<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank Nebraska, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
This report has been prepared for the information of shareholders of Weitz
Series Fund, Inc. -- Hickory Portfolio. For more detailed information about the
Fund, its investment objectives, management, fees and expenses, please see a
current prospectus. This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a current prospectus.
HICKORY PORTFOLIO
ANNUAL
REPORT
MARCH 31, 1997
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
PERFORMANCE SINCE INCEPTION
The following table summarizes performance information for the fund as compared
to the S&P 500 over the periods indicated. The table also sets forth average
annual total return data for the fund for the one year period ended March 31,
1997, and for the period since inception, calculated in accordance with SEC
standardized formulas.
<TABLE>
<CAPTION>
DIFFERENCE
PERIOD ENDED HICKORY FUND S&P 500 HICKORY FUND -- S&P 500
- ---------------------------------- ------------- ----------- -------------------------
<S> <C> <C> <C>
Mar. 31, 1997 (3 months) 0.5% 2.7% -2.2%
Dec. 31, 1996 35.4 22.9 12.5
Dec. 31, 1995 40.5 37.5 3.0
Dec. 31, 1994 -17.3 1.3 -18.6
Dec. 31, 1993 (9 months) 20.3 5.5 14.8
Since Inception (April 1, 1993)
Cumulative 90.1 85.5 4.6
Compound Annual
Average Return 17.4 16.7 0.7
</TABLE>
The portfolio's average annual total return for the one year ending March 31,
1997, and for the period since inception (April 1, 1993) was 28.2% and 17.4%,
respectively. The returns assume redemption at the end of each period and
reinvestment of dividends.
2
<PAGE>
The graph below shows the growth in value of a $100,000 investment in Hickory
since inception (April 1, 1993) to March 31, 1997, assuming the reinvestment of
all capital gain distributions and dividends, compared to the growth in value of
$100,000 invested in the S&P 500 for the same period, also assuming dividend
reinvestment. Hickory's performance numbers are calculated after deducting all
fees and expenses.
03/31/97
Hickory Portfolio
Comparison of Change in Value of $100,000
Investment in Hickory Portfolio & S&P 500
Hickory S&P 500
- --------------------------- ---------
Value of Value of
Period $100,000 $100,000
- --------------- --------- ---------
03/31/93 $ 100,000 $ 100,000
04/30/93 $ 91,621 $ 97,583
05/31/93 $ 95,999 $ 100,184
06/30/93 $ 96,609 $ 100,476
07/31/93 $ 99,489 $ 100,071
08/31/93 $ 107,204 $ 103,859
09/30/93 $ 108,002 $ 103,062
10/31/93 $ 115,026 $ 105,192
11/30/93 $ 111,438 $ 104,193
12/31/93 $ 120,267 $ 105,452
01/31/94 $ 118,421 $ 109,034
02/28/94 $ 116,476 $ 106,076
03/31/94 $ 110,109 $ 101,457
04/30/94 $ 109,060 $ 102,759
05/31/94 $ 110,065 $ 104,440
06/30/94 $ 104,789 $ 101,881
07/31/94 $ 104,153 $ 105,224
08/31/94 $ 110,360 $ 109,530
09/30/94 $ 109,189 $ 106,855
10/31/94 $ 107,787 $ 109,247
11/30/94 $ 101,810 $ 105,272
12/31/94 $ 99,476 $ 106,830
01/31/95 $ 99,870 $ 109,599
3
<PAGE>
<TABLE>
<S> <C> <C>
02/28/95 $ 103,994 $ 113,865
03/31/95 $ 105,513 $ 117,219
04/30/95 $ 105,229 $ 120,668
05/31/95 $ 111,054 $ 125,480
06/30/95 $ 118,331 $ 128,392
07/31/95 $ 124,859 $ 132,647
08/31/95 $ 133,445 $ 132,978
09/30/95 $ 139,110 $ 138,586
10/31/95 $ 133,237 $ 138,091
11/30/95 $ 137,345 $ 144,146
12/31/95 $ 139,728 $ 146,922
01/31/96 $ 146,980 $ 151,917
02/29/96 $ 148,848 $ 153,328
03/31/96 $ 148,334 $ 154,805
04/30/96 $ 151,650 $ 157,084
05/31/96 $ 159,513 $ 161,128
06/30/96 $ 163,383 $ 161,741
07/31/96 $ 150,145 $ 154,599
08/31/96 $ 160,466 $ 157,864
09/30/96 $ 168,758 $ 166,741
10/31/96 $ 171,426 $ 171,337
11/30/96 $ 179,661 $ 184,276
12/31/96 $ 189,125 $ 180,625
01/31/97 $ 195,946 $ 191,903
02/28/97 $ 200,614 $ 193,409
03/31/97 $ 190,121 $ 185,477
</TABLE>
