SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14A-11(c) or ss. 240.14a-12
BDI Investment Corporation
- - - - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - - - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than Registrant)
<PAGE>
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: Common
Stock.
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
BDI INVESTMENT CORPORATION
Notice is hereby given that the Annual Meeting of Stockholders of BDI
Investment Corporation will be held at the offices of the Company, 990 Highland
Drive, Suite 100, Solana Beach, California on Friday, October 18, 1996 at 11:00
in the forenoon for the following
purposes:
1. To elect three (3) directors for the ensuing year.
2. To ratify the selection of Coopers & Lybrand certified
public accountants, as the Company's auditors for fiscal
1997.
3. To consider and act upon other matters which may
properly come before the meeting or any adjournment
thereof.
The Board of Directors has fixed the close of business on August 19,
1996 as the date of determining the stockholders of record entitled to receive
notice of, and to vote at, the Annual Meeting. Whether or not you expect to be
present you are requested to complete and sign the enclosed proxy and return it
in the stamped envelope provided. Stockholders who are present at the meeting
may revoke their proxies and vote in person.
By Order of the Board of Directors
BDI INVESTMENT CORPORATION
s/s Donald Brody
------------
Donald Brody
Secretary
Solana Beach, CALIFORNIA
August 28, 1996
<PAGE>
BDI INVESTMENT CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 18, 1996
The undersigned hereby appoints ARTHUR BRODY attorney and proxy, with
power of substitution, to vote for and on behalf of the undersigned at the
annual meeting of stockholders of the Company to be held on October 18, 1996 and
at any adjournment thereof, upon matters properly coming before the meeting, as
set forth in the Notice of Meeting and Proxy Statement, both of which have been
received by the undersigned. Without otherwise limiting the general
authorization given hereby, said attorney and proxy is instructed to vote as
follows:
(1) Election of the Board's nominees for Directors. (The Board of
Directors recommends a vote "FOR".)
[ ] FOR all nominees listed below (except as marked to the contrary
below).
[ ] WITHHOLD AUTHORITY to vote for nominees listed below.
Nominees: Arthur Brody, Edward L. Kane and Michael Stolper
INSTRUCTION: To withhold authority to vote for any one or more nominees, write
the name(s) of such nominee(s) in the space provided below:
(2) Ratification of the selection of Coopers & Lybrand, certified public
accounts, as the Company's independent auditors for fiscal 1997. (The
Board of Directors recommends a vote "FOR")
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on reverse side)
<PAGE>
(3) Upon all such other matters as may properly come before the meeting
and/or any adjournment thereof, as they in their discretion may
determine. The Board of Directors is not aware of any other matters.
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED ON THIS PROXY, THIS
PROXY WILL BE VOTED FOR ALL OF THE BOARD'S NOMINEES AND FOR THE RATIFICATION OF
COOPERS & LYBRAND AS THE COMPANY'S INDEPENDENT AUDITORS.
Please sign exactly as your name appears on your stock certificate.
Give full title if any attorney, executor, administrator, trustee, Guardian,
etc.
For each account in the name of two or more persons, each should sign,
or if one signs he/she should attach evidence of his/her authority.
Please be sure to sign and date this Proxy in the box below.
__________________________________
Date
__________________________________
Stockholder sign above
__________________________________
Co-holder (if any) sign above
__________________________________
Print Name:
Please sign this proxy and return it promptly whether or not you expect
to attend the meeting. You may nevertheless vote in person if you do attend.
<PAGE>
BDI INVESTMENT CORPORATION
PROXY STATEMENT
The following statement is furnished in connection with the
solicitation by the board of directors of BDI Investment Corporation, 990
Highland Drive, Suite 100, Solana Beach, CA 92075, a New Jersey corporation
(hereinafter called the "Company"), of proxies to be used at the Annual Meeting
of Stockholders of the Company to be held at the offices of the Company on
Friday, October 18, 1996 at 11:00 in the forenoon, and at all adjournments
thereof. The Company is registered pursuant to Section 8(b) of the Investment
Company Act of 1940 as a closed end diversified investment company. This Proxy
Statement and the enclosed form of proxy are being sent or given to stockholders
on or about August 28, 1996.
