<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
----------------------------------------------------------------------
MAY 6, 1999
Dear Fellow Shareholder:
The Kirr, Marbach Partners Value Fund ("Fund") commenced
operations on December 31, 1998. Though March 31, 1999
marked the end of the Fund's first operating quarter, the
Fund has a September 30 fiscal year end. Thus, this is the
inaugural semi-annual report for the Fund. Overall, we are
quite pleased with the Fund's launch. The Fund had a total
return of 0.4% in the quarter ending March 31, 1999(1).
While this was certainly a modest gain compared with the
5.0% first quarter gain for the S&P 500(2), it actually
compared quite well with mid-cap oriented benchmarks. The
second quarter has started well for the Fund, which as of
April 30, 1999 had approximately $13.5 million in assets and
a year-to-date total return through April 30, 1999 of 7.5%.
While this does NOT necessarily signal the start of a turn
for our style, we are heartened the market seems to be
recognizing the outstanding investment merit of value
stocks. As the NEW YORK TIMES hypothesized in the April 18,
1999 article, "Value is Suddenly Looking Nifty," value
investors' time in the sun MAY have finally arrived. We hope
they are right.
The relative outperformance of large capitalization, growth
stocks versus everything else continued unabated in the
first quarter of 1999. While the headlines trumpeted new
highs for "the market" during the first quarter (with the
Dow Jones Industrial Average closing above 10,000 for the
first time on March 29, 1999), an EXTREMELY NARROW group of
stocks actually joined in the celebration. For the quarter,
the S&P 500 Index (an index dominated by the
mega-capitalization, growth stocks) had a total return of
5.0%. By contrast, the Value Line Index(3) and S&P Midcap
Index(4) (two indices more representative of our primary
stock universe) had total returns of -6.0% and -6.4%,
respectively.
Though our mid-cap value style has remained out of favor, we
are very encouraged by both the fundamentals supporting our
value approach and the fact that the PRIVATE market is
beginning to recognize the exceptional value in our sector,
as takeover activity in mid-caps has increased dramatically.
This last point was emphasized in the April 13, 1999 issue
of THE WALL STREET JOURNAL in the article, "Buyout Firms See
Big Bucks in Some Small Companies," describing how buyout
firms were viewing the mid- and small-cap universe as
fertile hunting ground for profitable acquisitions.
(1) Past performance does not reflect how the Fund may
perform in the future.
(2) The S&P 500 Index is an unmanaged,
capitalization-weighted index generally representative
of the U.S. market for large-cap stocks.
(3) The Value Line Index in an unmanaged, equally-weighted
index which includes 1700 U.S. stocks.
(4) The S&P Mid-cap Index is an unmanaged,
capitalization-weighted index generally representative
of the U.S. market for mid-capitalization stocks.
- --------------------------------------------------------------------------------
1
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
THE STOCK MARKET
The mega-cap growth stocks continued to leap ever higher in
the first quarter, leaving everything else in their
performance dust. The phenomenon of a relative handful of
stocks completely distorted what was occurring in the
overall market continued and even intensified in the first
quarter of 1999. The following chart by Smith Barney Salomon
shows while the popular indices were reaching record highs
(giving the illusion of a vibrant overall market), the
underlying picture was much less rosy for the stocks that
actually make up the market and begs the question, "What
record?"
