ANNUAL REPORT
SEPTEMBER 30, 1997
FMI
FOCUS FUND
A NO-LOAD
MUTUAL FUND
FMI FOCUS FUND
NOVEMBER 6, 1997
(PICTURE)
Ted D. Kellner, C.F.A.
Portfolio Manager
(PICTURE)
Richard E. Lane, C.F.A.
Portfolio Manager
THE VALUE OF A $10,000 INVESTMENT IN THE FMI FOCUS FUND FROM ITS INCEPTION
(12/16/96) TO 9/30/97 AS COMPARED TO THE STANDARD & POOR'S 500 AND THE RUSSELL
2000
FMI Focus Fund Standard & Poor's 500 Russell 2000
12/16/96 $10,000 $10,000 $10,000
12/31/96 $10,245 $10,279 $10,346
3/31/97 $10,736 $10,548 $9,811
6/30/97 $12,709 $12,389 $11,401
9/30/97 $16,796 $13,332 $13,098
RESULTS FROM FUND INCEPTION (12/16/96) THROUGH 9/30/97
Total Return*<F1>
Through 9/30/97
Total Return*<F1> From Fund
Last 3 Months Inception 12/16/96
FMI Focus Fund 32.2% 68.0%
Standard & Poor's 500 7.6% 33.3%
Russell 2000 14.9% 31.0%
*<F1>Total return includes change in share prices and in each case includes
reinvestments of any dividends, interest and capital gain distributions.
Dear Fellow Shareholder:
What an amazing quarter! The FMI Focus Fund had another excellent quarter,
increasing in value by over 32%. Indeed, the Fund was ranked #1 nationally out
of 245 funds in the capital appreciation category, according to Lipper
Analytical Services, Inc. For the nine and one half months since inception, the
Focus Fund's return is +67.96%. Additionally, Fund assets now stand at over $7
million after only nine months of operation. While the Fund certainly benefited
from a generally strong market, several factors unique to the Fund figured into
the outstanding performance.
From a top-down perspective, the Fund had a large percentage of its assets
invested in smaller companies and in the financial services area, both of which
enjoyed investor ardor during the third quarter. The most important
contributors to the excellent results, however, were from the Fund's two largest
individual holdings during the quarter, Bucyrus International, Inc. and General
Cable Corporation. Bucyrus agreed to be acquired at a significant premium over
market value, while General Cable's stock appreciated considerably on very
strong earnings.
We'd like to take a moment to review what happened with Bucyrus
International, as it not only marks the culmination of a period of intense
analysis, but also because it so epitomizes the type of investment opportunity
we love to find. Such companies tend to be under-followed and misunderstood,
generally exhibiting low valuations and low to non-existent expectations, yet
are showing signs of improvement. In this case, improving fundamentals were
driven by both new management and a positive environment for the industry. When
we find a situation reflecting these type of characteristics, the risk to reward
ratio tends to be quite favorable. When we find a situation encompassing all of
these characteristics and we have a unique insight, or research edge, FMI Focus
Fund's charter allows us to make a big bet... And so we did with Bucyrus
International.
Bucyrus emerged from bankruptcy several years ago, and by virtue of an equity
for debt swap, began trading "over the counter." At the time, no Wall Street
coverage existed, and the Company wasn't saying much. We felt we had a distinct
research edge, due to our long-standing expertise in the mining equipment
industry. We owned Bucyrus back in the late 1980s, before its last buyout. We
have also followed Harnischfeger (another major mining equipment manufacturer,
also conveniently located in Milwaukee) continuously, and owned the stock
several times over the past ten years. Through discussions with vendors,
suppliers and industry contacts, we detected a pick-up in the surface mining
equipment industry last year, which we felt was unrecognized in Bucyrus' stock
price. As our confidence grew, we increased the stake. Indeed, we were still
adding to the position when we were pleasantly surprised by the takeout bid.
General Cable, on the other hand, was a recent initial public offering (IPO).
IPOs are often difficult to value due to the limited information available on
previously privately-held companies. We were aware of this opportunity through
our primary research and ownership of the other publicly held wire and cable
stocks. We had met management and had been impressed with their strategy and
commitment. This broad-based industry background allowed us to "step up" and
make a sizable investment at an opportunistic price.
Despite the wonderful performance this year, I would like to add a word of
caution. Clearly, we have all benefited from a very robust market; however, as
the old saying goes, "Be careful not to confuse brains with a bull market." We
consider ourselves diligent, careful stock pickers, but also recognize that we
have all enjoyed an ideal environment this year. Also, we don't run across
special situations like Bucyrus International every day. Indeed, we would be
thrilled if we could find one or two such situations per year. Fortunately, FMI
Focus Fund's ability to take large positions means we don't need that many. And
while we're searching for those "big" opportunities, we intend to add value
through "singles" and "doubles," to use a baseball analogy.
