KALMAR
POOLED
INVESTMENT
TRUST
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
SEMI-ANNUAL REPORT
JUNE 30, 1998
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
DEAR FELLOW SHAREHOLDERS & FRIENDS:
This is the second Semi-Annual Report for your Kalmar "Growth-with-Value" Small
Cap Fund. This report covers approximately its first fifteen months of what we
hope will be a long, successful and very rewarding experience for shareholders,
among which your management team is proud to be meaningfully represented. As you
can see by referencing the Comparative Performance Statistics below, we are
pleased to present this Semi-Annual Report from the point of view of its
"Inception to Date" and "One Year" returns and less pleased with respect to its
"Year to Date" and "Latest Quarter".
COMPARATIVE PERFORMANCE.
<TABLE>
<CAPTION>
INCEPTION TO DATE ONE YEAR YEAR TO DATE LATEST QUARTER
TOTAL RETURN 4/11/97-6/30/98 6/30/97-6/30/98 12/31/97-6/30/98 3/31/98-6/30/98
- ------------ ----------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Kalmar Small Cap Fund +48.91% +23.68% +1.75% -5.43%
Russell 2000 Index +34.60% +16.50% +4.93% -4.66%
Lipper Small Cap Funds +34.14% +15.52% +6.45% -3.86%
S&P 500 Index +52.55% +30.16% +17.71% +3.30%
</TABLE>
From the perspective of Kalmar Investment's sixteen-year history generating
superior returns with the identical "Growth-with-Value" small company investment
approach, we are not discouraged by the latest six-months results. It is natural
that a patient approach like ours that focuses on longer-term ownership of
inefficiently-valued "good growth businesses" carefully researched in-house --
and that avoids the temptation of trying to ride the mercurial edge of market
psychology -- will have occasional periods of underperformance. Such should be
expected with a genuine investment-oriented, hence, low-turnover style.
At the same time, as any experienced and disciplined U.S. small cap investor
will attest, the last six to nine months have been a very perplexing period
indeed. A period that has created a dangerously growing divergence in the U.S
stock market between a small number of mega-cap market favorites trading at
increasingly extreme valuations and the great body of other stocks which,
relatively speaking, are languishing. A period when the smaller the company, the
worse the performance -- quite the contrary to what fundamentals suggest should
be taking place.
INVESTMENT OUTLOOK.
You may remember from the Fund's Annual Report issued in February that we voiced
optimism about the potential for a shift toward small company stock market
leadership in 1998. This followed an abrupt end in October to a long overdue
small stock rally, precipitated by an investor flight to quality and liquidity
amidst rising uncertainties from the Asian economic crisis. Among other factors,
our rationale was based on the combination of the superior relative earnings
growth potential of small, primarily domestically focused companies and their
very appealing relative valuation contrasted with the sharply slowing earnings
growth and historically stratospheric valuations of many of the large
multinational companies that dominate the S&P 500.
The frustration for small-cap managers like Kalmar, no matter how savy and able,
is that the actual investment fundamentals for small growth companies have
meaningfully improved relative to most big companies for over a year now, as we
have outlined in the past. Yet most such small stocks go ignored in a narrowing
two-tiered market divergence. This is primarily a function of huge money flows
into the same group of big name stocks from Main Street, and recently foreign
investors also, chasing both performance and quality and liquidity, irrespective
of exaggerated valuations. This isn't smart investing, it's greedy group think.
In my thirty-plus years investment experience, and the substantial experience of
your other team members, we've seen this movie before and the ending isn't
pretty.
1
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT -- CONTINUED
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
Consider the following two studies. The first by Sanford Bernstein shows that a
quarter of the top 1000 stocks now sell for over 40 times trailing earnings,
with some 130 of these selling at over 40 times FORECAST earnings. Leading us to
the following seven mega-cap market leaders, whose large gains alone account for
OVER A THIRD of the entire gain of the S&P 500 this year (that's right, 7 stocks
out of 500) and which trade for over 50 times FORECAST earnings: Dell Computer,
Microsoft, Lucent, Pfizer, Warner-Lambert, Coca-Cola, and Cisco. History proves
that such "flights to quality" at extreme valuations carry major risk. As we
have said before, this phenomenon and certain others like the Internet stock
mania are where the dangerous speculation is in this Bull Market.
