Upon certification by the Compensation Committee that the Company
achieved its performance target for fiscal 2006, 20% of the non-forfeited shares
vested on March 19, 2007, with the remaining non-forfeited shares vesting 20%
on
February 2, 2008, 30% on January 31, 2009, and 30% on January 30,
2010.
During
fiscal 2005, the Company granted 116,250 shares of non-vested common stock
under
its 2005 Restricted Stock Plan. These grants resulted in $145 and $293 of
compensation expense recognized on a graded vesting basis during
the thirteen and twenty-six week periods ended August 4, 2007,
respectively.
The
same grants resulted in $157 and $272 of compensation expense during the
thirteen and twenty-six week periods ended July 29, 2006. Due to participants
terminating their employment, 840 of these shares were forfeited to date and
the
vesting for 5,100 of these shares was accelerated. Upon certification by the
Compensation Committee that the Company achieved its performance target for
fiscal 2005, 20% of the non-forfeited shares vested on March 24, 2006, with
the
remaining non-forfeited, non-accelerated shares vesting 20% on February 3,
2007,
30% on February 2, 2008, and 30% on January 31, 2009.
In
total,
the Company recognized $965 and $1,941 of compensation expense related to
outstanding shares of non-vested stock during the thirteen and twenty-six week
periods ended August 4, 2007. The
Company recognized $157 and $554 of compensation expense during the thirteen
and
twenty-six week periods ended July 29, 2006.
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
As
of
August 4, 2007, 451,652 shares were available for grant under the various stock
option plans, of which 301,889 were available for grant to executive officers.
Also as of August 4, 2007, 349,700 shares were available for grant under the
Company’s 2005 Restricted Stock Plan, all of which were available for grant to
executive officers.
Options
granted during the first two quarters of fiscal 2007 and 2006 were granted
under
the Company’s 1993 Director Stock Option Plan. Grants were made with an exercise
price equal to the market value of the Company’s common stock on the date of
grant and a contractual term of ten years. Options granted under the 1993
Director Stock Option Plan typically vest over a period of three
years.
The
Company adopted FASB Statement No. 123 (revised 2004) Share-Based
Payment
(“SFAS
123(R)”) during the first quarter of fiscal 2006 utilizing the modified
prospective approach and did not restate financial results for prior periods.
Upon adoption of SFAS 123(R), management determined that the cumulative effect
adjustment from estimated forfeitures was immaterial and, as such, no cumulative
effect was recorded. Compensation expense was recognized during fiscal 2007
and
2006 for new awards, based on the grant date fair value, as well as for the
portion of awards granted in fiscal years prior to SFAS 123(R) adoption that
was
not vested as of the beginning of fiscal 2006. The fair value of stock options
is determined using the Black-Scholes option pricing model, while the fair
value
of grants of non-vested common stock awards is the stock price on the date
of
grant. The adoption of SFAS 123(R) resulted in $45 and $202 of stock option
compensation expense for the thirteen and twenty-six week periods ended August
4, 2007, respectively. This compares to $396 and $782 of stock option
compensation expense for the thirteen and twenty-six week periods ended July
29,
2006. Stock option compensation expense is allocated to cost of sales, selling
expense, and general and administrative expense in a method similar to that
of
allocating accrued incentive bonus expense.
Prior
to
the adoption of SFAS 123(R), the Company presented all tax benefits resulting
from the exercise of stock options as operating cash inflows in the statements
of cash flows, in accordance with the provisions of the EITF Issue No. 00-15,
Classification
in the Statement of Cash Flows of the Income Tax Benefit Received by a Company
upon Exercise of a Nonqualified Employee Stock Option.
SFAS
123(R) requires the benefits of tax deductions in excess of the compensation
cost recognized for those options exercised to be classified as financing cash
inflows on a prospective basis. This amount is shown as “excess tax benefit from
employee stock option exercises” on the statement of cash flows. For the
twenty-six week periods ended August 4, 2007 and July 29, 2006, respectively,
the excess tax benefit realized from exercised stock options was $5,048 and
$1,136, respectively. The Company has elected to adopt the transition method
described in FASB Staff Position No. FAS 123(R)3, Transition
Election Related to Accounting for the Tax Effect of Share-Based Payment
Awards.
The
weighted average grant date fair value of options granted during the twenty-six
weeks ended August 4, 2007 and July 29, 2006 was $12.81 and $9.97 per option,
respectively. The fair value of options granted was estimated at the date of
grant using the Black-Scholes option pricing model with the following
assumptions:
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
Risk-free
interest rate (1)
|
|
|
4.80
|
%
|
|
4.50
- 5.00
|
%
|
Dividend
yield (2)
|
|
|
2.40
|
%
|
|
1.60
- 2.00
|
%
|
Expected
volatility (3)
|
|
|
39.0
|
%
|
|
45.0
|
%
|
Expected
lives - years (4)
|
|
|
7.0
|
|
|
7.0
|
|
(1) |
Based
on the U.S. Treasury yield curve in effect at the time of grant
with a
term consistent with the
expected lives of stock
options.
|
(2) |
Based
on expected dividend yield as of the date of grant.
|
(3) |
Based
on historical volatility of the Company’s common stock over a period
consistent with the expected lives of options.
|
(4) |
Based
on historical and expected exercise behavior.
