NICHOLAS II, INC.
May 25, 2000
Dear Fellow Shareholders,
The trend in the new millennium has been volatility in the equity
markets. After last year's wild speculation in the technology and
biotechnology sectors, sanity has come back to the market this year. Many
of last year's high-flyers are down anywhere from 50% to 80% from their
highs reached near mid-March of 2000. The correction in the tech sector
that began in mid-March has continued through the date of this letter. The
recent correction, therefore, is not fully reflected in the numbers shown
in the chart below which shows performance for the periods ended March 31,
2000. Nicholas II's returns are more in line with benchmark indices
because the Fund did not correct as drastically as the indices. We feel
somewhat vindicated by our stance which has been to stick with our
principals of investing, and we hope going forward the market will remain
more rational and less speculative.
Returns for Nicholas II and selected indices are provided in the chart
below for the periods ended March 31, 2000.
<TABLE>
<CAPTION>
Average Annual Total Return*
------------------------------------------------
Three Six
Months Months 1 Year 3 Years 5 Years 10 Years 15 Years
------ ------ ------ ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Nicholas II, Inc. (Distributions Reinvested)...... (1.11)% 13.24% 4.57% 14.06% 16.13% 13.82% 13.68%
Russell 2000 Index(Dividends Reinvested).......... 7.08% 26.83% 37.29% 17.75% 17.24% 14.43% 12.77%
Standard & Poors 500 Index (Dividends Reinvested). 2.29% 17.52% 17.94% 27.39% 26.75% 18.83% 18.40%
Consumer Price Index.............................. 1.42% 2.03% 3.69% 2.28% 2.50% 2.90% 3.20%
Ending value of $10,000 invested in Nicholas II, Inc
(Distributions Reinvested) ........................ $9,889 $11,324 $10,457 $14,839 $21,121 $36,506 $68,459
</TABLE>
The first quarter of 2000, as well as other periods for Nicholas II,
was adversely affected by the Fund's lack of very speculative technology
and biotechnology stocks most of which were not making money, yet had huge
returns. When taking out speculative stocks, small company stocks have
been lackluster performers over the last few years. This is not an excuse
for our performance, it merely reflects our conservative nature. We will
not perform well when the markets are driven by speculation. We will,
however, likely perform better when the speculative selloff occurs, as was
evident during the most recent correction.
As I mentioned in our last letter, we are diligently looking at ways
to make investments in new economy companies. This latest correction has
given us a good opportunity to invest in some of these types of companies
at much more reasonable valuations. The areas of investment include
telecommunication broadband service providers and wireless service
providers as well as telecom, internet, and wireless infrastructure
companies. We also have added some software companies in the areas of
security and internet infrastructure. Finally, we have expanded to include
some names in the IT (information technology) services area which focus on
helping mainstream companies build out their internet presence. As of May
25, the portfolio contained 37% in the technology field. The majority of
our technology holdings have recurring revenue, and generate profit and
cash flow. These areas of the economy continue to grow rapidly. If we
make good decisions about the end markets and managements of these
companies, our performance should improve.
In assessing the rest of the year, we feel the volatility will
continue as the market digests and sorts out the winners and losers from
the many IPOs that went public last year, as well as the movement of
interest rates throughout the rest of the year.
Thank you for your continued support.
Sincerely,
/s/ David O. Nicholas
David O. Nicholas
President
* Total returns are historical and include change in share price and
reinvestment of dividend and capital gain distributions. Past
performance is no guarantee of future results. Principal value and
return will fluctuate so an investment, when redeemed, may be worth more
or less than original cost.
