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BDI INVESTMENT CORPORATION
-----------
For the Six Months Ending
December 31, 1998
<PAGE>
BDI INVESTMENT CORPORATION
C O N T E N T S
Statement of Assets and Liabilities for the
Six Months Ended December 31, 1998
and Fiscal Year Ended June 27, 1998.
Statement of Operations for the Six
Months Ended December 31, 1998
and December 31, 1997.
Statement of Changes in Net Assets for the
Six Months Ended December 31, 1998
and December 31, 1997.
Notes to Financial Statements
Schedule of Securities
Supplementary Information
Corporate Data
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF ASSETS AND LIABILITIES
(Unaudited)
Six Months Twelve Months
Ended Ended
December 31, June 27,
1998 1998
------------ ------------
<S> <C> <C>
ASSETS:
Investments in Securities at Market
Value (Note B) (Cost of $13,428,000) $ 14,199,000 $ 14,153,000
Cash and Cash Equivalents 156,000 112,000
Interest Receivable 250,000 252,000
Prepaid Expenses 1,000 0
------------ ------------
Total Assets: $ 14,606,000 $ 14,517,000
LIABILITIES:
Accounts Payable 10,000 8,000
Accrued Expenses 13,000 13,000
Dividend Payable 384,000 343,000
------------ ------------
Total Liabilities: $ 407,000 $ 364,000
------------ ------------
Net Assets: $ 14,199,000 $ 14,153,000
============ ============
NET ASSETS:
Preferred Stock, Without Par Value: $ 0 $ 0
Authorized, 500,000 Shares Issued None
Common Stock, Par Value $.10 Per Share
Authorized, 4,500,000 Shares
Issued, 1,425,151 $ 143,000 $ 143,000
Additional Paid-In Capital 3,673,000 3,673,000
Retained Earnings 10,405,000 10,359,000
Less-Treasury Stock at Cost, 3,600 Shares (22,000) (22,000)
------------ ------------
Net Assets: $ 14,199,000 $ 14,153,000
============ ============
Net Assets per Common Share Outstanding: $ 9.99 $ 9.96
============ ============
</TABLE>
See Notes To Financial Statements
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Six Months Ended
-------------------------
December 31 December 31
1998 1997
<S> <C> <C>
INVESTMENT INCOME: (Note B)
Interest $ 392,000 $ 393,000
Dean Witter Tax Exempt 0 18,000
Tax-Exempt Dividends 3,000 2,000
--------- ---------
$ 395,000 $ 413,000
EXPENSES:
Accounting and Bookkeeping 16,000 17,000
Legal 1,000 2,000
Directors' Fees 12,000 12,000
Other Operating 6,000 7,000
--------- ---------
35,000 38,000
--------- ---------
Net Investment Income $ 360,000 $ 375,000
--------- ---------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Proceeds from Sales
and redemptions 311,000 507,000
Cost of Investments Sold
and Redeemed 335,000 505,000
--------- ---------
Net Realized Gain/(Loss) (24,000) 2,000
Net Unrealized Gain/(Loss) 92,000 327,000
--------- ---------
Net Realized and Unrealized
Gain/(Loss) on Investments 68,000 329,000
--------- ---------
NET REALIZED AND UNREALIZED GAIN $ 428,000 $ 704,000
========= =========
</TABLE>
See Note to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
Six Months Ended Six Months Ended
December 31 December 31
1998 1997
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income $ 360,000 $ 375,000
Net Realized Gain/(Loss)
on Investments (24,000) 2,000
Net Unrealized Gain/(Loss) on
Investments 92,000 327,000
------------ ------------
Increase in Net Assets Derived
from Investment Activities 428,000 704,000
From Distributions to Shareholders:
One bi-annual dividend of $.25 and one
extraordinary $.0185 per share on
1,421,551 Shares Outstanding (382,000) (430,000)
------------ ------------
NET INCREASE/(DECREASE) IN ASSETS 46,000 274,000
NET ASSETS:
Beginning of Period 14,153,000 13,692,000
(including undistributed net
investment income)
------------ ------------
End of Period 14,199,000 13,966,000
============ ============
</TABLE>
See Note to Financial Statements
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
For Six Months Ended December 31, 1998
A. Consolidated Financial Statement:
The statement of assets and liabilities
including the schedule of tax-exempt securities as of
December 31, 1998, and the related statements of
operations, changes in new assets, and supplementary
information, for the six months ending December 31, 1998,
have been by the Company, without audit. In the opinion of
management, all adjustments (which include prepared only
normal reocurring adjustments) necessary to present fairly
the financial position at December 31, 1998 and all periods
presented have been made.