The second study by Salomon Smith Barney of performance by company
capitalization size tells a similar tale of extreme tiering within the U.S.
market.
UNWEIGHTED STOCK PRICE PERFORMANCE BY MARKET CAPITALIZATION
(YEAR-TO-DATE AS OF 6/30/98)
BY CAPITALIZATION PERFORMANCE NUMBER OF STOCKS
- ----------------- ----------- ----------------
(LESSER THAN)$250 Million -1.95% 5309
$250 Million - $2 Billion +1.11% 2017
$2 Billion - $5 Billion +3.59% 414
$5 Billion - $20 Billion +8.98% 280
(GREATER THAN)$20 Billion +16.62% 112
Such is today's environment. The biggest stocks continue to set records as they
move into thinner and thinner air, however illogically to our mind, while our
universe of sound, smaller growth companies seemingly has to struggle for every
eighth. The Good News is that your Kalmar portfolio companies on average are
growing earnings and assets substantially faster than the S&P 500, with cleaner
accounting, better balance sheets, and yet sell at historically big relative
discounts. By rights, and given patience and appropriate respect for risk, that
would appear to be a pretty compelling investment combination.
BIG PICTURE CONSIDERATIONS.
We conclude with the following very brief summary of some of the important Big
Picture investment fundamentals, as your Kalmar team perceives them now: (1) The
U.S. economy has entered a period of slowing growth but should continue to
expand well into next year. (2) Inflation will remain subdued but it is not
likely to decline further, as manufacturing/commodity deflation is offset by
gradually rising labor cost/health care/service sector inflation. (3) Interest
rates should remain in a range not far from current levels. (4) The dollar will
remain firm and in demand until the escalating trade deficit attracts greater
notice, perhaps early next year. (5) Other industrial economies will soon feel
more of the force of Asia's troubles, causing probable global slowing. (6)
Business profits will continue to slow, encouraging corporate managements to
embark on another round of restructuring, accompanied by more recurring
"non-recurring" charges. (7) China and Japan represent the big Asian risks now,
with hopefully no more competitive devaluations to come; cross your fingers. (8)
The big U.S. and European engines of growth can continue to carry the World
economy but it's not getting easier. (9) The "Goldilocks" economic scenario is
getting weaker and harder to rationalize, while the major stock market averages
move even further into uncharted territory. And (10), since the Earnings prop
under the stock market has weakened, this makes greater attention to the
Liquidity and Sentiment drivers even more critical for investment strategy. It's
the Main Street investing public and their unprecedented cash flows, not the
professionals, that will determine the big moves in this market.
2
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT -- CONTINUED
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
Finally, we report on two housekeeping matters for your interest and to assist
your tax planning. First, retroactive to January 1, 1998, Congress has reduced
the 18 month holding period to qualify for the lowest 20% long-term capital
gains tax rate to 12 months and has eliminated the 28% mid-term rate altogether.
This should be very favorable for taxable investors in the Kalmar Fund, given
our objective of fewer, better investment decisions for longer holding periods
and larger gains. Second, while these interim figures should not be taken as
predictive of the Fund's full year capital gains distribution, as of June 30,
1998, realized gains year-to-date were $+.207 in net long term gain per Fund
Share.
Wishing you the best for a productive and healthy Summer and Fall, your growing
Kalmar investment and administrative teams send their respect.
Yours sincerely,
[/S/ Fred B. Draper]
Ford B. Draper, Jr.
