TRENT EQUITY FUND
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SEMI-ANNUAL REPORT
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For the Six Months Ended
February 29, 2000
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Trent Equity Fund
Semi-Annual Report
For the Six Months Ending February 29, 2000
March 2000
Dear Shareholder:
For the six month period ending February 29, 2000 Trent Equity Fund was up
47.01% compared to a gain of 4.11% for the S&P 500 with dividends reinvested.
The Fund has benefited from a gradual broadening into companies involved in
telecommunications, computers and the internet. The Fund is participating
roughly equally in both areas of this unusually bifurcated market with surging
technology stocks on the one hand offset by weakness in mainstream, old economy
stocks on the other. For the past couple of years, strength in technology has
come from a truly unprecedented time of new technology growth with the surge in
internet use. Mainstream, old economy stocks have been weakening for a couple of
years because of increasing interest rates and investors switching to technology
stocks. Going forward, stock performance of technology stocks and mainstream,
old economy stocks should even out. Even with the rise in the Nasdaq composite
index surpassing 5,000, there continue to be exciting opportunities for
investing in stocks tied to the new economy. On the other hand, we are finding
the best values in mainstream, old economy stocks that have existed in the past
six years and are sanguine about prospects for those stocks.
ACTIVITY IN CURRENT HOLDINGS
The best performers during the six month period, in order of dollar impact, were
QUALCOMM, up 183%; Flycast Communications, up 430%; ITXC Corp., up 87%; and
Alpha Industries, up 145%. QUALCOMM owns the patents on and sells integrated
circuits for the best wireless technology for so-called third generation wire-
less, which will open up multimedia uses. Flycast Communications is an
internet-based buyside advertising network that has just recently been merged
into the internet incubator CMGI. ITXC Corp. is one of the leading service
providers of international internet voice telephony. Alpha Industries provides
gallium arsenide microchips for wireless handsets. A significant benefit from
gallium arsenide chips is longer battery life.
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The two poorest performers during the six month period were Mattel, down 48%;
and Central Parking Corporation, down 37%. Mattel has had difficulty turning
around its recent Learning Company acquisition. Similarly, Central Parking
Corporation has run into operating difficulties in assimilating its recent major
acquisition of Allright Parking.
NEW HOLDINGS
New purchases during the six month period were Alpha Industries, American Home
Products, Associates First Capital, Bank of America, Citrix Systems, Gillette,
Global Telesystems, Walt Disney Go.com, Healtheon WebMD, ITXC Corp., Leggett and
Platt, Madge Networks, Pharmanetics, Quokka Sports, Terayon Communications,
Terra Networks and Wind River Systems. We added to Central Parking, Gartner
Group, HJ Heinz, Mattel and Newell Rubbermaid. American Home Products is a major
pharmaceutical and healthcare products company. Associates First Capital is in
consumer finance. Bank of America is one of the largest US banks. Citrix Systems
provides networking software systems. Gillette dominates razors and blades.
Global Telesytems is a European fiber optic long distance company. Go.com is
Walt Disney's internet initiative. Healtheon WebMD is the largest internet-based
healthcare information provider and transaction processor. Leggett and Platt
makes springs for bedding. Madge Networks is a European internet-based provider
of video streaming and technology for advertising services. Pharmanetics
monitors new and existing coagulation drugs. Quokka Sports provides
internet-based sports programming. Terayon Communications manufactures modems
and infrastructure equipment for broadband cable. Terra Networks is an internet
service provider and portal for the Spanish and Portuguese speaking world. Wind
River Systems provides software for embedded computers.
SIGNIFICANT REALIZED GAINS AND LOSSES
In order of dollar magnitude, the largest realized gains versus cost during the
six month period were taken in Qualcomm; Terra Networks; Brunswick; and Tribune
Company. Qualcomm and Terra Networks were partial liquidations of their
positions due to increased valuation.