This information represents past performance of the Hickory Portfolio and is not
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than the original cost. The index used for comparison
purposes is the S&P 500 Index which consists of 500 companies. The index is
unmanaged and widely recognized as representative of the equity market in
general. Investment expenses are not deducted from the S&P 500 Index. Additional
information is available from Wallace R. Weitz & Co. at the address listed on
the front cover.
TOTAL RETURNS ARE BASED UPON PAST RESULTS AND ARE NOT A PREDICTION OF FUTURE
PERFORMANCE.
4
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
MARCH 31, 1997 - ANNUAL REPORT
April 7, 1997
Dear Fellow Shareholder:
The first two months of 1997 started quite well for most stock investors,
but March was less kind. For the quarter, Hickory gained 0.5%. Over the same
period the S&P 500 had a total return (including reinvested dividends) of 2.7%.
Over the last twelve months, Hickory's total return was 28.2%, while the S&P
500's total return was 19.8%. According to Lipper, the average growth mutual
fund had a total return of 11.8% over the same period.
REVIEW AND OUTLOOK
The stock market has been very kind to us over the past twelve months. Our
total return was significantly above both the S&P 500 and the average growth
fund. In fact, The Wall Street Journal on April 4, 1997, reported that Hickory's
performance was the eighth best of all growth funds over this twelve month
period. IT WON'T ALWAYS BE LIKE THIS. As I have told you in many of my previous
letters, I invest for the long-term, and use strategies that I hope will work
over time periods measured in years, not months or quarters. Even if our
long-term results continue to be good, there will inevitably be times when our
quarterly or annual numbers will not be as good. (The Wall Street Journal
ranking, based on data compiled by Lipper Analytical Services, Inc. was based on
total return for the twelve months ended March 31, 1997, and included 470 funds
in the relevant category.)
We may in fact be entering one of those periods right now. As I write this
letter, the stock market is in the midst of a correction that was apparently
brought on by investor concerns about the Federal Reserve's recent decision to
raise short-term interest rates. I don't believe I have any special insight into
whether the overall stock market will next zig or zag. I do know that
corrections, and even full blown bear markets, are not that uncommon over the
history of the stock market, and that we should, at a minimum, be mentally
prepared for the possibility of a significant downturn. I also know that not all
corrections end with an immediate recovery in stock prices. Sometimes the pain
needs to get much greater before a recovery can begin.
Ironically, and I think more importantly, I am having absolutely no
trouble finding attractive stocks to buy, and I continue to be quite happy with
the stocks we hold. In this letter I want to highlight two stocks that I
continue to think are excellent investment opportunities, Capital One Financial
and Valassis Communications. I have mentioned both companies in past letters,
and both have already been profitable investments. I continue to be quite
comfortable with my large positions in the two stocks and thought that an update
on these two companies might give you a sense of how it is possible to be
optimistic even though stock prices have already gone up significantly.
4
<PAGE>
Before getting into the details of Capital One and Valassis, it would
probably be useful to step back and talk about how I think about investment
opportunities. Whenever I analyze a potential investment I think about the
company in at least three ways. First, I try to gauge how good the business is.
