HODGES FUND
-----------
May 19, 1997
Dear Shareholder:
Allow me to thank you for being a shareholder of the Hodges Fund. I hope and
trust that you have been pleased with your investment. I am happy to announce
that we now have 921 shareholders toward our goal of 1000, the target number
required for listing in the mutual fund section of the national press. I know
you will appreciate our being listed, since it will enable you to keep up with
the Fund on a daily or weekly basis.
You may find it a little confusing that the Fund's March fiscal year-end does
not compare with the calendar year from which you see so many fund comparisons.
For the year ending in December, 1996, the Fund had an average annual return of
24.31%, after giving effect to sales charges, according to SEC advertising
requirements. The net asset value was actually up 27.48%. From April 1, 1996 to
March 31, 1997, our fiscal year end, the Fund's return was 11.31% and net asset
value was up 14.18%. This compares with the average capital appreciation fund
increasing by only 4% over the same period, according to Lipper Analytical
Services.
Through March 31 of this year, our average annual return since inception in
October, 1992 has been 14.87%. Net asset value increased 15.52% on an average
yearly basis.
The cumulative total return since inception has been 86%. Net asset value has
increased 90.78%. The three-year average return through March, 1997 was 17.28%
with net asset value up 18.28% on average. According to Lipper Analytical
Services, we ranked 23rd out of 240 capital appreciation funds on a three-year
basis through March of this year.
We have recently made some adjustments in our holdings - selling some holdings
and replacing them with companies in which we see capital appreciation
possibilities with what we deem to be slightly less risk.
If you have questions about our strategy or our holdings, please feel free to
call us.
Sincerely,
/s/ DON W. HODGES
DON W. HODGES
<PAGE>
HODGES FUND
-----------
Hodges Fund
Value of $10,000 vs. S&P 500 and Russell 2000
Annual Average Total Return Periods
Ended March 31, 1997
1 Year Inception (10/9/92)
11.31% 14.87%
<TABLE>
<CAPTION>
10/9/92 12/31/92 12/31/93 12/31/94 10/31/95 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96 3/31/97
------- -------- -------- -------- -------- -------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Hodges Fund 10,000 10,685 11,347 11,459 14,890 14,380 16,291 17,329 17,407 18,331 18,599
S & P 500 Index 10,000 10,417 11,968 12,427 15,707 16,699 17,599 18,376 18,952 20,538 21,087
Russell 2000 Index 10,000 11,777 14,000 13,745 16,508 17,655 18,556 19,484 19,550 20,569 19,503
</TABLE>
Past performance is not predictive of future performance.
<PAGE>
HODGES FUND
-----------
SCHEDULE OF INVESTMENTS at March 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 95.9% Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aircraft Manufacturing: 1.0%
2,000 Boeing Company.......................................................... $ 197,250
---------
Airlines: 2.8%
25,000 Southwest Airlines Company.............................................. 553,125
---------
Auto Manufacturing: 2.9%
10,000 General Motors Corp..................................................... 553,750
---------
Building Materials: 3.7%
10,000 Elcor Corp.............................................................. 256,250
10,000 NCI Building System, Inc.*.............................................. 323,750
5,000 Triangle Pacific Corp.*................................................. 137,500
---------
717,500
---------
Computer Chip Manufacturing: 3.7%
10,000 Micron Technology, Inc.................................................. 405,000
24,000 Optek Technology, Inc.*................................................. 315,000
---------
720,000
---------
Computer, Software and Networking: 4.4%
15,000 America Online, Inc.*................................................... 635,625
10,000 American Power Conversion Corp.*........................................ 216,250
---------
851,875
---------
Confectionaries: 4.5%
9,000 Tootsie Roll Industries, Inc............................................ 403,875
8,000 William Wrigley, Jr., Company........................................... 467,000
---------
870,875
---------
Construction Equipment: 2.7%
120,000 CMI Corp., Class A...................................................... 525,000
---------
Construction Materials: 5.9%
30,000 Texas Industries, Inc................................................... 825,000
5,000 Vulcan Materials Company................................................ 324,375
---------
1,149,375
---------
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE>
HODGES FUND
-----------
SCHEDULE OF INVESTMENTS at March 31, 1997, Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Products: 0.8%
140,000 Pentech International, Inc.*+........................................... $ 154,375
---------
Corrections Industry: 5.2%
26,750 Children's Comprehensive Services, Inc.................................. 307,625
20,000 Corrections Corp.*...................................................... 485,000
15,000 Wackenhut Corp., Class B................................................ 213,750
---------
1,006,375
---------
Electronic Distribution: 2.2%
35,963 Sterling Electronics Corp............................................... 427,061
---------
Entertainment: 2.2%
20,000 Gaylord Entertainment Company........................................... 430,000
