KALMAR
POOLED
INVESTMENT
TRUST
- ------------
[GRAPHIC OMITTED]
KALMAR "GROWTH-WITH-VALUE" SMALL CAP FUND
SEMI-ANNUAL REPORT
JUNE 30, 1999
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT
- ------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
DEAR FELLOW SHAREHOLDERS & FRIENDS:
From the small company investment perspective, and indeed specifically for your
"Growth-with-Value" Small Cap Fund, Kalmar is happy to report good news. At long
last, in April, the U.S. stock market finally began to broaden materially! And
accordingly, the performance of your Fund picked up very sharply!
This overdue change in trend was not only essential and healthy for a then
dangerously unbalanced market, but necessary to allow your Fund, with its
creative yet consciously lower risk approach to small growth investing, to
generate appealing returns. Very importantly also, it reinforces our optimism
about the future.
In contrast, the eighteen months leading up to April 1999 had seen a drastic
narrowing in the U.S. stock market. A shrinking handful of mega-cap technology
growth stocks, accompanied by new mania-driven Internet companies, had
effectively accounted for more than all the gains in the major stock market
averages. Most other stocks had either languished or declined, never mind the
progress they were showing fundamentally. This had produced the widest disparity
in investment returns between Growth and Value stocks / Large- and Small-cap
stocks in market history. And particularly discouraging to us as committed small
company investors, this was also a period when the smaller the company one
owned, regardless of growth and quality, the worse one's returns. However
illogical and fundamentally undeserved, such were the conditions your investment
team faced during that period.
The influence of those headwinds can be seen by referring to your Fund's returns
on a Six Months and One Year basis as depicted in the Comparative Performance
Table below. In these overlapping time periods, we were materially disadvantaged
because we did not abandon our proven "Growth-with-Value" investment
disciplines, move markedly up the market-cap size scale, or adopt extreme
strategies such as investing in wildly expensive, sizzle-over-substance Internet
names. Yet despite the heavy drag from that interim period, note that on an
Inception to Date basis your Fund's returns are right on track. Indeed, given
the handicap from the interim drag mentioned above, the Inception to Date
numbers speak very well for your investment team. So do the returns from the
Latest Quarter.
Specifically, in the quarter just ended, small company stocks as represented by
the Russell 2000 and the Lipper Small Cap Fund Index appreciated approximately
15%. Your Kalmar Fund enjoyed the same strong appreciation. Not only did small
stocks meaningfully outperform their mid-cap counterparts, but dramatically
outran the S&P 500, in fact by the biggest margin since fourth quarter 1992. The
S&P 500, dominated as it is by a couple handfuls of mega-cap technology growth
stocks, rose only 7%. Moreover, in our opinion, there is a good likelihood that
the market will now treat small caps more even-handedly than in recent years --
very possibly preferentially! If so, your Fund's special area of focus could
well represent the great future opportunity in what otherwise appears to be a
potentially risky U.S. equity market.
COMPARATIVE PERFORMANCE
<TABLE>
<CAPTION>
LATEST QUARTER SIX MONTHS ONE YEAR INCEPTION TO DATE
TOTAL RETURN 3/31/99 TO 6/30/99 12/31/98 TO 6/30/99 6/30/98 TO 6/30/99 4/11/97 TO 6/30/99
- ------------ ------------------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Kalmar Fund 15.00 0.00 (9.25) 35.13
Russell 2000 Index 15.55 9.28 1.50 36.57
Lipper Small Cap Index 14.85 9.43 1.92 36.72
S&P 500 7.05 12.29 22.76 87.08
</TABLE>
1
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT -- CONTINUED
- --------------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
INFLUENCES ON PERFORMANCE
By April, in the judgment of your investment team, the U.S. market appeared to
be approaching the climax of a wildly aberrant, momentum driven period. This had
resulted from the pronounced narrowing and speculative trends described above,
producing the widest disparity in performance between investment styles and cap
sizes in market history. The craze for Internet stocks and burgeoning public
"day trading" were just the capstones to other institutional investment
excesses.
