<PAGE> 1
THOMPSON PLUMB FUNDS, INC.
January 15, 1999
ANNUAL REPORT TO SHAREHOLDERS
Dear Fellow Shareholder:
We are proud to present you the following report depicting the investments and
returns of our family of mutual funds for the period ending November 30, 1998.
Last year was another very strong year for the performance of our
equity-oriented funds. The goals for each fund are as follows:
THOMPSON PLUMB BALANCED FUND
This Fund seeks to realize a combination of income and capital appreciation,
which will result in the highest total return while assuming reasonable risk.
The Balanced Fund invests in a diversified portfolio of common stocks and fixed
income securities.
THOMPSON PLUMB BOND FUND
This Fund seeks a high level of current income while at the same time preserving
investment capital. The Bond Fund invests primarily in a diversified portfolio
of investment-grade debt securities.
THOMPSON PLUMB GROWTH FUND
This Fund seeks a high level of long-term growth primarily through capital
appreciation, while at the same time assuming reasonable risk. The Growth Fund
invests primarily in a diversified portfolio of common stocks and securities
convertible into common stocks. Although current income is not a primary
objective of the Growth Fund, the Fund anticipates that capital growth will be
accompanied by growth through dividend income.
We hope that you find the report clear and concise and that it provides you with
a sufficient amount of detailed information in order to be able to review your
investment. Please visit our web site (http://www.thompsonplumb.com) for updated
daily information or call with any comments or questions.
Sincerely,
/s/ John W. Thompson /s/ Thomas G. Plumb
- --------------------- ---------------------
John W. Thompson, CFA Thomas G. Plumb, CFA
Chairman & Secretary President & Treasurer
<PAGE> 2
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
November 30, 1998
CONTENTS
<TABLE>
<CAPTION>
Page(s)
<S> <C>
REPORT TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT REVIEWS
Balanced Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bond Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Growth Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FINANCIAL STATEMENTS
Statements of assets and liabilities . . . . . . . . . . . . . . . 7
Schedules of investments . . . . . . . . . . . . . . . . . . . . . 8-12
Statements of operations . . . . . . . . . . . . . . . . . . . . . 13
Statements of changes in net assets. . . . . . . . . . . . . . . . 14
Notes to financial statements. . . . . . . . . . . . . . . . . . . 15-19
Financial highlights . . . . . . . . . . . . . . . . . . . . . . . 20-22
REPORT OF INDEPENDENT ACCOUNTANTS. . . . . . . . . . . . . . . . . . 23
</TABLE>
This annual report is authorized for distribution to prospective
investors only when preceded or accompanied by a Fund prospectus
which contains facts concerning the Funds' objectives and policies,
management, expenses, and other information.
3
<PAGE> 3
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
November 30, 1998
BALANCED FUND INVESTMENT REVIEW
The Balanced Fund posted an 11.63 percent return for the twelve months ended
November 30, 1998, its fourth consecutive year of double digit returns and
seventh in the last ten years. The Fund ranked in the top 45 percent of all
balanced funds for the one-year period and in the top 6 percent, 8 percent and
40 percent for the three-, five- and ten- year periods, respectively*. Our
common stock exposure, near the high end of the 75 percent maximum allowed,
contributed to our relative outperformance during the past three and five years.
1998 proved to be a volatile year as financial disruptions in Southeast Asia and
Russia ripped through the U.S. common stock and bond markets. As the crisis
intensified during the late summer, investors sought the safest of all
securities, U.S. Treasury bonds. Intensive buying of Treasury bonds pushed
interest rates to the lowest point since the U.S. Government began issuing the
30-year Treasury securities. The Federal Reserve eased the crisis by lowering
short-term interest rates three times for a total of three-quarters of one
percent. The U.S. economy proved to be very resilient despite international
events and maintained a robust growth rate in the third and fourth quarters of
the year. Consumers remained upbeat because of low unemployment and solid income
growth. The Fund benefited from the remarkable recovery in the equity markets
during the last quarter of the year as investors realized the impact of
international events was less severe than originally anticipated.
We remain committed to finding opportunities in the equity markets. The major
common stock indexes are being pushed to new highs by a narrow group of large
companies with high valuations. We believe that more value exists in smaller and
medium capitalization companies and in selected large growth companies with
reasonable valuations. While corrections in common stock valuations will occur
from time to time, we believe that common stocks will provide superior long-term
investment performance. Our current plan is to maintain the Fund's common stock
exposure near the top end of the asset allocation range.
Sincerely,
/s/ Thomas G. Plumb
- -------------------
Thomas G. Plumb
Portfolio Manager
*As measured by Lipper, Inc. out of 393, 280, 153 and 56 balanced funds for the
one-year, three-year, five-year and ten-year periods ended 11/30/98,
respectively.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
THOMPSON PLUMB BALANCED FUND
HISTORICAL PERFORMANCE
NOVEMBER 30, 1998
<TABLE>
<CAPTION>
DATE TPA S&P 500 LEHMAN
---- --- ------- ------
<S> <C> <C> <C>
Nov 88 10,000 10,000 10,000
Nov 89 12,046 13,082 11,256
Nov 90 12,188 12,629 12,154
Nov 91 14,425 15,198 13,785
Nov 92 15,998 18,005 14,935
Nov 93 16,482 19,824 16,390
Nov 94 16,836 20,032 16,090
Nov 95 20,375 27,440 18,429
Nov 96 25,632 35,085 19,502
Nov 97 31,114 45,087 20,736
Nov 98 34,733 55,755 22,576
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
------------------------------------
1 Year 5 Year 10 Year
------------------------------------
11.63% 16.08% 13.26%
------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
4
<PAGE> 4
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
November 30, 1998
BOND FUND INVESTMENT REVIEW
The Bond Fund had an excellent year, gaining 9.34 percent for 1998. Also, the
three-year and five-year annualized returns increased to 6.17 percent and 5.78
percent, respectively. In the fourth quarter, the Bond Fund gained 2.62 percent,
comprised of interest income plus appreciation of the bonds held.
