<PAGE> 1
[THOMPSON PLUMB FUNDS LOGO]
July 15, 2000
SEMIANNUAL REPORT TO SHAREHOLDERS
Dear Fellow Shareholder:
The following pages show the asset allocation, holdings and investment returns
of your family of mutual funds for the semiannual period ended May 31, 2000. To
put these in context, we also have included a review of the markets and our
quite competitive investment returns. Each fund has a distinct investment
objective which is summarized as follows:
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
<PAGE> 2
THOMPSON PLUMB FUNDS, INC.
SEMIANNUAL REPORT TO SHAREHOLDERS
MAY 31, 2000
CONTENTS
<TABLE>
<CAPTION>
Page(s)
<S> <C>
REPORT TO SHAREHOLDERS .................................................................................. 1
OVERALL INVESTMENT REVIEW ............................................................................... 3
FINANCIAL STATEMENTS
Statements of assets and liabilities ................................................................ 4
Schedules of investments ............................................................................ 5-9
Statements of operations ............................................................................ 10
Statements of changes in net assets ................................................................. 11
Notes to financial statements ....................................................................... 12-16
Financial highlights................................................................................. 17-19
</TABLE>
This semiannual 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.
2
<PAGE> 3
THOMPSON PLUMB FUNDS, INC.
SEMIANNUAL REPORT TO SHAREHOLDERS
JULY 15, 2000
OVERALL INVESTMENT REVIEW
The stock market story this year has been the tale of two markets. From November
through March technology stocks were the driving force. From March through May
the technology stocks that did not have earnings support led a correction in the
market. Some of the biggest winners became the biggest losers.
Within our stock holdings technology holdings were the biggest contributor to
our overall performance. We steadfastly avoided the "dot.com" mania that
preoccupied Wall Street, and instead concentrated on high quality technology and
service providers that provide the backbone to the data and communication
revolution. This strategy proved to be very advantageous when gravity hit the
companies that had no underlying earnings support. It allowed our equity
performance to significantly outpace the major market indices.
The next biggest contributors to your return were the healthcare and consumer
staples sectors of the market. These stocks added to your performance in a very
difficult environment.
As we write this, the Federal Reserve Bank has begun to take a wait and see
attitude towards the economy. Economic growth appears to be unsustainable at its
recent levels. Stock prices are more volatile than ever in recorded history.
However, the price disparity between the various components of the stock market
is as wide as we have ever seen. Some very good companies are trading at very
reasonable prices. We will continue to spend our time attempting to identify the
opportunities within the market. During an election year, anything can happen,
but we continue to believe that our team will provide you with a diversified
portfolio that will serve you well.
3
<PAGE> 4
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 2000 (UNAUDITED)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
GROWTH BALANCED BOND
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at market value (Cost $62,804,
$50,044, and $20,913, respectively)
Common stocks ............................................... $ 72,646 $41,921 --
Preferred stocks ............................................ -- 1,699 --
Bonds ....................................................... -- 13,782 $ 18,951
Short-term investments ...................................... 1,111 1,305 729
-------- ------- --------
Total Investments ......................................... 73,757 58,707 19,680
Receivable from investment advisor ............................ 9 -- 8
Prepaid expenses .............................................. 23 17 9
Due from sale of securities ................................... 320 -- --
Dividends and interest receivable ............................. 112 335 346
-------- ------- --------
Total Assets ................................................ 74,221 59,059 20,043
-------- ------- --------
LIABILITIES
Due on purchase of securities ................................. 346 -- --
