ANNUAL REPORT
JUNE 30, 2000
(EASTCLIFF FUNDS LOGO)
Eastcliff Total Return Fund
Eastcliff Growth Fund
Eastcliff Emerging
Growth Fund
Eastcliff Regional Small
Capitalization Value Fund
Eastcliff Contrarian
Value Fund
NO-LOAD MUTUAL FUNDS
Eastcliff Total
Return Fund
July 28, 2000
Dear Shareholder:
The Eastcliff Total Return Fund performed well over the fiscal year ending
June 30, 2000. The Fund gained 20.8% compared to the S&P 500 Index, which was up
7.2% for the same period. Equities (excluding cash) were up 23.4% for this same
period. The average annual compounded rate of return of the Fund for the five
and ten years ending June 30th was 25.8% and 17.3% respectively.
During the latter half of this fiscal year (March - June), equity investors
faced a declining market. Tightening monetary policy by the Federal Reserve
Board and the bursting of a speculative bubble in technology stocks sparked the
pullback among the major U.S. equity indexes. The market continues to be
narrowly focused therefore careful stock selection remains the key ingredient to
outperforming the benchmark S&P 500 Index.
The three top performing holdings in your Fund over the past twelve months
were: Intel Corp., Nokia Corp. ADR, and Cisco Systems. These stocks encompass
the areas of semiconductors, wireless equipment and networking (Internet
infrastructure). New stocks added include: EMC Corp. (data storage), Sun
Microsystems (computer networking), Viacom (entertainment/multi-media), and
Pharmacia (medical/drugs).
The asset allocation as of June 30, 2000 was 96% equities and 4% temporary
cash reserves. There appears to be evidence that the U.S. economy is slowing
which may put an end to interest rate increases by the Federal Reserve. I will
focus on the fundamentals of companies to see which ones can perform in a
potentially slower U.S. economy. This implies market leaders; no second tier
companies. Although prices of leading companies may go down due to market
volatility, they will be the leaders and come back faster when the market
rebounds.
As of July 27, 2000 our Board of Directors declared a distribution of
$0.02465 per share from net short-term gains and a distribution of $2.2683 per
share from net long-term capital gains, payable July 28, 2000, to shareholders
of record on July 26, 2000.
In closing, I would like to thank you for investing in the Eastcliff Total
Return Fund.
Sincerely,
/s/ Patrice J. Neverett
Patrice J. Neverett
Portfolio Manager
Past performance cannot guarantee future results. Prices will fluctuate and
redemption value may be more or less than original investment. This Fund is not
insured by the FDIC and is not a deposit or other obligation of or guaranteed by
Resource Trust Company or any of its affiliates.
Eastcliff Total Return Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
June 30, 2000
During the period from June 30, 1999 - December 31, 1999, the U.S. equity
markets reached new heights. The NASDAQ ended the year up 86% while the S&P 500
was up 21%.
During the First Quarter of 2000 investors faced a steadily declining market
coupled with intense volatility. The tech-heavy NASDAQ Composite Index reached a
high of 5048 on March 10, 2000, and closed below the 4000 level on June 30,
2000, a 20% decline. The blue chip Dow Jones Industrial Average surged forward
as the NASDAQ plummeted but the Dow rally was not sustainable. The 3 top
performing sectors during the First Quarter were: Technology, Utilities and
Financials. The worst performing sector was Basic Materials.
The Second Quarter remained exciting and sector rotation continued. The 3 top
performing sectors were: Healthcare, Consumer Staples and Utilities. Again,
Basic Materials was on the bottom.
The major averages were negative for the quarter: NASDAQ (-13.27%), Dow Jones
Industrial Average (-3.98%) and S&P 500 Index (-2.66%).
Over the past year, the Fund maintained its industry emphasis in computers
and software, communication equipment, pharmaceuticals and electronics.
Essentially, your Fund out-performed the benchmark S&P 500 Index because of
over-weighting those companies we felt were best positioned to participate in
the growing economy. The three top-performing holdings in your Fund over the
past twelve months were: Intel Corp. (+124.9%), Nokia Corp. ADR (+119.0%), and
Cisco Systems (+97.3%). At June 30, 2000, these companies represented 25% of the
portfolio.
Five companies under-performed the Index for the fiscal year ending June 30,
2000. Vodafone Airtouch (+6.6%), Microsoft (-11.3%), IBM (-14.9%), Bristol Myers
(-16.0%), and Worldcom (-20%). Collectively, they comprise 18% of the portfolio.
The objective of the Eastcliff Total Return Fund is to realize a combination
of capital appreciation and income resulting in the highest total return, while
assuming reasonable risks. In seeking to attain the Total Return Fund's
objective, no minimum or maximum percentage of the Fund's assets is required to
be invested in a specific asset class. At times, the Fund may be 100% invested
in common stocks. During the fiscal year ended June 30, 2000, we maintained an
asset allocation approximating 96% common equities and 4% temporary cash
reserves.
The Fund remains dedicated to high quality, first tier, "marquis name"
companies. We want to own companies with a significant advantage in the
marketplace. We remain optimistic about the market and will cautiously select
investments to enhance long-term total return for our shareholders.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
EASTCLIFF TOTAL RETURN FUND, STANDARD & POOR'S 500 STOCK INDEX
AND LEHMAN INTERMEDIATE CORPORATE BOND INDEX
LEHMAN INTERMEDIATE
EASTCLIFF TOTAL STANDARD & POOR'S CORPORATE BOND
DATE RETURN FUND 500 STOCK INDEX*<F1> INDEX**<F2>
---- ----------- -------------------- -----------
9/30/90 10,000 10,000 10,000
9/30/91 12,870 13,140 11,390
9/30/92 14,569 14,599 12,837
9/30/93 16,521 16,496 13,889
9/30/94 16,885 17,090 13,653
6/30/94 16,885 17,090 13,653
6/30/95 18,185 20,542 14,950
6/30/96 22,804 25,904 15,742
6/30/97 29,211 34,893 17,018
6/30/98 38,939 45,465 18,464
6/30/99 47,388 55,786 19,240
6/30/20 57,245 59,802 20,053
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURN
1-Year 5-Year 10-Year
+20.8% +25.8% +17.3%
*<F1> The Standard & Poor's 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. The
Standard & Poor's Ratings Group designates the stocks to be included
in the Index on a statistical basis. A particular stock's weighting
in the Index is based on its relative total market value (i.e., its
market price per share times the number of shares outstanding).
Stocks may be added or deleted from the Index from time to time.
**<F2> The Lehman Intermediate Corporate Bond Index includes all
Intermediate publicly issued, fixed rate debt issues rated
investment grade or higher, nonconvertible investment grade, dollar
denominated, SEC-registered corporate debt. The Index includes Bonds
with maturities of one to ten years and have outstanding par values
of at least $100 million.
Eastcliff Total Return Fund
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
ASSETS:
Investments in securities, at value (cost $9,668,222) $23,541,367
Cash 6,667
Receivable from investments sold 2,602,041
Dividend receivable 4,613
Interest receivable 2,447
-----------
Total assets $26,157,135
-----------
-----------
LIABILITIES:
Payable to brokers for investments purchased $ 1,945,792
Payable to adviser for management fees 20,285
Other liabilities 5,251
-----------
Total liabilities $ 1,971,328
-----------
NET ASSETS:
Capital Stock, $0.01 per value; 300,000,000
shares authorized; 1,025,184 shares outstanding 8,001,492
Net unrealized appreciation on investments 13,873,145
Undistributed net realized gains on investments 2,311,170
-----------
Net assets 24,185,807
-----------
Total liabilities and net assets $26,157,135
-----------
-----------
CALCULATION OF REDEMPTION PRICE:
Net asset value and redemption price per share
($24,185,807 / 1,025,184 shares outstanding) $ 23.59
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Total Return Fund
SCHEDULE OF INVESTMENTS
June 30, 2000
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS -- 99.1% (A)<F4>
COMMON STOCKS -- 99.1% (A)<F4>
CAPITAL GOODS SECTOR -- 6.1%
----------------------------
ELECTRICAL EQUIPMENT -- 6.1%
27,000 General Electric Co. $ 241,832 $ 1,431,000
COMMUNICATION SERVICES SECTOR -- 9.2%
-------------------------------------
TELECOMMUNICATION-CELLULAR -- 2.5%
10,000 Sprint Corp. (PCS Group)*<F3> 560,792 595,000
TELECOMMUNICATION-LONG DISTANCE -- 6.7%
6,000 Qwest Communications
International, Inc.*<F3> 223,985 298,125
19,500 Vodafone AirTouch
PLC SP ADR 492,843 808,031
10,000 WorldCom, Inc.*<F3>(formerly
MCI WorldCom, Inc.) 252,900 458,750
---------- -----------
969,728 1,564,906
CONSUMER CYCLICALS SECTOR -- 4.4%
---------------------------------
RETAIL-BUILDING SUPPLIES -- 3.2%
15,000 The Home Depot, Inc. 487,475 749,062
RETAIL-GENERAL MERCHANTS -- 1.2%
5,000 Wal-Mart Stores, Inc. 229,175 288,125
CONSUMER STAPLES SECTOR -- 1.6%
-------------------------------
ENTERTAINMENT -- 1.6%
5,700 Viacom Inc.*<F3> 338,807 389,737
FINANCIALS SECTOR -- 5.6%
-------------------------
INSURANCE-MULTILINE -- 5.6%
11,250 American International
Group, Inc. 273,556 1,321,875
HEALTHCARE SECTOR -- 13.0%
--------------------------
DIVERSE -- 4.6%
18,500 Bristol-Myers Squibb Co. 303,059 1,077,625
DRUGS MAJOR -- 8.4%
30,500 Pfizer Inc. 203,678 1,464,000
10,000 Pharmacia Corp. 522,475 516,875
---------- -----------
726,153 1,980,875
TECHNOLOGY SECTOR -- 59.2%
--------------------------
COMMUNICATION-EQUIPMENT -- 17.8%
62,000 Nokia Corp. "A" ADR 248,232 3,096,125
16,000 Nortel Networks Corp. 968,164 1,092,000
---------- -----------
1,216,396 4,188,125
COMPUTER HARDWARE -- 13.0%
5,500 Hewlett-Packard Co. 504,070 686,813
10,000 International Business
Machines Corp. 199,462 1,095,625
14,000 Sun Microsystems, Inc.*<F3> 833,639 1,273,125
---------- -----------
1,537,171 3,055,563
COMPUTER SOFTWARE/SERVICES -- 3.7%
10,800 Microsoft Corp. 153,870 864,000
COMPUTERS-NETWORKING -- 8.6%
32,000 Cisco Systems Inc.*<F3> 440,925 2,034,000
COMPUTERS-PERIPHERAL -- 5.9%
18,000 EMC Corp. (Mass.)*<F3> 818,821 1,384,875
ELECTRONICS-INSTRUMENTS -- 0.6%
2,097 Agilent Technologies, Inc.*<F3> 116,950 154,654
ELECTRONICS-SEMICONDUCTORS -- 9.6%
7,600 Intel Corp. 133,422 1,016,025
18,000 Texas Instruments Inc. 910,545 1,236,375
---------- -----------
1,043,967 2,252,400
---------- -----------
Total common stocks 9,458,677 23,331,822
---------- -----------
Total long-term
investments 9,458,677 23,331,822
SHORT-TERM INVESTMENTS -- 0.9% (A)<F4>
VARIABLE RATE DEMAND NOTE
$209,545 Firstar Bank U.S.A., N.A. 209,545 209,545
---------- -----------
Total short-term
investments 209,545 209,545
---------- -----------
Total investments
-- 100% $9,668,222 $23,541,367
---------- -----------
---------- -----------
*<F3> Non-income producing security.
