<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS FUND FOR INCOME, INC.
Dear Investor:
1997 was a very good year for the U.S. economy and financial markets. The
economy grew at an annual pace of 3.8%, with the unemployment rate falling to
its lowest level since the 1970's. Despite faster economic growth, inflation, as
measured by the Consumer Price Index, rose less than 2%, its smallest increase
in over ten years. Reflecting the strong economy, the Federal budget deficit
declined substantially and had almost been eliminated by year-end. Against this
backdrop, the Federal Reserve held monetary policy steady after one small
increase in the benchmark Federal funds rate in March.
Although both the U.S. bond and stock markets suffered setbacks at times during
the year, the combination of moderate growth and low inflation ultimately
provided a rewarding environment for investors. Long-term bond yields fell to
their lowest level in two years, while the broad stock market indices recorded
their third consecutive year of substantial gains. While many overseas markets
were buffeted by the economic crisis in Southeast Asia, U.S. markets remained
relatively stable or--in the case of the bond market--benefited from a "flight
to safety" as investors sought the security of the world's largest and most
efficient financial markets.
As in 1996, the high yield market outperformed the ten-year Treasury and the
high grade corporate bond markets, but lagged the exceptional returns posted by
the equity markets. The strong returns enjoyed by high yield bonds came despite
the record amount of new issuance. As measured by Donaldson, Lufkin & Jenrette,
companies raised over $120 billion of cash in the market, eclipsing 1996's
record of $66 billion. Demand, however, kept pace with supply throughout most of
the year as cash flowed into mutual funds, and pension and insurance companies,
seeking higher yields, increased their exposure to the market.
As a result, spreads-to-Treasuries generally tightened across the board with
lower-rated B, or riskier, bonds as well as higher duration issues achieving the
best returns. The market was also supported by the robust equity markets which
not only validated the underlying asset values of high yield issuers, but also
enabled many companies to reduce debt by selling common stock. High equity
values also provided an inexpensive currency with which to conduct mergers and
acquisitions.
During 1997, First Investors Fund For Income returned 12.6% on a net asset value
basis for Class A shares, equal to the average return for high yield bond funds
as measured by Lipper Analytical Services, Inc. Class B shares returned 12.0% on
a net asset value basis. For 1997, the Fund declared dividends from net
investment income of 37.8 cents per share on Class A shares and 35.1 cents per
share on Class B shares.
The largest driver of relative performance among high yield funds was how each
fund was positioned before and after the Asian debt crisis during the third and
fourth quarters. Fund For Income has for some time mostly avoided direct
investment in emerging markets. Additionally, the Fund historically has sought
to purchase the higher-quality credits in each rating classification. This
positioning hurt the Fund during the first part of the year, when strong
economic growth around the world drove risk premiums down (and bond prices up).
The Asian turmoil reversed the trend not only by causing the market to sell off
the debt of foreign companies, but by causing fears of slower growth and
heightened competition from low-cost imports here in the U.S. Accordingly, the
Fund's more conservative stance led to outperformance in the last few months of
the year. Net for the year, our position led to average relative performance.
Away from Asia, the Fund benefited from acquisitions by stronger credits. For
example, the Fund held the
1
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
debt of Harris Chemical which is slated to be purchased by IMC Global. Activity
within the telecommunications sector also boosted the Fund's performance. The
announced acquisition of Brooks Fiber by WorldCom and, more recently, of
Teleport by AT&T drove up the prices of all CLECs (competitive local exchange
carriers). The Fund owned Brooks' bonds and is overweighted in the CLEC sector.
On the other hand, the Fund's positions in the bonds of cyclical companies hurt
performance toward the end of the year as the market reacted to the Asian events
discussed above. Finally, once again helping performance was the lack of any new
defaulted or severely distressed issuers in the portfolio.
I believe that the outlook for high yield bonds in 1998 is fairly strong.
Continued high net issuance should be met by continued fund inflows, and default
rates will probably remain low. That said, the Fund will not waver from its
continuing emphasis on purchasing those credits which we believe have a strong
prospect of credit improvement regardless of overall economic developments. Even
a relatively small disappointment in corporate earnings growth or equity market
strength could lead the high yield sector to reassess risk premiums.
Investors who buy bond funds--whether for income or total return--should be
aware that the value of their investment fluctuates as interest rates change. In
addition, the value of a fund can fluctuate based on changes in the credit
quality of the bonds it holds. In particular, high yield funds invest in
lower-rated debt obligations which are more sensitive than higher-rated
investments to adverse economic changes or individual corporate developments,
and thus can be subject to a higher incidence of default. Investors should be
aware of these risks and recognize that successful investing generally requires
a long-term commitment to the market.
Following 1997's strong performance, the outlook for U.S. financial markets
continues to be positive, although uncertainties do exist. In particular, we
believe that the economic problems in Southeast Asia will slow growth in the
U.S. However, it is unclear to what extent growth will be slowed and,
consequently, what the ultimate impact will be on the financial markets. On a
positive note, Southeast Asia's problems should result in lower inflation
worldwide. Uncertainty often leads to volatile markets. During such times,
investors are generally best served by focusing on long-term objectives and
maintaining a disciplined approach to investing.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Nancy W. Jones
Vice President
and Portfolio Manager
January 30, 1998
2
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS FUND FOR INCOME, INC.
