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, 1998 through
February 28, 1999. As of February 28, 1999, net assets of the Trust were
$9,730,295 and the per share net asset value of the Trust was $22.38. During
this period, distributions were made in the amount of $3.37 per share.
In the last six months, the Trust had a realized gain on expired put and
call options of $126,566. 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 1, 1999
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999
SHARES VALUE
- -------- COMMON STOCKS: 92.1% ------------
AUTOMOBILES: 1.5%
1,540 DaimlerChrysler $ 144,664
----------
AUTOMOTIVE PARTS & SUPPLIES: 3.5%
7,400 Goodyear Tire & Rubber Company 342,250
----------
BUILDING PRODUCTS: 3.2%
6,400 Armstrong World Industries Inc. 314,800
----------
CHEMICALS: 9.1%
8,000 DuPont E.I. DeNemours & Co. 410,500
5,000 Lilly Eli & Co. 473,437
----------
883,937
----------
COMMUNICATIONS: 6.8%
4,200 AT&T Corp. 344,925
3,000 Bell Atlantic Corp. 172,312
2,200 GTE Corp. 142,725
----------
Total 659,962
----------
COMPUTERS: 1.7%
1,000 International Business Machines 170,000
----------
CONSTRUCTION EQUIPMENT: 5.6%
9,000 Caterpillar 410,063
4,000 Deere & Co. 130,750
----------
540,813
----------
CONSUMER GOODS AND SERVICES: 9.7%
8,600 American Home Products Corp. 511,700
2,500 Colgate-Palmolive Co. 212,187
2,000 Eastman & Kodak 132,375
1,000 Johnson & Johnson 85,375
----------
Total 941,637
----------
ENERGY PRODUCTS: 10.5%
5,000 Atlantic Richfield Co. 273,125
3,000 Exxon Corp. 199,687
2,400 Mobil Corp. 199,650
7,600 Texaco Inc. 353,875
----------
Total 1,026,337
----------
FINANCIAL SERVICES: 13.6%
6,900 BankAmerica Corp. 450,656
2,200 Bankers Trust NY Corp. 191,400
3,700 Chase Manhattan Corp. 294,612
9,000 Fleet Financial Group Inc. 386,438
----------
Total 1,323,106
----------
2
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999
SHARES VALUE
- --------- ------------
INDUSTRIAL MANUFACTURING: 6.6%
3,000 Cooper Industries Inc. $ 131,250
3,000 General Electric 300,938
4,000 PPG Industries Inc. 208,250
----------
Total 640,438
----------
INSURANCE: 1.2%
1,500 CIGNA Corp. 117,750
----------
OFFICE EQUIPMENT: 2.4%
4,200 Xerox Corp. 231,788
----------
PUBLISHING: 0.7%
600 McGraw-Hill Companies, Inc. 65,662
----------
RETAIL: 7.7%
8,500 JC Penney 307,063
11,000 Sears Roebuck & Co 446,875
----------
Total 753,938
----------
TRANSPORTATION: 8.3%
10,000 CSX Corp. 392,500
14,700 Norfolk Southern Corp. 412,519
----------
805,019
----------
Total common stocks (Cost $9,236,881) 8,962,101
----------
<TABLE>
<CAPTION>
PRINCIPAL
- ----------
<S> <C> <C>
REPURCHASE AGREEMENT: 5.2%
United Missouri Bank, 4.45%, Dated 02/26/99, Due 03/05/99
Repurchase price $501,434 (collateralized by FNMA, 0%,
$501,000 Due 04/16/99, Market Value $511,653) (Cost $501,000) 501,000
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $9,737,881)* (NOTES 1A AND 2) 97.3% 9,463,101
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES-NET 2.7% 267,194
---------
TOTAL NET ASSETS 100.0% $9,730,295
==========
* Cost for federal income tax purposes is $9,737,881 and net
unrealized depreciation consists of:
Gross Unrealized Appreciation $ 720,293
Gross Unrealized Depreciation (995,073)
----------
Net Unrealized Depreciation $ (274,780)
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
SCHEDULE OF OPTION CONTRACTS WRITTEN
FEBRUARY 28, 1999
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS VALUE
- ----------- ----------
<S> <C> <C>
COVERED CALL OPTIONS:
40 American Home Products, April $60 $12,000
25 Armstrong World Industries, March $75 313
10 Armstrong World Industries, June $60 1,063
25 Atlantic Richfield, April $70 781
10 AT&T Corp., March $100 125
10 AT&T Corp., April $95 1,250
20 BankAmerica, March $75 250
15 BankAmerica, May $75 2,062
10 Bell Atlantic, April $65 500
5 Bell Atlantic, June $65 875
20 Caterpillar Inc., May $55 1,000
20 Chase Manhattan Corp., March $80 6,500
5 CIGNA Corp., April $90 375
12 Colgate-Palmolive, May $100 1,350
15 Cooper Industries, April $50 750
7 DaimlerChrysler, April $115 263
20 Deere & Co., June $40 1,375
10 DuPont E.I. DeNemours & Co., April $60 500
30 DuPont E.I. DeNemours & Co., April $65 375
10 Eastman Kodak, April $75 563
20 Eli Lilly, April $90 15,000
10 Eli Lilly, April $100 2,875
15 Exxon Corp., April $80 234
40 Fleet Financial Group, April $50 1,750
15 General Electric, April $110 1,875
25 Goodyear Tire & Rubber, July $60 1,719
5 International Business Machines, April $190 1,438
10 Johnson & Johnson, April $90 1,375
6 McGraw-Hill, April $115 2,062
