<PAGE> 1
[THOMPSON PLUMB FUNDS, INC. LOGO]
January 15, 2000
ANNUAL REPORT TO SHAREHOLDERS
Dear Fellow Shareholder:
This report depicts the investments and returns of our family of mutual funds
for the period ending November 30, 1999. The financial statements detail the
investments on November 30th. The manager's review reflects the factors
contributing to each fund's performance as well as the relative performance
compared to common benchmarks. The investment goals for each fund are listed
below.
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 its primary
objective, the Growth Fund anticipates that capital growth is accompanied by
growth through dividend income.
THOMPSON PLUMB BALANCED FUND
This Fund seeks 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 preserving capital. The
Bond Fund invests primarily in a diversified portfolio of investment-grade debt
securities.
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
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<PAGE> 3
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
CONTENTS
Page(s)
REPORT TO SHAREHOLDERS ............................................. 1
INVESTMENT REVIEWS
Growth Fund ................................................ 4
Balanced Fund .............................................. 5
Bond 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
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> 4
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
GROWTH FUND INVESTMENT REVIEW
The stock market indices showed a strong advance in 1999 for the fifth straight
year. The Growth Fund returned 10.06%, its fifth consecutive year of double
digit returns. In 1999 the gains were centered primarily in a few sectors,
rather than in an across-the-board advance. The technology, telecommunications
and media companies associated with the tremendous growth of the Internet
performed remarkably well. We owned some of these issues, but not enough to keep
pace with market indices which are even more heavily weighted towards these
groups.
Typically, the stock market reacts quite negatively to rising interest rates.
Historically we have protected the portfolio by investing in high quality growth
companies that are trading at reasonable price earnings multiples and by
avoiding the exploited areas of the market. Last year this posture hurt our
relative performance as healthcare, traditional consumer product companies, and
depressed financial service companies under performed the broader markets. In
contrast, the companies that appeared to be the most exploited went to
unprecedented valuations.
Our goal has been to participate in the growth of the equity markets without
exposing your investment funds to the higher risks associated with high
price-to-earnings-multiple stocks and unprofitable companies. While this hurt
our relative returns in 1999, it has served us well historically and we think
our returns will be very attractive in the year 2000 and beyond. We have many
outstanding companies in the Thompson Plumb Growth Fund selling at their lowest
relative valuations in the last ten years.
Sincerely,
/s/ John W. Thompson
John W. Thompson
Portfolio Manager
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
THOMPSON PLUMB GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR SINCE INCEPTION
------ ------ ---------------
10.06% 23.97% 15.06%
<TABLE>
<CAPTION>
GROWTH
DATE FUND 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
Nov 99 29,910 40,036
</TABLE>
Past performance is not predictive of future performance.
4
<PAGE> 5
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
BALANCED FUND INVESTMENT REVIEW
The year that ended November 30, 1999 was another favorable year for the equity
markets but was a negative year for the bond markets. The Balanced Fund
participates in both markets and saw the positive return of its stocks somewhat
offset by its bonds. For the year it posted a return of 9.79%, which was
slightly above average for balanced funds across the country (195th of 444)*.
For the trailing three years, five years and ten years it has ranked in the top
29%, 22% and 36%, respectively*. Our common stock exposure was near the high end
of the maximum allowed for a balanced fund (75%) and that has contributed
significantly to our relative ranking over all of these periods.
Last year at this time we reported that the Federal Reserve Bank had lowered
short-term interest rates three times in response to the financial crisis
resulting from the disruptions in Southeast Asia, Russia and a large U.S. hedge
fund's collapse. Interest rates on the 30-year Treasury bond had reached the
lowest level since the U.S. Government began issuing them. The year that just
ended has been a mirror image of last year as the Federal Reserve Bank raised
interest rates three times in response to a robust economy and early warnings of
rising inflation. Thirty-year Treasury bond prices have retreated significantly
as yields rose from 5.10% to 6.30%. This resulted in the second worst overall
return for the bond market in the last twenty-six years.
Typically, rising interest rates and inflation fears are also negative for the
stock market and actually that was the case for the majority of stocks. The
soaring tech stocks pushed the S & P 500 Stock Index up 20.89% but unlike the
prior four years, most of the stocks in the Index did not fare as well. The
market performance was concentrated in a very few names. Companies with any
earnings at all actually declined 2% on average last year. The Balanced Fund's
stock performance reflected this dichotomy. Compared to the Index, we were
over-weighted in tech stocks and this proved to be a tremendous benefit to our
overall return. However, our holdings in the capital goods, consumer staples and
finance sectors offset this relative gain. In the big picture, the stock market
is the vehicle to allocate capital in our economy to the economic sectors with
the highest future return potential. The phenomenal price increases in Internet
related stocks reflects the perception of tremendous opportunity. We chose to
participate through companies that directly benefit from the spending of these
new highly capitalized companies, such as media companies (CBS, Infinity
Broadcasting, New York Times and Disney), communication companies (ATT, SBC) and
communication, software and component companies (Nortel, Lucent, ADCT, Linear,
Oracle, Intel, Lattice and Sterling Commerce).
