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NEW PROVIDENCE
CAPITAL GROWTH FUND
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a series of the New Providence Investment Trust
SEMI-ANNUAL REPORT 1998
FOR THE PERIOD ENDED NOVEMBER 30
INVESTMENT ADVISOR
New Providence Capital Management, Inc.
2859 Paces Ferry Road, Suite 2125
Atlanta, GA 30339
NEW PROVIDENCE CAPITAL GROWTH FUND
105 North Washington Street
Post Office Drawer 69
Rocky Mount, North Carolina 27802-0069
1-800-525-3863
This Report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.
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NEW PROVIDENCE CAPITAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
November 30, 1998
(Unaudited)
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Value
Shares (note 1)
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COMMON STOCKS - 98.79%
Apparel Manufacturing - 7.72%
(a)Nautica Enterprises, Inc. .............................................. 19,900 $ 391,781
(a)Tommy Hilfiger Corporation ............................................. 20,500 1,240,250
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1,632,031
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Commercial Services - 2.32%
D.R. Horton, Inc. ...................................................... 26,000 490,750
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Computers - 2.91%
(a)Sun Microsystems, Inc. ................................................. 8,300 614,719
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Computer Software & Services - 6.72%
(a)Keane, Inc. ............................................................ 13,200 379,500
(a)Network Associates, Inc. ............................................... 10,000 508,750
(a)Oracle Corporation ..................................................... 15,500 530,875
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1,419,125
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Electronics - 5.21%
(a)Lexmark International Group, Inc. ...................................... 14,400 1,101,600
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Environmental Control - 4.20%
(a)Allied Waste Industries, Inc. .......................................... 43,500 886,312
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Financial Services - 6.27%
Capital One Financial Corporation ...................................... 4,700 517,000
SunAmerica Inc. ........................................................ 10,200 808,350
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1,325,350
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Furniture & Home Appliances - 3.12%
Ethan Allen Interiors Inc. ............................................. 16,700 659,650
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Human Resources - 1.17%
(a)Modis Professional Services, Inc. ...................................... 20,700 247,106
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Insurance - Property & Casualty - 1.90%
Mercury General Corporation ............................................ 9,600 402,000
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Medical - Hospital Management & Service - 3.20%
Integrated Health Services, Inc. ....................................... 18,400 205,850
United HealthCare Corporation .......................................... 10,400 469,300
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675,150
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Miscellaneous - Manufacturing - 2.37%
Tyco International Ltd. ................................................ 7,600 500,175
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(Continued)
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NEW PROVIDENCE CAPITAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
November 30, 1998
(Unaudited)
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Value
Shares (note 1)
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COMMON STOCKS - (Continued)
Office & Business Equipment - 2.21%
Herman Miller, Inc. .................................................. 22,000 $ 467,500
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Restaurants & Food Service - 2.77%
Outback Steakhouse, Inc. ............................................. 16,500 585,750
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Retail - Apparel - 11.02%
(a)Just For Feet, Inc. .................................................. 25,000 565,625
Ross Stores, Inc. .................................................... 14,100 512,888
The TJX Companies, Inc. .............................................. 48,800 1,250,500
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2,329,013
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Retail - Automotive Parts - 2.55%
(a)AutoZone, Inc. ....................................................... 17,900 539,237
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Retail - Department Stores - 2.44%
(a)Saks Incorporated .................................................... 18,700 514,250
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Retail - General Merchandise - 4.88%
(a)Best Buy Co., Inc. ................................................... 9,700 558,963
Kmart Corporation .................................................... 31,000 472,750
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1,031,713
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Retail - Specialty Line - 5.66%
(a)Office Depot, Inc. ................................................... 36,700 1,195,044
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Telecommunications - 4.53%
Century Telephone Enterprises, Inc. .................................. 8,450 481,650
(a)Tellabs, Inc. ........................................................ 8,800 475,750
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957,400
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Textiles - 9.22%
Pillowtex Corporation ................................................ 15,500 523,125
Shaw Industries, Inc. ................................................ 25,200 510,300
(a)WestPoint Stevens, Inc. .............................................. 30,500 915,000
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1,948,425
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Transportation - Air - 4.08%
Alaska Air Group, Inc. ............................................... 11,200 419,300