President
August 7, 1998
PLEASE BEAR IN MIND THAT INVESTING IN SMALL COMPANIES' STOCKS CAN INVOLVE HIGHER
RISK AND VOLATILITY THAN THOSE OF LARGER COMPANIES. THE S&P 500 AND RUSSELL 2000
ARE UNMANAGED STOCK MARKET INDICES WITHOUT ANY ASSOCIATED EXPENSES AND THEIR
RETURNS ASSUME THE REINVESTMENT OF ALL DIVIDENDS. THE LIPPER SMALL CAP FUND
INDEX IS AN UNWEIGHTED INDEX OF MUTUAL FUND PERFORMANCE, WHICH CONSISTS OF THE
AVERAGE RETURN OF THE 30 LARGEST SMALL CAP FUNDS. ALSO, PAST PERFORMANCE IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS. INVESTMENT RETURNS AND PRINCIPAL
VALUES MAY FLUCTUATE, SO THAT, WHEN REDEEMED, SHARES MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
3
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED)
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
COMMON STOCK -- 92.4%
BASIC MATERIALS -- 2.5%
CHEMICALS - SPECIALTY -- 2.1%
Cuno, Inc.* ............................... 161,100 $ 3,483,787
Spartech Corp. ............................ 99,600 2,135,175
-----------
5,618,962
-----------
PAPER & FOREST PRODUCTS -- 0.4%
Caraustar Industries, Inc. ................ 42,600 1,230,075
-----------
TOTAL BASIC MATERIALS ................................... 6,849,037
-----------
CAPITAL GOODS -- 14.1%
ELECTRICAL EQUIPMENT -- 4.2%
American Precision Industries ............. 67,400 1,027,850
AMETEK, Inc. .............................. 128,500 3,766,656
Benchmark Electronics, Inc.* .............. 136,150 2,723,000
C & D Technology, Inc. .................... 67,250 3,900,500
-----------
11,418,006
-----------
MANUFACTURING - DIVERSE -- 5.0%
Applied Power, Inc. (A Shares) ............ 144,600 4,970,625
Furon Co. ................................. 300,200 5,441,125
Penn Engineering & Manufacturing Corp. .... 128,500 3,212,500
-----------
13,624,250
-----------
MANUFACTURING - SPECIAL -- 4.9%
Brady (W.H.) Co. .......................... 63,450 1,764,703
Insituform Technologies (A Shares)* ....... 468,800 6,489,950
Paxar Corp. ............................... 125,100 1,438,650
Zero Corp. ................................ 135,200 3,836,300
-----------
13,529,603
-----------
TOTAL CAPITAL GOODS ..................................... 38,571,859
-----------
CONSUMER CYCLICALS -- 23.4%
AUTO PARTS & EQUIPMENT -- 0.1%
Finishmaster, Inc.* ....................... 20,200 212,100
-----------
BUILDING MATERIALS -- 1.9%
Kevco, Inc.* .............................. 32,300 712,619
Shaw Group, Inc.* ......................... 172,000 4,472,000
-----------
5,184,619
-----------
HARDWARE & TOOLS -- 0.2%
Acorn Products, Inc.* ..................... 60,900 426,300
-----------
HOUSEHOLD FURNITURE & APPAREL -- 3.9%
Aaron Rents, Inc. ......................... 300,650 6,013,000
Watsco, Inc. .............................. 133,900 4,711,606
-----------
10,724,606
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
RETAIL - APPAREL -- 2.6%
Shoe Pavilion, Inc.* ...................... 200,000 $ 1,825,000
Stage Stores, Inc.* ....................... 118,900 5,380,225
-----------
7,205,225
-----------
RETAIL - DEPARTMENT STORES -- 2.0%
Family Dollar Stores, Inc. ................ 301,500 5,577,750
-----------
RETAIL - SPECIALTY -- 6.1%
Casey's General Stores, Inc. .............. 284,100 4,705,406
Department 56, Inc.* ...................... 74,500 2,644,750
Keystone Automotive Industries, Inc. ...... 223,200 5,161,500
Party City Corp.* ......................... 95,100 2,793,562
Sportsman's Guide, Inc.* .................. 300,000 1,350,000
-----------
16,655,218
-----------
SERVICES - ADVERTISING & MARKETING -- 0.5%
Market Facts, Inc.* ....................... 57,700 1,254,975
-----------
SERVICES - COMMERCIAL & CONSUMER -- 5.3%
Cort Business Services Corp.* ............. 90,700 2,857,050
DeVRY, Inc.* .............................. 213,800 4,690,237
Renters Choice, Inc.* ..................... 247,600 7,025,650
-----------
14,572,937
-----------
TEXTILES - HOME FURNISHINGS -- 0.8%
Interface, Inc. ........................... 110,600 2,232,737
-----------
TOTAL CONSUMER CYCLICALS ................................ 64,046,467
-----------
CONSUMER STAPLES -- 9.1%
BROADCAST MEDIA -- 0.3%
Blonder Tongue Laboratories, Inc.* ........ 61,300 720,275
-----------
DISTRIBUTIONS - FOOD & HEALTH -- 4.2%
Patterson Dental Co.* ..................... 116,150 4,253,994
Performance Food Group Co.* ............... 118,700 2,359,162
US Foodservice, Inc.* ..................... 136,900 4,800,056
-----------
11,413,212
-----------
HOUSEHOLD PRODUCTS -- 0.9%
Lesco, Inc. ............................... 134,975 2,530,781
-----------
RESTAURANTS -- 2.6%
Consolidated Products, Inc.* .............. 229,456 4,847,258