With the market at all time highs due to the returns on a select few stocks, we
feel that tremendous opportunities are developing in the stocks that haven't
participated in the market's growth. While continuing to own stocks in the
technology sectors, we are expanding our universe of potential purchases to
reflect the values that we see developing.
Sincerely,
/s/ Thomas G. Plumb
Thomas G. Plumb
Portfolio Manager
*As measured by Lipper, Inc. out of 444, 327, 209 and 59 balanced funds for the
one-year, three-year, five-year and ten-year periods ended 11/30/99,
respectively.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Thompson Plumb Balanced Fund
AVERAGE ANNUAL TOTAL RETURN
1 Year 5 Year 10 Year
------ ------ -------
9.79% 17.76% 12.21%
<TABLE>
<CAPTION>
LEHMAN
BROTHERS
BALANCED INTERMEDIATE
DATE FUND S&P 500 CORP/GOV'T
---- -------- ------- -------------
<S> <C> <C> <C>
Nov 89 10,000 10,000 10,000
Nov 90 10,118 9,654 10,798
Nov 91 11,975 11,618 12,247
Nov 92 13,281 13,763 13,268
Nov 93 13,682 15,154 14,561
Nov 94 13,976 15,313 14,294
Nov 95 16,914 20,975 16,373
Nov 96 21,278 26,819 17,326
Nov 97 25,829 34,465 18,422
Nov 98 28,833 42,619 20,056
Nov 99 31,656 51,523 20,281
</TABLE>
Past performance is not predictive of future performance.
5
<PAGE> 6
THOMPSON PLUMB FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
BOND FUND INVESTMENT REVIEW
The year that ended November 30, 1999 was a very difficult year for the bond
markets. With a strong economy and robust growth, the Federal Reserve Bank
raised interest rates three times to keep inflation under control. The
cumulative effect has been a significant increase in both long-term and
short-term interest rates; however, near-term economic uncertainties have caused
short-term rates to rise faster. The 5-year Treasury yield of 6.11%, 10-year
Treasury yield of 6.19%, and 30-year Treasury yield of 6.33%, are all at their
highest levels for the past 12 months. This resulted in the second worst overall
return for the bond market in the last 26 years.
The market value of the bonds that are held in the Fund decreased producing a
total return of -1.63% for the one-year return. Also, the 3-year and 5-year
annualized returns decreased to 4.05% and 6.07%, respectively.
The asset allocation for the Bond Fund has changed during the past year. We
increased Corporate bond holdings to take advantage of the higher spread between
Corporate bonds and Government bonds. The Corporate bonds are 85.1% of the
Fund's assets, while the U.S. Government and Federal Agency bonds now make up
14.7% of the Fund's assets. Short-term investments increased marginally to 0.2%
of the Fund's assets. Currently, "A" rated Corporate bonds are producing over 1%
per year higher rates than the equivalent maturing U.S. Treasury bonds. The
quality of these bonds that are held within the Fund remains high as we continue
to emphasize "A" quality bonds or higher.
During the last meeting the Federal Reserve changed their outlook to a bias
towards raising future interest rates. With these changes in mind, we have kept
the Bond Fund's duration near 4.78 years, and the average years-to-maturity to
6.33 years, while increasing the Bond Fund's yield-to-maturity to 7.14%.
We continue to 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.
Sincerely,
/s/ John W. Thompson
John W. Thompson
Portfolio Manager
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
Thompson Plumb Bond Fund
AVERAGE ANNUAL TOTAL RETURN
1 Year 5 Year Since Inception
------ ------ ---------------
-1.63% 6.07% 5.19%
<TABLE>
<CAPTION>
LEHMAN
BROTHERS
BOND INTERMEDIATE
DATE FUND CORP/GOV'T
---- ---- ----------
<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
Nov 99 14,849 16,225
</TABLE>
Past performance is not predictive of future performance.
