Dear Fellow Shareholders:
Investment Results - Semi Annual Fiscal Period Ended April 1998
The GLOBALT Growth Fund (the "Fund") ended the first half of its third fiscal
year with a 20.16% total return for the period. The Fund has returned 90.67%
(net of fees) since inception December 1, 1995, surpassing an 88.73% gain for
the Russell 1000 Growth Index while slightly lagging a 92.38% gain for the S&P
500 Index during the same time period.
shapeType75fFlipH0fFlipV0fLockAspectRatio0pib[GRAPHIC OMITTED]
Investment results since inception have been as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------------------------------------- --------------------- --------------------- ---------------------
Periods Ending 4/30/98 GLOBALT S&P 500 Russell 1000
Comparative Investment Returns (a) (b) Growth Fund Index (c) Growth Index (c)
- ---------------------------------------------- --------------------- --------------------- ---------------------
- ---------------------------------------------- --------------------- --------------------- ---------------------
Last Quarter 15.29% 13.84% 13.35%
- ---------------------------------------------- --------------------- --------------------- ---------------------
- ---------------------------------------------- --------------------- --------------------- ---------------------
Last 6 Months 20.16% 22.50% 23.05%
- ---------------------------------------------- --------------------- --------------------- ---------------------
- ---------------------------------------------- --------------------- --------------------- ---------------------
Average Annual 1 Year Return 40.74% 41.07% 42.13%
- ---------------------------------------------- --------------------- --------------------- ---------------------
- ---------------------------------------------- --------------------- --------------------- ---------------------
Average Annual Return Since Inception (d) 30.65% 31.09% 30.06%
- ---------------------------------------------- --------------------- --------------------- ---------------------
- ---------------------------------------------- --------------------- --------------------- ---------------------
Total Return Since Inception (d) 90.67% 92.38% 88.73%
- ---------------------------------------------- --------------------- --------------------- ---------------------
<FN>
(a) Past performance is not predictive of future performance.
(b) The GLOBALT Growth Fund's historical results are net of all
expenses, versus the gross market benchmarks (the S&P 500
Index and the Russell 1000 Growth Index). Investors are
reminded that when trying to achieve benchmark returns,
investment management fees, transaction costs and execution
costs will be incurred.
(c) The S&P 500 Index is an unmanaged index of 500 selected common
stocks, most of which are listed on the New York Stock
Exchange. The Index is adjusted for dividends and weighted
toward stocks with large market capitalizations. The Russell
1000 Growth Index is an unmanaged index of 1000 selected
"growth" oriented common stocks, most of which are listed on
the New York Stock Exchange. The Index is adjusted for
dividends and weighted toward stocks with large market
capitalizations.
(d) From December 1, 1995.
</FN>
</TABLE>
The Fund ended April 1998 with $11,116,820 in net assets and more than 70
shareholders. We welcome our new shareholders and look forward to furthering the
investment objectives of all our shareholders. We believe it is important to
note that all GLOBALT 401(k) participants have elected to be investors in the
Fund.
Investment Approach
To review, our approach to managing the GLOBALT Growth Fund is to achieve
long-term growth of capital by investing in U.S. companies which we believe
offer superior growth potential through exposure to rapidly growing foreign
markets. The Fund only invests in stocks of U.S. companies that are expected to
derive at least 20% of their revenues outside the U.S. Once we construct
portfolios, the connection you have to the global marketplace, by being an
investor in the GLOBALT Growth Fund, is much greater: the portfolio derives at
least 50% of revenues from outside the U.S.
Fund Performance Relative to Benchmarks
The Fund underperformed versus the benchmarks for the six months ended April 30,
1998. The Fund rebounded strongly during the last three months of the period,
steadily outpacing both indexes.
The Fund has beaten the Russell 1000 Growth Index since inception while at the
same time its +30.65% return is less than half a percent lower than the S&P 500
Index return for the same period. We are pleased with these results for the last
six months, particularly given the strong performance of two sectors in which we
are not represented, Consumer Durables and Retail.
Commentary and Outlook
In our last report in October of 1997 we wrote to you that the economic
framework for investing continued to be very positive although the short-term
risks were heightened because of the chaos in the Southeast Asia currencies and
economies. The U.S. market has divined that the damage in Asia is very real but
that its effect on economic sectors and individual companies varies widely.
Overall, the impact has not been great enough to bloody a very resilient U.S.
economy. Long-term, we remain very positive on the U.S. equity and bond markets,
and we also believe that the current turmoil in Asia presents U.S. companies
with significant opportunities to strengthen their positions and add to
profitability.
However, after many quarters of outright bullishness, we began to take a
slightly more defensive posture 12 months ago - reducing Asian exposure and
taking earnings uncertainty out of portfolios. With the market now 16% higher
than it was at the end of 1997, we are more cautious on a short-term basis.
What concerns us?
The U.S. is only now seeing the leading edge of the Asian fall-out: a
growing trade deficit and lower employment and sales in the industrial sector.
Although the market has looked through the news to date, we probably haven't
seen the worst yet.
Flattening growth in corporate profitability, more downward company
earnings revisions.
More difficulty finding valid re-investment opportunities in the market
with the Dow Jones Industrial Index at the 9200 level.
Very high volatility in the market.
And finally, representing a change in investor sentiment, investors'
opinion has shifted conclusively to the bullish side. If the market "climbs
a wall of worry," complacency could bring a short-term dose of reality that
the market goes both ways.
For the intermediate term we fear the very real possibility that the Year 2000
computer code conversion could cause serious business interruptions in late 1999
and 2000. We continue to analyze this issue and will have further comments next
time.
Having made a disclaimer, what course are we pursuing in the GLOBALT Growth
Fund?
Our conviction regarding the longer term potential for U.S. equities, plus
respect for the unreliability of market forecasting, is sufficient to keep
us invested.
As before, we will retain a moderate amount of reserves - in part to give
us the flexibility to be opportunistic in any general pullback or to
respond to individual stock volatility.
We will be disciplined about "reaching" or paying up for even the best
companies after pronounced upward moves.
Our response to flattening corporate profits will be to concentrate
portfolios in the companies in which we have the highest conviction in the
earnings outlook and/or relative valuation.
This is a significant shift. The process began twelve months ago, and
has resulted in a reduction in holdings from 58-60 to 43-44. Sector
balance is essentially unchanged, maintaining portfolio
diversification. Diversification is still a valid concept.
Over-diversification is counterproductive to investment returns.
Our biases continue to favor larger, higher quality companies with greater
exposure to the U.S., Latin American, and European economies over exposure to
Asia/Japan. While we now are giving a higher probability to a market decline, we
expect it to be limited to a relatively shallow and short-lived correction.
The recent events in Asia are proving again the strength and
resourcefulness of U.S. companies. Only partway through the corrective process,
the evidence supports our even higher conviction that the best way to access
international growth is through globally-competitive U.S. companies. U.S.
companies are being tested, and they are demonstrating that they are up to the
task.
We thank you for your continued confidence in the GLOBALT Growth Fund and, as
always, we welcome your questions or comments.
Sincerely,
Angela Z. Allen
President and Chief Executive Officer
AZA/gl
Fund Investment
Shares of the Fund are sold on a continuous basis.
The Fund's NASDAQ symbol is GROWX and can be used at any broker dealer or
financial institution where the Fund is available for purchase unless otherwise
noted.
Through the Fund's transfer agent, American Data Services, you may invest any
amount you choose as often as you wish, subject to a minimum initial investment
of $25,000 and minimum subsequent investments of $5,000 ($2,000 for IRA
accounts). Shares may also be purchased through a broker dealer or other
financial institution authorized by the Fund's distributor (investors may be
charged a fee for this service). Purchases can be made by mail or by bank wire
(please see prospectus for more information).
The Fund is also available through Charles Schwab's Mutual Fund OneSource
service at 1-800-435-4000 or on the Internet at www.schwab.com. The minimum
investment in the Fund through this service is $2,500 ($1,000 through a
qualified retirement plan). The GLOBALT Growth Fund's mutual fund symbol at
Schwab is GROWX. This enables the GLOBALT Growth Fund to be included as an
investment option in 401(k) plans.
The Fund is also available through Fidelity's FUNDSNetwork with a minimum
investment of $2,500 ($1,000 through a qualified retirement plan). It is listed
as the AmeriPrime Funds - GLOBALT Growth Fund (symbol: AVGGF). Fidelity can be
reached at 1-800-544-9697.
<PAGE>
GLOBALT Growth Fund
Schedule of Investments - (Unaudited) - April 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Common Stock - 99.0% Shares Value
Business Equipment & Services - 4.3%
Interpublic Group 3,175 $ 202,803
Omnicom Group 5,800 274,775
---------------
477,578
---------------
Capital Goods - 8.4%
General Electric Co. 5,700 485,212
General Telephone 7,700 449,969
---------------
---------------
935,181
---------------
Chemicals - 2.0%
Monsanto Co. 4,200 222,075
---------------
Consumer Non-Durables - 15.5%
Avon Products Inc. 2,700 221,906
Campbell Soup Co. 4,500 230,906
Coca Cola Company 3,050 231,419
Coca Cola Enterprises 7,900 298,225
Colgate-Palmolive Co. 2,800 251,125
Gilette Co. 1,000 115,437
Procter & Gamble Co. 2,600 213,687
Sara Lee Corp. 2,600 154,862
---------------
1,717,567
---------------
Consumer Services - 7.6%
Disney (Walt) Co. 2,700 335,644
Mattel Inc. 5,500 210,719
Time Warner Inc. 3,750 294,375
---------------
840,738
---------------
Energy Sector - 6.4%
Dresser Industries 4,400 232,650
Halliburton Co. 5,400 297,000
Texaco Inc. 3,000 184,500
---------------
---------------
714,150
---------------
Financial Services - 17.7%
American Express 2,600 265,200
American International Group 2,675 351,930
Franklin Resources, Inc. 3,000 160,500
Household Intl, Inc. 2,100 276,019
Merrill Lynch & Co. 3,600 315,900
Marsh & McLennan Co. 3,500 318,937
Morgan Stanley Dean Witter Discovery 3,540 279,217
---------------
1,967,703
---------------
Health Care - 16.4%
Baxter International Inc. 5,400 299,363
Becton Dickinson 3,600 250,650
Bristol Myers Squibb 2,400 254,100
Guidant Corp. 3,500 234,062
Johnson & Johnson 3,312 236,394
Lilly Eli & Co. 5,200 361,725
Pfizer Inc. 1,600 182,100
---------------
1,818,394
---------------
GLOBALT Growth Fund
Schedule of Investments -(Unaudited)- April 30, 1998 - continued
Common Stock - continued
Technology Sector - 16.5% Shares Value
Cicso Systems Inc. (a) 1,575 $ 115,369
Compaq Computer Corp. 5,100 143,119
Computer Assoc. Intl 4,700 275,244
Computer Sciences (a) 5,600 295,400
Emerson Electric 3,300 209,963
Lucent Technologies 3,680 280,140
Microsoft Corp. (a) 2,000 180,250
Xerox Corp. 3,000 340,500
---------------
1,839,985
---------------
Transportation - 4.2%
AMR Corp.(a) 1,700 259,039
Federal Express Corp. (a) 3,100 210,800
---------------
469,839
Total Common Stock - (Cost $8,512,294) 11,003,210
---------------
Money Market Securities - 1.0%
Star Treasury - 4.96% 12/31/98 (Cost $117,682) 117,682
---------------
TOTAL INVESTMENTS - (Cost $8,629,976) - 100.0% 11,120,892
===============
---------------
Liabilities less other assets (2,228)
---------------
Total Net Assets - 100.0% $ 11,118,664
===============
<FN>
(a) non-income producing
</FN>
</TABLE>
<PAGE>
GLOBALT Growth Fund April 30, 1998
Statement of Assets & Liabilities
<TABLE>
<CAPTION>
<S> <C>
Assets
Investment in securities, at value (cost $8,629,976) $ 11,120,892
Dividends receivable 7,132
Interest receivable 1,243
Reimbursement receivable from advisor 1,844
--------------------
Total assets 11,131,111
Liabilities
Accrued management fee payable 10,759
Other payable and accrued expenses 1,688
-------------------
Total liabilities 12,447
--------------------
Net Assets $ 11,118,664
====================
Net Assets consist of:
Paid in capital $ 8,517,890
Accumulated undistributed net investment income (43,913)
Accumulated undistributed net realized gain 153,771
Net unrealized appreciation on investments 2,490,916
--------------------
Net Assets, for 649,444 shares $ 11,118,664
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($8,002,674/649,444) $ 17.12
====================
</TABLE>
<PAGE>
GLOBALT Growth Fund
Statement of Operations for the six month period ended April 30, 1998
<TABLE>
<CAPTION>
<S> <C>
Dividend Income $ 47,965
Interest Income 18,341
-------------------
Total Income 66,306
Expenses
Management fee $ 56,010
Trustees' fees 1,844
---------------------
Total Expenses before reimbursement 57,854
Reimbursed expenses (1,844)
---------------------
Total Expenses 56,010
-------------------
Net Investment Income (Loss) 10,296
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities 196,438
Change in net unrealized appreciation (depreciation) on investment securities 1,658,112
---------------------
Net gain (loss) on investment securities 1,854,550
-------------------
Net increase (decrease) in net assets resulting $ 1,864,846
===================
from operations
</TABLE>
<PAGE>
GLOBALT Growth Fund
<TABLE>
<CAPTION>
Statement of Changes in Net Assets For the six
months ended For the year ended
April 30, 1998 October 31,1997
Increase in Net Assets
<S> <C> <C>
Operations
Net investment income $ 10,296 3,398
Net realized gain 196,438 659,135
Change in net unrealized appreciation 1,658,112 524,623
--------------- ------------------
Net Increase in net assets resulting from operations 1,864,846 1,187,156
--------------- ------------------
Distributions to shareholders:
From net investment income (5,420) (2,033)
From net realized gain (753,352) (52,184)
--------------- ------------------
Total Distributions (758,772) (54,217)
Share Transactions
Net proceeds from sale of shares 2,033,840 3,528,668
Shares issued in reinvestment 758,703 54,217
Shares redeemed (782,627) (156,226)
--------------- ------------------
Net increase in net assets resulting
from share transactions 2,009,916 3,426,659
--------------- ------------------
Total increase in net assets 3,115,990 4,559,598
Net Assets
Beginning of period 8,002,674 3,443,076
--------------- ------------------
End of period [including undistributed net investment
income of $10,296 and $3,398, respectively] $ 11,118,664 $ 8,002,674
=============== ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GLOBALT Growth Fund For the year For the year For the period
Financial Highlights ended ended ended
April 30, 1998 October 31, 1997 to October 31, 1996 (b)
Selected Per Share Data
Net asset value, beginning of period $15.66 $12.48 $10.00
--------------- ---------------- ---------------
Income from investment operations
Net investment income 0.02 0.01 0.01
Net realized and
unrealized gain (loss) 2.84 3.34 2.47
--------------- ---------------- ---------------
Total from investment operations 2.86 3.35 2.48
--------------- ---------------- ---------------
Less Distributions
From net investment income (0.01)
---------------
From net realized gain (1.39) (0.17) 0.00
--------------- ---------------- ---------------
--------------- ----------------
Total distributions (1.40) (0.17)
--------------- ----------------
Net asset value, end of period $17.12 $15.66 $12.48
Total Return 40.(a) 27.15% 27.(a)
Ratios and Supplemental Data
Net assets, end of period (000) $ 11,119 $8,003 $3,443
Ratio of expenses to average net assets 1.17(a) 1.17% 1.16(a)
Ratio of expenses to average net assets
before reimbursement 1.21(a) 1.19% 1.25(a)
Ratio of net investment income to
average net assets 0.21(a) 0.06% 0.11(a)
Ratio of net investment income to average
net assets before reimbursement 0.18(a) 0.04% 0.02(a)
Portfolio turnover rate 77.02(a) 110.01% 66.42(a)
Average commission rate 0.0600 0.0600 0.0740
<FN>
(a) Annualized
(b) For the period December 5, 1995 (commencement of operations.)
</FN>
</TABLE>
<PAGE>
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 1. ORGANIZATION
The GLOBALT Growth Fund Inc. (the "Fund") is organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"). The Trust is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company whose objective is to provide long term capital
growth. The Trust Agreement permits the trustees to issue an unlimited number of
shares of beneficial interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal instiutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains GLOBALT , Inc. (the "Adviser") to manage the Fund's
investments. The Adviser was organized as a Georgia Corporation in 1990. Angela
Allen, President of the Adviser, and Samuel Allen, Chairman of the Adviser, are
the controlling shareholders of GLOBALT, Inc. The investment decisions for the
Fund are made by a committee of the Adviser, which is primarily responsible for
the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest fees and
expenses of non-interested person trustees and extraordinary expenses. The
Adviser is voluntarily reimbursing the Fund for trustees fees. There is no
assurance that such reimbursement will continue in the future. As compensation
for its management services and agreement to pay the Fund's expenses, the Fund
is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.17% of the average daily net assets of the Fund.
It should be noted that most investment companies pay their own operating
expenses directly, while the Fund's expenses, except those specified above, are
paid by the Adviser. For the period from November 1, 1997 through April 30,
1998, the Adviser has received a fee of $56,010 from the Fund.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six months ended April 30, 1998, the Administrator received
fees of $15,000 from the Adviser for administrative services provided to the
fund.
GLOBALT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1998 was
$8,517,890.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six months For the six months For the year ended
For the year ended ended April 30, ended April 30,
October 31, 1997 October 31, 1997
1998 1998
Shares Dollars Shares Dollars
Shares sold 131,279 2,033,840 241,426 $3,528,668
Shares issued in
reinvestment of
dividends 53,733 758,703 4,216 54,217
Shares redeemed (46,444) (782,627) (10,682) (156,226)
-------- --------- -------- ---------
138,568 2,009,916 234,960 $3,426,659
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1997 through April 30, 1998, purchases and sales
of investment securities, other than short-term investments, aggregated
$5,306,057 and $3,708,119, respectively. The gross unrealized appreciation for
all securities totaled $2,508,959 and the gross unrealized depreciation for all
securities totaled $18,043 for a net unrealized appreciation of $2,490,916. The
aggregate cost of securities for federal income tax purposes at April 30, 1998
was $8,629,976. .