Comparison of change in value of $10,000 investment in the First Investors Fund
For Income, Inc. (Class A shares) and the Credit Suisse First Boston High Yield
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CREDIT SUISSE FIRST BOSTON HIGH YIELD
FUND FOR INCOME INDEX
<S> <C> <C> <C>
Jan-88 9,375 10,000
Dec-88 10,675 11,365
Dec-89 9,834 11,408
Dec-90 8,142 10,680
Dec-91 11,631 15,353
Dec-92 13,574 17,911
Dec-93 16,025 21,298
Dec-94 16,118 21,091
Dec-95 19,106 24,757
Dec-96 21,668 27,832
Dec-97 24,402 31,347
Average Annual Total Returns*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 12.62% 5.49%
Five Years 12.45% 11.00%
Ten Years 10.03% 9.33%
S.E.C. 30-Day Yield 6.91%
Class B Shares
One Year 11.95% 7.95%
Since Inception
(1/12/95) 14.11% 13.32%
S.E.C. 30-Day Yield 6.68%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS FUND FOR INCOME,
INC. (CLASS A SHARES) BEGINNING 1/1/88 WITH A THEORETICAL INVESTMENT IN THE
CREDIT SUISSE FIRST BOSTON HIGH YIELD INDEX. THE CREDIT SUISSE FIRST BOSTON HIGH
YIELD INDEX IS DESIGNED TO MEASURE THE PERFORMANCE OF THE HIGH YIELD BOND
MARKET. THE INDEX CONSISTS OF 1,282 DIFFERENT ISSUES, 1,089 OF WHICH ARE CASH
PAY, 150 ARE ZERO-COUPON, 12 ARE STEP BONDS, 21 ARE PAYMENT-IN-KIND BONDS AND
THE REMAINING 10 ARE IN DEFAULT. THE BONDS INCLUDED IN THE INDEX HAVE AN AVERAGE
LIFE OF 8.2 YEARS, AN AVERAGE MATURITY OF 8.3 YEARS, AN AVERAGE DURATION OF 4.5
YEARS AND AN AVERAGE COUPON OF 10.4%. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN
THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES.
FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE
INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM
THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS
WERE REINVESTED. THE PERFORMANCE OF CLASS B SHARES MAY BE GREATER THAN OR LESS
THAN THAT SHOWN IN THE LINE GRAPH ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES
IN SALES LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25% (PRIOR TO 7/1/93 AND
12/29/89, THE MAXIMUM SALES CHARGES WERE 6.9% AND 8.5%, RESPECTIVELY). THE
CLASS B "S.E.C. STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED
SALES CHARGE (MAXIMUM OF 4% IN THE FIRST YEAR). RESULTS REPRESENT PAST
PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. THE UNUSUALLY
HIGH CURRENT YIELDS OFFERED REFLECT THE SUBSTANTIAL RISKS ASSOCIATED WITH
INVESTMENTS IN HIGH YIELD BONDS. THE ISSUERS OF THE BONDS PAY HIGHER INTEREST
RATES BECAUSE THEY HAVE A GREATER LIKELIHOOD OF FINANCIAL DIFFICULTY, WHICH
COULD RESULT IN THEIR INABILITY TO REPAY THE BONDS FULLY WHEN DUE. PRICES OF
HIGH YIELD BONDS ARE ALSO SUBJECT TO GREATER FLUCTUATIONS. CREDIT SUISSE FIRST
BOSTON HIGH YIELD INDEX FIGURES FROM CREDIT SUISSE FIRST BOSTON CORPORATION
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
3
<PAGE>
PORTFOLIO COMPOSITION
FIRST INVESTORS FUND FOR INCOME, INC.
The dollar weighted average of credit ratings of all bonds held by the Fund
during the 1997 fiscal year and the dollar weighted average of the total of the
Fund's investments in zero coupon bonds, step bonds and pay-in-kind bonds during
the 1997 fiscal year, computed on a monthly basis, are set forth below. This
information reflects the average composition of the Fund's assets during the
1997 fiscal year and is not necessarily representative of the Fund as of the end
of its 1997 fiscal year, the current fiscal year or at any other time in the
future.
