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 JULY 30, 2005 [ ] 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 (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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] Indicate by check mark whether the registrant is a Shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] The number of shares issued of the Registrant's Common Stock, outstanding as of August 26, 2005 was 19,541,065 shares of Common Stock.
THE BUCKLE, INC. FORM 10-Q INDEX <TABLE> <CAPTION> Pages ----- <S> <C> Part I. Financial Information (unaudited) Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 20 Item 4. Controls and Procedures 20 Part II. Other Information Item 1. Legal Proceedings 21 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21 Item 3. Defaults Upon Senior Securities 21 Item 4. Submission of Matters to a Vote of Security Holders 21 Item 5. Other Information 22 Item 6. Exhibits 22 Signatures 23 </TABLE> 2
THE BUCKLE, INC. BALANCE SHEETS (DOLLAR AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS) <TABLE> <CAPTION> JULY 30, JANUARY 29, 2005 2005 --------- ----------- <S> <C> <C> ASSETS CURRENT ASSETS: Cash and cash equivalents $ 82,359 $ 173,897 Investments 27,506 25,523 Accounts receivable, net of allowance of $69 and $113, respectively 2,000 1,887 Inventory 100,867 68,330 Prepaid expenses and other assets 6,548 5,693 --------- ----------- Total current assets 219,280 275,330 --------- ----------- PROPERTY AND EQUIPMENT: 191,176 179,056 Less accumulated depreciation and amortization (101,937) (95,514) --------- ----------- 89,239 83,542 --------- ----------- LONG-TERM INVESTMENTS 39,690 44,032 OTHER ASSETS 2,639 2,639 --------- ----------- $ 350,848 $ 405,543 ========= =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 32,397 $ 12,665 Accrued employee compensation 10,180 18,467 Accrued store operating expenses 4,148 4,236 Gift certificates redeemable 3,168 4,654 Income taxes payable 1,640 5,714 --------- ----------- Total current liabilities 51,533 45,736 DEFERRED COMPENSATION 2,323 1,799 DEFERRED RENT LIABILITY 25,668 25,080 --------- ----------- Total liabilities 79,524 72,615 --------- ----------- COMMITMENTS STOCKHOLDERS' EQUITY: Common stock, authorized 100,000,000 shares of $.01 par value; issued and outstanding; 19,527,368 and 21,685,008 shares, respectively 195 217 Additional paid-in capital 40,592 26,857 Retained earnings 232,869 305,854 Unearned compensation - restricted stock (2,332) - --------- ----------- Total stockholders' equity 271,324 332,928 --------- ----------- $ 350,848 $ 405,543 ========= =========== </TABLE> See notes to financial statements. 3
THE BUCKLE, INC. STATEMENTS OF INCOME (DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) <TABLE> <CAPTION> THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED -------------------- ---------------------- JULY 30, JULY 31, JULY 30, JULY 31, 2005 2004 2005 2004 -------- -------- -------- -------- <S> <C> <C> <C> <C> SALES, net of returns and allowances $104,130 $ 96,848 $209,677 $191,622 COST OF SALES (including buying, distribution and occupancy costs) 67,883 67,054 136,181 131,166 -------- -------- -------- -------- Gross profit 36,247 29,794 73,496 60,456 -------- -------- -------- -------- OPERATING EXPENSES: Selling 21,721 18,399 42,614 36,733 General and administrative 3,850 3,853 7,978 7,750 -------- -------- -------- -------- 25,571 22,252 50,592 44,483 -------- -------- -------- -------- Income from operations 10,676 7,542 22,904 15,973 OTHER INCOME, Net 1,256 825 2,737 1,743 -------- -------- -------- -------- Income before income taxes 11,932 8,367 25,641 17,716 PROVISION FOR INCOME TAXES 4,379 3,050 9,467 6,511 -------- -------- -------- -------- NET INCOME $ 7,553 $ 5,317 $ 16,174 $ 11,205 ======== ======== ======== ======== Per share amounts: Basic income per share $ 0.39 $ 0.25 $ 0.81 $ 0.52 ======== ======== ======== ======== Diluted income per share $ 0.38 $ 0.24 $ 0.78 $ 0.50 ======== ======== ======== ======== Basic weighted average shares 19,145 21,406 19,905 21,388 Diluted weighted average shares 20,100 22,225 20,804 22,200 </TABLE> See notes to financial statements. 4
THE BUCKLE, INC. STATEMENTS OF STOCKHOLDERS' EQUITY (DOLLAR AMOUNTS IN THOUSANDS) <TABLE> <CAPTION> ADDITIONAL COMMON PAID-IN RETAINED UNEARNED STOCK CAPITAL EARNINGS COMPENSATION TOTAL ---------- ---------- ---------- ------------ ---------- <S> <C> <C> <C> <C> <C> FISCAL 2005 BALANCE, January 29, 2005 $ 217 $ 26,857 $ 305,854 $ - 332,928 Net income - - 16,174 - 16,174 Dividends paid on common stock, ($0.12 per share) - - (2,264) - (2,264) ($0.15 per share) (2,925) - (2,925) Common stock (764,860 shares) issued on exercise of stock options 7 10,985 - - 10,992 Issuance of restricted stock 1 2,750 - (2,751) - Amortization of restricted stock grant - - - 419 419 Common stock (3,000,000 shares) purchased and retired (30) - (83,970) - (84,000) ---------- ---------- ---------- ---------- ---------- BALANCE, July 30, 2005 $ 195 $ 40,592 $ 232,869 $ (2,332) $ 271,324 ========== ========== ========== ========== ========== FISCAL 2004 BALANCE, January 31, 2004 $ 215 $ 24,245 $ 272,125 $ (2,740) 293,845 Net income - - 11,205 - 11,205 Dividends paid on common stock, ($0.10 per share) - - (4,312) - (4,312) Common stock (123,990 shares) issued on exercise of stock options 1 1,967 - - 1,968 Amortization of restricted stock grant - - - 1,370 1,370 Forfeiture of restricted stock (757 shares) (16) (16) Common stock (45,700 shares) purchased and retired - (1,196) - - (1,196) ---------- ---------- ---------- ---------- ---------- BALANCE, July 31, 2004 $ 216 $ 25,000 $ 279,018 $ (1,370) $ 302,864 ========== ========== ========== ========== ========== </TABLE> See notes to financial statements. 5
THE BUCKLE, INC. STATEMENTS OF CASH FLOWS (DOLLAR AMOUNTS IN THOUSANDS) <TABLE> <CAPTION> TWENTY-SIX WEEKS ENDED ------------------------ JULY 30, JULY 31, 2005 2004 ---------- ---------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 16,174 $ 11,205 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation 8,115 7,828 Amortization of unearned compensation - restricted stock 419 1,370 Deferred taxes - (38) (Gain) loss on disposal of assets (117) 296 Changes in operating assets and liabilities: Accounts receivable (113) 2,118 Inventory (32,537) (39,841) Prepaid expenses (855) 4,219 Accounts payable 19,732 17,714 Accrued employee compensation (8,287) (5,152) Accrued store operating expenses (88) 1,005 Gift certificates redeemable (1,486) (1,096) Long-term liabilities and deferred compensation 1,112 324 Income taxes payable (4,074) 313 ---------- ---------- Net cash flows from operating activities (2,005) 265 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (13,877) (9,166) Proceeds from sale of property and equipment 182 - Change in other assets - 137 Purchase of investments (9,586) (8,206) Proceeds from sales and maturities of investments 11,945 10,717 ---------- ---------- Net cash flows from investing activities (11,336) (6,518) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the exercise of stock options 10,992 1,951 Purchases of common stock (84,000) (1,195) Payment of dividends (5,189) (4,314) ---------- ---------- Net cash flows from financing activities (78,197) (3,558) ---------- ---------- NET DECREASE IN CASH AND CASH EQUIVALENTS (91,538) (9,811) CASH AND CASH EQUIVALENTS, Beginning of period 173,897 119,976 ---------- ---------- CASH AND CASH EQUIVALENTS, End of period $ 82,359 $ 110,165 ========== ========== </TABLE> See notes to financial statements. 6
THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 30, 2005 AND JULY 31, 2004 (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 29, 2005, included in The Buckle, Inc.'s 2004 Form 10-K. 2. Stock-Based Compensation - The Company has several stock option plans which allow for granting of stock options to employees and directors, as described more fully in the notes included in the Company's 2004 Annual Report. A total of 3,225,000 shares of common stock are authorized for grants under such plans as of July 30, 2005; of these authorized shares, 321,032 shares were available for grant under the various plans, of which 195,350 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. The stock-based compensation expense reflected in net income for the thirteen and twenty-six week periods ended July 30, 2005 relates to the issuance of 77,500 shares of restricted stock on February 22, 2005. The stock-based compensation expense reflected in net income for the thirteen and twenty-six week periods ended July 31, 2004 is the result of the issuance of 169,840 shares of restricted stock on June 26, 2003. There is no recorded expense from the issuance of stock options, as all options granted under the various 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 of the restricted stock expense on net income and the impact 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. 7
THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 30, 2005 AND JULY 31, 2004 (Unaudited) <TABLE> <CAPTION> Thirteen Weeks Ended Twenty-six Weeks Ended --------------------------- ---------------------------- July 30,2005 July 31, 2004 July 30,2005 July 31, 2004 ------------ ------------- ------------ ------------- <S> <C> <C> <C> <C> Net income, as reported $ 7,553 $ 5,317 $ 16,174 $ 11,205 Add: Stock-based employee compensation expense included in reported net income, net of related tax effects 262 171 366 856 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (677) (872) (1,327) (2,258) ------------ ------------- ------------ ------------- Pro forma net income $ 7,138 $ 4,616 $ 15,213 $ 9,803 ============ ============= ============ ============= Earnings per share: Basic - as reported $ 0.39 $ 0.25 $ 0.81 $ 0.52 ============ ============= ============ ============= Basic - pro forma $ 0.37 $ 0.22 $ 0.76 $ 0.46 ============ ============= ============ ============= Diluted - as reported $ 0.38 $ 0.24 $ 0.78 $ 0.50 ============ ============= ============ ============= Diluted - pro forma $ 0.36 $ 0.21 $ 0.73 $ 0.44 ============ ============= ============ ============= </TABLE> 8
THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 30, 2005 AND JULY 31, 2004 (Unaudited) The weighted average fair value of options granted during the thirteen and twenty six week periods ended July 30, 2005 and July 31, 2004, respectively, under the SFAS No. 123 methodology was $16.40 and $14.93 per option, respectively. The fair value of options granted under the Plans was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions: <TABLE> <CAPTION> 2005 2004 <S> <C> <C> Risk-free interest rate 4.00 % 4.00 % Dividend yield 1.50 % 1.50 % Expected volatility 65.0 % 65.0 % Expected life (years) 7.0 years 7.0 years </TABLE> A summary of the Company's stock-based compensation activity related to stock options for the fiscal quarters ended July 30, 2005 and July 31, 2004 is as follows: <TABLE> <CAPTION> 2005 2004 ----------------------------- ----------------------------- Weighted Weighted Average Average Exercise Exercise Number Price Number Price ------------- ------------- ------------- ------------- <S> <C> <C> <C> <C> Outstanding - beginning of fiscal quarter 3,334,806 $ 19.47 3,853,847 $ 19.03 Granted 0 n/a 300 26.96 Expired/terminated (7,212) 26.04 (13,228) 25.48 Exercised (638,206) 13.61 (23,690) 17.86 ------------- ------------- ------------- ------------- Outstanding - end of quarter 2,689,388 $ 20.84 3,817,229 $ 19.01 ============= ============= ============= ============= </TABLE> There were 2,090,552 and 1,621,929 options exercisable at July 30, 2005 and July 31, 2004, respectively. The following table summarizes information about stock options outstanding as of July 30, 2005: <TABLE> <CAPTION> Options Outstanding Options Exercisable - ----------------------------------------------------------------- --------------------- Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise Exercise Prices Outstanding Life Price Exercisable Price <S> <C> <C> <C> <C> <C> <C> $ 6.250 $ 6.333 113,250 0.51 years $ 6.33 113,250 $ 6.33 8.670 9.292 77,863 1.52 9.23 77,863 9.23 11.750 17.010 493,600 6.16 16.47 489,100 16.46 17.188 23.950 1,231,121 4.50 20.91 1,215,705 20.95 25.750 34.083 773,554 6.41 26.80 194,634 28.11 ----------- -------- ------------ ----------- -------- 2,689,388 5.10 years $ 20.84 2,090,552 $ 19.34 =========== ======== ============ =========== ======== </TABLE> 3. 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 333 stores located in 38 states throughout the central, northwestern and southern regions of the United States as of July 30, 2005, and 324 stores in 38 states as of July 31, 2004. During the second quarter of fiscal 2005, the Company opened five new stores and substantially renovated three stores. During the second quarter of fiscal 2004, the Company opened three new stores and substantially renovated two stores. 9
THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 30, 2005 AND JULY 31, 2004 (Unaudited) The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: <TABLE> <CAPTION> Thirteen Weeks Ended Twenty-six Weeks Ended Merchandise Group July 30, 2005 July 31, 2004 July 30, 2005 July 31, 2004 ------------- ------------- ------------- ------------- <S> <C> <C> <C> <C> Denims 38.3% 35.5% 40.0% 35.7% Tops (including sweaters) 31.1 33.9 30.6 32.4 Accessories 10.1 11.8 9.7 11.4 Footwear 9.1 7.6 8.9 8.4 Sportswear/Fashions 8.0 9.2 6.8 9.4 Casual bottoms 2.2 1.6 2.7 2.3 Outerwear 1.1 0.3 1.2 0.4 Other 0.1 0.1 0.1 0.0 ----- ----- ----- ----- 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== </TABLE> 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 81,540 shares of common stock for the period ended July 31, 2004, are not included in the computation of diluted earnings per share because the options would be considered anti-dilutive. <TABLE> <CAPTION> Thirteen Weeks Ended Thirteen Weeks Ended July 30, 2005 July 31, 2004 --------------------------------- --------------------------------- Per Share Per Share Income Shares Amount Income Shares Amount --------- --------- --------- --------- --------- --------- <S> <C> <C> <C> <C> <C> <C> Basic EPS Net income $ 7,553 19,145 $ 0.39 $ 5,317 21,406 $ 0.25 Effect of Dilutive Securities Stock options - 955 (0.01) - 819 (0.01) --------- --------- --------- --------- --------- --------- Diluted EPS $ 7,553 20,100 $ 0.38 $ 5,317 22,225 $ 0.24 ========= ========= ========= ========= ========= ========= </TABLE> <TABLE> <CAPTION> Twenty-six Weeks Ended Twenty-six Weeks Ended July 30, 2005 July 31, 2004 --------------------------------- --------------------------------- Per Share Per Share Income Shares Amount Income Shares Amount --------- --------- --------- --------- --------- --------- <S> <C> <C> <C> <C> <C> <C> Basic EPS Net income $ 16,174 19,905 $ 0.81 $ 11,205 21,388 $ 0.52 Effect of Dilutive Securities Stock options - 899 (0.03) - 812 (0.02) --------- --------- --------- --------- --------- --------- Diluted EPS $ 16,174 20,804 $ 0.78 $ 11,205 22,200 $ 0.50 ========= ========= ========= ========= ========= ========= </TABLE> 10
