<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
HICKORY PORTFOLIO
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 1998
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
<PAGE>
<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 and five year periods ended
September 30, 1998, 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>
Sept. 30, 1998 (9 months) 14.8% 6.0% 8.8%
Dec. 31, 1997 39.2 33.4 5.8
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 202.2 155.3 46.9
Compound Annual
Average Return 22.3 18.6 3.7
</TABLE>
The portfolio's average annual total return for the one and five years ended
September 30, 1998, and for the period since inception (April 1, 1993) was
21.8%, 22.8% and 22.3%, respectively. The returns assume redemption at the end
of each period and reinvestment of dividends.
1
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF $100,000
INVESTMENT IN HICKORY PORTFOLIO & S&P 500
The graph below shows the growth in value of a $100,000 investment in Hickory
since inception (April 1, 1993) to September 30, 1998, 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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HICKORY PORTFOLIO S&P 500
<S> <C> <C>
$100,000 $100,000
Apr-93 $91,621 $97,583
May-93 $95,999 $100,184
Jun-93 $96,609 $100,476
Jul-93 $99,489 $100,071
Aug-93 $107,204 $103,859
Sep-93 $108,002 $103,062
Oct-93 $115,026 $105,192
Nov-93 $111,438 $104,193
Dec-93 $120,267 $105,452
Jan-94 $118,421 $109,034
Feb-94 $116,476 $106,076
Mar-94 $110,109 $101,457
Apr-94 $109,060 $102,759
May-94 $110,065 $104,440
Jun-94 $104,789 $101,881
Jul-94 $104,153 $105,224
Aug-94 $110,360 $109,530
Sep-94 $109,189 $106,885
Oct-94 $107,787 $109,247
Nov-94 $101,810 $105,272
Dec-94 $99,476 $106,830
Jan-95 $99,870 $109,599
Feb-95 $103,994 $113,865
Mar-95 $105,513 $117,219
Apr-95 $105,229 $120,668
May-95 $111,054 $125,480
Jun-95 $118,331 $128,392
Jul-95 $124,859 $132,647
Aug-95 $133,445 $132,978
Sep-95 $139,110 $138,586
Oct-95 $133,237 $138,091
Nov-95 $137,345 $144,146
Dec-95 $139,728 $146,922
Jan-96 $146,980 $151,917
Feb-96 $148,848 $153,328
Mar-96 $148,334 $154,805
Apr-96 $151,650 $157,084
May-96 $159,513 $161,128
Jun-96 $163,383 $161,741
Jul-96 $150,145 $154,599
Aug-96 $160,466 $157,864
Sep-96 $168,758 $166,741
Oct-96 $171,426 $171,337
Nov-96 $179,661 $184,276
Dec-96 $189,125 $180,625
Jan-97 $195,946 $191,903
Feb-97 $200,614 $193,409
Mar-97 $190,121 $185,477
Apr-97 $190,461 $196,540
May-97 $217,223 $208,497
Jun-97 $220,947 $217,832
Jul-97 $229,579 $235,160
Aug-97 $232,386 $221,995
Sep-97 $248,189 $234,145
Oct-97 $251,508 $226,334
Nov-97 $248,562 $236,802
Dec-97 $263,210 $240,866
Jan-98 $271,051 $243,527
Feb-98 $285,577 $261,080
Mar-98 $326,656 $274,439
Apr-98 $353,861 $277,199
May-98 $341,132 $272,440
Jun-98 $357,938 $283,497
Jul-98 $363,953 $280,486
Aug-98 $320,022 $239,974
Sep-98 $302,191 $255,348
</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 the Weitz Funds at the address listed on the front
cover.
2
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
SEPTEMBER 30, 1998 - SEMI-ANNUAL REPORT
October 7, 1998
Dear Fellow Shareholder:
The third quarter was not kind to stock investors. Hickory participated in
the decline, losing 15.6% during the quarter. This brings our year to date
return to +14.8% at the end of the quarter. Over the same periods the S&P 500
(with dividends reinvested) returned -9.9% and +6.0%, respectively. Over the
last twelve months Hickory's total return was +21.8%. This compares to +9.1% for
the S&P 500 and -1.5% for the average growth mutual fund (according to Lipper).