B. General:
On January 10, 1984, BDI Investment Corporation
(the "Company") filed a Registration Statement on Form N-2
with the Securities and Exchange Commission in order to
register under the Investment Company Act of 1940 as a
closed-end diversified management investment company.
C. Summary of Significant Accounting Policies:
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. Interest income is accrued and recorded based upon
settlement dates.
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 may "pass through" to its
shareholders the character of the income which it receives.
<PAGE>
BDI INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
For Six Months Ended December 31, 1998
Distributions:
It is the Company's policy to record
distributions to shareholders as of the date they are
declared by the Board of Directors.
Fiscal Year:
The Company's fiscal year ends on the Saturday
nearest the end of June.
D. Directors' Fees:
The Company pays fees and provides expense
reimbursement to members of the Board of Directors who are
not officers of the Company.
E. Purchases and Sales of Securities:
For the six months ending Dectember 31, 1998,
the aggregate cost of tax-exempt bond purchases were
$289,000 and the aggregate proceeds from sales or
redemptions of tax-exempt bonds were $275,000.
F. Income Taxes:
For the six months ending December 31, 1998, 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 B).
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 100,000 Anaheim CA Water Rev $ 103,000 $ 109,000
5.500%, 7/1/03
100,000 Assoc Bay Area Govt 100,000 101,000
5.900%, 10/1/99
255,000 Assoc Bay Area Govt 253,000 263,000
6.100%, 10/1/00
200,000 Bakersfield CA Pub Fing 200,000 210,000
5.800%, 9/15/06
110,000 Banning, California 105,000 116,000
7.000%, 3/1/20
40,000 Berkeley Unified School Dist 40,000 40,000
5.000%, 8/1/17
265,000 Buena Park Redev 263,000 270,000
6.300%, 9/1/99
260,000 Buena Park Redev 258,000 260,000
6.300%, 3/1/99
135,000 CA Edl Rev, Harvey Mudd College 139,000 153,000
6.050%, 12/1/08
100,000 CA HFF Healthcare 100,000 107,000
5.900%, 9/1/02
200,000 CA HFF Healthcare 202,000 217,000
6.000%, 9/1/03
25,000 CA Health Facilities 26,000 26,000
7.700%, 10/1/03
100,000 CA Health, Stanford 99,000 102,000
5.000%, 11/15/13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 50,000 CA Health, Kaiser $ 54,000 $ 53,000
7.000%, 10/1/08
175,000 CA Hsg Fin Agy Rev 175,000 178,000
5.200%, 2/1/13
25,000 CA Hsg Fin Agy Rev 25,000 27,000
6.25%, 2/1/06
100,000 California State GO's 100,000 104,000
5.000%, 7/1/12
125,000 CA State Pub Works 123,000 131,000
5.000%, 10/1/10
100,000 CA State Pub Works 99,000 99,000
4.700%, 10/1/14
150,000 CA State Pub Works 149,000 163,000
5.600%, 4/1/06
100,000 CA State Pub Works 101,000 110,000
6.400%,9/1/08
425,000 California Stwd San Gabriel 417,000 450,000
5.375%, 9/1/07
100,000 Carlsbad Ca Impt Bd 100,000 103,000
5.450%, 9/2/10
100,000 Carlsbad Ca Impt Bd 100,000 103,000
5.350%, 9/2/09
100,000 Compton Ca Com Redev 100,000 103,000
7.700%, 8/1/99
325,000 Compton, California Cmnty 325,000 340,000
7.800%, 8/8/01
100,000 Contra Costa County CA 100,000 111,000
6.200%, 8/1/08
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 165,000 Contra Costa Hosp COP $ 172,000 $ 185,000