Proxies and Voting at the Meeting
The Board of Directors has fixed the close of business on August 19,
1996 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting and, accordingly, only
stockholders of record at the close of business on that date will be entitled to
receive notice of and to vote at said meeting. At the close of business on the
record date, there were outstanding and entitled to vote at the meeting
1,421,551 shares of the Company's Common Stock which were held of record by 199
stockholders. Each share is entitled to one vote. A majority of the shares of
Common Stock voting at the meeting is required for the approval of each matter
being submitted to a vote of stockholders.
A form of proxy is enclosed for use at the meeting if a stockholder is
unable to attend in person. The proxy may be revoked at any time before it is
exercised if a stockholder notifies the secretary of the meeting, in writing, of
a desire to revoke or by attending the meeting and voting in person. All shares
represented by valid proxies pursuant to this solicitation (and not revoked
before they are exercised) will be voted for the proposals described in this
Proxy Statement. In the event a stockholder specifies a different choice by
means of the proxy, that stockholder's shares will be voted in accordance with
such specification.
The entire cost of soliciting these proxies will be borne by the
Company. In following up the original solicitation of the proxies by mail, the
Company will make arrangements with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy material to the beneficial
owners of the stock and may reimburse them for their expense in so doing. If
necessary, the Company my also use its Secretary and his assistants to solicit
proxies from the stockholders, either personally or by telephone or special
letter.
<PAGE>
Principal Stockholders
The only person or entity that owns of record, or that is known by the
Company to own beneficially, more than five (5) percent of the outstanding
voting securities of the Company is Arsobro, L.P. Its holdings as of August 19,
1996 were as follows:
Shares of Common Stock Percent
Owned Beneficially of
Names and Address of Stockholders as of August 21, 1995 Class
- - - - - --------------------------------- --------------------- -----
Arsobro, L.P. 1,316,957 92.64%
990 Highland Drive
Solana Beach, California
- - - - - -------------
(1) Arthur Brody generally possesses the sole power to vote and to make
investment decisions with respect to all of the shares beneficially
owned by the Arsobro, L.P. By virtue of his beneficial ownership of
such shares, Mr. Brody is a "control person" of the Company.
DESIGNATION OF INVESTMENT
ADVISER, PAYMENT OF
BROKERAGE COMMISSIONS
All investment decisions for the Company are made by Arthur Brody. Mr.
Brody is the principal partner of the principal shareholder of the company and
is the company's chairman and chief executive officer. Mr. Brody does not
receive a salary for his services in selecting investments and managing the
Company's investment portfolio. The Company has not entered into in the past and
does not now intend during the coming fiscal year to enter into a contract with
any person or firm to serve as an investment adviser.
During the fiscal year ended June 29, 1996 the Company's investment
portfolio consisted largely of tax exempt notes and bonds. Tax exempt
obligations are purchased and sold by municipal securities dealers on a
principal basis. No separately identifiable commission is paid.
In effecting trades, the Company utilizes municipal securities dealers
with a national reputation and expertise in trading tax exempt securities. The
Company selects dealers who, in the judgement of management, are able to execute
orders on an expeditious basis and at the best obtainable price. The providing
of research or other services to the Company is not a factor affecting the
selection of a municipal securities dealer.
<PAGE>
PROPOSAL 1
ELECTION OF THREE DIRECTORS
The Bylaws of the Company provides that the number of directors shall
be not less than three and no more than eleven members. By resolution the Board
of Directors has fixed the number of directors at three. Therefore, three
directors are to be elected to serve a term of one year and thereafter until
their respective successors shall have been elected and shall have qualified.
Unless a stockholder either indicates "authority withheld" on his/her proxy or
indicates on his/her proxy that his/her shares should not be voted for certain
nominees, it is intended that the person named in the proxy will vote for all of
the nominees listed below. Discretionary authority is solicited to vote for the
election of a substitute for any of said nominees, who, for any reason presently
unknown, cannot be a candidate for election. Three of the Company's present
directors intend to stand for reelection. Each nominee has consented to being
named in the Proxy Statement and to serve if elected.
During the fiscal year ended June 29, 1996 the Board of Directors held
three regular meetings. All of the Company's directors were present for all
three meetings. The Board of Directors does not have standing audit, nominating
or compensation committees or committees performing similar functions.
