AAM Equity Fund
Semi-Annual Report
April 30, 1999
Dear Shareholders:
Investment Result - Inception through April 30, 1999
Over the last six months, the AAM Equity Fund (the "Fund") has enjoyed a
positive return of 17.9% which is a nice recovery from the market's downturn
following inception of the Fund.
-------------- -------------- --------------
06/30/1998 10/31/1998 04/30/1999
- -------------------------- -------------- -------------- --------------
AAM Equity Fund $10,000 $9,430 $11,120
- -------------------------- -------------- -------------- --------------
S&P 500 $10,000 $9,750 $11,920
- -------------------------- -------------- -------------- --------------
Dow Jones $10,000 $9,660 $12,230
- -------------------------- -------------- -------------- --------------
Investment results since inception (not annualized):
- ---------------------------------- ------------- --------- -----------
Comparative AAM S&P 500 Dow Jones
Investment Returns a,b Equity Fund Index c Index c
- ---------------------------------- ------------- --------- -----------
Six Months Ending 4/30/99 17.9% 22.3% 26.6%
- ---------------------------------- ------------- --------- -----------
Since Inception d 11.2% 19.2% 22.3%
- ---------------------------------- ------------- --------- -----------
a Past performance is not indicative of future results.
b The AAM Equity Fund's historical returns are presented net of all fees and
expenses, versus the gross market benchmarks (the S&P 500 Index and the Dow
Jones Index). Investors should keep in mind 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 NY Stock Exchange. The Index is adjusted for
dividends and weighted toward sotcks with large market capitalizations. The Dow
Jones Index is an unmanaged index of 30 selected common stocks, which are listed
on the NY Stock Exchange. The Index is adjusted for dividends and is made up of
leading industrial and consumer stocks with large capitalizations.
d From June 30, 1998.
<PAGE>
From inception on June 30, 1998, the AAM Equity Fund (the "Fund") has
accumulated more than $4,000,000 in net assets.
Investment Approach
To remind our shareholders, the AAM Equity Fund's investment approach is to
achieve long-term growth of capital by investing in high quality large and
mid-cap U.S. companies. We select companies which are leaders in their various
industries which we believe will provide the greatest potential return over an
18 month to two year time horizon.
Commentary and Outlook
Since the inception of the AAM Equity Fund on June 30, 1998, the stock market
has taken investors on a "real" roller coaster ride. Since the market correction
in the summer and early fall of 1998, we have felt pretty good about our
returns. It has remained extremely difficult for most money managers and mutual
funds to keep pace with the S&P 500. Now, the Dow Jones Industrial Average has
outpaced the S&P 500 by almost 2 to 1 in the first 120 days of 1999. These are
definitely difficult times for the investment manager.
The Fund continues to be value driven; however, in early 1999, we did shift some
dollars into the more growth oriented technology sector. The technology stocks
we purchased were large-cap with a consistent history of earning and growth -
not stocks chasing the internet craze.
AAM is currently over 95% invested; and, we are confident that the markets will
reward high quality companies with consistent earnings over the next several
quarters. The only major negatives we see are the high valuations in some
sectors, particularly the internet and the current IPO craze. We have recently
noticed a shift to cyclicals and our portfolio has been nicely rewarded.
The remainder of 1999 may continue to be a volatile ride in the stock market;
however, we believe it is the only game in town where you can outpace inflation
and invest your assets for long-term future gains.
Sincerely,
Knox H. Fuqua
President and Chief Investment Officer
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund; this report is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by an effective prospectus. Read the prospectus carefully before
investing.
<PAGE>
<TABLE>
<CAPTION>
AAM Equity Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stock - 96.7% Shares Value
Aerospace & Defence - 3.4%
AlliedSignal, Inc. 1,300 $ 76,375
Lockheed Martin Corp. 1,500 64,594
-----------------
140,969
-----------------
Automobiles - 2.3%
Ford Motor Company 1,500 95,906
-----------------
Banks - 9.3%
BB&T Corp. 1,800 71,888
Capital One Financial Corp. 375 65,133
CCB Financial Corp. 1,200 69,300
Citigroup, Inc. 1,000 75,250
SunTrust Banks 800 57,200
Wachovia Corp. 500 43,938
-----------------
382,709
-----------------
Beverages - 3.4%
Anheuser Busch Cos. 975 71,297
Coca Cola Co. 1,000 68,000
-----------------
139,297
-----------------
Broadcasting - 1.9%
Cox Communications - Class A 1,000 79,375
-----------------
Chemicals - 4.2%
Air Products & Chemicals, Inc. 1,400 65,800
duPont (E.I) deNemours 1,500 105,938
-----------------
171,738
-----------------
Communications - 1.5%
Media General, Inc. - Class A 1,150 59,800
-----------------
Computer Components - 2.8%
EMC Corp. 475 51,745
Intel Corp. 1,000 61,187
-----------------
112,932
-----------------
Computer Services & Software - 1.2%
Microsoft Corp. 600 48,787
-----------------
Computer Systems - 3.7%
Cisco Systems, Inc. (a) 650 74,141
Hewlett-Packard Co. 1,000 78,875
-----------------
153,016
-----------------
Diversified Conglomerates - 1.9%
General Electric Co. 750 79,125
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
AAM Equity Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stock - continued Shares Value
Drugs & Healthcare - 10.2%
American Home Products Corp. 1,200 $ 73,200
Amgen, Inc. (a) 900 55,294
Bristol Myers Squibb 1,250 79,453
Johnson & Johnson 700 68,250
Merck & Co., Inc. 1,000 70,250
Schering-Plough & Corp. 1,500 72,469
-----------------
418,916
-----------------
Electronics - 4.0%
Koninklijke Philips Electron N 1,000 85,375
Motorola, Inc. 1,000 80,125
-----------------
165,500
-----------------
Energy Services - 2.1%
Halliburton Co. 2,000 85,250
-----------------
Entertainment - 1.5%
Disney (Walt) & Co. 2,000 63,500
-----------------
Foods - 3.0%
Sara Lee Corp. 2,500 55,625
Sysco Corp. 2,300 68,281
-----------------
123,906
-----------------
Household Products - 1.3%
Gillette Co. 1,000 52,188
-----------------
Insurance - 6.7%
American International Group 700 82,206
Berkshire Hathaway - Class B 25 61,750
Markel Corp. (a) 400 74,600
St. Paul Cos. 2,000 57,375
-----------------
275,931
-----------------
Manufacturing - 3.7%
Chesapeake Corp. 2,000 65,000
Deere & Co. 2,000 86,000
-----------------
151,000
-----------------
Mining & Building Materials - 2.9%
Cleveland Cliffs, Inc. 1,600 63,700
Martin Marietta Materials 875 54,086
-----------------
117,786
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
AAM Equity Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stock - continued Shares Value
Oil & Natural Gas - 7.6%
Atlantic Richfield 1,000 $ 83,937
Chevron Corp. 750 74,812
Enron Corp. 1,000 75,250
Schlumberger Ltd. 1,200 76,650
-----------------
310,649
-----------------
Other Consumer Goods - 1.6%
Tredegar Industries, Inc. 2,500 66,719
-----------------
Packaging & Containers - 2.4%
Alcoa, Inc. 1,600 99,600
-----------------
Real Estate Investment Trusts - 2.7%
Federal Realty Investment Trust 3,000 71,625
MGI Properties 1,350 37,294
-----------------
108,919
-----------------
Retail - 4.5%
Circuit City Stores, Inc. 1,000 61,500
Saks, Inc. (a) 2,500 70,781
Walgreen Co. 1,900 51,062
-----------------
183,343
-----------------
Telephone Services - 3.3%
MCI Worldcom 625 51,367
SBC Communications, Inc. 1,500 84,000
-----------------
135,367
-----------------
Transportation - 3.6%
Norfolk Southern 2,500 81,719
Tidewater, Inc. 2,500 66,250
-----------------
147,969
-----------------
Total Common Stock - (Cost $3,469,826) 3,970,197
-----------------
Principal
Money Market Securities - 2.1% Amount Value
Star Treasury Fund, 4.01% (b) (Cost $87,776) $87,776 87,776
-----------------
TOTAL INVESTMENTS - (Cost $3,557,602) - 98.8% 4,057,973
-----------------
Other assets less liabilities - 1.2% 48,665
-----------------
Total Net Assets - 100.0% $ 4,106,638
=================
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April 30, 1999.
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
AAM Equity Fund April 30, 1999
Statement of Assets and Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $3,557,602) $ 4,057,973
Receivable for securities sold 18,304
Dividends receivable 3,061
Interest receivable 388
Receivable from investment advisor for organization costs 5,213
Deferred organizational costs 25,783
------------------
Total assets 4,110,722
Liabilities
Accrued investment advisory fee payable $ 4,054
Other payables 30
-----------------
Total liabilities 4,084
------------------
Net Assets $ 4,106,638
==================
Net Assets consist of:
Paid in capital $ 3,671,661
Accumulated undistributed net investment income 16,463
Accumulated net realized gain (loss) on investments (81,857)
Net unrealized appreciation on investments 500,371
------------------
Net Assets, for 369,410 shares $ 4,106,638
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($4,106,638/369,410) $ 11.12
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
AAM Equity Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income 25,489
Interest Income 3,665
-------------------
Total Income 29,154
Expenses
Investment advisory fee 19,896
Organizational expenses 3,107
Trustees' fees 813
------------------
Total expenses before reimbursement 23,816
Reimbursed expenses (3,920)
------------------
Total operating expenses 19,896
-------------------
Net Investment Income 9,258
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (44,017)
Change in net unrealized appreciation (depreciation)
on investment securities 601,603
------------------
Net gain on investment securities 557,586
-------------------
Net increase in net assets resulting from operations $ 566,844
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
AAM Equity Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Period
April 30, ended
1999 October 31,
(Unaudited) 1998 (a)
----------------- -----------------
Increase (Decrease) in Net Assets
Operations
Net investment income $ 9,258 $ 7,205
Net realized gain (loss) on investment securities (44,017) (37,840)
Change in net unrealized appreciation (depreciation) 601,603 (101,232)
----------------- -----------------
Net increase (decrease) in net assets resulting from operations 566,844 (131,867)
----------------- -----------------
Share Transactions
Net proceeds from sale of shares 1,134,901 2,990,242
Shares redeemed (447,035) (6,447)
----------------- -----------------
Net increase in net assets resulting
from share transactions 687,866 2,983,795
----------------- -----------------
Total increase in net assets 1,254,710 2,851,928
Net Assets
Beginning of period 2,851,928 -
----------------- -----------------
End of period [including accumulated undistributed net
investment income of $16,463 and $7,205, respectively] $ 4,106,638 $ 2,851,928
================= =================
</TABLE>
(a) June 30, 1998 (commencement of operations) to October 31, 1998.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
AAM Equity Fund
Financial Highlights
<S> <C> <C>
Six months
ended Period
April 30, ended
1999 October 31,
(Unaudited) 1998 (c)
----------------- -----------------
Selected Per Share Data
Net asset value, beginning of period $ 9.43 $ 10.00
----------------- -----------------
Income from investment operations
Net investment income 0.03 0.03
Net realized and unrealized gain (loss) 1.66 (0.60)
----------------- -----------------
Total from investment operations 1.69 (0.57)
----------------- -----------------
Net asset value, end of period $ 11.12 $ 9.43
================= =================
Total Return (b) 17.92% (5.70)%
Ratios and Supplemental Data
Net assets, end of period (000) $4,107 $2,852
Ratio of expenses to average net assets 1.15% (a) 1.14% (a)
Ratio of expenses to average net assets before reimbursement 1.38% (a) 1.40% (a)
Ratio of net investment income to average net assets 0.54% (a) 0.90% (a)
Ratio of net investment income to average net assets
before reimbursement 0.31% (a) 0.64% (a)
Portfolio turnover rate 33.54% (a) 14.41% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) June 30, 1998 (commencement of operations) to October 31, 1998
See accompanying notes which are an integral part of the financial statements
<PAGE>
AAM Equity Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
AAM Equity Fund (the "Fund") is organized as a series of the AmeriPrime
Funds, an Ohio business trust (the "Trust"). The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company. The Fund's investment objective is to provide long-term
capital appreciation. The Declaration of Trust 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, and 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 (the
"Board").
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. 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.
<PAGE>
AAM Equity Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 Appalachian Asset Management, Inc. (the "Adviser") to
manage the Fund's investments. The adviser is controlled by its President, Knox
H. Fuqua. Mr. Fuqua 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 commission, 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 1.15% 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 six-month period ended April
30, 1999, the Advisor received a fee of $19,896 from the Fund. The Advisor has
voluntarily agreed to reimburse other expenses for the fiscal year ended October
31, 1999 to the extent necessary to maintain total operating expenses at the
rate of 1.15%. For the six-month period ended April 30, 1999, the Advisor
reimbursed expenses of $3,920.
<PAGE>
AAM Equity Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, 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 the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $3,671,661.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 111,035 $1,134,901 303,178 $2,990,242
Shares redeemed (44,096) (447,035) (707) (6,447)
------- --------- ------- ----------
66,939 $687,866 302,471 $2,983,795
======= ========= ======= ==========
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $1,165,939
and $549,388, respectively. At April 30, 1999, the unrealized appreciation for
all securities totaled $577,283 and the gross unrealized depreciation for all
securities totaled $76,912 for a net unrealized depreciation of $500,371. The
aggregate cost of securities for federal income tax purposes at April 30, 1999
was $3,557,602.
<PAGE>
AAM Equity Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
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 Fund. 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, 1999, National
Financial Services Corp. owned of record in aggregate more than 25% of the Fund.
NOTE 8. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the fund could be adversely affected if the
computer systems used by the Adviser, Administrator or servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Adviser and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Advisor cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 99.1% Shares Value
BASIC INDUSTRIES - 14.1%
Chemicals - 8.0%
DuPont (E.I.) De Nemours 2,500 $ 176,563
International Flavors & Fragrances 4,100 161,950
Rohm & Haas Co. 4,000 179,250
Witco Corp. 5,860 111,706
-----------------
629,469
-----------------
Manufacturers / Diversified - 1.7%
Minnesota Mining & Manufacturing Co. 1,500 133,500
-----------------
Manufacturers / Specialized - 1.8%
Pall Corporation 7,500 138,281
-----------------
Paper & Forest Products - 2.6%
Weyerhaeuser Co. 3,000 201,375
-----------------
TOTAL BASIC INDUSTRIES 1,102,625
-----------------
DURABLES - 4.0%
Autos & Auto Parts - 4.0%
DaimlerChrysler AG 1,419 139,328
Snap-On, Inc. 5,300 172,581
-----------------
311,909
-----------------
ENERGY - 11.4%
Oil & Gas - 11.4%
Baker Hughes, Inc. 7,500 224,062
Statia Terminals Group NV 1,600 26,800
Sunoco, Inc. 3,500 125,125
Unocal Corp. 4,500 187,032
USX-Marathon Group 4,800 150,000
YPF Sociedad Anonima 4,400 184,800
-----------------
897,819
-----------------
FINANCE - 16.2%
Banks - 9.9%
Bank of America Corp. 2,200 158,400
Mercantile BanCorp. 3,000 168,180
Morgan (J.P.) 1,200 161,700
SouthTrust Corp. 3,650 145,430
Summit Bancorp 3,400 144,075
-----------------
777,785
-----------------
Insurance - 1.8%
Penn-America Group 4,000 42,000
SAFECO Corp. 2,500 99,375
-----------------
141,375
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
FINANCE - continued
Real Estate Investment Trust - 2.0%
Patriot American Hospitality (New) 16,980 $ 85,960
Prison Realty Trust 3,500 68,250
-----------------
154,210
-----------------
Savings & Loans - 2.5%
Community Savings Bankshares, Inc. 15,511 193,887
-----------------
TOTAL FINANCE 1,267,257
-----------------
HEALTH - 7.5%
Medical Equipment & Supplies - 1.5%
Baxter International, Inc. 1,900 119,700
-----------------
Pharmaceuticals - 6.0%
American Home Products Corp. 2,900 176,900
Glaxo Wellcome PLC 2,300 133,975
Pharmacia & Upjohn, Inc. 2,800 156,800
-----------------
467,675
-----------------
TOTAL HEALTH 587,375
-----------------
INDUSTRIAL MACHINERY & EQUIPMENT - 3.7%
Diversified Machinery - 2.1%
Federal Signal Corp. 6,465 160,009
-----------------
Electrical Equipment - 1.6%
Thomas & Betts, Inc. 3,050 128,100
-----------------
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 288,109
-----------------
MEDIA & LEISURE - 2.0%
Leisure Durables & Toys - 1.1%
Adams Golf, Inc. (a) 3,000 11,250
Callaway Golf, Inc. 5,000 75,313
-----------------
86,563
-----------------
Lodging & Gaming - 0.9%
Cedar Fair, L.P. 3,000 72,000
-----------------
TOTAL MEDIA & LEISURE 158,563
-----------------
NON-DURABLES - 11.1%
Cosmetics - 2.7%
Avon Products 3,840 208,560
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
NON-DURABLES - continued
Foods - 4.8%
General Mills Inc. 1,800 $ 131,625
Heinz (H.J.) 2,300 107,381
Quaker Oats 2,200 142,038
-----------------
381,044
-----------------
Household Products - 2.5%
Kimberly-Clark Group 2,400 147,150
Tupperware Corp. 2,000 47,375
-----------------
194,525
-----------------
Tobacco - 1.1%
Philip Morris Cos., Inc. 2,550 89,410
-----------------
TOTAL NON-DURABLES 873,539
-----------------
RETAIL & WHOLESALE - 4.9%
Department Stores - 4.9%
May Department Stores 4,350 173,184
Penney (J.C.) 4,650 212,156
-----------------
385,340
-----------------
SERVICES - 3.6%
Printing - 1.2%
Deluxe Corp. 2,600 90,025
-----------------
Miscellaneous Services - 2.4%
Dun & Bradstreet Corp. 3,000 110,250
Unisource Worldwide 9,690 78,731
-----------------
188,981
-----------------
TOTAL SERVICES 279,006
-----------------
TECHNOLOGY - 7.2%
Communications Equipment - 2.4%
Amerilink Corp. (a) 1,900 13,063
Harris Corp. 5,000 172,812
-----------------
185,875
-----------------
Electronics - 3.0%
Hypercom Corp.(a) 8,000 52,000
Tektronix Inc. 6,850 166,112
Ultralife Batteries, Inc. (a) 5,000 23,125
-----------------
241,237
-----------------
Photography & Imaging - 1.8%
Eastman Kodak, Inc. 1,850 138,056
-----------------
TOTAL TECHNOLOGY - 565,168
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
TRANSPORTATION - 1.2%
Shipping - 1.2%
Knightsbridge Tankers Ltd. A 5,000 $ 94,063
-----------------
UTILITIES - 12.2%
Electric Utility - 1.8%
Korea Electric Power 8,600 141,900
-----------------
Natural Gas - 6.6%
Midcoast Energy Resources, Inc. 5,500 93,500
Sonat Corporation 6,004 214,643
Williams Companies 4,500 212,625
-----------------
520,768
-----------------
Telephone Services - 3.8%
AT&T Corp. 2,850 143,925
Telefonica de Argentina 4,000 149,500
-----------------
293,425
-----------------
TOTAL UTILITIES - 956,093
-----------------
TOTAL COMMON STOCKS (Cost $6,892,462) 7,766,866
-----------------
Preferred Stock - 1.1%
FINANCE - 1.1%
Insurance - 1.1%
Conseco Financial Preferred Series F (Cost $100,000) 2,000 84,125
-----------------
Principal
Amount Value
Money Market Securities - 0.3%
Star Treasury Fund, 4.01% (b) (Cost $27,345) $ 27,345 27,345
-----------------
TOTAL INVESTMENTS - 100.5% (Cost $ 7,019,807) 7,878,336
-----------------
Other assets less liabilities - (0.5%) (37,843)
-----------------
TOTAL NET ASSETS - 100.0% $ 7,840,493
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $7,019,807) $ 7,878,336
Receivable for securities sold 147,258
Receivable for fund shares sold 421
Dividends receivable 5,786
Interest receivable 100
------------------
Total assets 8,031,901
Liabilities
Accrued investment advisory fee payable $ 11,362
Payable for securities purchased 168,180
Payable for fund shares redeemed 11,866
-----------------
Total liabilities 191,408
------------------
Net Assets $ 7,840,493
==================
Net Assets consist of:
Paid in capital $ 6,512,554
Accumulated undistributed net investment income 18,289
Accumulated undistributed net realized gain on investments 451,121
Net unrealized appreciation on investments 858,529
------------------
Net Assets, for 459,727 shares $ 7,840,493
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($7,840,493/459,727) $ 17.05
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend income $ 92,962
Interest income 967
-------------------
Total Income 93,929
Expenses
Investment advisory fee $ 56,209
Trustees' fees 813
---------------
Total expenses before reimbursement 57,022
Reimbursed expenses (813)
---------------
Total operating expenses 56,209
-------------------
Net Investment Income 37,720
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 493,706
Change in net unrealized appreciation (depreciation)
on investment securities 680,553
---------------
Net gain on investment securities 1,174,259
-------------------
Net increase in net assets resulting from operations $ 1,211,979
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
----------------- -----------------
Increase (Decrease) in Net Assets
Operations
Net investment income $ 37,720 $ 77,723
Net realized gain (loss) on investment securities 493,706 (14,920)
Change in net unrealized appreciation (depreciation) 680,553 (341,521)
----------------- -----------------
Net increase (decrease) in net assets resulting from operations 1,211,979 (278,718)
----------------- -----------------
Distributions to shareholders
From net investment income (87,853) (37,359)
From net realized gain - (250,840)
----------------- -----------------
Total distributions (87,853) (288,199)
----------------- -----------------
Share Transactions
Net proceeds from sale of shares 441,108 4,543,528
Shares issued in reinvestment of distributions 83,004 285,845
Shares redeemed (1,145,505) (675,074)
----------------- -----------------
Net increase (decrease) in net assets resulting
from share transactions (621,393) 4,154,299
----------------- -----------------
Total increase in net assets 502,733 3,587,382
Net Assets
Beginning of period 7,337,760 3,750,378
----------------- -----------------
End of period [including accumulated undistributed net
investment income of $18,289 and $68,952, respectively] $ 7,840,493 $ 7,337,760
================= =================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Equity Income Fund
Financial Highlights
<S> <C> <C> <C> <C>
Six months
ended Period
April 30, Years ended October 31, ended
1999 ----------------------- October 31,
(Unaudited) 1998 1997 1996 (c)
------- ------- ------- -------
Selected Per Share Data
Net asset value, beginning of period $ 14.68 $ 16.15 $ 12.03 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment income 0.08 0.21 0.19 0.16
Net realized and unrealized gain (loss) 2.46 (0.60) 4.15 1.87
------- ------- ------- -------
Total from investment operations 2.54 (0.39) 4.34 2.03
------- ------- ------- -------
Less Distributions
From net investment income (0.17) (0.14) (0.22) -
From net realized gain - (0.94) - -
------- ------- ------- -------
Total distributions (0.17) (1.08) (0.22) -
------- ------- ------- -------
Net asset value, end of period $ 17.05 $ 14.68 $ 16.15 $ 12.03
======= ======= ======= =======
Total Return (b) 17.96% (3.17)% 36.58% 20.30%
Ratios and Supplemental Data
Net assets, end of period (000) $7,840 $7,338 $3,750 $1,122
Ratio of expenses to average net assets 1.50% (a) 1.50% 1.50% 1.51% (a)
Ratio of expenses to average net assets
before reimbursement 1.52% (a) 1.53% 1.55% 1.73% (a)
Ratio of net investment income to
average net assets 1.01% (a) 1.37% 1.28% 1.57% (a)
Ratio of net investment income to
average net assets before reimbursement 0.98% (a) 1.33% 1.22% 1.35% (a)
Portfolio turnover rate 49.82% (a) 75.95% 52.49% 62.51% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) December 1, 1995 (commencement of operations) to October 31, 1996
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Carl Domino Equity Income Fund (the "Fund") is organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"). The Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified series,
open end management investment company. The Fund's investment objective is to
provide long-term growth of capital together with current income. The
Declaration of Trust 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 (the
"Board").