<TABLE>
<CAPTION>
Comparable Quality of
Rated by Unrated Securities to
Moody's Bonds Rated by Moody's
---------- ------------------------
<S> <C> <C>
Baa2.............................................................. 0.00% 0.52%
Baa3.............................................................. 1.68 0.00
Ba1............................................................... 2.03 0.00
Ba2............................................................... 2.60 0.00
Ba3............................................................... 9.67 0.00
B1................................................................ 20.35 0.00
B2................................................................ 25.23 1.09
B3................................................................ 19.80 0.00
Caa............................................................... 1.00 3.59
Ca................................................................ 0.10 0.00
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
Zero Coupon Bonds 11.80%
Step Bonds 1.01%
Pay-in-kind Bonds 0.26%
</TABLE>
4
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--87.5%
AEROSPACE/DEFENSE--.5%
$ 2,000M Burke Industries,Inc., 10%, 2007 $ 2,065,000 $ 46
- ---------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS--1.3%
5,500M Terra Industries, Inc., 10.50%, 2005 5,940,000 134
- ---------------------------------------------------------------------------------------
APPAREL/TEXTILES--4.5%
3,500M Dan River, Inc., 10.125%, 2003 3,758,125 85
2,000M GFSI, Inc., 9.625%, 2007 2,060,000 46
2,450M Pillowtex Corp., 10%, 2006 2,633,750 59
650M Pillowtex Corp., 9%, 2007 (Note 4) 669,500 15
3,600M Polymer Group, Inc., 9%, 2007 3,618,000 81
7,000M Westpoint Stevens, Inc., 9.375%, 2005 7,350,000 165
- ---------------------------------------------------------------------------------------
20,089,375 451
- ---------------------------------------------------------------------------------------
AUTOMOTIVE--2.1%
1,650M Cambridge Industries, Inc., 10.25%, 2007 (Note 4) 1,724,250 39
2,800M Collins & Aikman Products Co., 11.50%, 2006 3,136,000 71
2,000M Exide Corp., 10%, 2005 2,110,000 48
2,260M Safelite Glass Corp., 9.875%, 2006 (Note 4) 2,373,000 53
- ---------------------------------------------------------------------------------------
9,343,250 211
- ---------------------------------------------------------------------------------------
BUILDING MATERIALS--4.0%
3,500M American Architectural Products Corp., 11.75%,
2007 (Note 4) 3,552,500 80
4,500M American Standard Corp., 0% - 10.50%, 2005 4,522,500 102
3,000M Nortek, Inc., 9.125%, 2007 3,033,750 68
4,950M Triangle Pacific Corp., 10.50%, 2003 5,222,250 118
1,277M Waxman USA, Inc., 11.125%, 2001 1,270,615 29
- ---------------------------------------------------------------------------------------
17,601,615 397
- ---------------------------------------------------------------------------------------
CHEMICALS--8.0%
4,750M AEP Industries, Inc., 9.875%, 2007 (Note 4) 4,898,437 110
4,200M Harris Chemical North America, Inc., 10.25%, 2001 4,441,500 100
6,125M Harris Chemical North America, Inc., 10.75%, 2003 6,538,437 147
6,600M Huntsman Polymers Corp., 11.75%, 2004 7,474,500 168
- ---------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CHEMICALS (continued)
$ 3,450M Hydrochem Industrial Services, Inc., 10.375%,
2007 $ 3,613,875 $ 81
2,000M Pharmaceutical Fine Chemicals, SA, 9.75%, 2007 2,030,000 46
1,500M Precise Technology, Inc., 11.125%, 2007 1,537,500 35
4,500M Texas Petrochemicals Corp., 11.125%, 2006 4,860,000 109
- ---------------------------------------------------------------------------------------
35,394,249 796
- ---------------------------------------------------------------------------------------
CONSUMER PRODUCTS--2.1%
4,070M Herff Jones, Inc., 11%, 2005 4,436,300 100
2,000M Hines Horticulture, Inc., 11.75%, 2005 2,200,000 50
2,700M Syratech Corp., 11%, 2007 2,524,500 57
- ---------------------------------------------------------------------------------------
9,160,800 207
- ---------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--.1%
600M Plastic Containers, Inc., 10%, 2006 636,000 14
- ---------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--1.9%
1,000M Amtrol, Inc., 10.625%, 2006 1,035,000 23
2,500M Day International Group, Inc., 11.125%, 2005 2,750,000 62
4,275M Fairfield Manufacturing, Inc., 11.375%, 2001 4,520,812 102
- ---------------------------------------------------------------------------------------
8,305,812 187
- ---------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.1%
1,000M Amphenol Corp., 9.875%, 2007 1,055,000 24
3,650M Essex Group, Inc., 10%, 2003 3,777,750 85
- ---------------------------------------------------------------------------------------
4,832,750 109
- ---------------------------------------------------------------------------------------
ELECTRONICS/INSTRUMENTS/COMPONENTS--1.1%
3,000M Advanced Micro Devices, Inc., 11%, 2003 3,210,000 72
1,600M L-3 Communications Corp., 10.375%, 2007 1,728,000 39
- ---------------------------------------------------------------------------------------
4,938,000 111
- ---------------------------------------------------------------------------------------
ENERGY--3.9%
3,500M Deeptech International, Inc., 12%, 2000 3,718,750 84
3,500M Falcon Drilling Co., Inc., 9.75%, 2001 3,648,750 82
- ---------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY (continued)
$ 5,000M KCS Energy, Inc., 11%, 2003 $ 5,512,500 $ 124
4,500M Magnum Hunter Resources, Inc., 10%, 2007 4,612,500 104
