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Previous: PHILLIPS CAPITAL INVESTMENTS INC, NSAR-A, 1997-08-27 |
Next: MANAGED SECTORS VARIABLE ACCOUNT, NSAR-A, 1997-08-27 |
PHILLIPS CAPITAL INVESTMENTS, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
FOR THE SIX MONTH PERIOD ENDED
JUNE 30, 1997
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
<S> <C> <C>
Assets:
Investments in securities, at value -
amortized cost $3,273,975.14 in 1997 and
$3,550,952.16 in 1996 - Note A $ 4,489,351.18 $ 4,503,809.98
Cash 96,985.91 353,107.63
Receivables - Note A
Interest 24,946.09 23,092.02
Dividends 1,899.08 8,545.69
Investment securities sold 80,964.42 0
Deferred registration expenses - Note B 1,169.79 1,336.97
Prepaid insurance 871.75 391.80
Other assets 954.27 0
---------------- ----------------
Total assets 4,697,142.49 4,890,284.09
---------------- ----------------
Liabilities
Accrued accounting fees 2,677.80 4,650.00
Federal income tax payable 0 790.00
Miscellaneous accounts payable 0 683.42
Due shareholders on sale 0 2,076.95
---------------- ----------------
Total liabilities 2,677.80 8,200.37
---------------- ----------------
Net Assets:
Net assets (equivalent to $15.04 and $13.74
per share based on 312,162.913
and 355,399.640 shares of capital
stock outstanding at June 30, 1997 and
December 31, 1996, respectively) - Note C $ 4,694,464.69 $ 4,882,083.72
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES
JUNE 30, 1997
<TABLE>
<CAPTION>
Principal
Amount or
COMMON STOCKS: 56.97% Shares Market Value
<S> <C> <C>
Energy Sources & Related: 8.72%
Alamco Inc. 4,000 $ 61,500.00
Norsk Hydro 1,500 81,281.25
Phillips Petroleum 1,400 60,550.00
Snyder Oil Corp. 4,000 73,500.00
USX Marathon Group 3,000 86,625.00
Wiser Oil 2,500 46,093.75
--------------
409,550.00
--------------
Insurance: 7.81%
American Bankers Insurance Group 1,700 107,525.00
ReliaStar Financial Corp. 1,200 87,750.00
RLI Corp. 2,500 91,093.75
Western National 3,000 80,437.50
--------------
366,806.25
--------------
Electric Utilities: 4.59%
Houston Industries 2,000 42,875.00
PacifiCorp 2,000 44,000.00
Southern Company 2,500 54,687.50
Texas Utilities 900 30,993.75
WPL Holdings 1,600 42,908.00
--------------
215,464.25
--------------
Chemicals: 4.42%
Akzo N.V. ADS 1,000 69,125.00
Dow Chemical 600 52,125.00
Monsanto 2,000 86,125.00
--------------
207,375.00
--------------
Shipping and Transportation: 4.41%
Sea Containers, Ltd. "A" 5,000 113,125.00
Transport Corp. of America 5,000 67,500.00
Rush Enterprises 4,200 26,250.00
--------------
206,875.00
--------------
Health Products and Services: 4.14%
Beverly Enterprises 3,000 48,750.00
Tenet Health Care 1,800 53,100.00
Universal Health Services "B" 2,400 92,400.00
--------------
194,250.00
--------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1997
<TABLE>
<CAPTION>
Principal
Amount or
Common Stocks, continued Shares Market Value
<S> <C> <C>
Consumer Products and Services: 3.78%
Showbiz Pizza 4,000 105,500.00
Spaghetti Warehouse Inc. 12,000 72,000.00
----------
177,500.00
----------
Investment Co./Foreign Securities: 3.77%
First Australian Fund 3,500 31,062.50
Growth Fund of Spain 5,425.757 82,742.79
New Germany Fund, Inc 4,000 63,000.00
----------
176,805.29
----------
Media/Entertainment: 3.55%
Pulitzer Publishing 933 49,449.00
Telecommunications "A" 3,000 44,625.00
Time Warner 1,500 72,375.00
----------
166,449.00
----------
Construction Products and Services: 3.49%
Centex Corp. 1,500 60,937.50
Oriole Homes "B" 4,000 32,000.00
Ply-Gem Industries 3,900 70,687.50
----------
163,625.00
----------
Merchandising: 2.67%
KMart 5,500 67,031.25
Intertan 6,100 22,493.75
Service Merchandise 12,000 36,000.00
----------
125,525.00
----------
Metals/Mining: 2.38%
Commonwealth Industries 1,800 36,675.00
IMCO Recycling Inc. 2,000 37,750.00
The Energy Group PLC 875 37,078.12
----------
111,503.12
----------
Multi-Industries: 1.67%
Canadian Pacific 2,000 56,500.00
Hanson, PLC 875 21,875.00
----------
78,375.00
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1997
<TABLE>
<CAPTION>
Principal
Amount or
Common Stocks, continued Shares Market Value
<S> <C> <C>
Business Products and Services: 1.04%
DH Technology 3,000 48,750.00
----------------
48,750.00
Forest Paper & Products: 0.55%