Additionally, the board held a special telephonic board meeting on August 21,
1995 and a special board meeting June 26, 1996 at which all directors
participated by conference call.
The following table sets forth the names of the three nominees for
election to the Board of Directors, the principal occupation or employment of
each nominee during the last five years, the principal business of the
organization in which said occupation or employment is carried on, the age of
each nominee, the period during which each nominee has served as a director of
the Company, the expiration date of the term for which each nominee has been
nominated, and the approximate number of shares and percentage of the class of
Common Stock of the Company beneficially owned by each nominee as of August 19,
1996. All nominees are presently serving as directors of the Company.
<PAGE>
<TABLE>
<CAPTION>
Owned
Position and Office with Beneficially
Company and Other Director Expiration as of Percentage
Name Principal Occupation Age Since of Term 8/19/96 (1) of Class
- - - - - ---- -------------------- --- ----- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Arthur Brody Chairman of the Board of 76 1958 10/97 1,316,957 92.64
(2)* Directors, President and Chief (2)
Executive Officer of the
Company. Also serves as
Chairman and Chief Executive
Officer of Brodart Co.
(Library services and retail
book stores.)
Edward L. Kane Independent Consultant; 58 1990 10/97
(3) Chairman and CEO of Altis
Outpatient Services, Inc. 1993
thru 1/95; President of Craig
Corporation from 1988 to 1993;
President of Reading Company
from 1991 to 1993; Director
since 1989.
Michael Stolper President, Stolper and 50 1986 10/97
(3) (4) Company, Inc. (pension
consulting firm which is a
registered investment
advisor); member of Board of
Directors of Meridian Fund
(registered investment company),
1983 to present; Director and
shareholder of Aster Capital
Management (registered investment
advisor); Director of Janus Capital
(registered investment advisor);
trustee of Pasadena Growth Fund
(registered investment company)
and Shareholder of Roger Engemann
Management Company (registered
investment advisor).
</TABLE>
<PAGE>
*Arthur Brody and Sophie Brody may be deemed to be interested persons of the
Company as that term is defined in Section 2(a)(19) of the Investment Company
Act of 1940 by virtue of their owning in excess of five (5) percent of the
Company's Common Stock.
(1) As of August 19, 1996, the only officer and director of the Company
nominated herein who owned beneficially shares of the Company's Common
Stock was Arthur Brody. (1,316,957 shares in the aggregate representing
92.64% of the outstanding Common Stock).
(2) For a description of the nature of the beneficial ownership of Arthur
and Sophie Brody, see footnotes (1) to the "Principal Stockholders"
chart.
(3) Mr. Kane and Mr. Stolper are the only nominees to the Company's Board
of Directors who are directors of another company with a class of
securities registered pursuant to Section 12 of the Securities and
Exchange Act of 1934, or any company subject to Section 15(d) of that
Act or registered as an investment company under the Investment Company
Act of 1940.
(4) Although Stolper and Company, Inc., is a registered investment adviser,
Mr. Stolper does not provide investment advice to the Company other
than in his capacity as a board member and does not receive any fees or
compensation other than regular fees paid to all non-officer board
members.
<PAGE>
Remuneration of Officers and Directors
During the fiscal year ended June 29, 1996, no officer or director of
the Company received any direct or contingent form of remuneration other than
fees paid to all non-officer directors.
Non-officer directors presently receive an annual director's fee of
$5,000, plus $500 for each meeting of the Board which they attend.
The Company does not presently maintain any stock option plan, pension
plan or profit sharing plan for officers or employees.
PROPOSAL 2
SELECTION OF INDEPENDENT AUDITORS
Coopers & Lybrand, certified public accountants, has been selected and
approved by the Board of Directors to examine and report on the accounts of the
Company for the fiscal year ending June 28, 1997. That firm conducted the audit
of the Company's accounts for the 1995 fiscal year.
A representative of Coopers & Lybrand is not expected to be present at
the Annual Meeting of Stockholders on October 18, 1996. Therefore, a
representative will not have an opportunity to make a statement at the meeting,
and is not expected to be available to respond to questions from stockholders.
Section 32(b) of the Investment Company Act or 1940 requires that the
selection of accountants by the Company's Board of Directors be ratified at the
Annual Meeting of Stockholders. Accordingly, stockholders are being asked to
ratify the selection of Coopers & Lybrand as the Company's independent auditors
for the fiscal year ending June 28, 1997.
