OLD DOMINION INVESTORS' TRUST, INC.
110 BANK STREET
SUFFOLK, VIRGINIA 23434
PHONE 757-539-2396
Custodian
UNITED MISSOURI BANK
928 Grand Avenue
Kansas City, Missouri 64141
Counsel
KAUFMAN & CANOLES
Nations Bank Center
P.O. Box 3037
Norfolk, VA 23574
Auditors
TAIT, WELLER AND BAKER
Two Penn Center Plaza
Suite 700
Philadelphia, Pennsylvania 19102-1707
Manager, Underwriter
INVESTORS' SECURITY COMPANY, INC.
110 Bank Street
Suffolk, Virginia 23434
Phone: (757) 539-2396
Transfer Agent
FPS SERVICES, INC.
3200 Horizon Drive
P.O. Box 61503
King of Prussia, PA 19406-0903
Phone: (610) 239-4500
[OLD DOMINION INVESTORS'
TRUST, INC. LOGO]
SEMI-ANNUAL REPORT
FEBRUARY 28, 1997
(unaudited)
<PAGE>
REPORT TO STOCKHOLDERS
TO THE STOCKHOLDERS:
This semi-annual report of The Old Dominion Investors' Trust, Inc. covers
the first 6-month period of the fiscal year from September 1, 1996 through
February 28, 1997. As of February 28, 1997, net assets of the Trust were
$8,767,000 and the per share net asset value of the Trust was $25.17. During
this period, distributions were made in the amount of $1.57 per share.
In the last six months, the Trust had a realized gain on expired call
options of $42,788. This additional income from options is paid out to
stockholders in the form of cash distributions. The earning power of the Trust's
Portfolio of securities will be increased to the extent that options written by
the Trust expire unexercised.
The Trust is looking for investments that will provide as much dividend
income to the stockholders as possible, and also offer capital gains potential
as well. We believe that economic trends currently in place will continue for
some time and that we will be poised to benefit from them.
Sincerely yours,
James F. Hope
President, Old Dominion Investors
Trust, Inc.
Cabell B. Birdsong
Portfolio Manager, Secretary &
Treasurer
April 14, 1997
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
PORTFOLIO OF INVESTMENTS
(Unaudited)
FEBRUARY 28, 1997
<TABLE>
<CAPTION>
SHARES COMMON STOCKS: 90.8% VALUE
- ------ ----------
<C> <S> <C>
AUTOMOBILES: 4.6%
12,000 Chrysler Corp. $ 406,500
----------
CHEMICALS: 12.2%
4,700 Dow Chemical Co. 380,700
3,000 E.I. DuPont De Nemours & Co. 321,750
1,000 Eastman Chemical Co. 55,125
3,600 Olin Corp. 144,000
3,500 Union Carbide Corp. 165,375
----------
Total 1,066,950
----------
COMMUNICATIONS: 1.0%
2,100 Pacific Telesis Group 85,575
----------
CONGLOMERATE: 2.3%
2,300 Eastman Kodak Co. 206,137
----------
CONSUMER GOODS AND SERVICES: 8.9%
5,500 American Home Products Corp. 352,000
1,300 Bristol-Myers Squibb Co. 169,650
2,500 Colgate-Palmolive Co. 258,750
----------
Total 780,400
----------
ELECTRIC & GAS UTILITIES: 1.4%
3,000 Dominion Resources Inc. 120,750
----------
ENERGY PRODUCTS: 14.1%
2,500 Atlantic Richfield Co. 312,500
3,000 Exxon Corp. 299,625
2,700 Mobil Corp. 331,425
3,000 Texaco, Inc. 296,625
----------
Total 1,240,175
----------
FINANCIAL SERVICES: 16.9%
4,500 Bankers Trust NY Corp. 408,375
4,300 Chase Manhattan Corp. 430,538
4,000 Fleet Financial Group Inc. 244,000
3,000 Great Western Financial Corp. 131,625
4,400 Nations Bank Corp. 263,450
----------
Total 1,477,988
----------
INSURANCE: 7.6%
4,400 Aetna Life and Casualty Co. 364,650
2,000 Cigna Corp 305,750
----------
Total 670,400
----------
MANUFACTURING: 13.8%
9,500 Cooper Industries Inc. 420,375
8,700 GTE Corp. 406,725
360 Primex Technologies Inc. 6,660
6,000 Xerox Corp. 375,000
----------
Total 1,208,760
----------
</TABLE>
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