Accrued expenses payable ...................................... 31 20 12
Due to investment advisor ..................................... 68 50 14
-------- ------- --------
Total Liabilities ........................................... 445 70 26
-------- ------- --------
NET ASSETS ...................................................... $ 73,776 $58,989 $ 20,017
======== ======= ========
Net Assets consist of:
Capital stock ($.001 par value) ............................... $ 51,231 $44,141 $ 21,160
Undistributed net investment income (loss) ................... (33) 383 298
Accumulated net realized gain (loss)
on investments .............................................. 11,625 5,802 (209)
Net unrealized appreciation (depreciation)
on investments .............................................. 10,953 8,663 (1,232)
-------- ------- --------
Net Assets ................................................. $ 73,776 $58,989 $ 20,017
======== ======= ========
Shares of capital stock outstanding
(100,000 shares authorized) ................................. 1,705 3,105 2,058
Offering and redemption price/Net asset
value per share ............................................. $ 43.26 $ 19.00 $ 9.73
======== ======= ========
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 5
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Value
------- -------
GROWTH FUND
<S> <C> <C>
COMMON STOCKS - 98.4%
BASIC MATERIALS - 0.8%
RPM................................. 60,000 $ 585,000
----------
CAPITAL GOODS - 5.9%
Advanced Lighting (a)............... 7,000 73,063
Boeing.............................. 8,000 312,500
Fastenal............................ 24,000 1,515,000
Pitney Bowes........................ 30,000 1,305,000
Teleflex............................ 16,000 567,000
Xerox............................... 20,000 542,500
----------
4,315,063
----------
CONSUMER PRODUCTS - 10.7%
Coca-Cola........................... 30,000 1,601,250
ConAgra............................. 30,000 691,875
Gillette............................ 37,000 1,234,875
PepsiCo............................. 36,000 1,464,750
Tootsie Roll........................ 19,600 676,200
UST................................. 20,000 332,500
Wrigley, Wm. Jr..................... 24,000 1,921,500
----------
7,922,950
----------
ENERGY - 1.6%
Chevron............................. 4,000 369,750
Exxon Mobil......................... 10,000 833,125
----------
1,202,875
----------
FINANCIAL SERVICES - 23.8%
Associated Banc-Corp................ 22,000 559,968
Associates First Capital - Class A.. 85,000 2,332,188
Bank of America..................... 20,000 1,111,250
Berkshire Hathaway - Class B (a).... 1,300 2,451,800
CIT Group - Class A................. 176,000 3,223,000
Conseco............................. 80,000 500,000
Fannie Mae.......................... 38,000 $2,284,750
Freddie Mac......................... 44,000 1,958,000
U.S. Bancorp........................ 34,000 884,000
Wells Fargo......................... 50,000 2,262,500
----------
17,567,456
----------
HEALTH CARE - 20.0%
Abbott Laboratories................. 37,000 1,505,437
BioChem Pharma (a).................. 30,000 699,375
Bristol-Myers Squibb................ 15,000 825,938
ChromaVision Medical Systems (a).... 10,000 106,875
ICN Pharmaceuticals................. 17,000 591,812
IMS Health.......................... 110,000 1,815,000
Johnson & Johnson................... 18,000 1,611,000
Lilly, Eli.......................... 23,000 1,750,875
McKesson HBOC....................... 18,000 295,875
Merck & Co.......................... 38,000 2,835,750
Schein, Henry (a)................... 45,000 793,125
Sybron International (a)............ 60,000 1,901,250
----------
14,732,312
----------
RETAIL - 3.0%
AutoZone (a)........................ 28,000 784,000
Office Depot (a).................... 60,000 423,750
Wendy's International............... 50,000 978,125
----------
2,185,875
----------
SERVICES - 5.4%
New York Times - Class A............ 40,000 1,535,000
Viacom - Class B (a)................ 40,000 2,480,000
----------
4,015,000
----------
TECHNOLOGY - 25.1%
Acxiom (a).......................... 40,000 1,170,000
Cadence Design Systems (a).......... 24,000 384,000
Compaq Computer..................... 18,000 472,500
Concord EFS (a)..................... 110,000 2,667,500
DST Systems (a)..................... 10,000 750,625
Galileo International............... 75,000 1,687,500
Linear Technology................... 26,000 1,535,625
</TABLE>
See Notes to Financial Statements.