|
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
A
summary
of the Company’s stock-based compensation activity related to stock options for
the twenty-six period ended August 4, 2007 is as follows:
|
|
2007
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
Average
|
|
|
|
|
|
|
|
|
|
Average
|
|
Remaining
|
|
|
|
Aggregate
|
|
|
|
|
|
Exercise
|
|
Contractual
|
|
|
|
Intrinsic
|
|
|
|
Shares
|
|
Price
|
|
Life
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
- beginning of year
|
|
|
2,969,377
|
|
$
|
12.56
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
27,000
|
|
|
33.87
|
|
|
|
|
|
|
|
|
|
|
Expired/forfeited
|
|
|
(1,902
|
)
|
|
14.67
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(645,832
|
)
|
|
13.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding
- end of quarter
|
|
|
2,348,643
|
|
$
|
12.64
|
|
|
4.28
|
|
|
years
|
|
$
|
50,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable
- end of quarter
|
|
|
2,311,284
|
|
$
|
12.40
|
|
|
4.20
|
|
|
years
|
|
$
|
50,549
|
|
The
total
intrinsic value of options exercised during the twenty-six week periods ended
August 4, 2007 and July 29, 2006, respectively, was $15,387 and $3,561. As
of
August 4, 2007, there was $321 of unrecognized compensation expense related
to
non-vested stock options. It is expected that this expense will be recognized
over a weighted average period of approximately 2.1 years.
A
summary
of the Company’s stock-based compensation activity related to grants of
non-vested shares of common stock for the twenty-six week period ended August
4,
2007 is as follows:
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
Grant
Date
|
|
|
|
Shares
|
|
Fair
Value
|
|
|
|
|
|
|
|
Non-Vested
- beginning of year
|
|
|
262,515
|
|
$
|
23.37
|
|
Granted
|
|
|
139,800
|
|
|
33.87
|
|
Forfeited
|
|
|
(1,455
|
)
|
|
25.46
|
|
Vested
|
|
|
(39,210
|
)
|
|
23.50
|
|
|
|
|
|
|
|
|
|
Non-Vested
- end of quarter
|
|
|
361,650
|
|
$
|
27.41
|
|
As
of
August 4, 2007, there was $5,945 of unrecognized compensation expense related
to
grants of non-vested shares. It is expected that this expense will be recognized
over a weighted average period of approximately 2.1 years. The total fair value
of shares vested during the twenty-six week periods ended August 4, 2007 and
July 29, 2006 was $1,372 and $624, respectively.
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
3.
|
Description
of the Business
-
The Company is a retailer of medium to better priced casual apparel,
footwear, and accessories for fashion conscious young men and women.
The
Company operates its business as one reportable industry segment.
The
Company had 362 stores located in 38 states throughout the continental
United States (excluding the northeast) as of August 4, 2007, and
346
stores in 38 states as of July 29, 2006. During the second quarter
of
fiscal 2007, the Company opened 9 new stores and substantially renovated
5
stores. During the second quarter of fiscal 2006, the Company opened
5 new
stores and substantially renovated 2
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
|
|
Percentage
of Net Sales
|
|
|
|
Thirteen
Weeks Ended
|
|
Twenty-six
Weeks Ended
|
|
Merchandise
Group
|
|
August 4, 2007
|
|
July 29, 2006
|
|
August 4, 2007
|
|
July 29, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Denims
|
|
|
37.4
|
%
|
|
38.2
|
%
|
|
39.8
|
%
|
|
41.0
|
%
|
Tops
(including sweaters)
|
|
|
36.5
|
|
|
32.1
|
|
|
33.8
|
|
|
30.2
|
|
Sportswear/Fashions
|
|
|
9.8
|
|
|
9.8
|
|
|
9.4
|
|
|
8.0
|
|
Accessories
|
|
|
8.1
|
|
|
9.4
|
|
|
7.8
|
|
|
8.9
|
|
Footwear
|
|
|
6.4
|
|
|
7.7
|
|
|
7.0
|
|
|
8.1
|
|
Casual
bottoms
|
|
|
1.4
|
|
|
2.3
|
|
|
1.6
|
|
|
2.7
|
|
Outerwear
|
|
|
0.3
|
|
|
0.4
|
|
|
0.5
|
|
|
1.0
|
|
Other
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
4.
|
Net
Earnings 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.
Basic and diluted earnings per share for the period ended July 29,
2006
have been adjusted to reflect the impact of the Company’s 3-for-2 stock
split paid in the form of a stock dividend on January 12,
2007.
|
|
|
Thirteen
Weeks Ended
|
|
Thirteen
Weeks Ended
|
|
|
|
August
4, 2007
|
|
July
29, 2006
|
|
|
|
|
|
|
|
Per
Share
|
|
|
|
|
|
Per
Share
|
|
|
|
Income
|
|
Shares
|
|
Amount
|
|
Income
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
EPS
|
|
$
|
11,792
|
|
|
29,776
|
|
$
|
0.40
|
|
$
|
6,639
|
|
|
29,050
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of Dilutive Securities
Stock
options and non-vested shares
|
|
|
- |
|
|
1,148 |
|
|
(0.02
|
) |
|
- |
|
|
1,061
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$
|
11,792
|
|
|
30,924
|
|
$
|
0.38
|
|
$
|
6,639
|
|
|
30,111
|
|
$
|
0.22
|
|
|
|
|
Twenty-six
Weeks Ended
|
|
|
Twenty-six
Weeks Ended
|
|
|
|
|
August
4, 2007
|
|
|
July
29, 2006
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Income
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
EPS
|
|
$
|
23,985
|
|
|
29,622
|
|
$
|
0.81
|
|
$
|
15,993
|
|
|
29,006
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of Dilutive Securities
Stock
options and non-vested shares
|
|
|
- |
|
|
1,184
|
|
|
(0.03
|
)
|
|
- |
|
|
1,056
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
$
|
23,985
|
|
|
30,806
|
|
$
|
0.78
|
|
$
|
15,993
|
|
|
30,062
|
|
$
|
0.53
|
|
5.