The asset allocation for the Bond Fund was substantially unchanged over the past
three months. Corporate bonds continue to make up 96.7 percent of the Fund's
assets while short-term investments total 3.3 percent. Currently, "A" rated
Corporate bonds are producing over 1% per year higher returns than the
equivalent maturities of U.S. Treasury bonds. The quality of the bonds that are
held within the Fund remains high as we continue to emphasize bonds of large,
well-known, major U.S. corporations rated "A" or higher.
The Federal Reserve has been monitoring the world economic picture and lowered
interest rates for the third time last quarter. If it perceives the economy to
be slowing further, the Federal Reserve could lower interest rates again.
However, in our view, there is a remote possibility that the economy could begin
to heat up and cause the Federal Reserve to raise interest rates to quell
inflation. We are also monitoring the economy and we see few signs of inflation
on the horizon, but we do see signs that wages have begun to increase due to
many shortages of skilled workers. With the current duration of the Fund at 5.4
years and the average time to maturity at 7.0 years, we believe that we are
managing the Fund to reach an optimum balance between the movement of interest
rates and the need to produce income for you.
In conclusion, the Bond Fund had a very solid 1998 and is positioned to provide
income with relatively low credit risk or interest rate risk.
Sincerely,
/s/ John W. Thompson
- --------------------
John W. Thompson
Portfolio Manager
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
THOMPSON PLUMB BOND FUND
HISTORICAL PERFORMANCE
NOVEMBER 30, 1998
<TABLE>
<CAPTION>
DATE TPA LEHMAN
---- --- ------
<S> <C> <C>
Feb 92 10,000 10,000
Nov 92 10,480 10,615
Nov 93 11,395 11,649
Nov 94 11,058 11,436
Nov 95 12,612 13,098
Nov 96 13,181 13,861
Nov 97 13,806 14,738
Nov 98 15,096 16,045
--------------------------------------
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------
1 Year 5 Year Since Inception
--------------------------------------
9.34% 5.78% 6.24%
--------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
5
<PAGE> 5
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
November 30, 1998
GROWTH FUND INVESTMENT REVIEW
The overall stock market and the Growth Fund experienced another very positive
year. It was the fourth year in a row of strong gains in the U.S. stock market.
While a major decline took place in the third quarter, the recovery in the
fourth quarter allowed the Fund to attain a total return of 13.74 percent for
its fiscal year. The Growth Fund ranked in the top 40 percent for the past
calendar year among all General Equity Funds, according to Lipper, Inc. But more
significantly, the Growth Fund ranked in the top 10 percent nationally in this
group for both the three-year and five-year periods.* The average annual total
returns were 26.04 percent and 21.57 percent, respectively, for the three- and
five-year periods.
In 1998 the popular stock market averages were propelled by a sensational year
for large capitalization pharmaceutical, telecommunications and technology
issues. By contrast, most large companies producing commodity-oriented products
and smaller-sized companies lagged behind these market indicators. Since the
Growth Fund has a number of holdings in smaller and more value-oriented stocks,
its performance was somewhat hindered on a relative basis. However, these issues
continue to represent attractive values and should help the Fund perform well in
the future.
The major holdings in the Growth Fund are somewhat more conservative now than
they were a year ago. In view of the extended bull market of the past several
years, we are attempting to reduce the volatility of the Fund. Our focus remains
on stocks whose valuations are judged as reasonable relative to their earnings
growth prospects.
We have been making good progress in improving our Fund's performance rankings,
as demonstrated by its three- and five-year returns. We are confident that our
investment philosophy will continue to provide excellent risk-adjusted returns
in the future. This remains our goal for you in the years ahead.