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. 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.
<PAGE>
Carl Domino Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 commissions, taxes,
interest, fees and expenses of the 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 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
six-month period ended April 30, 1999, the Adviser has received a fee of $56,209
from the Fund. The Advisor has voluntarily agreed to reimburse other expenses
for the fiscal year ended October 31, 1999 to the extent necessary to maintain
total operating expenses at the rate of 1.50%. For the six-month period ended
April 30, 1999, the Advisor reimbursed expenses of $813.
<PAGE>
Carl Domino Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, 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 no payments made to
the Distributor for the year ended October 31, 1998. Certain members of
management of the Administrator and the Distributor are also members of
management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $6,512,554.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 28,844 $441,108 293,838 $4,543,528
Shares issued in
reinvestment of
dividends 5,461 83,004 18,442 285,845
Shares redeemed (74,395) (1,145,505) (44,714) (675,074)
------ --------- ------- ----------
(40,090) $(621,393) 267,566 $4,154,299
====== ========= ======= ==========
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $1,859,855
and $2,485,388, respectively. The gross unrealized appreciation for all
securities totaled $1,389,157 and
<PAGE>
Carl Domino Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) -continued
NOTE 5. INVESTMENTS - continued
the gross unrealized depreciation for all securities totaled $530,628 for a net
unrealized appreciation of $858,529. The aggregate cost of securities for
federal income tax purposes at April 30, 1999 was $7,019,807.
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, 1999, Carl Domino
Associates, L.P., and entities which the Adviser could be deemed to control or
have investment discretion over, beneficially owned in aggregate more than 25%
of the Fund.
NOTE 8. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Adviser, Administrator or servicers do not properly
process and calculate date related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Adviser and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Adviser cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Global Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 97.2% Shares Value
BASIC INDUSTRIES - 8.7%
Chemicals - 2.9%
DuPont (E.I.) De Nemours 300 $ 21,188
PPG Industries, Inc. 300 19,481
-----------------
40,669
-----------------
Manufacturers / Diversified - 3.3%
Minnesota Mining & Manufacturing Co. 200 17,800
Tenneco, Inc. 1,000 27,000
-----------------
44,800
-----------------
Metals & Mining - 2.5%
Rio Tinto PLC 500 34,062
-----------------
TOTAL BASIC INDUSTRIES 119,531
-----------------
DURABLES - 5.5%
Autos & Auto Parts - 5.5%
DaimlerChrysler AG 200 19,638
Delphi Automotive Systems, Inc. 1,000 19,437
Ford Motor Co. 200 12,788
Snap-On, Inc. 350 11,397
Volvo AB - Class B 500 13,250
-----------------
76,510
-----------------
ENERGY - 20.0%
Energy Services - 3.9%
Baker Hughes, Inc. 500 14,937
Schlumberger Ltd. 600 38,325
-----------------
53,262
-----------------
Oil & Gas - 16.1%
Elf Aquitane 300 23,438
Eni Oil SPA 200 13,075
Royal Dutch Petroleum 400 23,475
Shell Transportation & Trading 600 27,262
Texaco, Inc. 200 12,550
TOTAL - Class B 500 34,000
USX-Marathon Group 1,500 46,875
YPF Sociedad Anonima 1,000 42,000
-----------------
222,675
-----------------
TOTAL ENERGY 275,937
-----------------
FINANCE - 13.6%
Banks - 10.0%
Banco Santiago 500 8,875
Bank of America Corp. 400 28,800
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
FINANCE - continued
Banks - continued
Bank of Ireland 200 15,950
Barclays PLC 200 25,000
Chase Manhattan, Inc. 150 12,413
First Union Corp. 350 19,381
Morgan (J.P.) 200 26,950
-----------------
137,369
-----------------
Insurance - 3.6%
AXA-UAP 300 19,181
ING Groep 150 9,206
SAFECO Corp. 550 21,863
-----------------
50,250
-----------------
TOTAL FINANCE 187,619
-----------------
HEALTH - 5.8%
Medical Equipment & Supplies - 1.8%
Baxter International, Inc. 400 25,200
-----------------
Pharmaceuticals - 4.0%
American Home Products Corp. 200 12,200
Glaxo Wellcome PLC 400 23,300
SmithKline Beecham 300 19,706
-----------------
55,206
-----------------
TOTAL HEALTH 80,406
-----------------
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
Electrical Equipment - 0.6%
Thomas & Betts, Inc. 200 8,400
-----------------
Industrial Machinery & Equipment - 1.1%
New Holland NV 1,000 14,500
-----------------
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 22,900
-----------------
MEDIA & LEISURE - 3.5%
Entertainment - 1.9%
News Corp. Ltd. 800 26,100
-----------------
Publishing - 1.6%
McGraw-Hill Companies 400 22,100
-----------------
TOTAL MEDIA & LEISURE 48,200
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
NON-DURABLES - 5.8%
Cosmetics - 1.4%
Avon Products 350 19,009
-----------------
Household Products - 3.0%
Kimberly-Clark Group 200 12,263
Unilever PLC 800 28,650
-----------------
40,913
-----------------
Tobacco - 1.4%
BAT Industries PLC 500 8,750
Philip Morris Cos., Inc. 300 10,519
-----------------
19,269
-----------------
TOTAL NON-DURABLES 79,191
-----------------
RETAIL & WHOLESALE - 3.3%
Department Stores - 3.3%
Penney (J.C.) 1,000 45,625
-----------------
SERVICES - 1.3%
Miscellaneous Services - 1.3%
Dun & Bradstreet Corp. 500 18,375
-----------------
TECHNOLOGY - 4.8%
Computer Services & Software - 1.8%
SAP AG 800 25,100
-----------------
Electronics - 1.8%
Tektronix Inc. 1,000 24,250
-----------------
Photography & Imaging - 1.2%
Eastman Kodak, Inc. 200 14,925
Polaroid Corp. 100 2,062
-----------------
16,987
-----------------
TOTAL TECHNOLOGY - 66,337
-----------------
UTILITIES - 23.2%
Cellular - 1.0%
Stet Hellas Telecommunications (a) 500 13,500
-----------------
Electric Utility - 4.3%
Endesa SA 700 15,444
Illinova Corp. 500 13,125
Korea Electric Power 500 8,250
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued
UTILITIES - continued
Electric Utility - continued
Reliant Energy, Inc. 400 11,325
Veba Corp. 200 11,000
-----------------
59,144
-----------------
Natural Gas - 6.6%
British Gas PLC 500 14,031
El Paso Energy Corp. 800 29,400
Transportadora De Gas 1,500 14,344
Williams Companies 700 33,075
-----------------
90,850
-----------------
Telephone Services - 11.3%
AT&T Corp. 450 22,725
Bell Atlantic Corp. 200 11,525
British Telecommunication 150 25,163
Nippon Telegraph & Telephone 500 26,875
STAR Telecommunications, Inc. (a) 2,000 19,375
Telecomm Italia SPA 300 31,856
Telefonica de Argentina 500 18,687
-----------------
156,206
-----------------
TOTAL UTILITIES - 319,700
-----------------
TOTAL COMMON STOCKS (Cost $1,237,569) 1,340,331
-----------------
Principal
Amount Value
Money Market Securities - 3.5%
Star Treasury Fund, 4.01% (b) (Cost $48,775) $ 48,775 48,775
-----------------
TOTAL INVESTMENTS - 100.7% (Cost $1,286,344) 1,389,106
-----------------
Other assets less liabilities - (0.7%) (9,401)
-----------------
TOTAL NET ASSETS - 100.0% $ 1,379,705
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Global Equity Income Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $1,286,344) $ 1,389,106
Dividends receivable 3,357
Interest receivable 84
------------------
Total assets 1,392,547
Liabilities
Accrued investment advisory fee payable $ 1,743
Payable for securities purchased 11,099
-----------------
Total liabilities 12,842
------------------
Net Assets $ 1,379,705
==================
Net Assets consist of:
Paid in capital $ 1,272,889
Accumulated undistributed net investment income 4,536
Accumulated net realized gain (loss) on investments (482)
Net unrealized appreciation on investments 102,762
------------------
Net Assets, for 113,489 shares $ 1,379,705
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($1,379,705/113,489) $ 12.16
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Global Equity Income Fund
Statement of Operations for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend income $ 8,720
Interest income 1,260
-------------------
Total Income 9,980
Expenses
Investment advisory fee $ 5,444
Trustees' fees 289
---------------
Total Expenses before Reimbursement 5,733
Reimbursed expenses (289)
---------------
Total Operating Expenses 5,444
-------------------
Net Investment Income 4,536
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (482)
Change in net unrealized appreciation (depreciation)
on investment securities 102,762
---------------
Net gain on investment securities 102,280
-------------------
Net increase in net assets resulting from operations $ 106,816
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Statement of Changes In Net Assets for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
Increase/(Decrease) in Net Assets
Operations
Net investment income $ 4,536
Net realized gain (loss) on investment securities (482)
Change in net unrealized appreciation (depreciation) 102,762
-----------------
Net Increase in net assets resulting from operations 106,816
-----------------
Share Transactions
Net proceeds from sale of shares 1,382,789
Shares redeemed (109,900)
-----------------
Net increase in net assets resulting
from share transactions 1,272,889
-----------------
Total increase in net assets 1,379,705
Net Assets
Beginning of period -
-----------------
End of period [including accumulated undistributed net
investment income of $4,536] $ 1,379,705
=================
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Financial Highlights for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
Selected Per Share Data
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment income 0.05
Net realized and unrealized gain (loss) 2.11
---------------
Total from investment operations 2.16
---------------
Net asset value, end of period $ 12.16
===============
Total Return (b) 21.60%
Ratios and Supplemental Data
Net assets, end of period (000) $1,380
Ratio of expenses to average net assets 1.50% (a)
Ratio of expenses to average net assets
before reimbursement 1.60% (a)
Ratio of net investment income to
average net assets 1.27% (a)
Ratio of net investment income to
average net assets before reimbursement 1.19% (a)
Portfolio turnover rate 20.25% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Global Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Carl Domino Global Equity Income Fund (the "Fund") was organized as a
series of the AmeriPrime Funds, an Ohio business trust (the "Trust), on October
22, 1998 and commenced operations on December 31, 1998. The Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified open-end
management investment company. The Fund's investment objective is to provide
long-term growth of capital together with current income. The Declaration of
Trust 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, and 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 (the
"Board").
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. 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.
<PAGE>
Carl Domino Global Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 J. Domino. John Wagstaff-Callahan, a partner 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 brokerage commission, 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 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
December 31, 1998 (commencement of operations) through April 30, 1999, the
Adviser received a fee of $5,444 from the Fund. The Adviser has voluntarily
agreed to reimburse other expenses to the extent necessary to maintain total
operating expenses at the rate of 1.50%. For the period from December 31, 1998
(commencement of operations) through April 30, 1999, The Advisor reimbursed
expenses of $289.
<PAGE>
Carl Domino Global Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the period from December 31, 1998 (commencement of operations) to
April 30, 1999, the Administrator received fees of $5,000 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 the Fund's shares. There were no payments
made to the Distributor from December 31, 1998 (commencement of operations) to
April 30, 1999. Certain members of management of the Administrator and the
Distributor are also members of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $1,272,889.
Transactions in shares were as follows:
For the period December 31, 1998
(Commencement of Operations) to April 30, 1999
Shares Dollars
Shares sold 123,489 $1,382,789
Shares redeemed (10,000) (109,900)
-------- ---------
113,489 $1,272,889
======== =========
NOTE 5. INVESTMENTS
For the period from December 31, 1998 (commencement of operations) through
April 30, 1999, purchases and sales of investment securities, other than
short-term investments, aggregated $1,298,360 and $60,309, respectively. As of
April 30, 1999, the gross unrealized appreciation for all securities totaled
$163,231 and the gross unrealized depreciation for all securities totaled
$60,469 for a net unrealized appreciation of
<PAGE>
Carl Domino Global Equity Income Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. INVESTMENTS - continued
$102,762. The aggregate cost of securities for federal income tax purposes at
April 30, 1999 was $1,286,344.
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 Fund. 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, 1999, Carl Domino
Associates, L.P., and entities which the Adviser could be deemed to control or
have investment discretion over, beneficially owned in aggregate more than 25%
of the Fund.
NOTE 7. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the fund could be adversely affected if the
computer systems used by the Adviser, Administrator or Servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Adviser and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Adviser cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 99.6% Shares Value
FINANCE - 14.4%
Federal Sponsored Credit - 9.4%
Freddie Mac 1,570 $ 98,517
-----------------
Insurance - 5.0%
Berkshire Hathaway - Class B (a) 21 51,870
-----------------
TOTAL FINANCE 150,387
-----------------
HEALTH - 14.6%
Medical Equipment & Supplies - 9.0%
Johnson & Johnson, Inc. 360 35,100
Medtronic, Inc. 810 58,269
-----------------
93,369
-----------------
Pharmaceuticals - 5.6%
Pfizer, Inc. 260 29,916
Schering-Plough Corp. 600 28,988
-----------------
58,904
-----------------
TOTAL HEALTH 152,273
-----------------
MEDIA & LEISURE - 6.1%
Entertainment - 2.8%
Disney (Walt) Co. 920 29,210
-----------------
Publishing - 3.3%
Gannett Co. 480 33,990
-----------------
TOTAL MEDIA & LEISURE 63,200
-----------------
NON-DURABLES - 5.5%
Beverages - 5.5%
Coca-Cola Co. 840 57,120
-----------------
RETAIL & WHOLESALE - 9.8%
Building Supplies - 3.2%
Home Depot, Inc. 560 33,565
-----------------
General Merchandise Stores - 3.3%
Wal-Mart Stores, Inc. 740 34,040
-----------------
Retail & Wholesale, Miscellaneous - 3.3%
Staples, Inc. (a) 1,150 34,500
-----------------
TOTAL RETAIL & WHOLESALE 102,105
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
TECHNOLOGY - 36.0%
Computers & Office Equipment - 16.6%
Dell Computer Corp. (a) 1,540 $ 63,429
EMC Corp. (a) 1,010 110,027
-----------------
173,456
-----------------
Computer Services & Software - 10.6%
Microsoft Corp. (a) 1,360 110,585
-----------------
Electronics - 5.9%
Intel Corp. 1,000 61,188
-----------------
Photography & Imaging - 2.9%
Xerox Corp. 520 30,550
-----------------
TOTAL TECHNOLOGY - 375,779
-----------------
UTILITIES - 13.2%
Telephone Services - 13.2%
AT&T Corp. 670 33,835
MCI WorldCom (a) 1,260 103,556
-----------------
137,391
-----------------
TOTAL COMMON STOCKS (Cost $1,018,294) 1,038,255
-----------------
Principal
Amount Value
Money Market Securities - 0.5%
Star Treasury Fund, 4.01% (b) (Cost $5,910) $ 5,910 5,910
-----------------
TOTAL INVESTMENTS - 100.1% (Cost $1,024,204) 1,044,165
-----------------
Other assets less liabilities - (0.1%) (1,361)
-----------------
TOTAL NET ASSETS - 100.0% $ 1,042,804
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Growth Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $1,024,204) $ 1,044,165
Interest receivable 47
------------------
Total assets 1,044,212
Liabilities
Accrued investment advisory fee payable $ 1,408
-----------------
Total liabilities 1,408
------------------
Net Assets $ 1,042,804
==================
Net Assets consist of:
Paid in capital $ 1,024,500
Accumulated net investment income (loss) (2,839)
Accumulated undistributed net realized gain on investments 1,182
Net unrealized appreciation on investments 19,961
------------------
Net Assets, for 99,756 shares $ 1,042,804
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($1,042,804/99,756) $ 10.45
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Carl Domino Growth Fund
Statement of Operations for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend income $ 1,005
Interest income 498
-------------------
Total Income 1,503
Expenses
Investment advisory fee $ 4,342
Trustees' fees 289
---------------
Total expenses before reimbursement 4,631
Reimbursed expenses (289)
---------------
Total operating expenses 4,342
-------------------
Net Investment Income (Loss) (2,839)
-------------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 1,182
Change in net unrealized appreciation (depreciation)
on investment securities 19,961
---------------
Net gain on investment securities 21,143
-------------------
Net increase in net assets resulting from operations $ 18,304
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Growth Fund
Statement of Changes In Net Assets for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (2,839)
Net realized gain on investment securities 1,182
Change in net unrealized appreciation (depreciation) 19,961
-----------------
Net Increase in net assets resulting from operations 18,304
-----------------
Share Transactions
Net proceeds from sale of shares 1,128,300
Shares redeemed (103,800)
-----------------
Net increase in net assets resulting
from share transactions 1,024,500
-----------------
Total increase in net assets 1,042,804
Net Assets
Beginning of period -
-----------------
End of period [including accumulated net
investment loss of $2,839] $ 1,042,804
=================
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Growth Fund
Financial Highlights for the period December 31, 1998
(Commencement of Operations) to April 30, 1999 (Unaudited)
Selected Per Share Data
Net asset value, beginning of period $ 10.00
---------------
Income from investment operations
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) 0.48
---------------
Total from investment operations 0.45
---------------
===============
Net asset value, end of period $ 10.45
===============
Total Return (b) 4.50%
Ratios and Supplemental Data
Net assets, end of period (000) $1,043
Ratio of expenses to average net assets 1.50% (a)
Ratio of expenses to average net assets
before reimbursement 1.62% (a)
Ratio of net investment income (loss) to
average net assets (0.99)% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (1.09)% (a)
Portfolio turnover rate 38.84% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
See accompanying notes which are an integral part of the financial statements
<PAGE>
Carl Domino Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Carl Domino Growth Fund (the "Fund") was organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust), on October 22, 1998 and
commenced operations on December 31, 1998. The Fund is registered under the
Investment Company Act of 1940, as amended, as a non-diversified open-end
management investment company. The Fund's investment objective is to provide
long term growth of capital. The Declaration of Trust 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, and 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 (the
"Board").
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. 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.
<PAGE>
Carl Domino Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 J. Domino. Bruce Honig 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 commission, 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 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
December 31, 1998 (commencement of operations) through April 30, 1999, the
Adviser received a fee of $4,342 from the Fund. The Adviser has voluntarily
agreed to reimburse other expenses to the extent necessary to maintain total
operating expenses at the rate of 1.50%. For the period December 31, 1998
(commencement of operations) through April 30, 1999, The Advisor reimbursed
expenses of $289.
<PAGE>
Carl Domino Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the period from December 31, 1998 (commencement of operations) to
April 30, 1999, the Administrator received fees of $5,000 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 the Fund's shares. There were no payments
made to the Distributor from December 31, 1998 (commencement of operations) to
April 30, 1999. Certain members of management of the Administrator and the
Distributor are also members of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $1,024,500.