- ---------------------------------------------------------------------------------------
17,492,500 394
- ---------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--1.0%
4,000M KSL Recreation Group, Inc., 10.25%, 2007 4,280,000 96
- ---------------------------------------------------------------------------------------
FINANCIAL--1.4%
3,000M Bay View Capital Corp., 9.125%, 2007 3,105,000 70
2,800M Terra Nova Holdings PLC, 10.75%, 2005 3,122,000 70
- ---------------------------------------------------------------------------------------
6,227,000 140
- ---------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--1.6%
1,000M Delta Beverage Group, Inc., 9.75%, 2003 1,040,000 23
3,500M Di Giorgio Corp., 10%, 2007 3,438,750 77
2,625M Fleming Companies, Inc., 10.625%, 2007 (Note 4) 2,782,500 63
- ---------------------------------------------------------------------------------------
7,261,250 163
- ---------------------------------------------------------------------------------------
GAMING/LODGING--3.3%
4,000M Casino America, Inc., 12.50%, 2003 4,360,000 98
4,000M Grand Casinos, Inc., 9%, 2004 (Note 4) 4,040,000 91
500M Majestic Star Casino, LLC, 12.75%, 2003 537,500 12
2,250M Prime Hospitality Corp., 9.25%, 2006 2,385,000 54
3,000M Showboat, Inc., 9.25%, 2008 3,210,000 72
- ---------------------------------------------------------------------------------------
14,532,500 327
- ---------------------------------------------------------------------------------------
HEALTHCARE--5.5%
1,000M Alaris Medical Systems, Inc., 9.75%, 2006 1,040,000 23
4,000M Genesis Healthcare, Inc., 9.75%, 2005 4,170,000 94
4,400M Healthsouth Rehabilitation Corp., 9.50%, 2001 4,642,000 104
3,750M Integrated Health Services, Inc., 10.25%, 2006 4,003,125 90
1,350M Integrated Health Services, Inc., 9.50%, 2007
(Note 4) 1,395,563 31
2,500M Integrated Health Services, Inc., 9.25%, 2008 2,559,375 58
- ---------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE (continued)
$ 2,200M Owens & Minor, Inc., 10.875%, 2006 $ 2,420,000 $ 54
3,800M Tenet Healthcare Corp., 10.125%, 2005 4,142,000 93
- ---------------------------------------------------------------------------------------
24,372,063 547
- ---------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--11.6%
3,000M CF Cable TV, Inc., 11.625%, 2005 3,405,000 77
5,000M Comcast United Kingdom Cable Corp., 0% - 11.20%,
2007 4,037,500 91
4,750M Diamond Cable Communications PLC, 0% - 11.75%,
2005 3,681,250 83
8,050M Echostar Communications Corp., 0% - 12.875%, 2004 7,365,750 166
5,000M Marcus Cable Operating Co., 0% - 13.50%, 2004 4,631,250 104
2,300M Rogers Communications, 9.125%, 2006 2,346,000 53
6,000M SCI Television Corp., 11%, 2005 6,195,000 139
3,000M Sinclair Broadcasting Group, 10%, 2005 3,210,000 72
3,150M TCI Satellite Entertainment, Inc., 10.875%, 2007
(Note 4) 3,307,500 74
6,500M Videotron Holdings PLC, 0% - 11.125%, 2004 6,158,750 139
4,000M Videotron, Ltd., 10.25%, 2002 4,240,000 95
3,000M Young Broadcasting Corp., 10.125%, 2005 3,172,500 71
- ---------------------------------------------------------------------------------------
51,750,500 1,164
- ---------------------------------------------------------------------------------------
MEDIA (OTHER)--2.6%
4,000M MDC Communications Corp., 10.50%, 2006 4,240,000 95
4,000M Outdoor Systems, Inc., 8.875%, 2007 4,190,000 94
3,000M Von Hoffman Press, Inc., 10.375%, 2007 (Note 4) 3,202,500 72
- ---------------------------------------------------------------------------------------
11,632,500 261
- ---------------------------------------------------------------------------------------
MINING/METALS--3.9%
1,400M Euramax International PLC, 11.25%, 2006 1,520,750 34
3,000M Murrin Murrin Holdings Property, Ltd., 9.375%,
2007 (Note 4) 2,985,000 67
4,000M Renco Metals, Inc., 11.50%, 2003 4,260,000 96
4,000M Russel Metals, Inc., 10.25%, 2000 4,155,000 94
1,155M UCAR Global Enterprises, Inc., 12%, 2005 1,300,819 29
3,500M Wheeling-Pittsburgh Corp., 9.25%, 2007 3,377,500 76
- ---------------------------------------------------------------------------------------
17,599,069 396
- ---------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
MISCELLANEOUS--.7%
$ 1,800M Allied Waste North America, Inc., 10.25%, 2006 $ 1,980,000 $ 45
1,025M Kindercare Learning Centers, Inc., 9.50%, 2009 1,019,875 23
- ---------------------------------------------------------------------------------------
2,999,875 68
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--5.6%
4,000M Container Corp., 11.25%, 2004 4,360,000 98
1,450M Fonda Group, Inc., 9.50%, 2007 1,384,750 31
2,500M Riverwood International, 10.25%, 2006 2,484,375 56
5,600M S.D. Warren Co., Inc., 12%, 2004 6,188,000 139
5,500M Stone Container Corp., 11.875%, 1998 5,775,000 130
2,000M Stone Container Corp., 9.875%, 2001 2,020,000 45
2,400M Stone Container Corp., 10.75%, 2002 2,526,000 57
- ---------------------------------------------------------------------------------------
24,738,125 556
- ---------------------------------------------------------------------------------------
RETAIL - FOOD/DRUG--.7%
2,000M Randall's Food Markets, Inc., 9.375%, 2007 (Note
4) 2,050,000 46
1,000M Shoppers Food Warehouse Corp., 9.75%, 2004 (Note
4) 1,022,500 23
- ---------------------------------------------------------------------------------------
3,072,500 69
- ---------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--1.9%
4,500M Barnes & Noble, Inc., 11.875%, 2003 4,837,500 109
2,000M Big 5 Corp., 10.875%, 2007 (Note 4) 1,990,000 45