With respect to the current holdings, a quick glance at the portfolio reveals
a significant overweighting in the financial services area, but no major
individual company "bets." The former reflects our long-standing inclination to
play the consolidation trend in banking and insurance, and the latter, that we
are looking for the next Bucyrus International, but haven't found it yet. Stay
tuned!
Again, we'd like to thank our shareholders for their support. Thanks, also,
to Fiduciary Management's back office, whose support allows us to concentrate on
the investment side. Lastly, I would like to thank all of our many contributors
of great ideas and insights. This network of friends and respected
professionals make it a joy to work in this business.
Again, thank you for your support of FMI Focus Fund.
Sincerely,
/s/ Ted D. Kellner /s/ Richard E. Lane
Ted D. Kellner, C.F.A. Richard E. Lane, C.F.A.
Portfolio Manager Portfolio Manager
225 E. Mason St. o Milwaukee, WI 53202 o 414-226-4555
FMI Focus Fund
REPORT OF INDEPENDENT ACCOUNTANTS
(PRICE WATERHOUSE LOGO)
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, WI 53202
October 27, 1997
To the Shareholders and Board of Directors
of FMI Focus Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of FMI Focus Fund (the "Fund") at
September 30, 1997, and the results of its operations, the changes in its net
assets and the financial highlights for the period December 16, 1996
(commencement of operations) through September 30, 1997, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ Price Waterhouse LLP
FMI Focus Fund
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1997
ASSETS:
Investments in securities, at value (cost $4,971,164) $5,376,963
Receivable for investments sold 403,486
Deferred organizational expenses 25,303
Due from adviser 17,275
Dividend and interest receivable 1,184
Cash 315
Other assets 695
----------
Total assets $5,825,221
==========
LIABILITIES:
Loan payable $550,000
Payable to brokers for investments purchased 70,810
Payable to adviser for management, administrative fees
and deferred expenses 29,236
Interest payable on loan payable 462
Other liabilities 18,419
----------
Total liabilities 668,927
----------
NET ASSETS:
Capital Stock, $0.01 par value; 500,000,000 shares authorized;
349,899 shares outstanding 4,599,413
Net unrealized appreciation on investments 405,799
Accumulated net realized gains on investments and securities
sold short 151,082
----------
Net assets 5,156,294
----------
Total liabilities and net assets $5,825,221
==========
CALCULATION OF NET ASSET VALUE:
Offering and redemption price per share ($5,156,294 / 349,899
shares outstanding) $14.74
=======
The accompanying notes to financial statements are an integral part of this
statement.
FMI Focus Fund
SCHEDULE OF INVESTMENTS
September 30, 1997
SHARES QUOTED
OR PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ------ -------
COMMON STOCKS -- 99.6% (A)<F3>
BANKS/SAVINGS & LOANS -- 20.0%
1,200 Blackhawk Bancorp, Inc. $15,750 $15,000
9,400 First Financial Corp. (Wis.) 308,181 320,192
10,000 Local Financial*<F2>(b)<F4> 100,000 110,000
1,500 Merchants
Bancshares, Inc. 30,750 42,750
17,000 Prime Bancshares, Inc.*<F2> 301,250 323,000
9,000 Southwest Bancorporation
of Texas, Inc.*<F2> 241,063 265,500
---------- ---------
996,994 1,076,442
CHEMICAL/SPECIALTY MATERIALS -- 3.3%
4,000 Minerals Technologies Inc. 154,128 178,252
CONSUMER PRODUCTS - NON-DURABLES -- 2.0%
4,000 Jostens, Inc. 98,490 108,500
DISTRIBUTION -- 2.6%
6,000 VWR Scientific Products
Corp.*<F2> 110,250 137,250
ELECTRONICS -- 7.7%
1,100 Berg Electronics Corp.*<F2> 36,272 59,125
3,000 Marquette Medical
Systems Inc.*<F2> 68,125 93,000
4,000 Methode Electronics, Inc. 71,391 103,000
4,000 MicroTouch
Systems, Inc.*<F2> 115,250 111,500
2,000 Tollgrade
Communications Inc.*<F2> 46,000 47,000
---------- ---------
337,038 413,625
HEALTH INDUSTRIES -- 13.9%
7,375 Covance Inc.*<F2> 132,504 159,484
10,000 Diametrics Medical, Inc.*<F2> 82,500 91,250
40,000 IBAH, Inc.*<F2> 172,501 190,000
6,000 MedPartners, Inc.*<F2> 136,110 128,628
8,600 Pharmaceutical Product
Development, Inc.*<F2> 175,350 175,225
---------- ---------
698,965 744,587
INDUSTRIAL PRODUCTS -- 11.0%
3,000 Cable Design
Technologies Corp.*<F2> 116,178 114,189
