<PAGE> 1
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 31, 1999
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ____________ to ____________
Commission File Number: 000-20132
THE BUCKLE, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
NEBRASKA 47-0366193
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
2407 WEST 24TH STREET, KEARNEY, NEBRASKA 68847
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (308) 236-8491
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |
The number of shares issued of the Registrant's Common Stock, outstanding as of
September 8, 1999 was 21,663,199 shares of Common Stock.
<PAGE> 2
THE BUCKLE, INC.
FORM 10-Q
INDEX
<TABLE>
Pages
-----
<S> <C> <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 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Part II. Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
(a) Exhibit 11, statement regarding computation of earnings per share
(b) No reports on Form 8-K were filed by the Company during the
Quarter ended July 31, 1999
Signatures 14
</TABLE>
2
<PAGE> 3
THE BUCKLE, INC.
BALANCE SHEETS
(columnar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS July 31, January 30,
CURRENT ASSETS: 1999 1999
---------------- ---------------
<S> <C> <C>
Cash and cash equivalents $ 42,760 $ 61,705
Short-term investments 28,276 26,691
Accounts receivable, net of
allowance of $300,000 4,225 3,980
Inventory 68,764 49,411
Prepaid expenses and other assets 2,532 2,231
-------- --------
Total current assets 146,557 144,018
PROPERTY AND EQUIPMENT: 85,562 74,041
Less accumulated depreciation 34,908 34,798
-------- --------
50,654 39,243
OTHER ASSETS 1,420 2,852
-------- --------
$198,631 $186,113
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 23,400 $ 16,817
Accrued employee compensation 7,643 16,919
Accrued store operating expenses 3,430 3,317
Gift certificates redeemable 1,244 1,593
Income taxes payable 2,190 1,337
-------- --------
Total current liabilities 37,907 39,983
STOCKHOLDERS' EQUITY:
Common stock, authorized 100,000,000 shares
of $.01 par value; issued 22,079,462 and
21,968,921 shares, respectively 221 220
Additional paid-in capital 39,047 37,431
Retained earnings 122,379 109,534
Unearned compensation - restricted stock (923) (1,055)
-------- --------
160,724 146,130
Total stockholders' equity -------- --------
$198,631 $186,113
======== ========
</TABLE>
See notes to financial statements.
3
<PAGE> 4
THE BUCKLE, INC.
STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
-------------------- ----------------------
July 31, August 1, July 31, August 1,
1999 1998 1999 1998
------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C> <C>
SALES, net of returns and allowances $ 79,584 $ 70,506 $159,272 $137,534
COST OF SALES (including buying,
distribution and occupancy costs) 52,958 46,240 105,545 90,527
-------- ---------- -------- --------
Gross profit 26,626 24,266 53,727 47,007
OPERATING EXPENSES:
Selling 14,331 12,812 29,144 25,764
General and administrative 2,425 2,141 4,920 4,366
-------- ---------- -------- --------
16,756 14,953 34,064 30,130
-------- ---------- -------- --------
Income from operations 9,870 9,313 19,663 16,877
OTHER INCOME 314 333 888 855
--------- ---------- -------- --------
Income before income taxes 10,184 9,646 20,551 17,732
Income tax expense 3,809 3,608 7,707 6,680
--------- ---------- -------- --------
NET INCOME $ 6,375 $ 6,038 $ 12,844 $ 11,052
========= ========== ======== ========
Basic income per share $0.29 $0.27 $0.58 $0.50
Diluted income per share $0.27 $0.26 $0.55 $0.48
Basic shares outstanding 22,079 22,001 22,061 21,965
Diluted shares outstanding 23,407 23,226 23,363 23,199
</TABLE>
See notes to financial statements.
4
<PAGE> 5
THE BUCKLE, INC.
STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Twenty-six Weeks Ended
July 31, 1999 August 1, 1998
------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,844 $ 11,052
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation 4,220 3,001
Loss on disposal of assets 395 207
Amortization of unearned compensation 132 132
Changes in assets and liabilities:
Accounts receivable (245) (1,069)
Inventory (19,353) (4,579)
Prepaid expenses and other assets (301) 29
Accounts payable 6,583 134
Accrued employee compensation (7,519) (5,050)
Accrued store operating expenses 113 471
Gift certificates redeemable (349) (314)
Income taxes payable 853 (17)
-------- --------
Net cash flows from operating activities (2,627) 3,997
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in short-term investments (1,585) (7,266)
Purchase of property and equipment (16,026) (9,437)
Decrease/(Increase) in other assets 1,432 (1)
-------- --------
Net cash flows from investing activities (16,179) (16,704)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchases of common stock (641) 0
Proceeds from the exercise of stock options 502 1,965
-------- --------
Net cash flows from financing activities (139) 1,965
-------- --------
Net decrease in cash and cash equivalents (18,945) (10,742)
Cash and cash equivalents, Beginning of period 61,705 53,593
-------- --------
Cash and cash equivalents, End of period $ 42,760 $ 42,851
======== ========
</TABLE>
See notes to financial statements.
5
<PAGE> 6
THE BUCKLE, INC.
NOTES TO FINANCIAL STATEMENTS
THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 31, 1999 AND AUGUST 1, 1998
(Unaudited)
1. Management Representation - The accompanying unaudited financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles 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 30, 1999, included in The
Buckle, Inc.'s 1998 Annual Report.
2. Description of the Business - The Company is a retailer of medium to better
priced casual apparel and footwear for fashion conscious young men and
women. The Company operates their business as one reportable industry
segment. The Company had 237 stores located in 32 states throughout the
central, northwestern and southern areas of the United States as of July
31, 1999, and 209 stores in 28 states as of August 1, 1998. During the
second quarter of fiscal 1999, the Company opened six new stores and
substantially renovated three stores. During the second quarter of fiscal
1998, the Company opened five new stores and substantially renovated two
stores.
The following is information regarding the Company's major product lines,
stated as a percentage of the Company's net sales:
<TABLE>
<CAPTION>
Percentage of Net Sales Percentage of Net Sales
Thirteen Weeks Ended Twenty-six Weeks Ended
Merchandise Group July 31, 1999 Aug. 1, 1998 July 31, 1999 Aug. 1, 1998
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Denims 16.0% 21.0% 18.1% 22.3%
Casual bottoms 4.2% 3.4% 4.3% 3.2%
Tops (incl. sweaters) 35.9% 32.8% 33.9% 31.5%
Sportswear/fashions 17.7% 16.9% 16.2% 16.4%
Accessories 6.7% 6.2% 6.0% 5.3%
Footwear 17.3% 18.7% 19.0% 20.3%
Other 2.2% 1.0% 2.5% 1.0%
----- ----- ----- ------
100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
</TABLE>
3. 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 and warrants.
4. Accounting Pronouncements - In June 1998, the FASB issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities" which
will be effective for fiscal years beginning after June 15, 2000. The
Company will adopt this Statement effective February 4, 2001. At this time,
the Company believes the impact of adopting this Statement should not be
significant to the results of operations or financial position.