<PAGE>
Financial Highlights
(For a share outstanding throughout each period)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[CAPTION]
<TABLE>
Six Months
Ended
March 31, Year ended September 30,
2000 --------------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
----------- ------ ------ ------ ------ ------
<C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $31.83 $34.78 $40.65 $33.34 $30.07 $26.71
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. .03 .01 .13 .08 .10 .24
Net gains (losses) on securities
(realized and unrealized)........... $ 4.18 1.18 (.69) 10.47 5.84 5.22
------ ------ ------ ------ ------ ------
Total from investment operations...... $ 4.21 1.19 (.56) 10.55 5.94 5.46
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
From net investment income............. (.01) (.13) (.08) (.08) (.18) (.21)
From captial gains .................... (.47) (4.01) (5.23) (3.16) (2.49) (1.89)
------ ------ ------ ------ ------ ------
Total distributions................. (.48) (4.14) (5.31) (3.24) (2.67) (2.10)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........... $35.56 $31.83 $34.78 $40.65 $33.34 $30.07
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL RETURN............................. 13.24%** 2.50% (1.66)% 34.94% 21.35% 22.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions)..... $819.4 $874.1 $960.0 $994.4 $774.8 $682.2
Ratio of expenses to average net assets.. .63%* .61% .59% .61% .62% .66%
Ratio of net investment income
to average net assets.................. .14%* .03% .33% .23% .29% .68%
Portfolio turnover rate.................. 79.05%* 21.03% 20.47% 30.21% 24.47% 19.63%
</TABLE>
*Annualized.
**Not annualized.
The accompanying notes to financial statements are an integral
part of these statements.
- -------------------------------------------------------------------------------
Top Ten Portfolio Holdings
March 31, 2000 (unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Percentage of
Net Assets
----------------
Fiserv, Inc. ............................................. 3.75%
Protective Life Corporation .............................. 3.45%
Sybron International Corporation.......................... 3.12%
Artesyn Technologies, Inc................................. 2.95%
Forest Laboratories, Inc.................................. 2.70%
CVS Corporation .......................................... 2.61%
General Motors Corporation - Class H...................... 2.55%
Elan Corporation, plc..................................... 2.51%
Marshall & Ilsley Corporation............................. 2.48%
Qwest Communications International Inc.................... 2.21%
-------
Total of top ten ............................... 28.33%
-------
-------
Schedule of Investments
March 31, 2000 (unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMMON STOCKS - 97.14%
Communication Services - 4.05%
98,000 FLAG Telecom Holdings Limited * $ 2,217,250
380,000 Global TeleSystems Group, Inc. * 7,790,000
175,000 Nextel Partners, Inc. * 5,075,000
372,590 Qwest Communications
International Inc. * 18,070,615
--------------
33,152,865
--------------
Consumer Cyclicals - Products - 1.65%
643,100 Thermo Instrument Systems Inc. * 13,545,294
--------------
Consumer Cyclicals - Retail - 5.35 %
374,500 Fastenal Company 17,929,187
157,800 Kohl's Corporation * 16,174,500
685,000 O'Reilly Automotive, Inc. * 9,718,438
--------------
43,822,125
--------------
Consumer Cyclicals - Services - 2.87%
367,500 Cintas Corporation 14,401,406
466,062 G&K Services, Inc. 9,110,067
- Class A
--------------
23,511,473
--------------
Consumer Staples -
Drug, Retail, Food & Beverage - 3.40%
569,948 CVS Corporation 21,408,672
200,000 Outback Steakhouse, Inc. * 6,412,500
--------------
27,821,172
--------------
Consumer Staples -
Media & Entertainment - 7.45%
222,865 Clear Channel
Communications, Inc. * 15,391,614
310,000 go.com * 6,471,250
358,926 International Speedway Corporation
