Avondale Total Return Fund
SEMI-ANNUAL REPORT
September 30, 1995
<PAGE>
November 3, 1995
Dear Fellow Shareholder:
This has been a very rewarding period for those of us who are share owners of
Avondale Total Return Fund.
The six months which ended September 30, 1995, continued the strong growth trend
which commenced in mid-1994. As the chart points out, we have experienced an
extremely satisfactory 1995. The performance was attributable to the flexibility
associated with the balanced fund approach.
Our technical and fundamental "dual screen" thesis enabled us to be in some of
the better situations at the right time. The significantly reduced portfolio
turnover rate indicates the strong performance was the result of positions
established several quarters ago. This report also indicates a closing balance
in equities of 77.9% of the total portfolio which continued the more aggressive
profile established in early 1995. I anticipate that ratio will diminish during
the next several months.
Once again, the value of diversification and strong buy/sell disciplines have
rewarded us with very positive results. For the year ending September 30, 1995,
your Fund (and mine) generated a return of 23.99%, as measured by Morningstar,
versus the Value Line Balanced Fund Index of 17.8% for the same period.
In actual fact, measuring balanced funds against one another is an imperfect
science due to the differences in the permissible category extremes provided for
in the prospectus of each different fund. As a shareholder, as well as portfolio
manager, my goal is a sensible approach to long-term performance. I am
comfortable stating Avondale is accomplishing that goal.
Sincerely,
Herbert R. Smith, Chairman/CEO
Herbert R. Smith, Incorporated
<PAGE>
Avondale Total Return Chart
(Graphic Ommitted)
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 77.9% Market Value
Banks: 3.8%
<S> <C> <C> <C>
8,200 Countrywide Credit Industries........................................... $ 192,700
4,705 First Commercial Corp................................................... 132,328
-------
325,028
-------
Beverages - Soft Drink: 1.9%
2,300 Coca-Cola Co............................................................ 158,700
-------
Building - Heavy Construction: 1.6%
2,400 Fluor Corp.............................................................. 134,400
-------
Chemicals: 4.1%
6,000 M. A. Hanna Co.......................................................... 158,250
4,400 Vigoro Corp............................................................. 185,900
-------
344,150
-------
Computer Services: 7.7%
4,200 Exar Corp. (a).......................................................... 150,150
5,200 First Data Corp......................................................... 322,400
12,500 General DataComm Industries, Inc. (a)................................... 184,375
-------
656,925
-------
Computers: 4.0%
2,200 Cisco Systems, Inc. (a)................................................. 151,800
2,000 IBM Corp................................................................ 188,750
-------
340,550
-------
Consumer Products: 5.2%
3,600 General Electric Co..................................................... 229,500
4,500 The Reader's Digest Association, Inc., Class A.......................... 212,062
-------
441,562
-------
Drugs: 14.5%
2,400 Bristol-Myers Squibb Co................................................. 174,900
8,500 Carrington Labs, Inc. (a)............................................... 295,375
1,800 Eli Lilly & Co.......................................................... 161,775
2,900 Johnson & Johnson....................................................... 214,962
3,200 Pfizer, Inc............................................................. 170,800
4,200 Schering Plough Corp.................................................... 216,300
-------
1,234,112
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Durable Goods: 4.5%
<S> <C> <C> <C>
4,900 Silicon Graphics, Inc................................................... $ 168,438
3,900 Watkin-Johnson Co....................................................... 213,525
-------
381,963
-------
Electronics Instrumentation: 13.0%
3,900 AMP, Inc................................................................ 150,150
5,100 Analog Devices, Inc. (a)................................................ 176,588
7,600 Dallas Semiconductor Corp............................................... 155,800
8,850 Kent Electronics Corp. (a).............................................. 388,294
21,600 Kollmorgen Corp......................................................... 229,500
-------
1,100,332
---------
Hotel/Motel: 3.5%
6,875 La Quinta Moter Inns, Inc............................................... 192,500
2,900 Marriott International.................................................. 108,388
-------
300,888
-------
Industrial Machinery: 2.4%
6,400 Toro Co................................................................. 201,600
-------
Manufacturing - Diversified: 1.6%
5,900 Pall Corp............................................................... 137,175
-------
Oil-Energy: 1.8%
1,500 Mobil Corp.............................................................. 149,437
-------
Restaurants: 1.2%
2,700 McDonald's Corp......................................................... 103,275
-------
Software/Services: 2.6%
10,933 Jack Henry & Associates................................................. 221,393
-------
Telecommunications Equipment: 1.3%
4,100 Belden, Inc............................................................. 107,625
-------
Toys/Games: 2.2%
6,250 Mattel, Inc............................................................. 183,594
-------
Transportation: 1.0%
3,200 Southwest Airlines Co................................................... 80,800
------
Total Common Stock (cost $4,749,352).................................... 6,603,509
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
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Market Value
U.S. Treasury Notes: 0.6%
<S> <C> <C> <C>
$ 50,000 7.125%, 2/28/2000....................................................... $ 52,076
--------
Agencies: 11.9%
500,000 FHLB, 8.00%, 5/16/2001.................................................. 505,620
100,000 FHLMC, 6.50%, 8/7/1998.................................................. 100,117
150,000 FNMA. 5.30%, 12/10/1998................................................. 145,838
250,000 FNMA, 8.03%, 5/16/2001.................................................. 252,475
-------
1,004,050
---------
Corporate: 3.6%
50,000 Dean Witter Discover, 5.00%, 4/1/1996................................... 49,786
100,000 Fed Farm, 7.24%, 3/3/1997............................................... 100,525
75,000 Pfizer, Inc., 6.50%, 2/1/1997........................................... 75,375
55,000 Waste Management Corp., 4.625%, 4/14/1996............................... 54,519
25,000 Xerox Credit Corp., 6.25%, 1/15/1996.................................... 25,016
------
305,221
-------
Total Bonds (cost $1,356,570)........................................... 1,361,347
---------
Shares SHORT-TERM INVESTMENTS: 5.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Funds: 5.7%
204,917 Dreyfus Treasury Prime Cash Management.................................. 204,917
282,822 Riverfront U.S. Government Securities Money............................. 282,822
-------
Total Short-Term Investments (cost $487,739)............................ 487,739
-------
Total Investment in Securities (cost $6,593,661*): 99.7%................ 8,452,595
Other Assets Less Liabilities: 0.3%..................................... 28,114
------
Net Assets: 100.0%...................................................... $8,480,709
==========
<FN>
(a) Indicates security on which no cash dividends were paid.
