[THE PERKINS FUND LOGO]
================================================================================
SEMI-ANNUAL REPORT
================================================================================
For the Six Months Ended
September 30, 2000
<PAGE>
[THE PERKINS FUND LOGO]
October 23, 2000
Dear Shareholders:
After a strong first quarter (especially for the Discovery Fund), both of our
Funds experienced pullbacks during the second quarter, followed by a small move
up in the third quarter. This left the Discovery Fund up for the first nine
months of calendar 2000 and the Opportunity Fund down slightly (see table on
page 3). Overall, it was a continuation of the highly volatile markets that we
have been experiencing over the last several years.
We see the current time period as a transition during which many high P/E
large-cap technology, network and telecom stocks (which have become extremely
overvalued over the last several years) have topped out and started to decline,
while many mid and small-cap stocks (which have been in downtrends for several
years) have started to bottom and move up. The following graph clearly
illustrates the divergence that has occurred over the past several years between
the large-cap dominated NASDAQ Composite and the average NASDAQ stock as
represented by the Advance-Decline line. Since 1995 and more so since the 1996
to 1997 time period, the market weighted NASDAQ Composite Index (which is driven
by large technology stocks) has been in an uptrend while the Advance-Decline
Line (which shows what has happened to NASDAQ stocks on average) has been in a
downtrend. As with all trends and
[GRAHPIC DESCRIPTION]
The following graph illustrates the divergence over the past several years
between the large-cap dominated NASDAQ Composite and the average NASDAQ stock as
represented by the Advance-Decline line.
1
<PAGE>
divergences, this cannot continue indefinitely and we continue to believe the
transition is in progress.
Currently the stock market, in general, is in a corrective phase. How long this
will last we don't know. However, when the correction has run its course, we
expect that small stocks should lead the next advance.
As we mentioned in our last letter, The Perkins Opportunity Fund has a
significant tax loss carryforward. Part of that carryforward was used up last
year; however, as of September 30, $4.85 million remains. This means that the
Fund may be able to take up to $2.40 per share of capital gains in the future
without having to make a taxable distribution. The carryforward resulted from
the sale of Fund holdings at a loss to cover redemptions in 1997 and 1998 when
small company stocks were performing badly. This represents a significant
shelter for taxable accounts and can work to the advantage of new investors and
long-term shareholders when the Fund is performing well. The Fund has many good
holdings that have the potential for capital appreciation and will not have to
distribute any tax liability until its carryforward is used up. We are pleased
that you as a shareholder have elected to retain your shares. We also believe it
would be an excellent time to add to your holdings to take advantage of this
hidden asset when the next upswing in the Fund's portfolio takes place.
The Discovery Fund, which is just 2 1/2 years old, is well-positioned in
micro-cap growth stocks, i.e., those with less than a $100 million market
capitalization. There are plenty to choose from, as the price decline in
small-cap stocks moved many into the micro-cap category. The Fund is still very
small, just $1.4 million in net assets as of September 30, which makes it very
interesting for new money since it contains only 32 stocks and, therefore, price
increases in just a few can be meaningful.
2
<PAGE>
The following table shows the Funds' returns by year and since inception,
compared to several popular indices.
PERKINS PERKINS
DISCOVERY OPPORTUNITY RUSSELL NASDAQ S&P
FUND FUND 2000 COMPOSITE 500
CALENDAR PERIOD (PDFDX) (POFDX) INDEX INDEX INDEX
--------------- ------- ------- ----- ----- -----
1993 (Partial Year) -- 39.52% 17.62% 17.26% 10.67%
1994 -- 14.85% (3.18)% (3.20)% 1.27%
1995 -- 70.35% 26.21% 39.92% 37.53%
1996 -- (7.33)% 14.76% 22.71% 22.99%
1997 -- (17.08)% 20.52% 21.64% 33.34%
1998 - Discovery (Part Yr) 9.67% -- (11.23)% 21.34% 12.84%
- Opportunity -- (16.01)% (3.45)% 39.63% 28.57%
1999 67.54% 98.58% 19.62% 85.58% 21.03%
2000 (YTD to 09/30/00) 24.91% (2.80)% 3.29% (9.74)% (1.44)%
Annualized - Discovery 39.80% -- 3.39% 32.73% 12.36%
Annualized - Opportunity
(Inception to 9/30/00) -- 17.42% 12.00% 25.20% 19.46%
Sincerely,
/s/ Richard W. Perkins /s/ Daniel S. Perkins
Richard W. Perkins, C.F.A. Daniel S. Perkins, C.F.A.