- Class A 16,129,237
120,000 Lamar Advertising Company * 5,460,000
780,000 USA Networks, Inc. * 17,598,750
--------------
61,050,851
--------------
Financial - Banks & Diversified
Financials - 4.72%
157,030 Fifth Third Bancorp 9,892,890
351,200 Marshall & Ilsley Corporation 20,281,800
460,000 National Commerce Bancorporation 8,510,000
--------------
38,684,690
--------------
Financial - Insurance - 5.13%
470,000 Nationwide Financial Services, Inc. 13,747,500
890,000 Protective Life Corporation 28,257,500
--------------
42,005,000
--------------
Health Care - Products - 16.50%
340,000 BioChem Pharma Inc.* 7,522,500
100,000 Biogen, Inc. * 6,987,500
455,000 Biomet, Inc. 16,550,625
370,000 Boston Scientific Corporation * 7,885,625
432,400 Elan Corporation, plc * 20,539,000
262,000 Forest Laboratories, Inc. * 22,139,000
225,500 Guidant Corporation * 13,262,219
881,300 Sybron International Corporation * 25,557,700
371,166 Watson Pharmaceuticals, Inc. * 14,730,650
--------------
135,174,819
--------------
Health Care - Services - 9.66%
342,168 Cardinal Health, Inc. 15,696,957
1,126,383 Health Management
Associates, Inc.-Class A * 16,050,958
700,000 IMS Health Incorporated 11,856,250
358,750 Manor Care, Inc. * 4,843,125
1,083,036 PSS World Medical, Inc. * 7,344,392
214,400 Patterson Dental Company * 8,200,800
700,000 Renal Care Group, Inc. * 15,181,250
--------------
79,173,732
--------------
Technology - Communication
Equipment - 6.55%
305,000 ADC Telecommunications, Inc. * 16,431,875
275,000 Andrew Corporation * 6,290,625
420,000 Harris Corporation 14,516,250
70,000 Tekelec * 2,598,750
220,000 Tellabs, Inc. * 13,856,568
--------------
53,694,068
--------------
Technology - Hardware - 7.36%
87,000 Apple Computer, Inc. * 11,815,687
1,278,400 Artesyn Technologies, Inc. * 24,209,700
195,000 Brooks Automation, Inc. * 12,187,500
70,000 Microchip Technology
Incorporated * 4,602,500
150,000 Zebra Technologies Corporation
- Class A * 7,500,000
--------------
60,315,387
--------------
Technology - Services - 17.32%
550,000 Concord EFS, Inc. * 12,615,625
530,100 DBT Online, Inc. * 9,839,981
825,625 Fiserv, Inc. * 30,702,930
167,500 General Motors Corporation
- Class H * 20,853,750
645,000 Keane, Inc. * 16,286,250
550,000 Loral Space & Communications Ltd. * 5,603,125
322,500 PanAmSat Corporation * 15,822,656
315,000 Paychex, Inc. 16,498,125
155,000 Predictive Systems, Inc. * 7,062,188
150,000 Proxicom, Inc. * 6,646,875
--------------
141,931,505
--------------
Technology - Software - 3.19%
35,000 Business Objects S.A. * 3,482,500
57,500 Citrix Systems, Inc. * 3,809,375
70,000 Entrust Technologies Inc. * 5,955,467
45,000 ISS Group, Inc. * 5,242,500
100,000 Rational Software Corporation * 7,650,000
--------------
26,139,842
--------------
Transportation - 1.94%
400,000 Expeditors International
of Washington, Inc. 15,900,000
--------------
TOTAL COMMON STOCKS
(cost $546,000,961) 795,922,823
--------------
CORPORATE BOND - 0.43 %
Health Care - Services - 0.43%
$6,000,000 Emeritus Corporation
6.25% due January 1, 2006
(cost $4,980,500) 3,540,000
--------------
SHORT-TERM INVESTMENTS - 2.27%
Commercial Paper - 0.91 %
2,500,000 WICOR Industries, Inc.
6.30%, due April 4, 2000 2,499,562
2,000,000 Marcus Corporation
6.35%, due April 6, 2000 1,998,942
3,000,000 Banta Corporation
6.30%, due April 10, 2000 2,996,325
--------------
7,494,829
--------------
Variable Rate Demand Note - 1.36%
11,150,837 Firstar Bank U.S.A., N.A.
5.80%, due April 3, 2000 11,150,837
--------------
TOTAL SHORT-TERM INVESTMENTS
(cost $18,640,493) 18,645,666
--------------
TOTAL INVESTMENTS
(cost $569,621,954) - 99.84% 818,108,489
--------------
OTHER ASSETS,
NET OF LIABILITIES - 0.16% 1,277,910
--------------
TOTAL NET ASSETS
(Basis of percentages
disclosed above) - 100% $819,386,399
--------------
--------------
* Nondividend paying security.
The accompanying notes to financial statements
are an integral part of this schedule.
