<PAGE>
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- ----------------------------------
BERGSTROM
CAPITAL
CORPORATION
- ----------------------------------
1996 FIRST QUARTER REPORT
Listed: American Stock Exchange (Ticker
symbol: BEM)
Transfer Agent, Registrar and Custodian: State Street Bank and Trust
Company, Boston, Massachusetts
Independent Auditors: Deloitte & Touche LLP, Boston, Massachusetts
Legal Counsel: Howard, Rice, Nemerovski, Canady, Falk & Rabkin PC, San
Francisco, California
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<PAGE>
BERGSTROM CAPITAL CORPORATION
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505 Madison Street, Suite 220
Seattle, Washington 98104
May 13, 1996
Dear Fellow Stockholders:
During the first quarter of 1996 the Company's net assets increased from
$149,357,224 to $153,932,699 which is an increase of $4,575,475. This increase
in net assets is after the repurchase of stock during the first quarter of
1996 for $642,340. The increase in net assets, before deducting the repurchase
of stock, was $5,217,815 which was composed of net investment income of
$148,689, realized gain from the sale of investments of $6,751,972, and a
decrease in unrealized appreciation of $1,682,846.
The per share net asset value (based on the number of shares outstanding at
the end of each period) increased from $128.35 on December 31, 1995 to $132.91
on March 31, 1996, an increase of 3.6%. The Company's performance for the
first quarter of 1996 was affected by the decrease in the value of the
Company's investment in the securities of Amgen, Inc. Excluding the value of
the Company's investment in the securities of Amgen, Inc., the per share net
asset value increased 5.4% during the first quarter of 1996. During the same
period the Dow Jones Industrial Average, adjusted for dividends, increased
9.6% and the Standard & Poor's 500 Stock Average, adjusted for dividends,
increased 5.4%. The per share net asset value on Friday, May 10, 1996 was
$133.41.
The value of the Company's investment in securities of Amgen, Inc. has
increased since the date of acquisition relative to the Company's other
assets, causing the Amgen, Inc. securities to account for 21.3% of the
Company's total assets on March 31, 1996. The investment of a substantial
percentage of the Company's assets in the securities of a single issuer or
industry exposes the Company to a greater risk of loss resulting from
unfavorable price movements or market conditions relating to such issuer or
industry. To help reduce this risk, the Company has been selling shares of
Amgen, Inc. since the third quarter of 1992. On September 30, 1992 the Company
owned 1,240,000 shares of Amgen, Inc. (as adjusted for the 2 for 1 stock split
on August 16, 1995). On March 31, 1996 the Company owned 565,000 shares of
Amgen, Inc. This is a reduction of 54.4% since September 30, 1992.
On January 24, 1994 the Company's Board of Directors authorized the Company
to purchase, on the American Stock Exchange, up to 62,500 shares of its
capital stock at market prices not in excess of the then current net asset
value per share. During the first quarter of 1996 the Company purchased 5,500
shares of its capital stock under this authorization. As of March 31, 1996 the
Company had 8,200 shares remaining under this authorization.
On February 26, 1996 the Company's Board of Directors authorized the Company
to purchase, on the American Stock Exchange, up to 50,000 shares of its
capital stock at market prices not in excess of the then current net asset
value per share. This authorization is in addition to the 1994 authorization
discussed above. Purchases under the 1994 authorization will be completed
before purchases under the 1996 authorization commence.
During the first quarter of 1996 the Company had total interest and dividend
income of $438,143 as compared to $599,095 for the same period in 1995 for a
decrease of $160,952. During the first quarter of 1996 operating expenses were
$289,454 which is a $7,118 decrease from $296,572 for the first quarter of
1995. The resulting net investment income of $148,689 for the first quarter of
1996 is a decrease from $302,523 for the first quarter of 1995. This resulted
in a decrease to $.13 per share versus $.25 per share.
During the first quarter the following changes were made in the Company's
portfolio of common stocks and convertible securities.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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SHARES PURCHASED OR ACQUIRED
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<TABLE>
<C> <S>
10,000 Adams Express Company
11,000 Astra AB-Sponsored ADR A
14,300 Automatic Data Processing (1)
4,200 Centocor, Inc.
50,000 Convertible Holdings, Inc.
Capital Shares
20,000 Federal Natl Mtg Assn (2)
3,320 Fritz Company, Inc.
16,000 Frontier Corp.