President Vice President
Past performance is no guarantee of future performance. The Discovery Fund's
one-year and average annual total return from inception (April 9, 1998) through
September 30, 2000 including the maximum sales charge of 4.75% was 59.67% and
37.08%, respectively. The Opportunity Fund's one-year, five-year and average
annual total return from inception (February 18, 1993) through September 30,
2000, including the maximum sales charge of 4.75% was 58.73%, 3.59% and 16.67%,
respectively. The Funds' returns and share values will fluctuate and shares may
be worth more or less than their original cost when redeemed. Small company
investing involves greater risks and volatility. The Funds are distributed by
First Fund Distributors, Inc., Phoenix, AZ 85018.
3
<PAGE>
THE PERKINS DISCOVERY FUND
SCHEDULE OF INVESTMENTS at September 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCKS: 90.9%
COMPUTER - INTERNET: 1.1%
10,000 Popmail.Com, Inc.* $ 4,687
3,000 VCampus Corp.* 10,875
----------
15,562
----------
COMPUTERS - INTEGRATED SYSTEMS: 7.2%
10,000 Digital Biometrics, Inc.* 62,500
3,000 Intelli-Check, Inc.* 40,875
----------
103,375
----------
COMPUTERS - PERIPHERAL EQUIPMENT: 10.2%
7,500 Check Technology Corp.* 33,281
6,000 Digi International, Inc.* 47,250
5,000 Fargo Electronics, Inc.* 30,937
5,000 Tidel Technologies, Inc.* 34,687
----------
146,155
----------
COMPUTERS - SOFTWARE: 6.8%
400 Fourth Shift Corp.* 850
3,000 Plato Learning, Inc.* 61,828
5,000 ShowCase Corp.* 34,687
----------
97,365
----------
CONSUMER PRODUCTS: 3.4%
3,000 Koala Corp.* 48,187
----------
DIVERSIFIED MANUFACTURING: 2.2%
2,000 Raven Industries, Inc. 31,750
----------
ELECTRONIC PRODUCTS: 6.9%
2,000 Axsys Technologies, Inc.* 72,375
5,000 Research, Inc.* 25,312
----------
97,687
----------
LEISURE - GAMING: 3.4%
2,500 Shuffle Master, Inc.* 48,594
----------
MEDICAL PRODUCTS: 22.5%
15,000 Conceptus, Inc.* 136,875
10,000 LecTec Corp.* 23,750
3,500 Merit Medical Systems, Inc.* 22,094
10,000 Rehabilicare, Inc.* 28,750
6,000 SpectraScience, Inc.* 57,000
7,700 Trimedyne, Inc.* 14,919
2,000 Vascular Solutions, Inc.* 37,531
----------
320,919
----------
OFFICE EQUIPMENT & SUPPLIES: 0.4%
7,000 ATS Money Systems, Inc.* 6,125
----------
REAL ESTATE SERVICES: 2.0%
2,500 HomeServices.Com, Inc.* 28,438
----------
RETAIL - INTERNET: 0.0%
10,000 Virtual Technology Corp. 550
----------
RETAIL - MISCELLANEOUS: 6.7%
1,500 Ag Services of America, Inc. 26,438
2,000 Damark International, Inc. - Class A* 24,500
2,500 Sharper Image Corp.* 44,063
----------
95,001
----------
TELECOMMUNICATIONS - EQUIPMENT/SERVICES: 18.1%
25,000 ACI Telecentrics, Inc.* 37,500
10,000 ChoiceTel Communications, Inc.* 32,500
2,000 Hector Communications Corp.* 26,000
10,000 OneLink Communications, Inc.* 12,188
4,000 Radyne Comstream, Inc.* 31,250
3,500 RMH Teleservices, Inc.* 56,219
5,000 Vialog Corp.* 44,063
4,000 WorldQuest Networks, Inc.* 18,250
----------
257,970
----------
TOTAL COMMON STOCKS (cost $1,080,417) 1,297,678
----------
WARRANT: 1.1%
TELECOMMUNICATIONS - EQUIPMENT/SERVICES: 1.1%
4,000 Raydyne ComStream, Inc.