Transactions in shares were as follows:
For the period December 31, 1998
(Commencement of Operations) to April 30, 1999
Shares Dollars
Shares sold 109,756 $1,128,300
Shares redeemed (10,000) (103,800)
-------- ---------
99,756 $1,024,500
======== =========
NOTE 5. INVESTMENTS
For the period from December 31, 1998 (commencement of operations) through
April 30, 1999, purchases and sales of investment securities, other than
short-term investments, aggregated $1,114,108 and $96,996, respectively. As of
April 30, 1999, the gross unrealized appreciation for all securities totaled
$43,052 and the gross unrealized
<PAGE>
Carl Domino Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. INVESTMENTS - continued
depreciation for all securities totaled $23,091 for a net unrealized
appreciation of $19,961. The aggregate cost of securities for federal income tax
purposes at April 30, 1999 was $1,024,204.
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 Fund. 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, 1999, Carl Domino
Associates, L.P., and entities which the Adviser could be deemed to control or
have investment discretion over, beneficially owned in aggregate more than 25%
of the Fund.
NOTE 7. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the fund could be adversely affected if the
computer systems used by the Adviser, Administrator or servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Adviser and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Adviser cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
Corbin Small-Cap Value Fund
May 17, 1999
Dear Shareholder:
The Corbin Small-Cap Value Fund experienced a very volatile six-month period.
During five of those months, the market continued to ignore the type of stocks
that comprise the majority of this fund's assets: small firms with low
price/earning ratios in basic businesses with outstanding growth prospects. In
April, however, this fund was one of the top performers in the country, as
investors became more concerned with valuation than whether you had ".com" in
your name. Many people have asked us if this is the beginning of a trend back
toward value stocks, and small stocks in particular. However, we do not see what
is happening as the beginning, rather a refocusing on the underlying long-term
theme. Why do we think that this fund will be successful in the long-term?
Because we look at businesses and the price we are paying for them. Currently,
the market is engaged in a period where it will pay outrageous prices for
equities that are liquid (large) or in perceived growth (technology or
healthcare) areas. People forget that the "com" in ".com" is short for
"company." Companies can only stay in business over the long-term by making
money. Many of the market's current set of darlings will not be able to achieve
this feat in any meaningful way for years, at the minimum, or are at prices that
do not justify their prospects.
At thirty-two years of age, I do not believe that "Old Fogy" status is mine for
the taking, yet. My years of experience in watching and participating in the
market have made me realize that using a selective eye is as important as
following a well-reasoned pattern of investment. This does not mean that what
you do will not fall in or out of favor given the market's vagaries. Rather, it
means that we are constantly increasing our chances for success by moving the
"pieces" (securities) into position, just like a successful chess master. As
someone investing in our fund, it helps to know that we are always thinking
ahead to our next set of moves, and then the moves after those. Our turnover has
been fairly tame compared to most funds, as we take our disciplined approach and
execute it for the long-term. This time horizon and our approach have been
scorned by the popular press and the millions of neophyte investors with money
at risk in the marketplace. The market has become a gambling casino, and stocks
are the "one-armed bandits of choice" for the crowd. Ultimately, the Wall Street
gamble is no different than the Las Vegas-style gamble - the odds will
eventually swing against those without the mathematics in their favor. We intend
to keep the mathematics of investment (price paid versus return) in our fund
shareholder's favor.
Lately, this has proven to be a challenge for most managers. Clearly, it is most
acceptable in today's society to "jump off the straight and narrow path" and
indulge oneself in spur-of-the-moment activities for the moment's sake of
feeling good. Unfortunately, there is always a consequence for this action that
often far outweighs the fleeting pleasure. For many investors, the
self-indulgence is having their assets over-weighted in areas where no value
exists, and once the market realizes that, a precipitous price decline ensues.
In other cases, it is not being able to see the forest through the trees and
missing the long-term ability to profit. These investors are constantly running
from "hot" sector to "hot" sector, trying to buy high and sell higher. What
advantage do they have over other investors? What advantage does a proctologist
think he has that can make him prosper over a professional investor holding the
same stock over the short-term? We are seeing signs that make us believe that
the current market cycle is drawing to a close. Institutions and individuals are
abandoning their asset allocation strategy in droves to put more money in the
"hot" areas, because they have been what has done best. This reminds me of
something Wayne Gretzsky, the hockey legend, once said, and that is, "An average
hockey player skates to where the puck is, but a great hockey player skates to
where the puck is going to be." Investors must ask themselves, where is the
profit in the future, because most likely it will not be where everyone else
currently sees it. During the past year, your fund manager has skated to where
he thought it would be, and alas, the puck did not appear. Therefore, we will
continue to "skate hard" and position ourselves for the scoring opportunity we
know will be coming.
One final comment I would like to make concerns a question that a fund holder
recently asked: When we decide that an investment will not produce the results
we expect, what do we do? If a company does not seem to be making the required
progress toward achieving its long-term potential, we sell it. If a management
team has been deceptive, we sell it. If the company has changed its focus, we
sell it. If a company is reaching a valuation not justified by its fundamentals,
we sell it. Otherwise, we hold it. I cannot tell you how many times in my career
a stock we hold has moved down, only to receive a takeover offer at a
substantially higher price than we had paid for it. This happened in April with
American Buildings Company (ABCO), when the stock moved from $22 per share to
$18 per share in less than two weeks. Within a week Onex, a Canadian firm,
offered to purchase the whole firm at $36 per share. This would have deprived
our shareholders of a large gain, if we had sold the stock because it declined.
OVERALL PORTFOLIO CHARACTERISTICS AND COMMENTARY
As of April 30th, the portfolio contained 24 equities, with 89.7% of the money
in equity securities, and 10.3% in cash. Our portfolio is characterized by a few
unique features that probably deserve comment. The first is the niche-type
businesses that we tend to own. Many of them have substantial barriers to entry
that should, over the long-term, allow for substantial profitability. For
example, a recent purchase during the last six months has been our investment in
Lancer. The company makes beverage dispensers that primarily are used for
Coca-Cola products. The company has only one main competitor worldwide (who
primarily has the Pepsi contracts) and should profit from the growth of Coke
worldwide. The company has a unique, patented product that is a "play" on one of
the best consumer brands in the world. Yet, I can assure you that the billions
of dollars of venture capital out there pursuing deals will probably not
consider starting a competitor to Lancer. The reason is that, although the niche
is profitable, the market is currently not of a size such that a new entrant
could justify the years that would be needed to patent products, get sales
people, and develop the brand awareness needed to compete. It would just be
easier to buy Lancer if one wished to enter that market.
The second thing we generally would like to mention is the incredible insider
ownership that our firms enjoy. As we look at the securities, we see that these
companies are run by owner-operators that have their cash right alongside ours
in the company. Today in large companies, shareholders are seeing their
interests diluted through stock options, money spent on luxuries for executives,
and a virtual list of entitlements for officers and directors. Our companies'
executives are hard working men and women who tend to have their offices
attached to the factory, know all their employees' names, and have 80%+ of their
wealth in the company stock. Consequently, we know that these people are going
to get out of bed every day, go to work, and do what is best for the
shareholders of the firm, because they are shareholders of the firm. This gives
us much comfort during periods of time when share prices are fluctuating
dramatically. Our owner-operators are out working so that share values will be
maximized in the long-term.
PERFORMANCE DISCUSSION
The fund generated a total return of 1.06% for the six months ended April 30,
1999. The Russell 2000 returned 15.00% and the S&P 600 Small-Cap did 9.25%
during that same time period. This has historically been one of the weirdest
times in this marketplace, as liquidations in many small-cap mutual funds have
caused extreme volatility. Coupled with this mix is the dominance of the
Internet stocks in the Russell 2000. Currently, the ten largest stocks in the
index are all Internet-related. Due to the stellar performance of these stocks,
the index has done substantially better than the average stock in the index
actually has. However, this should change in the next few months, when mid-year
adjustments are made in the index's list of companies, due to market
capitalizations that are now too high to be included. I always find it
interesting to note the difference in return between the two small-cap indices.
Returns for the Periods Ended April 30, 1999
- --------------------------------------------------------------------------------
Total Average
Annual Return
Six Months One Year Since Inception
Fund / Index
Corbin Small-Cap Value Fund 1.06% (36.22)% (16.86)%
Russell 2000 Index 15.00% (9.19)% 6.25%
S&P 600 Small-Cap Index 9.25% (14.31)% 4.16%
The Russell 2000 Index and the S&P 600 Small-Cap Index are widely recognized
unmanaged indices of common stock prices. Performance figures include the change
in value of the stocks in the indices and reinvestment of dividends. 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.
DESCRIPTION OF THE FUND'S FIVE LARGEST SECURITY POSITIONS
A shareholder asked me to describe and discuss the five largest holdings of the
portfolio. Even though I am not a piano player, I am more than happy to take
requests. Therefore, I have discussed them below:
Successories is a leader in the motivational and people-recognition business.
Its motivational items include wall decor, paper products, cups, etc. It
currently owns about 30 retail outlets, franchises 40 more stores, and operates
a catalog business. At the urging of Corbin & Company, Successories is divesting
its company-owned retail stores to franchisees, along with some other corporate
assets, to focus on its most profitable operations. These operations, catalog
sales and sales to franchisees, have 70% and 35% margins, respectively, before
corporate overhead. Therefore, if sales grow, the company can make extraordinary
amounts of money. It is our feeling that the company will achieve a successful
1999, emerging from the year nearly debt-free and profitable, and will have
successfully added new platforms to deliver its products. The Internet offers
the company the opportunity to put its catalog online, which could save millions
in printing and postage expense. Between cost savings and expected sales growth,
it is our belief that the company could show tremendous gains in profitability
over the next few years.
Durakon Industries is a leading maker of vehicle accessories and tow trucks. The
company has an excellent financial condition and experienced management. In
addition, future sales growth is virtually assured due to the company's recent
award of a large General Motors contract starting in the year 2001. In addition,
the company has a strong counter-cyclical element due to the fact that, as the
economy slows, tow truck and vehicle accessories sales tend to increase. The
company has reported strong earnings gains in the last few years, and we believe
that this will continue for the foreseeable future. The company trades at a low
multiple of earnings, as well as a low price/book ratio.
VTEL is a leader in the digital video-imaging business, primarily in the areas
of video-teleconferencing and video-streaming. The company has an exciting line
of products that it will introduce in the fall, as well as the integration of
its video-streaming technology into its business products. The company has moved
from being a hardware-oriented company to one that is software-oriented, meaning
that it is a higher-margin, less capital-intensive business. It is our belief
that missteps by competitors, coupled with a strong management team, will lead
the company to excellent growth in profitability and industry dominance over the
next five years.
Delta Financial is a leader in the mortgage-securitization market. The company
originates and purchases mortgages that it then packages into securities and
sells to investors. Last year, the industry went through substantial turmoil, as
the Russian default and the collapse of LTCM drove investors into Treasury
securities and away from mortgage-backed securities. Delta remained a pillar of
strength in the industry, which had many casualties. With most of its
competitors either out of business or crippled, Delta has a strong chance to
increase its market share and have that business be substantially more
profitable. The stock trades at a low price/earnings ratio, as well as
price/book.
Rush Enterprises is in the large-truck service and sales business, controlling
approximately 20% of the Peterbilt dealerships nationwide. In addition, it also
owns heavy equipment dealerships. The company is well-positioned for growth, as
it consolidates what was previously a fragmented industry. The company has
excellent management and a very conservative financial position. In addition,
the low valuation at the time of purchase was extremely compelling. If the
company can maintain its consistent pattern of growth, we believe that the
market will reward it with something other than a rock-bottom valuation.
FINAL THOUGHTS
Investing is a process of constantly trying to work factors beyond your control
into your favor. That means having a disciplined way to buy and sell, to take
what the market gives you, and to stay unemotional in your decisions. Over the
last year, we have been handed a lemon for this style of investing. Yet, the one
thing that is the aid of the true investor is time. That is because, with time,
things like the compounding of earnings, or earnings in general, matter. Time
will give other investors a chance to discover the securities owned by your
fund. Time gives companies with strong businesses the opportunity to maneuver
the odds in their favor, in order to build into even stronger businesses.
The other thing time does is to allow you to add to your holdings of this fund,
as well as others. Take the opportunity afforded by time to continue to invest.
One of Successories' motivational posters says: "You miss 100% of the shots you
don't take." That is true with investing. You have to have money in the markets
in order to make money in the markets. While short-term fluctuations can be
unnerving, with time those can be evened out, allowing you to participate in the
growth of these businesses.
We remain committed to viewing everything with the same philosophy of value that
has served us so well in the past. If you have any questions, please do not
hesitate to contact us.
Sincerely,
David A. Corbin, CFA
President and Chief
Investment Officer
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund; this report is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by an effective prospectus. Read the prospectus carefully before
investing.
<PAGE>
<TABLE>
<CAPTION>
Corbin Small-Cap Value Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 89.7% Shares Value
Auto Parts & Accessories - 1.9%
Bonded Motors, Inc. (a) 18,900 $ 43,706
-----------------
Bottled & Canned Soft Drinks - 3.5%
Cott Corp. (a) 12,440 43,540
Lancer Corp. (a) 4,900 38,588
-----------------
82,128
-----------------
Building Materials - 3.0%
Republic Group, Inc. 4,000 70,000
-----------------
Catalog & Mail Order Services - 10.2%
Successories, Inc. (a) 95,000 237,500
-----------------
Communication Equipment - 6.1%
VTEL Corp. (a) 27,500 140,937
-----------------
Computer Software - 3.7%
Titan Corp. (a) 15,000 86,250
-----------------
Department Stores - 3.0%
Duckwall Alco Stores, Inc. (a) 7,500 68,906
-----------------
Diversified Industrials - 2.2%
Griffon Corporation (a) 7,000 51,188
-----------------
Fabricated Metal Products - 6.2%
Butler Manufacturing Co. 2,600 77,188
RTI International Metals (a) 5,000 66,562
-----------------
143,750
-----------------
Financial Services - 9.7%
Delta Financial Corp. (a) 15,000 118,125
Onyx Acceptance Corp. (a) 13,000 107,250
-----------------
225,375
-----------------
Food Retailers - 1.0%
Ingles Markets Inc. - Class A 2,000 23,000
-----------------
Medical Supplies - 3.5%
Cyberonics, Inc. (a) 10,000 81,250
-----------------
Oil Drilling & Exploration - 3.4%
Unifab International Inc. (a) 7,000 78,312
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Corbin Small-Cap Value Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
Railroads - 1.0%
RailTex, Inc. (a) 1,700 $ 23,163
-----------------
Recreational Vehicles - 9.0%
Durakon Industries, Inc. (a) 17,400 209,887
-----------------
Restaurants - 7.3%
CKE Restaurants, Inc. 5,000 81,875
Lone Star Steakhouse & Saloon (a) 8,030 87,326
-----------------
169,201
-----------------
Retailers - 5.1%
Rush Enterprises, Inc. (a) 8,400 118,650
-----------------
Steel Manufacturing - 4.4%
Quanex Corp. 3,980 101,739
-----------------
Toys - 2.3%
Play by Play Toys & Novelties (a) 9,500 52,250
-----------------
Trucks/Trailers - 3.2%
Wabash National Corp. 4,715 73,967
-----------------
TOTAL COMMON STOCKS (Cost $2,301,606) 2,081,159
-----------------
Money Market Securities - 13.1% Principal Amount Value
Star Treasury Fund, 4.01% (b) (Cost $304,513) $304,513 304,513
-----------------
TOTAL INVESTMENTS - 102.8% (Cost $2,606,119) 2,385,672
-----------------
Liabilities less other assets - (2.8%) (65,412)
-----------------
Total Net Assets - 100.0% $ 2,320,260
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at
April 30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Corbin Small-Cap Value Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $2,606,119) $ 2,385,672
Receivable from custodian bank 654
Receivable for fund shares sold 1,000
Interest receivable 1,010
-------------------
Total assets 2,388,336
Liabilities
Accrued investment advisory fee payable $ 2,184
Payable for fund shares redeemed 65,892
------------------
Total liabilities 68,076
-------------------
Net Assets $ 2,320,260
===================
Net Assets consist of:
Paid in capital $ 3,423,790
Accumulated net investment income (loss) (3,312)
Accumulated net realized gain (loss) on investments (879,771)
Net unrealized depreciation on investments (220,447)
-------------------
Net Assets, for 346,571 shares $ 2,320,260
===================
Net Asset Value
Net Assets
Offering price and redemption price per share ($2,320,260/346,571) $ 6.69
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Corbin Small-Cap Value Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 4,237
Interest Income 7,214
----------------
Total Income 11,451
Expenses
Investment advisory fee $ 13,319
Trustees' fees 813
---------------
Total expenses before reimbursement 14,132
Reimbursed expenses (813)
---------------
Total operating expenses 13,319
----------------
Net Investment Income (Loss) (1,868)
----------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (327,683)
Change in net unrealized appreciation (depreciation)
on investment securities 334,644
---------------
Net gain on investment securities 6,961
----------------
Net increase in net assets resulting from operations $ 5,093
================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Corbin Small-Cap Value Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
------------------- -------------------
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (1,868) $ (3,050)
Net realized gain (loss) on investment securities (327,683) (467,038)
Change in net unrealized appreciation (depreciation) 334,644 (599,782)
------------------- -------------------
Net increase (decrease) in net assets resulting from operations 5,093 (1,069,870)
------------------- -------------------
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 461,904 2,309,098
Shares issued in reinvestment of distributions - 86,814
Shares redeemed (435,741) (279,062)
------------------- -------------------
Net increase in net assets resulting
from share transactions 26,163 2,116,850
------------------- -------------------
Total increase in net assets 31,256 954,573
Net Assets
Beginning of period 2,289,004 1,334,431
------------------- -------------------
End of period [including accumulated net investment (loss)
of ($3,312) and ($1,444), respectively] $ 2,320,260 $ 2,289,004
=================== ===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Corbin Small-Cap Value Fund
Financial Highlights
<S> <C> <C> <C>
Six months
ended Year Period
April 30, ended ended
1999 October 31, October 31,
(Unaudited) 1998 1997 (c)
---------------- ---------------- ----------------
Selected Per Share Data
Net asset value, beginning of period $ 6.62 $ 11.03 $ 10.00
---------------- ---------------- ----------------
Income from investment operations
Net investment income (loss) (0.01) (0.01) -
Net realized and unrealized gain (loss) 0.08 (3.76) 1.03
---------------- ---------------- ----------------
Total from investment operations 0.07 (3.77) 1.03
---------------- ---------------- ----------------
Less Distributions
From net investment income - (0.01) -
From net realized gain - (0.63) -
---------------- ----------------
---------------- ----------------
Total distributions - (0.64) -
---------------- ---------------- ----------------
Net asset value, end of period $ 6.69 $ 6.62 $ 11.03
================ ================ ================
Total Return (b) 1.06% (36.07)% 10.30%
Ratios and Supplemental Data
Net assets, end of period (000) $2,320 $2,289 $1,334
Ratio of expenses to average net assets 1.25% (a) 1.25% 1.23% (a)
Ratio of expenses to average net assets
before reimbursement 1.33% (a) 1.30% 1.23% (a)
Ratio of net investment income (loss) to
average net assets (0.18)% (a) (0.15)% 0.00%
Ratio of net investment income (loss) to
average net assets before reimbursement (0.25)% (a) (0.20)% 0.00%
Portfolio turnover rate 65.94% (a) 86.42% 20.41% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) June 30, 1997 (commencement of operations) to October 31, 1997
See accompanying notes which are an integral part of the financial statements
<PAGE>
Corbin Small-Cap Value Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
The Corbin Small-Cap Value Fund (the "Fund") is organized as a series of
the AmeriPrime Funds, an Ohio business trust (the "Trust"). The Fund 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
Declaration of Trust 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 Advisor'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, and the Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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.
<PAGE>
Corbin Small-Cap Value Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 "Advisor") to manage the Fund's
investments. David A. Corbin, President of the Advisor, is primarily responsible
for the day to day management of the Fund's portfolio.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage commissions, taxes,
interest, fees and expenses of the 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 Advisor 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. 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 Advisor. For the
six-month period ended April 30, 1999, the Advisor has received a fee of $13,319
from the Fund. The Advisor has voluntarily agreed to reimburse other expenses
for the fiscal year ended October 31, 1999, to the extent necessary to maintain
total operating expenses at the rate of 1.25%. For the six-month period ended
April 30, 1999, the Advisor reimbursed expenses of $813.
<PAGE>
Corbin Small-Cap Value Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, the Administrator
received fees of $10,000 from the Advisor for administrative services provided
to the Fund.
The Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor")
to act as the principal distributor of the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999, was $3,423,790.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 73,883 $461,904 248,212 $2,309,098
Shares issued in
reinvestment of
dividends - - 8,831 86,814
Shares redeemed (73,152) (435,741) (32,184) (279,062)
------ ------- ------- ---------
731 $26,163 224,859 $2,116,850
====== ======= ======= =========
<PAGE>
Corbin Small-Cap Value Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $607,411
and $652,263, respectively. The gross unrealized appreciation for all securities
totaled $157,339 and the gross unrealized depreciation for all securities
totaled $377,786 for a net unrealized depreciation of $220,447. The aggregate
cost of securities for federal income tax purposes at April 30, 1999 was
$2,606,119.
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 Advisor is not a registered broker-dealer of securities and thus does
not receive commissions on trades made on behalf of the Fund. 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, 1999, Charles
Schwab & Co. owned of record in aggregate more than 25% of the Fund.
NOTE 8. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Advisor, Administrator or Servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Advisor and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Advisor cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests, or worldwide
markets and economies.
<PAGE>
Florida Street Funds
Letter to Shareholders
April 30, 1999
Dear Shareholders,
We are pleased to report to you on the results of operations in the Florida
Street Funds during the six months ended April 30, 1999.