*Cost for federal income tax purposes is the same.
</FN>
Net unrealized appreciation consists of:
Gross unrealized appreciation....................................................... $1,973,603
Gross unrealized depreciation....................................................... (111,549)
--------
Net unrealized appreciation............................................. $1,862,054
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at September 30, 1995 (Unaudited)
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ASSETS
<S> <C>
Investments in securities, at value (identified cost $6,593,661) (Note 2-A) ............. $8,452,595
Receivable:
For dividends and interest ........................................................ 39,598
Prepaid expenses ........................................................................ 7,308
-----
Total assets ................................................................ 8,499,501
---------
LIABILITIES
Payable to investment manager ........................................................... 4,862
Payable to administrator ................................................................ 2,466
Dividends payable........................................................................ 1,112
Accrued expenses ........................................................................ 10,352
------
Total liabilities ........................................................... 18,792
------
NET ASSETS ........................................................................ $8,480,709
==========
Net asset value and redemption price per share
($8,480,709/299,832 shares outstanding;
unlimited number of shares authorized without par value) ........................ $28.28
======
SOURCE OF NET ASSETS
Paid-in capital ......................................................................... $6,284,110
Undistributed net investment income...................................................... 278
Undistributed net realized gain on investments .......................................... 334,267
Net unrealized appreciation of investments .............................................. 1,862,054
---------
Net assets ........................................................................ $8,480,709
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS for the Six Months Ended September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Interest ......................................................................... $ 66,420
Dividends ....................................................................... 36,092
------
Total investment income .................................................... 102,512
-------
Expenses
Investment management fees (Note 3) .............................................. 27,074
Administration fee (Note 3) ...................................................... 15,040
Custodian and accounting fees .................................................... 6,616
Transfer agent fees .............................................................. 3,259
Auditing fees .................................................................... 5,956
Legal fees ....................................................................... 763
Insurance ........................................................................ 2,688
Shareholder reports ............................................................... 393
Registration fees ................................................................. 764
Trustees' fees ................................................................... 1,504
Miscellaneous .................................................................... 2,987
-----
Total expenses ............................................................. 67,044
------
Net investment income ................................................. 35,468
------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions............................................. 484,411
Net increase in unrealized appreciation of investments................................... 895,145
-------
Net realized and unrealized gain on investments.............................. 1,379,556
---------
Net Increase in Net Assets Resulting from Operations................... $1,415,024
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
September 30, March 31,
1995* 1995
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
<S> <C> <C>
Net investment income ................................................ $ 35,468 $ 66,695
Net realized gain (loss) from security transactions ..................... 484,411 (150,144)
Net increase in unrealized appreciation of investments ................... 895,145 608,781
------- -------
Net increase in net assets resulting from operations .............. 1,415,024 525,332
--------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($0.12 and $0.23 per share,
respectively) ..................................................... (35,505) (66,394)
Distributions from realized gains ($0.84 per share)....................... -0- (253,847)
- --------
Total dividends and distributions .................................. (35,505) (320,241)
------- --------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived from net change in
outstanding shares (a).............................................. 165,792 (719,021)
------- --------
Total increase (decrease) in net assets............................ 1,545,311 (513,930)
NET ASSETS
Beginning of period....................................................... 6,935,398 7,449,328
--------- ---------
End of period (including undistributed net investment income of
$278 and $315, respectively)....................................... $8,480,709 $6,935,398
========== ==========
<FN>
(a) A summary of capital share transactions is as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1995* March 31, 1995
Shares Value Shares Value
<S> <C> <C> <C> <C>
Shares sold ...................................... 23,525 $613,332 21,036 $ 486,350
Shares issued in reinvestment of dividends
and distributions........................... 1,225 33,326 13,329 296,641
----- ------ ------ -------
24,750 646,658 34,365 782,991
Shares redeemed................................... (18,992) (480,866) (65,179) (1,502,012)
------- -------- ------- ----------
Net increase (decrease)........................... 5,758 $165,792 (30,814) $ (719,021)
===== ======== ======= ===========
<FN>
*Unaudited.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
for a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
September 30, Years Ended March 31,
1995* 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $23.58 $22.93 $24.78 $24.19 $22.44
Income from investment operations:
Net investment income.......................... .12 .23 .26 .46 .51
Net realized and unrealized gain (loss)
on investments ......................... 4.70 1.49 (.44) 1.62 1.92
---- ---- ---- ---- ----
Total from investment operations..................... 4.82 1.72 (.18) 2.08 2.43
---- ---- ---- ---- ----
Less distributions:.................................
