CENTRAL SECURITIES CORPORATION
INTERIM REPORT TO STOCKHOLDERS
AS OF MARCH 31, 1998
<PAGE>
TO THE STOCKHOLDERS OF
CENTRAL SECURITIES CORPORATION:
Financial data for the quarter ended March 31, 1998 and other pertinent
information prepared by management without audit by independent auditors are
submitted herewith.
Comparative market values of net assets are as follows:
<TABLE>
<CAPTION>
Mar. 31, 1998 Dec. 31, 1997 Mar. 31, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Net assets.......................................... $ 478,738,713 $ 434,423,053 $ 365,798,585
Convertible Preference Stock at liquidation
preference........................................ (9,039,575) (9,040,850) (9,046,450)
------------- ------------- -------------
Net assets applicable to Common Stock............... $ 469,699,138 $ 425,382,203 $ 356,752,135
============= ============= =============
Net asset coverage per share of Convertible
Preference Stock.................................. $ 1,324.01 $ 1,201.28 $ 1,010.89
Net assets per share of Common Stock................ 33.10 29.97 26.30
Pro forma net assets per share, reflecting
conversion of the Convertible Preference
Stock............................................. 31.02 28.14 24.83
Shares of Convertible Preference Stock
outstanding.................................. 361,583 361,634 361,858
Shares of Common Stock outstanding............. 14,191,918 14,191,745 13,562,224
</TABLE>
Comparative figures of income are as follows:
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
---- ----
<S> <C> <C>
Net investment income............................................... $1,304,034 $1,102,514
Number of times Preferred dividend earned...................... 7.2 6.1
Per share of Common Stock...................................... .08* .07*
Net realized gain on sale of investments............................ 11,039,373 12,211,844
Increase (decrease) in net unrealized appreciation of investments... 32,153,070 (4,019,665)
Increase in net assets resulting from operations.................... 44,496,477 9,294,693
</TABLE>
* Per-share data are based on the average number of Common shares outstanding
during the three-month period and are after recognition of the dividend
requirement on the Convertible Preference Stock.
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<PAGE>
PRINCIPAL PORTFOLIO CHANGES
January 1 to March 31, 1998
(Common Stock unless specified otherwise)
<TABLE>
<CAPTION>
Number of Shares
---------------------------------------
Held
March 31,
Purchased Sold 1998
--------- ---- ----
<S> <C> <C> <C>
American Management Systems, Inc. ........................... 50,000 975,000
The Bank of New York Company, Inc. .......................... 50,000 550,000
Capital One Financial Corporation............................ 25,000 300,000
Deltic Timber Corporation.................................... 5,000 70,000
Gallagher (Arthur J.) & Co. ................................. 50,000 --
Household International, Inc. ............................... 2,000 150,000
IXC Communications Corporation 7 1/4% Junior Conv. Pfd. Due
2007....................................................... 191* 10,743
Intel Corporation............................................ 30,000 510,000
Morrison Knudsen Corporation................................. 5,000 305,000
Nextel Communications, Inc. Class A.......................... 100,000 300,000
USG Corporation.............................................. 100,000 --
</TABLE>
* Received as a dividend.
The annual meeting of stockholders of the Corporation was held on March 11,
1998 with 90% and 97% of Common and Preference shares, respectively, being
represented. At the meeting the Board of Directors was reelected and the
selection of KPMG Peat Marwick LLP as auditors of the Corporation for the year
1998 was ratified. In addition, stockholders approved a proposal amending the
Certificate of Incorporation to increase the authorized number of shares of
capital stock and the proposals relating to the fundamental and non-fundamental
policies of the Corporation. Detailed information will be published in the June
30, 1998 Semi-Annual Report.
During the first three months of 1998 the Corporation did not repurchase
any of its Common or Preference Stock. However, it may from time to time
purchase Common or Preference Stock in such amounts and at such prices as the
Board of Directors may deem advisable in the best interests of stockholders.
It is with sadness that we note the passing of our former director Gardiner
S. Robinson. His wise counsel was of great value to the Corporation and its
stockholders for many years.
CENTRAL SECURITIES CORPORATION
WILMOT H. KIDD, PRESIDENT
375 Park Avenue
New York, NY 10152
April 22, 1998
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<PAGE>
BOARD OF DIRECTORS
DONALD G. CALDER DUDLEY D. JOHNSON
President President
G. L. Ohrstrom & Co., Inc. Young & Franklin Inc.
New York, NY Liverpool, NY
JAY R. INGLIS WILMOT H. KIDD
Executive Vice President President
Holt Corporation
New York, NY
C. CARTER WALKER, JR.
Washington, CT
OFFICERS
WILMOT H. KIDD, President
CHARLES N. EDGERTON, Vice President and Treasurer
KAREN E. RILEY, Secretary
OFFICE
375 Park Avenue, New York, NY 10152
212-688-3011
www.centralsecurities.com
CUSTODIAN
The Chase Manhattan Bank, N.A.
4 New York Plaza, New York, NY 10004
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York
P. O. Box 2500, Jersey City, NJ 07303-2500
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue, New York, NY 10154
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