Logan's Roadhouse, Inc.* .................. 114,900 2,384,175
-----------
7,231,433
-----------
SPECIALTY PRINTING -- 1.1%
Cadmus Communications Corp. ............... 122,500 2,970,625
-----------
TOTAL CONSUMER STAPLES .................................. 24,866,326
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
ENERGY -- 4.4%
OIL & GAS - DRILLING & EQUIPMENT -- 3.2%
Dawson Production Services, Inc.* ........... 90,700 $1,360,500
EVI Weatherford, Inc.* ...................... 60,400 2,242,350
J. Ray McDermott, S.A.* ..................... 58,630 2,433,145
Superior Energy Services, Inc.* ............. 166,450 842,653
UNIFAB International, Inc. .................. 109,200 1,774,500
----------
8,653,148
----------
OIL & GAS - EXPLORATION & PRODUCTION -- 1.2%
Brigham Exploration Co.* .................... 72,300 641,662
Evergreen Resources, Inc.* .................. 72,500 1,359,375
Patina Oil & Gas Corp. ...................... 183,500 1,284,500
----------
3,285,537
----------
TOTAL ENERGY ............................................. 11,938,685
----------
FINANCIAL -- 4.2%
CONSUMER FINANCE -- 3.5%
AmeriCredit Corp.* .......................... 158,900 5,670,744
Doral Financial Corp. ....................... 223,200 3,906,000
----------
9,576,744
----------
INSURANCE - LIFE & HEALTH -- 0.7%
Penn Treaty American Corp.* ................. 59,575 1,876,613
----------
TOTAL FINANCIAL .......................................... 11,453,357
----------
HEALTHCARE -- 8.2%
BIOTECHNOLOGY -- 0.9%
Life Technologies, Inc. ..................... 74,900 2,349,988
----------
HEALTHCARE - DIVERSE -- 1.7%
Sola International, Inc.* ................... 142,900 4,671,044
----------
HEALTHCARE - DRUGS MAJOR -- 0.4%
Chirex, Inc. ................................ 62,400 1,095,900
----------
HEALTHCARE - MANAGED CARE -- 1.6%
Healthplan Services Corp. ................... 199,700 3,494,750
PMR Corp.* .................................. 97,700 983,106
----------
4,477,856
----------
HEALTHCARE - MEDICAL PRODUCTS & SUPPLIES -- 2.6%
ATL Ultrasound, Inc. ........................ 88,900 4,056,063
Dentsply International, Inc. ................ 117,700 2,942,500
Sonosight, Inc. ............................. 19,366 141,614
----------
7,140,177
----------
HEALTHCARE - SPECIALIZED SERVICES -- 1.0%
Renal Care Group, Inc.* ..................... 48,500 2,137,031
Veterinary Centers of America, Inc. ......... 35,700 671,606
----------
2,808,637
----------
TOTAL HEALTHCARE ......................................... 22,543,602
----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
TECHNOLOGY -- 25.8%
COMMUNICATIONS - EQUIPMENT -- 1.2%
Allen Telecom, Inc. ..................... 111,800 $ 1,299,675
Norstan, Inc.* .......................... 79,800 1,999,988
-----------
3,299,663
-----------
COMPUTER HARDWARE -- 0.4%
Par Technology Corp.* ................... 30,000 181,875
STB Systems, Inc.* ...................... 72,100 901,250
-----------
1,083,125
-----------
COMPUTER SOFTWARE SERVICES -- 14.4%
American Management Systems, Inc.* ...... 85,300 2,553,669
Caere Corp.* ............................ 236,200 3,100,125
Clarify, Inc.* .......................... 143,000 1,930,500
Computer Horizons Corp.* ................ 120,696 4,473,296
Insight Enterprises, Inc.* .............. 72,600 2,904,000
Interlink Computer Sciences, Inc.* ...... 40,300 141,050
INTERSOLV, Inc. ......................... 325,200 5,223,525
Landmark Systems Corp.* ................. 148,100 1,277,363
May & Speh, Inc.* ....................... 204,700 4,068,413
Natural Microsystems Corp.* ............. 84,800 1,356,800
Platinum Technology, Inc. ............... 104,000 2,970,500
Systems & Computer Technology Corp.* .... 344,610 9,304,470
-----------
39,303,711
-----------
ELECTRONIC - INSTRUMENTS -- 3.4%
Analogic Corp. .......................... 134,300 6,009,925
Integrated Sensor Solutions, Inc.* ...... 200,000 1,062,500
Richardson Electronics, Ltd. ............ 159,200 2,149,200
-----------
9,221,625
-----------
ELECTRONICS - DEFENSE -- 1.0%
Electromagnetic Sciences, Inc.* ......... 142,500 2,707,500
-----------
ELECTRONICS - DISTRIBUTION -- 0.3%
Kent Electronics Corp.* ................. 53,300 976,056
-----------
ELECTRONICS - MISCELLANEOUS COMPONENTS -- 2.6%
ATMI, Inc.* ............................. 55,000 825,000
Integrated Circuit Systems, Inc.* ....... 59,000 980,875
Optek Technology, Inc.* ................. 106,200 2,031,075
Rogers Corp.* ........................... 96,600 3,187,800
-----------
7,024,750
-----------
SERVICES - COMPUTER SYSTEMS -- 2.5%
Keane, Inc.* ............................ 101,800 5,700,800
