<PAGE> 1
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
TO OUR SHAREHOLDERS:
June 1996 will mark Ellsworth's tenth anniversary. Such an event is an
appropriate time for reflection and consideration of the work done so far and
how to build on it. We believe that the Fund's stated goal of achieving a high
level of total return on its assets through a combination of current income and
capital appreciation has been met during this time. Indeed, the Fund's
investments have been successful enough to earn an overall four-star (above
average) rating from Morningstar*. Morningstar also provided a historical
profile of the Fund that indicated that within the Fund's peer group its return
was "above average" and the risk taken was "below average". Finally, for
calendar 1995, Ellsworth outperformed all other U.S. closed-end convertible
funds to win a performance award from Lipper Analytical Services.** All this is
evidence that Ellsworth's past performance did meet its stated goal. The future
is uncertain but we intend to approach it with the same `optimistic skepticism'
and the same belief that convertible bonds and preferred stocks can provide an
attractive mix of income and capital appreciation.
As we look ahead we see a market that has the potential to be ranked with
other long-term extended bull markets of the past. While we do expect a
correction or bear market to appear eventually, we believe that the lower tax
policies of the eighties that made for tremendous investment and reinvestment in
ideas, inventions, corporations and a multitude of breakthroughs combined with
the surge in savings put into mutual funds, pension funds and 401(K) accounts
have made a solid base for this extended expansion. This implies that this is a
bull market with real assets under it, not just hype and hot air.
As we have discussed in several reports to you, the convertible market is
evolving. The `plain vanilla' part of the market has been shrinking both in
relative size and in number of issues. Technical changes in several types of
convertibles available today have made for instruments that clearly are
convertible bonds or preferred stocks, but with differences that were not
anticipated ten years ago. We intend to review the Fund's operating policies and
restrictions to determine if they need revision to maintain the wide array of
diverse investments available to the Fund that fall within the management's
historical risk reward parameters.
We estimate that the Fund's net asset value (NAV) rose 4.91%, 24.56% and
92.48% for the three-month, one-year and five-year periods ended March 31, 1996
(assuming all dividends reinvested at NAV). The value of the Fund's shares rose
2.54%, 24.82% and 100.44% for those three-month, one-year and five-year periods
(assuming all dividends reinvested at actual reinvestment price). As quoted in
Barron's, Lipper Analytical Services reported that the average open-end
convertible fund's NAV+ rose 4.71%, 20.52% and 89.61% (also assuming all
dividends reinvested).
At its April meeting, the Board of Directors declared a twelve cents per
share dividend from net investment income, payable on May 28, 1996 to
shareholders of record May 13, 1996.
/s/ Ronald E. Dinsmore /s/ Thomas H. Dinsmore
Chairman President
May 15, 1996
- ---------
* Morningstar is an independent statistical service that rates mutual funds.
** Lipper Analytical Services, Inc. is an independent statistical service.
+ Average NAV of the forty-one open-end convertible funds followed by Lipper
Analytical Services, Inc.