I try to judge whether a particular company is likely to be able to earn high,
sustainable returns on invested capital. This is a qualitative analysis based on
many factors such as industry structure and customer behavior. Second, I try to
get an idea of Wall Street's opinion of the stock. What I am looking for here is
a sense that Wall Street is overly concerned about the wrong problem. I have
found that when other investors are worried about the wrong issue, the
possibility that a stock is undervalued is much greater. Finally, I take a hard,
quantitative look at the numbers and try to put a value on the company. As part
of this process, I am looking for reasons why this company might be more or less
valuable than the bottom line reported earnings number might suggest. The result
of all of this work is two end products: my best quantitative assessment of the
company's value and a qualitative assessment of my confidence in my value
number. Both Capital One and Valassis score quite highly in all aspects of this
process.
Capital One is a credit card specialist that makes its money from the fees
and interest it charges when consumers use its credit cards. I believe Capital
One is quite likely to continue to earn high returns for many years to come. The
industry tends to be of above average profitability. This is at least partly
because consumers as a group have a tendency to say one thing ("I never run a
balance on my credit card") and do another (Visa and MasterCard balances totaled
about $350 billion in 1996 and have been growing at 11% per year). More
importantly, I think Capital One has a strategy that will allow it to be much
more successful than the average credit card issuer. The company believes in
treating its business like a science. Capital One is constantly running
thousands of tests designed to help it focus its efforts on only the highest
return activities. It takes time to build the base of knowledge Capital One now
has, and it is very difficult to orient all aspects of an organization to think
in these terms. Wall Street, however, has worries about Capital One that I
believe are somewhat misplaced. Wall Street is extremely concerned about credit
quality. I agree with that concern to a certain extent, but I think Capital One
is able to handle this risk better than are most of its competitors. Remember
that Capital One tests and measures everything. I think they have a good
understanding of their true credit exposure, and they manage these risks in a
conservative manner. Finally, valuation continues to look quite attractive. I
don't know many businesses that grow earnings at 20% per year and yet still
trade at about eleven times next year's earnings. Best of all, the company's
earnings growth rate looks to me to be understated. I won't go into the
mind-numbing details -- they have to do with rapidly rising marketing
expenditures. Call me if you want to hear more. All in all, I find Capital One
just as appealing today ($37 per share at the end of the quarter) as when I
started buying it two years ago in the low $20s.
Valassis publishes the booklets of free standing inserts that get
distributed in Sunday newspapers all over the country. For many media
businesses, including Valassis, initial costs to develop distribution are quite
high, but once the operation reaches a certain size, incremental business can be
very, very profitable. The profitability of the free standing insert business
was disrupted when a new competitor tried unsuccessfully to enter the business a
few years ago. Pricing has been going up for several years, and I believe this
pattern can continue for many years to come. This should lead to rising earnings
even if the volume of coupons printed remains constant. Wall
5
<PAGE>
Street seems to have a never-ending list of worries about Valassis. The two
primary concerns seem to be that companies will stop using coupons as part of
their marketing plans, and that paper prices will rise unexpectedly. I am
comfortable that a free standing insert is both effective and efficient as a way
for manufacturers to communicate with potential consumers, and while the
business may not grow much, it doesn't need to for Valassis to work as an
investment. I also think that paper prices are unpredictable in the short run,
but as a long-term investor, short-term fluctuations in paper prices are
virtually meaningless. Finally, valuation remains quite attractive. The company
still trades at about eleven times next year's earnings, and, as is the case
with Capital One, reported earnings miss the best part of the story. In my view
the most important determinant of value is the amount of free cash a company
generates over time that can be distributed to shareholders. Unlike most growing
companies, Valassis can generate more free cash than it reports in earnings, and
management is using this free cash to pay down debt and buy back stock.