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
CARL DOMINO EQUITY INCOME FUND
Schedule of Investments - (Unaudited) April 30, 1998
<TABLE>
<S> <C> <C>
Common Stocks - 96.1% Shares Value
Autos, Auto Parts - 2.6%
Chrysler Corp. 1,635 $ 65,707
Tenneco, Inc. 2,300 99,044
----------------
----------------
164,751
----------------
Chemicals - 2.1%
Witco Corp. 3,400 134,725
----------------
Paper & Forest Products - 3.1%
Union Camp Corp. 1,400 84,525
Weyerhaeuser Co. 2,000 115,250
----------------
199,775
ENERGY
Oil & Gas - 12.0%
MCN Energy Group Inc. 3,000 113,250
Midcoast Energy Resources 4,400 98,725
Mobil Corporation 700 55,300
Sonat Corporation 3,100 137,562
Sun Co., Inc. 2,500 101,094
USX Marathon Group 2,300 82,369
Williams Companies 1,600 50,600
YPF Sociedad Anonima 3,700 129,037
----------------
767,937
----------------
Publishing - 1.7%
Readers Digest Association 4,020 108,037
----------------
Retail - 4.4%
Intimate Brands 4,100 118,900
May Department Stores 900 55,519
Penney (J.C.) 1,500 106,594
----------------
----------------
281,013
----------------
Lodging, Restaurants, Leisure - 2.2%
Patriot American Hospitality Inc. 5,480 138,370
----------------
NON-DURABLES
Cosmetics 4.5%
Avon Products 1,820 149,581
International Flavors & Fragrances 2,800 137,025
----------------
----------------
286,606
----------------
Food - 3.3%
General Mills 800 54,050
Heinz (H.J.) 1,800 98,100
Quaker Oats 1,200 62,400
----------------
----------------
214,550
----------------
Household Products - 3.8%
Kimberly-Clark Group 2,400 121,800
Tupperware Corp. 4,500 121,781
----------------
243,581
----------------
CARL DOMINO EQUITY INCOME FUND
Schedule of Investments - (Unaudited)- April 30, 1998 - continued
Common Stocks - continued Shares Value
Tobacco - .6%
Philip Morris 1,050 $ 39,178
----------------
HEALTH
Drugs - 5.5%
American Home Products Corp. 1,400 130,375
Glaxo Wellcome PLC 1,800 101,813
Pharmacia & Upjohn Inc. 2,800 117,775
----------------
----------------
349,963
----------------
Diversified Medical - 1.2%
Pall Corporation 4,000 78,500
----------------
Health Care - 3.4%
Baxter International Inc. 1,500 83,156
Oxford Health Plans (a) 8,000 137,000
----------------
----------------
220,156
----------------
Staples/Miscellaneous Services - 1.4%
Deluxe Corporation 2,600 87,100
----------------
Services/Miscellaneous - 6.1%
Boron Lepour Associates (a) 1,000 37,500
DA Consulting Group (a) 1,000 17,625
Healthword Corp(a) 3,000 51,375
ISS Group, Inc (a) 500 22,125
Unisource Worldwide 9,000 114,187
Waste Management 4,500 150,750
----------------
----------------
393,562
----------------
Scientific -.3%
Omega Protein Corp.(a) 1,000 17,500
----------------
Technology- 4.2%
Computer Assoc. Intl 2,000 117,125
Cotelliegent Group 1,000 25,813
Exodus Communication (a) 500 19,000
Hypercom Corp.(a) 8,000 104,000
----------------
----------------
265,938
----------------
Electrical Equipment - 1.8%
Thomas & Betts 2,000 116,750
----------------
Diversified Machinery - 3.2%
Federal Signal Corp. 5,465 117,156
General Signal 2,000 88,000
----------------
----------------
205,156
----------------
CARL DOMINO EQUITY INCOME FUND
Schedule of Investments - (Unaudited)- April 30, 1998 - continued
Common Stocks - continued Shares Value
Airlines, Truckers, & Railroads - 4.0%
Knightsbridge Tankers Ltd. A 5,000 $ 143,750
Union Pacific Corp. 2,100 114,975
----------------
----------------
258,725
----------------
Photography/Office Equipment - 2.8%
Eastman Kodak 1,050 75,797
Minnesota Mining & Manufacturing 1,100 103,812
----------------
----------------
179,609
----------------
Finance
Major Regional & Other Banks - 6.0%
Bankers Trust New York Corp. 1,000 129,125
Nations Bank Corp. 522 39,542
South Trust Corp. 1,650 70,435
Summitt Bancorp 2,900 145,362
----------------
384,464
----------------
Finance - .9%
Ocwen Asset Management (a) 3,000 55,125
----------------
Utilities
Electric Power Companies - 2.6%
EDP Electricidate de Portugal ADR 1,000 52,000
Korea Electric Power Corp.-SP ADR 12,000 111,750
----------------
----------------
163,750
----------------
Natural Gas - 1.9%
Atmos Energy Corp. 1,630 47,983
El Paso Natural Gas Company 2,054 75,870
----------------
----------------
123,853
----------------
Telephone Other - 7.3%
AT&T Corp. 1,800 108,113
Amerilink Corp. (a) 2,000 46,250
China Telecomm (a) 2,000 77,250
Frontier Corp. 4,000 119,750
Telefonica de Argentina (a) 3,000 115,687
----------------
467,050
----------------
REITs - 3.2%
CCA Prison Realty Corp.(a) 2,000 70,875
Mid-America Apartment Communities Inc. 1,000 26,625
SL Green Realty Trust 4,500 108,000
----------------
205,500
----------------
TOTAL COMMON STOCKS - 96.1% (Cost $5,254,164) 6,151,224
----------------
Preferred Stock 1.7%
Conseco Financial Preferred Series F (Cost $100,000) 2,000 109,125
----------------
CARL DOMINO EQUITY INCOME FUND - continued
Schedule of Investments - (Unaudited)- April 30, 1998 - continued
Principal
Amount Amount
Money Market Securities - 2.2%
Star Treasury 4.96% 12/31/98 (Cost $137,168) $ 137,168 $ 137,168
----------------
TOTAL INVESTMENTS - 100.0% (Cost $ 5,491,332) 6,397,517
Other assets less liabilities 1,249
----------------
TOTAL NET ASSETS - 100.00% 6,398,766
----------------
<FN>
(a) non-income producing
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<S> <C>
Assets
Investment in securities, at value (cost $5,491,332) $ 6,397,517
Dividends receivable 8,060
Interest receivable 550
Reimbursement receivable 1,848
--------------------
Total assets 6,407,975
Liabilities
Accrued investment advisory fee payable 7,469
Accrued trustees fees 1,740
-------------------
Total liabilities 9,209
--------------------
Net Assets $ 6,398,766
====================
Net Assets consist of:
Paid in capital $ 5,338,298
Accumulated undistributed net investment income 9,783
Accumulated undistributed net realized gain (loss) on investments 144,500
Net unrealized appreciation on investments 906,185
--------------------
Net Assets, for 375,589 shares $ 6,398,766
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($6,398,766/375,589) $ 17.04
====================
</TABLE>
<PAGE>
<PAGE>
Carl Domino Equity Income Fund
Statement of Operations (Unaudited) for the six months ended April 30, 1998
<TABLE>
<S> <C>
Investment Income
Dividend income $ 63,785
Interest income 2,160
--------------------
Total Investment Income 65,945
Expenses
Investment advisory fee $ 36,810
Trustees' fees 1,848
---------------
Total Expenses before Reimbursement 38,658
Reimbursed expenses (1,848)
---------------
Total Operating Expenses 36,810
--------------------
Net Investment Income (Loss) 29,135
--------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment transactions 162,111
Change in net unrealized appreciation (depreciation) on investment securities 386,688
---------------
Net gain (loss) on investment securities 548,799
--------------------
Net increase (decrease) in net assets resulting from operations $ 577,934
====================
</TABLE>
<PAGE>
<PAGE>
Carl Domino Equity Income Fund
<TABLE>
<S> <C> <C>
Statement of Changes in Net Assets (Unaudited) For the six For the year
months ended ended
April 30, 1998 October 31, 1997
Increase/(Decrease) in Net Assets
Operations
Net investment income $ 29,135 28,588
Net realized gain on investment transactions 162,111 224,774
Change in net unrealized appreciation 386,688 392,756
--------------- ---------------
Net Increase in net assets resulting from operations 577,934 646,118
--------------- ---------------
Distributions to shareholders:
From net investment income (37,359) (11,997)
From net realized gain (250,840) (10,581)
--------------- ---------------
--------------- ---------------
Total distributions (288,199) (22,578)
--------------- ---------------
Capital Share Transactions
Net proceeds from sale of shares 2,171,514 2,354,635
Shares issued in reinvestment of distributions 285,845 20,953
Shares redeemed (98,706) (371,396)
--------------- ---------------
Net increase in net assets resulting
from share transactions 2,358,653 2,004,192
--------------- ---------------
Total increase in net assets 2,648,388 2,627,732
Net Assets
Beginning of period $ 3,750,378 $ 1,122,646
--------------- ---------------
End of period [including undistributed net investment income
of $7,935 and $28,588, respectively.] $ 6,398,766 $ 3,750,378
=============== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund
Financial Highlights (Unaudited)
<S> <C> <C> <C>
For the six months For the year For the period
ended April 30, ended October 31, ended October 31,
Selected Per Share Data 1998 1997 1996 (b)
Net asset value, end of period $16.15 $12.03 $10.00
-------------- -------------- --------------
Income from investment operations
Net investment income 0.12 0.19 0.16
Net realized and unrealized gain (loss) 0.91 4.15 1.87
-------------- -------------- --------------
Total from investment operations 1.03 4.34 2.03
-------------- -------------- --------------
Less Distributions
From net investment income (0.14) (0.22) -
From net realized gain (0.94) - -
-------------- --------------
-------------- --------------
Total distributions (1.08) (0.22) -
-------------- -------------- --------------
Net asset value, end of period $17.04 $16.15 $12.03
Total Return 25.81(a) 36.58% 20.(a)
Ratios and Supplemental Data
Net assets, end of period (000) $6,399 $3,750 $1,122
Ratio of expenses to average
net assets before expense reductions 1.57(a) 1.55% 1.73(a)
Ratio of expenses to average net assets 1.50(a) 1.50% 1.51(a)
Ratio of net investment income to average
net assets before expense reductions 1.11(a) 1.22% 1.35(a)
Ratio of net investment income to average net assets 1.18(a) 1.28% 1.57(a)
Portfolio turnover rate 95.50% 52.49% 62.51(a)
Average commission rate 0.0600 0.0585 0.0604
<FN>
(a) Annualized
(b) For the period November 6, 1995 (commencement of operations) to October 31, 1998
</FN>
</TABLE>
<PAGE>
CARL DOMINO EQUITY INCOME FUND
Notes to Financial Statements
April 30, 1998
NOTE 1. ORGANIZATION
The Carl Domino Equity Income Fund (the "Fund") was organized as a series
of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on August 8,
1995, and commenced operations on November 6, 1995. The Trust is registered
under the Investment Company Act of 1940, as amended, as a diversified series,
open end management investment company. The investment objective of the fund is
to provide long-term growth of capital together with current income. The Trust
Agreement permits the Trustees to issue an unlimited number of shares of
beneficial interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations- Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Adviser's opinion the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Adviser determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Adviser, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
CARL DOMINO EQUITY INCOME FUND
Notes to Financial Statements
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Carl Domino Associates, L.P. (the "Adviser") to manage the
Fund's investments. The Adviser is a limited partnership organized in Delaware
and its general partner is Carl Domino, Inc. The controlling shareholder of Carl
Domino, Inc. is Carl Domino. Mr. Domino is primarily responsible for the day to
day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees, and extraordinary expenses. The
Adviser is voluntarily reimbursing the Fund for trustees fees. There is no
assurance that such reimbursement will continue in the future. As compensation
for its management services and agreement to pay the Fund's expenses, the Fund
is obligated to pay the Adviser a fee computed and accrued daily and paid
monthly at an annual rate of 1.50% of the average daily net assets of the Fund.
It should be noted that most investment companies pay their own operating
expenses directly, while the Fund's expenses, except those specified above, are
paid by the Adviser. For the period from November 1, 1997 through April 30,
1998, the Adviser received a fee of $36,810 from the Fund.
CARL DOMINO EQUITY INCOME FUND
Notes to Financial Statements
April 30, 1998
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six months ended April 30, 1998, the Administrator received
fees of $15,000 from the Adviser for administrative services provided to the
fund.
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1998 was
$5,338,298.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six months For the six months For the year ended For the year ended
ended ended October 31, 1997 October 31, 1997
April 30, 1998 April 30, 1998
Shares Dollars Shares Dollars
Shares sold 130,912 $2,171,514 165,650 $2,354,635
Shares issued in
reinvestment of
dividends 18,442 285,845 1,664 20,953
Shares redeemed (6,015) (98,706) (28,359) (371,396)
------- -------- -------- ---------
143,339 $2,358,653 138,955 $2,004,192
</TABLE>
CARL DOMINO EQUITY INCOME FUND
Notes to Financial Statements
April 30, 1998
NOTE 5. INVESTMENTS
For the period from November 1, 1997 through April 30, 1998, purchases and
sales of investment securities, other than short-term investments, aggregated
$3,212,018 and $2,110,635, respectively. The gross unrealized appreciation for
all securities totaled $1,003,090 and the gross unrealized depreciation for all
securities totaled $96,905 for a net unrealized appreciation of $906,185. The
aggregate cost of securities for federal income tax purposes at April 30, 1998
was $6,397,517.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 7. RELATED PARTY TRANSACTIONS
The Adviser is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of April 30, 1998, Carl Domino
Associates, L.P., and entities which the Adviser could be deemed to control or
have discretion over owned in aggregate more than 25% of the Fund.
<PAGE>
AIT Vision Fund
Investment Results - For the Period Ended April 30, 1997
Dear Fellow Shareholders:
Since the October 31, 1996 fiscal year end, the AIT Vision Fund appreciated 3.9%
for the six months ended April 30, 1997. According to Lipper Analytical
Services, Inc. the average return during this six month period for a peer group
of 799 growth funds was 7.2%. The unmanaged S&P 500 and Russell 3000 indices
advanced 14.7% and 11.9%, respectively, during the same six month period.
Comparative investment results are displayed below.
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------------------------------------ - ----- ------------------- ------- -----------------
Returns for the Periods Ended 4/30/97
- ------------------------------------------------ - ----- ------------------- ------- -----------------
Since Inception Average
Fund/Index 1 Year 12/28/95 Annual
- ---------- ------ -------- ------
AIT Vision Fund 18.2% 31.2% 22.4%
S&P 500 25.1% 34.1% 24.4%
Russell 3000 20.0% 29.4% 21.1%
- ------------------------------ -------- ---------------- ------------------- ------- -----------------
</TABLE>
Comparison of the Change in Value of a $10,000 Investment in AIT Vision Fund,
the Unmanaged S&P 500 Index, and the Unmanaged Russell 3000 Index
CHART
This chart shows the value of a hypothetical initial investment of $10,000 in
the Fund, the S&P 500 Index, and the Russell 3000 Index on December 28, 1995 and
held through April 30, 1997. The S&P 500 Index and the Russell 3000 Index are
widely recognized unmanaged indices of common stock prices. Performance figures
include the change in value of the stocks in the indices, reinvestment of
dividends, and are not annualized. The index returns do not reflect expenses,
which have been deducted from the Fund's return. THE FUND'S RETURN REPRESENTS
PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE RESULTS.
<PAGE>
Commentary - "Vuja De: the distinct feeling that you have never seen
anything like this before"
Those investors who may have been lulled into complacency by the U.S. market's
steady, unwavering upward climb have certainly been awakened by the market's
gyrations during the last six to twelve months. What a ride it has been: the
market peaked in June 1996 and promptly bottomed within the subsequent month,
then rapidly rose to another peak in February 1997 only to dramatically rebound
from a sell off and extreme bearishness during April 1997. This April 1997
rebound has extended its gains to date and continues to defy the well documented
warnings of Alan Greenspan, Warren Buffet, and most of the "talking heads" on
the financial networks. These commentators either proclaim the market's
impending collapse based upon time tested valuation measures or they declare
that things are different this time, a sense of "vuja de" which is the distinct
feeling that one has never experienced anything quite like this before (the
opposite of the well known deja vu).
During this period of heightened volatility, pockets of extreme return
differences have emerged within the broad market. The table below details two of
these extreme differences that have directly impacted the performance of the AIT
Vision Fund.
- -----------------------------------------------------------------------------
Comparative Index Returns for the Period Ended 4/30/97
- -----------------------------------------------------------------------------
Index/Characteristic 6 Months 1 Year
- -------------------- -------- ------
Russell 1000 (Largecap Stocks) 13.1% 22.4%
Russell 800* (Midcap Stocks) 6.7% 10.9%
Russell 2000 (Smallcap Stocks) 1.6% 0.1%
Largecap less Smallcap 11.5% 22.3%
Russell Midcap Value Stocks 10.3% 3.9%
Midcap Value less Midcap Growth 7.5% 13.8%
- ---------------------------------------------- --------------- --------------
* Subset of the Russell 1000.
The quantitative investment strategy followed by the AIT Vision Fund has led us
to typically hold positions which are not highly concentrated among the largest
capitalization nor the smallest capitalization companies, but instead looks for
stocks with steady earnings growth prospects regardless of company size. These
general tendencies have been extremely out of favor recently within the broad
market. As of April 30, 1997, the trailing one year return difference between
largecap and smallcap stocks of 22.3% is the single largest one year difference
since 1979! Unless you have owned the largest companies in the market (e.g.,
General Electric, Coca Cola, Exxon), you have struggled as an investor to keep
pace. This largecap outperformance has been partly the result of investors
pouring money into the market at record levels with a preference for safer, more
liquid stocks. Thus as we spread the AIT Vision Fund's holdings over a universe
of about 3,000 stocks, the narrowness of the market's leadership has worked
against performance.
Furthermore, if you combined diversified capitalization holdings with a growth
stock emphasis, you have recently compounded your pain and performance
struggles. As of April 30, 1997, the trailing one year outperformance of midcap
value over midcap growth stocks of 13.8% is the second largest such difference
since 1981. Therefore, given the extreme uncommon performance differences within
the recent market, no wonder some commentators are proclaiming that things are
different this time.
Outlook
So which will it be? Will the traditional valuation arguments for overvaluation
hold or is the present environment entirely different from the past? Our belief
is best summarized by Mark Twain who said, "The past doesn't repeat itself, but
it sure does rhyme." To us this means that an investor must study the market's
past behavior and be intelligent in employing a discipline based upon sound
economic and financial analysis which adapts to the natural evolution of market
forces.
Looking forward, our belief is that market returns will gradually broaden into
the smaller company stocks; and, due to the gradual deceleration of the U.S.
economy, companies which can deliver earnings growth independent of a slowing
business cycle will be rewarded. Therefore, we believe that the typical biases
of the AIT Vision Fund position it to benefit from these trends as they develop
in the future. Listed below are the top holdings of the AIT Vision Fund as of
April 30, 1997.
- --------------------------------------------------- -------------------- -
Ten Largest Holdings
- --------------------------------------------------- -------------------- -
Percent of
Net Assets
4/30/97
Walt Disney 3.49%
United Airlines 3.39%
Circuit City Stores 3.27%
Microsoft 3.12%
Cigna 3.00%
Enron Oil and Gas 2.92%
United Healthcare 2.91%
Georgia-Pacific 2.89%
Conseco 2.83%
Temple Inland 2.69%
-----
Total 30.51%
- ------------------------------------ ----------------------- ------------------
Thank you for your trust and continued confidence.
Respectfully,
Douglas W. Case, CFA
Managing Director of Portfolio Management
Advanced Investment Technology, Inc.