Indeed, market behavior had become so unsupportably extreme that, for a mix of
the reasons we discussed with many shareholders directly, market leadership
suddenly shifted towards more economically sensitive value stocks and notably
less expensive, less liquid smaller stocks. The factors prompting this shift
were reduced financial system turmoil and reviving world economic growth,
accompanied by rising industrial commodity prices, hints of inflation, and a
back-up in interest rates. These together encouraged professional investors
(though not the public as of yet) to accept narrower risk premiums, to have
confidence in more broadly shared earnings growth among companies, and to
envisage a termination and possible reversal of price/earnings ("P/E") multiple
expansion among ultra-high P/E mega-cap growth stocks. After all, there had been
nothing wrong with the competitiveness or accomplishments of small companies
right along.
However radically overdue, in the second quarter there finally was a decisive
and fully justified broadening of the U.S. equity market. What had been the
Nifty Fifty, then Nifty Fifteen, and finally Nifty Five underperformed. In sharp
contrast to recent years, what moved ahead were mid-cap, small-cap and micro-cap
stocks. For example, the unweighted S&P 500 with its 450 or so middle size and
large companies rose twice as much as the S&P 500 itself, heavily dominated by
mega-cap companies which lagged.
Similar broadening performance extended down through the small stock universe
itself. In the first quarter of 1999, generally speaking, generating performance
competitive with the Russell 2000 required extreme "New Era" investment
strategies: Owning the very largest (multi-billion market cap), most wildly
expensive (predominantly negative earnings), most speculative (largely Internet
related) stocks. In the second quarter by contrast, sensible investment
discipline and good research in "real companies" produced heartening returns
that handily beat the S&P 500 and were far more competitive with "New Era"
investment styles. It's a relief to be able to say that it almost seemed like
old times again.
Example: In the first quarter of 1999, removing the top 50 stocks from the
Russell 2000 (many of them non-earnings Internet plays) with an average $3.5
billion market cap and which soared 98%, left 1,832 other stocks with an average
market cap of $470 million and which declined 10.5%. Similarly in the first
quarter, stocks with P/E's greater than 50x were on average up 13.3%, whereas
those with P/E's less than 50x were down 13.0%. The same wide performance
disparity existed for negative earnings versus positive earnings stocks,
"concept stocks" versus good growth businesses.
Each of these unusual, seemingly illogical relationships substantially
normalized in the second quarter. The top 50 market cap stocks in the Russell
2000, while still on average producing good returns, in fact underperformed the
1,832 smaller ones. And, while in the second quarter Russell 2000 stocks with
P/E's greater than 50x still outperformed lower P/E stocks, there was a
substantial narrowing of the performance gap. Similarly, in the second quarter
positive earnings stocks within the Russell 2000 came very close to beating
negative earnings stocks. As one can see, we appear to be approaching reality.
Further supporting that notion, many of the largest Internet stocks corrected
sharply in the quarter.
2
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT -- CONTINUED
- -------------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
Clearly the Internet is a revolutionary communications and business medium. Like
the advent of electricity, but in a much more explosive time frame, it will
transform worldwide economic and competitive relationships as they now exist. It
will both threaten and create powerfully dynamic businesses, perhaps ones that
may be leaders in the early 21st century. But given the nascent definition and
development of this phenomenon, its frenzied investment hype, and totally
unprecedented multi-billion dollar valuations on immature unprofitable
businesses, it involves huge investment risk and unsustainable, unsupportable
stock prices. Indeed, we would be surprised if many Internet stocks have not
already experienced their all time speculative price peaks. Never mind the
legitimate economic implications of the "Net", stock market manias often work
that way.
SMALL COMPANY INVESTMENT OUTLOOK
Importantly, throughout the second quarter smaller cap stocks repeatedly held
their own during market declines vis-a-vis over-owned expensive mega-cap leaders
of recent years, while fully participating in market advances. This small stock
strength was broad-based, with solid participation from value segments first in
April and May and then growth segments in June. Moreover, the Russell 2000 was
able to overcome early-quarter weakness in Internet names to move ahead
decisively overall. Finally, though outperforming strongly last quarter, small
stock relative valuations remain only modestly above forty year lows, with the
Russell 2000 still well below its all time high reached in April 1998. This
contrasts dramatically with stratospheric record highs for the large stock
indexes.
We believe this combination of appealing small stock relative valuation,
substantial under-ownership, and impressive change in relative strength should
be considered significant and promising for the future.
Nevertheless, it appears that three additional important positive ingredients
may be necessary to ensure a multi-year cycle of small stock outperformance from
here. First, small company mutual fund cash flows must go generally positive.