I hope these descriptions of Capital One and Valassis give you a flavor
for how I think about stocks and for why I can remain optimistic in an uncertain
stock market environment. I don't believe these two companies are the cheapest
stocks in our portfolio, nor are they the most expensive. As always patience is
critical for value investors. I continue to believe our long run prospects are
bright.
SHAREHOLDER MEETING AND NEW HICKORY SYMBOL
Once again, Weitz & Co. will hold a meeting for our shareholders. The
meeting will take place at the Marriott Hotel in Omaha on Monday, June 2 at 4:30
p.m. This year's meeting will include a special meeting of shareholders with
official business as well as the usual question and answer session. We hope you
can attend.
Hickory recently received a new "symbol" that works much like a stock
symbol. The symbol is WEHIX. We have found that most on-line stock quote
services will treat this symbol as they would a stock symbol. So if you have
access to an on-line service, and if you insist on tracking every wiggle in the
value of your Hickory investment, you should be able to use this symbol to stay
up to date with Hickory's daily closing price.
As always, I welcome your questions.
Sincerely,
/s/ RICHARD LAWSON
Richard F. Lawson
Portfolio Manager
6
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- --------- ---------- ------------
<C> <S> <C> <C>
COMMON STOCKS -- 91.7%
BANKING -- 2.3%
1,000 Wells Fargo & Co. $ 88,506 $ 284,125
---------- ------------
CABLE TELEVISION -- 20.5%
37,000 Adelphia Communications Corp. CL A* 251,750 198,875
56,000 Century Communications Corp. CL A* 270,266 259,000
13,000 Comcast Corporation CL A 201,025 212,875
25,500 Comcast Corporation Special CL A 389,160 430,313
14,000 TCI Satellite Entertainment CL A* 133,102 108,500
40,000 Tele-Communications, Inc. CL A* 532,290 480,000
22,500 Tele-Communications Liberty Media CL A* 383,444 448,594
20,000 U.S. West Media Group* 366,200 372,500
---------- ------------
2,527,237 2,510,657
---------- ------------
CONSUMER PRODUCTS AND SERVICES -- 3.2%
37,000 American Classic Voyages Co.* 288,125 386,187
---------- ------------
DIVERSIFIED INDUSTRIES -- 1.2%
1,500 Lynch Corp.* 112,560 144,750
---------- ------------
FINANCIAL SERVICES -- 9.5%
16,000 Capital One Financial Corp. 407,291 596,000
8,000 First USA, Inc. 180,345 339,000
15,000 HealthCare Financial Partners, Inc.* 187,500 225,000
---------- ------------
775,136 1,160,000
---------- ------------
HEALTH CARE -- 2.9%
11,000 Seafield Capital Corp. 389,850 357,500
---------- ------------
MEDIA/OTHER -- 11.1%
36,400 Katz Media Group, Inc.* 335,334 232,050
50,000 Valassis Communications, Inc.* 742,213 1,118,750
---------- ------------
1,077,547 1,350,800
---------- ------------
MORTGAGE BANKING -- 7.3%
17,000 Countrywide Credit Industries, Inc. 259,020 420,750
30,305 Resource Bancshares Mtg. Grp., Inc. 320,743 477,304
---------- ------------
579,763 898,054
---------- ------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- --------- ---------- ------------
<C> <S> <C> <C>
REAL ESTATE AND CONSTRUCTION -- 3.8%
9,000 Forest City Enterprises, Inc. CL A $ 197,678 $ 382,500
2,750 SLH Corp.* 52,662 79,062
---------- ------------
250,340 461,562
---------- ------------
REAL ESTATE INVESTMENT TRUSTS -- 12.9%
20,000 NovaStar Financial, Inc. ** 300,000 300,000
27,685 Redwood Trust, Inc. 452,716 1,280,431
---------- ------------
752,716 1,580,431
---------- ------------
TELECOMMUNICATIONS SERVICES -- 17.0%
28,000 360 Communication Co.* 629,360 483,000
10,000 Airtouch Communications, Inc.* 238,100 230,000
88,000 Centennial Cellular Corp. CL A* 1,093,213 913,000
5,000 CommNet Cellular, Inc.* 133,125 127,500
22,000 Corecomm, Inc.* 486,567 319,000
---------- ------------
2,580,365 2,072,500
---------- ------------
Total Common Stocks 9,422,145 11,206,566
---------- ------------
WARRANTS -- 5.7%
23,500 Redwood Trust, Inc., Expiring 12/31/97* 92,548 699,125
---------- ------------
<CAPTION>
FACE
AMOUNT
- ---------
<C> <S> <C> <C>
SHORT-TERM SECURITIES -- 2.6%