<PAGE> 2
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
INVESTMENTS MARCH 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
OR SHARES (NOTE A)
---------- -----------
<S> <C> <C>
ADVERTISING--5.1%
Interpublic Group Cos., Inc. 3 3/4% 2002 Euro. cv. sub. deb ............................. $1,175,000 $ 1,239,625
Interpublic Group Cos., Inc. 3 3/4% 2002 cv. sub. deb.* ................................. 415,000 436,788
Omnicom Group, Inc. 4 1/2% 2000 cv. sub. deb.* .......................................... 1,275,000 2,091,000
-----------
3,767,413
-----------
AEROSPACE--4.3%
Morgan Stanley Group, Inc. 0% 2000 medium-term exchangeable notes
(exch. for Boeing Company common stock) ................................................. 2,000,000 2,030,000
Orbital Sciences Corp. 6 3/4% 2003 cv. sub. deb ......................................... 1,122,000 1,166,880
-----------
3,196,880
-----------
AUTOMOTIVE--2.8%
Ford Motor Co. depositary shares (representing $4.20 cum. cv. A pfd.) ................... 15,000 shs 1,680,000
MascoTech Industries, Inc. 6% cv. pfd ................................................... 30,100 shs 421,400
-----------
2,101,400
-----------
BANKING--13.9%
Barnett Banks, Inc. $4.50 cum. cv. A pfd ................................................ 20,000 shs 2,355,000
Boatmens Bancshares, Inc. depositary shares (representing 7% cum. cv. A pfd.) ........... 32,500 shs 1,105,000
Chemical Banking Corp. common stock ..................................................... 15,375 shs 1,083,938
First Commerce Corp. 7 1/4% cum. cv. pfd ................................................ 20,000 shs 765,000
National City Corp. depositary shares (representing $4.00 cum. cv. pfd.) ................ 19,100 shs 1,602,013
NationsBank Corp. common stock .......................................................... 10,035 shs 804,054
ONBANCorp, Inc. 6 3/4% cv. B pfd ........................................................ 15,000 shs 421,875
Washington Mutual Savings Bank $6.00 cv. perpetual D pfd ................................ 15,000 shs 1,785,000
Jefferson-Pilot Corp. 7 1/4% 2000 FCENS# ................................................ 5,000 420,000
-----------
10,341,880
-----------
BROADCASTING & CABLE--4.4%
Cablevision Systems Corp. depositary shares (representing 8 1/2% cum. cv. exch. pfd.) ... 40,000 shs 1,130,000
Triathlon Broadcasting Co. depositary shares (representing 9% mandatory cv. pfd.) ....... 50,000 shs 550,000
International CableTel, Inc. 7 1/4% 2005 cv. sub. notes* ................................ 600,000 741,000
Comcast Corp. 3 3/8% 2005 cv. sub. deb .................................................. 975,000 897,000
-----------
3,318,000
-----------
CAPITAL GOODS--5.7%
Westinghouse Electric Corp. depositary shares (representing $1.30 cv. C pfd.) ........... 72,000 shs 1,300,500
Cooper Industries, Inc. 7.05% 2015 cv. sub. deb ......................................... 1,067,000 1,104,345
General Signal Corp. 5 3/4% 2002 cv. sub. notes ......................................... 1,750,000 1,811,250
-----------
4,216,095
-----------
COMMUNICATIONS--3.6%
Comcast Cellular Corp. 0% 2000 senior participating zero coupon redeemable series A notes 1,200,000 894,000
MFS Communications Co., Inc. common stock ............................................... 177 shs 11,018
MFS Communications Co., Inc. depositary shares (representing 8% cum. cv. A pfd.) ........ 15,000 shs 826,875
Sprint Corp. 8 1/4% 2000 FCENS# (exch. for Southern New Eng. Telecom. common stock) ..... 25,000 968,750
-----------
2,700,643
-----------
DATA-PROCESSING SERVICES--7.2%