National Computer Systems, Inc. ......... 51,100 1,226,400
-----------
6,927,200
-----------
TOTAL TECHNOLOGY ....................................... 70,543,630
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
TRANSPORTATION -- 0.7%
AIR FREIGHT -- 0.4%
Airnet Systems, Inc.* ........................ 80,900 $ 1,304,513
------------
TRUCKING -- 0.3%
Gulfmark Offshore, Inc.* ..................... 18,200 414,050
Simon Transportation Services, Inc.* ......... 55,800 373,163
------------
787,213
------------
TOTAL TRANSPORTATION ................................ 2,091,726
------------
TOTAL COMMON STOCK
(COST $207,505,010) ............................... 252,904,689
------------
MONEY MARKET FUNDS -- 5.4%
Provident Temp Cash (Dollar Series) ......... 7,363,082 7,363,082
RBB Sansom Street Money Market Portfolio ... 7,363,081 7,363,081
------------
TOTAL MONEY MARKET FUNDS (COST $14,726,163) ........... 14,726,163
------------
PAR
(000)
-----
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.9%
Federal Home Loan Mortgage Corp. Discount Notes
5.150%, 07/14/98 (COST $7,979,133) .......... $7,994 7,979,133
-------------
TOTAL INVESTMENTS (COST $230,210,306) -- 100.7% ................ $275,609,985
OTHER ASSETS AND LIABILITIES, NET -- (0.7%) .................... (1,999,882)
-------------
NET ASSETS -- 100.0% ........................................... $273,610,103
============
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes was $210,408,079. At June 30,
1998, net unrealized appreciation was $65,201,906. This consisted of
aggregate gross unrealized appreciation in which there was an excess of
market value over tax cost of $75,353,088, and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost
over market value of $10,151,182.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
=================== JUNE 30, 1998
"GROWTH-WITH-VALUE"
SMALL CAP FUND
ASSETS
Investments in securities, at market value
(cost $230,210,306)(Note 2) .............................. $ 275,609,985
Receivables for:
Dividends and interest ................................... 98,719
Investment securities sold ............................... 66,764
Capital shares sold ...................................... 250,000
Unamortized organizational costs (Note 2) ................... 21,913
-------------
Total Assets ............................................. 276,047,381
-------------
LIABILITIES
Payables for:
Investment securities purchased .......................... 2,137,812
Due to Adviser (Note 4) ..................................... 217,397
Accrued expenses ............................................ 82,069
-------------
Total Liabilities ........................................ 2,437,278
-------------
NET ASSETS .................................................. $ 273,610,103
=============
NET ASSETS CONSISTED OF:
Shares of beneficial interest ............................... $ 196,269
Additional paid in capital .................................. 227,793,375
Accumulated net investment loss ............................. (557,909)
Accumulated net realized gain on investments (Note 2) ....... 778,689
Net unrealized appreciation on investments .................. 45,399,679
-------------
NET ASSETS FOR 19,626,917 SHARES ............................ $ 273,610,103
=============
NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE
($273,610,103/19,626,917 outstanding shares of beneficial
interest, $.01 par value)................................. $13.94
======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST STATEMENT OF OPERATIONS (UNAUDITED)
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
FOR THE
SIX-MONTH PERIOD
ENDED JUNE 30, 1998
-------------------
INVESTMENT INCOME
Dividends ................................................ $ 314,362
Interest ................................................. 659,513
-----------
Total Investment Income ............................... 973,875
-----------
EXPENSES
Advisory fee ............................................. 1,251,561
Accounting fee ........................................... 44,867
Administration fee ....................................... 137,553
Transfer agent fee ....................................... 8,942
Custodian fee ............................................ 18,085
Audit .................................................... 6,098
Legal .................................................... 14,999
Shareholder Reports ...................................... 10,395
Registration fee ......................................... 20,459
Trustees' fees and expenses .............................. 7,588
