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Previous: ACM GOVERNMENT SECURITIES FUND INC, NSAR-A, 1999-08-27 |
Next: PHILLIPS CAPITAL INVESTMENTS INC, NSAR-A, 1999-08-27 |
PHILLIPS CAPITAL INVESTMENTS, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
FOR THE SIX MONTH PERIOD ENDED
JUNE 30, 1999
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
<S> <C> <C>
Assets:
Investments in securities, at value -
amortized cost $2,974,504.41 in 1999 and
$3,962,343.53 in 1998 - Note A $ 429,050.66 $ 5,287,540.80
Cash 226,364.21 82,253.72
Receivables - Note A
Interest 22,364.37 30,850.68
Dividends 4,453.56 4,460.65
Investment securities sold -- 3,167.12
Deferred registration expenses - Note B 770.92 937.63
Prepaid insurance 741.11 316.72
Other assets 132.69 --
---------------- ----------------
Total assets 4,544,877.52 5,409,527.36
================ ================
Liabilities
Accrued accounting fees 2,975.34 6,000.00
Federal income tax payable -- 650.00
Miscellaneous accounts payable 896.92 570.97
Due shareholders on sale 98,179.30 --
---------------- ----------------
Total liabilities 102,051.56 7,220.97
---------------- ----------------
Net Assets:
Net assets (equivalent to $15.69 and $14.86 per share based on
283,175.088 and 363,465.526 shares of capital stock
outstanding at June 30, 1999 and
December 31, 1998, respectively) - Note C $ 4,442,825.96 $ 5,402,306.39
================ ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
1
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
Principal
Amount or
COMMON STOCKS: 56.50% Shares Market Value
----------------- ----------------
<S> <C> <C>
Energy Sources & Related: 7.66%
Norsk Hydro 1,500 $57,375.00
Phillips Petroleum 1,400 70,437.50
Range Resources 8,000 49,000.00
Santa Fe Snyder 8,200 65,600.00
USX Marathon Group 3,000 97,687.50
----------------
340,100.00
----------------
Shipping and Transportation: 7.22%
Sea Containers, Ltd. "A" 5,000 167,812.50
Transport Corp. of America 5,000 64,375.00
Rush Enterprises 5,500 88,687.50
----------------
320,875.00
----------------
Media/Entertainment: 6.49%
AT&T 1,744 97,337.00
Hearst-Argyle (Series A) 1,529 36,696.00
Pulitzer Publishing 933 45,308.81
Time Warner 1,500 108,937.50
----------------
288,279.31
----------------
Chemicals: 5.40%
Akzo N.V. ADS 2,000 84,750.00
Dow Chemical 600 76,125.00
Monsanto 2,000 79,125.00
----------------
240,000.00
----------------
Insurance: 5.09%
ReliaStar Financial Corp. 2,400 105,000.00
RLI Corp. 3,125 121,093.75
----------------
226,093.75
----------------
Consumer Products and Services: 4.68%
Fruit of the Loom 4,000 39,000.00
CEC Enterprises 4,000 169,000.00
----------------
208,000.00
----------------
Investment Co./Foreign Securities: 4.60%
First Australian Fund 7,500 59,531.25
Growth Fund of Spain 3,500 75,215.00
New Germany Fund, Inc 5,708.807 69,576.09
----------------
204,322.34
----------------
Health Products and Services: 4.47%
Beverly Enterprises 6,300 50,793.75
Tenet Health Care 1,800 33,412.50
Universal Health Services "B" 2,400 114,600.00
----------------
198,806.25
----------------
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1999
Principal
Amount or
Common Stocks, continued Shares Market Value
---------------- ----------------
Electric Utilities: 3.57%
Reliant Energy (Houston Ind) 2,000 55,250.00
Southern Company 2,500 66,250.00
Texas Utilities 900 37,293.75
----------------
158,793.75
----------------
Merchandising: 2.03%
KMart 5,500 90,406.25
----------------
90,406.25
----------------
Metals/Mining: 1.96%
Timken Company 2,700 52,650.00
IMCO Recycling Inc. 2,000 34,250.00
----------------
86,900.00
----------------
Construction Products and Services: 1.49%
Encore Wire 3,000 27,187.50
Hanson, PLC 875 38,828.12
----------------
66,015.62
----------------
Multi-Industries: 1.07%
Canadian Pacific 2,000 47,625.00
----------------
47,625.00
----------------
Forest & Paper Products: .77%
Abitibi Consolidated 3,000 34,125.00
----------------
34,125.00
----------------
TOTAL COMMON STOCKS 2,510,342.27