---------
Financial: 3.1%
30,000 Capstead Mortgage Corp.................................................. 611,250
---------
Food Products: 0.8%
10,000 Chiquita Brands International........................................... 156,250
---------
Gas Distribution: 1.3%
10,000 Atmos Energy Corp....................................................... 253,750
---------
Home Manufacturing: 0.9%
8,000 Palm Harbor Homes, Inc.*................................................ 171,500
---------
Insurance: 4.0%
59,000 Nobel Insurance, Ltd.................................................... 781,750
---------
Long Term Health Care: 2.0%
10,000 Vencor, Inc.*........................................................... 378,750
---------
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE>
HODGES FUND
-----------
SCHEDULE OF INVESTMENTS at March 31, 1997, Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Medical Related Services: 5.6%
110,000 Diagnostic Health Services, Inc.*....................................... $ 866,250
63,000 Laboratory Specialists of America, Inc.*................................ 141,750
15,000 Physicians Reliance Network, Inc.*...................................... 76,875
---------
1,084,875
---------
Networking: 3.4%
40,000 Optical Data Systems, Inc.*............................................. 500,000
8,000 Xylan Corp.*............................................................ 154,000
---------
654,000
---------
Oil and Gas Drilling: 1.1%
10,000 Global Marine, Inc.*.................................................... 215,000
---------
Oil and Gas Production: 2.8%
3,000 Exxon, Inc.............................................................. 323,250
2,000 Texaco, Inc............................................................. 219,000
---------
542,250
---------
Pharmaceuticals: 1.1%
3,000 Agouron Pharmaceuticals, Inc.*.......................................... 211,875
---------
Publishing - Books: 2.7%
5,000 Houghton Mifflin Company................................................ 270,000
25,000 Thomas Nelson, Inc...................................................... 262,500
---------
532,500
---------
Real Estate: 1.5%
10,000 Texas Pacific Land Trust................................................ 292,500
---------
Restaurants: 2.0%
20,000 Brinker International, Inc.*............................................ 252,500
5,000 Cracker Barrel Old Country Store Corp................................... 130,625
---------
383,125
---------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
HODGES FUND
-----------
SCHEDULE OF INVESTMENTS at March 31, 1997, Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail: 13.8%
226,400 Calloway's Nursery, Inc.*............................................... $ 183,950
200,000 E-Z Serve Corp.*........................................................ 175,000
13,000 Home Depot, Inc. ....................................................... 695,500
30,000 Kmart Corp.............................................................. 363,750
10,000 Neiman Marcus Group, Inc.*.............................................. 257,500
20,000 Price/Costco, Inc.*..................................................... 552,500
50,000 Southland Corp.*........................................................ 157,813
10,000 Wal-Mart Stores, Inc.................................................... 278,750
----------
2,664,763
----------
Shoe Manufacturing: 2.1%
20,000 Rocky Shoes & Boots, Inc.*.............................................. 267,500
10,000 Stride Rite Corp........................................................ 150,000
----------
417,500
----------
Stock Brokerage: 3.2%
10,000 Charles Schwab Corp..................................................... 318,750
15,000 Quick & Reilly Group, Inc............................................... 311,250
----------
630,000
----------
Venture Capital: 2.5%
5,500 Capital Southwest Corp.................................................. 373,312
90,000 Southern Venture II LP.................................................. 115,664
----------
488,976
----------
Total Common Stocks (cost $17,768,239) ................................. 18,627,175
----------
Shares WARRANTS: 0.4%
- -------------------------------------------------------------------------------------------------------------------
Corrections Industry: 0.2%
6,500 Correctional Service Corp., Class A*.................................... 42,250
----------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
HODGES FUND
-----------
SCHEDULE OF INVESTMENTS at March 31, 1997, Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail: 0.2%
3,000 Zale Corp.*............................................................. $ 25,875
----------
Total Warrants (cost $94,310)........................................... 68,125
----------
Principal Amount REPURCHASE AGREEMENT: 5.0%
- -------------------------------------------------------------------------------------------------------------------
$972,000 Star Bank Repurchase Agreement, 5.00%, dated 3/31/1997,
due 4/1/1997, collateralized by $1,045,000 GNMA, due
1/20/2024 (proceeds $972,135) (cost $972,000)........................... 972,000
-----------
Total Investment in Securities (cost $18,834,549++): 101.3%.............. 19,667,300
Liabilities in excess of Other Assets: (1.3%)........................... (244,834)
-----------
Total Net Assets: 100.0%................................................ $19,422,466
===========
* Non-income producing security.