General Motors Corp. (GME) common stock ................................................. 21,117 shs 1,203,669
Wang Laboratories, Inc. depositary shares (representing 6 1/2% cum. cv. B pfd.)* ........ 7,500 shs 411,563
American Express Company 6 1/4% 1996 FCENS# (exch. for First Data Corp. common stock) ... 35,000 2,065,000
First Financial Management Corp. 5% 1999 cv. sub. deb ................................... 1,000,000 1,715,000
-----------
5,395,232
-----------
ENERGY--6.4%
Chieftain International Funding Corp. 71 1/44% cv. red. pfd ............................. 41,000 shs 1,071,125
Unocal Corp. $3.50 cv. pfd.* ............................................................ 25,000 shs 1,450,000
AES Corp. 6 1/2% 2002 cv. deb ........................................................... 375,000 408,750
Pennzoil Company 4 3/4% 2003 exch. sr. deb. (exch. for Chevron Corp. common stock) ...... 500,000 522,500
Pennzoil Company 6 1/2% 2003 exch. sr. deb. (exch. for Chevron Corp. common stock) ...... 1,000,000 1,340,000
-----------
4,792,375
-----------
ENVIRONMENTAL SERVICES--1.0%
Sanifill, Inc. 5% 2006 cv. sub. deb ..................................................... 750,000 742,500
-----------
FINANCIAL & INSURANCE--12.9%
American General Delaware, LLC 6% cv. A MIPS+ ........................................... 30,000 shs 1,548,750
Old Republic International Corp. common stock ........................................... 58,536 shs 1,902,420
Pioneer Financial Services, Inc. common stock ........................................... 37,610 shs 611,163
American Travellers Corp. 6 1/2% 2005 cv. sub. deb ...................................... 750,000 1,095,000
Chubb Capital Corp. 6% 1998 Euro. cv. sub. deb .......................................... 1,300,000 1,423,500
First Central Financial Corp. 9% 2000 cv. sub. deb ...................................... 925,000 934,250
Pioneer Financial Services, Inc. 6 1/2% 2003 cv. sub. notes ............................. 500,000 512,500
Pioneer Financial Services, Inc. 8% 2000 cv. sub. deb ................................... 50,000 68,000
US West, Inc. 7 5/8% 1998 FCENS#
(exch. for Enhance Financial Services Group, Inc. common stock) ......................... 55,000 1,512,500
-----------
9,608,083
-----------
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
OR SHARES (NOTE A)
--------- ----------
<S> <C> <C>
FOODS--2.1%
ConAgra, Inc. common stock ........................................................ 10,886 shs $ 442,244
Grand Metropolitan Public Limited Co. 6 1/2% 2000 cv. sub. deb.* .................. 1,000,000 1,095,000
----------
1,537,244
----------
HEALTH CARE & DRUGS--8.3%
SmithKline Beecham plc ADR's (representing equity units) .......................... 18,600 957,900
Ciba Geigy Corp. 6 1/4% 2016 exch. sub. deb.* (exch. for ALZA Corp. common stock).. 500,000 517,500
Medco Containment Service, Inc. 6% 2001 cv. sub. deb .............................. 1,250,000 2,593,750
Roche Holdings, Inc. 0% 2010 liquid yield option notes* ........................... 2,500,000 1,115,625
Sandoz Capital BVI Ltd. 2% 2002 cv. sub. notes .................................... 500,000 556,875
TheraTx, Inc. 8% 2002 cv. sub. notes* ............................................. 500,000 460,000
----------
6,201,650
----------
HOTEL SERVICES--1.0%
HFS, Inc. 43 1/4% 2003 cv. senior notes ........................................... 250,000 258,125
Marriott International, Inc. 0% 2011 liquid yield option notes .................... 875,000 461,563
----------
719,688
----------
OFFICE EQUIPMENT--1.0%
Alco Standard Corp. depositary shares (representing 6 1/2% cv. BB pfd.) ........... 7,500 shs 712,500