6.400%, 11/1/05
35,000 Corona SFMR 35,000 37,000
5.500%, 11/1/10
100,000 Duarte Redev Agy 100,000 109,000
5.950%, 9/1/04
250,000 East Muni Wtr & Swr 243,000 261,000
5.375%, 7/1/13
340,000 Emeryville Public Fing 337,000 365,000
5.700%, 9/1/07
75,000 Escondido MF Hsg 75,000 79,000
5.250%, 1/1/05
75,000 Escondido MF Hsg 77,000 79,000
5.400%, 7/1/07
50,000 Los Angeles MFHR FHA 51,000 51,000
7.300%, 7/20/11
250,000 Lynwood Lease Rev 269,000 275,000
6.000%, 9/1/12
225,000 Metro Water Dist G.O. 192,000 228,000
5.250%, 3/1/22
500,000 Metro Water Dist Rev 500,000 527,000
5.400%,7/1/10
50,000 Metro Water Dist Rev 48,000 52,000
5.500%, 7/1/19
600,000 Metro Water Dist Rev 588,000 630,000
5.500%, 7/1/13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 350,000 Metro Water Dist Rev $ 341,000 $ 346,000
5.000%, 7/1/20
150,000 Midpeninsula Reg 150,000 172,000
6.950%, 9/1/08
20,000 Montclair, CA Redv Agy Res 19,000 24,000
7.750%, 10/1/11
100,000 Montebello Cmnty Redev 99,000 105,000
5.150%, 9/1/12
125,000 Oakland, California Redev. 125,000 134,000
7.400%, 6/1/10
45,000 Palmdale, CA SFMR 43,000 52,000
7.000%, 9/1/11
600,000 Placer Co Cal Wtr 600,000 636,000
5.500%, 7/1/10
145,000 Pleasanton CA CTFS 153,000 157,000
6.700%, 10/1/06
280,000 Puerto Rico HFC 290,000 293,000
7.500%, 4/1/22
155,000 Puerto Rico HFC SF GNMA 161,000 164,000
7.650%, 10/15/22
40,000 Redding CA Sch SR 36,000 40,000
5.000%, 3/1/19
235,000 Riverside Co CA Asset 235,000 254,000
6.000%, 6/1/04
600,000 Riverside Electric Rev 567,000 603,000
5.000%, 10/1/13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 105,000 Rossmoor Cmnty Svs $ 106,000 $ 108,000
5.800%, 9/2/05
50,000 Sacramento New Pub Hsg 52,000 52,000
6.000%, 12/1/07
185,000 San Clemente, CA Ltd Obl 185,000 191,000
7.900%, 9/1/99
155,000 San Francisco GO 159,000 164,000
6.100%, 6/15/07
100,000 San Francisco Port Comm 98,000 106,000
5.500%, 7/1/04
50,000 San Francisco Pub Hsg 50,000 51,000
5.125%, 8/1/10
200,000 San Joaquin Cop Hosp 200,000 214,000
5.900%, 9/1/03
100,000 San Luis Obisbo Wtr 100,000 104,000
5.375%, 6/1/08
105,000 San Luis Obisbo Wtr 105,000 110,000
5.500%, 6/1/09
150,000 Santa Clara Hsg Auth 150,000 150,000
4.500%, 6/1/16
600,000 Santa Maria Redev 581,000 600,000
5.000%, 6/1/16
200,000 Sierra Uni Sch Dist 193,000 208,000
5.650%, 3/1/04
90,000 Sonoma, CA Cmnty Redev 89,000 91,000
7.900%, 8/1/14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
INVESTMENT PORTFOLIO
SCHEDULE OF SECURITIES
December 31, 1998
MARKET
PAR VALUE ISSUER COST VALUE
--------- ------ ---- -----
<S> <C> <C> <C> <C>
$ 250,000 Tahoe Forest Hosp $ 246,000 $ 271,000
5.850%, 8/1/04
600,000 Tehatchapi School Dist 592,000 648,000
6.300%, 8/1/21
100,000 Temecula Valley CA Uni Sch 102,000 108,000
5.900%, 9/1/04
20,000 Thousand Oaks, CA RDV 20,000 20,000
7.900%, 1/1/16
130,000 University of CA Rev's 129,000 142,000
5.875%, 9/1/08
575,000 Vallejo CA Rev FHA 574,000 589,000
5.650%, 5/1/27
335,000 Westminister City COP 335,000 365,000
5.750%, 6/1/09
----------- ----------- -----------
$13,525,000 $13,428,000 $14,199,000
=========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BDI INVESTMENT CORPORATION
SUPPLEMENTARY INFORMATION