$316,325 Norwest U.S. Government Money Market Fund 316,325 316,325
---------- ------------
Total Investments in Securities $9,831,018 12,222,016
---------- ------------
----------
Other Liabilities in Excess of Other Assets (680)
------------
Total Net Assets -- 100% $12,221,336
------------
------------
Net Asset Value Per Share $ 18.899
------------
------------
</TABLE>
* Non-income producing
** This restricted security, exempt from registration under the Securities Act
of 1933, was purchased in a private placement and, unless registered under
the Act or exempted from registration, may only be sold to qualified
institutional investors or certain accredited investors.
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $9,831,018) $ 12,222,016
Accrued interest and dividends receivable 18,248
------------
Total assets 12,240,264
------------
Liabilities:
Accrued expense 8,049
Due to adviser 10,879
------------
Total liabilities 18,928
------------
Net assets applicable to outstanding capital stock $ 12,221,336
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 647
Additional paid-in capital 9,122,617
Accumulated undistributed net investment income 29,576
Accumulated undistributed net realized gains 677,498
Net unrealized appreciation of investments(note 5) 2,390,998
------------
Net assets $ 12,221,336
------------
------------
Net asset value and redemption price per share of outstanding
capital stock (646,671 shares outstanding) $ 18.899
------------
------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C> <C>
Investment income:
Dividends $ 148,492
Interest 14,418
-----------
Total investment income 162,910
-----------
Expenses (note 3):
Investment advisory fee $ 88,889
Administrative fee 22,222
Directors fees 717
Other expenses 26,660
-----------
Total expenses 138,488
Less administrative fee waived by investment adviser (5,154)
-----------
Net expenses 133,334
-----------
Net investment income 29,576
-----------
Realized and unrealized gain on investments:
Realized gain on investments 754,913
Net unrealized appreciation of investments 1,254,201
-----------
Net realized and unrealized gain on investments 2,009,114
-----------
Net increase in net assets resulting from operations $ 2,038,690
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1997 1996
------------- ------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 29,576 $ 1,255
Net realized gain 754,913 543,395
Net unrealized appreciation 1,254,201 1,047,935
------------- ------------
Net increase in net assets resulting from operations 2,038,690 1,592,585
------------- ------------
Distributions to shareholders from:
Net investment income (1,255) (44,007)
Net realized gain (528,237) (23,785)
------------- ------------
Total distributions (529,492) (67,792)
------------- ------------
Capital share transactions (note 4):
Proceeds from sales 4,480,732 1,866,882
Payments for redemptions (872,598) (419,250)
Reinvestment of distributions 445,790 66,521
------------- ------------
Total increase from capital share transactions 4,053,924 1,514,153
------------- ------------
Total increase in net assets 5,563,122 3,038,946
------------- ------------
Net assets:
Beginning of period 6,658,214 3,619,268
------------- ------------
End of period $ 12,221,336 $ 6,658,214
------------- ------------
------------- ------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
FINANCIAL HIGHLIGHTS
The following information provides selected data for a share of the Hickory
Portfolio outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------
1997 1996+++ 1995 1994
---------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.564 $ 11.257 $ 12.227 $ 11.147
---------- ---------- ---------- -------
Income (loss) from investment
operations:
Net investment income (loss) 0.045 0.004 (0.008) (0.290)
Net gains or losses on securities
(realized and unrealized) 4.329 4.504 (0.508) 1.420
---------- ---------- ---------- -------
Total from investment operations 4.374 4.508 (0.516) 1.130
---------- ---------- ---------- -------
Less distributions:
