<PAGE>
Royce Value Trust
SEMI-ANNUAL REPORT
JUNE 30, 1995
<PAGE>
Royce Value Trust, Inc.
1414 Avenue of the Americas
New York, NY 10019
(212) 355-7311
(800) 221-4268
Dear Shareholder:
If the Dow Jones Industrial Average were to continue its first half pace,
it would top 30,000 in the year 2000! Something to think about.
THE NUMBERS . . . UP, UP AND AWAY
The first half of 1995 was the best six month period for the S&P 500 since
the opening two quarters of 1991. Up 20.2%, the S&P 500 bested both major small
company indices, the Russell 2000 and the S&P Small Cap 600, which were up 14.4%
and 14.7%, respectively.
Royce Value Trust, Inc. ('RVT') was up 7.5% for the quarter and 13.4% for
the first half of 1995 on a net asset value basis. This is in keeping with RVT's
historical range of capturing 80% to 100% of small-cap index returns during
dramatic updrafts. As a market cycle matures, a turn away from growth and
momentum to less exciting, low valuation stocks usually takes place. This type
of period is generally favorable to RVT's style of investing.
For the 1-year, 3-year and 5-year periods ended June 30, 1995, RVT provided
average annual NAV total returns of 17.4%, 15.4% and 13.7%, respectively.
SMALL-CAP STOCKS -- LAGGING THEIR WAY TO NEW HIGHS
In the movie Star Wars, Luke Skywalker is told to 'Let The Force Be With
You.' The force in the first six months of 1995 was clearly with large-cap,
globally oriented stocks. The drop in the U.S. dollar and the submerging of many
'emerging' markets created a renewed interest in domestic, large-cap equities,
pushing the popular Dow Jones Industrial Average and S&P 500 indices to a long
string of new highs. In contrast, small-caps struggled to keep up. The Russell
2000 index of small-cap stocks finally eclipsed its previous high (March 18,
1994) in early June. In spite of the June surge, small-caps still lag their
large-cap counterparts.
WE HAD OUR 'SOX' KNOCKED OFF
Contributing to the first half's spectacular market returns was a meteoric
rise in technology stocks. The Philadelphia Semiconductor Index ('SOX') was up
over 100% in the last twelve months.
WEEKLY PRICE GRAPH FOR 'SOX'
(PHILA. SEMICONDUCTOR INDEX 6/94 - 6/95)
[GRAPH]
[Chart showing increase in Philadelphia Semiconductor Index from June 30,
1994 to June 30, 1995, with 1 year percentage change equalling 104.3%, and
6/30/94 and 6/30/95 closes being 119.46 and 244.01, respectively.]
The current atmosphere of euphoria suggests that memories of the 'high
tech, high wreck' experience that occurred with the last technology stock run-up
in 1983 (and subsequent collapse) have been erased. Although small-cap
technology stocks are popular and available, it has never been a market segment
to which we have committed significant amounts of capital.
1
<PAGE>
Imagine if the auto industry, in order to compete, had to produce more
fuel-efficient, easier-to-drive cars every year while cutting prices in half. Or
better yet, consider the airline industry which has a long record of high unit
growth but, as an industry, has yet to make the first dime in profits. We feel
that both examples are analogous to the pressures that many companies face in
the technology sector. The rate of product obsolescence rendered by scientific
advancement has made it difficult for many technology companies to maintain
competitive advantages and generate attractive long-term returns on capital.
Successful high technology companies require staggering amounts of product
innovation, incredible pricing power and uninterrupted earnings per share
gains - very hard to accomplish and very rare, indeed. For those companies that
slip in the competition, turnarounds are highly unusual. What these enterprises
may lack in retained earnings, they often make up in richly priced common
stocks.
For anyone feeling depressed about missing the recent high-tech stock
run-up, we thought we would share some interesting investment trivia which runs
counter to popular current assumptions:
<TABLE>
<CAPTION>
AVERAGE ANNUAL PERFORMANCE RESULTS
(12/31/79 - 6/30/95)
S&P S&P RUSSELL RUSSELL 2000
500 TECHNOLOGY 2000 TECHNOLOGY
---- ---------- ------- ------------
<S> <C> <C> <C>
15.3% 12.9% 13.6% 11.5%
</TABLE>
IN SPITE OF THE RECENT STELLAR MARKET PERFORMANCE AND ENORMOUS UNIT GROWTH,
TECHNOLOGY STOCKS HAVE ACTUALLY BEEN A DRAG ON THE LAST 15+ YEARS OF PERFORMANCE
FOR BOTH THE S&P 500 AND THE RUSSELL 2000.
History provides additional perspective on these exceptionally emotional
phases of the market. Past 'bubbles' have reflected obsessions like the 'tulip
mania' in the 17th century, the 'Nifty Fifty' in the early '70s, the energy
stock bonanza of the early '80s and the 1991 biotech stock craze. In each of
these bubbles, the money made by those smart enough to invest early was only
exceeded by the amount of money lost by those who invested late.
We believe that the appropriate way to participate in the technology sector
is to invest in companies who serve or benefit from the industry. It was the
suppliers of the picks and shovels, not the speculators, who made money during
the California gold rush. Our approach to the technology sector is similar.
[ILLUSTRATION]
[Cartoon showing miners standing in line to purchase picks and shovels.]
WHAT WE DO
Royce Value Trust uses a risk averse approach to invest in the securities
of small-cap companies. The investment approach attempts to understand and value
a company's 'private worth.' Private worth is what we believe the company would
bring if the entire enterprise were sold in a private transaction to a
knowledgeable buyer. The price we will pay for a security must be significantly
under our appraisal of its private worth. The consistent use of this discipline,
applied to less well-known securities, is the source of our performance.
NO OTHER PLACE WE WOULD RATHER BE
The Fund focuses on companies with market caps below $1 billion. Although
our orientation is small-cap, the picking universe
2
<PAGE>
is by no means small. Currently, more than 7,000 securities, representing over
$900 billion in total market capitalization, fall within our range. We believe
small-cap stocks, especially at the low end of the capitalization range, are
generally less-known and, therefore, less likely to be understood and properly
priced by investors.
HOW IT WORKS
Investment returns in undervalued small-cap companies can be unpredictable,
out-of-sync with the market and generally frustrating. Specific returns in any
given period are related to individual securities and market conditions.
Nevertheless, we expect in any period to have our share of winners and to see a
few laggards.
WINNERS
Our most recent successes are depicted in the table that follows. During
the first half of 1995, each contributed substantially to our performance and
are representative of our approach to investing. Some of RVT's BEST PERFORMERS,
as measured by dollar impact, were:
<TABLE>
<CAPTION>
SECURITY % GAIN
------------------------------------ --------
<S> <C>
Indigo, N.V. 201%
Comdisco, Inc. 31%
Atlantic Southeast Airlines, Inc. 94%
Claire's Stores, Inc. 51%
Diagnostic Products Corp. 39%
</TABLE>
Atlantic Southeast Airlines, Comdisco and Claire's Stores were relatively
large investments in stocks we knew well and are highly regarded in their
respective industries. In each case, we made investments when business
conditions were difficult and Wall Street expectations were low. Since the
beginning of the year, the airline industry, in the case of Atlantic Southeast
Airlines, the computer leasing business, in the case of Comdisco and the retail
environment, in the case of Claire's Stores, have improved modestly. However,
the investment community's opinion of these companies has changed radically and
they are now viewed as high quality growth stocks.
The story behind the fantastic 201% gain in Indigo is slightly different.
Indigo was an investment we made in a new technology company at a brief moment
when such investments were suspect. Initially billed as a hot new issue,
Indigo's first weeks of trading were anything but that. This company went public
at $20 per share and proceeded to drop by one-third. Always on the lookout for
fallen angels, we invested aggressively in this 'broken deal' about a year ago.
As the markets improved, particularly in technology shares, others discovered
Indigo's revolutionary new products. The rest is now history, for we sold the
last of our Indigo shares north of $50 per share.
MORE PATIENCE REQUIRED
One happy by-product of a bull market is that most of your stocks go up.
There are always a few exceptions. Our laggards generally fall into two
categories: undervalued companies that got cheaper (caught the flu) and those in
intensive care (with pneumonia). Fortunately, our five WORST PERFORMERS, as
measured by dollar impact, fall into the first category:
<TABLE>
<CAPTION>
SECURITY % LOSS
-------------------------------------- -------
<S> <C>
Thomaston Mills, Inc. 21%
Ethan Allen Interiors, Inc. 19%
Transnational Re Corp. 15%
K-Swiss, Inc. 34%
Velcro Industries, N.V. 15%
</TABLE>
In aggregate, our worst five performers set us back less than one percent.