They have gone from record negative redemptions in the first quarter, to neutral
in the second quarter, but must continue to trend positive. This will happen if
small stock performance continues strong. Accelerating small company takeover
activity and widespread treasury stock repurchases should assist small stock
relative progress. Remember cash doesn't necessarily chase value, but it always
chases performance.
Second, risk premiums need to continue to narrow and investors must again be
persuaded that both market cap and investment style diversification is a
productive thing. As happened conspicuously in second quarter 1999, continued
financial stability and ongoing improvement in world economic growth would
promote the former. As to the latter, a prolonged stall-out or actual correction
in the narrow market leadership of recent years would prompt a return to
investment common sense about diversification.
Furthermore, with aggregate assets devoted to small company investing having
shrunk in recent years relative to the expansion of assets devoted to large cap
indexing and large cap growth strategies, even moderate asset reallocation
downstream by professionally managed private pools (as seems to be happening
now) could help keep recent small cap fireworks going. This would prompt
greed-driven change in diversification thinking on the part of the public
investor.
3
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST REPORT FROM MANAGEMENT -- CONTINUED
- -------------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
The third and final missing ingredient necessary to truly sustain a superior
small cap outperformance cycle is that small cap profit growth must again exceed
that of large caps. While critically important, this is the least predictable of
the necessary additional influences. Since third quarter 1998, small company
earnings as a class (ignoring success of Kalmar companies) have lagged large cap
earnings growth rates. About to be reported second quarter 1999 earnings will
continue that pattern. The only way we can rationalize this conundrum is to
suggest that small stocks may be cheap enough that perhaps superior earnings
growth as a class may not be as critical this time around. If so, this would put
an even larger than usual premium on insightful research and stock selection to
own a good group of individually superior earners. That, in turn, would play
well with Kalmar's strong suit, with the general positioning of your portfolio,
and with the dynamics of your individual stock holdings as growth businesses.
Notwithstanding an inability to provide this last piece to the puzzle, Kalmar
believes the outlook for our small company "Growth-with-Value" investment
approach has improved meaningfully.
This brings our best wishes for a healthy and productive Summer and Fall, as
always.
Yours sincerely,
/s/ FORD B. DRAPER
Ford B. Draper, Jr., President
Kalmar Investment Advisers
4
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED)
- ------------------- JUNE 30, 1999
"GROWTH-WITH-VALUE"
SMALL CAP FUND
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
<S> <C> <C>
COMMON STOCK -- 99.9%
BUSINESS EQUIPMENT & SERV. -- 19.1%
EQUIPMENT & SERVICES -- 16.5%
Aaron Rents, Inc. ............................................ 330,250 $ 7,348,062
Acxiom Corp.*................................................. 164,160 4,093,740
Armor Holdings, Inc. ......................................... 107,200 1,118,900
Choicepoint, Inc.*............................................ 68,400 4,591,350
Cort Business Services Corp.*................................. 100,500 2,405,719
Cuno, Inc.*................................................... 162,700 3,111,637
DeVRY, Inc.*.................................................. 149,300 3,340,588
Excel Technology, Inc.*....................................... 157,900 2,092,175
F.Y.I., Inc.*................................................. 65,200 2,045,650
Ha-Lo Industries, Inc.*....................................... 165,200 1,631,350
Insight Enterprises, Inc.*.................................... 56,925 1,408,894
MAXIMUS, Inc.*................................................ 73,000 2,098,750
------------
35,286,815
------------
TIMESHARING & SOFTWARE -- 2.6%
Computer Horizons Corp.*...................................... 126,946 1,753,442
National Computer Systems, Inc. .............................. 114,800 3,874,500
-----------
5,627,942
-----------
TOTAL BUSINESS EQUIPMENT & SERV. ........................................... 40,914,757
-----------
CAPITAL GOODS -- 15.4%
CAPITAL EQUIPMENT -- 6.0%
American Precision Industries*................................ 67,700 727,775
Applied Power, Inc. (A Shares) ............................... 158,395 4,326,163
Furon Co. .................................................... 301,000 5,719,000
Shaw Group, Inc.*............................................. 68,400 1,085,850
Wabash National Corp. ........................................ 56,500 1,094,687
-----------
12,953,475
-----------
CONSTRUCTION MATERIALS -- 5.8%
Insituform Technologies (A Shares)*........................... 470,000 10,163,750
Trex Company, Inc.*........................................... 88,600 2,248,225
-----------