Amortization of organizational expense ................... 2,876
Miscellaneous ............................................ 8,361
-----------
Total Expenses ........................................ 1,531,784
-----------
NET INVESTMENT LOSS ......................................... (557,909)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions ............. 936,618
Change in net unrealized appreciation on investments ..... 3,072,353
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............. 4,008,971
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........ $ 3,451,062
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST STATEMENTS OF CHANGES IN NET ASSETS
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX-MONTH PERIOD APRIL 11, 1997(DAGGER)
ENDED JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
------------------- ----------------------
<S> <C> <C>
OPERATIONS
Net investment loss ........................................ $ (557,909) $ (598,871)
Net realized gain on investment transactions ............... 936,618 8,860,431
Change in net unrealized appreciation on investments ....... 3,072,353 42,327,326
------------- -------------
Net increase in net assets resulting from operations .... 3,451,062 50,588,886
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments ........................... -- (8,860,431)
Distribution in excess of net realized gain on investments . -- (5,367,704)
------------- -------------
Total Distributions ..................................... -- (14,228,135)
------------- -------------
SHARE TRANSACTIONS (A):
Receipt from shares sold ................................... 40,666,134 45,578,705
Receipt from securities transferred in-kind ................ 12,088,879 136,516,678
Shares reinvested .......................................... -- 12,948,955
Shares redeemed ............................................ (9,302,429) (4,748,632)
------------- -------------
Net increase in net assets from Fund share transactions . 43,452,584 190,295,706
------------- -------------
TOTAL INCREASE IN NET ASSETS .................................. 46,903,646 226,656,457
NET ASSETS:
Beginning of period ........................................ 226,706,457 50,000
------------- -------------
End of period .............................................. $ 273,610,103 $ 226,706,457
============= =============
(A) TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST WERE:
Shares sold ................................................ 2,881,563 3,696,217
Shares issued in exchange for securities transferred in-kind 851,608 12,234,389
Shares reinvested .......................................... -- 957,763
Shares redeemed ............................................ (659,892) (339,731)
------------- -------------
Net increase in shares ..................................... 3,073,279 16,548,638
Shares outstanding - Beginning balance ..................... 16,553,638 5,000
------------- -------------
Shares outstanding - Ending balance ........................ 19,626,917 16,553,638
============= =============
<FN>
(DAGGER) Commencement of Operations.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST FINANCIAL HIGHLIGHTS
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
SIX-MONTH PERIOD APRIL 11, 1997(DAGGER)
ENDED JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
------------------- ----------------------
<S> <C> <C>
Net asset value at beginning of period........................ $13.70 $10.00
====== ======
INVESTMENT OPERATIONS
Net investment loss........................................... (0.03) (0.04)
Net realized and unrealized gain on investments............... 0.27 4.66
------ -----
Total from investment operations........................ 0.24 4.62
------ -----
DISTRIBUTIONS
From net realized gain on investments......................... -- (0.57)
In excess of net realized gain on investments................. -- (0.35)
------ -----
Total distributions..................................... -- (0.92)
------ -----
Net asset value at end of period.............................. $13.94 $13.70
====== ======
Total return.................................................. 1.75% 46.35%
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses(DOUBLE DAGGER).................................... 1.22%* 1.25%*
Net investment loss........................................ (0.45)%* (0.51)%*
Portfolio turnover rate....................................... 7.68% 34.39%
Average commission rate paid 1................................ $0.0548 $0.0544
Net assets at end of period (000 omitted)..................... $273,610 $226,706
<FN>
* Annualized.