Let us first review the significant events that occurred in the markets and
economy recently. The DJIA finally breached the 10,000 mark for the first time,
after which investors focused on factors that could propel the market from such
a lofty level. Surprisingly, the focus was not on recent leaders. Technology
shares became victims of bad news from Compaq Computer, which blamed its woes on
industry fundamentals. While investors were assessing that situation, a number
of developments led to an advance of markets around the globe. The European
Central Bank made a surprise cut of 50 basis points in interest rates. The U.K.
central bank cut interest rates 25 basis points. Then additional signs of
recovery appeared in Asian economies and that the weakness in Brazil may not be
as bad as anticipated. Suddenly, the market developed a perception of better
global growth or at least less pronounced declines in economic activity for
those countries in recession. This led to a torrid rotation into value stocks
from the narrow list of growth stocks that carried the market to record highs.
Industrials were the place to be as oil shares, aluminum and papers sent
the DJIA to new highs while the S&P 500 retreated. The six-month advance in the
Dow was 26.6% compared to 22.3% for the broader S&P 500 Index. During April the
Dow rose 10.3% while the S&P managed only a 1.6% increase.
Technology stocks were indiscriminately trashed, along with the associated
Internet stocks. Ironically, this sudden, sharp rotation has actually helped
restore some order to the U.S. market as both growth and value stocks have
propelled the DJIA and S&P 500 to record highs.
The market at such lofty levels is creating some nervousness on our part,
because valuations have moved above a normal range when comparing earnings to
bond alternatives (see Chart 1). We are staying the course, however, with a
normal allocation to stocks and bonds and a well diversified fully invested
position.
Since the economy should be slowing in 1999 to a pace of near 2% growth in
the second and third quarters of the year, we do not think it is critical that
the Federal Reserve take any overt action such as increasing interest rates. The
announcement of a bias toward tightening credit has caused the bond market to
anticipate at least one tightening move. Investors have been bracing for such
action due to the changed perceptions about global growth that were discussed
above. Note that during the last six months the yield on the 1-year Treasury
note has risen 42 basis points while the 5-year Treasury yield has jumped a
whopping 96 basis points. It appears that the "bond vigilantes" are alive and
well. This term was coined in the 1980's to represent institutional bondholders
whose efforts were to keep real rates high and to help raise them further at the
first hint of rising inflation. This was to keep bondholders from suffering
through another inflationary cycle with negative returns.
Chart 1
T-Bond to Earnings Yield
10-year T-note s S&P 500 earnings yield
Ratio Mean Plus 1 SD Minus 1SD
1980 0.8 1.2 1.38 1.03
0.73 1.2 1.38 1.03
1981 1.18 1.2 1.38 1.03
1.21 1.2 1.38 1.03
1982 1.07 1.2 1.38 1.03
1.15 1.2 1.38 1.03
1983 1.3 1.2 1.38 1.03
1.45 1.2 1.38 1.03
1984 1.42 1.2 1.38 1.03
1.23 1.2 1.38 1.03
1985 1.12 1.2 1.38 1.03
1.33 1.2 1.38 1.03
1986 1.36 1.2 1.38 1.03
1.19 1.2 1.38 1.03
1987 1.7 1.2 1.38 1.03
1.88 1.2 1.38 1.03
1988 1.23 1.2 1.38 1.03
1.08 1.2 1.38 1.03
1989 1.02 1.2 1.38 1.03
1.17 1.2 1.38 1.03
1990 1.19 1.2 1.38 1.03
1.37 1.2 1.38 1.03
1991 1.17 1.2 1.38 1.03
1.43 1.2 1.38 1.03
1992 1.36 1.2 1.38 1.03
1.15 1.2 1.38 1.03
1993 1.07 1.2 1.38 1.03
0.9 1.2 1.38 1.03
1994 0.98 1.2 1.38 1.03
1.14 1.2 1.38 1.03
1995 1.1 1.2 1.38 1.03
0.95 1.2 1.38 1.03
1996 0.89 1.2 1.38 1.03
1.09 1.2 1.38 1.03
1997 1.23 1.2 1.38 1.03
1.36 1.2 1.38 1.03
1998 1.2 1.2 1.38 1.03
1.39 1.2 1.38 1.03
1.1 1.2 1.38 1.03
1999 1.32 1.2 1.38 1.03
Apr-99 1.59 1.2 1.38 1.03
We remain in a neutral stance in the bond market. We continue to favor
corporate debt of intermediate maturities given the healthy state of the economy
and the low level of inflation that allows investors to realize an above average
return after inflation.
Thank you for your support of the Florida Street Funds.
Sincerely,
The staff of Commonwealth Advisors, Inc.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund; this report is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by an effective prospectus. Read the prospectus carefully before
investing.
<PAGE>
Florida Street Bond Fund
Evidence of continuing strength of the U.S. Economy took its toll on the
bond market in the first half of the fund's fiscal year. Investors have become
increasingly concerned that the Federal Reserve may raise short-term interest
rates to reduce the risk of higher inflation.
The weakest sectors of the bond market were the U.S. Treasury, Agency and
higher-quality corporate bonds, while high-yield bonds (those rated below
investment grade) performed much better. High Yield bonds usually perform well
during periods of strong economic growth. During the first six months of the
fund's fiscal year, the fund outperformed the broad investment grade market but
trailed the Merrill Lynch High Yield bond index.
We believe the current economic environment supports the case for high
yield bonds. The fund has reduced its exposure to emerging market bonds, as we
are increasingly concerned about the sustainability of the economic recovery in
less developed countries. We are also concerned about the pressure on the
Federal Reserve to raise interest rates. For this reason, we have not emphasized
high-quality and long-dated bonds. We like the outlook for high-yield bonds.
Also, we are finding value in distressed issues. This category includes energy
credits, such as Parker Drilling, and telecommunications issues, such as
Globalstar LLC.
Since the summer of 1998, the funds share price (net asset value) has
fallen from approximately $10 per share to $8.66 per share. The decline was
offset by dividend and capital gain distributions of approximately $1.25 since
May of 1988. The decline in price is largely the result of weakness in high
yield bond prices over this period. Other markets were weak as well over this
period of time. Small Capitalization stocks, Utilities and Real Estate
Investment Trusts all performed below their historical averages during this
period. In fact, few markets outside of large capitalization stocks enjoyed
robust returns.
We believe the weakness we described above has left a large gap in
valuation between these markets and large capitalization stocks. In addition to
the valuation gap we see between large capitalization stocks and other markets,
we also see meaningful differences between the valuation of growth equities and
value equities. In summary, investors have flocked to equities instead of bonds
and they have focused mostly on large companies instead of small companies.
Looking ahead, we believe the attractive valuation of high yield bonds
supports a positive outlook for our markets. The most significant challenge
facing the market is the uncertainty created by Year 2000 concerns. While most
forecasts concerning Year 2000 are positive, we are concerned by the tone of
corporation's disclosures and the lack of detailed information contained in
these disclosures. Perhaps we are asking too much for companies to make more
complete discussions of Year 2000 risks. However, when one considers the large
number of computer systems and the increasing degree of connectivity between
computer systems, it seems reasonable to us that at least some systems will be
either fixed improperly or not fixed on time. This is stated not to cause alarm.
Most companies have identified their "critical systems" and these systems are
either fixed or undergoing repair. We are most concerned about the impact of
Year 2000 outside the United States and have reduced or eliminated foreign
holdings.
Lastly, I want to thank you for the confidence you have placed in us. We
know the last 12 months have not been good for many of the markets in which we
invest and we appreciate the patience and support of our fellow shareholders.
Walter A. Morales CFA
<PAGE>
<TABLE>
<CAPTION>
Florida Street Bond Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stock - 2.5% Shares Value
American Mobile Satellite - Warrants 1,000 $ 1,250
Golden State Bancorp Litigation - Warrants 82,000 153,750
Homeland Stores, Inc. 67,286 210,269
JPS Textile Group, Inc. 8,245 37,102
Rare Medium Group, Inc. 8,000 120,000
-----------------
TOTAL COMMON STOCK (Cost $720,547) 522,371
-----------------
Preferred Stock - 2.9%
Phone Tel Technologies, Inc. 4,000 312,000
Tesoro Petroleum Convertible 25,000 309,375
-----------------
TOTAL PREFERRED STOCK (Cost $528,500) 621,375
-----------------
Principal
Corporate Bonds - 89.6% Amount Value
American Eco Corp. 9.625%, 5/15/08 $ 500,000 302,500
American Rice, Inc. 13%, 7/31/02 (b) 770,000 388,850
Aames Financial Corp. 9.125% 11/1/03 500,000 367,500
Amresco 10%, 3/15/04 120,000 100,200
AMSC Acquisition Co., Inc. 12.25%, 4/1/08 1,000,000 800,000
Amscan Holdings, Inc. 9.875%, 12/15/07 (c) 250,000 217,813
Applied Extrusion Technologies, Inc. 11.50%, 4/1/02 35,000 36,487
Bally Total Fitness Holdings Series B 9.875%, 10/15/07 150,000 153,750
Bigco Productions, Inc. 12%, 3/1/05 (e) 100,000 9,000
Brauns Fashions, Inc. 12%, 1/1/05 450,000 447,750
Building Materials Corp. 8%, 10/15/07 (c) 100,000 99,250
CAI Wireless Systems, Inc. 0%, 10/14/04 1,000,000 495,000
CD Radio, Inc. 0%,12/1/07 (a) 250,000 131,250
Cafeteria Operators, Inc. 12%, 12/31/01 260,000 259,350
Cirrus Logic, Inc. 6%, 12/15/03 205,000 137,606
Covad Communications Group 0%, 3/15/08 (a) 250,000 188,750
Dairy Mart Stores, Inc. 10.25%, 3/15/04 10,000 9,400
DiGiorgio Corp. 10%, 6/15/07 100,000 99,625
Dimon, Inc. 8.875%, 6/1/06 175,000 162,867
Discovery Zone, Inc. 13.50%, 8/1/02 3,500,000 222,495
Edison Brothers Stores, Inc. 11%, 9/26/07 1,541,000 516,235
Equimar Shipholding, Inc. 9.875%, 7/1/07 250,000 178,438
Executive Risk Capital Trust 8.675%, 2/1/27 200,000 216,194
Finlay Fine Jewelry Corp. 8.375%, 5/1/08 35,000 34,825
Global Star, Inc. 11.25%, 6/15/04 135,000 96,525
Homeland Stores, Inc. 10%, 8/1/03 605,000 526,350
Iridium Capital Series B 14%, 7/15/05 1,115,000 440,425
Iron Mountain, Inc. 8.75%, 9/30/09 100,000 103,000
Kelley Oil & Gas Corp. 14%, 4/15/03 500,000 512,500
Laroche Industries, Inc. 9.50%, 9/15/07 1,500,000 1,117,500
Mastellone Hermanos, Inc. 11.75%, 4/1/08 250,000 228,438
Maxim Group, Inc. 9.25%, 10/15/07 150,000 147,000
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Bond Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Principal
Corporate Bonds - continued Amount Value
McMillin Cos. LLC 13%, 8/31/06 $1,020,000 $ 1,020,000
Metricom, Inc. 8%, 9/15/03 500,000 345,000
Mrs. Fields Holdings Co. 14%, 12/1/05 500,000 250,000
Mrs. Fields Orig. 10.125%, 12/1/04 350,000 339,500
National Equipment, Inc. 10%, 11/30/04 (c) 150,000 156,000
Novacare, Inc. 5.50% 1/15/00 900,000 774,000
Packaged Ice, Inc. 9.75%, 2/1/05 785,000 800,700
Paging Net Brasi 13.50%, 6/6/05 200,000 87,500
Parker Drilling Co. 5.50%, 8/1/04 900,000 636,187
Phar-Mor, Inc. 11.72%, 9/11/02 85,000 89,675
Ram Energy, Inc. 11.50%, 2/15/08 500,000 282,500
S3, Inc. 5.75%, 10/1/03 500,000 383,125
Service Merchandise, Inc. 9%, 12/15/04 2,656,000 604,240
Speciality Foods Corp.:
11.25%, 8/15/03 320,000 272,000
0%, 8/15/05 (a) 250,000 47,500
Sunbeam, Inc. 0%, 3/25/18 1,000,000 117,500
Telewest PLC 0%, 10/1/07 (a) 250,000 223,438
The Sports Club Co., Inc. 11.375%, 3/15/06 (c) 1,000,000 993,750
Tops Appliance, Inc. 6.50%, 11/30/03 150,000 75,000
Transamerica Energy, Inc. 11.50%, 6/15/02 350,000 57,750
Tricon Global Restaurant:
7.45% 5/15/05 300,000 308,873
7.65% 5/15/08 405,000 421,646
U.S. Diagnostic Labs, Inc. 9%, 3/31/03 615,000 405,900
United Dominion Real Estate 8.125%, 11/15/00 150,000 153,694
United Refining Co. 10.75%, 6/15/07 220,000 163,900
Webb Dell, Inc. 9.375%, 5/1/09 195,000 194,269
Wickes, Inc. 11.625%, 12/15/03 600,000 543,000
Zilog, Inc. 9.50%, 3/1/05 500,000 460,000
-----------------
TOTAL CORPORATE BONDS (Cost $20,970,422) 18,953,520
-----------------
Convertible Bonds - 3.2%
Aspen Technology, Inc. 5.25% 6/15/05 1,000,000 567,500
Lechters, Inc. 5%, 9/27/01 150,000 106,500
-----------------
TOTAL CONVERTIBLE BONDS (Cost $755,119) 674,000
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Bond Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Principal
U.S. Government Obligations - 1.8% Amount Value
Freddie Mac:
Series 1652 SC, 10.646%, 6/15/23 (d) $ 29,856 $ 30,174
Series 1856 SA, 3.0625%, 3/15/24 13,836,157 350,276
-----------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost $403,854) 380,450
-----------------
TOTAL INVESTMENTS - 100.0% (Cost $23,378,442) 21,151,716
-----------------
Other Assets less liabilities - 0.0% (7,013)
-----------------
TOTAL NET ASSETS - 100.0% $ 21,144,703
=================
</TABLE>
(a) Security initially issued in zero coupon form which converts to coupon form
at a specified rate and date. The coupon rate shown is the rate at April
30, 1999.
(b) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1999, the value of these securities amounted to $1,466,813 or 6.9% of net
assets.
(d) Floating rate security; the coupon rate shown represents the rate at April
30, 1999.
(e) Security not registered under the Securities Act of 1933. This security is
subject to legal or contractual restrictions on resale. At the end of the
period, restricted securities amounted to $9,000 or 0.04% of net assets.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Bond Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $23,378,442) $ 21,151,716
Receivable for securities sold 434,727
Receivable for fund shares sold 50,500
Interest receivable 816,505
Other accounts receivable 10,701
------------------
Total assets 22,464,149
Liabilities
Payable to custodian bank $ 971,063
Accrued investment advisory fee payable 13,194
Payable for securities purchased 19,984
Dividends payable 315,205
-----------------
Total liabilities 1,319,446
------------------
Net Assets $ 21,144,703
==================
Net Assets consist of:
Paid in capital $ 23,949,535
Accumulated undistributed net investment income 95,053
Accumulated net realized gain (loss) on investments (673,159)
Net unrealized depreciation on investments (2,226,726)
------------------
Net Assets, for 2,442,216 shares $ 21,144,703
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($21,144,703/2,442,216) $ 8.66
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Bond Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 3,188
Interest Income 1,935,806
---------------
Total Income 1,938,994
Expenses
Investment advisory fee $ 115,355
Trustees fees 813
---------------
Total expenses before reimbursement 116,168
Reimbursed expenses (37,547)
---------------
Total operating expenses 78,621
---------------
Net Investment Income 1,860,373
---------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (365,718)
Change in net unrealized appreciation (depreciation)
on investment securities (675,214)
---------------
Net gain (loss) on investment securities (1,040,932)
---------------
Net increase in net assets resulting from operations $ 819,441
===============
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Bond Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
------------------ -----------------
Increase in Net Assets
Operations
Net investment income $ 1,860,373 $ 1,222,554
Net realized gain (loss) on investment securities (365,718) 71,019
Change in net unrealized appreciation (depreciation) (675,214) (1,591,571)
------------------ -----------------
Net increase (decrease) in net assets resulting from operations 819,441 (297,998)
------------------ -----------------
Distributions to shareholders
From net investment income (1,864,526) (1,237,025)
From net realized gain (71,037) -
------------------ -----------------
Total distributions (1,935,563) (1,237,025)
------------------ -----------------
Share Transactions
Net proceeds from sale of shares 3,726,175 13,541,571
Shares issued in reinvestment of distributions 1,792,605 1,166,552
Shares redeemed (3,186,552) (533,511)
------------------ -----------------
Net increase in net assets resulting
from share transactions 2,332,228 14,174,612
------------------ -----------------
Total increase in net assets 1,216,106 12,639,589
Net Assets
Begining of period 19,928,597 7,289,008
------------------ -----------------
End of period [including accumulated undistributed net
investment income (loss) of $95,053 and $(14,436), respectively] $ 21,144,703 $ 19,928,597
================== =================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Bond Fund
Financial Highlights
<S> <C> <C> <C>
Six months
ended Year Period
April 30, ended ended
1999 October 31, October 31,
(Unaudited) 1998 1997 (c)
-------------- -------------- ---------------
Selected Per Share Data
Net asset value, beginning of period $ 9.16 $ 9.95 $ 10.00
-------------- -------------- ---------------
Income from investment operations
Net investment income 0.78 0.85 0.21
Net realized and unrealized gain(loss) (0.47) (0.79) (0.12)
-------------- -------------- ---------------
Total from investment operations 0.31 0.06 0.09
-------------- -------------- ---------------
Less Distributions
From net investment income (0.78) (0.85) (0.02)
From net realized gain(loss) (0.03) - -
Return of capital - - (0.12)
-------------- -------------- ---------------
Total distributions (0.81) (0.85) (0.14)
-------------- -------------- ---------------
============== ============== ===============
Net asset value, end of period $ 8.66 $ 9.16 $ 9.95
============== ============== ===============
Total Return (b) 3.67% 0.33% 0.90%
Ratios and Supplemental Data
Net assets, end of period (000) $21,145 $19,929 $7,289
Ratio of expenses to average net assets 0.75% (a) 0.75% 0.53% (a)
Ratio of expenses to average net assets
before reimbursement 1.11% (a) 1.10% 1.10% (a)
Ratio of net investment income to 17.74% (a) 8.73% 3.95% (a)
average net assets
Ratio of net investment income to
average net assets before reimbursement 17.38% (a) 8.38% 3.38% (a)
Portfolio turnover rate 160.31% (a) 10.45% 60.55% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) For the period August 4, 1997 (commencement of operations) to October 31,
1997
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Growth Fund
I am pleased to report that the Florida Street Growth Fund staged a rally
during the six-month period ended April 30, 1999. An investment in the Fund
during the period produced a total return of 16.67%. A comparison of this result
with market indices is shown below:
Month Year Life of Fund
Total Total (Average Annual
Fund / Index Return Return Total Return)
- --------------------------- ---------- ---------- -----------------
Florida Street Growth Fund 16.67% (5.59)% 4.15%
S&P 400 Mid-Cap Index 18.85% 6.41% 14.02%
S&P 600 Small-Cap Index 9.01% (14.31)% (0.45)%
- --------------------------- ---------- ---------- -----------------
Growth of $10,000 Since Inception
Period FS Growth S&PMid S&PSml
8/6/97 $10,000 $10,000 $10,000
08/31/97 $9,900 $9,848 $10,240
09/30/97 $10,550 $10,414 $10,917
10/30/97 $10,340 $9,961 $10,446
11/30/97 $10,120 $10,108 $10,337
12/31/97 $10,090 $10,500 $10,579
01/30/98 $9,939 $10,300 $10,373
02/28/98 $10,702 $11,153 $11,317
03/31/98 $11,214 $11,655 $11,749
04/30/98 $11,365 $11,868 $11,818
05/31/98 $10,803 $11,334 $11,192
6/30/98 $10,712 $11,405 $11,224
7/31/98 $10,200 $10,963 $10,366
8/31/98 $8,122 $8,924 $8,368
9/30/98 $8,634 $9,756 $8,879
10/31/98 $9,196 $10,627 $9,291
11/30/98 $9,552 $11,157 $9,813
12/31/98 $10,374 $12,504 $10,439
1/31/99 $10,669 $12,016 $10,307
2/28/99 $9,898 $11,388 $9,379
3/31/99 $9,863 $11,706 $9,500
4/30/99 $10,726 $12,629 $10,127
The chart show the value of a hypothetical investment of $10,000 in the Fund,
the S&P 400 Mid-Cap Index and the S&P 600 Small-Cap Index on August 6, 1997 and
held through April 30, 1999. The S&P 400 Mid-Cap Index and the S&P 600 Small-Cap
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.
The Fund's results were generated by strong returns in a narrow group of
stocks that belong to market sectors we have emphasized. These sectors include
financials, technology and telecommunications. This report will highlight the
stocks that contributed most to the six-month return.
The outstanding stock in the financial sector, and indeed the entire fund,
was Net Bank, Inc. An Internet banking company based in Atlanta, Georgia, this
is the first such bank to become profitable. Through this bank which has no
branches, customers may access banking services 24 hours a day, seven days a
week. Access is gained through a PC, ATM, phone or mail. In addition to CD's,
checking and money market accounts, such tech-friendly services as online
account registers, account activity review, and electronic bill paying are
offered. Residential mortgage and auto loans are offered and make up about one
third of the bank's portfolio.
