UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-08509
Buffalo Small Cap Fund, Inc.
(Exact name of registrant as specified in charter)
5420 W. 61st Place
Shawnee Mission, KS 66205
(Address of principal executive offices) (Zip code)
Kent W. Gasaway
5420 W. 61st Place
Shawnee Mission, KS 66205
(Name and address of agent for service)
(913) 384-1513
Registrant's telephone number, including area code
Date of fiscal year end: March 31, 2008
Date of reporting period: March 31, 2008
ITEM 1. REPORT TO STOCKHOLDERS.
The following is a copy of the report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940, as amended (the "1940 Act")
(17 CFR 270.30e-1)
ANNUAL REPORT
[graphic]
BUFFALO FUNDS
MARCH 31, 2008
MESSAGE TO OUR SHAREHOLDERS
(UNAUDITED)
We are currently in a difficult period for virtually all sectors of the U.S. and
world stock markets. Looking back, the U.S. stock market appears to have
forecasted a recession accurately this time (it does not always do so) as it
began to weaken materially in the latter half of 2007 and into 2008. Based on
current data, the U.S. economy likely entered recession in January. We have
never believed in "market timing", knowing that no one can consistently predict
recessions, interest rates, or commodity prices over time. This means that in
the short-term, we can often be out of sync with these hard-to-predict macro
economic factors. However, I do believe our investment team is very skilled at
picking stocks in industries that over the long-term should produce faster than
average growth.
During these downturns, what is absolutely key to long term results is how
we respond. It's only during these downtimes that we get a chance to buy
potentially great growth companies at bargain basement prices. One of the things
we have done during past downturns is to concentrate our portfolios into our
highest conviction names. Once again, we are concentrating our portfolios. For
example: Buffalo Small Cap Fund today has 53 stocks, with the top 10 holdings
representing about 31% of the Fund, the next 10 holdings representing about 23%,
and the next 10 representing about 18%. This means that nearly 3/4 of the
portfolio is now in 30 stocks. It's the most concentrated we've been since the
last downturn, and our conviction level is high in every position we own.
We will continue to focus on companies that we believe have strong balance
sheets, produce free cash flow, have high profit margins, have some advantage
over competitors, have scalable business models, great management teams and
finally historically cheap valuations. These should be companies that investors
will likely want to snap up first, when they again want to buy stocks.
I wanted to alert you to a few housekeeping items. First, we'll have a
proxy coming out shortly, primarily to reorganize all of our Funds into one
trust. As we opened funds over the years, some were registered in Delaware,
others in Maryland. We are now simply consolidating them in one place. At the
same time we're making sure the language related to our investment restrictions
is consistent across all Funds. This will shorten the prospectus a bit and
should make it easier to read and understand. Overall, this is a non-event for
how we manage the Funds and for your holdings of the Funds. The reorganization
will be non-taxable and the number of shares you hold will not change. Finally,
I have asked one of our senior portfolio managers, Grant Sarris, to replace me
on the Buffalo Funds' board of directors. I have served on the board since 1994
and felt Grant was at the perfect point in his career to take on this important
role. I will continue to co-manage several Buffalo Funds and will remain
president of the Buffalo Funds.
We thank you for your continued investment in our Funds.
Sincerely,
/s/ Kent W. Gasaway
Kent W. Gasaway
President, Buffalo Funds
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. MUTUAL FUND INVESTING
INVOLVES RISK; LOSS OF PRINCIPAL IS POSSIBLE. Please see the following Annual
Report for the Funds' holdings information.
- --------------------------------------------------------------------------------
2
PORTFOLIO MANAGEMENT REVIEW (UNAUDITED)
As most investors are well aware, the equity markets have experienced an
extreme amount of volatility this year. It started with a bursting of the
housing bubble, and led to a credit market crisis as investors realized that in
many cases the collateral backing securitized loans would be insufficient to
cover the debt. Ultimately, this led to massive loan write-offs by banks,
brokers and other financial institutions. In response, the Fed aggressively
funneled much needed liquidity into the financial system. The increased
liquidity came at cost - a weakening dollar. This weakness was compounded by the
fact that central banks around the world did not lower rates in tandem with the
Fed. The weak dollar provided further fuel for higher commodity prices. Because
of these dynamics there has been a substantial divergence in performance for
equities over the past year, heavily influenced by a company's size, geographic
exposure and sector. In our bond investments, we were continuously evaluating
risks and potential rewards, investing where we believed opportunities presented
themselves, and staying in cash when it appeared that the prudent investor
should wait. In our equity funds, we have continued to focus on secular growth
companies that we believe have the resources to continue to invest and thrive.
At the same time, we reduced or eliminated positions in companies that appeared
to be less well positioned for an extended economic downturn. It is our belief
that we should be left with portfolios of companies that have the potential to
grow revenues and earnings rapidly in the coming years.
The BUFFALO BALANCED FUND strongly outperformed the Fund's benchmark of
the weighted average of 60% of the S&P 500 Index and 40% of the Merrill Lynch
High Yield Master Index for the 1-year period ending March 31, 2008. SEE THE
INVESTMENT RESULTS TABLE FOR COMPARATIVE PERFORMANCE INFORMATION. The majority
of equities chosen for this Fund are income and/or value oriented. Energy, a
heavily weighted equity sector in the Fund, was among the Fund's top
contributors. The Fund held approximately 26% corporate bonds, 6% convertible
bonds, 58% common stock and 10% cash as of quarter end.
The Fund is managed with the goal of providing increasing income plus
capital appreciation. The Fund looks for equities of companies that have
increased their dividend at least every other year. We buy companies that appear
to have strong cash flows, stock repurchases and rising earnings. We look for
shareholder friendliness, and integrity of management.
On the fixed income side, the Fund invests in convertible bonds,
convertible preferred and high-yield bonds. The Fund buys mostly unsecured, high
yield bonds with ratings of BBB or lower, feeling that our research team's
depth, experience and expertise can add value in that area.
The BUFFALO HIGH YIELD FUND outperformed the Lipper High Yield Bond Funds
Index for the 1-year period ending March 31, 2008. SEE THE INVESTMENT RESULTS
TABLE FOR COMPARATIVE PERFORMANCE INFORMATION. The favorable performance
reflects healthy returns on several of our convertible holdings, and our
emphasis on quality single B and BB corporates that for the most part have held
up well during the turmoil in the broader high yield market.
The composition of the portfolio is roughly 75% corporate bonds, 22%
convertibles and 3% cash. In terms of credit quality, our corporate bonds are
primarily rated single B by the rating agencies*. The portfolio is diversified
across industry sectors with only one segment (Commercial Services and Supplies)
having a weighting of more than 10%.
We continue to maintain our discipline toward security selection. Our
corporate bond emphasis is on companies we feel have improving credit quality,
manageable leverage, and adequate liquidity. With the recent economic slowing,
turmoil caused by the sub-prime housing market, and general disruptions in the
credit markets, we are diligently monitoring our existing holdings, and are
focusing on companies with business models that should perform well in such an
environment.
We continue to stay away from emerging market bonds, collateralized debt
obligations, and most bonds issued in connection with leveraged buyouts, feeling
that there could be problems with many of these investments in a decelerating
economy. Within the convertible segment, our strategy is similar to most of our
equity portfolios at the Buffalo Funds, where we look for companies that should
benefit from long-term trends.
Throughout the year we have made adjustments to the weightings of existing
credits in the portfolio based on valuations, added new names that we believe
have appealing risk/reward tradeoffs, and sold a few credits that we viewed as
having deteriorating fundamental prospects relative to their return opportunity.
At times our cash was higher than we prefer, but we maintained our yield
discipline, looking for an adequate risk/reward balance in the difficult
environment. We are now closer to fully invested, with cash at approximately 3%.
The current environment seems to be offering additional buying opportunities and
we are allocating capital to what we feel are the best risk/reward opportunities
available.
We were excited to introduce the BUFFALO INTERNATIONAL FUND (BUFIX) on
September 28th, 2007 as we continue to build and refine our mutual fund line-up.
Given the start date of the Fund, this marks its first contribution to Buffalo
Funds' annual commentary. The Fund had been in existence approximately six
months as of our official year-end of March 31, 2008, so the commentary that
follows is based on the performance achieved for the partial year completed
since its inception. Please note that the figures and percentages presented
below are not annualized, but represent actual returns achieved during that
partial period.
- --------------------------------------------------------------------------------
3
MESSAGE TO OUR SHAREHOLDERS
(UNAUDITED)
(CONTINUED)
We are very pleased with the relative performance of the Buffalo
International Fund given the increasing volatility in world markets as well as
having most international indices reach their 52 week and all-time highs during
the month of October. This period (the six-month period ending March 31, 2008)
was largely marked by volatility and negative returns for stocks. The S&P 500
Index was down a -12.46% and international markets were down substantially as
well. Despite the tough market conditions, we were pleased with our relative
performance. Since the Fund's inception on September 28, 2007, through the
period ended March 31, 2008, the Buffalo International Fund (BUFIX) posted a
negative return of -6.30%. This compares quite favorably to the -11.38 and
- -10.56 posted by the MSCI EAFE and MSCI All Country World ex U.S. Indices,
respectively; our two primary benchmarks. In addition, the Lipper International
Fund Index posted a return of -10.32% for the same period.
The favorable relative performance reflects both the judiciousness with
which we invested our cash, and individual stock selection. In addition, the
U.S. dollar's weakness continued to help the dollar-based returns of
international funds. There weren't any particular countries, regions or
industries that stand out as helping our relative performance in the period. The
portfolio is diversified across a wide array of countries and industries with
Germany having the largest country weighting at the end of the period with a
weight of 17% and with the information technology related sector having the
highest sector weight at approximately 15%.
We expect international markets to continue to be volatile; however our
longer-term view is quite favorable. Given our strategy focused on long-term
secular growth, we take comfort in down markets as we believe we can put cash to
work at increasingly more attractive stock prices.
The loose dollar policy seemingly encouraged by the U.S. Government has
continued to pressure the U.S. dollar around the globe. However, longer-term,
assuming interest rate policy becomes more coordinated among G7 nations we'd
expect the dollar to stabilize and even rebound against the Euro. Against
emerging market currencies, we continue to expect the U.S. dollar should weaken
over the long-term.
We continue to maintain our discipline toward individual security
selection with an emphasis on secular growth opportunities. We do not base our
stock selections on benchmark weightings of sectors or countries, but on our
perceptions of the risk adjusted returns of individual securities.
For the one year period ending March 31, 2008, the BUFFALO JAYHAWK CHINA
FUND was down -4.47%, vs. the S&P/HKEx GEM Index decline of -36.76% and the MSCI
China Free Index positive return of 29.84%. SEE THE INVESTMENT RESULTS TABLE FOR
COMPARATIVE PERFORMANCE INFORMATION. 2007 was a roller coaster year for the
Chinese stock market and the high volatility has continued into 1Q08.
Last year we wrote of our concerns over the sustainability of the high
valuation of Chinese stocks due to three factors: (1) The tightening bias of the
People's Bank of China (the country's Central Bank); (2) The government
orchestrated revaluation of the Renminbi; and (3) The likely subsequent slowing
of Chinese growth and its impact on corporate earnings. Consequently we have
overweighted stocks that we believe have three characteristics: (1) the company
is undervalued; (2) the company's growth potential is underestimated; and (3)
the company is fundamentally misunderstood and erroneously categorized. We have
found that the companies that possess all three aforementioned characteristics
tend to fall into the small cap category. As a result, our portfolio is
overweighted in small cap Chinese companies.
In hindsight, our fundamental analysis of the market was correct as
evidenced by the eventual downturn of the Chinese stock market starting in
November, 2007. However, we under-estimated the extent of market exuberance
sustained by capital inflow and the market's clamor over large cap companies
with high valuation. The small cap companies in our portfolio did not
participate in the market rally. When the weight of high market valuation,
exacerbated volatility, and the negative impact from the aftermath of global
credit crunch finally caused the Chinese market to decline in late 2007, we
found our portfolio took a hit as well when other fund managers were selling
their holdings due to investor redemptions.
We are value investors. We believe that we excel in bottom-up fundamental
analysis, preferring it over technical analysis of charts, trading patterns and
capital flows. We believe that fundamental analysis can generate better returns
than technical analysis over the long run. So we are confident that our
investment strategy of investing in under-valued companies with sound
fundamentals should pay off.
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4
We see value in the utility, energy, and commodity sectors and have
increased our allocation to those areas. We believe that China's economy should
continue to grow close to 10%. The high economic growth should continue to
sustain the growing demand for power, energy, and metals, thus resulting in the
secular boom in those sectors. As the inflation fear cools down in China, the
electricity tariff will likely be increased, perhaps in the second half of 2008,
which in turn should boost the margins of the utility companies. In addition, we
believe that infrastructure companies such as toll roads and airports should
continue to enjoy growing traffic and increasing income. We continue to stay
clear of export-driven manufacturers as we believe that the strong Chinese
currency, weak dollar, pricing squeeze from overseas customers, and rising
domestic labor costs would cause continued margin erosion.
The BUFFALO LARGE CAP FUND underperformed the Russell 1000 Growth Index
for the 1-year period ending March 31, 2008. SEE THE INVESTMENT RESULTS TABLE
FOR COMPARATIVE PERFORMANCE INFORMATION.
The Fund's financial holdings were the largest detractors from
performance; although we have had limited exposure to banks, we have owned
asset-sensitive financials and trust companies whose stocks performed
particularly poorly in the market decline.
Not owning energy also hurt our performance, but our focus is on long term
growth, not highly cyclical industries. The Large Cap Fund has underweighted the
consumer discretionary sector, which helped the Fund's performance versus the
benchmark. The Fund's overweighting and better relative returns in healthcare
also helped performance.
The Fund is the most concentrated it has been since the last downturn, as
we have been attempting to prioritize by quality, our conviction levels, and
valuation. There are 37 stocks currently owned in the portfolio, down from 42 a
year ago. We have our heaviest weightings in those stocks that we believe have
the most potential to appreciate once the credit markets improve and consumer
confidence returns. We believe large capitalization stocks, which outperformed
the broader market in calendar year 2007, will likely continue to outperform for
some time due to their attractive valuations, operational diversity and
international exposure. We believe that the Federal Reserve lowering interest
rates should ultimately stimulate economic growth. The stock market serves as a
leading indicator and we are optimistic that we could see stabilization in mid
2008 with a likely recovery in the back half of the year. We remain focused on
our discipline of investing in growth industries that are beneficiaries of long
term trends that we have identified.
The BUFFALO MICRO CAP FUND underperformed the Russell Microcap Growth
Index for the 1 year period ending March 31, 2008. SEE THE INVESTMENT RESULTS
TABLE FOR COMPARATIVE PERFORMANCE INFORMATION. Equity performance in the past
twelve months has been heavily influenced by a company's size, geographic
exposure and sector. Unfortunately, the Micro Cap Fund was on the wrong side of
each of these three trends. Two of them, size and geographic exposure, are a
function of the Fund's mandate and the third, sector, a function of our
investment strategy.
In a fear driven market investors have a natural tendency to want to
reduce risk, which typically means focusing on larger, well established
companies with more consistent earnings and cash flow. Micro Cap companies are
obviously at the opposite end of this spectrum. During the past year, generally
the smaller the company's size, the worse it performed.
Geographic exposure played an important role in determining performance;
that is where the growth was coming from. Developing nations, such as China and
Brazil, continued to grow strongly so companies with a large portion of revenues
and earnings coming from outside the U.S. were able to capitalize on this
growth. The typical micro cap company is domestically focused with very little
presence outside the U.S.
Sector allocation was also a key determinant of performance this past
year. Because of our investment strategy we focus our research efforts on areas
with long term secular growth; healthcare, technology, consumer discretionary
and financials. Thus the Fund is not exposed to energy and materials.
The Fund's sizable weighting within the consumer discretionary sector had
the biggest negative impact on performance over the past year. Our holdings were
impacted by a combination of declining home prices and escalating gas prices,
which proved to be a punishing headwind for many of our companies. As long term
investors we try not to let short term volatility impact our investment outlook.
If we believe the company's competitive position has not been compromised and
management continues to execute their business plan, then we feel that the
secular growth supporting our companies should drive above average revenue and
earnings growth throughout a full business cycle.
Other notable impacts on performance were the Fund's weighting in
financials and technology, which declined in value at a greater rate than the
overall index. Lastly, the lack of exposure to energy and materials continued to
weigh on the Fund's overall performance.
- --------------------------------------------------------------------------------
5
MESSAGE TO OUR SHAREHOLDERS
(UNAUDITED)
(CONTINUED)
Another important item to note is the recent opening of the Fund to all
broker/dealers and other investment platforms as of January 11th. The Buffalo
Fund's Board and Micro Cap portfolio management team feel this is the right
decision for long term investors who want to participate in early stage growth
companies. While the near term environment continues to be uncertain, valuations
for many companies have reached what we believe are compelling levels, thus the
decision was made to open the Fund to a broader base of investors in the event
others may share this same opinion.
The BUFFALO MID CAP FUND underperformed the Russell MidCap Growth for the
1-year period ended March 31, 2008. SEE THE INVESTMENT RESULTS TABLE FOR
COMPARATIVE PERFORMANCE INFORMATION. Clearly the consumer has headwinds with
higher oil prices, weak housing and tight credit markets. Our overweighting in
consumer related holdings led to that sector being the Fund's primary detractor
from performance. Another detracting factor was our lack of energy holdings. The
Fund does not hold any energy stocks, which were strong performers in the
Russell MidCap Growth Index. Commodity related or deeply cyclical stocks
typically do not fit our strategy of long-term growth focus.
We had positive absolute performance in our healthcare holdings, another
heavily weighted sector. Healthcare as a sector is generally less economically
sensitive and somewhat defensive.
As a result of a slowing economy, we believe the market is gravitating
toward more secular growth names; this should benefit our existing portfolio. We
continue to have a 3-5 year time horizon for all the names in the portfolio. The
Fund is the most concentrated it has been since the last downturn, as we have
been attempting to prioritize by quality, our conviction levels, and valuation.
There are currently 49 stocks in the portfolio down from 57 a year ago. Our
focus is on secular growth companies, those that can continue to grow their
earnings in a tougher economic environment. We believe these companies should
perform strongly, and could likely receive premium valuations relative to the
overall market. We continue to stick to our strategy of buying growth companies
(at reasonable prices) that we feel are well positioned to benefit from solid
underlying growth trends regardless of the state of the economy.
The BUFFALO SCIENCE AND TECHNOLOGY FUND underperformed the NASDAQ
Composite Index for the 1-year period ending March 31, 2008. SEE THE INVESTMENT
RESULTS TABLE FOR COMPARATIVE PERFORMANCE INFORMATION. Positive attribution in
technology services and health services was offset by negative attribution in
health technology and electronic technology. In general, companies within the
portfolio that were small capitalization and exposed to domestic, discretionary
spending underperformed, while those that were large capitalization and exposed
to more stable, non-discretionary and international end markets outperformed.
The weighted average market capitalization of the Fund is $16B which is smaller
than that of the NASDAQ Composite Index and led to some of the relative
underperformance, as smaller cap stocks generally underperformed larger cap
stocks this year. We offer this analysis relative to the NASDAQ Composite to
provide an explanation of past performance. In practice, we do not manage to a
specific benchmark. Instead, our trend based investment strategy and proprietary
bottom up stock selection process drive sector allocation and portfolio
construction.
The Fund has 63% invested in the technology and services sector and 35% in
the healthcare technology and services sector. Ending the quarter, we held 61
securities in the portfolio, down from 69 holdings last year. Our portfolio
turnover picked up toward the end of the year as market volatility and lower
prices provided an attractive opportunity to concentrate the portfolio into our
best ideas.
Market volatility has picked up in the wake of consumer credit concerns.
The impact to the overall economy should continue to play out over the next few
quarters. We expect volatility to continue. We feel that our emphasis on secular
growth, good value, and diversity across the innovation-based industries
provides potential stability to the portfolio in uncertain economic periods. We
believe that our investment process positions us in well managed and financially
sound companies that we feel are well positioned to benefit from solid
underlying growth trends regardless of the state of the economy. Also, we are
disciplined, long term investors who emphasize preparation and independent
thought. Our belief in our investment process is strong. As such, we typically
take advantage of market situations in which fear or greed causes consensus
opinion to conform to the data point or story of the day rather than think
independently about the long term competitive positioning and growth prospects
of our companies. Our fundamental bottoms up work and proprietary valuation
methodology has been telling us that risk may be getting priced into the market
and that attractive long term investment opportunities seem increasingly
present. We are listening and executing to our disciplined process within the
growing innovation industries.
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6
The BUFFALO SMALL CAP FUND underperformed the Russell 2000 Growth in the
1-year time period ending March 31, 2008. SEE THE INVESTMENT RESULTS TABLE FOR
COMPARATIVE PERFORMANCE INFORMATION. Being a growth fund, many of our holdings
have not been immune to the current cyclical domestic downturn, however this has
also presented buying opportunities, allowing us to make purchases when
valuation levels have warranted. Healthcare was the greatest detractor from
performance this year, with private-pay and consumer related holdings being
hard-hit in the weaker economy. Our industrials also detracted from performance;
the industrials we discuss as part of our strategy tend to be business and
consumer services oriented (executive recruiting, education) and have not
performed as well as more conventional, cyclical industrials. The consumer
slowdown has been difficult for the Fund; as mentioned earlier it affected a
number of our healthcare holdings, and our heavily weighted consumer
discretionary sector has suffered as well. Clearly the consumer continues to
have headwinds with high oil prices, housing and mortgage industry issues and
tighter credit, but we believe that the consumer discretionary sector is very
attractively valued at this point, given a long term view.
As a long-term, growth-oriented fund, investments in commodity-driven or
deep cyclical stocks typically do not fit our strategy. We do not currently have
any energy, materials or utility holdings in the Fund, and thus did not
participate in the recent run up in oil and energy-related stocks. We are
focusing our holdings on long term secular growers that we expect to grow faster
than U.S. GDP OVER THE LONG TERM.
As a result of a slowing economy, the market is gravitating toward more
secular growth names. We continue our search for companies that have a long road
of growth ahead of them, but we will remain very disciplined regarding the
prices we will pay. The Fund is the most concentrated it has been since the last
downturn, as we have been prioritizing by quality, our conviction levels and
valuation. We have our heaviest weightings in those stocks that we believe have
the most potential to appreciate once the credit markets improve and consumer
confidence returns.
The BUFFALO USA GLOBAL FUND underperformed the Russell 3000 Growth in the
1-year period ending March 31, 2008. SEE THE INVESTMENT RESULTS TABLE FOR
COMPARATIVE PERFORMANCE INFORMATION. Within the Russell 3000, the best
performing sectors were energy and materials, with each sector turning in
performance over 20%. Our underweighting in those sectors hurt the Fund's
performance in the recent year. The consumer staples sector was a positive
performer in both the Fund and the index; stock selection in the Fund led to our
outperformance in that sector. Our consumer discretionary also outperformed the
index's, helped by both stock selection and our overweighting. The primary
detractor this year was technology, an overweighted sector that also
underperformed the index.
We have a good deal of flexibility in this Fund, investing in growth
companies from a broad spectrum of market capitalizations, industries and
geographic exposures. Using this approach, shareholders gain exposure to much of
the dynamic growth of an increasingly globally based economy. This Fund provides
a relatively distinct way to gain exposure to the growth in global trade; it
invests only in U.S.-BASED COMPANIES that receive at least 40% of their sales or
income from international sources.
The Fund was essentially designed for the environment we're in today.
While the US economy has struggled, the global economy has continued to grow. We
believe the Fund should be well positioned for continued international growth.
We've used recent market weakness as an opportunity to add to positions we feel
are attractively priced and well positioned to grow over the long term.
Sincerely,
/s/ John C. Kornitzer
John C. Kornitzer
President
/s/ Kent W. Gasaway
Kent W. Gasaway
Sr. Vice President
/s/ Robert Male
Robert Male
Sr. Vice President
/s/ Grant P. Sarris
Grant P. Sarris
Sr. Vice President
/s/ William J. Kornitzer III
William J. Kornitzer III
Sr. Vice President
* According to S&P: An obligation rated 'BBB' exhibits adequate protection
parameters. An obligation rated 'B' is more vulnerable to nonpayment than
obligations rated 'BB', but the obligor currently has the capacity to meet
its financial commitment on the obligation.
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7
BUFFALO BALANCED FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
S&P 500 &
ML High Yield
Buffalo S&P Master Index
Date Balanced Fund 500 Index* Weighted Average(1)*
---- ------------- ---------- --------------------
03/1998 10,000 10,000 10,000
03/1999 -10.49% 8,951 18.46% 11,846 11.85% 11,185
03/2000 16.78% 10,453 17.94% 13,971 10.24% 12,330
03/2001 -4.58% 9,974 -21.68% 10,942 -11.38% 10,927
03/2002 6.48% 10,621 0.24% 10,968 0.92% 11,028
03/2003 -19.32% 8,569 -24.76% 8,253 -13.40% 9,550
03/2004 33.50% 11,439 35.12% 11,151 29.72% 12,388
03/2005 9.75% 12,554 6.69% 11,897 6.73% 13,222
03/2006 11.23% 13,964 11.73% 13,293 9.96% 14,539
03/2007 11.67% 15,594 11.83% 14,865 11.68% 16,237
03/2008 3.23% 16,098 -5.08% 14,110 -4.37% 15,527
* UNMANAGED INDICES
(1) THE PERFORMANCE FIGURE SHOWN FOR COMPARISON PURPOSES IS A WEIGHTED AVERAGE
MADE UP OF 60% OF THE S&P 500 INDEX AND 40% OF THE MERRILL LYNCH HIGH YIELD
MASTER INDEX.
THE S&P 500 INDEX IS A CAPITALIZATION WEIGHTED INDEX OF 500 LARGE
CAPITALIZATION STOCKS WHICH IS DESIGNED TO MEASURE BROAD DOMESTIC SECURITIES
MARKETS.
THE MERRILL LYNCH HIGH YIELD MASTER INDEX IS AN UNMANAGED INDEX COMPRISED OF
OVER 1,200 HIGH YIELD BONDS REPRESENTATIVE OF THE HIGH YIELD BOND MARKET AS
A WHOLE.
BUFFALO HIGH YIELD FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo ML High Yield
Date High Yield Master Index*
---- ---------- -------------
03/1998 10,000 10,000
03/1999 -9.92% 9,008 1.94% 10,194
03/2000 4.83% 9,443 -1.32% 10,059
03/2001 11.16% 10,497 4.06% 10,468
03/2002 3.95% 10,912 1.95% 10,672
03/2003 5.95% 11,561 3.65% 11,062
03/2004 18.56% 13,706 21.61% 13,452
03/2005 2.96% 14,112 6.79% 14,365
03/2006 6.83% 15,076 7.31% 15,415
03/2007 6.42% 16,044 11.45% 17,180
03/2008 -1.52% 15,800 -3.46% 16,586
* UNMANAGED BOND INDEX
THE MERRILL LYNCH HIGH YIELD MASTER INDEX IS AN UNMANAGED INDEX COMPRISED OF
OVER 1,200 HIGH YIELD BONDS REPRESENTATIVE OF THE HIGH YIELD BOND MARKET AS A
WHOLE.
BUFFALO INTERNATIONAL FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo MSCI EAFE MSCI AC WORLD
Date International Fund Index Index Ex USA
---- ------------------ ----- ------------
9/28/2007 10,000 10,000 10,000
9/30/2007 10,000 10,000 10,000
10/31/2007 2.20% 10,220 3.84% 10,384 5.47% 10,547
11/30/2008 -1.96% 10,020 -3.45% 10,026 -4.66% 10,056
12/31/2007 0.50% 10,070 -2.30% 9,795 -1.51% 9,904
1/31/2008 -7.84% 9,280 -9.29% 8,885 -9.76% 8,937
2/29/2008 2.05% 9,471 1.27% 8,998 2.17% 9,131
3/31/2008 -1.06% 9,370 -1.52% 8,861 -2.57% 8,896
* 9/28/07 INCEPTION
** UNMANAGED STOCK INDEX
BUFFALO JAYHAWK CHINA FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo MSCI China
Date Jayhawk Fund Free Index
---- ------------ ----------
12/18/2006 10,000 10,000
12/31/2006 3.10% 10,310 8.78% 10,878
1/31/2007 -1.75% 10,130 -4.24% 10,417
2/28/2007 3.75% 10,509 -1.76% 10,233
3/31/2007 0.19% 10,529 3.85% 10,627
4/30/2007 3.70% 10,919 3.76% 11,027
5/31/2007 9.34% 11,939 7.53% 11,857
6/30/2007 4.19% 12,439 11.53% 13,225
7/31/2007 4.53% 13,003 10.35% 14,593
8/31/2007 0.46% 13,062 7.20% 15,644
9/30/2007 7.32% 14,019 19.94% 18,763
10/31/2007 5.60% 14,804 16.59% 21,876
11/30/2007 -4.83% 14,089 -13.52% 18,919
12/31/2007 -3.13% 13,648 -4.45% 18,077
1/31/2008 -10.87% 12,164 -21.56% 14,179
2/29/2008 0.26% 12,196 10.78% 15,708
3/31/2008 -17.55% 10,055 -12.18% 13,795
* 12/18/06 INCEPTION
** UNMANAGED STOCK INDEX
THE MSCI CHINA FREE INDEX IS A CAPITALIZATION WEIGHTED INDEX THAT MEASURES
THE PERFORMANCE OF STOCKS FROM THE COUNTRY OF CHINA.