Southwest Airlines Co. ............................................... 20,550 441,825
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861,125
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Transportation - Rail - 2.32%
Kansas City Southern Industries, Inc. ................................ 11,500 490,906
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Total Common Stocks (Cost $20,596,341) ............................... 20,874,331
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(Continued)
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NEW PROVIDENCE CAPITAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
November 30, 1998
(Unaudited)
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Value
Shares (note 1)
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INVESTMENT COMPANY - 1.11%
Evergreen Money Market Institutional Money
Market Fund Institutional Service Shares
(Cost $233,986) .......................................................... 233,986 $233,986
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Total Value of Investments (Cost $20,830,327 (b)) .................................. 99.90% $21,108,317
Other Assets Less Liabilities ...................................................... 0.10% 21,954
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Net Assets .................................................................. 100.00% $21,130,271
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(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is the same. Unrealized appreciation
(depreciation) of investments for financial reporting and federal income tax purposes is as follows:
Unrealized appreciation $ 2,707,302
Unrealized depreciation (2,429,312)
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Net unrealized appreciation $ 277,990
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See accompanying notes to financial statements
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NEW PROVIDENCE CAPITAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1998
(Unaudited)
ASSETS
Investments, at value (cost $20,830,327) ....................................................... $ 21,108,317
Cash ........................................................................................... 7,781
Income receivable .............................................................................. 5,439
Other assets ................................................................................... 349
Deferred organization expenses, net (note 4) ................................................... 25,006
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Total assets .............................................................................. 21,146,892
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LIABILITIES
Accrued expenses ............................................................................... 16,621
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NET ASSETS
(applicable to 2,010,189 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ........................................ $ 21,130,271
============
NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE
($21,130,271 / 2,010,189 shares) ............................................................... $ 10.51
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NET ASSETS CONSIST OF
Paid-in capital ................................................................................ $ 21,640,113
Accumulated net realized loss on investments ................................................... (787,832)
Net unrealized appreciation on investments ..................................................... 277,990
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$ 21,130,271
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See accompanying notes to financial statements
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NEW PROVIDENCE CAPITAL GROWTH FUND
STATEMENT OF OPERATIONS
Period ended November 30, 1998
(Unaudited)
INVESTMENT LOSS
Income
Dividends .................................................................................... $ 38,262
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Expenses
Investment advisory fees (note 2) ............................................................ 77,537
Fund administration fees (note 2) ............................................................ 12,923
Distribution fees (note 3) ................................................................... 25,846
Custody fees ................................................................................. 1,154
Registration and filing administration fees (note 2) ......................................... 2,295
Fund accounting fees (note 2) ................................................................ 13,536
Audit fees ................................................................................... 3,835
Legal fees ................................................................................... 7,081
Securities pricing fees ...................................................................... 1,322
Shareholder recordkeeping fees ............................................................... 4,480
Shareholder servicing expenses ............................................................... 1,538
Registration and filing expenses ............................................................. 12,113
Printing expenses ............................................................................ 1,102
Amortization of deferred organization expenses (note 4) ...................................... 2,716
Trustee fees and meeting expenses ............................................................ 1,637
Other operating expenses ..................................................................... 430
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Total expenses ......................................................................... 169,545
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Net investment loss ............................................................... (131,283)
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REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss from investment transactions .................................................... (787,836)
Decrease in unrealized appreciation on investments ................................................ (1,157,829)