Sincerely,
/s/ John W. Thompson
- --------------------
John W. Thompson
Portfolio Manager
*Ranking refers to the front-end, load-adjusted return in the General Equity
category as supplied by Lipper, Inc. The Growth Fund ranked 1205 out of 3323,
173 of 1972, 126 of 1224, and 225 of 735 funds for the one-year, three-year,
five-year, and since-inception periods ended 12/31/98, respectively.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
THOMPSON PLUMB GROWTH FUND
HISTORICAL PERFORMANCE
NOVEMBER 30, 1998
<TABLE>
<CAPTION>
DATE TPA S&P 500
---- --- -------
<S> <C> <C>
Feb 92 10,000 10,000
Nov 92 10,185 10,695
Nov 93 10,235 11,775
Nov 94 10,215 11,899
Nov 95 13,573 16,299
Nov 96 18,394 20,840
Nov 97 23,894 26,781
Nov 98 27,177 33,118
--------------------------------------
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------
1 Year 5 Year Since Inception
--------------------------------------
13.74% 21.57% 15.82%
--------------------------------------
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE
<PAGE> 6
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
November 30, 1998
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
BALANCED BOND GROWTH
FUND FUND FUND
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Investments, at market value (Cost $38,840,
$30,658, and $56,456, respectively)
Common stocks........................... $ 33,498 - $ 68,385
Bonds................................... 12,782 $ 31,151 -
Short-term investments.................. 1,091 1,077 153
-------- -------- --------
47,371 32,228 68,538
Prepaid expenses.......................... 6 5 8
Due from sale of securities............... 558 - -
Dividends and interest receivable......... 245 478 51
-------- -------- --------
Total Assets.......................... 48,180 32,711 68,597
-------- -------- --------
LIABILITIES
Due on purchase of securities............. 804 - -
Accrued expenses payable.................. 22 16 29
Due to investment advisor................. 39 22 62
-------- -------- --------
Total Liabilities..................... 865 38 91
-------- -------- --------
NET ASSETS................................. $ 47,315 $ 32,673 $ 68,506
======== ======== ========
Net Assets consist of:
Capital stock ($.001 par value)........... $ 35,737 $ 30,903 $ 50,706
Undistributed net investment income....... 488 419 -
Net realized gain (loss) on investments... 2,559 (219) 5,718
Net unrealized appreciation on
investments.............................. 8,531 1,570 12,082
-------- -------- --------
Net Assets............................ $ 47,315 $ 32,673 $ 68,506
======== ======== ========
Shares of capital stock outstanding
(100,000 shares authorized).............. 2,605 2,990 1,677
Offering and redemption price/Net asset
value per share.......................... $ 18.16 $ 10.93 $ 40.85
======== ======== ========
</TABLE>
See Notes to Financial Statments
7
<PAGE> 7
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
Shares or
Principal Market
Amount Value
------ -----
<S> <C> <C>
COMMON STOCKS - 70.7%
BASIC MATERIALS - 1.3%
FiberMark (a).................................... 49,000 $ 633,938
----------
CAPITAL GOODS - 10.5%
Advanced Lighting (a)............................ 80,000 700,000
Danaher.......................................... 12,000 547,500
General Electric................................. 10,500 950,250
Howmet International (a)......................... 57,500 884,062
Minnesota Mining & Manufacturing................. 10,000 803,125
Xerox............................................ 10,000 1,075,000
----------
4,959,937
----------
CONSUMER PRODUCTS - 7.4%
Discount Auto Parts (a).......................... 20,000 498,750
Gillette......................................... 18,000 826,875
PepsiCo.......................................... 28,000 1,083,250
Philip Morris.................................... 20,000 1,118,750
----------
3,527,625
----------
ENERGY - 2.9%
Chevron.......................................... 6,500 543,562
Exxon............................................ 11,000 825,688
----------
1,369,250
----------
FINANCIAL SERVICES - 10.3%
Associated Banc-Corp............................. 12,500 426,563
Bank One......................................... 16,000 821,000
BankAmerica...................................... 12,000 782,250
CIT Group - Class A.............................. 15,000 420,938
Fannie Mae....................................... 10,500 763,875
Household International.......................... 17,500 684,688
Merrill Lynch.................................... 10,000 750,000
Towne Services (a)............................... 30,000 225,000
----------
4,874,314
----------
HEALTH CARE - 9.8%
Abbott Laboratories.............................. 12,000 $ 576,000
BioChem Pharma (a)............................... 25,000 609,375
Johnson & Johnson................................ 12,000 975,000
Medco Research (a)............................... 8,000 162,000
Merck & Co....................................... 8,800 1,362,900
Sofamor Danek Group (a).......................... 8,500 950,406
----------
4,635,681
----------
RETAIL - 3.9%
AutoZone (a)..................................... 15,000 451,875
Fastenal......................................... 20,000 825,000
Lands' End (a)................................... 25,000 564,063
----------
1,840,938
----------
Services - 5.1%
CBS (a).......................................... 20,000 596,250
Disney, Walt..................................... 20,000 643,750
Merrill.......................................... 30,000 510,000
New York Times - Class A......................... 21,000 652,312
----------
2,402,312
----------
Technology - 14.4%
EMC (a).......................................... 16,000 1,160,000
JDA Software Group (a)........................... 35,000 280,000
Lattice Semiconductor (a)........................ 20,000 737,500
Linear Technology................................ 15,000 1,050,938
Microchip Technology (a)......................... 36,500 1,270,656
Oracle (a)....................................... 30,000 1,027,500
Parametric Technology (a)........................ 37,500 637,500
Zebra Technologies - Class A (a)................. 20,000 671,250
----------
6,835,344
----------
Telecommunications - 5.1%
ADC Telecommunications (a)....................... 28,000 836,500
Ameritech........................................ 3,000 162,375
Northern Telecom Limited......................... 15,000 700,312
SBC Communications............................... 15,000 719,062
----------
2,418,249
----------
TOTAL COMMON STOCKS
(COST $25,318,414).............................. 33,497,588
----------
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 8
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1998
(Continued)
Shares or
Principal Market
Amount Value
--------- ------
BONDS - 27.0%
CORPORATE BONDS - 23.6%
Aetna Services
6.375% Due 08/15/03 ..................... 1,000,000 $ 1,009,571
Aetna Services
7.125% Due 08/15/06 ..................... 2,000,000 2,096,618
American Home Products
7.900% Due 02/15/05 ..................... 1,000,000 1,129,440
General Electric Capital
8.750% Due 05/21/07 ..................... 640,000 772,422
Johnson Controls
6.300% Due 02/01/08 ..................... 2,000,000 2,070,582
Philip Morris
6.375% Due 02/01/06 ..................... 1,000,000 1,025,157
Thermo Electron Cvt
4.250% Due 01/01/03 ..................... 1,500,000 1,320,000
Union Pacific
6.000% Due 09/01/03 ..................... 685,000 676,986
Wisconsin Power & Light
7.000% Due 06/15/07 ..................... 1,000,000 1,094,150
-----------
Total Corporate Bonds .................... 11,194,926
-----------
UNITED STATES GOVERNMENT
AND AGENCY ISSUES - 3.4%
United States Treasury Notes
6.500% Due 05/31/02 ..................... 1,500,000 1,587,187
-----------
Total United States Government
and Agency Issues ....................... 1,587,187
-----------
TOTAL BONDS
(COST $12,429,930) ...................... 12,782,113
-----------
SHORT-TERM INVESTMENTS - 2.3%
VARIABLE RATE DEMAND NOTES - 2.3%
Firstar Bank ............................. 1,090,757 $ 1,090,757
-----------
Total Variable Rate Demand Notes ......... 1,090,757
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,090,757) ....................... 1,090,757
-----------
TOTAL INVESTMENTS - 100.0%
(COST $38,839,101) ...................... $47,370,458
===========
(a) Non-income producing
See Notes to Financial Statements.