6
<PAGE> 7
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
GROWTH BALANCED BOND
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at market value (Cost $62,301,
$47,584, and $26,207, respectively)
Common stocks ............................................ $ 77,760 $ 39,052 --
Bonds .................................................... -- 15,563 $ 25,547
Short-term investments ................................... 558 1,487 57
-------- -------- --------
78,318 56,102 25,604
Receivable from investment advisor ............................... 3 -- 4
Prepaid expenses ................................................. 14 9 7
Due from sale of securities ...................................... 41 186 --
Dividends and interest receivable ................................ 78 336 430
-------- -------- --------
Total Assets ........................................... 78,454 56,633 26,045
-------- -------- --------
LIABILITIES
Due on purchase of securities .................................... 417 288 --
Accrued expenses payable ......................................... 29 21 12
Due to investment advisor ........................................ 72 46 19
-------- -------- --------
Total Liabilities ...................................... 518 355 31
-------- -------- --------
NET ASSETS ............................................................... $ 77,936 $ 56,278 $ 26,014
======== ======== ========
Net Assets consist of:
Capital stock ($.001 par value) .................................. $ 58,977 $ 43,138 $ 26,072
Undistributed net investment income .............................. -- 632 390
Accumulated net realized gain
on investments ........................................... 2,942 3,991 154
Net unrealized appreciation (depreciation)
on investments ........................................... 16,017 8,517 (602)
-------- -------- --------
Net Assets ............................................. $ 77,936 $ 56,278 $ 26,014
======== ======== ========
Shares of capital stock outstanding
(100,000 shares authorized) .............................. 1,901 3,036 2,556
Offering and redemption price/Net asset
value per share .......................................... $ 41.00 $ 18.54 $ 10.18
======== ======== ========
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 8
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
GROWTH FUND
<S> <C> <C>
COMMON STOCKS - 99.3%
BASIC MATERIALS - 0.6%
Sigma-Aldrich ................................................... 15,000 $ 429,375
-----------
CAPITAL GOODS - 1.6%
Advanced Lighting (a) ........................................... 90,000 495,000
Pitney Bowes .................................................... 15,000 719,062
-----------
1,214,062
-----------
CONSUMER PRODUCTS - 10.6%
Coca-Cola ....................................................... 30,000 2,019,375
ConAgra ......................................................... 30,000 723,750
Gillette ........................................................ 40,000 1,607,500
PepsiCo ......................................................... 40,000 1,382,500
Tootsie Roll .................................................... 18,200 581,262
Wrigley, Wm. Jr ................................................. 24,000 1,996,500
-----------
8,310,887
-----------
ENERGY - 1.0%
Exxon ........................................................... 10,000 793,125
-----------
FINANCIAL SERVICES - 22.2%
Allstate ........................................................ 38,000 995,125
Associated Banc-Corp ............................................ 20,000 781,250
Associates First Capital - Class A .............................. 43,000 1,429,750
Bank of America ................................................. 20,000 1,170,000
Berkshire Hathaway - Class B (a) ................................ 375 699,375
CIT Group - Class A ............................................. 172,000 3,569,000
Fannie Mae ...................................................... 27,000 1,798,875
Freddie Mac ..................................................... 30,000 1,481,250
Hartford Life - Class A ......................................... 50,000 2,237,500
Merrill Lynch ................................................... 12,000 967,500
Wells Fargo ..................................................... 48,000 2,232,000
-----------
17,361,625
-----------
HEALTH CARE - 20.4%
Abbott Laboratories ............................................. 38,000 1,444,000
BioChem Pharma (a) .............................................. 47,000 1,075,125
Health Management - Class A (a) ................................. 120,000 1,477,500
ICN Pharmaceuticals ............................................. 24,000 583,500
Johnson & Johnson ............................................... 20,000 2,075,000
Lilly, Eli ...................................................... 32,000 2,296,000
Medtronic ....................................................... 50,000 1,943,750
Merck & Co. ..................................................... 38,000 2,983,000
PSS World Medical (a) ........................................... 40,000 401,252
Sybron International (a) ........................................ 70,000 1,719,375
-----------
15,998,502
-----------
RETAIL - 3.8%
Fastenal ........................................................ 50,000 1,925,000
Nordstrom ....................................................... 15,000 417,187
Office Depot (a) ................................................ 60,000 667,500
-----------
3,009,687
-----------
SERVICES - 14.8%
Acxiom (a) ...................................................... 80,000 1,422,504
CBS (a) ......................................................... 74,000 3,848,000
Equifax ......................................................... 14,000 346,500
Fiserv (a) ...................................................... 38,000 1,349,000
New York Times - Class A ........................................ 45,000 1,729,688
NOVA (a) ........................................................ 95,000 2,909,375
-----------
11,605,067
-----------
TECHNOLOGY - 21.3%
Altera (a) ...................................................... 10,000 538,750
Baan NV (a) ..................................................... 25,000 331,250
Compaq Computer ................................................. 30,000 733,125
Intel ........................................................... 28,000 2,147,250
Keane (a) ....................................................... 40,000 1,080,000
Linear Technology ............................................... 40,000 2,842,500
Maxim Integrated Products (a) ................................... 14,000 1,124,375
Microsoft (a) ................................................... 24,000 2,185,126