+ Restricted security. (Note 3)
++ At March 31, 1997, the cost of securities for Federal tax purposes was
$18,860,730. Unrealized appreciation and depreciation of securities were as
follows:
Gross unrealized appreciation........................................... $ 1,987,761
Gross unrealized depreciation........................................... (1,181,191)
-----------
Net unrealized appreciation.................................... $ 806,570
===========
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
HODGES FUND
-----------
STATEMENT OF ASSETS AND LIABILITIES at March 31, 1997
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at value (identified cost $18,834,549) (Notes 2-A and 3) ... $19,667,300
Cash................................................................................... 625
Receivables:
Dividends and interest .......................................................... 16,138
Investments sold................................................................. 26,499
Fund shares sold ................................................................ 106,880
Prepaid expenses....................................................................... 4,352
-----------
Total assets .............................................................. 19,821,794
-----------
LIABILITIES
Payables:
Administration fee............................................................... 3,428
Advisory fee..................................................................... 14,569
Distribution costs............................................................... 24,734
Fund shares redeemed............................................................. 42,608
Investments purchased............................................................ 297,664
Accrued expenses ...................................................................... 16,325
-----------
Total liabilities.......................................................... 399,328
-----------
NET ASSETS ................................................................................. $19,422,466
Net asset value and redemption price per share
($19,422,466/1,470,953 shares outstanding;
unlimited number of shares authorized without par value) ........................ $13.20
======
Computation of offering price per share
(Net asset value $13.20/.975).................................................... $13.54
======
COMPONENTS OF NET ASSETS
Paid-in capital ....................................................................... $16,986,995
Undistributed net realized gain on investments ........................................ 1,602,720
Net unrealized appreciation on investments............................................. 832,751
-----------
Net assets ...................................................................... $19,422,466
===========
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
HODGES FUND
-----------
STATEMENT OF OPERATIONS - For the Year Ended March 31, 1997
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Dividends........................................................................ $ 165,902
Interest ........................................................................ 33,283
-----------
Total income .............................................................. 199,185
-----------
Expenses
Advisory fees (Note 4) .......................................................... 141,685
Distribution costs (Notes 4 and 5) .............................................. 83,344
Administration fees (Note 4)..................................................... 33,748
Custodian and accounting fees.................................................... 28,984
Audit fees ...................................................................... 15,003
Transfer agent fees.............................................................. 14,494
Miscellaneous fees............................................................... 10,801
Registration fees ............................................................... 8,746
Reports to shareholders.......................................................... 7,747
Legal fees ...................................................................... 6,456
Trustees' fees .................................................................. 4,241
Insurance fees................................................................... 2,303
-----------
Total expenses............................................................. 357,552
-----------
Net investment loss ............................................... (158,367)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions .......................................... 3,206,306
Net change in unrealized appreciation on investments .................................. (904,746)
-----------
Net realized and unrealized gain on investments ........................... 2,301,560
-----------
Net Increase in Net Assets Resulting from Operations ................ $ 2,143,193
===========
</TABLE>
See accompanying Notes to Financial Statements.
