[THE MATTERHORN GROWTH FUND, INC. IMAGE]
Dear Shareholders,
The stock indices have reported substantial gains for the first half of
1997 as the market continues to rally to new all-time highs. The Matterhorn
Growth Fund, Inc. has also participated in this record-breaking market by
posting a double-digit return of 10.37% for the first six months of the year.
Performance for the Fund continued to be affected by a realignment of the
portfolio that was inherited from the previous manager. This includes the sale
of China Industrial Group, a substantial portion of One Liberty Properties, and
Americana Hotel & Realty. As you can see, the enclosed schedule of investments
reported for June 30, 1997 is more reflective of our investment style.
The stock market for the first half of 1997 was characterized by extreme
volatility. Although the economy grew with little inflation, investor concerns
over interest rate hikes and corporate earnings had caused sharp price movements
throughout the period. Nonetheless, strong corporate earnings combined with
acceptable levels of inflation should enable the market to continue its rise
through the 8,000 level. We remain bullish on the prospects of the domestic
economy and, in turn, the U.S. stock market.
Current stocks that we favor in this environment include Waste Management,
Inc., Pulitzer Publishing, Union Pacific, and Johnson & Johnson.
Sincerely Yours,
/s/ Gregory A. Church /s/ Sheldon E. Goldberg
Gregory A. Church Sheldon E. Goldberg
President Chairman
The Matterhorn Growth Fund, Inc. Matterhorn Asset Management Corp.
President
Matterhorn Asset Management Corp
<PAGE>
The Matterhorn Growth Fund, Inc.
Matterhorn Growth Fund
Value of $10,000 vs. S&P 500
KEY POINTS
Dates Fund S&P 500
9/27/88 10,000.00 10,000.00
6/30/89 12,279.41 12,131.20
6/30/90 13,799.02 14,160.95
6/30/91 14,215.69 15,221.62
6/30/92 15,441.18 17,249.53
6/30/93 19,901.61 19,601.34
6/30/94 21,016.54 19,875.12
6/30/95 25,085.45 25,068.76
6/30/96 27,996.13 31,566.03
6/30/97 31,022.75 42,524.74
Average Annual Total Return:
- ----------------------------
1 Year: 10.81%
----------
5 Year: 14.97%
----------
Since Inception (9/27/88): 13.79%
----------
* Previous periods during which the Fund was advised by another advisor are not
shown.
Past performance is not predictive of future performance.
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at June 30, 1997
- ------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 83.44% Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Auto: 2.12%
6,000 Cooper Tire & Rubber.................................................... $ 132,000
2,625 Mark IV Industries...................................................... 63,000
---------
195,000
---------
Banking: 4.48%
3,000 Chase Manhattan Corp.................................................... 291,188
2,000 First Chicago NBD Corp.................................................. 121,000
---------
412,188
---------
Beverage: 2.85%
7,000 PepsiCo, Inc............................................................ 262,938
---------
Broadcast Media: 1.10%
5,000 US West Media Group*.................................................... 101,250
---------
Chemicals: 4.56%
3,000 DuPont (E.I.) deNemours................................................. 188,625
6,000 Nalco Chemical.......................................................... 231,750
---------
420,375
---------
Computer Peripherals: 2.83%
7,000 Sun Microsystems*....................................................... 260,313
---------
Computer Software & Services: 3.77%
6,000 Ascend Communications, Inc.*............................................ 235,500
1,500 National Data Corp...................................................... 64,969
1,500 Sterling Software, Inc.*................................................ 46,875
---------
347,344
---------
Drugs: 5.49%
6,000 Johnson & Johnson....................................................... 386,250
1,000 Pfizer Inc.............................................................. 119,500
---------
505,750
---------
Electronics Industry: 6.71%
4,000 AMP, Inc................................................................ 167,000
1,500 General Motors, Class H................................................. 86,625
</TABLE>
3
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at June 30, 1997, Continued