Dividends from net investment income........... (.12) (.23) (.35) (.49) (.68)
Distributions from net capital gains........... -0- (.84) (1.32) (1.00) -0-
- ---- ----- ----- -
Total distributions.................................. (.12) (1.07) (1.67) (1.49) (.68)
---- ----- ----- ----- ----
Net asset value, end of period....................... $28.28 $23.58 $22.93 $24.78 $24.19
====== ====== ====== ====== ======
Total return......................................... 44.95%** 7.82% (0.82)% 9.19% 11.04%
Ratios/supplemental data:
Net assets, end of year (millions)................... $8.5 $6.9 $7.4 $7.6 $7.8
Ratio of expenses to average net assets:
Before expense reimbursement................... 1.73%** 1.77% 1.83% 1.78% 2.13%
After expense reimbursement.................... 1.73%** 1.77% 1.83% 1.78% 1.96%
Ratio of net investment income to average net assets:
Before expense reimbursement................... 2.65%** 0.96% 1.09% 1.97% 2.00%
After expense reimbursement.................... 2.65%** 0.96% 1.09% 1.97% 2.17%
Portfolio turnover rate ............................ 22.31% 52.24% 73.65% 157.64% 59.58%
<FN>
*Unaudited.
**Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS at September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Avondale Total Return Fund (the "Fund") is a series of shares of
beneficial interest of Professionally Managed Portfolios (the "Trust"), which is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management company.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities traded on a national
securities exchange or included in the NASDAQ National Market System are valued
at the last reported sale price at the close of regular trading on the last
business day of the period; securities traded on an exchange or NASDAQ for which
there has been no sale and other over-the-counter securities are valued at the
last reported bid price. Securities for which quotations are not readily
available are valued at their respective fair values as determined in good faith
by the Board of Trustees. Short-term investments are stated at cost, which when
combined with accrued interest, approximates market value. U.S. Government
securities with less than 60 days remaining to maturity when acquired by the
Fund are valued on an amortized cost basis. U.S. Government securities with more
than 60 days remaining to maturity are valued at the current market value (using
the mean between the bid and asked price) until the 60th day prior to maturity,
and are then valued at amortized cost based upon the value on such date unless
the Board determines during such 60 day period that this amortized cost basis
does not represent fair value.
B. Federal Income Taxes. The Fund intends to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no federal
income tax provision is required.
C. Security Transactions, Investment Income and Distributions. As is common
in the industry, security transactions are accounted for on the trade date.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recognized on an accrual basis. Discounts
and premiums on securities purchased are amortized over the life of the
respective securities.
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ended September 30, 1995, Herbert R. Smith, Incorporated
(the "Advisor") provided the Fund with investment management services under an
Investment Management Agreement. The Manager furnished all investment advice,
office space and certain administrative services. As compensation for its
services, the Manager was entitled to a monthly fee at the annual rate of 0.70%
on the first $200 million of average daily net assets; 0.60% on the next $300
million of net assets; and 0.50% on net assets exceeding $500 million for the
period from April 1, 1994 to October 6, 1994. Beginning October 7, 1994, the
Manager reduced its fee to .50% of average daily net assets.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
as the Fund's administrator under an administration agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund expenses and reviews the Fund's
expense accruals. For its services, the Administrator receives an annual fee
equal to the greater of 0.15 of 1% of the Fund's average daily net assets or
$30,000.
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. For
the period ended September 30, 1995, the Distributor did not receive any fees
from the Fund in connection with its distribution shares.
Certain officers and Trustees of the Fund are also officers and/or
directors of the Administrator and Distributor.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the period ended September 30, 1995, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities and U.S.
Government securities, were $1,353,250 and $1,211,860, respectively. For the
period ended September 30, 1995, the cost of purchases and the proceeds from
sales of U.S. Government securities, excluding short-term securities, were
$246,766 and $649,453, respectively.
<PAGE>
Investment Manager
Herbert R. Smith, Incorporated
1105 Holliday
Wichita Falls, Texas 76301
Custodian and Transfer Agent
The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45250-0967
Auditors
Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, Pennsylvania 19102
Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
This report is intended only for the information
of shareholders or those who have received the
prospectus covering shares of beneficial interest
of Avondale Total Return Fund, which contains
information about the management fee and other costs.