12,411,975
-----------
ELECTRICAL EQUIPMENT -- 2.2%
Hadco Corp.*.................................................. 32,700 1,299,825
Richardson Electronics, Ltd. ................................. 179,000 1,219,438
Technitrol, Inc. ............................................. 71,500 2,305,875
-----------
4,825,138
-----------
METAL FABRICATION -- 1.4%
Penn Engineering & Manufacturing Corp. ....................... 128,800 2,898,000
-----------
TOTAL CAPITAL GOODS......................................................... 33,088,588
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
- ------------------- JUNE 30, 1999
"GROWTH-WITH-VALUE"
SMALL CAP FUND
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
<S> <C> <C>
CONSUMER DURABLES -- 6.1%
HOUSEHOLD - MAJOR APPLIANCES -- 2.8%
Lesco, Inc. .................................................. 137,075 $ 2,621,559
Watsco, Inc. ................................................. 201,250 3,295,469
-----------
5,917,028
-----------
MOTOR VEHICLE PARTS -- 1.9%
Keystone Automotive Industries, Inc.*......................... 231,300 4,018,837
-----------
TIRES AND RUBBER PRODUCTS -- 1.4%
Rogers Corp.*................................................. 105,600 3,115,200
-----------
TOTAL CONSUMER DURABLES..................................................... 13,051,065
-----------
CONSUMER NON-DURABLES -- 10.1%
APPAREL -- 1.0%
Pacific Sunwear of California*................................ 85,950 2,095,031
-----------
FOOD & RELATED -- 4.1%
Performance Food Group Co.*................................... 119,000 3,235,313
US Foodservice, Inc.*......................................... 93,500 3,985,438
Worthington Foods, Inc. ...................................... 96,900 1,598,850
-----------
8,819,601
-----------
HOUSEHOLD - GENERAL PRODUCTS -- 5.0%
Department 56, Inc.*.......................................... 80,700 2,168,812
Flow International Corp.*..................................... 59,000 637,937
Rent-A-Center, Inc.*.......................................... 196,700 4,720,800
SLI, Inc.*.................................................... 117,600 3,175,200
-----------
10,702,749
-----------
TOTAL CONSUMER NON-DURABLES................................................. 21,617,381
-----------
CONSUMER SERVICES -- 2.3%
LEISURE TIME INDUSTRY -- 1.5%
Action Performance Companies, Inc.*........................... 98,300 3,243,900
-----------
PUBLISHING -- 0.8%
Cadmus Communications Corp. .................................. 122,800 1,688,500
-----------
TOTAL CONSUMER SERVICES..................................................... 4,932,400
-----------
ENERGY -- 5.7%
PETROLEUM - DOMESTIC -- 3.9%
Basin Exploration Inc.*....................................... 63,900 1,281,994
Evergreen Resources, Inc.*.................................... 149,200 3,757,975
Stone Energy Corp.*........................................... 77,700 3,292,538
-----------
8,332,507
-----------
PETROLEUM - SERVICES -- 1.8%
Brigham Exploration Co.*...................................... 54,300 108,600
Gulfmark Offshore, Inc.*...................................... 39,600 752,400
UNIFAB International, Inc.*................................... 109,400 916,225
Weatherford International*.................................... 60,500 2,215,813
-----------
3,993,038
-----------
TOTAL ENERGY................................................................ 12,325,545
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
- ------------------- JUNE 30, 1999
"GROWTH-WITH-VALUE"
SMALL CAP FUND
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
<S> <C> <C>
FINANCIAL SERVICES -- 5.9%
BANKS -- 2.0%
Doral Financial Corp. ........................................ 252,600 $ 4,357,350
-----------
FINANCE COMPANIES -- 3.0%
AmeriCredit Corp.*............................................ 401,200 6,419,200
-----------
SECURITY & COMM. BROKERS -- 0.9%
Federated Investors, Inc. .................................... 109,200 1,958,775
-----------
TOTAL FINANCIAL SERVICES.................................................... 12,735,325
-----------
HEALTH CARE -- 5.7%
HEALTH CARE - GENERAL -- 4.0%
Dentsply International, Inc. ................................. 150,600 4,216,800
Healthplan Services Corp. .................................... 65,100 443,494
Renal Care Group, Inc.*....................................... 72,975 1,888,228
Sola International, Inc.*..................................... 100,300 1,949,581
-----------
8,498,103
-----------
HOSPITAL SUPPLY & MGMT -- 1.7%
PMR Corp.*.................................................... 23,700 78,506
Unilab, Corp.*................................................ 76,300 457,800
Veterinary Centers of America, Inc.*.......................... 231,700 3,142,431
-----------
3,678,737
-----------
TOTAL HEALTHCARE............................................................ 12,176,840
-----------
RAW MATERIALS -- 5.4%
CHEMICALS - SPECIALTY -- 5.4%
Brady (W.H.) Co. ............................................. 63,650 2,068,625
Chirex, Inc.*................................................. 103,300 3,318,513
Spartech Corp. ............................................... 193,400 6,116,275
-----------
11,503,413
-----------