(DAGGER) Commencement of Operations.
(DOUBLE DAGGER) Rodney Square Management Corporation, the Fund's prior
administrator and accounting agent, waived a portion of its administration
and accounting fees for the period ended December 31, 1997. If these
expenses had been incurred by the Fund, the annualized ratio of expenses to
average daily net assets for the period ended December 31, 1997 would have
been 1.32%.
1 Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
1. DESCRIPTION OF THE FUND. The Kalmar "Growth-With-Value" Small Cap Fund
(the "Fund") is the first series of Kalmar Pooled Investment Trust (the
"Trust"), a Delaware business trust organized on November 6, 1996. The Fund
is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end diversified management investment company. The
investment objective of the Fund is long-term capital appreciation. The Fund
commenced investment operations on April 11, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies of the Fund.
SECURITY VALUATION. The Fund's securities, except short-term investments
with remaining maturities of 60 days or less, are valued at their market
value as determined by their last sale price in the principal market in
which these securities are normally traded. Lacking any sales, the security
will be valued at the mean between the closing bid and ask price. Short-term
investments with remaining maturities of 60 days or less are valued at
amortized cost, which approximates market value, unless the Trust's Board of
Trustees determines that this does not represent fair value. The value of
all other securities is determined in good faith under the direction of the
Board of Trustees. There were no securities valued by the Board of Trustees
on June 30, 1998.
FEDERAL INCOME TAXES. The Fund intends to continue to qualify for treatment
as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), and to
distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision has been provided.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions of net investment income and
net realized gains will be made annually. Additional distributions may be
made to the extent necessary to avoid the payment of a 4% excise tax. The
amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such
amounts are reclassified within the composition of net assets based on their
Federal tax-basis treatment; temporary differences do not require
reclassification. Dividends and distributions to shareholders which exceed
net investment income and net realized gains for financial reporting
purposes but not for tax purposes are reported as dividends in excess of net
investment income or distributions in excess of net realized gains. To the
extent they exceed net investment income and net realized gains for tax
purposes, they are reported as distributions of capital.
DEFERRED ORGANIZATION COSTS. Costs incurred by the Fund in connection with
its organization have been deferred and are being amortized using the
straight-line method over a five-year period beginning on the date that the
Fund commenced operations. In the event that any of the initial shares of
the Fund are redeemed during the amortization period by any holder thereof,
the redemption proceeds will be reduced by any unamortized organization
expenses in the same proportion as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
such redemption.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
13
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
TRANSFERS IN-KIND. Upon commencement of the Fund's investment operations, a
number of separately managed accounts managed by Kalmar Investment Advisers,
transferred appreciated securities in exchange for Fund shares. For purposes
of generally accepted accounting principles, the book cost of any securities
transferred in-kind to the Fund is equal to the market value of such
securities on their respective dates of contribution to the Fund. For tax
purposes, the cost of any securities transferred in-kind to the Fund is
equal to the cost of such securities to the contributing party on the date
of contribution. The result is a difference between book cost and tax cost
to the Fund.
OTHER. Investment security transactions are accounted for on a trade date
basis. The Fund uses the specific identification method for determining
realized gain or loss on investments for both financial and Federal income
tax reporting purposes. For the six-month period ended June 30, 1998,
realized gains for Federal income tax reporting purposes amounted to
$4,062,160. Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is recorded on an accrual basis.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES. During the six-month period
ended June 30, 1998, purchases and sales of investment securities (excluding
short-term investments) aggregated as follows:
Purchases .................................. $67,262,424*
Sales ...................................... 17,591,559
* Includes securities transferred in-kind
4. INVESTMENT ADVISORY FEE AND OTHER SERVICES. The Fund employs Kalmar
Investment Advisers as its investment adviser (the "Adviser"). Pursuant to
an Investment Advisory agreement with the Trust, on behalf of the Fund, the
Adviser selects investments and supervises the assets of the Fund in
accordance with the investment objective, policies and restrictions of the
Fund, subject to the supervision and direction of the officers and Board of
Trustees of the Trust. For its services, the Adviser is paid a monthly fee
at the annual rate of 1.00% of the Fund's average daily net assets. For the
six-month period ended June 30, 1998, the Fund incurred Advisory fees of
$1,251,561.