9,000 Grace (W.R.) & Co.
4,000 Harman Intl Inds, Inc. New
9,000 Hasbro, Inc.
15,000 Hercules, Inc.
23,500 Host Marriott Corp.
4,800 Host Marriott Services Corp. (3)
1,300 Johnson & Johnson
11,120 Lilly (Eli) & Co.
19,062 Mattel, Inc. (4)
12,000 Merck & Co., Inc.
8,500 Olsten, Inc. (5)
4,000 Pepsico, Inc.
24,000 Pharmacia & Upjohn, Inc.
4,184 RCM Growth Equity Fund, Inc.
7,000 Schlumberger, Ltd.
2,000 Smithkline Beecham Units - ADR
10,000 Sundstrand Corp. (6)
<CAPTION>
SHARES SOLD
- ------------------------------------------
10,000 Air Products & Chemicals, Inc.
10,000 Alco Standard Corp.
7,000 American Express Co.
28,000 American Greetings Corp, Class A
95,000 Amgen, Inc.
15,600 Automatic Data Processing, Inc.
(1)
12,000 Barnes & Noble, Inc.
18,000 Block (H&R), Inc.
4,200 Centocor, Inc.
22,000 Ericsson L M Tel Co ADR
60,000 General American Investors
Company
8,000 Federated Department Stores,
Inc.
7,000 Grace (W.R.) & Co.
28,000 GTE Corp.
4,800 Host Marriott Services Corp. (3)
4,000 Intel Corp.
25,312 Mattel, Inc. (4)
28,000 Nokia Corp Sponsored ADR
24,000 Officemax
5,000 Royal Dutch Petroleum Company
10,000 SBC Communications, Inc.
8,000 SGS Thomson Microelectronics
</TABLE>
(1) Received 14,300 shares as a 2 for 1 stock split and then sold 15,600
shares.
(2) Received 15,000 shares as a 4 for 1 stock split and then purchased 5,000
shares.
(3) Received 4,800 shares as a stock dividend from Marriott Services Corp. and
then sold 4,800 shares. Cost basis in the amount of $35,269 was
transferred from Marriott Services Corp. to Host Marriott Services Corp.
(4) Received 19,062 shares as a 5 for 4 split and then sold 25,312 shares.
(5) Received as a 3 for 2 stock split.
(6) Received as a 2 for 1 stock split.
At a special meeting of stockholders held on May 13, 1996, the Company's
stockholders approved a new subadvisory agreement between Bergstrom Advisers,
Inc., the Company's investment adviser, and RCM Capital Management, L.L.C.
("RCM"). The new subadvisory agreement will be effective upon the closing of
the acquisition of the Company's current subadviser, RCM Capital Management, a
California Limited Partnership, by Dresdner Bank AG. The closing is expected
to occur by June 30, 1996. After the acquisition, Bergstrom Advisers, Inc.
will continue as the Company's investment adviser, and RCM and Frank A.
Branson, Inc. will be the Company's subadvisers. RCM has informed the Company
that RCM's day-to-day operations will not be affected by the acquisition and
that the individuals who are primarily responsible for the management of the
RCM portion of the Company's portfolio will remain the same.
The Company does not have a dividend reinvestment program. The Company has
considered this over the years and has determined that the cost of such a
program would not be commensurate with the benefit. The Company's policy of
retaining all or a portion of the net long-term capital gains in certain years
accomplishes some of the same goals as would a dividend reinvestment program.
The Company's shares of capital stock are traded on the American Stock
Exchange and are
<PAGE>
BERGSTROM CAPITAL CORPORATION
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identified by the stock ticker symbol BEM. The net asset value per share as of
Friday's close of business is published each Saturday in Barrons and each
Monday in the Wall Street Journal, the New York Times and certain other
publications under "Closed-End Funds."
Your Company welcomes questions or comments from stockholders. If you wish
to communicate with the Company's transfer agent, State Street Bank and Trust
Company, the address is P.O. Box 8200, Boston, Massachusetts 02266-8200 and
the telephone number is 1-800-426-5523.
