February 20, 1999
Report to Fellow Shareholders:
The double-digit returns of 16.16%, 12.37% and 13.13%
in 1995, 1996 and 1997, respectively, were not maintained in
1998. Nicholas Income Fund's total return last year was
0.47%, which means we experienced a capital loss. After a
bad third quarter, which was down 4.00%, the Fund recovered
2.13% in the fourth quarter to eke out a miniscule gain for
the year. Performance figures for periods ended December
31, 1998, can be seen in the chart below:
<TABLE>
<CAPTION>
Average Annual Total Return*
------------------------------------------------
1 Year 3 Years 5 Years 10 Years 15 Years
------ ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Nicholas Income Fund, Inc.
(Distributions Reinvested)........... 0.47% 8.50% 8.17% 8.86% 9.81%
Morningstar High Yield Bond Fund
Category (Distributions Reinvested).. (0.72)% 8.05% 7.27% 9.27% 9.98%
Lehman Brothers Intermediate High Yield
Corporate Bond Index................. 1.50% 8.45% 8.36% 10.38% 11.20%
Consumer Price Index (Inflation)...... 1.61% 2.36% 3.14% 3.28%
Ending value of $10,000 invested in
Nicholas Income Fund, Inc.
(Distributions Reinvested)........... $10,047 $12,772 $14,810 $23,362 $40,701
</TABLE>
At December 31, 1998, total net assets of Nicholas
Income Fund were $239 million and cash and equivalents were
3.58%. During 1998 the Fund performed somewhat better than
other funds in the high-yield corporate bond category. The
average member of this group was in the red and some funds
posted losses greater than 5%. In addition, shareholders
should know that Nicholas Income Fund's bond portfolio is
entirely domestic, and that we do not buy bonds rated below
B. Management also wants to remind shareholders that the
Fund provided a 30-day SEC yield of 9.49% as of December 31,
1998.
Finally, it should be noted that the Nicholas Income
Fund has generally provided annual returns well above the
inflation rate. For example, over the last 10 years, the
real annual rate of return (annual return less inflation
rate) has been 5.72%.
Thank you for your interest in the Nicholas Income Fund.
Sincerely,
/S/ Albert O. Nicholas
- ----------------------
Albert O. Nicholas
President
*Total returns are historical and include change in share
price and reinvestment of dividend and capital gain
distributions. Past performance is no guarantee of future
results. Principal value, and yield, will fluctuate so an
investment, when redeemed, may be worth more or less than
original cost.
Financial Highlights
(For a share outstanding throughout each period)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $3.69 $3.53 $3.42 $3.21 $3.52 $3.38 $3.34 $3.01 $3.44 $3.68
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income... .32 .30 .30 .30 .30 .30 .31 .35 .39 .38
Net gains (losses) on
securities (realized
and unrealized)........ (.30) .15 .11 .21 (.31) .13 .03 .33 (.43) (.24)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total from investment
operations........... .02 .45 .41 .51 (.01) .43 .34 .68 (.04) .14
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS*:
Dividends (from net
investment income)..... (.32) (.29) (.30) (.30) (.30) (.29) (.30) (.35) (.39) (.38)
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF
PERIOD................. $3.39 $3.69 $3.53 $3.42 $3.21 $3.52 $3.38 $3.34 $3.01 $3.44
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL RETURN.............. 0.47% 13.13% 12.37% 16.16% (0.17)% 12.95% 10.33% 23.05% (1.03)% 3.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(millions)............... $239.4 $254.2 $185.7 $162.1 $140.9 $158.3 $119.1 $79.9 $60.6 $75.4
Ratio of expenses to
average net assets....... .48% .50% .55% .58% .59% .62% .69% .76% .77% .81%
Ratio of net investment
income to average net
assets................... 8.69% 8.29% 8.55% 8.72% 8.75% 8.42% 9.23% 10.70% 11.74% 10.46%
Portfolio turnover rate... 49.3% 32.2% 33.2% 29.2% 29.2% 39.1% 56.1% 27.5% 40.4% 39.6%
* The Fund distributed no capital gains for the time periods listed.
</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.