PORTFOLIO OF INVESTMENTS (CONTINUED)
(Unaudited)
FEBRUARY 29, 1996
<TABLE>
<CAPTION>
SHARES COMMON STOCKS: 90.8% VALUE
- ------- ----------
<C> <S> <C>
TRANSPORTATION: 8.0%
7,500 CSX Corp. 345,938
3,900 Norfolk Southern Corp. 355,387
----------
Total 701,325
----------
Total common stocks (Cost $7,076,844) 7,964,960
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL REPURCHASE AGREEMENT: 8.6%
- ---------
<S> <C> <C> <C>
5.00%, due 03/07/97 -- collateralized by $724,000
U.S. Treasury Note, 7.500%, 10/31/99 (market value
$783,258) (Repurchase proceeds $750,729)
$750,000 (Cost $750,000) 750,000
---------
Total Investments in Securities (Cost $7,826,844)*
(Notes 1A and 2) 99.4% 8,714,960
Liabilities in Excess of Cash and Other Assets -- Net 0.6% 52,471
----- ----------
Total Net Assets 100.0% $8,767,431
----- ----------
----- ----------
* Cost for federal income tax purposes is $7,826,844 and net unrealized
appreciation consists of:
Gross Unrealized Appreciation $ 904,682
Gross Unrealized Depreciation (16,566)
---------
Net Unrealized Appreciation $ 888,116
---------
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
SCHEDULE OF OPTION CONTRACTS WRITTEN
(Unaudited)
FEBRUARY 28, 1997
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS VALUE
- --------- -------
<S> <C> <C>
COVERED CALL OPTIONS:
10 Aetna Life and Casualty Co., March $80 $ 4,437
15 Aetna Life and Casualty Co., April $70 20,250
30 American Home Products Corp., April $70 1,687
10 Atlantic Richfield Co., April $145 125
20 Bankers Trust NY Corp., April $95 2,375
20 Chase Manhattan Corp., March $100 6,000
7 Cigna Corp., March $160 700
7 Cigna Corp., April $165 1,050
10 Colgate Palmolive Inc., April $110 2,125
20 CSX Corp., May $50 1,625
15 CSX Corp., May $55 375
10 Dow Chemical Co., March $90 125
10 Eastman Chemical Co., March $60 125
10 Eastman Kodak Co., March $90 1,812
15 Exxon Corp., April $110 1,406
10 E.I. Du Pont De Nemour., March $115 500
5 E.I. Du Pont De Nemour., April $115 750
10 Fleet Financial Group Inc., March $60 3,250
10 Fleet Financial Group Inc., April $65 2,813
20 Great Western Financial Corp. April $35 19,500
40 GTE Corp., March $50 1,250
10 Mobil Corp., March $135 250
5 Mobil Corp., May $135 625
20 Nations Bank Corp., April $67.50 1,313
10 Norfolk Southern Corp., March $95 438
10 Norfolk Southern Corp., June $100 1,000
10 Union Carbide Corp., July $50 1,875
10 Xerox Corp., March $65 750
20 Xerox Corp., April $65 3,375
-------
Total (premiums received $47,622)(Notes 1A, 1D and 3) $81,906
-------
-------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF ASSETS AND LIABILITIES
(Unaudited)
FEBRUARY 28, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (identified cost $7,826,844) (Notes 1A
and 2) $8,714,960
Cash 781,007
Receivables:
Securities Sold 463,790
Dividends and interest 32,066
Prepaid expenses and other 5,045
----------
Total assets 9,996,868
----------
LIABILITIES
Payables:
Securities purchased 1,123,880
Capital Stock Redeemed 8,676
Option contracts written, at value (premiums received $47,622) (Note 3) 81,906
Accrued expenses 14,975
----------
Total liabilities 1,229,437
----------
NET ASSETS
(Applicable to 348,346 shares of capital stock outstanding; 500,000 shares of
$12.50 par value authorized) $8,767,431
----------
----------
Computation of offering price:
Net asset value and redemption price per share ($8,767,431 # 348,346 shares) $ 25.17
----------
----------
Offering price per share (100/96 of net asset value)* $ 26.22
----------
----------
*On investments of $100,000 or more the offering price is reduced.
