May 4, 1997
Securities and Exchange Commission
Attn: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549
Re: Professionally Managed Portfolios
File No. 811-5037
CIK No. 811030
Dear Sir or Madam:
On behalf of the above Registrant and pursuant to Rule 30b-2 under
the Investment Company Act of 1940, I enclose for filing via EDGAR,
a copy of the Semi-annual Report to shareholders of the Academy
Value Fund series of the Registrant for the six month period ended
February 28, 1998.
If you have any questions, please contact me at (602) 952-1100.
Sincerely yours,
/s/
Robert H. Wadsworth
<PAGE>
Academy Value Fund
Semi-Annual Report
February 28, 1998
<PAGE>
Academy Value Fund
March 31, 1998
Dear Shareholders:
The last six months have been one of significant activity for the Academy Value
Fund. During the market decline in the third quarter of last year, your Fund was
able to use its cash reserves to purchase shares of high-quality companies at
significant discounts to their fair value. These companies include
highly-regarded names such as Tommy Hilfiger and Illinova. We also were able to
invest in several growth companies that are under-followed by Wall Street, such
as Olsten Corporation and Lone Star Steakhouse. In total, six new securities
were added to the portfolio while only one security was sold. We also took
advantage of the market decline to purchase additional shares of existing
holdings.
We are very excited about the composition of the current investment portfolio.
Given the steady growth/low interest rate environment, we think that the
prospects for equities remain solid over the near term. However, we continue to
be cautious in our investment approach to protect against another sharp decline
in market sentiment and prices. As always, we will place a priority on
protecting principal in our efforts to maximize value for our shareholders.
Sincerely,
/s/
Academy Capital Management, Inc.
<PAGE>
Academy Value Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at February 28, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 89.7% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Apparel Manufacturer: 1.8%
<S> <C> <C>
2,300 Tommy Hilfiger Corp.*................................................... $ 123,194
---------
Chemicals: 3.8%
5,150 Great Lakes Chemicals Corp.............................................. 250,419
682 Millennium Chemicals, Inc............................................... 17,604
------
268,023
-------
Computers and Information Processing: 5.6%
22,100 Bell Microproducts, Inc.*............................................... 176,800
14,044 Silicon Graphics, Inc.*................................................. 211,538
-------
388,338
-------
Conglomerate: 1.5%
4,193 Hanson Trust - PLC, ADR................................................. 106,135
-------
Consumer Services: 9.0%
8,000 CPI Corp................................................................ 192,500
4,550 Deluxe Corp............................................................. 154,984
7,300 Franklin Covey Company*................................................. 177,937
9,500 Sealright Company, Inc.*................................................ 106,875
- -------
632,296
-------
Cosmetic and Personal Care Products: 1.2%
1,966 Block Drug Company, Inc., Class A....................................... 82,818
------
Electric - Integrated: 3.5%
8,700 Illinova Corp........................................................... 241,425
-------
Electronic Security Devices: 2.9%
21,400 Ultrak, Inc.*........................................................... 201,962
-------
Environmental Services: 5.8%
20,141 Fluor Daniel/GTI, Inc.*................................................. 190,081
36,000 Gundle/SLT Environmental, Inc........................................... 216,000
-------
406,081
-------
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
SCHEDULE OF INVESTMENTS at February 28, 1998 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services: 7.9%
19,000 London Pacific Group, Ltd., ADR......................................... $ 237,500
117,300 National Auto Credit, Inc.*............................................. 190,612
4,100 Union Corp.*............................................................ 128,638
-------
556,750
-------
Health Care Providers: 3.6%
18,000 NovaCare, Inc.*......................................................... 252,000
-------
Industrial Products: 2.8%
6,550 Watts Industries, Inc., Class A......................................... 196,909
- -------
Insurance: 3.1%
6,656 AmerUs Life Holdings, Inc............................................... 217,152
-------
Media: 3.0%
7,900 King World Productions, Inc............................................. 210,831
-------
Medical Products: 6.3%
14,800 IDEXX Laboratories, Inc.*............................................... 232,175
10,100 Vital Signs, Inc........................................................ 213,363
-------
445,538
-------
Pharmaceuticals: 2.2%
44,300 Huntingdon Life Sciences Group - PLC, ADR*.............................. 155,050