----------
PAPER & PAPER PRODUCTS--1.2%
International Paper Capital Trust Company 5 1/4% cv. pfd.* ....................... 20,000 shs 915,000
----------
RETAIL--0.2%
Tops Appliance City, Inc. 6 1/2% 2003 cv. sub. deb ................................ 400,000 64,000
----------
TECHNOLOGY--9.1%
Conner Peripherals, Inc. 6 1/2% 2002 cv. sub. deb ................................. 850,000 952,000
Conner Peripherals, Inc. 6 3/4% 2001 cv. sub. deb ................................ 1,250,000 1,301,563
Emerson Radio Corp. 8 1/2% 2002 sr. cv. sub. deb.* ................................ 750,000 630,000
Motorola, Inc. 0% 2013 liquid yield option notes .................................. 350,000 260,750
Quantum Corp. 5% 2003 cv. sub. notes* ............................................. 500,000 502,500
Texas Instruments, Inc. 2 3/4% 2002 Euro. cv. sub. deb ............................ 150,000 187,125
Thermo Electron Corp. 5% 2001 cv. sub. deb.* ...................................... 275,000 530,750
Thermo Electron Corp. 4 1/4% 2003 cv. sub. deb.* .................................. 925,000 1,133,125
Thermo Optek Corp. 5% 2000 cv. sub. deb.* ......................................... 200,000 226,000
Thermo Quest Corp. 5% 2000 cv. sub. deb.* ......................................... 125,000 141,250
3Com Corp. 10 1/4% 2001 cv. sub. notes* ........................................... 250,000 353,438
VLSI Technology, Inc. 8 1/4% 2005 cv. sub. notes .................................. 600,000 559,500
----------
6,778,001
----------
TRANSPORTATION--4.1%
Delta Air Lines, Inc. depositary shares (representing $3.50 cum. cv. C pfd.) ...... 5,000 shs 305,625
AMR Corp. 6 1/8% 2024 cv. sub. deb ................................................ 1,000,000 1,153,750
Delta Air Lines, Inc. 3.23% 2003 cv. sub. notes ................................... 1,075,000 1,065,594
Mercury Air Group, Inc. 7 3/4% 2006 cv. sub. deb .................................. 500,000 565,000
----------
3,089,969
----------
U.S. TREASURY NOTES--0.0%
6 5/8% 3/31/97..................................................................... 25,000 25,273
CORPORATE SHORT-TERM NOTES--2.5%
Sears Roebuck Acceptance Corp. 5.10% 4/1/96 ....................................... 1,250,000 1,248,938
Sears Roebuck Acceptance Corp. 5.20% 4/1/96 ....................................... 600,000 599,740
----------
1,848,678
----------
TOTAL BONDS AND NOTES--57.6% ...................................................... $42,950,194
TOTAL PREFERRED STOCKS--27.3% ..................................................... 20,357,226
TOTAL COMMON STOCKS--9.4% ......................................................... 7,016,406
TOTAL CORPORATE SHORT-TERM NOTES--2.5% ............................................ 1,848,678
----------
TOTAL INVESTMENTS--96.8% .......................................................... 72,172,504
OTHER ASSETS AND LIABILITIES, NET--3.2% ........................................... 2,395,321
----------
TOTAL NET ASSETS--100.0% .......................................................... $74,567,825
===========
</TABLE>
- ------------
* Rule 144A security, may be sold only to qualified institutional buyers.
# Forced Conversion Exchangeable Notes
+ Monthly Income Preferred Securities.
! Collateral for a letter of credit.
The cost of investments for federal income tax purposes is $61,017,155 resulting
in gross unrealized appreciation and depreciation of $12,340,741 and $1,185,392,
respectively, or net unrealized appreciation of $11,155,349 on a tax cost basis.
See accompanying notes to financial statements.
