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WOMEN'S EQUITY MUTUAL FUND
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ANNUAL REPORT
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For the Year Ended
March 31, 2000
<PAGE>
WOMEN'S EQUITY MUTUAL FUND
April 15, 2000
Dear Shareholders:
Since launching the Women's Equity Mutual Fund, our goals have always been to
encourage shareholders to learn about the stock market, take responsibility for
their financial decisions, and invest wisely for the long term. By combining our
resources, we have also made an effort to exert collective influence on
corporations to improve their programs, policies and practices regarding women
employees. We have seen many positive changes since the inception of the Fund in
1993, including a significant increase in the number of women actively involved
in financial planning and investments, as well as promising advances in the
status of women in the workplace. However, there is still much room for
improvement, and we continue to explore new ways to use our collective voice.
As of March 31, 2000 the Fund's average total returns are as follows:
One Three Five From Inception
Year Years Years 10/1/93
---- ----- ----- -------
Women's Equity Mutual Fund 9.60% 23.83% 18.95% 15.26%
The recent volatility in the stock market, especially in technology stocks, is
of particular concern. While technology stocks accounted for virtually all of
the market's return in 1999, current prices for many technology companies
reflect valuations with a significant potential for disappointment. As the
markets sort out the winners and losers in this highly competitive sector,
investors should anticipate a continuation of the recent high level of
volatility. Our approach continues to reflect the view that this group will play
a central role in the growth of the U.S. economy. However, we have chosen to
focus on companies with superior financials, high levels of cash flow, and some
franchise value underpinning their business strategy.
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In looking ahead, the health of the market depends largely on the health of the
U.S. economy. After five consecutive rate hikes, we expect the Fed to continue
tightening to prevent an acceleration of inflation, but still allow for healthy
economic growth. Given the low rate of inflation, and in spite of the volatility
in certain sectors, we believe that returns in the year 2000 will be good,
although the source of those returns is likely to be quite different than in
1999.
As always, we appreciate your investment in the Women's Equity Mutual Fund and
welcome your comments and suggestions.
Sincerely yours,
/s/ Linda C.Y. Pei
Linda C.Y. Pei
President
Women's Equity Mutual Fund
Value of $10,000 vs S&P 500 Index
Average Annual Total Return
Period Ended March 31, 2000
1 Year....................... 9.60%
5 Year....................... 18.95%
Since Inception (10/1/93).... 15.26%
Women's Equity
Mutual Fund S&P 500 Index w/inc.
----------- --------------------
10/1/93 10,000 10,000
12/31/93 10,130 10,181
3/31/94 10,460 9,791
6/30/94 10,126 9,826
9/30/94 10,684 10,315
12/31/94 10,125 10,311
3/31/95 10,561 11,314
6/30/95 10,646 12,393
9/30/95 11,402 13,377
12/31/95 11,843 14,181
3/31/96 12,269 14,945
6/30/96 12,444 15,606
9/30/96 12,991 16,094
12/31/96 13,559 17,442
3/31/97 13,241 17,904
6/30/97 15,583 21,023
9/30/97 16,470 22,601
12/31/97 17,434 23,257
3/31/98 19,964 26,499
6/30/98 20,649 27,358
9/30/98 18,373 24,643
12/31/98 22,449 29,902
3/31/99 22,911 31,381
6/30/99 24,849 33,596
9/30/99 21,976 31,497
12/31/99 24,312 36,183
3/31/00 25,110 37,012
Past performance is not predictive of future performance.
The S&P 500 Index is a broad market-weighted average of U.S. blue-chip
companies. The S&P 500 Index is unmanaged and returns include reinvested
dividends.
