<PAGE>
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
SUB-TRANSFER AGENT
National Financial Data Services, Inc.
This report has been prepared for the information of shareholders of Weitz
Series Fund, Inc. -- Hickory Fund. 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.
510231
HICKORY FUND
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 1999
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
www.weitzfunds.com
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
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, 1999, 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, 1999 (9 months) 19.0% 5.4% 13.6%
Dec. 31, 1998 33.0 28.6 4.4
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 316.7 226.3 90.4
Compound Annual
Average Return 24.5 19.9 4.6
</TABLE>
The fund's average annual total return for the one and five years ended
September 30, 1999, and for the period since inception (April 1, 1993) was
37.9%, 30.7% and 24.5%, respectively. The returns assume redemption at the end
of each period and reinvestment of dividends.
2
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
The chart below depicts the change in the value of a $25,000 investment for the
period since inception of the Hickory Fund (April 1, 1993) through
September 30, 1999, as compared with the growth of the Standard & Poor's 500
Index during the same period. The Standard & Poor's Index is an unmanaged index
consisting of 500 companies generally representative of the market for stocks of
large-size U.S. companies. The information assumes reinvestment of dividends and
capital gains distributions. A $25,000 investment in the Hickory Fund on
April 1, 1993, would have been valued at $104,176 on September 30, 1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C> <C>
WEITZ HICKORY FUND
DATE HICKORY FUND S&P 500
April 1, 1993 $25,000 $25,000
April-93 $22,905 $24,396
May-93 $24,000 $25,046
June-93 $24,152 $25,119
July-93 $24,872 $25,018
August-93 $26,801 $25,965
September-93 $27,001 $25,765
October-93 $28,757 $26,298
November-93 $27,860 $26,048
December-93 $30,067 $26,363
January-94 $29,605 $27,258
February-94 $29,119 $26,519
March-94 $27,527 $25,364
April-94 $27,265 $25,690
May-94 $27,516 $26,110
June-94 $26,197 $25,470
July-94 $26,038 $26,306
August-94 $27,590 $27,382
September-94 $27,297 $26,714
October-94 $26,947 $27,312
November-94 $25,452 $26,318
December-94 $24,869 $26,708
January-95 $24,968 $27,400
February-95 $25,999 $28,466
March-95 $26,378 $29,305
April-95 $26,307 $30,167
May-95 $27,764 $31,370
June-95 $29,583 $32,098
July-95 $31,215 $33,162
August-95 $33,361 $33,244
September-95 $34,777 $34,647
October-95 $33,309 $34,523
November-95 $34,336 $36,037
December-95 $34,932 $36,731
January-96 $36,745 $37,979
February-96 $37,212 $38,332
March-96 $37,083 $38,701
April-96 $37,913 $39,271
May-96 $39,878 $40,282
June-96 $40,846 $40,435
July-96 $37,536 $38,650
August-96 $40,117 $39,466
September-96 $42,189 $41,685
October-96 $42,857 $42,834
November-96 $44,915 $46,069
December-96 $47,281 $45,156
January-97 $48,987 $47,976
February-97 $50,153 $48,352
March-97 $47,530 $46,369
April-97 $47,615 $49,135
May-97 $54,306 $52,124
June-97 $55,237 $54,458
July-97 $57,395 $58,790
August-97 $58,096 $55,499
September-97 $62,047 $58,536
October-97 $62,877 $56,584
November-97 $62,141 $59,201
December-97 $65,803 $60,216
January-98 $67,763 $60,882
February-98 $71,394 $65,270
March-98 $81,664 $68,610
April-98 $88,465 $69,300
May-98 $85,283 $68,110
June-98 $89,485 $70,874
July-98 $90,988 $70,121
August-98 $80,006 $59,993
September-98 $75,548 $63,837
October-98 $76,215 $69,025
November-98 $81,957 $73,206
December-98 $87,522 $77,422
January-99 $90,666 $80,658
February-99 $91,426 $78,152
March-99 $95,887 $81,278
April-99 $104,102 $84,425
May-99 $104,548 $82,434
June-99 $108,215 $87,005
July-99 $105,837 $84,291
August-99 $102,055 $83,871
September-99 $104,176 $81,575
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE INCEPTION
1-YEAR 5-YEARS (APRIL 1, 1993)
-------- -------- ----------------
<S> <C> <C> <C>
HICKORY FUND............................ 37.9% 30.7% 24.5%
Standard & Poor's 500 Index............. 27.8% 25.0% 19.9%
</TABLE>
This information represents past performance of the Hickory Fund and is not
indicative of future performance. The investment return and the 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.