Historical Record (unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[CAPTION]
<TABLE>
Net Investment Dollar Growth of
Net Income Capital Gain Weighted An Initial
Asset Value Distributions Distributions Price/Earnings $10,000
Per Share Per Share Per Share Ratio** Investment***
----------- -------------- ------------- -------------- ----------
<C> <C> <C> <C> <C> <C>
October 17, 1983* $10.00 $ --- $ --- --- $10,000
September 30, 1986........... 16.90 0.1630 0.0610 15.0 times 17,581
September 30, 1987........... 21.01 0.4200 0.5130 20.9 23,108
September 30, 1988........... 18.58 0.3380 1.3030 15.0 22,766
September 30, 1989........... 21.76 0.3350 0.0800 17.1 27,291
September 30, 1990........... 17.39 0.3124 0.6686 14.8 22,888
September 30, 1991........... 23.87 0.3422 0.1434 17.8 32,250
September 30, 1992........... 24.53 0.2447 0.4042 17.3 34,052
September 30, 1993........... 26.94 0.2350 0.8000 18.1 38,885
September 30, 1994........... 26.71 0.2000 1.4700 18.5 41,020
September 30, 1995........... 30.07 0.2056 1.8944 20.8 50,205
September 30, 1996........... 33.34 0.1750 2.4979 28.9 60,922
September 30, 1997........... 40.65 0.0779 3.1621 31.4 82,206
September 30, 1998........... 34.78 0.0810 5.2282 28.6 80,845
September 30, 1999........... 31.83 0.1337 4.0049 29.0 82,864
March 31, 2000............... 35.56 0.0100(a) 0.4701(a) 33.6 93,835
*Date of Initial Public Offering. (a) Paid December 23, 1999 to shareholders of
**Based on latest 12 months accomplished earnings. record December 22, 1999.
***Assuming reinvestment of all distributions.
</TABLE>
Range in quarter end price/earnings ratios
High Low
- -------------------- ---------------- -------
March 31, 2000 33.6 September 30, 1985 11.7
Statement of Assets and Liabilities
March 31, 2000 (unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
ASSETS:
<C> <C>
Investments in securities at market value (cost $569,621,954)(Note 1 (a)).................. $818,108,489
Cash....................................................................................... 116,564
Receivables --
Investment securities sold ........................................................... 3,705,965
Dividend and interest ................................................................ 312,069
--------------
Total receivables ............................................................... 4,018,034
--------------
Total assets .................................................................... 822,243,087
--------------
LIABILITIES:
Payables --
Investment securities purchased ...................................................... 2,150,000
Management fee (Note 2) .............................................................. 381,300
Other payables and accrued expenses .................................................. 325,388
--------------
Total liabilities ......................................................... 2,856,688
--------------
Total net assets .......................................................... $819,386,399
--------------
--------------
NET ASSETS CONSIST OF:
Fund shares issued and outstanding ........................................................ $ 360,111,309
Net unrealized appreciation on investments (Note 3) ....................................... 248,481,362
Accumulated undistributed net realized gains on investments ............................... 210,442,485
Accumulated undistributed net investment income............................................ 351,243
--------------
$819,386,399
--------------
--------------
NET ASSET VALUE PER SHARE ($.01 par value, 200,000,000 shares authorized),
offering price and redemption price ($819,386,399 ./. 23,045,566 shares
outstanding) .............................................................................. $35.56
------
------
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
Statement of Operations
For the six months ended March 31, 2000 (unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INCOME:
Dividend.................................................. $ 1,676,111
Interest.................................................. 1,674,287
------------
3,350,398
------------
EXPENSES:
Management fee (Note 2) .................................. 2,301,272
Transfer agent fees ...................................... 267,430
Postage and mailing....................................... 45,024
Registration fees......................................... 36,215
Custodian ................................................ 21,025
Legal fees ............................................... 19,614
Printing ................................................. 13,585
Audit and tax consulting fees............................. 10,000
Directors' fees .......................................... 7,500
Insurance ................................................ 6,093
Telephone ................................................ 5,554
Pricing and accounting ................................... 5,075
Other .................................................... 985
------------
2,739,372
------------
Net investment income............................... 611,026
------------
NET REALIZED GAIN ON INVESTMENTS: ............................ 210,444,508
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS ....... (101,859,577)
------------
Net realized and unrealized gains on investments ... 108,584,931
------------
Net increase in net assets resulting from operations $109,195,957
------------
------------
The accompanying notes to financial statements
are an integral part of this statement.