Yours very truly,
/s/ William L. McQueen
William L. McQueen
President
<PAGE>
BERGSTROM CAPITAL CORPORATION
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STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (see accompanying schedule):
Short-term investments (cost $9,287,582) $ 9,287,582
Common stocks (cost $71,315,056) 144,893,997
------------
TOTAL INVESTMENTS (cost $80,602,638) 154,181,579
Cash 5,700
Interest and dividends receivable 167,845
Other assets 88,130
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TOTAL ASSETS 154,443,254
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LIABILITIES:
Advisory fee payable 79,685
Payable for securities purchased 415,163
Other accrued expenses 15,707
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TOTAL LIABILITIES 510,555
------------
NET ASSETS applicable to 1,158,200 outstanding shares of capi-
tal stock equivalent to $132.91 per share on March 31, 1996 $153,932,699
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1996 1995
<S> <C> <C>
OPERATIONS:
Net investment income $ 148,689 $ 302,523
Realized gain (loss) on investments 6,751,972 (85,092)
Increase (decrease) in unrealized appreciation (1,682,846) 11,090,020
------------- -------------
Net increase in net assets resulting from oper-
ations 5,217,815 11,307,451
COST OF 5,500 SHARES OF BERGSTROM CAPITAL CORPO-
RATION STOCK PURCHASED (642,340)
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TOTAL INCREASE IN NET ASSETS 4,575,475 11,307,451
NET ASSETS, BEGINNING OF PERIOD 149,357,224 114,680,269
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NET ASSETS, END OF PERIOD $ 153,932,699 $ 125,987,720
============= =============
</TABLE>
See also Notes to Financial Statements in the Company's 1995 Annual Report to
Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 (Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 92,091
Dividends 346,052
-----------
TOTAL INCOME 438,143
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EXPENSES:
Advisory fees 220,950
Legal fees 4,951
Auditing fees 23,200
Stockholders' meeting and reports 3,776
Transfer agent fees and expenses 10,643
Custodian fees 6,155
Directors' fees and expenses 12,538
Fee for shares listed on American Stock Exchange 1,750
State and other taxes 1,545
Other 3,946
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TOTAL EXPENSES 289,454
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NET INVESTMENT INCOME ($.13 PER SHARE) 148,689
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain on investments (excluding short-
term investments):
Proceeds from sales $ 16,617,984
Cost of securities sold 9,866,012
------------
Realized gain on investments 6,751,972
Unrealized appreciation of investments:
Beginning of period 75,261,787
End of period 73,578,941
------------
Decrease in unrealized appreciation (1,682,846)
-----------
NET GAIN ON INVESTMENTS ($4.37 PER SHARE) 5,069,126
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS $ 5,217,815
===========
</TABLE>
See also Notes to Financial Statements in the Company's 1995 Annual Report to
Stockholders.
<PAGE>
BERGSTROM CAPITAL CORPORATION
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SCHEDULE OF INVESTMENTS
March 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT COST VALUE
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS (6.0%):
$ 2,314,000 State Street Bank and Trust Company,
4.50% Euro-Dollar Deposit due 04/01/96 $ 2,314,000 $ 2,314,000
4,000,000 General Motors Acceptance Corp., 5.46%
Note due 04/17/96 3,990,293 3,990,293
3,000,000 General Motors Acceptance Corp., 5.42%
Note due 05/08/96 2,983,289 2,983,289
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$ 9,314,000 TOTAL--SHORT-TERM INVESTMENTS 9,287,582 9,287,582
=========== ----------- ------------
COMMON STOCKS (94.0%):
ADVERTISING (0.8%):
27,500 Interpublic Group Of Companies, Inc. 851,484 1,299,375
----------- ------------
AEROSPACE AND DEFENSE (1.9%):
42,000 Loral Corp. 826,773 2,058,000
20,000 Sundstrand Corp. 505,395 815,000
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1,332,168 2,873,000