The recent catalyst for the stock has been better than expected account
growth resulting in positive revenue and earnings surprises. On April 22, first
quarter earnings of 9 cents per share were announced compared to a 2 cent per
share loss last year. Earlier in April, the company announced that depositor
growth was 51 percent above plan. Eight thousand new accounts were opened in the
first quarter, exceeding the goal of 2000 per month. Customers are attracted to
the higher interest payments and lower fees Net Bank can offer because of its
lean expense structure.
The Florida Street Growth Fund has realized a large gain in Net Bank by
selling one half of the Fund's holdings. These shares were sold near $190 per
share after having been purchased at $46 per share.
Three stocks within the technology sector helped boost the Fund's returns.
They are Dycom Industries, Cisco Systems, and Tellabs. We will profile Dycom
since it is the Fund's fifth largest holding as of April 30, 1999.
Dycom is an outsourcing solution to the telecommunications industry for
engineering services. Telecommunications services make up 90% of the company's
business, including the design, installation and maintenance of fiber optic,
coaxial and copper cable systems for local and long distance phone companies and
cable television operators. The company also provides inside wiring services for
businesses and government agencies, installs and maintains electrical lines and
locates underground utilities. Dycom's customers include BellSouth and Comcast
which, together, account for almost half of sales.
Dycom is positioned to benefit from the upgrade cycle in the cable
television industry and the buildout of high bandwidth networks over the next
several years. The stock has performed strongly, rising 95% during the last six
months.
Within the telecommunications sector, Frontier Corp. and MCI Worldcom were
outstanding performers for the Fund as these shares rose 83% and 48%,
respectively. Frontier is the lesser-known company and is the fund's second
largest holding, so we will explain why we own it.
Frontier Corp. is a telecommunications company that offers integrated
communications solutions primarily to business customers. The company is one of
the smallest companies in the S&P 500's Telephone Sector Index that includes all
of the regional Bell companies. The company combines its own and others' long
distance, local, cellular, Internet, data, and paging services into integrated
service packages for more than two million customers in the U.S., Canada and the
U.K. Long distance services account for most of the revenue. In conjunction with
Qwest Communications, Frontier is building a nationwide fiber-optic network.
Global Crossing, a smaller company that is building fiber-optic networks
worldwide with under-sea cable, has agreed to buy Frontier.
The original reasons for purchasing this stock included its modest size
compared to its peers, its reasonable valuation and its growth strategies which
focused on serving the communications needs of businesses. These strategies were
put in place by new management who vowed to strengthen this once stodgy company.
The Global Crossing deal appears to be a brilliant combination for both firms.
There were a few market sectors where we earned low scores during the
period. One was in Consumer Services, where we invested in the information
technology-staffing segment with disappointing results. Though we continue to
believe that companies such as Cotelligent Group and Modis Professional Services
offer investors above average earnings growth beyond year-2000 related services,
the market has not been willing to pay for this potential. We sold these stocks
but will look for opportunities to revisit this industry at a more opportune
time.
Our efforts to find gains in the healthcare sector were not successful
during the period. The largest holding in the sector is Watson Pharmaceuticals,
which manufactures and sells proprietary and generic pharmaceutical products.
The stock declined nearly 23% from its purchase price due primarily to a FDA
warning letter that was issued in January following an inspection of one of its
Florida manufacturing facilities. The company has reorganized its quality
assurance departments to address issues identified in the FDA report. We believe
that management is taking the steps necessary to assure investors that there are
no product safety problems at its facilities, and that the shares will again
reflect the earning power and stability of the company.
Through an earlier investment in HBO and Company, the Fund holds a small
number of shares in McKesson HBOC Inc. The company provides pharmaceutical
supply management and information technology to the healthcare industry. During
this reporting period the value of the shares declined approximately 50% as a
result of the discovery of accounting irregularities in HBO and Co.'s books. The
result has been a reduction in the company's fiscal 1999 earnings by 4.4%. The
shares are being retained due to the strong value they offer the long-term
investor.
In summary, we believe the Florida Street Growth Fund is well positioned
for resurgence in mid capitalization stocks, and we thank you for your support.
Richard Chauvin, Jr. CFA
<PAGE>
<TABLE>
<CAPTION>
Florida Street Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stock - 95.2% Shares Value
Banks & Bank Holding Companies - 9.8%
CCB Financial Corp. 1,500 $ 86,625
First Tennessee National Corp. 1,200 51,750
Fleet Financial Group, Inc. 1,500 64,594
Golden State Bancorp. - Warrants 8,000 15,000
Net Bank, Inc. 300 56,700
Regions Financial Corp. 1,200 45,300
State Street Corp. 700 61,250
-----------------
381,219
-----------------
Capital Equipment & Services - 4.4%
Illinois Tool Works, Inc. 700 53,900
NCI Buildings Systems (a) 3,000 72,187
Quanta Services, Inc. 1,600 46,100
-----------------
172,187
-----------------
Consumer Cyclical - 2.6%
D. R. Horton, Inc. 2,200 42,488
SCP Pool Corp. (a) 3,075 56,503
-----------------
98,991
-----------------
Consumer Non-Durables - 9.8%
Chattem, Inc. 4,100 160,156
Newell Rubbermaid, Inc. 2,000 94,875
Performance Food Group Co. (a) 3,200 84,800
U.S. Foodservice, Inc. (a) 1,000 42,062
-----------------
381,893
-----------------
Consumer Services - 2.3%
Carnival Corp. 1,200 49,500
Cintas Corp. 600 41,250
-----------------
90,750
-----------------
Energy - 5.7%
Baker Hughes, Inc. 1,500 44,812
Core Laboratories N.V. (a) 3,000 54,000
Mobil Corp. 300 31,425
Noble Drilling Corp. (a) 2,000 39,250
Pride International, Inc. (a) 2,050 23,959
Transocean Offshore, Inc. 1,000 29,688
-----------------
223,134
-----------------
Finance - 11.8%
Allied Capital Corp. 4,400 79,200
Amresco, Inc. (a) 13,000 84,500
Fannie Mae 700 49,656
MBNA Corp. 4,487 126,477
Protective Life Corp. 3,000 117,563
-----------------
457,396
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stock - continued Shares Value
Health Care - 6.0%
Elan Corp. PLC 1,000 $ 51,500
IMS Health, Inc. 1,200 36,000
McKesson HBOC, Inc. 370 12,950
MedQuist, Inc. 1,000 34,250
Pharmaceutical Product Development, Inc. 1,000 29,125
Watson Pharmaceuticals, Inc. (a) 1,700 68,850
-----------------
232,675
-----------------
Retail & Wholesale - 9.1%
Consolidated Stores Corp. (a) 1,500 51,562
Dollar General Corp. 781 27,384
Family Dollar Stores, Inc. 2,000 48,250
Fastenal Co. 1,200 57,300
Lowe's Companies 1,000 52,750
Rite Aid, Inc. 2,000 46,625
Saks Incorporated (a) 2,500 70,781
-----------------
354,652
-----------------
Services - 5.7%
Acxiom Corp. (a) 2,200 55,550
Metamor Worldwide, Inc. (a) 2,000 39,125
NCO Group, Inc. (a) 2,100 68,513
Rare Medium Group (a) 4,000 60,000
-----------------
223,188
-----------------
Technology - 14.8%
Applied Materials, Inc. (a) 350 18,769
Cisco Systems, Inc. (a) 850 96,953
Concord EFS, Inc. (a) 1,850 61,744
Cordant Technologies, Inc. 1,000 46,125
Dycom Industries (a) 2,250 102,797
Oracle Corp. (a) 2,000 54,125
QLogic Corp. (a) 600 41,962
SCI Systems, Inc. (a) 1,000 38,063
Sterling Commerce, Inc. (a) 800 25,050
Tellabs Inc. (a) 804 88,088
-----------------
573,676
-----------------
Telecommunications - 10.4%
Alltel Corp. 900 60,694
Cincinnati Bell, Inc. 1,500 33,938
e.spire Communications, Inc. 1,000 12,500
Frontier Corp. 2,700 149,006
Hyperion Telecommunications, Inc. - Class A 1,500 18,750
MCI WorldCom, Inc. (a) 900 73,969
MGC Communications, Inc. 1,000 34,000
Teligent, Inc. - Class A (a) 400 21,750
-----------------
404,607
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stock - continued Shares Value
Transportation - 2.0%
Atlantic Coast Airlines Holdings (a) 1,400 $ 43,225
Comair Holdings 1,500 33,094
-----------------
76,319
-----------------
Utilities - 0.8%
Consolidated Natural Gas Co. 550 32,725
-----------------
TOTAL COMMON STOCKS (Cost $3,236,183) 3,703,412
-----------------
Principal
Amount
Money Market Securities - 4.8%
Star Treasury Fund, 4.01% (b) (Cost $185,354) $185,354 185,354
-----------------
TOTAL INVESTMENTS - 100.0% (Cost $3,421,537) 3,888,766
-----------------
Other assets less liabilities - 0.0% (1,515)
-----------------
Total Net Assets - 100.0% $ 3,887,251
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at
April 30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Growth Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $3,421,537) $ 3,888,766
Receivable for securities sold 65,910
Dividends receivable 615
Interest receivable 868
------------------
Total assets 3,956,159
Liabilities
Accrued investment advisory fee payable $ 4,203
Payable for securities purchased 52,957
Payable for fund shares redeemed 11,748
-----------------
Total liabilities 68,908
------------------
Net Assets $ 3,887,251
==================
Net Assets consist of:
Paid in capital $ 3,744,741
Accumulated net investment income (loss) (5,151)
Accumulated net realized gain (loss) on investments (319,568)
Net unrealized appreciation on investments 467,229
------------------
Net Assets, for 364,427 shares $ 3,887,251
==================
Net Asset Value
Net Assets
Offering price and redemption price per share ($3,887,251/364,427) $ 10.67
==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Growth Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 14,963
Interest Income 6,430
---------------
Total Income 21,393
Expenses
Investment advisory fee $ 25,213
Trustees' fees 813
---------------
Total expenses before reimbursement 26,026
Reimbursed expenses (813)
---------------
Total operating expenses 25,213
---------------
Net Investment Income (Loss) (3,820)
---------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities (17,466)
Change in net unrealized appreciation (depreciation)
on investment securities 580,926
---------------
Net gain on investment securities 563,460
---------------
Net increase in net assets resulting from operations $ 559,640
===============
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Growth Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
----------------- -----------------
Increase in Net Assets
Operations
Net investment income (loss) $ (3,820) $ 6,034
Net realized gain (loss) on investment securities (17,466) (295,878)
Change in net unrealized appreciation (depreciation) 580,926 (146,025)
----------------- -----------------
Net increase (decrease) in net assets resulting from operations 559,640 (435,869)
----------------- -----------------
Distributions to shareholders
From net investment income (6,024) (2,075)
From net realized gain - (6,224)
----------------- -----------------
----------------- -----------------
Total Distributions (6,024) (8,299)
----------------- -----------------
Share Transactions
Net proceeds from sale of shares 1,182,806 1,857,985
Shares issued in reinvestment of distributions 6,024 8,299
Shares redeemed (1,175,166) (219,626)
----------------- -----------------
Net increase in net assets resulting
from share transactions 13,664 1,646,658
----------------- -----------------
Total increase in net assets 567,280 1,202,490
Net Assets
Begining of period 3,319,971 2,117,481
----------------- -----------------
End of period [including accumulated undistributed net
investment income (loss) of $(5,151) and $4,693] $ 3,887,251 $ 3,319,971
================= =================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Florida Street Growth Fund
Financial Highlights
<S> <C> <C> <C>
Six months
ended Year Period
April 30, ended ended
1999 October 31, October 31,
(Unaudited) 1998 1997 (c)
-------------- --------------- --------------
Selected Per Share Data
Net asset value, beginning of period $ 9.16 $ 10.19 $ 10.00
-------------- --------------- --------------
Income from investment operations
Net investment income (loss) (0.01) 0.02 0.03
Net realized and unrealized gain (loss) 1.54 (1.01) 0.16
-------------- --------------- --------------
Total from investment operations 1.53 (0.99) 0.19
-------------- --------------- --------------
Less Distributions
From net investment income (0.02) (0.01) -
From net realized gain (loss) - (0.03) -
-------------- --------------- --------------
Total Distributions (0.02) (0.04) -
-------------- --------------- --------------
Net asset value, end of period $ 10.67 $ 9.16 $ 10.19
============== =============== ==============
Total Return (b) 16.67% (9.73%) 1.90%
Ratios and Supplemental Data
Net assets, end of period (000) $3,887 $3,320 $2,117
Ratio of expenses to average net assets 1.35% (a) 1.25% 1.35% (a)
Ratio of expenses to average net assets
before reimbursement 1.39% (a) 1.35% 1.35% (a)
Ratio of net investment income (loss) to (0.20)% (a) 0.21% 1.14% (a)
average net assets
Ratio of net investment income (loss) to
average net assets before reimbursement (0.25)% (a) 0.12% 1.14% (a)
Portfolio turnover rate 119.00% (a) 63.10% 0.87% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) August 6, 1997 (commencement of operations) to October 31, 1997
See accompanying notes which are an integral part of the financial statements
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Florida Street Bond Fund (the "Bond Fund") and Florida Street Growth Fund
(the "Growth Fund") are series of the AmeriPrime Funds, an Ohio business trust
(the "Trust"). Each Fund is registered under the Investment Company Act of 1940,
as amended, as a non-diversified series, open-end management investment company.
Each Fund's investment objective is to provide total return over the long term.
The Declaration ofTrust 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 Advisor'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, and the Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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.
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
Federal Income Taxes- Each Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, each 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 Bond Fund intends to declare substantially all
of its net investment income as dividends to its shareholders on a daily basis
and to pay such dividends monthly. The Growth fund intends to distribute
substantially all of its net investment income as dividends to its shareholders
on an annual basis. Each Fund intends to distribute its net long-term capital
gains and its net short-term capital gains at least once a year.
Other- Each 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. OPERATING POLICIES
Restricted Securities- The funds are permitted to invest in securities that are
subject to legal or contractual restrictions on resale. These securities
generally may be resold in transactions exempt from registration or to the
public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. Information regarding restricted securities
is included at the end of each applicable fund's schedule of investments.
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds retain Commonwealth Advisors, Inc. (the "Advisor") to manage each
Fund's investments. Walter A. Morales, the Advisor's president and chief
investment manager, is responsible for the day to day management of the Bond
Fund; Richard L. Chauvin, Senior Vice-President of the Advisor, is responsible
for the day to day management of the Growth Fund.
Under the terms of the management agreement (the "Agreement"), the Advisor
manages each Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of each Fund except brokerage commissions, taxes,
interest, fees and expenses of non-interested person trustees, and extraordinary
expenses. As compensation for its management services and agreement to pay each
Fund's expenses, the Funds are obligated to pay the Advisor 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 Advisor. For the six-month period ended April 30, 1999, the Advisor received
fees of $115,355 and $25,213 from the Bond Fund and the Growth Fund,
respectively. The Advisor has voluntarily agreed to waive fees for the Bond Fund
for the fiscal year ended October 31, 1999 to the extent necessary to maintain
total operating expenses at the rate of 0.75%. The Advisor has voluntarily
agreed to reimburse other expenses for the Growth Fund for the fiscal year ended
October 31, 1999 to the extent necessary to maintain total operating expenses at
the rate of 1.35%. For the six-month period ended April 30, 1999, the Advisor
reimbursed expenses of $37,547 and $813 for the Bond Fund and the Growth Fund,
respectively.
Each Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage each Fund's business affairs and to provide each Fund with
administrative services, including all regulatory reporting and necessary office
equipment and personnel. For the six-month period ended April 30, 1999, the
Administrator received fees of $12,500 from the Advisor for administrative
services provided to each Fund.
Each Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor")
to act as the principal distributor of each Fund's shares. There were no
payments made to the Distributor for the six-month period ended April 30, 1999.
Certain members of management of the Administrator and the Distributor are also
members of management of the AmeriPrime Trust.
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. SHARE TRANSACTIONS
Bond Fund. As of April 30, 1999, there was an unlimited number of authorized
shares for the Fund. Paid in capital at April 30, 1999 was $23,949,535.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 414,530 $3,726,175 1,379,576 $13,541,571
Shares issued in
reinvestment of
dividends 200,780 1,792,605 118,681 1,166,552
Shares redeemed (359,322) (3,186,552) (55,224) (533,511)
------- --------- --------- ----------
255,988 $2,332,228 1,443,033 $14,174,612
======= ========= ========= ==========
Growth Fund. As of April 30, 1999, there was an unlimited number of authorized
shares for the Fund. Paid in capital at April 30, 1999 was $3,744,741.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 115,153 $1,182,806 175,386 $1,857,985
Shares issued in
reinvestment of
dividends 593 6,024 867 8,299
Shares redeemed (113,881) (1,175,166) (21,397) (219,626)
------- --------- ------- ---------
1,865 $13,664 154,856 $1,646,658
======= ========= ======= =========
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 6. INVESTMENTS
Bond Fund. For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $19,195,906
and $16,474,708, respectively. The gross unrealized appreciation for all
securities totaled $845,641 and the gross unrealized depreciation for all
securities totaled $3,072,367 for a net unrealized depreciation of $2,226,726.
The aggregate cost of securities for federal income tax purposes at April 30,
1999 was $23,378,442.
Growth Fund. For the six-month period ended April 30, 1999, purchases and sales
of investment securities, other than short-term investments, aggregated
$2,043,218 and $2,076,059, respectively. The gross unrealized appreciation for
all securities totaled $759,605 and the gross unrealized depreciation for all
securities totaled $292,376 for a net unrealized depreciation of $467,229. The
aggregate cost of securities for federal income tax purposes at April 30, 1999
was $3,421,537.
NOTE 7. 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 8. RELATED PARTY TRANSACTIONS
The Advisor 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, 1999, Charles
Schwab & Co. owned of record in aggregate more than 25% of each Fund.
NOTE 9. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, each Fund could be adversely affected if the
computer systems used by the Advisor, Administrator or servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Advisor and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by
<PAGE>
Florida Street Funds
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 9. YEAR 2000 ISSUE - continued
each of the Fund's major service providers. At this time, however, there can be
no assurance that these steps will be sufficient to avoid any adverse impact on
the Funds. In addition, the Advisor cannot make any assurances that the Year
2000 Issue will not affect the companies in which the Funds invest or worldwide
markets and economies.
<PAGE>
Fountainhead Special Value Fund
Dear Fellow Shareholders:
Patience is rewarded! For the six months ended April 30, 1999, the Fountainhead
Special Value Fund generated a return of 29.7%, easily outpacing both the
Russell Mid-Cap Index at 18.5% and the Russell 2000 Index at 15.2%. Since the
Fund's inception on December 31, 1996, our annualized return is 24.1%.
- --------------------------------------------------------------------------------
Returns for the Periods Ended 4/30/99
- --------------------------------------------------------------------------------
Total Average Annual
Return Since Inception
Fund/Index Six Months 1 Year December 31, 1996
- ---------- ---------- ------ -----------------
Fountainhead Special Value Fund 29.7% 0.4% 24.1%
Russell Mid-Cap Index 18.5% 5.9% 19.6%
Russell 2000 Index 15.2% 9.2)% 9.3%
Fountainhead
Special Russell Russell
Value Midcap 2000
Fund Index Index
12/96 $10,000 $10,000 $10,000
1/97 $10,420 $10,374 $10,200
2/97 $10,830 $10,358 $9,952
3/97 $10,140 $9,918 $9,482
4/97 $9,860 $10,165 $9,509
5/97 $10,869 $10,907 $10,567
6/97 $11,560 $11,264 $11,021
7/97 $11,990 $12,203 $11,533
8/97 $11,860 $12,270 $11,797
9/97 $12,950 $12,759 $12,661
10/97 $13,370 $12,263 $12,105
11/97 $13,070 $12,555 $12,026
12/97 $13,665 $12,902 $12,237
1/98 $13,433 $12,659 $12,043
2/98 $14,757 $13,649 $12,933
3/98 $15,910 $14,296 $13,466
4/98 $16,476 $14,332 $13,540
5/98 $15,758 $13,887 $12,810
6/98 $16,232 $14,080 $12,837
7/98 $15,424 $13,409 $11,798
8/98 $11,976 $11,263 $9,506
9/98 $12,229 $11,992 $10,251
10/98 $12,481 $12,810 $10,669
11/98 $11,730 $13,417 $11,232
12/98 $12,913 $14,205 $11,933
1/99 $13,967 $14,181 $12,088
2/99 $14,240 $13,708 $11,114
3/99 $15,352 $14,137 $11,285
4/99 $16,534 $15,182 $12,296
The chart shows the value of a hypothetical initial investment of $10,000 in the
Fund, the Russell Mid-Cap Index and the Russell 2000 Index on December 31, 1996
and held through April 30, 1999. The Russell Mid-Cap Index and the Russell 2000
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>
After a turbulent summer and fall, we made several strategic decisions in the
Fund during the latter part of 1998. For starters, we eliminated our positions
in healthcare service and oil service stocks (we believed that although an
eventual rebound was likely, the timing was uncertain and the potential upside
was limited by a clouded outlook), and in companies whose fundamentals were not
progressing satisfactorily. We reinvested these proceeds in a variety of
companies with a brighter outlook for the future, including select insurance,
wireless, cable, technology, and medical device stocks. These portfolio
realignments have paid off handsomely.