-------
Restaurants: 3.1%
12,450 Luby's Cafeterias, Inc.................................................. 216,319
-------
Retailers - Broadline: 5.7%
3,550 Dillard's, Inc., Class A................................................ 126,469
20,200 Kmart Corp.*............................................................ 270,175
-------
396,644
-------
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
SCHEDULE OF INVESTMENTS at February 28, 1998 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Retailers - Specialty: 1.8%
10,400 Wolohan Lumber Company.................................................. $ 126,750
---------
Telephone Systems: 2.8%
3,900 Telefonos de Mexico SA, ADR............................................. 197,681
-------
Tobacco: 10.6%
18,637 Imperial Tobacco Group - PLC, ADR....................................... 256,841
13,800 UST, Inc................................................................ 489,038
-------
745,879
-------
Transportation: 1.7%
8,200 Laidlaw, Inc............................................................ 120,438
-------
Total Common Stocks (cost $5,536,258)................................... 6,288,213
---------
Principal Amount REPURCHASE AGREEMENT: 10.9%
- ------------------------------------------------------------------------------------------------------------------------------------
$767,000 Star Bank Repurchase Agreement, 4.80%, dated 2/27/1998,
due 3/2/1998, collateralized by $783,956 GNMA, due 5/20/2024
(proceeds $767,307) (cost $767,000)..................................... 767,000
-------
Total Investments in Securities (cost $6,303,258+): 100.6% ............. 7,055,213
Liabilities in excess of Other Assets: (0.6)%........................... (40,300)
-------
Total Net Assets: 100.0% ............................................... $7,014,913
==========
<FN>
*Non-income producing security.
+ At February 28, 1998, the cost of securities for Federal tax purposes was the
same as the basis for financial reporting. Unrealized appreciation and
depreciation of securities were as follows:
Gross unrealized appreciation........................................... $1,229,704
Gross unrealized depreciation........................................... (477,749)
--------
Net unrealized appreciation................................... $ 751,955
=========
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at February 28, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (cost $5,536,258) ................................. $6,288,213
Repurchase agreement (cost $767,000)................................................... 767,000
Cash................................................................................... 264
Dividends and interest receivable...................................................... 3,901
Prepaid expenses and other assets...................................................... 200
---
Total assets .............................................................. 7,059,578
---------
LIABILITIES
Payables:
Advisory fees.................................................................... 5,133
Administration fee............................................................... 1,799
Distribution fees................................................................ 2,764
Securities purchased............................................................. 31,304
Accrued expenses ...................................................................... 3,665
-----
Total liabilities.......................................................... 44,665
------
NET ASSETS $7,014,913
==========
Net asset value, offering and redemption price per share
($7,014,913/542,929 shares outstanding;
unlimited number of shares authorized without par value) .............................. $12.92
======
COMPONENTS OF NET ASSETS
Paid-in capital........................................................................ $6,218,367
Accumulated net investment loss........................................................ (3,911)
Undistributed net realized gain on investments......................................... 48,502
Net unrealized appreciation on investments............................................. 751,955
-------
Net assets ................................................................ $7,014,913
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Six Months Ended February 28, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Dividends........................................................................ $ 51,656
Interest......................................................................... 17,796
------
Total income............................................................... 69,452
------
Expenses
Advisory fees.................................................................... 32,835
Administration fee............................................................... 14,876
Distribution fees................................................................ 8,209
Audit fees....................................................................... 7,661