|
Stock
Split
-
On December 11, 2006, the Company’s Board of Directors approved a 3-for-2
stock split payable in the form of a stock dividend for shareholders
of
record as of January 3, 2007, with a distribution date of January
12,
2007. All share and per share data (except historical stockholders’ equity
data) presented in the financial statements for all periods has been
adjusted to reflect the impact of this stock
split.
|
|
The
following table summarizes the Company’s Other Income for the thirteen and
twenty-six week periods included in this financial
statement:
|
|
|
Thirteen
Weeks Ended
|
|
Twenty-six
Weeks Ended
|
|
|
|
August 4, 2007
|
|
July 29, 2006
|
|
August 4, 2007
|
|
July 29, 2006
|
|
|
|
|
|
|
|
|
|
|
|
Interest/dividends
earned on investments
|
|
$
|
2,173
|
|
$
|
1,409
|
|
$
|
4,059
|
|
$
|
2,939
|
|
Insurance
proceeds
|
|
|
-
|
|
|
470
|
|
|
162
|
|
|
470
|
|
VISA/Mastercard
settlement
|
|
|
-
|
|
|
356
|
|
|
-
|
|
|
356
|
|
Miscellaneous
|
|
|
87
|
|
|
47
|
|
|
162
|
|
|
101
|
|
Other
Income, net
|
|
$
|
2,260
|
|
$
|
2,282
|
|
$
|
4,383
|
|
$
|
3,866
|
|
THE
BUCKLE, INC.
NOTES
TO
FINANCIAL STATEMENTS
THIRTEEN
and TWENTY-SIX WEEKS ENDED AUGUST 4, 2007 AND JULY 29, 2006
(Dollar
Amounts in Thousands Except Share and Per Share Amounts)
(Unaudited)
Other
income for the second quarter of fiscal 2006 included proceeds received from
the
settlement of Hurricane Katrina and Hurricane Rita insurance claims and
settlement of a lawsuit related to Visa/Mastercard interchange fees. Other
income for the first quarter of fiscal 2007 included additional proceeds
received from the settlement of Hurricane Katrina and Hurricane Rita insurance
claims.
7.
|
Recently
Issued Accounting
Pronouncements
|
The
Company adopted the provisions of Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting
for Uncertainty to Income Taxes
(FIN
48), on February 4, 2007. Under FIN 48, tax benefits are recorded only for
tax
positions that are more likely than not to be sustained upon examination by
tax
authorities. The amount recognized is measured as the largest amount of benefit
that is greater than 50% likely to be realized upon ultimate settlement.
Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns
that do not meet these recognition and measurement standards. The adoption
of
FIN 48 had no impact on the Company’s financial statements.
The
Internal Revenue Service has closed its examination of the Company’s income tax
returns through February 3, 2001. The tax years ended February 2, 2002 and
February 1, 2003 are also closed years. In addition, open tax years with the
Internal Revenue Service, as well as those related to a number of states, remain
subject to examination.
In
September 2006, the FASB issued Statement No. 157 (“SFAS 157”), Fair
Value Measurements.
This
standard defines fair value, establishes a framework for measuring fair value
in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 will be effective at the beginning of the Company’s
2008 fiscal year. The Company is currently assessing the effect of this
pronouncement on the financial statements, but does not anticipate that it
will
have a material impact on the Company’s financial position, liquidity, and
results of operations.
8.
|
Supplemental
Cash Flow Information
|
The
Company had non-cash investing activities during the twenty-six week periods
ended August 4, 2007 and July 29, 2006 of $610 and $224, respectively. The
non-cash investing activity related to unpaid purchases of property, plant
and
equipment included in accounts payable as of the end of the quarter. Amounts
reported as unpaid purchases are recorded as cash outflows from investing
activities for purchases of property, plant and equipment in the statement
of
cash flows in the period they are paid.
Additional
cash flow information for the Company includes cash paid for income taxes during
the twenty-six week periods ended August 4, 2007 and July 29, 2006 of $12,806
and $14,791, respectively.
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.
Due
to
the 53rd
week in
fiscal 2006’s retail calendar, the Company’s 2007 fiscal periods end a week
later in the calendar than the prior year. The Company’s comparable store net
sales for the quarter and year-to-date periods are compared to the prior year
13-week and 26-week periods ended August 5, 2006; however, total sales and
operating results are compared with the prior year fiscal period ended July
29,
2006.
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 they were open in the prior year on the
first day of the fiscal period being presented. Stores which have been
remodeled, expanded, and/or relocated, but would otherwise be included as
comparable stores, are not excluded from the comparable store sales calculation.
Online sales are excluded from comparable store sales. Management considers
comparable store sales to be an important indicator of current Company
performance, helping leverage certain fixed costs when results are positive.
Negative comparable store sales results could reduce net sales and have a
negative impact on operating leverage, thus reducing net income.
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, short-term investments, 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.