5
<PAGE> 6
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
Shares or
Principal Market BALANCED FUND Market
Amount Value Shares Value
------- ------ ------ -----
<S> <C> <C> <C> <C> <C>
COMMON STOCKS - 98.4% (Continued)
Microchip Technology (a)............ 5,000 $ 283,828
Microsoft (a)....................... 26,000 1,626,625 COMMON STOCKS - 71.0%
NOVA (a)............................ 90,000 2,643,750
SunGard Data Systems (a)............ 60,000 2,036,250 BASIC MATERIALS - 0.7%
Unisys (a).......................... 100,000 2,712,500 FiberMark (a).............. 38,000 $396,625
Zebra Technologies - Class A (a).... 12,000 576,000 ---------
------------
18,546,703
------------
CAPITAL GOODS - 5.8%
TELECOMMUNICATIONS - 2.1% Advanced Lighting (a)...... 30,000 313,125
SBC Communications.................. 36,000 1,572,750 Danaher.................... 18,000 867,375
------------ Emerson Electric........... 15,000 885,000
Fastenal................... 10,000 631,250
TOTAL COMMON STOCKS Pitney Bowes............... 17,000 739,500
(COST $61,692,575).................. 72,645,984 ---------
------------ 3,436,250
---------
SHORT-TERM INVESTMENTS - 1.5%
CONSUMER PRODUCTS - 7.3%
Coca-Cola.................. 17,500 934,063
VARIABLE RATE DEMAND NOTES - 1.5% Colgate-Palmolive.......... 15,500 815,687
Firstar Bank........................ 1,099,583 1,099,583 ConAgra.................... 15,000 345,937
Wisc. Central Credit Union.......... 11,590 11,590 Kimberly-Clark............. 18,000 1,089,000
------------ PepsiCo.................... 16,500 671,344
Total Variable Rate Demand Notes ... 1,111,173 Rayovac (a)................ 25,000 443,750
------------ ---------
4,299,781
---------
TOTAL SHORT-TERM INVESTMENTS ENERGY - 2.6%
(COST $1,111,173)................... 1,111,173 Chevron..................... 6,500 600,844
------------ Exxon Mobil................. 11,000 916,437
---------
1,517,281
TOTAL INVESTMENTS - 99.9% ---------
(COST $62,803,748).................. 73,757,157
------------
FINANCIAL SERVICES - 9.8%
Anchor BanCorp Wisconsin... 10,000 153,750
NET OTHER ASSETS AND Associated Banc-Corp....... 5,500 139,992
LIABILITIES - 0.1%................. 19,080 Bank of America............ 13,500 750,094
------------ Berkshire Hathaway -
Class B (a)............... 300 565,800
CIT Group - Class A........ 55,000 1,007,188
Conseco.................... 48,000 300,000
NET ASSETS - 100.0%................. $ 73,776,237
============
(a) Non-income producing
</TABLE>
See Notes to Financial Statements.