THE BUCKLE, INC. NOTES TO FINANCIAL STATEMENTS THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 30, 2005 AND JULY 31, 2004 (Unaudited) 5. Related Party Transactions - On March 24, 2005, the Company entered into an agreement with Daniel J. Hirschfeld, founder and Chairman, to purchase a total of 3,000,000 shares of the Company's outstanding stock from Mr. Hirschfeld. The shares represented approximately 13.8% of the Company's total shares of Common Stock then outstanding. The shares were purchased for $28.00 per share, or a total purchase price of $84 million. The Company retired the purchased shares, reducing the total shares outstanding and reducing Mr. Hirschfeld's ownership percentage to approximately 53%. The stock repurchase transaction was negotiated by a Special Committee of The Buckle, Inc.'s Board of Directors. The Special Committee was comprised of all of the Company's independent Directors, and therefore the transaction was approved by the independent Directors on the Company's Board. In connection with this transaction, the Special Committee received a written fairness opinion from Houlihan Lokey Howard & Zukin Financial Advisors, Inc., an international investment bank. 11
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 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. 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 reduce net sales and have a negative impact on operating leverage, thus reducing net earnings. Beginning with the four-week period ended May 1, 2004, the Company changed its method of reporting comparable store sales to exclude internet sales. Comparable store sales reported for all periods subsequent to that date reflect the impact of this change and for all prior periods the impact was immaterial. 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. 12
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 each of the thirteen and twenty-six week periods ended July 30, 2005, and July 31, 2004: <TABLE> <CAPTION> PERCENTAGE OF NET SALES PERCENTAGE OF NET SALES THIRTEEN WEEKS ENDED PERCENTAGE TWENTY-SIX WEEKS ENDED PERCENTAGE ----------------------------- INCREASE/ ---------------------------- INCREASE/ JULY 30, 2005 JULY 31, 2004 (DECREASE) JULY 30, 2005 JULY 31, 2004 (DECREASE) ------------- ------------- ---------- ------------- ------------- ---------- <S> <C> <C> <C> <C> <C> <C> Net sales 100.0% 100.0% 7.5 100.0% 100.0% 9.4% Cost of sales (including buying, distribution and occupancy costs) 65.2% 69.2% 1.2 65.0% 68.5% 3.8% ----- ----- ---- ----- ----- ---- Gross profit 34.8% 30.8% 21.7 35.0% 31.5% 21.6% Selling expenses 20.8% 19.0% 18.1 20.3% 19.2% 16.0% General and administrative expenses 3.7% 4.0% -0.1% 3.8% 4.0% 2.9% ----- ----- ---- ----- ----- ---- Income from operations 10.3% 7.8% 41.5 10.9% 8.3% 43.4% Other income, net 1.2% 0.9% 52.2 1.3% 0.9% 57.0% ----- ----- ---- ----- ----- ---- Income before income taxes 11.5% 8.7% 42.6 12.2% 9.2% 44.7% Provision for income taxes 4.2% 3.2% 43.6 4.5% 3.4% 45.4% ----- ----- ---- ----- ----- ---- Net income 7.3% 5.5% 42.0 7.7% 5.8% 44.3% ----- ----- ---- ----- ----- ---- </TABLE> Net sales increased from $96.8 million in the second quarter of fiscal 2004 to $104.1 million in the second quarter of fiscal 2005, a 7.5% increase. Comparable store sales increased from the second quarter of fiscal 2004 to the second quarter of fiscal 2005 by $2.7 million or 2.9%. The comparable store sales increase resulted primarily from a 5.3% increase in the average retail price per piece of merchandise sold during the second quarter of fiscal 2005 compared with the second quarter of fiscal 2004 and a 1.0% increase in the average units per transaction during the period, partially offset by a decrease in the number of transactions. Sales growth for the thirteen week period was also attributable to the inclusion of a full three months of operating results for three stores opened after the first quarter of 2004 and seven new stores opened during the first two quarters of fiscal 2005. Net sales increased from $191.6 million in the first six months of fiscal 2004 to $209.7 million for the first six months of fiscal 2005, a 9.4% increase. Comparable store sales for the twenty-six week period ended July 30, 2005 compared to the twenty-six week period ended July 31, 2004 increased $8.6 million or 4.6%. The comparable store sales increase resulted primarily from a 5.2% increase in the average retail price per piece of merchandise sold during the twenty-six week period compared with the same period in the prior year, partially offset by a decrease in the number of transactions during the