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SCHEDULE OF INVESTMENTS AT MARCH 31, 2000
Shares Value
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COMMON STOCKS: 99.6%
Computer Services: 1.0%
3,100 Affiliated Computer Services, Inc.* $ 117,800
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Consumer Durables: 1.3%
2,000 Harley-Davidson, Inc. 158,750
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Consumer Products and Services: 7.8%
6,000 Avon Products, Inc. 174,375
5,000 Colgate-Palmolive Company 281,875
7,500 Dollar General Corporation 201,563
4,000 Jones Apparel Group, Inc.* 127,500
3,500 The Gillette Company 131,906
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917,219
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Electronic Measure Instruments: 0.7%
800 Agilent Technologies, Inc.* 83,200
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Financial Services: 13.5%
2,500 American International Group, Inc. 273,750
4,000 Bank of America Corp. 209,750
3,800 Federal National Mortgage Association 214,463
10,000 FleetBoston Financial Corp. 365,000
6,000 MBNA Corporation 153,000
1,500 The Charles Schwab Corp. 85,219
1,400 Wachovia Corp. 94,587
5,000 Wells Fargo & Company 204,687
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1,600,456
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Food - Wholesale/Distribution: 1.2%
4,000 SYSCO Corp. 142,750
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Furnishings: 3.2%
7,000 Herman Miller, Inc. 196,000
8,500 Leggett & Platt, Inc. 182,750
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378,750
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Healthcare: 13.7%
4,400 Biomet, Inc. 160,050
3,000 Cardinal Health, Inc. 137,625
2,000 Guidant Corporation* 117,625
2,000 IDX Sys Corp.* $ 54,750
4,000 Johnson& Johnson 280,250
5,800 Medtronic, Inc. 298,337
4,500 Merck & Co., Inc. 279,562
4,000 Schering-Plough Corporation 147,000
2,000 Stryker Corp. 139,500
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1,614,699
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Industrial Materials: 1.4%
4,000 Praxair, Inc. 166,500
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Instruments - Scientific: 0.5%
600 Waters Corporation* 57,150
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Insurance - Property/Casualty: 0.9%
1,500 The Chubb Corporation 101,344
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Investment Management: 1.0%
3,000 T. Rowe Price Associates, Inc. 118,500
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Oil & Gas Producers: 2.2%
5,000 BP Amoco PLC ADR 265,313
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Producer Products: 4.1%
5,000 Illinois Tool Works, Inc. 276,250
6,000 Teleflex, Inc. 213,000
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489,250
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Publishing Newspapers: 1.1%
4,000 McClatchy Company, Class A 131,000
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Retail: 6.4%
8,500 BJ's Wholesale Club, Inc.* 328,313
3,400 Costco Wholesale Corp.* 178,713
1,500 The Home Depot, Inc. 96,750
7,000 The TJX Companies, Inc. 155,312
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759,088
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Technology: 25.7%
4,000 Applied Materials, Inc.* 377,000
2,600 Automatic Data Processing 125,450
5,800 Cisco Systems, Inc.* 448,413
2,100 Hewlett-Packard Company 278,381
3,100 Intel Corporation 409,006
3
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SCHEDULE OF INVESTMENTS AT MARCH 31, 2000 (CONTINUED)
Shares Value
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Technology (continued)
2,600 International Business
Machines Corporation $ 306,800
4,000 Microsoft Corporation* 425,000
2,700 Oracle Corporation* 210,769
5,000 Sanmina Corporation* 337,812
1,200 Sun Microsystems, Inc.* 112,444
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3,031,075
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Telecommunications - Equipment: 2.6%
5,000 Lucent Technologies Inc. 303,750
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Telephone - Local: 5.3%
2,345 ALLTEL Corporation 147,882
4,200 BellSouth Corporation 197,400
3,000 CenturyTel, Inc. 111,375
4,000 SBC Communications Inc. 168,000
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624,657
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Telephone - Long Distance: 4.4%
6,500 AT&T Corp. 365,625
3,400 MCI WorldCom Incorporated* 154,063
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519,688
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Transportation: 1.6%
9,000 Southwest Airlines Co. 187,312
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TOTAL COMMON STOCKS (cost $7,879,070) 11,768,251
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Principal
Amount Value
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SHORT-TERM INVESTMENT: 0.5%
Money Market Investment: 0.5%
$57,214 Firstar Stellar Treasury Fund (cost $57,214) $ 57,214
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TOTAL INVESTMENT IN SECURITIES
(cost $7,936,284+): 100.1% 11,825,465
Liabilities in excess of Other Assets: (0.1%) (17,122)
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NET ASSETS: 100.0% $11,808,343
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* Non-income producing security.
