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Previous: PHILLIPS CAPITAL INVESTMENTS INC, NSAR-A, 1998-08-27 |
Next: WORLD GOVERNMENTS VARIABLE ACCOUNT, NSAR-A, 1998-08-27 |
PHILLIPS CAPITAL INVESTMENTS, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
FOR THE SIX MONTH PERIOD ENDED
JUNE 30, 1998
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
<S> <C> <C>
Assets:
Investments in securities, at value -
amortized cost $3,932,686.02 in 1998 and
$3,630,576.89 in 1997 - Note A $5,529,387.85 $5,028,727.83
Cash 100,940.77 44,005.87
Receivables - Note A
Interest 30,253.63 23,576.95
Dividends 3,732.84 18,865.05
Investment securities sold -- 2,677.63
Deferred registration expenses - Note B 1,081.75 1,169.79
Prepaid insurance 871.75 316,73
Other assets 2,132.46 0
------------- -------------
Total assets 5,668,401.05 5,119,339.85
------------- -------------
Liabilities
Accrued accounting fees 3,325.35 5,350.00
Federal income tax payable -- 300.00
Miscellaneous accounts payable 531.02 581.28
Due shareholders on sale -- 0
------------- -------------
Total liabilities 3,856.37 6,231.28
------------- -------------
Net Assets:
Net assets (equivalent to $16.53 and $15.06 per share
based on 342,735.154 and 339,582.628 shares of capital
stock outstanding at June 30, 1998 and December 31,
1997, respectively) - Note C $5,664,544.68 $5.113.108.57
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES
JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Amount or
COMMON STOCKS: 52.32% Shares Market Value
<S> <C> <C>
Energy Sources & Related: 7.86%
Domain Energy 3,500 $42,000.00
Norsk Hydro 1,500 66,187.50
Panaco, Inc. 10,600 42,400.00
Phillips Petroleum 1,400 67,462.50
Snyder Oil Corp. 4,000 79,750.00
USX Marathon Group 3,000 102,937.50
Wiser Oil 4,000 44,250.00
----------
444,987.50
----------
Media/Entertainment: 5.77%
Pulitzer Publishing 933 83,270.25
Telecommunications "A" 3,000 115,312.50
Time Warner 1,500 128,156.25
----------
326,739.00
----------
Shipping and Transportation: 5.60%
Sea Containers, Ltd. "A" 5,000 191,250.00
Transport Corp. of America 5,000 82,500.00
Rush Enterprises 4,200 43,575.00
----------
317,325.00
----------
Chemicals: 4.95%
Akzo N.V. ADS 1,000 110,875.00
Dow Chemical 600 58,012.50
Monsanto 2,000 111,750.00
----------
280,637.50
----------
Electric Utilities: 4.69%
Houston Industries 2,000 61,625.00
PacifiCorp 2,000 45,250.00
Southern Company 2,500 69,218.75
Texas Utilities 900 37,462.50
Interstate Energy Corp 1,600 52,000.00
----------
265,556.25
----------
Consumer Products and Services: 4.54%
Showbiz Pizza 4,000 161,250.00
Spaghetti Warehouse Inc. 12,000 96,000.00
----------
257,250.00
----------
Insurance: 4.28%
ReliaStar Financial Corp. 2,400 115,200.00
RLI Corp. 3,125 127,148.44
----------
242,348.44
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Amount or
Common Stocks, continued Shares Market Value
<S> <C> <C>
Health Products and Services: 4.21%
Beverly Enterprises 3,000 42,000.00
Tenet Health Care 1,800 56,250.00
Universal Health Services "B" 2,400 140,100.00
----------
238,350.00
----------
Investment Co./Foreign Securities: 3.69%
First Australian Fund 6,000 39,375.00
Growth Fund of Spain 4,425.757 95,153.78
New Germany Fund, Inc 4,000 74,500.00
----------
209,028.78
----------
Merchandising: 2.86%
KMart 5,500 105,875.00
Intertan 6,100 32,787.50
Service Merchandise 15,000 23,437.50
----------
162,100.00
----------
Multi-Industries: 1.47%
Canadian Pacific 2,000 56,750.00
Hanson, PLC 875 26,523.44
----------
83,273.44
----------
Construction Products and Services: 1.00%
Centex Corp. 1,500 56,625.00
----------
56,625.00
----------
Metals/Mining: 0.97%
Commonwealth Industries 1,800 18,000.00
IMCO Recycling Inc. 2,000 37,000.00
----------
55,000.00
----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Amount or