9
<PAGE>
HODGES FUND
-----------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
March 31, March 31,
1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM:
OPERATIONS
Net investment loss........................................................ $ (158,367) $ (67,390)
Net realized gain from security transactions .............................. 3,206,306 1,783,600
Net change in unrealized appreciation on investments....................... (904,746) 1,406,629
----------- -----------
Net increase in net assets resulting from operations ............... 2,143,193 3,122,839
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net realized gain from security transactions*.............................. (1,706,975) (1,719,697)
----------- -----------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change
in outstanding shares (a) .............................................. 5,714,684 2,572,239
----------- -----------
Total increase in net assets ........................................ 6,150,902 3,975,381
NET ASSETS
Beginning of year.......................................................... 13,271,564 9,296,183
----------- -----------
End of year (including accumulated net investment loss
of $158,367 and $0, respectively)...................................... $19,422,466 $13,271,564
=========== ===========
</TABLE>
(a) A summary of capital shares transactions is as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1997 March 31, 1996
--------------------- -----------------------
Shares Value Shares Value
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Shares sold ...................................... 385,232 $5,092,543 137,704 $1,683,074
Shares issued in reinvestment of distribution .... 113,132 1,399,627 153,128 1,695,559
Shares redeemed .................................. (58,775) (777,486) (64,430) (806,394)
------- ---------- ------- ----------
Net increase ..................................... 439,589 $5,714,684 226,402 $2,572,239
======= ========== ======= ==========
*See Financial Highlights for per share data.
</TABLE>
See accompanying Notes to Financial Statements.
10
<PAGE>
HODGES FUND
-----------
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Year Year Year Year Oct. 9, 1992*
Ended Ended Ended Ended through
March 31 March 31, March 31, March 31, March 31,
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $12.87 $11.55 $10.80 $11.78 $10.25
Income from investment operations:
Net investment income (loss) ............... (.11) (.07) (.08) (.03) .02
Net realized and unrealized gain on
investments ............................. 1.85 3.42 1.09 .07 1.51
------ ------ ------ ------ ------
Total from investment operations.................. 1.74 3.35 1.01 .04 1.53
------ ------ ------ ------ ------
Less distributions:
From net investment income.................. -0- -0- -0- (.01) -0-
From net capital gains ..................... (1.41) (2.03) (.26) (1.01) -0-
------ ------ ------ ------ ------
Total distributions............................... (1.41) (2.03) (.26) (1.02) -0-
------ ------ ------ ------ ------
Net asset value, end of period ................... $13.20 $12.87 $11.55 $10.80 $11.78
====== ====== ====== ====== ======
Total return ..................................... 14.18% 32.33% 9.60% 0.22% 25.59%+
Ratios/supplemental data:
Net assets, end of period (millions).............. $ 19.4 $ 13.3 $ 9.3 $ 8.5 $ 6.9
Ratio of expenses to average net assets:
Before expense reimbursement ............... 2.14% 2.08% 2.31% 2.63% 2.17%+
After expense reimbursement................. 2.14% 2.08% 2.31% 2.07% 2.17%+
Ratio of net investment income (loss) to
average net assets:
Before expense reimbursement ............... (0.95%) (0.61%) (0.75%) (0.84%) 0.41%+
After expense reimbursement ................ (0.95%) (0.61%) (0.75%) (0.29%) 0.41%+
Portfolio turnover rate .......................... 115.77% 124.89% 73.65% 192.03% 26.23%
Average commision rate paid per share++............ $.0331 - - - -
</TABLE>
*Commencement of operations.
+Annualized.
++For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged. This amount may vary from period to period and fund to
fund depending on the mix of trades executed in various markets where trading
practices and commission rate structures may differ.
See accompanying Notes to Financial Statements.
11
<PAGE>
HODGES FUND
-----------
NOTES TO FINANCIAL STATEMENTS at March 31, 1997
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Hodges 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 non-diversified, open-end
management investment company. The Fund's primary investment objective is
capital appreciation. The Fund began operations on October 9, 1992.