COMMON STOCK UNWEIGHTED(5) PRICE PERFORMANCE
(AS OF MARCH 29, 1999 -- FIRST DJIA 10,000 CLOSE)
<TABLE>
<CAPTION>
UNWEIGHTED
PERFORMANCE AVERAGE DECLINE
(YTD THRU 3/29) FROM 52-WEEK HIGH
--------------- -----------------
<S> <C> <C>
BY MARKET CAPITALIZATION
Less than $250 Million (5545 of 8041
stocks or 69% of stocks) -4.9% -50.3%
$250 Million--$2 Billion (1752 stocks or
22% of stocks) -10.3% -32.4%
$2 Billion--$5 Billion (356 stocks or 4%
of stocks) -4.4% -23.0%
$5 Billion--$20 Billion (267 stocks or
3% of stocks) +2.0% -16.6%
Greater than $20 Billion (121 stocks or
2% of stocks) +6.0% -11.5%
BY EXCHANGE/INDEX
S&P 500 +0.5% -21.6%
NYSE -8.0% -32.8%
NASDAQ -5.3% -41.3%
</TABLE>
(5) "Unweighted price performance" means the performance of each stock in the
category is given EQUAL WEIGHT (regardless of market capitalization) in
calculating the performance for the category. Conversely, indices such as
the S&P 500 and S&P Mid-cap are CAPITALIZATION-WEIGHTED. This means the
performance of the largest capitalization stock in the index has a much
greater impact on the performance of the index than does that of the
smallest capitalization stock in the index.
- --------------------------------------------------------------------------------
2
<PAGE>
KIRR, MARBACH PARTNERS
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VALUE FUND
Because the market's bifurcation by market capitalization is
well known, we will focus on the differences between "value"
(the Adviser's investment style) and "growth." We attempt to
find companies with A) strong management, B) solid financial
strength and C) good profitability with stocks selling at
compelling valuation (i.e. low price to earnings, low price
to free cash flow, low price to sales and/or low price to
private market value). We view our equity investments as if
we were buying the underlying business and try to buy great
businesses at cents on the dollar. Growth investors also try
to buy great businesses. However, unlike a value investor,
the growth investor views valuation as a secondary
consideration. As long as the company's "story" and/ or
earnings progression is intact, the typical growth stock
buyer is perfectly willing to pay more than a dollar for a
dollar's value, in the belief an endless supply of new money
funneled into growth stocks will push their valuations ever
higher.
The investment firm Sanford Bernstein calculated that growth
outperformed value by almost 2 to 1 from August of 1994
through 1998, with the relative outperformance of growth in
1998 the greatest by far in the last 25 years. Further, the
30 largest growth stocks (6% of the companies in the S&P
500) contributed 65% of the 1998 return for the S&P 500
while the other 470 stocks (94% of the S&P 500) contributed
only 35%. Those same 30 largest growth stocks had a total
return of 69% in 1998, while the remaining 470 gained 10%.
Performance leadership narrowed even FURTHER in the first
quarter of 1999, with 10 of the largest growth stocks (2% of
the companies in the S&P 500) accounting for a whopping 82%
of the S&P 500's total return. Thus, as "the market" sprints
higher and higher, fewer and fewer stocks are participating
in the rise.
While the popular press has begun to declare everything but
large cap growth dead, we find the fundamental case
OVERWHELMING that the obituaries are premature and believe
the relative performance pendulum will again swing in our
favor. Sanford Bernstein calculated the price-to-sales ratio
of cyclical companies (key component of the value universe)
at the end of 1998 vs. the S&P 500 and the price-to-book
ratio of value stocks vs. the market to be at 25 YEAR
HISTORICAL LOWS. The Fund's portfolio has a
price-to-earnings ratio LESS THAN HALF that of the S&P 500,
but with an expected earnings growth rate MORE THAN TWICE
that of the S&P 500. We believe the compelling valuation of
this universe will be realized, either in the public or
private market.
Conversely, Sanford Bernstein calculated the S&P 500 at the
end of 1998 to be at 50 YEAR HISTORICAL HIGHS on a number of
valuation measures, with the top 30 growth names that have
driven S&P 500 performance even farther off the map and
dangerously extended, in our view. These stocks can surely
go higher, fueled by investors chasing yesterday's
performance, but they won't climb to the sky.