REVIEW AND OUTLOOK
The last three months have been a very difficult stock environment. As I
write this, the S&P 500 is down about 20 percent from its high, making this a
bear market in the eyes of many commentators. However, the losses in the biggest
stocks are not nearly as bad as the damage that has been done to the smaller
companies. The Russell 2000, a commonly used index of smaller capitalization
stocks, is down about 35 percent from its peak. Including the declines we have
experienced since the end of the third quarter, Hickory's decline from its peak
is about 33 percent, slightly less than that of the Russell 2000.
I have always felt that investing in the stock market is necessarily a
long-term exercise. No one should expect that any stock market investment will
always generate positive returns over all time periods. Nevertheless, I am well
aware that it is no fun seeing our investments decline in value. As most of you
know, my wife and I do all of our personal investing by buying shares of
Hickory. However, while I am cautious about the stock market over the next few
months, I continue to be optimistic about the LONG-TERM OPPORTUNITIES this
market is presenting to the PATIENT investor.
This letter will include a discussion of three main topics: some
perspective on the current investment environment, how this environment has
affected the companies in which we invest, and how we are attempting to take
advantage of the opportunities that are arising.
The world seems to be experiencing a global financial crisis. Others can
tell us what caused the crisis, but it appears to have originated in Asia and
more recently has affected South America and Russia, and is now spreading to
Europe and the U. S. The most significant sign of the crisis in this country
thus far is the failure and bail-out of Long-Term Capital, a very large and very
highly leveraged hedge fund.
We have not invested in foreign companies, and none of the companies in
which we invest have, to our knowledge, any direct exposure to Long-Term
Capital. However, in the case of some of our companies, particularly some of our
financial companies, these events have had significant
3
<PAGE>
repercussions. Investors and speculators have become less willing to accept any
form of risk and the bond markets in particular are experiencing great
volatility. Many companies that need to access the capital markets for funding
are finding that the usual sources of liquidity are either much more expensive
or completely unavailable. In this environment those companies with strong
underlying businesses, appropriate leverage, and positive cashflow will be best
positioned to take advantage of the current turmoil. Since these are the
attributes we have always favored in businesses, only a small fraction of our
companies have been directly affected.
Altogether, it seems that the stock market has overreacted to these
events. Some examples may help illustrate my point.
- - Centennial Cellular has agreed to be purchased for $43.50 per share. The
price was in line with other transactions, there were multiple bidders, and
the company's performance has been well above expectations since the deal was
announced. The deal was originally scheduled to close next month. The buyer
apparently wants to buy, the seller wants to sell, but investors act as if
getting the financing to complete the deal is impossible and have driven the
stock to as low as $23.50. It is important to note that Centennial does not
need financing to operate. We have no special insight into whether the
financing will appear, but we think Centennial is a very attractive stock at
these prices even if there is no chance the deal ever happens.
- - The stock price of Data Transmission (DTN), a provider of niche information
services, has also been affected by the apparent lack of financing. The
company put itself up for sale this past summer. Optimists expected a quick
sale; but as worries about financing increased, the stock has dropped from
about $40 to the low $20s. Even though I think the value of the company has
gone up this year, the price is now below where I first started buying last
winter, when I had no reason to believe the company would ever be sold.
- - Capital One Financial is an information based marketer of credit cards and
other services and has been discussed in previous letters. It is a great
company, generating rapid earnings growth and considerable cashflow. It
finances itself in many ways, including securitizations. The securitization
market is clearly less friendly today than two months ago, but these
developments have a very modest impact on Capital One. Nevertheless, Capital
One's stock has dropped more than 50 percent from its high two months ago.
- - Imperial Credit is a specialty finance company with several wholly and
partially owned businesses. The liquidity crisis has clearly affected some of
its partially owned businesses, but the wholly owned businesses, which always
represented the majority of Imperial's value, remain sound. They are cash
generating, have several sources of liquidity, and have considerable earnings
power that should eventually resurface once this crisis is over. The market,
however, seems to be treating Imperial as an inevitable bankruptcy.
In this uncertain environment, many stocks seem very cheap. We have
focused our new investments on those companies where we feel that the eventual
downside risk is small, but the
4
<PAGE>
upside is still quite attractive. All four of the examples above have met these
criteria. I do not know if these stocks will go up or down in the short run. We
have always said that we will focus on finding value and that our ability to
time the market is quite limited. Short-term volatility has always been part of
stock market investing in general, and my investment style in particular. In
times of great market stress, this is particularly true.