Sterling Commerce (a) ........................................... 38,000 978,500
SunGard Data Systems (a) ........................................ 75,000 1,668,750
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 9
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
------ -----
<S> <C> <C>
COMMON STOCKS - 99.3% (Continued)
Unisys (a) ............................................................. 90,000 $ 2,587,500
Zebra Technologies - Class A (a) ....................................... 8,000 483,000
-----------
16,700,126
-----------
TELECOMMUNICATIONS - 3.0%
SBC Communications ..................................................... 45,000 2,337,188
-----------
TOTAL COMMON STOCKS
(COST $61,742,548) ................................................... 77,759,644
-----------
SHORT-TERM INVESTMENTS - 0.7%
VARIABLE RATE DEMAND NOTES - 0.7%
Firstar Bank ........................................................... 533,319 533,319
Wisc. Central Credit Union ............................................. 25,000 25,000
-----------
Total Variable Rate Demand Notes ....................................... 558,319
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $558,319) ...................................................... 558,319
-----------
TOTAL INVESTMENTS - 100.0%
(COST $62,300,867) ................................................... $78,317,963
===========
(a) Non-income producing
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
BALANCED FUND
COMMON STOCKS - 69.6%
BASIC MATERIALS - 1.1%
FiberMark (a) .......................................................... 50,000 $ 625,000
-----------
CAPITAL GOODS - 3.7%
Advanced Lighting (a) .................................................. 72,200 397,100
Titan Corp. (a) ........................................................ 25,000 676,563
Xerox .................................................................. 37,000 1,001,312
-----------
2,074,975
-----------
CONSUMER PRODUCTS - 4.6%
Coca-Cola .............................................................. 10,000 673,125
ConAgra ................................................................ 10,000 241,250
Discount Auto Parts (a) ................................................ 16,000 221,000
Gillette ............................................................... 18,000 723,375
PepsiCo ................................................................ 20,000 691,250
-----------
2,550,000
-----------
ENERGY - 2.6%
Chevron ................................................................ 6,500 575,656
Exxon .................................................................. 11,000 872,438
-----------
1,448,094
-----------
FINANCIAL SERVICES - 10.0%
Anchor Bancorp Wisconsin ............................................... 25,000 400,000
Associated Banc-Corp ................................................... 7,000 273,437
Bank One ............................................................... 18,000 634,500
Berkshire Hathaway - Class B (a) ....................................... 400 746,000
CIT Group - Class A .................................................... 30,000 622,500
Fannie Mae ............................................................. 11,000 732,875
Hartford Life - Class A ................................................ 15,000 671,250
Schwab, Charles ........................................................ 22,500 853,594
Wells Fargo ............................................................ 15,000 697,500
-----------
5,631,656
-----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 10
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 69.6% (Continued)
HEALTH CARE - 9.7%
Abbott Laboratories .................................................... 15,000 $ 570,000
American Home Products ................................................. 15,000 780,000
Johnson & Johnson ...................................................... 9,000 933,750
Medtronic .............................................................. 28,076 1,091,454
Merck & Co. ............................................................ 16,000 1,256,000
PSS World Medical (a) .................................................. 80,000 802,504
-----------
5,433,708
-----------
RETAIL - 4.5%
Dayton Hudson .......................................................... 6,000 423,375
Fastenal ............................................................... 20,000 770,000
Office Depot (a) ....................................................... 40,000 445,000
Walgreen ............................................................... 30,000 873,750
-----------
2,512,125
-----------
SERVICES - 8.0%
CBS (a) ................................................................ 15,000 780,000
Disney, Walt ........................................................... 35,000 975,625
Fiserv (a) ............................................................. 20,000 710,000
Infinity Broadcasting - Class A (a) .................................... 15,000 546,563
New York Times - Class A ............................................... 15,000 576,562
NOVA (a) ............................................................... 30,000 918,750
-----------
4,507,500
-----------
TECHNOLOGY - 20.4%
Dell Computer (a) ...................................................... 10,000 430,000
EMC (a) ................................................................ 14,000 1,169,875
Intel .................................................................. 5,000 383,438
IBM .................................................................... 10,000 1,030,625
JDA Software Group (a) ................................................. 15,000 210,000
Keane (a) .............................................................. 25,000 675,000
Lattice Semiconductor (a) .............................................. 12,000 537,000
Linear Technology ...................................................... 14,000 994,875
Lucent Technologies .................................................... 5,000 365,313
Microchip Technology (a) ............................................... 15,000 950,625
Nortel Networks ........................................................ 10,000 740,000
<CAPTION>
Shares or
Principal Market
Amount Value
------ -----
<S> <C> <C>
Oracle (a) ............................................................. 15,000 $ 1,017,187
Sterling Commerce (a) .................................................. 25,000 643,750
Storage Technology (a) ................................................. 40,000 790,000
SunGard Data Systems (a) ............................................... 30,000 667,500
Unisys (a) ............................................................. 30,000 862,500
-----------
11,467,688
-----------
TELECOMMUNICATIONS - 5.0%