- --------------------------------------------------------------------------------
3
<PAGE>
KIRR, MARBACH PARTNERS
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VALUE FUND
Though it's too soon to tell if the encouraging start to the
second calendar quarter signals a sea change in value vs.
growth, we don't believe for a minute this is a "new era"
for growth stocks and value will never come back. We note
when a trend has been in place for a time, the easiest thing
to do is rationalize why it's happening and why it will
continue AD INFINITUM. It takes a little more vision to see
past the crowd and intestinal fortitude to remain true to
our mission of generating outstanding LONG-TERM investment
performance.
Thank you for your investment in the Kirr, Marbach Partners
Value Fund.
Regards,
<TABLE>
<S> <C>
[MARK D. FOSTER SIGNATURE] [MICKEY KIM SIGNATURE]
Mark D. Foster, CFA Mickey Kim, CFA
President Vice President, Treasurer and Secretary
</TABLE>
- --------------------------------------------------------------------------------
4
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at current value (cost $9,573,214) $9,711,684
Cash 20,499
Dividends receivable 8,641
Receivable from Investment Adviser 6,684
Interest receivable 233
----------
Total Assets 9,747,741
----------
LIABILITIES:
Payable for securities purchased 518,037
Accrued expenses and other liabilities 29,060
----------
Total Liabilities 547,097
----------
NET ASSETS $9,200,644
----------
----------
NET ASSETS CONSIST OF:
Capital stock $9,229,068
Undistributed net investment income 7,644
Undistributed net realized loss on investments (174,538)
Net unrealized appreciation on investments 138,470
----------
Total Net Assets $9,200,644
----------
----------
Shares outstanding (500,000,000 shares of $0.01
par value authorized) 916,481
Net asset value, redemption price and offering
price per share $ 10.04
----------
----------
</TABLE>
(1) Commencement of operations.
STATEMENT OF OPERATIONS
DECEMBER 31, 1998(1) THROUGH MARCH 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 18,525
Interest income 7,465
---------
Total Investment Income 25,990
---------
EXPENSES:
Organization costs 43,952
Shareholder servicing and accounting costs 13,496
Investment management fee 12,231
Administration fee 8,361
Professional fees 7,963
Federal and state registration 4,633
Custody fees 3,822
Distribution fees 3,058
Reports to shareholders 2,548
Directors fees 1,911
Other 2,382
---------
Total expenses before reimbursement 104,357
Less: Reimbursement from Investment Adviser (86,011)
---------
Net Expenses 18,346
---------
NET INVESTMENT INCOME 7,644
---------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments (174,538)
Change in unrealized appreciation on investments 138,470
---------
Net realized and unrealized loss on investments (36,068)
---------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ (28,424)
---------
---------
</TABLE>
See notes to the financial statements.
- --------------------------------------------------------------------------------
5
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
DECEMBER 31, 1998(1) THROUGH MARCH 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
OPERATIONS:
Net investment income $ 7,644
Net realized loss on investments (174,538)
Change in unrealized appreciation on investments 138,470
----------
Net decrease in net assets resulting from
operations (28,424)
----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 9,274,636
Shares issued to holders in reinvestment of
dividends --
Cost of shares redeemed (45,568)
----------
Net increase in net assets from capital share
transactions 9,229,068
----------
TOTAL INCREASE IN NET ASSETS 9,200,644
----------
NET ASSETS:
Beginning of period --
----------
End of period (including undistributed net
investment income of $7,644) $9,200,644
----------
----------
CHANGES IN SHARES OUTSTANDING:
Shares sold 921,038
Shares issued to holders in reinvestment of
dividends --
Shares redeemed (4,557)
----------
Net increase 916,481
----------
----------
</TABLE>
(1) Commencement of operations.
See notes to the financial statements.