Because I have been taking advantage of the bargains I am seeing in the
stock market, our cash position has decreased from about 30 percent in
mid-August (at the time Hickory was closed to new investors) to about 17 percent
now. I plan to continue to work down our cash position gradually over time as
new attractive opportunities arise.
In summary, I continue to believe in our approach and its ability to
generate adequate returns OVER THE LONG TERM. This has clearly been a very
challenging investment environment, and the challenges may well continue for
some time to come. Hickory has always been a concentrated portfolio with a bias
toward smaller companies. These attributes should be expected to result in
short-term volatility, and recently, they have. However, while investors should
not expect an immediate bounce, we strongly believe that opportunities are being
created, and we are working hard to take advantage of those opportunities. For
those investors with the patience to wait for better times and the ability to
stomach possible further declines in the interim, this looks to us like an
excellent time to invest in small-cap value stocks.
Thank you for your continued support.
Sincerely,
/s/ RICHARD F. LAWSON
Richard F. Lawson
Portfolio Manager
5
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 82.8%
AUTO SERVICES -- 3.0%
1,125,000 Insurance Auto Auctions, Inc.* $ 14,761,110 $ 14,062,500
------------- -------------
CABLE TELEVISION -- 7.8%
181,900 Adelphia Communications Corp. CL A* 4,350,681 7,116,838
895,700 Century Communications Corp. CL A* 13,365,989 21,384,837
106,000 Comcast Corp. CL A 3,338,775 4,942,250
6,500 Comcast Corp. Special CL A 92,732 305,094
65,448 Tele-Communications, Inc. CL A* 1,947,439 2,560,653
------------- -------------
23,095,616 36,309,672
------------- -------------
CONSUMER PRODUCTS AND SERVICES -- 4.3%
1,364,400 American Classic Voyages Co.* 19,196,717 20,124,900
------------- -------------
DIVERSIFIED INDUSTRIES -- 0.8%
47,800 Lynch Corp.* 4,375,240 3,656,700
------------- -------------
FINANCIAL SERVICES -- 9.7%
64,000 Capital One Financial Corp. 5,285,629 6,624,000
4,580,100 Imperial Credit Industries, Inc.* 74,575,499 28,625,625
1,742,000 United Panam Financial Corp.* 17,602,599 9,798,750
------------- -------------
97,463,727 45,048,375
------------- -------------
HEALTH CARE -- 1.1%
344,400 Lab Holdings, Inc. 6,849,852 5,252,100
------------- -------------
INFORMATION SERVICES -- 5.2%
795,900 Data Transmission Network Corp.* 24,603,487 23,877,000
------------- -------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- ------------- -------------
<C> <S> <C> <C>
MEDIA AND ENTERTAINMENT -- 11.4%
233,400 Tele-Communications Liberty Media CL A* $ 7,552,912 $ 8,562,862
833,504 Tele-Communications TCI Ventures Group A* 14,869,481 14,950,978
732,700 Valassis Communications, Inc.* 25,565,988 29,308,000
------------- -------------
47,988,381 52,821,840
------------- -------------
MORTGAGE BANKING -- 5.7%
777,100 New Century Financial Corp.* 7,757,301 5,876,819
1,154,500 Resource Bancshares Mtg. Grp., Inc. 20,671,049 20,492,375
443,300 Southern Pacific Funding Corp.* 4,997,670 249,356
------------- -------------
33,426,020 26,618,550
------------- -------------
REAL ESTATE AND CONSTRUCTION -- 0.7%
147,200 Forest City Enterprises, Inc. CL A 3,882,144 3,091,200
------------- -------------
REAL ESTATE INVESTMENT TRUSTS -- 8.9%
773,200 Dynex Capital, Inc. 7,424,160 6,523,875
694,200 Fortress Investment Corp. 13,399,776 12,495,600
222,600 Hanover Capital Mortgage Holdings, Inc. 3,596,028 1,530,375
25,000 Healthcare Financial Partners Units** 2,500,000 2,500,000
615,800 Impac Mortgage Holdings, Inc. 9,192,303 8,313,300
520,000 NovaStar Financial, Inc. 9,749,352 6,760,000
220,000 Redwood Trust, Inc. 5,019,867 3,190,000
------------- -------------
50,881,486 41,313,150
------------- -------------
TELECOMMUNICATIONS SERVICES -- 22.1%
95,000 Cellular Communications of Puerto Rico* 708,374 1,104,375
1,345,000 Centennial Cellular Corp. CL A* 48,583,393 43,040,000
95,000 Corecomm Limited* 708,374 1,033,125
1,500 East/West Communications, Inc.* 225 3,562
1,064,600 Telephone and Data Systems, Inc. 42,628,141 37,127,925
1,055,300 Vanguard Cellular Systems, Inc. CL A* 19,358,994 20,050,700
------------- -------------
111,987,501 102,359,687
------------- -------------
MISCELLANEOUS SECURITIES -- 2.1% 8,934,884 9,730,400
------------- -------------
Total Common Stocks 447,446,165 384,266,074
------------- -------------
</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>
WARRANTS -- 0.3%
424,300 Hanover Capital Mtg. Holdings, Inc., Expiring 9/15/00 $ 1,248,753 $ 79,556
260,000 NovaStar Financial, Inc., Expiring 2/03/01 1,688,775 1,170,000
------------- -------------