(a)<F4> Percentages for the various classifications relate to total
investments.
The accompanying notes to financial statements are an integral part of this
schedule.
Eastcliff Total Return Fund
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
INCOME:
Dividends $ 112,641
Interest 49,384
----------
Total income 162,025
----------
EXPENSES:
Management fees 246,156
Administrative services 48,889
Professional fees 17,548
Transfer agent fees 14,771
Custodian fees 5,822
Printing and postage expense 4,067
Registration fees 3,618
Board of Directors fees 750
Other expenses 3,145
----------
Total expenses before reimbursement 344,766
Less expenses assumed by adviser (25,106)
----------
Net expenses 319,660
----------
NET INVESTMENT LOSS (157,635)
----------
NET REALIZED GAIN ON INVESTMENTS 3,951,623
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 836,763
----------
NET GAIN ON INVESTMENTS 4,788,386
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,630,751
----------
----------
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2000 and June 30, 1999
2000 1999
-------- --------
OPERATIONS:
Net investment (loss) income $ (157,635) $ 108,705
Net realized gain on investments 3,951,623 3,979,587
Net increase in unrealized
appreciation on investments 836,763 901,682
----------- -----------
Net increase in net assets
resulting from operations 4,630,751 4,989,974
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.02364
and $0.16696 per share, respectively) (24,713) (192,872)
Distributions from net realized gains ($3.73142
and $2.35253 per share, respectively) (3,957,048) (2,719,992)
----------- -----------
Total distributions (3,981,761)* (2,912,864)
<F5>
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (23,597 and
119,629 shares, respectively) 530,777 2,609,981
Net asset value of shares issued in
distributions (180,696 and 120,051
shares, respectively) 3,595,034 2,587,962
Cost of shares redeemed (249,560 and 352,993
shares, respectively) (5,590,580) (7,727,554)
----------- -----------
Net decrease in net assets derived from
Fund share activities (1,464,769) (2,529,611)
----------- -----------
TOTAL DECREASE (815,779) (452,501)
NET ASSETS AT THE BEGINNING OF THE YEAR 25,001,586 25,454,087
----------- -----------
NET ASSETS AT THE END OF THE YEAR
(including undistributed net investment income
of $0 and $24,705, respectively) $24,185,807 $25,001,586
----------- -----------
----------- -----------
*<F5> See Note 8.
The accompanying notes to financial statements are an integral part of these
statements.
Eastcliff Total Return Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each year)
<TABLE>
YEARS ENDED JUNE 30,
---------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $23.36 $21.50 $16.86 $14.62 $11.96
Income from investment operations:
Net investment (loss) income (0.13) 0.10 0.23 0.23 0.09
Net realized and unrealized gains on investments 4.11 4.28 5.19 3.47 2.90
------ ------ ------ ------ ------
Total from investment operations 3.98 4.38 5.42 3.70 2.99
Less distributions:
Dividends from net investment income (0.02) (0.17) (0.25) (0.12) (0.17)
Distributions from net realized gains (3.73) (2.35) (0.53) (1.34) (0.16)
------ ------ ------ ------ ------
Total from distributions (3.75) (2.52) (0.78) (1.46) (0.33)
------ ------ ------ ------ ------
Net asset value, end of year $23.59 $23.36 $21.50 $16.86 $14.62
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 20.8% 21.7% 33.3% 28.1% 25.4%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 24,186 25,002 25,454 21,626 17,799
Ratio of expenses (after reimbursement) to average net assets(a)<F6> 1.3% 1.3% 1.3% 1.3% 1.3%
Ratio of net investment (loss) income to average net assets(b)<F7> (0.6%) 0.4% 1.2% 1.5% 0.7%
Portfolio turnover rate 46.7% 32.9% 38.4% 58.3% 95.1%
</TABLE>
(a)<F6> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been, for the years ended June 30, 2000, 1999, 1998, 1997
and 1996, as follows: 1.4%, 1.4%, 1.4%, 1.5% and 1.6%, respectively.
(b)<F7> If the Fund had paid all of its expenses, the ratios would have
been, for the years ended June 30, 2000, 1999, 1998, 1997 and 1996,
as follows: (0.7%), 0.3%, 1.1%, 1.3% and 0.4%, respectively.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff
Growth Fund
July 28, 2000
Dear Shareholder:
The first half of 2000 can be characterized by one word: VOLATILITY. As the
year began, the market climbed during January and February with little regard to
rising interest rates, slowing economic growth and valuation. This all changed
quite dramatically from mid-March through May. From the first quarter highs to
the second quarter lows, the major indexes all dropped -- by a minimum of 13%
for the S&P 500 to a 40% decline in the NASDAQ Composite. With the possibility
that the Federal Reserve has about completed its tightening of interest rates,
the market responded with strong performance in the month of June. Sector
rotation that investors typically experience over a year or more was condensed
into this 90-day period. For example, the Amex Biotech Index plummeted 50% only
to rise 85% by quarter end. The CBOE Internet Index fell by 45% only to gain
back 35%. Throughout all of this volatility the Eastcliff Growth Fund returned
3.4% for the six months ending June 30, 2000. This is well ahead of the -0.4%
return in the S&P 500 Index and in-line with the Russell 1000 Growth's 4.7%
upward move.
Chairman Alan Greenspan and the Federal Reserve have raised interest rates
six times over the past year to slow down GDP growth from over 6% to a more
sustainable 3-4% level. The result of these interest rate moves is just
starting to show up in the economy, with housing starts falling -3.9% in May and
job gains in June a modest 11,000 versus over 400,000 in March. The transition
to a slower economy will also result in slower profit growth. As the second
quarter earnings season begins, there have been a greater number of negative
earnings announcements versus the past three reporting periods. In addition,
more companies will face tougher revenue and earnings comparisons in the second
half of 2000. This increases the risk of not meeting investor expectations
while demand for most products and services is slowing.
Despite the volatility in the first half of the year, the best performing
sectors in the market included Technology, with Healthcare and Utilities also
experiencing strong results. The strongest performing sector in the Eastcliff
Growth Fund was Healthcare. Our strong stock selection within Healthcare was
additive to results with companies like American Home Products and Pfizer
appreciating nearly 50% so far this year. Many of the best performing stocks in
the Fund again came from the Technology sector with companies like Intel,
Oracle, JDS Uniphase and Brocade Communications appreciating more then 50% for
the first six months of the year. While consumer companies have performed
poorly, and detracted from absolute returns, the Fund is underweight in this
sector.
As of July 27, 2000, your Board of Directors declared a distribution of
$0.3333 per share from net short-term gains and $0.81504 per share from net
long-term gains, payable July 28, 2000, to shareholders of record on July 26,
2000.
We are optimistic about the equity markets long-term prospects, but we remain
vigilant in examining whether the companies we own can adjust to a period of
slower GDP growth and maintain profit momentum. Managing this transition in the
context of higher valuations will be the key to generating superior investment
performance in the second half of 2000. We appreciate all of your support and
interest in the Fund and look forward to providing each of our shareholders with
favorable investment returns over the long term.
Respectfully submitted,
/s/ Clark J. Winslow
Clark J. Winslow
Portfolio Manager
Past performance cannot guarantee future results. Prices will fluctuate and
redemption value may be more or less than original investment. This Fund is not
insured by the FDIC and is not a deposit or other obligation of or guaranteed by
Resource Trust Company or any of its affiliates.
Eastcliff Growth Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
June 30, 2000
For the first half of the fiscal year, the Fund achieved a strong return of
18.5%. While modestly behind the Russell 1000 Growth, the gain substantially
exceeded the S&P 500 return of 7.7%. After a dip in the September quarter,
investor enthusiasm for technology stocks propelled a jump in the December
quarter where the Fund increased 27.2%.
Your portfolio benefited from major increases in Tellabs, Nokia, America
Online and Oracle in Technology. CBS and Clear Channel achieved substantial
gains in the media sector. Some of the retailers and financials such as Staples
and Fannie Mae underperformed despite good earnings reports.
For the three months ending June 30, 2000, the market retreated as investors
showed concern over rising interest rates, slowing GDP growth and high
valuations. Market returns were led by a different group of stocks than in the
first quarter. While technology companies dominated the first quarter of 2000,
the most recent period saw "Old Economy" sectors like Healthcare and Utilities
perform strongly.
For the quarter and on a year to date basis, Healthcare has performed
strongly. Our strong stock selection has been modestly offset by the Fund's
underweight exposure in healthcare issues. While technology companies
underperformed in the second quarter, they are still performing well on a year-
to-date basis. The Eastcliff Growth Fund is market weight in technology
companies, but our focus on infrastructure and wireless companies has proven to
be additive to returns. We are optimistic about the equity markets long-term
prospects, but we remain vigilant in examining whether the companies we own can
adjust to a period of slower GDP growth and maintain profit momentum. Managing
this transition in the context of higher valuations will be the key to
generating superior investment performance in the second half of 2000.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN EASTCLIFF GROWTH FUND,
RUSSELL 1000 GROWTH INDEX AND STANDARD & POOR'S 500 STOCK INDEX
DATE EASTCLIFF RUSSELL 1000 STANDARD & POOR'S 500
GROWTH FUND GROWTH INDEX**<F10> STOCK INDEX*<F9>
7/1/95*<F8> 10,000 10,000 10,000
6/30/96 12,560 12,781 12,620
6/30/97 13,916 16,787 16,999
6/30/98 18,634 22,058 22,150
6/30/99 20,162 28,079 27,200
6/30/00 24,699 35,296 29,158
*<F8> inception date
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURN
1-Year 5-Year
+22.5% +19.8%
*<F9> The Standard & Poor's 500 Index consists of 500 selected common
stocks, most of which are listed on the New York Stock Exchange.
The Standard & Poor's Ratings Group designates the stocks to be
included in the Index on a statistical basis. A particular stock's
weighting in the Index is based on its relative total market value
(i.e., its market price per share times the number of shares
outstanding). Stocks may be added or deleted from the Index from
time to time.
**<F10> The Russell 1000 Growth Index contains those Russell 1000
securities with a greater-than-average growth orientation.
Securities in this Index tend to exhibit higher price-to-book and
price-earnings ratios, lower dividend yields and higher forecasted
growth values than the Value universe.