<PAGE>
<TABLE>
<CAPTION>
AIT Vision U.S. Equity Portfolio
Schedule of Investments April 30, 1997 (Unaudited)
<S> <C> <C>
Common Stock - 98.4% Shares Value
Apparel - 1.3%
TJX Companies Inc. 1,000 47,250
-----------------
Banks - 2.0%
Northern Trust Corp. 1,700 75,650
-----------------
Chemicals - 2.5%
Rohm & Hass & Co. 1,100 91,575
-----------------
Communications & Communications Equipment - 9.5%
Bell South Corp. 900 40,050
Century Telecommunications 2,200 65,725
Cincinnati Bell 1,600 89,600
Clear Channel Communications 900 43,650
Gentex Corp. 1,700 30,600
Worldcom Inc. 3,500 84,000
-----------------
353,625
-----------------
Computers, Periphals & Software- 16.3%
Adobe Systems Inc. 2,000 78,250
Cisco Systems Inc. 1,800 93,150
Comdisco Inc. 1,100 34,925
Computer Associates International 1,700 88,400
Dell Computer 700 58,581
EMC Corp. 1,400 50,925
Intel Corp. 600 91,875
Microsoft Corp. 900 109,350
-----------------
605,456
-----------------
Computer Office Equipment - 1.1%
Black & Decker Corp. 1,200 40,200
-----------------
Cosmetics - 2.5%
Colgate Palmolive 500 55,500
Proctor & Gamble Co. 300 37,725
-----------------
93,225
-----------------
Drugs - 6.6%
Abbott Labs 700 42,700
Bristol Myers Squibb 1,000 65,500
Johnson & Johnson 900 55,125
Merck & Co. Inc. 700 63,350
Pfizer Inc. 200 19,200
-----------------
245,875
-----------------
Electric Utilities - 1.1%
Union Electric Co. 1,200 42,750
-----------------
Energy - Oil & Gas - 6.1%
Anadarkko Petroleum Corp. 1,400 76,825
Enron Oil & Gas Co. 5,500 102,438
Ensco International Inc 1,000 47,500
-----------------
<PAGE>
226,763
-----------------
AIT Vision U.S. Equity Portfolio - continued
Common Stocks - continued
Financial Services - 1.8% Shares Value
Charles Schwab Corp. 1,800 65,925
-----------------
Food - 3.8%
Coca Cola Enterprises Inc. 1,600 96,600
Pepsico Inc. 1,300 45,338
-----------------
141,938
-----------------
Healthcare - 5.2%
Healthsouth Rehabilitation Corp. 4,600 90,850
United Healthcare 2,100 102,112
-----------------
192,962
-----------------
Holding Companies - 3.0%
McDermott International Inc. 2,000 37,000
Nipsco Industrial Inc. 1,000 39,500
Southern Co. 1,800 36,675
-----------------
113,175
-----------------
Industrial Machinery & Equipment - 1.5%
U.S. Filter Corp. 1,900 57,713
-----------------
Insurance - 8.7%
Cigna Corp. 700 105,263
Conseco Inc. 2,400 99,300
Travelers Group 1,000 55,375
Washington Mutual Inc. 1,300 64,187
-----------------
324,125
-----------------
Grocery - 1.7%
Safeway Inc. 1,425 63,591
-----------------
Hotels/Restaurants - 1.8%
Hilton Hotels Corp. 2,500 67,500
-----------------
Paper & Paper Products - 5.3%
Georgia Pacific Corp. 1,300 101,400
Temple Inland Inc. 1,700 94,350
-----------------
195,750
-----------------
Railroad - 1.6%
St. Joe Corp. 800 58,100
-----------------
Retail - 8.5%
American Stores Co. 1,300 59,150
Circuit City Stores Inc. 2,900 114,912
Dillard Department Stores Class A 3,000 92,625
GAP Inc. 1,500 47,812
-----------------
314,499
-----------------
Television, Video Production - 3.3%
Disney (Walt) Co. 1,500 123,000
-----------------
Transportation - 3.2%
UAL Corp. 1,600 119,000
-----------------
TOTAL COMMON STOCKS (Cost $3,590,933) $3,659,647
<PAGE>
-----------------
AIT Vision U.S. Equity Portfolio - continued
Money Market Securities - 1.6% Principal Amount
Star Treasury 4.160%, 12/31/97 $59,597 $59,596
-----------------
Total Bonds & Notes (Cost $59,597)
TOTAL INVESTMENTS - 100.0%
Cost $3,650,529 $3,719,243
-----------------
Other Assets less liabilities - 0.0% (364)
-----------------
TOTAL NET ASSETS - 100% $3,718,879
=================
</TABLE>
<TABLE>
<CAPTION>
AIT Vision U.S. Equity Portfolio April 30,1997
Statement of Assets and Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $3,650,529) $ 3,719,243
Reveivable for securities sold 73,920
Dividends receivable 3,438
Interest receivable 157
Receivable from advisor for trustees fees 876
------------------
Total assets 3,797,634
Liabilities
Accrued advisory fee $ 76,152
Accrued trustees' fees 2,061
Other payables and accrued expenses 542
-----------------
Total liabilities 78,755
------------------
Net Assets 3,718,879
==================
Net Assets consist of:
Paid in capital $ 3,725,810
Undistributed net investment income (loss) 4,259
Undistributed net realized gain (loss) (79,904)
Net unrealized appreciation (depreciation) on investments 68,714
------------------
Net Assets, for 323,716 shares 3,718,879
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($3,718,879/323,716) $ 11.49
==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AIT Vision U.S. Equity Portfolio
Statement of Operations for the Six month period ended April 30, 1997 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 9,114
Interest Income 159
------------------
Total Income 9,273
Expenses
Investment advisory fee $ 5,013
Trustee's fees 876
------------------
Total Expenses before reimbursement 5,889
Reimbursed trustees fees (876)
------------------
Total operating expenses 5,013
------------------
Net Investment Income (Loss) 4,259
------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (81,056)
Change in net unrealized appreciation (depreciation) on
investment securities 34,579
------------------ ------------------
Net gain (loss) (46,477)
------------------
Net increase (decrease) in net assets resulting $ (42,218)
==================
from operations
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AIT Vision U.S. Equity Portfolio
Statement of Changes (Unaudited) November 6, 1995
For the six months (commencement of
ended April 30, operations) to October 31,
<S> <C> <C>
Increase/(Decrease) in Net Assets 1997 1996
Operations
Net investment income (loss) $ 4,259 $ (2,866)
Net realized gain (loss) (81,056) 82,838
Change in net unrealized appreciation (depreciation) 34,579 34,135
--------------- --------------
Net Increase (decrease) in net assets resulting from operations (42,218) 114,107
--------------- --------------
Distributions to shareholders:
From net investment income 0 0
From net realized gain (81,686) 0
--------------- --------------
Total distributions (81,686)
Share Transactions
Net proceeds from sale of shares 3,152,207 536,013
Shares issued in reinvestment 81,686 0
Shares redeemed (18,269) (47,961)
--------------- --------------
Net increase (decrease) in net assets resulting
from share transactions 3,215,624 488,052
--------------- --------------
Total increase (decrease) in net assets 3,091,720 602,159
Net Assets
Begining of period $ 627,159 $ 25,000
--------------- --------------
End of period including undistributed net investment
income(loss) of $4,259 and $(2,866) $ 3,718,879 $ 627,159
=============== ==============
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (Unaudited) November 6, 1995
For the six months (commencement of
Selected Per Share Data ended April 30, operations) to October 31,
1997 1996
<S> <C> <C>
Net asset value,
begining of period $12.62 $10.00
-------------- --------------
Income from investment
Operations
Net investment income 0.03 (0.07)
Net realized and
unrealized gain (loss) 0.44 2.69
-------------- --------------
Total from investment operations 0.47 2.62
Less Distributions
From net investment income (1.60) 0.00
-------------- --------------
Net asset value,
end of period $11.49 $12.62
============== ==============
Total Return (a) -(18.05)% 31.03%
Ratios and Supplemental Data
Net assets, end of period (000) $3,719 $627
Ratio of expenses to
average net assets (a) 0.69% 1.87%
Ratio of expenses to
average net assets before reimbursement (a) 0.81% 1.87%
Ratio of net investment income to
average net assets (a) 0.58% -0.70%
Ratio of net investment income to
average net assets before reimbursement (a) 0.46%
Portfolio turnover rate (a) 179.07% 238.63%
Average commission rate 0.041 0.0471
(a) Annualized
</TABLE>
<PAGE>
AIT VISION U.S. EQUITY PORTFOLIO
Notes to Financial Statements
April 30, 1997
1. ORGANIZATION
The AIT Vision U.S. Equity Portfolio (the "Fund") was organized as a series
of the AmeriPrime Funds, an Ohio business trust (the "Trust"), on August 8,
1995, and commenced operations on November 6, 1995. The Trust is registered
under the Investment Company Act of 1940, as amended, as a diversified series,
open end management investment company. The Trust Agreement permits the Trustees
to issue an unlimited number of shares of beneficial interest of separate series
without par value.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations- Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Adviser's opinion the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Adviser determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Adviser, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
<PAGE>
AIT VISION U.S. EQUITY PORTFOLIO
Notes to Financial Statements
April 30, 1997
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Advanced Investment Technology, Inc. (the "Adviser") to
manage the Fund's investments. Dean S. Barr is a controlling shareholder of the
Adviser. Douglas W. Case, CFA, Director of Equity Portfolio Management, Dean S.
Barr, Chairman and Chief Investment Officer, and Susan L. Reigel, Portfolio
Management, are primarily responsible for the day to day management of the
Fund's portfolio. Prior to October 29, 1996, the Fund was managed by LBS Capital
Management, Inc.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees, and extraordinary expenses. As
compensation for its management services and agreement to pay the Fund's
expenses, the Fund is obligated to pay the Adviser a fee computed and accrued
daily and paid monthly at an annual rate of 0.70% of the average daily net
assets of the Fund. It should be noted that most investment companies pay their
own operating expenses directly, while the Fund's expenses, except those
specified above, are paid by the Adviser. For the period from November 1, 1996
through April 30, 1997, the Adviser has received a fee of $5,013 from the Fund.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1997 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1997 was
$3,728,676.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the period from For the period
November 6, 1995 from November 6,
(Commencement of 1995 (Commencement
Operations) through of Operations)
For the six month For the six month October 31, 1997 through October
period ended April period ended April 31, 1997
30, 1997 30, 1997
Shares Dollars Shares Dollars
Shares sold 268,461 $3,152,207 51,315 $536,013
Shares issued in
reinvestment of
dividends 7,210 81,686 0 0
Shares redeemed (1,648) (18,269) (4,122) (47,961)
------- -------- ------- --------
274,023 $3,215,624 47,193 $488,052
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1996 through April 30, 1997, purchases and
sales of investment securities, other than short-term investments, aggregated
$5,354,480 and $2,256,474 respectively. The gross unrealized appreciation for
all securities totaled $68,714 and the gross unrealized depreciation for all
securities totaled $153,022 for a net unrealized appreciation of $84,308. The
aggregate cost of securities for federal income tax purposes at April 30, 1997
was $3,650,529.
<PAGE>
AIT VISION U.S. EQUITY PORTFOLIO
Notes to Financial Statements
April 30, 1997
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 7. RELATED PARTY TRANSACTIONS
The Adviser is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund under Section
2(a)(9) of the Investment Company Act of 1940. As of April 30, 1997, LBS Capital
Management Inc., and entities which the Adviser could be deemed to control or
have discretion over owned in aggregate more than 25% of the Fund.
<PAGE>
New Cap Contrarian Fund
Schedule of Investments - (Unaudited)- April 30, 1998
<TABLE>
<S> <C> <C>
Common Stock - 107.0% Shares Value
Auto Parts & Products - 10.4%
Boston Acoustics Inc. 1,000 $ 31,625
Chicago Rivets & Machine Co. 1,800 65,250
Johnson Controls Inc. 1,000 59,375
------------------
------------------
156,250
------------------
Communications - 1.5%
Davox Corp (a) 1,000 22,375
------------------
Computer Services & Software - 1.1%
3Com* (a) 500 17,125
------------------
Financial Services - .7%
J W Charles Financial Services (a) 800 9,900
------------------
Industrial Machinery & Equipment - 10.8%
Carlisle Cos. Inc. 1,000 50,750
Gardner Denver Machinery Inc. (a) 1,500 42,281
Moore Products Co. 1,000 35,000
Newport Corp 1,400 28,525
Zygo Corp.(a) 300 6,375
------------------
162,931
------------------
Industrial Products - 1.3%
Deswell Industries, Inc. 1,000 19,875
------------------
Industrial Services - 8.1%
Kaydon Corp. 2,800 122,675
------------------
Insurance - 10.6%
CorVel Corp.(a) 1,000 35,625
Sun America Inc. 2,500 124,844
------------------
160,469
------------------
Medical Services - 1.8%
Dionex Corp. (a) 500 26,688
------------------
Medical Supplies & Equipment -5.2%
PSS World Medical Inc. (a) 3,500 78,531
------------------
Metal Recycling Services - 1.7%
Metal Management Inc.(a) 2,000 25,875
------------------
New Cap Contrarian Fund
Schedule of Investments -(Unaudited)- April 30, 1998 - continued
Common Stock - continued Shares Value
Non-Precious Metals Mining - Exploration - 2.5%
Adrian Resources Ltd. (Panama) (a) 10,000 $ 6,250
Consolidated Magna Ventures Ltd. (Canada) 45,500 12,724
Farrallon Resources Ltd. 6,000 18,037
------------------
37,011
------------------
Precious Metals Mining - Exploration - 12.9%
Brandon Gold Corp. 38,800 26,583
Manhattan Minerals Corp. 12,500 34,956
Nevsun Resources (Ghana, Mali) 55,400 115,031
Oliver Gold Corp. (Mali, Zimbabwe) 98,600 17,922
------------------
194,492
------------------
Precious Metals Mining - Producing - 21.5%
Bema Gold Corp. (Chile) (a) 3,000 7,500
Banro Resource Corp. (Zaire) 16,000 68,513
Crystallex International Corp. (a) 60,000 247,500
------------------
------------------
323,513
------------------
Oil & Oilfield Services - 5.2%
Arakis Energy Corp. (a) 10,000 17,500
World Fuel Services Corp. 3,000 60,563
------------------
------------------
78,063
------------------
Retail - 11.7%
Paul Harris Stores (a) 3,000 44,813
Pier One Imports Inc. 4,500 118,687
Stride Rite Corp. 1,000 12,562
------------------
176,062
------------------
TOTAL COMMON STOCKS 107.0% (Cost $1,894,149) 1,611,835
------------------
OPTIONS -
Short Options -
Description Strike Price Expiration Contracts
Dionex Corp. 60 Jul. 1998 5 1,281
Sun America, Inc. 60 Dec. 1998 17 4,038
------------------
TOTAL OPTIONS - (0.3%) (Cost $7,541) (5,319)
------------------
TOTAL INVESTMENTS - 106.7% (Cost $1,886,608) $ 1,606,516
Liabilities less other assets - (6.7%) (100,498)
------------------
TOTAL NET ASSETS - 100.0% $ 1,506,018
<FN>
==================
Legend
(a) non-income producing
</FN>
</TABLE>
<PAGE>
New Cap Contrarian Fund April 30, 1998
Statement of Assets & Liabilities
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cost $1,886,608) $ 1,606,516
---------------------
Liabilities
Payable to custodian bank 93,902
Accrued advisory fee 3,184
Accrued trustees' fees 689
Accrued distribution fees 2,708
Other payables and accrued expenses 15
------------------
Total liabilities 100,498
---------------------
Net Assets $ 1,506,018
=====================
Net Assets consist of:
Paid in capital $ 1,806,914
Accumulated undistributed net investment income(loss) (63,162)
Accumulated undistributed net realized gain(loss) 42,358
Net unrealized (depreciation) on investments (280,092)
---------------------
Net Assets, for 182,813 shares $ 1,506,018
=====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($1,506,018/182,813) $ 8.24
=====================
</TABLE>
<PAGE>
New Cap Contrarian Fund
Statement of Operations for the six months ended April 30, 1998
<TABLE>
<S> <C> <C>
Investment Income
Dividend Income $ 2,592
Interest Income 431
-----------------
Total Income 3,023
Expenses
Management fee $ 19,092
12-B1 fees 1,909
Trustees' fees 635
-----------------
Total Expenses 21,636
-----------------
Net Investment Income (Loss) (18,613)
-----------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities 8,013
Net realized gain (loss) on options transactions 0
Change in net unrealized appreciation (depreciation) on investment securities (55,137)
-----------------
Net gain (loss) (47,124)
-----------------
Net increase (decrease) in net assets resulting from operations $ (65,737)
=================
</TABLE>
<PAGE>
New Cap Contrarian Fund
<TABLE>
<S> <C> <C>
Statement of Changes in Net Assets (Unaudited)
For the six For the year
months ended ended
Increase/(Decrease) in Net Assets April 30, 1998 October 31, 1997
Operations
Net investment income (loss) $ (18,613) (44,549)
Net realized gain (loss) on securities transactions 8,013 171,581
Net realized gain (loss) on options transactions - (75,762)
Change in net unrealized appreciation (depreciation) (55,137) (177,571)
--------------- ------------------
Net Increase (decrease) in net assets resulting from operations (65,737) (126,301)
--------------- ------------------
Distributions to shareholders:
From net investment income - -
From net capital gains (38,200) -
--------------- ------------------
Total distributions (38,200) -
--------------- ------------------
Share Transactions
Net proceeds from sale of shares 56,807 762,466
Shares issued in reinvestment 38,200 -
Shares redeemed (167,150) (461,769)
--------------- ------------------
Net increase (decrease) in net assets resulting
from share transactions (72,143) 300,697
--------------- ------------------
Total increase (decrease) in net assets (176,080) 174,396
Net Assets
Beginning of period 1,682,098 1,507,702
--------------- ------------------
End of period [including net investment income (loss) of
of $(44,549) and $(5,245), respectively] $ 1,506,018 $ 1,682,098
=============== ==================
</TABLE>
New Cap Contrarian Fund
<TABLE>
<S> <C> <C> <C>
Financial Highlights
For the six months ended For the year ended For the period ended
Selected Per Share Data April 30, 1998 October 31, 1997 October 31, 1996 (b)
Net asset value, $8.74 $9.21 $10.00
--------------- ------------- -------------
begining of period
Income from investment operations
Net investment income (0.10) (0.22) (0.05)
Net realized and unrealized gain (loss) (0.33) (0.23) (0.74)
--------------- ------------- -------------
Total from investment operations (0.43) (0.45) (0.79)
--------------- ------------- -------------
Less Distributions
From net interest income - - -
From net capital gain (0.07) - -
--------------- ------------- -------------
Total distributions (0.07) - -
--------------- ------------- -------------
Net asset value,
end of period $8.24 $8.76 $9.21
Total Return (6.63%(a) (4.89)% (15.80)(a)%
Ratios and Supplemental Data
Net assets, end of period (000) $1,506 $1,682 $1,508
Ratio of expenses to
average net assets 2.83%(a) 2.83% 2.89(a)
Ratio of net investment income to
average net assets (2.44)%(a) (2.56)% -1.16(a)
Portfolio turnover rate 71%(a) 146% 92%(a)
Average commission rate 0.0279 0.0375 0.0497
<FN>
(a) Annualized
(b) May 2, 1996 (commencement of operations) to October 31, 1996.
</FN>
</TABLE>
<PAGE>
NEW CAP CONTRARIAN FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
1. ORGANIZATION
The New Cap Contrarian Fund (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on December 26, 1995 and
commenced operations on May 2, 1996. The Trust is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
management investment company. The investment objective of the fund is provide
maximum long term growth. The Trust Agreement permits the trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
NEW CAP CONTRARIAN FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains. However, for the taxable year ended October 31, 1996 the
Fund did not qualify to be taxed as a "regulated investment company" for federal
income tax purposes. The Fund intends to qualify as a "regulated investment
company" in subsequent years. This non-qualification had no effect on net asset
value or tax owed by the Fund.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Newport Investment Advisors, Inc. (the "Adviser") to
manage the Fund's investments. Kenneth M. Holeski, president and controlling
shareholder of the Adviser, is primarily responsible for the day to day
management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except 12b-1 fees, brokerage, taxes,
interest, fees and expenses of non-interested person trustees and extraordinary
expenses. As compensation for its management services and agreement to pay the
Fund's expenses, the Fund is obligated to pay the Adviser a fee computed and
accrued daily and paid monthly at an annual rate of 2.50% of the average daily
net assets of the Fund. It should be noted that most investment companies pay
their own operating expenses directly, while the Fund's expenses, except those
specified above, are paid by the Adviser. For the period from November 1, 1997
through April 30, 1998, the Adviser received a fee of $19,092 from the Fund.
NEW CAP CONTRARIAN FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six months ended April 30, 1998, the Administrator received
fees of $15,000 from the Adviser for administrative services provided to the
fund.
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares
of capital stock authorized for the Fund. Paid in capital at April 30, 1998 was
$1,806,914.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six For the six months For the year ended For the year ended
months ended ended October 31, 1997 October 31, 1997
April 30, 1998 April 30, 1998
Shares Dollars Shares Dollars
Shares sold 7,565 $56,807 82,953 $762,422
Shares issued in
reinvestment of
dividends 5,107 38,200 0 0
Shares redeemed (21,883) (167,150) (54,641) (461,769)
-------- --------- -------- ---------
(9,211) $(72,143) 28,312 $300,697
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1997 (commencement of operations) through April
30,1998 , purchases and sales of investment securities, other than short-term
investments, aggregated $546,739 and $557,158, respectively. The gross
unrealized appreciation for all securities totaled $267,060 and the gross
unrealized depreciation for all securities totaled $547,152 for a net unrealized
depreciation of $280,092. The aggregate cost of securities for federal income
tax purposes at April 30, 1998 was $1,886,608. As of April 30, 1998 the Fund has
invested 38.7% of its net assets in foreign securities.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
NEW CAP CONTRARIAN FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 7. RELATED PARTY TRANSACTIONS
The Adviser is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of April 30,1998, Cheryl
Holeski (wife of the President and controlling shareholder of Newport Investment
Advisor) owns more than 25% of the fund.