10 Mobil Corp., May $95 812
20 PPG Industries, May $65 437
20 Sears Roebuck & Co., April $50 625
30 Sears Roebuck & Co., July $55 1,406
25 Texaco Inc., April $60 469
-------
Total (premiums received $68,620) 64,347
-------
PUT OPTIONS:
10 DaimlerChrysler, March $100 7,000
25 JC Penney, March $40 7,500
18 Xerox Corp., March $60 9,225
-------
Total (premiums received $14,581) 23,725
-------
Total (premiums received $83,201)(Notes 1A, 1D and 3) $88,072
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF ASSETS AND LIABILITIES
(Unaudited)
FEBRUARY 28, 1999
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (identified cost $9,737,881) (Notes 1A and 2) $ 9,463,101
Cash 299,387
Receivable for:
Dividends and interest 34,085
Securities sold 12,962
Capital stock sold 3,123
Prepaid expenses 5,845
-----------
Total assets 9,818,503
-----------
LIABILITIES
Option contracts written, at value (premiums received $83,201) (Note 3) 88,072
Accrued expenses 136
-----------
Total liabilities 88,208
-----------
NET ASSETS
(Applicable to 434,831 shares of capital stock outstanding; 500,000 shares of $12.50
par value authorized) $ 9,730,295
===========
Computation of offering price:
Net asset value and redemption price per share ($9,730,295 / 434,831 shares) $ 22.38
===========
Offering price per share (100/96 of net asset value)* $ 23.31
===========
*On investments of $100,000 or more the offering price is reduced.
Net assets consist of:
Paid-in capital $ 9,489,610
Undistributed net investment income 10,622
Undistributed net realized gain on investments 509,714
Net unrealized depreciation of investments (279,651)
-----------
$ 9,730,295
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF OPERATIONS
(Unaudited)
SIX MONTHS ENDED FEBRUARY 28, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 115,473
Interest 15,399
----------
Total income 130,872
----------
Expenses
Investment management fee (Note 4) 24,146
Professional fees 10,418
Insurance expense 8,330
Printing shareholder reports 4,163
Directors' fees 3,801
Distribution expenses 2,503
----------
Total expenses 53,361
----------
NET INVESTMENT INCOME 77,511
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND OPTIONS WRITTEN
Net realized gain on option contracts written 126,566
Net realized gain on investments 473,001
Net change in unrealized depreciation of investments and option
contracts written 423,673
----------
NET GAIN ON INVESTMENTS 1,023,240
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,100,751
==========
</TABLE>
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
------------------- ----------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS
Net investment income $ 77,511 $ 147,512
Net realized gain on option contracts written 126,566 248,786
Net realized gain on investments 473,001 1,326,755
Net change in unrealized depreciation of investments and
option contracts written 423,673 (1,758,011)
------------ ------------
Net increase (decrease) in net assets resulting from operations 1,100,751 (34,958)
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income ($0.42 and $0.22 per share,
respectively) (169,720) (77,335)
Distributions from realized gain on investments ($2.95 and $2.65 per share,
respectively) (1,158,391) (1,295,332)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from the change in the number of
outstanding shares (a) 1,061,573 825,231
------------ ------------
Total increase (decrease) in net assets 834,213 (582,394)
NET ASSETS
Beginning of the period 8,896,082 9,478,476
------------ ------------
End of the period
(including undistributed net investment income of $10,622 and $102,831, respectively) $ 9,730,295 $ 8,896,082
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF CHANGES IN NETS ASSETS (CONTINUED)
(a) Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ ---------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold 12,679 $ 299,581 42,392 $ 1,145,997
Shares issued in reinvestment of distributions from net
investment income and realized gain on investments and
options contracts written 45,877 1,017,893 41,541 1,031,217
------ ---------- ------ ------------
58,556 1,317,474 83,933 2,177,214
Shares redeemed (11,122) (255,901) (50,036) (1,351,983)
------- ---------- ------- ------------
Net increase 47,434 $1,061,573 33,897 $ 825,231
======= ========== ======= ============
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28,
--------------
1999
--------------
(UNAUDITED)
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 22.96
--------
Income from investment operations --