+ At March 31, 2000, the basis of investments 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 $ 4,170,387
Gross unrealized depreciation (281,206)
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Net unrealized appreciation $ 3,889,181
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See accompanying Notes to Financial Statements.
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STATEMENT OF ASSETS AND LIABILITIES AT MARCH 31, 2000
ASSETS
Investments in securities, at value (cost $7,936,284) ...... $ 11,825,465
Receivables:
Investment securities sold ................................ 53,703
Dividends and interest .................................... 11,876
Fund shares sold .......................................... 2,126
Prepaid expenses .......................................... 3,295
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Total assets .......................................... 11,896,465
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LIABILITIES
Payables:
Investment securities purchased ......................... 52,022
Fund shares redeemed .................................... 1,868
Advisory fees ........................................... 79
Accrued expenses .......................................... 34,153
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Total liabilities ..................................... 88,122
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NET ASSETS .................................................. $ 11,808,343
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NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($11,808,343/568,701 shares outstanding; unlimited
number of shares authorized without par value) ............. $ 20.76
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COMPONENTS OF NET ASSETS
Paid-in capital ............................................ $ 7,762,590
Accumulated net investment loss ............................ (2,586)
Accumulated net realized gain on investments ............... 159,158
Net unrealized appreciation on investments ................. 3,889,181
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Net assets ............................................ $ 11,808,343
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See accompanying Notes to Financial Statements.
5
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STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2000
INVESTMENT INCOME
Income
Dividends ...................................................... $ 105,912
Interest ....................................................... 8,193
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Total income ................................................. 114,105
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Expenses
Advisory fees .................................................. 108,676
Administration fees ............................................ 30,000
Distribution fees .............................................. 27,169
Audit fees ..................................................... 20,613
Fund accounting fees ........................................... 19,911
Transfer agent fees ............................................ 19,623
Custody fees ................................................... 14,026
Registration expense ........................................... 10,931
Reports to shareholders ........................................ 8,176
Trustee fees ................................................... 5,234
Legal fees ..................................................... 3,407
Insurance expense .............................................. 550
Miscellaneous .................................................. 322
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Total expenses ............................................... 268,638
Less: fees waived and expenses absorbed ...................... (105,624)
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Net expenses ................................................. 163,014
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NET INVESTMENT LOSS ....................................... (48,909)
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments ............................... 343,492
Net unrealized appreciation on investments ..................... 710,174
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Net realized and unrealized gain on investments .............. 1,053,666
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $ 1,004,757
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See accompanying Notes to Financial Statements.
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STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
March 31, 2000 March 31 1999
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INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ............................ $ (48,909) $ (31,565)
Net realized gain on investments ............... 343,492 652,750
Net unrealized appreciation on investments ..... 710,174 496,587
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NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................ 1,004,757 1,117,772
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DISTRIBUTIONS TO SHAREHOLDERS
From net realized gain ......................... (519,847) (335,895)
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CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net
change in outstanding shares (a) ............. 1,567,045 2,003,249
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TOTAL INCREASE IN NET ASSETS .................. 2,051,955 2,785,126
NET ASSETS
Beginning of year .............................. 9,756,388 6,971,262
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END OF YEAR (including accumulated net
investment loss of $2,586 and $1,909,
respectively) .............................. $11,808,343 $ 9,756,388
=========== ===========
(a) A summary of capital share transactions is as follows:
Year Ended Year Ended
March 31, 2000 March 31, 1999
--------------------- ----------------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold 122,816 $ 2,487,943 125,386 $2,361,170
Shares issued in reinvestment
of distribution 25,444 499,980 17,931 324,916
Shares redeemed (70,745) (1,420,878) (37,925) (682,837)
------- ----------- ------- ----------
Net increase 77,515 $ 1,567,045 105,392 $2,003,249
======= =========== ======= ==========
See accompanying Notes to Financial Statements.