<PAGE>
Dear Fellow Shareholders,
Human nature often runs counter to common sense. While impatience can
be a catalyst for change and progress, it can also be the main culprit in many
of life's mistakes. Consider this common example: A man is standing in line at
the grocery store with a gallon of milk. He's chosen the express line since he
has saved time by doing so in the past. After barely moving for five minutes he
notices a lady with five bags of groceries heading to her car. He recalls that
she was still shopping when he entered the express line. After several more
minutes with little progress, he abandons his express line and heads for what
appears to be a faster checker. As he now stands in his new, slower line his
frustration escalates while watching the folks previously behind him in the
express line head for their cars, groceries in hand.
Obviously in hindsight, the man's impatience caused him to make a poor
decision at the worst possible time. It is this same impatience that can cause
an investor to sell a lagging stock just before it doubles in price. Similarly,
mutual fund investors may be tempted to chase returns, in other words, reverse a
good decision in order to chase what appears to be a better return at the
moment. It is important to be aware of this basic human tendency.
In our last annual report, we pointed out the ups and downs that should
be expected with our concentrated, yet diversified approach. We emphasized how
undervalued our portfolio was compared to the overall market and how well our
fund held up on the days when the market took its worst beatings. Finally we
noted that our style, while historically successful, had recently produced some
disappointing performance, which we viewed as a buying opportunity and
recommended that investors do the same.
Kudos to those who did. "Buying on dips" takes discipline and is never
easy, yet the strategy seems to consistently reward investors over time. In the
six months since our last writing, shares in the IMS Capital Value Fund have
increased by 12.87% (+25.74% annualized). With a diversified portfolio of thirty
to thirty-five, hand-picked companies, our results tend to be determined more by
the performance of our largest holdings than by the direction of the overall
market. Several of the undervalued and largely undiscovered gems in our
portfolio have been starting to get noticed. Rubbermaid, our largest holding at
7% of fund assets, gained over 20% during the period, including dividends, as it
reported earnings that exceeded Wall Street's expectations. Other top performers
among our ten largest holdings included Fruit of the Loom, up 42%, which
surprised the analysts with earnings that nearly doubled their expectations;
Waste Management, rose 43% as it announced a well-received merger with USA
Waste, giving the company access to one of the top C.E.O.'s in the business;
Office Depot, up 60% on strong earnings growth; and U.S. West Media, up 50% on a
general resurgence of the cable industry after Microsoft's $1 billion investment
and extremely positive operating results. Conversely, Sunbeam, after a strategic
acquisition of Coleman, First Alert and the maker of Mr. Coffee, surprised
everyone with very disappointing earnings as the stock got clobbered, dropping
from $45 to $25.
For investors who purchased shares at the fund's inception in August
of 1996, your investment adjusted for dividends and capital gains has gained
36.12% or 19.46% on an annualized basis. The fund has returned 19.83% to
shareholders over the last 12 months.
We continue to search out quality companies trading at historically low
valuations based on their fundamentals: Price-to-book, price-to-earnings,
price-to-sales and price-to-cash flow. We look for globally-diversified
companies with good business characteristics that have been out of favor with
investors for quite some time. We analyze twenty-eight aspects of the company
using our valuation model and assign a score based on the results. If we
determine that a company is a candidate for ownership, we then wait for the
company to exhibit some concrete signs that a turn around is indeed underway. By
owning a diversified collection of undervalued, blue chip stocks with the above
characteristics, we believe the fund provides shareholders with a lower level of
risk than many other, more aggressive investment styles.
Runaway bull markets can have some very strange side effects. They can
make some very smart managers look a bit boring and they have a way of making
lucky speculators look smart. The term "bull market genius" comes to mind. These
are the folks who've seen a couple of their stocks double in the last two years
and are now ready to start telling you what to do with your money. We've also
seen some well-known value managers throw in the towel and start chasing
over-priced growth stocks such as Coke, Gillette and Microsoft. Although the
market may be trading at record highs, the companies in your fund's portfolio
are still very reasonably priced. While the S & P 500 trades at roughly six
times book value, the IMS Capital Value Fund trades at just three times book. Be
assured that our convictions remain strong. We will not be drawn into the fray
of frothy and excessive valuations, rather, we will continue striving to both
grow and protect our shareholders assets.
Thank you for joining all of us at IMS Capital Management as
shareholders in the fund. We are working diligently towards our goal of making
the IMS Capital Value Fund one of the most respected and successful value funds
in the industry.
Carl W. Marker Douglas E. Johanson, C.F.A
Portfolio Manager Research Analyst
<PAGE>
IMS Capital Value Fund
Schedule of Investments - (Unaudited) April 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Common Stocks - 94.7% Shares Value
Apparel - 5.5%
Fruit of the Loom (a) 17,000 $ 635,375
Nike Inc. (Class B) 1,000 47,750
--------------------
--------------------
683,125
--------------------
Cable TV & Equipment - 7.4%
General Instrument Corp. 19,000 426,313
U.S. West Media Group (a) 13,000 490,750
--------------------
--------------------
917,063
--------------------
Communications - 5.0%
Paging Network Inc. 24,000 337,500
Motorola Inc. 5,000 278,125
--------------------
--------------------
615,625
--------------------
Computer & Related Technologies - 12.8%
Electronic Data Systems 16,000 688,000
Intel Corp. 4,000 323,250
Novell, Inc.(a) 27,000 270,000
Symantec Corp. 10,000 290,000
--------------------
--------------------
1,571,250
--------------------
Computers & Peripherals - 2.6%
American Power Conversion (a) 10,000 321,875
--------------------
Environmental - 5.2%
Waste Management Inc. 19,000 636,500
--------------------
Food & Tobacco - 3.8%
RJR Nabisco Holdings Corp. 17,000 472,812
--------------------
Food Distribution - 2.3%
Fleming Companies 15,000 281,250
--------------------
Other Services - 5.4%
H & R Block 7,400 333,000
Olsten Corp. 24,000 328,500
--------------------
--------------------
661,500
--------------------
Healthcare Products - 6.0%
Bausch & Lomb 7,500 370,781
IVAX Corp. (a) 38,000 370,500
--------------------
--------------------
741,281
--------------------
Other Consumer Goods Services - 8.8%
Singer Co. 25,000 242,188
Shaw Industries, Inc. 28,000 453,250
Toy Biz (a) 37,000 386,187
--------------------
--------------------
1,081,625
--------------------
IMS Capital Value Fund
Schedule of Investments - (Unaudited) April 30, 1998 - continued
Common Stocks - continued
Hospitals & Managed Care - 4.9% Shares Value
PacifiCare Health Systems, Inc. (Class A) (a) 4,500 $ 316,125
Foundation Health Systems (a) 10,000 289,375
--------------------
--------------------
605,500
--------------------
Household Products - 8.9%
Sunbeam Corp. 13,000 326,625
Rubbermaid Inc. 27,000 772,875
--------------------
--------------------
1,099,500
--------------------
Insurance - 2.8%
Conseco Inc. 7,000 347,375
--------------------
Energy - 2.8%
YPF S.A. Sponsored ADR (a) 10,000 348,750
--------------------
Retail - 7.6%
PETsMART, Inc. (a) 37,000 434,750
Office Depot Inc. (a) 15,000 496,875
--------------------
931,625
--------------------
Utilities - 2.9%
Niagra Mohawk Power(a) 14,000 171,500
Texas Utilities Co. 4,500 180,000
--------------------
--------------------
351,500
--------------------
TOTAL COMMON STOCKS (Cost $ 9,957,310) $ 11,668,156
====================
Money Market Securities - 5.3%
Star Treasury 4.61%, 12/31/98 (Cost $ 648,159) 648,159
--------------------
TOTAL INVESTMENTS - 100.0% (Cost $ 10,605,469) 12,316,315
Other assets less liabilities 2,310
--------------------
TOTAL NET ASSETS - 100% $ 12,318,625
====================
(a) non-income producing
</TABLE>
<PAGE>
IMS Capital Value Fund
Statement of Assets & Liabilities (Unaudited)
April 30, 1998
<TABLE>
<S> <C>
Assets
Investment in securities, at value (cost $10,605,469) $ 12,316,315
Interest receivable 441
Deferred Organizational Costs 20,214
----------------------
Total assets 12,336,970
Liabilities
Redemptions payable 1,931
Accrued advisory fee payable 16,415
-------------------
Total liabilities 18,346
----------------------
Net Assets $ 12,318,624
======================
Net Assets consist of:
Paid in capital $ 10,829,388
Accumulated undistributed net investment income (108,185)
Accumulated undistributed net realized gain (113,425)
Net unrealized appreciation on investments 1,710,846
----------------------
Net Assets, for 975,430 shares $ 12,318,624
======================
Net Asset Value
Net Assets
Offering price and redemption price per share ($12,318,624/975,430) $ 12.63
======================
</TABLE>
<PAGE>
IMS Capital Value Fund
Statement of Operations for the six months ended April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividend Income $ 59,250
Interest Income 4,233
---------------------
Total Income 63,483
Expenses
Investment advisory fee $ 86,761
Administration fee 15,000
Transfer agent fee 11,964
Fund accounting fee 8,100
Legal fees 4,244
Custodian fee 4,003
Amortization of ogranizational expenses 2,416
Audit fees 690
Registration fees 1,954
Shareholder reports 1,957
Trustees fees 270
Miscellaneous 2,306
---------------------
Total operating expenses before reimbursement 139,665
Reimbursed expenses (42,115)
---------------------
Total operating expenses 97,550
---------------------
Net Investment Income (Loss) (34,067)
---------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (90,558)
Change in net unrealized appreciation (depreciation) on
on investment securities 1,511,303
---------------------
Net gain (loss) on investment securities 1,420,745
---------------------
Net increase (decrease) in net assets resulting
from operations $ 1,386,678
=====================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets (Unaudited) For the six For the
months ended year ended
April 30, 1998 October 31, 1997
<S> <C> <C>
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (34,067) (48,844)
Net realized gain (loss) (90,558) 672,917
Change in net unrealized appreciation (depreciation) 1,511,303 (44,863)
--------------- ---------------
Net Increase in net assets resulting from operations 1,386,678 579,210
--------------- ---------------
Distributions to shareholders:
From net investment income (25,273) -
From net capital gain (682,377) -
--------------- ---------------
--------------- ---------------
Total distributions (707,650) -
--------------- ---------------
Share Transactions
Net proceeds from sale of shares 2,011,841 5,141,834
Shares issued in reinvestment 702,348 -
Shares redeemed (1,006,542) (529,761)
--------------- ---------------
Net increase in net assets resulting
from share transactions 1,707,647 4,612,073
--------------- ---------------
Total increase in net assets 2,386,675 5,191,283
Net Assets
Beginning of period 9,931,949 4,740,666
--------------- ---------------
End of period [including undistributed net investment
income (loss) $(34,067) and $(48,844), respectively$] 12,318,624 $ 9,931,949
=============== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund
Financial Highlights (Unaudited) For the six For the For the
months ended year ended period ended
Selected Per Share Data April 30, 1998 October 31, 1997 October 31, 1996
<S> <C> <C> <C>
Net asset value, beginning of period $12.06 $10.76 $10.00
----------------- ---------------- ----------------
Income from investment operations
Net investment income -(0.04) (0.08) (0.01)
Net realized and unrealized gain (loss) 1.37 1.38 0.77
----------------- ---------------- ----------------
Total from investment operations 1.41 1.30 0.76
================= ================ ================
Less Distributions
From net interest income (0.03) 0.00 0.00
From net capital gain (0.81) 0.00 0.00
----------------- ---------------- ----------------
----------------- ---------------- ----------------
Total distributions (0.84) 0.00 0.00
----------------- ---------------- ----------------
Net asset value, end of period $12.63 $12.06 $10.76
================= ================ ================
Total Return 25.(a) 12.08% 30.(a)
Ratios and Supplemental Data
Net assets, end of period (000) $ 12,319 $9,932 $4,741
Ratio of expenses to
average net assets 2.(a) 2.54% 1.(a)
Ratio of expenses to average net
assets before reimbursement 1.(a) 1.97% 3.(a)
Ratio of net investment income to
average net assets (0.(a)) (0.64%) (0.(a)%
Ratio of net investment income to average
net assets before reimbursement (1.(a)) 1.20% (2.(a)%
Portfolio turnover rate 34.(a) 34.76% 3.56%
Average commission rate 0.05142 0.0439 0.0416
</TABLE>
<PAGE>
IMS CAPITAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 1. ORGANIZATION
The IMS Capital Value Fund. (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on July 30, 1996 and
commenced operations on August 5, 1996. The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The investment objective of the fund is to
provide long-term growth to its shareholders a value oriented contrarian
philosophy by investing in large high quality dividend paying U.S. companies.
The Trust Agreement permits the trustees to issue an unlimited number of shares
of beneficial interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
IMS CAPITAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains IMS Capital Management, Inc. (the "Adviser") to manage the
Fund's investments. Carl W. Marker, Chairman and President of the Adviser, is
primarily responsible for the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
1.59% of the average daily net assets of the Fund. For the period from November
1, 1997 through April 30, 1998, the Adviser received a fee of $86,761 from the
Fund. The Adviser is voluntarily reimbursing certain Fund expenses. There is no
assurance that such reimbursement will continue in the future.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six months ended April 30, 1998, the Administrator received
fees of $15,000 from the Adviser for administrative services provided to the
fund.
IMS CAPITAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares
of capital stock authorized for the Fund. Paid in capital at was $10,829,388.
Transactions in capital stock were as follows:
For the year ended For the year ended For the year ended
For the year ended April 30, 1998 April 30, 1998
October 31, 1997 October 31, 1997
<TABLE>
<S> <C> <C> <C> <C>
Shares Dollars Shares Dollars
Shares sold 173,176 $2,011,841 426,253 $5,141,834
Shares issued in
reinvestment of
dividends 65,032 702,348 0 0
Shares redeemed (86,549) (1,006,542) (43,144) (529,761)
-------- ----------- -------- ---------
151,659 $1,707,647 383,109 $4,612,073
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1997 through April 30, 1998, purchases and sales
of investment securities, other than short-term investments, aggregated
$4,702,710 and $3,702,590, respectively. The gross unrealized appreciation for
all securities totaled $2,132,463 and the gross unrealized depreciation for all
securities totaled $421,618 for a net unrealized appreciation of $1,710,845. The
aggregate cost of securities for federal income tax purposes at April 30, 1998
was $10,605,469.
IMS CAPITAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
Fountainhead Special Value Fund
King Investment Advisors, Inc.
Fellow Shareholders:
For the six months ended April 30, 1998, we are pleased to report that the
Fountainhead Special Value Fund delivered outstanding results, generating a
return of 23.2% for its shareholders and outperforming its benchmark indices,
the S&P 500 (+22.5%) and the S&P 400 MidCap Index (+19.2%). In fact, for the
twelve months ended April 30, 1998, the Fund handily outperformed its comparable
indices, returning 67.1% (versus 41.1% for the S&P 500 and 47.9% for the S&P
400), and ranked second of 278 among all other mid-cap funds over the same time
frame, according to Lipper Analytical Services.
CHART
Recent Success and the Role of our Private-Market Value Approach
Consistent with our prior period's results, the Fund's returns were once again
aided by our success in identifying stocks trading at a discount to their
private-market value. Over the six-month period, five additional mergers or
acquisitions of stocks owned in the Fund were announced. We started 1998 on
solid ground as Southern New England Telecommunications (SNG), a
Connecticut-based independent telecommunications company, announced a definitive
agreement to be acquired by SBC Communications, Inc. for 0.8784 shares of SBC
stock ($65.83 per share). KING first bought SNG for the Fund at the end of June
1997 at an average price of $40.15 per share. At the time, we believed the
Company would eventually be acquired as industry consolidation progressed and
companies continued to build mass to compete more efficiently and effectively.
We estimated that SNG was worth approximately $60 to $70 per share on a deal. As
a result of the acquisition, SNG generated a return of more than 60% for the
Fund's shareholders. After the acquisition was announced, we sold our position
to realize our gains, as SNG had met our price target. The merger will probably
not close until the end of 1998 as both companies seek regulatory approval and
may face possible antitrust concerns. Rather than waiting to receive SBC stock,
we decided to redeploy the capital elsewhere. Also in January, Comcast UK Cable
Partners, a small-cap operator of Comcast Corp.'s cable-television and
telecommunications assets in the United Kingdom, announced an agreement to be
acquired by NTL, Inc. at a 30% premium to the prior day's close.
On February 13, the acquisition of Coast Savings Financial (CSA) by H. F.
Ahmanson (AHM) closed. The acquisition, announced in October 1997, had to that
point generated a 37% return for the Fund's shareholders. After the announcement
of AHM's CSA acquisition, we decided to hold CSA and receive AHM stock, as AHM's
fundamentals were positive and the recent CSA purchase made it California's
trophy S&L franchise. We believed that another financial institution would
eventually acquire AHM and that it was worth $80 to $90 per share. Our analysis
proved accurate. On March 17--just over a month after the CSA merger closed--AHM
announced a definitive agreement to be acquired by Washington Mutual (WAMU) for
approximately $80 per share in stock. As a result of our original position in
CSA, Fountainhead shareholders were able to experience a 52% gain over the
sixteen-month holding period.
Also in March, 360(degree) Communications Company (XO)--one of the Fund's larger
positions--entered into an agreement to be purchased by Alltel, Inc. We first
bought XO when it was trading at a steep discount to its private-market value;
we thought the Company, with expertise in its field of business, was a takeover
candidate for a larger telecommunications company. A takeover would serve as a
catalyst for the Company to reach its private-market value of approximately $35
per share. On March 16, 1998, XO announced a definitive agreement to be acquired
by Alltel (AT), an Arkansas-based wireline- and wireless-telecom company, for
approximately $34 per share in stock (0.74 Alltel shares for each XO share). XO
was one of the first purchases made in the Fund at an average cost of $18.88 per
share. The result is an 80% price appreciation over the sixteen-month holding
period. In light of the acquisition news, we are reviewing the transaction to
see if it would be beneficial to hold out for Alltel stock. We believe that AT
itself may be a takeover candidate.
Finally, on April 3, Long Island Bancorp (LISB) announced a definitive agreement
to be acquired by Astoria Financial for approximately $70 per share in stock.
The LISB acquisition will give Astoria $16.6 billion in assets and 96 branches
on New York's Long Island and surrounding areas; the area's ten million
residents comprise one of the wealthiest markets in the nation. KING originally
purchased LISB for its solid fundamentals; non-performing assets were only 1.03%
of total assets, earnings had been strong, and LISB's mortgage-banking divisions
provided diversified revenues. In addition, LISB, well-positioned in its
markets, was an attractive acquisition candidate for a larger national bank
looking to tap into the New York market or for a large New York institution
seeking to solidify market share. We estimated LISB's private-market value in
the $55 to $65 per-share range. We originally bought the stock at an average
cost of $40.63 per share; thus, our shareholders' price appreciation has been
60% over its relatively short holding period. At this point, we are analyzing
Astoria's prospects, which are quite good. In fact, it is possible that Astoria
will be purchased in the next one to two years. We estimate the private-market
value (of the proforma Astoria) to be in the $80 to $90 per-share range.
Why Own Mid-Cap Stocks?
Conventional wisdom holds that small- and mid-cap stocks are always more risky
investments than their large-cap brethren. As usual, conventional wisdom is
wrong. Recent years have seen one of the most narrow markets in history, one in
which just a handful of large-cap names have driven the performance of the
well-known indices. For example, in 1997, only 33 stocks in the S&P 500 (6% of
the index) accounted for 50% of the return for the year. In 1996, only 25 (5% of
the index) accounted for 50% of the move.
While these large-cap names outperform for a number of reasons, three are
primary:
Large-cap stocks are generally more liquid.
Index funds (primarily those based on the large-cap-biased S&P 500) are
extremely popular.
Large sums of money are flowing into the markets; managers are penalized
for holding cash, and thus they must put their capital to work somewhere.
The well-known large-cap names generally require less analytical work, so
they have become a parking place for unwanted cash.