Statements of Changes in Net Assets
For the six months ended March 31, 2000 (unaudited) and the year ended
September 30, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[CAPTION]
<TABLE>
2000 1999
--------------- ------------
<C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ............................................ $ 611,026 $ 270,041
Net realized gain on investments ................................. 210,444,508 22,672,428
Net increase (decrease) in unrealized appreciation on investments (101,859,577) 11,314,637
-------------- ------------
Net increase in net assets
resulting from operations.............................. 109,195,957 34,257,106
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.0100 and $0.1337 per share, respectively) .................. (259,783) (3,694,992)
Distributions from net realized gains on investment transactions
($0.4701 and $4.0049 per share, respectively) .................. (12,212,372) (110,681,240)
-------------- ------------
Total distributions....................................... (12,472,155) (114,376,232)
-------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (2,101,255 and 4,328,067
shares, respectively) .......................................... 70,773,029 154,027,842
Reinvestment of distributions
(329,925 and 3,119,952 shares, respectively) ................... 11,623,249 107,638,328
Cost of shares redeemed (6,848,565 and 7,591,153 shares,
respectively) .................................................. (233,878,970) (267,431,680)
-------------- ------------
Decrease in net assets derived from capital
share transactions .................................... (151,482,692) (5,765,510)
-------------- ------------
Total decrease in net assets ............................ (54,758,890) (85,884,636)
-------------- ------------
NET ASSETS:
Beginning of period (including undistributed net investment
income of $3,168,886 in fiscal 1999).............................. 874,145,289 960,029,925
-------------- ------------
End of period (including undistributed net investment
income of $351,243 in fiscal 2000) ............................... $819,386,399 $874,145,289
-------------- -------------
-------------- -------------
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
Notes to Financial Statements
March 31, 2000 (unaudited)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(1) Summary of Significant Accounting Policies --
Nicholas II, Inc. (the "Fund") is an open-end, diversified management
investment company registered under the Investment Company Act of 1940,
as amended. The primary objective of the Fund is growth in which income
is a secondary consideration. To achieve its objective, the Fund invests
in a diversified list of common stocks having growth potential. The
following is a summary of the significant accounting policies of the Fund.
(a) Each equity security is valued at the last sale price reported by
the principal security exchange on which the issue is traded, or if
no sale is reported, the last bid price. Most debt securities,
excluding short-term investments, are valued at current evaluated
bid price. Variable rate demand notes are valued at cost which
approximates market value. U.S. Treasury Bills and commercial paper
are stated at market value with the resultant difference between
market value and original purchase price being recorded as interest
income. Investment transactions are generally recorded no later
than the first business day after the trade date. Cost amounts, as
reported on the schedule of investments and the statement of assets
and liabilities, are the same for federal income tax purposes.
(b) Net realized gains and losses on common stocks and bonds were
computed on the basis of specific identification.
(c) Provision has not been made for federal income taxes or excise taxes
since the Fund has elected to be taxed as a "regulated investment
company" and intends to distribute substantially all taxable income
to its shareholders and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies.
(d) The amount of dividends and distributions from net investment income
and net realized capital gains are determined in accordance with
federal income tax regulations, which may differ from generally
accepted accounting principles. To the extent these book and tax
differences are permanent in nature, such amounts are reclassified
among fund shares issued and outstanding, accumulated undistributed
net realized gains on investments and accumulated undistributed net
investment income. Accordingly, at March 31, 2000, no
reclassifications were recorded.
(e) Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Non-cash dividends, if any, are recorded at
fair market value on date of distribution.
(f) 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
revenues and expenses during the reporting period. Actual results
could differ from estimates.
(2) Investment Adviser and Management Agreement --
The Fund has an agreement with Nicholas Company, Inc. (with whom certain
officers and directors of the Fund are affiliated) to serve as investment
adviser and manager. Under the terms of the agreement, a monthly fee is
paid to the investment adviser based on .75 of 1% on an annual basis of
the average net asset value up to and including $50 million, .60 of 1% on
an annual basis of the average net asset value over $50 million up to and
including $100 million and .50 of 1% on an annual basis of the average
net asset value in excess of $100 million. Also, the investment adviser
may be reimbursed for clerical and administrative services rendered by
its personnel. This advisory agreement is subject to an annual review by
the Directors of the Fund.