This outstanding recent performance has been primarily due to the success of our
discount to private-market value discipline. We at KING were not the only ones
to recognize that many companies with solid franchise values were selling at low
valuations; other strategic investors realized this as well, evidenced over the
last six months as our shareholders benefited from acquisitions of five
companies represented in the Fund.
Your Fund started off 1999 with a flourish. Merger and acquisition activity in
telecommunications triggered a frenzy in the wireless industry, as investors
began to contemplate who would be next. The heightened interest led to strong
price moves in many of our wireless holdings, including Nextel, Rural Cellular,
and Western Wireless. Soon thereafter, in the financial services arena, Fortis
entered into a definitive agreement to acquire American Bankers (at a 20%
premium to the prior-day close); Global Crossing, a telecom company, made a bid
for Frontier at a 39% premium; Adelphia, a cable provider, offered to acquire
Century Communications--one of Fountainhead's largest holdings--at a 25%
premium; and United News, a publisher, offered to acquire CMP Media at a 17%
premium. Finally, a bidding war in the cable industry (Comcast and AT&T fought
over MediaOne Group, which was owned by the Fund) resulted in a significant
price move in this group, which has benefited Fountainhead.
However, it was not just acquisitions which propelled our performance. Solid
fundamentals and announcements to enhance shareholder value also helped many of
our other holdings generate strong returns.
Going forward, we remain cautious about equity markets as a whole. With that
said, recent developments look positive for small- and mid-cap stocks. Long out
of favor, cyclical stocks have suddenly come alive, substantially outperforming
the S&P 500 recently, as have small- and mid-cap stocks. We believe that stocks
with solid fundamentals in this area could be poised for a nice run and could
narrow the recent performance disparity between high price-to-earnings growth
and Internet stocks and the vast majority of stocks. For starters, the large-cap
indices are achieving new highs with broader market participation; advancers are
beginning to outpace decliners. In addition, the formerly high-flying Internet
stocks and high-tech names are either starting to run out of gas (the Microsofts
and Dells of the world are floundering), or are rapidly declining from previous
highs (the Amazons and the rest of the dot-com companies), as investors lose
their obsession with Internet mania as these stocks continue to lose money
despite growing sales. The good news for long-suffering small- and mid-cap
stocks is that this money will seek a home, and a portion of the S&P 500 and
tech outflow seems to be moving in their direction.
One reason large-caps outperformed mid- and small-caps last year was because
investors were concerned that lesser-known and less liquid names could present
too great a risk in a market downturn. In a speech to the Securities Industry
Association last November, Federal Reserve Chairman Alan Greenspan noted that
"the enhanced demand for liquidity protection . . . reflected a markedly
decreased willingness to deal with uncertainty--that is a tendency to disengage
from risk-taking to a highly unusual degree." These comments explain last fall's
flight to quality from small- and mid-cap names. However, given the strength of
the U.S. economy in the face of low inflation, the Japanese economy bottoming
out, and the seemingly positive developments in many emerging markets, an
environment of consumer confidence has been created in which investors are more
willing to accept risk. Given the extremely attractive valuations of mid- and
small-cap stocks, investors should increasingly seek companies in this market
segment which have strong growth prospects and reasonable valuations.
Also, the increase in merger and acquisition activity should continue to benefit
mid- and small-cap stocks. As evidenced by the five buyouts in the Fund in the
first part of 1999 alone, companies with a solid franchise trading at attractive
valuations are being acquired by large-cap companies looking to solidify market
share or expand product lines. Many are being acquired at significant premiums,
and many in cash deals (as opposed to stock). This is also a bullish sign, as
less stock is out on the market for the same number of dollars to pursue.
In summary, the relative mid-cap aggregate multiple is at a level not seen since
1993, despite earnings growing faster than those of the S&P 500. Increased
confidence, incremental money inflows, more insider buying, continued merger and
acquisition activity, low interest rates, and participation from a broader
number of companies all bode well for this segment of the market.
On a final note, we would like to announce a significant milestone: the Fund has
recently been assigned a ticker symbol. You can now find the Fund under the
symbol KINGX to obtain the daily net asset value. As always, daily prices are
updated on our Website, which you can find at http://www.kingadvisors.com.
All of us at King Investment Advisors, who are also fellow shareholders, thank
you for your continued support.
Sincerely,
Roger E. King
Chairman and President
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund; this report is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by an effective prospectus. Read the prospectus carefully before
investing.
<PAGE>
Fountainhead Holdings
as of April 30, 1999
Broadcasting/Cable
Cablevision Systems Corporation (CVC) - CVC owns and operates cable-TV
systems in eighteen states, with operations in Boston, Cleveland, and
metropolitan New York. The Company also manages entertainment, news, and
sports programming; owns a majority interest in Madison Square Garden; and
manages Radio City Music Hall.
Century Communications - Class A (CTYA) - CTYA, one of the ten largest
domestic cable operators, owns, operates, and manages 72 cable-TV systems in
25 states and Puerto Rico. The Company also owns and operates
cellular-telephone systems throughout the United States.
Clearnet Communications, Inc. (CLNTF) - CLNTF operates enhanced specialized
mobile radio, a digital wireless service. The Company provides the ability to
integrate enhanced dispatch, mobile telephone, text messaging with
acknowledgment paging, and mobile data services. CLNTF, which provides analog
dispatch services across Canada, operates a multi-location mobile
communications retailer.
Jones Intercable, Inc. - Class A (JOINA) - JOINA operates cable-TV systems in
thr United States. The Company also operates a cable-TV brokerage business
and makes and markets data-encryption products. In addition, JOINA has a
minority interest in an affiliated company which provices educational
programming. Currently, Comcast Corp. owns a large amount of JOINA,
controlling 47%.
LodgeNet Entertainment Corporation (LNET) - LNET provides entertainment and
broadcast services to the lodging and multi-family dwelling unit markets. The
Company offers video on demand, network-based video games, cable programming,
and other interactive entertainment and information services. LNET operates
in the United States, Canada, and selected international markets.
MediaOne Group, Inc. (UMG) - UMG, formerly US WEST Media Group, provides
broadband communications and the Internet to customers in the United States,
Europe, and Asia. UMG holds interests in wireless communications outside the
United States.
United International Holdings, Inc. - Class A (UCOMA) - UCOMA provides voice,
video, data, and programming services outside the United States. The Company
has ownership interests in and operates in 23 countries throughout the world.
<PAGE>
Publishing/Advertising
CMP Media, Inc. (CMPX) - CMPX, a technology media company, provides
information products and services to technology builders, sellers, and users
worldwide. The Company publishes magazines and newspapers about computers,
electronics, information technology, and the Internet. CMP's publications
include WINDOWS Magazine, InformationWeek, Computer Reseller News, and EE
Times.
E4L, Inc. (ETV) - ETV sells consumer products through infomercials and
electronic commerce. The Company manages all phases of direct marketing for
most of its products in the United States and international markets,
including project selection and development, manufacturing by third parties,
production and broadcast of infomercials, order processing and fulfillment,
and customer service.
Entertainment/Lodging
Hilton Hotels Corp. (HLT) - HLT owns, operates, and manages 260 luxury and
mid-scale hotels in the United States, including some of the world's most
renowned properties, such as the Waldorf-Astoria, Hilton San Francisco and
Towers, Hilton Hawaiian Village, and Chicago's Palmer House Hilton. HLT will
continue to pursue growth by acquiring full-service hotels in markets seeing
little new supply in major metropolitan areas as well as in tourist
destinations. In 1998, HLT bought $860 million of hotel properties at
attractive prices. The Company will continue to build its franchise program
in the United States, Canada, and Mexico. HLT's lodging and gaming divisions
split into two separately traded companies at year-end 1998.
Consumer Goods: Retail Food
Great Atlantic & Pacific Tea Company (GAP) - GAP retails food and general
merchandise. The Company operates 839 stores under the names A&P, Super
Fresh, Sav-A-Center, Farmer Jack, Kohl's, Food Emporium, Waldbaum's, Super
Food Market, Ultra Market, Dominion, and Food Basics. GAP also has 55 Food
Basics franchise stores in Canada. The Company operates a coffee roasting
plant in Landover, Maryland which makes and distributes coffees under the
Eight O'Clock, Bokar, and Royale labels for sale through its own stores and
by other retailers outside GAP's trading area.
<PAGE>
Technology
Cabletron Systems, Inc. (CS) - CS is a leading supplier of intelligent hubs
to the enterprise network market, with annual sales approaching $1.6 billion.
CS, the leader in the high-end hub market, continues to enhance the
performance and functionality of its SmartSwitch product line. The Company,
one of the four largest networking companies, employs more than 6,000 people
worldwide.
Data Processing
Information Resources, Inc. (IRIC) - IRIC provides Universal Product Code
scanner-based business solutions to the consumer package goods (CPG)
industry. The Company also offers other services to CPG manufacturers,
including household-level information collected via consumer panels.
Insurance
Horace Mann Educators, Inc. (HMN) - HMN is a multi-line (primarily property
and casualty) company which focuses on meeting the insurance needs of
educators and their families. Headquartered in Springfield, Illinois, it was
bought by Gibbons, Green in an LBO from CIGNA in 1989. In July 1995, Gibbons,
Green sold its remaining shares in a public offering. HMN's management owns
approximately 5% of the company's outstanding stock.
MONY Group, Inc. (MNY) - Chartered in 1842, Mutual of New York, or The MONY
Group, Inc. (MNY), is the second largest life-insurance company in the United
States, as well as the oldest. The Company provides a wide range of life
insurance, annuity, and investment products primarily to higher-income
individuals, particularly family builders, pre-retirees, and small-business
owners. MNY had its initial public offering in November 1998, issuing 11.25
million shares at $23.50.
ReliaStar Financial Corp. (RLR) - RLR, formerly The NWNL Companies, is an
insurance holding company which issues and distributes individual life
insurance and annuities, group life and health insurance, and life and health
reinsurance. The Company also markets and manages mutual funds. Based on
revenues, RLR is the eleventh largest public life insurance holding company
in the United States.
<PAGE>
Savings & Loans
Astoria Financial Corp. (ASFC) - ASFC ranks as the second largest publicly
traded thrift in New York and the sixth largest in the country, with more
than $18 billion in assets. ASFC provides retail banking, mortgages, and
consumer-loan services to more than 700,000 customers, and originates
mortgage loans through extensive broker networks and loan-production offices.
Commercial Federal Corp. (CFB) - CFB, the parent company of Commercial
Federal Bank, a federal savings bank, offers mortgage banking, consumer and
business financing, insurance, and trust and investment services. The Company
operates 243 offices in Iowa, Nebraska, Kansas, Colorado, Oklahoma, Missouri,
Minnesota, South Dakota, and Arizona.
Medical Devices
Beckman Coulter, Inc. (BEC) - BEC designs, makes, markets, and repairs
laboratory instrument systems, reagents, and related products for scientific
research, new product R&D, and diagnostic analysis. The Company's products
are used for diagnostic and life science applications by medical schools,
hospital laboratories, and others.
Respironics, Inc. (RESP) - RESP is a leading designer, manufacturer, and
marketer of advanced medical devices for home, hospital, and alternative
clinical care settings. In addition to therapy products for obstructive sleep
apnea and portable ventilation, the Company's major lines include monitoring
devices for newborns, sleep diagnostics, and products for respiratory
disorders, including asthma-management devices.
St. Jude Medical, Inc. (STJ) - STJ, the world's largest manufacturer of
mechanical heart valves, serves physicians worldwide with cardiovascular and
vascular products. Its products include prosthetic heart valves, vascular
grafts, an intra-aortic balloon pump system, a centrifugal blood-pump system,
and cardiac rhythm-management products. The Company has great franchise
value, as it is a leader in all its markets.
Pharmaceuticals
Dura Pharmaceuticals, Inc. (DURA) - DURA develops and markets prescription
pharmaceutical products for allergies, asthma, and other respiratory
conditions. DURA has built a name for itself by acquiring the rights to
manufacture and market drugs, which are meaningful to DURA, from large
pharmaceutical companies, typically with revenues less than $100 million
annually. Historically, management has been able to increase the market
penetration of these products.
<PAGE>
Telecommunications
IXC Communications, Inc. (IIXC) - IIXC transmits voice and data over
dedicated circuits and processes long-distance traffic through its switches.
Customers include AT&T, MCI, Sprint, WorldCom, and more than three hundred
other long-distance companies.
Nextel Communications, Inc. (NXTL) - NXTL provides digital and analog
wireless-communications services to its United States customers under the
Nextel name. NXTL provides specialized wireless-communications services in
the United States and Hawaii.
Rural Cellular Corp. (RCCC) - RCCC provides wireless telecommunications in
selected markets in Maine, Minnesota, North Dakota, South Dakota, and
Wisconsin.
Skytel Communications, Inc. (SKYT) -SKYT provides wireless messaging services
in the United States. The Company provides one-way messaging facilities and
messaging technology and software. SKYT's products include the SkyWord and
SkyPager paging systems.
Telephone & Data Systems, Inc. (TDS) - TDS is a diversified
telecommunications-service company with established cellular telephone and
local telephone operations. Through its strategic business units (United
States Cellular, TDS Telecom, and Aerial Communications), TDS operates in
cellular, local telephone, and personal communications services (PCS) markets
around the country. TDS provides service in growing and closely related
segments of the telecom industry to more than 2.7 million customers.
Viatel, Inc. (VYTL) - VYTL is a rapidly growing facilities-based
telecommunications carrier providing long-distance services to end-users,
other carriers, and resellers. The Company integrates long-distance services
in targeted markets in Western Europe, combining national and international
long-distance. VYTL's western European long-distance market opportunity is
approximately 1.4 times the size of the United States' long-distance market.
Western Wireless Corp. (WWCA) - WWCA, a leading provider of
wireless-communications services in the western United States, offers
cellular service under the Cellular One name in 17 states. As a result of the
Company's combined cellular and PCS licenses, as well as its joint ventures,
WWCA covers 59% of the continental United States.
Transportation
GATX Corp. (GMT) - GMT is a full-service lessor of rail tank and freight
cars. The Company also operates terminals, contracts warehouses, provides
shipping services, and leases commercial aircraft. GMT offers financial
services focused on owning or managing transportation and distribution
assets.
<PAGE>
<TABLE>
<CAPTION>
Fountainhead Special Value Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 99.6% Shares Value
Advertising - 4.1%
CMP Media, Inc. - Class A (a) 3,200 $ 123,000
E4L, Inc. (a) 30,000 223,125
------------------
346,125
------------------
Broadcasting / Cable - 21.6%
Cablevision Systems Corp. (a) 3,100 239,863
Century Communications - Class A (a) 10,500 515,156
Jones Intercable, Inc. - Class A (a) 8,000 371,000
LodgeNet Entertainment Corp. (a) 12,500 106,250
MediaOne Group, Inc. (a) 2,900 236,531
United International Holdings, Inc. - Class A (a) 6,000 358,500
------------------
1,827,300
------------------
Data Processing - 2.0%
Information Resources, Inc. (a) 21,900 169,725
------------------
Insurance - 8.1%
Horace Mann Educators, Inc. 10,000 227,500
MONY Group, Inc. 7,000 185,500
ReliaStar Financial Corp. 7,500 275,625
------------------
688,625
------------------
Lodging - 3.4%
Hilton Hotels Corp. 18,400 287,500
------------------
Medical Devices - 14.6%
Beckman Coulter, Inc. 6,300 303,581
Respironics, Inc. (a) 14,100 199,163
St. Jude Medical, Inc. (a) 26,400 735,900
------------------
1,238,644
------------------
Pharmaceuticals - 2.5%
Dura Pharmaceuticals, Inc. (a) 17,400 208,800
------------------
Retail Food - 2.4%
Great Atlantic & Pacific Tea Co. 6,700 206,025
------------------
Savings & Loan - 4.5%
Astoria Financial Corp. 2,760 138,345
Commercial Federal Corp. 10,000 242,500
------------------
380,845
------------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Fountainhead Special Value Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
Technology - 14.1%
Cabletron Systems, Inc. (a) 9,000 $ 84,937
IXC Communications, Inc. (a) 15,200 602,300
Viatel, Inc. (a) 11,000 506,000
------------------
1,193,237
------------------
Telecommunications - 16.4%
Clearnet Communications, Inc. (a) 27,400 320,238
Nextel Communications, Inc. (a) 12,800 524,000
Rural Cellular Corp. Class A (a) 13,400 237,850
SkyTel Communications, Inc. (a) 3,000 51,375
Western Wireless Corp. 6,200 254,587
------------------
1,388,050
------------------
Telephone - 3.5%
Telephone & Data Systems, Inc. 5,000 299,375
------------------
Transportation - 2.4%
GATX Corp. 6,000 206,250
------------------
TOTAL COMMON STOCKS (Cost $6,862,304) 8,440,501
------------------
Money Market Securities - 0.4% Principal Amount
Star Treasury Fund, 4.01% (b) (Cost $36,828) $36,828 36,828
------------------
TOTAL INVESTMENTS - 100.0% (Cost $6,899,132) 8,477,329
------------------
Liabilities less other assets - 0.0% (3,736)
------------------
Total Net Assets - 100.0% $ 8,473,593
==================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Fountainhead Special Value Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (Cost $6,899,132) $ 8,477,329
Receivable from custodian bank 596
Receivable for fund shares sold 1,997
Dividends receivable 1,640
Interest receivable 135
-------------------
Total assets 8,481,697
Liabilities
Accrued investment advisory fee payable $ 8,068
Other payables and accrued expenses 36
------------------
Total liabilities 8,104
-------------------
Net Assets $ 8,473,593
===================
Net Assets consist of:
Paid in capital $ 6,833,456
Accumulated net investment income (loss) (32,719)
Accumulated undistributed net realized gain on investments 94,659
Net unrealized appreciation on investments 1,578,197
-------------------
Net Assets, for 517,868 shares $ 8,473,593
===================
Net Asset Value
Net Assets
Offering price and redemption price per share ($8,473,593/517,868) $ 16.36
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Fountainhead Special Value Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 9,234
Interest Income 2,261
----------------
Total Income 11,495
Expenses
Investment advisory fee $ 44,214
Administration fees 15,000
Transfer agent fees 6,646
Pricing & bookkeeping fees 6,798
Legal fees 3,382
Custodian fees 3,023
Audit fees 552
Registration fees 1,976
Shareholder reports 4,013
Trustees' fees 813
Miscellaneous 514
----------------
Total expenses before reimbursement 86,931
Reimbursed expenses (42,717)
----------------
Total operating expenses 44,214
----------------
Net Investment Income (Loss) (32,719)
----------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 111,299
Change in net unrealized appreciation (depreciation)
on investment securities 1,868,707
----------------
Net gain on investment securities 1,980,006
----------------
Net increase in net assets resulting from operations $ 1,947,287
================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Fountainhead Special Value Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
------------------ ------------------
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (32,719) $ (37,441)
Net realized gain (loss) on investment securities 111,299 (188)
Change in net unrealized appreciation (depreciation) 1,868,707 (655,499)
------------------ ------------------
Net increase (decrease) in net assets resulting from operations 1,947,287 (693,128)
------------------ ------------------
Distributions to shareholders
From net realized gain - (34,177)
------------------ ------------------
Share Transactions
Net proceeds from sale of shares 965,132 4,888,881
Shares issued in reinvestment of distributions - 34,164
Shares redeemed (1,076,146) (187,621)
------------------ ------------------
Net increase (decrease) in net assets resulting
from share transactions (111,014) 4,735,424
------------------ ------------------
Total increase in net assets 1,836,273 4,008,119
Net Assets
Beginning of period 6,637,320 2,629,201
------------------ ------------------
End of period [including accumulated net
investment income (loss) of ($32,719) and $0, respectively] $ 8,473,593 $ 6,637,320
================== ==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Fountainhead Special Value Fund
Financial Highlights
<S> <C> <C> <C>
Six months
ended Year Period
April 30, ended ended
1999 October 31, October 31,
(Unaudited) 1998 1997 (c)
--------------- --------------- ---------------
Selected Per Share Data
Net asset value, beginning of period $ 12.61 $ 13.35 $ 10.00
--------------- --------------- ---------------
Income from investment operations
Net investment income (loss) (0.06) (0.09) (0.02)
Net realized and unrealized gain (loss) 3.81 (0.51) 3.37
--------------- --------------- ---------------
Total from investment operations 3.75 (0.60) 3.35
--------------- --------------- ---------------
Less Distributions
From net realized gain - (0.14) -
--------------- --------------- ---------------
Net asset value, end of period $ 16.36 $ 12.61 $ 13.35
=============== =============== ===============
Total Return (b) 29.74% (4.67)% 33.70%
Ratios and Supplemental Data
Net assets, end of period (000) $8,474 $6,637 $2,629
Ratio of expenses to average net assets 1.25% (a) 1.20% 0.97% (a)
Ratio of expenses to average net assets
before reimbursement 2.45% (a) 2.76% 8.25% (a)
Ratio of net investment income (loss) to
average net assets (0.92)% (a) (0.67)% (0.16)% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (2.13)% (a) (2.22)% (7.45)% (a)
Portfolio turnover rate 258.09% (a) 108.31% 130.63% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) December 31, 1996 (commencement of operations) to October 31, 1997
See accompanying notes which are an integral part of the financial statements
<PAGE>
Fountainhead Special Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
The Fountainhead Special Value Fund (the "Fund") is organized as a series
of the AmeriPrime Funds, an Ohio business trust (the "Trust"). The Fund is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's investment
objective is to provide long term capital growth. The Declaration of Trust
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 Advisor'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 Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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.