TOTAL RAW MATERIALS......................................................... 11,503,413
-----------
RETAIL -- 8.0%
RESTAURANTS -- 2.7%
Consolidated Products, Inc.*.................................. 324,127 5,834,286
-----------
RETAIL - FOOD STORES -- 2.2%
Casey's General Stores, Inc. ................................. 316,600 4,749,000
-----------
RETAIL - GEN. MERCHANDISE -- 1.8%
Family Dollar Stores, Inc. ................................... 158,500 3,804,000
-----------
RETAIL - SPECIALTY STORES -- 1.3%
Shoe Pavilion, Inc.*.......................................... 250,000 1,125,000
Sportsman's Guide, Inc.*...................................... 300,000 1,612,500
-----------
2,737,500
-----------
TOTAL RETAIL................................................................ 17,124,786
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST SCHEDULE OF INVESTMENTS (UNAUDITED) -- CONTINUED
- ------------------- JUNE 30, 1999
"GROWTH-WITH-VALUE"
SMALL CAP FUND
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES (NOTE 2)
-------- ----------
<S> <C> <C>
TECHNOLOGY -- 16.2%
COMMUNICATIONS EQUIPMENT -- 2.4%
C-Cube Microsystems, Inc.*.................................... 51,200 $ 1,622,400
Inter-Tel, Inc. .............................................. 51,100 932,575
Polycom, Inc.*................................................ 44,000 1,716,000
Tollgrade Communications, Inc.*............................... 56,100 855,525
------------
5,126,500
------------
COMPUTERS - PERIPHERALS -- 7.9%
Benchmark Electronics, Inc.*.................................. 113,950 4,095,078
Caere Corp.*.................................................. 256,300 3,395,975
Landmark Systems Corp.*....................................... 177,100 1,837,413
Merant PLC Sponsored ADR*..................................... 28,490 555,555
SPSS, Inc.*................................................... 79,100 2,031,881
Systems & Computer Technology Corp.*.......................... 345,410 5,030,033
------------
16,945,935
------------
DEFENSE -- 0.6%
EMS Technologies, Inc.*....................................... 88,100 1,277,450
------------
ELECTRONIC COMPONENTS -- 1.2%
ATMI, Inc.*................................................... 83,800 2,493,050
------------
ELECTRONIC INSTRUMENTS -- 4.1%
Analogic Corp. ............................................... 57,400 1,784,781
Artesyn Technologies, Inc.*................................... 59,800 1,326,813
Credence Systems Corp.*....................................... 86,000 3,192,750
Veeco Instruments, Inc.*...................................... 77,400 2,631,600
------------
8,935,944
------------
TOTAL TECHNOLOGY............................................................ 34,778,879
------------
TOTAL COMMON STOCK
(Cost $183,882,127) ...................................................... 214,248,979
------------
MONEY MARKET FUNDS -- 2.3%
Sansom Street Fund - Money Market Portfolio .................. 2,515,101 2,515,101
Temp Cash Fund - Dollar Series ............................... 2,515,102 2,515,102
------------
TOTAL MONEY MARKET FUNDS (Cost $5,030,203) ................................. 5,030,203
------------
TOTAL INVESTMENTS (Cost $188,912,330)(DAGGER)-- 102.2% .............................. 219,279,182
OTHER ASSETS AND LIABILITIES, NET-- (2.2%) .......................................... (4,698,666)
------------
NET ASSETS-- 100.0% ................................................................. $214,580,516
============
<FN>
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes was $177,656,554. At June 30,
1999, net unrealized appreciation was $41,622,628. This consisted of
aggregate gross unrealized appreciation in which there was an excess of
market value over tax cost of $51,365,191, and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost
over market value of $9,742,563.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
- ------------------- JUNE 30, 1999
"GROWTH-WITH-VALUE"
SMALL CAP FUND
ASSETS
Investments in securities, at market value
(Cost $188,912,330)....................................... $219,279,182
Recievable for:
Dividends and interest.................................... 92,691
Capital shares sold....................................... 6,000
Other assets................................................. 16,113
------------
Total Assets.............................................. 219,393,986
------------
LIABILITIES:
Payables for:
Investment securities purchased........................... 4,179,238
Capital shares redeemed...................................... 399,797
Due to Adviser............................................... 177,887
Accrued expenses............................................. 56,548
------------
Total Liabilities......................................... 4,813,470
------------
NET ASSETS................................................... $214,580,516
============
NET ASSETS CONSISTED OF:
Shares of beneficial interest................................ $ 169,626
Additional paid-in capital................................... 182,972,487
Accumulated net realized gain on investments................. 1,071,551
Net unrealized appreciation on investments................... 30,366,852
------------
NET ASSETS FOR 16,962,637 SHARES OUTSTANDING................. $214,580,516