Total Warrants 2,937,528 1,249,556
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
- -----------
<C> <S> <C> <C>
SHORT-TERM SECURITIES -- 16.9%
$ 3,613,385 Norwest U.S. Government Money Market Fund 3,613,385 3,613,385
2,250,000 U.S. Treasury Bill 10/01/98 2,250,000 2,250,000
8,000,000 U.S. Treasury Bill 11/05/98 7,960,917 7,969,200
10,000,000 Federal Home Loan Mtg. Corp. Discount Note 11/10/98 9,940,000 9,943,110
5,000,000 Federal Farm Credit Bank Discount Note 12/21/98 4,940,375 4,942,740
20,000,000 Federal Farm Credit Bank 5.54% 1/04/99 20,000,000 20,028,780
20,000,000 Federal Natl. Mtg. Assoc. Discount Note 1/14/99 19,687,333 19,707,160
10,000,000 U.S. Treasury Bill 1/14/99 9,856,646 9,874,580
------------- -------------
78,248,656 78,328,955
------------- -------------
Total Investments in Securities $ 528,632,349 463,844,585
------------- -------------
-------------
Other Liabilities in Excess of Other Assets -- 0.0% (201,247)
-------------
Total Net Assets -- 100% $ 463,643,338
-------------
-------------
Net Asset Value Per Share $ 26.827
-------------
-------------
</TABLE>
*Non-income producing
**Each unit consists of five shares of common stock and one stock purchase
warrant
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $528,632,349) $463,844,585
Cash 1,741
Accrued interest and dividends receivable 735,333
Receivable for securities sold 640,906
Prepaid expense 32,463
------------
Total assets 465,255,028
------------
Liabilities:
Due to adviser 451,476
Payable for securities purchased 1,160,214
------------
Total liabilities 1,611,690
------------
Net assets applicable to outstanding capital stock $463,643,338
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 17,283
Additional paid-in capital 532,355,347
Accumulated undistributed net investment income 1,160,369
Accumulated undistributed net realized loss (5,101,897)
Net unrealized depreciation of investments (note 5) (64,787,764)
------------
Net assets $463,643,338
------------
------------
Net asset value and redemption price per share of outstanding
capital stock (17,282,954 shares outstanding) $ 26.827
------------
------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Dividends $ 981,099
Interest 1,798,195
------------
Total investment income 2,779,294
------------
Expenses (note 3):
Investment advisory fee 1,304,184
Administrative fee 242,879
Director's fees 1,630
Other expenses 70,230
------------
Total expenses 1,618,923
------------
Net investment income 1,160,371
------------
Realized and unrealized loss on investments:
Realized loss on investments (5,101,897)
Net unrealized depreciation of investments (77,434,933)
------------
Net realized and unrealized loss on investments (82,536,830)
------------
Net decrease in net assets resulting from operations $(81,376,459)
------------
------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------ --------------
<S> <C> <C>
Increase (Decrease) in net assets:
From operations:
Net investment income (loss) $ 1,160,371 $ (25,460)
Net realized gain (loss) (5,101,897) 1,995,094
Net unrealized appreciation (depreciation) (77,434,933) 10,256,171
------------------ --------------
Net increase (decrease) in net assets resulting from operations (81,376,459) 12,225,805
------------------ --------------
Distributions to shareholders from:
Net investment income -- (54,656)
Net realized gain (1,159,996) (1,462,058)
------------------ --------------
Total distributions (1,159,996) (1,516,714)
------------------ --------------
Capital share transactions (note 4):
Proceeds from sales 575,420,349 23,078,046
Payments for redemptions (74,524,273) (3,086,396)
Reinvestment of distributions 955,604 1,406,036
------------------ --------------
Total increase from capital share transactions 501,851,680 21,397,686
------------------ --------------
Total increase in net assets 419,315,225 32,106,777
------------------ --------------
Net assets:
Beginning of period 44,328,113 12,221,336
------------------ --------------
End of period $ 463,643,338 $ 44,328,113
------------------ --------------
------------------ --------------
</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>
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
1998 ----------------------------------------------------
(UNAUDITED) 1998 1997 1996++ 1995 1994
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 29.414 $ 18.899 $ 15.564 $ 11.257 $ 12.227 $ 11.147
----------- -------- -------- -------- -------- --------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income
(loss) 0.101 (0.007) 0.045 0.004 (0.008) (0.290)
Net gains or losses on
securities (realized
and unrealized) (2.243) 12.503 4.329 4.504 (0.508) 1.420
----------- -------- -------- -------- -------- --------
Total from investment
