REPORT TO STOCKHOLDERS
TO THE STOCKHOLDERS:
The Annual Report of Old Dominion Investors Trust, Inc. covers the 12
month period of our year from September 1, 1998 through August 31, 1999.
There were no factors, strategies, or techniques that materially affected
the Fund over the past year, Management continued to purchase good quality blue
chip stocks listed on the New York Stock Exchange. All securities that are
purchased for the Fund must have paid continuous dividends for at least 10
years. We believe this gives the Fund additional stability.
We focus on buying and adding stocks of companies with average dividend
yields and good prospects for improving earnings.
The Fund, through August 31, 1999, received $242,218 from expired call
options ($.53 per share). This income is distributed to stockholders in the
form of cash distributions. We will continue to sell options on portfolio
securities as market conditions warrant. Management believes this is a good
strategy to achieve above average income. Otherwise, high yields are just not
to be found in many stocks.
The Fund will continue to seek out attractive investments that sell at
reasonable prices in relation to earnings.
Sincerely yours,
Cabell B. Birdsong
President, Investors Security Co., Inc.
Investment Advisor and Manager
James F. Hope
President, Old Dominion Investors
Trust, Inc.
October 15, 1999
<PAGE>
COMPARISON OF THE CHANGE IN A $10,000 INVESTMENT IN OLD DOMINION INVESTORS'
TRUST AND THE STANDARD & POORS 500 INDEX OF AUGUST 31, 1999
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
THOUSANDS.$
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S&P 500 INDEX 10.00 9.50 12.06 13.01 15.00 15.82 19.21 22.81 32.07 34.67 48.47
- -----------------------------------------------------------------------------------------------
OLD DOMINION 9.60 8.27 10.01 10.54 11.62 12.31 14.53 16.61 21.17 21.08 25.69
Year ended August 31,
</TABLE>
AVERAGE ANNUAL RETURNS FOR THE PERIODS ENDED AUGUST 31, 1999*
1 Year 5 Year 10 Year
------ -------- ---------
16.98% 14.92% 9.90%
* Average annual return for the Fund assumes the purchase of shares
at the maximum offering price and the deduction of all fees and
expenses.
<TABLE>
<CAPTION>
VALUE AT AUGUST 31, 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Old Dominion Investors' Trust $ 9,600 $8,268 $10,011 $10,541 $11,619
Standard & Poors 500 Index $10,000 $9,501 $12,057 $13,014 $14,996
<CAPTION>
VALUE AT AUGUST 31, 1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Old Dominion Investors' Trust $12,307 $14,533 $16,613 $21,171 $21,082 $25,692
Standard & Poors 500 Index $15,816 $19,209 $22,805 $32,071 $34,666 $48,472
</TABLE>
Performance and data represent past performance. Investment return and
principal value of an investment in the Fund will fluctuate. Your shares, when
redeemed, may be worth more or less than their original cost.
2
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- -------- COMMON STOCKS: 91.0% ------------
<S> <C> <C>
ALUMINUM: 1.8%
3,000 Alcoa $ 193,687
----------
AUTOMOTIVE PARTS & SUPPLIES: 3.9%
7,400 Goodyear Tire & Rubber Company 415,325
----------
BUILDING PRODUCTS: 2.5%
5,500 Armstrong World Industries Inc. 267,094
----------
CHEMICALS: 4.3%
1,000 Dow Chemical 113,625
5,500 DuPont E.I. DeNemours & Co. 348,562
----------
462,187
----------
COMMUNICATIONS: 8.1%
9,050 AT & T Corp. 407,250
5,000 Bell Atlantic Corp 306,250
2,200 GTE Corp. 150,975
----------
Total 864,475
----------
COMPUTERS: 1.9%
1,600 International Business Machines 199,300
----------
CONSTRUCTION EQUIPMENT: 2.6%
5,000 Caterpillar 283,125
----------
CONSUMER GOODS AND SERVICES: 10.3%
9,100 American Home Products Corp. 377,650
5,000 Colgate-Palmolive Co. 267,500
6,200 Eastman Kodak 455,312
----------
Total 1,100,462
----------
ENERGY PRODUCTS: 9.1%
1,300 Atlantic Richfield Co. 114,319
5,000 Exxon Corp. 394,375
1,400 Mobil Corp. 143,325
5,100 Texaco Inc. 323,850
----------
Total 975,869
----------
FINANCIAL SERVICES: 13.7%
6,900 Bank of America Corp. 417,450
5,700 Chase Manhattan Corp. 477,019
5,000 First Union 207,500
9,000 Fleet Financial Group Inc. 358,313
----------
Total 1,460,282
----------
INDUSTRIAL MANUFACTURING: 9.9%
Cooper Industries Inc.