2,000M J Crew Operating Corp., 10.375%, 2007 (Note 4) 1,740,000 39
- ---------------------------------------------------------------------------------------
8,567,500 193
- ---------------------------------------------------------------------------------------
TELECOMMUNICATIONS--14.1%
5,300M American Communications Services, Inc., 0% - 13%,
2005 4,200,250 95
3,300M Brooks Fiber Properties, Inc., 0% - 10.875%, 2006 2,747,250 62
2,500M Brooks Fiber Properties, Inc., 0% - 11.875%, 2006 2,006,250 45
2,000M Brooks Fiber Properties, Inc., 10%, 2007 2,305,000 52
5,800M Comcast Cellular Holdings, Inc., 9.50%, 2007 6,061,000 136
750M GCI, Inc., 9.75%, 2007 785,625 18
4,600M GST USA, Inc., 0% - 13.875%, 2005 3,519,000 79
5,000M Intermedia Communications, Inc., 8.50%, 2008
(Note 4) 5,025,000 113
- ---------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
PRINCIPAL INVESTED
AMOUNT FOR EACH
OR $10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS (continued)
$ 1,050M Netia Holdings BV, 10.25%, 2007 (Note 4) $ 1,005,375 $ 23
7,000M Nextlink Communications, Inc., 12.50%, 2006 7,997,500 180
2,500M Omnipoint Corp., 11.625%, 2006 2,643,750 60
6,000M Orion Network Systems, Inc., 11.25%, 2007 6,810,000 153
5,000M Paging Network, Inc., 10%, 2008 5,193,750 117
3,800M Powertel, Inc., 0% - 12%, 2006 2,736,000 62
4,000M Powertel, Inc., 11.125%, 2007 4,340,000 98
4,175M Qwest Communications International, 0% - 9.47%,
2007 (Note 4) 2,849,438 64
4,000M RCN Corp., 0% - 11.125%, 2007 (Note 4) 2,520,000 57
- ---------------------------------------------------------------------------------------
62,745,188 1,414
- ---------------------------------------------------------------------------------------
TRANSPORTATION--3.0%
4,000M Coach USA, Inc., 9.375%, 2007 4,110,000 92
5,700M Eletson Holdings, Inc., 9.25%, 2003 5,856,750 132
3,100M Moran Transportation Co., 11.75%, 2004 3,456,500 78
- ---------------------------------------------------------------------------------------
13,423,250 302
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost
$367,774,408) 389,000,671 8,753
- ---------------------------------------------------------------------------------------
COMMON STOCKS--.1%
MEDIA (CABLE TV/BROADCASTING)
15,753 *Echostar Communications Corp.--Class "A" (cost
$0) 263,863 6
- ---------------------------------------------------------------------------------------
PREFERRED STOCKS--6.0%
MEDIA (CABLE TV/BROADCASTING)--4.5%
2,705 American Radio Systems Corp., 11.375%, Series "B" 320,204 7
86,022 Cablevision Systems Corp., 11.125%, PIK, Series
"M" 9,849,462 222
4,224 Echostar Communications, 12.125% 4,351,008 98
4,755 Time Warner, Inc., 10.25%, PIK, Series "K" 5,349,375 120
- ---------------------------------------------------------------------------------------
19,870,049 447
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.1%
100,000 S.D. Warren Co., Inc., 14%, Series "B" 4,900,000 110
- ---------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES FOR EACH
OR $10,000 OF
WARRANTS SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
PUBLISHING & PRINTING--.4%
11,820 Primedia, 11.625%, Series "B" $ 1,261,764 $ 28
5,000 Primedia, 9.20%, Series "E" (Note 4) 520,000 12
- ---------------------------------------------------------------------------------------
1,781,764 40
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost
$21,778,563) 26,551,813 597
- ---------------------------------------------------------------------------------------
WARRANTS--.4%
GAMING/LODGING--.0%
7,000 *Goldriver Finance Corp., Liquidating Trust 7,000 --
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.2%
55,390 *Gaylord Container Corp. (expiring 11/1/02) 318,492 7
100,000 *S.D. Warren Co., Inc. (expiring 12/15/06) (Note
4) 500,000 11
- ---------------------------------------------------------------------------------------
818,492 18
- ---------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--.0%
65,000 *Cort Business Services Corp. (expiring 9/1/98) 219,375 5
- ---------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.2%
7,300 *American Communications Services, Inc. (expiring
11/1/05) (Note 4) 766,500 17
6,000 *Orion Network Systems, Inc. (expiring 1/15/07) 72,000 2
- ---------------------------------------------------------------------------------------
838,500 19
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $214,858) 1,883,367 42
- ---------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
UNITS INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
UNITS--.9%
MEDIA (CABLE TV/BROADCASTING)
3,850 Star Choice Communications (cost $3,850,000) (a)
(Note 4) $ 3,984,750 $ 90
- ---------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--1.8%
$ 7,500M U.S. Treasury Note, 7.25%, 2004 (cost $8,163,281) 8,109,383 182
- ---------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.8%
500M Ford Motor Credit Corp., 5.95%, 1/7/98 499,504 11
7,500M Lubrizol Corp., 6.25%, 1/13/98 7,484,375 169
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$7,983,879) 7,983,879 180
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $409,764,989) 98.5% 437,777,726 9,850
OTHER ASSETS, LESS LIABILITIES 1.5 6,668,589 150
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $444,446,315 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
(a) Each unit consists of one 13% Senior Secured Note due 2005, and 23.16
Warrants (expiring 12/15/05) to buy one share of common stock at $.01 per
share
See notes to financial statements
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS FUND FOR INCOME, INC.