ADC Telecommunications (a) ............................................. 20,000 1,066,250
AT&T ................................................................... 12,500 698,438
SBC Communications ..................................................... 19,948 1,036,049
-----------
2,800,737
-----------
TOTAL COMMON STOCKS
(COST $29,989,822) ................................................... 39,051,483
-----------
BONDS - 27.7%
CORPORATE BONDS - 23.2%
Aetna Services
6.375% Due 08/15/03 .................................................. 1,000,000 962,596
Aetna Services
7.125% Due 08/15/06 .................................................. 2,000,000 1,941,090
American Home Products
7.900% Due 02/15/05 .................................................. 1,000,000 1,040,145
Ford Motor
8.875% Due 04/01/06 .................................................. 1,015,000 1,100,999
General Electric Capital
8.750% Due 05/21/07 .................................................. 740,000 807,806
Goldman Sachs
7.350% Due 10/01/09 .................................................. 1,000,000 993,532
Johnson Controls
6.300% Due 02/01/08 .................................................. 2,000,000 1,861,624
Lilly, Eli
6.570% Due 01/01/16 .................................................. 1,000,000 934,629
Thermo Electron Cvt
4.250% Due 01/01/03 .................................................. 1,500,000 1,280,625
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 11
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
BONDS - 27.7% (Continued)
Union Pacific
6.000% Due 09/01/03 .................................................. 1,185,000 $ 1,141,945
Wisconsin Power & Light
7.000% Due 06/15/07 .................................................. 1,000,000 986,280
-----------
Total Corporate Bonds .................................................. 13,051,271
-----------
UNITED STATES GOVERNMENT
AND AGENCY ISSUES - 4.5%
United States Treasury Notes
6.375% Due 01/15/00 .................................................. 1,500,000 1,500,937
United States Treasury Notes
6.500% Due 05/31/02 .................................................. 1,000,000 1,010,625
-----------
Total United States Government
and Agency Issues .................................................... 2,511,562
-----------
TOTAL BONDS
(COST $16,106,806) ................................................... 15,562,833
-----------
SHORT-TERM INVESTMENTS - 2.7%
VARIABLE RATE DEMAND NOTES - 2.7%
Firstar Bank ........................................................... 1,328,599 1,328,599
Wisc. Central Credit Union ............................................. 158,884 158,884
-----------
Total Variable Rate Demand Notes ....................................... 1,487,483
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,487,483) .................................................... 1,487,483
-----------
TOTAL INVESTMENTS - 100.0%
(COST $47,584,111) ................................................... $56,101,799
===========
(a) Non-income producing
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
BOND FUND
BONDS - 99.8%
CORPORATE BONDS - 85.1%
American Home Products
7.900% Due 02/15/05 .................................................. 1,000,000 $ 1,040,145
Anheuser-Busch
7.100% Due 06/15/07 .................................................. 1,000,000 1,002,949
Associates Corp.
7.240% Due 08/15/06 .................................................. 1,000,000 997,587
AT&T
7.000% Due 05/15/05 .................................................. 1,000,000 996,395
Beneficial Corp.
6.850% Due 10/03/07 .................................................. 1,000,000 975,895
General Electric Capital
8.750% Due 05/21/07 .................................................. 1,000,000 1,091,629
Hartford Life
6.900% Due 06/15/04 .................................................. 1,000,000 989,494
Hartford Life
7.100% Due 06/15/07 .................................................. 500,000 492,572
Hershey Foods
6.700% Due 10/01/05 .................................................. 1,000,000 979,967
Household Finance
7.000% Due 08/01/03 .................................................. 500,000 498,580
Lucent Technologies
7.250% Due 07/15/06 .................................................. 1,000,000 1,017,908
NationsBank
6.690% Due 04/03/02 .................................................. 1,000,000 998,861
New York Times
6.950% Due 11/18/09 .................................................. 1,000,000 986,119
Northern Trust
7.300% Due 09/15/06 .................................................. 1,000,000 1,001,784
Penney, J. C.
7.600% Due 04/01/07 .................................................. 1,000,000 933,132
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 12
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
NOVEMBER 30, 1999
(Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- -----------
<S> <C> <C>
BONDS - 99.8% (Continued)
Schwab, Charles
6.520% Due 05/27/08 .......................... 1,000,000 $ 934,070
Sears, Roebuck
6.700% Due 11/15/06 .......................... 1,000,000 948,463
SmithKline Beecham
7.375% Due 04/15/05 .......................... 965,000 988,030
Travelers Property & Casualty
6.750% Due 04/15/01 .......................... 1,000,000 999,489
Tribune
6.875% Due 11/01/06 .......................... 1,000,000 974,500
Wells Fargo
7.125% Due 08/15/06 .......................... 1,000,000 995,932
Wisconsin Electric Power
7.125% Due 03/15/16 .......................... 1,000,000 951,205
Wisconsin Power & Light
7.000% Due 06/15/07 .......................... 1,000,000 986,280
-----------
Total Corporate Bonds .......................... 21,780,986
-----------
UNITED STATES GOVERNMENT
AND AGENCY ISSUES - 14.7%
Fannie Mae
7.400% Due 07/01/04 .......................... 1,000,000 1,030,865
Fannie Mae
6.500% Due 08/15/04 .......................... 1,000,000 996,098
Federal Home Loan Banks
6.370% Due 07/13/04 .......................... 1,000,000 990,409
United States Treasury Notes
7.875% Due 11/15/04 .......................... 700,000 748,781
-----------
Total United States Government
and Agency Issues ............................ 3,766,153
-----------
TOTAL BONDS
(COST $26,150,091) ........................... 25,547,139
-----------
SHORT-TERM INVESTMENTS - 0.2%
VARIABLE RATE DEMAND NOTES - 0.2%
Firstar Bank ................................... 35,533 35,533
Wisc. Central Credit Union ..................... 21,448 21,448
-----------
Total Variable Rate Demand Notes ............... 56,981
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $56,981) ............................... 56,981
-----------
TOTAL INVESTMENTS - 100.0%
(COST $26,207,072) ........................... $25,604,120
===========
</TABLE>
See Notes to Financial Statements.