<PAGE> 4
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------
<S> <C>
ASSETS:
Investments at value (cost $61,017,155) (Note A) ................................................ $72,172,504
Cash ............................................................................................ 1,960,416
Dividends and interest receivable ............................................................... 606,920
Other assets .................................................................................... 10,516
-----------
Total assets .................................................................................. 74,750,356
-----------
LIABILITIES:
Payable for securities purchased ................................................................ 127,925
Accrued management fee (Note B) ................................................................. 46,102
Accrued expenses ................................................................................ 8,504
-----------
Total liabilities ............................................................................. $ 182,531
-----------
NET ASSETS AT VALUE ............................................................................... $74,567,825
===========
NET ASSETS CONSIST OF:
Undistributed net investment income ............................................................. $ 694,082
Undistributed net realized gain from investment transactions .................................... 2,064,449
Unrealized appreciation on investments .......................................................... 11,155,349
Capital shares (Note C) ......................................................................... 66,435
Additional paid-in capital ...................................................................... 60,587,510
-----------
NET ASSETS AT VALUE ............................................................................... $74,567,825
===========
Net asset value per share ($74,567,825 divided by 6,643,517 outstanding shares) ................... $ 11.22
===========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30, 1995
---------------- ------------------
<S> <C> <C>
Increase in net assets from operations:
Net investment income ...................................................... $ 1,495,845 $ 3,162,167
Net realized gain from investment transactions ............................. 2,064,449 1,864,104
Net increase in unrealized appreciation of investments ..................... 3,162,744 6,758,963
----------- -----------
Net increase in net assets resulting from operations ..................... 6,723,038 11,785,234
Dividends paid from net investment income .................................... (1,523,421) (3,313,565)
Distribution from net realized gain on investments ........................... (1,867,368) (1,425,603)
Capital share transactions (Note C) .......................................... 1,466,314 1,407,527
----------- -----------
Increase in net assets ................................................... 4,798,563 8,453,593
Net assets at beginning of period ............................................ $69,769,262 61,315,669
----------- -----------
Net assets at end of period (including undistributed net investment
income of $694,082 and $724,705, respectively) ............................. $74,567,825 $69,769,262
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
STATEMENT OF OPERATIONS
Six Months Ended March 31, 1996 (unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME (Note A)
Interest ..................................................... $1,180,792
Dividends .................................................... 724,769
----------
Total Income ............................................... 1,905,561
----------
EXPENSES (Note B):
Management fee ............................................... 267,233
Custodian .................................................... 9,942
Transfer agent ............................................... 13,917
Professional fees ............................................ 28,024
Reports to Shareholders ...................................... 33,494
Directors' fees .............................................. 16,550
Treasurer's office ........................................... 12,500
Listing fee .................................................. 9,500
Other ........................................................ 18,556
----------
Total Expenses ................................................. 409,716
----------
NET INVESTMENT INCOME .......................................... $1,495,845
==========
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions ................. 2,064,449
Net increase in unrealized appreciation of investments ......... 3,162,744
----------
Net gain on investments ........................................ 5,227,193
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $6,723,038
==========
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED SEPTEMBER 30,
ENDED ------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: MARCH 31, 1996+ 1995 1994 1993 1992 1991
--------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .... $ 10.76 $ 9.72 $ 10.39 $ 9.31 $ 8.45 $ 7.50
------- ------- ------- ------- ------- -------
Net investment income ................... .23 .48 .51 .53 .54 .53
Net realized and unrealized gain (loss) . 76 1.30 (.58) 1.14 .82 1.00
------- ------- ------- ------- ------- -------
Total from investment operations ...... .99 1.78 (.07) 1.67 1.36 1.53
Less Distributions: .....................
Dividends from net investment income .... (.24) (.51) (.53) (.50) (.50) (.58)
Distributions from realized gains ....... (.29) (.23) (.07) (.09) -- --
------- ------- ------- ------- ------- -------
Total distributions ................... (.53) (.74) (.60) (.59) (.50) (.58)
------- ------- ------- ------- ------- -------
Net asset value, end of period .......... 11.22 10.76 9.72 10.39 9.31 8.45
======= ======= ======= ======= ======= =======
Net assets, end of period (000's) ....... 74,568 69,769 61,316 64,457 56,946 51,687
Market price, end of period ............. 9.625 9.125 8.375 9.375 8.375 7.375
Total Investment Return:
Based on market value ................. 11.40 % 18.95 % (4.46)% 19.73 % 20.97 % 25.41 %
Based on net asset value* ............. 9.36 % 19.50 % (0.61)% 18.60 % 16.55 % 21.14 %
Ratios/Supplemental Data:
Ratio of expenses to average net assets . 1.1 %** 1.2 % 1.1 % 1.2 % 1.2 % 1.4 %
Ratio of net investment income to average
net assets ............................ 4.2 %** 5.0 % 5.2 % 5.5 % 6.1 % 6.7 %
Portfolio turnover rate ................. 22 % 44 % 45 % 99 % 70 % 37 %
Average commission rate paid ............ $ 0.076
</TABLE>
- ----------------
+ Unaudited
* Assumes valuation of the Fund's shares, and reinvestment of dividends,
at net asset values.