However, the best news is that we still have conviction that each of these
companies represents solid investment value. With a little more patience, any
one of these could make next year's winners list.
3
<PAGE>
NO LONGER SMALL, UNKNOWN OR UNDER-OWNED
THERE HAVE BEEN SOME EXTRAORDINARY DEVELOPMENTS IN THE SMALL-CAP SECTOR,
BUT THEY ARE NOT WHAT YOU MAY THINK.
Small-caps are no longer 'small' when compared to industry definitions of a
decade ago. The upward bias (success) of the overall equity market has elevated
the capitalization of small-cap stocks dramatically over the last ten years. For
example, the weighted average market cap of the Russell 2000 index of small-cap
issues has risen from $140 million in June 1985 to $410 million as of June 30,
1995.
Morningstar, the leading independent mutual fund evaluation service, has
devised a set of market capitalization parameters that places equity mutual
funds into one of three capitalization boxes: small, medium or large. Portfolios
with median market caps under $1 billion are considered small-cap. Although we
do not have exact numbers, we believe the weighted average market cap in many of
these funds is close to $1 billion, a more revealing picture of just how 'big'
small-cap has become.
TEN YEARS OF EXPLOSIVE GROWTH!
[GRAPH]
[Pictorial chart showing increase in number of small-cap funds and assets
under management from 1984 to 1995; in 1995, 310 funds with $50 billion in
assets.]
Performance success and investor acceptance has translated into a
significant flow of funds into the small-cap sector. In the mutual fund arena,
there are now over 300 small-cap funds representing approximately $50 billion in
assets. By contrast, there were only 24 small-cap funds with assets totaling $4
billion at the end of 1984. This over ten-fold increase in the number of
small-cap funds and category assets has changed the playing field in a
significant way. It is interesting to note that the majority of the funds have
elected to focus their energies at the upper end of the Morningstar
capitalization range ($500 million - $1 billion) where there is greater
liquidity but, by definition, more competition.
The growth in small company mutual funds and assets has dramatically
decreased the number of unknown, inefficiently priced stocks at the upper end of
the small-cap market. We have taken two countermeasures for the benefit of our
investors.
In the zone where most small-cap funds traffic ($500 million - $1 billion
in market capitalization), we believe that a higher level of portfolio
concentration is appropriate. This approach implies confidence in our non-
quantitative and non-Wall Street research abilities. We believe that we are
uniquely equipped to accomplish this task by virtue of our 20+ years of
small-cap investment experience and our sizeable research effort.
A second area of opportunity is at the other end of the capitalization
range, the sector known as micro-cap. The micro-cap universe has the largest
number of companies in which to invest, but the smallest number of institutional
investors who do so. Currently, fewer than 10 mutual funds have a micro-cap
charter. Micro-cap companies are the antithesis of what most professional
small-cap investors are looking for - they are not well known, not well
researched and their securities are not easy to buy and sell. These are
precisely the conditions that breed undervalued securities. As an experienced
institutional investor in a sector dominated by individuals, we believe that we
have a particular advantage in micro-cap research and trading capabilities, key
components for success. We believe that micro-caps offer
4
<PAGE>
today the investment opportunities that small-caps did 15 years ago. We will
continue to increase their weighting in the portfolio.
[ILLUSTRATION]
[Cartoon of fortune teller and customer]
STAR GAZING
In spite of the spectacular run-up by large-cap equities since the market
lows of last December, there are several indications that small-cap stocks may
soon resume a leadership role. June was the first month of small-cap
outperformance since February, with the Russell 2000 up 5.2% versus a 2.4%
return for the S&P 500. This performance momentum has continued into the first
part of the third quarter, a good omen for small-cap issues. Also, now that the
U.S. dollar has stopped declining against other major currencies, domestic
small-cap stocks are competing on a level playing field. This has historically
given small-cap stocks a performance edge.
Finally, one has to wonder if the current level of low volatility is
sustainable in light of the market's high returns. While we cannot explain this
phenomena, we do not view this as a permanent condition. Since the last 10%
market correction in 1990, the pay-off has been with investors who took the
highest risk. We believe that over the next three years risk management will
have a similar pay-off. WE REMAIN COMMITTED TO ACHIEVING ABOVE AVERAGE LONG-TERM
RETURNS WITH THIS LOW RISK APPROACH.
Your continued confidence is appreciated.
Yours faithfully,
<TABLE>
<S> <C>
CHARLES M. ROYCE Jack E. Fockler, Jr.
Charles M. Royce W. Whitney George
President Vice Presidents
</TABLE>
July 31, 1995
Note: S&P 500, Russell 2000 and S&P 600 are unmanaged and include the
reinvestment of dividends.
5
<PAGE>
FUND HIGHLIGHTS June 30, 1995
--------------
Net Assets $305,362,309
Net Asset Value Per Share $13.99
Market Price Per Share $12.00
Shares Outstanding 21,806,476
--------------------------------------------------------------------------------
FINANCIAL REVIEW
The table below represents the total returns of the Fund on two separate bases.
NAV total return is the compound rate of return, using net asset values, on an
amount invested in the Fund throughout the stated period and assumes
reinvestment of dividend and capital gain distributions and primary
participation in rights offerings. Stockholders are able to reinvest
distributions, and purchase shares through rights offerings, at prices which
have historically been below NAV, and without commission costs. NAV return is
the most meaningful measurement of a continuous stockholder's progress. Market
Value total return presents similar information, but values the Fund at market
rather than NAV and therefore, reflects the actual experience of a stockholder,
before commission costs, who bought and sold shares of the Fund at the beginning
and ending dates.
<TABLE>
<CAPTION>
NAV Market Value S&P Russell S&P Small-
Total Return Total Return 500`D' 2000`D' Cap 600`D'
------------ ------------ ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
3 months ended 6/30/95 7.5% 5.5% 9.5% 9.4% 9.5%
6 months ended 6/30/95 13.4 9.1 20.2 14.4 14.7
Annual Returns (ended December 31)
1994 1.1 -5.6 1.3 -1.8 -4.8
1993 17.9 14.8 10.0 18.9 18.8
1992 19.9 26.8 7.7 18.4 21.0
1991 39.5 35.3 30.5 46.1 48.5
1990 -13.1 -10.8 -3.2 -19.5 -23.7
Average Annual Total Returns (ended June 30, 1995)
3-Year 15.4% 11.4% 13.2% 16.4% 16.4%
5-Year 13.7 12.3 12.1 12.9 12.6
Since Inception* 12.0 8.9 13.0 10.7 8.5
</TABLE>
`D' The S&P 500, Russell 2000 and S&P SmallCap 600 are unmanaged indices and
include the reinvestment of dividends. Source: Frank Russell Co.
* Inception date - November 26, 1986
The results presented in this report represent past performance and should not
be considered representative of the 'total return' from an investment in the
Fund today. They are provided only to give an historical perspective of the
Fund. The investment return and net asset and market values of Fund shares will
fluctuate, so that the shares may be worth more or less than their original cost
when sold.
6
<PAGE>
HISTORY SINCE INCEPTION
The following table details the share accumulation history of an initial
investor in the Fund who reinvested all distributions and participated fully in
the rights offering. By reinvesting all distributions and fully participating in
the rights offering, an investor maximizes his returns. This table should be
read in conjunction with the Financial Review of the Fund (see page 6).
<TABLE>
<CAPTION>
Amount Purchase NAV MKT
History Invested Price Shares Value Value
------------------ -------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
11/26/86 Initial Purchase $10,000 $10.000 1,000 $ 9,280 $10,000
10/15/87 Distribution $.30 7.000 42
12/31/87 Distribution $.22 7.125 32 8,578 7,250
12/27/88 Distribution $.51 8.625 63 10,529 9,238
09/22/89 Rights Offering 405 9.000 45
12/29/89 Distribution $.52 9.125 67 12,942 11,866
09/24/90 Rights Offering 457 7.375 62
12/31/90 Distribution $.32 8.000 52 11,713 11,074
09/23/91 Rights Offering 638 9.375 68
12/31/91 Distribution $.61 10.625 82 17,919 15,697
09/25/92 Rights Offering 825 11.000 75
12/31/92 Distribution $.90 12.500 114 21,999 20,874
09/24/93 Rights Offering 1,469 13.000 113
12/31/93 Distribution $1.15 13.000 160 26,603 25,428
10/28/94 Rights Offering 1,103 11.250 98
12/19/94 Distribution $1.05 11.375 191 27,939 24,905
06/30/95 $14,897 2,264 $31,673 $27,168
---------------------------------------------------------------------------------------------
</TABLE>
The Board of Directors of the Fund has authorized the Fund to repurchase up to
300,000 shares of its common stock in open market and other transactions through
December 31, 1995. Such repurchases would be effected at a price per share which
is less than the then current net asset value, but not in excess of the then
prevailing market price.