9
<PAGE> 9
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1998
(Continued)
- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
Shares or
Principal Market
Amount Value
--------- ------
BONDS - 96.7%
CORPORATE BONDS - 96.7%
American Home Products
7.900% Due 02/15/05 ...................... 1,000,000 $1,129,440
Anheuser-Busch
7.100% Due 06/15/07 ...................... 1,000,000 1,074,880
Associates Corp.
7.240% Due 08/15/06 ...................... 1,000,000 1,088,051
AT & T
7.000% Due 05/15/05 ...................... 1,000,000 1,085,201
Beneficial Corp.
6.850% Due 10/03/07 ...................... 1,000,000 1,054,828
Dayton Hudson
6.400% Due 02/15/03 ...................... 1,000,000 1,029,791
Disney, Walt
6.750% Due 03/30/06 ...................... 1,000,000 1,080,726
duPont, E. I. de Nemours
6.750% Due 09/01/07 ...................... 1,000,000 1,093,405
General Electric Capital
8.750% Due 05/21/07 ...................... 1,000,000 1,206,909
Hartford Life
6.900% Due 06/15/04 ...................... 1,000,000 1,047,075
Hartford Life
7.100% Due 06/15/07 ...................... 500,000 533,936
Hershey Foods
6.700% Due 10/01/05 ...................... 1,000,000 1,076,843
Johnson Controls
6.300% Due 02/01/08 ...................... 1,000,000 1,035,291
Lucent Technologies
7.250% Due 07/15/06 ...................... 1,000,000 1,118,846
Madison Gas & Electric
6.020% Due 09/15/08 ...................... 500,000 504,966
Michigan Consolidated Gas
7.210% Due 05/01/07 ...................... 500,000 545,092
Morgan, J. P.
6.700% Due 11/01/07 ...................... 1,000,000 $1,046,566
NationsBank
6.690% Due 04/03/02 ...................... 1,000,000 1,034,147
Northern Trust
7.300% Due 09/15/06 ...................... 1,000,000 1,090,023
Norwest Financial
6.250% Due 11/01/02 ...................... 1,000,000 1,023,821
Penney, J. C.
7.600% Due 04/01/07 ...................... 1,000,000 1,097,572
Philip Morris
9.000% Due 01/01/01 ...................... 1,000,000 1,068,936
Philip Morris
7.650% Due 07/01/08 ...................... 500,000 558,629
Schwab, Charles
6.520% Due 05/27/08 ...................... 1,000,000 1,030,100
Sears, Roebuck
6.700% Due 11/15/06 ...................... 1,000,000 1,054,885
SmithKline Beecham
7.375% Due 04/15/05 ...................... 965,000 1,065,652
Travelers Property & Casualty
6.750% Due 04/15/01 ...................... 1,000,000 1,024,627
Tribune
6.875% Due 11/01/06 ...................... 1,000,000 1,065,222
Wal-Mart Stores
7.500% Due 05/15/04 ...................... 1,000,000 1,108,487
Wells Fargo
7.125% Due 08/15/06 ...................... 1,000,000 1,082,731
Wisconsin Power & Light
7.000% Due 06/15/07 ...................... 1,000,000 1,094,150
-----------
Total Corporate Bonds ..................... 31,150,828
-----------
TOTAL BONDS
(COST $29,581,448) ....................... 31,150,828
-----------
See Notes to Financial Statements.