- --------------------------------------------------------------------------------
6
<PAGE>
KIRR, MARBACH PARTNERS
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VALUE FUND
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1998(1) THROUGH MARCH 31, 1999 (UNAUDITED)
<TABLE>
<S> <C>
For a Fund share outstanding throughout the period
Per Share Data:
Net asset value, beginning of period $10.00
-----------
Income from investment operations:
Net investment income 0.01(2)
Net realized and unrealized gain on investments 0.03
-----------
Total from investment operations 0.04
-----------
Net asset value, end of period $10.04
-----------
-----------
Total return 0.40%(3)
Supplemental Data and Ratios:
Net assets, end of period $9,200,644
Ratios of expenses to average net assets
Before expense reimbursement 8.53%(4)
After expense reimbursement 1.50%(4)
Ratio of net investment income/(loss) to average
net assets
Before expense reimbursement (6.40)% (4)
After expense reimbursement 0.63%(4)
Portfolio turnover rate 23.54%
</TABLE>
(1) Commencement of operations.
(2) Net investment income per share is calculated using the ending balance of
undistributed net investment income prior to consideration of adjustments
for permanent book and tax differences.
(3) Not annualized.
(4) Annualized.
See notes to the financial statements.
- --------------------------------------------------------------------------------
7
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ----------
<C> <S> <C>
COMMON STOCKS - 79.4%
AUTO & TRANSPORTATION - 6.8%
9,400 Midas, Inc. $ 313,725
10,000 Ogden Corp. 240,625
6,000 Wabash National Corp. 69,750
----------
624,100
----------
BUSINESS SERVICE - 9.4%
1,931 Cintas Group 126,259
6,900 First Data 294,975
5,200 H&R Block 246,350
16,000 Republic Industries, Inc.* 198,000
----------
865,584
----------
CONGLOMERATE - 1.5%
5,000 Tenneco, Inc. 139,688
----------
CONSUMER CYCLICAL - 10.4%
11,100 Jostens 235,875
15,200 Mattel 378,100
17,800 Pier 1 Imports 144,625
4,900 The Limited 194,162
----------
952,762
----------
CONSUMER NON-DURABLE - 11.4%
6,300 Capital Senior Living Corp.* 44,494
14,400 International Home Foods, Inc.* 231,300
6,700 Lancaster Colony Corp. 178,387
11,600 Richfood Holdings, Inc. 250,125
6,400 St. Jude Medical* 156,000
11,200 U S Industries 184,100
----------
1,044,406
----------
<CAPTION>
NUMBER OF
SHARES VALUE
- ---------- ----------
<C> <S> <C>
FINANCIAL SERVICES - 10.0%
11,200 Allied Capital Corp. $ 205,800
10,800 Commercial Federal Corp. 250,425
10,600 HCC Insurance Holdings, Inc. 204,050
4,300 XL Capital LTD - Class A F 261,225
----------
921,500
----------
MANUFACTURING - 8.7%
11,600 Allied Waste Industries, Inc.* 167,475
15,100 Emcor Group, Inc.* 259,531
10,200 Englehard Corp. 172,762
5,600 Great Lakes Chemical 205,800
----------
805,568
----------
TECHNOLOGY - 12.3%
8,000 Century Communications* 371,500
4,850 LSI Logic Corp.* 151,259
3,900 Mediaone Group* 247,650
7,200 Silicon Graphics, Inc.* 120,150
12,500 Wang Laboratories* 245,313
----------
1,135,872
----------
UTILITIES & ENERGY - 8.9%
2,637 AT&T Corp. 210,466
14,200 BJ Services* 332,813
7,600 Calpine Corp.* 276,925
----------
820,204
----------
Total Common Stocks (cost $7,171,214) $7,309,684
----------
----------
</TABLE>
See notes to the financial statements.
- --------------------------------------------------------------------------------
8
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ----------
SHORT-TERM INVESTMENTS - 26.1%
<C> <S> <C>
REPURCHASE AGREEMENT
$2,402,000 Repurchase Agreement with Firstar Bank,
3.50%, dated 3/31/99, due 4/1/99
collateralized by U.S. Treasury Notes
valued at $2,423,000. Repurchase
proceeds of $2,402,234. $2,402,000
----------
Total repurchase agreements (cost
$2,402,000) 2,402,000
----------
Total investments - 105.5% (cost
$9,573,214) 9,711,684
Liabilities in excess of other assets -
(5.5)% (511,040)
----------
TOTAL NET ASSETS - 100.0% $9,200,644
----------
----------
</TABLE>
* Non-income producing security.