6
<PAGE> 7
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
Market Market
Shares Value Shares Value
------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS - 71.0% (Continued) Fiserv (a)......................... 15,000 $ 701,250
Intel.............................. 5,000 623,438
E*TRADE Group (a).............. 25,000 $ 389,062 IBM................................ 11,500 1,234,094
Fannie Mae....................... 15,000 901,875 Lattice Semiconductor (a).......... 15,000 889,687
Marshall & Ilsley................ 16,000 776,000 Lernout & Hauspie Speech (a)....... 8,000 334,500
Wells Fargo...................... 17,000 769,250 Linear Technology.................. 16,000 945,000
---------- Lucent Technologies................ 3,000 172,125
5,753,011 Microchip Technology (a)........... 13,000 737,953
---------- Microsoft (a)...................... 4,500 281,531
HEALTH CARE - 10.9% Network Associates (a)............. 25,000 546,875
American Home Products........... 15,000 808,125 Nortel Networks.................... 6,000 325,875
Bristol-Myers Squibb............. 12,000 660,750 NOVA (a)........................... 25,000 734,375
Cardinal Health.................. 20,000 1,297,500 Oracle (a)......................... 10,000 718,750
ChromaVision Medical SunGard Data Systems (a)........... 25,000 848,438
Systems (a)..................... 30,000 320,625 Tellabs (a)........................ 15,000 974,062
IMS Health....................... 28,000 462,000 Titan (a).......................... 10,000 358,750
Johnson & Johnson................ 7,000 626,500 Unisys (a)......................... 50,000 1,356,250
Medtronic........................ 14,400 743,400 Zebra Technologies - Class A (a)... 5,000 240,000
Merck & Co. ..................... 16,000 1,194,000 ----------
PSS World Medical (a)............ 35,000 295,313 14,362,703
---------- ----------
6,408,213
----------
RETAIL - 4.4%
CVS.............................. 15,000 652,500 TELECOMMUNICATIONS - 2.4%
Discount Auto Parts (a).......... 30,000 300,000 AT & T............................. 16,500 572,344
Office Depot (a)................. 70,000 494,375 SBC Communications................. 20,000 873,750
Target........................... 6,000 376,125 ----------
Walgreen......................... 30,000 851,250 1,446,094
---------- ----------
2,674,250 TOTAL COMMON STOCKS 41,920,970
---------- (COST $32,678,907)................ ----------
SERVICES - 2.8%
Infinity Broadcasting -
Class A (a)..................... 15,000 474,375
New York Times - Class A......... 12,500 479,687
Viacom - Class B (a)............. 10,850 672,700 PREFERRED STOCKS - 2.9%
----------
1,626,762
----------
CONSUMER PRODUCTS - 2.9%
Newell Financial Cvt.
5.250% Due 12/01/27............... 45,000 1,698,750
TECHNOLOGY - 24.3% ----------
ADC Telecommunications (a)....... 10,000 671,875
Concord EFS (a).................. 40,000 970,000
EMC (a).......................... 6,000 697,875
TOTAL PREFERRED STOCK
(COST $1,617,255)................. 1,698,750
----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE> 8
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- -----------
<S> <C> <C>
BONDS - 23.4%
CORPORATE BONDS - 20.0%
Aetna Services
6.375% Due 08/15/03................ 1,000,000 $ 943,067
American Home Products
7.900% Due 02/15/05................ 1,000,000 1,008,004
Citicorp
6.375% Due 11/15/08................ 1,000,000 903,747
First Union
6.400% Due 04/01/08................ 500,000 447,365
Ford Motor
8.875% Due 04/01/06................ 1,015,000 1,061,591
Ford Motor
7.250% Due 10/01/08................ 500,000 476,230
General Electric
8.750% Due 05/21/07................ 740,000 782,068
Goldman Sachs
7.350% Due 10/01/09................ 1,000,000 933,928
Johnson Controls
6.300% Due 02/01/08................ 2,000,000 1,826,212
Thermo Electron Cvt.
4.250% Due 01/01/03................ 1,500,000 1,350,000
Union Pacific
6.000% Due 09/01/03................ 1,185,000 1,113,556
Wisconsin Power & Light
7.000% Due 06/15/07................ 1,000,000 948,265
-----------
Total Corporate Bonds............... 11,794,033
-----------
UNITED STATES GOVERNMENT
AND AGENCY ISSUES - 3.4%
United States Treasury Notes
6.375% Due 01/31/02................ 2,000,000 1,987,500
-----------
Total United States Government
and Agency Issues................... 1,987,500
-----------
TOTAL BONDS
(COST $14,442,339).................. 13,781,533
-----------
SHORT-TERM INVESTMENTS - 2.2%
VARIABLE RATE DEMAND NOTES - 2.2%
Firstar Bank........................ 1,076,147 1,076,147
Wisc. Central Credit Union.......... 229,137 229,137
-----------
Total Variable Rate Demand Notes.... 1,305,284
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,305,284)................... 1,305,284
-----------
TOTAL INVESTMENTS - 99.5%
(COST $50,043,785).................. 58,706,537
-----------
NET OTHER ASSETS AND
LIABILITIES - 0.5%.................. 282,075
-----------
NET ASSETS - 100.0%................. $58,988,612
===========
(a) Non-income producing
</TABLE>
See Notes to Financial Statements.