Eastcliff Growth Fund
STATEMENT OF NET ASSETS
June 30, 2000
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS -- 97.1% (A)<F12>
COMMON STOCKS -- 97.1% (A)<F12>
CAPITAL GOODS SECTOR -- 7.3%
----------------------------
ELECTRICAL EQUIPMENT -- 4.4%
5,300 General Electric Co. $ 192,562 $ 280,900
1,700 SCI Systems, Inc.*<F11> 61,302 66,619
4,400 Solectron Corp.*<F11> 151,078 184,250
----------- -----------
404,942 531,769
MANUFACTURER-DIVERSE -- 2.9%
7,400 Tyco International Ltd. 294,850 350,575
COMMUNICATION SERVICES SECTOR -- 4.1%
-------------------------------------
TELECOMMUNICATION-CELLULAR -- 1.2%
2,400 Nextel Communications, Inc.*<F11> 127,809 146,850
TELECOMMUNICATION-LONG DISTANCE -- 2.9%
4,700 Vodafone AirTouch
PLC SP ADR 170,365 194,756
3,400 WorldCom, Inc.*<F11> (formerly
MCI WorldCom Inc.) 95,170 155,975
----------- -----------
265,535 350,731
CONSUMER CYCLICALS SECTOR -- 4.0%
---------------------------------
RETAIL-BUILDING SUPPLIES -- 3.3%
5,000 The Home Depot, Inc. 56,388 249,687
3,600 Lowe's Companies, Inc. 159,066 147,825
----------- -----------
215,454 397,512
RETAIL-GENERAL MERCHANTS -- 0.7%
1,400 Wal-Mart Stores, Inc. 41,977 80,675
CONSUMER STAPLES SECTOR -- 11.1%
--------------------------------
BROADCAST MEDIA -- 3.8%
3,600 AMFM Inc.*<F11> 199,396 248,400
2,785 Clear Channel
Communications, Inc.*<F11> 142,109 208,875
----------- -----------
341,505 457,275
ENTERTAINMENT -- 5.2%
1,400 Gemstar International
Group Ltd.*<F11> 64,182 86,034
2,500 Time Warner Inc. 159,751 190,000
5,299 Viacom Inc. Series B*<F11> 136,364 361,326
----------- -----------
360,297 637,360
RETAIL-DRUG STORES -- 2.1%
6,400 CVS Corp. 234,547 256,000
ENERGY SECTOR -- 2.7%
---------------------
OIL & GAS-DRILLING & EQUIPMENT -- 2.7%
3,200 Halliburton Co. 130,067 151,000
5,000 Santa Fe International Corp. 172,166 174,687
----------- -----------
302,233 325,687
FINANCIALS SECTOR -- 5.5%
-------------------------
CONSUMER FINANCE -- 3.2%
6,200 MBNA Corp. 41,229 168,175
2,400 Providian Financial Corp. 180,054 216,000
----------- -----------
221,283 384,175
FINANCIAL-DIVERSE -- 1.2%
2,900 Fannie Mae 173,204 151,344
INVESTMENT BANKS/BROKERS -- 1.1%
4,000 Charles Schwab Corp.*<F11> 100,440 134,500
HEALTHCARE SECTOR -- 8.5%
-------------------------
BIOTECHNOLOGY -- 0.8%
600 Genentech, Inc.*<F11> 59,094 103,200
DIVERSE -- 4.0%
2,100 American Home
Products Corp. 120,477 123,375
7,700 Pfizer Inc. 269,096 369,600
----------- -----------
389,573 492,975
DRUGS MAJOR -- 1.7%
3,900 Pharmacia Corp. 221,803 201,581
MEDICAL PRODUCTS & SUPPLIES -- 2.0%
4,900 Medtronic, Inc. 172,713 244,081
TECHNOLOGY SECTOR -- 45.7%
--------------------------
COMMUNICATION-EQUIPMENT -- 11.3%
1,200 Applied Micro Circuits Corp.*<F11> 115,672 118,500
2,600 Comverse Technology, Inc.*<F11> 99,969 241,800
600 Corning Inc. 101,423 161,925
3,600 Lucent Technologies Inc. 201,274 213,300
6,300 Nokia Corp. "A" ADR 148,609 314,606
3,800 Nortel Networks Corp. 180,777 259,350
900 Tellabs, Inc.*<F11> 14,841 61,594
----------- -----------
862,565 1,371,075
COMPUTER HARDWARE -- 1.9%
2,600 Sun Microsystems, Inc.*<F11> 117,178 236,438
COMPUTER SOFTWARE/SERVICES -- 11.2%
1,700 Amdocs Limited*<F11> 137,432 130,475
3,600 America Online, Inc.*<F11> 179,462 189,900
1,600 BEA Systems, Inc.*<F11> 63,709 79,100
1,400 Exodus Communications*<F11> 58,156 64,487
6,200 Microsoft Corp.*<F11> 225,611 496,000
3,200 Oracle Corp.*<F11> 75,083 269,000
700 VERITAS Software Corp.*<F11> 70,292 79,111
400 Yahoo! Inc.*<F11> 52,080 49,550
----------- -----------
861,825 1,357,623
COMPUTERS-NETWORKING -- 5.3%
10,100 Cisco Systems Inc.*<F11> 29,248 641,981
COMPUTERS-PERIPHERAL -- 3.0%
500 Brocade Communications
Systems, Inc.*<F11> 72,937 91,742
3,500 EMC Corp. (Mass.)*<F11> 149,712 269,281
----------- -----------
222,649 361,023
ELECTRONICS-SEMICONDUCTORS -- 10.5%
3,100 Flextronics International Ltd.*<F11> 140,666 212,931
3,000 Intel Corp. 172,795 401,063
1,200 JDS Uniphase Corp.*<F11> 24,788 143,850
3,100 Linear Technology Corp. 102,519 198,206
3,200 Texas Instruments Inc. 151,087 219,800
1,400 Vitesse Semiconductor
Corp.*<F11> 85,814 102,988
----------- -----------
677,669 1,278,838
EQUIPMENT-SEMICONDUCTORS -- 1.0%
3,300 Lam Research Corp.*<F11> 127,084 123,750
SERVICES-DATA PROCESSING -- 1.5%
4,200 Fiserv, Inc.*<F11> 78,465 181,650
TRANSPORTATION SECTOR -- 1.3%
-----------------------------
RAILROADS -- 1.3%
1,800 Kansas City Southern
Industries, Inc. 82,997 159,638
UTILITIES SECTOR -- 6.9%
------------------------
NATURAL GAS -- 2.7%
5,100 Enron Corp. 208,608 328,950
POWER PRODUCERS-INDEPENDENT -- 4.2%
11,100 AES Corp.*<F11> 323,851 506,438
----------- -----------
Total common stocks 7,519,398 11,793,694
----------- -----------
Total long-term
investments 7,519,398 11,793,694
SHORT-TERM INVESTMENTS -- 3.1% (A)<F12>
VARIABLE RATE DEMAND NOTE
$376,651 Firstar Bank U.S.A., N.A. 376,651 376,651
----------- -----------
Total short-term
investments 376,651 376,651
----------- -----------
Total investments $ 7,896,049 12,170,345
-----------
-----------
Liabilities, less cash and
receivables (0.2%) (A)<F12> (18,939)
-----------
Net Assets $12,151,406
-----------
-----------
Net Asset Value Per Share
($0.01 par value 300,000,000
shares authorized), offering
and redemption price
($12,151,406 / 1,045,644
shares outstanding) $ 11.62
-----------
-----------
*<F11> Non-income producing security.
(a)<F12> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Growth Fund
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
INCOME:
Dividends $ 49,178
Interest 65,765
------------
Total income 114,943
------------
EXPENSES:
Management fees 180,988
Administrative services 34,162
Professional fees 21,190
Transfer agent fees 13,888
Custodian fees 12,523
Amortization of organizational expenses 6,301
Registration fees 2,595
Printing and postage expense 2,008
Board of Directors fees 750
Other expenses 3,002
------------
Total expenses before reimbursement 277,407
Less expenses assumed by adviser (44,949)
------------
Net expenses 232,458
------------
NET INVESTMENT LOSS (117,515)
------------
NET REALIZED GAIN ON INVESTMENTS 11,691,677
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (10,029,788)
------------
NET GAIN ON INVESTMENTS 1,661,889
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,544,374
------------
------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2000 and June 30, 1999
2000 1999
-------- --------
OPERATIONS:
Net investment loss $ (117,515) $ (338,893)
Net realized gain on investments 11,691,677 6,333,970
Net decrease in unrealized appreciation
on investments (10,029,788) (3,348,005)
----------- -----------
Net increase in net assets
resulting from operations 1,544,374 2,647,072
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($6.42145
and $3.2244 per share, respectively) (10,647,441) (10,153,275)
----------- -----------
Total distributions (10,647,441)*(10,153,275)
<F13>
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (123,334 and
119,876 shares, respectively) 1,461,530 1,729,497
Net asset value of shares issued in distributions
(211,309 and 704,428 shares, respectively) 2,339,526 9,744,911
Cost of shares redeemed (2,069,732 and 1,214,807
shares, respectively) (25,920,439) (17,188,048)
----------- -----------
Net decrease in net assets derived from
Fund share activities (22,119,383) (5,713,640)
----------- -----------
TOTAL DECREASE (31,222,450) (13,219,843)
NET ASSETS AT THE BEGINNING OF THE YEAR 43,373,856 56,593,699
----------- -----------
NET ASSETS AT THE END OF THE YEAR $12,151,406 $43,373,856
----------- -----------
----------- -----------
*<F13> See Note 8.
The accompanying notes to financial statements are an integral part of these
statements.
Eastcliff Growth Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $15.60 $17.85 $13.92 $12.56 $10.00
Income from investment operations:
Net investment loss (a)<F14> (0.08) (0.18) (0.15) (0.14) (0.08)
Net realized and unrealized gains on investments 2.52 1.15 4.71 1.50 2.64
------ ------ ------ ------ ------
Total from investment operations 2.44 0.97 4.56 1.36 2.56
Less distributions:
Dividend from net investment income -- -- -- -- --
Distributions from net realized gains (6.42) (3.22) (0.63) -- --
------ ------ ------ ------ ------
Total from distributions (6.42) (3.22) (0.63) -- --
------ ------ ------ ------ ------
Net asset value, end of period $11.62 $15.60 $17.85 $13.92 $12.56
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 22.5% 8.0% 33.9% 10.8% 25.6%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 12,151 43,374 56,594 46,389 46,193
Ratio of expenses (after reimbursement)
to average net assets (b)<F15> 1.3% 1.3% 1.3% 1.3% 1.3%
Ratio of net investment loss to average net assets (c)<F16> (0.7%) (0.7%) (0.9%) (1.0%) (0.8%)
Portfolio turnover rate 123.9% 86.3% 93.3% 54.3% 40.3%
</TABLE>
(a)<F14> In 2000, net investment loss per share is calculated using average
shares outstanding. In prior years, net investment loss per share
is calculated using ending balances prior to consideration of
adjustments for permanent book and tax differences.
(b)<F15> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been, for the years ended June 30, 2000, 1997 and 1996,
1.5%, 1.3% and 1.4%, respectively.
(c)<F16> If the Fund had paid all of its expenses, the ratios would have
been, for the years ended June 30, 2000, 1997 and 1996, (0.9%),
(1.0%) and (0.9%), respectively.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Emerging Growth Fund
July 28, 2000
Dear Shareholder:
Before reviewing our performance in detail, it is useful to review the market
activity of late 1999 and the first half of 2000. Market speculation in the
second half of 1999 and into the first quarter of 2000 reached excesses not seen
in some time. This was particularly pronounced in technology and biotechnology
stocks. Hot-money keyed on revenue momentum and stock price momentum to drive
stocks higher, with little regard given to the underlying sustainability of
business models (i.e. potential to produce profits) or stock price valuation.