Top Ten Issuers
December 31, 1998 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percentage
Name of Net Assets
- ---- -------------
<S> <C>
Stater Brothers Holdings, Inc................ 4.12%
Greyhound Lines, Inc......................... 3.73%
Advanced Micro Devices, Inc.................. 3.56%
Playtex Family Products Corp. ............... 3.46%
Fisher Scientific International Inc.......... 3.34%
Paging Network, Inc.......................... 3.28%
Nine West Group, Inc......................... 3.17%
Comcast Corporation.......................... 3.11%
Brown Group, Inc............................. 3.09%
Canadian Forest Oil Ltd...................... 3.08%
------
Total of top ten issuers................. 33.94%
------
------
</TABLE>
Schedule of Investments
December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quoted
Shares or Market
Principal Value
Amount (Note A)
- --------- ----------
<S> <C> <C>
NON-CONVERTIBLE BONDS - 81.87%
Consumer Products and Services - 23.39%
$ 7,000,000 Brown Group, Inc.
9.50%, 10/15/06 $ 7,393,750
7,875,000 Greyhound Lines, Inc.
11.50%, 4/15/07 8,938,125
5,000,000 KinderCare Learning Centers, Inc.
9.50%, 2/15/09 4,975,000
8,000,000 Nine West Group, Inc.
9.00%, 8/15/07 7,600,000
3,600,000 Outboard Marine Corp.
8.625%, 3/15/01 3,702,686
6,200,000 Paging Network, Inc.
10.125%, 8/1/07 5,983,000
2,000,000 Paging Network, Inc.
8.875%, 2/1/06 1,860,000
8,000,000 Playtex Family Products Corp.
9.00%, 12/15/03 8,280,000
8,000,000 Revlon Consumer Products Corporation
8.625%, 2/1/08 7,280,000
-------------
56,012,561
-------------
Diversified Products and Services - 2.17%
4,150,000 Sequa Corp.
8.75%, 12/15/01 4,191,500
1,000,000 Sequa Corp.
9.625%, 10/15/99 1,015,300
-------------
5,206,800
-------------
Energy - 5.73%
7,850,000 Canadian Forest Oil Ltd.
8.75%, 9/15/07 7,379,000
2,000,000 Triton Energy Limited
8.75%, 4/15/02 1,780,000
5,000,000 Triton Energy Limited
9.25%, 4/15/05 4,550,000
-------------
13,709,000
-------------
Finance and Insurance - 0.61%
1,000,000 Litchfield Financial Corp.
10.00%, 11/1/04 1,000,000
475,000 Litchfield Financial Corp.
8.875%, 11/1/03 460,750
-------------
1,460,750
-------------
Food and Beverages - 5.72%
3,000,000 Chiquita Brands International, Inc.
10.25%, 11/1/06 3,112,500
3,000,000 Chiquita Brands International, Inc.
9.125%, 3/1/04 3,000,000
1,000,000 Chiquita Brands International, Inc.
9.625%, 1/15/04 1,017,500
4,000,000 Fleming Companies, Inc.
10.50%, 12/1/04 3,780,000
3,000,000 Fleming Companies, Inc.
10.625%, 7/31/07 2,797,500
-------------
13,707,500
-------------
Food Retailer - 6.33%
5,000,000 Perkins Family Restaurants, L.P.
10.125%, 12/15/07 5,300,000
6,070,000 Stater Brothers Holdings, Inc.
11.00%, 3/1/01 5,994,125
4,000,000 Stater Brothers Holdings, Inc.
9.00%, 7/1/04 3,860,000
-------------
15,154,125
-------------
Health Care Products - 3.34%
8,000,000 Fisher Scientific International Inc.
9.00%, 2/1/08 8,000,000
-------------
Health Care Services - 6.50%
5,000,000 Genesis Health Ventures, Inc.
9.25%, 10/1/06 4,700,000
8,000,000 Magellan Health Services, Inc.
9.00%, 2/15/08 7,040,000
4,000,000 Quorum Health Group, Inc.
8.75%, 11/1/05 3,820,000
-------------
15,560,000
-------------
Industrial Products and Services - 8.33%
7,750,000 CEX Holdings, Inc.
9.625%, 6/1/08 6,897,500
8,000,000 Doman Industries Ltd.
9.25%, 11/15/07 5,920,000
8,000,000 Parker Drilling Company
9.75%, 11/15/06 7,120,000
-------------
19,937,500
-------------
Media, Communications and
Entertainment - 16.19%
2,000,000 Adelphia Communications Corp.
11.875%, 9/15/04 2,150,000
7,000,000 American Media, Inc.
11.625%, 11/15/04 7,140,000
5,000,000 Cinemark USA, Inc.
9.625%, 8/1/08 5,225,000
2,000,000 Comcast Cellular Communications, Inc.