Georgia Pacific Corp. 300 25,612.50
----------------
25,612.50
TOTAL COMMON STOCKS 2,674,465.42
----------------
PREFERRED STOCKS: 0.96%
Texaco Capital Preferred "B" 2,000 45,250.00
----------------
45,250.00
SHORT-TERM DEPOSITS: 9.69%
Beal Banc CD 5.25% Due 10/7/97 95,000.00
Guaranty Federal CD 5.05% Due 7/14/97 95,000.00
Univ Bnk AnnArbor CD 5.5% due 12/26/97 75,000.00
Midfirst Bank CD 5.5% due 12/16/97 95,000.00
Western American CD 6.0% Due 10/31/97 95,000.00
----------------
TOTAL SHORT-TERM TIME DEPOSITS 455,000.00
----------------
OTHER SHORT-TERM SECURITIES: 28.00%
Institutional Liquid Assets - Treasury 123,462.32 123,462.32
GE Capital Commercial Paper of 8/22/97 200,000.00 194,798.44
U.S. Treasury Notes 5% of 1/31/98 800,000.00 796,500.00
U.S. Treasury Notes 5.625% of 8/31/97 200,000.00 199,875.00
----------------
TOTAL OTHER SHORT-TERM SECURITIES 1,314,635.76
----------------
TOTAL INVESTMENTS IN SECURITIES 4,489,351.18
----------------
OTHER ASSETS (NET OF LIABILITIES): 4.38%
Total Other Assets (Net of Liabilities) 205,113.51
----------------
NET ASSETS: 100.00% $ 4,694,464.69
================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 1997 December 31, 1996
<S> <C> <C>
Investment Income
Income - Note A
Interest $ 54,744.26 $ 109,879.61
Dividends 21,605.19 38,483.50
-------------- --------------
Total income 76,349.45 148,363.11
-------------- --------------
Expenses
Investment advisory fees - Note E 21,446.94 41,951.47
Accounting fees 2,777.80 5,425.00
Registration fees and expenses 219.73 1,484.00
Directors' fees 750.00 1,625.00
Insurance 621.05 1,359.00
Postage and delivery 153.50 85.00
Printing and electronic filing 937.00 1,376.54
Professional fees 1,229.52 1,539.00
Other 276.66 820.34
Federal income tax 0 790.00
-------------- --------------
Total expenses 28,412.20 56,455.35
-------------- --------------
Investment income - net 47,937.25 91,907.76
-------------- --------------
Realized and Unrealized Gain on
Investments - Note D
Net realized gain on investments 122,634.33 612,312.46
Change in unrealized appreciation
of investments for the period 262,518.23 (301,068.52)
-------------- --------------
Net gain (loss) on investments 385,152.56 311,243.94
-------------- --------------
Net increase (decrease) in net
assets resulting from operations 433,089.81 403,151.70
============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 1997 December 31, 1996
<S> <C> <C>
Increase in Net Assets from Operations
Investment income - net 47,937.25 91,907.76
Net realized gain on investment 122,634.33 612,312.46
Change in unrealized appreciation 262,518.23 (301,068.52)
---------------- ----------------
Net increase (decrease) in net assets
resulting from operations 433,089.81 403,151.70
---------------- ----------------
Dividends Paid to Shareholders - Note F
Investment income 0 (90,896.34)
Net realized capital gains 0 (611,624.32)
---------------- ----------------
Total dividends paid to shareholders 0 (702,520.66)
---------------- ----------------
Capital Share Transactions (620,708.84) 140,400.20
---------------- ----------------
Net increase (decrease) (187,619.03) (158,968.76)
Net Assets
Beginning of period (including undistributed
investment income of $4,831.09) 4,882,083.72 5,041,052.48
---------------- ----------------
End of period (including undistributed
investment income of $52,768.34) $ 4,694,464.69 $ 4,882,083.72
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
Note A - Summary of Significant Accounting Policies
The Company is operated as a diversified, open-end management investment
company.
Security valuation: Investments in securities listed on the New York Stock
Exchange, American Stock Exchange or other security exchanges, and securities
traded in the Over-The-Counter market are valued at their closing sales price.
If no sale has been reported for that day, the last published sale or the last
recorded bid price, whichever is the more recent, is used, unless in the opinion
of the Board of Directors the value thus obtained may not fairly indicate the
actual market value, in which case these securities, and any other assets for
which market quotations are not readily available, are valued at fair value as
determined by the management and approved in good faith by the Board of
Directors.