------------------------
The Board of Directors of the Fund is authorized to offer stockholders an
opportunity to subscribe for additional shares of common stock of the Fund
through rights offerings at a price per share that may be less than the then
current net asset value of the Fund's common stock. The timing and terms of any
such offerings are left to the Board's discretion.
7
<PAGE>
PORTFOLIO SUMMARY
The following information is provided as a 'bird's eye' view of the RVT
portfolio. For a more complete picture, the full portfolio and accompanying
financial statements should be read in their entirety.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION % OF COMMON STOCKS VALUE % OF NET ASSETS
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Top 100 Stocks 61.3% $ 203,643,858 66.7%
Other Stocks 38.7 128,783,281 42.2
------- -------------- -------
Common Stocks 100.0% 332,427,139 108.9
-------
-------
Bonds & Preferred Stocks 5,596,268 1.9
Investment Company Convertible Notes (38,519,582) (12.6)
Cash and Other Net Assets 5,858,484 1.8
-------------- -------
Total Net Assets $ 305,362,309 100.0%
-------------- -------
-------------- -------
PORTFOLIO DIAGNOSTICS
---------------------------------------------------------------------------------------------
Weighted Average Market Capitalization (Total
Portfolio) $355 Million
Median Market Capitalization (Total Portfolio) $167 Million
Weighted Average P/E Ratio (100 Largest Positions) 13.0x
Weighted Average P/B Ratio (100 Largest Positions) 1.6x
Weighted Average Portfolio Yield (100 Largest
Positions) 1.7%
COMMON STOCK SECTORS % OF NET ASSETS
---------------------------------------------------------------------------------------------
Financial 27.3%
Industrial Cyclicals 24.0
Services 17.6
Retail 10.5
Consumer Durables 9.1
Technology 6.5
Consumer Staples 5.9
Energy 5.2
Health 2.8
TOP TWENTY POSITIONS MARKET VALUE % OF NET ASSETS
---------------------------------------------------------------------------------------------
1 Comdisco, Inc. $5,306,513 1.7%
2 Ash Grove Cement Company 4,030,257 1.3
3 Exar Corporation 3,789,275 1.2
4 Florida Rock Industries, Inc. 3,535,525 1.2
5 Baldwin & Lyons, Inc. Cl. B 3,346,450 1.1
6 Claire's Stores, Inc. 3,286,063 1.1
7 Transnational Re Corporation Cl. A 3,017,400 1.0
8 Vallen Corporation 3,011,922 1.0
9 Alleghany Corporation 2,848,664 0.9
10 The Pioneer Group, Inc. 2,778,875 0.9
11 The Dress Barn, Inc. 2,761,200 0.9
12 Sturm, Ruger & Company, Inc. 2,727,450 0.9
13 Wesco Financial Corporation 2,714,375 0.9
14 The Standard Register Company 2,669,500 0.9
15 Fab Industries, Inc. 2,650,450 0.9
16 Puerto Rican Cement Company, Inc. 2,632,150 0.9
17 Kimball International, Inc. Cl. B 2,610,550 0.9
18 Diagnostic Products Corporation 2,544,050 0.8
19 Plenum Publishing Corporation 2,541,000 0.8
20 National Bancorp of Alaska, Inc. 2,538,270 0.8
</TABLE>
8
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
COMMON STOCKS - 108.9%
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
CONSUMER DURABLES - 9.1%
26,390 Allen Organ Company
Cl. B............... $ 1,174,343
49,600 Arctco, Inc. ......... 582,800
95,536 *The First Years,
Inc. ............... 1,934,604
41,000 Flexsteel Industries,
Inc. ............... 420,250
99,400 Garan Incorporated.... 1,664,950
51,500 *Johnson Worldwide
Associates, Inc. Cl.
A................... 1,210,250
120,700 Juno Lighting, Inc. .. 1,931,200
95,800 Kimball International,
Inc. Cl. B.......... 2,610,550
57,300 *`D'Kit Manufacturing
Co. ................ 615,975
61,600 *Lazare Kaplan
International,
Inc................. 462,000
173,942 *Lifetime Hoan
Corporation......... 1,956,848
54,700 Matthews International
Corporation Cl. A... 1,025,625
23,000 National Presto
Industries, Inc. ... 1,043,625
84,250 Rauch Industries,
Inc. ............... 774,047
141,000 The Rival Company..... 2,079,750
30,700 Russ Berrie and
Company, Inc. ...... 425,963
43,700 The Singer Company
N.V. ............... 1,130,738
115,700 Skyline Corporation... 2,097,063
47,200 Stanhome Inc. ........ 1,557,600
83,600 Sturm, Ruger &
Company, Inc. ...... 2,727,450
13,700 Thor Industries,
Inc................. 270,575
10,000 Wellco Enterprises,
Inc. ............... 155,000
------------
27,851,206
------------
CONSUMER STAPLES - 5.9%
68,000 Alico, Inc. .......... 1,207,000
11,500 Farmer Bros. Co. ..... 1,408,750
12,900 Flowers Industries,
Inc. ............... 254,775
24,500 Genesee Corporation
Cl. B............... $ 943,250
25,300 Golden Enterprises,
Inc. ............... 177,100
563 Hershey Creamery
Company............. 928,950
52,200 *J & J Snack Foods
Corp. .............. 659,025
148,400 K-Swiss Inc. Cl. A.... 1,929,200
109,700 Midwest Grain
Products, Inc. ..... 2,029,450
99,600 *Pentech
International,
Inc. ............... 298,800
22,000 Reebok International
Ltd. ............... 748,000
43,081 SL Industries, Inc. .. 220,790
4,050 Seaboard
Corporation......... 1,046,925
168,400 The Stride Rite
Corporation......... 1,747,150
5,150 Tootsie Roll
Industries, Inc. Cl.
A................... 356,638
129,500 *The Topps Company,
Inc. ............... 809,375
35,600 Velcro Industries
N.V. ............... 2,055,900
30,200 Weyco Group, Inc. .... 1,087,200
------------
17,908,278
------------
ENERGY - 5.2%
144,200 *American Oilfield
Divers, Inc. ....... 937,300
40,000 *Belden & Blake
Corporation......... 650,000
21,900 *Tom Brown, Inc. ..... 325,763
76,100 Camco International
Inc. ............... 1,778,838
87,500 *Cliffs Drilling
Company............. 1,246,875
31,400 Devon Energy
Corporation......... 675,100
28,000 *Gulfmark
International
Inc. ............... 525,000
112,900 *Hornbeck Offshore
Services, Inc. ..... 1,778,175
64,200 Lufkin Industries,
Inc. ............... 1,203,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
ENERGY - (continued)
15,000 *Nabors Industries,
Inc. ............... $ 123,750
111,950 *Noble Drilling
Corporation......... 825,631
31,100 *Oceaneering
International,
Inc................. 276,013
166,400 *Offshore Logistics,
Inc. ............... 2,329,600
49,800 Penn Virginia
Corporation......... 1,400,625
17,500 *Pool Energy Services
Co. ................ 144,375
111,700 *Reading & Bates
Corporation......... 1,033,225
47,000 *Toreador Royalty
Corporation......... 146,875
19,900 Western Gas Resources,
Inc. ............... 343,275
------------
15,744,170
------------
FINANCIAL - 27.3%
17,888 *Alleghany
Corporation......... 2,848,664
50,750 ALLIED Group, Inc. ... 1,446,375
94,000 ALLIED Life Financial
Corporation......... 1,621,500
184,600 AMRESCO, INC. ........ 1,730,625
45,474 Argonaut Group,
Inc. ............... 1,443,800
36,856 *Avatar Holdings
Inc................. 1,345,244
15,000 BHC Financial,
Inc. ............... 245,625
215,900 Baldwin & Lyons, Inc.