OTHER MATTERS
At the time this Proxy Statement was mailed to stockholders, the Board
of Directors was not aware that any matter other than those referred to in the
form of proxy would be presented for action at the meeting. If any other matters
properly come before the meeting, it is intended that the shares represented by
proxies will be voted with respect to those matters in accordance with the best
judgement of the persons voting them. The proxies will be effective at any
adjournment of the Annual Meeting. Provided a quorum is present in person or by
proxy, the Company does not intend to adjourn the meeting, even if an
insufficient number of affirmative votes is received with respect to any
proposal.
NOTICE REGARDING FILING OF SHAREHOLDER
PROPOSALS AT 1997 ANNUAL MEETING
As required by the Rules of the Securities and Exchange Commission, the
Company hereby notifies all stockholders that if a stockholder intends to
present a proposal at the 1997 Annual Meeting of Stockholders, the proposal must
be received by the Company in writing no later than April 18, 1997 in order for
such proposal to be eligible for inclusion in the Company's Proxy Statement and
form of proxy for next year's meeting.
<PAGE>
ANNUAL REPORT
A copy of the Company's annual report for the fiscal year ended June
29, 1996, including financial statements, is being sent along with this Proxy
Statement for review by the stockholders. The annual report is not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made. Additional copies of the Annual Report may be
obtained by writing to BDI Investment Corporation, 990 Highland Drive, Suite
100, Solana Beach, California 92075, Attention: Mr. Arthur Brody, Chairman.
By Order of the Board of Directors
/s/Donald Brody
------------
Donald Brody
Secretary
August 28, 1996
<PAGE>
BDI INVESTMENT CORPORATION
--------------------------
REPORT ON AUDITED FINANCIAL STATEMENTS
For the Year Ended June 29, 1996 and July 2, 1995
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
BDI Investment Corporation
We have audited the accompanying statement of assets and liabilities of BDI
Investment Corporation, including the schedule of portfolio investments as of
June 29, 1996, 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 five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements 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 of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmations of investments owned as of
June 29, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as wee 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 referred to
above present fairly, in all material respects, the financial position of BDI
Investment Corporation as of June 29, 1996, the results of its operations for
the year then ended, the changes in its net assets for each of the two years
then ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting procedures.
/s/Coopers & Lybrand L.L.P.
---------------------------
Coopers & Lybrand L.L.P.
San Diego, California
July 26, 1996
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
June 29, 1996
---------
ASSETS AND LIABLILITES
<S> <C>
Assets:
Investments, at value (cost: $13,499,000)(Notes 2 and 6) ... $13,236,000
Cash and cash equivalents .................................. 86,000
Interest receivable ........................................ 259,000
Other assets ............................................... 9,000
-----------
Total assets: ............................. 13,590,000
Liabilities:
Payable to affiliate ....................................... 11,000
Accrued expenses ........................................... 10,000
Dividend payable ........................................... 288,000
-----------
Total liabilities: ........................ 309,000
-----------
NET ASSETS
Net assets (Note 8) ............................................. $13,281,000
===========
Net asset value per share (based on 1,421,551
shares outstanding) .......................................... $ 9.34
===========
</TABLE>
The accompanying notes are an intregal part
of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended June 29, 1996
----------
<S> <C>
Imvestment income:
Tax-exempt interest .......................................... $ 792,000
Taxable dividends ............................................ 2,000
Tax-exempt dividends ......................................... 32,000
----------
826,000
Expenses:
Bookkeeping .................................................. 23,000
Professional fees ............................................ 14,000
Directors' fees .............................................. 13,000
Transfer agent fees .......................................... 3,000
Other operating .............................................. 5,000
----------
58,000
----------
Net investment income ....................... 768,000
----------
Realized and unrealized gains on investments:
Proceeds from sales and bond redemptions ..................... 1,711,000
Cost of investments sold and redeemed (identified cost basis) 1,636,000
----------
Net realized gain on investments transactions ................ 75,000
Net change in unrealized appreciation in investments ......... 150,000
----------
Net realized/unrealized gains on investments 225,000
----------
Change in net assets resulting from operations .................... $ 993,000
==========
</TABLE>
The accompanying notes are an intregal part
of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended June 29, 1996 and July 2, 1995
---------
1996 1995
---- ----
<S> <C> <C>
Increase (decrease) in net assets from operations:
Net investment income ............................... $ 768,000 $ 798,000
Net realized gain (loss) from investment transactions 75,000 (59,000)
Net change in unrealized appreciation on investments 150,000 227,000
------------ ------------
Change in net assets resulting
from operations .................... 993,000 966,000
Distributions to shareholders from net investment income . (707,000) (808,000)
------------ ------------
Change in net assets ............... 286,000 158,000
Net assets:
Beginning of period ................................. 12,995,000 12,837,000
------------ ------------
End of period (including undistributed
net investment income of $609,000 - 1996 and
$548,000 - 1995) ................................. $ 13,281,000 $ 12,995,000
============ ============
</TABLE>
The accompanying notes are an intregal part
of the financial statements.
