<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
July 1, 1998
Dear Fellow Shareholder:
After paying out approximately $0.07 in dividends, the Fund ended the second
quarter with a net asset value of $29.92, for a decline of 5.2% in the period.
Despite the S&P 500's 3.3% advance in the second quarter, Morningstar's equity
fund average* declined 0.4% and Morningstar's average mid-cap value fund
declined 3.2% for the same period. For the one, five, and ten years ended June
30, 1998, the Fund's annualized returns are 20.7%, 21.5%, and 18.0%,
respectively.
In the second quarter, lower interest rates and earnings estimates generated
by the Asian financial crisis, heightened the stock market's admiration for its
most richly valued members. As a result, the highest P/E stocks outperformed all
the rest. The relative performance of high P/E stocks in the first half of 1998
was reported to be the best of the last 20 years. While this type of behavior
may be explainable in the short term, it runs counter to our fundamental premise
that low P/E stocks outperform in the long run.
Performance in the quarter was impacted as well by our exposure to the
beaten down energy related stocks, where record low oil prices seem more than
fully discounted. In addition, several of our financial services holdings gave
back some of their first quarter gains. We are not pleased with our near term
results; however, we believe that adhering to a disciplined investment strategy
provides superior returns over longer periods.
While the market's recent focus on high P/E equities has been counter to our
value style, it has created an environment in which many companies are trading
at substantial discounts to the market and their long term fundamental value. We
continue to add high quality, low absolute and relative P/E stocks to the
portfolio and to sell stocks that no longer meet our valuation criteria. Price
appreciation permitted us to harvest Associates First Capital Corporation,
Mellon Bank Corporation, and Wal-Mart Stores, Inc. in the quarter.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We continue to strive to earn above average long-term returns and appreciate
your ongoing commitment to the Sound Shore Fund.
Sincerely,
[SIGNATURE]
T. GIBBS KANE, JR.
PRESIDENT
*MORNINGSTAR DOMESTIC EQUITY FUNDS AVERAGE ANNUAL TOTAL RETURN PERFORMANCE
FOR PERIODS ENDING 6/30/98 ARE: 3 MONTHS -0.4%, 1 YEAR 22.6%, 5 YEARS 18.2%, AND
10 YEARS 15.6%. FUNDS INCLUDED IN EACH TIME PERIOD: 3068, 2746, 1079, AND 529,
RESPECTIVELY. MORNINGSTAR MID-CAP VALUE FUNDS AVERAGE TOTAL RETURN PERFORMANCE
FOR PERIODS ENDING 6/30/98 ARE: 3 MONTHS -3.2%, 1 YEAR 18.5%, 5 YEARS 17.1% AND
10 YEARS 14.4%. FUNDS INCLUDED IN EACH TIME PERIOD: 241, 223, 74 AND 44,
RESPECTIVELY.
THE S&P 500 IS AN UNMANAGED INDEX REPRESENTING THE AVERAGE PERFORMANCE OF
500 WIDELY HELD, PUBLICLY TRADED, LARGE CAPITALIZATION STOCKS. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THE INDEX.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE FUND'S AVERAGE
ANNUAL TOTAL RETURN ASSUMES REINVESTMENT OF ALL DIVIDEND AND CAPITAL GAIN
DISTRIBUTIONS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT,
WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
FORUM FINANCIAL SERVICES, INC. IS THE FUND'S DISTRIBUTOR.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR MARKET
FACE AMOUNT VALUE
----------- --------------
<S> <C> <C>
COMMON STOCK (89.7%)
- -----------------------------------------------------------------------------------------
AUTOMOTIVE (6.5%)
Borg-Warner Automotive, Inc. 614,100 $ 29,515,180
Ford Motor Co. 664,000 39,176,000
Magna International, Inc., Class A 876,000 60,115,500
--------------
128,806,680
--------------
BANKS (7.7%)
Banc One Corp. 1,262,500 70,463,280
First Union Corp. 1,413,000 82,307,250
--------------
152,770,530
--------------
BASIC MATERIALS (2.6%)
Ispat International plc* 1,296,300 24,305,620
Reynolds Metals Co. 498,900 27,907,220