6
<PAGE> 7
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
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 31, 1999, and August 1, 1998:
THE BUCKLE, INC.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Percentage of Net Sales Percentage of Net Sales
----------------------- -----------------------
Thirteen weeks ended Percentage Twenty-six weeks ended Percentage
July 31, August 1, increase July 31, August 1, increase
1999 1998 (decrease) 1999 1998 (decrease)
------------ ------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net sales 100.0% 100.0% 12.9% 100.0% 100.0% 15.8%
Cost of sales (including
buying, distribution and
occupancy costs) 66.5% 65.6% 14.5% 66.3% 65.8% 16.6%
----- ----- ---- ----- ----- ----
Gross profit 33.5% 34.4% 9.7% 33.7% 34.2% 14.3%
Selling expenses 18.0% 18.2% 11.9% 18.3% 18.7% 13.1%
General and
Administrative expenses 3.1% 3.0% 13.3% 3.1% 3.2% 12.7%
----- ----- ---- ----- ----- ----
Income from operations 12.4% 13.2% 6.0% 12.3% 12.3% 16.5%
Other income .4% .5% (5.7)% .6% .6% 3.9%
----- ----- ---- ----- ----- ----
Income before income
Taxes 12.8% 13.7% 5.6% 12.9% 12.9% 15.9%
Income tax expense 4.8% 5.1% 5.6% 4.8% 4.9% 15.4%
----- ----- ---- ----- ----- ----
Net Income 8.0% 8.6% 5.6% 8.1% 8.0% 16.2%
==== ===== ==== ===== ===== ====
</TABLE>
Net sales increased from $70.5 million in the second quarter of fiscal 1998 to
$79.6 million in the second quarter of fiscal 1999, a 12.9% increase. Comparable
store sales increased from the second quarter of fiscal 1998 to the second
quarter of fiscal 1999 by $0.6 million or 0.9%. The comparable store sales
increase resulted from an increase in the number of pieces sold, as the average
price per piece of merchandise sold in the second quarter of fiscal
1999,compared with the fiscal 1998 second quarter, was unchanged.
7
<PAGE> 8
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales increased from $137.5 million in the first six months of fiscal 1998
to $159.3 million for the first six months of fiscal 1999, a 15.8% increase.
Comparable store sales for the twenty-six weeks ended July 31, 1999 compared to
the twenty-six weeks ended August 1, 1998 increased $5.0 million or 3.8%. Sales
growth of 12.0% for this twenty-six week period was attributable to the
inclusion of a full six months of operating results for the 11 stores opened in
1998 and the opening of 15 new stores in the first twenty-six weeks of fiscal
1999. Average sales per square foot increased 1.1% from $142.70 to $144.30.
Gross profit after buying, occupancy, and distribution expenses increased $2.4
million in the second quarter of fiscal 1999 to $26.6 million, a 9.7% increase.
As a percentage of net sales, gross profit decreased from 34.4% in the second
quarter of fiscal 1998 to 33.5% in the second quarter of fiscal 1999. Gross
profit increased $6.7 million for the first twenty-six weeks of fiscal 1999 to
$53.7 million, a 14.3% increase. As a percentage of net sales, gross profit in
the first six months decreased from 34.2% for fiscal 1998, to 33.7% for fiscal
1999. The decrease in gross profit as a percentage of net sales for both the
three and six month periods of fiscal 1999 compared to the same periods of
fiscal 1998 was primarily attributable to an increase in occupancy costs. This
decline was partially offset by improvement in the actual merchandise margins
for the three and six months of fiscal 1999 compared to the same periods of
fiscal 1998.
Selling expenses increased from $12.8 million for the second quarter of fiscal
1998 to $14.3 million for the second quarter of fiscal 1999, a 11.9% increase.
Selling expenses as a percentage of net sales decreased from 18.2% for fiscal
1998 to 18.0% for fiscal 1999. Year-to-date selling expense rose 13.1% from
$25.8 million through the first half of fiscal 1998 to $29.1 million for the
first half of fiscal 1999. As a percentage of net sales, selling expense in the
first six months decreased from 18.7% for fiscal 1998, to 18.3% for fiscal 1999.
The primary reason for the improvement in selling expenses as a percentage of
net sales is leverage provided by the adoption of the Company's 1999 Management
Incentive Program.
General and administrative expenses increased from $2.1 million in the second
quarter of fiscal 1998 to $2.4 million in the second quarter of fiscal 1999, a
13.3% increase. As a percentage of net sales, general and administrative
expenses increased to 3.1% for the second quarter of fiscal 1999 compared to
3.0% for the second quarter of fiscal 1998. For the first half of fiscal 1999,
general and administrative expense rose 12.7% from $4.4 million for the six
months ended August 1, 1998, to $4.9 million for the six months ended July 31,
1999. As a percentage of net sales, general and administrative expense decreased
to 3.1% for the first half of fiscal 1999 compared to 3.2% for the first half of
fiscal 1998. Decreases in general and administrative expenses for the first six
months, as a percentage of net sales, resulted primarily from leverage provided
by the adoption of the Company's 1999 Management Incentive Program, partially
offset by slight increases in various expense categories.