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
---------
1. General
On January 10, 1984, BDI Investment Corporation (the "Company") filed a
Registration Statement on Form N-2 with the Securities and Exchange
Commission to register under the Investment Company Act of 1940 as a
closed-end diversified management investment company.
2. Summary of Significant Accounting Policies:
Cash Equivalents
Cash equivalents represent highly liquid money market funds.
Investments
The investment portfolio consists primarily of tax-exempt bonds which
are valued at the last bid price on the last business day of the
quarter.
Income Recognition
Security transactions are recorded on the trade date. Purchases of
securities are recorded at cost. Any premiums paid or discounts received
are recognized in the determiniation of realized gain or loss. The
company amortizes bond premiums over the life of the bond using the
effective yield method. Bond discounts are not amortized. Purchased
interest income is accrued and recorded based upon settlement dates.
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 abd liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and expense
during the reporting period. Actual results could differ from estimates.
Continued
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
---------
2. Summary of Significant Accounting Policies, Continued:
Fair Value of Financial Instruments
Statement of Financial Accounting Standards ("SFAS") No. 107,
"Disclosure About Fair Value of Financial Instruments", defines the fair
value of a financial instrument as the amount at which the instrument
could be exchanged in a current transaction between willing parties The
carrying value of cash, interest receivable, accounts payable, accrued
liabilities and payable to affiliate approxiamate fair value because of
the short maturity of those instruments.
Taxes
The Company has qualified as a Regulated Investment Company under
certain provisions of the Internal Revenue Code beginning with the
fiscal year starting July 1, 1984. Under such provisions, the Company
will not be subject to federal income tax on income which it receives
and distributes to its shareholders, provided that it distributes
substantially all such income. As a Regulated Investment Company, the
Company "passes through" to its shareholders character of the income
which it receives.
Distributions
It is the Company's policy to record distributions to shareholders as of
the earlier of the date they are declared by the Board of Directors or
the record date. All dividends declared during the current year
represent distributions from net investment income.
Distributions during 1996 and 1995 consisted of one $.0473, one $.20 and
one $.25; and two $.13, one $.25 and one $.0588 dividends, respectively.
Fiscal Year
The Company's fiscal year ends on the Saturday nearest the end of June.
The current year presented represents a 52 week year.
3. Concentration of Credit Risk:
The Company invests primarily in California state and municipal bonds,
most of which are guarenteed by the state or are privately insured. At
June 29,1996, the value of such bonds was approximately $12,262,000. In
addition, the Company's cash and cash equivalents consist of uninsured
deposits with a major broker-dealer.
Continued
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
---------
4. Directors' Fees:
The Company pays fees and provides expense reimbursement to members of
the Board of Directors who are not officers of the Company. Directors
fees for the year ended June 29, 1996 were $13,000.
5. Related Party Transaction:
The Company pays an affiliate for bookkeeping services. Fees for the
year ended June 29, 1996 were approximately $23,000.
Investment management services are provided to the Company by its chief
executive officer and principal shareholder. The Company's chief
executive officer does not charge fees for these services because he is
the majority shareholder.
Certain legal services are provided to the Company by the secretary of
the Company. Fees paid for these services aggregated $800 during 1996.