9.50%, 5/1/07 2,120,000
5,000,000 Comcast Corporation
9.375%, 5/15/05 5,337,500
4,000,000 CSC Holdings, Inc.
9.875%, 5/15/06 4,360,000
5,000,000 Hollinger International, Inc.
9.25%, 2/1/06 5,275,000
2,000,000 Young Broadcasting Inc.
10.125%, 2/15/05 2,105,000
5,000,000 Young Broadcasting Inc.
9.00%, 1/15/06 5,050,000
-------------
38,762,500
-------------
Technology - 3.56%
8,000,000 Advanced Micro Devices, Inc.
11.00%, 8/1/03 8,520,000
-------------
TOTAL NON-CONVERTIBLE BONDS
(cost $202,847,344) 196,030,736
-------------
CONVERTIBLE BONDS - 4.51%
7,531,000 Emeritus Corporation
6.25%, 1/1/06 5,638,836
1,900,000 Thermo Optek Corporation
5.00%, 10/15/00 1,812,125
3,348,000 ThermoQuest Corporation
5.00%, 8/15/00 3,335,445
-------------
TOTAL CONVERTIBLE BONDS
(cost $11,062,555) 10,786,406
-------------
STOCKS - 10.04%
265,000 Glacier Water Trust I
Preferred, 9.0625%, 1/31/28 5,101,250
5,000 Homestead Savings Convertible
Preferred, Series A, $2.95 * 5,000
100,000 Healthcare Realty Trust Inc. 2,231,250
260,000 National Health Investors, Inc. 6,418,750
611,828 National Health Realty, Inc. 6,959,544
110,000 Omega Healthcare Investors, Inc. 3,320,625
-------------
TOTAL STOCKS
(cost $26,560,767) 24,036,419
-------------
SHORT-TERM INVESTMENTS - 1.74%
Commercial Paper - 1.67%
4,000,000 Fiserv, Inc.
5.20%, due January 4, 1999 4,000,000
-------------
Variable Rate Demand Notes - 0.07%
127,831 General Mills, Inc.
5.23%, due January 4, 1999 127,831
26,638 Sara Lee Corporation
5.23%, due January 4, 1999 26,638
-------------
154,469
-------------
TOTAL SHORT-TERM INVESTMENTS
(cost $4,152,158) 4,154,469
-------------
TOTAL INVESTMENTS
(cost $244,622,824) 235,008,030
------------
CASH AND RECEIVABLES,
NET OF LIABILITIES - 1.84% 4,411,825
-------------
TOTAL NET ASSETS
(Basis of percentages
disclosed above) 239,419,855
-------------
-------------
</TABLE>
* This security has been classified as non-income producing.
The accompanying notes to financial statements
are an integral part of this schedule.
Statement of Assets and Liabilities
December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in securities at market value (cost $244,622,824) (Note A)............ $235,008,030
Interest and dividends receivable................................................. 6,004,230
------------
Total assets............................................................ 241,012,260
------------
LIABILITIES:
Payables-
Dividends payable............................................................ 1,426,437
Management fee (Note C)...................................................... 82,527
Other payables and accrued expenses.......................................... 83,441
------------
Total liabilities....................................................... 1,592,405
------------
Total net assets........................................................ $239,419,855
------------
------------
NET ASSETS CONSIST OF:
Fund shares issued and outstanding................................................ $252,360,857
Net unrealized depreciation on investments (Note B)............................... (9,617,105)
Accumulated net realized losses on investments.................................... (4,067,693)
Accumulated undistributed net investment income................................... 743,796
------------
$239,419,855
------------
------------
NET ASSET VALUE PER SHARE ($.01 par value, 100,000,000 shares authorized),
offering price and redemption price ($239,419,855/70,591,700
shares outstanding)............................................................... $3.39
-----
-----
The accompanying notes to financial statements
are an integral part of this statement.
</TABLE>
Statement of Operations
For the Year Ended December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INCOME: (Note A)
Interest...................................... $20,820,295
Dividends..................................... 2,588,125
Other......................................... 169,618
-----------
Total income............................. 23,578,038
-----------
EXPENSES:
Management fee (Note C)....................... 926,354
Transfer agent fees........................... 135,545
Registration fees............................. 42,844
Legal fees.................................... 26,631
Postage and mailing fees...................... 21,845
Audit and tax consulting fees................. 14,900
Custodian fees................................ 12,462
Printing fees................................. 12,315
Directors' fees............................... 12,000
Insurance fees................................ 8,500
Pricing service fees.......................... 5,858
Telephone fees................................ 4,569
Other operating expenses...................... 1,636
-----------
Total expenses........................... 1,225,459
-----------
Net investment income.................... 22,352,579
-----------
NET REALIZED GAINS ON INVESTMENTS.................. 1,478,353
NET DECREASE IN UNREALIZED APPRECIATION
ON INVESTMENTS................................... (23,042,691)
-----------
Net loss on investments.................. (21,564,338)
-----------
Net increase in net assets
resulting from operations................ $ 788,241
-----------
-----------
</TABLE>
The accompanying notes to financial statements
are an integral part of this statement.