As a result of the above changes, the Company's income from operations increased
$0.6 million to $9.9 million for the second quarter of fiscal 1999 compared to
$9.3 million for the second quarter of fiscal 1998, a 6.0% increase. Income from
operations was 12.4% of net sales in the second quarter of fiscal 1999 compared
to 13.2% in the second quarter of fiscal 1998. Income from operations,
year-to-date through July 31, 1999, was $19.7 million, a $2.8 million increase
8
<PAGE> 9
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
from the first half of the prior year. Income from operations was 12.3% of net
sales for the first six months of both fiscal 1999 and fiscal 1998.
For the quarter ended July 31, 1999, other income decreased 5.7%. For the six
months ended July 31, 1999, other income increased 3.9%. The decrease in the
second quarter was due to the loss on disposal of fixed assets related to
write-offs recorded from the rollout of new point of sale systems and store
remodels. The increase year-to-date is primarily due to additional interest
income, as the level of cash and short-term investments was greater than in the
same period of fiscal 1998 partially offset by the loss on disposal of fixed
assets.
Income tax expense as a percentage of pre-tax income was 37.5% in the first half
of fiscal 1999 compared to 37.7% in the first half of fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES
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 1999, the Company's had negative cash flow from operating activities of
$2.6 million. During the first half of fiscal 1998, the Company's had positive
cash flow from operating activities of $4.0 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, and construction costs for opening new stores.
The primary differences creating greater usage of cash this year versus last
year are a greater build up of inventory, a higher level of capital expenditures
and a higher level of bonuses paid.
The Company has available an unsecured line of credit of $5.0 million and a $5.0
million line of credit for foreign and domestic letters of credit, with First
National Bank and Trust Company of Kearney, Nebraska. Borrowings under the
lending arrangements provide for interest to be paid at a rate equal to the
prime rate published in the Wall Street Journal on the date of the borrowings.
As of July 31, 1999, the Company had working capital of $108.7 million,
including $42.8 million of cash and cash equivalents and short-term investments
of $28.3 million. The Company has, from time to time, borrowed against these
lines during periods of peak inventory build-up. There were minor bank
borrowings during the first half of fiscal 1999 and no bank borrowings during
the first half of fiscal 1998.
During the first half of fiscal 1999 and 1998 the Company invested $10.5 million
and $4.6 million, respectively, in new store construction, store renovation and
upgrading store technology, net of any construction allowances received from
landlords. The Company also spent approximately $1.9 million and $4.8 million in
the first half of fiscal 1999 and 1998, respectively, in capital expenditures
for the corporate headquarters and distribution center. During fiscal 1998, the
Company completed its expansion to the corporate headquarters and distribution
facility. The addition is approximately 124,000 square feet, added to the
existing
9
<PAGE> 10
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
55,000 square foot building. The majority of the space is used for the
distribution center, with approximately 7,800 square feet of new office space.
The distribution center was completed in June 1998 and the new office space was
completed in December 1998. The former distribution area was remodeled for use
as store supply warehousing and offices, merchandising and advertising offices
as well as new workroom, showroom and conference room space. The remodel of this
phase was completed in March 1999. The next remodeling phase includes remodeling
and reorganization of the existing office space. This phase was partially
completed in June 1999 and is expected to be completed during the third quarter
of fiscal 1999. The final phase of the remodel project is estimated to be
complete during fiscal 1999. The total cost of the expansion plus all phases of
the remodel project is estimated to be $8.5 million, of which approximately $6.5
million was incurred during fiscal 1998. Also during the second quarter of
fiscal 1999, the Company purchased a second corporate aircraft at a cost of $3.6
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.