3
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
SEPTEMBER 30, 1999 - SEMI-ANNUAL REPORT
October 6, 1999
Dear Fellow Shareholder:
Our investments in Hickory declined in value during the third quarter. Our
total return over the most recent three months was -3.7%, bringing our year to
date return to +19.0%. Over the same periods the S&P 500 (with dividends
reinvested) returned -6.2% and +5.4% respectively. Over the last twelve months
Hickory's total return was +37.9%. This compares to +27.8% for the S&P 500 and
+30.3% for the average growth mutual fund (according to Lipper).
REVIEW AND OUTLOOK
It would not be too much of a stretch to compare Hickory's investment
results over the last few months to a man treading water in the ocean. He goes
up and down with the waves but ends up about where he started. That's the
conclusion one would reach looking just at our total returns. If you looked
below the surface, I think the picture looks considerably better. In choppy
periods like this one, it is quite common for some stocks to do well and others
to do poorly, and that has certainly been the case lately. We have always found
that this kind of stock market is helpful to our long-term investment
performance even though it may not be obvious at the time. We have been taking
advantage of periodic bouts of market euphoria to reduce our positions in stocks
that have appreciated significantly and are no longer as cheap as they once
were. We have also been taking advantage of the market's current dislike of some
companies to buy their stocks at attractive prices. This seems like an ideal
time to tell you about some of the stocks we have been buying recently.
Countrywide Credit is the largest independent originator and servicer of
mortgages. The stock was held in Hickory from the fund's inception until about a
year and a half ago, when we sold the last of our position at prices about 50
percent higher than the current market price. This is a good company that has
successfully competed in a cyclical industry for many years. Because the
industry is experiencing a down cycle (when interest rates go up, fewer people
take out mortgages, pressuring the origination part of Countrywide's business),
the stock is now out of favor with investors and can be purchased for about
9 times this year's earnings. I think Countrywide's stock is even more
attractive because the company is pursuing several related business
opportunities, including originating mortgages over the Internet. At current
market prices, it seems clear that Countrywide is not being treated as an
Internet stock by investors today.
Mail-Well is a new company and a new industry for Hickory. The company
competes in niches within the commercial printing industry. These niches include
manufacturing envelopes and printing high-end brochures and annual reports.
Mail-Well has a long history of
4
<PAGE>
successfully growing by acquisition. This kind of "rollup" company is now out of
favor with investors. The reasons for this dislike are in some cases quite
rational. I see little appeal in a company that is merely using a temporarily
high stock price to buy growth. However, Mail-Well's strategy is different. They
make most of their acquisitions using available free cashflow and then add
significant operational synergies to the businesses they buy. The result is
lower costs, increased profit margins, and high returns on investment. But
because this type of company is out of favor, we have been able to buy
Mail-Well's stock at very attractive prices. Mail-Well trades at less than ten
times this year's cash earnings, which seems too low relative to an expected
growth rate of more than 20 percent.
On several occasions in the past I have looked at satellite service
businesses as potentially attractive. These businesses share several
characteristics with other businesses we like. They usually require a large
upfront investment to create the service and market it to potential customers,
creating a barrier to future competition. Customers use the service over an
extended period of time, creating a stable revenue stream. And once the business
successfully reaches maturity, it is often capable of generating significant
free cashflow. The problem has always been picking the time to get in. If you
invest too early, you run the risk that the business will not be as successful
as expected. The recent difficulties faced by Iridium, a worldwide satellite
phone business, are an excellent illustration of this risk. Alternatively, if
you wait until the business model is proven, the market has often discovered the
business and the stock is no longer cheap.
Recently two opportunities have arisen that seem to overcome these
problems. The two companies are Orbital Sciences and Loral Space and
Communications. In this letter I will focus on Loral, a diversified satellite
manufacturing and service company. Loral's most controversial business is
Globalstar, a competitor to Iridium. Globalstar is prepared to begin marketing
its phone service this fall. While I believe Globalstar will be a success, I
don't think it has to succeed for Loral to be an attractive investment. Loral
also owns three other businesses, including manufacturing and operating
satellites and providing communication services. These businesses appear quite
attractive on their own merits. I believe that Loral's current stock price is
less than the value of these operations, even if you assume that Loral's
ownership in Globalstar is worthless. Loral has apparently fallen into no-man's
land for most investors. The level of skepticism towards Globalstar is currently
quite high. If you don't believe in Globalstar, it would be easy to decide to
also avoid Loral. On the other hand, if you were convinced of Globalstar's
value, you would probably decide that you have more upside with Globalstar than
with Loral. I see this situation as an opportunity. I am always more comfortable
when I can identify why Wall Street doesn't like a stock, and in Loral's case,
those reasons seem quite clear.