12
<PAGE> 13
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1999
(In thousands)
<TABLE>
<CAPTION>
GROWTH BALANCED BOND
FUND FUND FUND
-------- -------- -------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends ...................................... $ 705 $ 348 --
Interest ....................................... 14 919 $ 1,704
------- ------- -------
719 1,267 1,704
------- ------- -------
EXPENSES
Accounting services fees ....................... 114 86 53
Directors fees ................................. 16 11 6
Federal & state registration ................... 32 27 23
Investment advisory fees ....................... 710 431 174
Professional fees .............................. 31 26 20
Other expenses ................................. 90 54 20
------- ------- -------
Total expenses ............................... 993 635 296
Less expenses reimbursable by advisor......... 28 -- 38
------- ------- -------
Net expenses ..................................... 965 635 258
------- ------- -------
NET INVESTMENT INCOME (LOSS) ..................... (246) 632 1,446
------- ------- -------
Net realized gain on investments ................. 3,355 4,228 373
Net unrealized appreciation (depreciation)
on investments ................................. 3,935 (14) (2,172)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS ................... 7,290 4,214 (1,799)
------- ------- -------
Net increase (decrease) in net assets
resulting from operations ...................... $ 7,044 $ 4,846 $ (353)
======= ======= =======
</TABLE>
See Notes to Financial Statements.
13
<PAGE> 14
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED NOVEMBER 30,
(In thousands)
<TABLE>
<CAPTION>
GROWTH FUND BALANCED FUND BOND FUND
----------- ------------- ---------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) ........... $ (246) $ (109) $ 632 $ 488 $ 1,446 $ 1,691
Net realized gain on investments ....... 3,355 5,836 4,228 2,559 373 162
Net unrealized appreciation
(depreciation) on investments ........ 3,935 1,206 (14) 1,517 (2,172) 1,045
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations ............ 7,044 6,933 4,846 4,564 (353) 2,898
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income -- -- (488) (261) (1,475) (1,688)
Distributions from net realized gains on
securities transactions .............. (5,885) (3,968) (2,796) (3,478) -- --
-------- -------- -------- -------- -------- --------
Total distributions to shareholders ...... (5,885) (3,968) (3,284) (3,739) (1,475) (1,688)
-------- -------- -------- -------- -------- --------
FUND SHARE TRANSACTIONS .................... 8,271 20,165 7,401 10,153 (4,831) (674)
-------- -------- -------- -------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS .... 9,430 23,130 8,963 10,978 (6,659) 536
NET ASSETS
Beginning of period ...................... 68,506 45,376 47,315 36,337 32,673 32,137
-------- -------- -------- -------- -------- --------
End of period ............................ $ 77,936 $ 68,506 $ 56,278 $ 47,315 $ 26,014 $ 32,673
======== ======== ======== ======== ======== ========
Accumulated undistributed net investment
income included in net assets at end
of period .............................. $ 0 $ 0 $ 632 $ 488 $ 390 $ 419
</TABLE>
See Notes to Financial Statements.
14
<PAGE> 15
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
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 Growth Fund (the "Growth Fund"), Thompson Plumb Balanced Fund (the
"Balanced Fund"), and Thompson Plumb Bond Fund (the "Bond 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 - Each Fund's investments are valued at their market prices
(generally the last reported sales price on the exchange where the securities
are primarily traded) or, where market quotations are not readily available, at
fair value as determined in good faith by the Advisor pursuant to procedures
established by the Funds' Board of Directors. Debt securities held by a Fund
with remaining maturities of 60 days or less may be valued on an amortized cost
basis.
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.
PERMANENT BOOK AND TAX DIFFERENCES - Generally accepted accounting principles
require that permanent financial reporting and tax differences relating to
shareholder distributions be reclassified to the capital accounts.