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Net realized and unrealized loss on investments .............................................. (1,945,665)
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Net decrease in net assets resulting from operations ................................... $(2,076,948)
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See accompanying notes to financial statements
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NEW PROVIDENCE CAPITAL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
For the
period from
July 11, 1997
(commencement of
Period ended operations) to
November 30, May 31,
1998 1998
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(DECREASE) INCREASE IN NET ASSETS
Operations
Net investment loss .............................................................. $ (131,283) $ (156,113)
Net realized (loss) gain from investment transactions ............................ (787,836) 209,061
(Decrease) increase in unrealized appreciation on investments .................... (1,157,829) 1,435,819
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Net (decrease) increase in net assets resulting from operations .............. (2,076,948) 1,488,767
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Distributions to shareholders from
Net realized gains from investment transactions .................................. (52,944) 0
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Capital share transactions
Increase in net assets resulting from capital share transactions (a) ............. 96,386 21,675,010
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Total (decrease) increase in net assets ................................. (2,033,506) 23,163,777
NET ASSETS
Beginning of period ................................................................... 23,163,777 0
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End of period ......................................................................... $ 21,130,271 $ 23,163,777
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(a) A summary of capital share activity follows:
For the period from July 11, 1997
Period ended (commencement of operations)
November 30, 1998 to May 31, 1998
Shares Value Shares Value
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Shares sold .............................................. 7,329 $ 80,138 2,002,953 $ 21,687,588
Shares issued for reinvestment
of distributions .................................... 4,492 52,468 0 0
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11,821 132,606 2,002,953 21,687,588
Shares redeemed .......................................... (3,467) (36,220) (1,118) (12,578)
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Net increase ........................................ 8,354 $ 96,386 2,001,835 $ 21,675,010
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See accompanying notes to financial statements
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NEW PROVIDENCE CAPITAL GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
For the period
from September 29,
Period ended 1997 (date of initial
November 30, public offering) to
1998 May 31, 1998
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Net asset value, beginning of period $11.57 $11.37
(Loss) income from investment operations
Net investment loss (0.07) (0.08)
Net realized and unrealized (loss) gain on investments (0.96) 0.28
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Total from investment operations (1.03) 0.20
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Distributions to shareholders from
Net realized gain from investment transactions (0.03) 0.00
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Net asset value, end of period $10.51 $11.57
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Total return (8.96)% 1.76 %
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Ratios/supplemental data
Net assets, end of period $21,130,271 $23,163,777
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Ratio of expenses to average net assets
Before expense reimbursements and waived fees 1.64 %(a) 1.79 %(a)
After expense reimbursements and waived fees 1.64 %(a) 1.62 %(a)
Ratio of net investment loss to average net assets
Before expense reimbursements and waived fees (1.28)%(a) (1.41)%(a)
After expense reimbursements and waived fees (1.28)%(a) (1.24)%(a)
Portfolio turnover rate 69.70 % 57.27 %
Average brokerage commission per share (b) $0.0500 $0.0503
(a) Annualized.
(b) Represents total commissions paid on portfolio securities divided by total portfolio shares purchased or sold on which
commissions were charged.
See accompanying notes to financial statements
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NEW PROVIDENCE CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1998
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The New Providence Capital Growth Fund (the "Fund") is a diversified
series of shares of beneficial interest of The New Providence
Investment Trust (the "Trust"). The Trust, an open-ended investment
company, was organized on July 9, 1997 as a Massachusetts Business
Trust and is registered under the Investment Company Act of 1940, as
amended. The investment objective of the Fund is to provide
shareholders with long-term capital growth, consisting of both realized
and unrealized capital gains. Current income is of secondary
importance. The Fund will seek to achieve this objective by investing
primarily in a portfolio of equity securities traded on domestic U.S.
exchanges or on over-the-counter markets. The Fund began operations on
July 11, 1997. As of November 30, 1998, one shareholder of record owned
92.48% of the outstanding shares of the Fund. The following is a
summary of significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are
carried at value. Securities listed on an exchange or quoted
on a national market system are valued at the last sales price
as of 4:00 p.m. New York time on the day of valuation. Other
securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are
valued at the most recent bid price. Securities for which
market quotations are not readily available, if any, are
valued by using an independent pricing service or by following
procedures approved by the Board of Trustees. Short-term
investments are valued at cost which approximates value.