BUFFALO LARGE CAP FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo Russell 1000
Date Large Cap Growth Index*
---- --------- -------------
03/1998 10,000 10,000
03/1999 2.73% 10,273 28.11% 12,811
03/2000 31.07% 13,465 34.12% 17,182
03/2001 -9.86% 12,137 -42.72% 9,842
03/2002 2.06% 12,387 -2.00% 9,645
03/2003 -30.71% 8,583 -26.76% 7,064
03/2004 40.05% 12,021 32.18% 9,337
03/2005 1.52% 12,203 1.16% 9,446
03/2006 9.95% 13,418 13.14% 10,687
03/2007 11.10% 14,907 7.06% 11,441
03/2008 -6.25% 13,975 -0.75% 11,355
* UNMANAGED STOCK INDEX
THE RUSSELL 1000 GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL 1000
INDEX COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED GROWTH
VALUES. THE RUSSELL 1000 INDEX CONSISTS OF THE 1,000 LARGEST COMPANIES IN THE
RUSSELL 3000 INDEX.
- --------------------------------------------------------------------------------
8
BUFFALO MICRO CAP FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo Russell Microcap
Date Micro Cap Growth Index**
---- --------- --------------
05/21/2004 10,000 10,000
09/2004 -3.60% 9,640 -1.97% 9,803
03/2005 10.17% 10,620 5.42% 10,334
09/2005 10.83% 11,771 11.22% 11,494
03/2006 15.03% 13,540 15.94% 13,326
09/2006 -7.49% 12,526 -11.80% 11,753
03/2007 12.56% 14,099 11.16% 13,065
03/2008 -30.23% 9,837 -19.73% 10,487
* 5/21/04 INCEPTION
** UNMANAGED STOCK INDEX
THE RUSSELL MICROCAP GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL
MICROCAP COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED
GROWTH VALUES. THE RUSSELL MICROCAP INDEX CONSISTS OF THE SMALLEST 1,000
COMPANIES IN THE SMALL-CAP RUSSELL 2000 INDEX PLUS THE NEXT 1,000 SECURITIES.
BUFFALO MID CAP FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo Russell Midcap
Date Mid Cap Growth Index**
---- ------- --------------
12/17/2001 10,000 10,000
03/2002 1.20% 10,120 -0.44% 9,956
03/2003 -25.49% 7,540 -26.11% 7,356
03/2004 64.85% 12,430 49.63% 11,008
03/2005 2.15% 12,698 8.31% 11,922
03/2006 25.21% 15,899 22.68% 14,626
03/2007 2.41% 16,282 6.90% 15,635
03/2008 -10.60% 14,556 -4.55% 14,924
* 12/17/01 INCEPTION
** UNMANAGED STOCK INDEX
THE RUSSELL MIDCAP GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL
MIDCAP COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED
GROWTH VALUES. THE RUSSELL MIDCAP INDEX CONSISTS OF THE 800 SMALLEST
COMPANIES IN THE RUSSELL 1000 INDEX.
BUFFALO SCIENCE & TECHNOLOGY FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo NASDAQ
Date Science & Technology Composite Index**
---- -------------------- -----------------
04/16/2001 10,000 10,000
03/2002 1.80% 10,180 -3.36% 9,664
03/2003 -40.96% 6,010 -27.32% 7,024
03/2004 83.69% 11,040 48.69% 10,444
03/2005 -2.81% 10,730 0.25% 10,470
03/2006 27.96% 13,730 17.03% 12,253
03/2007 4.28% 14,318 3.50% 12,682
03/2008 -10.57% 12,804 -5.89% 11,935
* 4/16/01 INCEPTION
** UNMANAGED STOCK INDEX
THE NASDAQ COMPOSITE INDEX IS A BROAD-BASED CAPITALIZATION-WEIGHTED INDEX OF
STOCKS IN ALL THREE NASDAQ TIERS: GLOBAL SELECT, GLOBAL MARKET AND CAPITAL
MARKET.
BUFFALO SMALL CAP FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo Russell 2000
Date Small Cap Growth Index**
---- --------- --------------
04/14/1998 10,000 10,000
03/1999 -4.69% 9,531 -10.41% 8,959
03/2000 64.87% 15,714 59.05% 14,249
03/2001 8.95% 17,120 -39.81% 8,577
03/2002 41.04% 24,146 4.95% 9,001
03/2003 -34.49% 15,818 -31.63% 6,154
03/2004 88.07% 29,749 63.16% 10,041
03/2005 5.75% 31,460 0.87% 10,128
03/2006 22.46% 38,526 27.84% 12,948
03/2007 4.95% 40,433 1.56% 13,150
03/2008 -18.74% 32,856 -8.94% 11,975
* 4/14/98 INCEPTION
** UNMANAGED STOCK INDEX
THE RUSSELL 2000 GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL 2000
INDEX COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED GROWTH
VALUES.
BUFFALO USA GLOBAL FUND
HYPOTHETICAL GROWTH OF A $10,000 INVESTMENT
[The following table was represented as a line graph in the printed material.]
Buffalo Russell 3000
Date USA Global Growth Index*
---- ---------- -------------
03/1998 10,000 10,000
03/1999 -2.52% 9,748 24.35% 12,435
03/2000 60.72% 15,667 35.77% 16,883
03/2001 -19.80% 12,565 -42.52% 9,704
03/2002 7.78% 13,542 -1.47% 9,562
03/2003 -30.79% 9,373 -27.08% 6,972
03/2004 47.11% 13,788 34.15% 9,353
03/2005 -1.30% 13,609 1.15% 9,461
03/2006 14.05% 15,521 14.40% 10,823
03/2007 11.86% 17,362 6.53% 11,530
03/2008 -6.51% 16,232 -1.45% 11,363
* UNMANAGED STOCK INDEX
THE RUSSELL 3000 GROWTH INDEX MEASURES THE PERFORMANCE OF THOSE RUSSELL 3000
INDEX COMPANIES WITH HIGHER PRICE-TO-BOOK RATIOS AND HIGHER FORECASTED GROWTH
VALUES. THE RUSSELL 3000 INDEX CONSISTS OF THE 3,000 LARGEST COMPANIES BASED
ON TOTAL MARKET CAPITALIZATION.
- --------------------------------------------------------------------------------
9
INVESTMENT RESULTS
TOTAL RETURNS AS OF MARCH 31, 2008
AVERAGE ANNUAL
------------------------------------------
GROSS EXPENSE THREE SINCE
RATIO* MONTHS ONE YEAR FIVE YEARS TEN YEARS INCEPTION
- --------------------------------------------------------------------------------------------------------------------------------
BUFFALO BALANCED FUND (INCEPTION DATE 8/12/94) ........... 1.03% -5.18% 3.23% 13.44% 4.88% 7.73%
S&P 500 Index ............................................ N/A -9.44% -5.08% 11.32% 3.50% 9.96%
S&P 500 Index & Merrill Lynch High Yield
Master Index Weighted Average** ........................ N/A -6.88% -4.37% 10.23% 4.38% 9.09%
Lipper Balanced Funds Index .............................. N/A -5.29% -0.66% 9.54% 4.76% 8.11%
BUFFALO HIGH YIELD FUND (INCEPTION DATE 5/19/95) ......... 1.02% -3.13% -1.52% 6.45% 4.68% 7.36%
Merrill Lynch High Yield Master Index .................... N/A -2.98% -3.46% 8.45% 5.19% 6.72%
Lipper High Yield Bond Funds Index ....................... N/A -3.50% -4.05% 7.99% 3.15% 5.32%
BUFFALO INTERNATIONAL FUND (INCEPTION DATE 9/28/07) ...... 1.21% -6.95% N/A N/A N/A -6.30% ***
MSCI EAFE Index .......................................... N/A -9.53% N/A N/A N/A -11.38% ***
MSCI AC WORLD Index Ex USA ............................... N/A -9.70% N/A N/A N/A -10.56% ***
Lipper International Fund Index .......................... N/A -9.42% N/A N/A N/A -10.32% ***
BUFFALO JAYHAWK CHINA FUND (INCEPTION DATE 12/18/06) ..... 2.19% -26.32% -4.47% N/A N/A 0.46%
MSCI China Free Index .................................... N/A -23.69% 29.84% N/A N/A 28.55%
S&P Hong Kong GEM Index .................................. N/A -37.17% -36.76% N/A N/A -29.11%
BUFFALO LARGE CAP FUND (INCEPTION DATE 5/19/95) .......... 1.06% -9.89% -6.25% 10.24% 3.40% 8.90%
Russell 1000 Growth Index ................................ N/A -10.18% -0.75% 9.96% 1.28% 7.53%
S&P 500 Index ............................................ N/A -9.44% -5.08% 11.32% 3.50% 9.39%
Lipper Large-Cap Growth Fund Index ....................... N/A -11.22% 1.04% 9.76% 1.02% 6.89%
BUFFALO MICRO CAP FUND (INCEPTION DATE 5/21/04) .......... 1.51% -19.06% -30.23% N/A N/A -0.43%
Russell Microcap Growth Index ............................ N/A -16.95% -19.73% N/A N/A 1.25%
Russell 2000 Index ....................................... N/A -9.90% -13.00% N/A N/A 7.46%
Lipper Micro-Cap Funds Index ............................. N/A -13.82% -15.46% N/A N/A 5.30%
BUFFALO MID CAP FUND (INCEPTION DATE 12/17/01) ........... 1.02% -15.89% -10.60% 14.06% N/A 6.16%
Russell Midcap Growth Index .............................. N/A -10.95% -4.55% 15.20% N/A 6.58%
S&P Midcap 400 Index ..................................... N/A -8.85% -6.97% 15.10% N/A 8.70%
Lipper Mid-Cap Growth Funds Index ........................ N/A -12.79% 1.08% 15.12% N/A 6.10%
BUFFALO SCIENCE & TECHNOLOGY FUND (INCEPTION DATE 4/16/01) 1.03% -15.10% -10.57% 16.33% N/A 3.62%
NASDAQ Composite Index ................................... N/A -14.07% -5.89% 11.19% N/A 2.58%
S&P 500 Index ............................................ N/A -9.44% -5.08% 11.32% N/A 3.47%
Lipper Science & Technology Funds Index .................. N/A -15.67% -2.93% 11.83% N/A -1.31%
BUFFALO SMALL CAP FUND (INCEPTION DATE 4/14/98) .......... 1.01% -15.27% -18.74% 15.74% N/A 12.68%
Russell 2000 Growth Index ................................ N/A -12.83% -8.94% 14.24% N/A 1.69%
S&P Smallcap 600 Index ................................... N/A -7.46% -10.60% 15.62% N/A 6.97%
Lipper Small-Cap Growth Funds Index ...................... N/A -14.73% -9.52% 12.68% N/A 3.89%
BUFFALO USA GLOBAL FUND (INCEPTION DATE 5/19/95) ......... 1.05% -9.82% -6.51% 11.61% 4.96% 9.60%
Russell 1000 Growth Index ................................ N/A -10.18% -0.75% 9.96% 1.28% 7.53%
S&P 500 Index ............................................ N/A -9.44% -5.08% 11.32% 3.50% 9.39%
Russell 3000 Growth Index ................................ N/A -10.39% -1.45% 10.26% 1.29% 7.41%
Lipper Multi-Cap Growth Fund Index ....................... N/A -12.17% -2.40% 12.38% 2.78% 7.72%
* AS REPORTED IN THE FUNDS' PROSPECTUS DATED JULY 30, 2007.
** THE PERFORMANCE FIGURE SHOWN FOR COMPARISON PURPOSES IS A WEIGHTED AVERAGE
MADE UP OF 60% OF THE S&P 500 INDEX AND 40% OF THE MERRILL LYNCH HIGH YIELD
MASTER INDEX.
*** CUMULATIVE SINCE INCEPTION DATED 9/28/2007.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE; PAST PERFORMANCE DOES
NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF
AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF
THE FUNDS MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED.
PERFORMANCE DATA CURRENT OF THE MOST RECENT MONTH-END MAY BE OBTAINED BY
CALLING 1-800-49-BUFFALO OR BY VISITING THE WEBSITE AT WWW.BUFFALOFUNDS.COM
- --------------------------------------------------------------------------------
10
THE BUFFALO BALANCED, INTERNATIONAL, JAYHAWK CHINA, LARGE CAP, MID CAP, SCIENCE
& TECHNOLOGY AND USA GLOBAL FUNDS IMPOSE A 2.00% REDEMPTION FEE ON SHARES HELD
FOR LESS THAN 60 DAYS AND THE BUFFALO HIGH YIELD, MICRO CAP AND SMALL CAP FUNDS
IMPOSE A 2.00% REDEMPTION FEE ON SHARES HELD LESS THAN 180 DAYS. PERFORMANCE
DATA DOES NOT REFLECT THE REDEMPTION FEE. IF REFLECTED, TOTAL RETURNS WOULD BE
REDUCED.
The Funds' returns shown do not reflect the deduction of taxes that a
shareholder would pay on distributions or the redemption of shares. The
benchmark returns shown, excluding the Lipper Indices, reflect the reinvestment
of dividends and capital gains but do not reflect the deduction of any
investment management fees, other expenses or taxes. The performance of the
Lipper Indices is presented net of the Funds' fees and expenses; however,
applicable sales charges are not taken into consideration. One cannot invest
directly in an index.
The S&P 500 INDEX is a capitalization weighted index of 500 large capitalization
stocks which is designed to measure broad domestic securities markets. The
MERRILL LYNCH HIGH YIELD MASTER INDEX is an unmanaged index comprised of over
1,200 high yield bonds representative of high yield bond markets as a whole. The
LIPPER BALANCED FUNDS INDEX is an unmanaged, net asset value weighted index of
the 30 largest balanced mutual funds. The LIPPER HIGH YIELD BOND FUNDS INDEX is
a widely recognized index of the 30 largest mutual funds that invest primarily
in high yield bonds. The MSCI CHINA FREE INDEX is a capitalization weighted
index that measures the performance of stocks from the country of China. The
RUSSELL 1000 GROWTH INDEX measures the performance of those Russell 1000 Index
companies with higher price-to-book ratios and higher forecasted growth values.
The RUSSELL 1000 INDEX consists of the 1,000 largest companies in the Russell
3000 Index. The LIPPER LARGE-CAP GROWTH FUNDS INDEX is an unmanaged, equally
weighted performance index of the 30 largest qualifying mutual funds (based on
net assets) in the Lipper Large-Cap classification. The RUSSELL MICROCAP GROWTH
INDEX measures the performance of those Russell Microcap companies with higher
price-to-book ratios and higher forecasted growth values. The RUSSELL MICROCAP
INDEX consists of the smallest 1,000 companies in the small-cap Russell 2000
Index plus the next 1,000 securities. The RUSSELL 2000 INDEX consists of the
smallest 2,000 securities in the Russell 3000 Index, representing approximately
8% of the Russell 3000 total market capitalization. The LIPPER MICRO-CAP FUNDS
INDEX is an unmanaged equally weighted performance index of the 30 largest
qualifying mutual funds (based on net assets) in the Lipper Micro-Cap
classification. The RUSSELL MIDCAP GROWTH INDEX measures the performance of
those Russell Midcap companies with higher price-to-book ratios and higher
forecasted growth values. The RUSSELL MIDCAP INDEX consists of the 800 smallest
companies in the Russell 1000 Index. The S&P MIDCAP 400 INDEX consists of 400
domestic stocks chosen for market size, liquidity and industry group
representation. It is a market-weighted index with each stock affecting the
index in proportion to its market value. The LIPPER MID-CAP GROWTH FUNDS INDEX
is an unmanaged, equally weighted performance index of the 30 largest qualifying
mutual funds (based on net assets) in the Lipper Mid-Cap classification. The
NASDAQ COMPOSITE INDEX is a broad-based capitalization-weighted index of stocks
in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The
LIPPER SCIENCE & TECHNOLOGY FUNDS INDEX is an unmanaged, equally weighted
performance index of the 30 largest qualifying mutual funds (based on net
assets) in the Lipper Science and Technology classification. The RUSSELL 2000
GROWTH INDEX measures the performance of those Russell 2000 Index companies with
higher price-to-book ratios and higher forecasted growth values. The S&P
SMALLCAP 600 INDEX consists of 600 domestic stocks chosen for market size,
liquidity, bid-asked spread, ownership, share turnover and number of no-trade
days and industry group representation. The LIPPER SMALL-CAP GROWTH FUNDS INDEX
is an unmanaged, equally weighted performance index of the 30 largest qualifying
mutual funds (based on net assets) in the Lipper Small-Cap classification. The
RUSSELL 3000 GROWTH INDEX measures the performance of those Russell 3000 Index
companies with higher price-to-book ratios and higher forecasted growth values.
The RUSSELL 3000 INDEX consists of the 3,000 largest U.S. companies based on
total market capitalization. The LIPPER MULTI-CAP GROWTH FUNDS INDEX is an
unmanaged, equally weighted performance index of the 30 largest qualifying
mutual funds (based on net assets) in the Lipper Multi-Cap Growth
classification. The LIPPER INTERNATIONAL FUNDS INDEX is an unmanaged, equally
weighted performance index of the 30 largest qualifying mutual funds (based on
net assets) in the Lipper International classifications. The MSCI EAFE INDEX is
an unmanaged, market-weighted index of companies in developed markets, excluding
the U.S. and Canada. Its returns include net reinvested dividends but, unlike
Fund returns, do not reflect the payment of sales commissions or other expenses
incurred in the purchase or sale of the securities included in the Index. The
MSCI AC WORLD (EX-U.S.) INDEX is a free float-adjusted market capitalization
index that is designed to measure equity market performance in the global
developed and emerging markets, excluding the U.S. The S&P HONG KONG GEM INDEX
is a float adjusted and market capitalization weighted index that does not have
a fixed number of constituents. The index is calculated using a market
cap-weighted methodology. This means that the index level reflects the total
market value of all the component stocks relative to a particular base period.
Index calculations are based on stock prices taken from the Stock Exchange of
Hong Kong (SEHK).
REFERENCES TO SPECIFIC SECURITIES SHOULD NOT BE CONSTRUED AS RECOMMENDATIONS BY
THE FUNDS OR THEIR ADVISOR. PLEASE REFER TO THE SCHEDULE OF INVESTMENTS IN THE
REPORT FOR FUND HOLDINGS INFORMATION.
CASH FLOW MEASURES THE CASH GENERATING CAPABILITY OF A COMPANY BY ADDING
NON-CASH CHARGES (E.G. DEPRECIATION) AND INTEREST TO PRETAX INCOME.
PLEASE REFER TO THE PROSPECTUS FOR SPECIAL RISKS ASSOCIATED WITH INVESTING IN
THE BUFFALO FUNDS, INCLUDING, BUT NOT LIMITED TO, RISKS INVOLVED WITH
INVESTMENTS IN SCIENCE AND TECHNOLOGY, FOREIGN, LOWER- OR NON-RATED SECURITIES
AND SMALLER COMPANIES.
MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
QUASAR DISTRIBUTORS, LLC, DISTRIBUTOR. 5/08
- --------------------------------------------------------------------------------
11
EXPENSE EXAMPLE
As a shareholder of the Funds, you incur two types of costs: (1)
transaction costs (including redemption fees) and (2) ongoing costs, including
management fees and other Fund specific expenses. The example below is intended
to help you understand your ongoing costs (in dollars) of investing in the Funds
and to compare these costs with the ongoing costs of investing in other mutual
funds. The example is based on an investment of $1,000 invested at the beginning
of the period and held for the entire period (10/1/07 - 3/31/08). This
information is unaudited.
ACTUAL EXPENSES
The first line of the tables below provides information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Period"
to estimate the expenses you paid on your account during the period. Although
the Funds charge no sales load or transaction fees, you will be assessed fees
for outgoing wire transfers, returned checks and stop payment orders at
prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds' transfer
agent. If you request that a redemption be made by wire transfer, currently a
$15.00 fee is charged by the Funds' transfer agent. You will be charged a
redemption fee equal to 2.00% of the net amount of the redemption if you redeem
your shares of the Buffalo Balanced, Jayhawk China, Large Cap, Mid Cap, Science
& Technology and USA Global Funds within 60 days of purchase. The Buffalo High
Yield, Small Cap and Micro Cap Funds will charge a redemption fee equal to 2.00%
of the net amount of the redemption if you redeem your shares within 180 days of
purchase. To the extent a Fund invests in shares of other investment companies
as part of its investment strategy, you will indirectly bear your proportionate
share of any fees and expenses charged by the underlying funds in which the Fund
invests in addition to the expenses of the Fund. Actual expenses of the
underlying funds are expected to vary among the various underlying funds. These
expenses are not included in the example below. The example below includes
management fees, registration fees and other expenses. However, the example
below does not include portfolio trading commissions and related expenses and
other extraordinary expenses as determined under U.S. generally accepted
accounting principles.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of each table below provides information about
hypothetical account values and hypothetical expenses based on the Funds' actual
expense ratios and an assumed rate of return of 5% per year before expenses,
which are not the Funds' actual returns. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in our Funds and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds. Please note that the expenses shown in
the tables are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as redemption fees. Therefore, the second line of the
tables is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
BUFFALO BALANCED FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 945.50 $4.96
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.90 $5.15
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.02%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO HIGH YIELD FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 963.50 $5.01
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.90 $5.15
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.02%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
- --------------------------------------------------------------------------------
12
BUFFALO INTERNATIONAL FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 937.00 $6.25
Hypothetical (5% return before expenses) .... $1,000.00 $1,018.55 $6.51
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.29%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE PERIOD SINCE COMMENCEMENT OF OPERATIONS.
BUFFALO JAYHAWK CHINA FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 717.30 $7.38
Hypothetical (5% return before expenses) .... $1,000.00 $1,016.40 $8.67
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.72%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE PERIOD SINCE COMMENCEMENT OF OPERATIONS.
BUFFALO LARGE CAP FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 864.10 $4.89
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.75 $5.30
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.05%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO MICRO CAP FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 707.80 $6.40
Hypothetical (5% return before expenses) .... $1,000.00 $1,017.50 $7.57
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.50%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO MID CAP FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 799.30 $4.54
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.95 $5.10
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.01%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO SCIENCE & TECHNOLOGY FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 789.50 $4.56
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.90 $5.15
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.02%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO SMALL CAP FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 784.00 $4.50
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.95 $5.10
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.00%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
BUFFALO USA GLOBAL FUND BEGINNING ENDING EXPENSES PAID DURING
ACCOUNT VALUE ACCOUNT VALUE PERIOD OCTOBER 1, 2007 -
OCTOBER 1, 2007 MARCH 31, 2008 MARCH 31, 2008*
- -----------------------------------------------------------------------------------------------------------------------------------
Actual ...................................... $1,000.00 $ 864.00 $4.80
Hypothetical (5% return before expenses) .... $1,000.00 $1,019.85 $5.20
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO OF 1.03%,
MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY
183/366 TO REFLECT THE ONE-HALF YEAR PERIOD.
- --------------------------------------------------------------------------------
13
ALLOCATION OF PORTFOLIO HOLDINGS
Percentages represent market value as a percentage of total investments as of
March 31, 2008.
BUFFALO BALANCED FUND
[The following table was represented as a pie chart in the printed material.]
Short Term Investments 1.44%
Convertible Bonds 6.42%
Common Stocks 62.63%
Corporate Bonds 29.51%
BUFFALO INTERNATIONAL FUND
[The following table was represented as a pie chart in the printed material.]
Short-Term Investments 12.97%
Africa 0.83%
Europe 55.17%
The Americas 8.93%
Asia 19.58%
Middle East 2.52%
BUFFALO HIGH YIELD FUND
[The following table was represented as a pie chart in the printed material.]
Convertible Bonds 18.68%
Short Term Investments 2.38%
Preferred Stocks 1.58%
Corporate Bonds 74.87%
Convertible Preferred Stocks 2.24%
Common Stocks 0.25%
BUFFALO JAYHAWK CHINA FUND
[The following table was represented as a pie chart in the printed material.]
Short Term Investments 3.59%
Financials 4.22%
Consumer Discretionary 11.24%
Energy 11.35%
Health Care 14.51%
Industrials 12.21%
Consumer Staples 5.01%
Utilities 11.88%
Materials 4.89%
Telecommunication Services 9.85%
Information Technology 11.25%
BUFFALO LARGE CAP FUND
[The following table was represented as a pie chart in the printed material.]
Consumer Staples 9.53%
Short Term Investments 1.25%
Health Care 22.76%
Information Technology 29.46%
Financials 16.76%
Industrials 6.58%
Consumer Discretionary 13.66%
- --------------------------------------------------------------------------------
14
BUFFALO MICRO CAP FUND
[The following table was represented as a pie chart in the printed material.]
Short Term Investments 1.47%
Health Care 20.01%
Consumer Discretionary 21.94%
Information Technology 24.97%
Industrials 12.70%
Financials 18.91%
BUFFALO SMALL CAP FUND
[The following table was represented as a pie chart in the printed material.]
Short Term Investments 1.06%
Consumer Discretionary 25.35%
Health Care 25.60%
Preferred Stocks 0.11%
Information Technology 26.43%
Industrials 16.06%
Financials 5.39%
BUFFALO MID CAP FUND
[The following table was represented as a pie chart in the printed material.]
Telecommunications Services 3.59%
Health Care 25.06%
Consumer Discretionary 27.48%
Information Technology 18.05%
Financials 10.52%
Short Term Investments 0.44%
Industrials 12.65%
Consumer Staples 2.21%
BUFFALO USA GLOBAL FUND
[The following table was represented as a pie chart in the printed material.]
Short Term Investments 2.22%
Health Care 17.33%
Information Technology 34.55%
Consumer Discretionary 19.69%
Materials 1.31%
Consumer Staples 10.99%
Industrials 10.59%
Financials 3.32%
BUFFALO SCIENCE & TECHNOLOGY FUND
[The following table was represented as a pie chart in the printed material.]