3,500 General Electric 393,094
4,500 Minnesota Mining & Manufacturing 425,250
4,000 PPG Industries Inc. 240,250
----------
Total 1,058,594
----------
INSURANCE: 3.4%
4,000 CIGNA Corp 359,250
----------
</TABLE>
3
<PAGE>
OLD DOMINION INVESTORS' TRUST
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ------------
<S> <C> <C>
OFFICE EQUIPMENT: 8.3%
8,600 Xerox Corp. $ 410,650
8,000 Pitney Bowes 472,000
----------
882,650
----------
PUBLISHING: 3.5%
7,200 McGraw-Hill Companies 372,150
----------
PHARMACEUTICALS: 7.7%
5,500 Merck & Co. 369,531
6,000 Lilly Eli & Co. 447,750
----------
817,281
----------
Total common stocks (Cost $9,580,300) 9,711,731
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- ----------
<S> <C> <C>
REPURCHASE AGREEMENT: 6.3%
United Missouri Bank, 4.80%, Dated 8/27/99, Due 9/3/99,
Repurchase price $672,627 (collateralized by FNMA, 0%
$672,000 Due 10/05/99, Market Value $686,067) (Cost $672,000) 672,000
-------
TOTAL INVESTMENTS IN SECURITIES
(COST $10,252,300)* (NOTES 1A AND 2) 97.3% 10,383,731
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES-NET 2.7% 285,669
----------
TOTAL NET ASSETS 100.0% $10,669,400
===========
* Cost for federal income tax purposes is $10,252,300 and net
unrealized appreciation consists of:
Gross Unrealized Appreciation $ 607,791
Gross Unrealized Depreciation (476,360)
-----------
Net Unrealized Appreciation $ 131,431
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
SCHEDULE OF OPTION CONTRACTS WRITTEN
AUGUST 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS VALUE
- ----------- ---------
<S> <C> <C>
COVERED CALL OPTIONS:
20 Alcoa, October $70 $ 2,625
10 American Home Products, October $55 313
30 American Home Products, October $60 562
25 Armstrong World, September $60 156
10 Armstrong World, December $60 750
7 Atlantic Richfield, January $100 2,012
30 AT&T Corp, October $65 187
15 AT&T Corp, October $70 188
35 Bank of America, November $75 1,094
22 Bell Atlantic, October $70 825
25 Caterpillar Inc, November $70 1,406
28 Chase Manhattan, September $95 175
17 CIGNA, October $100 1,381
10 Dow Chemical, October $130 563
25 DuPont, September $80 156
10 Eli Lilly, October $80 1,688
20 Eli Lilly, October $85 1,750
10 Exxon, October $85 625
15 Exxon, October $90 375
25 First Union, January $55 1,172
45 Fleet Financial, October $50 844
15 General Electric, October $99 1,125
37 Goodyear Tire, October $65 925
11 GTE Corp, December $80 1,306
6 IBM, September $145 75
33 McGraw-Hill, November $60 1,650
27 Merck, October $80 506
10 Minnesota Mining & Manufacturing, January $110 1,938
17 Minnesota Mining & Manufacturing, October $100 3,081
7 Mobil Corp, November $110 1,662
20 PPG Industries, November $70 750
10 Pitney Bowes, January $70 1,250
25 Pitney Bowes, October $75 781
20 Texaco, October $70 1,625
40 Xerox Corp, October $60 500
-------
Total (premiums received $79,352) 36,021
-------
PUT OPTION:
55 Eastman Kodak, July $80 3,438
-------
Total (premium received $6,440) 3,438
-------
Total (premiums received $85,792) (Notes 1A, 1D and 3) $39,459
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (identified cost $10,252,300) (Notes 1A and 2) $ 10,383,731
Cash 409,796
Receivable for:
Dividends and interest 30,899
Securities sold 758
Prepaid expenses 18,520
Due from advisor 26,611
------------
Total assets 10,870,315
------------
LIABILITIES
Payable for securities purchased 161,456
Options written, at value (premiums received $85,792) (Note 3) 39,459
------------
Total liabilities 200,915
------------
NET ASSETS
(Applicable to 452,837 shares of capital stock outstanding; 500,000 shares of $12.50 par
value authorized) $ 10,669,400
============
Computation of offering price:
Net asset value and redemption price per share ($10,669,400/452,837 shares) $ 23.56
============
Offering price per share (100/96 of net asset value)* $ 24.54
============
*On investments of $100,000 or more the offering price is reduced.