Finally, Premier Parks owns and operates regional amusement parks, mostly
in mid-sized markets. Their most famous brand is Six Flags, which they purchased
last year. The regional amusement park business has all of the attributes we
look for in a business. A local park can develop a strong franchise and is
largely immune to new competition. Management is
5
<PAGE>
therefore in a good position to raise prices modestly and to control costs.
Capital expenditure costs can also be controlled. This is different from the
situation facing Disney in Orlando. Because Disney draws from across the
country, and because Disney World competes with Universal Studios, Disney needs
to continue to invest heavily in new and updated attractions. Premier also needs
to keep its parks fresh, but because it is a local business it can accomplish
this with much more modest expenditures. Premier's management has done an
excellent job of managing its parks, and of acquiring other parks. The stock has
been relatively volatile lately as investors swing from appreciating the
attractiveness of the business to worrying about current business trends. The
latest concern is the string of accidents that have occurred in American
amusement parks this year. While the accidents are certainly unfortunate, there
doesn't seem to be any evidence that business has been adversely affected as a
result, and Premier is not concerned about any potential new regulation because
their current standards of operation are already quite high.
In closing, I am becoming increasingly optimistic about the long-term
prospects of our investments. The overall market will do what the market will
do, and I am quite sure that does not mean it will go straight up for the next
ten years. Nevertheless, patient investors like us who look for growing value,
priced at a discount should continue to find interesting opportunities.
Thank you for your continued support.
Sincerely,
/s/ RICHARD F. LAWSON
Richard F. Lawson
Portfolio Manager
6
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 95.1%
AUTO SERVICES -- 2.4%
1,275,700 Insurance Auto Auctions, Inc.* $ 16,579,335 $ 18,976,037
------------ ------------
CABLE TELEVISION -- 5.8%
133,800 Adelphia Communications Corp. CL A* 2,811,481 7,869,113
838,000 Century Communications Corp. CL A* 13,057,323 38,233,750
------------ ------------
15,868,804 46,102,863
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 7.0%
1,523,200 American Classic Voyages Co.* 21,706,958 34,938,400
702,200 Premier Parks, Inc.* 20,638,802 20,363,800
------------ ------------
42,345,760 55,302,200
------------ ------------
DIVERSIFIED INDUSTRIES -- 0.2%
54,700 Lynch Corp.* 1,924,676 1,456,387
------------ ------------
FINANCIAL GUARANTEE INSURANCE -- 4.2%
810,000 The PMI Group, Inc. 23,132,333 33,108,750
------------ ------------
FINANCIAL SERVICES -- 11.6%
845,700 Allied Capital Corp. 14,509,567 18,975,394
350 Berkshire Hathaway, Inc. CL A* 25,528,400 19,250,000
758,000 Capital One Financial Corp. 23,682,628 29,562,000
4,983,600 Imperial Credit Industries, Inc.* 76,714,986 21,803,250
1,086,000 United Panam Financial Corp.* 10,234,294 2,104,125
------------ ------------
150,669,875 91,694,769
------------ ------------
HEALTH CARE -- 0.7%
608,850 LabOne, Inc. 7,868,452 5,707,969
------------ ------------
INFORMATION SERVICES -- 4.6%
1,465,200 Data Transmission Network Corp.* 40,129,109 36,538,425
------------ ------------
LODGING AND GAMING -- 3.7%
1,063,500 Harrah's Entertainment, Inc.* 15,692,726 29,512,125
------------ ------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- ------------ ------------
<C> <S> <C> <C>
MEDIA AND ENTERTAINMENT -- 10.3%
1,336,400 AT&T Corp - Liberty Media Group A* $ 23,358,081 $ 49,613,850
718,050 Valassis Communications, Inc.* 15,787,235 31,549,322
------------ ------------
39,145,316 81,163,172
------------ ------------
MORTGAGE BANKING -- 6.2%
562,600 New Century Financial Corp.* 5,431,799 9,915,825
975,200 Countrywide Credit Industries, Inc. 31,520,245 31,450,200
1,492,500 Resource Bancshares Mtg. Grp., Inc. 22,846,412 7,415,859
------------ ------------
59,798,456 48,781,884
------------ ------------
OIL AND GAS DRILLING -- 2.8%
995,000 Noble Drilling Corp.* 12,525,538 21,765,625
------------ ------------
PRINTING SERVICES -- 3.3%
1,906,100 Mail-Well, Inc.* 24,515,549 26,447,137
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 0.5%
187,200 Forest City Enterprises, Inc. CL A 4,843,744 4,176,900
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 3.7%
968,113 Dynex Capital, Inc. 18,821,190 6,534,763