--------------
52,212,840
--------------
BUILDING & BUILDING MATERIALS (2.9%)
American Standard Cos., Inc.* 744,700 33,278,780
Kaufman & Broad Home Corp. 747,800 23,742,650
--------------
57,021,430
--------------
CAPITAL GOODS (0.4%)
Albany International Corp., Class A 358,050 8,570,780
--------------
COMMUNICATIONS (2.6%)
Century Telephone Enterprises, Inc. 1,141,500 52,366,310
--------------
</TABLE>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR MARKET
FACE AMOUNT VALUE
----------- --------------
<S> <C> <C>
CONSUMER PRODUCTS (10.1%)
American Greetings Corp. 1,021,000 $ 52,007,190
Department 56, Inc.* 142,300 5,051,650
Hasbro, Inc. 1,552,800 61,044,450
Polaris Industries, Inc. 422,500 15,896,560
Polaroid Corp. 1,197,700 42,593,200
UST, Inc. 905,500 24,448,500
--------------
201,041,550
--------------
ENERGY (6.6%)
EVI Weatherford, Inc.* 975,900 36,230,280
Occidental Petroleum Corp. 655,000 17,685,000
Sun Co., Inc. 1,186,400 46,047,150
Tidewater, Inc. 923,500 30,475,500
--------------
130,437,930
--------------
FINANCIAL (3.3%)
Fannie Mae 1,066,000 64,759,500
--------------
HEALTHCARE (2.3%)
Beverly Enterprises, Inc.* 2,572,000 35,525,760
John Alden Financial Corporation 445,400 9,798,800
--------------
45,324,560
--------------
INSURANCE (15.0%)
Allstate Corp. 630,000 57,684,370
Ambac Financial Group, Inc. 556,500 32,555,250
Loews Corp. 665,900 58,016,535
MBIA, Inc. 766,600 57,399,175
PartnerRe Ltd. 799,600 40,779,600
PMI Group, Inc. 705,500 51,766,065
--------------
298,200,995
--------------
</TABLE>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR MARKET
FACE AMOUNT VALUE
----------- --------------
<S> <C> <C>
PROFESSIONAL SERVICES (4.3%)
GTECH Holdings Corp.* 916,500 $ 30,874,595
IKON Office Solutions, Inc. 2,015,500 29,350,725
Valassis Communications, Inc.* 644,600 24,857,388
--------------
85,082,708
--------------
RESTAURANTS & LODGING (4.2%)
La Quinta Inns, Inc. 1,568,100 33,126,115
Tricon Global Restaurants, Inc.* 1,606,500 50,905,975
--------------
84,032,090
--------------
TECHNOLOGY (7.3%)
IBM Corp. 509,500 58,496,975
Teradyne, Inc.* 614,500 16,437,875
Texas Instruments, Inc. 706,500 41,197,785
Varian Associates, Inc. 720,200 28,087,800
--------------
144,220,435
--------------
TRANSPORTATION (2.2%)
Delta Airlines, Inc. 56,000 7,238,000
Southwest Airlines Co. 1,258,500 37,283,066
--------------
44,521,066
--------------
UTILITIES (8.1%)
CalEnergy Co., Inc.* 2,201,600 66,185,610
Citizens Utilities Co.* 1,953,004 18,797,629
Enron Corp. 953,500 51,548,590
Texas Utilities Co. 575,000 23,934,375
--------------
160,466,204
--------------
WASTE MANGAGEMENT (3.6%)
Republic Industries, Inc.* 2,866,600 71,665,000
--------------
TOTAL COMMON STOCK (COST $1,612,405,758) $1,781,500,608
--------------
</TABLE>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR MARKET
FACE AMOUNT VALUE
----------- --------------
<S> <C> <C>
SHORT-TERM HOLDINGS (10.4%)
- -----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (6.5.%)
- -----------------------------------------------------------------------------------------
U.S. TREASURY BILLS
4.64% yield, 7/23/98 $40,000,000 $ 39,888,778
4.89% yield, 7/30/98 40,000,000 39,845,656
5.01% yield, 8/6/98 50,000,000 49,760,000
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $129,494,434) $ 129,494,434
--------------
MONEY MARKET HOLDINGS (3.9%)
- -----------------------------------------------------------------------------------------
Boston 1784 Institutional U.S. Treasury Money Market Fund 3,440,490 3,440,490
Dreyfus Government Cash Management Fund 72,579,988 72,579,988
Forum Daily Assets Government Fund 583,230 583,230
Forum Daily Assets Cash Fund 948,950 948,950
--------------
TOTAL MONEY MARKET HOLDINGS (COST $77,552,658) $ 77,552,658
--------------
TOTAL SHORT-TERM HOLDINGS (COST $207,047,092) $ 207,047,092
--------------
TOTAL INVESTMENTS (100.1%) (COST $1,819,452,850) $1,988,547,700