10
<PAGE> 10
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1998
(Continued)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
------ -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 3.3%
VARIABLE RATE DEMAND NOTES - 3.3%
Firstar Bank.................................... 970,902 $ 970,902
Wisc. Central Credit Union...................... 105,941 105,941
-----------
Total Variable Rate Demand Notes................ 1,076,843
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,076,843)............................. 1,076,843
-----------
TOTAL INVESTMENTS - 100.0%
(COST $30,658,291)............................ $32,227,671
===========
- ---------------------------------------------------------------------------
GROWTH FUND
- ---------------------------------------------------------------------------
COMMON STOCKS - 99.8%
BASIC MATERIALS - 2.3%
Sigma-Aldrich................................... 50,000 $ 1,606,250
-----------
CAPITAL GOODS - 8.2%
Advanced Lighting (a)........................... 125,000 1,093,750
Howmet International (a)........................ 100,000 1,537,500
Minnesota Mining & Manufacturing................ 28,000 2,248,750
Xerox........................................... 7,000 752,500
-----------
5,632,500
-----------
CONSUMER PRODUCTS - 15.7%
Gillette........................................ 40,000 1,837,500
Kimberly-Clark.................................. 35,000 1,841,875
PepsiCo......................................... 62,000 2,398,625
Philip Morris................................... 52,000 2,908,750
Wrigley, Wm. Jr. ............................... 20,000 1,762,500
-----------
10,749,250
-----------
ENERGY - 3.4%
Chevron......................................... 14,000 1,170,750
Exxon........................................... 15,000 1,125,938
-----------
2,296,688
-----------
FINANCIAL SERVICES - 18.2%
American International Group.................... 5,000 470,000
Associated Banc-Corp............................ 22,500 767,812
Associates First Capital - Class A.............. 21,000 1,635,375
BankAmerica..................................... 25,000 1,629,688
CIT Group - Class A............................. 80,000 2,245,000
Fannie Mae...................................... 27,000 1,964,250
Hartford Life - Class A......................... 20,000 1,096,250
Household International......................... 24,000 939,000
Merrill Lynch................................... 23,000 1,725,000
-----------
12,472,375
-----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 11
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1998
(Continued)
Shares or
Principal Market
Amount Value
--------- ------
COMMON STOCKS - 99.8% (Continued)
HEALTH CARE - 20.6%
Abbott Laboratories ........................ 24,000 $ 1,152,000
BioChem Pharma (a) ......................... 30,000 731,250
Bristol-Myers Squibb ....................... 10,000 1,225,625
DENTSPLY International ..................... 65,000 1,746,875
Johnson & Johnson .......................... 21,000 1,706,250
Medco Research (a) ......................... 10,000 202,500
Merck & Co. ................................ 17,000 2,632,875
Schein, Henry (a) .......................... 20,000 710,000
Sofamor Danek Group (a) .................... 19,000 2,124,438
Sybron International (a) ................... 65,000 1,616,875
Young Innovations (a) ...................... 19,000 261,250
-----------
14,109,938
-----------
RETAIL - 5.5%
AutoZone (a) ............................... 63,000 1,897,875
Fastenal ................................... 45,000 1,856,250
-----------
3,754,125
-----------
SERVICES - 11.1%
BA Merchant Services - Class A (a) ......... 100,000 1,675,000
CBS (a) .................................... 76,000 2,265,750
Merrill .................................... 33,000 561,000
New York Times - Class A ................... 45,000 1,397,812
Outdoor Systems (a) ........................ 64,000 1,728,000
-----------
7,627,562
-----------
TECHNOLOGY - 11.3%
Altera (a) ................................. 18,000 $ 883,125
EMC (a) .................................... 12,000 870,000
JDA Software Group (a) ..................... 85,000 680,000
Linear Technology .......................... 28,000 1,961,750
Maxim Integrated Products (a) .............. 24,000 942,000
Parametric Technology (a) .................. 50,000 850,000
Sonic Foundry (a) .......................... 10,000 116,250
Sterling Commerce (a) ...................... 10,000 362,500
Zebra Technologies - Class A (a) ........... 32,000 1,074,000
-----------
7,739,625
-----------
TELECOMMUNICATIONS - 3.5%
SBC Communications ......................... 50,000 2,396,875
-----------
TOTAL COMMON STOCKS
(COST $56,303,071) ........................ 68,385,188
-----------
SHORT-TERM INVESTMENTS - 0.2%
VARIABLE RATE DEMAND NOTES - 0.2%
Firstar Bank ............................... 152,633 152,633
-----------
Total Variable Rate Demand Notes ........... 152,633
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $152,633) ........................... 152,633
-----------
TOTAL INVESTMENTS - 100.0%
(COST $56,455,704) ........................ $68,537,821
===========
(a) Non-income producing
See Notes to Financial Statements.
12
<PAGE> 12
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1998
(In thousands)
BALANCED BOND GROWTH
FUND FUND FUND
-------- ------- -------
INVESTMENT INCOME
Dividends .............................. $ 253 - $ 685
Interest ............................... 783 $ 2,022 33
------- ------- -------
1,036 2,022 718
------- ------- -------
EXPENSES
Accounting services fees ............... 75 62 96
Directors fees ......................... 9 7 13
Federal & state registration ........... 27 25 28
Investment advisory fees ............... 358 206 581
Professional fees ...................... 26 21 33
Other expenses ......................... 53 23 76
------- ------- -------
Total expenses ......................... 548 344 827
Less expenses reimbursable by advisor .. - 13 -
------- ------- -------
Net expenses ............................. 548 331 827
------- ------- -------
NET INVESTMENT INCOME (LOSS) ............. 488 1,691 (109)
------- ------- -------
Net realized gain on investments ......... 2,559 162 5,836
Net unrealized appreciation on investments 1,517 1,045 1,206
------- ------- -------
NET GAIN ON INVESTMENTS .................. 4,076 1,207 7,042
------- ------- -------
Net increase in net assets resulting from
operations ............................. $4,564 $ 2,898 $ 6,933
======= ======= =======
See Notes to Financial Statements.
13
<PAGE> 13
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED NOVEMBER 30,
(In thousands)
<TABLE>
<CAPTION>
BALANCED FUND BOND FUND GROWTH FUND
----------------- ---------------- ----------------
1998 1997 1998 1997 1998 1997
------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations
Net investment income (loss) ........... $ 488 $ 302 $ 1,691 $ 1,530 $ (109) $ (135)
Net realized gain (loss) on investments 2,559 3,492 162 (200) 5,836 4,104
Net unrealized appreciation
on investments ........................ 1,517 1,998 1,045 120 1,206 5,098
------- ------- ------- ------- ------- -------
Net increase in net assets resulting
from operations ....................... 4,564 5,792 2,898 1,450 6,933 9,067
------- ------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income (261) (294) (1,688) (1,393) - -
Distributions from net realized gains on
securities transactions ............... (3,478) (1,724) - - (3,968) (1,838)
------- ------- ------- ------- ------- -------
Total distributions to shareholders ..... (3,739) (2,018) (1,688) (1,393) (3,968) (1,838)
------- ------- ------- ------- ------- -------
FUND SHARE TRANSACTIONS .................. 10,153 11,794 (674) 9,927 20,165 14,070
------- ------- ------- ------- ------- -------
TOTAL INCREASE IN NET ASSETS ............. 10,978 15,568 536 9,984 23,130 21,299
NET ASSETS
Beginning of period ..................... 36,337 20,769 32,137 22,153 45,376 24,077
------- ------- ------- ------- ------- -------
End of period ........................... $47,315 $36,337 $32,673 $32,137 $68,506 $45,376
======= ======= ======= ======= ======= =======
Accumulated undistributed net investment
income included in net assets at end
of period .............................. $ 488 $ 261 $ 419 $ 416 $ 0 $ 0
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 14
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
NOTE 1 - ORGANIZATION
Thompson Plumb Funds, Inc. (the "Company") is a Wisconsin corporation registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end, diversified management investment company.