** Annualized
See accompanying notes to financial statements.
<PAGE> 6
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(A) Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940 as a diversified, closed-end
investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements:
1. Security Valuation
Investments in securities traded on a national securities exchange are valued at
market using the last reported sales price. Securities traded in the
over-the-counter market and listed securities for which no sales were reported
are valued at the mean between closing reported bid and asked prices. Where no
closing prices are available, value is determined by management, with the
approval of the Board of Directors.
2. Securities Transactions and Related Investment Income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) with gain or loss on the sale of securities being
determined based upon identified cost. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis.
3. Federal Income Taxes
It is the policy of the Fund to distribute substantially all of its taxable
income within the prescribed time and to otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies.
Therefore, no provision for federal income taxes is believed necessary.
4. Dividends and Distributions to Shareholders
The liability for dividends and distributions payable is recorded on the
ex-dividend date.
(B) The management fee is paid to Davis/Dinsmore Management Company, investment
adviser. The contract provides for payment of a monthly advisory fee, computed
at an annual rate of 3/4% of 1% of the first $100,000,000 and 1/2 of 1% of
the excess over $100,000,000 of the Fund's net asset value in such month. The
annual fee is subject to reduction to the extent that the ordinary expenses of
the Fund (excluding taxes and interest) exceed 1.5% of the first $100,000,000 of
the average of the monthly net asset values of the Fund for the year.
The adviser's organization furnishes investment advice, office equipment and
facilities, and pays the salaries of all executive officers of the Fund, except
that the costs associated with personnel and certain non-personnel expenses of
the office of the Treasurer up to a maximum of $25,000 a year are reimbursed by
the Fund. Such reimbursements amounted to $12,500 for the six months ended March
31, 1996. The officers of the Fund are directors, officers or employees of the
investment adviser.
(C) At March 31, 1996, 6,643,517 shares of $.01 par value common stock
(20,000,000 shares authorized) were outstanding. During the six months ended
March 31, 1996, 159,598 shares were issued in connection with reinvestment of
dividends from net investment income and capital gains, resulting in an increase
in paid-in capital of $1,466,314.
(D) Purchases and sales of investments aggregated $15,211,190 and $17,723,409,
respectively, for the six months ended March 31, 1996, exclusive of short-term
notes.
(E) A distribution of $.12 per share from net investment income was declared
April 18, 1996, payable May 28, 1996, to shareholders of record at the close of
business May 13, 1996.
<PAGE> 7
PRINCIPAL PORTFOLIO CHANGES January 1, 1996 to March 31, 1996
<TABLE>
<CAPTION>
SHARES OR PRINCIPAL AMOUNT
--------------------------------
HELD AT
ADDITIONS REDUCTIONS 3-31-96
--------- ---------- -------
<S> <C> <C> <C>
Bindley Western Industries, Inc. 6 1/2% 2002 cv. sub. deb .. 1,350,000 --
Boatmens Bancshares, Inc. depositary shares
(representing 7% cum cv. A pfd.) ............................. 20,500 32,500
Browning-Ferris Industries, Inc. 7 1/4% 1998 notes ......... 25,000 --