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In order of dollar magnitude, the largest realized losses versus cost during the
six month period were taken in Oakwood Homes; Service Corp. International;
Lockheed Martin; and United Asset Management. Continuing deteriorating industry
fundamentals hurt Oakwood Homes and Service Corp. International. Cost overruns
hurt Lockheed Martin and lack of revenue and cash flow growth hindered United
Asset Management.
At Trent Equity Fund, we are trying to ensure that all of our shareholders are
treated fairly. We feel that the added costs of having short-term money flow
into the Fund is very disruptive and adds additional expenses to the Fund. To
protect our long-term shareholders, we have decided to add a redemption fee to
deter investors who do not have a long-term orientation to the Fund. The fee
will apply to new investments and will be 1% on shares held less than 60 days.
All fees paid under the redemption fee will be paid back to the Fund to the full
benefit of the remaining shareholders.
We believe that the Fund has had an excellent six months in terms of
performance. We thank you for being an investor in Trent Equity Fund.
Trent Capital Management, Inc.
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TRENT EQUITY FUND
SCHEDULE OF INVESTMENTS at February 29, 2000 (Unaudited)
Shares Value
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COMMON STOCKS: 102.9%
COMMERCIAL SERVICES: 6.4%
11,920 Central Parking Corporation $ 176,565
1,650 Equifax Inc. 34,959
11,350 Gartner Group, Inc., Class A 162,447
10,375 The ServiceMaster Company 114,125
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488,096
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COMPUTERS: 1.8%
1,000 Hewlett-Packard Company 134,500
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CONSUMER PRODUCTS: 4.6%
12,460 Mattel, Inc. 119,927
6,400 The Gillette Company 225,600
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345,527
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ELECTRONIC COMPONENTS: 20.9%
2,300 Alpha Industries, Inc. 333,931
5,310 QUALCOMM Incorporated* 756,343
1,900 Terayon Communication Systems, Inc. * 488,537
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1,578,811
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FINANCIAL SERVICES: 7.9%
2,650 American Express Company 355,597
4,800 Associates First Capital Corp., Class A 95,400
1,000 Bank of America Corp. 46,063
2,450 Federal Home Loan Mortgage Corp. 102,288
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599,348
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FOOD & BEVERAGE: 0.6%
1,550 H.J. Heinz Company 49,503
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HOME FURNISHINGS: 1.3%
5,800 Leggett & Platt, Inc. 97,513
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HOUSEHOLD PRODUCTS: 3.1%
10,000 Newell Rubbermaid Inc. $ 231,250
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INTERNET CONTENT: 20.5%
5,780 CMGI Inc.* 748,871
9,375 Go.Com* 206,836
3,300 Healtheon/WebMD Corporation* 182,531
13,600 Quokka Sports, Inc.* 171,700
1,825 Terra Networks, S.A.* 236,566
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1,546,504
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INTERNET SERVICES: 3.6%
25,000 Madge Networks N. V.* 270,312
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MEDIA: 6.9%
7,400 AMFM Inc.* 454,175
7,400 Sinclair Broadcast Group, Inc., Class A* 70,300
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524,475
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MEDICAL SUPPLIES: 3.0%
1,800 American Home Products Corp. 78,300
875 Johnson & Johnson 62,781
8,000 PharmaNetics, Inc.* 87,000
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228,081
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RETAIL: 3.6%
7,600 Claire's Stores, Inc. 132,525
6,575 Dollar General Corporation 137,664
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270,189
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SOFTWARE: 8.9%
3,400 Citrix Systems, Inc.* 358,488
5,400 Wind River Systems, Inc.* 313,538
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672,026
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See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
SCHEDULE OF INVESTMENTS at February 29, 2000 (Unaudited), Continued
Shares Value
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TELECOMMUNICATIONS: 9.8%
8,400 Global Telesystems Group, Inc.* $ 210,000
6,500 ITXC Corporation* 533,000
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743,000
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TOTAL INVESTMENTS IN SECURITIES: 102.9%
(Cost $5,094,860+) 7,779,135
Liabilities in excess of Other Assets: (2.9)% (217,204)
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TOTAL NET ASSETS: 100.0% $7,561,931
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* Non-income producing security.