7
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FINANCIAL HIGHLIGHTS FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 19.86 $ 18.07 $ 12.10 $ 11.22 $ 9.93
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) ................... (0.09) (0.06) (0.04) (0.01) 0.01
Net realized and unrealized gain
on investments ............................... 1.94 2.65 6.16 0.90 1.59
------- ------- ------- ------- -------
Total from investment operations ................. 1.85 2.59 6.12 0.89 1.60
------- ------- ------- ------- -------
Less distributions:
From net investment income ..................... 0.00 0.00 0.00 (0.01) (0.31)
From net realized gain ......................... (0.95) (0.80) (0.15) 0.00 0.00
------- ------- ------- ------- -------
Total distributions .............................. (0.95) (0.80) (0.15) (0.01) (0.31)
------- ------- ------- ------- -------
Net asset value, end of year ..................... $ 20.76 $ 19.86 $ 18.07 $ 12.10 $ 11.22
======= ======= ======= ======= =======
Total return ..................................... 9.60% 14.76% 50.77% 7.92% 16.17%
Ratios/supplemental data:
Net assets, end of year
(millions) ................................... $ 11.8 $ 9.8 $ 7.0 $ 4.4 $ 3.3
Ratio of expenses to average net assets:
Before fees waived and expenses absorbed ........ 2.47% 2.70% 3.12% 4.09% 4.75%
After fees waived and expenses absorbed ......... 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income (loss)
to average net assets:
Before fees waived and expenses absorbed ........ (1.42)% (1.60)% (1.88)% (2.64)% (1.97)%
After fees waived and expenses absorbed ......... (0.45)% 0.40% (0.26)% (0.05)% 1.28%
Portfolio turnover rate ........................ 19.32% 16.36% 27.21% 51.13% 120.64%
</TABLE>
See accompanying Notes to Financial Statements.
8
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NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
The Women's Equity Mutual Fund (the "Fund") is 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 Fund's primary
investment objective is to provide long-term capital appreciation. The Fund
began operations on October 1, 1993.
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 Nasdaq are valued at the last reported sales
price at the close of regular trading on each day that 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 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 income tax provision is required.
C. SECURITY TRANSACTIONS, DIVIDEND INCOME AND DISTRIBUTIONS. Security
transactions are accounted for on the trade date. The cost of
securities sold is determined 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 es- timates.
E. RECLASSIFICATION OF CAPITAL ACCOUNTS. The Fund accounts and reports
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 Fund decreased
9
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
paid-in capital by $48,232 due to the Fund experiencing a net in-
vestment loss during the year. Accumulated net realized gain on
investments and net assets were not affected by this change.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the year ended March 31, 2000, Pro-Conscience Funds, Incorporated (the
"Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, 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 1.00% based upon the average daily net assets
of the Fund. For the year ended March 31, 2000, the Fund incurred $108,676 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 1.50% of average
daily net assets. Any fee withheld 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 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 Trustee 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 year ended March 31, 2000, the Advisor waived fees of
$105,624. United States Trust Company of Boston (the "Sub-Advisor") acts as
Sub-Advisor to the Fund and is entitled to compensation for its services from
the Advisor.
Investment Company Administration, L.L.C. (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
10
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the year ended March 31, 2000, the Fund incurred $30,000 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 - 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 may 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. For the year ended March 31, 2000, the Fund paid
fees of $27,169 to the Advisor.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of securities, other than
short-term investments, for the year ended March 31, 2000 were $3,275,531 and
$2,052,441, 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.
11
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS OF
WOMEN'S EQUITY MUTUAL FUND
THE BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Women's Equity Mutual Fund, a series of
Professionally Managed Portfolios, as of March 31, 2000, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 2000, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Women's Equity Mutual Fund as of March 31, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with generally accepted accounting
principles.
TAIT, WELLER & BAKER
PHILADELPHIA, PENNSYLVANIA
APRIL 21, 2000
12
<PAGE>
================================================================================
Advisor
PRO-CONSCIENCE FUNDS, INC.
625 Market Street, 16th Floor
San Francisco, California 94105
(415) 547-9135
--
Distributor
FIRST FUND DISTRIBUTORS, INC.
4455 E. Camelback Road, Suite 261E
Phoenix, Arizona 85018
--
Custodian
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
425 Walnut Street
Cincinnati, Ohio 45202
--
Transfer Agent
AMERICAN DATA SERVICES, INC.
P.O. Box 5536
Hauppauge, New York 11788
(800) 282-2340
--
Auditors
TAIT, WELLER & BAKER
8 Penn Center, Suite 800
Philadelphia, Pennsylvania 19101
--
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.