Subsequently, the market went into a significant two and one half month
correction with the NASDAQ Composite Index declining 37%. This setback, while
painful, served to lessen the amount of speculation that had been fueling
performance. The market rebounded in June, setting the stage, we believe, for a
more balanced market environment for the remainder of 2000. The market has
broadened as seen in healthcare and energy stocks, which led second quarter
performance in the small and mid-cap growth area. Valuations also seem more
reasonable with many of the prior stock market leaders, including unprofitable
dot-coms, failing to fully recover the share price lost during the correction.
As part of our portfolio strategy during this corrective phase, we lightened
up on technology holdings. As we became more confident that the worst of the
correction was behind us, we opportunistically upgraded the quality of our
portfolios with a particular focus on boosting our technology exposure. We
purchased many industry-leading growth companies where valuations had become
more attractive. We significantly boosted our telecommunications sector exposure
given the strong global capital spending cycle, which is being fueled by demand
for wireless services and broadband access. New technology investments in the
Eastcliff Emerging Growth Fund included Digital Lightwave, ECtel Ltd, NetIQ,
Nova Measuring and Pixelworks.
For the quarter, the Fund declined 6.3% compared with a loss of 7.4% for the
Russell 2000 Growth benchmark. Since inception on September 30, 1999, the Fund
has risen 29.2% versus a rise of 35.0% for the Russell 2000 Growth. While this
has been a most challenging year in the market, we are pleased that we have
outperformed of late. This reflects numerous new investments that proved to be
winning stocks and improving market breadth. We are very comfortable with the
valuations in our market and believe this rebound has significant upside
potential. We believe recent market trends favor our research-intense,
diversified investment management approach.
Thank you for your continued support.
Sincerely,
/s/ Gail M. Knappenberger
Gail M. Knappenberger
Portfolio Manager
Past performance cannot guarantee future results. Prices will fluctuate and
redemption value may be more or less than original investment. This Fund is not
insured by the FDIC and is not a deposit or other obligation of or guaranteed by
Resource Trust Company or any of its affiliates.
Eastcliff Emerging Growth Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
June 30, 2000
The Emerging Growth Fund commenced trading on September 30, 1999. During the
Fund's first six months of operations, the market was driven by speculation,
volatility and narrow leadership within the technology and biotechnology
sectors. The quarter ended June 30, 2000 began with a two and one half month
correction and the NASDAQ declining 37%. The market then rebounded in June
which set the stage, we believe, for a more balanced market environment for the
remainder of 2000. Since inception, the Fund has underperformed the Russell
2000 Growth Index slightly, rising 29.2% versus a gain of 35% for the Index. We
believe that the re-balancing of the Russell 2000 Growth Index on June 30
combined with the broader market environment will favor our research-intense,
diversified management approach.
In the last quarter, we lightened up on our technology holdings until we
became more confident that the worst of the correction was over. We then
opportunistically upgraded the quality of the Fund with a particular focus on
boosting our technology exposure. We significantly boosted our
telecommunications sector exposure given the strong global capital spending
cycle, which is being fueled by demand for wireless services and broadband
access. New investments in the Fund included Digital Lightwave, ECTEL Ltd,
NetIQ, Nova Measuring, Pixelworks, and Tollgrade Communications. Technology,
healthcare, and consumer services continue to represent the largest area of
investment in the Fund. We continue to believe that current market conditions
will favor the small cap investor and our investment style.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
EASTCLIFF EMERGING GROWTH FUND AND RUSSELL 2000 GROWTH INDEX
DATE EASTCLIFF EMERGING GROWTH FUND RUSSELL 2000 GROWTH INDEX*<F18>
9/30/99*<F17> 10,000 10,000
12/31/99 12,992 13,339
3/31/00 13,791 14,577
6/30/00 12,921 13,503
*<F17> inception date 9/30/99
Past performance is not predictive of future performance.
TOTAL RETURN
Since inception 9/30/99
29.2%
*<F18> Russell 2000 Growth Index measures the performance of those Russell
2000 companies with higher price-to-book ratios and higher
forecasted growth values.
Eastcliff Emerging Growth Fund
STATEMENT OF NET ASSETS
June 30, 2000
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS -- 99.0% (A)<F20>
COMMON STOCKS -- 99.0% (A)<F20>
BASIC MATERIALS SECTOR -- 1.5%
------------------------------
IRON & STEEL -- 1.5%
8,000 NS Group, Inc.*<F19> $ 111,417 $ 167,500
CAPITAL GOODS SECTOR -- 3.0%
----------------------------
CONTAINERS-METAL/GLASS -- 1.6%
8,500 Mobile Mini, Inc.*<F19> 168,044 187,531
ELECTRICAL EQUIPMENT -- 1.4%
8,000 Manufacturers' Services Ltd.*<F19> 150,285 164,500
COMMUNICATION SERVICES SECTOR -- 2.8%
-------------------------------------
TELEPHONE -- 2.8%
2,450 Tollgrade Communications
Inc.*<F19> 155,816 324,625
CONSUMER CYCLICALS SECTOR -- 13.2%
----------------------------------
BUILDING MATERIALS -- 2.3%
5,200 Trex Company, Inc.*<F19> 133,538 260,000
PUBLISHING -- 1.1%
3,600 Penton Media, Inc. 54,827 126,000
RETAIL-COMPUTERS & ELECTRONICS -- 3.1%
4,450 Tweeter Home Entertainment
Group, Inc.*<F19> 153,907 135,169
8,150 Ultimate Electronics, Inc.*<F19> 153,134 218,394
---------- -----------
307,041 353,563
RETAIL-DISCOUNTERS -- 1.4%
8,550 Family Dollar Stores, Inc. 173,747 167,259
SERVICES-COMMERCIAL & CONSUMER -- 5.3%
7,500 The Corporate Executive
Board Co.*<F19> 336,176 449,063
6,850 NCO Group, Inc.*<F19> 257,081 158,406
---------- -----------
593,257 607,469
CONSUMER STAPLES SECTOR -- 8.7%
-------------------------------
BROADCAST MEDIA -- 4.8%
3,500 Citadel Communications
Corp.*<F19> 124,025 122,281
4,600 Emmis Communications
Corp.*<F19> 199,813 190,325
6,400 Radio One, Inc. Cl D*<F19> 145,683 141,200
3,200 Radio One, Inc.*<F19> 72,842 94,600
---------- -----------
542,363 548,406
HOUSEHOLD PRODUCTS -- 1.0%
7,800 Koala Corp.*<F19> 120,712 110,175
RESTAURANTS -- 2.9%
11,200 Panera Bread Co.*<F19> 114,908 113,400
6,800 P.F. Chang's China
Bistro, Inc.*<F19> 153,300 217,175
---------- -----------
268,208 330,575
ENERGY SECTOR -- 7.2%
---------------------
OIL & GAS-DRILLING & EQUIPMENT -- 5.8%
3,850 CARBO Ceramics Inc. 110,206 135,231
7,000 Global Industries, Ltd.*<F19> 104,125 132,125
9,200 Marine Drilling
Companies, Inc.*<F19> 253,457 257,600
3,800 Precision Drilling Corp.*<F19> 122,466 146,775
---------- -----------
590,254 671,731
OIL-EXPLORATION & PRODUCTS -- 1.4%
5,750 Patterson Energy, Inc.*<F19> 165,490 163,875
FINANCIALS SECTOR -- 1.8%
-------------------------
BANKS-MAJOR REGIONAL -- 1.8%
5,000 Silicon Valley Bancshares*<F19> 118,444 213,125
HEALTHCARE SECTOR -- 16.4%
--------------------------
DRUGS MAJOR -- 7.6%
2,250 Emisphere Technologies,
Inc.*<F19> 139,298 95,871
15,250 First Horizon
Pharmaceutical Corp.*<F19> 131,594 148,688
7,900 Jones Pharma Inc. 223,263 315,506
5,500 Medicis Pharmaceutical
Corp.*<F19> 233,400 313,500
---------- -----------
727,555 873,565
MEDICAL PRODUCTS & SUPPLIES -- 7.1%
10,200 CIMA Labs Inc.*<F19> 199,849 206,550
7,250 SurModics, Inc.*<F19> 212,197 188,500
6,700 Sybron International Corp.*<F19> 188,206 132,744
5,900 Zoll Medical Corp.*<F19> 263,186 289,100
---------- -----------
863,438 816,894
SPECIALIZED SERVICES -- 1.7%
3,550 Albany Molecular
Research, Inc.*<F19> 174,394 193,253
TECHNOLOGY SECTOR -- 44.4%
--------------------------
COMMUNICATION-EQUIPMENT -- 9.6%
3,550 Digital Lightwave, Inc.*<F19> 207,377 356,997
1,900 Ditech Communications*<F19> 155,837 179,669
7,200 ECtel Ltd.*<F19> 169,884 165,600
2,550 Stanford Microdevices, Inc.*<F19> 38,026 110,765
5,950 Tekelec*<F19> 246,748 286,716
---------- -----------
817,872 1,099,747
COMPUTER SOFTWARE/SERVICES -- 16.4%
4,700 Adept Technology, Inc.*<F19> 100,746 219,725
7,400 Advent Software, Inc.*<F19> 218,421 477,300
10,450 Blue Wave Systems Inc.*<F19> 135,133 107,766
11,500 The InterCept Group*<F19> 207,246 195,500
2,350 NetIQ Corp.*<F19> 108,394 140,119
5,150 Peregrine Systems, Inc.*<F19> 108,955 178,640
5,000 RadiSys Corp.*<F19> 230,166 283,750
11,700 Radyne ComStream Inc.*<F19> 125,061 169,650
3,200 TTI Team Telecom
International Ltd.*<F19> 112,461 115,200
---------- -----------
1,346,583 1,887,650
ELECTRONICS-INSTRUMENTS -- 2.8%
2,500 Methode Electronics, Inc. 107,812 96,562
14,250 Nova Measuring
Instruments Ltd.*<F19> 213,327 228,891
---------- -----------
321,139 325,453
ELECTRONICS-SEMICONDUCTORS -- 9.9%
8,650 ACT Manufacturing, Inc.*<F19> 313,059 401,684
3,275 ANADIGICS, Inc.*<F19> 117,016 111,555
3,200 Flextronics International Ltd.*<F19> 211,800 219,800
6,650 Pixelworks, Inc.*<F19> 79,197 151,288
3,250 Semtech Corp.*<F19> 132,950 248,574
---------- -----------
854,022 1,132,901
SERVICES-COMPUTER SYSTEMS -- 0.6%
6,750 CareScience, Inc.*<F19> 75,469 71,297
SERVICES-DATA PROCESSING -- 5.1%
5,000 Fiserv, Inc.*<F19> 146,138 216,250
7,450 National Computer
Systems, Inc. 294,960 366,912
---------- -----------
441,098 583,162
---------- -----------
Total common stocks 9,275,013 11,380,256
---------- -----------
Total long-term
investments 9,275,013 11,380,256
SHORT-TERM INVESTMENTS -- 1.9% (A)<F20>
VARIABLE RATE DEMAND NOTE
$212,936 Firstar Bank U.S.A., N.A. 212,936 212,936
---------- -----------
Total short-term
investments 212,936 212,936
---------- -----------
Total investments $9,487,949 11,593,192
----------
----------
Liabilities, less cash and
receivables (0.9%) (A)<F20> (102,320)
-----------
Net Assets $11,490,872
-----------
-----------
Net Asset Value Per Share
($0.01 par value 300,000,000
shares authorized), offering
and redemption price
($11,490,872 / 899,770
shares outstanding) $ 12.77
-----------
-----------
*<F19> Non-income producing security.