F Foreign security.
See notes to the financial statements.
- --------------------------------------------------------------------------------
9
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1999 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Kirr Marbach Partners Funds, Inc. (the "Corporation") was
organized as a Maryland corporation on September 23, 1998
and is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end diversified
management investment company issuing its shares in series,
each series representing a distinct portfolio with its own
investment objective and policies. The one series presently
authorized is the Kirr, Marbach Partners Value Fund (the
"Fund"). The investment objective of the Fund is to seek
long-term growth of capital. The Fund commenced operations
on December 31, 1998.
The following is a summary of significant accounting
policies consistently followed by the Fund.
a) Investment Valuation - Common stocks and other
equity-type securities that are listed on a securities
exchange are valued at the last quoted sales price on the
day the valuation is made. Price information, on listed
stocks, is taken from the exchange where the security is
primarily traded. Securities which are listed on an exchange
but which are not traded on the valuation date are valued at
the average of the most recent bid and asked prices.
Unlisted securities for which market quotations are readily
available are valued at the latest quoted bid price. Debt
securities are valued at the latest bid prices furnished by
independent pricing services. Other assets and securities
for which no quotations are readily available are valued at
fair value as determined in good faith under the supervision
of the Board of Directors of the Corporation. Short-term
instruments (those with remaining maturities of 60 days or
less) are valued at amortized cost, which approximates
market.
b) Federal Income Taxes - A provision, for federal income
taxes or excise taxes, has not been made since the Fund has
elected to be taxed as a "regulated investment company" and
intends to distribute substantially all taxable income to
its shareholders and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment
companies.
c) Income and Expense - The Fund is charged for those
expenses that are directly attributable to the Fund, such as
advisory, administration and certain shareholder service
fees. Net investment income and realized and unrealized
gains and losses are allocated to the Fund daily.
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10
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
d) Distributions to Shareholders - Dividends from net
investment income and distributions of net realized capital
gains, if any, will be declared and paid at least annually.
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 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 those
estimates.
f) Foreign Securities - Investing in securities of foreign
companies and foreign governments involves special risks and
considerations not typically associated with investing in
U.S. companies and the U.S. government. These risks include
revaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be
less liquid and their prices more volatile than those of
securities of comparable U.S. companies and the U.S.
government.
g) Repurchase Agreements - The Fund may enter into
repurchase agreements with certain banks or non-bank
dealers. The Adviser will monitor, on an ongoing basis, the
value of the underlying securities to ensure that the value
always equals or exceeds the repurchase price plus accrued
interest.
h) Other - Investment and shareholder transactions are
recorded on the trade date. The Fund determines the gain or
loss realized from the investment transactions by comparing
the original cost of the security lot sold with the net
sales proceeds. Dividend income is recognized on the
ex-divided date or as soon as information is available to
the Fund and interest income is recognized on an accrual
basis. Generally accepted accounting principles require that
permanent financial reporting and tax differences be
reclassified to capital stock.
2. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding
short-term investments, by the Fund for the period December
31, 1998, to March 31, 1999, were as follows:
<TABLE>
<CAPTION>
PURCHASE SALES
---------- --------
<S> <C> <C>
U.S. Government $ -- $ --
Other $8,260,528 $914,776
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1999 (UNAUDITED)
At March 31, 1999, gross unrealized appreciation and
depreciation of investments for tax purposes were as
follows:
<TABLE>
<S> <C>
Appreciation $ 555,100
(Depreciation) (416,630)
---------
Net appreciation on investments $ 138,470
---------
---------
</TABLE>
At March 31, 1999, the cost of investments for federal
income tax purposes was $9,573,214.