Prior to January 5, 1998, Rodney Square Management Corporation ("RSMC"), a
wholly owned subsidiary of Wilmington Trust Company ("WTC"), which is wholly
owned by Wilmington Trust Corporation, a publicly held bank holding company,
served as Administrator to the Fund pursuant to an Administration Agreement
with the Trust on behalf of the Fund. Effective January 5, 1998, the
services previously provided by RSMC are provided by PFPC Inc. ("PFPC"), an
indirect wholly-owned subsidiary of PNC Bank Corp., a multi-bank holding
company. As Administrator, PFPC is responsible for services such as
budgeting, maintaining federal registration of the Fund's shares, financial
reporting, compliance monitoring and corporate management. For the services
provided, the Fund pays a monthly administration fee at an annual rate based
upon the average daily net assets of the Fund of 0.15% of average daily net
assets up to $50 million and 0.10% of average daily net assets over $50
million. The administration fee earned by RSMC for the period January 1,
1998 through January 4, 1998, amounted to $2,677 and the fee earned by PFPC
for the period January 5, 1998, through June 30, 1998 amounted to $134,876.
14
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
===================
"GROWTH-WITH-VALUE"
SMALL CAP FUND
Prior to January 5, 1998, RSMC determined the net asset value per share of
the Fund and provided accounting services to the Fund pursuant to an
Accounting Services Agreement with the Trust. Effective January 5, 1998, the
services previously provided by RSMC are provided by PFPC. The Fund pays an
annual fee of $45,000, plus an amount based on the average daily net assets
of the Fund as follows: 0.03% of average daily net assets over $50 million
up to $100 million and 0.02% of average daily net assets over $100 million.
The accounting services fee earned by RSMC for the period January 1, 1998
through January 4, 1998, amounted to $919 and the fee earned by PFPC for the
period January 5, 1998, through June 30, 1998 amounted to $43,948.
Prior to January 5, 1998, RSMC also served as transfer agent and dividend
disbursing agent of the Fund pursuant to a Transfer Agency Agreement with
the Trust on behalf of the Fund. Effective January 5, 1998, the services
previously provided by RSMC are provided by PFPC.
Prior to January 5, 1998, WTC served as Custodian of the assets of the Fund
pursuant to a Custody Agreement with the Trust. Effective January 5, 1998,
the services previously provided by WTC are provided by PNC Bank, N.A.
Certain Trustees and officers of the Trust are also officers of the Adviser.
Such Trustees and officers are paid no fees by the Trust for serving as
Trustees or officers of the Trust.
15
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
INVESTMENT ADVISER
KALMAR INVESTMENT ADVISERS
BARLEY MILL HOUSE
3701 KENNETT PIKE
GREENVILLE, DE 19807
UNDERWRITER
PROVIDENT DISTRIBUTORS, INC.
FOUR FALLS CORPORATE CENTER, 6TH FLOOR
WEST CONSHOHOCKEN, PA 19428-2961
SHAREHOLDER SERVICES
PFPC INC.
400 BELLEVUE PARKWAY
WILMINGTON, DE 19809
CUSTODIAN
PNC BANK, N.A.
1600 MARKET STREET
PHILADELPHIA, PA 19103
LEGAL COUNSEL
PEPPER HAMILTON LLP
3000 TWO LOGAN SQUARE
18TH & ARCH STREETS
PHILADELPHIA, PA 19103-2799
AUDITORS
PRICEWATERHOUSECOOPERS LLP
2400 ELEVEN PENN CENTER
PHILADELPHIA, PA 19103
<PAGE>
KALMAR POOLED INVESTMENT TRUST
BARLEY MILL HOUSE
3701 KENNETT PIKE
GREENVILLE, DE 19807
(PHONE) 302-658-7575
(FAX) 302-658-7513
KL06 - 8/98