The Company consists of separate mutual funds series (the "Funds"): Thompson
Plumb Balanced Fund (the "Balanced Fund"), Thompson Plumb Bond Fund (the "Bond
Fund"), and Thompson Plumb Growth Fund (the "Growth Fund"). The assets and
liabilities of each Fund are segregated and a shareholder's interest is limited
to the Fund in which the shareholder owns shares.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements.
SECURITY VALUATION - Portfolio securities which are traded on an exchange or in
the over-the-counter market are valued at the last sale price reported by the
exchange on which the securities are primarily traded on the day of valuation.
Securities for which there are no transactions on a given day or securities not
traded on an exchange or in the over-the-counter market are valued at the
average of the most recent bid and asked prices. Debt securities for which
market quotations are not readily available may be valued based on information
supplied by independent pricing services, including services using matrix
pricing formulas and/or independent broker bid quotations. Debt securities with
remaining maturities of 60 days or less may be valued on an amortized cost
basis, which involves valuing an instrument at its cost and thereafter assuming
a constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating rates on the market value of the instrument. Any
securities or other assets for which market quotations are not readily available
are valued at fair value as determined in good faith by the Advisor (Thompson,
Plumb & Associates, Inc.) pursuant to procedures established under the general
supervision and responsibility of the Board of Directors of Thompson Plumb
Funds, Inc.
REALIZED GAINS AND LOSSES ON SECURITIES - Gains or losses realized on sales of
securities are determined by comparing the identified cost of the security lot
sold with the net sales proceeds.
VARIABLE-RATE DEMAND NOTES - The Funds invest in short-term, variable-rate
demand notes, which are unsecured instruments. The Funds may be susceptible to
credit risk with respect to these instruments to the extent the issuer defaults
on its payment obligation. Each Fund's policy is to not purchase variable-rate
demand notes unless at the time of purchase the issuer has unsecured debt
securities outstanding that have received a rating within the two highest
categories from either Standard & Poor's (that is, A-1, A-2 or AAA, AA) or
Moody's Investors Service, Inc. (that is, Prime-1, Prime-2 or Aaa, Aa).
Accordingly, the Funds do not anticipate nonperformance of these obligations by
the issuers.
15
<PAGE> 15
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
PERMANENT BOOK AND TAX DIFFERENCES - Generally accepted accounting principles
require that permanent financial reporting and tax differences relating to
shareholder distributions be reclassified to paid-in capital.
OTHER - Investment securities transactions are accounted for on the trade date.
Discounts and premiums on securities purchased are amortized over the life of
the respective securities on the same basis for book and tax purposes. Dividend
income is recorded on the ex-dividend date. Interest income is recorded as
earned. Each Fund is charged for those expenses that are directly attributed to
it, such as advisory, custodial, accounting services and certain shareholder
servicing fees, while other expenses that cannot be directly attributable to a
Fund are allocated among the Funds in proportion to the net assets of the
respective Fund.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
NOTE 3 - INVESTMENT ADVISORY & ACCOUNTING SERVICES AGREEMENTS AND OTHER
TRANSACTIONS WITH AFFILIATES
The Company has entered into an Advisory Agreement with Thompson, Plumb &
Associates, Inc. (the "Advisor") for management of each Fund's portfolio and for
the administration of other Fund affairs. As compensation for its services, the
Advisor receives a fee computed daily and payable monthly as follows: (i) for
the Balanced Fund, .85 of 1% of average daily net assets up to $50 million and
.80 of 1% of average daily net assets in excess of $50 million; (ii) for the
Bond Fund, .65 of 1% of average daily net assets up to $50 million and .60 of 1%
of average daily net assets in excess of $50 million; (iii) for the Growth Fund,
1.00% of average daily net assets up to $50 million and .90 of 1% of average
daily net assets in excess of $50 million.
Pursuant to an Accounting Services Agreement, the Advisor maintains the Funds'
financial records in accordance with the 1940 Act, prepares all necessary
financial statements of the Funds, and calculates the net asset value per share
of the Funds on a daily basis. As compensation for its services, each Fund pays
the Advisor a fee computed daily and payable monthly at the annual rate of .20
of 1% of net assets up to $30 million and .125 of 1% of net assets in excess of
$30 million, with a minimum fee of $30,000 per year.