(a)<F20> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Emerging Growth Fund
STATEMENT OF OPERATIONS
For the Period from September 30, 1999 (commencement of operations)
to June 30, 2000
INCOME:
Dividends $ 2,765
Interest 29,055
----------
Total income 31,820
----------
EXPENSES:
Management fees 64,153
Administrative services 12,831
Professional fees 11,215
Transfer agent fees 9,714
Custodian fees 6,559
Registration fees 2,857
Board of Directors fees 500
Printing and postage expense 441
Other expenses 760
----------
Total expenses before reimbursement 109,030
Less expenses assumed by adviser (25,631)
----------
Net expenses 83,399
----------
NET INVESTMENT LOSS (51,579)
----------
NET REALIZED LOSS ON INVESTMENTS (503,509)
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 2,105,243
----------
NET GAIN ON INVESTMENTS 1,601,734
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,550,155
----------
----------
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Emerging Growth Fund
STATEMENT OF CHANGES INNET ASSETS
For the Period from September 30, 1999 (commencement of operations)
to June 30, 2000
OPERATIONS:
Net investment loss $ (51,579)
Net realized loss on investments (503,509)
Net increase in unrealized appreciation on investments 2,105,243
-----------
Net increase in net assets resulting from operations 1,550,155
-----------
DISTRIBUTION TO SHAREHOLDERS:
Distribution from net realized gains ($0.14382 per share) (83,872)
-----------
Total distribution (83,872)*<F21>
-----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (893,736 shares) 9,951,196
Net asset value of shares issued in
distribution (6,669 shares) 80,901
Cost of shares redeemed (635 shares) (7,508)
-----------
Net increase in net assets derived
from Fund share activities 10,024,589
-----------
TOTAL INCREASE 11,490,872
NET ASSETS AT THE BEGINNING OF THE PERIOD --
-----------
NET ASSETS AT THE END OF THE PERIOD $11,490,872
-----------
-----------
*<F21> See Note 8.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout the period)
FOR THE PERIOD FROM
SEPTEMBER 30, 1999+<F22> TO
JUNE 30, 2000
---------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment loss (0.06)
Net realized and unrealized gains on investments 2.97
------
Total from investment operations 2.91
Less distributions:
Dividend from net investment income --
Distribution from net realized gains (0.14)
------
Total from distributions (0.14)
------
Net asset value, end of period $12.77
------
------
TOTAL INVESTMENT RETURN 29.2%*<F23>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 11,491
Ratio of expenses (after reimbursement)
to average net assets (b)<F25> 1.3%(a)<F24>
Ratio of net investment loss
to average net assets (c)<F26> (0.8%)(a)<F24>
Portfolio turnover rate 91.5%
+<F22> Commencement of operations.
*<F23> Not annualized.
(a)<F24> Annualized.
(b)<F25> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratio
would have been 1.7%(a)<F24>.
(c)<F26> If the Fund had paid all of its expenses, the ratio would have been
(1.2%)(a)<F24>.
The accompanying notes to financial statements are an integral part of these
statements.
Eastcliff Regional
Small Capitalization
Value Fund
July 28, 2000
Dear Shareholder:
The small cap value investment arena has not been under assault for our
entire career. It just seems that way. Since the spring of 1998, with only
brief reprieves, the environment for the value investor and small cap value in
particular has been as challenging as any we can recall for at least several
decades. When asked when will this change, honesty causes us to reply--we don't
know. When negative attitudes towards this sector have lifted in the past, it
has produced excellent results with a relatively low risk profile. It is our
belief in this truism that compels us to spend each day researching and
selecting/buying for your portfolio those companies that we believe reflect the
best balance of reward and valuation.
While stock market valuations of companies we own in your portfolio will at
times not be reflective of the value we as analysts see in the company, we are
encouraged as a number of our portfolio companies have been taken over by the
strategic buyers at handsome premiums to the market price.
So far this year, four companies in your portfolio have been taken private or
acquired by strategic buyers including Justin Industries where Warren Buffet is
the buyer.
In a prior comment to you we stated that while it may be obvious_all previous
"new economies" eventually become "old economies," and in those transitions, a
tremendous amount of money was made and lost. The fourth quarter of 1999 and
the first quarter of 2000 spoke of money made. This past quarter saw many
investors deal with losses sustained through new economy investments as the B2C
and B2B companies are having to contend with P2P i.e. path to profitability.
The battle continues.
As of July 27, 2000, your Board of Directors declared a dividend of $0.00532
per share from net investment income, payable July 28, 2000, to shareholders of
record on July 26, 2000.
Sincerely,
/s/ Richard W. Jensen /s/ Elizabeth M. Lilly /s/ Richard J. Rinkoff
Richard W. Jensen Elizabeth M. Lilly Richard J. Rinkoff
Portfolio Manager Portfolio Manager Portfolio Manager
Past performance cannot guarantee future results. Prices will fluctuate and
redemption value may be more or less than original investment. This Fund is not
insured by the FDIC and is not a deposit or other obligation of or guaranteed by
Resource Trust Company or any of its affiliates.
Eastcliff Regional Small Capitalization Value Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
June 30, 2000
The challenging environment that has enveloped the small cap value arena for
close to two years continues. Looking at the chart below one can see how
closely this portfolio had tracked since inception with the Russell 2000. This
all changed beginning in the fourth quarter of 1999 when the internet/bio-
technology sectors took on "bubble market" characteristics. This had an
explosive impact on the Russell 2000 with the growth portion of the index rising
33.4% in the fourth quarter versus 1.5% for the value index. The first quarter
of 2000 saw much more modest differences between growth and value, 9.3% versus
3.8%, a result of the bubble bursting in March of this year. In a period where
the mantra was "no price is too high to pay for some stocks and no price is low
enough to pay for others" the value investor suffers. We did. While the second
quarter of this year was much kinder than the first, we have yet to see a return
to the more normal valuation periods that preceded 1998. While the "momentum
stock buyers" have frantically moved their funds from one "sure thing" to
another in the hopes of making a profit, seldom to any avail, we strive to
insure we remain focused. While we have built an entire portfolio on what we
believe to be excellent values, deserving of higher multiples, at times it seems
no one cares. However, it has always been periods of disdain that subsequently
have lead to periods of excellent returns.
At present we have thirty-seven companies represented in the portfolio with
the top ten holdings currently representing 42% of the portfolio. As manager of
a capital appreciation fund, we believe in investing a relatively high portion
of the portfolio in a limited number of companies. We continue to follow a
bottom-up strategy to investing that focuses on investing in the best companies
we can find with strong managements and that are undervalued by the market.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
EASTCLIFF REGIONAL SMALL CAPITALIZATION VALUE FUND AND RUSSELL 2000 INDEX
EASTCLIFF REGIONAL SMALL
DATE CAPITALIZATION VALUE FUND RUSSELL 2000 INDEX*<F28>
9/16/96*<F27> 10,000 10,000
9/30/96 9,850 10,128
12/31/96 10,908 10,655
3/31/97 10,517 10,104
6/30/97 12,251 11,742
9/30/97 13,847 13,489
12/31/97 13,209 13,030
3/31/98 14,168 14,346
6/30/98 13,683 13,672
9/30/98 10,387 10,917
12/31/98 12,698 12,698
3/31/99 11,446 12,009
6/30/99 13,523 13,877
9/30/99 12,790 13,000
12/31/99 12,704 15,397
3/31/00 12,048 16,487
6/30/00 11,924 15,864
*<F27> inception date 9/16/96
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURN
1-Year Since inception 9/16/96
(11.8%) +4.8%
*<F28> The Russell 2000 Index is an index comprised of 2000 publicly
traded small capitalization common stocks that are ranked in terms
of capitalization below the large and mid-range capitalization
sectors of the United States equity market. The Russell 2000 Index
is a trademark/service mark of the Frank Russell Company.
Eastcliff Regional Small Capitalization Value Fund
STATEMENT OF NET ASSETS
June 30, 2000
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS -- 97.3% (A)<F30>
COMMON STOCKS -- 97.3% (A)<F30>
BASIC MATERIALS SECTOR -- 13.1%
-------------------------------
CHEMICALS-SPECIALTY -- 11.2%
55,700 Ferro Corp. $ 1,266,115 $ 1,169,700
40,700 H.B. Fuller Co. 1,975,479 1,854,394
110,300 Material Sciences Corp.*<F29> 1,384,696 1,103,000
----------- -----------
4,626,290 4,127,094
PAPER & FOREST PRODUCTS -- 1.9%
19,200 Rayonier Inc. 879,289 688,800
CAPITAL GOODS SECTOR -- 25.0%
-----------------------------
AEROSPACE/DEFENSE -- 4.1%
22,500 Alliant Techsystems Inc.*<F29> 1,242,317 1,517,344
CONTAINERS-METAL/GLASS -- 2.5%
52,100 U.S. Can Corp.*<F29> 846,359 905,237
ELECTRICAL EQUIPMENT -- 4.7%
14,300 SPX Corp.*<F29> 420,526 1,729,406
MANUFACTURER-DIVERSE -- 9.4%
53,500 Graco Inc. 1,115,298 1,738,750
26,000 Sames Corp.*<F29> 910,292 409,500
109,180 U.S. Industries, Inc. 2,019,943 1,323,807
----------- -----------
4,045,533 3,472,057
MANUFACTURER-SPECIAL -- 1.3%
24,100 Donaldson Company, Inc. 368,049 475,975
OFFICE EQUIPMENT & SUPPLIES -- 3.0%
43,000 Herman Miller, Inc. 1,092,955 1,112,625
CONSUMER CYCLICALS SECTOR -- 26.6%
----------------------------------
AUTO PARTS & EQUIPMENT -- 1.6%
46,600 Tower Automotive, Inc.*<F29> 639,453 582,500
FOOTWEAR -- 3.2%
53,800 Justin Industries, Inc. 937,899 1,176,875
HARDWARE & TOOLS -- 1.7%
18,900 The Toro Co. 610,351 622,519
LEISURE TIME-PRODUCTS -- 4.8%
54,700 Polaris Industries Inc. 1,774,587 1,750,400
PUBLISHING-NEWSPAPER -- 4.0%
23,000 Central Newspapers, Inc. 515,747 1,454,750
RETAIL-DISCOUNTERS -- 2.7%
45,500 Damark International, Inc.*<F29> 828,112 978,250
SERVICES-ADVERTISING/MARKETING -- 6.6%
60,300 AC Nielsen Corp.*<F29> 1,134,599 1,326,600
25,400 True North
Communications Inc. 825,353 1,117,600
----------- -----------
1,959,952 2,444,200
SERVICES-COMMERCIAL & CONSUMER -- 2.0%
58,500 Regis Corp. 1,110,707 731,250
CONSUMER STAPLES SECTOR -- 10.2%
--------------------------------
BROADCAST MEDIA -- 1.1%
16,800 ValueVision
International, Inc.*<F29> 385,363 403,200
ENTERTAINMENT -- 2.0%
29,800 LodgeNet Entertainment
Corp.*<F29> 292,914 722,650
FOODS -- 4.2%
88,400 International Multifoods
Corp. 1,865,097 1,530,425
HOUSEHOLD PRODUCTS -- 1.8%
73,400 Central Garden & Pet Co.*<F29> 689,778 658,303
RESTAURANTS -- 1.1%
21,382 VICORP Restaurants, Inc.*<F29> 288,956 390,221
ENERGY SECTOR --3.8%
--------------------
OIL & GAS-REFINING & MARKETING -- 2.8%
86,200 Pennzoil-Quaker State Co. 832,943 1,039,787
OIL-EXPLORATION & PRODUCTS -- 1.0%
19,700 Nuevo Energy Co.*<F29> 386,330 371,838
FINANCIALS SECTOR -- 4.1%
-------------------------
BANKS-MAJOR REGIONAL -- 4.1%
58,500 TCF Financial Corp. 1,272,251 1,502,719
HEALTHCARE SECTOR -- 3.2%
-------------------------
MEDICAL PRODUCTS & SUPPLIES -- 3.2%
39,400 Edwards Lifesciences Corp.*<F29> 771,720 728,900
55,000 Rochester Medical Corp.*<F29> 824,162 460,625
----------- -----------
1,595,882 1,189,525
TECHNOLOGY SECTOR -- 7.9%
-------------------------
COMPUTER HARDWARE -- 2.4%
65,000 PLATO Learning, Inc.*<F29> 784,559 893,750
ELECTRONICS-SEMICONDUCTORS -- 1.1%
71,400 Aetrium Inc.*<F29> 954,423 410,550
SERVICES-COMPUTER SYSTEMS -- 4.4%
43,500 Complete Business
Solutions, Inc.*<F29> 930,078 763,969
19,600 MCSi Inc.*<F29> 454,956 507,150
38,100 Ogden Corp.*<F29> 385,046 342,900
----------- -----------
1,770,080 1,614,019
TRANSPORTATION SECTOR -- 3.4%
-----------------------------
RAILROADS -- 3.4%
36,900 GATX Corp. 1,312,379 1,254,600
----------- -----------
Total common stocks 34,329,081 35,750,869
----------- -----------
Total long-term
investments 34,329,081 35,750,869
SHORT-TERM INVESTMENTS -- 2.4% (A)<F30>
VARIABLE RATE DEMAND NOTE
$868,604 Firstar Bank U.S.A., N.A. 868,604 868,604
----------- -----------
Total short-term
investments 868,604 868,604
----------- -----------
Total investments $35,197,685 36,619,473
-----------
-----------
Cash and receivables, less
liabilities -- 0.3% (A)<F30> 111,850
-----------
Net Assets $36,731,323
-----------
-----------
Net Asset Value Per Share
($0.01 par value 300,000,000
shares authorized), offering
and redemption price
($36,731,323 / 3,161,887
shares outstanding) $ 11.62
-----------
-----------
*<F29> Non-income producing security.