Registration fees................................................................ 7,106
Fund accounting fees............................................................. 6,832
Transfer agent fees.............................................................. 4,700
Custody fees..................................................................... 3,020
Legal fees....................................................................... 2,409
Reports to shareholders.......................................................... 2,012
Trustee fees..................................................................... 1,738
Miscellaneous.................................................................... 1,617
Insurance........................................................................ 358
---
Total expenses............................................................. 93,373
Less: expenses reimbursed.................................................. (27,702)
-------
Net expenses............................................................... 65,671
------
Net investment income ............................................... 3,781
-----
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain from security transactions..................................... 53,242
Net change in unrealized appreciation on investments............................. (200,579)
--------
Net realized and unrealized loss on investments............................ (147,337)
--------
Net decrease in net assets resulting from operations ................ $ (143,556)
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
February 28, August 31,
1998# 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
<S> <C> <C>
Net investment income (loss)...................................................... $ 3,781 $ (12,409)
Net realized gain from security transactions...................................... 53,242 621,063
Net change in unrealized appreciation on investments.............................. (200,579) 691,891
-------- -------
Net (decrease) increase in net assets resulting from operations ............ (143,556) 1,300,545
-------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net realized gain from security transactions...................................... (601,385) -0-
-------- -
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding shares (a)...... 1,491,057 306,917
--------- -------
Total increase in net assets ............................................... 746,116 1,607,462
NET ASSETS
Beginning of period............................................................... 6,268,797 4,661,335
--------- ---------
End of period .................................................................... $7,014,913 $6,268,797
========== ==========
<FN>
(a) A summary of capital shares transactions is as follows:
Six Months Year
Ended Ended
February 28, 1998# August 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold.................................... 80,793 $1,102,896 84,279 $1,109,926
Shares issued in reinvestment of distribution.. 47,353 601,385 -0- -0-
Shares redeemed................................ (15,796) (213,224) (63,999) (803,009)
------- -------- ------- --------
Net increase................................... 112,350 $1,491,057 20,280 $ 306,917
======= ========== ====== =========
#Unaudited.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended August 31, December 9, 1994*
Ended through
February 28,1998# 1997 1996 August 31,1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $14.56 $11.36 $11.60 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income (loss)..................... 0.01 (0.03) 0.01 0.03
Net realized and unrealized (loss) gain
on investments................................. (0.36) 3.23 (0.10) 1.57
----- ---- ----- ----
Total from investment operations....................... (0.35) 3.20 (0.09) 1.60
----- ---- ----- ----
Less distributions:
From net investment income....................... -0- -0- (0.03) -0-
From net capital gains........................... (1.29) -0- (0.12) -0-
----- - ----- -
Total distributions.................................... (1.29) -0- (0.15) -0-
----- - ----- -
Net asset value, end of period......................... $12.92 $14.56 $11.36 $11.60
====== ====== ====== ======
Total return........................................... (2.22)% 28.17% (0.64)% 22.68%+
Ratios/supplemental data:
Net assets, end of period (millions)................... $ 7.0 $ 6.3 $ 4.7 $ 3.2
Ratio of expenses to average net assets:
Before expense reimbursement and waived fee...... 2.84%+ 3.42% 3.39% 5.20%+
After expense reimbursement and waived fee....... 2.00%+ 2.00% 2.00% 2.00%+
Ratio of net investment (loss) gain to average net assets:
Before expense reimbursement and waived fee...... (0.73)%+ (1.67)% (1.20)% (2.62)%+
After expense reimbursement and waived fee....... 0.12%+ (0.24)% 0.18% 0.64%+
Portfolio turnover rate................................ 5.21% 49.72% 27.71% 13.26%
Average commission rate paid per share++................ $0.0492 $0.0488 $0.0536 -
<FN>
#Unaudited.
*Commencement of operations.
+Annualized.