Dividends from net investment income (0.002) (0.136) -- 0.083
Distributions from realized gains (1.037) (0.065) (0.454) (0.133)
---------- ---------- ---------- -------
Total distributions (1.039) (0.201) (0.454) (0.050)
---------- ---------- ---------- -------
Net asset value, end of period $ 18.899 $ 15.564 $ 11.257 $ 12.227
---------- ---------- ---------- -------
---------- ---------- ---------- -------
Total return 28.2% 40.6% (4.2%) 10.1%
Ratios/supplemental data:
Net assets, end of period ($000) $ 12,221 $ 6,658 $ 3,619 $ 2,499
Ratio of net expenses to average net
assets+ 1.50% 1.50% 1.50% 1.50%
Ratio of net investment income (loss) to
average net assets 0.33% 0.02% (0.17%) (2.92%)
Portfolio turnover rate 28% 28% 20% 29%
Average commission rate paid (per share) $ 0.0498++
</TABLE>
+ Absent voluntary waivers, the expense ratio would have been 1.56% for the
year ended March 31, 1997, and 1.61% for the year ended March 31, 1996.
++ Required by regulations issued in 1995.
+++ Calculated using average daily shares.
See accompanying notes to financial statements.
12
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(1) ORGANIZATION
Weitz Series Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as an open-end management investment company issuing
shares in series, each series representing a distinct portfolio with its own
investment objectives and policies. At March 31, 1997, the Fund had four
series: the Hickory Portfolio, the Value Portfolio, the Fixed Income
Portfolio, and the Government Money Market Portfolio. The accompanying
financial statements present the financial position and results of
operations of the Hickory Portfolio (the "Portfolio").
The Portfolio's investment objective is capital appreciation. The Portfolio
intends to invest principally in common stocks, preferred stocks and a
variety of securities convertible into equity such as rights, warrants,
preferred stocks and convertible bonds. The following significant accounting
policies are in accordance with accounting policies generally accepted in
the investment company industry.
(2) SIGNIFICANT ACCOUNTING POLICIES
(a) VALUATION OF INVESTMENTS
Investments are carried at market determined using the following
valuation methods:
- Securities traded on a national or regional securities exchange are
valued at the last quoted sales price.
- Securities not listed on an exchange or securities in which there
were no reported transactions will be valued at the mean between the
last current closing bid and ask prices.
- Securities or other assets for which reliable recent market
quotations are not readily available will be valued at fair market
value as determined in good faith by or under the direction of the
Fund's Board of Directors or a committee of the Board.
When the Portfolio writes a call option, an amount equal to the premium
received by the Portfolio is included in the Portfolio's statement of
assets and liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the
option written. The current market value of a traded option is the last
sales price on the principal exchange on which such option is traded, or,
in the absence of such sale, the latest ask quotation. When an option
expires on its stipulated expiration date or the Portfolio enters into a
closing purchase transaction, the Portfolio realizes a gain (or loss if
the cost of a closing purchase transaction exceeds the premium received
when the option was sold) without regard to any unrealized gain or loss
on the underlying security, and the liability related to such option is
extinguished. When a call option is exercised, the Portfolio realizes a
gain or loss from the sale of the underlying security and the proceeds
from such sale are increased by the premium originally received. No call
options were written in the year ended March 31, 1997.
13
<PAGE>
The risk in writing a call option is that the Portfolio gives up the
opportunity of profit if the market price of the security increases. The
Portfolio also has the additional risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist.