16
<PAGE> 16
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
<TABLE>
<CAPTION>
NOTE 4 - FUND SHARE TRANSACTIONS
Transactions in shares of the Funds during 1998 and 1997 were as follows:
(In thousands) 1998 1997
----------------- -----------------
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
BALANCED FUND
Shares sold 605 $ 10,521 940 $ 14,996
Shares issued in reinvestment of dividends 16 252 19 283
Shares issued in reinvestment of realized gains 215 3,401 112 1,659
Shares redeemed (232) (4,021) (325) (5,144)
----- -------- ----- --------
Net increase 604 $ 10,153 746 $ 11,794
===== ======== ===== ========
BOND FUND
Shares sold 576 $ 6,158 1,357 $ 14,014
Shares issued in reinvestment of dividends 153 1,621 129 1,322
Shares redeemed (789) (8,453) (527) (5,409)
----- -------- ----- --------
Net increase (decrease) (60) $ (674) 959 $ 9,927
===== ======== ===== ========
GROWTH FUND
Shares sold 629 $ 24,420 506 $ 17,157
Shares issued in reinvestment of realized gains 111 3,900 54 1,629
Shares redeemed (216) (8,155) (141) (4,716)
----- -------- ----- --------
Net increase 524 $ 20,165 419 $ 14,070
===== ======== ===== ========
</TABLE>
17
<PAGE> 17
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income and realized gains on
securities for the Balanced Fund and the Growth Fund normally will be declared
on an annual basis within 30 days and paid within 60 days following the Funds'
fiscal year-end. Bond Fund distributions to shareholders from net investment
income normally will be declared on a quarterly basis within 30 days and paid
within 60 days following the Fund's fiscal quarter, and distributions to
shareholders from realized gains on securities normally will be declared on an
annual basis within 30 days and paid within 60 days following the Fund's fiscal
year-end. Distributions are recorded on the ex-dividend date.
Quarterly distributions from net investment income for the Bond Fund during
fiscal 1998 totaled $1,688,086 or $0.56 per share. For the period ended November
30, 1998, a capital gains distribution for the Balanced Fund and the Growth Fund
and a distribution from net investment income for the Balanced Fund and the Bond
Fund were declared December 15, 1998 payable to shareholders on December 16,
1998.
<TABLE>
<CAPTION>
BALANCED FUND BOND FUND GROWTH FUND
--------------------- --------------------- ---------------------
Total Per Total Per Total Per
Distribution Share Distribution Share Distribution Share
------------ ----- ------------ ----- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Distributions to Shareholders
- -----------------------------
1998 Net investment income $ 488,411 $ 0.19 $ 559,917 $0.22 - -
1998 Long-term capital gains $2,796,329 $ 1.08 - - $5,457,389 $ 3.25
1998 Short-term capital gains - - - - $ 427,581 $ 0.25
</TABLE>
18
<PAGE> 18
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
NOTE 6 - PURCHASE AND SALE OF SECURITIES
Investment transactions for the year ended November 30, 1998 were as follows:
BALANCED FUND BOND FUND GROWTH FUND
------------- --------- -----------
U. S. GOVERNMENT SECURITIES
- ---------------------------
Purchases $ 1,715,916 $ 1,023,594 --
Sales $ 2,233,016 $ 6,120,594 --
SECURITIES OTHER THAN
U. S. GOVERNMENT AND
SHORT-TERM INVESTMENTS
- ----------------------
Purchases $39,093,749 $ 9,783,852 $56,950,979
Sales $31,743,589 $ 5,766,248 $39,183,405
NOTE 7 - FEDERAL INCOME TAXES
No provision has been made for Federal income taxes since the Funds have elected
to be taxed as regulated investment companies and intend to distribute
substantially all income to shareholders and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. The Bond Fund has $18,639 of net capital losses which expire November
30, 2002 and $200,225 of net capital losses which expire November 30, 2005 that
may be used to offset capital gains in future years to the extent provided by
tax regulations.
During the period ended November 30, 1998, the Bond Fund utilized a Federal
income tax capital loss carryforward of $159,150 to offset certain realized
capital gains during the period.
During the period ended November 30, 1998, the Bond Fund utilized a post-October
capital loss carryforward of $3,031 to offset certain realized capital gains
during the period.
For Federal income tax purposes at November 30, 1998:
<TABLE>
<CAPTION>
Aggregate Aggregate
unrealized unrealized Net unrealized
Aggregate cost appreciation depreciation appreciation
of investments for investments for investments for investments
in securities held held held
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Balanced Fund $ 39,076,907 $ 9,012,451 $ (718,900) $ 8,293,551
Bond Fund $ 30,658,291 $ 1,569,380 - $ 1,569,380
Growth Fund $ 56,623,459 $13,706,257 $(1,791,895) $11,914,362
</TABLE>
19
<PAGE> 19
THOMPSON PLUMB FUNDS, INC.
FINANCIAL HIGHLIGHTS
The following table presents information relating to a share of capital stock
outstanding for the entire period.
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
BALANCED FUND
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.16 $ 16.54 $ 14.23 $ 13.55 $ 14.17
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.19 0.18 0.19 0.24 0.27
Net realized and unrealized gains
on investments 1.65 3.01 3.21 2.26 0.04
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 1.84 3.19 3.40 2.50 0.31
LESS DISTRIBUTIONS
- ------------------
Distributions from net investment income (0.13) (0.23) (0.23) (0.28) (0.27)
Distributions from capital gains (1.71) (1.34) (0.86) (1.54) (0.66)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (1.84) (1.57) (1.09) (1.82) (0.93)
NET ASSET VALUE, END OF PERIOD $ 18.16 $ 18.16 $ 16.54 $ 14.23 $ 13.55
======= ======= ======= ======= =======
TOTAL RETURN 11.63% 21.39% 25.80% 21.02% 2.15%
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (millions) $ 47.3 $ 36.3 $ 20.8 $ 18.1 $ 17.2
Ratios to average net assets:
Ratio of expenses 1.30% 1.40% 1.45% 1.49% 1.42%
Ratio of net investment income 1.16% 1.04% 1.32% 1.71% 1.84%
Portfolio turnover rate 83.07% 76.66% 134.82% 111.16% 110.01%
</TABLE>
See Notes to Financial Statements.