- ------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electronics Industry, continued
4,000 General Signal Corp..................................................... $ 174,500
2,500 Motorola................................................................ 190,000
---------
618,125
---------
Heavy Industries: 2.59%
3,000 FMC Corp.*.............................................................. 238,312
---------
Hotel / Gaming: 1.17%
6,000 Harrah's Entertainment*................................................. 108,000
---------
Insurance: 5.39%
1,400 General Re Corp......................................................... 254,800
5,000 NAC Re Corp............................................................. 241,875
---------
496,675
---------
Miscellaneous: 1.20%
2,000 Fluor Corp.............................................................. 110,375
---------
Natural Gas: 0.92%
3,000 Equitable Resources, Inc................................................ 85,125
---------
Office Equipment & Supplies: 2.65%
3,100 Xerox Corp.............................................................. 244,512
---------
Packaging: 2.32%
4,000 Crown Cork & Seal Co., Inc.............................................. 213,750
---------
Petroleum: 1.42%
6,000 Lyondell Petrochemical.................................................. 130,875
---------
Publishing: 3.96%
2,500 Media General........................................................... 100,000
5,000 Pulitzer Publishing..................................................... 265,000
---------
365,000
---------
</TABLE>
4
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at June 30, 1997, Continued
- ------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Real Estate Investment Trust: 3.19%
22,000 One Liberty Properties, Inc............................................. $ 294,250
---------
Restaurants: 2.82%
10,000 Wendy's International................................................... 259,375
---------
Retail: 2.56%
12,000 Heilig Meyers Co........................................................ 235,500
---------
Semiconductor: 1.82%
2,500 LSI Logic Corp.*........................................................ 80,000
8,000 S3 Inc.*................................................................ 87,500
---------
167,500
---------
Technology: 6.75%
12,000 Bell Microproducts*..................................................... 126,750
5,000 Cognizant Corp.......................................................... 202,500
5,500 Electronic Data Systems................................................. 225,500
1,500 Filenet Corp.*.......................................................... 21,750
3,000 Silicon Graphics, Inc.*................................................. 45,000
---------
621,500
---------
Telecommunications Services: 7.71%
5,000 Ameritech Corp.......................................................... 339,687
8,000 BellSouth Corp.......................................................... 371,000
---------
710,687
---------
Transportation: 3.06%
4,000 Union Pacific Corp...................................................... 282,000
---------
Total Common Stocks (cost $6,596,953)................................... 7,686,719
---------
Principal Amount COMMERCIAL PAPER: 10.85%
- ------------------------------------------------------------------------------------------------------------------
$1,000,000 Ford Motor Credit, 5.569%, due 7/7/1997 (cost $1,000,000)............... 1,000,000
---------
</TABLE>
5
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at June 30, 1997, Continued
- ------------------------------------------------------------------------------------------------------------------
Principal Amount REPURCHASE AGREEMENT: 11.19% Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
$1,031,000 Star Bank Repurchase Agreement, 5.25%, dated 6/30/1997,
due 7/1/1997, collateralized by $1,030,000 GNMA, 6.5%,
due 2/20/2024 (proceeds $1,031,150) (cost $1,031,000)................... $ 1,031,000
-----------
Total Investment in Securities (cost $8,627,953+): 105.48%.............. 9,717,719
Liabilities in excess of other assets: (5.48)%.......................... (504,896)
-----------
Total Net Assets: 100.0%................................................ $ 9,212,823
===========
*Non-income producing security.