(b) FEDERAL INCOME TAXES
Since the Portfolio's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income and net realized gains may differ for financial
statement and tax purposes. The character of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate characterization for Federal income tax purposes. Also,
due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gains were recorded by the Portfolio.
(c) SECURITY TRANSACTIONS
Security transactions are accounted for on the date securities are
purchased or sold (trade date). Income dividends and distributions to
shareholders are recorded on the ex-dividend date. Interest, including
amortization of discount and premium, is accrued as earned.
Realized gains or losses are determined by specifically identifying the
security sold.
(d) DIVIDEND POLICY
The Portfolio will declare and distribute income dividends and capital
gains distributions as may be required to qualify as a regulated
investment company under the Internal Revenue Code. All dividends and
distributions will be reinvested automatically unless the shareholder
elects otherwise.
(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
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
(3) RELATED PARTY TRANSACTIONS
The Fund and Portfolio have retained Wallace R. Weitz & Company (the
"Adviser") as their exclusive investment adviser. In addition, the Fund has
an agreement with Weitz Securities, Inc. to act as distributor for the
Portfolio's shares. Certain officers and directors of the Fund are also
officers and directors of the Adviser and Weitz Securities, Inc.
Under the terms of a management and investment advisory agreement, the
Adviser receives a management fee equal to 1% per annum of the Portfolio's
average daily net asset value. The Adviser has agreed to reimburse the
Portfolio up to the amount of advisory fees paid to the extent that total
expenses exceed 1.50% of the Portfolio's average daily net asset value.
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<PAGE>
Under the terms of an administration agreement, certain services are being
provided including the transfer of shares, disbursement of dividends, fund
accounting and related administrative services of the Fund for which the
Adviser is being paid a monthly fee. During the year ended March 31, 1997,
the fee was calculated at an average annual rate of .25% of the Portfolio's
average daily net assets, of which .06% was waived.
Weitz Securities, Inc., as distributor, received no compensation for the
distribution of Portfolio shares.
(4) CAPITAL STOCK
The Fund is authorized to issue a total of 100 million shares of common
stock in series with a par value of $.001 per share. Ten million of these
shares have been authorized by the Board of Directors to be issued in the
series designated Hickory Portfolio, of which 646,671 shares are outstanding
at March 31, 1997. The Board of Directors may authorize additional shares in
other series of the Fund's shares without shareholder approval. Each share
of stock will have a pro rata interest in the assets of the series to which
the stock of that series relates and will have no interest in the assets of
any other series.
Transactions in the capital stock of the Portfolio are summarized as follow:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
Transactions in shares:
Shares issued................................................................ 245,327 129,659
Shares redeemed.............................................................. (50,285) (28,893)
Distributions reinvested..................................................... 23,823 5,526
--------- ---------
Net increase............................................................... 218,865 106,292
--------- ---------
--------- ---------
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Portfolio, other than short-term securities, aggregated $5,728,110 and
$2,409,962, respectively. The cost of investments is the same for financial
reporting and Federal income tax purposes. At March 31, 1997, the aggregate
gross unrealized appreciation and depreciation were $3,195,111 and $804,113,
respectively.
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<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Weitz Series Fund, Inc. -- Hickory Portfolio:
We have audited the accompanying statement of assets and liabilities of
Weitz Series Fund, Inc. -- Hickory Portfolio, including the schedule of
investments in securities, as of March 31, 1997, and the related statement of
operations, the statement of changes in net assets, and the financial highlights
for the year then ended. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended March 31, 1996,
and the financial highlights for all years prior to April 1, 1996, were audited
by other auditors whose report, dated April 17, 1996, expressed an unqualified
opinion on those statements.
We conducted our audit 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, 1997, by correspondence with the custodian. 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 audit provides 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
Weitz Series Fund, Inc. -- Hickory Portfolio as of March 31, 1997, the results
of its operations, changes in its net assets, and financial highlights for the
year then ended in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
April 18, 1997
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