20
<PAGE> 20
THOMPSON PLUMB FUNDS, INC.
FINANCIAL HIGHLIGHTS
(Continued)
The following table presents information relating to a share of capital stock
outstanding for the entire period.
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
BOND FUND
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.54 $ 10.59 $ 10.67 $ 9.88 $ 10.78
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment income 0.56 0.54 0.52 0.57 0.48
Net realized and unrealized gains (losses)
on investments 0.39 (0.06) (0.07) 0.78 (0.78)
------- ------- ------- ------- -------
Total from Investment Operations 0.95 0.48 0.45 1.35 (0.30)
LESS DISTRIBUTIONS
- ------------------
Distributions from net investment income (0.56) (0.53) (0.53) (0.56) (0.47)
Distributions from capital gains - - - - (0.13)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.56) (0.53) (0.53) (0.56) (0.60)
NET ASSET VALUE, END OF PERIOD $ 10.93 $ 10.54 $ 10.59 $ 10.67 $ 9.88
======= ======= ======= ======= =======
TOTAL RETURN 9.34% 4.74% 4.51% 14.06% (2.96%)
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (millions) $ 32.7 $ 32.1 $ 22.2 $ 14.9 $ 10.2
Ratios to average net assets:
Ratio of expenses 1.04% 1.14% 1.13% 1.13% 1.00%
Ratio of expenses without reimbursement 1.08% - - 1.34% 1.48%
Ratio of net investment income 5.30% 5.42% 5.48% 5.70% 4.83%
Ratio of net investment income without
reimbursement 5.26% - - 5.49% 4.34%
Portfolio turnover rate 35.09% 52.61% 104.43% 111.95% 165.74%
</TABLE>
See Notes to Financial Statements.
21
<PAGE> 21
THOMPSON PLUMB FUNDS, INC.
FINANCIAL HIGHLIGHTS
(Continued)
The following table presents information relating to a share of capital stock
outstanding for the entire period.
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
GROWTH FUND
NET ASSET VALUE, BEGINNING OF PERIOD $ 39.36 $ 32.79 $ 24.74 $ 20.43 $ 20.47
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net investment loss (0.07) (0.12) (0.06) (0.05) (0.20)
Net realized and unrealized gains
on investments 4.92 9.16 8.66 6.22 0.16
------- ------- ------- ------- -------
Total from Investment Operations 4.85 9.04 8.60 6.17 (0.04)
LESS DISTRIBUTIONS
- ------------------
Distributions from net investment income - - - - -
Distributions from capital gains (3.36) (2.47) (0.55) (1.86) -
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (3.36) (2.47) (0.55) (1.86) -
NET ASSET VALUE, END OF PERIOD $ 40.85 $ 39.36 $ 32.79 $ 24.74 $ 20.43
======= ======= ======= ======= =======
TOTAL RETURN 13.74% 29.90% 35.52% 32.87% (0.19%)
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net assets, end of period (millions) $ 68.5 $ 45.4 $ 24.1 $ 12.6 $ 4.7
Ratios to average net assets:
Ratio of expenses 1.41% 1.52% 1.58% 2.00% 2.00%
Ratio of expenses without reimbursement - - - - 2.31%
Ratio of net investment income (0.19%) (0.41%) (0.27%) (0.31%) (0.49%)
Ratio of net investment income without
reimbursement - - - - (0.80%)
Portfolio turnover rate 67.13% 77.66% 101.91% 86.68% 116.69%
</TABLE>
See Notes to Financial Statements.
22
<PAGE> 22
[PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
January 20, 1999
To the Board of Directors and Shareholders of Thompson Plumb Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Thompson Plumb Balanced Fund,
Thompson Plumb Bond Fund and Thompson Plumb Growth Fund (constituting the
Thompson Plumb Funds, Inc., hereafter referred to as the "Funds") at November
30, 1998, the results of each of their operations, the changes in each of their
net assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
- ----------------------------------
23
<PAGE> 23
DIRECTORS OF THE FUNDS
George H. Austin
Mary Ann Deibele
John W. Feldt
Donald A. Nichols
Thomas G. Plumb, CFA: Vice President
Thompson, Plumb & Associates, Inc.
John W. Thompson, CFA: President
Thompson, Plumb & Associates, Inc.
OFFICERS OF THE FUNDS
John W. Thompson, CFA
Chairman & Secretary
Thomas G. Plumb, CFA
President & Treasurer
David B. Duchow, CFA
Assistant Vice President
John C. Thompson, CFA
Assistant Vice President
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Firstar Mutual Fund Services, LLC
P. 0. Box 701
Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
650 Third Avenue South, Suite 1300
Minneapolis, Minnesota 55402
LEGAL COUNSEL
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
INVESTMENT ADVISOR
Thompson, Plumb & Associates, Inc.
1200 John Q. Hammons Drive
Madison, Wisconsin 53717
Telephone: (608) 831-1300
THOMPSON PLUMB
FUNDS, INC.
---------------------------
ANNUAL REPORT
November 30, 1998
THOMPSON PLUMB BALANCED FUND
THOMPSON PLUMB BOND FUND
THOMPSON PLUMB GROWTH FUND
1200 John Q. Hammons Drive
Madison, Wisconsin 53717
Telephone: (608) 831-1300
(800) 999-0887
www.thompsonplumb.com