operations (2.142) 12.496 4.374 4.508 (0.516) 1.130
----------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (0.073) (0.002) (0.136) -- 0.083
Distributions from
realized gains (0.445) (1.908) (1.037) (0.065) (0.454) (0.133)
----------- -------- -------- -------- -------- --------
Total distributions (0.445) (1.981) (1.039) (0.201) (0.454) (0.050)
----------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 26.827 $ 29.414 $ 18.899 $ 15.564 $ 11.257 $ 12.227
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
TOTAL RETURN (7.5%) 71.8% 28.2% 40.6% (4.2%) 10.1%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period ($000) $463,643 $ 44,328 $ 12,221 $ 6,658 $ 3,619 $ 2,499
Ratio of net expenses to
average net assets 1.23%* 1.46% 1.50%+ 1.50%+ 1.50% 1.50%
Ratio of net investment
income (loss) to
average net assets 0.88%* (0.13%) 0.33% 0.02% (0.17%) (2.92%)
Portfolio turnover rate 5% 29% 28% 28% 20% 29%
</TABLE>
* Annualized
+ 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.
++ Calculated using average daily shares.
See accompanying notes to financial statements.
12
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
(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 September 30, 1998, 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
invests 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 value determined using the following valuation
methods:
- Securities traded on a national or regional securities exchange and
over-the-counter securities traded on the NASDAQ national market
are valued at the last sales price; if there were no sales on that
day, securities are valued at the mean between the latest available
and representative bid and asked prices.
- Securities not listed on an exchange are valued at the mean between
the latest available and representative bid and ask prices.
- The value of certain debt securities for which market quotations
are not readily available may be based upon current market prices
of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing similar factors.
- The value of securities for which market quotations are not readily
available, including restricted and not readily marketable
securities, is determined in good faith under the supervision of
the Fund's Board of Directors.
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
13
<PAGE>
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. Although no call options were written in the six
months ended September 30, 1998, such options are authorized.
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 AND DISTRIBUTIONS TO SHAREHOLDERS
Security transactions are accounted for on the date securities are
purchased or sold (trade date). Income dividends are recorded on the
ex-dividend date. Interest, including amortization of discount and
premium, is accrued as earned. Distributions to shareholders are recorded
on the ex-dividend date.
Realized gains or losses are determined by specifically identifying the
security sold.
(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
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.
14
<PAGE>
(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.
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 six months ended September
30, 1998, the fee was calculated at an average annual rate of .18% of the
Portfolio's average daily net assets.
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. Twenty million of these
shares have been authorized by the Board of Directors to be issued in the
series designated Hickory Portfolio. 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>
SIX MONTHS ENDED
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------ --------------
<S> <C> <C>
Transactions in shares:
Shares issued..................................................... 18,249,963 917,276
Shares redeemed................................................... (2,504,781) (128,242)
Distributions reinvested.......................................... 30,736 71,331
---------- --------------
Net increase.................................................... 15,775,918 860,365
---------- --------------
---------- --------------
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Portfolio, other than short-term securities, aggregated $439,613,840 and
$10,669,225, respectively. The cost of investments for Federal income tax
purposes is $531,022,377. At September 30, 1998, the aggregate gross
unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, were $28,762,633 and $95,940,425, respectively.
15
<PAGE>
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WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
Lorraine Chang
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 Minnesota, 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.