+ At June 30, 1997, the cost of securities for Federal tax purposes was
$8,627,953. Unrealized appreciation and depreciation of securities, based on
cost for Federal income tax purposes, were as follows:
Gross unrealized appreciation........................................... $ 1,219,245
Gross unrealized depreciation.......................................... (129,479)
-----------
Net unrealized appreciation....................................... $ 1,089,766
===========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at June 30, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at value (identified cost $8,627,953)....................... $ 9,717,719
Cash................................................................................... 926
Receivables:
Dividends and interest........................................................... 13,300
Fund shares sold................................................................. 1,268
Due from Adviser................................................................. 7,028
Prepaid expenses....................................................................... 6,639
Other assets........................................................................... 2,478
-----------
Total assets .............................................................. 9,749,358
-----------
LIABILITIES
Payable for investment securities purchased............................................ 511,525
Other accrued expenses................................................................. 25,010
-----------
Total liabilities.......................................................... 536,535
-----------
NET ASSETS ............................................................................. $ 9,212,823
===========
Net asset value, offering and redemption price per share
($9,212,823/1,351,548 shares outstanding;
100,000,000 shares authorized with $.001 par value) ............................. $6.82
=====
COMPONENTS OF NET ASSETS
Paid-in capital........................................................................ $ 7,996,061
Accumulated net investment loss........................................................ (107,624)
Accumulated net realized gain on investments........................................... 234,620
Net unrealized appreciation on investments............................................. 1,089,766
-----------
Net assets ................................................................ $ 9,212,823
===========
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - Year Ended June 30, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income
Dividends........................................................................ $ 150,357
Interest ........................................................................ 92,011
---------
Total investment income ................................................... 242,368
---------
Expenses
Advisory fees (Note 3) .......................................................... 87,501
Professional fees................................................................ 77,838
Administration fee (Note 3)...................................................... 43,534
Transfer agent fees.............................................................. 26,201
Registration fees................................................................ 23,804
12b-1 expense (Note 3)........................................................... 21,872
Miscellaneous.................................................................... 20,786
Accounting fees.................................................................. 14,754
Reports to shareholders.......................................................... 14,351
Officer's salary................................................................. 12,605
Custody fees..................................................................... 11,765
Directors' fees.................................................................. 5,514
Insurance........................................................................ 3,991
---------
Total expenses............................................................. 364,516
Less expenses reimbursed by Adviser........................................ (14,524)
---------
Net expenses............................................................... 349,992
---------
Net investment loss ..................................................... (107,624)
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on:
Investments ..................................................................... 239,902
Options.......................................................................... 31,638
---------
Total net realized gain.................................................... 271,540
Net change in unrealized appreciation on investments................................... 751,797
---------
Net realized and unrealized gain................................................. 1,023,337
---------
Net Increase in Net Assets Resulting from Operations ...................... $ 915,713
=========
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
June 30, 1997 June 30, 1996
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss....................................................... $ (107,624) $ (148,883)
Net realized gain on investments ......................................... 271,540 1,768,870
Net change in unrealized appreciation (depreciation) on investments....... 751,797 (614,509)
---------- ----------
Net increase in net assets resulting from operations ............... 915,713 1,005,478
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net realized gain on investments.......................................... (1,051,231) (765,908)
---------- ----------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold................................................. 889,719 255,949
Net asset value of shares issued on reinvestment of distributions......... 985,471 727,336
Cost of shares redeemed................................................... (1,342,657) (1,400,287)
---------- ----------
Net increase (decrease) from capital share transactions ............ 532,533 (417,002)
---------- ----------
Total increase (decrease) in net assets ...................... 397,015 (177,432)
NET ASSETS
Beginning of year......................................................... 8,815,808 8,993,240
---------- ----------
End of year (including accumulated net investment loss of
$107,624 and $148,883, respectively)................................ $9,212,823 $8,815,808
========== ==========
CHANGE IN SHARES
Shares sold .............................................................. 134,740 37,245