Common Stocks, continued Shares Market Value
<S> <C> <C>
Forest & Paper Products: 0.43%
Georgia Pacific Corp. 300 17,681.25
Georgia Pacific Timber 300 6,918.75
------------
24,600.00
------------
TOTAL COMMON STOCKS 2,963,820.90
------------
PREFERRED STOCKS: 1.73%
Texaco Capital Preferred "B" 2,000 54,375.00
Con Agra Capital LC 2,500 43,437.50
------------
97,812.50
------------
SHORT-TERM DEPOSITS: 8.39%
Beal Banc CD 5.87% Due 7/7/98 95,000.00
Guaranty Federal CD 5.39% Due 7/14/98 95,000.00
Bank of Oklahoma CD 5.25% Due 10/1/98 95,000.00
Western Bank PR CD 5.45% Due 9/30/98 95,000.00
Western American CD 5.75% Due 10/30/98 95,000.00
------------
TOTAL SHORT-TERM TIME DEPOSITS 475,000.00
------------
OTHER SHORT-TERM SECURITIES: 35.18%
Institutional Liquid Assets - Treasury 205,171.89 205,171.89
Amex Cr Corp Comm'l Paper of 7/23/98 194,620.00 194,620.00
GE Capital Commercial Paper of 12/7/98 200,000.00 196,400.00
U.S. Treasury Notes 4.75% of 8/31/98 900,000.00 898,593.75
U.S. Treasury Notes 5.00% of 1/31/99 500,000.00 497,968.75
------------
TOTAL OTHER SHORT-TERM SECURITIES 1,992,754.45
------------
TOTAL INVESTMENTS IN SECURITIES 5,529,387.85
------------
OTHER ASSETS (NET OF LIABILITIES): 2.38%
Total Other Assets (Net of Liabilities) 135,156.83
------------
NET ASSETS: 100.00% $5,664,544.68
=============
</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, 1998 December 31, 1997
<S> <C> <C>
Investment Income
Income - Note A
Interest $62,011.81 $112,639.25
Dividends 24,921.28 47,191.17
----------- -----------
Total income 86,933.09 159,830.42
----------- -----------
Expenses
Investment advisory fees - Note E 24,325.79 43,693.37
Accounting fees 2,875.35 5,450.00
Registration fees and expenses 88.04 679.73
Directors' fees 875.00 1,500.00
Insurance 545.99 1,176.06
Postage and delivery 395.00 153.50
Printing and electronic filing 22.73 0
Professional fees 225.00 1,454.52
Other 1,934.61 3,522.01
Federal income tax 0 300.00
----------- -----------
Total expenses 31,287.51 57,929.19
----------- -----------
Investment income - net 55,645.58 101,901.23
----------- -----------
Realized and Unrealized Gain on
Investments - Note D
Net realized gain on investments 245,020.00 304,539.34
Change in unrealized appreciation
of investments for the period 198,550.90 445,293.12
----------- -----------
Net gain (loss) on investments 443,570.90 749,832.46
----------- -----------
Net increase (decrease) in net
assets resulting from operations $499,216.48 $851,733.69
=========== ===========
</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, 1998 December 31, 1997
<S> <C> <C>
Increase in Net Assets from Operations
Investment income - net $55,645.58 $101,901.23
Net realized gain on investment 245,020.00 304,539.34
Change in unrealized appreciation 198,550.90 445,293.12
------------- -------------
Net increase (decrease) in net assets
resulting from operations 499,216.48 851,733.69
------------- -------------
Dividends Paid to Shareholders - Note F
Investment income 0 (101,452.98)
Net realized capital gains 0 (304,358.85)
Total dividends paid to shareholders 0 (405,811.83)
Capital Share Transactions 52,219.63 (214,897.01)
------------- -------------
Net increase (decrease) 551,436.11 231,024.85
Net Assets
Beginning of period (including undistributed
investment income of $5,279.34) 5,113,108.57 4,882,083.72
------------- -------------
End of period (including undistributed
investment income of $60,924.92) $5,664,544.68 $5,113,108.57
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
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, 1998 and December 31, 1997, there were 10,000,000 shares of
$1.00 par value capital stock authorized. Capital paid-in aggregated
$3,416,925.87 and $3,367,858.76 at June 30, 1998 and December 31, 1997,
respectively.