Wts., Exp. 02/08/2005* 15,250
----------
4
<PAGE>
THE PERKINS DISCOVERY FUND
SCHEDULE OF INVESTMENTS at September 30, 2000 (Unaudited) - (Continued)
--------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT:
7.4% $106,000 Firstar Bank Repurchase Agreement, 4.25%,
date 9/29/2000, due 10/02/2000, collateralized by $109,682
FHLB, 5.19%, due 10/20/2003 (proceeds $106,037) (cost $106,000) $ 106,000
----------
TOTAL INVESTMENTS IN SECURITIES
(cost $1,186,417+): 99.4% 1,418,928
----------
Other Assets less Liabilities: 0.6% 9,184
----------
NET ASSETS: 100.0% $1,428,112
==========
* Non-income producing security.
+ At September 30, 2000, the basis of invesments for federal income tax
purposes was the same as their cost for financial reporting purposes.
Unrealized appreciation and depreciation were as follows:
Gross unrealized appreciation $ 394,029
Gross unrealized depreciation (161,518)
---------
Net unrealized appreciation $ 232,511
=========
See accompanying Notes to Financial Statements.
5
<PAGE>
THE PERKINS OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS at September 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCKS: 83.8%
BUSINESS SERVICES: 19.5%
87,500 Appliance Recycling Centers of America, Inc.* $ 164,062
25,000 G&K Services, Inc. 701,562
437,500 Health Fitness Corp.* 164,062
750,000 Insignia Systems, Inc.* 5,765,625
400,000 Integrated Security Systems, Inc.* 187,500
250,000 Reality Interactive, Inc.* 87,500
-----------
7,070,311
-----------
COMPUTER - INTERNET: 1.0%
50,000 VCampus Corp.* 181,250
11,743 WebMD Corp.* 179,078
-----------
360,328
-----------
COMPUTERS - INTEGRATED SYSTEMS: 4.7%
337,500 Applied Digital Solutions, Inc.* 1,276,172
100,000 Zamba Corp.* 425,000
-----------
1,701,172
-----------
COMPUTERS - PERIPHERAL EQUIPMENT: 6.3%
100,000 Ciprico, Inc.* 1,012,500
200,000 Digital Biometrics, Inc.* 1,250,000
100,000 RSI Systems, Inc.* 28,125
-----------
2,290,625
-----------
COMPUTERS - SOFTWARE: 12.3%
100,000 3DO Co. (The)* 668,750
100,000 Ebix.com, Inc.* 356,250
200,000 Fourth Shift Corp.* 425,000
50,000 IntraNet Solutions, Inc.* 2,500,000
75,000 ShowCase Corp.* 520,313
-----------
4,470,313
-----------
CONSUMER PRODUCTS: 3.2%
250,000 Galagen, Inc.* 250,000
250,000 MBC Holding Co.* 906,250
-----------
1,156,250
-----------
DIRECT MARKETING: 1.4%
20,000 ValueVision International, Inc.* 502,500
-----------
ELECTRONIC PRODUCTS: 3.8%
175,000 Micro Component Technology, Inc.* 1,400,000
-----------
FOOD - WHOLESALE: 1.6%
40,000 SUPERVALU, Inc. 602,500
-----------
LEISURE - MISCELLANEOUS: 2.3%
50,000 American Classic Voyages Co.* 731,250
100,000 Innovative Gaming Corp. of America* 103,125
-----------
834,375
-----------
MEDICAL PRODUCTS: 15.2%
100,000 ATS Medical, Inc.* 1,506,250
200,000 InnerDyne, Inc.* 1,400,000
100,000 LecTec Corp.* 237,500
57,386 Possis Medical, Inc.* 387,356
175,000 SpectraScience, Inc.* 1,662,500
50,000 Theragenics Corp.* 325,000
-----------
5,518,606
-----------
RETAIL - MISCELLANEOUS: 10.5%
200,000 Big Buck Brewery & Steakhouse, Inc.* 362,500
41,500 Guitar Center, Inc.* 510,969
30,000 Hot Topic, Inc.* 900,000
112,500 Wilsons The Leather Experts, Inc.* 2,032,031
-----------
3,805,500
-----------
TELECOMMUNICATIONS - EQUIPMENT/SERVICES: 2.0%
85,000 ChoiceTel Communications, Inc.* 276,250
100,000 Norstan, Inc.* 300,000
115,000 OneLink Communications, Inc.* 140,156
-----------
716,406
-----------
TOTAL COMMON STOCKS
(cost $33,145,728) 30,428,886
-----------
6
<PAGE>