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 and twenty-six week
periods ended August 4, 2007, and July 29, 2006:
|
|
Percentage of Net Sales
|
|
Percentage
|
|
Percentage of Net Sales
|
|
Percentage
|
|
|
|
Thirteen Weeks Ended
|
|
Increase/
|
|
Twenty-six Weeks Ended
|
|
Increase/
|
|
|
|
Aug.4, 2007
|
|
July 29, 2006
|
|
(Decrease)
|
|
Aug.4, 2007
|
|
July 29, 2006
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
21.3
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
15.7
|
%
|
Cost
of sales (including buying, distribution and occupancy
costs)
|
|
|
62.6
|
%
|
|
66.7
|
%
|
|
13.9
|
%
|
|
62.5
|
%
|
|
65.5
|
%
|
|
10.5
|
%
|
Gross
profit
|
|
|
37.4
|
%
|
|
33.3
|
%
|
|
36.2
|
%
|
|
37.5
|
%
|
|
34.5
|
%
|
|
25.7
|
%
|
Selling
expenses
|
|
|
20.2
|
%
|
|
21.6
|
%
|
|
13.4
|
%
|
|
19.8
|
%
|
|
20.8
|
%
|
|
10.2
|
%
|
General
and administrative expenses
|
|
|
3.9
|
%
|
|
3.6
|
%
|
|
33.0
|
%
|
|
4.0
|
%
|
|
3.5
|
%
|
|
30.9
|
%
|
Income
from operations
|
|
|
13.3
|
%
|
|
8.1
|
%
|
|
98.5
|
%
|
|
13.7
|
%
|
|
10.2
|
%
|
|
55.7
|
%
|
Other
income, net
|
|
|
1.8
|
%
|
|
2.2
|
%
|
|
-0.9
|
%
|
|
1.8
|
%
|
|
1.8
|
%
|
|
13.4
|
%
|
Income
before income taxes
|
|
|
15.1
|
%
|
|
10.3
|
%
|
|
77.1
|
%
|
|
15.5
|
%
|
|
12.0
|
%
|
|
49.3
|
%
|
Provision
for income taxes
|
|
|
5.6
|
%
|
|
3.8
|
%
|
|
76.1
|
%
|
|
5.7
|
%
|
|
4.5
|
%
|
|
48.1
|
%
|
Net
income
|
|
|
9.5
|
%
|
|
6.5
|
%
|
|
77.6
|
%
|
|
9.8
|
%
|
|
7.5
|
%
|
|
50.0
|
%
|
Net
sales
increased from $102.4 million in the second quarter of fiscal 2006 to $124.3
million in the second quarter of fiscal 2007, a 21.3% increase. Comparable
store
sales increased by $10.5 million, or 10.1%, for the thirteen week period ended
August 4, 2007, compared to the thirteen week period ended August 5, 2006.
The
comparable store sales increase was primarily due to an increase in the number
of transactions at comparable stores during the period, in addition to a 2.8%
increase in the average retail price per piece of merchandise sold during the
period and a 0.9% increase in the average number of units sold per transaction.
Sales growth for the thirteen week period was also attributable to the inclusion
of a full quarter of operating results for the 13 new stores opened after the
first quarter of fiscal 2006, to the opening of 13 new stores during the first
two quarters of fiscal 2007, to growth in online sales, and to a calendar shift
of the fiscal periods due to the fifty-third week in fiscal 2006.
The
Company’s average retail price per piece of merchandise sold increased $0.98, or
2.8%, during the second quarter of fiscal 2007 compared to the second quarter
of
fiscal 2006. This $0.98 increase was primarily attributable to the following
changes (with their corresponding effect on the overall average price per
piece): a 9.6% increase in knit shirt price points ($0.92), a 5.0% increase
in
denim price points ($0.66), and a 6.6% increase in woven shirt price points
($0.15). These increases were partially offset by the impact of a shift in
the
merchandise mix (-$0.48) and by reduced price points in certain other
categories. These changes are primarily a reflection of merchandise shifts
in
terms of brands and product styles, fabrics, details, and finishes.
Net
sales
increased from $212.0 million in the first two quarters of fiscal 2006 to $245.4
million for the first two quarters of fiscal 2007, a 15.7% increase. Comparable
store sales increased by $17.2 million, or 8.3%, for the twenty-six week period
ended August 4, 2007, compared to the twenty-six week period ended August 5,
2006. The comparable store sales increase was primarily due to an increase
in
the number of transactions at comparable stores during the period, in addition
to a 2.3% increase in the average retail price per piece of merchandise sold
during the period and a 1.4% increase in the average number of units sold per
transaction. Sales growth for the twenty-six week period was also attributable
to the inclusion of a full two quarters of operating results for the 17 new
stores opened during fiscal 2006, to the opening of 13 new stores during the
first two quarters of fiscal 2007, to growth in online sales, and to a calendar
shift of the fiscal periods due to the fifty-third week in fiscal 2006. Average
sales per square foot increased 10.5% from $121.37 for the twenty-six week
period ended July 29, 2006, to $134.09 for the twenty-six week period ended
August 4, 2007.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
Company’s average retail price per piece of merchandise sold increased $0.83,
approximately 2.3%, during the first two quarters of fiscal 2007 compared to
the
first two quarters of fiscal 2006. This $0.83 increase was primarily
attributable to the following changes (with their corresponding effect on the
overall average price per piece): a 5.0% increase in denim price points ($0.71),
a 7.9% increase in knit shirt price points ($0.71), and an 11.9% increase in
woven shirt price points ($0.28). These increases were partially offset by
the
impact of a shift in the merchandise mix (-$0.48) and by reduced price points
in
certain other categories. These changes are primarily a reflection of
merchandise shifts in terms of brands; product styles, fabrics, details and
finishes.
Gross
profit after buying, distribution, and occupancy expenses increased $12.3
million in the second quarter of fiscal 2007 to $46.4 million, a 36.2% increase.
As a percentage of net sales, gross profit increased from 33.3% in the second
quarter of fiscal 2006 to 37.4% in the second quarter of fiscal 2007. This
increase was primarily attributable to a 1.7% improvement in actual merchandise
margins achieved through an increase in regular-price selling during the period
and to a 2.4% reduction, as a percentage of net sales, related to leveraged
buying, distribution, and occupancy costs. Of the 2.4% reduction (as a
percentage of net sales) related to leveraged buying, distribution, and
occupancy costs, approximately 1.0% was attributable to an increase in sales
during the quarter as a result of a calendar shift in the fiscal periods due
to
the fifty-third week in fiscal 2006.