Transactions in capital stock for the six month period ended June 30, 1998
and for the year ended December 31, 1997, were as follows:
<TABLE>
<CAPTION>
Shares Amount
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Shares sold 5,381.649 11,990.444 $88,041.64 $167,000.00
Shares issued in reinvestment
of dividends 0 27,419.715 0 405,811.83
--------- ----------- ---------- ------------
5,381.649 39,410.159 88,041.64 572.811.83
Shares redeemed 2,229.123 55,227.171 35,822.01 787,708.84
--------- ----------- ---------- ------------
Net increase (decrease) 3,152.526 (15,817.012) $52,219.63 ($214,897.01)
========= =========== ========== ============
</TABLE>
7
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
JUNE 30, 1998
Note D - Investment Transactions
Purchases of common stocks during the six months ended June 30, 1998 were
$100,650.00 and $154,285.00 for the year ended December 31, 1997; sales were
$363,913.17 for the six months ended June 30, 1998 and $651,731.14 for the year
ended December 31, 1997. Purchases of U.S. Government obligations were
$1,406,338.65 and $1,195,781.20 for the six months ended June 30, 1998 and the
year ended December 31, 1997, respectively, and $1,200,000.00 and $1,200,000.00
were sold/matured during the six months ended June 30, 1998 and the year ended
December 31, 1997, respectively.
As of June 30, 1998 and December 31, 1997, the unrealized appreciation of
securities was $1,344,211.88 and $1,398,150.93, respectively; accumulated
undistributed net realized gains on investment transactions totaled $247,256.96
and $2,236.96 at June 30, 1998 and December 31, 1997, 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 16, 1997, a distribution of $0.975 per share, aggregating
$304,358.85, was declared from net realized gains from investment transactions
and a dividend of $0.325 per share, aggregating $101,452.98 was declared from
net investment income. The distribution and dividend were paid on December 18,
1997 to shareholders of record on December 17, 1997.
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, 1998 1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
Per-Share Data:
Investment income $.25 $.53 $.48 $.67 $.47 $.34 $.47
Expenses (.09) .19 .18 .16 .15 .15 .15
------ ------ ------ ------ ------ ------ ------
Investment income - net .16 .34 .30 .49 .31 .19 .32
Distributions from net
investment income 0 (.33) (.29) (.49) (.31) (.19) (.32)
Net realized and unrealized
gain (loss) on securities 1.31 2.28 1.07 1.58 (.21) .77 .92
Distributions from net realized
long-term gains on securities 0 (.97) (1.99) (.36) (.24) (.11) (.33)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net
asset value 1.47 1.32 (.91) 1.22 (.45) .66 .59
Net asset value:
Beginning of year 15.06 13.74 14.65 13.43 13.88 13.22 12.63
------ ------ ------ ------ ------ ------ ------
End of Period $16.53 $15.06 $13.74 $14.65 $13.43 $13.88 $13.22
====== ====== ====== ====== ====== ====== ======
Ratios (Annualized)
Ratio of expenses to average
net assets 1.16% 1.19% 1.20% 1.11% 1.11% 1.14% 1.18%
Ratio of net investment income
to average net assets 2.05% 2.10% 1.96% 2.98% 2.19% 1.45% 2.09%
Portfolio turnover rate 6.70% 5.71% 19.08% 28.17% 37.62% 3.10% 20.42%
Shares Outstanding at End of Period 342,735.154 339,582.628 355,399.640 343,987.019 419,130.701 409,961.200 367,041.839
</TABLE>
* Selected data for a share of capital stock outstanding throughout the year.
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