period. Sales growth for the twenty-six week period was also attributable to the inclusion of a full six months of operating results for 13 stores opened during fiscal 2004 and 7 new stores opened during the first twenty-six weeks of fiscal 2005. Average sales per square foot increased 5.6% from $120 for the six months ended July 31, 2004, to $127 for the six months ended July 30, 2005. The Company's increase in average price per piece of merchandise sold (as stated above) during the second quarter was primarily attributable to a shift in the mix of merchandise sold during the period, a 4.2% increase in average denim price points, a 6.6% increase in average knit shirt price points, a 4.5% increase in average woven shirt price points and a 14.8% increase in average sweater price points. The effect of these increases was partially offset by a 7.0% decrease in average accessories price points, a 6.0% percent decrease in average active sportswear price points and a 4.8% decrease in average footwear price points. For the first six months of fiscal 2005, the increase was primarily attributable to a shift in the mix of merchandise sold during the period, a 4.1% increase in average denim price points, a 3.9% increase in average knit shirt price points and a 12.8% increase in average sweater price points; partially offset by a 4.1% decrease in average accessories price points, a 5.4% decrease in average active sportswear price points and a 1.7% decrease in average footwear price points. These changes for both the thirteen and twenty-six week periods ended July 30, 2005, are a reflection of merchandise shifts in terms of brands, product styles, fabrics, details and finishes. 13
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Gross profit after buying, occupancy and distribution expenses increased $6.5 million in the second quarter of fiscal 2005 to $36.2 million, a 21.7% increase. As a percentage of net sales, gross profit was 34.8% in the second quarter of fiscal 2005 versus 30.8% in the second quarter of fiscal 2004. The increase in gross profit, as a percentage of net sales, resulted primarily from a 3.7% improvement in actual merchandise margins achieved through timely sell-through on new products, reduced markdowns and an increase in the sale of private label merchandise, which achieves higher margins. The Company also had reductions in second quarter expense, as a percentage of net sales, related to leveraged occupancy costs (0.5%) and reduced buying costs (0.1%). These reductions were, however, partially offset by an increase in the incentive bonus accrual based on growth in comparable store sales, gross margin and net income (0.2%) and increases in certain distribution expenses (0.1%). Gross profit increased $13.0 million for the first twenty-six weeks of fiscal 2005 to $73.5 million, a 21.6% increase. As a percentage of net sales, gross profit for the first six months of fiscal 2005 increased to 35.0% versus 31.5% for the same period in fiscal 2004. The increase in gross profit, as a percentage of net sales, resulted primarily from a 2.5% improvement in actual merchandise margins achieved through timely sell-through on new products, reduced markdowns and an increase in the sale of private label merchandise, which achieves higher margins. The Company also had reductions in second quarter expense, as a percentage of net sales, related to leveraged occupancy costs (1.0%) and reduced buying costs (0.1%). These reductions were, however, partially offset by an increase in the incentive bonus accrual based on growth in comparable store sales, gross margin and net income (0.1%). 14
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Selling expense increased from $18.4 million in the second quarter of fiscal 2004 to $21.7 million for the second quarter of fiscal 2005, an 18.1% increase. Selling expenses, as a percentage of net sales, increased from 19.0% for the second quarter of fiscal 2004 to 20.8% for the second quarter of fiscal 2005. The increase in selling expense, as a percentage of net sales, resulted primarily from increases in the incentive bonus accrual (1.0%), payroll taxes (0.3%), internet expenses (0.2%), store salaries (0.2%), insurance costs (0.2%) and bankcard fees (0.2%). These increases were partially offset by decreases, as a percentage of net sales, in advertising and certain other selling expenses. Year-to-date, selling expense rose from $36.7 million in the first six months of fiscal 2004 to $42.6 million for the first six months of fiscal 2005, a 16.0% increase. As a percentage of net sales, selling expense for the period increased from 19.2% in fiscal 2004 to 20.3% in fiscal 2005. The increase in selling expense, as a percentage of net sales, resulted primarily from increases in the incentive bonus accrual (0.6%), payroll taxes (0.2%), internet expenses (0.2%), store salaries (0.1%), insurance costs (0.1%) and bankcard fees (0.1%). These increases