Federal income taxes: For tax years beginning after December 31, 1987, it
is the Company's intention to comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its capital gains and investment income to its
shareholders. Therefore, provision has been made for Federal income taxes only
on the undistributed income which is immaterial.
Other: The Company follows industry practice and records security
transactions on the trade date. Dividend income is recognized on the ex-dividend
date, and interest is recognized on an accrual basis.
Note B - Organizational and Registration Expenses
Registration expenses will be amortized as new shares are issued.
Note C - Capital Share Transactions
As of June 30, 1997 and December 31, 1996, there were 10,000,000 shares of
$1.00 par value capital stock authorized. Capital paid-in aggregated
$2,989,466.64 and $3,566,938.75 at June 30, 1997 and December 31, 1996,
respectively.
Transactions in capital stock for the six month period ended June 30, 1997
and for the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
Shares Amount
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Shares sold 11,990.444 22,304.946 $167,000.00 $339,000.00
Shares issued in reinvestment
of dividends 0 47,427.703 0 652,605.19
----------- ---------- ------------ -----------
11,990.444 69,732.649 167,000.00 991,605.19
Shares redeemed 55,227.171 58,320.028 787,708.84 851,204.99
----------- ---------- ------------ -----------
Net increase (decrease) (43,236.727) 11,412.621 ($620,708.84) $140,400.20
=========== ========== ============ ===========
</TABLE>
7
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
JUNE 30, 1997
Note D - Investment Transactions
Purchases of common stocks during the six months ended June 30, 1997 were
$65,660.00 and $588,358.81 for the year ended December 31, 1996; sales were
$325,680.68 for the six months ended June 30, 1997 and $998,015.67 for the year
ended December 31, 1996. Purchases of U.S. Government obligations were
$796,067.30 and $793,567.93 for the six months ended June 30, 1997 and the year
ended December 31, 1996, respectively, and $1,000,000.00 and $2,300,000.00 were
sold/matured during the six months ended June 30, 1997 and the year ended
December 31, 1996, respectively.
As of June 30, 1997 and December 31, 1996, the unrealized appreciation of
securities was $1,215,376.04 and $952,857.81, respectively; accumulated
undistributed net realized gains on investment transactions totaled $124,690.76
and $2,056.43 at June 30, 1997 and December 31, 1996, respectively.
Note E - Investment Advisory Fees
The Company pays advisory fees for investment management and advisory
services under a management agreement (Agreement) that provides for fees to be
computed monthly at an annual rate of 0.9 percent of the Company's average daily
net assets up to $30,000,000, 0.75 percent of assets from $30,000,000 to
$60,000,000 and 0.6 percent for those assets in excess of $60,000,000. The
Agreement provides for an expense reimbursement from the investment advisor if
the Company's total expenses exceed 2.0 percent of the Company's average daily
net assets for any year.
Note F - Distributions to Shareholders
On December 27, 1996, a distribution of $1.985 per share, aggregating
$611,624.32, was declared from net realized gains from investment transactions
and a dividend of $0.295 per share, aggregating $90,896.34 was declared from net
investment income. The distribution and dividend were paid on December 27, 1996
to shareholders of record on December 26, 1996.
8
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER-SHARE DATA AND RATIOS*
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Per-Share Data:
Investment income $.25 $.48 $.67 $.47 $.34 $.47
Expenses (.09) .18 .18 .16 .15 .15
------ ----- ------ ------ ------ ------
Investment income - net .16 .30 .49 .31 .19 .32
Distributions from net investment income 0 (.29) (.49) (.31) (.19) (.32)
Net realized and unrealized gain (loss)
on securities 1.14 1.07 1.58 (.21) .77 .92
Distributions from net realized
long-term gains on securities 0 (1.99) (.36) (.24) (.11) (.33)
------ ----- ------ ------ ------ ------
Net increase (decrease) in net
asset value 1.30 (.91) 1.22 (.45) .66 .59
Net asset value:
Beginning of year 13.74 14.65 13.43 13.88 13.22 12.63
------ ----- ------ ------ ------ ------
End of Period $15.04 13.74 $14.65 $13.43 $13.88 $13.22
====== ===== ====== ====== ====== ======
Ratios (Annualized)
Ratio of expenses to average net assets 1.20% 1.20% 1.11% 1.11% 1.14% 1.18%
Ratio of net investment income to
average net assets 2.02% 1.96% 2.98% 2.19% 1.45% 2.09%
Portfolio turnover rate 5.04% 19.08% 28.17% 37.62% 3.10% 20.42%
Shares Outstanding at End of Period 312,162.913 355,399.640 343,987.019 419,130.701 409,961.200 367,041.839
</TABLE>
* Selected data for a share of capital stock outstanding throughout the year.
9
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