Consumer Discretionary 3.08%
Information Technology 54.34%
Telecommunications Services 2.69%
Industrials 2.63%
Health Care 35.07%
Short Term Investments 2.19%
- --------------------------------------------------------------------------------
15
BUFFALO BALANCED FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 62.13%
CONSUMER DISCRETIONARY -- 0.07%
AUTO COMPONENTS -- 0.07%
8,600 Modine Manufacturing Co. ................................................. $ 124,614
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 124,614
-------------
CONSUMER STAPLES -- 11.35%
BEVERAGES -- 4.00%
80,000 The Coca-Cola Co. ........................................................ 4,869,600
25,000 PepsiCo, Inc. ............................................................ 1,805,000
-------------
6,674,600
-------------
FOOD & STAPLES RETAILING -- 1.76%
40,000 Costco Wholesale Corp. ................................................... 2,598,800
10,000 Whole Foods Market, Inc. ................................................. 329,700
-------------
2,928,500
-------------
FOOD PRODUCTS -- 3.80%
70,000 ConAgra Foods, Inc. ...................................................... 1,676,500
25,000 Del Monte Foods Co. ...................................................... 238,250
30,000 General Mills, Inc. ...................................................... 1,796,400
20,000 Kellogg Co. .............................................................. 1,051,200
25,000 Wm. Wrigley Jr. Co. ...................................................... 1,571,000
-------------
6,333,350
-------------
HOUSEHOLD PRODUCTS -- 1.79%
30,000 Colgate-Palmolive Co. .................................................... 2,337,300
10,000 Kimberly-Clark Corp. ..................................................... 645,500
-------------
2,982,800
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 18,919,250
-------------
ENERGY -- 23.27%
ENERGY EQUIPMENT & SERVICES -- 3.22%
50,000 Patterson-UTI Energy, Inc. ............................................... 1,309,000
30,000 Schlumberger Ltd. ........................................................ 2,610,000
20,000 Weatherford International Ltd.(a) ........................................ 1,449,400
-------------
5,368,400
-------------
OIL & GAS -- 20.05%
45,000 Anadarko Petroleum Corp. ................................................. 2,836,350
25,000 Apache Corp. ............................................................. 3,020,500
25,000 BP, PLC -- ADR ........................................................... 1,516,250
70,000 ChevronTexaco Corp. ...................................................... 5,975,200
85,000 ConocoPhillips ........................................................... 6,477,850
35,000 Exxon Mobil Corp. ........................................................ 2,960,300
25,000 Hess Corp. ............................................................... 2,204,500
70,000 Marathon Oil Corp. ....................................................... 3,192,000
20,000 Royal Dutch Shell PLC -- ADR ............................................. 1,379,600
40,000 Suncor Energy, Inc. ...................................................... 3,854,000
-------------
33,416,550
- ----------------------------------------------------------------------------------------------------------
TOTAL ENERGY ............................................................. 38,784,950
-------------
- --------------------------------------------------------------------------------
16
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
FINANCIALS -- 5.03%
COMMERCIAL BANKS -- 1.00%
25,000 Marshall & Ilsley Corp. .................................................. $ 580,000
35,000 Wilmington Trust Corp. ................................................... 1,088,500
-------------
1,668,500
-------------
INSURANCE -- 4.03%
50,000 The Allstate Corp. ....................................................... 2,403,000
45,000 The Chubb Corp. .......................................................... 2,226,600
55,000 Cincinnati Financial Corp. ............................................... 2,092,200
-------------
6,721,800
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 8,390,300
-------------
HEALTH CARE-- 7.06%
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.69%
20,000 Baxter International, Inc. ............................................... 1,156,400
-------------
PHARMACEUTICALS -- 6.37%
60,000 Abbott Laboratories ...................................................... 3,309,000
30,000 Eli Lilly & Co. .......................................................... 1,547,700
35,000 GlaxoSmithKline, PLC -- ADR .............................................. 1,485,050
40,000 Johnson & Johnson ........................................................ 2,594,800
40,000 Wyeth .................................................................... 1,670,400
-------------
10,606,950
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 11,763,350
-------------
INDUSTRIALS -- 8.24%
AEROSPACE & DEFENSE -- 3.61%
10,000 The Boeing Co. ........................................................... 743,700
20,000 Lockheed Martin Corp. .................................................... 1,986,000
20,000 Northrop Grumman Corp. ................................................... 1,556,200
25,000 United Technologies Corp. ................................................ 1,720,500
-------------
6,006,400
-------------
COMMERCIAL SERVICES & SUPPLIES -- 2.10%
100,000 Pitney Bowes, Inc. ....................................................... 3,502,000
-------------
INDUSTRIAL CONGLOMERATES -- 2.53%
100,000 General Electric Co. ..................................................... 3,701,000
10,000 ITT Corp. ................................................................ 518,100
-------------
4,219,100
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS 13,727,500
-------------
INFORMATION TECHNOLOGY -- 5.76%
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 3.71%
100,000 Applied Materials, Inc. .................................................. 1,951,000
200,000 Intel Corp. .............................................................. 4,236,000
-------------
6,187,000
-------------
SOFTWARE -- 2.05%
120,000 Microsoft Corp. .......................................................... 3,405,600
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 9,592,600
-------------
- --------------------------------------------------------------------------------
17
BUFFALO BALANCED FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
MATERIALS -- 0.88%
CHEMICALS -- 0.56%
20,000 E.I. du Pont de Nemours & Co. ............................................ $ 935,200
-------------
METALS & MINING -- 0.32%
15,000 Alcoa, Inc. .............................................................. 540,900
- ----------------------------------------------------------------------------------------------------------
TOTAL MATERIALS .......................................................... 1,476,100
-------------
UTILITIES -- 0.47%
ELECTRIC UTILITIES -- 0.47%
25,000 OGE Energy Corp. ......................................................... 779,250
- ----------------------------------------------------------------------------------------------------------
TOTAL UTILITIES .......................................................... 779,250
-------------
TOTAL COMMON STOCKS .................................................................... 103,557,914
- ----------------------------------------------------------------------------------------------------------
(COST $75,976,413)
CONVERTIBLE BONDS -- 6.37%
CONSUMER DISCRETIONARY -- 4.85%
HOTELS RESTAURANTS & LEISURE -- 0.91%
Magna Entertainment Corp.
$3,000,000 7.250%, 12/15/2009 ....................................................... 1,515,000
-------------
MEDIA -- 3.94%
Lions Gate Entertainment Corp.
3,500,000 2.938%, 10/15/2024 ....................................................... 3,661,875
3,000,000 3.625%, 03/15/2025 ....................................................... 2,898,750
-------------
6,560,625
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY 8,075,625
-------------
HEALTH CARE-- 1.52%
BIOTECHNOLOGY -- 1.52%
Amylin Pharmaceuticals, Inc.
2,300,000 2.500%, 04/15/2011 ....................................................... 2,535,750
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 2,535,750
-------------
TOTAL CONVERTIBLE BONDS ................................................................ 10,611,375
- ----------------------------------------------------------------------------------------------------------
(COST $11,711,405)
CORPORATE BONDS -- 29.28%
CONSUMER DISCRETIONARY -- 10.27%
AUTOMOBILES -- 2.19%
Ford Motor Credit Company
4,000,000 7.375%, 10/28/2009 ....................................................... 3,645,820
-------------
HOTELS RESTAURANTS & LEISURE -- 2.40%
Circus Circus
2,000,000 7.625%, 07/15/2013 ....................................................... 1,855,000
Isle of Capri Casinos
3,000,000 7.000%, 03/01/2014 ....................................................... 2,152,500
-------------
4,007,500
-------------
- --------------------------------------------------------------------------------
18
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (CONTINUED)
LEISURE EQUIPMENT & PRODUCTS -- 0.84%
Eastman Kodak Co.
$1,000,000 7.250%, 11/15/2013 ....................................................... $ 960,000
Mikohn Gaming Corp.
461,000 11.875%, 08/15/2008. ..................................................... 441,984
-------------
1,401,984
-------------
MEDIA -- 0.06%
Fisher Communications, Inc.
100,000 8.625%, 09/15/2014 ....................................................... 101,500
-------------
SPECIALTY RETAIL -- 2.91%
FTD, Inc.
4,000,000 7.750%, 02/15/2014 ....................................................... 3,540,000
United Auto Group, Inc.
1,500,000 7.750%, 12/15/2016 ....................................................... 1,305,000
-------------
4,845,000
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.87%
Interface, Inc.
3,000,000 9.500%, 02/01/2014 ....................................................... 3,120,000
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 17,121,804
-------------
CONSUMER STAPLES -- 5.04%
FOOD PRODUCTS -- 3.89%
Pilgrims Pride Corp.
4,000,000 8.375%, 05/01/2017 ....................................................... 3,540,000
Smithfield Foods, Inc.
3,000,000 7.750%, 07/01/2017 ....................................................... 2,940,000
-------------
6,480,000
-------------
PERSONAL PRODUCTS -- 1.15%
Elizabeth Arden, Inc.
2,000,000 7.750%, 01/15/2014 ....................................................... 1,910,000
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 8,390,000
-------------
ENERGY -- 5.93%
OIL & GAS -- 3.16%
United Refining Co.
5,300,000 10.500%, 08/15/2012 ...................................................... 5,273,500
-------------
OIL, GAS & CONSUMABLE FUELS -- 2.77%
Swift Energy Co.
5,000,000 7.125%, 06/01/2017 ....................................................... 4,612,500
- ----------------------------------------------------------------------------------------------------------
TOTAL ENERGY ............................................................. 9,886,000
-------------
HEALTH CARE -- 4.77%
HEALTH CARE PROVIDERS & SERVICES -- 2.36%
Carriage Services, Inc.
3,000,000 7.875%, 01/15/2015 ....................................................... 2,932,500
Psychiatric Solutions, Inc.
1,000,000 7.750%, 07/15/2015 ....................................................... 1,000,000
-------------
3,932,500
-------------
- --------------------------------------------------------------------------------
19
BUFFALO BALANCED FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
PHARMACEUTICALS -- 2.41%
Warner Chilcott Corp.
$4,000,000 8.750%, 02/01/2015 ....................................................... $ 4,020,000
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 7,952,500
-------------
INDUSTRIALS -- 3.27%
COMMERCIAL SERVICES & SUPPLIES -- 2.68%
Greenbrier Companies, Inc.
1,500,000 8.375%, 05/15/2015 ....................................................... 1,417,500
Iron Mountain, Inc.
3,000,000 8.625%, 04/01/2013 ....................................................... 3,045,000
-------------
4,462,500
-------------
DIVERSIFIED MANUFACTURING -- 0.59%
Blount, Inc.
1,000,000 8.875%, 08/01/2012 ....................................................... 987,500
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 5,450,000
-------------
TOTAL CORPORATE BONDS .................................................................. 48,800,304
- ----------------------------------------------------------------------------------------------------------
(COST $50,539,980)
SHORT TERM INVESTMENTS -- 1.43%
INVESTMENT COMPANIES -- 0.83%
229,429 Fidelity Institutional Money Market Portfolio ............................ 229,429
1,145,127 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 1,145,127
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 1,374,556
-------------
U.S. TREASURY BILLS -- 0.60%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 0.40%
1,008,000 1.57%, 04/03/2008 ........................................................ 1,007,912
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS ................................................ 1,007,912
-------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 2,382,468
- ----------------------------------------------------------------------------------------------------------
(COST $2,382,468)
TOTAL INVESTMENTS -- 99.21% ............................................................ 165,352,061
(COST $140,610,266)
Other Assets in Excess of Liabilities -- 0.79% ......................................... 1,308,816
-------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 166,660,877
=============
ADR -- AMERICAN DEPOSITARY RECEIPT
PLC -- PUBLIC LIMITED COMPANY
(A) FOREIGN ISSUED SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
20
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS-- 0.25%
ENERGY -- 0.25%
ENERGY EQUIPMENT & SERVICES -- 0.25%
17,025 Eagle Geophysical, Inc.(a)(b) ............................................ $ 374,550
- ----------------------------------------------------------------------------------------------------------
TOTAL ENERGY ............................................................. 374,550
-------------
MEDIA -- 0.00%
SPECIAL PURPOSE ENTITY -- 0.00%
7,250 Adelphia Recovery Trust Escrow(a)(b) ..................................... 0
725,000 Adelphia Recovery Trust(a)(b) ............................................ 0
- ----------------------------------------------------------------------------------------------------------
TOTAL MEDIA .............................................................. 0
-------------
TOTAL COMMON STOCKS .................................................................... 374,550
- ----------------------------------------------------------------------------------------------------------
(COST $719,125)
CONVERTIBLE PREFERRED STOCKS -- 2.20%
FINANCIALS -- 2.20%
COMMERCIAL BANKS -- 2.20%
118,200 Boston Private Capital Trust I (a) ....................................... 3,324,375
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 3,324,375
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS ..................................................... 3,324,375
- ----------------------------------------------------------------------------------------------------------
(COST $5,842,000)
PREFERRED STOCKS -- 1.55%
FINANCIALS --1.55%
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 1.55%
125,000 Firstservice Corp. ....................................................... 2,343,750
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 2,343,750
-------------
TOTAL PREFERRED STOCKS ................................................................. 2,343,750
- ----------------------------------------------------------------------------------------------------------
(COST $2,656,250)
CONVERTIBLE BONDS -- 18.34%
CONSUMER DISCRETIONARY -- 8.17%
LEISURE EQUIPMENT & PRODUCTS -- 3.67%
WMS Industries, Inc.
$2,000,000 2.750%, 07/15/2010 ....................................................... 5,555,000
-------------
MEDIA -- 4.50%
Lions Gate Entertainment Corp.
6,500,000 2.938%, 10/15/2024 ....................................................... 6,800,625
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 12,355,625
-------------
FINANCIALS --1.20%
COMMERCIAL BANKS -- 1.20%
Privatebancorp, Inc.
1,900,000 3.625%, 03/15/2027 ....................................................... 1,819,250
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 1,819,250
-------------
- --------------------------------------------------------------------------------
21
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE-- 2.67%
BIOTECHNOLOGY -- 2.67%
Amylin Pharmaceuticals, Inc.
$3,655,000 2.500%, 04/15/2011 ....................................................... $ 4,029,637
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 4,029,637
-------------
INDUSTRIALS-- 3.10%
AIRLINES -- 3.10%
JetBlue Airways Corp.
6,030,000 3.750%, 03/15/2035 ....................................................... 4,688,325
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 4,688,325
-------------
INFORMATION TECHNOLOGY -- 3.20%
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 3.20%
Fairchild Semiconductor International
4,830,000 5.000%, 11/01/2008 ....................................................... 4,836,038
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 4,836,038
-------------
TOTAL CONVERTIBLE BONDS ................................................................ 27,728,875
- ----------------------------------------------------------------------------------------------------------
(COST $24,670,178)
CORPORATE BONDS -- 73.53%
CONSUMER DISCRETIONARY -- 34.93%
AUTOMOBILES -- 2.83%
Ford Motor Credit Company
4,700,000 7.375%, 10/28/2009 ....................................................... 4,283,838
-------------
HOTELS RESTAURANTS & LEISURE -- 8.39%
Circus Circus
3,100,000 7.625%, 07/15/2013 ....................................................... 2,875,250
Isle of Capri Casinos
4,025,000 7.000%, 03/01/2014 ....................................................... 2,887,937
Las Vegas Sands Corp.
925,000 6.375%, 02/15/2015 ....................................................... 820,937
MGM Mirage
180,000 8.375%, 02/01/2011 ....................................................... 181,350
Pinnacle Entertainment, Inc.
2,685,000 8.250%, 03/15/2012 ....................................................... 2,544,038
Royal Caribbean Cruises Ltd.
3,950,000 7.500%, 10/15/2027 ....................................................... 3,370,938
-------------
12,680,450
-------------
HOUSEHOLD DURABLES -- 4.30%
Jarden Corp.
2,000,000 7.500%, 05/01/2017 ....................................................... 1,760,000
Rent-A-Center, Inc.
5,100,000 7.500%, 05/01/2010 ....................................................... 4,743,000
-------------
6,503,000
-------------
LEISURE EQUIPMENT & PRODUCTS -- 1.36%
Mikohn Gaming Corp.
2,141,000 11.875%, 08/15/2008 ...................................................... 2,052,684
-------------
- --------------------------------------------------------------------------------
22
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY (CONTINUED)
MEDIA -- 0.12%
Fisher Communications, Inc.
$175,000 8.625%, 09/15/2014 ....................................................... $ 177,625
-------------
SPECIALTY RETAIL -- 8.30%
Autonation, Inc.
2,000,000 7.000%, 04/15/2014 ....................................................... 1,785,000
FTD, Inc.
4,150,000 7.750%, 02/15/2014 ....................................................... 3,672,750
Group 1 Automotive, Inc.
1,840,000 8.250%, 08/15/2013 ....................................................... 1,738,800
GSC Holdings Corp.
1,770,000 8.000%, 10/01/2012 ....................................................... 1,880,625
United Auto Group, Inc.
4,000,000 7.750%, 12/15/2016 ....................................................... 3,480,000
-------------
12,557,175
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 8.47%
Interface, Inc.
2,250,000 10.375%, 02/01/2010 ...................................................... 2,362,500
3,570,000 9.500%, 02/01/2014 ....................................................... 3,712,800
Oxford Industries, Inc.
3,820,000 8.875%, 06/01/2011 ....................................................... 3,648,100
Phillips Van-Heusen
3,120,000 7.750%, 11/15/2023 ....................................................... 3,090,073
-------------
12,813,473
-------------
WIRELESS TELECOMMUNICATION SERVICES -- 1.16%
Rogers Wireless, Inc.
1,665,000 7.500%, 03/15/2015 ....................................................... 1,751,627
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 52,819,872
-------------
CONSUMER STAPLES -- 9.99%
BEVERAGES -- 1.34%
Constellation Brands, Inc.
2,000,000 8.125%, 01/15/2012 ....................................................... 2,030,000
-------------
FOOD & STAPLES RETAILING -- 1.17%
Pantry, Inc.
2,000,000 7.750%, 02/15/2014 ....................................................... 1,770,000
-------------
FOOD PRODUCTS -- 4.01%
Pilgrims Pride Corp.
3,800,000 8.375%, 05/01/2017 ....................................................... 3,363,000
Smithfield Foods, Inc.
2,750,000 7.750%, 07/01/2017 ....................................................... 2,695,000
-------------
6,058,000
-------------
HOUSEHOLD PRODUCTS -- 1.99%
Prestige Brands, Inc.
3,100,000 9.250%, 04/15/2012 ....................................................... 3,007,000
-------------
PERSONAL PRODUCTS -- 1.48%
Elizabeth Arden, Inc.
2,350,000 7.750%, 01/15/2014 ....................................................... 2,244,250
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 15,109,250
-------------
- --------------------------------------------------------------------------------
23
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
ENERGY -- 7.98%
OIL & GAS -- 7.98%
Inergy L.P./Inergy Finance Corp.
$3,600,000 6.875%, 12/15/2014 ....................................................... $ 3,528,000
600,000 8.250%, 03/01/2016 ....................................................... 616,500
Susser Holdings LLC
1,050,000 10.625%, 12/15/2013 (15.313, 12/15/2009) ................................. 1,084,125
The Premcor Refining Group, Inc.
2,530,000 7.500%, 06/15/2015 ....................................................... 2,649,393
United Refining Co.
4,200,000 10.500%, 08/15/2012 ...................................................... 4,179,000
- ----------------------------------------------------------------------------------------------------------
TOTAL ENERGY ............................................................. 12,057,018
-------------
HEALTH CARE -- 6.49%
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.76%
Cooper Cos, Inc.
1,200,000 7.125%, 02/15/2015 ....................................................... 1,146,000
-------------
HEALTH CARE PROVIDERS & SERVICES -- 3.12%
Carriage Services, Inc.
3,000,000 7.875%, 01/15/2015 ....................................................... 2,932,500
Davita, Inc.
1,000,000 7.250%, 03/15/2015 ....................................................... 980,000
Psychiatric Solutions, Inc.
800,000 7.750%, 07/15/2015 ....................................................... 800,000
-------------
4,712,500
-------------
PHARMACEUTICALS -- 2.61%
Warner Chilcott Corp.
3,936,000 8.750%, 02/01/2015 ....................................................... 3,955,680
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 9,814,180
-------------
INDUSTRIALS -- 13.39%
COMMERCIAL SERVICES & SUPPLIES -- 11.36%
Allied Waste North America
3,600,000 7.875%, 04/15/2013 ....................................................... 3,721,500
Education Mgmt Llc
3,805,000 8.750%, 06/01/2014 ....................................................... 3,234,250
FTI Consulting, Inc.
500,000 7.750%, 10/01/2016 ....................................................... 520,000
Greenbrier Companies, Inc.
2,715,000 8.375%, 05/15/2015 ....................................................... 2,565,675
Iron Mountain, Inc.
1,350,000 8.625%, 04/01/2013 ....................................................... 1,370,250
4,875,000 7.750%, 01/15/2015 ....................................................... 4,923,750
Mobile Mini, Inc.
1,000,000 6.875%, 05/01/2015 ....................................................... 835,000
-------------
17,170,425
-------------
DIVERSIFIED MANUFACTURING -- 1.44%
Blount, Inc.
2,210,000 8.875%, 08/01/2012 ....................................................... 2,182,375
-------------
MACHINERY -- 0.59%
American Railcar Inds, Inc.
1,000,000 7.500%, 03/01/2014 ....................................................... 885,000
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 20,237,800
-------------
- --------------------------------------------------------------------------------
24
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
MANUFACTURING -- 0.16%
TRANSPORTATION EQUIPMENT -- 0.16%
Transdigm, Inc.
$235,000 7.750%, 07/15/2014 ....................................................... $ 236,175
- ----------------------------------------------------------------------------------------------------------
TOTAL MANUFACTURING ...................................................... 236,175
-------------
SERVICES -- 0.59%
BUSINESS SERVICES -- 0.59%
Lamar Media Corp.