Cl. B............... 3,346,450
46,100 Belize Holdings
Inc. ............... 737,600
50,000 *Benson Financial
Corporation......... 662,500
64,400 W. R. Berkley
Corp. .............. 2,286,200
121,200 E.W. Blanch Holdings,
Inc. ............... 2,257,350
12,500 CB Bancshares,
Inc. ............... 381,250
24,200 CMAC Investment
Corporation......... 1,049,675
28,475 California Bancshares,
Inc. ............... 597,975
83,500 Capitol Transamerica
Corporation......... $ 1,607,375
174,700 Comdisco, Inc. ....... 5,306,513
95,518 The Commerce Group,
Inc. ............... 1,707,384
7,800 Consolidated-Tomoka
Land Co. ........... 105,300
4,141 County Bank Corp...... 207,050
61,600 DUFF & PHELPS
CORPORATION......... 662,200
65,100 Eaton Vance Corp. .... 2,099,475
40,000 Fidelity National
Financial, Inc. .... 600,000
215 The First National
Bank of Anchorage... 324,650
38,500 Fremont General
Corporation......... 928,813
40,900 Arthur J. Gallagher &
Co. ................ 1,487,738
73,645 *`D'General Builders
Corporation......... 36,823
114,000 *Gryphon Holdings
Inc. ............... 1,852,500
28,015 Harleysville Group,
Inc. ............... 700,375
202,475 Hilb, Rogal & Hamilton
Company............. 2,530,938
31,081 Independence Holding
Company............. 108,784
144,400 Intercargo
Corporation......... 1,588,400
7,400 The John Nuveen
Company............. 177,600
20,712 Keystone Heritage
Group, Inc. ........ 533,334
42,100 Lehman Bros. Holdings
Inc. ............... 920,938
27,800 Leucadia National
Corporation......... 1,403,900
200 THE MECHANICS BANK.... 1,050,000
41,400 Mid Ocean Limited..... 1,309,275
33,500 *Mutual Assurance,
Inc. ............... 1,005,000
23,800 NYMAGIC, INC. ........ 377,825
49,770 National Bancorp of
Alaska, Inc. ....... 2,538,270
59,500 New England Investment
Companies, L.P. .... 1,115,625
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
FINANCIAL - (continued)
39,300 The Newhall Land and
Farming Company..... $ 545,288
114,500 Nobel Insurance
Limited............. 1,180,781
30,000 Oriental Federal
Savings Bank........ 570,000
55,987 Orion Capital
Corporation......... 2,183,493
129,400 Pennsylvania
Manufacturers
Corporation......... 2,005,700
103,400 The Pioneer Group,
Inc. ............... 2,778,875
7,000 Piper Jaffray
Companies Inc. ..... 105,875
47,212 Poe & Brown, Inc. .... 1,097,679
12,900 T. Rowe Price
Associates, Inc. ... 496,650
19,250 RLI Corp. ............ 437,938
69,600 Raymond James
Financial, Inc. .... 1,348,500
68,500 Reliance Group
Holdings, Inc. ..... 445,250
15,356 *Reliance Group
Holdings, Inc. ..... 28,793
27,700 Student Loan
Corporation......... 744,438
45,000 Susquehanna
Bancshares, Inc. ... 1,057,500
36,750 TITAN Holdings,
Inc. ............... 445,594
5,000 Transatlantic
Holdings, Inc. ..... 325,000
150,400 *Transnational Re
Corporation Cl. A... 3,017,400
55,500 Trenwick Group
Inc. ............... 2,358,750
26,200 U. S. Trust Corp. .... 1,886,400
79,800 *Vista Resources,
Inc. ............... 1,615,950
7,550 Vornado Realty
Trust............... 263,306
21,500 Wesco Financial
Corporation......... 2,714,375
73,100 **Willis Corroon Group
plc ADR............. 877,200
24,500 Zenith National
Insurance Corp. .... 526,750
------------
83,344,403
------------
HEALTH - 2.8%
69,700 Diagnostic Products
Corporation......... $ 2,544,050
89,200 *HAEMONETICS
CORPORATION......... 1,717,100
43,100 Jones Medical
Industries, Inc. ... 479,488
104,800 Life Technologies,
Inc. ............... 2,358,000
47,200 *Spacelabs Medical,
Inc. ............... 1,197,700
25,000 *Sullivan Dental
Products, Inc. ..... 267,750
------------
8,564,088
------------
INDUSTRIAL CYCLICALS - 24.0%
25,900 Aceto Corporation..... 382,025
2,501 R. P. Adams Company,
Inc. ............... 47,519
50,200 American Filtrona
Corporation......... 1,480,900
21,900 Ameron, Inc. ......... 793,875
45,000 *Art's-Way
Manufacturing Co.,
Inc. ............... 270,000
16,450 Ash Grove Cement
Company Cl. A....... 1,200,850
38,759 Ash Grove Cement
Company Cl. B....... 2,829,407
13,500 Guy F. Atkinson
Company of
California.......... 126,563
12,900 BHA Group, Inc. ...... 161,250
15,300 *Banister Foundation
Inc. ............... 131,963
25,200 *Bird Corp. .......... 173,250
116,600 Blessings
Corporation......... 1,457,500
27,700 W. H. Brady Co. Cl.
A................... 1,869,750
24,000 Burnham Corporation
Cl. A............... 684,000
18,000 Burnham Corporation
Cl. B............... 513,000
55,800 CalMat Co. ........... 1,157,850
36,400 Cascade Corp. ........ 582,400
71,646 *Chemfab
Corporation......... 1,173,203
19,700 CLARCOR Inc. ......... 450,638
77,600 Cohu, Inc. ........... 1,813,900
2,000 ConBraCo Industries,
Inc. ............... 1,000,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
INDUSTRIAL CYCLICALS - (continued)
53,400 Curtiss-Wright
Corporation......... $ 2,382,975
6,022 Decker Manufacturing
Corporation......... 242,386
46,500 Delta Woodside
Industries, Inc. ... 354,563
19,432 *Detection Systems,
Inc. ............... 133,595
297,900 *DeVlieg-Bullard,
Inc. ............... 409,613
86,900 Fab Industries,
Inc. ............... 2,650,450
161,400 *Figgie International
Inc. Cl. A.......... 1,392,075
124,600 Florida Rock
Industries, Inc. ... 3,535,525
25,000 *Fruit of the Loom,
Inc. Cl. A.......... 528,125
30,300 Gilbert Associates,
Inc. Cl. A.......... 393,900
85,700 P. H. Glatfelter
Company............. 1,724,713
24,300 Gleason Corporation... 537,638
24,800 Gorman-Rupp Company... 359,600
30,600 Greif Bros.
Corporation Cl. A... 715,275
125,000 *Group Technologies
Corporation......... 578,125
25,000 Haskel International,
Inc. Cl. A.......... 175,000
119,019 Hawkins Chemical,
Inc. ............... 803,378
23,800 *Insituform
Technologies,
Inc. ............... 315,350
43,600 International Aluminum
Corporation......... 1,384,300
58,900 Kaman Corporation Cl.
A................... 750,975
60,800 *Kinark Corporation... 190,000
79,750 Knape & Vogt
Manufacturing
Company............. 1,196,250
12,900 *Kreisler
Manufacturing
Corp. .............. 91,913
82,850 LeaRonal, Inc. ....... 1,750,206
143,983 Lilly Industries, Inc.
Cl. A............... $ 1,691,800
53,900 *The Lincoln Electric
Company............. 1,617,000
16,078 Liqui-Box
Corporation......... 514,496
12,038 *`D'The Logan Clay
Products Company.... 252,798
68,200 *MK Gold Company...... 238,700
39,553 MacDermid,
Incorporated........ 1,819,438
20,100 Mine Safety Appliances
Company............. 1,065,300
32,300 Paul Mueller
Company............. 1,017,450
14,500 Nordson Corporation... 790,250
37,600 Oil-Dri Corporation of
America............. 559,300
63,700 Oshkosh Truck
Corporation Cl. B... 788,288
57,800 Peerless Mfg. Co. .... 628,575
10,000 *Pegasus Gold Inc. ... 101,250
1,000 Penn Engineering and
Manufacturing
Corp. .............. 75,500
75,800 *Perini Corporation... 776,950
33,400 Precision Castparts
Corp. .............. 1,173,175
29,300 Preformed Line
Products Company.... 981,550
86,300 Puerto Rican Cement
Company, Inc. ...... 2,632,150
103,750 Quaker Chemical
Corporation......... 1,685,938
51,270 Robroy Industries,
Inc. Cl. A.......... 845,955
22,500 Roper Industries,
Inc. ............... 787,500
5,000 *SPS Technologies,
Inc. ............... 188,125
31,100 *Shorewood Packaging
Corporation......... 454,838
103,600 *Simpson Manufacturing
Co., Inc. .......... 1,256,150
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
INDUSTRIAL CYCLICALS - (continued)
59,500 The L. S. Starrett
Company Cl. A....... $ 1,346,188
11,400 Tecumseh Products
Company Cl. A....... 501,600
44,286 Thermal Industries,
Inc. ............... 437,324
158,400 Thomaston Mills, Inc.
Cl. A............... 1,980,000
2,000 Thomaston Mills, Inc.