(a)<F30> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Regional Small Capitalization Value Fund
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
INCOME:
Dividends $ 509,213
Interest 105,816
-----------
Total income 615,029
-----------
EXPENSES:
Management fees 454,869
Administrative services 68,994
Professional fees 18,555
Custodian fees 17,718
Transfer agent fees 17,274
Printing and postage expense 10,258
Amortization of organizational expenses 4,974
Registration fees 4,513
Board of Director fees 750
Other expenses 8,626
-----------
Total expenses before reimbursement 606,531
Less expenses assumed by Adviser (36,888)
-----------
Net expenses 569,643
-----------
NET INVESTMENT INCOME 45,386
-----------
NET REALIZED LOSS ON INVESTMENTS (690,254)
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (5,597,913)
-----------
NET LOSS ON INVESTMENTS (6,288,167)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(6,242,781)
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Regional Small Capitalization Value Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2000 and June 30, 1999
<TABLE>
2000 1999
-------- --------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 45,386 $ (118,169)
Net realized loss on investments (690,254) (875,261)
Net decrease in unrealized appreciation on investments (5,597,913) (1,017,084)
----------- -----------
Net decrease in net assets resulting from operations (6,242,781) (2,010,514)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($0.09215 and $0.1144 per share, respectively) (363,868) (522,086)
----------- -----------
Total distributions (363,868)*<F31> (522,086)
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (476,955 and 819,149 shares, respectively) 5,722,593 9,853,719
Net asset value of shares issued in distributions (27,783
and 40,053 shares, respectively) 330,895 499,462
Cost of shares redeemed (1,394,631 and 1,389,608 shares, respectively) (16,525,986) (16,148,675)
----------- -----------
Net decrease in net assets derived from Fund share activities (10,472,498) (5,795,494)
----------- -----------
TOTAL DECREASE (17,079,147) (8,328,094)
NET ASSETS AT THE BEGINNING OF THE YEAR 53,810,470 62,138,564
----------- -----------
NET ASSETS AT THE END OF THE YEAR
(including undistributed net investment income of $16,682 and $0, respectively) $36,731,323 $53,810,470
----------- -----------
----------- -----------
</TABLE>
*<F31> See Note 8.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
FOR THE YEARS ENDED JUNE 30, FOR THE PERIOD FROM
-------------------------------------- SEPTEMBER 16, 1996+<F32> TO
2000 1999 1998 JUNE 30, 1997
-------- -------- -------- ---------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 13.28 $ 13.56 $ 12.23 $ 10.00
Income from investment operations:
Net investment income (loss) 0.01 (0.03) (0.01) 0.02
Net realized and unrealized (losses)
gains on investments (1.58) (0.14) 1.43 2.23
------- ------- ------- -------
Total from investment operations (1.57) (0.17) 1.42 2.25
Less distributions:
Dividends from net investment income -- -- (0.00) (0.02)
Distributions from net realized gains (0.09) (0.11) (0.09) --
------- ------- ------- -------
Total from distributions (0.09) (0.11) (0.09) (0.02)
------- ------- ------- -------
Net asset value, end of period $ 11.62 $ 13.28 $ 13.56 $ 12.23
------- ------- ------- -------
------- ------- ------- -------
TOTAL INVESTMENT RETURN (11.8%) (1.2%) 11.7% 22.5%(b)<F34>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 36,731 53,810 62,139 29,231
Ratio of expenses (after reimbursement)
to average net assets (c)<F35> 1.3% 1.3% 1.3% 1.3%(a)<F33>
Ratio of net investment income (loss)
to average net assets (d)<F36> 0.1% (0.2%) (0.1%) 0.3%(a)<F33>
Portfolio turnover rate 57.3% 29.2% 35.5% 29.4%
</TABLE>
+<F32> Commencement of operations.
(a)<F33> Annualized.
(b)<F34> Not annualized.
(c)<F35> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses for the year
ending June 30, 2000 and for the period September 16, 1996+<F32> to
June 30, 1997, the ratios would have been 1.3% and 1.6%(a)<F33>,
respectively.
(d)<F36> If the Fund had paid all of its expenses for the year ending June
30, 2000 and for the period September 16, 1996+<F32> to June 30,
1997, the ratios would have been 0.1% and (0.0)%(a)<F33>,
respectively.
The accompanying notes to financial statements are an integral part of these
statements.
Eastcliff Contrarian Value Fund
July 28, 2000
Dear Shareholder:
Over the past twelve months, the stock market experienced heightened
volatility and increased narrowness, as investors continued to focus on the hot
technology and telecommunication stocks, while ignoring most others, especially
in the small/mid-capitalization value sectors. The so-called "new economy"
stocks dominated investors' sentiment, while the "old-economy" stocks were
discarded, irrespective of their underlying strong fundamentals.
The Eastcliff Contrarian Value Fund languished in such a narrow market
environment. However, in March, we began to see the market broaden, amidst
growing signs that the frenzy and high expectations surrounding the "new
economy" stocks were finally abating. Given this more level playing field, the
Fund posted a very strong recovery in March which is continuing.
The abnormal undervaluation that existed for most value stocks has now set
the stage for an enormous opportunity to realize significant returns. The
Eastcliff Contrarian Value Fund's risk/reward ratio is extremely favorable and
as attractive as we have seen it over the past 10 years. We believe the
market's return to a more level playing field bodes very well for our type of
value stocks. The combination of low valuation levels and improving earnings in
our portfolio of companies that are restructuring their asset base, cutting
costs and improving their balance sheets, should provide us with an extended
period of significant outperformance over the next several years. We are looking
forward to it.
As of July 27, 2000, your Board of Directors declared a dividend of $0.0469
per share from net investment income, payable July 28, 2000, to shareholders of
record on July 26, 2000
Respectfully submitted,
/s/ Lee C. Garcia /s/ Bruce D. Bottomley
Lee C. Garcia Bruce D. Bottomley
Managing Director Managing Director
Past performance cannot guarantee future results. Prices will fluctuate and
redemption value may be more or less than original investment. This Fund is not
insured by the FDIC and is not a deposit or other obligation of or guaranteed by
Resource Trust Company or any of its affiliates.
Eastcliff Contrarian Value Fund
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
June 30, 2000
The Fund invests in undervalued, underperforming companies selling at a large
discount to asset value and future earning power, where there is an unrecognized
"jewel", or growth business, masked by underachieving low return businesses.
These companies have the potential to significantly appreciate in value when
highly incentivized management unlocks the earning power through asset sales,
spin-offs, debt reduction, strategic acquisitions and share buybacks, leading to
higher profitability and a higher stock price.
Since a significant portion of the Fund is invested in mid-cap stocks with
emphasis on the deeply undervalued basic industry and energy sectors,
performance of the Fund languished or declined for most of the fiscal year as
investors continued to ignore these "old economy" stocks, irrespective of their
underlying strong fundamentals and management's successful restructuring
efforts. Technology and telecom stocks ruled investors' sentiments in an
increasingly narrow market.
However, starting in March our portfolio began to recover, as the market
began to broaden and correct its excesses. Our energy stocks led the rebound,
joined by others in the consumer durable and non-durable sectors. In addition,
with valuations so cheap, several of our companies attracted strategic business
buyers. We had several takeovers in the past 12 months, amongst which were
Eastern Enterprises, Northeast Utilities, Reynolds Metals and American National
Can. All these companies had valuable "jewels" around which management could
restructure the business. Our portfolio is full of such companies and we are
optimistic that if the stock market will not appraise them, then
business/financial buyers will.
The current shift to a more level playing field bodes very well for our type
of value stocks. Earnings, balance sheets and asset quality are slowly
beginning to matter again. The combination of low valuation levels and improving
earnings in our portfolio of companies that are restructuring their asset base,
cutting costs and improving their balance sheets, should provide us with an
extended period of significant outperformance over the next several years.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
EASTCLIFF CONTRARIAN VALUE FUND AND RUSSELL MIDCAP INDEX
DATE EASTCLIFF CONTRARIAN VALUE FUND RUSSELL MIDCAP INDEX*<F38>
12/30/97*<F37> 10,000 10,000
12/31/97 10,030 10,026
3/31/98 10,780 11,110
6/30/98 10,410 10,942
9/30/98 8,611 9,320
12/31/98 9,121 11,039
3/31/99 8,465 10,987
6/30/99 9,860 12,180
9/30/99 9,179 11,134
12/31/99 9,060 13,053
3/31/00 8,986 14,368
6/30/00 9,218 13,720
*<F37> inception date 12/30/97
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURN
1-Year Since inception 12/30/97
(6.5%) (3.2%)
*<F38> The Russell Midcap Index consists of the smallest 800 securities in
the Russell 1000 Index as ranked by total market capitalization.