During the remainder of fiscal 1999, the Company anticipates completing
approximately twenty additional store construction projects, including
approximately twelve new stores and approximately eight stores to be remodeled
and/or relocated. As of July 31, 1999, eight additional lease contracts have
been signed, and additional leases are in various stages of negotiation.
Management now estimates that total capital expenditures during fiscal 1999 will
be approximately $22.5 million before any landlord allowances, estimated to be
at approximately $1.5 million.
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 1996, 1997, and 1998, the Christmas and
back-to-school seasons accounted for an average of 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
twenty-six week periods ended July 31, 1999, and August 1, 1998.
YEAR 2000 MATTERS
Year 2000 Background - The Company recognizes that the arrival of the year 2000
poses a unique worldwide technological challenge as all computer information
systems will require the ability to recognize the date change from December 31,
1999 to January 1, 2000 and forward to properly process transactions. Computer
programs and hardware as well as software products that are date sensitive may
recognize a date using "00" as the Year 1900 rather than the Year 2000. This
could result in system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions or engage in normal business activities.
10
<PAGE> 11
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's goal is to be Year 2000 compliant, meaning critical systems,
devices, applications or business relationships have been evaluated and are
expected to be suitable for continued use into and beyond the Year 2000, or
contingency plans are in place. The Company has assessed its business computer
systems, such as general ledger, payroll, accounts payable and inventory
control, including distribution center functions. The majority of these systems,
which are internally developed computer programs, have been corrected. The
stores' point-of-sale systems are not internally developed but rather operate
via third-party software systems.
During August 1997, the Company entered into an agreement with a third-party
provider to prepare the customized software necessary to bring the stores'
Point-of-Sale system into Year 2000 compliance. This system has been rolled out
to the retail outlets, which was completed in July of 1999.
The Company presently believes that with modifications to its internally
developed programs and with new third-party software, the Year 2000 issue will
not pose significant operational problems for the Company. However, if such
modification and replacements are not made, or not completed on time, the Year
2000 issue could have a material impact on the company.
Year 2000 Costs - Total costs of this project to date have been incurred and
expensed or capitalized in the normal course of operations of the Company. The
total remaining cost of the Year 2000 project is estimated at less than
$100,000. The majority of such cost is for the purchase of new software and
hardware for replacement of all stores' Point-of-Sale systems and has been
capitalized and paid for with cash flow from operations. The hardware and
software replacement would have been done regardless of the Year 2000 issue to
improve the technology in the retail stores. The remaining costs of the project
are based upon the management's best estimates, using currently available
information and making assumptions regarding future events including the
continued availability of certain resources, third-party readiness and other
factors.
Risk Assessment - At this time, the Company believes its most reasonably likely
worst case scenarios are: (1) the stores are unable to authorize bankcard sales
electronically at the Point-of-Sale terminals nor verify checks tendered; and
(2) that principal suppliers are not Year 2000 ready and cannot timely deliver
their products. Although the Company does not believe that this scenario will
occur, it has assessed the effect of such an event and does not expect that it
would have a material adverse effect on the Company's financial condition and
results of operations.
The Company currently operates 240 retail stores in 33 states, has many
suppliers, and believes that this will help mitigate any adverse impact. The
company assessed this risk and believes that its contingency plans would
mitigate the long-term effect of this scenario. In the event that a temporary
disruption does occur, the Company does not expect that it would have a material
adverse effect on its financial condition and results of operations.
11
<PAGE> 12
THE BUCKLE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Contingency Plans - Contingency plans will be prepared so that the Company's
critical business processes can be expected to continue to function on January
1, 2000 and beyond. The Company's contingency plans will be structured to
address both remediation of systems and their components and overall business
operating risk. These plans are intended to mitigate both internal risks and
potential risks in the supply chain of the Company's suppliers.
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, year 2000 issues, as well as other risks and
uncertainties inherent in the Company's business and the retail industry in
general. Any changes in these factors could result in significantly different
results for the Company. The Company further cautions that the forward-looking
information contained herein is not exhaustive or exclusive. The Company does
not undertake to update any forward-looking statements, which may be made from
time to time by or on behalf of the Company.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has evaluated the disclosure requirements of Item 305 of S-K
"Quantitative and Qualitative Disclosures about Market Risk," and has concluded
that the Company has no market risk sensitive instruments for which these
additional disclosures are required.