Net assets consists of:
Paid-in capital $7,448.419
Undistributed net realized gains on investments 440,348
Undistributed net investment income 24,832
Net unrealized appreciation of investments and options written 853,832
----------
$8,767,431
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF OPERATIONS
(Unaudited)
SIX MONTHS ENDED FEBRUARY 28, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 120,774
Interest 13,583
----------
Total Income 134,357
----------
Expenses
Investment management fee (Note 4) 20,524
Professional fees 10,418
Insurance expense 7,099
Distribution expenses (Note 4) 2,212
Directors' fees 3,801
Printing expense 1,629
Registration and filing 323
Other expense 2,826
----------
Total expenses 48,832
----------
NET INVESTMENT INCOME 85,525
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND OPTIONS
WRITTEN
Net realized gain on options written 42,788
Net realized gain on investments 557,401
Net change in unrealized appreciation of investments
and option contracts written 573,255
----------
NET GAIN ON INVESTMENTS AND OPTIONS WRITTEN 1,173,444
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,258,969
----------
----------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, YEAR ENDED
1997 AUGUST 31, 1996
---------------- ---------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS
Net investment income $ 85,525 $ 180,294
Net realized gain on options written 42,788 104,627
Net realized gain on investments 557,401 595,065
Net change in unrealized appreciation of investments and options written 573,255 136,807
---------------- ---------------
Net increase in net assets resulting from operations 1,258,969 1,016,793
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income ($.42 and $.29 per share,
respectively) (142,713) (98,274)
Distributions from realized gain on investment and options written ($1.15
and $1.13 per share, respectively) (390,713) (381,011)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from the change in the number
of outstanding share (a) 248,799 (21,148)
---------------- ---------------
Total increase in net assets 974,342 516,360
NET ASSETS
Beginning of year 7,793,089 7,276,729
---------------- ---------------
End of year
(including undistributed net investment income of $24,832 and $82,020,
respectively) $8,767,431 $ 7,793,089
---------------- ---------------
---------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
(a) Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
--------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- ------- -----------
<S> <C> <C> <C> <C>
(UNAUDITED)
Shares sold 6,312 $ 152,517 23,141 $ 534,981
Shares issued in reinvestment of
distributions from net investment income
and realized gain on investments and
options contracts written 15,296 357,881 14,133 314,471
------- --------- ------- -----------
21,608 510,398 37,274 849,452
Shares redeemed (10,820) (261,599) (37,920) (870,600)
------- --------- ------- -----------
Net increase (decrease) 10,788 $ 248,799 (646) $ (21,148)
------- --------- ------- -----------
------- --------- ------- -----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, YEAR ENDED AUGUST 31,
------------ ----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
PER SHARE OPERATING
PERFORMANCE
Net asset value,
beginning of period $23.09 $21.52 $19.64 $20.24 $19.71 $ 20.09 $ 18.23 $ 23.49 $20.37 $30.97 $27.25
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
Income from investment
operations --
Net investment income 0.25 0.53 0.68 0.63 0.54 0.71 0.64 0.75 0.67 0.46 0.43
Net realized and
unrealized gain
(loss) on
investments and
options written 3.40 2.46 2.67 0.51 1.39 0.31 2.88 (3.78) 4.37 (5.95) 6.33
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
Total from
investment
operations 3.65 2.99 3.35 1.14 1.93 1.02 3.52 (3.03) 5.04 (5.49) 6.76
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
Less distributions --
Distributions from net
investment income 0.42 0.29 0.78 0.64 0.45 0.66 0.71 0.82 0.75 0.43 0.89
Distributions from
realized gains on
investments 1.15 1.13 0.44 1.10 0.95 0.74 0.95 1.41 1.17 4.68 2.15
Distributions in
excess of realized
gains on investments -- -- 0.25 -- -- -- -- -- -- -- --
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
Total distributions 1.57 1.42 1.47 1.74 1.40 1.40 1.66 2.23 1.92 5.11 3.04
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
Net asset value, end of
period $25.17 $23.09 $21.52 $19.64 $20.24 $ 19.71 $ 20.09 $ 18.23 $23.49 $20.37 $30.97
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
------------ ------ ------ ------ ------ ------- ------- ------- ------ ------ ------
TOTAL RETURN* 16.44% 14.31% 18.05% 5.92% 10.23% 5.29% 21.09% (13.87)% 26.29% (16.84)% 27.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in thousands) $8,767 $7,793 $7,277 $6,918 $6,718 $ 6,745 $ 6,525 $ 6,202 $6,796 $5,523 $7,388
Ratio to average net
assets --
Expenses 1.19%+ 1.30% 1.39% 1.33% 1.17% 1.34% 1.33% 1.20% 1.54% 1.66% 1.10%
Net investment income 2.08%+ 2.35% 3.42% 3.29% 2.69% 2.73% 3.46% 3.69% 3.07% 3.94% 3.42%
Portfolio turnover rate 54% 119% 64% 67% 76% 54% 56% 76% 88% 45% 53%
Average Commission per
share $.2951 $.4008 -- -- -- -- -- -- -- -- --
</TABLE>
*Calculated without deduction of sales load.
+Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
FEBRUARY 28, 1997
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Old Dominion Investors' Trust, Inc. (the "Trust") is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-end
management investment company. The primary investment objective of the Trust is
to seek income with long-term growth of capital being a secondary objective.
There can be no assurance that the Trust's objective will be achieved. The
Trust's assets are invested in marketable securities whose prices fluctuate.
Therefore, the value of the outstanding shares of the Trust are not fixed, but
vary with the daily changes in market value of those securities held in the
Trust's portfolio.
The following is a summary of the significant accounting policies followed
by the Trust:
A. SECURITY VALUATION. Portfolio securities which are traded on an exchange
are valued at the last reported sale price on the date of valuation. If
there is no reported sale then the valuation is based upon the mean
between the bid and ask prices. Securities for which reliable quotations
are not readily available are valued at fair market value as determined
in good faith by the Trust's Board of Directors. Short-term investments
are valued at cost which when combined with accrued interest equals fair
market value.
B. FEDERAL INCOME TAXES. The Trust intends to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
C. SECURITY TRANSACTIONS AND DIVIDENDS. As is common in the industry,
security transactions are accounted for on the trade date. Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Interest income is recorded on the accrual basis.
D. OPTION ACCOUNTING PRINCIPLES. When the Trust sells an option, the premium
received is recorded as a liability. Each day the option contract
liability is valued in accordance with the procedures for security
valuations discussed above. When an offsetting option is purchased
(closing transaction) or the option contract expires, the Trust realizes
a gain or loss and the liability related to such option contract is
eliminated. When an option is exercised, the Trust realizes a gain or
loss from the sale of the underlying security and the proceeds of the
sale are increased by the premiums originally received.
E. USE OF ESTIMATES. In preparing financial statements in accordance with
generally accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements, and revenues and expenses during
the reporting period. Actual results could differ from those estimates.
NOTE 2 -- INVESTMENTS
During the six months ended February 28, 1997, the cost of purchases and the
proceeds from sale of securities, excluding short-term notes, were $4,095,772
and $4,446,119, respectively.
NOTE 3 -- PUT OPTIONS AND COVERED CALL OPTIONS WRITTEN
A summary of option contracts written by the Trust during the period is as
follows:
<TABLE>
<CAPTION>
NUMBER OF OPTION
OPTIONS PREMIUMS
--------- --------
<S> <C> <C>
Options outstanding at beginning of period 541 $57,338
Options written 737 82,220
Options cancelled in closing purchase transactions -- --
Options expired (437) (42,788)
Options exercised (442) (49,148)
--------- --------
Options outstanding at end of period 399 $47,622
--------- --------
--------- --------
</TABLE>
As of February 28, 1997, portfolio securities valued at $3,038,962 were
subject to covered call options written by the Trust.
NOTE 4 -- INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investors Security Company, Inc. ("Investors Security") provides the Trust
with investment management and advisory services pursuant to an agreement and
contract dated December 20, 1988. Investors Security furnishes all investment
advice, office space and salaries of personnel needed by the Trust.
Additionally, Investors Security has agreed to act as the Trust's registrar and
transfer agent and to bear all related costs associated with the registration
and transfer of the Trust's shares. As compensation for its services, the
Manager is paid a monthly fee which is equal to an annual rate of .50% of the
Trust's average net assets.
7
<PAGE>
Effective January 1, 1990, the fund has adopted a Plan pursuant to Rule
12B-1 under the 1940 Act (the "Plan"), whereby it may pay up to .25% of average
daily net assets to its principal underwriter, Investors Security, for expenses
incurred in the distribution of the Fund's shares. Pursuant to this Plan,
Investors Security is entitled to reimbursement for payments to securities
dealers providing shareholders services. Distribution expenses incurred by
Investors Security were $2,212 during the six months ended February 28, 1997.
Investors Security is a registered securities broker/dealer and serves as
the Trust's principal underwriter. During the six months ended February 28,
1997, Investors Security received $0.00 in underwriter's concessions and $6,102
in commissions as a retail dealer in the Trust's shares. Investors Security also
received $51,282 in brokerage commissions on the execution of certain of the
Trust's portfolio transactions.
Certain officers and directors of the Trust are also officers and/or
directors of Investors Security.
8