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
15
<PAGE> 16
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
(Continued)
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 AND 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 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; (ii) 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; (iii) 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.
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.
The Advisor has contractually agreed to waive management fees and/or
reimbursement expenses incurred by the Funds through March 31, 2000 so that the
operating expenses of the funds do not exceed the following percentages of their
respective average daily net assets: Growth Fund - 1.30%; Balanced Fund - 1.25%;
and Bond Fund - 0.95%.
16
<PAGE> 17
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
(Continued)
NOTE 4 - FUND SHARE TRANSACTIONS
Transactions in shares of the Funds during 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
(In thousands) 1999 1998
------------------------- -------------------------
Shares Dollars Shares Dollars
------ -------- ------ -------
<S> <C> <C> <C> <C>
GROWTH FUND
Shares sold 430 $ 16,868 629 $ 24,420
Shares issued in reinvestment of realized gains 160 5,811 111 3,900
Shares redeemed (366) (14,408) (216) (8,155)
------ -------- ------ --------
Net increase 224 $ 8,271 524 $ 20,165
====== ======== ====== ========
BALANCED FUND
Shares sold 778 $ 13,844 605 $ 10,521
Shares issued in reinvestment of dividends 28 469 16 252
Shares issued in reinvestment of realized gains 161 2,715 215 3,401
Shares redeemed (536) (9,627) (232) (4,021)
------ -------- ------ --------
Net increase 431 $ 7,401 604 $ 10,153
====== ======== ====== ========
BOND FUND
Shares sold 632 $ 6,625 576 $ 6,158
Shares issued in reinvestment of dividends 133 1,390 153 1,621
Shares redeemed (1,199) (12,846) (789) (8,453)
------ -------- ------ --------
Net decrease (434) $ (4,831) (60) $ (674)
====== ======== ====== ========
</TABLE>
17
<PAGE> 18
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
(Continued)
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income and realized gains on
securities for the Growth Fund and the Balanced 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 1999 totaled $1,474,881 or $0.58 per share. For the period ended November
30, 1999, a capital gains distribution and a distribution from net investment
income for the Balanced Fund and the Bond Fund were declared December 15, 1999
payable to shareholders on December 16, 1999.
<TABLE>
<CAPTION>
GROWTH FUND BALANCED FUND BOND FUND
----------- ------------- ---------
Total Per Total Per Total Per
Distribution Share Distribution Share Distribution Share
------------ ----- ------------ ----- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Distributions to Shareholders
1999 Net investment income -- -- $ 631,694 $0.21 $516,475 $0.21
1999 Long-term capital gains $1,828,464 $0.97 $ 3,821,808 $1.28 $195,395 $0.08
1999 Short-term capital gains $1,121,516 $0.59 $ 172,996 $0.06 -- --
</TABLE>
18
<PAGE> 19
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
(Continued)
NOTE 6 - PURCHASE AND SALE OF SECURITIES
Investment transactions for the year ended November 30, 1999 were as follows:
<TABLE>
<CAPTION>
GROWTH FUND BALANCED FUND BOND FUND
----------- ------------- ---------
<S> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
Purchases -- $ 3,061,348 $ 7,853,614
Sales -- $ 2,045,078 $ 3,992,398
SECURITIES OTHER THAN
U.S. GOVERNMENT AND
SHORT-TERM INVESTMENTS
Purchases $59,887,594 $33,991,000 $ 2,455,786
Sales $57,802,657 $30,881,929 $ 10,030,128
</TABLE>
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.
During the period ended November 30, 1999, the Bond Fund utilized a Federal
income tax capital loss carryforward of $218,864 to offset realized capital
gains during the current fiscal year.
The Bond Fund incurred $35,999 of post-October capital losses, during 1999,
which are not recognized for tax purposes until the first day of the following
fiscal year.
For Federal income tax purposes at November 30, 1999:
<TABLE>
<CAPTION>
Aggregate Aggregate Net unrealized
unrealized unrealized appreciation
Aggregate cost appreciation depreciation (depreciation)
of investments for investments for investments for investments
in securities held held held
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Growth Fund $62,309,551 $17,921,196 $(1,912,784) $16,008,412
Balanced Fund $47,588,216 $10,389,401 $(1,875,818) $ 8,513,583
Bond Fund $26,212,199 $ 1,313 $ (609,392) $ (608,079)
</TABLE>
19
<PAGE> 20
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,
------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
GROWTH FUND
NET ASSET VALUE, BEGINNING OF PERIOD $ 40.85 $ 39.36 $ 32.79 $ 24.74 $ 20.43
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.13) (0.07) (0.12) (0.06) (0.05)
Net realized and unrealized gains
on investments 3.78 4.92 9.16 8.66 6.22
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 3.65 4.85 9.04 8.60 6.17
LESS DISTRIBUTIONS
Distributions from net investment income -- -- -- -- --
Distributions from capital gains (3.50) (3.36) (2.47) (0.55) (1.86)
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS (3.50) (3.36) (2.47) (0.55) (1.86)
NET ASSET VALUE, END OF PERIOD $ 41.00 $ 40.85 $ 39.36 $ 32.79 $ 24.74
========= ========= ========= ========= =========
TOTAL RETURN 10.06% 13.74% 29.90% 35.52% 32.87%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 77.9 $ 68.5 $ 45.4 $ 24.1 $ 12.6
Ratios to average net assets:
Ratio of expenses 1.32% 1.41% 1.52% 1.58% 2.00%
Ratio of expenses without reimbursement 1.36% 1.41% 1.52% 1.58% 2.00%
Ratio of net investment loss (0.34%) (0.19%) (0.41%) (0.27%) (0.31%)
Ratio of net investment loss without
reimbursement (0.37%) (0.19%) (0.41%) (0.27%) (0.31%)
Portfolio turnover rate 79.17% 67.13% 77.66% 101.91% 86.68%
</TABLE>
See Notes to Financial Statements.