8
<PAGE> 9
THOMPSON PLUMB FUNDS, INC.
SCHEDULES OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
Principal Market
BOND FUND Amount Value
---------- --------
<S> <C> <C>
BONDS - 94.7%
CORPORATE BONDS - 94.7%
American Home Products
7.900% Due 02/15/05 ............... 1,000,000 $1,008,004
Anheuser-Busch
7.100% Due 06/15/07 ............... 1,000,000 964,613
Associates Corp.
7.240% Due 08/15/06 ............... 1,000,000 948,536
AT & T
7.000% Due 05/15/05 .............. 1,000,000 969,550
Beneficial Corp
6.850% Due 10/03/07 .............. 1,000,000 931,457
Deere & Co.
7.850% Due 05/15/10 .............. 500,000 489,913
Ford Motor
7.500% Due 06/15/04 .............. 700,000 691,397
Hartford Life
7.100% Due 06/15/07 .............. 500,000 472,088
Hershey Foods
6.700% Due 10/01/05 .............. 1,000,000 961,695
Lucent Technologies
7.250% Due 07/15/06 .............. 1,000,000 984,355
Morgan, J. P
6.700% Due 11/01/07 .............. 500,000 459,001
NationsBank
6.690% Due 04/03/02 .............. 1,000,000 980,726
New York Times
6.950% Due 11/18/09 .............. 1,000,000 949,966
Northern Trust
7.300% Due 09/15/06 .............. 1,000,000 969,900
Penney, J. C
7.600% Due 04/01/07 .............. 1,000,000 838,847
Schwab, Charles
6.520% Due 05/27/08 .............. 1,000,000 892,783
<CAPTION>
Principal Market
Amount Value
---------- --------
<S> <C> <C>
Sears, Roebuck
6.700% Due 11/15/06 ............. 1,000,000 $ 917,744
SmithKline Beecham
7.375% Due 04/15/05 ............. 765,000 758,725
Tribune
6.875% Due 11/01/06 ............. 1,000,000 947,824
Wells Fargo
7.125% Due 08/15/06 ............. 1,000,000 959,259
Wisconsin Electric Power
7.125% Due 03/15/16 ............. 1,000,000 906,289
Wisconsin Power & Light
7.000% Due 06/15/07 ............. 1,000,000 948,265
----------
Total Corporate Bonds ........... 18,950,937
----------
TOTAL BONDS
(COST $20,183,668) .............. 18,950,937
----------
SHORT-TERM INVESTMENTS - 3.6%
VARIABLE RATE DEMAND NOTES - 3.6%
Firstar Bank .................... 417,677 417,677
Wisc. Central Credit Union ...... 311,447 311,447
-----------
Total Variable Rate Demand
Notes........................... 729,124
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $729,124) ................. 729,124
-----------
TOTAL INVESTMENTS - 98.3%
(COST $20,912,792) .............. 19,680,061
-----------
NET OTHER ASSETS AND
LIABILITIES - 1.7% .............. 336,510
-----------
NET ASSETS - 100.0% .............. $20,016,571
===========
</TABLE>
See Notes to Financial Statements.