<PAGE>
Fountainhead Special Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 "Advisor") to manage
the Fund's investments. Roger E. King, President of the Advisor, is primarily
responsible for the day-to-day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Advisor
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
Advisor 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 six-month period
ended April 30, 1999, the Advisor has received a fee of $44,214 from the Fund.
The Advisor has voluntarily agreed to reimburse other expenses for the Fund for
the fiscal year ended October 31, 1999 to the extent necessary to maintain total
operating expenses at the rate of 1.25%. For the six-month period ended April
30, 1999, the Advisor reimbursed expenses of $42,717. There is no assurance that
such reimbursement will continue in the future.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and to provide the Fund with
administrative services, including all regulatory reporting and necessary office
equipment and personnel. For the six-month period ended April 30, 1999, the
Administrator received fees of $15,000 from the Advisor for administrative
services provided to the Fund.
<PAGE>
Fountainhead Special Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor")
to act as the principal distributor of the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999 there was an unlimited number of authorized shares for
the Fund. Paid in capital at April 30, 1999 was $6,833,456.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 65,735 $965,132 341,534 $4,888,881
Shares issued in
reinvestment of
dividends - - 2,614 34,164
Shares redeemed (74,346) (1,076,146) (14,634) (187,621)
------ --------- ------- ---------
(8,611) $(111,014) 329,514 $4,735,424
====== ========= ======= =========
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $9,365,153
and $9,053,850, respectively. The gross unrealized appreciation for all
securities totaled $1,774,648 and the gross unrealized depreciation for all
securities totaled $196,451 for a net unrealized appreciation of $1,578,197. The
aggregate cost of securities for federal income tax purposes at April 30, 1999
was $6,899,132.
<PAGE>
Fountainhead Special Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
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. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the advisor, administrator and servicers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Issue." The advisor
and administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used, and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Advisor cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests, or worldwide
markets and economies.
<PAGE>
GLOBALT Growth Fund
Dear Fellow Shareholders:
Review
Large capitalization and growth stocks continued their dominance over mid cap,
small cap and value stocks during the first quarter of 1999. Most noteworthy of
all, the equity markets continued their extremely narrow advance, i.e., fewer
and fewer large, liquid stocks drove market returns. In fact, more than 77% of
all U.S. stocks underperformed the S&P 500 Index by more than 15 percentage
points - indicating market leadership even more narrow than at the 1973 peak of
the former "Nifty-Fifty" stock heyday. (Nifty-Fifty is defined as the 50 large,
well-known, "glamour" stocks such as Avon.) What this means is primarily
twofold: 1) it is increasingly difficult for investment managers with reasonably
diversified portfolios to outperform the market, and 2) equity benchmarks like
the S&P 500 Index, that are driven by such a narrow group of leaders, have high
inherent risk. We discuss the extremely unusual market characteristics in The
GLOBALT Review in detail. If you have not received a copy, we would be happy to
send you one.
It is certainly true that the markets are as distorted as any one of us has
experienced (going back as long as 36 years). The period since the Asian crisis
erupted (nearly two years ago) has been the severest test that a global strategy
such as ours could experience. U.S./global stocks, in general, have been under
pressure due to the problems in Asia, Russia and now Latin America. It is not a
coincidence that so many managers are having difficulty keeping pace with
benchmarks that are being increasingly driven by fewer and fewer stocks.
Commentary
No one can say that current trends in the market will not persist for an
extended period, or when they will change. We are on record as saying that there
are good reasons for growth being scarcer and more highly valued (see current
and past quarterly issues of The GLOBALT Review). However, the current trends
have taken on distinctly speculative overtones. As mentioned before, 77% of all
stocks in the S&P 500 Index are underperforming the Index by at least 15
percentage points (1,500 basis points)! The prior peak in this measure occurred
in 1997 at a reading of 59% and was followed by a market sell off, while the
highest prior reading on record (also 59%) occurred in 1973 at the height of the
"Nifty-Fifty" period and was followed by the very damaging bear market of
1973-74.
The point, really, is that while current trends can continue, and diversified
managers fall further behind the high growth indices, they aren't normal and
they do not represent an investment posture for fiduciary accounts. If they
don't continue, there is potentially significant risk: either a decline in the
most highly valued, most extended stocks, or, that other stocks provide the
incremental return that will determine investment rankings. The alternatives, of
course, do not have to be this extreme; there can be combinations of the two. We
want to be clear on our stance and how we believe we can serve our GLOBALT
Growth Fund shareholders best over a full market cycle.
<PAGE>
Outlook
What steps are we taking to deliver superior results in this unprecedented
economic environment?
1. Maintain our conviction that globalization is the overarching, driving
force in the market
It was never more apparent how interconnected world economies and markets
are than in 1998. Many of the world's regions are in early stages of
recovery that should gain momentum in the second half of 1999 and continue
into 2000 and beyond. Nothing would help the diversifying parts of our
portfolios (capital spending, financial services, energy, etc.) that have
contributed very little recently to return more than improvement in U.S.
sales and exports to these regions. It would be logical to expect that our
portfolios would be more competitive with growth benchmarks in a more
balanced world economy, as they have in previous periods.
2. Stay with our investment strategy
From the very beginning we identified this strategy as a larger cap
strategy rather than exclusively a mega cap strategy. It was based on the
premise that portfolios should own the large cap, true global growth
companies and be able to blend in some attractive companies on the lower
end of the large cap spectrum. For eighteen to twenty-four months now, the
market has almost exclusively favored the mega caps. But there will come a
time when the better situated, medium/large cap companies will add
significantly to portfolio returns.
Our portfolios will have a distinct growth orientation, but they will have
more breadth than the 10-15 largest holdings in the S&P that it would take
to keep up if current trends continue. We own a large percentage of the
stocks that dominate this index, but in some cases, our weightings will be
smaller and, overall, we will maintain a diversified growth profile.
3. Execute our strategy faithfully and effectively
- - Identify and own the key growth stocks that typify our strategy
- - Extend the holding periods for the best companies, i.e. keep valuation
factor in the proper perspective of long-term investing
- - Stay fully invested
- - Maintain our sell discipline
From a tactical standpoint, we have modestly expanded the universe of
securities that we choose from to include several important companies (for
example, Wal-Mart, MCI WorldCom) that are rapidly globalizing. The net
effect will be to give us more representation in two sectors whose returns
occasionally make it difficult to compete with the index - Retail and
Utilities.
To sharpen execution, we have also strengthened our analytical capability,
in particular by the addition of an experienced analyst in the technology
area, a key sector for any contemporary growth manager.
4. Maintain reasonable sector balance
As stated, we are fully cognizant of the necessity for a portfolio to own
the true global growers that represent long-term fundamental economic
trends. However, many of the leaders have literally doubled and tripled in
a relatively short time, and it is only prudent to expect that they will be
joined at some point by a broader group of companies on the lower end of
the large cap spectrum. We have not had a market cycle in recent years
because the market has only gone in one direction. We enjoyed our best year
in 1993, nearly doubling the return of the S&P 500. In this period,
worldwide economic growth accelerated. The market broadened out, and our
broader sector representation paid off handsomely.
We firmly believe that active management of diversified portfolios will add
value to the major indices and do so with less risk than is incorporated in
mimicking the 10 - 15 largest components of the indices at this stage.
Although it is not central to our position, it will not surprise us in the
months to come if the major indices underperform the broader market, i.e.,
if the equal-weighted S&P 500, for example, outperforms the
capitalization-weighted index.
In summary, we are absolutely committed to the effective execution of the global
growth strategy that we believe in unequivocally. We sense that the composition
of market leadership is already changing - as always, just when frustration and
the tendency to give up and join the stampede is greatest. (There is solid
short-term evidence to back this up.) The strategy has been adversely impacted
for approximately eighteen months by global economic factors, but the ability to
participate in the most powerful economic force today -- global growth through
superior U.S. companies in a diversified portfolio - we believe will be one of a
small number of strategies that will deliver consistent results over a market
cycle.
We appreciate your confidence in the GLOBALT Growth Fund. Please contact with
any questions or comments you may have.
Sincerely,
Angela Z. Allen
President and Chief Executive Officer
AZA/gl
<PAGE>
Fund Investment
Shares of the Fund are sold on a continuous basis.
Through the Fund's transfer agent, Unified Fund 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 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: GROWX). Fidelity can be
reached at 1-800-544-9697.
The Fund is also available through the Schwab 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.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund; this report is not
authorized for distribution to prospective shareholders unless preceded or
accompanied by an effective prospectus. Read the prospectus carefully before
investing.
<PAGE>
<TABLE>
<CAPTION>
GLOBALT Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 98.4% Shares Value
Banks - 2.3%
Bank of America Corp. 5,300 $ 381,600
------------------
Business Equipment & Services - 4.7%
Interpublic Group 4,800 372,300
Omnicom Group 5,800 420,500
------------------
792,800
------------------
Capital Goods - 3.2%
General Electric Co. 5,200 548,600
------------------
Chemicals - 3.0%
Monsanto Co. 11,400 515,850
------------------
Computers - 18.7%
Cisco Systems, Inc. (a) 3,662 417,697
Computer Sciences (a) 7,700 458,631
Compuware Corp. (a) 12,000 292,500
International Business Machines, Inc. 2,700 564,806
Microsoft Corp. (a) 4,800 390,300
Oracle Corp. (a) 9,150 247,622
Sun Microsystems (a) 7,000 418,688
VERITAS Software Corp. (a) 5,400 383,400
------------------
3,173,644
------------------
Consumer Non-Durables - 9.8%
Coca Cola Company 6,850 465,800
Coca Cola Enterprises 16,200 558,900
Gillette Co. 6,200 323,563
Procter & Gamble Co. 3,300 309,581
------------------
1,657,844
------------------
Consumer Services - 7.1%
Disney (Walt) Co. 5,700 180,975
Mattel, Inc. 14,900 385,538
Time Warner, Inc. 9,200 644,000
------------------
1,210,513
------------------
Energy Sector - 1.1%
Texaco, Inc. 2,900 181,975
------------------
Financial Services - 12.4%
American Express 4,300 561,956
American International Group 5,362 629,700
Citigroup, Inc. 6,700 504,175
Marsh & McLennan Co. 5,400 413,437
------------------
2,109,268
------------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
GLOBALT Growth Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
Hardware - 2.3%
Black & Decker Corp. 7,000 $ 397,250
------------------
Health Care - 14.8%
Baxter International, Inc. 5,100 321,300
Bristol Myers Squibb 6,500 413,156
Guidant Corp. 3,400 182,537
Johnson & Johnson 3,812 371,670
Medtronic, Inc. 6,800 489,175
Pfizer Inc. 3,100 356,694
Warner-Lambert Co. 5,500 373,656
------------------
2,508,188
------------------
Machinery - 2.2%
Ingersoll-Rand Co. 5,400 373,613
------------------
Technology - 10.6%
Emerson Electric Co. 3,300 212,850
Intel Corp. 4,200 256,987
Lucent Technologies 4,900 294,613
Micron Technology, Inc. (a) 6,900 256,162
Molex, Inc. - Class A 14,800 427,350
Xerox Corp. 6,000 352,500
------------------
1,800,462
------------------
Telecommunications - 4.2%
GTE Corp. 6,100 408,319
MCI WorldCom, Inc. 3,800 312,313
------------------
720,632
------------------
Transportation - 2.0%
AMR Corp.(a) 4,800 335,100
------------------
Total Common Stock - (Cost $13,756,835) 16,707,339
------------------
Money Market Securities - 1.6%
Star Treasury Fund, 4.01% (b) (Cost $274,413) $274,413 274,413
------------------
TOTAL INVESTMENTS - (Cost $14,031,248) - 100.0% 16,981,752
------------------
Other assets less liabilites - 0.0% (4,915)
------------------
Total Net Assets - 100.0% $ 16,976,837
==================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
GLOBALT Growth Fund April 30, 1999
Statement of Assets and Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $14,031,248) $ 16,981,752
Receivable from custodian bank 551
Receivable for fund shares sold 1,202
Dividends receivable 6,478
Interest receivable 1,157
-------------------
Total assets 16,991,140
Liabilities
Accrued investment advisory fee payable $ 14,303
------------------
Total liabilities 14,303
-------------------
Net Assets $ 16,976,837
===================
Net Assets consist of:
Paid in capital 13,146,562
Accumulated net investment income (loss) (24,505)
Accumulated undistributed net realized gain on investments 904,276
Net unrealized appreciation on investments 2,950,504
-------------------
Net Assets, for 912,099 shares $ 16,976,837
===================
Net Asset Value
Net Assets
Offering price and redemption price per share ($16,976,837/912,099) $ 18.61
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
GLOBALT Growth Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 53,557
Interest Income 9,385
----------------
Total Income 62,942
Expenses
Investment advisory fee $ 82,020
Trustees' fees 813
----------------
Total expenses before reimbursement 82,833
Reimbursed expenses (813)
----------------
Total operating expenses 82,020
----------------
Net Investment Income (Loss) (19,078)
----------------
Realized & Unrealized Gain
Net realized gain on investment securities 902,346
Change in net unrealized appreciation (depreciation)
on investment securities 1,621,472
----------------
Net gain on investment securities 2,523,818
----------------
Net increase in net assets resulting from operations $ 2,504,740
================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
GLOBALT Growth Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
------------------ ------------------
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (19,078) $ 14,740
Net realized gain on investment securities 902,346 687,055
Change in net unrealized appreciation (depreciation) 1,621,472 496,228
------------------ ------------------
Net increase in net assets resulting from operations 2,504,740 1,198,023
------------------ ------------------
Distributions to shareholders
From net investment income (15,584) (5,420)
From net realized gain (592,834) (753,352)
------------------ ------------------
------------------ ------------------
Total distributions (608,418) (758,772)
------------------ ------------------
Share Transactions
Net proceeds from sale of shares 3,077,066 3,441,709
Shares issued in reinvestment of distributions 608,118 758,704
Shares redeemed (313,777) (933,230)
------------------ ------------------
Net increase in net assets resulting
from share transactions 3,371,407 3,267,183
------------------ ------------------
Total increase in net assets 5,267,729 3,706,434
Net Assets
Beginning of period 11,709,108 8,002,674
------------------ ------------------
End of period [including accumulated undistributed net
investment income (loss) of $(24,505) and $12,698] $ 16,976,837 $ 11,709,108
================== ==================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
GLOBALT Growth Fund
Financial Highlights
<S> <C> <C> <C> <C>
Six months
ended Period
April 30, Years ended October 31, ended
1999 --------------------------- October 31,
(Unaudited) 1998 1997 1996 (c)
----------- ----------- ----------- -----------
Selected Per Share Data
Net asset value, beginning of period $ 16.14 $ 15.66 $ 12.48 $ 10.00
----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss) (0.02) 0.02 0.01 0.01
Net realized and unrealized gain 3.32 1.86 3.34 2.47
----------- ----------- ----------- -----------
Total from investment operations 3.30 1.88 3.35 2.48
----------- ----------- ----------- -----------
Less Distributions
From net investment income (0.02) (0.01) - -
From net realized gain (0.81) (1.39) (0.17) -
----------- ----------- ----------- -----------
Total Distributions (0.83) (1.40) (0.17) -
----------- ----------- ----------- -----------
Net asset value, end of period $ 18.61 $ 16.14 $ 15.66 $ 12.48
=========== =========== =========== ===========
Total Return (b) 20.71% 13.28% 27.15% 24.80%
Ratios and Supplemental Data
Net assets, end of period (000) $16,977 $11,709 $8,003 $3,443
Ratio of expenses to average net assets 1.17% (a) 1.17% 1.17% 1.16% (a)
Ratio of expenses to average net assets
before reimbursement 1.18% (a) 1.19% 1.19% 1.25% (a)
Ratio of net investment income (loss) to
average net assets (0.27)% (a) 0.14% 0.06% 0.11% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.28)% (a) 0.12% 0.04% 0.02% (a)
Portfolio turnover rate 139.74% (a) 83.78% 110.01% 66.42% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) December 1, 1995 (commencement of operations) to October 31, 1996
See accompanying notes which are an integral part of the financial statements
<PAGE>
GLOBALT Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
GLOBALT Growth Fund (the "Fund") is a member of the AmeriPrime Funds, an
Ohio business trust (the "Trust). The Fund is registered under the Investment
Company Act of 1940, as amended, as a diversified series, open end management
investment company. The Fund's investment objective is to provide long term
growth of capital. 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 Advisor'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, and the Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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.
<PAGE>
GLOBALT Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 "Advisor") to manage the Fund's
investments. The advisor was organized as a Georgia corporation in 1990. Angela
Allen, President of the Advisor, and Samuel Allen, Chairman of the Advisor, are
the controlling shareholders of GLOBALT, Inc. The investment decisions for the
Fund are made by a committee of the Advisor, 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 Advisor
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage commissions, 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 Advisor 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 Advisor. For the six-month period ended April
30, 1999, the Advisor received a fee of $82,020 from the Fund. The Advisor has
voluntarily agreed to reimburse other expenses for the fiscal year ended October
31, 1999 to the extent necessary to maintain total expenses at the rate of
1.17%. For the six-month period ended April 30, 1999, the Advisor reimbursed
expenses of $813.
<PAGE>
GLOBALT Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, the Administrator
received fees of $15,000 from the Advisor for administrative services provided
to the Fund.
The Fund retains AmeriPrime Financial Securities, Inc. ("the Distributor")
to act as the principal distributor of the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $13,146,562.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 169,647 $3,077,066 216,459 $3,441,709
Shares issued in
reinvestment of
dividends 34,260 608,118 53,733 758,704
Shares redeemed (17,415) (313,777) (55,461) (933,230)
------- --------- ------- ---------
186,492 $3,371,407 214,731 $3,267,183
======= ========= ======= =========
<PAGE>
GLOBALT Growth Fund
Notes to Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $13,037,154
and $9,562,730, respectively. The gross unrealized appreciation for all
securities totaled $3,139,816 and the gross unrealized depreciation for all
securities totaled $189,312 for a net unrealized appreciation of $2,950,504. The
aggregate cost of securities for federal income tax purposes at April 30, 1999
was $14,031,248.
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. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the fund could be adversely affected if the
computer systems used by the Advisor, Administrator or servicers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Advisor and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Advisor cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
IMS Capital Value Fund
April 30, 1999
Dear Fellow Shareholders,
In the fall of last year, we stressed to our shareholders how value tends to
outperform growth over the long haul and we asserted that our style would
eventually regain its position of leadership. Offering a glimmer of hope, we
wrote, "...while it's still very early, several indicators suggest the landscape
may already be shifting towards a more favorable value environment."
As it turns out, our fund went on to close the fourth quarter of 1998 with a
return of 20.10%. During the first four months of 1999, the IMS Capital Value
Fund gained an additional 12.57%. The fund's NAV currently stands at $14.06. The
average annual return to shareholders since the fund's inception on August 5,
1996 has been 16.40%. The twelve-month return was 11.32% and the fund's return
for the last six months was 24.65%.
According to Lipper Analytical Services, our returns beat 75% of the funds in
our category (flex-cap value) in 1998. All indications suggest we are doing at
least as well, if not better, so far in 1999. While it may be wonderful to watch
our returns improve so dramatically in such a short period of time, we are only
in the second inning of the game. We feel our best ideas have yet to hit their
stride and that the fund is well-positioned to capitalize on the growth of the
Internet, the growing use of technology, the powerful buying and investment
habits of baby boomers and several other strategic opportunities over the next
decade.
Some of the stocks that contributed to our positive results in the last six
months include:
AT & T up 63%
Citigroup up 60%
Motorola up 54%
Nike up 42%
Oracle up 37%
The objective of the IMS Capital Value Fund is to provide long-term growth of
capital. We invest primarily in blue chip stocks with strong value
characteristics and improving business momentum. The fund's portfolio of
approximately thirty companies is well-diversified across all major sectors of
the market. Considerable care is taken to manage the fund on a tax-efficient
basis in an effort to produce superior after-tax returns. We continually search
out undervalued opportunities that will help to both grow and protect our
shareholder's capital. Our goal remains making the IMS Capital Value Fund one of
the most successful and respected funds in the industry.
We appreciate your trust and thank you for joining us as shareholders.