----------------
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1999
Principal
Amount or
Shares Market Value
---------------- ----------------
PREFERRED STOCKS: 2.69%
Texaco Capital Preferred "B" 3,000 59,437.50
Con Agra Capital LC 3,000 60,000.00
----------------
119,437.50
----------------
SHORT-TERM DEPOSITS: 8.39%
Beal Banc CD 4.72% Due 07/07/99 95,000.00
Imperial Bank of Calif CD 4.8% Due 8/24/99 95,000.00
Western American CD 4.9% Due 10/29/99 95,000.00
Bremmer CD 4.95% Due 12/13/99 95,000.00
----------------
TOTAL SHORT-TERM TIME DEPOSITS 380,000.00
----------------
OTHER SHORT-TERM SECURITIES: 28.82%
Institutional Liquid Assets - Treasury 189,217.70 189,217.70
Amex Cr Corp Comm'l Paper of 9/7/99 195,223.61 195,223.61
GE Capital Commercial Paper of 11/22/99 195,173.33 195,173.33
U.S. Treasury Notes 5.375% of 1/31/2000 300,000.00 300,281.25
U.S. Treasury Notes 5.875% of 7/31/99 400,000.00 400,375.00
----------------
TOTAL OTHER SHORT-TERM SECURITIES 1,280,270.89
----------------
TOTAL INVESTMENTS IN SECURITIES 4,290,050.66
----------------
OTHER ASSETS (NET OF LIABILITIES): 3.44%
Total Other Assets (Net of Liabilities) 152,775.30
----------------
NET ASSETS: 100.00% $4,442,825.96
================
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 1999 December 31, 1998
---------------- ---------------------
<S> <C> <C>
Investment Income
Income - Note A
Interest 43,598.32 $128,502.17
Dividends 27,140.77 51,331.01
---------------- ----------------
Total income 70,739.09 179,833.18
---------------- ----------------
Expenses
Investment advisory fees - Note E 20,278.77 49,503.38
Accounting fees 2,975.34 6,630.00
Registration fees and expenses 166.70 692.17
Directors' fees 875.00 1,750.00
Insurance 511.63 1,101.00
Postage and delivery 253.40 459.00
Printing and electronic filing 0 166.34
Professional fees 1,408.50 585.00
Other 642.99 2,783.92
Federal income tax 0 650.00
---------------- ----------------
Total expenses 27,112.33 63,320.81
---------------- ----------------
Investment income - net 43,626.76 116,512.37
---------------- ----------------
Realized and Unrealized Gain on
Investments - Note D
Net realized gain on investments 200,381.38 143,417.51
---------------- ----------------
Change in unrealized appreciation
of investments for the period (9,651.10) (72,953.58)
---------------- ----------------
Net gain (loss) on investments 190,730.28 70,463.93
---------------- ----------------
Net increase (decrease) in net
assets resulting from operations $234,357.04 $186,976.30
================ ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 1999 December 31, 1998
---------------- ---------------------
<S> <C> <C>
Increase in Net Assets from Operations
Investment income - net $43,626.76 $116,512.37
Net realized gain on investment 200,381.38 143,417.51
Change in unrealized appreciation (9,651.10) (72,953.58)
---------------- ----------------
Net increase (decrease) in net assets
resulting from operations 234,357.04 186,976.30
---------------- ----------------
Dividends Paid to Shareholders - Note F
Investment income 0 (115,507.78)
Net realized capital gains 0 (143,091.66)
---------------- ----------------
Total dividends paid to shareholders 0 (258,589.44)
---------------- ----------------
Capital Share Transactions (1,193,837.47) 360,820.96
---------------- ----------------
Net increase (decrease) (959,480.43) 289,197.82
Net Assets
Beginning of period (including undistributed
investment income of $6,283.93) 5,402,306.39 5,113,108.57
---------------- ----------------
End of period (including undistributed
investment income of $49,910.00) $4,442,825.96 $5,402,306.39
================ ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
6
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
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, 1999 and December 31, 1998, there were 10,000,000 shares of
$1.00 par value capital stock authorized. Capital paid-in aggregated
$2,591,249.77 and $3,416,925.87 at June 30, 1999 and December 31, 1998,
respectively.