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 have been no sales 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, Dividends and Distributions. As is common in
the industry, security transactions are recorded on the trade date.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
Income and capital gains distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. Those differences are primarily due to
differing treatments for net operating losses and deferral of wash
sale losses.
D. Use of Estimates. In preparing financial statements in conformity
with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
12
<PAGE>
HODGES FUND
-----------
NOTES TO FINANCIAL STATEMENTS, Continued
- --------------------------------------------------------------------------------
NOTE 3 - RESTRICTED SECURITIES
On March 31, 1997, the Fund held restricted securities (i.e., securities
which may not be publicly sold without registration under the Securities Act or
without an exemption under that Act). These securities are valued at fair value
as determined by the Board of Trustees, giving consideration to credit quality,
dividend rate, if any, projected earnings and marketability of the securities of
comparable issuers. On March 31, 1997, and on the date of acquisition, there
were no market quotations available for unrestricted securities of the same
class. Dates of acquisition and cost of restricted securities are as follows:
<TABLE>
<CAPTION>
Per Unit Value
Shares Acquisition Date at 3-31-97 Cost
------ ---------------- ---------- ----
<S> <C> <C> <C> <C>
Pentech International, Inc. 50,000 January 13, 1997 $0.50 $25,000
=======
</TABLE>
The restricted security had a fair value of $25,000 or 0.13% of net assets at
March 31, 1997.
NOTE 4 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the year ended March 31, 1997, Hodges Capital Management, Incorporated
(the "Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnishes all investment advice,
office space and certain administrative services, and provides most personnel
needed by the Fund. As compensation for its services, the Advisor receives a
monthly fee at the annual rate of 0.85% based upon the average daily net assets
of the Fund. For the year ended March 31, 1997, the Fund incurred $141,685 in
advisory fees.
Investment Company Administration Corporation (the "Administrator") acts
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 a monthly fee at
the following annual rate:
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets
First Dallas Securities, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Advisor. For the year ended March 31, 1997,
the Distributor received as commissions $58,983 from the Fund in connection with
its distribution of the Fund's shares.
Certain officers and trustees of the Trust are also officers and/or
directors of the Administrator.
13
<PAGE>
HODGES FUND
-----------
NOTES TO FINANCIAL STATEMENTS, Continued
- --------------------------------------------------------------------------------
NOTE 5 - DISTRIBUTION COSTS
The Fund has adopted a Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will pay a fee to
the Distributor at an annual rate of up to 0.50% of the average daily net assets
of the Fund. The fee is paid to the Distributor as reimbursement for, or in
anticipation of, expenses incurred for distribution-related activity. During the
year ended March 31, 1997, the Fund paid fees of $83,344 to the Distributor.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of securities, excluding
short-term securities, for the year ended March 31, 1997, were $21,801,664 and
$18,469,135, respectively.
14
<PAGE>
HODGES FUND
-----------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
HODGES FUND and
THE BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Hodges Fund (a series of
Professionally Managed Portfolios) as of March 31, 1997, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the four years in the period then ended and for the
period from October 9, 1992 (commencement of operations) to March 31, 1993.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and brokers. Where brokers did
not reply to our confirmation request, we carried out other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Hodges Fund as of March 31, 1997, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended and for the period from October 9, 1992 (commencement of
operations) to March 31, 1993, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
April 17, 1997
15
<PAGE>
<TABLE>
<S> <C>
Advisor
Hodges Capital Management, Incorporated HODGES FUND
2905 Maple Avenue -----------
Dallas, Texas 75201
(800) 388-8512
o Designed
Distributor for Investors
First Dallas Securities, Inc. Who Want Growth
2905 Maple Avenue
Dallas, Texas 75201
o
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
o
Transfer Agent
American Data Services, Inc.
24 West Carver Street
2nd Floor
Huntington, New York 11743
o
Auditors
Tait, Weller & Baker
Two Penn Center Plaza, Suite 700
Philadelphia, Pennsylvania 19102 Annual Report
o
Legal Counsel For the Year Ended
Heller, Ehrman, White & McAuliffe March 31, 1997
333 Bush Street
San Francisco, California 94104
</TABLE>
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