1,000,000 6.625%, 08/15/2015 ....................................................... 885,000
- ----------------------------------------------------------------------------------------------------------
TOTAL SERVICES ........................................................... 885,000
-------------
TOTAL CORPORATE BONDS .................................................................. 111,159,295
- ----------------------------------------------------------------------------------------------------------
(COST $115,606,645)
SHORT TERM INVESTMENTS -- 2.34%
INVESTMENT COMPANIES -- 0.18%
270,140 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 270,140
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 270,140
-------------
U.S. TREASURY BILLS -- 2.16%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 2.16%
1,286,000 1.57%, 04/03/2008 ........................................................ 1,285,888
1,977,000 0.37%, 04/10/2008 ........................................................ 1,976,816
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS ................................................ 3,262,704
-------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 3,532,844
- ----------------------------------------------------------------------------------------------------------
(COST $3,532,844)
TOTAL INVESTMENTS -- 98.21% ............................................................ 148,463,689
-------------
(COST $153,027,042)
Other Assetsin Excess of Liabilities -- 1.79% .......................................... 2,712,054
-------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 151,175,743
=============
(A) NON INCOME PRODUCING
(B) FAIR VALUED SECURITY. THE TOTAL VALUE OF THIS SECURITY AMOUNTED TO $374,550
(0.25% OF NET ASSETS) AT MARCH 31, 2008.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
25
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 85.76%
AUSTRIA -- 1.05%
OIL & GAS -- 1.05%
3,500 OMV AG ................................................................... $ 231,331
- ----------------------------------------------------------------------------------------------------------
TOTAL AUSTRIA ............................................................ 231,331
-------------
BERMUDA -- 0.72%
CAPITAL MARKETS -- 0.72%
6,500 Invesco Ltd. ............................................................. 158,340
- ----------------------------------------------------------------------------------------------------------
TOTAL BERMUDA ............................................................ 158,340
-------------
BRAZIL -- 5.43%
DIVERSIFIED FINANCIAL SERVICES -- 2.23%
14,000 Bolsa de Mercadorias e Futuros ........................................... 127,657
27,000 Bovespa Holding SA ....................................................... 363,909
-------------
491,566
-------------
IT SERVICES -- 1.96%
26,000 Redecard SA .............................................................. 432,518
-------------
WATER UTILITIES -- 1.24%
2,500 Companhia de Saneamento Basico do Estado de Sao Paulo -- SABESP -- ADR ... 110,825
11,000 Companhia de Saneamento de Minas Gerais -- Copasa MG ..................... 161,737
-------------
272,562
- ----------------------------------------------------------------------------------------------------------
TOTAL BRAZIL ............................................................. 1,196,646
-------------
CANADA -- 0.31%
METALS & MINING -- 0.31%
1,000 Cameco Corporation ....................................................... 32,940
1,500 Harry Winston Diamond Corp. .............................................. 35,865
- ----------------------------------------------------------------------------------------------------------
TOTAL CANADA ............................................................. 68,805
-------------
CHINA -- 7.76%
CONSTRUCTION & ENGINEERING -- 0.55%
200,000 Baoye Group Co. Ltd. ..................................................... 122,323
-------------
EMPLOYMENT AGENCIES -- 1.10%
14,900 51job, Inc. -- ADR(a) .................................................... 242,125
-------------
FOOD & STAPLES RETAILING -- 0.73%
11,800 China Nepstar Chain Drugstore Ltd. -- ADR(a) ............................. 160,480
-------------
FOOD PRODUCTS -- 5.37%
516,825 Chaoda Modern Agriculture (Holdings) Ltd. ................................ 590,359
531,000 China Green (Holdings) Ltd. .............................................. 592,335
-------------
1,182,694
- ----------------------------------------------------------------------------------------------------------
TOTAL CHINA .............................................................. 1,707,622
-------------
DENMARK -- 1.00%
ELECTRICAL EQUIPMENT -- 1.00%
2,000 Vestas Wind System A/S(a) ................................................ 220,153
- ----------------------------------------------------------------------------------------------------------
TOTAL DENMARK ............................................................ 220,153
-------------
- --------------------------------------------------------------------------------
26
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
FINLAND -- 1.13%
COMMUNICATIONS EQUIPMENT -- 1.13%
7,800 Nokia Oyj -- ADR ......................................................... $ 248,274
- ----------------------------------------------------------------------------------------------------------
TOTAL FINLAND ............................................................ 248,274
-------------
FRANCE -- 10.60%
AUTOMOBILES -- 0.77%
2,200 PSA Peugeot Citroen ...................................................... 170,740
-------------
ENERGY EQUIPMENT & SERVICES -- 0.35%
1,000 Technip SA ............................................................... 77,897
-------------
MACHINERY -- 1.76%
1,600 Vallourec SA ............................................................. 388,069
-------------
MULTI-UTILITIES -- 2.35%
7,400 Veolia Environnement -- ADR .............................................. 517,482
-------------
OIL & GAS -- 0.34%
1,000 Total SA -- ADR .......................................................... 74,010
-------------
SOFTWARE -- 3.26%
8,500 Dassault Systemes S.A. ................................................... 494,267
2,600 UbiSoft Entertainment SA(a) .............................................. 223,962
-------------
718,229
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.77%
3,500 LVMH Moet Hennessy Louis Vuitton SA ...................................... 389,369
- ----------------------------------------------------------------------------------------------------------
TOTAL FRANCE ............................................................. 2,335,796
-------------
GERMANY -- 17.36%
CHEMICALS -- 5.63%
7,700 Bayer AG ................................................................. 617,230
3,000 Wachker Chemie AG ........................................................ 622,536
-------------
1,239,766
-------------
ELECTRICAL EQUIPMENT -- 2.66%
9,200 SGL Carbon AG(a) ......................................................... 585,350
-------------
HOUSEHOLD PRODUCTS -- 2.19%
11,400 Henkel KGaA .............................................................. 483,609
-------------
INDUSTRIAL CONGLOMERATES -- 1.63%
3,300 Siemens AG -- ADR ........................................................ 359,502
-------------
PHARMACEUTICALS -- 2.03%
3,600 Merck KGaA ............................................................... 446,961
-------------
SOFTWARE -- 1.48%
6,600 SAP AG -- ADR ............................................................ 327,162
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.74%
5,800 Adidas AG ................................................................ 383,524
- ----------------------------------------------------------------------------------------------------------
TOTAL GERMANY ............................................................ 3,825,874
-------------
GUERNSEY --1.66%
SOFTWARE -- 1.66%
12,900 Amdocs Ltd.(a) ........................................................... 365,844
- ----------------------------------------------------------------------------------------------------------
TOTAL GUERNSEY ........................................................... 365,844
-------------
- --------------------------------------------------------------------------------
27
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HONG KONG -- 1.39%
INDUSTRIAL CONGLOMERATES -- 0.93%
410,000 Guangdong Investment Ltd. ................................................ $ 205,427
-------------
REAL ESTATE -- 0.46%
7,000 Cheung Kong (Holdings) Ltd. .............................................. 100,778
- ----------------------------------------------------------------------------------------------------------
TOTAL HONG KONG .......................................................... 306,205
-------------
INDIA -- 1.92%
PHARMACEUTICALS -- 1.92%
29,300 Dr. Reddy's Laboratories Ltd. -- ADR ..................................... 424,264
- ----------------------------------------------------------------------------------------------------------
TOTAL INDIA .............................................................. 424,264
-------------
ISRAEL -- 2.51%
PHARMACEUTICALS -- 2.51%
12,000 Teva Pharmaceutical Industries Ltd. -- ADR ............................... 554,280
- ----------------------------------------------------------------------------------------------------------
TOTAL ISRAEL ............................................................. 554,280
-------------
JAPAN -- 2.77%
COMMERCIAL SERVICES & SUPPLIES -- 0.78%
3,500 SECOM CO., LTD. .......................................................... 172,217
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 1.99%
3,300 HOYA ..................................................................... 77,972
23,000 Nippon Electric Glass Co., Ltd. .......................................... 361,212
-------------
439,184
- ----------------------------------------------------------------------------------------------------------
TOTAL JAPAN .............................................................. 611,401
-------------
LUXEMBOURG -- 2.39%
ENERGY EQUIPMENT & SERVICES -- 0.93%
4,100 Tenaris S.A. -- ADR ...................................................... 204,385
-------------
WIRELESS TELECOMMUNICATION SERVICES -- 1.46%
3,400 Millicom International Cellular S.A.(a) .................................. 321,470
- ----------------------------------------------------------------------------------------------------------
TOTAL LUXEMBOURG ......................................................... 525,855
-------------
MALAYSIA -- 0.20%
INDUSTRIAL CONGLOMERATES -- 0.20%
15,000 Sime Darby Berhad ........................................................ 43,849
- ----------------------------------------------------------------------------------------------------------
TOTAL MALAYSIA ........................................................... 43,849
-------------
MEXICO -- 1.07%
WIRELESS TELECOMMUNICATION SERVICES -- 1.07%
3,700 America Movil SAB de C.V. -- ADR ......................................... 235,653
- ----------------------------------------------------------------------------------------------------------
TOTAL MEXICO ............................................................. 235,653
-------------
- --------------------------------------------------------------------------------
28
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
NETHERLANDS -- 2.35%
DIVERSIFIED FINANCIAL SERVICES -- 1.17%
6,900 ING Groep N.V. -- ADR .................................................... $ 257,853
-------------
HOUSEHOLD DURABLES -- 1.18%
6,800 Koninklijke (Royal) Philips Electronics N.V. -- ADR ...................... 260,712
- ----------------------------------------------------------------------------------------------------------
TOTAL NETHERLANDS ........................................................ 518,565
-------------
NORWAY -- 0.76%
COMMERCIAL SERVICES & SUPPLIES -- 0.76%
22,000 Tomra Systems ASA ........................................................ 167,054
- ----------------------------------------------------------------------------------------------------------
TOTAL NORWAY ............................................................. 167,054
-------------
REPUBLIC OF KOREA (SOUTH) -- 0.20%
WIRELESS TELECOMMUNICATION SERVICES -- 0.20%
2,000 SK Telecom Co., Ltd. -- ADR(a) ........................................... 43,220
- ----------------------------------------------------------------------------------------------------------
TOTAL REPUBLIC OF KOREA (SOUTH) .......................................... 43,220
-------------
SINGAPORE -- 4.30%
COMMERCIAL SERVICES & SUPPLIES -- 0.17%
100,000 Bio-Treat Technology Ltd. ................................................ 36,856
-------------
DIVERSIFIED FINANCIAL SERVICES -- 1.18%
15,500 Jardine Strategic Holdings Ltd.(a) ....................................... 260,710
-------------
HOTELS RESTAURANTS & LEISURE -- 1.90%
220,000 Mandarin Oriental International Ltd. ..................................... 418,915
-------------
MACHINERY -- 1.05%
105,000 Hyflux Ltd. .............................................................. 231,755
- ----------------------------------------------------------------------------------------------------------
TOTAL SINGAPORE .......................................................... 948,236
-------------
SOUTH AFRICA -- 0.83%
WIRELESS TELECOMMUNICATION SERVICES -- 0.83%
12,000 MTN Group Ltd. ........................................................... 182,417
- ----------------------------------------------------------------------------------------------------------
TOTAL SOUTH AFRICA ....................................................... 182,417
-------------
SPAIN -- 5.97%
COMMERCIAL BANKS -- 1.98%
21,900 Banco Santander SA -- ADR ................................................ 436,686
-------------
COMPUTER INTEGRATED SYSTEMS DESIGN -- 1.17%
10,900 Telvent GIT, S.A ......................................................... 257,785
-------------
DIVERSIFIED FINANCIAL SERVICES -- 2.82%
12,700 Bolsas y Mercados Espanoles .............................................. 620,264
- ----------------------------------------------------------------------------------------------------------
TOTAL SPAIN .............................................................. 1,314,735
-------------
SWEDEN -- 0.79%
COMMUNICATIONS EQUIPMENT -- 0.79%
8,900 Telefonaktiebolaget LM Ericsson -- ADR ................................... 174,885
- ----------------------------------------------------------------------------------------------------------
TOTAL SWEDEN ............................................................. 174,885
-------------
- --------------------------------------------------------------------------------
29
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
SWITZERLAND -- 6.71%
CAPITAL MARKETS -- 3.94%
5,600 Credit Suisse Group -- ADR ............................................... $ 284,928
7,900 Julius Baer Holding AG ................................................... 583,136
-------------
868,064
-------------
CHEMICALS -- 1.06%
4,000 Syngenta AG -- ADR ....................................................... 234,040
-------------
FOOD PRODUCTS -- 1.13%
500 Nestle SA ................................................................ 249,921
-------------
MANAGEMENT CONSULTING SERVICES -- 0.58%
4,700 ABB Ltd. -- ADR .......................................................... 126,524
- ----------------------------------------------------------------------------------------------------------
TOTAL SWITZERLAND ........................................................ 1,478,549
-------------
TAIWAN -- 0.99%
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 0.99%
21,200 Taiwan Semiconductor Manufacturing Company Ltd. -- ADR ................... 217,724
- ----------------------------------------------------------------------------------------------------------
TOTAL TAIWAN ............................................................. 217,724
-------------
UNITED KINGDOM -- 3.26%
BEVERAGES -- 2.03%
5,500 Diageo plc -- ADR ........................................................ 447,260
-------------
COMMERCIAL SERVICES & SUPPLIES -- 0.46%
14,000 Experian Group Ltd. ...................................................... 102,048
-------------
FOOD PRODUCTS -- 0.10%
500 Cadbury Schweppes plc -- ADR ............................................. 22,110
-------------
SOFTWARE -- 0.67%
3,000 NDS Group plc -- ADR(a) .................................................. 146,610
- ----------------------------------------------------------------------------------------------------------
TOTAL UNITED KINGDOM ..................................................... 718,028
-------------
UNITED STATES -- 0.34%
AUTO COMPONENTS -- 0.34%
1,500 Autoliv, Inc. ............................................................ 75,300
- ----------------------------------------------------------------------------------------------------------
TOTAL UNITED STATES ...................................................... 75,300
-------------
TOTAL COMMON STOCKS .................................................................... 18,898,905
- ----------------------------------------------------------------------------------------------------------
(COST $20,030,908)
- --------------------------------------------------------------------------------
30
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.04%
BRAZIL -- 1.04%
OIL & GAS -- 1.04%
2,700 Petroleo Brasileiro S.A. ................................................. $ 228,663
- ----------------------------------------------------------------------------------------------------------
TOTAL BRAZIL ............................................................. 228,663
-------------
TOTAL PREFERRED STOCKS ................................................................. 228,663
- ----------------------------------------------------------------------------------------------------------
(COST $227,211)
SHORT TERM INVESTMENTS -- 12.93%
INVESTMENT COMPANIES -- 8.98%
980,296 Fidelity Institutional Money Market Portfolio ............................ 980,296
1,000,000 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 1,000,000
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 1,980,296
-------------
U.S. TREASURY BILLS -- 3.95%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 3.95%
487,000 1.55%, 04/03/2008 ........................................................ 486,957
383,000 1.41%, 04/10/2008 ........................................................ 382,865
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS ................................................ 869,822
-------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 2,850,118
- ----------------------------------------------------------------------------------------------------------
(COST $2,850,118)
TOTAL INVESTMENTS -- 99.73% ............................................................ 21,977,686
(COST $23,108,237)
Other Assets in Excess of Liabilities -- 0.27% ......................................... 60,272
-------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 22,037,958
=============
(A) ADR -- AMERICAN DEPOSITARY RECEIPT
(B) NON INCOME PRODUCING
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
31
BUFFALO JAYHAWK CHINA FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.56%
CONSUMER DISCRETIONARY -- 11.03%
AUTO COMPONENTS -- 1.47%
3,620,000 Launch Tech Company Ltd. -- Class H ...................................... $ 432,578
-------------
AUTOMOBILES -- 0.44%
175,100 Chongqing Changan Automobile Co., Ltd. -- Class B ........................ 127,957
-------------
DISTRIBUTORS -- 0.19%
65,000 Matsunichi Communication Holdings Ltd. ................................... 57,275
-------------
MEDIA -- 1.16%
8,869,000 HC International, Inc.(a) ................................................ 341,876
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 7.77%
25,768,000 Tack Fat Group International Ltd. ........................................ 2,284,559
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 3,244,245
-------------
CONSUMER STAPLES -- 4.91%
FOOD PRODUCTS -- 3.83%
1,011,000 China Green (Holdings) Limited ........................................... 1,127,778
-------------
PERSONAL PRODUCTS -- 1.08%
92,000 Hengan International Group Co Ltd. ....................................... 317,187
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 1,444,965
-------------
ENERGY -- 11.14%
COAL & CONSUMABLE FUELS -- 1.99%
144,500 China Shenhua Energy Co. ................................................. 585,178
-------------
OIL & GAS -- 8.67%
926,000 China Petroleum & Chemical Corp. -- Class H .............................. 801,043
669,000 CNOOC Ltd. ............................................................... 985,572
610,000 PetroChina Company Ltd. .................................................. 763,756
-------------
2,550,371
-------------
OIL, GAS & CONSUMABLE FUELS -- 0.48%
79,000 China Coal Energy Company ................................................ 139,711
- ----------------------------------------------------------------------------------------------------------
TOTAL ENERGY ............................................................. 3,275,260
-------------
FINANCIALS -- 4.14%
COMMERCIAL BANKS -- 1.26%
160,000 Bank Of Communications Co. Ltd. .......................................... 189,657
51,000 China Merchants Bank Co., Ltd. ........................................... 179,137
-------------
368,794
-------------
INSURANCE -- 2.88%
118,000 Ping An Insurance (Group) Co. of China Ltd. .............................. 847,652
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 1,216,446
-------------
- --------------------------------------------------------------------------------
32
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE -- 14.23%
HEALTH CARE EQUIPMENT & SUPPLIES -- 7.87%
7,955,815 Golden Meditech Company Ltd. ............................................. $ 2,314,369
-------------
PHARMACEUTICALS -- 6.36%
38,000 China Biologic Products Inc.(a) .......................................... 137,750
12,106,000 Hua Han Bio-Pharmaceutical Holdings Ltd. -- Class H ...................... 1,733,863
-------------
1,871,613
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE 4,185,982
-------------
INDUSTRIALS -- 11.98%
AIRLINES -- 0.74%
276,000 China Southern Airline Co. Ltd. -- Class H(a) ............................ 217,348
-------------
COMMERCIAL SERVICES & SUPPLIES -- 3.06%
9,168,000 Jolimark Holdings Ltd. ................................................... 901,174
-------------
MACHINERY -- 1.11%
189,894 China International Marine Containters (Group) Co. Ltd.(a) ............... 325,225
-------------
ROAD & RAIL -- 3.23%
1,063,350 China Shipping Container Lines Company Ltd. -- Class H ................... 408,331
320,399 Dazhong Trans(a) ......................................................... 542,179
-------------
950,510
-------------
TRANSPORTATION INFRASTRUCTURE -- 3.84%
758,000 Anhui Expressway Co. Ltd. ................................................ 546,641
234,000 Beijing Capital International Airport Co. Ltd. -- Class H ................ 214,552
554,700 Guangdong Provincial Expressway Development Co. Ltd. -- Class B(a)(b) .... 368,486
-------------
1,129,679
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 3,523,936
-------------
INFORMATION TECHNOLOGY -- 11.03%
COMMUNICATIONS EQUIPMENT -- 1.18%
71,000 Vtech Holdings Ltd. ...................................................... 346,876
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 5.78%
4,902,000 Kwang Sung Electronics H.K.(b) ........................................... 1,700,629
-------------
INTERNET SOFTWARE & SERVICES -- 1.67%
594,000 China Lotsynergy Holding Ltd(a) .......................................... 33,414
12,394,000 China.com, Inc.(a) ....................................................... 457,412
-------------
490,826
-------------
SOFTWARE -- 2.40%
200,000 CDC Corporation(a) ....................................................... 706,000
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 3,244,331
-------------
- --------------------------------------------------------------------------------
33
BUFFALO JAYHAWK CHINA FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
MATERIALS -- 4.79%
CONSTRUCTION MATERIALS -- 0.21%
57,413 CSG Holding Co. Ltd. ..................................................... $ 61,884
-------------
METALS & MINING -- 4.58%
158,000 Aluminum Corporation Of China Ltd. ....................................... 256,947
163,000 Jiangxi Copper Co. Ltd. -- Class H ....................................... 312,955
324,000 Yanzhou Coal Mining Co. Ltd. -- Class H .................................. 460,697
326,000 Zijin Mining Group Co., Ltd. -- Class H .................................. 317,502
-------------
1,348,101
- ----------------------------------------------------------------------------------------------------------
TOTAL MATERIALS .......................................................... 1,409,985
-------------
TELECOMMUNICATION SERVICES -- 9.66%
DIVERSIFIED TELECOMMUNICATION SERVICES -- 2.73%
1,272,000 China Telecom Corp. Ltd. -- Class H ...................................... 802,506
-------------
WIRELESS TELECOMMUNICATION SERVICES -- 6.93%
92,500 China Mobile Ltd. ........................................................ 1,389,786
306,000 China Unicom Ltd. ........................................................ 650,145
-------------
2,039,931
- ----------------------------------------------------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES ......................................... 2,842,437
-------------
UTILITIES -- 11.65%
ELECTRIC UTILITIES -- 11.65%
2,744,000 Datang International Power Generation Company Ltd. -- Class H ............ 1,474,633
4,148,000 Huadian Power International Corp. Ltd. -- Class H ........................ 1,044,757
1,186,000 Huaneng Power International, Inc. -- Class H ............................. 907,155
- ----------------------------------------------------------------------------------------------------------
TOTAL UTILITIES .......................................................... 3,426,545
-------------
TOTAL COMMON STOCKS .................................................................... 27,814,132
- ----------------------------------------------------------------------------------------------------------
(COST $32,956,626)
- --------------------------------------------------------------------------------
34
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
WARRANTS --0.00%
CONSUMER DISCRETIONARY -- 0.00%
DISTRIBUTORS -- 0.00%
Matsunichi Comm. Warrants(b)
19,500 Expiration: July 2010, Exercise Price: $6.00 ............................. $ 0
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 0
-------------
TOTAL WARRANTS ......................................................................... 0
- ----------------------------------------------------------------------------------------------------------
(COST $0)
SHORT TERM INVESTMENTS -- 3.53%
INVESTMENT COMPANIES -- 2.46%
721,801 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 721,801
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 721,801
-------------
U.S. TREASURY BILLS -- 1.07%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 1.07%
191,000 1.60%, 04/03/2008 ........................................................ 190,983
124,000 1.42%, 04/10/2008 ........................................................ 123,956
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS ................................................ 314,939
-------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 1,036,740
- ----------------------------------------------------------------------------------------------------------
(COST $1,036,740)
TOTAL INVESTMENTS -- 98.09% ............................................................ 28,850,872
(COST $33,993,366)
Other Assets in Excess of Liabilities -- 1.91% ......................................... 562,108
-------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 29,412,980
=============
(A) NON INCOME PRODUCING
(B) FAIR VALUE SECURITY. THE TOTAL VALUE OF THIS SECURITY AMOUNTED TO $2,069,115
(7.03% OF NET ASSETS) AT MARCH 31, 2008.
As of March 31, 2008, the country diversification was as follows:
MARKET
VALUE PERCENTAGE
- --------------------------------------------------------------------------------
China ............................................... $15,122,462 51.41%
Hong Kong ........................................... 12,691,670 43.15%
----------- ------
Total Common Stocks ................................. 27,814,132 94.56%
Total Short Term Investments ........................ 1,036,740 3.53%
----------- ------
Total Investments ................................... 28,850,872 98.09%
Other Assets in Excess of Liabilities ............... 562,108 1.91%
----------- ------
TOTAL NET ASSETS .................................... $29,412,980 100.00%
=========== ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
35
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.77%
CONSUMER DISCRETIONARY -- 13.66%
HOTELS RESTAURANTS & LEISURE -- 3.97%
27,700 Marriott International, Inc. -- Class A .................................. $ 951,772
13,500 Starwood Hotels & Resorts Worldwide, Inc. ................................ 698,625
--------------
1,650,397
--------------
INTERNET & CATALOG RETAIL -- 3.65%
50,800 eBay, Inc.(a) ............................................................ 1,515,872
--------------
MEDIA -- 6.04%
34,750 Viacom Inc. -- Class B(a) ................................................ 1,376,795
36,000 The Walt Disney Co. ...................................................... 1,129,680
--------------
2,506,475
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 5,672,744
--------------
CONSUMER STAPLES -- 9.53%
BEVERAGES -- 1.79%
10,300 PepsiCo, Inc. ............................................................ 743,660
--------------
FOOD & STAPLES RETAILING -- 7.74%
38,400 CVS Corp. ................................................................ 1,555,584
14,800 Walgreen Co. ............................................................. 563,732
33,100 Whole Foods Market, Inc. ................................................. 1,091,307
--------------
3,210,623
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 3,954,283
--------------
FINANCIALS -- 16.76%
CAPITAL MARKETS -- 2.42%
22,000 Morgan Stanley ........................................................... 1,005,400
--------------
COMMERCIAL BANKS -- 3.01%
18,800 Northern Trust Corp. ..................................................... 1,249,636
--------------
DIVERSIFIED FINANCIAL SERVICES -- 8.88%
25,200 American Express Co. ..................................................... 1,101,744
8,600 Franklin Resources, Inc. ................................................. 834,114
14,600 Legg Mason, Inc. ......................................................... 817,308
18,700 T. Rowe Price Group, Inc. ................................................ 935,000
--------------
3,688,166
--------------
FINANCIAL SERVICES -- 0.15%
1,000 Visa Inc. -- Class B(a) .................................................. 62,360
--------------
INSURANCE -- 2.30%
17,100 Principal Financial Group, Inc. .......................................... 952,812
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 6,958,374
--------------
- --------------------------------------------------------------------------------
36
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE -- 22.77%
BIOTECHNOLOGY -- 1.92%
15,500 Gilead Sciences, Inc.(a) ................................................. $ 798,715
--------------
HEALTH CARE PROVIDERS & SERVICES -- 1.90%
18,000 Medco Health Solutions, Inc.(a) .......................................... 788,220
--------------
PHARMACEUTICALS -- 18.95%
30,700 Barr Pharmaceuticals Inc.(a) ............................................. 1,483,117
16,300 Bayer AG -- ADR .......................................................... 1,312,080
100,100 Schering-Plough Corp. .................................................... 1,442,441
30,800 Shire Pharmaceuticals PLC -- ADR ......................................... 1,785,168
44,100 Wyeth .................................................................... 1,841,616
--------------
7,864,422
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 9,451,357
--------------
INDUSTRIALS -- 6.59%
AIR FREIGHT & LOGISTICS -- 3.71%
16,600 FedEx Corp. .............................................................. 1,538,322
--------------
COMMERCIAL SERVICES & SUPPLIES -- 2.88%
28,200 Automatic Data Processing, Inc. .......................................... 1,195,398
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 2,733,720
--------------
INFORMATION TECHNOLOGY -- 29.46%
COMMUNICATIONS EQUIPMENT -- 7.52%
47,300 Cisco Systems, Inc.(a) ................................................... 1,139,457
82,500 Corning, Inc. ............................................................ 1,983,300
--------------
3,122,757
--------------
COMPUTERS & PERIPHERALS -- 2.06%
42,600 Netapp, Inc.(a) .......................................................... 854,130
--------------
INTERNET SOFTWARE & SERVICES -- 1.67%
23,900 Yahoo!, Inc.(a) .......................................................... 691,427
--------------
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 12.21%
35,300 Altera Corp. ............................................................. 650,579
59,200 Applied Materials, Inc. .................................................. 1,154,992
43,300 Broadcom Corp. -- Class A(a) ............................................. 834,391
60,100 Intel Corp. .............................................................. 1,272,918
40,900 Texas Instruments, Inc. .................................................. 1,156,243
--------------
5,069,123
--------------
SOFTWARE -- 6.01%
27,500 Electronic Arts Inc.(a) .................................................. 1,372,800
39,500 Microsoft Corp. .......................................................... 1,121,010
--------------
2,493,810
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 12,231,247
--------------
TOTAL COMMON STOCKS .................................................................... 41,001,725
- ----------------------------------------------------------------------------------------------------------
(COST $36,949,842)
- --------------------------------------------------------------------------------
37
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
SHORT TERM INVESTMENTS -- 1.24%
INVESTMENT COMPANIES -- 1.24%
515,876 SEI Daily Income Trust Treasury II Fund -- Class B ....................... $ 515,876
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 515,876
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 515,876
- ----------------------------------------------------------------------------------------------------------
(COST $515,876)
TOTAL INVESTMENTS -- 100.01% ........................................................... 41,517,601
(COST $37,465,718)
Liabilities in Excess of Other Assets -- (0.01)% ....................................... (4,496)
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 41,513,105
==============
ADR -- AMERICAN DEPOSITARY RECEIPT
(A) NON INCOME PRODUCING
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
38
BUFFALO MICRO CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.77%
CONSUMER DISCRETIONARY -- 21.99%
HOTELS RESTAURANTS & LEISURE -- 7.88%
59,326 McCormick & Schmick's Seafood Restaurants, Inc.(a) ....................... $ 691,148
73,100 Morton's Restaurant Group, Inc.(a) ....................................... 579,683
70,900 Shuffle Master, Inc.(a) .................................................. 379,315
15,400 Steiner Leisure Ltd.(a)(b) ............................................... 508,200
--------------
2,158,346
--------------
LEISURE EQUIPMENT & PRODUCTS -- 4.67%
54,800 MarineMax, Inc.(a) ....................................................... 682,808
35,300 Winnebago Industries, Inc. ............................................... 596,570
--------------
1,279,378
--------------
SPECIALTY RETAIL -- 4.13%
51,300 A.C. Moore Arts & Crafts, Inc.(a) ........................................ 349,866
69,150 Cache, Inc.(a) ........................................................... 780,704
--------------
1,130,570
--------------
TEXTILES, APPAREL & LUXURY GOODS -- 5.31%
79,009 The Dixie Group, Inc.(a) ................................................. 662,095
35,100 Oxford Industries, Inc. .................................................. 790,803
--------------
1,452,898
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 6,021,192
--------------
FINANCIALS -- 18.96%
CAPITAL MARKETS -- 5.16%
81,400 Sanders Morris Harris Group, Inc. ........................................ 664,224
10,600 Stifel Financial Corp.(a) ................................................ 475,940
41,400 Thomas Weisel Partners Group, Inc.(a) .................................... 274,068
--------------
1,414,232
--------------
COMMERCIAL BANKS -- 4.16%
27,500 Boston Private Financial Holdings, Inc. .................................. 291,225
26,900 PrivateBancorp, Inc. ..................................................... 846,543
--------------
1,137,768
--------------
DIVERSIFIED FINANCIAL SERVICES -- 9.64%
29,700 Cohen & Steers, Inc. ..................................................... 786,753
61,500 Hennessy Advisors, Inc. .................................................. 485,850
137,500 MarketAxess Holdings, Inc.(a) ............................................ 1,366,750
--------------
2,639,353
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 5,191,353
--------------
- --------------------------------------------------------------------------------
39
BUFFALO MICRO CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE -- 20.06%
BIOTECHNOLOGY -- 2.69%
17,500 LifeCell Corp.(a) ........................................................ $ 735,525
--------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 9.60%
84,500 Align Technology, Inc.(a) ................................................ 938,795
21,025 Meridian Bioscience, Inc. ................................................ 702,866
169,900 Remedent, Inc.(a) ........................................................ 166,502
42,400 Spectranetics Corp.(a) ................................................... 354,464
101,800 Trinity Biotech plc -- ADR(a) ............................................ 467,262
--------------
2,629,889
--------------
HEALTH CARE PROVIDERS & SERVICES -- 5.86%
11,800 ICON PLC -- ADR(a) ....................................................... 765,702
23,800 MWI Veterinary Supply, Inc.(a) ........................................... 839,188
--------------
1,604,890
--------------
PHARMACEUTICALS -- 1.91%
113,700 Bioform Medical, Inc.(a) ................................................. 523,020
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 5,493,324
--------------
INDUSTRIALS -- 12.73%
COMMERCIAL SERVICES & SUPPLIES -- 12.73%
11,500 Capella Education Company(a) ............................................. 627,900
74,700 Cbiz, Inc.(a) ............................................................ 606,564
33,200 Heidrick & Struggles International, Inc.(a) .............................. 1,079,996
42,100 Innerworkings, Inc.(a) ................................................... 590,663