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at value
(identified cost $409,764,989) (Note
1A).................................. $437,777,726
Cash................................... 237,970
Receivables:
Interest............................. 8,231,740
Capital shares sold.................. 247,785
Other assets........................... 168,816
------------
Total Assets........................... 446,664,037
LIABILITIES
Payables:
Dividend payable..................... $ 943,148
Capital shares redeemed.............. 854,065
Accrued advisory fee................... 271,929
Accrued expenses....................... 148,580
------------
Total Liabilities...................... 2,217,722
------------
NET ASSETS (Note 6):
Class A (98,909,392 shares
outstanding)....................... 438,657,284
Class B (1,308,672 shares
outstanding)....................... 5,789,031 $444,446,315
------------
------------
------------
NET ASSETS CONSIST OF:
Capital paid in........................ $969,733,595
Undistributed net investment income.... 4,745,384
Accumulated net realized loss on
investment transactions.............. (558,045,401)
Net unrealized appreciation in value of
investments.......................... 28,012,737
------------
Total.................................. $444,446,315
------------
------------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 4.43
-----
-----
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A ($4.43/.9375)*....... $ 4.73
-----
-----
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B (Note 6)............. $ 4.42
-----
-----
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
13
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS FUND FOR INCOME, INC.
Year Ended December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 39,650,340
Dividends (Note 1E).................. 1,956,990
Consent fees......................... 1,046,130
------------
Total income........................... $ 42,653,460
Expenses (Notes 1 and 3):
Advisory fee......................... 3,217,285
Shareholder servicing costs.......... 891,951
Distribution plan expenses - Class
A.................................. 647,844
Distribution plan expenses - Class
B.................................. 38,520
Professional fees.................... 60,379
Reports and notices to
shareholders....................... 58,307
Custodian fees....................... 49,935
Other expenses....................... 91,858
------------
Total expenses......................... 5,056,079
Less: Custodian fees paid indirectly... (19,773)
------------
Net expenses........................... 5,036,306
------------
Net investment income.................. 37,617,154
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 7,801,754
Net unrealized appreciation of
investments.......................... 7,327,698
------------
Net gain on investments................ 15,129,452
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $ 52,746,606
------------
------------
</TABLE>
See notes to financial statements
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS FUND FOR INCOME, INC.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
YEAR ENDED DECEMBER 31 1997 1996
- --------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................ $ 37,617,154 $ 39,637,266
Net realized gain (loss) on
investments........................ 7,801,754 (5,886,757)
Net unrealized appreciation of
investments........................ 7,327,698 19,592,189
------------ ------------
Net increase in net assets
resulting from operations........ 52,746,606 53,342,698
------------ ------------
DIVIDENDS TO SHAREHOLDERS
Net investment income - Class A...... (37,571,202) (37,526,146)
Net investment income - Class B...... (367,759) (210,871)
------------ ------------
Total dividends.................... (37,938,961) (37,737,017)
------------ ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............ 16,851,806 14,956,436
Value of dividends reinvested........ 26,312,729 25,915,540
Cost of shares redeemed.............. (50,837,153) (50,539,459)
------------ ------------
(7,672,618) (9,667,483)
------------ ------------
Class B:
Proceeds from shares sold............ 2,600,932 1,604,309
Value of dividends reinvested........ 234,762 127,411
Cost of shares redeemed.............. (543,250) (249,045)
------------ ------------
2,292,444 1,482,675
------------ ------------
Net decrease from capital share
transactions....................... (5,380,174) (8,184,808)
------------ ------------
Net increase in net assets......... 9,427,471 7,420,873
NET ASSETS
Beginning of year.................... 435,018,844 427,597,971
------------ ------------
End of year (including undistributed
net investment income of $4,745,384
and $5,067,191, respectively)...... $444,446,315 $435,018,844
------------ ------------
------------ ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 3,881,531 3,564,924
Issued for dividends reinvested...... 6,059,302 6,171,776
Redeemed............................. (11,715,604) (12,071,004)
------------ ------------
Net decrease in Class A capital
shares outstanding................. (1,774,771) (2,334,304)
------------ ------------
------------ ------------
Class B:
Sold................................. 599,023 383,768
Issued for dividends reinvested...... 54,064 30,324
Redeemed............................. (124,769) (59,519)
------------ ------------
Net increase in Class B capital
shares outstanding................. 528,318 354,573
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
1. SIGNIFICANT ACCOUNTING POLICIES--The Fund is registered under the Investment
Company Act of 1940 (the "1940 Act") as a diversified, open-end management
investment company. The investment objective of the Fund is to seek high current
income and secondarily to seek capital appreciation.