9
<PAGE> 10
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED MAY 31, 2000
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
GROWTH BALANCED BOND
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends ................................... $ 435 $ 214 --
Interest .................................... 7 516 $ 722
------- ------- -------
442 730 722
------- ------- -------
EXPENSES
Accounting services fees .................... 57 47 21
Directors fees .............................. 8 6 3
Federal & state registration ................ 16 14 11
Investment advisory fees .................... 354 242 67
Professional fees ........................... 15 12 10
Other expenses .............................. 48 26 10
------- ------- -------
Total expenses ............................. 498 347 122
Less expenses reimbursable by advisor ...... 23 -- 23
------- ------- -------
Net expenses ................................ 475 347 99
------- ------- -------
NET INVESTMENT INCOME (LOSS) ................ (33) 383 623
------- ------- -------
Net realized gain (loss) on investments...... 11,633 5,806 (168)
Net unrealized appreciation (depreciation)
on investments ............................ (5,064) 146 (630)
------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS............... 6,569 5,952 (798)
------- ------- -------
Net increase (decrease) in net assets
resulting from operations .................. $ 6,536 $ 6,335 $ (175)
======= ======= =======
</TABLE>
See Notes to Financial Statements.
10
<PAGE> 11
THOMPSON PLUMB FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTH PERIODS ENDED MAY 31,
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
GROWTH FUND BALANCED FUND BOND FUND
2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ............ $ (33) $ (104) $ 383 $ 325 $ 623 $ 698
Net realized gain (loss) on investments.. 11,633 2,111 5,806 3,421 (168) 426
Net unrealized appreciation
(depreciation) on investments .......... (5,064) 2,342 146 (827) (630) (1,579)
-------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations ............... 6,536 4,349 6,335 2,919 (175) (455)
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income.. - - (632) (488) (715) (804)
Distributions from net realized gains on
securities transactions ................ (2,950) (5,885) (3,995) (2,796) (195) -
-------- -------- -------- -------- -------- --------
Total distributions to shareholders ..... (2,950) (5,885) (4,627) (3,284) (910) (804)
-------- -------- -------- -------- -------- --------
FUND SHARE TRANSACTIONS ................... (7,746) 6,497 1,003 2,893 (4,912) (5,788)
-------- -------- -------- -------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS ... (4,160) 4,961 2,711 2,528 (5,997) (7,047)
NET ASSETS
Beginning of period ..................... 77,936 68,506 56,278 47,315 26,014 32,673
-------- -------- -------- -------- -------- --------
End of period ........................... $ 73,776 $ 73,467 $ 58,989 $ 49,843 $ 20,017 $ 25,626
======== ======== ======== ======== ======== ========
Accumulated undistributed net investment
income (loss) included in net assets at
end of period .......................... $ (33) $ (104) $ 383 $ 325 $ 298 $ 313
</TABLE>
See Notes to Financial Statements.
11
<PAGE> 12
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
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
12
<PAGE> 13
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
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 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, 2001 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%.
13
<PAGE> 14
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
NOTE 4 - FUND SHARE TRANSACTIONS
Transactions in shares of the Funds during the six months ended May 31, 2000 and
1999 were as follows:
(In thousands)
<TABLE>
<CAPTION>
2000 1999
-------------------- --------------------
Shares Dollars Shares Dollars
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
GROWTH FUND
Shares sold 163 $ 6,717 186 $ 7,307
Shares issued in reinvestment of realized gains 74 2,890 160 5,811
Shares redeemed (433) (17,353) (168) (6,621)
--------- --------- --------- ---------
Net increase (decrease) (196) $ (7,746) 178 $ 6,497
========= ========= ========= =========
BALANCED FUND
Shares sold 289 $ 5,352 251 $ 4,453
Shares issued in reinvestment of dividends 36 615 28 469
Shares issued in reinvestment of realized gains 229 3,925 161 2,715
Shares redeemed (485) (8,889) (263) (4,744)
--------- --------- --------- ---------
Net increase 69 $ 1,003 177 $ 2,893
========= ========= ========= =========
BOND FUND
Shares sold 158 $ 1,558 365 $ 3,889
Shares issued in reinvestment of dividends 67 663 71 759
Shares issued in reinvestment of realized gains 19 183 - -
Shares redeemed (742) (7,316) (962) (10,436)
--------- --------- --------- ---------
Net decrease (498) $ (4,912) (526) $ (5,788)
========= ========= ========= =========
</TABLE>
14
<PAGE> 15
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
(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.