------------
NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE
($214,580,516/16,962,637 outstanding shares of beneficial
interest, $0.01 par value)................................... $12.65
======
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, 1999
-------------------
INVESTMENT INCOME
Dividends ............................................. $ 334,219
Interest............................................... 274,350
-----------
Total Income........................................... 608,569
-----------
EXPENSES
Advisory fee........................................... 1,055,874
Accounting fee......................................... 40,953
Administration fee..................................... 117,985
Transfer agent fee..................................... 13,866
Custodian fee.......................................... 14,644
Audit.................................................. 10,412
Legal.................................................. 11,469
Shareholder reports.................................... 14,420
Registration fee....................................... 21,378
Trustee fees........................................... 7,609
Amortization of organizational expense................. 2,876
Miscellaneous.......................................... 11,904
-----------
Total expenses...................................... 1,323,390
NET INVESTMENT LOSS....................................... (714,821)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions........... (2,345,262)
Net change in unrealized appreciation of investments... 1,171,947
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS........... (1,173,315)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $(1,888,136)
===========
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
SIX-MONTH PERIOD FOR THE FISCAL
ENDED JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
------------------- --------------------
<S> <C> <C>
OPERATIONS
Net investment loss........................................ $ (714,821) $ (1,253,233)
Net realized loss on investment transactions............... (2,345,262) (8,108,156)
Change in net unrealized appreciation (depreciation)
on investments.......................................... 1,171,947 (13,132,422)
------------ ------------
Net decrease in net assets resulting
from operations...................................... (1,888,136) (22,493,811)
------------ ------------
SHARE TRANSACTIONS (A):
Receipt from shares sold................................... 8,658,443 52,930,125
Receipt from securities transferred in-kind................ 439,086 12,088,879
Shares redeemed............................................ (30,168,514) (31,692,013)
------------ ------------
Net increase in net assets from Fund share transactions. (21,070,985) 33,326,991
------------ ------------
TOTAL INCREASE IN NET ASSETS.................................. (22,959,121) 10,833,180
NET ASSETS:
Beginning of period........................................ 237,539,637 226,706,457
------------ ------------
End of period.............................................. $214,580,516 $237,539,637
============ ============
(A) TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST WERE:
Shares sold................................................ 760,435 3,922,701
Shares issued in exchange for securities transferred
in kind (Note 2)........................................ -- 851,608
Shares redeemed............................................ (2,572,804) (2,552,941)
------------ ------------
Net increase in shares..................................... (1,812,369) 2,221,368
Shares outstanding - Beginning balance..................... 18,775,006 16,553,638
------------ ------------
Shares outstanding - Ending balance........................ 16,962,637 18,775,006
============ ============
</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 FOR THE FISCAL APRIL 11, 1997(DAGGER)
ENDED JUNE 30, 1999 YEAR ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1998 DECEMBER 31, 1997
-------------------- ------------------ --------------------
<S> <C> <C> <C>
Net asset value at beginning of period........... $ 12.65 $ 13.70 $ 10.00
======== ======== ========
INVESTMENT OPERATIONS
Net investment income............................ (0.03) (0.07) (0.04)
Net realized and unrealized gain (loss) on
investments................................... 0.03 (0.98) 4.66
-------- -------- --------
Total from investment operations........... -- (1.05) 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................. $ 12.65 $ 12.65 $ 13.70
======== ======== ========
Total return..................................... 0.00% (7.66)% 46.35%
RATIOS (TO AVERAGE NET ASSETS)/SUPPLEMENTAL DATA:
Expenses(DOUBLE DAGGER)....................... 1.25%* 1.24% 1.25%*
Net investment income(DOUBLE DAGGER).......... (0.68)%* (0.52)% (0.51)%*
Portfolio turnover rate.......................... 23.87% 27.41% 34.39%
Net assets at end of period (000 omitted)........ $214,581 $237,540 $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 endedDecember 31, 1997. If these expenses had
been incurred by the Fund, the annualized ratio of expenses to average dailynet
assets for the period ended December 31, 1997 would have been 1.32%.