49,500 Universal Technical Institute, Inc.(a) ................................... 580,635
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 3,485,758
--------------
INFORMATION TECHNOLOGY -- 25.03%
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 3.82%
43,600 DTS, Inc.(a) ............................................................. 1,046,400
--------------
INTERNET SOFTWARE & SERVICES -- 6.85%
123,000 Internap Network Services Corp.(a) ....................................... 610,080
59,100 The Knot, Inc.(a) ........................................................ 694,425
45,050 LoopNet, Inc.(a) ......................................................... 572,135
--------------
1,876,640
--------------
SOFTWARE -- 14.36%
54,500 Deltek, Inc.(a) .......................................................... 707,410
40,000 Double-Take Software Inc.(a) ............................................. 467,200
39,300 Monotype Imaging Holdings Inc.(a) ........................................ 593,823
235,300 Packeteer, Inc.(a) ....................................................... 1,197,677
89,000 PDF Solutions, Inc.(a) ................................................... 490,390
37,800 PROS Holdings, Inc.(a) ................................................... 474,390
--------------
3,930,890
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 6,853,930
--------------
TOTAL COMMON STOCKS .................................................................... 27,045,557
- ----------------------------------------------------------------------------------------------------------
(COST $32,807,096)
- --------------------------------------------------------------------------------
40
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
SHORT TERM INVESTMENTS -- 1.47%
INVESTMENT COMPANY -- 1.47%
403,150 SEI Daily Income Trust Treasury II Fund -- Class B ....................... $ 403,150
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANY ............................................................... 403,150
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 403,150
- ----------------------------------------------------------------------------------------------------------
(COST $403,150)
TOTAL INVESTMENTS -- 100.24% ........................................................... 27,448,707
(COST $33,210,246)
Liabilities in Excess of Other Assets -- (0.24)% ....................................... (66,198)
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 27,382,509
==============
ADR -- AMERICAN DEPOSITARY RECEIPT
(A) NON INCOME PRODUCING
(B) FOREIGN ISSUED SECURITY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
41
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 97.97%
CONSUMER DISCRETIONARY -- 27.03%
AUTO COMPONENTS -- 4.43%
147,300 Autoliv, Inc. ............................................................ $ 7,394,460
550,800 Gentex Corp. ............................................................. 9,446,220
--------------
16,840,680
--------------
HOTELS RESTAURANTS & LEISURE -- 2.35%
153,175 Life Time Fitness, Inc.(a) ............................................... 4,780,592
126,100 Royal Caribbean Cruises Ltd.(b) .......................................... 4,148,690
--------------
8,929,282
--------------
LEISURE EQUIPMENT & PRODUCTS -- 1.53%
365,200 Brunswick Corp. .......................................................... 5,832,244
--------------
MEDIA -- 1.18%
124,600 Lamar Advertising Co.(a) ................................................. 4,476,878
--------------
SPECIALTY RETAIL -- 13.78%
118,000 Abercrombie & Fitch Co. -- Class A ....................................... 8,630,520
168,610 Barnes & Noble, Inc. ..................................................... 5,167,897
820,300 Chico's FAS, Inc.(a) ..................................................... 5,832,333
293,200 PETsMART, Inc. ........................................................... 5,993,008
184,300 Tiffany & Co. ............................................................ 7,711,112
379,000 Urban Outfitters, Inc.(a) ................................................ 11,881,650
294,100 Williams-Sonoma, Inc. .................................................... 7,128,984
--------------
52,345,504
--------------
TEXTILES, APPAREL & LUXURY GOODS -- 3.76%
73,200 Mohawk Industries, Inc.(a) ............................................... 5,241,852
155,500 Polo Ralph Lauren Corp. .................................................. 9,064,095
--------------
14,305,947
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 102,730,535
--------------
CONSUMER STAPLES -- 2.17%
FOOD & STAPLES RETAILING -- 2.17%
250,600 Whole Foods Market, Inc. ................................................. 8,262,282
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 8,262,282
--------------
FINANCIALS -- 10.36%
COMMERCIAL SERVICES -- 1.28%
170,475 Interactive Data Corp. ................................................... 4,853,423
--------------
DIVERSIFIED FINANCIAL SERVICES -- 9.08%
366,800 Janus Capital Group, Inc. ................................................ 8,535,436
107,450 Legg Mason, Inc. ......................................................... 6,015,051
232,100 Morningstar, Inc.(a) ..................................................... 14,239,335
114,000 T. Rowe Price Group, Inc. ................................................ 5,700,000
--------------
34,489,822
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 39,343,245
--------------
- --------------------------------------------------------------------------------
42
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE -- 24.65%
BIOTECHNOLOGY -- 2.28%
296,300 Amylin Pharmaceuticals, Inc.(a) .......................................... $ 8,654,923
--------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 5.85%
141,000 DENTSPLY International, Inc. ............................................. 5,442,600
478,300 Qiagen N.V.(a)(b) ........................................................ 9,948,640
114,600 Sigma-Aldrich Corp. ...................................................... 6,835,890
--------------
22,227,130
--------------
HEALTH CARE PROVIDERS & SERVICES -- 8.61%
180,200 Charles River Laboratories International, Inc.(a) ........................ 10,620,988
379,400 IMS Health, Inc. ......................................................... 7,971,194
337,800 Pharmaceutical Product Development, Inc. ................................. 14,153,820
--------------
32,746,002
--------------
PHARMACEUTICALS -- 7.91%
169,600 Barr Pharmaceuticals, Inc.(a) ............................................ 8,193,376
225,300 Endo Pharmaceuticals Holdings, Inc.(a) ................................... 5,393,682
366,600 Medicis Pharmaceutical Corp. -- Class A .................................. 7,218,354
159,600 Shire Pharmaceuticals PLC -- ADR ......................................... 9,250,416
--------------
30,055,828
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 93,683,883
--------------
INDUSTRIALS -- 12.45%
COMMERCIAL SERVICES & SUPPLIES -- 12.45%
402,000 Career Education Corp.(a) ................................................ 5,113,440
166,400 DeVry, Inc. .............................................................. 6,962,176
216,500 Hewitt Associates, Inc. -- Class A(a) .................................... 8,610,205
313,150 Iron Mountain, Inc.(a) ................................................... 8,279,686
288,700 ITT Educational Services, Inc.(a) ........................................ 13,259,991
210,100 Monster Worldwide, Inc.(a) ............................................... 5,086,521
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 47,312,019
--------------
INFORMATION TECHNOLOGY -- 17.77%
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 1.69%
678,100 Jabil Circuit, Inc. ...................................................... 6,414,826
--------------
INTERNET SOFTWARE & SERVICES -- 3.31%
225,500 Akamai Technologies, Inc.(a) ............................................. 6,350,080
307,000 DealerTrack Holdings Inc.(a) ............................................. 6,207,540
--------------
12,557,620
--------------
IT SERVICES -- 1.14%
90,000 Fiserv, Inc.(a) .......................................................... 4,328,100
--------------
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 5.48%
192,700 KLA-Tencor Corp. ......................................................... 7,149,170
414,300 National Semiconductor Corp. ............................................. 7,589,976
270,200 SanDisk Corp.(a) ......................................................... 6,098,414
--------------
20,837,560
--------------
SOFTWARE -- 6.15%
275,600 Citrix Systems, Inc.(a) .................................................. 8,083,348
221,300 F5 Networks, Inc.(a) ..................................................... 4,021,021
612,600 Red Hat, Inc.(a) ......................................................... 11,265,714
--------------
23,370,083
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 67,508,189
--------------
- --------------------------------------------------------------------------------
43
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 3.54%
DIVERSIFIED TELECOMMUNICATION SERVICES -- 3.54%
507,600 NeuStar, Inc.(a) ......................................................... $ 13,441,248
- ----------------------------------------------------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES ......................................... 13,441,248
--------------
TOTAL COMMON STOCKS .................................................................... 372,281,401
- ----------------------------------------------------------------------------------------------------------
(COST $391,466,378)
SHORT TERM INVESTMENTS -- 0.43%
U.S. TREASURY BILL -- 0.43%
1,639,000 1.57%, 04/03/2008 ........................................................ 1,638,857
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. Treasury Bill ................................................. 1,638,857
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 1,638,857
- ----------------------------------------------------------------------------------------------------------
(COST $1,638,857)
TOTAL INVESTMENTS -- 98.40% ............................................................ 373,920,258
(COST $393,105,235)
Other Assets in Excess of Liabilities -- 1.60% ......................................... 6,088,176
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 380,008,434
==============
ADR -- AMERICAN DEPOSITARY RECEIPT
(A) NON INCOME PRODUCING
(B) FOREIGN ISSUED SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
44
BUFFALO SCIENCE & TECHNOLOGY FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.59%
CONSUMER DISCRETIONARY -- 3.11%
AUTO COMPONENTS -- 1.54%
130,100 Gentex Corp. ............................................................. $ 2,231,215
--------------
INTERNET & CATALOG RETAIL -- 1.57%
76,000 eBay Inc.(a) ............................................................. 2,267,840
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 4,499,055
--------------
HEALTH CARE -- 35.34%
BIOTECHNOLOGY -- 4.37%
76,000 Amylin Pharmaceuticals, Inc.(a) .......................................... 2,219,960
15,500 Gilead Sciences, Inc.(a) ................................................. 798,715
99,100 InterMune, Inc.(a) ....................................................... 1,444,878
44,400 LifeCell Corp.(a) ........................................................ 1,866,132
--------------
6,329,685
--------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 10.61%
342,800 Align Technology, Inc.(a) ................................................ 3,808,508
143,300 American Medical Systems Holdings, Inc.(a) ............................... 2,033,427
104,100 Mentor Corp. ............................................................. 2,677,452
371,265 Orthovita, Inc.(a) ....................................................... 957,864
157,300 Qiagen N.V.(a)(b) ........................................................ 3,271,840
241,200 Trinity Biotech Plc -- ADR(a) ............................................ 1,107,108
32,200 Varian Medical Systems, Inc.(a) .......................................... 1,508,248
--------------
15,364,447
--------------
HEALTH CARE PROVIDERS & SERVICES -- 8.96%
117,400 AMN Healthcare Services, Inc.(a) ......................................... 1,810,308
33,100 athenahealth Inc.(a) ..................................................... 783,477
37,500 Charles River Laboratories International, Inc.(a) ........................ 2,210,250
22,200 Covance, Inc.(a) ......................................................... 1,841,934
102,500 IMS Health, Inc. ......................................................... 2,153,525
99,800 Pharmaceutical Product Development, Inc. ................................. 4,181,620
--------------
12,981,114
--------------
PHARMACEUTICALS -- 11.40%
62,100 Barr Pharmaceuticals, Inc.(a) ............................................ 3,000,051
26,000 Bayer AG -- ADR .......................................................... 2,092,888
376,000 Bioform Medical, Inc.(a) ................................................. 1,729,600
91,900 Medicis Pharmaceutical Corp. -- Class A .................................. 1,809,511
143,000 Schering-Plough Corp. .................................................... 2,060,630
47,600 Shire Pharmaceuticals Group PLC -- ADR ................................... 2,758,896
73,500 Wyeth .................................................................... 3,069,360
--------------
16,520,936
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 51,196,182
--------------
INDUSTRIALS -- 2.65%
COMMERCIAL SERVICES & SUPPLIES -- 2.65%
59,700 Hewitt Associates, Inc. -- Class A(a) .................................... 2,374,269
60,500 Monster Worldwide, Inc.(a) ............................................... 1,464,705
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 3,838,974
--------------
- --------------------------------------------------------------------------------
45
BUFFALO SCIENCE & TECHNOLOGY FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 54.77%
COMMUNICATIONS EQUIPMENT -- 6.40%
101,600 Adtran, Inc. ............................................................. $ 1,879,600
83,900 Cisco Systems, Inc.(a) ................................................... 2,021,151
127,100 Corning, Inc. ............................................................ 3,055,484
72,600 Nokia Oyj -- ADR ......................................................... 2,310,858
--------------
9,267,093
--------------
COMPUTERS & PERIPHERALS -- 3.28%
99,200 EMC Corp.(a) ............................................................. 1,422,528
166,000 NetApp, Inc.(a) .......................................................... 3,328,300
--------------
4,750,828
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 6.37%
33,600 Dolby Laboratories, Inc. -- Class A(a) ................................... 1,218,336
284,300 Jabil Circuit, Inc. ...................................................... 2,689,478
58,300 Molex, Inc. .............................................................. 1,350,228
84,050 National Instruments Corp. ............................................... 2,197,067
61,800 Trimble Navigation Ltd.(a) ............................................... 1,766,862
--------------
9,221,971
--------------
INTERNET SOFTWARE & SERVICES -- 6.36%
81,800 Akamai Technologies, Inc.(a) ............................................. 2,303,488
329,100 Internap Network Services Corp.(a) ....................................... 1,632,336
206,500 The Knot, Inc.(a) ........................................................ 2,426,375
98,800 Yahoo!, Inc.(a) .......................................................... 2,858,284
--------------
9,220,483
--------------
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 21.20%
121,300 Broadcom Corp. -- Class A(a) ............................................. 2,337,451
107,700 Cabot Microelectronics Corp.(a) .......................................... 3,462,555
61,800 Cree, Inc.(a) ............................................................ 1,727,928
172,285 FormFactor Inc.(a) ....................................................... 3,290,643
124,550 Intel Corp. .............................................................. 2,637,969
158,550 Maxim Integrated Products, Inc. .......................................... 3,232,835
195,100 MKS Instruments, Inc.(a) ................................................. 4,175,140
126,900 SanDisk Corp.(a) ......................................................... 2,864,133
308,400 Semtech Corp.(a) ......................................................... 4,419,372
90,400 Texas Instruments, Inc. .................................................. 2,555,608
--------------
30,703,634
--------------
SOFTWARE -- 11.16%
72,200 Citrix Systems, Inc.(a) .................................................. 2,117,626
24,200 Electronic Arts Inc.(a) .................................................. 1,208,064
141,400 F5 Networks, Inc.(a) ..................................................... 2,569,238
115,207 Manhattan Associates, Inc.(a) ............................................ 2,641,697
80,300 Oracle Corp.(a) .......................................................... 1,570,668
523,600 Packeteer, Inc.(a) ....................................................... 2,665,124
184,600 Red Hat, Inc.(a) ......................................................... 3,394,794
--------------
16,167,211
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY 79,331,220
--------------
- --------------------------------------------------------------------------------
46
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.72%
DIVERSIFIED TELECOMMUNICATION SERVICES -- 2.72%
148,700 NeuStar, Inc.(a) ......................................................... $ 3,937,576
- ----------------------------------------------------------------------------------------------------------
TOTAL TELECOMMUNICATION SERVICES ......................................... 3,937,576
--------------
TOTAL COMMON STOCKS .................................................................... 142,803,007
- ----------------------------------------------------------------------------------------------------------
(COST $152,873,960)
SHORT TERM INVESTMENTS -- 2.20%
INVESTMENT COMPANY -- 0.92%
1,332,636 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 1,332,636
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANY ................................................. 1,332,636
U.S. TREASURY BILLS -- 1.28%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 1.28%
732,000 1.57%, 04/03/2008 ........................................................ 731,936
1,127,000 1.05%, 04/10/2008 ........................................................ 1,126,704
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. Treasury Bills ................................................ 1,858,640
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 3,191,276
- ----------------------------------------------------------------------------------------------------------
(COST $3,191,276)
TOTAL INVESTMENTS -- 100.79% ........................................................... 145,994,283
(COST $156,065,236)
Liabilities in Excess of Other Assets -- (0.79)% ....................................... (1,143,688)
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 144,850,595
==============
ADR -- AMERICAN DEPOSITARY RECEIPT
(A) NON INCOME PRODUCING
(B) FOREIGN ISSUED SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
47
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.64%
CONSUMER DISCRETIONARY -- 25.30%
AUTO COMPONENTS -- 1.50%
1,396,964 Gentex Corp. ............................................................. $ 23,957,933
--------------
HOTELS RESTAURANTS & LEISURE -- 9.17%
1,735,320 Ameristar Casinos, Inc. .................................................. 31,669,590
544,200 Life Time Fitness, Inc.(a) ............................................... 16,984,482
1,160,950 Panera Bread Co.(a) ...................................................... 48,632,195
1,747,400 P.F. Chang's China Bistro, Inc.(a)(c) .................................... 49,696,056
--------------
146,982,323
--------------
HOUSEHOLD DURABLES -- 0.02%
12,600 Ethan Allen Interiors, Inc. .............................................. 358,218
--------------
INTERNET & CATALOG RETAIL -- 1.79%
5,668,900 Coldwater Creek, Inc.(a)(c) .............................................. 28,627,945
--------------
LEISURE EQUIPMENT & PRODUCTS -- 7.49%
4,700 Brunswick Corp. .......................................................... 75,059
1,557,332 MarineMax, Inc.(a)(c) .................................................... 19,404,357
1,245,600 Winnebago Industries, Inc. ............................................... 21,050,640
2,208,925 WMS Industries, Inc.(a) .................................................. 79,455,032
--------------
119,985,088
--------------
MEDIA -- 2.04%
3,345,700 Lions Gate Entertainment Corp.(a)(b) ..................................... 32,620,575
--------------
SPECIALTY RETAIL -- 1.65%
2,650,900 Christopher & Banks Corp.(c) ............................................. 26,482,491
--------------
TEXTILES, APPAREL & LUXURY GOODS -- 1.64%
1,169,625 Oxford Industries, Inc.(c) ............................................... 26,351,651
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 405,366,224
--------------
FINANCIALS -- 5.38%
CAPITAL MARKETS -- 1.37%
954,462 Raymond James Financial, Inc. ............................................ 21,933,537
--------------
COMMERCIAL BANKS -- 2.53%
1,361,300 Boston Private Financial Holdings, Inc. .................................. 14,416,167
829,900 PrivateBancorp, Inc. ..................................................... 26,116,953
--------------
40,533,120
--------------
DIVERSIFIED FINANCIAL SERVICES -- 1.48%
1,801,706 MarketAxess Holdings, Inc.(a)(c) ......................................... 17,908,957
94,765 Morningstar, Inc.(a) ..................................................... 5,813,833
--------------
23,722,790
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS 86,189,447
--------------
HEALTH CARE -- 25.55%
BIOTECHNOLOGY -- 3.23%
1,196,150 Amylin Pharmaceuticals, Inc.(a) .......................................... 34,939,541
1,155,700 InterMune, Inc.(a) ....................................................... 16,850,106
--------------
51,789,647
--------------
- --------------------------------------------------------------------------------
48
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES -- 9.53%
3,918,725 Align Technology, Inc.(a)(c) ............................................. $ 43,537,035
2,934,060 American Medical Systems Holdings, Inc.(a) ............................... 41,634,311
1,715,600 Mentor Corp.(c) .......................................................... 44,125,232
971,450 Wright Medical Group, Inc.(a) ............................................ 23,450,803
--------------
152,747,381
--------------
HEALTH CARE PROVIDERS & SERVICES -- 9.30%
607,875 Charles River Laboratories International, Inc.(a) ........................ 35,828,153
290,925 Covance, Inc.(a) ......................................................... 24,138,047
1,390,056 Pharmaceutical Product Development, Inc. ................................. 58,243,346
1,844,300 PSS World Medical, Inc.(a) ............................................... 30,726,038
--------------
148,935,584
--------------
HEALTH CARE TECHNOLOGY -- 1.50%
2,334,400 Allscripts Healthcare Solutions, Inc.(a) ................................. 24,091,008
--------------
PHARMACEUTICALS -- 1.99%
1,618,600 Medicis Pharmaceutical Corp. -- Class A .................................. 31,870,234
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE ........................................................ 409,433,854
--------------
INDUSTRIALS -- 16.03%
COMMERCIAL SERVICES & SUPPLIES -- 16.03%
439,800 Bright Horizons Family Solutions, Inc.(a) ................................ 18,928,992
4,887,090 Corinthian Colleges, Inc.(a)(c) .......................................... 35,333,660
592,483 DeVry, Inc. .............................................................. 24,789,489
1,333,100 FirstService Corp.(a)(b) ................................................. 28,888,277
1,278,200 Heidrick & Struggles International, Inc.(a)(c) ........................... 41,579,846
663,000 ITT Educational Services, Inc.(a) ........................................ 30,451,590
2,078,600 Korn/Ferry International(a) .............................................. 35,128,340
2,198,350 Navigant Consulting, Inc.(a) ............................................. 41,724,683
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 256,824,877
--------------
INFORMATION TECHNOLOGY -- 26.38%
COMMUNICATIONS EQUIPMENT -- 2.17%
1,881,150 Adtran, Inc. ............................................................. 34,801,275
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 3.99%
803,692 Dolby Laboratories, Inc. -- Class A(a) ................................... 29,141,872
905,375 National Instruments Corp. ............................................... 23,666,502
390,150 Trimble Navigation Ltd.(a) ............................................... 11,154,389
--------------
63,962,763
--------------
INTERNET SOFTWARE & SERVICES -- 3.00%
2,797,000 Internap Network Services Corp.(a)(c) .................................... 13,873,120
1,906,200 The Knot, Inc.(a)(c) ..................................................... 22,397,850
936,200 LoopNet, Inc.(a) ......................................................... 11,889,740
--------------
48,160,710
--------------
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 13.94%
1,194,442 Cabot Microelectronics Corp.(a)(c) ....................................... 38,401,311
1,358,600 Cree, Inc.(a) ............................................................ 37,986,456
1,503,450 Fairchild Semiconductor International, Inc.(a) ........................... 17,921,124
1,817,400 FormFactor, Inc.(a) ...................................................... 34,712,340
2,340,268 MKS Instruments, Inc.(a) ................................................. 50,081,735
3,084,800 Semtech Corp.(a)(c) ...................................................... 44,205,184
--------------
223,308,150
--------------
- --------------------------------------------------------------------------------
49
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY (CONTINUED)
SOFTWARE -- 3.28%
1,304,600 Manhattan Associates, Inc.(a)(c) ......................................... $ 29,914,478
756,400 Quality Systems, Inc. .................................................... 22,593,668
--------------
52,508,146
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 422,741,044
--------------
TOTAL COMMON STOCKS .................................................................... 1,580,555,446
- ----------------------------------------------------------------------------------------------------------
(COST $1,651,543,888)
PREFERRED STOCKS -- 0.12%
FINANCIALS -- 0.12%
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.12%
96,700 Firstservice Corp.(b) .................................................... 1,813,125
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 1,813,125
--------------
TOTAL PREFERRED STOCKS ................................................................. 1,813,125
- ----------------------------------------------------------------------------------------------------------
(COST $1,738,105)
SHORT TERM INVESTMENTS -- 1.06%
INVESTMENT COMPANIES -- 0.73%
1,684,363 Fidelity Institutional Money Market Portfolio ............................ 1,684,363
10,000,000 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 10,000,000
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 11,684,363
--------------
U.S. TREASURY BILLS -- 0.33%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 0.33%
3,680,000 0.89%, 04/10/2008 ........................................................ 3,679,180
1,639,000 0.41%, 04/17/2008 ........................................................ 1,638,701
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. Treasury Bills ................................................ 5,317,881
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 17,002,244
- ----------------------------------------------------------------------------------------------------------
(COST $17,002,244)
TOTAL INVESTMENTS -- 99.82% ............................................................ 1,599,370,815
(COST $1,670,284,237)
Other Assets in Excess of Liabilities -- 0.18% ......................................... 2,943,965
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $1,602,314,780
==============
(A) NON INCOME PRODUCING
(B) FOREIGN ISSUED SECURITIES
(C) AFFILIATED COMPANY: THE FUND OWNS 5% OR MORE OF THE OUTSTANDING VOTING
SECURITIES OF THE ISSUER. SEE NOTE 7 TO FINANCIAL STATEMENTS FOR FURTHER
INFORMATION.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
50
BUFFALO USA GLOBAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 97.03%
CONSUMER DISCRETIONARY -- 19.55%
AUTO COMPONENTS -- 4.64%
161,900 Gentex Corp. ............................................................. $ 2,776,585
68,500 Johnson Controls, Inc. ................................................... 2,315,300
--------------
5,091,885
--------------
HOTELS RESTAURANTS & LEISURE -- 7.72%
62,100 Carnival Corp.(b) ........................................................ 2,513,808
20,700 Las Vegas Sands Corp.(a) ................................................. 1,524,348
49,500 McDonald's Corp. ......................................................... 2,760,615
45,100 Yum! Brands, Inc. ........................................................ 1,678,171
--------------
8,476,942
--------------
HOUSEHOLD DURABLES -- 1.08%
23,400 Snap-on Inc. ............................................................. 1,189,890
--------------
INTERNET & CATALOG RETAIL -- 1.78%
65,400 eBay Inc.(a) ............................................................. 1,951,536
--------------
SPECIALTY RETAIL -- 1.84%
48,200 Tiffany & Co. ............................................................ 2,016,688
--------------
TEXTILES, APPAREL & LUXURY GOODS -- 2.49%
46,900 Polo Ralph Lauren Corp. .................................................. 2,733,801
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER DISCRETIONARY ............................................. 21,460,742
--------------
CONSUMER STAPLES -- 10.90%
BEVERAGES -- 2.99%
53,900 The Coca-Cola Co. ........................................................ 3,280,893
--------------
FOOD PRODUCTS -- 1.76%
30,850 Wm. Wrigley Jr. Co. ...................................................... 1,938,614
--------------
HOUSEHOLD PRODUCTS -- 6.15%
27,000 Colgate-Palmolive Co. .................................................... 2,103,570
28,600 Kimberly-Clark Corp. ..................................................... 1,846,130
40,015 Procter & Gamble Co. ..................................................... 2,803,851
--------------
6,753,551
- ----------------------------------------------------------------------------------------------------------
TOTAL CONSUMER STAPLES ................................................... 11,973,058
--------------
FINANCIALS -- 3.29%
FINANCIAL SERVICES -- 0.15%
2,600 Visa Inc. -- Class A(a) .................................................. 162,136
--------------
INSURANCE -- 3.14%
53,100 AFLAC, Inc. .............................................................. 3,448,845
- ----------------------------------------------------------------------------------------------------------
TOTAL FINANCIALS ......................................................... 3,610,981
--------------
HEALTH CARE -- 17.20%
HEALTH CARE EQUIPMENT & SUPPLIES -- 9.34%
28,700 Baxter International, Inc. ............................................... 1,659,434
42,600 DENTSPLY International, Inc. ............................................. 1,644,360
89,900 Mentor Corp. ............................................................. 2,312,228
38,800 Sigma-Aldrich Corp. ...................................................... 2,314,420
49,700 Varian Medical Systems, Inc.(a) .......................................... 2,327,948
--------------
10,258,390
--------------
- --------------------------------------------------------------------------------
51
BUFFALO USA GLOBAL FUND
SCHEDULE OF INVESTMENTS
March 31, 2008
(CONTINUED)
SHARES FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES -- 3.94%
77,100 IMS Health, Inc. ......................................................... $ 1,619,871
64,500 Pharmaceutical Product Development, Inc. ................................. 2,702,550
--------------
4,322,421
--------------
PHARMACEUTICALS -- 3.92%
41,500 Abbott Laboratories ...................................................... 2,288,725
31,000 Johnson & Johnson ........................................................ 2,010,970
--------------
4,299,695
- ----------------------------------------------------------------------------------------------------------
TOTAL HEALTH CARE 18,880,506
--------------
INDUSTRIALS -- 10.51%
AIR FREIGHT & LOGISTICS -- 2.28%
29,000 Expeditors International Washington, Inc. ................................ 1,310,220
16,300 United Parcel Service, Inc. -- Class B ................................... 1,190,226
--------------
2,500,446
--------------
COMMERCIAL SERVICES & SUPPLIES -- 5.12%
59,500 Brady Corp. .............................................................. 1,989,085
75,400 Heidrick & Struggles International, Inc. ................................. 2,452,762
48,700 Monster Worldwide, Inc.(a) ............................................... 1,179,027
--------------
5,620,874
--------------
MACHINERY -- 3.11%
101,100 Chart Industries, Inc.(a) ................................................ 3,421,224
- ----------------------------------------------------------------------------------------------------------
TOTAL INDUSTRIALS ........................................................ 11,542,544
--------------
INFORMATION TECHNOLOGY -- 34.28%
COMMUNICATIONS EQUIPMENT -- 2.12%
96,900 Cisco Systems, Inc.(a) ................................................... 2,334,321
--------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 6.74%
45,100 Dolby Laboratories, Inc. -- Class A(a) ................................... 1,635,326
154,600 Jabil Circuit, Inc. ...................................................... 1,462,516
57,400 National Instruments Corp. ............................................... 1,500,436
97,915 Trimble Navigation Ltd.(a) ............................................... 2,799,390
--------------
7,397,668
--------------
IT SERVICES -- 1.74%
89,700 Western Union Co. ........................................................ 1,907,919
--------------
SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT -- 15.26%
87,800 Broadcom Corp. -- Class A(a) ............................................. 1,691,906
66,905 Cabot Microelectronics Corp.(a) .......................................... 2,150,995
118,600 FormFactor, Inc.(a) ...................................................... 2,265,260
116,600 Intel Corp. .............................................................. 2,469,588
43,500 KLA-Tencor Corp. ......................................................... 1,613,850
116,500 MKS Instruments, Inc.(a) ................................................. 2,493,100
121,200 National Semiconductor Corp. ............................................. 2,220,384
81,800 SanDisk Corp.(a) ......................................................... 1,846,226
--------------
16,751,309
--------------
- --------------------------------------------------------------------------------
52
SHARES OR
FACE AMOUNT FAIR VALUE
- ----------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY (CONTINUED)
SOFTWARE -- 8.42%
96,900 F5 Networks, Inc.(a) ..................................................... $ 1,760,673
27,140 Electronic Arts Inc.(a) .................................................. 1,354,829
67,600 Microsoft Corp. .......................................................... 1,918,488
106,000 Oracle Corp.(a) .......................................................... 2,073,360
116,500 Red Hat, Inc.(a) ......................................................... 2,142,435
--------------
9,249,785
- ----------------------------------------------------------------------------------------------------------
TOTAL INFORMATION TECHNOLOGY ............................................. 37,641,002
--------------
MATERIALS -- 1.30%
CHEMICALS -- 1.30%
32,800 Ecolab Inc. .............................................................. 1,424,504
- ----------------------------------------------------------------------------------------------------------
TOTAL MATERIALS .......................................................... 1,424,504
--------------
TOTAL COMMON STOCKS .................................................................... 106,533,337
- ----------------------------------------------------------------------------------------------------------
(COST $96,801,828)
SHORT TERM INVESTMENTS -- 2.20%
INVESTMENT COMPANIES -- 1.80%
471,691 Fidelity Institutional Money Market Portfolio ............................ 471,691
1,500,000 SEI Daily Income Trust Treasury II Fund -- Class B ....................... 1,500,000
- ----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES ............................................... 1,971,691
--------------
U.S. TREASURY BILLS -- 0.40%
PUBLIC FINANCE, TAXATION AND MONETARY POLICY -- 0.40%
442,000 1.55%, 04/03/2008 ........................................................ 441,962
- ----------------------------------------------------------------------------------------------------------
TOTAL U.S. Treasury Bills ................................................ 441,962
--------------
TOTAL SHORT TERM INVESTMENTS ........................................................... 2,413,653
- ----------------------------------------------------------------------------------------------------------
(COST $2,413,653)
TOTAL INVESTMENTS -- 99.23% ............................................................ 108,946,990
(COST $99,215,481)
Other Assets in Excess of Liabilities -- 0.77% ......................................... 845,002
--------------
TOTAL NET ASSETS -- 100.00% ............................................................ $ 109,791,992
==============
(A) NON INCOME PRODUCING
(B) FOREIGN ISSUED SECURITIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
53
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2008
BUFFALO BUFFALO BUFFALO
BALANCED HIGH YIELD INTERNATIONAL
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at cost:
Investments in securities of unaffiliated issuers ..................... $ 140,610,266 $ 153,027,042 $ 23,108,237
Investments in securities of affiliated issuers ....................... -- -- --
------------- ------------- -------------
Total investments, at cost ............................................ $ 140,610,266 $ 153,027,042 $ 23,108,237
============= ============= =============
Investments in securities, at value:
Investments in securities of unaffiliated issuers ..................... $ 165,352,061 $ 148,463,689 $ 21,977,686
Investments in securities of affiliated issuers ....................... -- -- --
------------- ------------- -------------
Total investments, at value ............................................... 165,352,061 148,463,689 21,977,686