Sincerely,
Carl W. Marker
Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 93.9% Shares Value
Apparel - 3.6%
Nike, Inc. - Class B 6,500 $ 404,219
-----------------
Beverages - 3.1%
Pepsico, Inc. 9,500 350,906
-----------------
Communications - 2.2%
Motorola, Inc. 3,000 240,375
-----------------
Computer & Related Technologies - 12.4%
Electronic Data Systems Corp. 7,500 403,125
Intel Corp. 7,000 428,313
Oracle Corp. (a) 8,000 216,500
Symantec Corp. (a) 17,000 337,875
-----------------
1,385,813
-----------------
Drugs & Pharmaceuticals - 8.0%
American Home Products Corp. 5,500 335,500
Amgen, Inc. (a) 3,000 184,313
IVAX Corp. (a) 28,000 367,500
-----------------
887,313
-----------------
Electrical Equipment - 3.7%
American Power Conversion, Inc. (a) 12,500 412,500
-----------------
Energy Services - 3.6%
Diamond Offshore Drilling, Inc. 12,000 396,750
-----------------
Entertainment - 3.1%
Marvel Enterprises, Inc. (a) 37,000 346,875
-----------------
Finance - 7.6%
Citigroup, Inc. 6,000 451,500
T. Rowe Price Associates, Inc. 10,500 395,719
-----------------
847,219
-----------------
Hospitals & Managed Care - 2.2%
Pacificare Health Systems, Inc. - Class A (a) 3,300 241,931
-----------------
Household Products - 3.7%
Kimberly-Clark, Inc. 5,000 306,562
Sunbeam Corp. 20,000 107,500
-----------------
414,062
Iron & Steel - 3.8%
USX-U.S. Steel Group 14,000 423,500
-----------------
Oil & Gas - 3.2%
Pennzoil-Quaker State, Inc. 28,000 362,250
-----------------
Packaging & Containers - 2.5%
Crown Cork & Seal, Inc. 8,500 276,250
-----------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
IMS Capital Value Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
Pollution Control - 4.4%
Waste Management, Inc. 8,600 $ 485,900
-----------------
Retail - 7.3%
OfficeMax, Inc. (a) 38,000 384,750
Toys R Us (a) 20,000 435,000
-----------------
819,750
-----------------
Services - 4.6%
H & R Block 9,000 433,125
Olsten Corp. 11,300 76,275
-----------------
509,400
-----------------
Telecommunications - 5.8%
AT&T Corp. 8,250 416,625
Paging Network, Inc. (a) 60,000 234,375
-----------------
651,000
-----------------
Tobacco - 3.2%
RJR Nabisco Holdings Corp. 14,000 360,500
-----------------
Transportation - 3.0%
FDX Corp. 3,000 337,687
-----------------
Utilities - 2.9%
Niagra Mohawk Holdings, Inc. (a) 24,000 321,000
-----------------
TOTAL COMMON STOCKS (Cost $8,647,549) 10,475,200-
Money Market Securities - 6.4% Principal Amount
Star Treasury Fund, 4.01% (b) (Cost $717,609) $717,609 717,609
-----------------
TOTAL INVESTMENTS - 100.3% (Cost $9,365,158) 11,192,809
-----------------
Liabilities less other assets - (0.3%) (37,125)
-----------------
TOTAL NET ASSETS - 100.0% $ 11,155,684
=================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $9,365,158) $ 11,192,809
Receivable from custodian bank 513
Receivable for fund shares sold 30,000
Dividends receivable 6,865
Interest receivable 2,310
Deferred organizational costs 15,498
-------------------
Total assets 11,247,995
Liabilities
Accrued investment advisory fee payable $ 24,370
Payable for fund shares redeemed 62,832
Other payables and accrued expenses 5,109
-----------------
Total liabilities 92,311
-------------------
Net Assets $ 11,155,684
===================
Net Assets consist of:
Paid in capital $ 8,357,419
Accumulated net investment income (loss) (3,523)
Accumulated undistributed net realized gain on investments 977,222
Accumulated net realized gain (loss) on options transactions (3,085)
Net unrealized appreciation on investments 1,827,651
-------------------
Net Assets, for 793,165 shares $ 11,155,684
===================
Net Asset Value
Net Assets
Offering price and redemption price per share ($11,155,684/793,165) $ 14.06
===================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 84,608
Interest Income 6,078
---------------------
Total Income 90,686
Expenses
Investment advisory fee $ 74,656
Administration fee 15,000
Transfer agent fee 9,775
Fund accounting fee 8,652
Legal fees 4,117
Custodian fee 2,963
Amortization of organizational expenses 2,339
Audit fees 763
Registration fees 1,725
Shareholder reports 2,772
Trustees' fees 813
Miscellaneous 685
---------------------
Total expenses before reimbursement 124,260
Reimbursed expenses (30,051)
---------------------
Total operating expenses 94,209
---------------------
Net Investment Income (Loss) (3,523)
---------------------
Realized & Unrealized Gain (Loss)
Net realized gain on investment securities 1,022,619
Net realized gain on options transactions 2,923
Change in net unrealized appreciation (depreciation)
on investment securities 1,558,740
---------------------
Net gain on investment securities 2,584,282
---------------------
Net increase in net assets resulting from operations $ 2,580,759
=====================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Year
April 30, ended
1999 October 31,
(Unaudited) 1998
------------------ -----------------
Increase/(Decrease) in Net Assets
Operations
Net investment income (loss) $ (3,523) $ (60,430)
Net realized gain on investment securities 1,022,619 26,314
Net realized gain (loss) on options transactions 2,923 (6,008)
Change in net unrealized appreciation (depreciation) 1,558,740 69,368
------------------ -----------------
Net increase (decrease) in net assets resulting from operations 2,580,759 29,244
------------------ -----------------
Distributions to shareholders
Return of capital - (25,273)
From net capital gain - (682,377)
------------------ -----------------
------------------ -----------------
Total distributions - (707,650)
------------------ -----------------
Share Transactions
Net proceeds from sale of shares 464,985 3,955,446
Shares issued in reinvestment of distributions - 702,348
Shares redeemed (3,414,049) (2,387,348)
------------------ -----------------
Net increase (decrease) in net assets resulting
from share transactions (2,949,064) 2,270,446
------------------ -----------------
Total increase (decrease) in net assets (368,305) 1,592,040
Net Assets
Beginning of period 11,523,989 9,931,949
------------------ -----------------
End of period [including accumulated net investment
income (loss) of $(3,523) and $0, respectively] $ 11,155,684 $ 11,523,989
================== =================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
IMS Capital Value Fund
Financial Highlights
<S> <C> <C> <C> <C>
Six Months
ended Period
April 30, Years ended October 31, ended
1999 --------------------------- October 31,
(Unaudited) 1998 1997 1996 (c)
----------- ----------- ----------- -----------
Selected Per Share Data
Net asset value, beginning of period $ 11.28 $ 12.06 $ 10.76 $ 10.00
----------- ----------- ----------- -----------
Income from investment operations:
Net investment income (loss) - (0.06) (0.08) (0.01)
Net realized and unrealized gain 2.78 0.12 1.38 0.77
----------- ----------- ----------- -----------
Total from investment operations 2.78 0.06 1.30 0.76
----------- ----------- ----------- -----------
Less Distributions
From net investment income - (0.03) - -
From net realized gain - (0.81) - -
----------- ----------- ----------- -----------
Total Distributions - (0.84) - -
----------- ----------- ----------- -----------
Net asset value, end of period $ 14.06 $ 11.28 $ 12.06 $ 10.76
=========== =========== =========== ===========
Total Return (b) 24.65% 2.27% 12.08% 7.60%
Ratios and Supplemental Data
Net assets, end of period (000) $11,156 $11,524 $9,932 $4,741
Ratio of expenses to average net assets 1.59% (a) 1.73% 1.97% 1.84% (a)
Ratio of expenses to average net assets
before reimbursement 2.10% (a) 2.34% 2.54% 3.92% (a)
Ratio of net investment income (loss) to
average net assets (0.06)% (a) (0.53)% (0.64)% (0.25)% (a)
Ratio of net investment income (loss) to
average net assets before reimbursement (0.57)% (a) (1.14)% (1.20)% (2.32)% (a)
Portfolio turnover rate 78.84% (a) 81.74% 34.76% 3.56% (a)
</TABLE>
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) August 5, 1996 (commencement of operations) to October 31, 1996
See accompanying notes which are an integral part of the financial statements
<PAGE>
IMS Capital Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
IMS Capital Value Fund (the "Fund") is organized as a series of the
AmeriPrime Funds, an Ohio business trust (the "Trust"). The Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to provide
long-term growth. The Declaration of Trust 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 Advisor'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, and the Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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.
<PAGE>
IMS Capital Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 "Advisor") to manage the
Fund's investments. Carl W. Marker, Chairman and President of the Advisor, is
primarily responsible for the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Advisor
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
Advisor a fee computed and accrued daily and paid monthly at an annual rate of
1.36% of the average daily net assets of the Fund. For the six-month period
ended April 30, 1999, the Advisor received a fee of $74,656 from the Fund. The
Advisor has voluntarily agreed to reimburse other expenses for the Fund for the
fiscal year ended October 31, 1999 to the extent necessary to maintain total
operating expenses at the rate of 1.59%. For the six-month period ended April
30, 1999, the Advisor reimbursed expenses of $30,051. There is no assurance that
such reimbursement will continue in the future.
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, the Administrator
received fees of $15,000 from the Advisor for administrative services provided
to the fund.
<PAGE>
IMS Capital Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Securities, Inc. (the "Distributor")
to act as the principal distributor of the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $8,357,419.
Transactions in shares were as follows:
Six months ended Year ended
April 30, 1999 October 31, 1998
Shares Dollars Shares Dollars
Shares sold 36,014 $464,985 338,518 $3,955,446
Shares issued in
reinvestment of
dividends - - 65,032 702,348
Shares redeemed (264,626) (3,414,064) (205,539) (2,387,348)
------- --------- -------- ---------
(228,612) $(2,949,064) 198,011 $2,270,446
======= ========= ======= =========
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of
investment securities, other than short-term investments, aggregated $4,453,809
and $8,023,641, respectively. The gross unrealized appreciation for all
securities totaled $1,935,131 and the gross unrealized depreciation for all
securities totaled $107,480 for a net unrealized appreciation of $1,827,651. The
aggregate cost of securities for federal income tax purposes at April 30, 1999
was $9,365,158.
<PAGE>
IMS Capital Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
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. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by the Advisor, Administrator or Servicers do not properly
process and calculate date related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Issue." The Advisor and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtain reasonable assurances that comparable steps are being taken by each of
the Fund's major service providers. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact on the
Fund. In addition, the Advisor cannot make any assurances that the Year 2000
Issue will not affect the companies in which the Fund invests or worldwide
markets and economies.
<PAGE>
<TABLE>
<CAPTION>
Marathon Value Fund
Schedule of Investments - April 30, 1999 (Unaudited)
<S> <C> <C>
Common Stocks - 77.3% Shares Value
Apparel - 6.8%
St. John's Knits, Inc. 9,800 $ 266,438
------------------
Banks & Bank Holding Companies - 1.0%
First Security Corp. 2,130 40,470
------------------
Beverages - 1.9%
PepsiCo, Inc. 2,000 73,875
------------------
Broadcasting - 1.9%
MediaOne Group 900 73,406
------------------
Business Equipment & Services - 9.5%
Computer Sciences Corp. (a) 2,000 119,125
(John H.) Harland Co. 6,000 99,375
Keane, Inc. (a) 1,500 37,219
Olsten Corp. 7,700 51,975
SunGard Data Systems, Inc. 2,000 63,875
------------------
371,569
------------------
Consumer Products (Durables) - 3.8%
Clayton Homes, Inc. 3,125 34,766
Fibermark, Inc. (a) 3,000 39,000
Helen of Troy, Ltd. (a) 2,500 35,000
QEP Co. (a) 5,000 38,125
------------------
146,891
------------------
Consumer Products (Non-Durables) - 3.2%
Del Labratories, Inc. 1,700 32,194
Food Lion Inc. - Class B 9,000 91,125
------------------
123,319
------------------
Computer Software - 4.5%
BMC Software, Inc. (a) 1,000 43,063
Compuware Corp. (a) 3,000 73,125
Oracle Corp. (a) 2,200 59,537
------------------
175,725
------------------
Financial Services - 3.0%
Bear Stearns Companies, Inc. 2,535 118,194
------------------
Healthcare Products - 5.7%
Corvel Corp. (a) 3,000 105,750
Warner-Lambert Co. 1,700 115,494
------------------
221,244
------------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Marathon Value Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Common Stocks - continued Shares Value
Hospitals - 5.2%
HEALTHSOUTH Corp. (a) 10,000 $ 134,375
Ventas Inc. 15,100 67,950
------------------
202,325
------------------
Industrial Cyclicals - 4.3%
Teleflex, Inc. 2,000 87,125
Tyco International Ltd. 1,000 81,250
------------------
168,375
------------------
Measuring Equipment - 2.5%
Thermospectra Corp. (a) 9,000 97,875
------------------
Oil & Gas Services - 2.1%
Nabors Industries, Inc. (a) 4,000 82,250
------------------
Pharmaceuticals - 3.3%
Merck & Co. 1,100 77,275
Watson Pharmaceuticals, Inc. 1,300 52,650
------------------
129,925
------------------
Recreational Vehicles - 3.7%
Artic Cat, Inc. 16,600 143,175
------------------
Retail - 7.9%
American Stores Co. 4,000 126,250
Building Materials Holdings (a) 4,000 51,000
Dress Barn, Inc. (a) 9,100 133,087
------------------
310,337
------------------
Restaurants - 1.5%
Schlotzsky's, Inc. (a) 5,000 56,875
------------------
Telecommunications - 2.3%
Telxon Corp. 9,000 90,000
------------------
Transportation - 3.2%
Covenant Transport Inc. - Class A (a) 5,000 68,750
Werner Enterprises, Inc. 3,000 57,750
------------------
126,500
------------------
TOTAL COMMON STOCKS (Cost $3,163,300) 3,018,768
------------------
See accompanying notes which are an integral part of the financial statements
<PAGE>
Marathon Value Fund
Schedule of Investments - April 30, 1999 (Unaudited) - continued
Principal
Amount Value
MONEY MARKET SECURITIES - 27.6%
Star Treasury Fund, 4.01% (b) (Cost $1,078,517) $1,078,517 $ 1,078,517
------------------
TOTAL INVESTMENTS - 104.9% (Cost $4,241,817) 4,097,285
------------------
Liabilities less other assets - (4.9)% (189,927)
------------------
TOTAL NET ASSETS - 100.0% $ 3,907,358
==================
</TABLE>
(a) Non-income producing
(b) Variable rate security; the coupon rate shown represents the rate at April
30, 1999.
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Marathon Value Fund April 30, 1999
Statement of Assets & Liabilities (Unaudited)
<S> <C> <C>
Assets
Investment in securities, at value (cost $4,241,817) $ 4,097,285
Receivable from custodian bank 492
Receivable for securities sold 74,818
Receivable for fund shares sold 7,458
Dividends receivable 693
Interest receivable 3,322
--------------------
Total assets 4,184,068
Liabilities
Accrued investment advisory fee payable $ 4,522
Payable for securities purchased 272,188
------------------
Total liabilities 276,710
--------------------
Net Assets $ 3,907,358
====================
Net Assets consist of:
Paid in capital $ 4,296,869
Accumulated undistributed net investment income 6,570
Accumulated net realized gain (loss) on security transactions (309,767)
Accumulated undistributed net realized gain on options transactions 58,218
Net unrealized depreciation on investments (144,532)
--------------------
Net Assets, for 439,873 shares $ 3,907,358
====================
Net Asset Value
Net Assets
Offering price and redemption price per share ($3,907,358/439,873) $ 8.88
====================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Marathon Value Fund
Statement of Operations for the six months ended April 30, 1999 (Unaudited)
<S> <C> <C>
Investment Income
Dividend Income $ 19,195
Interest Income 13,793
----------------
Total Income 32,988
Expenses
Investment advisory fee $ 26,402
Trustees' fees 813
---------------
Total expenses before reimbursement 27,215
Reimbursed expenses (813)
---------------
Total operating expenses 26,402
----------------
Net Investment Income (Loss) 6,586
----------------
Realized & Unrealized Gain
Net realized gain (loss) on investment securities (50,929)
Net realized gain on options transactions 39,468
Change in net unrealized appreciation (depreciation)
on investment securities 160,922
---------------
Net gain (loss) on investment securities 149,461
----------------
Net increase in net assets resulting from operations $ 156,047
================
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Marathon Value Fund
Statement of Changes in Net Assets
<S> <C> <C>
Six months
ended Period
April 30, ended
1999 October 31,
(Unaudited) 1998 (a)
------------------ ------------------
Increase/(Decrease) in Net Assets
Operations
Net investment income $ 6,586 $ 6,326
Net realized gain (loss) on investment securities (50,929) (258,838)
Net realized gain on options transactions 39,468 18,750
Change in net unrealized appreciation (depreciation) 160,922 (305,454)
------------------ ------------------
Net increase (decrease) in net assets resulting from operations 156,047 (539,216)
------------------ ------------------
Distributions to shareholders
From net investment income (6,342) -
------------------ ------------------
Share Transactions
Net proceeds from sale of shares 519,014 3,806,088
Shares issued in reinvestment of distributions - -
Shares redeemed (20,012) (8,221)
------------------ ------------------
Net increase in net assets resulting
from share transactions 499,002 3,797,867
------------------ ------------------
Total increase in net assets 648,707 3,258,651
Net Assets
Beginning of period 3,258,651 -
------------------ ------------------
End of period [including accumulated undistributed net
investment income of $6,570 and $6,326, respectively] $ 3,907,358 $ 3,258,651
================== ==================
</TABLE>
(a) March 12, 1998 (commencement of operations) to October 31, 1998
See accompanying notes which are an integral part of the financial statements
<PAGE>
<TABLE>
<CAPTION>
Marathon Value Fund
Financial Highlights
<S> <C> <C>
Six months
ended Period
April 30, ended
1999 October 31,
(Unaudited) 1998 (c)
---------------- ----------------
Selected Per Share Data
Net asset value, beginning of period $ 8.48 $ 10.00
---------------- ----------------
Income from investment operations
Net investment income 0.02 0.02
Net realized and unrealized gain (loss) 0.40 (1.54)
---------------- ----------------
Total from investment operations 0.42 (1.52)
---------------- ----------------
Less Distributions
From net investment income (0.02) -
---------------- ----------------
Net asset value, end of period $ 8.88 $ 8.48
================ ================
Total Return (b) 4.91% (15.20)%
Ratios and Supplemental Data
Net assets, end of period (000) $3,907 $3,259
Ratio of expenses to average net assets 1.48% (a) 1.47% (a)
Ratio of expenses to average net assets before reimbursement 1.52% (a) 1.50% (a)
Ratio of net investment income to average net assets 0.37% (a) 0.36% (a)
Ratio of net investment income to average net assets
before reimbursement 0.32% (a) 0.33% (a)
Portfolio turnover rate 106.83% (a) 61.04% (a)
(a) Annualized
(b) For periods of less than a full year, total returns are not annualized.
(c) March 12, 1998 (commencement of operations) to October 31, 1998
</TABLE>
See accompanying notes which are an integral part of the financial statements
<PAGE>
Marathon Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited)
NOTE 1. ORGANIZATION
Marathon Value Fund (the "Fund") is organized as a series of the AmeriPrime
Funds, an Ohio business trust (the "Trust"). The Fund is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to provide
maximum long-term capital appreciation. The Declaration of Trust 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 Advisor'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 Advisor 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 Advisor, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust (the "Board").
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
Advisor 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 Advisor,
subject to review of the Board. 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, 1999 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
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 "Advisor") to manage the
Fund's investments. Mark Matsko, the Fund's portfolio manager, is primarily
responsible for the day to day management of the Fund's portfolio.
Under the terms of the management agreement, (the "Agreement"), the Advisor
manages the Fund's investments subject to approval of the Board of Trustees and
pays all expenses of the Fund except brokerage commissions, taxes, interest,
fees and expenses of the 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 Advisor 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. 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 Advisor. For the six-month period ended April
30, 1999, the Advisor has received a fee of $26,402 from the Fund. The Advisor
has voluntarily agreed to reimburse other expenses for the fiscal year ended
October 31, 1999 to the extent necessary to maintain total operating expenses at
the rate of 1.48%. For the six-month period ended April 30, 1999, the Advisor
reimbursed expenses of $813.
<PAGE>
Marathon Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
The Fund retains AmeriPrime Financial Services, Inc. (the "Administrator")
to manage the Fund's business affairs and provide the Fund with administrative
services, including all regulatory reporting and necessary office equipment and
personnel. For the six-month period ended April 30, 1999, the Administrator
received fees of $15,000 from the Advisor for administrative services provided
to the Fund.
The Fund retains AmeriPrime Financial Securities, Inc. (the Distributor) to
act as the principal distributor of the Fund's shares. There were no payments
made to the Distributor for the six-month period ended April 30, 1999. Certain
members of management of the Administrator and the Distributor are also members
of management of the AmeriPrime Trust.
NOTE 4. SHARE TRANSACTIONS
As of April 30, 1999, there was an unlimited number of authorized shares
for the Fund. Paid in capital at April 30, 1999 was $4,296,869.
Transactions in shares were as follows:
Six months ended Period ended
April 30, 1999 October 31, 1998 (a)
Shares Dollars Shares Dollars
Shares sold 58,038 $519,014 385,265 $3,806,088
Shares issued in
reinvestment of
dividends - - - -
Shares redeemed (2,350) (20,012) (1,080) (8,221)
------ -------- ------- ---------
55,688 $499,002 384,185 $3,797,867
====== ======== ======= ==========
(a) March 12, 1998 (commencement of operations) to October 31, 1998
<PAGE>
Marathon Value Fund
Notes To Financial Statements
April 30, 1999 (Unaudited) - continued
NOTE 5. INVESTMENTS
For the six-month period ended April 30, 1999, purchases and sales of investment
securities, other than short-term investments, aggregated $1,561,250 and
$1,651,914, respectively. As of April 30, 1999, the gross unrealized
appreciation for all securities totaled $230,197 and the gross unrealized
depreciation for all securities totaled $374,729 for a net unrealized
depreciation of $144,532. The aggregate cost of securities for federal income
tax purposes at April 30,1999, was $4,241,817.
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 Advisor is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Fund. 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, 1999, Charles
Schwab & Co. owned of record in aggregate more than 25% of the Fund.
NOTE 8. YEAR 2000 ISSUE
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Advisor, Administrator or servicers do not properly process and
calculate date-related information and data from and after January 1, 2000. This
is commonly known as the "Year 2000 Issue." The Advisor and Administrator have
taken steps that they believe are reasonably designed to address the Year 2000
Issue with respect to computer systems that are used and to obtain reasonable
assurances that comparable steps are being taken by each of the Fund's major
service providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund. In addition,
the Advisor cannot make any assurances that the Year 2000 Issue will not affect
the companies in which the Fund invests or worldwide markets and economies.