THE PERKINS OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS at September 30, 2000 (Unaudited) - (Continued)
--------------------------------------------------------------------------------
SHARES VALUE
--------------------------------------------------------------------------------
WARRANTS: 0.1%
COMPUTER - INTERNET: 0.0%
100,000 Popmail.Com, Inc. Wts., Exp. 11/03/01* $ 6,250
-----------
MEDICAL PRODUCTS: 0.0%
11,477 Possis Medical, Inc. Wts., Exp. 03/06/04* 0
-----------
RETAIL - MISCELLANEOUS: 0.0%
300,000 Big Buck Brewery & Steakhouse, Inc. Wts. A,
Exp. 12/13/01* 18,750
-----------
TELECOMMUNICATIONS - EQUIPMENT/SERVICES: 0.1%
85,000 ChoiceTel Communications, Inc. Wts., Exp. 11/10/02* 21,250
-----------
TOTAL WARRANTS (cost $10,801) 46,250
-----------
PRINCIPAL AMOUNT VALUE
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT: 13.8%
$4,992,000 Firstar Bank Repurchase Agreement, 4.25%,
9/30/2000, due 10/02/2000, collateralized by $5,165,398
FHLB, 5.19%, due 10/20/2003 (proceeds $4,993,768)
(cost $4,992,000) $ 4,992,000
-----------
TOTAL INVESTMENTS IN SECURITIES (cost $38,148,529+): 97.7% 35,467,136
-----------
Other Assets less Liabilities: 2.3% 842,014
-----------
NET ASSETS: 100.0% $36,309,150
===========
* Non-income producing security.
+ At September 30, 2000, the basis of securities for federal income tax
purposes was $38,192,731. Unrealized appreciation and depreciation were as
follows:
Gross unrealized appreciation $ 10,013,087
Gross unrealized depreciation (12,694,480)
------------
Net unrealized depreciation $ (2,681,393)
============
See accompanying Notes to Financial Statements.
7
<PAGE>
THE PERKINS DISCOVERY FUND
STATEMENT OF ASSETS AND LIABILITIES at September 30, 2000 (Unaudited)
ASSETS
Investments in securities, at value (cost $1,186,417) ....... $ 1,418,928
Cash ........................................................ 747
Receivables:
Securities sold ........................................... 30,228
Due from advisor .......................................... 7,146
Dividends and interest .................................... 373
Prepaid expenses ............................................ 2,630
Deferred organization costs ................................. 7,554
-----------
Total assets ............................................ 1,467,606
-----------
LIABILITIES
Payables:
Fund shares redeemed ...................................... 21,123
Administration fees ....................................... 2,466
Distribution fees ......................................... 843
Accrued expenses ............................................ 15,062
-----------
Total liabilities ....................................... 39,494
-----------
NET ASSETS .................................................... $ 1,428,112
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($1,428,112/46,691 shares outstanding; unlimited
number of shares authorized without par value) ............ $ 30.59
===========
MAXIMUM OFFERING PRICE PER SHARE ($30.59/.9525) ............. $ 32.12
===========
COMPONENTS OF NET ASSETS
Paid-in capital ............................................. $ 719,255
Accumulated net investment loss ............................. (13,220)
Accumulated net realized gain on investments ................ 489,566
Net unrealized appreciation on investments .................. 232,511
-----------
Net assets ................................................ $ 1,428,112
===========
See accompanying Notes to Financial Statements.