Net investment income 0.18
Net realized and unrealized gain (loss) on investments 2.61
--------
Total from investment operations 2.79
--------
Less distributions --
Distributions from net investment income 0.42
Distributions from realized gains on investments 2.95
Distributions in excess of realized gains on investments --
---------
Total distributions 3.37
---------
Net asset value, end of period $ 22.38
=========
TOTAL RETURN* 12.48 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 9,730
Ratio to average net assets --
Expenses 1.13%**
Net investment income 1.64%**
Portfolio turnover rate 27%
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 26.81 $ 23.09 21.52 $ 19.64 $ 20.24
-------- ------- ------ ------- -------
Income from investment operations --
Net investment income 0.40 0.47 0.53 0.68 0.63
Net realized and unrealized gain (loss) on investments ( 0.38) 5.52 2.46 2.67 0.51
-------- ------- ------ ------- -------
Total from investment operations 0.02 5.99 2.99 3.35 1.14
-------- ------- ------ ------- -------
Less distributions --
Distributions from net investment income 0.22 0.62 0.29 0.78 0.64
Distributions from realized gains on investments 3.65 1.65 1.13 0.44 1.10
Distributions in excess of realized gains on investments -- -- -- 0.25 --
-------- -------- ------- ------- --------
Total distributions 3.87 2.27 1.42 1.47 1.74
-------- -------- ------- ------- --------
Net asset value, end of period $ 22.96 $ 26.81 $ 23.09 $ 21.52 $ 19.64
======== ======== ======= ======= ========
TOTAL RETURN* ( 0.42)% 27.44% 23.09% 18.05% 5.92%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $ 8,896 $ 9,478 $ 7,793 $ 7,277 $ 6,918
Ratio to average net assets --
Expenses 1.08% 1.16% 1.30% 1.39% 1.33%
Net investment income 1.48% 1.88% 2.35% 3.42% 3.29%
Portfolio turnover rate 86% 86% 119% 64% 67%
</TABLE>
*Calculated without deduction of sales load.
**Annualized
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
FEBRUARY 28, 1999
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, 1999, the cost of purchases and
the proceeds from sales of securities, excluding short-term notes, were
$2,955,265 and $2,398,051, respectively.
NOTE 3 -- OPTIONS WRITTEN
A summary of option contracts written by the Trust during the period is as
follows:
<TABLE>
<CAPTION>
CALLS PUTS
------------------------ -----------------------
NUMBER OF OPTION NUMBER OF OPTION
OPTIONS PREMIUMS OPTIONS PREMIUMS
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Options outstanding at beginning of period 665 $ 90,397 -- $ --
Options written 1,121 139,212 101 27,841
Options closed -- -- -- --
Options expired 951 120,375 23 6,191
Options exercised 265 40,614 25 7,069
----- -------- --- -------
Options outstanding at end of period 570 $ 68,620 53 $14,581
===== ======== === =======
</TABLE>
As of February 28, 1999, portfolio securities valued at $3,450,021 were
subject to covered call options written by the Trust.
9
<PAGE>
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 investment
advisory agreement and contract. Investors Security furnished 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.
The Trust 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 Company, Inc. ("ISC"), for expenses
incurred in the distribution of the Trust's shares. Pursuant to this Plan, ISC
is entitled to reimbursement for payments to securities dealers providing
shareholder services. Distribution expenses incurred by ISC were $2,503 during
the six months ended February 28, 1999.
Investors Security is a registered securities broker/dealer and serves as
the Trust's principal underwriter. During the six months ended February 28,
1999, Investors Security received $0 in underwriter's concessions and $3,148 in
commissions as a retail dealer in the Trust's shares. Investors Security also
received $20,901 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.
10
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
110 BANK STREET
SUFFOLK, VIRGINIA 23434
PHONE 757-539-2396
Custodian
UMB BANK
928 Grand Avenue
Kansas City, Missouri 64141
Counsel
KAUFMAN & CANOLES
Nations Bank Center
P.O. Box 3037
Norfolk, VA 23574
Auditors
BRIGGS, BUNTING & DOUGHERTY, LLP
Two Logan Square,
Suite 2121
Philadelphia, Pennsylvania 19103-4901
Manager, Underwriter
INVESTORS' SECURITY COMPANY, INC.
110 Bank Street
Suffolk, Virginia 23434
Phone: (757) 539-2396
Transfer Agent
FIRST DATA INVESTOR SERVICES GROUP
3200 Horizon Drive
P.O. Box 61503
King of Prussia, PA 19406-0903
Phone: (610) 239-4500
[LOGO]
SEMI-ANNUAL REPORT
FEBRUARY 28, 1999
(unaudited)