A. Security Valuation--Except as provided below, a security listed or traded on
an exchange or the Nasdaq Stock Market is valued at its last sale price on the
exchange where the security is principally traded, and lacking any sales, the
security is valued at the mean between the closing bid and asked prices.
Securities traded in the over-the-counter market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) are valued at
the mean between the last bid and asked prices based upon quotes furnished by a
market maker for such securities. Securities may also be priced by a pricing
service. The pricing service uses quotations obtained from investment dealers or
brokers and other available information in determining values. Short-term
corporate notes which are purchased at a discount are valued at amortized cost.
Securities for which market quotations are not readily available, and any other
assets are valued on a consistent basis at fair value as determined in good
faith by or under the supervision of the Fund's officers in a manner
specifically authorized by the Board of Directors.
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of the Fund to comply with
the special provisions of the Internal Revenue Code applicable to investment
companies and to make sufficient distributions of income and capital gains (in
excess of any available capital loss carryovers) to relieve it from all, or
substantially all, such taxes. At December 31, 1997 the Fund had capital loss
carryovers of $558,045,401 of which $350,158,165 expires in 1998, $207,520,038
in 1999, $254,689 in 2002 and $112,509 in 2005.
C. Distributions to Shareholders--Dividends to shareholders from net investment
income are declared daily and paid monthly. Income dividends and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for capital loss carryforwards and post-
October capital losses.
D. Use of Estimates--The preparation of the 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 at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
E. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
identified cost basis for both financial statement and federal income tax
purposes. Dividend income is recorded on the ex-dividend date. Shares of stock
received in lieu of cash dividends on certain preferred stock holdings are
recognized as dividend income and recorded at the market value of the shares
received. During the year ended December 31, 1997, the Fund recognized
$1,956,990 of dividend income from these taxable "pay in kind" distributions.
Interest income and estimated expenses are accrued daily. The Fund's custodian
has provided credits in the amount of $19,773 against custodian charges based on
the uninvested cash balances of the Fund.
16
<PAGE>
2. SECURITIES TRANSACTIONS--For the year ended December 31, 1997, purchases and
sales of securities, other than United States Government obligations and
short-term corporate notes, aggregated $183,074,499 and $186,008,618,
respectively.
At December 31, 1997, the cost of investments for federal income tax purposes
was $409,764,989. Accumulated net unrealized appreciation on investments was
$28,012,737, consisting of $28,920,815 gross unrealized appreciation and
$908,078 gross unrealized depreciation.
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors of the Fund are officers and directors of its investment adviser,
First Investors Management Company, Inc. ("FIMCO"), its underwriter, First
Investors Corporation ("FIC"), its transfer agent, Administrative Data
Management Corp. ("ADM"), and/or First Financial Savings Bank, S.L.A. ("FFS"),
custodian of the Fund's individual retirement accounts. Officers and directors
of the Fund received no remuneration from the Fund for serving in such
capacities. Their remuneration (together with certain other expenses of the
Fund) was paid by FIMCO or FIC. Effective January 1, 1998, independent directors
will be remunerated by the Fund.
The Investment Advisory Agreement provides as compensation to FIMCO an annual
fee, payable monthly, at the rate of .75% on the first $250 million of the
Fund's average daily net assets, declining by .03% on each $250 million
thereafter, down to .66% on average daily net assets over $750 million.
For the year ended December 31, 1997, FIC, as underwriter, received $472,941 in
commissions after allowing $60,576 to other dealers. Shareholder servicing costs
included $572,966 in transfer agent fees paid to ADM, and $175,971 in IRA
custodian fees paid to FFS.
Pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act, the
Fund is authorized to pay FIC a fee in an amount up to .30% of the average net
assets of the Class A shares and 1% of the average net assets of the Class B
shares on an annualized basis each year, payable monthly. The fee consists of a
distribution fee and a service fee. The service fee is paid for the ongoing
servicing of clients who are shareholders of the Fund. However, pursuant to
settlements entered into with various state regulators, the fee is limited to
.15% for Class A and .85% for Class B until February 1, 1998. For the year ended
December 31, 1997, this fee reduction amounted to $647,844 for Class A and
$6,799 for Class B.
4. RULE 144A SECURITIES--Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and may
only be resold to qualified institutional investors. At December 31, 1997, the
Fund held twenty-three 144A securities with an aggregate value of $54,904,313
representing 12.4% of the Fund's net assets. These securities are valued as set
forth in Note 1A.