Conner Peripherals, Inc. 6 1/2% 2002 cv. sub. deb .......... 850,000 850,000
Conner Peripherals, Inc. 6 3/4% 2001 cv. sub. deb .......... 1,250,000 1,250,000
HFS, Inc. 4 3/4% 2003 cv. senior notes ..................... 250,000 250,000
Kaman Corp. depositary shares (representing 6 1/2% cv. pfd.) 10,040 --
Marriott International, Inc. 0% 2011 liquid yield option notes 875,000 875,000
Mercury Air Group, Inc. 7 3/4% 2006 cv. sub. deb ........... 500,000 500,000
Pioneer Financial Services, Inc. 6 1/2% 2003 cv. sub. notes 500,000 500,000
Quantum Corp. 5% 2003 cv. sub. notes* ........................ 500,000 500,000
Sandoz Capital BVI Ltd. 2% 2002 cv. sub. notes* .............. 500,000 1,050,000 500,000
Sanifill, Inc. 5% 2006 cv. sub. deb .......................... 750,000 750,000
Seagate Technology, Inc. 6 3/4% 2012 cv. sub. deb .......... 1,295,000 --
Starbucks Corp. 4 1/4% 2002 cv. sub. deb ................... 500,000 --
Thermo Electron Corp. 4 1/4% 2003 cv. sub. deb.* ........... 800,000 925,000
Thermo Electron Corp. 5% 2001 cv. sub. deb.* ................. 500,000 275,000
Time Warner, Inc. 8 1/4% 2015 cv. sub. deb ................. 853,050 --
Triathlon Broadcasting Co. depositary shares
(representing 9% mandatory cv. pfd.) ......................... 50,000 50,000
Wang Laboratories, Inc. depositary shares
(representing 6 1/2% cum cv. B pfd.)* ...................... 7,500 7,500
</TABLE>
* Rule 144A security.
- --------------------------------------------------------------------------------
The results of the shareholder vote at the Annual Meeting of Shareholders held
on January 18, 1996, were:
1. The nominated directors were elected.
<TABLE>
<CAPTION>
Votes for Votes withheld
--------- --------------
<S> <C> <C>
Ronald E. Dinsmore 5,478,821 138,637
Thomas H. Dinsmore 5,474,109 143,349
Donald M. Halsted, Jr. 5,484,177 133,281
Jane D. O'Keefe 5,478,430 139,028
</TABLE>
2. The selection of Coopers & Lybrand as independent accountants was ratified
with 5,480,783 votes for, 53,072 against, and 83,003 abstaining.
3. The amendment to the Articles of Incorporation to require the Board of
Directors to consider giving shareholders the right to tender their shares was
disapproved with 727,361 votes for, 2,066,069 against and 214,366 abstaining.
- --------------------------------------------------------------------------------
Pursuant to Section 23 of the Investment Company Act of 1940, notice is hereby
given that the Fund may in the future purchase shares of Ellsworth Convertible
Growth and Income Fund, Inc. Common Stock from time to time, at such times, and
in such amounts, as may be deemed advantageous to the Fund. Nothing herein shall
be considered a commitment to purchase such shares.
<PAGE> 8
DIRECTORS
GORDON F. AHALT
WILLIAM A. BENTON
ELLSWORTH
ELIZABETH C. BOGAN CONVERTIBLE 2
GROWTH AND
RONALD E. DINSMORE INCOME FUND*
THOMAS H. DINSMORE, C.F.A.
DONALD M. HALSTED, JR.
GEORGE R. LIEBERMAN
JANE D. O'KEEFFE
DIRECTOR EMERITUS
DUNCAN O. MCKEE
OFFICERS
RONALD E. DINSMORE Chairman of the Board
THOMAS H. DINSMORE President
JANE D. O'KEEFFE Executive Vice President
SIGMUND LEVINE Senior Vice President
and Secretary
H. TUCKER LAKE Vice President, Trading
GARY I. LEVINE Treasurer and
Assistant Secretary
[FPO GRAPHIC]
INVESTMENT ADVISER
Davis/Dinsmore Management Company
65 Madison Ave., Morristown, NJ 07960-7308
(201) 631-1177
SHAREHOLDER SERVICES AND TRANSFER AGENT
The Bank of New York
Shareholder Relations Department-11E
P.O. Box 11258, Church Street Station
New York, NY 10286-1258
(800) 524-4458
COMMON STOCK LISTING
American Stock Exchange
Symbol: ECF
1996
SEMI-ANNUAL
REPORT
MARCH 31, 1996
[Recycle Logo] Printed on recycled paper