Year-to-date,
gross profit increased $18.8 million for the first twenty-six weeks of fiscal
2007 to $91.9 million, a 25.7% increase. As a percentage of net sales, gross
profit increased from 34.5% for the first two quarters of fiscal 2006 to 37.5%
for the first two quarters of fiscal 2007. This
increase was primarily attributable to a 1.6% improvement in actual merchandise
margins achieved through an increase in regular-price selling during the period
and to a 1.4% reduction, as a percentage of net sales, related to leveraged
buying, distribution, and occupancy costs. Of the 1.4% reduction (as a
percentage of net sales) related to leveraged buying, distribution, and
occupancy costs, approximately 0.5% was attributable to an increase in sales
during the second quarter as a result of a calendar shift in the fiscal periods
due to the fifty-third week in fiscal 2006.
Selling
expenses increased from $22.1 million for the second quarter of fiscal 2006
to
$25.1 million for the second quarter of fiscal 2007, a 13.4% increase. As a
percentage of net sales, selling expenses decreased from 21.6% in the second
quarter of fiscal 2006 to 20.2% in the second quarter of fiscal 2007. The
decrease was primarily attributable to a 1.0% reduction, as a percentage of
net
sales, in store payroll expense and a 0.3% reduction in stock option
compensation expense. The Company also achieved a 0.9% reduction, as a
percentage of net sales, by leveraging certain other selling expenses. These
reductions were, however, partially offset by increases in expense related
to
the incentive bonus accrual (0.5%, as a percentage of net sales), health
insurance expense (0.2%, as a percentage of net sales), and bankcard fees (0.1%,
as a percentage of net sales).
Year-to-date,
selling expenses increased from $44.0 million in the first two quarters of
fiscal 2006 to $48.5 million in the first two quarters of fiscal 2007, a 10.2%
increase. As a percentage of net sales, selling expenses decreased from 20.8%
in
fiscal 2006 to 19.8% in fiscal 2007. The decrease was primarily attributable
to
a 0.8% reduction, as a percentage of net sales, in store payroll expense and
a
0.2% reduction in stock option compensation expense. The Company also achieved
a
0.8% reduction, as a percentage of net sales, by leveraging certain other
selling expenses. These reductions were, however, partially offset by increases
in expense related to the incentive bonus accrual (0.6%, as a percentage of
net
sales), health insurance expense (0.1%, as a percentage of net sales), and
bankcard fees (0.1%, as a percentage of net sales).
General
and administrative expenses increased from $3.7 million in the second quarter
of
fiscal 2006 to $4.9 million in the second quarter of fiscal 2007, a 33.0%
increase. As a percentage of net sales, general and administrative expenses
increased from 3.6% in the second quarter of fiscal 2006 to 3.9% in the second
quarter of fiscal 2007. The
increase was driven primarily by increases in equity compensation expense
related to outstanding shares of non-vested stock (0.6%, as a percentage of
net
sales) and expense related to the incentive bonus accrual (0.2%, as a percentage
of net sales). These increases were partially offset by a 0.5% reduction, as
a
percentage of net sales, related to the leveraging of certain other general
and
administrative expenses.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Year-to-date,
general and administrative expense increased from $7.5 million for the first
two
quarters of fiscal 2006 to $9.9 million for the first two quarters of fiscal
2007, a 30.9% increase. As a percentage of net sales, general and administrative
expense increased from 3.5% in fiscal 2006 to 4.0% in fiscal 2007. The increase
was driven primarily by increases in equity compensation expense related to
outstanding shares of non-vested stock (0.5%, as a percentage of net sales),
expense related to the incentive bonus accrual (0.2%, as a percentage of net
sales), and expense related to unrealized gains in the Company’s non-qualified
deferred compensation plan (0.1%, as a percentage of net sales). These increases
were partially offset by a 0.3% reduction, as a percentage of net sales, related
to the leveraging of certain other general and administrative
expenses.
As
a
result of the above changes, the Company's income from operations increased
98.5% to $16.5 million for the second quarter of fiscal 2007 compared to $8.3
million for the second quarter of fiscal 2006. Income from operations was 13.3%
of net sales for the second quarter of fiscal 2007 compared to 8.1% for the
second quarter of fiscal 2006. Income from operations, for the twenty-six week
period ended August 4, 2007, increased 55.7% to $33.6 million compared to $21.5
million for the twenty-six week period ended July 29, 2006. Income from
operations was 13.7% of net sales for the first two quarters of fiscal 2007
compared to 10.2% for the first two quarters of fiscal 2006.
Other
income for the quarter ended August 4, 2007, decreased 0.9% from other income
for the quarter ended July 29, 2006. The decrease in other income during the
quarter was the result of proceeds received in the second quarter of fiscal
2006
for Hurricane Katrina and Hurricane Rita Insurance claims and for settlement
of
a lawsuit related to Visa/Mastercard interchange fees, which were almost equally
offset by an increase in interest income earned on the Company’s cash and
investments. For the twenty-six week period ended August 4, 2007, other income
increased 13.4% from other income for the twenty-six week period ended July
29,
2006. The increase in other income for the first two quarters of fiscal 2007
was
due to an increase in interest income earned on the Company’s cash and
investments, which was partially offset by the above-referenced proceeds
received during the second quarter of fiscal 2006.