4,900 General Cable
Corporation*<F2> 131,112 173,950
5,000 Layne Christensen Co.*<F2> 91,875 105,000
1,350 Raychem Corp. 102,243 114,075
3,000 Watts Industries, Inc. 79,422 83,250
---------- ---------
520,830 590,464
INSURANCE --21.7%
6,000 CMAC Investment Corp. 303,673 321,750
3,000 Delphi Financial
Group, Inc.*<F2> 125,992 128,814
1,500 Executive Risk Inc. 78,125 102,563
15,000 Motor Club of America*<F2> 215,000 211,875
7,000 The PMI Group, Inc. 415,920 401,191
---------- ---------
1,138,710 1,166,193
MEDIA/COMMUNICATION -- 10.5%
11,000 Bell & Howell
Holdings Co.*<F2> 330,160 356,818
2,000 Corning Inc. 96,671 94,500
4,000 PairGain
Technologies, Inc.*<F2> 102,094 114,000
---------- ---------
528,925 565,318
MISCELLANEOUS - FINANCE -- 2.4%
2,400 Enhance Financial Services
Group Inc. 123,119 131,400
PRINTING/PUBLISHING/FORMS -- 2.1%
3,000 John Wiley & Sons, Inc. 112,230 114,939
RETAIL TRADE -- 2.4%
3,000 Federated Department
Stores, Inc.*<F2> 130,867 129,375
---------- ---------
Total common stocks 4,950,546 5,356,345
SHORT-TERM INVESTMENTS -- 0.4% (A)<F3>
VARIABLE RATE DEMAND NOTES
$20,618 Wisconsin Electric
Power Company 20,618 20,618
---------- ---------
Total variable rate
demand notes 20,618 20,618
---------- ---------
TOTAL INVESTMENTS (100%) $4,971,164 $5,376,963
========== =========
*<F2>Non-income producing security.
(a)<F3>Percentages for the various classifications relate to total
investments.
(b)<F4>Security, purchased September 3, 1997, is illiquid and unregistered
and is valued at fair value as discussed in footnote (1)(a). The issuer, at its
own cost, has agreed to cause registration of the security within 120 days after
the original issuance.
The accompanying notes to financial statements are an integral part of this
schedule.
FMI Focus Fund
STATEMENT OF OPERATIONS
For the Period from December 16, 1996 (commencement of operations) to September
30, 1997
INCOME:
Dividends $7,290
Interest 4,464
--------
Total income 11,754
--------
EXPENSES:
Professional fees 24,298
Management fees 10,941
Transfer agent fees 8,338
Registration fees 7,510
Custodian fees 5,202
Amortization of organizational expenses 4,465
Administrative services 3,718
Printing and postage expenses 3,611
Other expenses 1,753
--------
Total operating expenses before interest expense,
dividends on short positions
and reimbursement 69,836
Interest expense $1,802
Dividends on short positions 84
--------
Total interest expense and dividends on short positions 1,886
--------
Total expenses before reimbursement 71,722
Less expenses assumed by adviser (39,748)
--------
Net expenses 31,974
NET INVESTMENT LOSS (20,220)
--------
Net realized gain on investments 516,508
Net realized gain on short positions 7,628
--------
NET REALIZED GAIN ON INVESTMENTS AND SHORT POSITIONS 524,136
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 405,799
--------
NET GAIN ON INVESTMENTS AND SHORT POSITIONS 929,935
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $909,715
========
The accompanying notes to financial statements are an integral part of this
statement.
FMI Focus Fund
STATEMENT OF CHANGES IN NET ASSETS
For the Period from December 16, 1996 (commencement of operations) to September
30, 1997
OPERATIONS:
Net investment loss $(20,220)
Net realized gain on investments and short positions 524,136
Net increase in unrealized appreciation on investments 405,799
---------
Net increase in net assets resulting from operations 909,715
---------
DISTRIBUTIONS TO SHAREHOLDERS:
Distribution from net investment income ($0.015 per share) (818)
Distribution from net realized gains ($1.8971 per share) (355,365)
---------
Total distributions (356,183)*<F5>
---------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (316,306 shares) 4,178,695
Net asset value of shares issued in distribution (24,664 shares) 339,335
Cost of shares redeemed (1,071 shares) (15,268)
---------
Net increase in net assets derived from Fund share activities 4,502,762
---------
TOTAL INCREASE 5,056,294
NET ASSETS AT THE BEGINNING OF THE PERIOD 100,000
---------
NET ASSETS AT THE END OF THE PERIOD $5,156,294
=========
*<F5>Total distributions consists entirely of ordinary income, of which 2% is
eligible for the corporate dividends received deduction.