were partially offset by decreases, as a percentage of net sales, in advertising and certain other selling expenses. General and administrative expenses remained the same at $3.9 million for the second quarter of both fiscal 2004 and fiscal 2005. As a percentage of net sales, general and administrative expenses decreased from 4.0% for the second quarter of fiscal 2004 to 3.7% for the second quarter of fiscal 2005. The reduction in general and administrative expenses, as a percentage of net sales, was attributable to a reduction in the amount of restricted stock compensation recognized during the quarter (0.3%) and reduced expense related to gains/losses on the disposal of assets (0.4%). These reductions were partially offset by increases in the incentive bonus accrual (0.2%), home office payroll expense (0.1%), compensation expense related to unrealized gains in the Company's non-qualified deferred compensation plan (0.1%) and certain other general and administrative expenses. Year-to-date, general and administrative expense rose from $7.8 million for the first six months of fiscal 2004 to $8.0 million for the first six months of fiscal 2005, a 2.9% increase. As a percentage of net sales, general and administrative expense for the period decreased from 4.0% in fiscal 2004 to 3.8% in fiscal 2005. The reduction in general and administrative expenses, as a percentage of net sales, was attributable to a reduction in the amount of restricted stock compensation recognized during the six month period (0.5%) and reduced expense related to gains/losses on the disposal of assets (0.3%). These reductions were partially offset by increases in the incentive bonus accrual (0.3%), professional fees related to the Company's stock buyback from its founder and Sarbanes Oxley compliance (0.3%) and home office payroll expense (0.1%). As a result of the above changes, the Company's income from operations increased $3.2 million to $10.7 million for the second quarter of fiscal 2005 compared to $7.5 million for the second quarter of fiscal 2004, a 41.5% increase. Income from operations was 10.3% of net sales for the second quarter of fiscal 2005 compared to 7.8% of net sales for the second quarter of fiscal 2004. Income from operations, for the twenty-six week period ended July 30, 2005, was $22.9 million, a $6.9 million or 43.4% increase from the same twenty-six week period in fiscal 2004. Income from operations was 10.9% of net sales for the first six months of fiscal 2005 compared to 8.3% for the first six months of fiscal 2004. For the quarter ended July 30, 2005, other income increased $0.4 million. For the six months ended July 30, 2005, other income increased $1.0 million. The increase in other income for both the three and six month periods in fiscal 2005 compared to the same periods in the prior year was primarily due to increased income earned on the Company's cash and investments resulting from higher interest rates. Income tax expense, as a percentage of pre-tax income, was 36.7% in the second quarter of fiscal 2005 compared to 36.5% for the second quarter of fiscal 2004. For the first half of fiscal 2005, income tax expense was 36.9% of pre-tax income compared to 36.8% for the first half of fiscal 2004. 15
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES As of July 30, 2005, the Company had working capital of $167.7 million, including $82.4 million of cash and cash equivalents and short-term investments of $27.5 million. The Company's primary ongoing cash requirements are for inventory, payroll, new store expansion and remodeling. Historically, the Company's primary source of working capital has been cash flow from operations. However, the first half of each fiscal year is typically a period of decreasing cash flows created by various operating, investing and financing activities. During the first half of fiscal 2005 and 2004, the Company's cash flow (used) provided by operating activities was $(2.0) and $0.3 million, respectively. 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, and construction costs for new and remodeled stores. The differences in cash flow for the first six months of fiscal 2005 compared to the first six months of fiscal 2004 were primarily due to growth in net income, a reduced build-up of inventory and additional purchases of property and equipment. During the first quarter of fiscal 2005, the Company completed a repurchase of 3 million shares of common stock, resulting in a cash payout of $84 million. 