For the period ended February 29, 2000, a distribution from net investment
income for the Bond Fund was declared March 15, 2000 payable to shareholders on
March 16, 2000. 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
-----------------------------
2000 Net investment income - - - - $198,193 $0.10
1999 Net investment income - - $ 631,694 $0.21 $516,475 $0.21
1999 Short-term capital gains $1,121,516 $0.59 $ 172,996 $0.06 - -
1999 Long-term capital gains $1,828,464 $0.97 $3,821,808 $1.28 $195,395 $0.08
</TABLE>
15
<PAGE> 16
THOMPSON PLUMB FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
(Continued)
NOTE 6 - PURCHASE AND SALE OF SECURITIES
Investment transactions for the six months ended May 31, 2000 were as follows:
<TABLE>
<CAPTION>
GROWTH FUND BALANCED FUND BOND FUND
<S> <C> <C> <C>
U. S. GOVERNMENT SECURITIES
---------------------------
Purchases - $ 2,993,438 -
Sales - $ 3,509,141 $3,740,671
SECURITIES OTHER THAN
U. S. GOVERNMENT AND
SHORT-TERM INVESTMENTS
----------------------
Purchases $28,080,467 $24,762,965 $2,163,866
Sales $39,763,767 $27,411,548 $4,198,346
</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.
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.
At May 31, 2000, the investment cost and aggregate unrealized
appreciation and depreciation on investments for Federal income tax purposes
were as follows:
<TABLE>
<CAPTION>
Net unrealized
Federal Unrealized Unrealized appreciation
tax cost appreciation depreciation (depreciation)
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Growth Fund $62,807,563 $14,771,820 $ (3,822,226) $10,949,594
Balanced Fund $50,047,790 $10,836,137 $ (2,177,390) $ 8,658,747
Bond Fund $20,912,792 - $ (1,232,731) $(1,232,731)
</TABLE>
16
<PAGE> 17
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,
------------------------------------------------------
2000(a) 1999 1998 1997 1996 1995
------- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
GROWTH FUND
NET ASSET VALUE, BEGINNING OF PERIOD $41.00 $40.85 $39.36 $32.79 $24.74 $20.43
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.02) (0.13) (0.07) (0.12) (0.06) (0.05)
Net realized and unrealized gains
on investments 3.84 3.78 4.92 9.16 8.66 6.22
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 3.82 3.65 4.85 9.04 8.60 6.17
LESS DISTRIBUTIONS
Distributions from net investment income - - - - - -
Distributions from capital gains (1.56) (3.50) (3.36) (2.47) (0.55) (1.86)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.56) (3.50) (3.36) (2.47) (0.55) (1.86)
NET ASSET VALUE, END OF PERIOD $43.26 $41.00 $40.85 $39.36 $32.79 $24.74
====== ====== ====== ====== ====== ======
TOTAL RETURN 9.75% (b) 10.06% 13.74% 29.90% 35.52% 32.87%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $73.8 $77.9 $68.5 $45.4 $24.1 $12.6
Ratios to average net assets:
Ratio of expenses 1.28% (c) 1.32% 1.41% 1.52% 1.58% 2.00%
Ratio of expenses without reimbursement 1.36% (c) 1.36% 1.41% 1.52% 1.58% 2.00%
Ratio of net investment loss (0.08%)(c) (0.34%) (0.19%) (0.41%) (0.27%) (0.31%)
Ratio of net investment loss without
reimbursement (0.16%)(c) (0.37%) (0.19%) (0.41%) (0.27%) (0.31%)
Portfolio turnover rate 38.29% (b) 79.17% 67.13% 77.66% 101.91% 86.68%
</TABLE>
(a) For the six month period ended May 31, 2000 (Unaudited).