The accompanying notes to financial statements are an integral part of this
statement.
FMI Focus Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout the period)
FOR THE PERIOD FROM
DECEMBER 16, 1996+<F6>TO
SEPTEMBER 30, 1997
---------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment loss (a)<F9> (0.04)
Net realized and unrealized gains on investments and short positions 6.69
------
Total from investment operations 6.65
Less distributions:
Dividend from net investment income (0.01)
Distribution from net realized gains (1.90)
------
Total from distributions (1.91)
------
Net asset value, end of period $14.74
======
TOTAL INVESTMENT RETURN 68.0%*<F7>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 5,156
Ratio of operating expenses (after reimbursement) to average
net assets (b)<F10> 2.75%**<F8>
Ratio of interest expense and dividends on short positions
to average net assets 0.17%**<F8>
Ratio of net investment loss to average net assets (c)<F11> (1.85%)**<F8>
Portfolio turnover rate 298.2%
Average commission rate paid $0.0758
+<F6>Commencement of operations.
*<F7>Not annualized.
**<F8>Annualized.
(a)<F9>Net investment loss before interest expense and dividends on short
positions for the period ended September 30, 1997 was ($0.04).
(b)<F10>Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses for the period ended
September 30, 1997, the ratio would have been 6.38%**<F8>.
(c)<F11>Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses for the period ended
September 30, 1997, the ratio would have been (5.48%)**<F8>.
The accompanying notes to financial statements are an integral part of this
statement.
FMI Focus Fund
NOTES TO FINANCIAL STATEMENTS
September 30, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the FMI
Focus Fund (the "Fund"), a portfolio of FMI Funds, Inc. (the "Company") which
is registered under the Investment Company Act of 1940. The Company was
incorporated under the laws of Maryland on September 5, 1996 and the Fund
commenced operations on December 16, 1996. The investment objective of the
Fund is to seek capital appreciation principally through investing in common
stocks and warrants, engaging in short sales, investing in foreign securities
and effecting transactions in stock index contracts, options and stock index
futures contracts, and options on securities and stock indexes.
(a) Each security, including securities sold short, but excluding short-term
investments, is valued at the last sale price reported by the principal
security exchange on which the issue is traded. Common stocks which are
listed on a national securities exchange or the Nasdaq Stock Market but
which were not traded on the valuation date are valued at the most recent
bid price. Securities sold short which are listed on a national securities
exchange or the Nasdaq Stock Market but which were not traded on the
valuation date are valued at the most recent ask price. Unlisted equity
securities for which market quotations are readily available are valued at
the most recent bid price. Options purchased or written by the Fund are
valued at the average of the most recent bid and ask prices. Securities for
which quotations are not readily available are valued at fair value as
determined by the investment adviser under the supervision of the Board of
Directors. Short-term investments are valued at amortized cost which
approximates quoted market value. Investment transactions are recorded no
later than the first business day after the trade date. The cost amounts of
securities for Federal income tax purposes aggregates $4,977,910. The
difference between cost amounts for book purposes and tax purposes is due to
deferred wash losses.
(b) Net realized gains and losses on common stock are computed on the basis of
the cost of specific certificates.
(c) Provision has not been made for Federal income taxes since the Fund will
elect to be taxed as a "regulated investment company" and intends to
distribute substantially all net investment company taxable income and net
capital gains to its shareholders and otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
(d) Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
(e) The Fund has investments in short-term variable rate demand notes, which
are unsecured instruments. The Fund may be susceptible to credit risk with
respect to these notes to the extent the issuer defaults on its payment
obligation. The Fund's policy is to monitor the creditworthiness of the
issuer and does not anticipate nonperformance by these counterparties.
(f) Generally accepted accounting principles require that permanent financial
reporting and tax differences be reclassified to capital stock.
(g) 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 revenues and expenses during the
reporting period. Actual results could differ from these estimates.