8
<PAGE>
THE PERKINS DISCOVERY FUND
STATEMENT OF OPERATIONS For the Six Months Ended September 30, 2000 (Unaudited)
INVESTMENT INCOME
Income
Interest ..................................................... $ 4,626
Dividends .................................................... 360
---------
Total income ............................................... 4,986
---------
Expenses
Transfer agent fees .......................................... 20,437
Administration fees .......................................... 15,041
Registration expense ......................................... 7,216
Fund accounting fees ......................................... 7,369
Advisory fees ................................................ 7,283
Audit fees ................................................... 6,548
Custody fees ................................................. 2,875
Trustee fees ................................................. 1,676
Distribution fees ............................................ 1,576
Deferred organization expense ................................ 1,504
Legal fees ................................................... 1,025
Reports to shareholders ...................................... 985
Shareholder service fees ..................................... 869
---------
Total expenses ............................................. 74,404
Less: fees waived and expenses absorbed .................... (56,198)
---------
Net expenses ............................................... 18,206
---------
NET INVESTMENT LOSS ...................................... (13,220)
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments ............................. 109,194
Net unrealized depreciation on investments ................... (570,190)
---------
Net realized and unrealized loss on investments ............ (460,996)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $(474,216)
=========
See accompanying Notes to Financial Statements.
9
<PAGE>
THE PERKINS DISCOVERY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000# MARCH 31, 2000
------------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ........................... $ (13,220) $ (24,768)
Net realized gain on investments .............. 109,194 528,588
Net unrealized appreciation
(depreciation) on investments ............... (570,190) 728,192
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................ (474,216) 1,232,012
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net realized gain ........................ -- (120,760)
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets
derived from net change in outstanding
shares (a) .................................. (60,075) 54,376
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... (534,291) 1,165,628
NET ASSETS
Beginning of period ........................... 1,962,403 796,775
----------- -----------
END OF PERIOD ................................. $ 1,428,112 $ 1,962,403
=========== ===========
(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
-------------------- --------------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold ..................... 2,917 $ 84,920 7,170 $ 162,035
Shares issued in reinvestment
of distributions................ 58 2,095 4,268 91,630
Shares redeemed.................. (5,076) (147,090) (8,564) (199,289)
------ -------- ------ --------
Net increase (decrease).......... (2,101) $ (60,075) 2,874 $ 54,376
====== ========= ===== =========
</TABLE>
# Unaudited
See accompanying Notes to Financial Statements.
10
<PAGE>
PERKINS OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES at September 30, 2000 (Unaudited)
ASSETS
Investments in securities, at value (cost $38,148,529) ..... $ 35,467,136
Cash ....................................................... 32
Receivables:
Fund shares sold ......................................... 1,055,933
Interest ................................................. 1,179
------------
Total assets ........................................... 36,524,280
============
LIABILITIES
Payables:
Fund shares redeemed ..................................... 78,924
Due to advisor ........................................... 29,451
Distribution fees ........................................ 21,199
Administration fees ...................................... 7,365
Accrued expenses ........................................... 78,190
------------
Total liabilities ...................................... 215,129
------------
NET ASSETS ................................................... $ 36,309,151
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($36,309,152/1,774,333 shares outstanding; unlimited
number of shares authorized without par value) ........... $ 20.46
============
MAXIMUM OFFERING PRICE PER SHARE ($20.46/.9525) ............ $ 21.48
============
COMPONENTS OF NET ASSETS
Paid-in capital ............................................ $ 43,365,934
Accumulated net investment loss ............................ (313,521)
Accumulated net realized loss on investments ............... (4,061,869)
Net unrealized depreciation on investments ................. (2,681,393)
------------
Net assets ............................................. $ 36,309,151
============
See accompanying Notes to Financial Statements.
11
<PAGE>
PERKINS OPPORTUNITY FUND
STATEMENT OF OPERATIONS For the Six Months Ended September 30, 2000 (Unaudited)
INVESTMENT INCOME
Income
Dividends .................................................. $ 114,897
Interest ................................................... 175
-----------
Total income ............................................. 115,072
-----------
Expenses
Advisory fees .............................................. 185,590
Transfer agent fees ........................................ 76,222
Administration fees ........................................ 49,599
Distribution fees .......................................... 40,010
Custody fees ............................................... 17,607
Shareholder service fees ................................... 13,061
Fund accounting fees ....................................... 11,581
Audit fees ................................................. 9,409
Registration fees .......................................... 8,260
Reports to shareholders .................................... 6,607
Insurance expense .......................................... 5,948
Trustee fees ............................................... 3,161
Legal fees ................................................. 954
Miscellaneous .............................................. 584
-----------
Total expenses ........................................... 428,593
-----------
NET INVESTMENT LOSS .................................... (313,521)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments ............................. 834,528
Net unrealized depreciation on investments ................... (9,412,405)
-----------
Net realized and unrealized loss on investments ............ (8,577,877)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $(8,891,398)
===========
See accompanying Notes to Financial Statements.