As a result, returns have been stellar in the large-cap names; however, their
valuations have now reached historically high levels. In fact, most of these
stocks are trading at huge premiums to their respective growth rates. For
example:
1998E P/E 1999E P/E P/E-to-Growth Rate Price/Book
Pfizer 57.6x 48.1x 3.3x `99E 2.7x `98E 19.0x Gillette 40.0x 33.9x 2.3x `99E 1.9x
`98E 14.1x Proctor & Gamble 31.0x 27.4x 2.4x `99E 2.1x `98E 10.9x Merck 27.4x
23.6x 1.9x `99E 1.6x `98E 11.4x Bristol-Myers Squibb 29.5x 26.3x 2.2x `99E 2.0x
`98E 14.7x Dell Computer 38.9x 30.8x 1.3x `99E 1.0x `98E 35.5x Microsoft 55.7x
46.9x 2.3x `99E 2.0x `98E 201.x Coca-Cola 45.1x 38.6x 2.6x `99E 2.2x `98E 25.3x
We do not own any of these commonly held stocks because their valuations are too
high. Stocks are frequently considered fully valued when trading at, or in some
cases, at a slight premium to, their respective growth rates. While many of the
companies in the above list are certainly well-run, have great franchises and
excellent management teams, and in many cases trade at slight premiums to their
peers, their current multiples are extreme. Quality is worth a higher premium,
but is it worth these extreme multiples--in many cases double that of the S&P
500 and two to three times that of their growth rates?
Furthermore, the stock prices of many of these large-cap companies continue to
rise, despite declining earnings estimates for the group. On the other hand, the
estimates for small- and mid-cap stocks are remaining constant, or in many cases
rising. In the small-cap area, estimates have been revised, but on average a
mere 1.6% downward. The mid-cap earnings estimates are almost unchanged, falling
0.1% over the past month. In addition, most of the large-cap multinationals have
some Asian exposure. If the situation in the Far East continues to deteriorate,
further downward revisions may be necessary. (Motorola, Intel, Hewlett-Packard,
and many other high-tech names have already felt the pressure). Should earnings
estimates be lowered, and projected earnings growth rates be revised down, these
stocks will look more expensive on a valuation basis.
The question now becomes how to define risk. If risk is a function of downside
potential and overvaluation, then many large-cap stocks, while wonderfully
well-run companies, are currently risky investments. King Investment Advisors is
a value manager. As a result of the run-up in most large-cap stocks over the
last several years, and the lofty multiples at which they are currently trading,
the mid- and small-cap areas seem very attractive to us at current levels. While
many of these stocks may prove more volatile over short periods of time
(quarter-to-quarter), we are paying more realistic prices for these companies as
evidenced by our equity statistics outlined below (as April 30, 1998):
Fountainhead S&P 500
Price/Earnings (`98E): 19.4x 23.1x
Price/Book: 3.5x 6.0x
Despite the historically high valuation level of the overall market, we continue
to find value in attractive, unique companies in the mid- and small-cap areas.
This market niche dovetails nicely with our investment style and philosophy, as
many smaller companies have solid management, differentiated strategies, and
often dominance in a particular market segment or geographical region; however,
these companies are not often large enough to compete effectively with the
larger national players. As a result, they are frequently considered attractive
assets for a larger company and are bought out. (We certainly are not the only
ones uncovering these gems; larger competitors and (eventually) the market also
identify them over time. We merely try to be there first to realize most of the
potential gains.) Although we do not actively seek companies viewed solely as
acquisition candidates, our investment style and philosophy tend to identify
companies which others may also eventually view as attractive. Essentially,
benefiting from merger and acquisition activity is a natural by-product of our
investment process.
We are pleased to report that our strong performance record continues to attract
new investors, while our existing investors have stayed with us. The Fund's
assets grew from $2.6 million on October 31, 1997 to $6.7 million on April 30,
1998. Of course, this represents capital appreciation as well as investments by
new shareholders.
Since all our investment team, and most of our administrative staff, have money
invested in the Fund, you can be assured we will continue to do our best.
Sincerely,
Roger E. King
Chairman and President
<PAGE>
Fountainhead Special Value Fund
Schedule of Investments - (Unaudited) - April 30, 1998
<TABLE>
<S> <C> <C>
Common Stocks - 99.9% Shares Value
Banks and Bank Holding Companies - 16.2%
Banc One Corp. 880 $ 51,755
Bayview Capital Corp. 6,500 212,063
Reliance Bancorp, Inc. 2,750 108,625
Riggs National Corp. 7,200 207,450
Trans Financial Inc. 2,450 135,975
United Bankshares, Inc. 4,600 120,175
Wells Fargo & Co. 700 257,950
---------------
1,093,993
---------------
Communications - 17.2%
360 Communications (a) 7,400 226,162
Clearnet Communications Inc. (a) 17,000 236,937
DSC Communications, Inc. (a) 10,100 181,800
Paxon Communications Corp. 18,000 241,875
Rural Cellular Corp (a) 8,400 149,100
Western Wireless Corp.(a) 6,400 124,800
---------------
---------------
1,160,674
---------------
Computer Services & Software - 2.3%
Intuit Inc. (a) 2,900 154,244
---------------
Drugs - 6.8%
Dura Pharmaceuticals, Inc. 6,400 169,600
---------------
Financial Services - 3.5%
FBR Asset Investment Corp. (b) 5,000 105,000
Lehman Brothers Holdings 1,800 127,912
---------------
---------------
232,912
---------------
Healthcare & Healthcare Services - 12.0%
Capital Senior Living Corp. 16,000 239,000
Integrated Health Services 3,600 138,825
Mariner Health Corp. 710 12,869
Paragon Health Network, Inc.(a) 9,990 186,688
St. Jude Medical Inc. (a) 6,500 230,344
---------------
---------------
807,726
---------------
Insurance - 2.7%
Amerin Corp. (a) 5,800 184,512
---------------
Media & Leisure - 7.0%
Century Communications-CL 17,000 263,500
Lynch Corp. (a) 1,500 156,750
US WEST Media Group, Inc. (a) 1,400 52,850
---------------
473,100
---------------
Fountainhead Special Value Fund - continued
Schedule of Investments - (Unaudited) - April 30, 1998 - continued
Common Stocks - continued Shares Value
Oil & Gas Services - 13.7%
R & B Falcon Corp. (a) 6,900 221,231
Rowan Companies, Inc. (a) 8,000 235,500
Santa Fe International Corp. 6,900 270,394
---------------
---------------
727,125
---------------
Oil & Gas Exploration & Production - 2.9%
Neuvo Energy Co. (a) 5,400 192,375
---------------
Retail Stores - %
Duane Reade Inc. 12,000 285,000
Dominick's Supermarkets, Inc 6,000 240,375
Saks Holdings Inc. 10,000 223,125
---------------
---------------
748,500
---------------
Thrifts, Savings & Loans - 11.6%
Ahmanson (H.F.) & Co. 1,750 133,438
Bank United Financial (a) 14,500 235,625
Coast Federal 1,300 22,019
Dime Bancorp 1,900 58,306
Long Island Bancorp 2,400 158,400
St. Paul Bancorp 2,000 50,000
Sovereign Bancorp. Inc 6,480 122,310
---------------
780,098
---------------
TOTAL COMMON STOCKS (Cost $5,510,512) 6,724,859
---------------
Money Market Securities - 0.2%
Star Treasury, 4.92%, 12/31/98 (Cost $10,431) 10,431
---------------
TOTAL INVESTMENTS - 100% (Cost $5,520,943) 6,927,665
Liabilities less other assets - (0.1%) (3,990)
---------------
Total Net Assets $ 6,923,675
===============
<FN>
Legend
(a) non-income producing
(b) private placement
</FN>
</TABLE>
<PAGE>
Fountainhead Special Value Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cost $5,520,943) $ 6,735,290
Subscriptions receivable 165
Dividends receivable 1,960
Interest receivable 634
--------------------
Total assets 6,738,049
Liabilities
Accrued investment advisory fee payable $ 6,578
Other payables and accrued expenses 171
-------------------
Total liabilities 6,749
--------------------
Net Assets $ 6,731,300
====================
Net Assets consist of:
Paid in capital $ 5,282,998
Accumulated undistributed net investment income (8,955)
Accumulated undistributed net realized gain 242,910
Net unrealized appreciation on investments 1,214,347
--------------------
Net Assets, for 412,933 shares $ 6,731,300
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($6,731,300/412,933) $ 16.30
====================
</TABLE>
<PAGE>
Fountainhead Special Value Fund
Statement of Operations for the six months ended April 30, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend Income $ 3,488
Interest Income 13,150
-------------------
Total Income 16,638
Expenses
Investment advisory fee $ 20,446
Administration fees 15,297
Transfer agent fees 6,952
Pricing & bookkeeping fees 4,800
Legal fees 4,173
Custodian fees 3,346
Audit fees 690
Registration fees 12,275
Shareholder reports 3,375
Trustees' fees 270
Miscellaneous 224
-------------------
Total operating expenses before reimbursement 71,848
Reimbursed expenses (47,799)
-------------------
Total operating expenses 24,049
-------------------
Net Investment Income (7,411)
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 257,818
Change in net unrealized appreciation on investment securities 849,358
-------------------
Net gain (loss) on investment transactions 1,107,176
-------------------
Net increase in net assets resulting from operations $ 1,099,765
===================
</TABLE>
Fountainhead Special Value Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<S> <C> <C>
For the six For the
month period ended period ended
Increase/(Decrease) in Net Assets April 30, 1998 October 31, 1998 (a)
Operations
Net investment (loss) $ (7,411) $ (1,544)
Net realized gain 257,818 19,269
Change in net unrealized appreciation 849,358 364,989
----------------- -----------------
Net Increase in net assets resulting from operations 1,099,765 382,714
----------------- -----------------
Distributions to shareholders:
From net investment income - -
From net realized gain (34,177) -
----------------- -----------------
Total distributions (34,177) -
----------------- -----------------
Share Transactions
Net proceeds from sale of shares 3,054,107 2,274,079
Shares issued in reinvestment 34,164 -
Shares redeemed (51,760) (27,592)
----------------- -----------------
Net increase in net assets resulting
from share transactions 3,036,511 2,246,487
----------------- -----------------
Total increase in net assets 4,102,099 2,629,201
Net Assets
Beginning of period 2,629,201 -
----------------- -----------------
End of period [including undistributed net investment loss of
($7,411) and ($1,544), respectively. $ 6,731,300 $ 2,629,201
================= =================
<FN>
(a) December 31, 1996 (commencement of operations) to October 31, 1998
</FN>
</TABLE>
Fountainhead Special Value Fund
Financial Highlights (Unaudited)
Selected Per Share Data
<TABLE>
<S> <C> <C>
For the six For the
month period ended period ended
April 30, 1998 October 31, 1998 (c)
Net asset value, beginning of period $ 13.35 $ 10.00
============ ============
Income from investment operations
Net investment income (0.03) (0.02)
Net realized and unrealized gain (loss) 3.12 3.37
------------ ------------
Total from investment operations 3.09 3.35
------------ ------------
Less Distributions
From net interest income - -
From net realized gain (0.14)
------------
------------ ------------
Total distributions (0.14)
------------ ------------
Net asset value, end of period $ 16.30 $ 13.35
============ ============
Total Return 46.(a) 40.(a)
Ratios and Supplemental Data
Net assets, end of period (000) $6,731 $2,629
Ratio of expenses to average net assets 1.11%(a)(b) 0.97%(a)
Ratio of expenses to average net assets
before reimbursement 3.33%(a)(b) 8.25%(a)
Ratio of net investment income to
average net assets -(2.56)%(a) (0.16%(a)
Ratio of net investment income to average
net assets before reimbursement -(0.34)%(a) (7.45)%(a)
Portfolio turnover rate 133.78%(a) 130.63(a)
Average commissions paid 0.0529 0.0637
<FN>
(a) Annualized
(b) For the period November 1, 1997 to the fund's advisor agreed to reimburse
expenses (c) December 31, 1996 (commencement of operations) to October 31, 1998
</FN>
</TABLE>
<PAGE>
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 1. ORGANIZATION
The Fountainhead Special Value Fund. (the "Fund") was organized as a series of
the AmeriPrime Funds, an Ohio business trust (the "Trust"), on October 20, 1995
and commenced operations on December 31, 1996. The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Funds investment objective is to provide long
term capital growth. The Trust Agreement permits the trustees to issue an
unlimited number of shares of beneficial interest of separate series without par
value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains King Investment Advisors, Inc. (the "Adviser") to manage
the Fund's investments. Roger King, President of the Adviser, is primarily
responsible for the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
1.43% of the average daily net assets of the Fund. For the period from November
1, 1997 through April 30, 1998, the Adviser has received a fee of $20,446 from
the Fund. The Adviser is voluntarily reimbursing certain Fund expenses. There is
no assurance that such reimbursement will continue in the future.
FOUNTAINHEAD SPECIAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1998 was $.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six months For the six months For the For the
ended ended period ended period ended
April 30, 1998 April 30, 1998 October 31, 1997(a) October 31, 1997(a)
Shares Dollars Shares Dollars
Shares sold 216,924 $3,054,108 199,337 $2,474,079
Shares issued in
reinvestment of
dividends 2,614 34,164 - -
Shares redeemed (3,570) (51,760) (28,359) (27,592)
------- -------- -------- --------
215,968 $3,036,512 196,962 $2,246,487
<FN>
(a) For the period December 31, 1996 (commencement of operations) to October 31,
1997.
</FN>
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1997 through April 30, 1998, purchases and sales
of investment securities, other than short-term investments, aggregated
$5,949,938 and $2926,617, respectively. The gross unrealized appreciation for
all securities totaled $1,214,525 and the gross unrealized depreciation for all
securities totaled $178 for a net unrealized appreciation of $1,214,347. The
aggregate cost of securities for federal income tax purposes at April 30, 1998
was $5,520,943.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
May 2, 1998
Dear Shareholder:
The events of the last few months have convinced us that the world has gone
crazy when it comes to the valuation of securities. In fact, we do not believe
that there is a "securities" market anymore. Instead, we believe that it should
be called a "specurities" market; this would take the "secure" part out, while
spotlighting the speculative nature of the marketplace. The Corbin Small-Cap
Value Fund is not caught up in that madness and consequently, for the past six
months, paid the price. While everyone would agree that Rome was not built in a
day, it seems that fortunes on Wall Street can be made almost that quickly.
Pfizer, EntreMed, Lucent Technologies, and a few others have been the latest to
be caught up in this tidal wave of speculative buying.
As we said in our first annual report, the Fund's goal is to produce a 12%-18%
return per year. With the Fund two months away from its first full year in
operation, we believe that will be achieved. More importantly, this return would
have been delivered whether times were good or bad, in my opinion. We have
assembled a group of securities that are not really correlated with any major
market index; they are a group that will move based on their own fundamentals.
OVERALL PORTFOLIO CHARACTERISTICS AND COMMENTARY
As of April 30th, the portfolio contained 34 equities, with 100% of the money in
equity securities, and 0% in cash. During the first quarter of the year, our
research team has been on the road trying to find investment opportunities that
have no risk (defined as long term impairment of capital) and that have the
potential to double in price during the next three-to-five years. This is the
same thing we have been doing for the last six years, with an overall
accomplishment of our goals. What has changed over that time is the view of the
market toward certain stocks and certain industries. In 1990, a broker could
have stood on the street corner at Seventh and Main in Fort Worth selling shares
of Chase, Citicorp, Travelers, and Wells Fargo at 15% off their current price
and gotten few takers. For decades, these stocks rarely achieved any premium
over their book value; today they stand at over 5X book. Which is closer to the
true valuation, where they are now, or where they had been for decades? When I
came to Fort Worth for school, the hot stocks both here and on Wall Street were
Western Company, Gearheart, and Pengo. When the books were closed on these
stocks, they all ended up in the worst chapter of them all: Chapter 11. For
proof of how quickly things can change on Wall Street, investors should look at
those three gems.
Some people think that our view is narrow-minded and pessimistic in this new era
of prosperity. However, many investors have forgotten one thing: risk. When
everyone is convinced that a new time has dawned, risk is at its highest point,
and that our participation is limited on the downside. The way this is
accomplished is through the "three Vs": virtue, verification, and valuation. By
virtue of our process, we are going to turn up names that over the long-term
will be capable of doubling in price over our investment time horizon. These are
statistically cheap businesses that have favorable fundamentals. We verify these
facts by visiting the companies before we invest, and then we revisit them to
make sure the situation has not changed. We invite you to call Dick Moeller at
VTEL, Tim Duke at Steel of West Virginia, Jim Beltrame at Successories, or
almost any other CEO of a stock in the portfolio to ask about our verification
and "hands-on" activity. Finally, our valuation techniques ensure that we will
receive substantially more than we are paying for. We will not "pay-up" for
something that is trendy, despite its short-term momentum.
Runaway bull markets have the ability to make smart people look dumb, and dumb
people look pretty smart. After twenty years of buying stocks, we know that this
current craze will also pass, and when it does, many people will be weeping.
This change may begin tomorrow, or not for some period of time. However, we
believe that when it does occur, what we do and how we do it will have earned
the most important V, that of vindication.
PERFORMANCE DISCUSSION
As the saying goes, "Which would you rather have first, the good news or the bad
news?" The good news is that, since June 30, 1997 (our inception date) the Fund
has returned 11.73%, very close to our annual goal of 12%-18%. The bad news is
that the Fund generated a total return of 1.30% for the six month period ended
April 30, 1998. The Russell 2000 finished up 12.14% and the S&P 600 finished up
13.13%. This was a bitter pill to swallow, particularly because it appeared that
the half-year period would be relatively quiet, thanks to the profit picture and
steady U.S. interest rates.
The "Magnificent Seven" (Duckwall-Alco, Durakon, Quanex, Perceptron,
Successories, VTEL, and RailTex) let the portfolio down. Since these securities
comprised a significant portion of the portfolio at the end of the period, it
was disappointing to see them languish. With that in mind, we have taken the
initiative to encourage these, and other portfolio companies, to move forward
with plans to increase shareholder value and investor interest. Our efforts have
succeeded at several firms, so far and we will continue to push for moves to
increase the value of the shares we hold. We are not satisfied to let our stocks
remain in their current range, because their potential is too great. If each
company adopts our programs to augment its already strong operating results, we
believe these stocks' true potential will be shown.
DISCUSSION OF TRANSACTIONS
PURCHASES AND SALES
Purchase of Aames Financial (AAM) - We built a position in this leader in the
sub-prime lending business, as the company adopted more conservative accounting
practices, which should reduce some investor concerns.
Purchase of Bonded Motors (BMTR) - The company is one of the largest rebuilders
of automotive engines in the country. The firm trades at 11X this year's
earnings estimate, with a 25%-30% projected growth rate.
Purchase of Dawson Production (DPSI) - The company is a leader in the petroleum
and natural gas workover business in the Southwest.
Purchase of Dawson Geophysical (DWSN) - The company is the second largest
on-shore geophysical company in the U.S.
Purchase of Delta Finance Corp. (DFC) - DFC is a sub-prime lender in the same
industry as AAM. Delta has some of the most conservative gain-on-sale accounting
practices in the business, which, after our meeting with management, appeared to
make the stock dramatically undervalued. (See below)
Purchase of Friendly Ice Cream (FRND) - The company has a good reputation
and was brought public at a low -----------------------------------------
cash-flow multiple.
Purchase of GT Bicycles (GTBX) - The company is a leading manufacturer of mid-to
premium-priced bicycles. The stock was purchased at 11X expected 1998 earnings,
and the company is estimated to grow 17% per year over the next 5 years.
Purchase of Lancer Corp. (LAN) - The company is the world's leading maker of
products to dispense fountain drinks. It also makes other products related to
the beverage business.
Purchase of Middleby Corp. (MIDD) - Middleby is the leader in the
institutional restaurant equipment business. It trades at 12x earnings, with a
15% growth rate.
Purchase of Motor Car Parts & Accessories (MPAA) - The firm is a leading
rebuilder of engine starters for the automotive industry. It traded at 12X this
year's earnings and has a 20% growth rate.
Purchase of Play-by-Play Toys (PYBP) - The firm is a leader in the toy business,
as the Primary Warner Brothers licensee. The company also produces crane games.
Purchase of Republic Group (RGC) - The company recycles paper and is a leader in
the wallboard industry. It pays a slight dividend yield, along with great growth
prospects.