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BANKS (2.2%):
23,000 Comerica, Inc. 744,004 960,250
30,000 Morgan (J.P.) & Co., Inc. 2,024,651 2,490,000
----------- ------------
2,768,655 3,450,250
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BEVERAGES (2.8%):
40,000 Coca-Cola Co. 107,495 3,305,000
15,000 Pepsico, Inc. 807,640 948,750
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915,135 4,253,750
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BIOTECHNOLOGY (21.3%):
565,000 Amgen, Inc. (B) 2,951,841 32,840,625
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BUSINESS SERVICES (6.3%):
185,000 ADT Limited (B) 1,809,792 3,260,625
18,000 Danka Business Systems PLC Sponsored
ADR 491,529 760,500
135,000 Huntingdon International Holdings plc-
ADR 741,765 826,875
131,322 Manpower, Inc. 2,250,241 4,070,976
25,500 Olsten Corp. 521,215 822,375
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5,814,542 9,741,351
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CHEMICALS (1.3%):
8,000 Grace (W.R.) & Co. 569,709 626,000
15,000 Hercules, Inc. 934,403 930,000
24,250 RPM, Inc. Ohio 334,003 375,875
----------- ------------
1,838,115 1,931,875
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</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT
COMMON STOCKS-CONTINUED COST VALUE
<C> <S> <C> <C>
COMMUNICATION SYSTEMS (2.5%):
15,000 Air Touch Communications, Inc. (B) $ 447,081 $ 466,875
16,000 Frontier Corp. 474,200 504,000
15,000 MCI Communications Corp. 350,775 453,750
35,000 SBC Communications, Inc. 320,874 1,841,875
17,000 Vodafone Group PLC Sponsored ADR 614,140 637,500
----------- ------------
2,207,070 3,904,000
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COMPUTERS AND INFORMATION (1.7%):
14,000 Hewlett Packard Co. 1,074,189 1,316,000
12,000 International Business Machines 1,087,868 1,333,500
----------- ------------
2,162,057 2,649,500
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CONSUMER DURABLES (0.8%):
33,400 Harman International Industries, Inc.
New 1,241,814 1,252,500
----------- ------------
CONSUMER SERVICES (1.4%):
60,000 Block (H&R), Inc. 194,038 2,167,500
----------- ------------
COSMETICS/PERSONAL CARE (0.7%):
12,000 Avon Products, Inc. 719,256 1,029,000
----------- ------------
DRUGS AND HEALTH SUPPLIES (5.2%):
19,000 Allergan, Inc. 616,711 700,625
11,000 Astra AB Sponsored ADR A 461,594 510,125
18,000 Boston Scientific Corp. (B) 325,080 828,000
13,000 Forest Labs, Inc. (B) 557,561 633,750
19,001 Guident Corp. 446,633 1,028,429
6,300 Johnson & Johnson 547,203 581,175
22,000 Merck & Co., Inc. 1,288,942 1,369,500
36,000 Pharmacia & Upjohn, Inc. (B) 1,377,690 1,435,500
18,000 Smithkline Beecham Units-ADR 678,452 927,000
----------- ------------
6,299,866 8,014,104
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ELECTRICAL COMPONENTS (2.1%):
11,000 Emerson Electric Co. 307,904 888,250
17,000 Grainger (W.W.), Inc. 686,425 1,141,125
18,900 Hubbell, Inc. Class B 995,572 1,226,138
69,000 Micro-Metrics, Inc. (A, B, C) 227,700 25,000
----------- ------------
2,217,601 3,280,513
----------- ------------
ELECTRONICS/NEW TECHNOLOGY (.8%):
3,500 Cabletron Systems, Inc. (B) 266,770 231,875
17,000 Ericsson L M Tel Co ADR 301,406 363,375
11,000 Intel Corp. 628,776 625,625
----------- ------------
1,196,952 1,220,875
----------- ------------
</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT
COMMON STOCKS-CONTINUED COST VALUE
<C> <S> <C> <C>
FINANCIAL SERVICES, DIVERSIFIED
(0.5%):
25,000 Federal National Mortgage Association $ 645,849 $ 796,875
----------- ------------
FOOD/FOOD PROCESSING (1.3%):
9,000 Dreyers Grand Ice Cream, Inc. 281,117 303,750
55,000 Eskimo Pie Corporation 981,063 1,045,000
18,000 Sara Lee Corporation 476,469 587,250
----------- ------------
1,738,649 1,936,000
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HARDWARE AND TOOLS (0.3%):
10,000 Snap-On, Inc. 421,687 467,500
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HOUSEHOLD PRODUCTS (DURABLE) (0.7%):
41,000 Newell Co. 864,047 1,096,750