Cash ...................................................................... -- 46,484 --
Cash denominated in foreign currency, at value(1) ......................... -- -- 20,309
Receivables:
Investments sold ........................................................ -- -- --
Fund shares sold ........................................................ 310,358 112,364 17,500
Dividends ............................................................... 156,159 72,028 56,259
Interest ................................................................ 1,213,528 2,872,977 1,721
Other assets .............................................................. 16,331 12,697 4,043
------------- ------------- -------------
Total assets ........................................................ 167,048,437 151,580,239 22,077,518
------------- ------------- -------------
LIABILITIES:
Payables:
Investments purchased ................................................. -- -- --
Fund shares purchased ................................................. 243,838 272,620 --
Management fees ....................................................... 141,865 130,688 18,224
Custodian ............................................................. -- -- 16,004
Accrued expenses ........................................................ 1,857 1,188 5,332
------------- ------------- -------------
Total liabilities ................................................... 387,560 404,496 39,560
------------- ------------- -------------
NET ASSETS ................................................................ $ 166,660,877 $ 151,175,743 $ 22,037,958
============= ============= =============
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) ............................. $ 143,121,466 $ 154,988,939 $ 23,456,868
Accumulated net investment income ....................................... 130,642 180,781 2,330
Undistributed net realized gain (loss) from investment and foreign
currency transactions ................................................. (1,333,026) 569,376 (291,002)
Net unrealized appreciation (depreciation) from investments and
translation of assets and liabilities in foreign currency ............. 24,741,795 (4,563,353) (1,130,238)
------------- ------------- -------------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES ............................... $ 166,660,877 $ 151,175,743 $ 22,037,958
============= ============= =============
Capital shares, $1.00 par value:
Authorized .............................................................. 25,000,000 100,000,000 Unlimited
============= ============= =============
Outstanding ............................................................. 14,644,610 14,532,197 2,351,882
============= ============= =============
NET ASSET VALUE PER SHARE ................................................. $ 11.38 $ 10.40 $ 9.37
============= ============= =============
Cash denominated in foreign currencies, at cost ........................... -- -- 19,996
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
54
BUFFALO
BUFFALO BUFFALO BUFFALO BUFFALO SCIENCE & BUFFALO BUFFALO
JAYHAWK CHINA LARGE CAP MICRO CAP MID CAP TECHNOLOGY SMALL CAP USA GLOBAL
FUND FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------------------------------------
$ 33,993,366 $ 37,465,718 $ 33,210,246 $ 393,105,235 $ 156,065,236 $ 990,971,793 $ 99,215,481
-- -- -- -- -- 679,312,444 --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 33,993,366 $ 37,465,718 $ 33,210,246 $ 393,105,235 $ 156,065,236 $1,670,284,237 $ 99,215,481
============== ============== ============== ============== ============== ============== ==============
$ 28,850,872 $ 41,517,601 $ 27,448,707 $ 373,920,258 $ 145,994,283 $1,117,531,641 $ 108,946,990
-- -- -- -- -- 481,839,174 --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
28,850,872 41,517,601 27,448,707 373,920,258 145,994,283 1,599,370,815 108,946,990
-- -- -- -- -- 35,947 --
324,126 -- -- -- -- -- --
419,944 -- -- 8,667,512 201,358 4,057,230 778,925
30,675 38,047 6,235 1,503,516 110,776 1,312,066 121,795
25,560 28,007 7,899 156,964 48,972 1,010,480 97,858
1,334 777 733 1,610 1,491 11,522 1,496
11,184 8,555 4,027 26,676 21,053 75,892 16,309
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
29,663,695 41,592,987 27,467,601 384,276,536 146,377,933 1,605,873,952 109,963,373
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
159,680 -- -- 2,072,055 -- -- --
12,015 43,469 50,354 751,083 1,399,821 2,185,923 77,232
40,823 35,985 34,284 329,119 125,509 1,368,271 93,493
14,252 -- -- 1,110,694 -- -- --
23,945 428 454 5,151 2,008 4,978 656
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
250,715 79,882 85,092 4,268,102 1,527,338 3,559,172 171,381
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 29,412,980 $ 41,513,105 $ 27,382,509 $ 380,008,434 $ 144,850,595 $1,602,314,780 $ 109,791,992
============== ============== ============== ============== ============== ============== ==============
$ 33,826,183 $ 33,643,305 $ 31,700,502 $ 394,245,436 $ 153,411,483 $1,617,124,425 $ 100,460,489
-- 1,000 -- -- -- -- 33,293
729,025 3,816,917 1,443,546 4,947,975 1,510,065 56,103,777 (433,299)
(5,142,228) 4,051,883 (5,761,539) (19,184,977) (10,070,953) (70,913,422) 9,731,509
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 29,412,980 $ 41,513,105 $ 27,382,509 $ 380,008,434 $ 144,850,595 $1,602,314,780 $ 109,791,992
============== ============== ============== ============== ============== ============== ==============
Unlimited 10,000,000 Unlimited Unlimited Unlimited 100,000,000 10,000,000
============== ============== ============== ============== ============== ============== ==============
3,145,651 2,109,003 3,240,567 29,554,143 12,700,591 78,256,590 5,266,095
============== ============== ============== ============== ============== ============== ==============
$ 9.35 $ 19.68 $ 8.45 $ 12.86 $ 11.41 $ 20.48 $ 20.85
============== ============== ============== ============== ============== ============== ==============
323,860 -- -- -- -- -- --
- --------------------------------------------------------------------------------
55
STATEMENTS OF OPERATIONS
For the Period Ended March 31, 2008
BUFFALO BUFFALO BUFFALO
BALANCED HIGH YIELD INTERNATIONAL
FUND FUND FUND(1)
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ................................................................ $ 4,812,207 $ 11,524,543 $ 85,763
Dividends:
Dividends from securities of unaffiliated issuers ..................... 2,403,218 505,478 104,271
Dividends from securities of affiliated issuers (Note 7) .............. -- -- --
Foreign tax withheld .................................................... (7,181) (21,801) (10,551)
------------ ------------ ------------
Total investment income ............................................... 7,208,244 12,008,220 179,483
------------ ------------ ------------
EXPENSES:
Management fees ......................................................... 1,799,348 1,782,314 106,624
Custody fees ............................................................ -- -- 28,185
Registration fees ....................................................... 38,948 23,958 2,634
Other ................................................................... 6,088 6,522 421
------------ ------------ ------------
Total expenses ........................................................ 1,844,384 1,812,794 137,864
------------ ------------ ------------
Net investment income (loss) .......................................... 5,363,860 10,195,426 41,619
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) from:
Investment transactions of unaffiliated issuers ....................... 3,272,616 2,426,104 (291,002)
Investment transactions of affiliated issuers (Note 7) ................ -- -- --
Foreign currency transactions ......................................... -- -- (40,043)
Net unrealized appreciation/depreciation during the period on:
Investments ........................................................... (3,527,834) (14,935,730) (1,130,238)
Translation of assets and liabilities in foreign currencies ........... -- -- --
------------ ------------ ------------
Net realized and unrealized loss ...................................... (255,218) (12,509,626) (1,461,283)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ....... $ 5,108,642 $ (2,314,200) $ (1,419,664)
============ ============ ============
(1) FOR THE PERIOD FROM SEPTEMBER 28, 2007 (COMMENCEMENT OF OPERATIONS) TO
MARCH 31, 2008.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
56
BUFFALO
BUFFALO BUFFALO BUFFALO BUFFALO SCIENCE & BUFFALO BUFFALO
JAYHAWK CHINA LARGE CAP MICRO CAP MID CAP TECHNOLOGY SMALL CAP USA GLOBAL
FUND FUND FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------------------
$ 142,092 $ 107,130 $ 47,646 $ 1,007,069 $ 306,002 $ 2,605,566 $ 355,900
503,826 547,813 146,202 2,472,470 849,922 8,572,648 1,185,687
-- -- -- -- -- 1,440,781 --
(9,070) (10,521) -- -- (16,106) (18,188) --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
636,848 644,422 193,848 3,479,539 1,139,818 12,600,807 1,541,587
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
524,225 557,160 678,449 4,470,548 1,809,283 21,143,991 1,099,771
58,414 -- -- -- -- -- --
16,587 23,876 19,584 34,428 28,716 54,566 33,756
1,821 2,988 3,024 12,288 5,894 56,121 3,382
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
601,047 584,024 701,057 4,517,264 1,843,893 21,254,678 1,136,909
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
35,801 60,398 (507,209) (1,037,725) (704,075) (8,653,871) 404,678
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
3,286,531 4,710,548 2,563,819 37,061,864 11,065,828 197,824,213 190,470
-- -- -- -- -- 21,183,247 --
10,196 -- -- -- -- -- --
(6,146,453) (8,071,338) (15,688,683) (87,222,355) (31,651,343) (616,125,561) (11,538,683)
525 -- -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(2,849,201) (3,360,790) (13,124,864) (50,160,491) (20,585,515) (397,118,101) (11,348,213)
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ (2,813,400) $ (3,300,392) $ (13,632,073) $ (51,198,216) $ (21,289,590) $ (405,771,972) $ (10,943,535)
============== ============== ============== ============== ============== ============== ==============
- --------------------------------------------------------------------------------
57
STATEMENTS OF CHANGES IN NET ASSETS
March 31, 2008
BUFFALO
BALANCED FUND
--------------------------------
YEAR ENDED YEAR ENDED
MARCH 31, 2008 MARCH 31, 2007
- ------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) ...................................................... $ 5,363,860 $ 4,645,911
Net realized gain from investment and foreign currency transactions ............... 3,272,616 9,401,706
Net unrealized appreciation/depreciation during the period on investments and
translation of assets and liabilities in foreign currencies ..................... (3,527,834) 3,564,122
-------------- --------------
Net increase (decrease) in net assets resulting from operations ............... 5,108,642 17,611,739
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............................................................. (5,303,101) (4,688,752)
Net realized gain from investment transactions .................................... (5,826,774) --
-------------- --------------
Total dividends and distributions to shareholders ............................... (11,129,875) (4,688,752)
CAPITAL SHARE TRANSACTIONS:
Shares sold ....................................................................... 63,360,616 120,178,149
Reinvested dividends and distributions ............................................ 10,162,275 3,698,814
-------------- --------------
Shares issued ................................................................... 73,522,891 123,876,963
Redemptions ....................................................................... (67,263,482) (120,662,898)
Redemption fees (Note 5) .......................................................... 26,182 31,040
-------------- --------------
Shares repurchased .............................................................. (67,237,300) (120,631,858)
-------------- --------------
Net increase (decrease) from capital share transactions ....................... 6,285,591 3,245,105
-------------- --------------
Total increase (decrease) in net assets ..................................... 264,358 16,168,092
NET ASSETS:
Beginning of period ............................................................... 166,396,519 150,228,427
-------------- --------------
End of period ..................................................................... $ 166,660,877 $ 166,396,519
============== ==============
Accumulated net investment income (loss) at end of period ......................... $ 130,642 $ 60,551
============== ==============
Fund share transactions:
Shares sold ....................................................................... 5,231,020 10,636,147
Reinvested dividends and distributions ............................................ 843,453 327,587
-------------- --------------
6,074,473 10,963,734
Shares repurchased ................................................................ (5,643,814) (10,675,901)
-------------- --------------
Net increase (decrease) in fund shares .......................................... 430,659 287,833
============== ==============
(1) FOR THE PERIOD FROM SEPTEMBER 28, 2007 (COMMENCEMENT OF OPERATIONS) TO
MARCH 31, 2008.
(2) FOR THE PERIOD FROM DECEMBER 18, 2006 (COMMENCEMENT OF OPERATIONS) TO
MARCH 31, 2007.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
58
BUFFALO BUFFALO BUFFALO BUFFALO
HIGH YIELD FUND INTERNATIONAL FUND JAYHAWK CHINA FUND LARGE CAP FUND
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2008 MARCH 31, 2007 MARCH 31, 2008(1) MARCH 31, 2008 MARCH 31, 2007(2) MARCH 31, 2008 MARCH 31, 2007
- --------------------------------------------------------------------------------------------------------------------------
$ 10,195,426 $ 10,604,915 $ 41,619 $ 35,801 $ (28,038) $ 60,398 $ (9,350)
2,426,104 3,338,296 (331,045) 3,296,727 135,193 4,710,548 1,084,420
(14,935,730) (3,166,870) (1,130,238) (6,145,928) 1,003,700 (8,071,338) 4,263,538
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(2,314,200) 10,776,341 (1,419,664) (2,813,400) 1,110,855 (3,300,392) 5,338,608
(10,502,793) (10,858,286) -- (117,393) -- (59,398) (43,455)
(544,460) -- -- (2,593,503) -- (1,567,312) --
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(11,047,253) (10,858,286) -- (2,710,896) -- (1,626,710) (43,455)
45,380,795 26,212,844 24,082,096 20,749,734 22,884,319 13,788,273 7,052,191
8,074,452 8,151,175 -- 2,623,292 -- 1,607,659 42,790
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
53,455,247 34,364,019 24,082,096 23,373,026 22,884,319 15,395,932 7,094,981
(70,403,980) (64,421,478) (626,995) (11,854,504) (602,042) (21,241,272) (14,358,026)
26,613 22,161 2,521 22,884 2,738 3,208 2,379
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(70,377,367) (64,399,317) (624,474) (11,831,620) (599,304) (21,238,064) (14,355,647)
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(16,922,120) (30,035,298) 23,457,622 11,541,406 22,285,015 (5,842,132) (7,260,666)
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(30,283,573) (30,117,243) 22,037,958 6,017,110 23,395,870 (10,769,234) (1,965,513)
181,459,316 211,576,559 -- 23,395,870 -- 52,282,339 54,247,852
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 151,175,743 $ 181,459,316 $ 22,037,958 $ 29,412,980 $ 23,395,870 $ 41,513,105 $ 52,282,339
============== ============== ============== ============== ============== ============== ==============
$ 180,781 $ 406,817 $ 2,330 $ -- $ (2,039) $ 1,000 $ --
============== ============== ============== ============== ============== ============== ==============
4,092,034 2,340,460 2,418,413 1,681,894 2,280,846 609,622 352,970
741,588 738,068 -- 216,682 -- 71,943 2,327
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
4,833,622 3,078,528 2,418,413 1,898,576 2,280,846 681,565 355,297
(6,421,963) (5,811,071) (66,531) (974,864) (58,907) (994,360) (722,996)
- -------------- -------------- -------------- -------------- -------------- -------------- --------------
(1,588,341) (2,732,543) 2,351,882 923,712 2,221,939 (312,795) (367,699)
============== ============== ============== ============== ============== ============== ==============
- --------------------------------------------------------------------------------
59
STATEMENTS OF CHANGES IN NET ASSETS
March 31, 2008
BUFFALO
MICRO CAP FUND
YEAR ENDED YEAR ENDED
MARCH 31, 2008 MARCH 31, 2007
- ------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss) ...................................................... $ (507,209) $ (536,496)
Net realized gain from investment and foreign currency transactions ............... 2,563,819 4,073,744
Net unrealized appreciation/depreciation during the period on investments and
translation of assets and liabilities in foreign currencies ..................... (15,688,683) (1,698,997)
-------------- --------------
Net increase (decrease) in net assets resulting from operations ............... (13,632,073) 1,838,251
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ............................................................. -- --
Net realized gain from investment transactions .................................... (3,482,157) (2,891,049)
-------------- --------------
Total dividends and distributions to shareholders ............................. (3,482,157) (2,891,049)
CAPITAL SHARE TRANSACTIONS:
Shares sold ....................................................................... 3,601,054 6,939,489
Reinvested dividends and distributions ............................................ 3,396,132 2,832,253
-------------- --------------
Shares issued ................................................................... 6,997,186 9,771,742
Redemptions ....................................................................... (19,954,238) (12,466,299)
Redemption fees (Note 5) .......................................................... 5,211 5,591
-------------- --------------
Shares repurchased .............................................................. (19,949,027) (12,460,708)
-------------- --------------
Net increase (decrease) from capital share transactions ....................... (12,951,841) (2,688,966)
-------------- --------------
Total increase (decrease) in net assets ..................................... (30,066,071) (3,741,764)
NET ASSETS:
Beginning of period ............................................................... 57,448,580 61,190,344
-------------- --------------
End of period ..................................................................... $ 27,382,509 $ 57,448,580
============== ==============
Accumulated net investment income at end of period ................................ $ -- $ --
============== ==============
Fund share transactions:
Shares sold ....................................................................... 323,168 534,700
Reinvested dividends and distributions ............................................ 330,363 219,384
-------------- --------------
653,531 754,084
Shares repurchased ................................................................ (1,725,969) (979,314)
-------------- --------------
Net increase (decrease) in fund shares .......................................... (1,072,438) (225,230)
============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
60
BUFFALO BUFFALO BUFFALO BUFFALO
MID CAP FUND SCIENCE & TECHNOLOGY FUND SMALL CAP FUND USA GLOBAL FUND
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2008 MARCH 31, 2007 MARCH 31, 2008 MARCH 31, 2007 MARCH 31, 2008 MARCH 31, 2007 MARCH 31, 2008 MARCH 31, 2007
- -----------------------------------------------------------------------------------------------------------------------------------
$ (1,037,725) $ (1,169,333) $ (704,075) $ (462,103) $ (8,653,871) $ (8,239,029) $ 404,678 $ 165,267
37,061,864 11,499,914 11,065,828 4,538,110 219,007,460 123,373,979 190,470 5,163,322
(87,222,355) (1,203,630) (31,651,343) 982,925 (616,125,561) (25,748,484) (11,538,683) 2,137,187
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
(51,198,216) 9,126,951 (21,289,590) 5,058,932 (405,771,972) 89,386,466 (10,943,535) 7,465,776
-- -- -- -- -- -- (402,160) (192,295)
(35,000,462) (7,186,450) (10,295,364) (6,400,155) (205,414,207) (142,939,633) (3,457,374) (1,999,838)
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
(35,000,462) (7,186,450) (10,295,364) (6,400,155) (205,414,207) (142,939,633) (3,859,534) (2,192,133)
149,703,596 179,479,373 91,644,206 88,607,228 536,338,711 400,156,726 75,619,969 13,813,188
33,333,319 6,869,162 10,109,112 6,347,756 198,679,626 138,893,161 3,820,921 2,149,677
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
183,036,915 186,348,535 101,753,318 94,954,984 735,018,337 539,049,887 79,440,890 15,962,865
(113,273,064) (136,138,862) (78,199,571) (52,115,066) (634,712,878) (488,847,222) (29,884,924) (19,326,090)
35,762 50,925 27,334 24,274 208,058 164,616 12,992 3,179
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
(113,237,302) (136,087,937) (78,172,237) (52,090,792) (634,504,820) (488,682,606) (29,871,932) (19,322,911)
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
69,799,613 50,260,598 23,581,081 42,864,192 100,513,517 50,367,281 49,568,958 (3,360,046)
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
(16,399,065) 52,201,099 (8,003,873) 41,522,969 (510,672,662) (3,185,886) 34,765,889 1,913,597
396,407,499 344,206,400 152,854,468 111,331,499 2,112,987,442 2,116,173,328 75,026,103 73,112,506
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
$ 380,008,434 $ 396,407,499 $ 144,850,595 $ 152,854,468 $1,602,314,780 $2,112,987,442 $ 109,791,992 $ 75,026,103
============= ============= ============= ============= ============== ============== ============= =============
$ -- $ -- $ -- $ -- $ -- $ -- $ 33,293 $ 29,458
============= ============= ============= ============= ============== ============== ============= =============
9,337,090 12,167,344 6,378,012 6,715,884 19,433,900 14,788,847 3,194,143 617,660
2,175,804 457,639 762,952 521,246 8,299,065 5,188,389 161,654 96,999
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
11,512,894 12,624,983 7,140,964 7,237,130 27,732,965 19,977,236 3,355,797 714,659
(7,491,591) (9,362,906) (5,783,593) (4,035,093) (24,948,839) (18,211,542) (1,330,448) (892,369)
- ------------- ------------- ------------- ------------- -------------- -------------- ------------- -------------
4,021,303 3,262,077 1,357,371 3,202,037 2,784,126 1,765,694 2,025,349 (177,710)
============= ============= ============= ============= ============== ============== ============= =============
- --------------------------------------------------------------------------------
61
FINANCIAL HIGHLIGHTS
BUFFALO BALANCED FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR. 2008 2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..................... $ 11.71 $ 10.79 $ 9.98 $ 9.38 $ 7.27
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income .............................. 0.36 0.32 0.30 0.29 0.29
Net gains on securities
(both realized and unrealized) ................... 0.05 0.92 0.81 0.62 2.12
---------- ---------- ---------- ---------- ----------
Total from investment operations ..................... 0.41 1.24 1.11 0.91 2.41
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ............... (0.36) (0.32) (0.30) (0.31) (0.30)
Distributions from capital gains ................... (0.38) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions .................................. (0.74) (0.32) (0.30) (0.31) (0.30)
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ........ --(1) --(1) --(1) --(1) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ........................... $ 11.38 $ 11.71 $ 10.79 $ 9.98 $ 9.38
========== ========== ========== ========== ==========
Total return ........................................... 3.23% 11.67% 11.23% 9.75% 33.50%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................. $ 166,661 $ 166,397 $ 150,228 $ 143,041 $ 77,275
Ratio of expenses to average net assets ................ 1.02% 1.03% 1.03% 1.03% 1.05%
Ratio of net investment income to average net assets ... 2.99% 2.85% 2.89% 3.13% 3.47%
Portfolio turnover rate ................................ 17% 28% 18% 30% 32%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
62
FINANCIAL HIGHLIGHTS
BUFFALO HIGH YIELD FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR. 2008 2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..................... $ 11.26 $ 11.22 $ 11.13 $ 11.24 $ 9.86
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income .............................. 0.65 0.63 0.58 0.42 0.43
Net gains (losses) on securities
(both realized and unrealized) ................... (0.81) 0.06 0.16 (0.09) 1.37
---------- ---------- ---------- ---------- ----------
Total from investment operations ..................... (0.16) 0.69 0.74 0.33 1.80
---------- ---------- ---------- ---------- ----------
Less distributions:
Dividends from net investment income ............... (0.67) (0.65) (0.65) (0.44) (0.43)
Distributions from capital gains ................... (0.03) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions .................................. (0.70) (0.65) (0.65) (0.44) (0.43)
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ........ --(1) --(1) --(1) --(1) 0.01
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ........................... $ 10.40 $ 11.26 $ 11.22 $ 11.13 $ 11.24
========== ========== ========== ========== ==========
Total return ........................................... (1.52%) 6.42% 6.82% 2.96% 18.56%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................. $ 151,176 $ 181,459 $ 211,577 $ 304,746 $ 324,123
Ratio of expenses to average net assets ................ 1.02% 1.02% 1.02% 1.02% 1.03%
Ratio of net investment income to average net assets ... 5.71% 5.66% 5.03% 3.71% 3.89%
Portfolio turnover rate ................................ 22% 9% 28% 45% 51%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
63
FINANCIAL HIGHLIGHTS
BUFFALO INTERNATIONAL FUND
FOR THE PERIOD FROM
SEPTEMBER 28, 2007
(COMMENCEMENT OF
CONDENSED DATA FOR A SHARE OF CAPITAL OPERATIONS) TO
STOCK OUTSTANDING THROUGHOUT THE PERIOD. MARCH 31, 2008
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period .................................... $ 10.00
----------
Income from investment operations:
Net investment gain ................................................. 0.02
Net gains (losses) on securities (both realized and unrealized) ..... (0.65)
----------
Total from investment operations ...................................... (0.63)
----------
Paid-in capital from redemption fees (Note 5) ......................... --(1)
----------
Net asset value, end of period .......................................... $ 9.37
==========
Total return* ........................................................... (6.30%)
==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) ................................ $ 22,038
Ratio of expenses to average net assets** ............................... 1.29%
Ratio of net investment income to average net assets** .................. 0.39%
Portfolio turnover rate* ................................................ 11%
* NOT ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
64
FINANCIAL HIGHLIGHTS
BUFFALO JAYHAWK CHINA FUND
FOR THE PERIOD FROM
DECEMBER 18, 2006
(COMMENCEMENT OF
CONDENSED DATA FOR A SHARE OF CAPITAL YEAR ENDED OPERATIONS) TO
STOCK OUTSTANDING THROUGHOUT THE PERIOD. MARCH 31, 2008 MARCH 31, 2007
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ............................. $ 10.53 $ 10.00
---------- ----------
Income from investment operations:
Net investment income (loss) ................................. 0.02 (0.01)
Net gains on securities (both realized and unrealized) ....... (0.29) 0.54
---------- ----------
Total from investment operations ............................... (0.27) 0.53
---------- ----------
Less distributions:
Dividends from net investment income ............................. (0.05) --
Distributions from capital gains ................................. (0.87) --
---------- ----------
Total distributions .............................................. (0.92) --
---------- ----------
Paid-in capital from redemption fees (Note 5) ................... 0.01 --(1)
---------- ----------
Net asset value, end of period ................................... $ 9.35 $ 10.53
========== ==========
Total return* .................................................... (4.47%) 5.30%
========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) ......................... $ 29,413 $ 23,396
Ratio of expenses to average net assets** ........................ 1.72% 2.13%
Ratio of net investment income (loss) to average net assets** .... 0.10% (0.48%)
Portfolio turnover rate* ......................................... 75% 3%
* NOT ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
65
FINANCIAL HIGHLIGHTS
BUFFALO LARGE CAP FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR .......................... 2008 2007 2006 2005 2004
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ............................. $ 21.59 $ 19.45 $ 17.81 $ 17.57 $ 12.57
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income ...................................... 0.02 -- 0.03 0.12 0.01
Net gains (losses) on securities
(both realized and unrealized) ........................... (1.30) 2.16 1.73 0.15 5.02
--------- --------- --------- --------- ---------
Total from investment operations ............................. (1.28) 2.16 1.76 0.27 5.03
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ....................... (0.02) (0.02) (0.12) (0.03) (0.03)
Distributions from capital gains ........................... (0.61) -- -- -- --
--------- --------- --------- --------- ---------
Total distributions .......................................... (0.63) (0.02) (0.12) (0.03) (0.03)
--------- --------- --------- --------- ---------
Paid-in capital from redemption fees (Note 5) ................ --(1) --(1) --(1) --(1) --
--------- --------- --------- --------- ---------
Net asset value, end of year ................................... $ 19.68 $ 21.59 $ 19.45 $ 17.81 $ 17.57
========= ========= ========= ========= =========
Total return ................................................... (6.25%) 11.10% 9.95% 1.52% 40.05%
========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ......................... $ 41,513 $ 52,282 $ 54,248 $ 56,299 $ 57,657
Ratio of expenses to average net assets ........................ 1.05% 1.05% 1.04% 1.05% 1.04%
Ratio of net investment income (loss) to average net assets .... 0.11% (0.02%) 0.16% 0.64% 0.10%
Portfolio turnover rate ........................................ 32% 17% 40% 17% 41%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
66
FINANCIAL HIGHLIGHTS
BUFFALO MICRO CAP FUND
FOR THE PERIOD FROM
MAY 21, 2004
(COMMENCEMENT OF
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31, OPERATIONS) TO
STOCK OUTSTANDING THROUGHOUT THE PERIOD. 2008 2007 2006 MARCH 31, 2005
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ................................... $ 13.32 $ 13.48 $ 10.62 $ 10.00
-------- -------- -------- --------
Income from investment operations:
Net investment loss ................................................ (0.16) (0.13) (0.12) (0.07)
Net gains (losses) on securities (both realized and unrealized) .... (3.69) 0.66 3.03 0.66
-------- -------- -------- --------
Total from investment operations ..................................... (3.85) 0.53 2.91 0.59
-------- -------- -------- --------
Less distributions from capital gains ................................ (1.02) (0.69) (0.05) --
-------- -------- -------- --------
Paid-in capital from redemption fees (Note 5) ........................ --(1) --(1) --(1) 0.03
-------- -------- -------- --------
Net asset value, end of period ......................................... $ 8.45 $ 13.32 $ 13.48 $ 10.62
======== ======== ======== ========
Total return* .......................................................... (30.23%) 4.13% 27.48% 6.20%
======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) ............................... $ 27,383 $ 57,449 $ 61,190 $ 39,327
Ratio of expenses to average net assets** .............................. 1.50% 1.50% 1.51% 1.58%
Ratio of net investment loss to average net assets** ................... (1.08%) (0.95%) (1.09%) (1.14%)
Portfolio turnover rate* ............................................... 34% 38% 50% 28%
* NOT ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
67
FINANCIAL HIGHLIGHTS
BUFFALO MID CAP FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR. 2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .................... $ 15.53 $ 15.46 $ 12.54 $ 12.43 $ 7.54
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment loss ............................... (0.03) (0.05) (0.02) (0.04) (0.04)
Net gains (losses) on securities
(both realized and unrealized) .................. (1.42) 0.41 3.17 0.31 4.93
---------- ---------- ---------- ---------- ----------
Total from investment operations .................... (1.45) 0.36 3.15 0.27 4.89
---------- ---------- ---------- ---------- ----------
Less distributions from capital gains ............... (1.22) (0.29) (0.23) (0.16) --
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ....... --(1) --(1) --(1) --(1) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .......................... $ 12.86 $ 15.53 $ 15.46 $ 12.54 $ 12.43
========== ========== ========== ========== ==========
Total return .......................................... (10.60%) 2.41% 25.21% 2.15% 64.85%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................ $ 380,008 $ 396,407 $ 344,206 $ 170,880 $ 112,070
Ratio of expenses to average net assets ............... 1.01% 1.02% 1.02% 1.03% 1.03%
Ratio of net investment loss to average net assets .... (0.23%) (0.32%) (0.21%) (0.39%) (0.48%)
Portfolio turnover rate ............................... 34% 21% 19% 21% 24%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
68
FINANCIAL HIGHLIGHTS
BUFFALO SCIENCE & TECHNOLOGY FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR 2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .................... $ 13.48 $ 13.68 $ 10.73 $ 11.04 $ 6.01
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment loss ............................... (0.06) (0.04) (0.04) (0.02) (0.04)
Net gains (losses) on securities
(both realized and unrealized) ................. (1.26) 0.54 3.04 (0.29) 5.07
---------- ---------- ---------- ---------- ----------
Total from investment operations .................... (1.32) 0.50 3.00 (0.31) 5.03
---------- ---------- ---------- ---------- ----------
Less distributions from capital gains ............... (0.75) (0.70) (0.05) -- --
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ....... --(1) --(1) --(1) --(1) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .......................... $ 11.41 $ 13.48 $ 13.68 $ 10.73 $ 11.04
========== ========== ========== ========== ==========
Total return .......................................... (10.57%) 4.28% 27.96% (2.81%) 83.69%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................ $ 144,851 $ 152,854 $ 111,331 $ 62,690 $ 34,924
Ratio of expenses to average net assets ............... 1.02% 1.03% 1.03% 1.05% 1.03%
Ratio of net investment loss to average net assets .... (0.39%) (0.37%) (0.40%) (0.24%) (0.55%)
Portfolio turnover rate ............................... 52% 35% 46% 25% 38%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
69
Financial Highlights
BUFFALO SMALL CAP FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR 2008 2007 2006 2005 2004
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year .................... $ 28.00 $ 28.71 $ 26.30 $ 25.70 $ 13.79
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment loss ............................... (0.11) (0.11) (0.11) (0.07) (0.10)
Net gains (losses) on securities
(both realized and unrealized) .................. (4.75) 1.44 5.63 1.56 12.21
---------- ---------- ---------- ---------- ----------
Total from investment operations .................... (4.86) 1.33 5.52 1.49 12.11
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Dividends from net investment income .............. -- -- -- (0.02) --
Distributions from capital gains .................. (2.66) (2.04) (3.11) (0.87) (0.20)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions ................... (2.66) (2.04) (3.11) (0.89) (0.20)
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ....... --(1) --(1) --(1) -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .......................... $ 20.48 $ 28.00 $ 28.71 $ 26.30 $ 25.70
========== ========== ========== ========== ==========
Total return .......................................... (18.74%) 4.95% 22.46% 5.75% 88.07%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................ $1,602,315 $2,112,987 $2,116,173 $1,845,847 $1,704,869
Ratio of expenses to average net assets ............... 1.00% 1.01% 1.01% 1.01% 1.01%
Ratio of net investment loss to average net assets .... (0.41%) (0.42%) (0.42%) (0.28%) (0.53%)
Portfolio turnover rate ............................... 37% 15% 27% 35% 22%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
70
FINANCIAL HIGHLIGHTS
BUFFALO USA GLOBAL FUND
CONDENSED DATA FOR A SHARE OF CAPITAL YEARS ENDED MARCH 31,
STOCK OUTSTANDING THROUGHOUT THE YEAR 2008 2007 2006 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..................... $ 23.15 $ 21.39 $ 18.82 $ 19.18 $ 13.04
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income .............................. 0.08 0.05 0.05 0.12 0.02
Net gains (losses) on securities
(both realized and unrealized) ................... (1.48) 2.45 2.59 (0.37) 6.12
---------- ---------- ---------- ---------- ----------
Total from investment operations ..................... (1.40) 2.50 2.64 (0.25) 6.14
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Dividends from net investment income ............... (0.08) (0.06) (0.07) (0.11) --
Distributions from capital gains ................... (0.82) (0.68) -- -- --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions .................... (0.90) (0.74) (0.07) (0.11) --
---------- ---------- ---------- ---------- ----------
Paid-in capital from redemption fees (Note 5) ........ --(1) --(1) --(1) --(1) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ........................... $ 20.85 $ 23.15 $ 21.39 $ 18.82 $ 19.18
========== ========== ========== ========== ==========
Total return ........................................... (6.51%) 11.86% 14.05% (1.30%) 47.11%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) ................. $ 109,792 $ 75,026 $ 73,113 $ 73,977 $ 79,192
Ratio of expenses to average net assets ................ 1.03% 1.04% 1.04% 1.04% 1.03%
Ratio of net investment income to average net assets ... 0.37% 0.24% 0.23% 0.67% 0.14%
Portfolio turnover rate ................................ 31% 13% 11% 33% 21%
(1) LESS THAN $0.01 PER SHARE.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
71
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
1. SIGNIFICANT ACCOUNTING POLICIES:
The Buffalo Balanced Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo Large
Cap Fund, Inc., Buffalo Funds (comprised of the Buffalo International Fund, the
Buffalo Jayhawk China Fund, Buffalo Micro Cap Fund, Buffalo Mid Cap Fund and
Buffalo Science & Technology Fund), Buffalo Small Cap Fund, Inc. and Buffalo USA
Global Fund, Inc. (the "Funds") are registered under the Investment Company Act
of 1940, as amended, as diversified open-end management investment companies.