</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 September 30, 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 such securities valued by the Board of Trustees on June 30, 1999.
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. At December 31, 1998 a
net investment loss of $1,253,233 and a $6,515,124 book realized capital loss
was reclassified into paid in capital. The $6,515,124 book realized capital loss
reclassified into paid in capital was due to a permanent difference between the
tax realized capital loss of $1,593,032 and book realized capital loss of
$8,108,156. This permanent difference was the result of securities being sold
that had a permanent book and tax cost basis difference, which was caused by
transfers in-kind (see "transfers in-kind"). The Fund has a capital loss
carryforward of $1,199,555, which expires on December 31, 2006, available to
offset future capital gains. 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.
13
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
- -------------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
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.
TRANSFERS IN-KIND. During the six-month period ended June 30, 1999, certain
shareholders transferred securities in exchange for Fund shares. These exchanges
were conducted on a taxable basis, whereby for both generally accepted
accounting principles and tax purposes the cost of the 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. Upon the Fund's commencement of
investment operations, a number of separately managed accounts managed by Kalmar
Investment Advisers, transferred appreciated securities in exchange for Fund
shares. These exchanges were conducted on a tax free basis, whereby 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 those securities transferred in-kind to the Fund is equal to the
historical cost of those securities to the contributing party. The result is a
permanent difference between book cost and tax cost to the Fund. This permanent
book/tax difference will cause a difference in book realized capital gains and
losses and tax realized capital gains and losses. These differences will be
reclassified into paid in capital.
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. 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, 1999, purchases and sales of investment securities (excluding
short-term investments) aggregated as follows:
Purchases .................................. $48,585,949*
Sales ...................................... 53,437,935
* Includes securities transferred in-kind of $439,086
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.
Effective January 5, 1998, PFPC Inc. ("PFPC"), an indirect wholly-owned
subsidiary of PNC Bank Corp., a multi-bank holding company, serves as
administrator to the Fund. 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. 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. 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.
14
<PAGE>
KALMAR
POOLED
INVESTMENT
TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
- -------------------
"GROWTH-WITH-VALUE"
SMALL CAP FUND
Effective January 5, 1998, PFPC determines the net asset value per share of the
Fund and provides accounting services to the Fund pursuant to an Accounting
Services Agreement with the Trust. Prior to January 5, 1998, RSMC provided these
services. 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.
Effective January 5, 1998, PFPC serves as transfer agent and dividend disbursing
agent of the Fund pursuant to a Transfer Agency Agreement with the Trust on
behalf of the Fund. Prior to January 5, 1998, RSMC provided these services.
PFPC Trust Company serves as Custodian of the assets of the Fund pursuant to a
Custody Agreement with the Trust.
Certain Trustees and officers of the Trust are also officers of the Adviser.
Such Trustees and officers are not paid any 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
WILMINGTON, DE 19807
(WEBSITE)WWW.KALMARINVESTMENTS.COM
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
PFPC TRUST COMPANY
200 STEVENS DRIVE
LESTER, PA 19113
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
WILMINGTON, DE 19807
(PHONE) 302-658-7575
(FAX) 302-658-7513
(WEBSITE)WWW.KALMARINVESTMENTS.COM
KL06 - 6/99