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HOUSEHOLD PRODUCTS (NON-DURABLE)
(1.6%):
11,700 Kimberly Clark Corp. 724,775 871,650
19,000 Proctor & Gamble Co. 906,015 1,610,250
----------- ------------
1,630,790 2,481,900
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INSURANCE (1.6%):
17,325 American International Group, Inc. 490,860 1,622,053
18,000 PMI Group, Inc. 818,585 785,250
----------- ------------
1,309,445 2,407,303
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LODGING (1.5%):
48,000 Marriott International, Inc. 1,357,311 2,280,000
----------- ------------
MEDICAL SUPPLIES (3.4%):
18,000 Abbott Laboratories 635,148 733,500
100,000 Baxter International, Inc. 952,713 4,525,000
----------- ------------
1,587,861 5,258,500
----------- ------------
OFFICE EQUIPMENT (0.6%):
8,000 Xerox Corp. 845,314 1,004,000
----------- ------------
OTHER RECREATION (1.0%):
23,400 Disney (Walt) Co. 891,571 1,494,675
----------- ------------
PETROLEUM SERVICES (.4%):
7,000 Schlumberger, Ltd. 523,562 553,875
----------- ------------
PHARMACEUTICALS (4.0%):
16,000 Bistrol-Myers Squibb Co. 430,822 1,370,000
39,000 Lilly Eli & Co. 1,351,106 2,535,000
14,000 Schering-Plough Corp. 487,839 813,750
14,000 Warner Lambert Co. 1,122,972 1,445,500
----------- ------------
3,392,739 6,164,250
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</TABLE>
<PAGE>
BERGSTROM CAPITAL CORPORATION
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<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT
COMMON STOCKS-CONTINUED COST VALUE
<C> <S> <C> <C>
RECREATION--TOYS (1.4%):
9,000 Hasbro, Inc. $ 317,870 $ 333,000
70,000 Mattel, Inc. 1,140,532 1,898,764
----------- ------------
1,458,402 2,231,764
----------- ------------
RECREATION PRODUCTS (0.9%):
19,000 Eastman Kodak Co. 929,830 1,349,000
----------- ------------
REGULATED INVESTMENT COMPANIES (9.8%):
400,000 The Adams Express Company 7,511,553 7,650,000
300,000 Convertible Holdings, Inc. Capital
Shares 2,793,333 3,712,500
15,000 RCM Growth Equity Fund, Inc. 3,181,957 3,715,200
----------- ------------
13,486,843 15,077,700
----------- ------------
RESTAURANTS (2.8%):
47,500 Host Marriott Corp. 599,962 641,250
76,000 McDonalds Corp. 2,152,551 3,648,000
----------- ------------
2,752,513 4,289,250
----------- ------------
RETAIL TRADE (.9%):
25,000 Crown Books Corporation (B) 309,500 200,000
22,000 Federated Department Stores, Inc. (B) 590,213 709,500
18,000 Hannaford Bros. Co. 448,648 522,000
----------- ------------
1,348,361 1,431,500
----------- ------------
SOFTWARE AND PROCESSING (8.1%):
13,000 Automatic Data Processing, Inc. 285,181 511,875
382,500 Boole & Babbage, Inc. (B) 340,000 9,801,562
17,000 General Motors Corp. Class E 648,108 969,000
12,000 Microsoft Corp. (B) 999,600 1,237,500
----------- ------------
2,272,889 12,519,937
----------- ------------
TRANSPORTATION SERVICES (1.4%):
55,000 Fritz Companies, Inc. (B) 1,146,799 2,145,000
----------- ------------
TOTALS -- COMMON STOCKS 71,315,056 144,893,997
----------- ------------
TOTALS -- INVESTMENTS $80,602,638 $154,181,579
=========== ============
</TABLE>
(A) Company "affiliated" with the Corporation as defined in the Investment
Company Act of 1940.
(B) Presently non dividend paying.
(C) Venture security.
See also Notes to Financial Statements in the Company's 1995 Annual Report to
Stockholders.
<PAGE>
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LOGO
BOARD OF DIRECTORS
ERIK E. BERGSTROM GEORGE COLE SCOTT
Chairman Registered Representative
Registered Investment Adviser Representative
WILLIAM L. McQUEEN Anderson & Strudwick Incorporated
President and Treasurer C.H. WILLIAMS
Retired Banker
NORMAN R. NIELSEN
Manager and Senior Member
of Research Staff
SRI International
OFFICERS
WILLIAM L. McQUEEN PAMELA A. FIORINI
Secretary
President and Treasurer
ELIZABETH C. HEDLUND
Assistant Secretary
- --------------------------------------------------------------------------------
BERGSTROM CAPITAL CORPORATION
505 Madison Street, Suite 220
Seattle, Washington 98104
(206) 623-7302