12
<PAGE> 13
THE BUCKLE, INC.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities: None
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders:
(a) June 4, 1999, Annual Meeting
(b) Board of Directors:
Daniel J. Hirschfeld Robert E. Campbell
Dennis H. Nelson William D. Orr
Karen B. Rhoads Ralph M. Tysdal
Bill L. Fairfield
NUMBER OF SHARES*
-----------------
For Against Abstain Del N-Vote
--- ------- ------- ----------
(c) 1. Election of Board of Directors:
Daniel J. Hirschfeld 20,243,258 0 8,549
Dennis H. Nelson 20,243,258 0 8,549
Karen B. Rhoads 20,243,013 0 8,794
Bill L. Fairfield 20,240,398 0 11,409
Robert E. Campbell 20,241,070 0 10,737
William D. Orr 20,240,765 0 11,042
Ralph M. Tysdal 20,242,893 0 8,914
2. Appoint Deloitte & Touche LLP
as independent accountants. 20,233,992 11,841 5,974
3. Approval of the Company's 1999
Management Incentive Plan 18,692,874 266,511 21,150 1,271,272
*includes only shares represented in person or by proxy at the annual
meeting
(d) None
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K:
(a) See Exhibit 11, statement regarding computation of earnings per
share.
(b) No reports on Form 8-K were filed by the Company during the
quarter ended July 31, 1999.
13
<PAGE> 14
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 14, 1999 /s/ DENNIS H. NELSON
-----------------------------------
DENNIS H. NELSON, President and CEO
Dated: September 14, 1999 /s/ KAREN B. RHOADS
-----------------------------------
KAREN B. RHOADS, Vice President
of Finance and CFO
14
<PAGE> 1
EXHIBIT 11
THE BUCKLE, INC.
COMPUTATIONS OF EARNINGS PER SHARE
(dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirteen Weeks Ended
July 31, 1999 August 1, 1998
--------------------------------------------- --------------------------------------------
Income Shares Per Share Income Shares Per Share
Amount Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Net Income $ 6,375 22,079 $ 0.29 $ 6,038 22,001 $ 0.27
Effect of Dilutive Securities
Stock Options 1,328 1,225
--------------------------------------------- --------------------------------------------
Diluted EPS $ 6,375 $23,407 $ 0.27 $ 6,038 23,226 $ 0.26
============================================= ============================================
<CAPTION>
Twenty-six Weeks Ended Twenty-six Weeks Ended
July 31, 1999 August 1, 1998
--------------------------------------------- --------------------------------------------
Income Shares Per Share Income Shares Per Share
Amount Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Net Income $ 12,844 22,061 $ 0.58 $11,052 21,965 $ 0.50
Effect of Dilutive Securities
Stock Options 1,302 1,234
--------------------------------------------- --------------------------------------------
Diluted EPS $ 12,844 $23,363 $ 0.55 $11,052 23,199 $ 0.48
============================================= ============================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 42,760
<SECURITIES> 28,276
<RECEIVABLES> 4,525
<ALLOWANCES> 300
<INVENTORY> 68,764
<CURRENT-ASSETS> 146,557
<PP&E> 85,562
<DEPRECIATION> 34,908
<TOTAL-ASSETS> 198,631
<CURRENT-LIABILITIES> 37,907
<BONDS> 0
221
0
<COMMON> 0
<OTHER-SE> 160,503
<TOTAL-LIABILITY-AND-EQUITY> 198,631
<SALES> 79,584
<TOTAL-REVENUES> 79,584
<CGS> 52,958
<TOTAL-COSTS> 16,756
<OTHER-EXPENSES> (314)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,184
<INCOME-TAX> 3,809
<INCOME-CONTINUING> 6,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,375
<EPS-BASIC> .29
<EPS-DILUTED> .27
</TABLE>