3. AGREEMENTS
The Fund has entered into an Investment Advisory Agreement
with Kirr, Marbach & Company, LLC (the "Investment
Adviser"). Pursuant to its advisory agreement with the Fund,
the Investment Adviser is entitled to receive a fee,
calculated daily and payable monthly, at the annual rate of
1.00% as applied to the Fund's daily net assets.
Until December 31, 1999, the Investment Adviser has agreed
to voluntarily waive its advisory fee and/or reimburse the
Fund's other expenses, including organization expenses, to
the extent that total operating expenses (exclusive of
interest, taxes, brokerage commissions and other costs
incurred in connection with the purchase or sale of
portfolio securities, and extraordinary items) exceed the
annual rate of 1.50% of the net assets of the Fund, computed
on a daily basis. Accordingly, for the period December 31,
1998, to March 31, 1999, the Investment Adviser waived
advisory fees in the amount of $86,011. After December 31,
1999, the Investment Adviser may terminate or revise the
total annual operating expense limitations at any time. Any
waiver or reimbursement is subject to later adjustment to
allow the Investment Adviser to recoup amounts waived or
reimbursed to the extent actual fees and expenses for a
period are less than the expense limitation cap of 1.50%,
provided, however, that the Investment Adviser shall only be
entitled to recoup such amounts for a period of three years
from the date such amount was waived or reimbursed.
Rafferty Capital Markets, Inc., (the "Distributor") serves
as principal underwriter of the shares of the Fund pursuant
to a Distribution Agreement between the Distributor and the
Corporation. The Fund's shares are sold on a no-load basis
and, therefore, the Distributor receives no sales commission
or sales load for providing services to the Fund. The
Corporation has adopted a plan pursuant to
- --------------------------------------------------------------------------------
12
<PAGE>
KIRR, MARBACH PARTNERS
- --------------------------------------------------------------------------------
VALUE FUND
Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), which
authorizes the Corporation to pay the Distributor a
distribution and shareholder servicing fee of up to 0.25% of
the Fund's average daily net assets (computed on an annual
basis). All or a portion of the fee may be used by the Fund
or the Distributor to pay its distribution fee and costs of
printing reports and Prospectuses for potential investors
and the costs of other distribution and shareholder
servicing expenses.
- --------------------------------------------------------------------------------
13
<PAGE>
- ------------------------------------------------
DIRECTORS
MARK D. FOSTER
MICKEY KIM
JEFFREY N. BROWN
MARK E. CHESNUT
JOHN F. DORENBUSCH
PRINCIPAL OFFICERS
MARK D. FOSTER, President
MICKEY KIM, Vice President, Treasurer and Secretary
INVESTMENT ADVISER
KIRR, MARBACH & COMPANY, LLC
621 WASHINGTON STREET
COLUMBUS, INDIANA 47201
DISTRIBUTOR
RAFFERTY CAPITAL MARKETS, INC.
550 MAMARONECK AVENUE
HARRISON, NEW YORK 10528
CUSTODIAN
FIRSTAR BANK MILWAUKEE, N.A.
THIRD FLOOR
615 E. MICHIGAN STREET
MILWAUKEE, WISCONSIN 53202
ADMINISTRATOR, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
FIRSTAR MUTUAL FUND SERVICES, LLC
THIRD FLOOR
615 E. MICHIGAN STREET
MILWAUKEE, WISCONSIN 53202
INDEPENDENT ACCOUNTANTS
KPMG LLP
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
LEGAL COUNSEL
GODFREY & KAHN, S.C.
780 N. WATER STREET
MILWAUKEE, WISCONSIN 53202
KIRR, MARBACH PARTNERS
VALUE FUND
[LOGO]
------------------------------------------
SEMI-ANNUAL REPORT
MARCH 31, 1999