Purchase of Seitel (SEI) - Seitel is one of the leading geophysical firms in the
country. It has a 30% expected growth rate and was acquired at 15X earnings.
Purchase of Unit Corp. (UNT) - The company is involved in the production of
oil and gas in the Anadarko and ------------------------------ Permian Basin.
Sale of Altron (ALTN) - This position was eliminated due to its relative
portfolio weighting.
Sale of Alrenco (RNCO) - The position was sold after it had appreciated
significantly.
Sale of Award Software (AWRD) - This position was eliminated due to its relative
portfolio weighting.
Sale of Commercial Intertech (TEC) - The company reached its price objectives
and was sold.
Sale of Computational Systems (CSIN) - The company was bought out by Emerson
Electric.
Sale of Computer Language Research (CLRI) - The company was bought-out by
Thomson Corporation, at a premium of more than 100% above our purchase price.
Sale of Deflecta-Shield (TRUX) - The company was acquired by Lund.
Sale of Delta Financial Corp. (DFC) - We sold the stock after the price
increased 80% in less than two months. While this was not intended to be a
short-term position, the rapid appreciation appeared to make the stock
relatively fairly valued.
Sale of Flexsteel Industries (FLXS) - The stock was sold due to its price
appreciation.
Sale of Friendly Ice Cream (FRND) - The company showed poor prospects.
Sale of Galoob Toys (GAL) - After beginning to question the future of the
company, we took advantage of aggressive quarter-end buying to sell our
position.
Sale of Glenayre Technologies (GEMS) - The company did not realize its potential
within our target time period.
Sale of Haggar Corp. (HGGR) - The company showed no progress toward a
rebound to its former level of profitability.
Sale of Oregon Metallurgical (OREM) - The company was bought out by Allegheny
Teledyne.
Sale of Outback Steakhouse (OSSI) - We sold our shares of Outback Steakhouse
after the stock reached our target price. The stock price increased just over
100% in the one year we owned it.
Sale of Quanex (NX) - This stock was sold due to the need in the portfolio to
raise cash for stocks with greater
- -------------------
potential.
Sale of Sterling Electronics (SEC) - The company was purchased by Bell
Industries.
Sale of TransCoastal Marine Services (TCMS) - This stock was sold quickly after
its IPO, due to significant price appreciation.
Sale of Ultratech Stepper (UTEK) - The position was eliminated due to size.
Sale of Wellman (WLM) - The long-term outlook for the company deteriorated, and
the expected growth rate declined. We took advantage of some strength in the
price to sell the stock.
DISCUSSION OF SELECTED INDIVIDUAL SECURITY HOLDINGS
The following are interesting developments concerning selected securities
currently held in the portfolio:
Aames Financial (AAM) - Aames received a $38 million investment from Ronald
Perelman and Gerald Ford, who acquired 9.9% of the company. Several analysts on
Wall Street have viewed this move as a signal that Perelman and Ford will
eventually buy-out Aames.
American Residential Services (ARS) - The company took a one-time charge for
severance costs, lease costs, and reevaluation of the implementation of a new
management information system. The charge led to lower than expected fourth
quarter earnings but should better position the company for 1998.
Cott Corporation (COTTF) - Cott experienced the second largest gain in market
share in the soft drink industry, behind Coca-Cola. However, higher raw material
prices and increased price competition from Coke and Pepsi resulted in a
fourth-quarter loss.
Duckwall-Alco Stores (DUCK) - Duckwall-Alco continued its expansion by opening
18 new stores in Texas and New Mexico. The openings brought the total number of
stores to 225, and the company anticipates having 247 by August, 1998.
Durakon Industries (DRKN) - The company announced plans to repurchase 10% of its
stock. In addition, The Colonel's International, a manufacturer of automotive
accessories, disclosed that it had approached Durakon to discuss a merger.
Durakon responded by stating that it was not in the best interest of the Durakon
shareholders to pursue such a merger.
Perceptron (PRCP) - The company announced a share repurchase plan.
RMI Titanium (RTI) - RTI received three new contracts to supply titanium to
Boeing, Northrop Grumman, and French military contractor Aerospatiale.
Reliability Inc. (REAL) - Reliability announced plans to close its North
Carolina chip-testing plant, resulting in a first-quarter charge of
approximately $0.05 per share. The company expects 1998 earnings to be about 10%
lower than earlier estimates, but still above 1997 results.
Steel of West Virginia (SWVA) - The company completed its plant modernization
project during the first quarter.
Successories (SCES) - Successories is nearing the final stages of testing its
golf-related catalog, which, when completed, will be mailed to 1.2 million
subscribers of Golf Digest.
VTEL Corporation (VTEL) - VTEL continued to make progress with its merger
with CLIX and intends to have it fully
- -------------------------
integrated by July 31.
Walden Residential Properties (WDN) - The company announced plans to enter a $47
million joint venture with Grupe Co. The venture involves two developments near
Sacramento and will expand the company's business in California.
FINAL THOUGHTS
The past six months was a disappointment for our firm. While we have poured all
of our efforts into our original research, the market has not rewarded those
efforts. The "value" approach relies on the eventual "discovery" of its holdings
by the broader market, but most of our holdings have remained undervalued in
this market environment. We believe that this will change in the future, with
our process being rewarded. We will continue to execute our discipline,
realizing that what we do should not be measured over a couple of years, but
rather over a long-term horizon.
I continue to have only three personal investments; my shares of Corbin &
Company and my shares of this Fund are two of those three. Over the last few
months, I have bought more shares of the Fund and will continue to do so in the
future. We have faith that our process will prove its worth, and we are excited
to have you here with us for this great adventure.
Sincerely,
David A. Corbin, CFA
President and Chief
Investment Officer
<PAGE>
Corbin Small-Cap Value Fund
Schedule of Investments - April 30, 1998
<TABLE>
<S> <C> <C>
Common Stocks - 100.0% Shares Value
Auto Parts & Accessories - 5.8%
Bonded Motors Inc. (a) 8,000 $ 85,000
Motor Car Parts and Accessories 2,000 36,750
-----------------
-----------------
121,750
-----------------
Bottled & Canned Soft Drinks - 3.5%
Cott Corp (Quebec) 12,440 72,696
-----------------
Building Materials - 1.8%
Republic Group Inc. 2,000 38,000
-----------------
Business Services - 4.7%
Vtel Corp. (a) 17,410 97,931
-----------------
-----------------
Catalog & Mail Order Services - 3.7%
Successories Inc. (a) 14,050 77,275
-----------------
Computer Programming Services - 0.2%
Raster Graphics Inc. (a) 3,860 5,187
-----------------
Construction - 3.9%
American Residential Services, Inc. (a) 7,400 80,937
-----------------
Department Stores - 3.7%
Duckwall Alco Stores (a) 4,260 77,745
-----------------
Equipment Rental & Leasing - 1.0%
Lancer Corp. (a) 1,500 21,750
-----------------
Fabricated Metal Products - 6.3%
American Buildings Co. 1,630 56,642
Butler Manufacturing Co. 1,980 73,879
-----------------
-----------------
130,521
-----------------
Corbin Small-Cap Value Fund
Schedule of Investments - April 30, 1998 - continued
Common Stocks - continued Value
Financial Services - 2.2%
Aames Financial 3,400 $ 46,537
-----------------
Food Service - 1.2%
Middleby Corp. 3,000 24,000
-----------------
Furniture Manufactures - 3.7%
Flexsteel Industries, Inc. 5,520 76,935
-----------------
Measuring & Controlling Devices - 3.4%
Perceptron Inc. (a) 4,650 70,912
-----------------
Metal Mining - 2.7%
RMI Titanium (a) 2,500 55,781
-----------------
Oil & Gas Services & Exploration - 5.1%
Dawson Geophysical Co. 1,200 20,850
Dawson Production Services 1,600 21,000
Seitel Corp. 2,500 42,188
Unit Corp. 2,200 21,450
-----------------
-----------------
105,488
-----------------
Power Distribution - 4.0%
Reliability Inc. (a) 6,700 82,912
-----------------
Railroads - 4.0%
Rail Tex Inc. (a) 5,700 84,431
-----------------
Real Estate - 3.9%
Walden Residential Properties 3,300 80,437
-----------------
Recreational Vehicles - 10.1%
Arctic Cat Inc. 9,470 94,700
Durakon Industries Inc. (a) 10,780 115,885
-----------------
-----------------
210,585
-----------------
Restaurants - 4.1%
Lone Star Steakhouse & Saloon (a) 4,030 85,638
-----------------
Trucks/Trailers - 4.0%
Wabash National Corp. 2,715 83,826
-----------------
Steel Manufacturing - 13.4%
Insteel Industries 9,180 67,130
Quanex Corp. 2,580 75,627
Steel West Virgina Inc.(a) 9,540 109,710
Webco Industries (a) 3,000 27,375
-----------------
-----------------
279,842
-----------------
Toys - 3.6%
GT Bicycles, Inc.(a) 6,800 44,200
Play by Play Toy & Novelties (a) 1,800 30,600
-----------------
-----------------
74,800
TOTAL COMMON STOCKS (Cost $2,138,758) $ 2,085,916
-----------------
TOTAL INVESTMENTS - (Cost $2,138,758) 2,085,916
Other Assets less liabilities - 0.0% (2,576)
-----------------
Total Net Assets - 100.0% $ 2,083,340
=================
Legend
(a) non-income producing
</TABLE>
<PAGE>
Corbin Small-Cap Value Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cost $2,138,758) $ 2,085,916
Receivable for fund shares sold 1,836
Interest receivable 594
--------------------
Total assets 2,088,346
Liabilities
Due to custodian bank $ 2,864
Accrued investment advisory fee payable 2,099
Payable for fund shares redeemed 43
-------------------
Total liabilities 5,006
--------------------
Net Assets $ 2,083,340
====================
Net Assets consist of:
Paid in capital $ 2,086,794
Accumulated undistributed net investment income (937)
Accumulated undistributed net realized gain 50,325
Net unrealized appreciation on investments (52,842)
--------------------
Net Assets, for 198,531 shares $ 2,083,340
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($2,083,340/198,531) $ 10.49
====================
</TABLE>
<PAGE>
Corbin Small-Cap Value Fund
Statement of Operations for the six month period ended April 30, 1998
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend Income $ 7,714
Interest Income 3,368
-------------------
Total Income 11,082
Expenses
Investment advisory fee $ 10,570
-------------------
Total Operating Expenses 10,570
-------------------
Net Investment Income (Loss) 512
-------------------
Realized & Unrealized Gain
Net realized gain on investment securities 135,370
Change in net unrealized appreciation on investment securities (97,533)
-------------------
-------------------
Net gain (loss) on investment securities 37,837
-------------------
Net increase in net assets resulting from operations $ 38,349
===================
</TABLE>
Corbin Small-Cap Value Fund
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<S> <C> <C>
For the six month For the period
period ended ended
Increase/(Decrease) in Net Assets April 30, 1998 October 31, 1997 (a)
Operations
Net investment income (loss) $ 512 $ (5)
Net realized gain 135,370 5,918
Change in net unrealized appreciation (97,533) 44,691
--------------- ---------------
Net Increase in net assets resulting from operations 38,349 50,604
--------------- ---------------
Distributions to shareholders:
From net investment income (1,444)
From net realized gain (90,963) -
--------------- ---------------
---------------
Total distributions (92,407)
---------------
Share Transactions
Net proceeds from sale of shares 844,561 1,283,875
Shares issued in reinvestment 86,814 -
Shares redeemed (128,408) (48)
--------------- ---------------
---------------
Net increase in net assets resulting from share transactions 802,967 1,283,827
--------------- ---------------
Total increase in net assets 748,909 1,334,431
Net Assets
Beginning of period 1,334,431 -
--------------- ---------------
End of period [including undistributed net investment loss of ($5)] $ 2,083,340 $ 1,334,431
=============== ===============
<FN>
(a) June 30, 1997 (commencement of operations) to October 31, 1997.
</FN>
</TABLE>
<PAGE>
Corbin Small-Cap Value Fund
Financial Highlights
<TABLE>
<S> <C> <C>
Selected Per Share Data For the six month For the period
period ended ended
Net asset value, April 30, 1998 October 31, 1997 (a)
Net asset value, beginning of period $11.03 $10.00
------------ -------------
Income from investment
Operations
Net investment income 0.00 0.00
Net realized and
unrealized gain (loss) 0.10 1.03
------------ -------------
Total from investment operations 0.10 1.03
------------ -------------
Less Distributions
From net interest income (0.01) 0.00
From net realized gain (0.63) 0.00
------------ -------------
------------
Net asset value, (0.64)
------------
Net asset value, end of period $10.49 $11.03
============ =============
Total Return 2.62(a) 30.32(a)
Ratios and Supplemental Data
Net assets, end of period (000) $2,083 $1,334
Ratio of expenses to
average net assets 1.25(a) 1.23(a)
Ratio of net investment income to
average net assets 0.06(a) 0.00(a)
Portfolio turnover rate 67.01(a) 20.41(a)
Average commissions paid 0.05232 0.0681
(a) Annualized
</TABLE>
<PAGE>
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 1. ORGANIZATION
The Corbin Small-Cap Value Fund. (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on June 10, 1997 and
commenced operations on June 30, 1997. The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The investment objective of the Fund is to
provide long term capital appreciation to its shareholders. The Trust Agreement
permits the trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long-term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Corbin & Company (the "Adviser") to manage the Fund's
investments. David A. Corbin , President of the Adviser, is primarily
responsible for the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
1.25% of the average daily net assets of the Fund. For the period from November
1, 1997 through April 30, 1998, the Adviser received a fee of $10,570 from the
Fund.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six months ended April 30, 1998, the Administrator received
fees of $15,000 from the Adviser for administrative services provided to the
fund.
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
CORBIN SMALL-CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1998 was
$2,086,794.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six months For the six months For the period For the period
ended April 30, ended April 30, ended October 31, ended October 31,
1998 1998 1997 1997
Shares Dollars Shares Dollars
Shares sold 131,279 2,033,840 120,985 $1,283,875
Shares issued in
reinvestment of
dividends 53,733 758,703 - -
Shares redeemed (46,444) (782,627) (4) (48)
-------- --------- --- ----
138,568 2,009,916 120,981 $1,283,827
</TABLE>
NOTE 5. INVESTMENTS
For the period from November 1, 1997 through April 30, 1998, purchases and sales
of investment securities, other than short-term investments, aggregated
$1,439,974 and $568,340, respectively. The gross unrealized appreciation for all
securities totaled $122,848 and the gross unrealized depreciation for all
securities totaled $175,690 for a net unrealized depreciation of $52,842. The
aggregate cost of securities for federal income tax purposes at April 30, 1998
was $2,085,916.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE>
Florida Street Funds
Letter to Shareholders
April 30, 1998
Dear Fellow Shareholders,
I am pleased to present the first semi-annual report of the Florida Street
Funds. This report covers activity in the funds during the six month period
ended April 30. The report includes an investment review by each fund's
portfolio manager, followed by security holdings and financial statements for
the period.
The last six months have been a period of significant progress for your
fund family. Net assets totaled $9,406,489 as we began this fiscal year, and
have now grown to $18,212,914. In addition, due to the Florida Street Bond Fund
surpassing $10 million in net assets, the fund was assigned a ticker of "FLSBX".
This gives investors daily access to price and dividend information.
The Economy
Even casual observers now know that the economic backdrop for the capital
markets has been nearly perfect. In our judgment, it remains so. Three economic
measures with particular influence on our domestic markets are GDP growth,
inflation and interest rates.
GDP Growth. None of the classic signs of recession risk are evident.
Inventories are in general balance. The Federal Reserve's impulse to further
move to a more restrictive monetary policy is stayed by the drag of the Asian
crisis on the U.S. economy, the global weakness in prices of goods and
commodities, and importantly, the productivity gains in the U.S. which have
allowed wage levels to rise but have kept labor costs low. We expect GDP to rise
2.9% in 1998 with continued gains in the 1.5%-2.5% range in 1999.
Inflation. If there is one macro-economic measure to obsess over, this
would be an excellent choice. However, the outlook here remains positive. Recent
market action indicates that equities can advance even in the face of
decelerating earnings so long as the factors that drive the price/earnings ratio
(notably inflation) are sufficiently positive. Many investors have noted that
the equity market as a whole seems insensitive to disappointing earnings news at
the moment. The lesson that can be learned from this observation is that
inflation news may hold the key to market valuation in future months. Even
modest news on the inflation front may move stock prices more than earnings
announcements. We forecast that inflation in 1998 will be under 2.0%.
Interest Rates. Due to the Federal Reserve's reluctance to cut short
rates when the economy is so strong and the labor market so tight, interest
rates have not followed inflation down in full measure. But there is downward
pressure on short term rates despite the strong economy, and this influences the
valuation investors are placing on U.S. equities. Despite the Fed's recent
change in bias towards tighter credit, we believe there is a reasonable chance
of a rate cut in the second half of this year, bringing short term rates down.
On a more cautionary note, we would not be surprised to see a brief economic
scare emerge. The most likely and most damaging would be an interruption in the
steam of good news on the inflation front. Whether influenced by El
Nino-influenced vegetable prices, an upturn in oil prices, or a seemingly
aggressive labor contract settlement, coming after so much positive news such an
event could easily have a short-term adverse effect on the equity markets. This
possibility should concern traders but has less significance for strategic
investors.
We currently see a small gap between equity values and current interest rates
and earnings. This gap does not appear large enough to trigger a shift in asset
allocation, but it does make equities vulnerable to a negative surprise in the
underlying fundamental trends discussed above. Our view is that this gap will be
eliminated and further modest price gains realized over the next 12 months. As
long as the underlying trends favor continued low inflation, low interest rates
and higher earnings, equity will remain the asset of choice, and that will be
reflected in historically high P/E ratios.
Thank you for joining us as fellow shareholders of the Florida Street Funds.
We will continue to work to justify your confidence.
Sincerely,
Walter A. Morales
President and Chief Investment Officer
Commonwealth Advisors, Inc.
<PAGE>
For the six-month period ending 4/30/98, Florida Street Bond Fund returned
5.01%. This compares with a return of 5.38% for the Salomon Gov't/Corp Index and
5.62% for the Merrill Lynch High Yield Bond Index.
As of 4/30/98, the fund contained 81 issues. The fund has an average yield to
maturity of 10.019% and an average maturity of 8.58 years.
The last six months was a favorable environment for high yield bonds. The
economy has continued to expand, but many economists believe that if the economy
maintains its current growth rate, the Federal Reserve will move to raise
interest rates later this year. We do not expect interest rates to rise in the
near future and would not be surprised if the next major move in interest rates,
which should occur early next year, results in a drop in interest rates. We base
this belief on continued economic troubles in Asia and an expected slowdown in
U.S. economic growth. If this scenario unfolds, it may not be favorable to high
yield bonds. We continue to monitor the relative value of investment grade and
non-investment grade bonds and at this moment, we prefer higher quality bonds.
A portion of the your funds portfolio is invested in distressed securities,
primarily corporate bonds. While this sector has provided exciting returns in
the past, we are finding it difficult to find acceptable securities in this
sector of the market. It may be that the economy has performed so well that very
few distressed companies are available for investment. We believe that one
should look at where we are in the credit cycle. It is highly possible that
credit is too available, to both consumers and business. If this is the case,
one would expect to see more companies experiencing financial distress in the
next several quarters.
The international sector of the bond market has produced enticing returns over
the last six months. However, the fund has a very low allocation to
international bonds. Concerns over the Asian economies and the affect on other
countries have caused us to maintain a very low allocation to international
bonds. While the market for Asian bonds has rallied, prices are still lower than
they were one year ago. Despite of the lower prices, we do not find the market
attractive and do not believe that investors in these markets are being
compensated for the risks they are taking.
Looking forward, the bond market should continue to benefit from low inflation.
This has allowed bond investors to receive higher inflation adjusted returns
than in previous years. We think this supports a bullish outlook on the bond
market. Bonds are also benefiting from increased purchases by foreign investors.
While we believe the outlook for bonds is quite favorable, investing in bond is
not without risk. The economy continues to perform very well, and some
economists believe that if the economy continues to expand at its current rate
interest rates will have to rise. While an increase in interest rates would not
benefit the bond market in the short run, we continue to feel that any rise will
be short-lived. It is more likely, in our opinion, that the strength of the
economy is preventing the rates from rallying.