(b) Calculated on a non-annualized basis.
(c) Calculated on an annualized basis.
See Notes to Financial Statements.
17
<PAGE> 18
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,
------------------------------------------------------------
2000(a) 1999 1998 1997 1996 1995
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BALANCED FUND
NET ASSET VALUE, BEGINNING OF PERIOD $18.54 $18.16 $18.16 $16.54 $14.23 $13.55
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.12 0.21 0.19 0.18 0.19 0.24
Net realized and unrealized gains
on investments 1.89 1.44 1.65 3.01 3.21 2.26
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 2.01 1.65 1.84 3.19 3.40 2.50
LESS DISTRIBUTIONS
Distributions from net investment income (0.21) (0.19) (0.13) (0.23) (0.23) (0.28)
Distributions from capital gains (1.34) (1.08) (1.71) (1.34) (0.86) (1.54)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.55) (1.27) (1.84) (1.57) (1.09) (1.82)
NET ASSET VALUE, END OF PERIOD $19.00 $18.54 $18.16 $18.16 $16.54 $14.23
====== ====== ====== ====== ====== ======
TOTAL RETURN 11.76% (b) 9.79% 11.63% 21.39% 25.80% 21.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $59.0 $56.3 $47.3 $36.3 $20.8 $18.1
Ratios to average net assets:
Ratio of expenses 1.20% (c) 1.25% 1.30% 1.40% 1.45% 1.49%
Ratio of net investment income 1.34% (c) 1.24% 1.16% 1.04% 1.32% 1.71%
Portfolio turnover rate 50.02% (b) 66.64% 83.07% 76.66% 134.82% 111.16%
</TABLE>
(a) For the six month period ended May 31, 2000 (Unaudited).
(b) Calculated on a non-annualized basis.
(c) Calculated on an annualized basis.
See Notes to Financial Statements.
18
<PAGE> 19
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,
----------------------------------------------------------
2000(a) 1999 1998 1997 1996 1995
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BOND FUND
NET ASSET VALUE, BEGINNING OF PERIOD $10.18 $10.93 $10.54 $10.59 $10.67 $ 9.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.31 0.59 0.56 0.54 0.52 0.57
Net realized and unrealized gains (losses)
on investments (0.37) (0.76) 0.39 (0.06) (0.07) 0.78
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (0.06) (0.17) 0.95 0.48 0.45 1.35
LESS DISTRIBUTIONS
Distributions from net investment income (0.31) (0.58) (0.56) (0.53) (0.53) (0.56)
Distributions from capital gains (0.08) - - - - -
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (0.39) (0.58) (0.56) (0.53) (0.53) (0.56)
NET ASSET VALUE, END OF PERIOD $9.73 $10.18 $10.93 $10.54 $10.59 $10.67
====== ====== ====== ====== ====== ======
TOTAL RETURN (0.60%)(b) (1.63%) 9.34% 4.74% 4.51% 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) $20.0 $26.0 $32.7 $32.1 $22.2 $14.9
Ratios to average net assets:
Ratio of expenses 0.94% (c) 0.97% 1.04% 1.14% 1.13% 1.13%
Ratio of expenses without reimbursement 1.16% (c) 1.11% 1.08% 1.14% 1.13% 1.34%
Ratio of net investment income 5.98% (c) 5.41% 5.30% 5.42% 5.48% 5.70%
Ratio of net investment income without
reimbursement 5.76% (c) 5.27% 5.26% 5.42% 5.48% 5.49%
Portfolio turnover rate 10.71% (b) 40.67% 35.09% 52.61% 104.43% 111.95%
</TABLE>
(a) For the six month period ended May 31, 2000 (Unaudited).
(b) Calculated on a non-annualized basis.
(c) Calculated on an annualized basis.
See Notes to Financial Statements.
19
<PAGE> 20
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 LOGO ]
SEMIANNUAL REPORT
May 31, 2000
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