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.1%) (3,038,337)
--------------
NET ASSETS (100.0%) (66,368,493 SHARES OUTSTANDING) $1,985,509,363
--------------
--------------
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE PER SHARE) $ 29.92
--------------
--------------
AT JUNE 30, 1998, NET ASSETS CONSISTED OF:
- -----------------------------------------------------------------------------------------
Par Value $ 66,368
Paid in Capital 1,779,873,737
Accumulated Undistributed Net Investment Income 84,053
Unrealized Appreciation on Investments 169,094,850
Accumulated Net Realized Gain on Investments 36,390,355
--------------
NET ASSETS $1,985,509,363
--------------
--------------
</TABLE>
* Non-income producing security.
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income:
Dividends..................................... $10,178,635
Interest...................................... 3,284,526
-----------
Total Income.............................. 13,463,161
-----------
Expenses:
Investment adviser fee (Note 3)............... 6,705,210
Administration fee (Note 3)................... 894,028
Transfer agent fee (Note 3)................... 869,052
Custodian fee................................. 104,518
Accounting fee (Note 3)....................... 103,122
Legal fee..................................... 6,368
Auditing fee.................................. 12,375
Director's fees and expenses.................. 17,780
Registration fees............................. 123,330
Miscellaneous................................. 72,409
-----------
Total Expenses............................ 8,908,192
-----------
Net Investment Income............................. 4,554,969
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments sold............. 38,916,767
Net change in unrealized appreciation of
investments...................................... 16,164,720
-----------
Net realized and unrealized gain on investments... 55,081,487
-----------
Net increase in net assets resulting from
operations....................................... $59,636,456
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS (UNAUDITED) 1997
-------------- --------------
<S> <C> <C>
Operations:
Net investment income................................. $ 4,554,969 $ 4,136,471
Net realized gain on investments sold................. 38,916,767 37,617,224
Net change in unrealized appreciation of
investments......................................... 16,164,720 128,043,327
-------------- --------------
Increase in net assets from operations................ 59,636,456 169,797,022
Dividends to shareholders from net investment income...... (4,469,429 ) (4,140,113)
Dividends to shareholders in excess of net investment
income................................................... -- (19,001)
Dividends to shareholders from net realized gains......... -- (37,617,224)
Dividends to shareholders in excess of net realized
gains.................................................... -- (986,085)
Capital share transactions (Note 5)....................... 616,656,368 1,053,789,481
-------------- --------------
Total increase........................................ 671,823,395 1,180,824,080
Net assets:
Beginning of the year................................. 1,313,685,968 132,861,888
-------------- --------------
End of period (Including line (A)).................... $1,985,509,363 $1,313,685,968
-------------- --------------
-------------- --------------
(A) Accumulated undistributed net investment income
(loss)............................................. $ 84,053 $ (1,487)
-------------- --------------
-------------- --------------
</TABLE>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. ORGANIZATION
Sound Shore Fund, Inc. (the "Fund") was incorporated on February 19, 1985, as a
no-load, diversified, open-end management investment company under the
Investment Company Act of 1940.
2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates.