The shares of the Buffalo Funds are issued in multiple series, with each series,
in effect, representing a separate fund. The following is a summary of
significant accounting policies consistently followed by the Funds in the
preparation of their financial statements.
A. INVESTMENT VALUATION -- Corporate stocks and bonds traded on a national
securities exchange or national market, except those traded using the National
Association of Securities Dealers' Automated Quotation System ("NASDAQ"), are
valued at the latest sales price thereof, or if no sale was reported on that
date, the mean between the most recent quoted bid and asked price is used. All
equity securities that are traded using NASDAQ are valued using the NASDAQ
Official Closing Price ("NOCP"), which may not necessarily represent the last
sales price. If there has been no sale on such exchange or on NASDAQ on such
day, the security is valued at the closing bid price on such day.
When market quotations are not readily available, any security or other asset is
valued at its fair value as determined in good faith under procedures approved
by the Boards of Directors/Trustees (the "Board"). If events occur that will
affect the value of a Fund's portfolio securities before the NAV has been
calculated (a "significant event"), the security will generally be priced using
a fair value procedure. The Board has adopted specific procedures for valuing
portfolio securities and delegated the responsibility of fair value
determinations to a Valuation Committee. Some of the factors that may be
considered by the Valuation Committee in determining fair value are fundamental
analytical data relating to the investment; the nature and duration of any
restriction on the disposition; trading in similar securities of the same issuer
or comparable companies; information from broker-dealers; and an evaluation of
the forces that influence the market in which the securities are purchased or
sold. As of March 31, 2008, the Buffalo High Yield Fund held fair valued
securities with market a value of $374,550 or 0.25% of total net assets, and the
Buffalo Jayhawk China Fund held four valued securities with market value of
$2,069,115 a 7.03% of total net assets.
Debt securities with remaining maturities of 60 days or less are normally valued
at amortized cost, unless the Board determines that amortized cost does not
represent fair value.
When the Buffalo Jayhawk China Fund or the Buffalo International Fund buys or
sells securities on a foreign stock exchange, the transaction is undertaken in
the local currency rather than in U.S. dollars. In purchasing or selling local
currency to execute transactions on foreign exchanges, the Buffalo Jayhawk China
Fund and the Buffalo International Fund will be exposed to the risk that the
value of the foreign currency will increase or decrease, which may impact the
value of the portfolio holdings and your investment. China has, and may continue
to adopt, internal economic policies that affect its currency valuations in a
manner that may be disadvantageous for U.S. investors or U.S. companies seeking
to do business in China. In addition, a country may impose formal or informal
currency exchange controls (or "capital controls"). These types of controls may
restrict or prohibit the Buffalo Jayhawk China Fund's ability to repatriate both
investment capital and income, which could undermine the value of the portfolio
holdings and potentially place the Buffalo Jayhawk China Fund's assets at risk
of total loss.
B. FEDERAL INCOME TAXES -- Each Fund complies with the requirements of
Subchapter M of the Internal Revenue Code necessary to qualify as a regulated
investment company and makes the requisite distributions of income and capital
gains to its shareholders sufficient to relieve it from all or substantially all
federal income and excise taxes. Therefore, no federal income tax provision has
been provided.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN 48").
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. If applicable, the
Fund would recognize interest and penalties accrued related to unrecognized tax
benefits in "Other expenses" on the Statement of Operations. Adoption of FIN 48
is required as of the date of the last Net Asset Value ("NAV") calculation in
the first required financial statement reporting period for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years
(March 31, 2005 - March 31, 2007) as of the effective date. The Funds have
adopted FIN 48 and as of March 31, 2008, management has determined the Funds did
not have any tax positions that did not meet the "more-likely-than-not
threshold" of being sustained by the applicable tax authority.
- --------------------------------------------------------------------------------
72
C. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions are
accounted for on the date the securities are purchased or sold (trade date).
Dividend income is recorded on the ex-dividend date except that certain
dividends for foreign securities where the ex-dividend date may have passed are
recorded as soon as the Fund is informed of the dividend in the exercise of
reasonable diligence. Interest income is recognized on the accrual basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. All discounts/premiums are accreted/amortized for
financial reporting purposes and are included in interest income.
D. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions are determined in accordance with income
tax regulations, which may differ from U.S. generally accepted accounting
principles. These differences are primarily due to differing treatments for
premium amortization on debt securities and deferral of post October and wash
sale losses.
E. USE OF ESTIMATES -- The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from such
estimates.
F. FOREIGN CURRENCY TRANSLATION -- Values of investments denominated in foreign
currencies are converted into U.S. dollars using a spot market rate of exchange
on the day of valuation. Purchases and sales of investments and dividend and
interest income are translated to U.S. dollars using a spot market rate of
exchange prevailing on the respective dates of such transactions. The portion of
security gains or losses resulting from changes in foreign exchange rates is
included with net realized and unrealized gain or loss from investments, as
appropriate, for both financial reporting and tax purposes.
G. PURCHASED AND WRITTEN OPTION CONTRACTS -- Certain of the Funds may purchase
and write call or put options on securities and indices and enter into related
closing transactions. As a holder of a call option, a Fund has the right, but
not the obligation, to purchase a security at the exercise price during the
exercise period. As the writer of a call option, a Fund has the obligation to
sell the security at the exercise price during the exercise period. As a holder
of a put option, a Fund has the right, but not the obligation, to sell a
security at the exercise price during the exercise period. As the writer of a
put option, a Fund has the obligation to buy the underlying security at the
exercise price during the exercise period.
The premium that a Fund pays when purchasing a call option or receives when
writing a call option will reflect, among other things, the market price of the
security, the relationship of the exercise price to the market price of the
security, the relationship of the exercise price to the volatility of the
security, the length of the option period and supply and demand factors. The
premium is the market value of an option.
A purchaser (holder) of a put option pays a non-refundable premium to the seller
(writer) of a put option to obtain the right to sell a specified amount of a
security at a fixed price (the exercise price) during a specified period
(exercise period). Conversely, the seller (writer) of a put option, upon payment
by the holder of the premium, has the obligation to buy the security from the
holder of the put option at the exercise price during the exercise period.
An option that is written by a Fund is generally valued at the last sale price
or, in the absence of the last sale price, the average of the quoted bid and
asked prices. An option that is purchased by a Fund is generally valued at the
last sale price or, in the absence of the last sale price, the average of the
quoted bid and asked prices. If an options exchange closes after the time at
which a Fund's net asset value is calculated, the last sale or last bid and
asked prices as of that time will be used to calculate the net asset value.
H. INDEMNIFICATIONS -- Under the Funds' organizational documents, officers and
directors/trustees are indemnified against certain liabilities arising out of
the performance of their duties to the Funds. In addition, in the normal course
of business, the Funds enter into contracts that provide general indemnification
to other parties. The Funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Funds
that have not yet occurred, and may not occur. However, the Funds have not had
prior claims or losses pursuant to these contracts and expect the risk of loss
to be remote.
I. RECENT ACCOUNTING PRONOUNCEMENT -- In September 2006, the Financial
Accounting Standards Board (FASB) issued STATEMENT ON FINANCIAL ACCOUNTING
STANDARDS NO. 157, "FAIR VALUE MEASUREMENTS" (FAS 157). This standard clarifies
the definition of fair value for financial reporting, establishes a framework
for measuring fair value and requires additional disclosures about the use of
fair value measurements. FAS 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. As of March 31, 2008, the Funds do not believe the adoption
of FAS 157 will impact the amounts reported in the financial statements,
however, additional disclosures will be required about the inputs used to
develop the measurements of fair value and the effect of certain of the
measurements reported in the statement of operations for a fiscal period.
- --------------------------------------------------------------------------------
73
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(CONTINUED)
2. FEDERAL TAX MATTERS:
The tax character of distributions paid during the years ended March 31, 2008
and March 31, 2007 was as follows:
YEAR ENDED MARCH 31, 2008 YEAR ENDED MARCH 31, 2007
----------------------------------------------------------
ORDINARY LONG-TERM ORDINARY LONG-TERM
INCOME CAPITAL GAINS* INCOME CAPITAL GAINS
- --------------------------------------------------------------------------------------------------
Buffalo Balanced Fund ................ $ 5,711,754 $ 5,418,121 $ 4,688,752 $ --
Buffalo High Yield Fund .............. 10,502,793 544,460 10,858,286 --
Buffalo International Fund ........... -- -- -- --
Buffalo Jayhawk China Fund ........... 2,710,896 -- -- --
Buffalo Large Cap Fund ............... 59,398 1,567,312 24,521 18,934
Buffalo Micro Cap Fund ............... -- 3,482,157 -- 2,891,049
Buffalo Mid Cap Fund ................. 2,097,788 32,902,674 58,754 7,127,696
Buffalo Science & Technology Fund .... 2,270,198 8,025,166 238,846 6,161,309
Buffalo Small Cap Fund ............... 20,342,199 185,072,008 -- 142,939,633
Buffalo USA Global Fund .............. 426,757 3,432,777 578,234 1,613,899
* The Funds designate as long-term capital gain dividends, pursuant to
Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the
earnings and profits of the Fund related to net capital gain to zero for the
year ended March 31, 2008.
Total distributions paid differ from the Statements of Changes in Net Assets due
primarily to the recharacterization of short-term capital gain distributions to
ordinary distributions for tax purposes.
Additionally, U.S. generally accepted accounting principles require that certain
components of net assets relating to permanent differences be reclassified
between financial and tax reporting. These reclassifications have no effect on
net assets or net asset value per share. For the year ended March 31, 2008, the
following table shows the reclassifications made:
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PAID IN
INCOME (LOSS) GAIN (LOSS) CAPITAL
- -----------------------------------------------------------------------------------
Buffalo Balanced Fund ................ $ 9,332 $ (9,332) $ --
Buffalo High Yield Fund .............. 81,331 (81,331) --
Buffalo International Fund ........... (39,289) 40,043 (754)
Buffalo Jayhawk China Fund ........... 83,631 (83,529) (102)
Buffalo Large Cap Fund ............... -- -- --
Buffalo Micro Cap Fund ............... 507,209 (507,209) --
Buffalo Mid Cap Fund ................. 1,037,725 (1,037,725) --
Buffalo Science & Technology Fund .... 704,075 (704,075) --
Buffalo Small Cap Fund ............... 8,653,871 (4,100,291) (4,553,580)
Buffalo USA Global Fund .............. 1,317 147 (1,464)
The permanent differences primarily relate to Foreign Currency adjustments, Sale
on discount bonds, Net Operating Losses and excise tax paid with differing book
and tax methods for accounting.
As of March 31, 2008, the components of accumulated earnings (losses) for income
tax purposes were as follows:
BUFFALO BUFFALO BUFFALO BUFFALO BUFFALO
BALANCED HIGH YIELD INTERNATIONAL JAYHAWK CHINA LARGE CAP
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
Cost of Investments(a) ................... $140,675,416 $153,848,401 $ 23,118,715 $ 34,047,332 $ 37,485,038
------------ ------------ ------------ ------------ ------------
Gross Unrealized Appreciation ............ 31,505,897 5,997,465 778,388 3,198,400 8,107,792
Gross Unrealized Depreciation ............ (6,829,252) (11,382,177) (1,919,417) (8,394,860) (4,075,229)
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation (depreciation) $ 24,676,645 $ (5,384,712) $ (1,141,029) $ (5,196,460) $ 4,032,563
============ ============ ============ ============ ============
Undistributed ordinary income ............ 195,792 491,602 57,460 473,011 1,000
Undistributed long-term capital gain ..... -- 1,079,914 -- 309,980 3,836,237
------------ ------------ ------------ ------------ ------------
Total Distributable earnings ............. $ 195,792 $ 1,571,516 $ 57,460 782,991 3,837,237
============ ============ ============ ============ ============
Other accumulated gain/(loss) ............ (1,333,026) -- (335,341) 266 --
------------ ------------ ------------ ------------ ------------
Total accumulated gain/(loss) ............ $ 23,539,411 $ (3,813,196) (1,418,910) (4,413,203) 7,869,800
============ ============ ============ ============ ============
THE DIFFERENCE BETWEEN BOOK-BASIS AND TAX-BASIS UNREALIZED APPRECIATION IS
ATTRIBUTABLE PRIMARILY TO THE TAX DEFERRAL OF LOSSES ON WASH SALES, CPDI
ADJUSTMENTS, AND PREMIUM AMORIZATION.
(A) REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSE AND DIFFERS FROM THE COST
FOR FINANCIAL REPORTING PURPOSES
- --------------------------------------------------------------------------------
74
BUFFALO BUFFALO BUFFALO BUFFALO BUFFALO
MICRO CAP MID CAP SCIENCE & SMALL CAP USA GLOBAL
FUND FUND TECHNOLOGY FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Cost cost of Investments(a) ................. $ 33,217,566 $393,105,235 $156,973,005 $1,670,736,115 $ 99,297,383
------------ ------------ ------------ -------------- ------------
Gross Unrealized Appreciation ............... 3,935,210 55,210,841 19,752,450 294,104,082 19,532,536
Gross Unrealized Depreciation ............... (9,704,069) (74,395,818) (30,731,172) (365,469,382) (9,882,929)
------------ ------------ ------------ -------------- ------------
Net unrealized appreciation (depreciation) .. $ (5,768,859) $(19,184,977) $(10,978,722) $ (71,365,300) $ 9,649,607
============ ============ ============ ============== ============
Undistributed ordinary income ............... 27,186 -- 876,672 -- 33,293
Undistributed long-term capital gain ........ 1,423,680 4,947,975 1,541,162 56,555,655 --
------------ ------------ ------------ -------------- ------------
Total Distributable earnings ................ $ 1,450,866 $ 4,947,975 $ 2,417,834 $ 56,555,655 $ 33,293
============ ============ ============ ============== ============
Other accumulated loss ...................... -- -- -- -- (351,397)
------------ ------------ ------------ -------------- ------------
Total accumulated gain/(loss) ............... $ (4,317,993) $(14,237,002) $ (8,560,888) $ (14,809,645) $ 9,331,503
============ ============ ============ ============== ============
THE DIFFERENCE BETWEEN BOOK-BASIS AND TAX-BASIS UNREALIZED APPRECIATION IS
ATTRIBUTABLE PRIMARILY TO THE TAX DEFERRAL OF LOSSES ON WASH SALES, CPDI
ADJUSTMENTS, AND PREMIUM AMORIZATION.
(A) REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSE AND MAY DIFFER FROM THE COST
FOR FINANCIAL REPORTING PURPOSES
The Buffalo High Yield Fund utilized $720,399 of prior year capital loss
carryover in the current year.
At March 31, 2008, the following funds deferred, on a tax basis, post-October
losses of:
Buffalo Balanced Fund ........... $1,333,026
Buffalo International Fund ...... $ 335,654
Buffalo USA Global Fund ......... $ 351,397
For the fiscal year ended March 31, 2008, certain dividends paid by the Funds
may be subject to a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The percentage of dividends
declared from ordinary income designated as qualified dividend income was as
follows (unaudited):
Buffalo Balanced Fund ....................... 41.49%
Buffalo High Yield Fund ..................... 3.95%
Buffalo International Fund .................. 0.00%
Buffalo Jayhawk China Fund .................. 5.16%
Buffalo Large Cap Fund ...................... 100.00%
Buffalo Micro Cap Fund ...................... 0.00%
Buffalo Mid Cap Fund ........................ 100.00%
Buffalo Science & Tech Fund ................. 45.27%
Buffalo Small Cap Fund ...................... 0.00%
Buffalo USA Global Fund ..................... 100.00%
For corporate shareholders, the percent of ordinary income distributions
qualifying for the corporate dividends received deduction for the fiscal year
ended March 31, 2008 was as follows (unaudited):
Buffalo Balanced Fund ....................... 37.90%
Buffalo High Yield Fund ..................... 2.00%
Buffalo International Fund .................. 0.00%
Buffalo Jayhawk China Fund .................. 0.00%
Buffalo Large Cap Fund ...................... 100.00%
Buffalo Micro Cap Fund ...................... 0.00%
Buffalo Mid Cap Fund ........................ 100.00%
Buffalo Science & Tech Fund ................. 20.10%
Buffalo Small Cap Fund ...................... 0.00%
Buffalo USA Global Fund ..................... 100.00%
The percentage of ordinary income distributions that are designated as
interest-related dividends under Internal Revenue Code Section 871(k)(1)(C) for
each Fund were as follows (unaudited):
Buffalo Balanced Fund ....................... 63.00%
Buffalo High Yield Fund ..................... 98.00%
Buffalo International Fund .................. 0.00%
Buffalo Jayhawk China Fund .................. 0.00%
Buffalo Large Cap Fund ...................... 7.00%
Buffalo Micro Cap Fund ...................... 0.00%
Buffalo Mid Cap Fund ........................ 25.00%
Buffalo Science & Tech Fund ................. 10.00%
Buffalo Small Cap Fund ...................... 0.00%
Buffalo USA Global Fund ..................... 8.00%
The Percentage of taxable ordinary income distributions that are designated as
short-term capital gain distributions under Internal Revenue Section
871(k)(2)(C) for each Fund were as follows (unaudited):
Buffalo Balanced Fund ....................... 7.15%
Buffalo High Yield Fund ..................... 0.00%
Buffalo International Fund .................. 0.00%
Buffalo Jayhawk China Fund .................. 95.67%
Buffalo Large Cap Fund ...................... 0.00%
Buffalo Micro Cap Fund ...................... 0.00%
Buffalo Mid Cap Fund ........................ 100.00%
Buffalo Science & Tech Fund ................. 100.00%
Buffalo Small Cap Fund ...................... 100.00%
Buffalo USA Global Fund ..................... 5.73%
- --------------------------------------------------------------------------------
75
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(CONTINUED)
For the year ended March 31, 2008, the BUFFALO INTERNATIONAL FUND earned foreign
source income and paid foreign taxes which they intend to pass through to their
shareholders pursuant to Section 853 of the Internal Revenue Code as follows:
COUNTRY GROSS DIVIDEND TAXES WITHHELD
- -----------------------------------------------------
Brazil Real ........ 4,837 7
Canadian ........... 110 16
European Union ..... 29,620 4,745
Japanese Yen ....... 5,262 368
3. RELATED PARTY TRANSACTIONS:
Management fees are paid to Kornitzer Capital Management, Inc. ("KCM") at the
rate of 1.00% per annum of the average daily net asset values of the Funds or
series, except for the Buffalo Jayhawk China Fund and Buffalo Micro Cap Fund,
which have a management fee rate of 1.50% and 1.45%, respectively. The
management fees are for services, which include the costs of all management,
supervisory and administrative services required in the normal operation of the
Funds. This includes investment management and supervision; fees of the
custodian (except for the additional cost of maintaining custody of assets in
foreign jurisdictions, when compared to domestic custody costs), independent
registered public accounting firm and legal counsel; fees and expenses of
officers, directors and other personnel; rent; shareholder services; and other
items incidental to corporate administration. Pursuant to a Master Services
Agreement with U.S. Bancorp Fund Services, LLC ("US Bancorp"), KCM pays US
Bancorp a fee of 30/100 of 1% (0.30%) of each Fund's average daily net assets
out of the fees KCM receives from the Funds. US Bancorp provides or obtains
various operational services required by the Funds, pays various Fund expenses
and acts as paying agent to compensate other Fund service providers. Some of the
other Fund service providers are affiliates of US Bancorp.
The Buffalo Jayhawk China Fund is sub-advised by Jayhawk Capital Management, LLC
("JCM"). Together with KCM, JCM is responsible for implementing the Fund's
investment program, and is responsible for the day-to-day investment activity of
the Fund. For its services, KCM pays JCM, out of its own resources, a monthly
sub-advisory fee at the annual rate of 0.55% of the Fund's average daily net
assets.
The management fees do not include the cost of acquiring and disposing of
portfolio securities, taxes, if any, imposed directly on the Funds or series and
their shares, insurance, certain director expenses and the cost of qualifying
the Funds' or series' shares for sale in any jurisdiction. Certain officers and
a director/trustee of the Funds are also officers and/or directors of Kornitzer
Capital Management, Inc.
A director/trustee of the Funds is affiliated with US Bancorp and U.S. Bank,
N.A., which provide accounting, administration, transfer agency and custodian
services to the Funds, as described above.
4. AGGREGATE COMPENSATION TO DIRECTORS/TRUSTEES:
The Buffalo Funds do not directly compensate any of their directors or trustees.
U.S. Bancorp Fund Services, LLC pays director/trustee fees to non-interested
Board members from its share of the management fee that it receives from
Kornitzer Capital Management, Inc. The aggregate compensation paid to the Funds'
non-interested directors/trustees for their service on the Funds' Boards for the
year ended March 31, 2008 was $54,400. Interested directors/trustees who are
affiliated with either the advisor or the Funds' service providers do not
receive any compensation from the Funds, but are compensated directly by the
advisor or service provider in connection with their employment with those
entities.
5. REDEMPTION FEE:
Shares of the Buffalo Balanced Fund, Buffalo International Fund, Buffalo Jayhawk
China Fund, Buffalo Large Cap Fund, Buffalo Mid Cap Fund, Buffalo Science &
Technology Fund and Buffalo USA Global Fund sold or exchanged within 60 days of
their purchase and shares of the Buffalo High Yield Fund, Buffalo Micro Cap Fund
and Buffalo Small Cap Fund sold or exchanged within 180 days of their purchase
are subject to a redemption fee of 2.00% of the value of the shares sold or
exchanged. The Fund will employ the "first in, first out" method to calculate
the 60-day or 180-day holding period. The redemption fee is retained by the
Funds and will help pay transaction and tax costs that long-term investors may
bear when the Funds realize capital gains as a result of selling securities to
meet investor redemptions.
- --------------------------------------------------------------------------------
76
6. INVESTMENT TRANSACTIONS:
The aggregate purchases and sales of securities, excluding short-term
investments and U.S. government securities, for the Funds for the period ended
March 31, 2008, were as follows:
BUFFALO BUFFALO BUFFALO BUFFALO BUFFALO
BALANCED HIGH YIELD INTERNATIONAL JAYHAWK LARGE CAP
FUND FUND FUND(1) CHINA FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
Purchases .............. $37,496,070 $ 34,551,475 $ 22,167,658 $ 33,028,711 $16,496,951
Proceeds from Sales .... $28,329,467 $ 39,247,473 $ 1,792,723 $ 22,223,176 $25,600,744
BUFFALO BUFFALO SCIENCE & BUFFALO BUFFALO
MICRO CAP MID CAP TECHNOLOGY SMALL USA GLOBAL
FUND FUND FUND CAP FUND FUND
- -----------------------------------------------------------------------------------------------------------------------
Purchases .............. $15,272,177 $186,271,715 $115,377,702 $762,409,781 $77,351,796
Proceeds from Sales .... $24,028,286 $143,126,101 $ 88,427,467 $798,567,114 $28,187,297
(1) FOR THE PERIOD FROM SEPTEMBER 28, 2007 (COMMENCEMENT OF OPERATIONS) TO
MARCH 31, 2008.