(3) Net Unrealized Appreciation --
Aggregate gross unrealized appreciation (depreciation) as of March 31,
2000, based on investment cost for federal tax purposes is as follows:
Aggregate gross unrealized appreciation on investments.. $288,690,947
Aggregate gross unrealized depreciation on investments.. (40,209,585)
------------
Net unrealized appreciation ........................ $248,481,362
------------
------------
(4) Investment Transactions --
For the period ended March 31, 2000, the cost of purchases and the
proceeds from sales of investment securities, other than short-term
obligations, aggregated $325,132,724 and $405,606,807, respectively.
AUTOMATIC INVESTMENT PLAN - AN UPDATE (unaudited)
- -------------------------------------------------
The Nicholas Family of Fund's Automatic Investment Plan provides a simple
method to dollar cost average into the fund(s) of your choice.
Dollar cost averaging involves making equal systematic investments over an
extended time period. A fixed dollar investment will purchase more shares
when the market is low and fewer shares when the market is high. The
automatic investment plan is an excellent way for you to become a disciplined
investor.
The following table illustrates what dollar cost averaging can achieve.
Please note that past performance is no guarantee of future results.
Nicholas Company recommends dollar cost averaging as a practical investment
method. It should be consistently applied for long periods (5 years or more)
so that investments are made through several market cycles. The table will
be updated and appear in future financial reports issued by the Nicholas
Family of Funds.
[CAPTION]
<TABLE>
Nicholas II
---------------------
<C> <C> <C>
$1,000 initial investment on ............................................................. 10/17/83* 3/31/90
Number of years of investing $100 each month following the date of initial investment..... 16.5 10
Total cash invested ...................................................................... $20,800 $13,000
Total dividends and capital gains distributions reinvested ............................... $33,382 $10,002
Total full shares owned 3/31/00 .......................................................... 2,174 797
Total market value on 3/31/00 ............................................................ $77,299 $28,324
The results above assume purchase on the last day of the month. The Nicholas
Automatic Investment Plan actually invests on the 20th of each month (or on the alternate
date specified by the investor). Total market value includes reinvestment of all distributions.
*Date of initial offering.
</TABLE>
- -------------------------------------------------------------------------------
Nicholas Family of Funds
Services Offered
===============================================================================
IRA
Traditional Simple Educational
Roth SEP
Self-employed Master Retirement Plan
Profit Sharing Money Purchase
Automatic Investment Plan
Direct Deposit of Dividend and Capital Gain Distributions
Systematic Withdrawal Plan with Direct Deposit
Monthly Automatic Exchange between Funds
Telephone Redemption (Regular accounts only)
Telephone Exchange
24 hour Automated Account Information (1-800-544-6547)
Please call a shareholder representative for further information on the above
services or with any other questions you may have regarding the Nicholas Family
of Funds (1-800-227-5987)
Officers and Directors
ALBERT O. NICHOLAS, President and Director
ROBERT H. BOCK, Director
MELVIN L. SCHULTZ, Director
RICHARD SEAMAN, Director
DAVID L. JOHNSON, Executive Vice President
THOMAS J. SAEGER, Executive Vice President and Secretary
DAVID O. NICHOLAS, Senior Vice President
LYNN S. NICHOLAS, Senior Vice President
JEFFREY T. MAY, Senior Vice President and Treasurer
MARK J. GIESE, Vice President
CANDACE L. LESAK, Vice President
TRACY C. EBERLEIN, Assistant Vice President
KATHLEEN A. EVANS, Assistant Vice President
Investment Adviser
NICHOLAS COMPANY, INC.
Milwaukee, Wisconsin
414-272-6133 or 800-227-5987
Transfer Agent
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547
Custodian
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
Milwaukee, Wisconsin
Auditors
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
Counsel
MICHAEL, BEST & FRIEDRICH LLP
Milwaukee, Wisconsin
- -----------------------------------------------------------------------
This report is submitted for the information of shareholders
of the Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