20
<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,
----------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
BALANCED FUND
NET ASSET VALUE, BEGINNING OF PERIOD $18.16 $18.16 $16.54 $14.23 $13.55
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.21 0.19 0.18 0.19 0.24
Net realized and unrealized gains
on investments 1.44 1.65 3.01 3.21 2.26
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 1.65 1.84 3.19 3.40 2.50
LESS DISTRIBUTIONS
Distributions from net investment income (0.19) (0.13) (0.23) (0.23) (0.28)
Distributions from capital gains (1.08) (1.71) (1.34) (0.86) (1.54)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.27) (1.84) (1.57) (1.09) (1.82)
NET ASSET VALUE, END OF PERIOD $18.54 $18.16 $18.16 $16.54 $14.23
====== ====== ====== ====== ======
TOTAL RETURN 9.79% 11.63% 21.39% 25.80% 21.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $56.3 $47.3 $36.3 $20.8 $18.1
Ratios to average net assets:
Ratio of expenses 1.25% 1.30% 1.40% 1.45% 1.49%
Ratio of net investment income 1.24% 1.16% 1.04% 1.32% 1.71%
Portfolio turnover rate 66.64% 83.07% 76.66% 134.82% 111.16%
</TABLE>
See Notes to Financial Statements.
21
<PAGE> 22
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,
-------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
BOND FUND
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.93 $ 10.54 $ 10.59 $ 10.67 $ 9.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.59 0.56 0.54 0.52 0.57
Net realized and unrealized gains (losses)
on investments (0.76) 0.39 (0.06) (0.07) 0.78
--------- --------- ------- ------- --------
TOTAL FROM INVESTMENT OPERATIONS (0.17) 0.95 0.48 0.45 1.35
LESS DISTRIBUTIONS
Distributions from net investment income (0.58) (0.56) (0.53) (0.53) (0.56)
Distributions from capital gains -- -- -- -- --
--------- --------- ------- ------- --------
TOTAL DISTRIBUTIONS (0.58) (0.56) (0.53) (0.53) (0.56)
NET ASSET VALUE, END OF PERIOD $ 10.18 $ 10.93 $ 10.54 $ 10.59 $ 10.67
========= ========= ======= ======= ========
TOTAL RETURN (1.63%) 9.34% 4.74% 4.51% 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $ 26.0 $ 32.7 $ 32.1 $ 22.2 $ 14.9
Ratios to average net assets:
Ratio of expenses 0.97% 1.04% 1.14% 1.13% 1.13%
Ratio of expenses without reimbursement 1.11% 1.08% 1.14% 1.13% 1.34%
Ratio of net investment income 5.41% 5.30% 5.42% 5.48% 5.70%
Ratio of net investment income without
reimbursement 5.27% 5.26% 5.42% 5.48% 5.49%
Portfolio turnover rate 40.67% 35.09% 52.61% 104.43% 111.95%
</TABLE>
See Notes to Financial Statements.
22
<PAGE> 23
[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
January 20, 2000
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 Growth Fund,
Thompson Plumb Balanced Fund and Thompson Plumb Bond Fund (constituting the
Thompson Plumb Funds, Inc., hereafter referred to as the "Funds") at November
30, 1999, the results of each of their operations, the changes in each of their
net assets and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States. 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 auditing standards generally accepted in the
United States, 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
23
<PAGE> 24
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
Timothy R. O'Brien
Assistant Vice President
John C. Thompson, CFA
Assistant Vice President
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Firstar Mutual Fund Services, LLC
P.O. 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, 1999
THOMPSON PLUMB GROWTH FUND
THOMPSON PLUMB BALANCED FUND
THOMPSON PLUMB BOND FUND
1200 John Q. Hammons Drive
Madison, Wisconsin 53717
Telephone: (608) 831-1300
(800) 999-0887
www.thompsonplumb.com
------------------------------------