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. Borrowing under the line of credit note provides 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 this line during periods of peak inventory build-up. There were no bank borrowings during the first half of fiscal 2005 or fiscal 2004. During the first half of fiscal 2005 and 2004 the Company invested $8.9 million and $8.8 million, respectively, in new store construction, store renovation and upgrading store technology. The Company also spent approximately $5.0 million in the first half of fiscal 2005 in capital expenditures related to the expansion of its corporate headquarters and distribution center compared to $0.4 million spent in the first half of fiscal 2004. During the remainder of fiscal 2005, the Company anticipates completing approximately eight additional store construction projects, including approximately five new stores and approximately three stores to be remodeled and/or relocated. As of July 30, 2005, eight additional lease contracts have been signed. Management now estimates that total capital expenditures during fiscal 2005 will be approximately $23.4 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 July 30, 2005, had total cash and investments of $149.6 million. The Company does not currently have plans for a merger, acquisition or accelerated store expansion. The Company's plans for new store expansion and remodels/relocations during the next three years are reasonably consistent with its past three fiscal years' average. Based upon past results and current plans, management does not anticipate any material changes in the Company's need for cash in the upcoming year. 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. 16
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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, 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. 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 is redeemed for merchandise. A current liability is recorded at the time of card purchases. The Company establishes a current liability for estimated merchandise returns based upon historical average sales return percentage, applying the percentage using the assumption that merchandise returns will occur within nine days following the sale. Customer returns could potentially exceed historical average and returns may occur after the time period reserved for, thus reducing future net sales results and potentially reducing future net earnings. The accrued liability for reserve for sales returns was $307,500 at July 30, 2005 and $267,500 at January 29, 2005. 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 using calculations applied to current inventory levels by department within each of four different markdown levels. Management also reviews the levels of inventory in each markdown group 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 earnings. The liability for markdown reserves and/or obsolescence was $4.8 million and $5.0 million as of July 30, 2005 and January 29, 2005, respectively. 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. 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 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. 17
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 earnings. 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. If the Company subsequently determined the lease term to vary from that used in calculations of straight-line rent expense, there could be additional expense to be recorded, thus reducing the Company's earnings for the period of correction. 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 July 30, 2005: <TABLE> <CAPTION> Payments Due by Period ------------------------------------------------------------ Contractual obligations (dollar amounts in Less than 1 thousands) Total year 1-3 years 4-5 years After 5 years -------- ----------- --------- --------- ------------- <S> <C> <C> <C> <C> <C> Long term debt and purchase obligations $ - $ - $ - $ - $ - Deferred compensation $ 2,322 $ - $ - $ - $ 2,322 Operating leases $207,863 $32,909 $60,376 $51,940 $62,638 Total contractual obligations $210,185 $32,909 $60,376 $51,940 $64,960 </TABLE> 18
THE BUCKLE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS <TABLE> <CAPTION> Amount of Commitment Expiration Per Period ----------------------------------------------------- Other Commercial Commitments (dollar Total Amounts Less than 1 amounts in thousands) Committed year 1-3 years 4-5 years After 5 years - ---------------------------- ------------- ----------- --------- --------- ------------- <S> <C> <C> <C> <C> <C> Lines of credit $ 17,500 $ 17,500 $ - $ - $ - Total commercial commitments $ 17,500 $ 17,500 $ - $ - $ - </TABLE> The Company did not have any contingent liability for landlord allowances as of July 30, 2005. The Company has available an unsecured line of credit of $17.5 million of which $10 million is available for letters of credit. 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. Amounts of outstanding letters of credit, reported in the notes included in the Company's 2004 Annual Report, 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. 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) historically contributing the greatest volume of net sales. For fiscal years 2002, 2003, and 2004, the Christmas and back-to-school seasons accounted for approximately 40% 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 periods ended July 30, 2005, and July 31, 2004. 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. 19