Florida Street Bond Fund
Schedule of Investments - April 30, 1998 - (Unaudited)
<TABLE>
<S> <C> <C>
Common Stock - 4.7% Shares Value
Colonial Properties Trust 3,000 $ 89,062
JPS Textile Group Inc. 4,997 58,715
Liberty Property Trust 3,800 97,138
Metals USA Inc. 5,000 97,500
Patriot American Hospitality, Inc. 2,000 50,500
Phone Tel Technologies PFD 4,000 216,000
Service Merchandise Co. (a) 10,000 21,250
TNP Enterprises, Inc. 1,525 49,181
Western Resources, Inc. 700 27,344
------------------
TOTAL COMMON STOCK (Cost $729,252) 706,690
------------------
Par
Corporate Bonds - 87.5% Value Value
Allied Waste Industries, 0.00%, 6/1/02 150,000 111,375
American Restaurant 11.5%, 2/15/03 300,000 301,500
American Restaurant 11.5%, 2/15/03 200,000 201,000
American Rice Inc., 13.0%, 7/31/02 260,000 208,000
American Standard 7.37%, 4/15/05 350,000 345,761
American Standard Cos. 7.37%, 02/01/08 100,000 97,250
Amscan Holdings, Inc. 9.87%, 12/15/07 250,000 262,500
Bally Total Fitness Holding Ser. B. 9.87%, 10/15/07 150,000 157,125
Beazer Gines USA 8.87%m 4/1/08 250,000 252,500
Beckman Coulter 7.45% 3/4/08 250,000 250,909
BHP Finance USA Put Bonds 6.42%, 3/1/26 200,000 198,753
Brazos Sportswear, 10.50%, 7/1/07 350,000 353,063
Brauns Fashions, 12.00%, 1/1/05 400,000 394,000
Building Materials Corp, 8.00% 10/15/07 100,000 100,750
CD Radio Inc. 0.0%,12/1/07 250,000 146,875
Cablevision Systems, 8.125%, 8/15/09 150,000 157,500
Callon Petroleum, 10.0%, 12/15/01 145,000 148,806
Cirrus Logic Inc. 6.0%, 12/15/03 205,000 158,362
Clark Refining & Marketing, Inc. 8.38%, 11/15/07 250,000 253,750
Cleveland Electric Illum, 9.00%, 7/01/23 100,000 109,334
Covad Comm. Group 0.0%, 3/11/03 250,000 138,125
DiGiorgio Corp., 10%, 6/15/07 100,000 100,000
Edison Brothers Stores 11.0%, 9/26/07 100,000 93,500
Executive Risk Cap Trust 8.68%, 2/1/27 200,000 216,978
First Union Florida 6.18%, 2/15/36 250,000 249,361
Global Star, 11.25%, 6/15/04 215,000 221,987
HIH Capital Ltd., 7.50%, 9/25/06 250,000 197,500
Homeland Stores, 10.0% 8/1/03 85,000 78,200
Hovnanian K Enterprises, 9.75% 6/1/05 100,000 101,250
Florida Street Bond Fund
Schedule of Investments - April 30, 1998 (Unaudited) - continued
Par
Corporate Bonds - continued Value Value
Integrated Health Services, 9.25%, 1/15/08 250,000 258,125
Iron Mountain Inc. 8.75%, 9/30/09 100,000 102,500
Jackson Products Inc. 9.50%, 4/15/05 125,000 124,214
K Mart Corp 8.00%, 12/13/01 15,000 15,374
Lechters Inc. 5.00%, 9/27/01 150,000 127,500
Mastellone Herma 11.75%, 4/1/08 250,000 261,250
Maxim Group Inc. 9.25%, 10/15/07 150,000 153,750
McLeod USA Inc. 0.0%, 3/01/02 150,000 112,125
Microcell Telecom, 0%, 12/00/01 300,000 224,250
Mrs. Fields Orig. 10.12%, 12/1/04 350,000 350,000
National Equipment 10.0%, 11/30/04 150,000 162,750
Niagra Mohawk Power Corp., 9.50% 3/1/21 250,000 265,777
Nine West Group Inc. 9.0%, 8/15/07 150,000 145,500
Ohio Savings Capital Trust I, 9.50%, 6/03/27 325,000 357,610
Paging Net Brasi 13.5%, 6/06/05 200,000 201,500
Pamida Inc. 11.75%, 3/15/03 105,000 108,150
Pathmark Stores 0.0%, 11/1/03 250,000 200,000
Perkins Family Resturants 10.12%, 12/15/07 80,000 85,200
Petroleum HT & PWR 12.25%, 2/1/05 100,000 98,750
Phar-Mor Inc. 11.72%, 9/11/02 55,000 58,300
RNC Corp. 0.0%, 2/15/03 250,000 158,750
Ram Energy 11.5%, 2/15/08 500,000 507,500
Revlon 8.62%, 2/1/08 250,000 250,625
Riverwood Intl Corp 10.25%, 4/1/06 500,000 520,000
Service Merchandise 9.0%, 12/15/04 500,000 379,375
Specialty Foods Corp. 11.25%, 8/15/03 100,000 92,500
Specialty Foods 0.00%, 8/15/05 250,000 97,500
Speedy Muffler King 10.875% 10/1/06 100,000 89,500
TCI Satellite 0.0%, 02/01/02 250,000 178,750
Telewest PLC. 0.0%, 10/1/00 250,000 202,500
Triangle Capital Trust 9.375%, 6/1/27 325,000 357,604
Trico Marine Services 8.50%, 8/1/05 115,000 115,575
Trump Atlantic Association Funding Inc. 11.25%, 5/1/06 100,000 100,000
UDC Homes, 12.50%, 5/1/00 135,000 137,025
Unisys Corp. 7.88%, 4/1/08 250,000 250,625
United Refining Co. 10.75%, 6/15/07 180,000 182,700
Zilog Inc. 9.5%, 3/1/05 500,000 435,000
------------------
TOTAL CORPORATE BONDS 13,074,168
------------------
(Cost $ 12,736,974)
U.S. Government Obligations - 5.5%
FHR 1496 PA, 8/15/22 221,859 210,109
FHR 1652 SC 111,810 112,849
FNMA 1993-167 5.09%,9/25/23 164,389 158,434
FNMA FRN 1994-51 SA 0.0%, 3/25/24 100,000 59,657
Freddie Mac FRN 0.0%, 9/15/22 100,000 84,574
Freddie Mac FHR 1560 7.87%, 11/15/22 214,390 199,253
------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 824,876
------------------
Money Market Securities - 0.7%
Star Treasury 4.82% 10/31/98 (Cost $96,626) 96,626
------------------
TOTAL INVESTMENTS - 98.4% (Cost $14,607,661) 14,702,360
Other Assets less liabilities - 1.6% 242,511
------------------
TOTAL NET ASSETS - 100.0% 14,944,871
==================
</TABLE>
Florida Street Bond Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cos$14,607,661) $ 14,702,360
Dividends receivable 1,650
Interest receivable 298,611
Other receivables 108,724
--------------------
Total assets 15,111,345
Liabilities
Payable for investments purchased 58,086
Accrued advisory fee 8,738
Dividends payable 99,651
------------------
Total liabilities 166,475
--------------------
Net Assets $ 14,944,870
====================
Net Assets consist of:
Paid in capital $ 14,850,534
Accumulated undistributed net investment income (2,679)
Accumulated undistributed net realized gain (loss) on investments 2,316
Net unrealized appreciation on investments 94,699
--------------------
Net Assets, for 1,489,746 shares $ 14,944,870
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($14,944,870/1,489,746) $ 10.03
====================
</TABLE>
Florida Street Bond Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cos$14,607,661) $ 14,702,360
Dividends receivable 1,650
Interest receivable 298,611
Other receivables 108,724
--------------------
Total assets 15,111,345
Liabilities
Payable for investments purchased 58,086
Accrued advisory fee 8,738
Dividends payable 99,651
------------------
Total liabilities 166,475
--------------------
Net Assets $ 14,944,870
====================
Net Assets consist of:
Paid in capital $ 14,850,534
Accumulated undistributed net investment income (2,679)
Accumulated undistributed net realized gain (loss) on investments 2,316
Net unrealized appreciation on investments 94,699
--------------------
Net Assets, for 1,489,746 shares $ 14,944,870
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($14,944,870/1,489,746) $ 10.03
====================
</TABLE>
Florida Street Bond Fund
Statement of Operations (Unaudited) for the six month period ended
April 30, 1998
<TABLE>
<S> <C> <C>
Investment Income
Dividend Income $ 24,246
Interest Income 446,878
--------------------
Total Income 471,124
Expenses
Advisory fee $ 39,227
--------------------
Total Expenses 39,227
--------------------
Net Investment Income 431,897
--------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (2,679)
Change in net unrealized appreciation
(depreciation) on investment securities 54,640
--------------------
Net gain (loss) 51,961
--------------------
Net increase (decrease) in net assets resulting $ 483,858
====================
from operations
</TABLE>
Florida Street Bond Fund
<TABLE>
<S> <C> <C>
Statement of Changes in Net Assets (Unaudited) For the six For the period
months ended ended
April 30, 1998 October 31, 1997
Increase in Net Assets
Operations
Net investment income $ 431,897 105,474
Net realized gain (loss) on securities transactions (2,679) (97,781)
Change in net unrealized appreciation 54,640 40,059
---------------- ---------------
Net Increase in net assets resulting from operations 483,858 47,752
---------------- ---------------
Distributions to shareholders:
From net investment income (429,616) (7,658)
From net realized gain - -
Return of capital - (97,781)
---------------- ---------------
Total distributions (429,616) (105,439)
Share Transactions
Net proceeds from sale of shares 7,344,576 7,463,588
Shares issued in reinvestment 435,404 -
Shares redeemed (178,360) (116,893)
---------------- ---------------
Net increase in net assets resulting
from share transactions 7,601,620 7,346,695
---------------- ---------------
Total increase in net assets 7,655,862 7,289,008
Net Assets
Begining of period 7,289,008 -
---------------- ---------------
End of period [including
undistributed net investment income of $2,316 $ 14,944,870 7,289,008
================ ===============
an $35 respectively.]
</TABLE>
Florida Street Bond Fund
Financial Highlights
<TABLE>
<S> <C> <C>
For the six For the period
months ended ended
April 30, 1998 October 31, 1997
Selected Per Share Data
Net asset value, beginning of period $9.95 $10.00
--------------- -------------
Income from investment operations
Net investment income 0.38 0.21
Net realized and unrealized gain(loss) 0.08 (0.12)
--------------- -------------
Total from investment operations 0.46 0.09
--------------- -------------
Less Distributions
From net interest income (0.38) (0.02)
From net realized gain(loss) 0.00 0.00
Return of capital 0.00 (0.12)
--------------- -------------
--------------- -------------
Total distributions (0.38) (0.14)
--------------- -------------
Net asset value, end of period $10.03 $9.95
Total Return 5.01(a) 3.69(a)
Ratios and Supplemental Data
Net assets, end of period (000) $14,945 $7,289
Ratio of expenses to average net assets 0.75(a) 0.53(a)
Ratio of net investment income to average net assets 8.22(a) 3.95(a)
Portfolio turnover rate 3.29% 60.55%
Average commission rate 0.08207 0.0339
(a) Annualized
(b) For the period August 4, 1997 (commencement of operations)
</TABLE>
<PAGE>
Florida Street Growth Fund
Results as of April 30, 1998
Fund/Indices Six Months
Life of Fund*
Florida St. Growth Fund 9.5% 13.2%
S&P Small Cap 600 Index 13.1% 16.0%
S&p Mid Cap 400 Index 19.2% 18.7%
S&P 500 Index
22.5% 17.1%
- ------------------------------------------------------------------------
Fellow Shareholders,
During the six months ended April 30, 1998, the Florida Street Growth Fund
achieved a total return of 9.50%. Since the fund's inception on August 6, 1997,
its return has been 13.2%. It is useful to compare this return to that of medium
and small capitalization indexes due to the broad range of market cap in the
fund's holdings. It is evident from the table above that the stock market
continued to be led by large companies. During the last six months, the S&P 500
has outdistanced the S&P 600 by an astounding 9.4%.
Your fund's returns trailed the general market for several reasons. The
primary reason was the defensive stance we took following the fund's inception.
We did not chase rapidly rising stocks, and we held reserves of 12-15% during
much of the period. During the most recent months, we found few compelling
purchase candidates. Additionally, we initiated and held positions in several
energy service stocks such as Tuboscope, Pride International and Halter Marine
which have exciting outlooks but whose performance suffered as investors worried
about the effect of declining oil prices on the industry's backlog. We continue
to hold these stocks which, we believe, offer compelling value. The recent price
performance of this group has been encouraging as well.
Overall, stock selection has had a positive effect on fund results. Among the
best performers for the period were specialty retailers Dollar General and
Goody's Family Clothing. They are 47% and 78% above your cost, respectively.
Sales trends continue to look healthy at these companies.
We are also very pleased with the investments made in the temporary staffing
industry. You own three companies involved in the most dynamic segment of
temporary staffing; information technology professionals. Accustaff, Cotelligent
Group and Metamor Worldwide (formerly Corestaff) have all contributed positively
to the fund's results. Your returns on cost are 23%, 32% and 27%, respectively.
These companies are benefiting from Year 2000 spending by corporations and a
growing trend toward outsourcing of many IT functions.
There were some disappointments during the period. The most significant may
have been the announcement by Cendant that accounting errors in a CUC
International unit, which was recently merged into Cendant, would reduce
earnings significantly. We continue to hold the stock, as we believe management
is very capable and will make the merger a successful one.
Another disappointing investment was Lone Star Technologies, a Manufacturer
of oilfield tubular goods. Our purchase was ill-timed, as investors were
becoming more concerned about declining oil prices, while we were focusing on
the apparent value in a stock that had retreated significantly from its
recenthigh price.
We recognized our mistake and sold the stock.
As the fund' advisor we continually search for ideas to enhance the fund's
return and risk posture. We apply a diverse set of criteria which combine value,
growth and momentum factors. Recent purchases include companies that are
consolidating their industries such as ITEQ ( process and pollution control
equipment), Eastern Environmental Services ( waste pickup), and Metals USA (
metals processing).
Additions to the technology segment of the fund are Datastream Systems (
industrial automation software) and Harbinger Corp. ( electronic commerce
services).
We believe the fund is well positioned in numerous healthy and exciting
businesses. Many of these companies are not well-followed by Wall Street,
creating opportunities for capitalizing on trends that are not well known. The
top ten holdings are listed in the table. We believe these issues have good
prospects for above average returns. In total, they represent approximately one
fifth of the fund's net asset value.
Thank you for joining us as a fellow shareholder of the Florida Street Growth
Fund. We will strive to justify the confidence you have placed in us.