6. Purchases and Sales of Securities:
For the year ending June 29, 1996, the aggregate cost of security
purchases was $1,842,000, of which $168,000 consisted of U.S. Government
securities and the aggregate proceeds from sales or redemptions of
securities was $1,711,000, of which $170,000 consisted of U.S.
Government securities.
No fees are charged by the securities custodian, a customary practice
when securities transactions occur with that institution.
7. Income Taxes:
For the year ended June 29, 1996, no income tax expense was incurred due
to the Company's qualification as a Regulated Investment Company and
the distribution of substantially all its income for the current fiscal
year to its shareholders (see Note 2). At June 29, 1996, the Company has
capital loss carryovers totaling $101,000 which expire in the years 2000
to 2003.
Continued
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
---------
8. Net Assets:
As of June 29, 1996, net assets consist of:
<TABLE>
<CAPTION>
<S> <C>
Preferred stock, without par value: authorized,
500,000 shares; issued, none ................. $ --
Common stock, par value $.10 per share: authorized,
4,500,000 shares; issued, 1,425,151 .......... 143,000
Less treasury stock at cost, 3,600 shares . (22,000)
Additional paid-in capital ........................ 3,673,000
Accumulated undistributed net investment income ... 609,000
Accumulated undistributed net realized losses ..... (101,000)
Unrealized depreciation on investments ............ (263,000)
Retained earnings at June 30, 1984 ................ 9,242,000
------------
$ 13,281,000
============
</TABLE>
Retained earnings at June 30, 1984 represents cumulative undistributed
earnings of the Company prior to its qualification as a regulated
investment company (see Note 1).
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio)
----------------------------------------------
California
<S> <C> <C> <C>
$34,000 Anaheim, California; Electric Revenue $35,000 $36,000
Bond; 6.700%, October 1, 1998
103,000 Anaheim, California; Water Revenue; 100,000 101,000
6.000%, July 1, 2003
100,000 Associated Bay Area Government; 100,000 99,000
Certificate of Participation, 5.625%;
October 1, 1998
100,000 Associated Bay Area Government; 100,000 100,000
Certificate of Participation, 5.900%;
October 1, 1999
253,000 Associated Bay Area Government; 255,000 252,000
Certificate of Participation, 6.100%;
October 1, 2000
200,000 Bakersfield, California; Public 200,000 202,000
Financing Authority Revenue;
Series A; 5.800%, September 15, 2006
124,000 Banning, California; Community 130,000 134,000
Redevelopment Agency; 7.000%;
March 1, 2020
263,000 Buena Park, California; Community 265,000 265,000
Redevelopment Agency; 6.300%;
September 1, 1999
258,000 Buena Park, California; Community 260,000 260,000
Redevelopment Agency; 6.300%;
March 1, 1999
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$67,000 California Educational Facilities $65,000 $67,000
Authority Revenue Refunding,
Pepperdine University; 6.750%;
January 15, 2006
100,000 California Health Facilities Financing 100,000 103,000
Authority Revenue, Refunding AIDS
Healthcare Foundation; 5.900%;
September 1, 2002
202,000 California Health Facilities Financing 200,000 206,000
Authority Revenue, Refunding AIDS
Healthcare Foundation; 6.000%;
September 1, 2003
53,000 California Health Facilities Financing 50,000 54,000
Authority Revenue, Refunding Kaiser
Permanente; Series A; 7.000%;
October 1, 2008
25,000 California Housing Finance Agency 25,000 26,000
Revenue, Home Mortgage; Series C;
6.250%; February 1, 2006
192,000 California; Special District 190,000 192,000
Financial Authority; Certificate of
Participation; 8.000%; July 1, 1998
149,000 California; State Public Works Board; 150,000 150,000
Lease; RFDG - Long Beach and
San Luis Obispo Series B; 5.600%;
April 1, 2006
101,000 California; State Public Works Board; 100,000 105,000