Statements of Changes in Net Assets
For the years ended December 31, 1998 and 1997
- -------------------------------------------------------------------------------
<TABLE>
1998 1997
------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................... $ 22,352,579 $ 18,216,084
Net realized gain on investments......................... 1,478,353 1,781,466
Net increase (decrease) in unrealized appreciation on investments (23,042,691) 7,724,030
------------ -------------
Net increase in net assets resulting from operations....... 788,241 27,721,580
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.3155 and $0.2903 per share, respectively)................. (22,331,451) (18,102,607)
------------ -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (18,725,675 and 21,707,323
shares, respectively)......................................... 67,790,328 79,140,388
Net asset value of shares issued in distributions from net
investment income (4,867,962 and 3,765,603 shares,
respectively)................................................. 16,989,161 13,707,776
Cost of shares redeemed (21,806,858 and 9,318,378
shares, respectively)......................................... (78,022,412) (33,929,068)
------------ ------------
Increase in net assets derived from
capital share transactions............................... 6,757,077 58,919,096
------------ ------------
Total increase (decrease) in net assets.................... (14,786,133) 68,538,069
------------ ------------
NET ASSETS:
Beginning of period (including undistributed net
investment income of $722,668 and $609,191, respectively).... 254,205,988 185,667,919
------------ ------------
End of period (including undistributed net
investment income of $743,796 and $722,668, respectively)..... $239,419,855 $254,205,988
------------ ------------
------------ ------------
</TABLE>
The accompanying notes to financial statements.
are an integral part of these statements.
Notes to Financial Statements
December 31, 1998
- -----------------------------------------------------------------------------
Note A -- Summary of significant accounting policies:
Nicholas Income Fund, Inc. (the "Fund") is an open-end diversified
investment company. The primary objective of the Fund is high current income
consistent with the preservation and conservation of capital values.
Securities valuation -- Market values of most debt securities are based
on valuations provided by a pricing service, which determines valuations for
normal, institutional-size trading units of securities using market
information, transactions for comparable securities and various other
relationships between securities which are generally recognized by
institutional traders. Equity securities, are generally valued at the last
sale price reported by the principal security exchange on which the issue is
traded or if no sale is reported, the latest bid price is used. U.S.
Treasury Bills and commercial paper, if any, are stated at market value with
the resultant difference between market value and original purchase price
being recorded as interest income. Variable rate demand notes are valued at
cost which approximates market value.
Securities transactions and related investment income -- Securities
transactions are generally recorded no later than the first business day
after the trade date (date the order to buy or sell is executed). Gains or
losses on sales of investments are calculated on an identified cost basis.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Distributions to shareholders are recorded on
the ex-dividend date.
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 estimates.
Note B -- Income taxes:
No provision has been made for federal income taxes or excise taxes
because it is the policy of the Fund to distribute all taxable net income and
qualify as a "regulated investment company" under the provisions in the
Internal Revenue Code applicable to regulated investment companies. The Fund
is not subject to State of Wisconsin income taxes. As of December 31, 1998,
the Fund has approximately $4,068,000 of net capital losses which may be used
to offset capital gains in future years. Capital loss carryovers of
approximately $482,000 will expire in 1999, $2,081,000 in 2000, and
$1,505,000 in 2003. Approximately $1,888,000 of capital loss carry overs
generated in previous years expired on December 31, 1998.