Richard Chauvin, Jr. CFA
Portfolio Manager
<PAGE>
Florida Street Growth Fund
Schedule of Investments -(Unaudited) April 30, 1998
<TABLE>
<S> <C> <C>
Common Stock - 92.7% Shares Value
Banks & Bank Holding Companies - 4.1%
Carolina First Corp. 1,500 $ 43,500
CCB Financial Corp. 400 43,500
National Commerce Bancorporation 500 22,375
Norwest Corp. 600 23,812
---------------
133,187
---------------
Capital Equipment & Services 6.0%
Allied Signal Inc. 1,050 46,003
Deere & Co. 400 23,375
Illinois Tool Wks Inc. 400 28,200
Itec Inc (a) 1,800 22,950
Kuhlman Corp. 500 24,500
NCI Buildings Systems (a) 1,000 52,000
---------------
197,028
---------------
Consumer Cyclicals 10.1%
Action Performance (a) 900 31,163
Autozone Inc (a) 700 21,131
Consolidated Stores Corp (a) 1,100 44,000
Dollar General Corp. 625 23,672
Garden Ridge Corp. 1,100 21,037
Goody's Clothing Inc.(a) 750 37,125
Home Depot Inc. 400 27,850
Keystone automotive Inds. Inc. (a) 600 15,487
Movado Group Inc. 1,200 36,525
Palm Harbor Homes Inc. (a) 1,200 53,250
Proffitt's Inc. (a) 500 19,875
---------------
---------------
331,115
---------------
Consumer Services 10.8%
Accustaff Inc. (a) 1,100 39,462
Acxiom Corp. (a) 1,200 29,100
Billing Information Concepts (a) 1,300 36,400
Carnival Corp. Cl. A. 600 41,737
Cendant Corp.(a) 820 20,500
Eastern Environmental Svcs. Inc. (a) 2,700 70,537
Landry's Seafood Restaurants, Inc.(a) 1,000 28,500
Metamor Worldwide Inc.(a) 1,200 45,900
Piccadilly Cafeteria 1,000 13,188
Rare Hospitality Intl. Inc. (a) 2,200 28,600
---------------
---------------
353,924
---------------
Consumer Non - Durables - 4.5%
Flowers Industries 1,000 21,375
Pepsico, Inc. 500 19,844
Performance Food Group Co. (a) 900 18,225
Richfood Holdings 1,350 37,041
SCP Pool Corp. 2,050 48,431
---------------
144,916
---------------
Florida Street Growth Fund
Schedule of Investments -(Unaudited) - April 30, 1998
Energy Sector - 7.4%
Core Laboratories(a) 1,200 $ 34,050
Friede Goldman (a) 700 28,175
Halter marine Corp (a) 600 10,875
Mitcham Industries Inc (a) 800 9,350
Mobil Corp. 300 23,700
Nabors Industries (a) 400 10,075
Newpark Resources Inc.(a) 1,600 38,500
Pride International Inc.(a) 750 18,234
Southern Mineral Inc.(a) 2,800 9,975
Superior Energy Services Inc. (a) 4,000 44,500
Tuboscope Vetco International Corp. (a) 600 14,213
---------------
241,647
---------------
Financial Services - 14.3%
Allied Capital Corp. 1,200 31,200
Amresco Inc. (a) 1,300 47,125
Capital RE 350 25,834
Federal National Mtg. (Fannie Mae) 1,000 59,875
Fleet Financial Group Inc. 350 30,231
Greentree Financial 600 24,450
Interstate/Johnson Lane 550 17,291
Lehman Brothers Holdings Inc. 200 14,212
MBNA Corp. 1,325 44,884
Protective Life Corp. 1,000 37,125
Raymond James Financial Inc. 750 24,422
Reliastar Financial Cos. 700 31,938
Sirrom Capital Corp. 1,600 47,800
SunAmerica Inc. 600 29,963
---------------
466,350
---------------
Health Care - 4.1%
Bristol-Myers Squibb co. 250 26,469
Cognizant Corp. 600 30,863
Diagnostic Health Services (a) 6,000 54,750
SmithKline beecham Plc Adr Cl A 200 11,913
Vencor Inc. (a) 400 10,850
---------------
---------------
134,845
---------------
Natural Resources/Basic Materials - 4.3%
IMC Global Inc. 600 21,600
Metals USA Inc.(a) 3,500 68,250
Nucor Corp. 500 29,969
PPG Industries 300 21,206
---------------
---------------
141,025
---------------
Florida Street Growth Fund
Schedule of Investments -(Unaudited) - April 30, 1998
Technology Sector - 13.8%
Applied Materials, Inc. (a) 900 $ 32,512
Coherent Communication Corp.(a) 700 34,431
Compaq Computer Corp. 1,200 33,675
Compucom Systems Inc.(a) 3,100 23,250
Concord EFS Inc.(a) 900 28,350
Cotelligent Group Inc.(a) 1,300 33,556
Datastream Systems (a) 1,000 23,000
Harbinger Corp.(a) 800 29,100
PairGain Technology (a) 400 7,375
PMT Services Inc.(a) 1,200 23,400
Qlogic Corp. (a) 500 22,250
SCI Systems Inc.(a) 1,000 41,188
Tech Data (a) 1,000 49,875
World Access Inc.(a) 600 23,175
Xerox Corp. 400 45,400
---------------
450,537
---------------
Transportation/Commercial - 2.0%
ASA Hldgs Ins. 800 30,400
Skywest Inc. 400 16,200
Smithway Motor Express Corp. (a) 1,200 20,100
---------------
---------------
66,700
---------------
Telecommunications - 4.3%
Frontier Corp. 2,200 65,863
GTE Corp. 400 23,375
Premier Technologies (a) 800 25,500
Worldcom Inc.(a) 600 25,669
---------------
140,407
---------------
Utilities 1.0
Consolidated Natural Gas Co. 550 31,625
---------------
Index Units 6.0%
S & P 400 Mid-Cap Depository Receipts 2,700 195,328
---------------
Total Common Stock (Cost $2,655,756) $ 3,028,634
---------------
Money Market Securities - 8.2%
Star Treasury 4.82% 12/31/98 (Cost $268,767) 268,767
---------------
Bonds .7%
Premiere Technologies Cvt Bond 5.75%, 7/01/04 22,443 23,325
---------------
TOTAL INVESTMENTS - 101.6% (Cost $2,946,966) 3,320,726
===============
Other Assets less liabilities - -1.6% (52,682)
Total Net Assets - 100.0% $ 3,268,044
===============
<FN>
(a) non-income producing
</FN>
</TABLE>
<PAGE>
Florida Street Growth Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
<S> <C> <C>
Assets
Investment in securities, at value (cost $2,946,966) $ 3,320,726
Dividends receivable 1,314
Interest receivable 1,395
--------------------
Total assets 3,323,435
Liabilities
Payable for investments purchased $ 51,875
Accrued advisory fee payable 3,516
-------------------
Total liabilities 55,391
--------------------
Net Assets 3,268,044
====================
Net Assets consist of:
Paid in capital $ 2,960,486
Accumulated undistributed net investment income 3,570
Accumulated undistributed net realized gain (loss) on investments (69,772)
Net unrealized appreciation on investments 373,760
--------------------
Net Assets, for 288,691 shares $ 3,268,044
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($3,268,044/288,691) $ 11.32
====================
</TABLE>
<PAGE>
Florida Street Growth Fund
Statement of Operations for the six month period ended April 30, 1998
(Unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividend Income $ 7,167
Interest Income 10,986
-------------------
Total Income 18,153
Expenses
Advisory fee $ 13,242
----------------------
Total Expenses 13,242
-------------------
Net Investment Income (Loss) 4,911
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (63,548)
Change in net unrealized appreciation (depreciation) on investment securities 341,432
----------------------
Net gain (loss) on investment securities 277,884
-------------------
Net increase (decrease) in net assets resulting from operations $ 282,795
===================
</TABLE>
Florida Street Growth Fund
<TABLE>
<S> <C> <C>
Statement of Changes in Net Assets (Unaudited) For the six For the period
months ended August 6, 1997
April 30, 1998 to October 31,1997 (a)
Increase in Net Assets
Operations
Net investment income $ 4,911 5,346
Net realized gain(loss) on securities transactions (63,548) (4,612)
Change in net unrealized appreciation 341,432 32,328
------------------ ------------------
Net Increase in net assets resulting from operations 282,795 33,062
------------------ ------------------
Distributions to shareholders:
From net investment income (2,075) -
From net realized gain (6,224) -
------------------ ------------------
Total Distributions (8,299) -
Share Transactions
Net proceeds from sale of shares 1,017,382 2,127,711
Shares issued in reinvestment 8,299 -
Shares redeemed (149,614) (43,292)
------------------ ------------------
Net increase in net assets resulting
from share transactions 876,067 2,084,419
------------------ ------------------
Total increase in net assets 1,150,563 2,117,481
Net Assets
Begining of period 2,117,481 -
------------------ ------------------
End of period [including undistributed net investment
income of $4,911 and $5,346]. $ 3,268,044 2,117,481
================== ==================
<FN>
(a) Commencement of Operations
</FN>
</TABLE>
Florida Street Growth Fund
<TABLE>
<S> <C> <C>
Financial Highlights (Unaudited)
For the period For the period
Selected Per Share Data ended ended
April 30, 1998 October 31, 1997
Net asset value, beginning of period $10.19 $10.00
------------ -------------
Income from investment operations
Net investment income 0.00 0.03
Net realized and unrealized gain (loss) 1.17 0.16
------------ -------------
Total from investment operations 1.17 0.19
------------ -------------
Less Distributions
From net interest income (0.01) -
From net realized gain (loss) (0.03) -
------------ -------------
Total Distributions (0.04) -
------------ -------------
Net asset value, end of period $11.32 $10.19
============ =============
Total Return 23.29% 7.(a)
Ratios and Supplemental Data
Net assets, end of period (000) $3,268 $2,117
Ratio of expenses to
average net assets 1.12(a) 1.355(a)
Ratio of net investment income to
average net assets 0.41(a) 1.14%(a)
Portfolio turnover rate 9.57% 0.87%
Average commissions paid 0.0967 0.0973
<FN>
(a) Annualized
(b) Commencement of Operations
</FN>
</TABLE>
<PAGE>
FLORIDA STREET FUNDS
Notes to Financial Statements
April 30, 1998
NOTE 1. ORGANIZATION
The Florida Bond Fund (the "Bond Fund") and the Florida Street Growth Fund (the
"Growth Fund") were organized as series of the AmeriPrime Funds, an Ohio
business trust (the "Trust"), on June 15, 1997, and commenced operations on
August 4 and August 6, 1997, respectively. The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified series, open end
management investment company. The investment objective of the Bond Fund is to
provide total return to shareholders over the long term. The investment
objective of the Florida Street Growth Fund is to provide total return to its
shareholders over the long term. The Trust Agreement permits the Trustees to
issue an unlimited number of shares of beneficial interest of separate series
without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuations- Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when, in the Adviser's opinion the last bid price does not accurately reflect
the current value of the security. All other securities for which
over-the-counter market quotations are readily available are valued at their
last bid price. When market quotations are not readily available, when the
Adviser determines the last bid price does not accurately reflect the current
value or when restricted securities are being valued, such securities are valued
as determined in good faith by the Adviser, in conformity with guidelines
adopted by and subject to review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
FLORIDA STREET FUNDS
Notes to Financial Statements
April 30, 1998
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds retain Commonwealth Advisors, Inc. (the "Adviser") to manage the
Fund's investments. The Adviser is a Louisiana corporation. Walter A. Morales,
the adviser's president and chief investment manager is responsible for the day
to day management of the bond fund, Richard L. Chauvin, Senior Vice-President
and Fund Manager of the adviser is responsible for the day to day management of
the Growth Fund.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, fees and
expenses of non-interested person trustees, and extraordinary expenses. As
compensation for its management services and agreement to pay the Funds
expenses, the Funds are obligated to pay the Adviser a fee computed and accrued
daily and paid monthly at an annual rate of 1.10% and 1.35% of the average daily
net assets of the Bond Fund and the Growth Fund, respectively. It should be
noted that most investment companies pay their own operating expenses directly,
while the Funds expenses, except those specified above, are paid by the Adviser.
For the period from November 1, 1997 through April 30, 1998, the Adviser
received fees of $39,227 and $13, 242 from the Bond Fund and the Growth Fund,
respectively.
FLORIDA STREET FUNDS
Notes to Financial Statements
April 30, 1998
NOTE 4. CAPITAL SHARE TRANSACTIONS
Florida Street Bond Fund. As of April 30, 1998 there was an unlimited number of
no par value shares of capital stock authorized for the Fund. Paid in capital at
April 30, 1998 was $14,948,315.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six For the six For the period For the period
months ended months ended ended ended
April 30, 1998 April 30, 1998 October 31, 1997 October 31, 1997
(a) (a)
Shares Dollars Shares Dollars
Shares sold 731,204 $7,344,576 744,446 $7,463,588
Shares issued in
reinvestment of
dividends 43,535 435,404 0 0
Shares redeemed (17,717) (178,360) (11,722) (116,893)
-------- --------- -------- ---------
757,022 $7,601,620 732,724 $7,346,695
<FN>
(a) August 4, 1997 (commencement of operations) to October 31, 1998.
</FN>
</TABLE>
Florida Street Growth Fund. As of April 30, 1998, there was an unlimited number
of no par value shares of capital stock authorized for the Fund. Paid in capital
at April 30, 1998 was $2,960,486.
Transactions in capital stock were as follows:
<TABLE>
<S> <C> <C> <C> <C>
For the six For the six For the period For the period
months ended months ended ended ended
April 30, 1998 April 30, 1998 October 31, 1997 October 31, 1997
(a) (a)
Shares Dollars Shares Dollars
Shares sold 94,097 $1,017,382 211,885 $2,127,711
Shares issued in
reinvestment of
dividends 23,609 8,299 0 0
Shares redeemed (36,718) (149,984) (4,179) (43,292)
-------- --------- ------- --------
80,988 $876,697 207,703 $7,346,695
</TABLE>
FLORIDA STREET FUNDS
Notes to Financial Statements
April 30, 1998
NOTE 5. INVESTMENTS
Florida Street Bond Fund. For the period from November 1, 1997, to April 30,
1998 purchases and sales of investment securities, other than short-term
investments, aggregated $749,198 and $347,803, respectively. The gross
unrealized appreciation for all securities totaled $330,572 and the gross
unrealized depreciation for all securities totaled $235,873 for a net unrealized
appreciation of $94,699. The aggregate cost of securities for federal income tax
purposes at April 30, 1998 was $14,607,661.
Florida Street Growth Fund. For the period from November 1, 1997 through April
30, 1998, purchases and sales of investment securities, other than short-term
investments, aggregated $1,297,913 and $229,550, respectively. The gross
unrealized appreciation for all securities totaled $434,700 and the gross
unrealized depreciation for all securities totaled $60,940 for a net unrealized
appreciation of $373,760. The aggregate cost of securities for federal income
tax purposes at April 30, 1998 was $2,946,966.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 7. RELATED PARTY TRANSACTIONS
The Adviser is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under Section
2(a)(9) of the Investment Company Act of 1940. As of October 31, 1997, Charles
Schwab & Co. owned in aggregate more than 25% of the Fund.
<PAGE>
June 8, 1998
Dear Shareholder:
After only seven weeks of managing the Marathon Value Fund, it seems much too
soon to be writing our first shareholder letter; however, this is a great
opportunity to welcome you as a fellow shareholder in the fund.
The Fund began on March 9, 1998, with an NAV of $10.00. For the period from
March 9, 1998 (commencement of operations), through April 30, 1998, the NAV grew
to $10.32. Since inception, the Fund is up 3.2% versus a return of 4.7% for the
Russell 2000 and 5.0% for the S&P 600 Smallcap Index. The largest part of the
index's performance came during March while the fund was attempting to invest
its cash. Conversely, the Fund did very well in April out-performing both the
Russell 2000 and the S&P 600 Smallcap Index.
Currently, small and mid-cap stocks are having a very difficult time keeping up
with the performance of the larger, more liquid companies. The Dow Jones
Industrials and the S&P 500 have been the investment of choice, and the smaller
companies have suffered through several years of lagging performance. Contrary
investors that we are, we see this as an opportunity, not a problem. The growing
valuation differences between the large S&P stocks and the smaller stocks should
make the stocks we invest in increasingly attractive.
Although we enjoy seeing our stocks increase in value, sometimes a decline in
prices creates opportunities. The recent turmoil in the markets has given us the
opportunity to buy additional shares in companies at what we feel will turn out
to be bargain prices. After buying shares in St. John Knits, Arctic Cat, and
Adflex Solutions at higher prices in April and May, we were able to add to these
positions at lower prices as new money entered the fund.
This fund is intended for long-term "investors" and the week-to-week movement of
our stocks, although sometimes wonderful and sometimes painful, is not our
focus. When we purchase shares of a stock it is usually with the intention of
holding the shares for several years as the business grows in value, or as other
investors come to recognize the value that already exists. We feel we are
investing in companies that will be worth significantly more in the future.
On behalf of all the employees of Burroughs & Hutchinson, I would like to thank
you for your investment in our fund. We are excited about the future of this
fund and look forward to working with you in the future.
Sincerely,
Mark Matsko, CFA
Portfolio Manager
<PAGE>
Marathon Value Fund
Schedule of Investments - (Unaudited) - April 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Common Stocks - 63.2% Shares Value
Banks & Bank Holding Cos. - 4.3%
California State Bank 1,000 $ 50,750
First Commerce Bancshares (a) 2,000 57,000
------------------
------------------
107,750
------------------
Business Equipment & Services - 9.6%
Analysts International Corp. (a) 1,000 29,000
(John H.) Harland Co. 6,000 106,875
Olsten Corp. 7,700 105,394
------------------
------------------
241,269
------------------
Consumer Products (durables) - 4.8%
QEP Co. (a) 5,000 45,000
Toro Co. 2,000 75,750
------------------
------------------
120,750
------------------
Consumer Products (non-durables) - 6.5%
Food Lion Inc. - Class B 10,000 101,250
Morton International, Inc. 2,000 64,000
------------------
------------------
165,250
------------------
Computers & Peripherals - 3.8%
Adflex Solutions, Inc. (a) 3,200 69,600
Datum Inc. (a) 1,500 25,125
------------------
------------------
94,725
------------------
Financial Services - 5.4%
Bear Stearns Companies Inc. 1,000 57,062
United Asset Management Corp. 3,000 79,500
------------------
------------------
136,562
------------------
Healthcare Products - 9.4%
Ballard Medical Products 2,000 50,250
Corvel Corp. (a) 1,500 53,437
EMPI, Inc. (a) 4,000 80,000
Vencor Inc. (a) 2,000 54,250
------------------
------------------
237,937
------------------
Manufacturing - Electrical - 4.5%
Woodhead Industries, Inc. 6,000 112,500
------------------
Measuring Equipment - 2.8%
Lecroy Corp. (a) 1,500 34,875
Thermospectra Corp. (a) 4,000 36,250
------------------
------------------
71,125
------------------
Marathon Value Fund
Schedule of Investments - (Unaudited) - April 30, 1998
Common Stocks - continued Shares Value
Oil & Gas Services - 1.2%
Maverick Tube Corp. (a) 1,000 $ 17,438
Patterson Energy Inc. (a) 1,000 14,000
------------------
------------------
31,438
------------------
Recreational Vehicles - 4.0%
Artic Cat. Inc. (a) 10,100 101,000
------------------
Restaurants - 1.3%
Schlotzsky's Inc. (a) 2,000 32,000
------------------
Transportation - 5.6%
Arnold Industries Inc. 6,100 97,600
Trico Marine Services, Inc. (a) 2,000 45,250
------------------
------------------
142,850
------------------
==================
TOTAL COMMON STOCKS (Cost $1,542,859) $ 1,595,156
==================
Money Market Securities - 39.6% Principal Amount
Star Treasury 4.83%, 12/31/98 (Cost: $999,375) $ 999,375 $ 999,375
------------------
------------------
TOTAL INVESTMENTS - % (Cost $2,542,234) $ 2,594,531
------------------
------------------
Liabilities less other assets - (2.8%) (71,232)
------------------
=================
TOTAL NET ASSETS - 100.0% $ 2,523,299
==================
<FN>
(a) non-income producing security
</FN>
</TABLE>
<PAGE>
Marathon Value Fund April 30, 1998
Statement of Assets & Liabilities (Unaudited)
<TABLE>
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Assets
Investment in securities, at value (cost $2,542,234) $ 2,594,531
Receivable for invesments sold 83,725
Dividends receivable 620
Interest receivable 3,922
--------------------
Total assets 2,682,798
Liabilities
Payable for investments purchased $ 157,296
Accrued investment advisory fee payable 2,203
-------------------
Total liabilities 159,499
--------------------
Net Assets $ 2,523,299
====================
Net Assets consist of:
Paid in capital $ 2,459,118
Accumulated undistributed net investment income 4,009
Accumulated undistributed net realized gain 7,875
Net unrealized appreciation on investments 52,297
--------------------
Net Assets, for 244,517 shares $ 2,523,299
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($2,523,299/244,517) $ 10.32
====================
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Marathon Value Fund
Statement of Operations for the period March 12, 1998 (Commencement of
Operations) to April 30, 1998 (Unaudited)
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Investment Income
Dividend Income $ 740
Interest Income 6,240
-------------------
Total Income 6,980
Expenses
Investment advisory fee $ 2,971
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Total Operating Expenses 2,971
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Net Investment Income (Loss) 4,009
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Realized & Unrealized Gain
Net realized gain on investment securities 7,875
Change in net unrealized appreciation on investment securities 52,297
-------------------
-------------------
Net gain (loss) on investment securities 60,172
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Net increase in net assets resulting from operations $ 64,181
===================
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Marathon Value Fund
Statement of Changes in Net Assets (Unaudited)
for the period March 12, 1998 (commencement of operations) to April 30, 1998
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Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ 4,009
Net realized gain 7,875
Change in net unrealized appreciation 52,297
---------------
Net Increase in net assets resulting from operations 64,181
---------------
Distributions to shareholders:
From net investment income -
---------------
Share Transactions
Net proceeds from sale of shares 2,459,118
Shares issued in reinvestment -
Shares redeemed -
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Net increase in net assets resulting from share transactions 2,459,118
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Total increase in net assets 2,523,299
Net Assets
Beginning of period -
---------------
End of period [including undistributed net investment income of $4,009] $ 2,523,299
===============
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Marathon Value Fund
Financial Highlights (Unaudited)
for the period March 12, 1998 (Commencement of Operations) to April 30, 1998
Selected Per Share Data
Net asset value,
beginning of period $10.00
------------
Income from investment
Operations
Net investment income 0.03
Net realized and
unrealized gain (loss) 0.29
------------
Total from investment operations 0.32
------------
Less Distributions
From net interest income -
From net realized gain -
------------
Net asset value,
end of period $10.32
============
Total Return 23.36(a)
Ratios and Supplemental Data
Net assets, end of period (000) $2,523
Ratio of expenses to
average net assets 1.44(a)
Ratio of net investment income to
average net assets 1.94(a)
Portfolio turnover rate 41.76(a)
Average commissions paid 0.0631
(a) Annualized
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MARATHON VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(Unaudited)
NOTE 1. ORGANIZATION
The Marathon Value Fund. (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"), on March 9, 1998 and
commenced operations on March 12, 1998. The Trust is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The investment objective of the Fund is to
provide long term capital appreciation to its shareholders. The Trust Agreement
permits the trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation- Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market values of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
MARATHON VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(Unaudited)
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net investment income and any
realized capital gains.
Dividends and Distributions- The Fund intends to distribute substantially all of
its net investment income as dividends to its shareholders on an annual basis.
The Fund intends to distribute its net long-term capital gains and its net short
term capital gains at least once a year.
Other- The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Burroughs & Hutchinson, Inc. (the "Adviser") to manage the
Fund's investments. Mark Matsko, is primarily responsible for the day to day
management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees. As
compensation for its management services the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
1.48% of the average daily net assets of the Fund. For the period from March 12,
1998 through April 30, 1998, the Adviser has received a fee of $2,971 from the
Fund.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator") to
manage the funds business affairs and provide the fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the period ended April 30, 1998, the Administrator received fees
of $2,500 from the Adviser for administrative services provided to the fund.
The fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to act
as the principal distributor of fund shares, there were not any payments made to
the Distributor for the six month period ended April, 30, 1998. Certain members
of management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
MARATHON VALUE FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(Unaudited)
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of April 30, 1998 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Paid in capital at April 30, 1998 was
$2,459,118.
Transactions in capital stock were as follows:
For the
period from March 12, 1998
(Commencement of Operations) through April
30, 1998
Shares Amount
- --------- ----------
Shares sold 244,517 $2,459,118
Shares issued in reinvestment
of dividends - -
Shares redeemed - -
----------- --------------
Net increase 244,517 $2,459,118
====== ========
NOTE 5. INVESTMENTS
For the period from March 12, 1998 (commencement of operations) through April
30, 1998, purchases and sales of investment securities, other than short-term
investments, aggregated $1,618,709 and $93,938, respectively. The gross
unrealized appreciation for all securities totaled $75,762 and the gross
unrealized depreciation for all securities totaled $23,462 for a net unrealized
appreciation of $52,300. The aggregate cost of securities for federal income tax
purposes at April 30, 1998 was $2,542,234.
NOTE 6. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
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