Cl. B............... 27,250
67,000 *Total Containment,
Inc. ............... 711,875
59,800 *The Turner
Corporation......... 598,000
4,308 United Screw and Bolt
Corporation......... 258,480
73,700 Versa Technologies,
Inc. ............... 1,068,650
10,700 Wausau Paper Mills
Company............. 244,094
39,300 Woodhead Industries,
Inc. ............... 540,375
33,800 Woodward Governor
Company............. 2,129,400
46,100 Zero Corporation...... 691,500
------------
73,372,985
------------
RETAIL - 10.5%
10,000 *Alexander's, Inc. ... 555,000
44,100 Blair Corporation..... 1,515,938
25,900 *The Buckle, Inc. .... 404,688
202,400 *CATHERINES STORES
CORPORATION......... 2,251,700
134,600 Charming Shoppes,
Inc. ............... 706,650
181,300 Claire's Stores,
Inc. ............... 3,286,063
173,800 *The Clothestime,
Inc. ............... 499,675
73,000 *Crown Books
Corporation......... 821,250
17,400 Dart Group Corporation
Cl. A............... 1,468,125
130,400 Deb Shops Inc. ....... 423,800
283,200 *The Dress Barn,
Inc................. 2,761,200
124,400 *Ethan Allen Interiors
Inc. ............... $ 2,208,100
110,100 Family Dollar Stores,
Inc. ............... 1,623,975
80,500 Frederick's of
Hollywood, Inc. Cl.
A................... 412,563
154,400 Frederick's of
Hollywood, Inc. Cl.
B................... 694,800
37,000 *InterTAN Inc. ....... 277,500
75,800 *Little Switzerland,
Inc. ............... 331,625
10,000 *Mac Frugal's
Bargains -
Close-outs Inc. .... 175,000
20,000 Melville
Corporation......... 685,000
144,600 *Mikasa, Inc. ........ 2,150,925
44,257 *Monro Muffler Brake,
Inc. ............... 641,727
49,000 *Orchard Supply
Hardware Stores
Corporation......... 551,250
15,900 Oshkosh B'Gosh, Inc.
Cl. A............... 254,400
9,000 Oshkosh B'Gosh, Inc.
Cl. B............... 146,250
143,205 Pier 1 Imports,
Inc. ............... 1,324,646
168,600 *Stein Mart, Inc. .... 2,276,100
27,183 Strawbridge & Clothier
Cl. A............... 543,660
111,600 *Suzy Shier Limited... 548,303
51,500 Tiffany & Co. ........ 1,751,000
172,100 *The Wet Seal, Inc.
Cl. A............... 795,963
------------
32,086,876
------------
SERVICES - 17.6%
41,500 AAR CORP. ............ 741,813
79,712 Air Express
International
Corporation......... 1,873,232
65,100 *American City
Business Journals,
Inc. ............... 1,432,200
79,748 Arnold Industries,
Inc. ............... 1,395,590
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
SERVICES - (continued)
82,800 Atlantic Southeast
Airlines, Inc. ..... $ 2,494,350
83,309 *Bell Industries,
Inc. ............... 1,780,730
52,700 Bowl America
Incorporated Cl.
A................... 415,013
5,000 Cracker Barrel Old
Country Store,
Inc. ............... 103,125
23,700 *Jenny Craig, Inc. ... 195,525
100,100 Crawford & Company Cl.
A................... 1,726,725
31,800 Crawford & Company Cl.
B................... 536,625
115,600 Dames & Moore......... 1,502,800
93,800 Ennis Business Forms,
Inc. ............... 1,160,775
99,700 *FRP Properties,
Inc. ............... 2,143,550
152,800 *FCA International
Ltd. ............... 344,776
2,600 Fisher Companies
Inc. ............... 188,500
16,900 Florida East Coast
Industries, Inc. ... 1,246,375
58,800 *Fresh America
Corp. .............. 308,700
220,935 Frozen Food Express
Industries, Inc. ... 2,140,308
5,000 *GC Companies,
Inc. ............... 163,750
11,617 Grey Advertising
Inc. ............... 2,230,464
20,304 *Hardinge Inc. ....... 388,314
41,325 The Harper Group...... 692,194
10,000 *Hirsh International
Corp. Cl. A......... 160,000
27,500 *IHOP Corp. .......... 708,125
42,600 *International Dairy
Queen, Inc. Cl...... 830,700
92,850 *JOULE' Inc. ......... 185,700
10,000 *KLLM Transport
Services, Inc. ..... 120,000
39,500 Kenan Transport
Company............. 790,000
40,300 Lawson Products,
Inc. ............... 1,067,950
46,200 McClatchy Newspapers,
Inc. Cl. A.......... $ 1,022,175
123,700 Merrill Corporation... 2,350,300
85,000 *MovieFone, Inc. Cl.
A................... 371,875
38,400 NCH Corporation....... 2,208,000
13,500 New England Business
Service, Inc. ...... 266,625
9,300 *Nichols Research
Corporation......... 159,263
9,900 *Payco American
Corporation......... 76,725
72,600 Plenum Publishing
Corporation......... 2,541,000
173,500 Richardson
Electronics, Ltd. .. 1,257,875
3,000 *Robert Half
International
Inc. ............... 76,875
78,500 *Rollins Environmental
Services, Inc. ..... 372,875
18,000 Rykoff-Sexton, Inc. .. 317,250
76,350 *SEATTLE FILMWORKS,
Inc. ............... 1,297,950
166,900 Sotheby's Holdings,
Inc. Cl. A.......... 2,274,013
140,500 The Standard Register
Company............. 2,669,500
30,000 *Steck-Vaughn
Publishing
Corporation......... 262,500
52,600 Stone & Webster,
Inc. ............... 1,551,700
107,500 *TBC Corporation...... 1,155,625
24,000 Treadco, Inc. ........ 336,000
61,100 *The Union
Corporation......... 969,963
167,329 *Vallen Corporation... 3,011,922
------------
53,617,920
------------
TECHNOLOGY - 6.5%
82,800 Astro-Med, Inc. ...... 947,025
39,081 BEI Electronics,
Inc. ............... 283,337
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
TECHNOLOGY - (continued)
14,500 *Bolt Beranek And
Newman Inc. ........ $ 396,938
11,000 *CEM Corporation...... 137,500
129,605 *CSP Inc. ............ 972,038
32,000 Communications
Systems, Inc. ...... 552,000
50,200 *Comptek Research,
Inc. ............... 903,600
16,200 *Dionex Corporation... 741,150
128,450 *Exar Corporation..... 3,789,275
57,100 *Giga-tronics
Incorporated........ 442,525
15,000 Hach Company.......... 202,500
35,289 *IFR Systems, Inc. ... 414,646
58,400 *ILC Technology,
Inc. ............... 540,200
6,200 *Indigo N.V. ......... 310,000
26,300 *Integral Systems,
Inc. ............... 723,250
27,800 Joslyn Corporation.... 729,750
105,000 Landauer Inc ......... 1,981,875
94,000 *MDL Information
Systems, Inc. ...... 1,398,250
14,725 Modern Controls,
Inc. ............... 134,366
1,000 *National Instruments
Corporation......... 17,750
28,500 Newport Corporation... 267,188
31,200 *Phoenix Technologies
Ltd. ............... 335,400
67,200 *Programming &
Systems, Inc. ...... 16,800
20,800 *`D'Sage Laboratories,
Inc. ............... 1,331,200
91,100 Scitex Corporation
Limited............. 1,958,650
47,500 *Technical
Communications
Corporation......... 320,625
------------
19,847,838
------------
UTILITIES - 0.0%
10,000 *Digital Systems
International,
Inc. ............... $ 89,375
------------
Total Common Stocks
(Cost
$261,721,704)....... 332,427,139
------------
PREFERRED STOCKS - .4%
3,000 Bird Corp. $1.85
Conv. .............. 56,250
10,000 Cliffs Drilling
Company $2.3125
Conv. Ex. .......... 283,750
41,000 Manville Corporation
$1 Ser. B Cum. ..... 1,025,000
------------
Total Preferred Stocks
(Cost $900,908)..... 1,365,000
------------
CORPORATE BONDS - 1.4%
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
----------
<S> <C> <C>
$ 380,000 Ag Services of
America, Inc. 7%
Conv. Deb. due
5/31/03............. 402,800
824,000 Dixie Yarns, Inc. 7%
Conv. Sub. Deb. due
5/15/12............. 613,880
300,000 Figgie International
Inc. 9.875% Sr. Nt.
due 10/1/99......... 285,000
1,500,000 National Education
Corporation 6.5%
Conv. Sub. Deb. due
5/15/11............. 975,000
149,000 Pier 1 Imports, Inc.