Income
tax expense as a percentage of pre-tax income was 37.0% in the second quarter
of
fiscal 2007 compared to 37.2% in the second quarter of fiscal 2006, bringing
net
income to $11.8 million in the second quarter of fiscal 2007 compared to $6.6
million in the second quarter of fiscal 2006, an increase of 77.6%. For the
first half of fiscal 2007, income tax expense was 36.8% of pre-tax income
compared to 37.1% for the first half of fiscal 2006, bringing net income to
$24.0 million for the first half of fiscal 2007 compared to $16.0 million for
the first half of fiscal 2006, an increase of 50.0%.
LIQUIDITY
AND CAPITAL RESOURCES
As
of
August 4, 2007, the Company had working capital of $216.2 million, including
$25.6 million of cash and cash equivalents and short-term investments of $132.1
million. The Company's primary ongoing cash requirements are for inventory,
payroll, occupancy costs, dividend payments, new store expansion, and
remodeling. Historically, the Company's primary source of working capital has
been cash flow from operations. The first half of each fiscal year is typically
a period of negative cash flows created by various operating, investing, and
financing activities. During the first half of fiscal 2007, the Company’s
operating activities provided $16.9 million in net cash flow compared to the
first half of fiscal 2006, when the Company’s operating activities provided $2.2
million.
The
uses
of cash for both twenty-six week periods include payment of annual bonuses
accrued at fiscal year end, changes in inventory and accounts payable for build
up of inventory levels, dividend payments, and construction costs for new and
remodeled stores. The increase in cash flow for the first two quarters of fiscal
2007 compared to the first two quarters of fiscal 2006 was primarily due to
growth in net income, increased proceeds from the exercise of stock options,
changes in accrued employee compensation, and reduced purchases of common stock,
partially offset by greater purchases of investments, greater purchases of
property and equipment, and increased dividend payments.
During
the first half of fiscal 2007 and 2006, the Company invested $14.1 million
and
$9.8 million, respectively, in new store construction, store renovation, and
store technology upgrades. The Company also spent $0.8 million and $1.1 million
in the first half of fiscal 2007 and 2006, respectively, in capital expenditures
for the corporate headquarters and distribution facility.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
During
the remainder of fiscal 2007, the Company anticipates completing approximately
nine additional store construction projects, including approximately seven
new
stores and approximately two stores to be substantially remodeled and/or
relocated. Management now estimates that total capital expenditures during
fiscal 2007 will be approximately $24 to $27 million. 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. The Company has a consistent record of generating
positive cash flow each year and, as of August 4, 2007, had total cash and
investments of $187.1 million. The Company does not currently have plans for
a
merger or acquisition and has fairly consistent plans for new store expansion
and remodels. Based upon past results and current plans, management does not
anticipate any large swings in the Company’s need for cash in the upcoming
years. However, future conditions may reduce the availability of funds based
upon factors such as a decrease in demand for the Company’s product, change in
product mix, competitive factors, and general economic conditions as well as
other risks and uncertainties which would reduce the Company’s sales, net
profitability, and cash flows. Also, the Company’s acceleration in store
openings and/or remodels or the Company entering into a merger, acquisition,
or
other financial related transaction could reduce the amount of cash available
for further capital expenditures and working capital requirements.
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 line of credit
provides that outstanding letters of credit cannot exceed $10 million.
Borrowings under the line of credit provide for interest to be paid at a rate
equal to the prime rate established by the Bank. 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 half of fiscal 2007 or
2006.
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 inventory 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. Management believes that
the estimates and judgments used in preparing these financial statements were
the most appropriate at that time. Presented below are those critical accounting
policies that management believes require subjective and/or complex judgments
that could potentially affect reported results of operations.
1.
|
Revenue
Recognition.
Retail store sales are recorded upon the purchase of merchandise
by
customers. Online sales are recorded when merchandise is delivered
to the
customer, with the time of delivery being based on an estimate of
the
shipping time from the Company’s distribution center to the customer.
Shipping fees charged to customers are included in revenue and shipping
costs are included in selling expenses. The Company accounts for
layaway
sales in accordance with SAB No. 101, recognizing revenue from sales
made
under its layaway program upon delivery of the merchandise to the
customer. Revenue is not recorded when gift cards and gift certificates
are sold, but rather when a card or certificate is redeemed for
merchandise. A current liability for unredeemed gift cards and
certificates is recorded at the time the card or certificate is purchased.
The amount of the gift certificate liability is determined using
the
outstanding balances from the prior three years of issuance and the
gift
card liability is determined using the outstanding balances from
the prior
four years of issuance. The liability recorded for unredeemed gift
cards
and gift certificates was $4.3 million and $6.7 million as of August
4,
2007 and February 3, 2007, respectively. The Company records breakage
as
other income when the probability of redemption, which is based on
historical redemption patterns, is
remote.
|
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The
Company establishes a liability for estimated merchandise returns based upon
the
historical average sales return percentage. Customer returns could potentially
exceed the historical average, thus reducing future net sales results and
potentially reducing future net income. The accrued liability for reserve for
sales returns was $0.4 million and $0.3 million at August 4, 2007 and February
3, 2007, respectively.
2.
|
Inventory.
Inventory is valued at the lower of cost or market. Cost is determined
using an 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 using
calculations applied to current inventory levels within each of four
different markdown levels. Management also reviews the levels of
inventory
in each markdown group and the overall aging of the inventory versus
the
estimated future demand for such product and the current market
conditions. Such judgments could vary significantly from actual results,
either favorably or unfavorably, due to fluctuations in future economic
conditions, industry trends, consumer demand, and the competitive
retail
environment. Such changes in market conditions could negatively impact
the
sale of markdown inventory causing further markdowns or inventory
obsolescence, resulting in increased cost of goods sold from write-offs
and reducing the Company’s net income. The liability recorded as a reserve
for markdowns and/or obsolescence was $6.4 million as of August 4,
2007
and February 3, 2007. We are not aware of any events, conditions,
or
changes in demand or price that would indicate that our inventory
valuation may not be materially accurate at this
time.
|
3.
|
Income
Taxes.