This index is widely regarded to accurately capture the medium-
sized universe of securities and represents approximately 34% of
the Russell 1000 market capitalization. The Russell Midcap Index
and the Russell 1000 Index are trademarks/service marks of the
Frank Russell Company.
Eastcliff Contrarian Value Fund
STATEMENT OF NET ASSETS
June 30, 2000
SHARES OR
PRINCIPAL MARKET
AMOUNT COST VALUE
------ ---- -----
LONG-TERM INVESTMENTS -- 97.3% (A)<F40>
COMMON STOCKS -- 97.3% (A)<F40>
BASIC MATERIALS SECTOR -- 22.1%
-------------------------------
CHEMICALS-DIVERSE -- 7.9%
13,600 Engelhard Corp. $ 265,169 $ 232,050
3,600 FMC Corp.*<F39> 212,415 208,800
---------- ----------
477,584 440,850
CHEMICALS-SPECIALTY -- 6.1%
13,400 W.R. Grace & Co.*<F39> 161,534 162,475
12,600 Hercules Inc. 324,237 177,187
---------- ----------
485,771 339,662
CONTAINERS & PACKAGING -- 3.7%
26,100 Pactiv Corp.*<F39> 264,294 205,537
IRON & STEEL -- 4.4%
14,500 AK Steel Holding Corp. 248,325 116,000
7,250 Allegheny Technologies, Inc. 262,700 130,500
---------- ----------
511,025 246,500
CAPITAL GOODS SECTOR -- 14.0%
-----------------------------
CONTAINERS-METAL/GLASS -- 3.0%
5,200 Ball Corp. 165,804 167,375
MANUFACTURER-DIVERSE -- 5.2%
24,000 U.S. Industries, Inc. 559,469 291,000
WASTE MANAGEMENT -- 5.8%
17,100 Waste Management, Inc. 339,784 324,900
CONSUMER CYCLICALS SECTOR -- 19.1%
----------------------------------
HARDWARE & TOOLS -- 3.1%
7,200 The Stanley Works 178,544 171,000
RETAIL-APPAREL -- 3.2%
9,600 The TJX Companies, Inc. 193,962 180,000
RETAIL-BUILDING SUPPLIES -- 2.7%
3,600 American Standard
Companies Inc.*<F39> 160,404 147,600
RETAIL-SPECIALTY -- 10.1%
6,800 Footstar, Inc.*<F39> 176,864 226,100
32,600 Venator Group, Inc.*<F39> 350,097 334,150
---------- ----------
526,961 560,250
CONSUMER STAPLES SECTOR -- 5.2%
-------------------------------
HOUSEHOLD PRODUCTS -- 5.2%
12,500 Fort James Corp. 308,766 289,062
ENERGY SECTOR -- 13.9%
----------------------
OIL & GAS-DRILLING & EQUIPMENT -- 1.1%
2,500 R&B Falcon Corp.*<F39> 23,854 58,906
OIL & GAS-REFINING & MARKETING -- 6.1%
6,419 Sunoco, Inc. 217,731 188,960
5,300 Tosco Corp. 139,093 150,056
---------- ----------
356,824 339,016
OIL-EXPLORATION & PRODUCTS -- 6.7%
2,572 Devon Energy Corp. 60,188 144,515
15,900 Ocean Energy Inc.*<F39> 144,300 225,581
---------- ----------
204,488 370,096
FINANCIALS SECTOR -- 4.9%
-------------------------
FINANCIAL-DIVERSE -- 4.9%
1,605 Alleghany Corp.*<F39> 266,390 269,640
TECHNOLOGY SECTOR -- 2.8%
-------------------------
ELECTRONICS-DEFENSE -- 2.8%
8,200 Raytheon Co. Cl B 193,447 157,850
UTILITIES SECTOR -- 15.3%
-------------------------
ELECTRIC COMPANIES -- 6.8%
12,100 Citizens Communications*<F39> 92,168 208,725
11,100 Western Resources, Inc. 360,330 172,050
---------- ----------
452,498 380,775
NATURAL GAS -- 8.5%
10,300 Atmos Energy Corp. 234,757 180,250
4,100 Kinder Morgan, Inc. 90,934 141,706
5,900 ONEOK, Inc. 168,672 153,032
---------- ----------
494,363 474,988
---------- ----------
Total common stocks 6,164,232 5,415,007
---------- ----------
Total long-term
investments 6,164,232 5,415,007
SHORT-TERM INVESTMENTS -- 2.5% (A)<F40>
VARIABLE RATE DEMAND NOTE
$141,739 Firstar Bank U.S.A., N.A. 141,739 141,739
---------- ----------
Total short-term
investments 141,739 141,739
---------- ----------
Total investments $6,305,971 5,556,746
----------
----------
Cash and receivables, less
liabilities -- 0.2% (A)<F40> 11,122
----------
Net Assets $5,567,868
----------
----------
Net Asset Value Per Share
($0.01 par value 300,000,000
shares authorized), offering
and redemption price
($5,567,868 / 637,272
shares outstanding) $ 8.74
----------
----------
*<F39> Non-income producing security.
(a)<F40> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Contrarian Value Fund
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
INCOME:
Dividends $ 181,971
Interest 12,059
-----------
Total income 194,030
-----------
EXPENSES:
Management fees 88,879
Professional fees 18,158
Administrative services 17,776
Transfer agent fees 12,691
Custodian fees 6,880
Amortization of organizational expenses 4,652
Registration fees 3,508
Printing and postage expense 1,288
Board of Directors fees 750
Other expenses 2,237
-----------
Total expenses before reimbursement 156,819
Less expenses assumed by adviser (41,277)
-----------
Net expenses 115,542
-----------
NET INVESTMENT INCOME 78,488
-----------
NET REALIZED LOSS ON INVESTMENTS (945,224)
NET INCREASE IN UNREALIZED DEPRECIATION ON INVESTMENTS (137,560)
-----------
NET LOSS ON INVESTMENTS (1,082,784)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,004,296)
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
Eastcliff Contrarian Value Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2000 and June 30, 1999
<TABLE>
2000 1999
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income $ 78,488 $ 142,761
Net realized loss on investments (945,224) (1,010,104)
Net increase in unrealized depreciation on investments (137,560) (975,472)
----------- -----------
Net decrease in net assets resulting from operations (1,004,296) (1,842,815)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.11224 and $0.07285 per share, respectively) (132,684) (137,368)
Distributions from net realized gains ($0.29322 per share) -- (547,599)
----------- -----------
Total distributions (132,684)*<F41> (684,967)
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (29,961 and 360,391 shares, respectively) 273,649 3,450,436
Net asset value of shares issued in distributions (1,155 and 58,268 shares, respectively) 9,853 524,234
Cost of shares redeemed (853,492 and 839,208 shares, respectively) (7,407,655) (7,187,121)
----------- -----------
Net decrease in net assets derived from Fund share activities (7,124,153) (3,212,451)
----------- -----------
TOTAL DECREASE (8,261,133) (5,740,233)
NET ASSETS AT THE BEGINNING OF THE YEAR 13,829,001 19,569,234
----------- -----------
NET ASSETS AT THE END OF THE YEAR
(including undistributed net investment income of $26,775 and $77,482, respectively) $ 5,567,868 $13,829,001
----------- -----------
----------- -----------
</TABLE>
*<F41> See Note 8.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
YEARS ENDED JUNE 30, FOR THE PERIOD FROM
----------------------- DECEMBER 30, 1997+<F42> TO
2000 1999 JUNE 30, 1998
-------- -------- ---------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.47 $10.41 $10.00
Income from investment operations:
Net investment income*<F43> 0.08 0.09 0.04
Net realized and unrealized (losses) gains on investments (0.70) (0.66) 0.37
------ ------ ------
Total from investment operations (0.62) (0.57) 0.41
Less distributions:
Dividends from net investment income (0.11) (0.07) --
Distributions from net realized gains -- (0.30) --
------ ------ ------
Total from distributions (0.11) (0.37) --
------ ------ ------
Net asset value, end of period $ 8.74 $ 9.47 $10.41
------ ------ ------
------ ------ ------
TOTAL INVESTMENT RETURN (6.5%) (5.3%) 4.1%(b)<F45>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 5,568 13,829 19,569
Ratio of expenses (after reimbursement) to average net assets (c)<F46> 1.3% 1.3% 1.3%(a)<F44>
Ratio of net investment income to average net assets (d)<F47> 0.9% 0.9% 0.7%(a)<F44>
Portfolio turnover rate 42.5% 45.0% 13.6%
</TABLE>
+<F42> Commencement of operations.
*<F43> In 2000, net investment income per share is calculated using average
shares outstanding. In prior periods, net investment income per
share is calculated using ending balances prior to consideration of
adjustments for permanent book and tax difference.
(a)<F44> Annualized.
(b)<F45> Not annualized.
(c)<F46> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been for the years ended June 30, 2000 and 1999 and for
the period December 30, 1997+<F42> to June 30, 1998, 1.8%, 1.5% and
1.5%(a)<F44>, respectively.
(d)<F47> If the Fund had paid all of its expenses, the ratios would have been
for the years ended June 30, 2000 and 1999 and for the period
December 30, 1997+<F42> to June 30, 1998, 0.4%, 0.7% and
0.5%(a)<F44>, respectively.
The accompanying notes to financial statements are an integral part of these
statements.
Eastcliff Funds
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the
Eastcliff Funds, Inc. (the "Company"), which is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended. This Company consists of a series of five funds: Eastcliff Total
Return Fund (the "Total Return Fund"), Eastcliff Growth Fund (the "Growth
Fund"), Eastcliff Emerging Growth Fund (the "Emerging Growth Fund"),
Eastcliff Regional Small Capitalization Value Fund (the "Regional Small Cap
Fund") and Eastcliff Contrarian Value Fund (the "Contrarian Value Fund")
(collectively the "Funds"). 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. The Company was incorporated under the laws of
Wisconsin on May 23, 1986.
The investment objective of the Total Return Fund is to realize a
combination of capital appreciation and income which will result in the
highest total return by investing in a combination of equity and debt
securities, while assuming reasonable risks; the investment objective of
the Growth Fund is to produce long-term growth of capital by investing
principally in equity securities; the investment objective of the Emerging
Growth Fund is to produce long-term growth of capital by investing in
equity securities of small to small midcap companies; the investment
objective of the Regional Small Cap Fund is to produce capital appreciation
by investing principally in equity securities of small capitalization
companies headquartered in Colorado, Illinois, Indiana, Iowa, Michigan,
Minnesota, Montana, Nebraska, North and South Dakota, Ohio and Wisconsin;
and the investment objective of the Contrarian Value Fund is to produce
long-term growth of capital by investing in out-of-favor, undervalued
companies with restructuring and turnaround potential.