6.875% Conv. Sub.
Deb. due 4/01/02.... 148,255
314,000 Reliance Group
Holdings, Inc. 9%
Sr. Note due
11/15/00............ 309,683
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
ROYCE VALUE TRUST, INC.
SCHEDULE OF INVESTMENTS AT JUNE 30, 1995 (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- ------------
<S> <C> <C>
CORPORATE BONDS - (continued)
1,073,000 Richardson
Electronics, Ltd.
7.25% Conv. Sub.
Deb. due 12/15/06... $ 858,400
690,000 Waterhouse Investors
Services, Inc. 6%
Conv. Sub. Deb. due
12/15/03............ 638,250
------------
Total Corporate Bonds
(Cost $3,664,298)... 4,231,268
------------
REPURCHASE AGREEMENT - 2.9%
State Street Bank and Trust
Company, 5.50% due 7/3/95,
collateralized by U.S. Treasury
Obligation, 7.50% due 1/31/97,
valued at $9,000,336 (Cost
$9,000,000)...................... $ 9,000,000
------------
TOTAL INVESTMENTS - 113.6% (COST
$275,286,910).................... 347,023,407
LIABILITIES LESS CASH AND OTHER
ASSETS - (13.6%)................. (41,661,098)
------------
NET ASSETS - 100.0%................ $305,362,309
------------
------------
</TABLE>
* Non-income producing.
** American Depository Receipt.
`D' At June 30, 1995, the Fund owned 5% or more of the Company's outstanding
shares thereby making the Company an affiliated person as that term is
defined in the Investment Company Act of 1940.
INCOME TAX INFORMATION -- The cost for federal income tax purposes was
$275,289,578. At June 30, 1995, net unrealized appreciation for all securities
was $71,733,829, consisting of aggregate gross unrealized appreciation of
$83,593,015 and aggregate gross unrealized depreciation of $11,859,186.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
ROYCE VALUE TRUST, INC.
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30,
1995
------------
<S> <C>
ASSETS:
Investments at value (identified cost $275,286,910) (Note 1)............................... $347,023,407
Cash....................................................................................... 377,131
Receivable for investments sold............................................................ 1,260,835
Receivable for dividends and interest...................................................... 584,041
Prepaid expenses and other assets.......................................................... 52,778
------------
TOTAL ASSETS............................................................................. 349,298,192
------------
LIABILITIES:
Notes payable (Note 2)..................................................................... 38,519,582
Payable for investments purchased.......................................................... 4,999,719
Investment advisory fee payable (Note 3)................................................... 271,743
Accrued expenses........................................................................... 144,839
------------
TOTAL LIABILITIES........................................................................ 43,935,883
------------
NET ASSETS............................................................................... $305,362,309
------------
------------
ANALYSIS OF NET ASSETS:
Undistributed net investment income........................................................ $ 575,930
Accumulated net realized gain on investments............................................... 15,564,879
Net unrealized appreciation on investments................................................. 71,736,497
Capital Stock (21,806,476 shares outstanding) (Note 5)..................................... 21,806
Additional paid-in capital................................................................. 217,463,197
------------
NET ASSETS............................................................................... $305,362,309
------------
------------
PRICING OF SHARES:
Net asset value per share, assuming conversion of Notes ($345,362,309[div]24,692,479 fully
converted shares) (Note 2)............................................................... $13.99
------
------
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
ended ended
June 30, 1995 December 31,
(unaudited) 1994
------------- ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income.................................................. $ 335,655 $ 785,924
Net realized gain on investments....................................... 15,940,821 21,004,491
Net unrealized appreciation/depreciation on investments................ 20,053,973 (19,255,498)
------------- ------------
Increase in net assets resulting from operations....................... 36,330,449 2,534,917
Dividends paid from net investment income.............................. -- (205,729)
Distributions paid from net realized gains............................. -- (21,395,807)
FROM CAPITAL STOCK TRANSACTIONS:
Increase in net assets from capital stock transactions (Note 5)........ -- 41,540,833
------------- ------------
Increase in net assets................................................. 36,330,449 22,474,214
NET ASSETS:
Beginning of period.................................................... 269,031,860 246,557,646
------------- ------------
End of period (including undistributed net investment income of
$575,930 and $240,275, respectively)................................. $ 305,362,309 $269,031,860
------------- ------------
------------- ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
ROYCE VALUE TRUST, INC.
STATEMENT OF CASH FLOWS (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
ended
June 30, 1995
-------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Investment income received............................................................... $ 3,440,128
Interest paid............................................................................ (2,300,000)
Payment of operating expenses............................................................ (1,898,685)
Purchase of investments.................................................................. (71,276,648)
Proceeds from sales and maturities of investments........................................ 72,359,404
-------------
Cash from operating activities...................................................... 324,199
Cash at beginning of period......................................................... 52,932
-------------
Cash at end of period............................................................... $ 377,131
-------------
-------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS TO CASH FROM OPERATING
ACTIVITIES:
Net increase in net assets resulting from operations..................................... $ 36,330,449
Net increase in investments.............................................................. (23,527,477)
Net increase in unrealized appreciation on investments................................... (20,053,973)
Decrease in dividends and interest receivable............................................ 77,807
Decrease in receivable for investments sold.............................................. 6,707,535
Accretion of organization costs.......................................................... 81,812
Decrease in interest payable on Notes.................................................... (1,150,000)
Increase in payable for investments purchased............................................ 1,964,899
Net decrease in accrued expenses and other assets........................................ (106,853)
-------------
Cash from operating activities...................................................... $ 324,199
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
ROYCE VALUE TRUST, INC.
STATEMENT OF OPERATIONS (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
ended
June 30, 1995
-------------
<S> <C>
INVESTMENT INCOME:
Income:
Dividends............................................................................... $ 2,879,681
Interest................................................................................ 482,640
-------------
Total Income.................................................................. 3,362,321
-------------
Expenses:
Investment advisory fee (Note 2)........................................................ 1,578,270
Interest expense (Note 2)............................................................... 1,150,000
Amortization of underwriting discount and offering costs (Note 2)....................... 81,812
Custodian and transfer agent fees....................................................... 64,436
Administrative and clerical............................................................. 56,422
Legal and auditing fees................................................................. 50,633
Stockholder reports and notices......................................................... 29,820
Directors' fees......................................................................... 26,788
Supplies and postage.................................................................... 22,580
Federal and state registration fees..................................................... 14,842
Facilities and office space............................................................. 13,685
Fee waived by adviser (Note 3).......................................................... (62,622)
-------------
Total Expenses................................................................ 3,026,666
-------------
Net Investment Income......................................................... 335,655
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments............................................................ 15,940,821
Net unrealized appreciation on investments.................................................. 20,053,973
-------------
Net realized and unrealized gain on investments............................................. 35,994,794
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................ $ 36,330,449
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
ROYCE VALUE TRUST, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
This table is presented to show selected data for a share outstanding
throughout each period, and to assist stockholders in evaluating the Fund's
performance over the last five years.