5. CONCENTRATION OF CREDIT RISK--The Fund's investment in high yield securities
whether rated or unrated may be considered speculative and subject to greater
market fluctuations and risks of loss of income and principal than lower
yielding, higher rated, fixed income securities. The risk of loss due to default
by the issuer may be significantly greater for the holders of high yielding
securities, because such securities are generally unsecured and are often
subordinated to other creditors of the issuer.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
6. CAPITAL--The Fund sells two classes of shares, Class A and Class B, each with
a public offering price that reflects different sales charges and expense
levels. Class A shares are sold with an initial sales charge of up to 6.25% of
the amount invested and together with the Class B shares are subject to
distribution plan fees as described in Note 3. Class B shares are sold without
an initial sales charge, but are generally subject to a contingent deferred
sales charge which declines in steps from 4% to 0% over a six-year period. Class
B shares automatically convert into Class A shares after eight years. Realized
and unrealized gains or losses, investment income and expenses (other than
distribution plan fees) are allocated daily to each class of shares based upon
the relative proportion of net assets of each class. Of the 1,000,000,000 shares
originally authorized, the Fund has designated 500,000,000 shares as Class A and
500,000,000 shares as Class B.
18
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS FUND FOR INCOME, INC.
The following table sets forth the per share operating performance for a share
of capital stock outstanding, total return, ratios to average net assets and
other supplemental data for each year indicated.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------- ----------------------
1995
Year Ended December 31 1997 1996 1995 1994 1993 1997 1996 *
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Year..... $ 4.29 $ 4.13 $ 3.81 $4.17 $ 3.89 $ 4.28 $ 4.13 $ 3.81
------ ------ ------ ----- ------ ------ ------ ------
Income from Investment Operations
Net investment income................ .38 .39 .38 .37 .39 .34 .38 .31
Net realized and unrealized gain
(loss) on investments.............. .14 .14 .30 (.35) .29 .15 .12 .33
------ ------ ------ ----- ------ ------ ------ ------
Total from Investment Operations... .52 .53 .68 .02 .68 .49 .50 .64
------ ------ ------ ----- ------ ------ ------ ------
Less Dividends from
Net Investment Income................ .38 .37 .36 .38 .40 .35 .35 .32
------ ------ ------ ----- ------ ------ ------ ------
Net Asset Value, End of Year........... $ 4.43 $ 4.29 $ 4.13 $3.81 $ 4.17 $ 4.42 $ 4.28 $ 4.13
------ ------ ------ ----- ------ ------ ------ ------
------ ------ ------ ----- ------ ------ ------ ------
TOTAL RETURN (%)+...................... 12.62 13.40 18.54 .58 18.06 11.95 12.51 17.46
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in
millions)............................ $439 $432 $425 $401 $431 $6 $3 $2
Ratio to Average Net Assets: (%)
Expenses............................. 1.15 1.16 1.18 1.22 1.32 1.85 1.86 1.92(a)
Net investment income................ 8.63 9.27 9.53 9.34 9.54 7.93 8.57 8.78(a)
Portfolio Turnover Rate (%)............ 45 30 33 39 76 45 30 33
</TABLE>
+ Calculated without sales charge
* For the period 1/12/95 (date class B shares first offered) to 12/31/95
(a) Annualized
See notes to financial statements
19
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
First Investors Fund For Income, Inc.
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of First Investors Fund For Income, Inc., as of
December 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the periods indicated
thereon. 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 of 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 as of
December 31, 1997, by correspondence with the custodian. An audit also 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 referred to
above present fairly, in all material respects, the financial position of First
Investors Fund For Income, Inc. at December 31, 1997, and the results of its
operations, changes in its net assets and financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 30, 1998
20
<PAGE>
(This page has been left blank intentionally.)
21
<PAGE>
FIRST INVESTORS FUND FOR INCOME, INC.
DIRECTORS
- -------------------------------------------
JAMES J. COY (Emeritus)
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
NANCY S. SCHAENEN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- -------------------------------------------
GLENN O. HEAD
President
NANCY W. JONES
Vice President
CONCETTA DURSO
Vice President and Secretary
JOSEPH I. BENEDEK
Treasurer
CAROL LERNER BROWN
Assistant Secretary
GREGORY R. KINGSTON
Assistant Treasurer
MARK S. SPENCER
Assistant Treasurer
22
<PAGE>
FIRST INVESTORS FUND FOR INCOME, INC.
SHAREHOLDER INFORMATION
- -------------------------------------------
INVESTMENT ADVISER
FIRST INVESTORS MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
UNDERWRITER
FIRST INVESTORS CORPORATION
95 Wall Street
New York, NY 10005
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
TRANSFER AGENT
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
23
<PAGE>
FIRST INVESTORS FUND FOR INCOME, INC.
95 WALL STREET
NEW YORK, NY 10005
First Investors Logo
Logo is described as follows: The arabic numeral one separated into seven
vertical segments followed by the words "First Investors."
A MEMBER OF THE
FIRST INVESTORS FINANCIAL NETWORK
FIFI-065
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" appear in a box to the
right of a circle containing the words "MAILED FROM ZIP CODE 11201" which
appears to the right of the above language in the printed piece.
Vertically reading from bottom to top in the center of the page the words "FIRST
INVESTORS" appear in the printed piece.
FIRST
INVESTORS
FUND FOR
INCOME, INC.
ANNUAL
REPORT
DECEMBER 31, 1997