In June 2006, the FASB issued Interpretation No. 48, Accounting
for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No.
109
(FIN 48). The Company adopted FIN 48 with the fiscal year beginning
February 4, 2007. Under FIN 48, tax benefits are recognized only
for tax
positions that are more likely than not to be sustained upon examination
by tax authorities. The amount recognized is measured as the largest
amount of benefit that is greater than 50 percent likely to be realized
upon ultimate settlement. Unrecognized tax benefits are tax benefits
claimed in the Company’s tax returns that do not met the recognition and
measurement standards. The adoption of FIN 48 had no impact on the
Company’s financial statements.
|
The
Internal Revenue Service has closed its examination of the Company’s income tax
returns through February 3, 2001. The tax years ended February 2, 2002 and
February 1, 2003 are also closed years. In addition, open tax years with the
Internal Revenue Service as well as those related to a number of states remain
subject to examination.
4.
|
Operating
Leases.
The Company leases retail stores under operating leases. Most lease
agreements contain tenant improvement allowances, rent holidays,
rent
escalation clauses, and/or contingent rent provisions. For purposes
of
recognizing lease incentives and minimum rental expenses on a
straight-line basis over the terms of the leases, the Company uses
the
date of initial possession to begin amortization, which is generally
when
the Company enters the space and begins to make improvements in
preparation of intended use. For tenant improvement allowances and
rent
holidays, the Company records a deferred rent liability on the balance
sheets and amortizes the deferred rent over the terms of the leases
as
reductions to rent expense on the statements of
income.
|
For
scheduled rent escalation clauses during the lease terms or for rental payments
commencing at a date other than the date of initial occupancy, the Company
records minimum rental expenses on a straight-line basis over the terms of
the
leases on the statements of income. Certain leases provide for contingent rents,
which are determined as a percentage of gross sales in excess of specified
levels. The Company records a contingent rent liability on the balance sheets
and the corresponding rent expense when specified levels have been achieved
or
are reasonably probable to be achieved.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OFF-BALANCE
SHEET ARRANGEMENTS,
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, results of
operations, or cash flows. 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 August
4, 2007:
|
|
Payments
Due by Period
|
|
Contractual
obligations (dollar amounts in thousands)
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
|
Long
term debt and purchase obligations
|
|
$
|
1,336
|
|
$
|
594
|
|
$
|
742
|
|
$
|
-
|
|
$
|
-
|
|
Deferred
compensation
|
|
$
|
3,845
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
3,845
|
|
Operating
leases
|
|
$
|
219,662
|
|
$
|
37,572
|
|
$
|
67,659
|
|
$
|
48,533
|
|
$
|
65,898
|
|
Total
contractual obligations
|
|
$
|
224,843
|
|
$
|
38,166
|
|
$
|
68,401
|
|
$
|
48,533
|
|
$
|
69,743
|
|
|
|
|
|
Amount
of Commitment Expiration Per Period
|
|
Other
Commercial Commitments (dollar amounts in thousands)
|
|
Total Amounts Committed
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
After 5 years
|
|
Lines
of credit
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Total
commercial commitments
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
The
Company has available an unsecured line of credit of $17.5 million, of which
$10
million is available for letters of credit, which is excluded from the preceding
table. Certain merchandise purchase orders require that the Company open letters
of credit. When the Company takes possession of the merchandise, it releases
payment on the letters of credit. The amounts of outstanding letters of credit
reported reflect the open letters of credit on merchandise ordered, but not
yet
received or funded. The Company believes it has sufficient credit available
to
open letters of credit for merchandise purchases. There were no bank borrowings
during the second quarter of fiscal 2007 or the second quarter of fiscal 2006.
The Company had outstanding letters of credit totaling $1.0 million and $0.7
million at August 4, 2007 and February 3, 2007, respectively. The Company has
no
other off-balance sheet arrangements.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SEASONALITY
AND INFLATION
The
Company's business is seasonal, with the holiday season (from approximately
November 15 to December 30) and the back-to-school season (from approximately
July 15 to September 1) historically contributing the greatest volume of net
sales. For fiscal years 2006, 2005, and 2004, the holiday and back-to-school
seasons accounted for approximately 36%, 37%, and 38%, respectively, of the
Company's 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 and twenty-six week periods ended August 4, 2007 and July 29,
2006. Quarterly results may vary significantly depending on a variety of factors
including the timing and amount of sales and costs associated with the opening
of new stores, the timing and level of markdowns, the timing of store closings,
the remodeling of existing stores, competitive factors, and general economic
conditions.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
The
Company adopted the provisions of Financial Accounting Standards Board (FASB)
Interpretation No. 48, Accounting
for Uncertainty to Income Taxes
(FIN
48), on February 4, 2007. Under FIN 48, tax benefits are recorded only for
tax
positions that are more likely than not to be sustained upon examination by
tax
authorities. The amount recognized is measured as the largest amount of benefit
that is greater than 50% likely to be realized upon ultimate settlement.
Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns
that do not meet these recognition and measurement standards. The adoption
of
FIN 48 had no impact on the Company’s financial statements.
The
Internal Revenue Service has closed its examination of the Company’s income tax
returns through February 3, 2001. The tax years ended February 2, 2002 and
February 1, 2003 are also closed years. In addition, open tax years with the
Internal Revenue Service, as well as those related to a number of states, remain
subject to examination.