<TABLE>
<CAPTION>
Six Months
Ended June Years Ended December 31,
30, 1995 ---------------------------------------------------
(unaudited) 1994 1993 1992 1991 1990
------------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 12.34 $ 13.47 $ 12.50 $ 11.23 $ 8.58 $10.35
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............ 0.02 0.04 0.09 0.15 0.17 0.17
Net gains or losses on
investments (realized and
unrealized)................... 1.64 0.09 2.12 2.12 3.20 (1.49)
------------- ------- ------- ------- ------- ------
Total from investment
operations.................. 1.66 0.13 2.21 2.27 3.37 (1.32)
------------- ------- ------- ------- ------- ------
LESS DISTRIBUTIONS:
Dividends (from net investment
income)....................... -- (0.01) (0.09) (0.15) (0.17) (0.17)
Distributions (from capital
gains)........................ -- (1.04) (1.06) (0.75) (0.44) (0.15)
------------- ------- ------- ------- ------- ------
Total distributions........... -- (1.05) (1.15) (0.90) (0.61) (0.32)
------------- ------- ------- ------- ------- ------
CAPITAL STOCK TRANSACTIONS:
Effect of rights offering........ -- (0.14) (0.08) (0.06) (0.10) (0.08)
Effect of reinvestment of
distributions................. -- (0.07) (0.01) (0.04) (0.01) (0.05)
Effect of potential conversion of
Notes (a)..................... (0.01) -- -- -- -- --
------------- ------- ------- ------- ------- ------
Total capital stock
transactions................ (0.01) (0.21) (0.09) (0.10) (0.11) (0.13)
------------- ------- ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD (A)... $ 13.99 $ 12.34 $ 13.47 $ 12.50 $ 11.23 $ 8.58
------------- ------- ------- ------- ------- ------
------------- ------- ------- ------- ------- ------
MARKET VALUE, END OF PERIOD.......... $ 12.00 $ 11.00 $12.875 $ 12.25 $10.375 $8.125
------------- ------- ------- ------- ------- ------
------------- ------- ------- ------- ------- ------
TOTAL RETURN (B):
Net Asset Value (a).............. 13.4% 1.1% 17.9% 19.9% 39.5% -13.1
Market Value..................... 9.1% -5.6% 14.8% 26.8% 35.3% -10.8
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in
thousands)......................... $305,362 $269,032 $246,558 $202,483 $166,550 $118,308
Ratio of Expenses to Average Net
Assets (including management fee
and interest expense).............. 2.1%* 2.0% 1.3% 0.8% 0.8% 0.9%
Ratio of Management Fee to Average
Net Assets......................... 1.1%* 1.2% 1.1% 0.5% 0.4% 0.4%
Ratio of Interest Expense to Average
Net Assets......................... 0.8%* 0.5% -- -- -- --
Ratio of Net Investment Income to
Average Net Assets................. 0.2%* 0.3% 0.7% 1.3% 1.5% 1.8%
Portfolio Turnover Rate.............. 19% 35% 33% 40% 34% 28%
</TABLE>
------------
(a) For periods ended after June 22, 1994, Net Asset Value per share and Net
Asset Value Total Return are calculated assuming the Notes have been fully
converted unless the effect of doing so would result in a higher Net Asset
Value per share than would be calculated without such assumption.
(b) The Net Asset Value and Market Value Total Return assume a continuous
stockholder who reinvested all net investment income dividends and capital
gain distributions and fully exercised all rights issued.
* Annualized.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
ROYCE VALUE TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Royce Value Trust, Inc. (the 'Fund') was incorporated under the laws of the
State of Maryland on July 1, 1986 as a diversified closed-end investment
company. The Fund commenced operations on November 26, 1986.
Valuation of investments:
Securities listed on an exchange or on the Nasdaq National Market System
are valued on the basis of the last reported sale prior to the time the
valuation is made or, if no sale is reported for such day, at their bid price
for exchange-listed securities and at the average of their bid and asked prices
for Nasdaq securities. Quotations are taken from the market where the security
is primarily traded. Other over-the-counter securities for which market
quotations are readily available are valued at their bid price. Securities for
which market quotations are not readily available are valued at their fair value
under procedures established and supervised by the Fund's Board of Directors.
Bonds and other fixed income securities may be valued by reference to other
securities with comparable ratings, interest rates and maturities, using
established independent pricing services.
Investment transactions and related investment income:
Investment transactions are accounted for on the trade date and dividend
income is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Realized gains and losses from investment transactions and
unrealized appreciation and depreciation of investments are determined on the
basis of identified cost for book and tax purposes.
Taxes:
As a qualified regulated investment company under Subchapter M of the
Internal Revenue Code, the Fund is not subject to income taxes to the extent
that it distributes substantially all of its taxable income for its fiscal year.
The schedule of investments includes information regarding income taxes under
the caption 'Income Tax Information'.
Distributions:
Dividend and capital gain distributions are recorded on the ex-dividend
date and paid annually in December. Dividend and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid-in capital and may affect net investment income per
share. Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
Repurchase agreements:
The Fund enters into repurchase agreements with respect to its portfolio
securities solely with State Street Bank and Trust Company ('SSB&T'), the
custodian of its assets. The Fund restricts repurchase agreements to maturities
of no more than seven days. Securities pledged as collateral for repurchase
agreements are held by SSB&T until maturity of the repurchase agreements.
Repurchase agreements could involve certain risks in the event of default or
insolvency of SSB&T, including possible delays or restrictions upon the ability
of the Fund to dispose of the underlying securities.
Net Asset Value:
Net asset value per share is calculated assuming that the Investment
Company Convertible Notes outstanding have been converted into shares of Common
Stock, unless the effect of doing so would result in a higher net asset value
per share than would be calculated without such assumption.
21
<PAGE>
ROYCE VALUE TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
--------------------------------------------------------------------------------
NOTE 2. INVESTMENT COMPANY CONVERTIBLE NOTES:
The Fund issued $40,000,000 aggregate principal amount of Investment
Company Convertible Notes (the 'Notes') on June 22, 1994. The Fund received
proceeds of $38,350,000 after the deduction of the underwriting discount and
offering costs incurred by the Fund in connection with the issuance of the
Notes. The underwriting discount and the offering costs of $1,200,000 and
$450,000, respectively, are being amortized over the term of the Notes.
The Notes, which are unsecured obligations of the Fund, mature on June 30,
2004 and bear interest payable on June 30 and December 31 of each year
commencing with June 30, 1994 at the rate of 5 2/4% per annum. The Notes have an
Aaa rating from Moody's Investor Service, Inc. ('Moody's').
The Notes are convertible into shares of Common Stock of the Fund at the
option of the holder, at any time prior to maturity, except during the period
from the second trading day prior to the ex-dividend date through the record
date for distributions to stockholders each year and unless previously redeemed
at the option of the Fund. The initial conversion price was $14.00 per share.
The conversion price at June 30, 1995 is $13.86. This conversion price is
subject to an annual net adjustment involving an escalation of 6.75% and a
reduction for the impact on net asset value per share of distributions to
stockholders.
Under the Investment Company Act of 1940, the Fund is required to maintain
an asset coverage of at least 300% for the Notes. In addition, the Indenture
governing the Notes requires the Fund to maintain a certain discounted asset
coverage for its portfolio that equals or exceeds the Note Basic Maintenance
Amount under the guidelines established by Moody's. The Fund has met these
requirements since the issuance of the Notes.
Commencing July 1, 1997, and any time thereafter prior to maturity, the
Fund may, at its option, redeem the Notes in whole or in part for cash at a
price equal to 100% of their principal amount, together with accrued interest
thereon. Prior to July 1, 1997, the Fund will have the option to redeem the
Notes for cash at a price equal to 100% of their principal amount, together with
accrued interest, only if a redemption is necessary for the Fund to maintain the
required asset coverage for the Notes and/or continue to qualify as a regulated
investment company.
On July 1, 1999, if the average market price per $1,000 principal amount of
Notes for the 45 trading days ending May 31, 1999 is less than $950, the Fund
will either call all of the Notes for redemption or reset one or more of the
terms of the Notes so that the market value of the Notes is at or as close as
possible to par.
NOTE 3. INVESTMENT ADVISORY AGREEMENT:
Under the Investment Advisory Agreement between Quest Advisory Corp.
('Quest') and the Fund, the Basic Fee is a monthly fee equal to 1/12 of 1% (1%
on an annualized basis) of the average of the total net assets of the Fund at
the end of each month included in the applicable performance period, which is a
rolling 36 month period ending with the most recent calendar month.
The Basic Fee for such monthly period is subject to increase or decrease,
depending on the extent, if any, by which the investment performance of the Fund
exceeds by more than 2 percentage points, or is exceeded by more than 1
percentage point by, the percentage change in the investment record of the S&P
500 for such performance period. For each percentage point in excess of two (2)
that the investment performance of the Fund exceeds the percentage change in the
investment record of the S&P 500, such Basic Fee is increased at the rate of
1/12 of .05%. For each percentage point in excess of one (1) that the percentage
change in the investment record of the S&P 500 exceeds the investment
performance of the Fund, such Basic Fee is decreased at the rate of 1/12 of .1%.
22
<PAGE>
ROYCE VALUE TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
--------------------------------------------------------------------------------
The maximum increase or decrease in the Basic Fee for any month may not
exceed 1/12 of .5%. Accordingly, the maximum monthly fee rate as adjusted for
performance 1/12 of 1.5% and would be payable if the investment performance of
the Fund exceeds the percentage change in the investment record of the S&P 500
by 12 or more percentage points for the performance period, the minimum monthly
fee rate as adjusted for performance is 1/12 of .5% and would be payable if the
percentage change in the investment record of the S&P 500 exceeded the
investment performance of the Fund by 6 or more percentage points for the
performance period.
The Investment Advisory Agreement also provides that Quest will not be
entitled to receive any fees for any performance period in which the investment
performance of the Fund, rounded to the nearest whole point, is less than zero.
In the event that the Fund's investment performance for a performance period,
rounded to the nearest whole point, is less than zero, Quest will not be
required to refund to the Fund any fees earned for any prior performance period.