++For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate paid 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.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Academy Value Fund
NOTES TO FINANCIAL STATEMENTS at February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Academy Value 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 investment company. The Fund began operations on December 9,
1994. The investment objective of the Fund is growth of capital. The Fund seeks
to achieve its objective by investing primarily in common stocks.
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 sales 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.
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. The cost of securities owned on realized
transactions are relieved on a first-in, first-out basis. Dividend
income and distributions to shareholders are recorded on the
ex-dividend date.
D. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements. Actual results could differ from those
estimates.
NOTE 3 - COMMITMENTS AND RELATED PARTY TRANSACTIONS
For the six months ended February 28, 1998, Academy Capital Management,
Inc. (the "Advisor") provided the Fund with investment management services under
an Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities and most of the personnel needed by the Fund. As
compensation for its services, the Advisor was entitled to a monthly fee at the
annual rate of 1.00% based upon the average daily net assets of the Fund. For
the six months ended February 28, 1998, the Fund incurred $32,835 in Advisory
fees.
<PAGE>
Academy Value Fund
NOTES TO FINANCIAL STATEMENTS at February 28, 1998 (Unaudited), Continued
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce its fees to the extent necessary to limit the Fund's aggregate
annual operating expenses to 2.00% of average daily net assets. Any such
reductions made by the Advisor in its fees or payments or reimbursement of
expenses which are the Fund's obligation are subject to reimbursement by the
Fund provided the Fund is able to effect such reimbursement and remain in
compliance with applicable expense limitations. For the six months ended
February 28, 1998, the Advisor reimbursed the Fund in the amount of $27,702. The
Fund may reimburse the Advisor pursuant to this agreement in later years in
which operating expenses for the portfolio are less than the applicable
percentage limitation set forth previously for any such year. As of February 28,
1998, the cumulative expense waiver and reimbursement from the Advisor to the
Fund are $104,863 and $96,449, respectively.
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 daily net assets
$50 to $100 million 0.15% of average daily net assets
$100 to $150 million 0.10% of average daily net assets
Over $150 million 0.05% of average daily net assets
For the six months ended February 28, 1998, the Fund incurred $14,876 in
Administration fees.
First Fund Distributors, 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 Administrator.
Certain officers and trustees of the Trust are also officers and/or
directors of the Administrator and the Distributor.
NOTE 4 - DISTRIBUTION PLAN
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 Advisor as Distribution Coordinator at an annual rate of up to 0.25% of the
average daily net assets of the Fund. The fee is paid to the Advisor as
reimbursement for, or in anticipation of, expenses incurred for
distribution-related activity. During the six months ended February 28, 1998,
the Fund paid fees of $8,209 to the Advisor.
<PAGE>
Academy Value Fund
NOTES TO FINANCIAL STATEMENTS at February 28, 1998 (Unaudited), Continued
NOTE 5 - PURCHASES AND SALES OF SECURITIES
For the six months ended February 28, 1998, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$1,361,256 and $307,107, respectively.
NOTE 6 - REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements with government securities
dealers recognized by the Federal Reserve Board, with member banks of the
Federal Reserve System or with such other brokers or dealers that meet the
credit guidelines established by the Board of Trustees. The Fund will always
receive and maintain, as collateral, securities whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Fund in each agreement, and the Fund will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer
to the account of the custodian. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral.
If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
<PAGE>
Advisor
Academy Capital Management, Inc.
500 North Valley Mills Drive
Suite 208
Waco, Texas 76710
(817) 751-0555
Distributor
First Fund Distributors, Inc.
4455 East Camelback Road
Suite 261E
Phoenix, Arizona 85018
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Transfer Agent
American Data Services, Inc.
P.O. Box 5536
Hauppauge, New York 11788-0132
Independent Auditors
Ernst & Young, LLP
515 South Flower Street
Los Angeles, California 90071
Legal Counsel
Paul, Hastings, Janofsky & Walker, LLP
345 California Street, 29th Floor
San Francisco, California 94104
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.