Shares issued on reinvestment of distributions............................ 158,947 115,085
Shares redeemed........................................................... (201,491) (200,891)
---------- ----------
Net increase (decrease)................................................... 92,196 (48,561)
========== ==========
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
The Matterhorn Growth Fund, Inc.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
- ----------------------------------------------------------------------------------------------------------------
Years Ended June 30,
--------------------------------------------------
1997 1996(a) 1995 1994 1993*
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........................ $ 7.00 $ 6.88 $ 5.87 $ 7.09 $ 6.30
------ ------ ------ ------ ------
Income from investment operations:
Net investment loss ................................ (.07) (.12) (.17) (.17) (.04)
Net realized and unrealized gain on
investments................................... .74 .85 1.28 .71 1.77
------ ------ ------ ------ ------
Total from investment operations.......................... .67 .73 1.11 .54 1.73
------ ------ ------ ------ ------
Less distributions:
From net realized gains............................. (.85) (.61) (.10) (1.76) (.94)
------ ------ ------ ------ ------
Total distributions....................................... (.85) (.61) (.10) (1.76) (.94)
------ ------ ------ ------ ------
Net asset value, end of year.............................. $ 6.82 $ 7.00 $ 6.88 $ 5.87 $ 7.09
====== ====== ====== ====== ======
Total return ............................................. 10.81% 11.60% 19.32% 5.60% 28.89%
Ratios/supplemental data:
Net assets, end of year (000's omitted)................... $9,213 $8,816 $8,993 $8,201 $8,048
Ratio to average net assets:
Expenses (excluding interest) ...................... 4.00% 4.21% 4.62% 4.87% 4.27%
Interest expense.................................... .00 .02 .56 .14 .12
------ ------ ------ ------ ------
Total expenses, net of reimbursement................ 4.00%+ 4.23% 5.18% 5.01% 4.39%
====== ====== ====== ====== ======
Net investment loss................................. (1.23)% (1.64)% (2.50)% (2.77)% (.62)%
====== ====== ====== ====== ======
Portfolio turnover rate .................................. 137.38% 88.32% 72.11% 160.06% 167.27%
Average commission rate paid**............................ $.0623 $ -- $ -- $ -- $ --
(B) BANK LOANS
Amount outstanding at end of year (000's omitted)......... $ -- $ -- $ 366 $ 27 $ --
Average amount of bank loans outstanding
during the year (monthly average) (000's omitted)... $ -- $ 12 $ 456 $ 44 $ 49
Average number of shares outstanding during
the year (monthly average) (000's omitted)*......... -- 1,306 1,369 1,268 773
Average amount of debt per share during the year.......... $ -- $ .01 $ .33 $ .03 $ .06
</TABLE>
* Based on average month-end shares outstanding.
** A fund is required to disclose its average commission rate paid per share for
security trades on which commissions are charged. This amount may vary from fund
to fund depending on the mix of trades executed in various markets where trading
practices and commission rate structures may differ. This rule took effect on
September 30, 1996 and is not required for periods prior to that date.
+ In the absence of the expense reimbursement, expenses would have been 4.17% of
average net assets for the year ended June 30, 1997.
(a) On March 15, 1996, the investment adviser changed, and Matterhorn Asset
Management Corporation became the Fund's investment adviser.
See Notes to Financial Statements.
10
<PAGE>
The Matterhorn Growth Fund, Inc.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Matterhorn Growth Fund, Inc. (the "Fund") is a Maryland corporation
incorporated on May 2, 1980 and is registered under the Investment Company Act
of 1940 (the "1940 Act") as a non-diversified, open-end management investment
company. The Fund's objective is to seek long-term capital appreciation for
shareholders.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities are valued daily based
upon latest closing market prices for those securities traded on
national securities exchanges, or if there has been no sale that day
at the mean between the last bid and asked prices, and at the closing
bid price for those securities traded in the over-the-counter market.
Short-term investments with less than 60 days to maturity when
acquired by the Fund are valued on an amortized cost basis. All other
securities and assets are valued at fair value, as determined in good
faith by the Board of Directors.
B. Equity Option Contracts. When the Fund writes a call option, the
premiums received are recorded as a liability and marked-to-market
daily to reflect the current value of the option written. If the
written option is not exercised prior to expiration, the premium
received is treated as realized gain. If the written option is
exercised, the premium received is added to the sale proceeds of the
underlying security.
The premium paid by the Fund for the purchase of an option is
included as an investment and is marked-to-market daily to reflect
the current value of the option purchased. If the purchased option is
not exercised prior to expiration, the premium paid is treated as
realized loss. If the Fund exercised a call option, the cost of the
security is increased by the premium paid to buy the call. If the
Fund exercises a put option, it realizes a gain or loss from the sale
of the underlying security and the proceeds from such sale are
decreased by the premium originally paid.
C. Security Transactions and Related Investment Income. Securities
transactions are accounted for on the trade date, and dividend income
is recorded on the ex-dividend date. Interest income is recorded on
the accrual basis. The cost of securities sold is determined on a
first-in, first-out basis for both financial statement and federal
income tax purposes.
It is the Fund's policy to take possession of securities as
collateral under repurchase agreements and to determine, on a daily
basis, that the value of such securities are sufficient to cover the
value of the repurchase agreements.
D. Federal Income Taxes. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
shareholders. Therefore, no provision for federal income tax is
required.
11
<PAGE>
The Matterhorn Growth Fund, Inc.
NOTES TO FINANCIAL STATEMENTS, Continued
- --------------------------------------------------------------------------------
E. Dividends and Distributions to Shareholders. Dividends and
distributions to shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from
generally accepted accounting principles.
F. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
A. Investment Advisory Agreements. Pursuant to an Advisory Agreement
with Matterhorn Asset Management Corporation (the "Adviser"), the
Adviser receives a fee, payable monthly, at the annual rate of 1.00%
of the Fund's average daily net assets.
The Fund is responsible for its own operating expenses, as defined.
The Adviser has agreed until March 15, 1998, to reimburse the Fund to
the extent that the Fund's operating expenses (excluding interest,
taxes, brokerage commissions and other portfolio transaction
expenses, capital expenditures and extraordinary expenses) exceeds 4%
of the Fund's average daily net assets.
B. Distribution Agreements. Bainbridge & Co. ("Bainbridge") and
Cumberland Brokerage Corporation ("Cumberland") act as
co-distributors for shares of the Fund pursuant to a Distribution
Agreement. Bainbridge and Cumberland are affiliates of the Adviser.
C. Distribution Plan. The Fund has adopted a Distribution Plan in
accordance with Rule 12b-1 under the 1940 Act. The Plan provides that
the Fund will pay Bainbridge and Cumberland an aggregate distribution
fee, payable monthly, at the annual rate of 0.25% of the Fund's
average daily net assets. The fee is paid to Bainbridge and
Cumberland as compensations for their services rendered.
D. Administration Agreement. Pursuant to an Administration Agreement
with Investment Company Administration Corporation ("Administrator",
"ICAC") the Fund pays ICAC for its services a monthly fee at the
annual rate of 0.10% of the Fund's average daily net assets, subject
to a minimum annual fee of $45,000 for the first year and $40,000
thereafter.
E. Other. The Fund pays each Director who is not an "interested person"
a $250 attendance fee and any expenses incurred to attend the
meetings. Total fees paid to Directors for year ended June 30, 1997
are included in the "Statement of Operations".
Certain officers and Directors of the Fund are also officers and/or
Directors of the Adviser, Administrator and co-distributors.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the year ended June 30, 1997, purchases and proceeds from the sales of
securities, other than short-term securities, aggregated $9,688,505 and
$11,222,699, respectively.
12
<PAGE>
The Matterhorn Growth Fund, Inc.
NOTES TO FINANCIAL STATEMENTS, Continued
- --------------------------------------------------------------------------------
NOTE 5 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Fund's activity during the period in writing equity call options had
off-balance-sheet risk of accounting loss. A written equity call option
obligates the Fund to deliver the underlying security upon exercise by the
holder of the option. The Fund covers options written by owning the underlying
security.
A summary of the Fund's call option transactions written for the year
ended June 30, 1997 is as follows:
Number of Premiums
Option Contracts Received
---------------- --------
Contracts outstanding at
June 30, 1996 0 $ 0
Options written 40 11,420
Options bought back (40) (11,420)
Options exercised 0 0
Options expired 0 0
--- -------
Contracts outstanding at
June 30, 1997 0 $ 0
=== =======
13
<PAGE>
The Matterhorn Growth Fund, Inc.
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
The Matterhorn Growth Fund, Inc.
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of The Matterhorn Growth Fund, Inc. as of
June 30, 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 the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit 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 June
30, 1997, by correspondence with the custodian and brokers. 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 audit provides 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 The
Matterhorn Growth Fund, Inc. as of June 30, 1997, the results of its operations,
the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
MCGLADREY & PULLEN, LLP
New York, New York
August 1, 1997
14
<PAGE>
INVESTMENT ADVISER
Matterhorn Asset Management Corporation
301 Oxford Valley Road, Suite 802B
Yardley, Pennsylvania 19067
CO-DISTRIBUTORS
Bainbridge & Co.
301 Oxford Valley Road, Suite 801B
Yardley, Pennsylvania 19067
Cumberland Brokerage Corporation
614 Landis Avenue
Vineland, New Jersey 08360
CUSTODIAN
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
TRANSFER AGENT
American Data Services, Inc.
24 West Carver Street, 2nd Floor
Huntington, New York 11743
1-800-637-3901
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate
so that shares, when redeemed, may be worth more or less than their original
cost. Statements and other information herein are dated and are subject to
change.
<PAGE>
[THE MATTERHORN GROWTH FUND, INC. IMAGE]
Annual Report
June 30, 1997