+ At February 29, 2000, the basis of investments for federal income tax
purposes was the same as their cost for financial reporting purposes.
Unrealized appreciation and depreciation of securities were as follows:
Gross unrealized appreciation $3,241,867
Gross unrealized depreciation (557,592)
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Net unrealized appreciation $2,684,275
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See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES at February 29, 2000 (Unaudited)
ASSETS
Investments in securities, at value (cost $5,094,860) ........ $ 7,779,135
Receivables:
Fund shares sold ........................................... 233,711
Dividends .................................................. 4,049
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Total assets ............................................. 8,016,895
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LIABILITIES
Payables:
Securities purchased ....................................... 236,159
Fund shares redeemed ....................................... 5,460
Advisory fees .............................................. 3,639
Cash overdraft ............................................... 188,166
Accrued expenses ............................................. 21,540
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Total liabilities ........................................ 454,964
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NET ASSETS ..................................................... $ 7,561,931
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NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($7,561,931/375,055 shares outstanding; unlimited number
of shares authorized without par value) .................... $ 20.16
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COMPONENTS OF NET ASSETS
Paid-in capital .............................................. $ 3,933,560
Accumulated net investment loss .............................. (40,138)
Undistributed net realized gain on investments ............... 984,234
Net unrealized appreciation on investments ................... 2,684,275
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Net assets ............................................... $ 7,561,931
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See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
STATEMENT OF OPERATIONS For the Six Months Ended February 29, 2000 (Unaudited)
INVESTMENT INCOME
Income
Dividends ................................................... $ 20,564
Interest .................................................... 1,330
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Total income .............................................. 21,894
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Expenses
Advisory fees ............................................... 35,669
Administration fees ......................................... 14,930
Fund accounting fees ........................................ 8,883
Audit fees .................................................. 7,664
Transfer agent fees ......................................... 5,539
Custody fees ................................................ 1,672
Legal fees .................................................. 1,868
Trustee fees ................................................ 2,048
Reports to shareholders ..................................... 1,388
Registration fees ........................................... 1,794
Distribution fees ........................................... 3,705
Insurance ................................................... 149
Miscellaneous ............................................... 342
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Total expenses ............................................ 85,651
Less: fees waived and expenses absorbed ................... (23,619)
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Net expenses .............................................. 62,032
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NET INVESTMENT LOSS ..................................... (40,138)
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments ............................ 1,028,751
Net change in unrealized appreciation on investments ........ 1,466,554
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Net realized and unrealized gain on investments ........... 2,495,305
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 2,455,167
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See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, AUGUST 31,
2000# 1999
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INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss .......................... $ (40,138) $ (41,680)
Net realized gain on investments ............. 1,028,751 796,793
Net change in unrealized
appreciation on investments .................. 1,466,554 940,957
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NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ 2,455,167 1,696,070
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DISTRIBUTION TO SHAREHOLDERS
From net realized gain ....................... (584,644) (725,130)
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CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets derived
from net change in outstanding shares (a) .. 477,168 995,731
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TOTAL INCREASE IN NET ASSETS ............. 2,347,691 1,966,671
NET ASSETS
Beginning of period .......................... 5,214,240 3,247,569
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END OF PERIOD ................................ $ 7,561,931 $ 5,214,240
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(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000# AUGUST 31, 1999
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Shares Value Shares Value
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Shares sold 91,269 $1,749,326 45,236 $ 666,688
Shares issued in reinvestment
of distribution 34,061 564,398 60,162 693,068
Shares redeemed (94,792) (1,836,556) (26,471) (364,025)