The following represent significant accounting policies of the Fund:
A) SECURITY VALUATION
Securities traded on a national securities exchange are valued at the last
reported sales price. Common stocks which are not so traded, for which no sale
was reported, and over-the-counter securities are valued at the mean between
the closing bid and asked prices. Debt instruments having sixty days or less
remaining until maturity are stated at amortized cost. Debt instruments having
a remaining maturity of more than sixty days are valued at the mean between
the last reported bid and asked price obtained from a dealer maintaining an
active market in that security or on the basis of prices obtained from a
pricing service approved as reliable by the Board of Directors. All other
investment assets, including restricted and not readily marketable securities,
are valued in such manner as the Board of Directors in good faith deems
appropriate to reflect their fair market value.
B) INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on an accrual basis.
C) DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, if any, are declared and paid
semi-annually. Dividends from net realized capital gains, if any, are declared
and paid out at least annually. Dividends are based on amounts calculated in
accordance with applicable federal income tax regulations.
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
D) FEDERAL TAXES
The Fund intends to qualify and continue to qualify each year as a regulated
investment company and distribute all of its taxable income. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gain and certain other amounts, if any, the Fund will not be
subject to a federal excise tax. Therefore, no federal income or excise tax
provision is required.
E) REALIZED GAIN AND LOSS
Security transactions are recorded on a trade date basis. Realized gain and
loss on investments sold are recorded on the basis of identified cost.
3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Sound Shore Management, Inc. ("Adviser").
Pursuant to an Investment Advisory Agreement, the Adviser receives an advisory
fee, at an annual rate of 0.75% of the Fund's average daily net assets.
OTHER SERVICES
Under an Administration Agreement, the Fund pays an administration fee to Forum
Administrative Services, LLC ("FAdS") at an annual rate of 0.10% of the Fund's
average daily net assets.
Effective January 29, 1998, under a Fund Accounting Agreement, Forum Accounting
Services, LLC ("FAcS"), an affiliate of FAdS, provides portfolio accounting
services to the Fund. FAcS is paid a fee at an annual rate of $60,000 per year.
Prior to January 29, 1998, FAcS received a fee at an annual rate of 0.075% of
the Fund's average daily net assets.
Effective January 29, 1998, under a Transfer Agency Agreement, Forum Shareholder
Services, LLC ("FSS"), an affiliate of FAdS, provides transfer agency services
to the Fund. FSS is paid a fee at an annual rate of 0.10% of the Fund's average
daily net assets. A previous Transfer Agency Agreement was in effect with Forum
Financial Corp. ("FFC"), in which FFC received a fee at an annual rate of 0.075%
of the Fund's average daily net assets, plus certain other fees and expenses.
Pursuant to a Distribution Services Agreement, Forum Financial Services, Inc.
("FFSI") acts as distributor of the Fund's shares and is not paid any fee for
its distribution services.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund pays Directors who are unaffiliated with the Adviser or FAdS $1,000 per
meeting attended, plus $750 per quarter.
Fees for investment advisory and other related parties in the amount of
$1,233,040 and $164,405, respectively, are payable at June 30, 1998.
4. PURCHASES AND SALES OF SECURITIES
The cost of securities purchased and the proceeds from sales of securities
(excluding short-term investments) for the six months ended June 30, 1998,
aggregated $912,119,118 and $389,180,131, respectively.
For federal income tax purposes, the tax basis of investment securities owned as
of June 30, 1998 was $1,819,452,850. The aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax cost
was $276,333,026 and aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value was $107,238,176.