Series 1991 A; Lease Revenue Bonds,
Department of Correction; 6.400%;
September 1, 2008
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$175,000 California State Department of $175,000 $177,000
Veteran Co; 7.000%; April 1, 2016
417,000 California; Statewide Community 425,000 406,000
Development, Certificate of Participation,
San Gabriel Valley; 5.375%, September 1, 2007
100,000 Compton, California; Community 100,000 109,000
Redevelopment Agency; RFTG T/A
Walnut Industrial Series B;
7.700%, August 1, 1999
325,000 Compton, California; Community 325,000 362,000
Redevelopment Agency; RFTG T/A
Walnut Industrial Series B;
7.800%, August 8, 2001
100,000 Contra Costa County, California; 100,000 105,000
CTFS PTRN; 6.200%, August 1, 2008
172,000 Contra Costa County, California; 165,000 172,000
CTFS PTRN; Merrithew Memorial
Hospital replacement Project;
6.400%, November 1, 2005
243,000 East Municipal Water & Sewer 250,000 240,000
District of California; 5.375%;
July 1, 2013
349,000 El Dorado Hills, California; 340,000 360,000
Community Service Center; 7.900%;
June 1, 2008
337,000 Emeryville, California 340,000 337,000
Public Financing Authority; Revenue
Bond; 5.700%; September 1, 2007
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$51,000 Los Angeles County, California; $50,000 $52,000
Multi-Family Housing Revenue;
FHA; 7.300%; July 1, 2011
192,000 Metro Water Dist R.G.O.; 225,000 211,000
5.250%, March 1, 2022
500,000 Metro Water District; Waterworks 500,000 490,000
Revenue; 5.400%; July 1, 2010
48,000 Metro Water District; Waterworks 50,000 47,000
Revenue; 5.500%; July 1, 2019
588,000 Metro Water District; Waterworks 600,000 576,000
Revenue; 5.500%; July 1, 2013
341,000 Metro Water District; Waterworks 350,000 305,000
Revenue; 5.000%; July 1, 2020
150,000 Midpeninsula Regional Open Space 150,000 164,000
District; 6.950%; September 1, 2008
24,000 Montclair, California; 7.750% 25,000 27,000
October 1, 2011
70,000 Morgan Hill, California; 70,000 71,000
Redevelopment Agency Tax
Allocation; 5.250%; March 1, 1998
111,000 Northern California Power 115,000 106,000
Agency; Public Power Revenue;
5.000%, July 1, 2009
125,000 Oakland, California; YMCA; 125,000 133,000
7.400%, June 1, 2010
43,000 Palmdale, California; Single 45,000 49,000
Family Mortgage Revenue;
7.000%, September 1, 2011
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$600,000 Placer Co., California Water Agency; $600,000 $594,000
5.500%, July 1, 2010
152,000 Pleasanton, California; Certificate 145,000 154,000
Participation CTFS Partnership; 6.700%;
October 1, 2006
36,000 Redding, California; School District; 40,000 35,000
5.000%, March 1, 2019
235,000 Riverside County, California; Asset 235,000 236,000
Leasehold Revenue Hospital;
6.000%, June 1, 2007
567,000 Riverside City, California; 600,000 543,000
Electric RFDG Revenue; 5.000%;
October 1, 2013
52,000 Sacramento, California; New Public 50,000 52,000
Housing Authority; 6.000%, December 1, 2007
190,000 San Clemente, California; LMTD 190,000 197,000
Obligation Wastewater Treatment
Plant; 7.900%; September 1, 1999
158,000 San Francisco, California; City and 155,000 161,000
County General Obligation; 6.100%;
June 15, 2007
98,000 San Francisco, California; Port 100,000 100,000
Commission; 5.500%; July 1, 2004
50,000 San Francisco, California; New Public 50,000 48,000
Housing Authority; 5.125%;
August 1, 2010
200,000 San Joaquin, California; General 200,000 196,000
Hospital Revenue; 5.9000%;
September 1, 2003
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$100,000 San Luis Obisbo, California; $100,000 $100,000
Water Treatment Plant;
5.375%; June 1, 2008
105,000 San Luis Obisbo, California; 105,000 104,000
Water Treatment Plant;
5.500%, June 1; 2009
581,000 Santa Maria, California; 600,000 534,000
Redevelopment; 5.000%;
June 1, 2016
85,000 Santa Margarita, California; 85,000 87,000
Water Districts #3 and #4;