(a) Each security, excluding short-term investments, is valued at the last
sale price reported by the principal security exchange on which the
issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Securities for which quotations are not readily available
are valued at fair value as determined by the investment adviser under
the supervision of the Board of Directors. Short-term investments are
valued at amortized cost which approximates market value. For
financial reporting purposes, investment transactions are recorded on
trade date. The cost amounts as reported on the schedule of
investments for the Total Return Fund and the statements of net assets
for the Growth Fund, Emerging Growth Fund, Regional Small Cap Fund and
the Contrarian Value Fund are substantially the same for Federal
income tax purposes.
(b) The Funds may purchase securities on a when-issued or delayed delivery
basis. Although the payment and interest terms of these securities are
established at the time the purchaser enters into the agreement, these
securities may be delivered and paid for at a future date, generally
within 45 days. The Funds record purchases of when-issued securities
and reflect the value of such securities in determining net asset
value in the same manner as other portfolio securities.
(c) Net realized gains and losses on sales of securities are computed on
the identified cost basis.
(d) Provision has not been made for Federal income taxes since the
Emerging Growth Fund will elect and all other Funds have elected to be
taxed as "regulated investment companies" and intend to distribute
substantially all net investment company taxable income and net
capital gains to shareholders and otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment
companies. The Regional Small Cap Fund has utilized $746,400 of
capital loss carryovers in fiscal year 2000. The Contrarian Value
Fund has $2,034,554 of a capital loss carryover which expires June 30,
2008. To the extent the Fund realizes future net capital gains, those
gains will be offset by any unused capital loss carryover. The
Contrarian Value Fund has utilized $1,101,950 of post-October losses
from the prior year to offset current year net capital gains, as
provided by tax regulations. The Emerging Growth Fund has $591,426 of
post-October losses, the Regional Small Cap Fund has $1,559,400 of
post-October losses and the Contrarian Value Fund has $17,562 of post-
October losses, which are deferred for tax purposes until the year
ending June 30, 2001. The Growth Fund also utilized $5,327,489 of
earnings and profits distributed to shareholders on redemption of
shares as part of the dividends paid deduction.
(e) Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
(f) The Funds have investments in short-term variable rate demand notes,
which are unsecured instruments. The Funds may be susceptible to
credit risk with respect to these notes to the extent the issuer
defaults on its payment obligation. The Funds' policy is to monitor
the creditworthiness of the issuer and nonperformance by these
counterparties is not anticipated.
(g) Generally accepted accounting principles require that permanent
differences between income for financial reporting and tax purposes
be reclassified in the capital accounts.
(h) 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.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Funds have entered into management agreements with Resource
Capital Advisers, Inc. ("RCA"), with whom certain officers and directors of
the Funds are affiliated, to serve as investment adviser and manager. Under
the terms of the agreements, the Growth Fund, Emerging Growth Fund,
Regional Small Cap Fund and Contrarian Value Fund pay RCA a monthly fee at
the annual rate of 1% of such Funds daily net assets and for the Total
Return Fund, 1% on the first $30,000,000 of the daily net assets and 0.75%
on the daily net assets over $30,000,000.
In addition to the reimbursement required under the management
agreements, RCA has voluntarily reimbursed the Funds for expenses over 1.3%
of the daily net assets of the Funds. These reimbursements amounted to
$25,106, $44,949, $25,631, $36,888 and $41,277 for the year ending June 30,
2000, for the Total Return Fund, Growth Fund, Emerging Growth Fund,
Regional Small Cap Fund and the Contrarian Value Fund, respectively. These
voluntary reimbursements may be modified or discontinued at any time by
RCA.
The Funds have administrative agreements with Fiduciary Management,
Inc. ("FMI"), with whom certain directors of the Funds are affiliated, to
supervise all aspects of the Funds' operations except those performed by
RCA. Under the terms of the agreements, the Funds will each pay FMI a
monthly administrative fee at the annual rate of 0.2% on the first
$25,000,000 of the daily net assets of such Fund, 0.1% on the daily net
assets of such Fund on the next $20,000,000 and 0.05% on the daily net
assets of such Fund over $45,000,000.
The Funds have entered into Distribution Plans (the "Plans"), pursuant
to Rule 12b-1 under the Investment Company Act of 1940, with RCA. The Plans
provide that the Funds may incur certain costs which may not exceed the
lesser of a monthly amount equal to 1% of the Funds' daily net assets or
the actual distribution costs incurred by RCA during the year. Amounts
payable under the Plans are paid monthly to RCA for any activities or
expenses primarily intended to result in the sale of shares of such Fund.
For the year ending June 30, 2000, no such expenses were incurred.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains are distributed to
shareholders. The distributions were paid on July 28, 2000, to shareholders
of record on July 26, 2000.
<TABLE>
TOTAL EMERGING REGIONAL CONTRARIAN
RETURN FUND GROWTH FUND GROWTH FUND SMALL CAP FUND VALUE FUND
----------- ----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Dividend from net investment income $ -- $ -- $ -- $ 16,682 $ 26,775
$ per share -- -- -- 0.00532 0.04690
Short-term gains 25,184 317,861 -- -- --
$ per share 0.02465 0.33330 -- -- --
Long-term capital gains 2,318,160 777,319 -- -- --
$ per share 2.26830 0.81504 -- -- --
</TABLE>
Shareholders will be sent a 2000 Form 1099-DIV in January, 2001
representing their proportionate share of these distributions. The Form
1099-DIV would consider the impact of any retroactive tax law changes.
(4) DEFERRED EXPENSES --
Organizational expenses for the Regional Small Cap Fund and Contrarian
Value Fund were deferred and are being amortized on a straight-line basis
over a period of five years beginning with the date of sales of shares to
the public. These expenses were advanced by RCA who will be reimbursed by
the Regional Small Cap Fund and Contrarian Value Fund over a period of five
years. The unamortized organizational expenses at June 30, 2000, were
$6,215 and $11,629, respectively.
(5) INVESTMENT TRANSACTIONS --
For the year ended June 30, 2000, purchases and proceeds of sales of
investment securities of the Total Return Fund (excluding short-term
securities) were $10,966,505 and $15,636,508, respectively; purchases and
proceeds of sales of investment securities of the Growth Fund (excluding
short-term securities) were $21,613,369 and $53,803,892, respectively;
purchases and proceeds of sales of investment securities of the Emerging
Growth Fund (excluding short-term securities) were $17,599,298 and
$7,820,775, respectively; purchases and proceeds of sales of investment
securities of the Regional Small Cap Fund, (excluding short-term
securities) were $24,829,735 and $35,448,316, respectively; and purchases
and proceeds of sales of investment securities of the Contrarian Value Fund
(excluding short-term securities) were $3,667,771 and $10,740,048,
respectively.
(6) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of June 30, 2000, liabilities of the Funds included the following:
<TABLE>
TOTAL EMERGING REGIONAL CONTRARIAN
RETURN FUND GROWTH FUND GROWTH FUND SMALL CAP FUND VALUE FUND
----------- ----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Payable to brokers for investments purchased $1,945,792 $287,839 $180,816 $ -- $ --
Payable to RCA for management fees
and deferred expenses 20,285 10,073 8,789 7,557 16,532
Other liabilities 5,251 9,857 2,637 14,748 1,483
</TABLE>
(7) SOURCES OF NET ASSETS --
<TABLE>
TOTAL EMERGING REGIONAL CONTRARIAN
RETURN FUND GROWTH FUND GROWTH FUND SMALL CAP FUND VALUE FUND
----------- ----------- ----------- -------------- ----------
<S> <C> <C> <C> <C> <C>
As of June 30, 2000, the sources of
net assets were as follows:
Fund shares issued and outstanding $ 8,001,492 $ 6,941,777 $ 9,977,055 $37,203,200 $ 8,567,278
Net unrealized appreciation (depreciation)
on investments 13,873,145 4,274,296 2,105,243 1,421,788 (749,225)
Undistributed net realized gains (losses)
on investments 2,311,170 935,333 (591,426) (1,910,347) (2,276,960)
Undistributed net investment income -- -- -- 16,682 26,775
----------- ----------- ----------- ----------- -----------
$24,185,807 $12,151,406 $11,490,872 $36,731,323 $ 5,567,868
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Aggregate net unrealized appreciation (depreciation) as of June 30, 2000, consisted of the following:
Aggregate gross unrealized appreciation $13,883,274 $ 4,356,295 $ 2,530,246 $ 5,637,130 $ 517,211
Aggregate gross unrealized depreciation (10,129) (81,999) (425,003) (4,215,342) (1,266,436)
----------- ----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) $13,873,145 $ 4,274,296 $ 2,105,243 $ 1,421,788 $ (749,225)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
(8) REQUIRED FEDERAL INCOME TAX DISCLOSURES (UNAUDITED) --
In early 2000, shareholders received information regarding all
distributions paid to them by the Funds during the fiscal year ended June
30, 2000. The Funds hereby designate the following amounts as long-term
capital gains distributions.
TOTAL EMERGING REGIONAL CONTRARIAN
RETURN FUND GROWTH FUND GROWTH FUND SMALL CAP FUND VALUE FUND
----------- ----------- ----------- -------------- ----------
$3,957,048 $12,499,429 -- $331,433 --
The amounts above include $3,771,862 of earnings and profits
distributed to shareholders on redemptions for the Growth Fund. For the
Total Return Fund, Growth Fund, Emerging Growth Fund and Contrarian Value
Fund, the percentage of ordinary income which is eligible for the corporate
dividend received deduction for the fiscal year ended June 30, 2000, was
58%, 2%, 7% and 77%, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
100 East Wisconsin Avenue Telephone 414 212 1600
Suite 1500
Milwaukee, WI 53202
(PRICEWATERHOUSECOOPERS LOGO)
July 28, 2000
To the Shareholders and Board of Directors
of Eastcliff Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, of Eastcliff Total Return Fund and the
statements of net assets of Eastcliff Growth Fund, Eastcliff Emerging Growth
Fund, Eastcliff Regional Small Capitalization Value Fund, and Eastcliff
Contrarian Value Fund (constituting Eastcliff Funds, Inc., hereafter referred to
as the "Funds") 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 the Funds at June 30, 2000, the results of each of
their operations, the changes in each of their net assets and the financial
highlights for the periods indicated, in conformity with 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 June 30,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
EASTCLIFF FUNDS
1400 Peavey Building
730 Second Avenue South
Minneapolis, Minnesota 55402
612-336-1444
INVESTMENT ADVISER
RESOURCE CAPITAL ADVISERS, INC.
1400 Peavey Building
730 Second Avenue South
Minneapolis, Minnesota 55402
PORTFOLIO MANAGERS
EASTCLIFF TOTAL RETURN FUND
PALM BEACH INVESTMENT ADVISERS, INC.
EASTCLIFF GROWTH FUND
WINSLOW CAPITAL MANAGEMENT, INC.
EASTCLIFF EMERGING GROWTH FUND
KB GROWTH ADVISORS, LLC
EASTCLIFF REGIONAL SMALL CAPITALIZATION VALUE FUND
WOODLAND PARTNERS LLC
EASTCLIFF CONTRARIAN VALUE FUND
SASCO CAPITAL, INC.
ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR MUTUAL FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-595-5519
or
414-765-4124
CUSTODIAN
FIRSTAR BANK, N.A.
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