There were no purchases or sales of long-term U.S. government securities for any
Funds during the period ended March 31, 2008.
7. TRANSACTIONS WITH AFFILIATES:*
Investments representing 5% or more of the outstanding voting securities of a
portfolio company result in that company being considered an affiliated company,
as defined in the 1940 Act. The aggregate market value of all securities of
affiliated companies held in the Buffalo Small Cap Fund as of March 31, 2008
amounted to $481,839,174 representing 30.07% of net assets. There were no
affiliated companies held in any other Funds. Transactions in the Buffalo Small
Cap Fund during the year ended March 31, 2008 in which the issuer was an
"affiliated person" are as follows:
CABOT
ALIGN MICRO- CHRISTOPHER &
TECHNOLOGY, ELECTRONICS BANKS COLDWATER. CORINTHIAN
INC. CORP. CORP. CREEK, INC. COLLEGES, INC.
- --------------------------------------------------------------------------------------------------
March 31, 2007 Balance
Shares ............. -- 1,714,200 -- -- --
Cost ............... $ -- $54,353,800 $ -- $ -- $ --
Gross Additions
Shares ............. 492,375 68,667 799,400 987,450 383,700
Cost ............... $ 5,901,213 $ 2,521,690 $12,085,455 $ 6,953,503 $ 3,542,687
Gross Deductions
Shares ............. -- 588,425 -- -- --
Cost ............... $ -- $21,318,585 $ -- $ -- $ --
March 31, 2008 Balance
Shares ............. 3,918,725 1,194,442 2,650,900 5,668,900 4,887,090
Cost ............... $48,083,820 $35,556,905 $47,000,874 $71,445,153 $69,462,912
=========== =========== =========== =========== ===========
Realized gain ........ $ -- $ 4,534,871 $ -- $ -- $ --
=========== =========== =========== =========== ===========
Investment income .... $ -- $ -- $ 572,736 $ -- $ --
=========== =========== =========== =========== ===========
HEIDRICK & INTERNAP
STRUGGLES NETWORK MANHATTAN
INTERNATIONAL, SERVICES THE KNOT, ASSOCIATES,
INC. CORP. INC. INC.***
- ----------------------------------------------------------------------------------
March 31, 2007 Balance
Shares ............. 1,155,600 -- -- --
Cost ............... $36,519,343 $ -- $ -- $ --
Gross Additions
Shares ............. 122,600 349,950 330,150 --
Cost ............... $ 4,658,328 $ 3,460,908 $ 3,816,889 $ --
Gross Deductions
Shares ............. -- -- -- --
Cost ............... $ -- $ -- $ -- $ --
March 31, 2008 Balance
Shares ............. 1,278,200 2,797,000 1,906,200 1,304,600
Cost ............... $41,177,671 $43,371,549 $32,627,077 $27,832,828
=========== =========== =========== ===========
Realized gain ........ $ -- $ -- $ -- $ --
=========== =========== =========== ===========
Investment income .... $ 314,392 $ -- $ -- $ --
=========== =========== =========== ===========
* AS A RESULT OF THE BUFFALO SMALL CAP FUND'S BENEFICIAL OWNERSHIP OF COMMON
STOCK OF THESE COMPANIES, REGULATORS REQUIRE THAT THE FUND STATE THAT IT MAY
BE DEEMED AN AFFILIATE OF THE RESPECTIVE ISSUER. THE FUND DISCLAIMS THAT THE
"AFFILIATED PERSONS" ARE AFFILIATES OF THE DISTRIBUTORS, ADVISOR, FUNDS OR
ANY OTHER CLIENT OF THE ADVISOR.
** THIS FIGURE INCLUDES A 3:2 STOCK SPLIT WHICH TOOK PLACE ON JUNE 15, 2007
*** THIS IS AN AFFILIATE DUE TO CHANGE IN THE OUTSTANDING SHARES OF ISSUING
COMPANY
NOTE: SCHEDULE MAY NOT ROLL FORWARD, AS THE SCHEDULE ONLY REFLECTS
ACTIVITY DURING THE TIME THE FUND WAS DEEMED AN AFFILIATE (HELD MORE THAN 5%
OF A STOCK'S OUTSTANDING SECURITIES).
- --------------------------------------------------------------------------------
77
NOTES TO FINANCIAL STATEMENTS
March 31, 2008
(CONTINUED)
MARKETAXESS OXFORD P.F. CHANG'S WMS
MARINEMAX, HOLDINGS, MENTOR INDUSTRIES, CHINA BISTRO SEMTECH INDUSTRIES,
INC. INC. CORP. INC. INC. CORP.*** INC. TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
March 31, 2007 Balance
Shares ............. -- -- -- -- -- -- 3,198,525** --
Cost ............... $ -- $ -- $ -- $ -- $ -- $ -- $48,328,222 $139,201,365
Gross Additions
Shares ............. 617,032 260,306 28,750 275,025 482,900 -- 38,100 5,236,405
Cost ............... $ 9,920,906 $ 2,976,359 $ 861,931 $ 6,801,307 $14,997,983 $ -- $ 1,102,995 $ 79,602,154
Gross Deductions
Shares ............. -- -- -- -- -- -- 1,027,700 1,616,125
Cost ............... $ -- $ -- $ -- $ -- $ -- $ -- $36,499,927 $ 57,818,512
March 31, 2008 Balance
Shares ............. 1,557,332 1,801,706 1,715,600 1,169,625 1,747,400 3,084,800 -- 36,682,520
Cost ............... $29,564,586 $27,632,087 $51,427,231 $42,367,008 $65,414,621 $46,348,122 $ -- $679,312,444
=========== =========== =========== =========== =========== =========== =========== ============
Realized gain ........ $ -- $ -- $ -- $ -- $ -- $ -- $16,648,376 $ 21,183,247
=========== =========== =========== =========== =========== =========== =========== ============
Investment income .... $ -- $ -- $ 343,120 $ 210,533 $ -- $ -- $ -- $ 1,440,781
=========== =========== =========== =========== =========== =========== =========== ============
* AS A RESULT OF THE BUFFALO SMALL CAP FUND'S BENEFICIAL OWNERSHIP OF COMMON
STOCK OF THESE COMPANIES, REGULATORS REQUIRE THAT THE FUND STATE THAT IT MAY
BE DEEMED AN AFFILIATE OF THE RESPECTIVE ISSUER. THE FUND DISCLAIMS THAT THE
"AFFILIATED PERSONS" ARE AFFILIATES OF THE DISTRIBUTORS, ADVISOR, FUNDS OR
ANY OTHER CLIENT OF THE ADVISOR.
** THIS FIGURE INCLUDES A 3:2 STOCK SPLIT WHICH TOOK PLACE ON JUNE 15, 2007
*** THIS IS AN AFFILIATE DUE TO CHANGE IN THE OUTSTANDING SHARES OF ISSUING
COMPANY
NOTE: SCHEDULE MAY NOT ROLL FORWARD, AS THE SCHEDULE ONLY REFLECTS ACTIVITY
DURING THE TIME THE FUND WAS DEEMED AN AFFILIATE (HELD MORE THAN 5% OF A STOCK'S
OUTSTANDING SECURITIES).
8. OPTIONS WRITTEN:
The number of option contracts written and the premiums received by the Buffalo
Balanced Fund during the year ended March 31, 2008 were as follows:
CALL OPTIONS WRITTEN
CONTRACTS PREMIUMS
- -------------------------------------------------------------------
Outstanding, beginning of period ............. -- --
Options written .............................. 300 $36,899
Options terminated in closing transaction .... 300 $36,899
Options exercised ............................ -- --
Options expired .............................. -- --
--- -------
Outstanding, end of period ................... 0 $ 0
=== =======
9. SUBSEQUENT EVENT
Upon the recommendation of the Adviser, the Boards of Directors of the Maryland
Funds (the Buffalo Balanced Fund, Inc., the Buffalo High Yield Fund, Inc., the
Buffalo Large Cap Fund, Inc., the Buffalo Small Cap Fund, Inc. and the Buffalo
USA Global Fund, Inc.) have voted unanimously to recommend for submission to the
shareholders for approval a Plan of Reorganization which would convert each of
the Maryland Funds into a corresponding new series of the existing Delaware
Trust (the "Buffalo Funds"). Each of the Maryland Funds would have its assets
transferred to a new "shell series" with corresponding names as part of the
Delaware Trust. For each of the Funds, however, the investment objectives,
policies and strategies would remain the same. The existing Trust currently has
five series (the Buffalo Jayhawk China Fund, the Buffalo Micro Cap Fund, the
Buffalo Mid Cap Fund, the Buffalo Science & Technology Fund and the Buffalo
International Fund). The current Maryland Funds would increase the number of
Funds in the Delaware Trust to ten Funds if this change is approved.
- --------------------------------------------------------------------------------
78
The purpose of this of the proposed reorganization is to provide for greater
uniformity for the Funds and to operate the current Maryland Funds under
Delaware law, which is expected to result in fewer administrative burdens on the
Funds. Management expects costs and expenses to decrease as a result, as well as
provide for administrative efficiencies. The Plan of Reorganization is included
in the proxy materials to be sent to shareholders and will be subject to
shareholder vote at the annual shareholders meeting currently scheduled for June
25, 2008.
In addition to the Plan of Reorganization, the Boards of Directors/Trustees of
both the Maryland Funds and the Delaware Trust have submitted for shareholder
approval a proposal for uniform fundamental investment restrictions for all
Funds. The proposed changes in the fundamental investment restrictions does not
signify an intent or plan to change the objectives, strategies or policies of
any of the Funds and no changes in the management or operations of the Funds are
expected. The revisions to current fundamental investment restrictions were made
to update all the Funds restrictions to uniformly reflect current legal and
regulatory obligations, as well as the restrictions the Board has determined
appropriate for the Fund in accordance with the policies of the Trust. Like the
Plan of Reorganization, information regarding these proposals will be included
in the proxy material to be sent to shareholders and will be subject to
shareholder vote at the annual shareholders meeting currently scheduled for June
25, 2008. Form N-14 will be filed with SEC reflecting these changes in the
information regarding the Funds.
THIS REPORT HAS BEEN PREPARED FOR THE INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS, AND IS NOT TO BE CONSTRUED AS AN OFFERING OF THE SHARES OF THE FUNDS.
SHARES OF THE FUNDS ARE OFFERED ONLY BY THE PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED FROM BUFFALO FUNDS C/O U.S. BANCORP FUND SERVICES, LLC,
1-800-49-BUFFALO OR AT WWW.BUFFALOFUNDS.COM.
- --------------------------------------------------------------------------------
79
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARDS OF DIRECTORS/TRUSTEES AND SHAREHOLDERS:
We have audited the accompanying statements of assets and liabilities,
including the schedule of investments, of Buffalo Balanced Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo Large Cap Fund, Inc., Buffalo Funds (comprised of
Buffalo International Fund, Buffalo Jayhawk China Fund, Buffalo Micro Cap Fund,
Buffalo Mid Cap Fund, and Buffalo Science & Technology Fund), Buffalo Small Cap
Fund, Inc., and Buffalo USA Global Fund, Inc. (collectively referred to herein
as "the Funds"), as of March 31, 2008, and the related statements of operations
for the periods then ended, and the statements of changes in net assets and
financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of March 31, 2008, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Funds at March 31, 2008, the results of their operations, the changes in their
net assets and the financial highlights for the periods indicated therein, in
conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
May 23, 2008
- --------------------------------------------------------------------------------
80
NOTICE TO SHAREHOLDERS
DIRECTORS/TRUSTEES AND OFFICERS OF THE FUNDS (UNAUDITED)
The management and affairs for the Funds are supervised by the
Directors/Trustees ("Directors") under the laws of the particular Fund's state
of organization. The Directors and executive officers of the Funds and their
principal occupations for the last five years are set forth below. Each may have
held other positions with the named companies during that period.
NUMBER OF
FUNDS IN
COMPLEX OTHER
POSITION(S) TERM OF OFFICE OVERSEEN DIRECTORSHIPS
HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) BY HELD BY
NAME, AGE AND ADDRESS WITH FUNDS TIME SERVED DURING PAST 5 YEARS DIRECTOR DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Kent W. Gasaway (48) Director Indefinite term and Senior Vice President/Portfolio Ten None
5420 West 61st Place served since inception. Manager, Kornitzer Capital
Shawnee Mission, KS 66205 President One year term and Management, Inc. (management
and served since May 2003. company).
Treasurer
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Joseph C. Neuberger (46) Director Indefinite term and Executive Vice President, U.S. Ten Trustee, MUTUALS.com
615 E. Michigan Street served since May 2003. Bancorp Fund Services, LLC (an open-end
Milwaukee, WI 53202 Chairman One year term and (1994 - present). investment company
served since May 2003. with two
portfolios);
Trustee, Trust for
Professional
Managers (an
open-end
investment company
with five
portfolios).
NON-INTERESTED DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas S. Case (66) Director Indefinite term and Retired. Ten None
515 Piney Creek Road served since
Reno, NV 89511 inception.
- ------------------------------------------------------------------------------------------------------------------------------------
Gene M. Betts (55) Director Indefinite term and Chief Financial Officer, Embarq Ten Director, Garmin
Embarq Corp. served since February Corp. (telecommunications Ltd. (a global
5454 W. 110th Street 2001. company) May 2006 - present; positioning
Overland Park, KS 66211 Senior Vice President and equipment company).
Treasurer, Sprint Corp.
(telecommunications company)
1990-2005.
- ------------------------------------------------------------------------------------------------------------------------------------
J. Gary Gradinger (65) Director Indefinite term and Chairman, President and Chief Ten Director, MGP
Golden Star Inc. served since February Executive Officer, Golden Star Ingredients, Inc.
400 East 10th Avenue 2001. Inc. (manufacturer of textile
North Kansas City, MO 64116 cleaning products).
- ------------------------------------------------------------------------------------------------------------------------------------
Philip J. Kennedy (62) Director Indefinite term and Internship Coordinator and Ten None
Department of Business served since May 1995. Instructor for the Department
Administration of Business Administration,
Penn State Shenango Penn State Shenango; Associate
147 Shenango Avenue Professor and Chair of
Sharon, PA 16146 Accounting, Business
Administration and
Entrepreneurship, Benedictine
College; formerly Associate
Professor, Slippery Rock
University; Director, Great
Plains Trust Company.
OFFICERS OF THE FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Rachel A. Spearo (28) Secretary One year term and Counsel, U.S. Bancorp Fund N/A N/A
615 E. Michigan Street served since August Services, LLC since September
Milwaukee, WI 53202 2006. 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Koster (47) Chief Indefinite term and Chief Compliance Officer since N/A N/A
5420 West 61st Place Compliance served since October October 2004 and Chief
Shawnee Mission, KS 66205 Officer 2004. Financial Officer since May
2002, Kornitzer Capital
Management, Inc. (management
company); Senior Manager from
2001-2002, Mock & Dakan P.C.;
Senior Manager from 1990-2001,
KPMG LLP.
(1) EACH OF THESE DIRECTORS MAY BE DEEMED TO BE AN "INTERESTED PERSON" OF THE
FUNDS AS THAT TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED. MESSRS. NEUBERGER AND GASAWAY ARE INTERESTED DIRECTORS DUE TO THEIR
EMPLOYMENT BY U.S. BANCORP FUND SERVICES, LLC AND KORNITZER CAPITAL
MANAGEMENT, INC., RESPECTIVELY. U.S. BANCORP FUND SERVICES, LLC IS THE
FUNDS' ADMINISTRATOR AND REGISTERED TRANSFER AGENT. KORNITZER CAPITAL
MANAGEMENT, INC. IS THE FUNDS' ADVISOR.
- --------------------------------------------------------------------------------
81
NOTICE TO SHAREHOLDERS
(CONTINUED)
A NOTE ON FORWARD-LOOKING STATEMENTS
Except for historical information contained in this annual report for the Funds,
the matters discussed in this report may constitute forward-looking statements
made pursuant to the safe harbor provisions of the Securities Litigation Reform
Act of 1995. These include any advisor and/or portfolio manager predictions,
assessments, analyses or outlooks for individual securities, industries, market
sectors and/or markets. These statements involve risks and uncertainties. In
addition to the general risks described for the Funds in the current Prospectus,
other factors bearing on these reports include the accuracy of the advisor's or
portfolio mangers' forecasts and predictions, and the appropriateness of the
investment programs designed by the advisor or portfolio manager to implement
their strategies efficiently and effectively. Any one or more of these factors,
as well as other risks affecting the securities markets and investment
instruments generally, could cause the actual results of the Funds to differ
materially as compared to benchmarks associated with the Funds.
ADDITIONAL INFORMATION
The Buffalo Funds have adopted proxy voting policies and procedures that
delegate to Kornitzer Capital Management, Inc., the Funds' investment advisor,
the authority to vote proxies. A description of the Buffalo Funds' proxy voting
policies and procedures is available without charge, upon request, by calling
the Funds toll free at 1-800-49-BUFFALO. A description of these policies and
procedures is also included in the Funds' Statement of Additional Information,
which is available on the SEC's website at http://www.sec.gov.
The actual voting records relating to portfolio securities during the most
recent twelve month period ended June 30 (as filed with the SEC on Form N-PX)
are available without charge, upon request, by calling the Funds toll free at
1-800-49-BUFFALO or by accessing the SEC's website at http://www.sec.gov.
The Funds file their complete schedule of portfolio holdings with the SEC four
times each fiscal year at quarter-ends. The Funds file the Schedule of Portfolio
Holdings with the SEC on Form N-CSR (second and fourth quarters) and on Form N-Q
(first and third quarters). Shareholders may view the Funds' Forms N-CSR and N-Q
on the SEC's website at http://www.sec.gov. Forms N-CSR and N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the SEC's Public Reference Room may be obtained by calling
1-202-551-8090 (direct) or 1-800-SEC-0330 (general SEC number).
APPROVAL OF INVESTMENT ADVISORY CONTRACTS
The Board of Trustees/Directors (the "Trustees") of Buffalo Funds, a Delaware
statutory trust, on behalf of its series, the Buffalo Science & Technology Fund,
the Buffalo Micro Cap Fund and the Buffalo Mid Cap Fund, and Buffalo Balanced
Fund, Inc., Buffalo Large Cap Fund, Inc., Buffalo Small Cap Fund, Inc., Buffalo
USA Global Fund, Inc. and Buffalo High Yield Fund, Inc., all Maryland
corporations (all such funds referred to collectively as the "Funds") met on
November 16, 2007, to consider the renewal of the Management Agreements (the
"Agreements") between the Funds and Kornitzer Capital Management, Inc., the
Funds' investment adviser (the "Adviser"). In advance of the meeting, the
Trustees requested and received materials to assist them in considering the
approval of the Agreements. The materials provided contained information with
respect to the factors enumerated below, including the Agreements, a memorandum
prepared by the Trustees' independent legal counsel discussing in detail the
Trustees' fiduciary obligations and the factors they should assess in
considering the approval of the Agreements, detailed comparative information
relating to the advisory fees, overall expenses and performance of the Funds,
due diligence materials relating to the Adviser (including the Adviser 's Form
ADV and financial information, information regarding key personnel, information
relating to the Adviser's and the Funds' compliance programs and Code of Ethics
information that the Adviser regularly provides to the Trustees in connection
with reports on its activities and the activities of the Funds at the Trustees'
periodic Board meetings) and other pertinent information. In addition, the
Independent Trustees, as defined below, met in executive session with their
independent counsel immediately prior to the Board meeting held on November 16,
2007, to review and discuss the information provided to them and their duties
and responsibilities in connection with the renewal of the Agreements. Based on
their evaluation of information provided by the Adviser, in conjunction with the
Funds' other service providers, the Trustees, by a unanimous vote (including a
separate vote of the Trustees who are not "interested persons," as that term is
defined in the Investment Company Act of 1940, as amended (the "Independent
Trustees")), approved renewal of the Agreements for an additional term of one
year ending November 30, 2008.
DISCUSSION OF FACTORS CONSIDERED
In considering the Agreements and reaching their conclusions, the Trustees
reviewed and analyzed various factors that they determined were relevant,
including the factors enumerated below.
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1. NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED TO THE FUNDS.
The Trustees considered the nature, extent and quality of services provided by
the Adviser to the Funds. The Trustees considered the Adviser's specific
responsibilities in all aspects of day-to-day management of the Funds, as well
as the qualifications, experience and responsibilities of the portfolio
management teams and other key personnel of the Adviser involved in the
day-to-day activities of the Funds. The Trustees noted and approved the
Adviser's emphasis on long-term results and the quality of the Adviser's reports
throughout the course of the year as well as in connection with the contract
renewal process. The Trustees also noted the services that extended beyond
portfolio management, including operations and compliance, and they considered
the overall capability of the Adviser, including its continuing commitment to
enhance distribution of the Funds. The Trustees concluded that the Adviser had
sufficient quality and depth of personnel, resources, investment methods and
compliance policies and procedures essential to performing its duties under the
Agreements and that the nature, overall quality and extent of the management
services to be provided to the Funds were satisfactory and reliable.
2. INVESTMENT PERFORMANCE OF THE ADVISER.
In assessing the portfolio management services provided by the Adviser, the
Trustees considered information provided to them prior to their meeting on
November 16, 2007, including, without limitation, materials prepared by Lipper,
Inc. with respect to the fees, expenses and performance of each of the Funds
compared with similar funds managed by other investment advisers, as well as
information presented to them by the Adviser at the meeting and throughout the
preceding year. The Trustees considered the peer group and index comparisons in
the materials provided relevant and concluded that the overall performance of
the Funds was favorable in comparison to the Funds' comparative peer groups and
indices. The Trustees also expressed confidence in the Adviser 's portfolio
management teams and the evolution of the Adviser and acknowledged the Adviser's
emphasis on long-term results. After considering all of the information
presented, the Trustees concluded that the Funds and their shareholders would
continue to benefit from the Adviser's management.
3. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER.
The Trustees considered the cost of services and the structure of the Adviser's
fees. The Trustees considered the cost structure of the Funds relative to their
peer groups based on the Lipper, Inc. analysis provided to the Trustees prior to
their meeting. The Trustees also examined the level of profits that could be
expected to accrue to the Adviser from the fees payable under the Agreements,
noting that the Adviser's profitability had remained substantially the same from
year to year based on financial information provided by the Adviser.
The Trustees specifically considered the fee structure for the Funds as well as
the Funds' overall expense ratios. The Trustees concluded that the 0.70%
advisory fee payable by all Funds except the Buffalo Micro Cap Fund appeared, on
average, to be at the low end of the spectrum when compared to the Funds'
comparative peer groups. The higher advisory fee for the Buffalo Micro Cap Fund
also appeared reasonable compared to its relevant peer group. The Trustees also
observed that the Funds' overall expense ratios were below the median expense
ratios for funds in their comparative peer groups in almost all cases. In light
of the comparative expense and advisory fee information and the investment
management services provided by the Adviser, the Trustees concluded that the
Funds' expenses and the fees paid to the Adviser were competitive and,
therefore, fair and reasonable. The Trustees further concluded that the
Adviser's profit from sponsoring the Funds had not been and would not be
excessive and would enable the Adviser to maintain adequate profit levels to
support its provision of advisory services to the Funds.
4. EXTENT OF ECONOMIES OF SCALE AS THE FUNDS GROW.
The Trustees reviewed the structure of the Adviser's advisory fees and discussed
potential economies of scale based on the Funds' current size and as they grow
(and if such economies are realized, how they would be shared with
shareholders). The Trustees concluded that the potential economies of scale that
the Funds might realize would be achievable under the structure of the Adviser's
advisory fees and the Funds' expenses, particularly in light of the Adviser's
proposal to consider fee breakpoints in the future as the Funds grow. The
Trustees therefore concluded that the Adviser's fee structure was acceptable
based on the potential economies of scale that may be achieved by the Funds as
they grow combined with the Adviser's commitment to consider breakpoints in the
future.
5. BENEFITS DERIVED FROM THE RELATIONSHIP WITH THE FUNDS.
The Trustees considered the direct and indirect benefits that could be received
by the Adviser from its association with the Funds. The Trustees examined the
brokerage of the Adviser with respect to the Funds. The Trustees concluded that
the benefits the Adviser may receive, such as greater name recognition and/or
increased ability to obtain research or brokerage services, appear to be
reasonable, and in many cases may benefit the Funds.
CONCLUSIONS
The Trustees considered all of the foregoing factors. In considering the
Agreements, the Trustees did not identify any one factor as all-important, but
rather considered these factors collectively in light of the Funds' surrounding
circumstances. Based on this review, the Trustees, including a majority of the
Independent Trustees, approved the Agreements with the Funds as being in the
best interests of the Funds and their shareholders.
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83
[LOGO, BUFFALO FUNDS]
1-800-49-BUFFALO
(1-800-492-8332)
www.buffalofunds.com
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer and principal financial officer. The registrant has
not made any amendments to its code of ethics during the period covered by this
report. The registrant has not granted any waivers from any provisions of the
code of ethics during the period covered by this report. A copy of the
registrant's Code of Ethics is filed herewith.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors has determined that it has at least one
audit committee financial expert serving on its audit committee. The names of
the audit committee financial experts are Gene M. Betts and Philip J. Kennedy.
Messrs. Betts and Kennedy are "independent" as defined in Item 3(2) of Form
N-CSR.
ITEM 4. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES.
(a) - (d) Aggregate fees billed to the registrant for each of the last two
fiscal years for professional services rendered by the Registrant's
Independent Registered Public Accounting Firm were as follows:
============================================================
FYE 03/31/2008 FYE 03/31/2007
------------------------------------------------------------
Audit Fees $16,702 $14,257
Audit-Related Fees $1,111 $538
Tax Fees $2,280 $2,122
All Other Fees $0 $0
============================================================
Audit fees include amounts related to the audit of the registrant's annual
financial statements and services normally provided by the Independent
Registered Public Accounting Firm in connection with statutory and regulatory
filings, including registration statements. Audit-related fees refer to the
reading and commenting on the registrant's semi-annual reports. Tax fees include
amounts related to tax compliance, tax planning, and tax advice, including
specifically tax return review and excise tax distribution review services.
There were no fees billed for services rendered to the registrant's investment
adviser or any entity controlling, controlled by or under common control with
the investment adviser that provides ongoing services to the registrant that
were required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X.
(e) (1) The registrant's audit committee charter requires pre-approval in
advance of (i) audit and non-audit services performed by the registrant's
Independent Registered Public Accounting Firm for the registrant; and (ii) audit
and non-audit services relating directly to the operations and financial
reporting of the registrant performed by the registrant's principal accounting
for the registrant's investment adviser, and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant.
(2) None of the services described in (b) - (d) above were approved by the
audit committee specifically pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X.
(f) Not applicable.
(g) The aggregate non-audit fees were for audit-related and tax services
rendered to the registrant. As disclosed above, the amount of fees billed for
such services were $3,391 and $2,660 for the 2008 and 2007 fiscal years,
respectively.
(h) There were no non-audit services rendered to the registrant's
investment adviser or any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant that were not required to be pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable because the registrant is not a listed issuer.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments is included as part of the report to shareholders filed
under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable because the registrant is not a closed-end management investment
company.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable because the registrant is not a closed-end management investment
company.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASES.
Not applicable because the registrant is not a closed-end management investment
company.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors/trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's Principal Executive Officer and Principal Financial Officer
has reviewed and evaluated the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the 1940 Act) as of a date
within 90 days of the filing of this report as required by Rule 30a-3(b)
under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934. Based on his review, the Principal Executive Officer
and Principal Financial Officer has concluded that the disclosure controls
and procedures are effective in ensuring that information required to be
disclosed in this report is appropriately recorded, processed, summarized
and reported and made known to him by others within the registrant and by
the registrant's service providers.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are
reasonably likely to materially affect, registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Registrant's code of ethics or amendment thereto, that are subject of
the disclosure required by Item 2, is filed herewith.
(2) Certifications pursuant to Section 302(a) of the Sarbanes-Oxley Act of
2002 are filed herewith.
(3) Not applicable.
(b) Certifications required pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Buffalo Small Cap Fund, Inc.
-------------------------------------------------
By (Signature and Title) /s/ Kent W. Gasaway
-------------------------------------------------
Kent W. Gasaway, President and Treasurer
Date June 6, 2008
-------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following person on behalf of the registrant and in the capacities and on the
date indicated.
By (Signature and Title) /s/ Kent W. Gasaway
-------------------------------------------------
Kent W. Gasaway, President and Treasurer
Date June 6, 2008
-------------------------------------------------