Net increase 30,538 $ 477,168 78,927 $ 995,731
# Unaudited.
See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED AUGUST 31,
FEBRUARY 29, ----------------------------------------------
2000# 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $15.13 $12.23 $11.90 $ 9.86 $10.24 $11.50
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ...................... (0.11) (0.12) (0.16) (0.10) (0.06) --
Net realized and unrealized
gain on investments .................... 6.85 5.73 0.49 2.14 0.67 0.67
------ ------ ------ ------ ------ ------
Total from investment operations ......... 6.74 5.61 0.33 2.04 0.61 0.67
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
From net realized gain ................... (1.71) (2.71) -- -- (0.99) (1.93)
------ ------ ------ ------ ------ ------
Total distributions ...................... (1.71) (2.71) -- -- (0.99) (1.93)
------ ------ ------ ------ ------ ------
Net asset value, end of period ........... $20.16 $15.13 $12.23 $11.90 $ 9.86 $10.24
====== ====== ====== ====== ====== ======
Total return ............................. 47.01% 52.81% 2.77% 20.69% 7.23% 9.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) ..... $ 7.6 $ 5.2 $ 3.2 $ 3.3 $ 3.0 $ 3.8
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed.. 2.76%+ 3.36% 3.08% 3.48% 3.63% 3.65%
After fees waived and expenses absorbed... 2.00%+ 2.00% 2.00% 2.00% 2.10% 1.85%
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed.. (2.05%)+ (2.31%) (2.23%) (2.25%) (2.15%) (2.00%)
After fees waived and expenses absorbed... (1.29%)+ (0.94%) (1.15%) (0.76%) (0.62%) (0.15%)
Portfolio turnover rate .................. 61.63% 53.71% 41.14% 43.81% 59.33% 46.52%
</TABLE>
# Unaudited.
+ Annualized.
See accompanying Notes to Financial Statements.
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TRENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION
Trent Equity Fund (the "Fund") is a diversified series of shares of
beneficial inter est 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 September 2, 1992. The investment objective of the Fund is to seek capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities.
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 . Securities traded on a national securities
exchange or Nasdaq 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
shareholders. Therefore, no federal income tax provision is required.
C. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS. Security
transac- tions are accounted for on the trade date. The cost of
securities sold is deter- mined on a first-in, first-out basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recog- nized on the accrual
basis.
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.
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TRENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the six months ended February 29, 2000, Trent Capital Management, Inc.
(the "Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice, of-
fice space and certain administrative services, 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 1.15% based upon the average daily net assets
of the Fund. For the six months ended February 29, 2000, the Fund incurred
$35,669 in advisory fees.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to limit the Fund's total expenses to not more than 2.00% of average
daily net assets. Any fee withheld or voluntarily reduced and/or any Fund
expense absorbed by the Advisor voluntarily or pursuant to an agreed upon
expense cap shall be reimbursed by the Fund to the Advisor, if so requested by
the Advisor, anytime before the end of the third fiscal year following the year
to which the fees waived and expenses absorbed relate, provided the aggregate
amount of the Fund's current operating expenses for such fiscal year does not
exceed the applicable limitation on Fund expenses. Any such reimbursement is
also contingent upon Board of Trustees review and approval prior to the time the
reimbursement is initiated. The Fund must pay its current ordinary operating
expenses before the Advisor is entitled to any reimbursement. For the six months
ended February 29, 2000, the Advisor voluntarily waived fees of $23,619.
Investment Company Administration, LLC (the "Administrator") acts as the
Fund's Administrator under an Administration Agreement. The Administrator pre-
pares 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
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TRENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
For the six months ended February 29, 2000, the Fund incurred $14,930 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 Distributor.
NOTE 4 - INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of securities, other than
short-term investments, for the six months ended February 29, 2000, were
$3,978,428 and $3,850,983, respectively.
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Advisor
TRENT CAPITAL MANAGEMENT, INC.
3101 North Elm Street
Suite 150
Greensboro, North Carolina 27408
(336) 282-9302
Distributor
FIRST FUND DISTRIBUTORS, INC.
4455 East Camelback Road
Suite 261E
Phoenix, Arizona 85018
Custodian
FIRSTAR BANK, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Transfer Agent
ICA FUND SERVICES CORPORATION
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85108
Auditors
TAIT, WELLER & BAKER
8 Penn Center Plaza, Suite 800
Philadelphia, Pennsylvania 19103
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.