B. Federal Income Taxes - No provision has been made for federal
income taxes since substantially all taxable income has been
distributed to shareholders. It is the policy of the Fund to
comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and to make
sufficient distributions of taxable income to relieve it from
all federal income taxes.
Net investment income (loss) and net realized gains (losses)
may differ for financial statement and income tax purposes
primarily because of losses incurred subsequent to October 31,
which are deferred for income tax purposes. The character of
distributions made during the year from net investment income
or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the
income or realized gains were recorded by the Fund.
C. Investment Transactions - Investment transactions are recorded
on the trade date. Realized gains and losses are determined
using the specific identification cost method. Interest income
is recorded daily on an accrual basis. Dividend income is
recorded on the ex-dividend date.
D. Distributions to Shareholders - The Fund may declare dividends
quarterly, payable in March, June, September and December, on
a date selected by the Trust's Trustees. In addition,
distributions may be made annually in December out of net
realized gains through October 31 of that year. Distributions
to shareholders are recorded on the ex-dividend date. The Fund
may make a supplemental distribution subsequent to the end of
its fiscal year ending May 31.
E. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results
could differ from those estimates.
(Continued)
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NEW PROVIDENCE CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1998
(Unaudited)
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, New Providence Capital
Management, Inc. (the "Advisor") provides the Fund with a continuous
program of supervision of the Fund's assets, including the portfolio,
and furnishes advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As
compensation for its services, the Advisor receives a fee at the annual
rate of 0.75% of the Fund's average daily net assets.
The Fund's administrator, The Nottingham Company (the "Administrator"),
provides administrative services to and is generally responsible for
the overall management and day-to-day operations of the Fund pursuant
to an accounting and administrative agreement with the Trust. As
compensation for its services, the Administrator receives a fee at the
annual rate of 0.125% of the Fund's first $50 million of average daily
net assets, 0.10% of the next $50 million of average daily net assets,
and 0.075% of average daily net assets over $100 million. The
Administrator also receives a monthly fee of $2,250 for accounting and
recordkeeping services. The contract with the Administrator provides
that the aggregate fees for the aforementioned administration,
accounting and recordkeeping services shall not be less than $50,000
per year. The Administrator also charges the Fund for certain expenses
involved with the daily valuation of portfolio securities.
North Carolina Shareholder Services, LLC (the "Transfer Agent") serves
as the Fund's transfer, dividend paying, and shareholder servicing
agent. The Transfer Agent maintains the records of each shareholder's
account, answers shareholder inquiries concerning accounts, processes
purchases and redemptions of the Fund shares, actts as dividend and
distribution disbursing agent, and performs other shareholder servicing
functions.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the distributor or the Administrator.
NOTE 3 - DISTRIBUTION AND SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company
Act of 1940 (the "Act"), adopted a distribution plan pursuant to Rule
12b-1 of the Act (the "Plan"). The Act regulates the manner in which a
regulated investment company may assume expenses of distributing and
promoting the sales of its shares and servicing of its shareholder
accounts.
The Plan provides that the Fund may incur certain expenses, which may
not exceed 0.25% per annum of the Fund's average daily net assets for
each year elapsed subsequent to adoption of the Plan, for payment to
the Distributor and others for items such as advertising expenses,
selling expenses, commissions, travel or other expenses reasonably
intended to result in sales of shares of the Fund or support servicing
of shareholder accounts. Expenditures incurred as service fees may not
exceed 0.25% per annum of the Fund's average daily net assets.
(Continued)
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NEW PROVIDENCE CAPITAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
November 30, 1998
(Unaudited)
NOTE 4 - DEFERRED ORGANIZATION EXPENSES
All expenses of the Fund incurred in connection with its organization
and the registration of its shares have been assumed by the Fund. The
organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.
NOTE 5 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $14,464,817 and $14,075,551, respectively, for the period
ended November 30, 1998.