7.500%; November 1, 2011
193,000 Sierra Unified School District, 200,000 194,000
California; CTFS PARTN Financing;
6.160%; March 1, 2004
99,000 Sonoma, California; Community 100,000 102,000
Redevelopment Agency; Tax Allocation
7.900%; August 1, 2014
246,000 Tahoe Forest Hospital District, 250,000 255,000
California; Insured Health Facility
Revenue; 5.850%; August 1, 2004
593,000 Tehachapi School District; 600,000 555,000
6.300%; August 1, 2021
102,000 Temecula Valley Unified School 100,000 97,000
District Financing Project; California;
5.900%; September 1, 2004
80,000 Thousand Oaks, Califonria; 80,000 82,000
Redevelopment Agency; Single
Family Residential Mortgage
Revenue; 7.900%; January 1, 2016
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF PORTFOLIO INVESTMENTS, CONTINUED
June 29, 1996
---------
Value at
Cost Issuer and Title of Issue Par Value Year End
---- ------------------------- --------- --------
Tax Exempt Bonds (98% of Investment Portfolio), Continued
---------------------------------------------------------
<S> <C> <C> <C>
$129,000 University of California, Revenue $130,000 $127,000
Bond, Series B; 5.875%;
September 1, 2008
574,000 Vallejo, California; Mortgage 575,000 541,000
Revenue; 5.650%; May 1, 2027
335,000 Westminister City, California; 335,000 318,000
Certificate pf Participation - Public
Improvement Project; 5.750%;
June 1, 2009
---------- ---------- ----------
12,345,000 12,475,000 12,263,000
---------- ---------- ----------
Puerto Rico
344,000 Puerto Rico; HFC SFM Mortgage 335,000 353,000
Revenue; 7.500%; April 1, 2022
314,000 Puerto Rico; Housing and Financial 305,000 319,000
Corporation; GNMA; 7.650%;
October 15, 2022
----------- ----------- ----------
13,003,000 $13,115,000 12,935,000
----------- =========== ----------
Tax Exempt Funds (2% of Investment Portfolio)
496,000 Dean Witter Coldwell Banker Tax 24,875 301,000
Exempt Mortgage Fund
----------- -----------
$13,499,000 $13,236,000
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
FINANCIAL HIGHLIGHTS
For the Years Ended June 29, 1996, July 2,
1995, July 3, 1994,
June 27, 1993 and June 29, 1992
Selected data for each share of common stock follows:
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Investment income $0.58 $0.61 $0.64 $0.72 $0.77
Expenses 0.04 0.05 0.05 0.05 0.08
----- ----- ----- ----- ----
Net investment income 0.54 0.56 0.59 0.67 0.69
Distributions from net investment
income (0.50) (0.57) (0.59) (0.69) (0.73)
Net realized and unrealized gain (loss)
on investments 0.16 0.12 (0.64) 0.15 0.06
----- ----- ------ ----- ----
Net increase (decrease) in
net asset value 0.20 0.11 (0.64) 0.13 0.02
Net asset value:
Beginning of period 9.14 9.03 9.67 9.54 9.52
----- ----- ----- ----- ----
End of period $9.34 $9.14 $9.03 $9.67 $9.54
----- ----- ----- ----- -----
Total return 7.66% 7.53% -0.52% 8.60% 7.88%
===== ===== ====== ===== =====
Ratio of expenses to
average net assests 0.44% 0.50% 0.55% 0.48% 0.82%
===== ===== ===== ===== =====
Ratio of net investment
income to average net assets 5.76% 6.29% 6.15% 6.97% 7.27%
===== ===== ===== ===== =====
Market price at end of period * * * * *
Portfolio turnover 12.92% 15.47% 24.36% 35.72% 19.43%
====== ====== ====== ====== ======
Number of shares outstanding at the
end of each period 1,421,551 1,421,551 1,421,551 1,421,551 1,421,551
========= ========= ========= ========= =========
</TABLE>
* Due to the limited market that currently
exists for the Company's common stock, there
is is no established market price.
<PAGE>
BDI INVESTMENT CORPORATION
CORPORATE DATA
---------
Chairman of the Board of Directors, Arthur Brody
Chief Executive Officer, President
and Treasurer
Director Edward Kane
Director Michael Stolper
Secretary Donald Brody
Counsel Lowenstein, Sandler, Kohl,
Fisher and Boylan
Auditors Coopers & Lybrand L.L.P.
Transfer agent Registrar & Transfer Company
Custodian Dean Witter Reynolds, Inc.