Transactions in capital stock for the six month period ended June 30, 1999
and for the year ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
Shares Amount
---------------------------------- ----------------------------------
1999 1998 1999 1998
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Shares sold 10,860.235 14,702,241 166,701.05 232,170.23
Shares issued in reinvestment
of dividends 0 17,555.963 0 258,599.44
--------------- --------------- ---------------- ---------------
10,860.235 32,258.384 166,701.05 490,769.67
Shares redeemed 91,150.673 8,375.486 1,360,538.52 129,948.71
--------------- --------------- ---------------- ---------------
Net increase (decrease) (80,290.438) 23,882.898 (1,193,837.47) 360,820.96
=============== =============== ================ ===============
</TABLE>
7
<PAGE>
PHILLIPS CAPITAL INVESTMENTS, INC.
INVESTMENTS IN SECURITIES (Continued)
JUNE 30, 1999
Note D - Investment Transactions
Purchases of common stocks during the six months ended June 30, 1999 were
$24,286.00 and $429,479.95 for the year ended December 31, 1998; sales were
$324,632.39 for the six months ended June 30, 1999 and $533,096.68 for the year
ended December 31, 1998. Purchases of U.S. Government obligations were
$705,134.48 and $2,195,598.44 for the six months ended June 30, 1999 and the
year ended December 31, 1998, respectively, and $1,300,000.00 and $2,100,000.00
were sold/matured during the six months ended June 30, 1999 and the year ended
December 31, 1998, respectively.
As of June 30, 1999 and December 31, 1998, the unrealized appreciation of
securities was $1,315,546.25 and $1,325,192.35, respectively; accumulated
undistributed net realized gains on investment transactions totaled $202,944.15
and $2,562.77 at June 30, 1999 and December 31, 1998, 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 17, 1998, a distribution of $0.415 per share, aggregating
$143,091.66, was declared from net realized gains from investment transactions
and a dividend of $0.335 per share, aggregating $115,507.78 was declared from
net investment income. The distribution and dividend were paid on December 29,
1998 to shareholders of record on December 28, 1998.
8
<PAGE>
<TABLE>
<CAPTION>
PHILLIPS CAPITAL INVESTMENTS, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER-SHARE DATA AND RATIOS*
Six Months
Ended
June 30, Year Ended December 31,
1999 1998 1997 1996 1995 1994 1993
--------- ---------- ---------- ---------- ---------- ---------- ----------
Per-Share Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income $.26 $.52 $.53 $.48 $.67 $.47 $.34
Expenses .10 .18 .19 .18 .16 .15 .15
--------- ---------- ---------- ---------- ---------- ---------- ----------
Investment income - net .16 .34 .34 .30 .49 .31 .19
Distributions from net
investment income 0 (.34) (.33) (.29) (.49) (.31) (.19)
Net realized and unrealized
gain (loss) on securities .67 .21 2.28 1.07 1.58 (.21) .77
Distributions from net
realized long-term gains
on securities 0 (.41) (.97) (1.99) (.36) (.24) (.11)
--------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
asset value .83 (.20) 1.32 (.91) 1.22 (.45) .66
Net asset value:
Beginning of year 14.86 15.06 13.74 14.65 13.43 13.88 13.22
--------- ---------- ---------- ---------- ---------- ---------- ----------
End of Period $15.69 14.86 $15.06 $13.74 $14.65 $13.43 $13.88
========= ========== ========== ========== ========== ========== ==========
Ratios (Annualized)
Ratio of expenses to average
net assets 1.19% 1.18% 1.19% 1.20% 1.11% 1.11% 1.14%
Ratio of net investment income
to average net assets 1.91% 2.17% 2.10% 1.96% 2.98% 2.19% 1.45%
Portfolio turnover rate 1.88% 15.97% 5.71% 19.08% 28.17% 37.62% 3.10%
Shares Outstanding at End of
Period 283,175.088 363,465.526 339,582.628 355,399.640 343,987.019 419,130.701 409,961.200
</TABLE>
* Selected data for a share of capital stock outstanding throughout the year.
9
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