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 are 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. In connection with the preparation of the Company's Annual Report on Form 10-K as of January 29, 2005, the Company's management assessed the effectiveness of the Company's internal control over financial reporting. In performing this assessment, management reviewed the Company's lease accounting policies in light of a February 7, 2005 letter from the Office of the Chief Accountant of the Securities and Exchange Commission to the American Institute of Certified Public Accountants expressing views regarding lease-related accounting issues and their application under GAAP. The Company determined that its historical accounting for rent holidays, tenant allowances and certain other lease accounting policies, when reviewed against the guidance as set forth in the SEC letter, were not in accordance with GAAP. As a result, the Company changed its accounting policies and procedures to conform to GAAP as set forth in the SEC letter. Management concluded that it had a material weakness in the effectiveness of internal controls over the selection and monitoring of the policies used in accounting for leases and tenant allowances as of January 29, 2005. During the fiscal quarter ended April 30, 2005 and prior to filing the Company's Annual Report on Form 10-K for fiscal 2004, the Company corrected its accounting for leases and tenant allowances and restated its financial statements for each of the fiscal years ended January 31, 2004, February 1, 2003 and February 2, 2002, thus remediating that material weakness. Other than the changes to the Company's lease accounting policies and procedures, there were no significant changes in the Company's internal control over financial reporting that occurred during the fiscal quarter ended July 30, 2005, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. 20
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 the periods indicated: <TABLE> <CAPTION> Approximate Total Number of Dollar Value of Total Shares Purchased Shares that May Number Average as Part of Yet Be Purchased of Shares Price Paid Publicly Under Publicly Purchased Per Share Announced Plans Announced Plans <S> <C> <C> <C> <C> January 30, to Feb. 26, 2005 -0- $ 485,550 Feb. 27, to April 2, 2005 3,000,000 28.00 3,000,000 485,550 April 3, to April 30, 2005 -0- -0- 485,550 --------- ------ --------- 3,000,000 $28.00 3,000,000 ========= ====== ========= </TABLE> The shares purchased during the quarter ended April 30, 2005 were pursuant to an agreement entered into with founder and chairman, Daniel J. Hirschfeld, on March 24, 2005 and announced on March 25, 2005 to purchase 3,000,000 shares. Subsequent to April 30, 2005, the Company has not repurchased any shares of its common stock. The shares yet to be purchased are remaining from a 500,000 share repurchase plan, announced by the Company on December 27, 2000. Item 3. Defaults Upon Senior Securities: None Item 4. Submission of Matters to a Vote of Security Holders: (a) June 2, 2005, Annual Meeting (b) Board of Directors: Daniel J. Hirschfeld Robert E. Campbell Dennis H. Nelson William D. Orr Karen B. Rhoads Ralph M. Tysdal James E. Shada Bruce L. Hoberman Bill L. Fairfield David A. Roehr <TABLE> <CAPTION> NUMBER OF SHARES* ----------------------------------- For Against Abstain Del N-Vote ---------- ------- --------- ---------- <S> <C> <C> <C> <C> (c) 1. Election of Board of Directors: Daniel J. Hirschfeld 16,159,640 0 2,141,349 Dennis H. Nelson 16,392,290 0 1,908,699 Karen B. Rhoads 16,321,687 0 1,979,302 James E. Shada 16,159,240 0 2,141,749 Bill L. Fairfield 17,690,947 0 610,042 Robert E. Campbell 17,689,297 0 611,692 William D. Orr 17,687,597 0 613,392 Ralph M. Tysdal 17,687,897 0 613,092 Bruce L. Hoberman 17,690,497 0 610,492 David A. Roehr 17,689,747 0 611,242 </TABLE> 21
<TABLE> <CAPTION> NUMBER OF SHARES* ----------------------------------- For Against Abstain Del N-Vote ---------- -------- --------- ---------- <S> <C> <C> <C> <C> 2. Appoint Deloitte & Touche LLP as independent auditors. 17,760,363 538,860 1,766 3. Approve Company's 2005 Management Incentive Program 16,196,207 778,869 8,566 1,317,347 4. Approve Company's 2005 Restricted Stock Plan 15,373,781 1,599,055 10,806 1,317,347 5. Approve Awards Pursuant to Company's 2005 Restricted Stock Plan 16,341,205 631,671 10,766 1,317,347 </TABLE> * 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. 22
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 7, 2005 /s/ DENNIS H. NELSON . ------------------------------------------ DENNIS H. NELSON, President and CEO Dated: September 7, 2005 /s/ KAREN B. RHOADS . ------------------------------------------ KAREN B. RHOADS, Vice President of Finance and CFO 23