5. CAPITAL STOCK
As of June 30, 1998, 100,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $1,779,940,105. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ ----------------
<S> <C> <C> <C> <C>
Sale of shares......................................... 31,453,744 $ 952,669,739 44,779,211 $ 1,186,548,003
Reinvestment of dividends.............................. 134,886 4,025,545 1,423,166 39,625,513
Redemption of shares................................... (11,199,922) (340,038,916) (6,343,176) (172,384,035)
------------- --------------- ------------ ----------------
Net increase from captial transactions................. 20,388,708 $ 616,656,368 39,859,201 $ 1,053,789,481
------------- --------------- ------------ ----------------
------------- --------------- ------------ ----------------
</TABLE>
Of the 66,368,493 shares outstanding as of June 30, 1998, the Employees' Profit
Sharing Plan of Sound Shore Management, Inc. owned 301,519 shares.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SOUND SHORE FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994
--------------- --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 28.57 $ 21.71 $ 18.16 $ 15.46 $ 16.50
------ ------ ------ ------ ------
Investment Operations
Net Investment Income (Loss).......... 0.20 0.12 0.13 0.25 0.22
Net Realized and Unrealized Gain
(Loss) on Investments............... 1.22 7.75 5.90 4.33 (0.17)
------ ------ ------ ------ ------
Total from Investment Operations.......... 1.42 7.87 6.03 4.58 0.05
------ ------ ------ ------ ------
Distributions From
Net Investment Income................. (0.07) (0.12)(a) (0.13) (0.21) (0.22)
Net Realized Gain..................... -- (0.87) (2.35) (1.67) (0.87)
In Excess of Net Realized Gain........ -- (0.02) -- -- --
------ ------ ------ ------ ------
Total Distributions....................... (0.07) (1.01) (2.48) (1.88) (1.09)
------ ------ ------ ------ ------
Net Asset Value, End of Period............ $ 29.92 $ 28.57 $ 21.71 $ 18.16 $ 15.46
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return.............................. 4.96% 36.40% 33.27% 29.87% 0.30%
Ratio/Supplementary Data
Net Assets at End of Period (in
thousands).............................. $1,985,509 $1,313,686 $132,862 $67,602 $59,993
Ratios to Average Net Assets:
Expenses.............................. 1.00%(b) 1.08% 1.15% 1.15% 1.22%
Net Investment Income................. 0.49%(b) 0.62% 0.70% 1.41% 1.32%
Portfolio Turnover Rate................... 30.76% 53.39% 69.31% 53.01% 75.52%
Average Commission Rate (c)............... $0.0589 $0.0568 $0.0563 N/A N/A
<CAPTION>
1993
------------
<S> <C>
Net Asset Value, Beginning of Period...... $ 16.24
------
Investment Operations
Net Investment Income (Loss).......... 0.14
Net Realized and Unrealized Gain
(Loss) on Investments............... 1.80
------
Total from Investment Operations.......... 1.94
------
Distributions From
Net Investment Income................. (0.14)
Net Realized Gain..................... (1.54)
In Excess of Net Realized Gain........ --
------
Total Distributions....................... (1.68)
------
Net Asset Value, End of Period............ $ 16.50
------
------
Total Return.............................. 11.96%
Ratio/Supplementary Data
Net Assets at End of Period (in
thousands).............................. $58,179
Ratios to Average Net Assets:
Expenses.............................. 1.27%
Net Investment Income................. 0.88%
Portfolio Turnover Rate................... 90.99%
Average Commission Rate (c)............... N/A
</TABLE>
(a) In 1997 the Fund distributed an amount in excess of net investment income of
less than $0.01 per share.
(b) Annualized.
(c) For the fiscal years beginning on or after September 1, 1995, the Fund is
required to disclose average commission per share paid to brokers on the
purchase and sale of equity securities on which commissions are charged.
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
- ----------------------------------------------
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- ----------------------------------------------
SOUND SHORE FUND, INC.
Two Portland Square
Portland, ME 04101
http://www.soundshorefund.com
INVESTMENT ADVISER
Sound Shore Management, Inc.
P.O. Box 1810
8 Sound Shore Drive
Greenwich, Connecticut 06836
ADMINISTRATOR
Forum Administrative Services, LLC
Two Portland Square
Portland, Maine 04101
CUSTODIAN
BankBoston, N.A.
P.O. Box 1959
Boston, Massachusetts 02105
TRANSFER AGENT & DIVIDEND
DISBURSING AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, Maine 04101
[LOGO]
SEMI-ANNUAL REPORT
JUNE 30, 1998
(UNAUDITED)