Net assets consist of:
Paid-in capital $ 9,920,521
Undistributed net investment income 60,899
Undistributed net realized gain on investments 510,216
Net unrealized depreciation of investments 177,764
------------
$ 10,669,400
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Income
Dividends $ 221,237
Interest 38,201
----------
Total income 259,438
----------
Expenses
Investment management fee (Note 4) 51,188
Professional fees 13,102
Insurance expense 16,095
Printing shareholder reports 6,812
Directors' fees 9,335
Distribution expenses 12,904
----------
Total expenses 109,436
----------
NET INVESTMENT INCOME 150,002
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on option contracts written 242,218
Net realized gain on investments 643,552
Net change in unrealized depreciation of investments and option
contracts written 881,088
----------
NET GAIN ON INVESTMENTS 1,766,858
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $1,916,860
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED AUGUST 31,
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS
Net investment income $ 150,002 $ 147,512
Net realized gain on option contracts written 242,218 248,786
Net realized gain on investments 643,552 1,326,755
Net change in unrealized depreciation of investments and
option contracts written 881,088 (1,758,011)
------------ ------------
Net increase (decrease) in net assets resulting from operations 1,916,860 (34,958)
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income ($0.47 and $0.22 per share,
respectively) (191,934) (77,335)
Distributions from net realized gain on investments ($3.60 and $3.65 per share,
respectively) (1,444,092) (1,295,332)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from the change in the number of
outstanding shares(a) 1,492,484 825,231
------------ ------------
Total increase (decrease) in net assets 1,773,318 (582,394)
NET ASSETS
Beginning of the period 8,896,082 9,478,476
------------ ------------
End of the period
(including undistributed net investment income of $60,899 and $102,831, respectively) $ 10,669,400 $ 8,896,082
============ ============
</TABLE>
(a) Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
1999 1998
---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold 41,777 $1,003,626 42,392 $ 1,145,997
Shares issued in reinvestment of distributions from net
investment income and realized gain on investments and
options contracts written 55,419 1,246,738 41,541 1,031,217
------ ---------- ------ ------------
97,196 2,250,364 83,933 2,177,214
Shares redeemed (31,756) (757,880) (50,036) (1,351,983)
------- ---------- ------- ------------
Net increase 65,440 $1,492,484 33,897 $ 825,231
======= ========== ======= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
FINANCIAL HIGHLIGHTS
YEAR ENDED AUGUST 31,
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 22.96 $ 26.81 $ 23.09 $ 21.52 $ 19.64
------- ------- ------- ------- -------
Income from investment operations--
Net investment income 0.34 0.40 0.47 0.53 0.68
Net realized and unrealized gain (loss) on investments 4.33 (0.38) 5.52 2.46 2.67
------- ------- ------- ------- -------
Total from investment operations 4.67 0.02 5.99 2.99 3.35
------- ------- ------- ------- -------
Less distributions--
Distributions from net investment income 0.47 0.22 0.62 0.29 0.78
Distributions from net realized gains on investments 3.60 3.65 1.65 1.13 0.44
Distributions in excess of realized gains on investments -- -- -- -- 0.25
------- ------- -------- -------- -------
Total distributions 4.07 3.87 2.27 1.42 1.47
------- ------- -------- -------- -------
Net asset value, end of period $ 23.56 $ 22.96 $ 26.81 $ 23.09 $ 21.52
======= ======= ======== ======== =======
TOTAL RETURN* 21.86% (0.42)% 27.44% 23.09% 18.05%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $10,669 $ 8,896 $ 9,478 $ 7,793 $ 7,277
Ratio to average net assets--
Expenses 1.07% 1.08% 1.16% 1.30% 1.39%
Net investment income 1.47% 1.48% 1.88% 2.35% 3.42%
Portfolio turnover rate 87% 86% 86% 119% 64%
</TABLE>
* Calculated without deduction of sales load.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
(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:
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.
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.
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.
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.
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.
(2) INVESTMENTS
During the year ended August 31, 1999, the cost of purchases and the
proceeds from sales of securities, excluding short-term notes, was $8,399,046
and $7,838,494, respectively.
10
<PAGE>
OLD DOMINION INVESTORS' TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
(3) OPTIONS WRITTEN
A summary of option contracts written by the Trust during the year 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 year 650 $ 90,397 -- $ --
Options written 2,597 306,850 161 38,578
Options closed (12) (1,860) (25) (4,531)
Options exercised (619) (98,398) (25) (7,069)
Options expired (1,904) (217,637) (56) (20,538)
------ ---------- --- ---------
Options outstanding at end of year 712 $ 79,352 55 $ 6,440
====== ========== === =========
</TABLE>
As of August 31, 1999, portfolio securities valued at $4,430,019 were
subject to covered call options written by the Trust.
(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 $11,704 for
the year ended August 31, 1999.
Investors Security is a registered securities broker/dealer and serves as
the Trust's principal underwriter. During the year ended August 31, 1999,
Investors Security received $16.12 in underwriter's concessions and $33,021 in
commissions as a retail dealer in the Trust's shares. Investors Security also
received $117,416 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.
11
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
OLD DOMINION INVESTORS' TRUST, INC.
SUFFOLK, VIRGINIA
We have audited the accompanying statement of assets and liabilities of
Old Dominion Investors' Trust, Inc., including the portfolio of investments and
schedule of option contracts written, as of August 31, 1999, 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 three years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial highlights of Old Dominion Investors' Trust, Inc. for each of the two
years in the period ended August 31, 1996 were audited by other auditors whose
report dated September 26, 1996, expressed an unqualified opinion on the
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999, by correspondence with the custodian and brokers. Where
brokers did not reply to our confirmation requests, we carried out other
appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Old Dominion Investors' Trust, Inc. as of August 31, 1999, the results of its
operations for the year then ended, and the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the three years in the period then ended in conformity with generally
accepted accounting principles.
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
September 23, 1999
12
<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
[GRAPHIC OMITTED]
ANNUAL REPORT
AUGUST 31, 1999