12
<PAGE>
PERKINS OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTH ENDED YEAR ENDED
SEPTEMBER 30, 2000# MARCH 31, 2000
------------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ............................. $ (313,521) $ (694,108)
Net realized gain on investments ................ 834,528 10,098,026
Net unrealized appreciation (depreciation)
on investments ................................ (9,412,405) 19,358,743
------------ ------------
NET (DECREASE) INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS................... (8,891,398) 28,762,661
------------ ------------
CAPITAL SHARE TRANSACTIONS
Net decrease in net assets derived from
net change in outstanding shares (a) .......... (5,005,359) (10,331,153)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ..... (13,896,757) 18,431,508
NET ASSETS
Beginning of period ............................. 50,205,908 31,774,400
------------ ------------
END OF PERIOD ................................... $ 36,309,151 $ 50,205,908
============ ============
</TABLE>
(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000# MARCH 31, 2000
--------------------------- ---------------------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold ........ 847,367 $ 16,817,886 633,195 $ 11,778,533
Shares redeemed .... (1,093,380) (21,823,245) (1,294,244) (22,109,686)
---------- ----------- ---------- -----------
Net decrease ....... (246,014) $ (5,005,359) (661,049) $(10,331,153)
========== =========== ========== ===========
# Unaudited.
See accompanying Notes to Financial Statements.
13
<PAGE>
PERKINS DISCOVERY FUND
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
APRIL 9, 1998*
SIX MONTHS ENDED YEAR ENDED THROUGH
SEPTEMBER 30, 2000# MARCH 31, 2000 MARCH 31, 1999
------------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of period...................... $ 40.22 $ 17.35 $ 15.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................... (0.28) (0.51) (0.15)
Net realized and unrealized
gain (loss) on investments ........................... (9.35) 26.07 2.50
------- ------- -------
Total from investment operations ......................... (9.63) 25.56 2.35
------- ------- -------
LESS DISTRIBUTIONS:
From net realized gain ................................. -- (2.69) --
------- ------- -------
Net asset value, end of period ........................... $ 30.59 $ 40.22 $ 17.35
======= ======= =======
Total return ............................................. (23.94)%^ 160.88% 15.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions).................... $ 1.4 $ 2.0 $ 0.8
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed ................. 10.21%+ 12.27% 24.67%+
After fees waived and expenses absorbed .................. 2.50%+ 2.50% 2.50%+
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed ............... (9.53)%+ (11.97)% (23.41)%+
After fees waived and expenses absorbed ................ (1.81)%+ (2.20)% (1.24)%+
Portfolio turnover rate ................................ 25.61%^ 144.58% 137.32%
</TABLE>
* Commencement of operations.
+ Annualized.
# Unaudited.
^ Not Annualized.
See accompanying Notes to Financial Statements.
14
<PAGE>
PERKINS OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
SIX MONTHS ENDED -------------------------------------------------------
SEPTEMBER 30, 2000# 2000 1999 1998 1997 1996*
------------------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $ 24.85 $ 11.85 $ 14.24 $ 12.58 $ 18.78 $ 13.03
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .......................... (0.18) (0.34) (0.24) (0.34) (0.24) (0.12)
Net realized and unrealized gain (loss)
on investments............................... (4.21) 13.34 (2.15) 2.00 (4.98) 6.66
-------- -------- -------- -------- -------- --------
Total from investment operations ............. (4.39) 13.00 (2.39) 1.66 (5.22) 6.54
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From net realized gain ....................... -- -- -- -- (0.98) (0.79)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............... $ 20.46 $ 24.85 $ 11.85 $ 14.24 $ 12.58 $ 18.78
======== ======== ======== ======== ======== ========
Total return ................................. (17.67)%^ 109.70% (16.78)% 13.20% (28.94)% 51.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions)........ $ 36.3 $ 50.2 $ 31.8 $ 56.1 $ 75.3 $ 92.3
Ratio of expenses to average net assets..... 2.31%+ 2.18% 2.24% 2.27% 1.90% 1.97%
Ratio of net investment loss to average
net assets ............................... (1.69)%+ (1.90)% (1.69)% (1.85)% (1.25)% (1.16)%
Portfolio turnover rate ................... 7.75%^ 29.64% 19.34% 53.37% 86.88% 92.45%
</TABLE>
* Per share data has been restated to give effect to a 2-for-1 stock split to
shareholders of record as of the close of June 3, 1996.