SIX MONTHS ENDED DECEMBER 31, 1998, DECEMBER 31, 1997,
DECEMBER 31, 1996, DECEMBER 31, 1995 AND DECEMBER 31, 1994
selected date for each share of common stock follows:
1998 1997 1996 1995 1994
-------- ------ ----- ----- -----
<S> <C> <C> <C> <C> <C>
Investment Income $ 0.28 0.29 0.29 0.29 0.28
Expenses 0.02 0.03 0.02 0.02 0.02
-------- ------ ----- ----- -----
Net Investment Income 0.26 0.26 0.27 0.27 0.26
Dividends from net investment
income (0.27) (0.30) (0.21) (0.30) (0.32)
-------- ------ ----- ----- -----
Distributions in excess of net
investment income (0.01) (0.04) 0.06 (0.03) (0.06)
Net realized gain (loss) and
increase/(decrease) in
unrealized appreciation 0.04 0.23 0.25 0.46 (0.55)
-------- ------ ----- ----- -----
Net increase (decrease) in
net asset value 0.03 0.19 0.31 0.43 (0.61)
-------- ------ ----- ----- -----
Beginning of period 9.96 9.63 9.34 9.14 9.03
-------- ------ ----- ----- -----
End of period 9.99 9.82 9.65 9.57 8.42
======== ====== ===== ===== =====
Ratio of expense to average
net assests 0.25% 0.27% 0.25% 0.22% 0.30%
======== ====== ===== ===== =====
Ratio of net investment
income to average net assets 2.54% 2.71% 2.80% 2.85% 2.94%
======== ====== ===== ===== =====
Ratio of total investment
operating expenses to total
investment income 8.86% 9.20% 8.27% 7.25% 9.25%
======== ====== ===== ===== =====
Market price at end of period * * * * *
Portfolio Turnover 1.95% 3.62% 0.97% 8.14% 6.63%
======== ====== ===== ===== =====
Number of shares outstanding at the
end of each period 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
Arthur Brody Chairman of the Board of Directors,
Chief Executive Officer, President
and Treasurer
Edward Kane Director
Michael Stolper Director
Donald Brody Secretary
COUNSEL: Lowenstein, Sandler, Kohl,
Fisher and Boylan
AUDITORS: Lavine, Lofgren, Morris and
Engelberg
TRANSFER AGENT: Registrar & Transfer Co.
CUSTODIAN: Dean Witter
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-3-1999
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 13,428
<INVESTMENTS-AT-VALUE> 14,199
<RECEIVABLES> 250
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 156
<TOTAL-ASSETS> 14,606
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 407
<TOTAL-LIABILITIES> 407
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,673
<SHARES-COMMON-STOCK> 1,421,551
<SHARES-COMMON-PRIOR> 1,421,551
<ACCUMULATED-NII-CURRENT> 514
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (92)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 695
<NET-ASSETS> 14,199
<DIVIDEND-INCOME> 3
<INTEREST-INCOME> 392
<OTHER-INCOME> 0
<EXPENSES-NET> 35
<NET-INVESTMENT-INCOME> 360
<REALIZED-GAINS-CURRENT> (24)
<APPREC-INCREASE-CURRENT> 92
<NET-CHANGE-FROM-OPS> 428
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 382
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 46
<ACCUMULATED-NII-PRIOR> 514
<ACCUMULATED-GAINS-PRIOR> (92)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35
<AVERAGE-NET-ASSETS> 14,160
<PER-SHARE-NAV-BEGIN> 9.96
<PER-SHARE-NII> .26
<PER-SHARE-GAIN-APPREC> .04
<PER-SHARE-DIVIDEND> .27
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.93
<EXPENSE-RATIO> 0.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
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