(h) The Fund may sell securities short. For financial statement purposes, an
amount equal to the settlement amount would be included in the Statement of
Assets and Liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the short
position. Subsequent fluctuations in the market prices of securities sold,
but not yet purchased, may require purchasing the securities at prices which
may differ from the market value reflected on the Statement of Assets and
Liabilities. The Fund is liable for any dividends payable on securities
while those securities are in a short position. As collateral for its short
positions, the Fund is required under the 1940 Act to maintain segregated
assets consisting of liquid securities. These segregated assets are required
to be adjusted daily to reflect changes in the value of the securities sold
short. As of September 30, 1997 there were no short positions in the Fund.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Fiduciary Management, Inc. ("FMI"),
with whom certain officers and directors of the Fund are affiliated, to serve
as investment adviser and manager. Under the terms of the agreement, the Fund
will pay FMI a monthly management fee at the annual rate of 1% of the daily
net assets. The Fund has an administrative agreement with FMI to supervise
all aspects of the Fund's operations except those performed by FMI pursuant to
the management agreement. Under the terms of the agreement, the Fund will pay
FMI a monthly administrative fee at the annual rate of 0.2% of the daily net
assets up to and including $30,000,000, 0.1% on the next $70,000,000 and 0.05%
of the daily net assets of the Fund in excess of $100,000,000.
As required under the management agreement, FMI has reimbursed the Fund for
expenses over 2.75% of the daily net assets of the Fund. These reimbursements
amounted to $39,748 for the period ended September 30, 1997.
(3) CREDIT FACILITY --
Firstar Bank Milwaukee, NA has made available to the Fund a $1,000,000 credit
facility pursuant to a Credit Agreement ("Agreement") dated August 21, 1997
(subsequently amended) for the purpose of purchasing portfolio securities.
The Agreement is renewed annually each August. Principal and interest of each
loan under the Agreement are due not more than 90 days after the date of the
loan. Amounts under the credit facility bear interest at a rate per annum
equal to the prime rate (8.50% on September 30, 1997) on the amount borrowed.
Additionally, the Fund pays a commitment fee of 0.25% of the commitment and an
unused line fee of 0.25% of the unused amount of the facility. Advances are
collateralized by securities owned by the Fund. During the period August 21,
1997 through September 30, 1997, the Fund had an outstanding average daily
balance of $151,829 under the Agreement. The maximum amount outstanding
during that period was $825,000. Interest expense amounted to $1,802 for the
period ended September 30, 1997. At September 30, 1997, the Fund had a loan
payable balance of $550,000, and the securities collateralizing the Agreement
amounted to $5,231,345.
Pursuant to the 1940 Act, the Fund is required to satisfy asset coverage
requirements on its outstanding borrowings. At September 30, 1997, the Fund
satisfied all asset coverage requirements of the 1940 Act.
(4) Distribution to Shareholders --
Net investment income and net realized gains are distributed to shareholders.
(5) DEFERRED EXPENSES --
Organizational expenses were deferred and are being amortized on a straight-
line basis over a period of five years beginning with the date of sales of
shares to the public. These expenses were advanced by the Adviser who will be
reimbursed by the Fund over a period of five years. The proceeds of any
redemption of the initial shares by the original shareholder will be reduced
by a pro-rata portion of any then unamortized deferred 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. The unamortized
organizational expenses at September 30, 1997 were $25,303.
(6) INVESTMENT TRANSACTIONS --
For the period ending September 30, 1997, purchases and proceeds of sales of
investment securities (excluding short-term investments) were $8,447,465 and
$4,023,334, respectively, and $98,871 and $99,667, respectively, of short-term
U.S. Government Securities.
(7) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of September 30, 1997, liabilities of the Fund included the following:
Loan payable $550,000
Payable to brokers for securities purchased 70,810
Payable to FMI for management, administrative fees
and deferred expenses 29,236
Interest payable on loan payable 462
Other liabilities 18,419
(8) SOURCES OF NET ASSETS --
As of September 30, 1997, the sources of net assets were as follows:
Fund shares issued and outstanding $4,599,413
Net unrealized appreciation on investments 405,799
Accumulated net realized gains on investments 151,082
---------
$5,156,294
=========
Aggregate net unrealized appreciation as of September 30, 1997, consisted of
the following:
Aggregate gross unrealized appreciation $449,090
Aggregate gross unrealized depreciation (43,291)
---------
Net unrealized appreciation $405,799
=========
FMI FOCUS FUND
225 East Mason Street
Milwaukee, Wisconsin 53202
414-226-4555
BOARD OF DIRECTORS
BARRY K. ALLEN
TED D. KELLNER
THOMAS W. MOUNT
DONALD S. WILSON
INVESTMENT ADVISER
AND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
800-811-5311
or
414-765-4124
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
This report is not authorized for use as an offer of sale or a solicitation
of an offer to buy shares of FMI Focus Fund unless accompanied or preceded by
the Fund's cuurent prospectus. Past performance is not indicative of future
performance. Investment return and principal value of an investment may
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