+ Annualized.
# Unaudited.
^ Not annualized.
See accompanying Notes to Financial Statements.
15
<PAGE>
THE PERKINS DISCOVERY FUND AND
THE PERKINS OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
The Perkins Discovery Fund and the Perkins Opportunity Fund (the "Funds") are a
diversified 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 an open-end management investment company. The
Funds' primary investment objective is capital appreciation. The Perkins
Discovery Fund and Perkins Opportunity Fund began operations on April 9, 1998
and February 18, 1993, respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles.
A. SECURITIES VALUATION. Securities traded on a national securities exchange
or Nas-daq are valued at the last reported sale price at the close of
regular trading on each day the exchanges are open for trading; 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 stated
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 Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all taxable income to their shareholders. Therefore, no
federal income tax provision is required.
For the Perkins Opportunity Fund, at March 31, 2000, there is a capital
loss car-ryforward of approximately $4,852,000, of which $1,117,000 expires
March 31, 2006 and $3,735,000 expires March 31, 2007, available to offset
future gains, if any.
C. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS. Security
transactions are accounted for on the trade date. The cost of securities
owned on realized transactions are relieved on a specific identification
basis. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recognized on an accrual basis.
Income and capital gains distributions to shareholders 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.
16
<PAGE>
THE PERKINS DISCOVERY FUND AND
THE PERKINS OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
D. DEFERRED ORGANIZATION COSTS. All of the expenses incurred by the Adviser in
connection with the organization and registration of the Perkins Discovery
Fund's shares will be borne by the Fund and are being amortized to expense
on a straight-line basis over a period of five years.
E. 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, as well as the
reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
F. RECLASSIFICATION OF CAPITAL ACCOUNTS. The Funds account and report for
distributions to shareholders in accordance with the American Institute of
Certified Public Accountant's Statement of Position 93-2: DETERMINATION,
DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL AND
RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES. For the year ended
March 31, 2000, the Perkins Discovery Fund decreased net realized gain on
investments by $24,768 due to the Fund experiencing a net investment loss
during the year. For the year ended March 31, 2000, the Perkins Opportunity
Fund decreased paid-in capital by $694,108 due to the Fund experiencing a
net investment loss during the previous fiscal year. Net assets were not
affected by these changes.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the six months ended September 30, 2000, Perkins Capital Management, Inc.
(the "Advisor") provided the Funds with investment management services under an
Investment Advisory Agreement. The Advisor furnishes all investment advice,
office space and certain administrative services, and provides most of the
personnel needed by the Funds. 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 September 30, 2000, the
Perkins Discovery Fund and the Perkins Opportunity Fund incurred $7,283 and
$185,590 in Advisory fees, respectively.
The Funds are responsible for their own operating expenses. The Advisor has
agreed to reduce fees for the Perkins Discovery Fund to the extent necessary to
limit the Fund's aggregate annual operating expenses to 2.50% of the average
daily net assets. For the six months ended September 30, 2000, the Advisor has
voluntarily waived its fees of $7,283 and absorbed expenses of $48,915 for the
Perkins Discovery Fund.
17
<PAGE>
THE PERKINS DISCOVERY FUND AND
THE PERKINS OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
Any fee withheld or voluntarily reduced and/or any Fund expense absorbed by the
Advisor 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 fee waiver and/or expense
absorption relates, 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.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Funds' Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Funds; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Funds-custodian, transfer agent and accountants;
coordinates the preparation and payment of Funds' expenses and reviews the
Funds' expense accruals. For its services, the Administrator receives a monthly
fee at the following annual rate:
Under $12 million $30,000
$12 to $50 million 0.25% of average daily net assets
$50 to $100 million 0.20% of average daily net assets
$100 to $200 million 0.15% of average daily net assets
Over $200 million 0.10% of average daily net assets
For the six months ended September 30, 2000, the Funds incurred $15,041 and
$49,599 in Administration fees for the Perkins Discovery Fund and the Perkins
Opportunity Fund, respectively.