At December 31, 1998, the net unrealized depreciation based on cost was
as follows (the Fund's book and Federal income tax cost of investment assets
were substantially identical):
Aggregate gross unrealized appreciation for all
investments in which there was an excess of
value over tax cost......................... $ 3,978,561
Aggregate gross unrealized depreciation for all
investments in which there was an excess of
tax cost over value......................... (13,595,666)
-----------
Net unrealized depreciation............ $(9,617,105)
-----------
-----------
Note C -- Expenses:
The Fund has an investment advisory agreement with Nicholas Company,
Inc. (with whom certain officers and directors of the Fund are affiliated) to
serve as investment adviser and manager. The management fee of Nicholas
Company, Inc. is payable at an annual rate of 1/2 of 1% of the average daily
net assets of the Fund up to and including $50,000,000. On average daily net
assets over $50,000,000 up to and including $100,000,000, the management fee
is reduced to an annual rate of 4/10 of 1% and on average daily net assets
over $100,000,000, the fee is further reduced to an annual rate of 3/10 of
1%. Nicholas Company, Inc. has agreed to reduce such management fee by any
operating expenses (other than management fee) incurred by the Fund in excess
of 1/2 of 1% of average daily net assets.
At December 31, 1998, liabilities of the Fund included $82,527 payable to
the investment adviser.
Note D -- Investment portfolio transactions:
For the year ended December 31, 1998, the cost of purchases and the
proceeds from sales of investments, other than short-term obligations,
aggregated $140,593,383 and $117,783,368, respectively.
Independent Auditors' Report
To the Board of Directors and Shareholders
of Nicholas Income Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Nicholas Income Fund, Inc. (the "Fund"), including the schedule of
investments, as of December 31, 1998, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended and the financial highlights for each
of the ten years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned at December 31, 1998 by correspondence with the custodian.
An audit includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of Nicholas Income
Fund, Inc. as of December 31, 1998, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the ten years
in the period then ended in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
January 25, 1999
Historical Record (unaudited)
- ------------------------------------------------------------------------------
<TABLE>
Net Investment Growth of
Net Income An Initial
Asset Value Distributions $10,000
Per Share Per Share Investment**
----------- ------------- ------------
<S> <C> <C> <C>
November 21, 1977 *.......... $5.10 $ -- $10,000
December 31, 1987............ 3.64 0.4660 22,560
December 31, 1988............ 3.68 0.3710 25,164
December 31, 1989............ 3.44 0.3830 26,155
December 31, 1990............ 3.01 0.3970 25,886
December 31, 1991............ 3.34 0.3460 31,853
December 31, 1992............ 3.38 0.2955 35,143
December 31, 1993............ 3.52 0.2890 39,695
December 31, 1994............ 3.21 0.3010 39,626
December 31, 1995............ 3.42 0.2950 46,029
December 31, 1996............ 3.53 0.2960 51,721
December 31, 1997............ 3.69 0.2903 58,514
December 31, 1998............ 3.39 0.3155 58,788
* Initial date under Nicholas Company, Inc. management.
** Assuming reinvestment of distributions.
The Fund distributed no capital gains for the time periods listed.
</TABLE>
NICHOLAS FAMILY OF FUNDS
Services Offered
- ---------------------------------------------------------------------
* IRAs
*Traditional *Simple *Educational
*Roth *SEP
*Self-employed Master Retirement Plan
*Money Purchase *Profit Sharing
*Automatic Investment Plan
*Direct Deposite of Distributions
*Systematic Withdrawl Plan
*Monthly Automatic Exchange between Funds
*Telephone Redemption (Regular accounts only)
*Telephone Exchange
*24-hour Automated Account Information (800-544-6547)
Please call a shareholder representative for further information on
the above services or with any other questions you may have regarding
the Nicholas Family of Funds.
OFFICERS AND DIRECTORS
ALBERT O. NICHOLAS
President and Director
FREDERICK F. HANSEN
Director
JAY H. ROBERTSON
Director
MELVIN L. SCHULTZ
Director
DAVID L. JOHNSON
Executive Vice President
THOMAS J. SAEGER
Executive Vice President and Secretary
JEFFREY T. MAY
Senior Vice President and Treasurer
DAVID O. NICHOLAS
Senior Vice President
CANDACE L. LESAK
Vice President
KATHLEEN A. EVANS
Assistant Vice President
Investment Adviser
NICHOLAS COMPANY, INC.
Milwaukee, Wisconsin
414-272-6133 or 800-227-5987
Transfer Agent
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547
Custodian
FIRSTAR BANK MILWAUKEE, N.A.
Milwaukee, Wisconsin
Counsel
MICHAEL, BEST & FRIEDRICH LLP
Milwaukee, Wisconsin
Auditors
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
This report is submitted for the information of shareholders of
the Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective
prospectus.
ANNUAL REPORT
NICHOLAS INCOME FUND, INC.
700 North Water Street
Milwaukee, Wisconsin 53202
www.nicholasfunds.com
December 31, 1998