In
September 2006, the FASB issued Statement No. 157 (“SFAS 157”), Fair
Value Measurements.
This
standard defines fair value, establishes a framework for measuring fair value
in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS 157 will be effective at the beginning of the Company’s
2008 fiscal year. The Company is currently assessing the effect of this
pronouncement on the financial statements, but does not anticipate that it
will
have a material impact on the Company’s financial position, liquidity, and
results of operations.
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.
THE
BUCKLE, INC.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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
The
Company maintains a system of disclosure controls and procedures that are
designed to provide reasonable assurance that material information, which is
required to be timely disclosed, is accumulated and communicated to management
in a timely manner. An evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rules
13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was
performed as of the end of the period covered by this report. This evaluation
was performed under the supervision and with the participation of the Company’s
Chief Executive Officer and Chief Financial Officer.
Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures as of the end of
the period covered by this report were effective to provide reasonable assurance
that information required to be disclosed by the Company in the Company’s
reports that it files or submits under the Exchange Act is accumulated and
communicated to the management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure and are effective to provide reasonable assurance that such
information is recorded, processed, summarized, and reported within the time
periods specified by the SEC’s rules and forms.
Change
in Internal Control Over Financial Reporting
There
were no changes in the Company's internal control over financial reporting
that
occurred during the Company's last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.
THE
BUCKLE, INC.
PART
II
— OTHER
INFORMATION
Item
1. Legal
Proceedings:
None
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds:
The
following table sets forth information concerning purchases made by the Company
of its common stock for each of the months in the fiscal quarter ended August
4,
2007:
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per
Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
|
|
Maximum Number of Shares that May Yet Be Purchased
Under Publicly
Announced Plans
|
|
|
|
|
|
|
|
|
|
|
|
May
6, to June 2, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
380,100
|
|
June
3, to July 7, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
380,100
|
|
July
8, to August 4, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
380,100
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
The
Board of Directors authorized a 1,500,000 share repurchase plan. This plan
has
380,100 shares remaining as of August 4, 2007. Shares have been adjusted to
reflect the impact of the Company’s 3-for-2 stock split paid in the form of a
stock dividend on January 12, 2007.
Item
3. Defaults
Upon Senior Securities: None
Item
4. Submission
of Matters to a Vote of Security Holders:
(a)
May 31, 2007, Annual Meeting
(b)
Board
of
Directors:
Daniel
J. Hirschfeld
|
Robert
E. Campbell
|
Dennis
H. Nelson
|
John
P. Peetz
|
Karen
B. Rhoads
|
Ralph
M. Tysdal
|
James
E. Shada
|
Bruce
L. Hoberman
|
Bill
L. Fairfield
|
David
A. Roehr
|
|
|
Number
of Shares*
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
Del
N-Vote
|
|
(c)
1. Election of Board of Directors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
J. Hirschfeld
|
|
|
28,309,421
|
|
|
0
|
|
|
490,414
|
|
|
|
|
Dennis
H. Nelson
|
|
|
28,621,793
|
|
|
0
|
|
|
178,042
|
|
|
|
|
Karen
B. Rhoads
|
|
|
27,857,810
|
|
|
0
|
|
|
942,025
|
|
|
|
|
James
E. Shada
|
|
|
28,211,297
|
|
|
0
|
|
|
588,538
|
|
|
|
|
Bill
L. Fairfield
|
|
|
28,761,326
|
|
|
0
|
|
|
38,509
|
|
|
|
|
Robert
E. Campbell
|
|
|
28,759,376
|
|
|
0
|
|
|
40,459
|
|
|
|
|
Jack
Peetz
|
|
|
28,757,221
|
|
|
0
|
|
|
42,614
|
|
|
|
|
Ralph
M. Tysdal
|
|
|
28,418,325
|
|
|
0
|
|
|
381,510
|
|
|
|
|
Bruce
L. Hoberman
|
|
|
28,764,971
|
|
|
0
|
|
|
34,864
|
|
|
|
|
David
A. Roehr
|
|
|
28,752,721
|
|
|
0
|
|
|
47,114
|
|
|
|
|
|
|
Number
of Shares*
|
|
|
|
For
|
|
Against
|
|
Abstain
|
|
Del
N-Vote
|
|
2.
Appoint Deloitte & Touche LLP as
independent auditors.
|
|
|
28,748,650
|
|
|
48,110
|
|
|
3,075
|
|
|
|
|
3.
Approve Company’s 2007 Management
Incentive Program
|
|
|
28,483,995
|
|
|
298,337
|
|
|
17,503
|
|
|
|
|
4.
Approve Amendment to Company’s
2005 Restricted Stock Plan
|
|
|
27,379,989
|
|
|
342,987
|
|
|
23,748
|
|
|
1,053,111
|
|
5.
Approve Awards Pursuant to Company’s
2005 Restricted Stock Plan
|
|
|
28,553,495
|
|
|
229,189
|
|
|
17,151
|
|
|
|
|
6.
Approve Amendment to Company’s
1993 Director Stock Option Plan
|
|
|
28,365,278
|
|
|
418,296
|
|
|
16,261
|
|
|
|
|
*includes
only shares represented in person or by proxy at the annual meeting
(d)
None
Item
5. Other
Information:
None
Item
6.
Exhibits:
|
(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.
|
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:
September
12, 2007 |
|
/s/ DENNIS
H.
NELSON.
|
|
|
|
DENNIS
H. NELSON,
President and CEO
|
|
|
|
|
|
|
|
|
Dated:
September
12, 2007 |
|
/s/ KAREN
B.
RHOADS .
|
|
|
|
KAREN
B. RHOADS,
Vice President
|
|
of
Finance and CFO
|