In calculating the investment performance of the Fund and the percentage
change in the investment record of the S&P 500, all dividends and other
distributions during the performance period are treated as having been
reinvested and gain (loss) from transactions in Fund shares is eliminated.
Fractions of a percentage point are rounded to the nearest whole point (to the
higher whole point if exactly one-half).
For the six months ended June 30, 1995, the Fund paid Quest advisory fees
totalling $1,515,648, net of $62,622 voluntarily waived by Quest.
NOTE 4. TRANSACTIONS IN SHARES OF AFFILIATED COMPANIES:
An 'Affiliated Company', as defined in the Investment Company Act of 1940,
is a company in which the Fund owns at least 5% of the company's outstanding
voting securities. The Fund effected the following transactions in shares of
such companies during the six months ended June 30, 1995.
<TABLE>
<CAPTION>
Purchases Sales
------------------ --------------- Realized Dividend
Affiliated Company Shares Cost Shares Cost Gain/Loss Income
------------------ ------ -------- ------ ----- --------- --------
<S> <C> <C> <C> <C> <C> <C>
General Builders Corporation................... -- -- -- -- -- --
Kit Manufacturing Co........................... 24,100 $262,088 -- -- -- --
The Logan Clay Products Company................ -- -- -- -- -- --
Sage Laboratories, Inc......................... -- -- -- -- -- --
</TABLE>
NOTE 5. FUND SHARES:
At June 30, 1995, there were 150,000,000 shares of common stock and
50,000,000 shares of preferred stock, $.001 par value, authorized. Only common
stock has been issued, and transactions were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1995 December 31, 1993
------------------- ------------------------
Shares Amount Shares Amount
--------- ------- --------- -----------
<S> <C> <C> <C> <C>
Net proceeds from rights offerings................... -- -- 1,119,159 $12,590,539
Dividends and distributions reinvested in additional
shares............................................. -- -- 2,381,336 28,950,294
</TABLE>
NOTE 6. PURCHASES AND SALES OF SECURITIES:
For the six months ended June 30, 1995, the cost of purchases and the
proceeds from sales of investment securities, other than short-term securities,
amounted to $64,241,547 and $59,654,890, respectively.
23
<PAGE>
ROYCE VALUE TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
--------------------------------------------------------------------------------
NOTE 7. QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
Net Realized and Increase (Decrease)
Unrealized Gain in Net Assets
Net Investment (Loss) on Resulting from
Investment Income Income Investments Operations
------------------ ---------------- ------------------- -------------------
Per Per Per Per
1995 Total Share Total Share Total Share Total Share
----------------- ---------- ----- -------- ----- ----------- ----- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31......... $1,748,732 $0.08 $161,195 $0.01 $14,547,443 $0.66 $14,708,638 $0.67
June 30.......... 1,613,589 0.07 174,460 0.01 21,447,351 0.98 21,621,811 0.99
---------- ----- -------- ----- ----------- ----- ----------- -----
$3,362,321 $0.15 $335,655 $0.02 $35,994,794 $1.64 $36,330,449 $1.66
---------- ----- -------- ----- ----------- ----- ----------- -----
---------- ----- -------- ----- ----------- ----- ----------- -----
1994
-----------------
March 31......... $1,267,705 $0.07 $288,569 $0.01 ($2,911,824) ($0.15) ($2,623,255) ($0.13)
June 30.......... 1,235,331 0.06 273,029 0.01 (8,890,935) (0.46) (2,794,258) (0.14)
September 30..... 1,637,652 0.08 77,308 0.01 22,441,970 1.15 16,129,579 0.83
December 31...... 1,914,577 0.10 147,018 0.01 (8,890,218) (0.45) (8,177,149) (0.43)
---------- ----- -------- ----- ----------- ----- ----------- -----
$6,055,265 $0.31 $785,924 $0.04 $ 1,748,993 $0.09 $ 2,534,917 $0.13
---------- ----- -------- ----- ----------- ----- ----------- -----
---------- ----- -------- ----- ----------- ----- ----------- -----
</TABLE>
At the Annual Meeting of Shareholders held on June 28, 1995, Fund stockholders
elected directors and ratified the Board's selection of the Fund's independent
public accountant for 1995, as follows:
<TABLE>
<CAPTION>
NAME OF DIRECTOR/ VOTES VOTES VOTES CAST BROKER
OTHER PROPOSAL CAST FOR ABSTAINED AGAINST NON-VOTES
----------------------------------------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Charles M. Royce 14,564,444 95,809 N/A 583
Thomas R. Ebright 14,564,444 95,809 N/A 583
Richard M. Galkin 14,564,444 95,809 N/A 583
Stephen L. Isaacs 14,564,444 95,809 N/A 583
David L. Meister 14,564,444 95,809 N/A 583
Ratification of independent public
accountant 14,541,985 80,132 38,136 583
</TABLE>
24
<PAGE>
DISTRIBUTION REINVESTMENT PLAN
WHAT IS THE DISTRIBUTION REINVESTMENT PLAN?
Distributions of net investment income, if any, and capital gains are
normally made in December. The Fund's Distribution Reinvestment Plan (the
'Plan') offers you an automatic way to reinvest your dividends and capital gains
distributions in additional shares of the Fund, increasing your holdings in the
Fund. Reinvestment of the annual distribution is done at market price, without
commissions. The number of shares to be issued to a stockholder will be
determined by dividing the amount of the distribution payable to the stockholder
by the last reported sale price of a share of the Fund's common stock on the
valuation date, which follows the record date.
HOW DO REGISTERED STOCKHOLDERS PARTICIPATE IN THE PLAN?
If your shares are registered directly with the Fund, you are automatically
a participant in the Plan unless you have instructed the Plan Agent in writing
otherwise. The Plan Agent must receive the instructions not less than 10 days
prior to the record date for a distribution in order to be effective for that
distribution. A registered stockholder may also receive the distribution in the
form of a stock certificate for the full shares and a check for the fractional
share if the Plan Agent is properly notified. Stockholders who elect to not
participate in the Plan will receive all distributions in cash paid by check
mailed directly to the stockholder by State Street Bank and Trust Company,
dividend paying agent and Plan Agent.
WHAT IF MY SHARES ARE HELD BY A BROKERAGE FIRM, BANK OR OTHER NOMINEE?
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the stockholder of record, we still expect them to automatically
participate in the Plan on your behalf. Please consult with your brokerage firm,
bank or other nominee to be certain that it is participating in the Plan on your
behalf. If your nominee is unable to participate on your behalf, you should
instruct your nominee to have your shares registered in your name in order to
participate.
HOW WILL I KNOW HOW MANY SHARES I HAVE?
The Plan Agent maintains the accounts for registered stockholders in the
Plan and sends written confirmation of all transactions in the account,
including information needed by participants for personal and tax records.
Shares in the account of each participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each participant will
be able to vote those shares at a shareholder meeting or by proxy. A participant
may also send other stock certificates held by them to the Plan Agent to be held
in non-certificated form. There is no service fee charged to participants for
reinvesting distributions. The Plan Agent's fees for the processing of the
distribution reinvestment are paid for by the Fund. A participant may terminate
his account under the Plan by written notice to the Plan Agent. Termination will
be effective as described in the Plan. If a participant elects to sell his
shares before the Plan is terminated, the Plan Agent will deduct a $2.50 fee
plus brokerage commissions from the sale transaction. If a nominee is the
registered owner of your shares, the nominee will maintain the accounts on your
behalf.
WHAT IF I NEED MORE INFORMATION?
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: Royce Value Trust, Inc. Distribution Reinvestment Plan, c/o State
Street Bank and Trust Company, PO Box 8200, Boston MA 02266-8200, (800)
426-5523.
25
<PAGE>
OFFICERS
Charles M. Royce, President and Treasurer
Jack E. Fockler, Jr., Vice President
W. Whitney George, Vice President
Daniel A. O'Byrne, Vice President
& Assistant Secretary
Susan I. Grant, Secretary
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP
CUSTODIAN, TRANSFER AGENT
AND REGISTRAR
State Street Bank and Trust Company
DIRECTORS
Thomas R. Ebright
Quest Advisory Corp., Vice President
Royce, Ebright & Associates, Inc., President
Richard M. Galkin
Richard M. Galkin Associates Inc.,
President
Stephen L. Isaacs
Columbia University Development Law and
Policy Program, Director; Attorney
David L. Meister
Communications Industry, Consultant
Charles M. Royce
Quest Advisory Corp., President
Royce Value Trust, Inc.
Semi-Annual Report 1995
1414 Avenue of the Americas
New York, New York 10019
(800) 221-4268
<PAGE>
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as ......... 'D'
The divisions symbol shall be expressed as ...... [div]