First Fund Distributors, Inc. (the "Distributor") acts as the Funds' principal
underwriter in a continuous public offering of the Funds' 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 - DISTRIBUTION COSTS
The Funds have adopted a Distribution Plan (the "Plan") in accordance with Rule
12b-1 under the 1940 Act. The Plan provides that the Funds may pay a fee to the
Distributor at an annual rate of up to 0.20% of the average daily net assets of
the Funds. The fee is paid to the Distributor as reimbursement for, or in
anticipation of, expenses incurred for distribution-related activity. For the
six months ended Sep-tember 30, 2000, the Perkins Discovery Fund and the Perkins
Opportunity Fund paid the Distributor $1,576 and $40,010 under the Plan,
respectively.
18
<PAGE>
THE PERKINS DISCOVERY FUND AND
THE PERKINS OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
NOTE 5 - SHAREHOLDER SERVICING FEE
The Funds have entered into a Shareholder Service Agreement with the Advisor,
under which the Funds pay servicing fees at an annual rate of up to 0.25% of
each Fund's average daily net assets. Payments to the Advisor under the
Shareholder Servicing Agreement may reimburse the Advisor for payments it makes
to selected brokers, dealers and administrators which have entered into Service
Agreements with the Advisor for services provided to shareholders of the Funds.
The services provided by such intermediaries are primarily designed to assist
shareholders of the Funds and include the furnishing of office space and
equipment, telephone facilities, personnel and assistance to the Funds in
servicing such shareholders. Services provided by such intermediaries also
include the provision of support services to the Funds and include establishing
and maintaining shareholders-accounts and record processing, purchase and
redemption transactions, answering routine client inquiries regarding the Funds,
and providing such other personal services to shareholders as the Funds may
reasonably request. For the six months ended September 30, 2000, the Perkins
Discovery Fund and Perkins Opportunity Fund incurred $869 and $13,061 in
Shareholder Servicing fees, respectively.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
For the six months ended September 30, 2000, the cost of purchases and the
proceeds from sales of securities for the Perkins Discovery Fund, excluding
short-term securities, were $333,853 and $462,812, respectively.
For the six months ended September 30, 2000, the cost of purchases and the
proceeds from sales of securities for the Perkins Opportunity Fund, excluding
short-term securities, were $2,504,327 and $8,074,670, respectively.
NOTE 7 - REPURCHASE AGREEMENTS
The Funds 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 Funds 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 Funds in each agreement, and the Funds will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer
to the accounts 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.
19
<PAGE>
THE PERKINS DISCOVERY FUND AND
THE PERKINS OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
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 Funds may be delayed or limited.
NOTE 8 - INVESTMENTS IN AFFILIATES
Affiliated companies, as defined in Section 2 (a) (3) of the Investment Company
Act of 1940, are companies 5% or more of whose outstanding voting shares are
held by the Fund. For the six months ended September 30, 2000, the Perkins
Opportunity Fund had the following transactions with affiliated companies:
<TABLE>
<CAPTION>
Shares Held Shares Held Value
March 31, Shares Shares September 30, September 30,
2000 Purchased Sold 2000 2000
---- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Insignia Systems Inc.: 750,000 750,000 $5,765,625
MBC Holding Company: 250,000 250,000 906,360
Reality Interactive Inc.: 250,000 250,000 87,500
-------- ----------
Totals $6,759,485
==========
</TABLE>
20
<PAGE>
================================================================================
Advisor
PERKINS CAPITAL MANAGEMENT, INC.
730 East Lake Street
Wayzata, MN 55391-1769
(800) 998-3190
(952) 473-8367
Distributor
FIRST FUND DISTRIBUTORS, INC.
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85018
Custodian
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
425 Walnut Street
Cincinnati, OH 45202
Transfer Agent and Shareholder Services
PFPC, INC.
P.O. Box 8813
Wilmington, DE 19899-8813
(800) 280-4779
Auditors
TAIT, WELLER & BAKER
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19101
Legal Counsel
PAUL, HASTINGS, JANOFSKY & WALKER LLP
345 California Street, 29th Floor
San Francisco, CA 94104
================================================================================
This report is intended for the 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.