879,332 Fortress Investment Corp. 16,612,841 14,948,644
222,600 Hanover Capital Mortgage Holdings, Inc. 3,555,031 890,400
25,000 Healthcare Financial Partners Units** 2,500,000 2,500,000
520,000 NovaStar Financial, Inc. 9,356,282 1,820,000
220,000 Redwood Trust, Inc. 4,964,257 2,846,250
------------ ------------
55,809,601 29,540,057
------------ ------------
RESTAURANTS -- 1.0%
245,000 Applebee's International 5,024,688 8,253,437
------------ ------------
RETAIL DISCOUNT -- 5.6%
2,000,000 Consolidated Stores Corp.* 35,340,276 44,125,000
------------ ------------
SATELLITE SERVICES -- 6.8%
1,729,700 Loral Space & Communications, Ltd.* 31,042,830 29,729,219
1,358,900 Orbital Sciences Corp.* 31,116,972 23,780,750
------------ ------------
62,159,802 53,509,969
------------ ------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- ------------ ------------
<C> <S> <C> <C>
TELECOMMUNICATIONS SERVICES -- 11.4%
433,044 Centennial Cellular Corp. CL A* $ 6,099,390 $ 19,676,437
54,700 Lynch Interactive 3,010,390 4,102,500
1,875 East/West Communications, Inc.* 788 11,719
750,000 Telephone and Data Systems, Inc. 29,474,424 66,609,375
------------ ------------
38,584,992 90,400,031
------------ ------------
MISCELLANEOUS SECURITIES -- 3.3% 21,718,943 25,798,567
------------ ------------
Total Common Stocks 673,677,975 752,361,304
------------ ------------
WARRANTS -- 0.0%
424,300 Hanover Capital Mtg. Holdings, Inc., Expiring 9/15/00 1,248,753 26,519
260,000 NovaStar Financial, Inc., Expiring 2/03/01 1,688,775 32,500
------------ ------------
Total Warrants 2,937,528 59,019
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 0.8%
871,429 NovaStar Financial, Inc. 7% Pfd. Class B Cumulative 6,100,003 6,100,003
------------ ------------
<CAPTION>
FACE
AMOUNT
- -----------
<C> <S> <C> <C>
SHORT-TERM SECURITIES -- 4.2%
$ 9,132,452 Norwest U.S. Government Money Market Fund $ 9,132,452 $ 9,132,452
24,000,000 Fannie Mae Discount Note 12/10/99 23,759,667 23,759,208
------------ ------------
Total Short-Term Securities 32,892,119 32,891,660
------------ ------------
Total Investments in Securities $715,607,625 791,411,986
============ ------------
Other Liabilities in Excess of Other Assets -- (0.1%) (426,702)
------------
Total Net Assets -- 100% $790,985,284
============
Net Asset Value Per Share $ 36.36
============
</TABLE>
*Non-income producing
**Each unit, which is restricted as to sale, consists of five shares of common
stock and one stock purchase warrant. The company distributed an additional
warrant per unit to unitholders during 1998. The warrants currently have no
value or cost assigned to them.
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $715,607,625) $791,411,986
Accrued interest and dividends receivable 68,808
Receivable for securities sold 3,176,293
------------
Total assets 794,657,087
------------
Liabilities:
Due to adviser 745,886
Payable for securities purchased 2,809,134
Other liabilities 116,783
------------
Total liabilities 3,671,803
------------
Net assets applicable to outstanding capital stock $790,985,284
============
Net assets represented by:
Additional paid-in capital (note 4) 691,114,557
Accumulated undistributed net investment loss (532,896)
Accumulated undistributed net realized gains 24,599,262
Net unrealized appreciation of investments (note 5) 75,804,361
------------
Total representing net assets applicable to
shares outstanding $790,985,284
============
Net asset value per share of outstanding capital stock
(21,755,014 shares outstanding) $ 36.36
============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Dividends $ 2,480,496
Interest 1,706,594
-----------
Total investment income 4,187,090
-----------
Expenses (note 3):
Investment advisory fee 3,832,558
Administrative fee 604,125
Directors fees 1,882
Other expenses 276,018
-----------
Total expenses 4,714,583
-----------
Net investment income (527,493)
-----------
Realized and unrealized gain on investments:
Net realized gain on investments 24,909,853
Net unrealized appreciation of investments 30,357,882
-----------
Net realized and unrealized gain on investments 55,267,735
-----------
Net increase in net assets resulting from
operations $54,740,242
===========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
------------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income (loss) $ (527,493) $ 1,902,090
Net realized gain 24,909,853 10,684,350
Net unrealized appreciation 30,357,882 32,799,309
------------ -------------
Net increase in net assets resulting from
operations 54,740,242 45,385,749
------------ -------------
Distributions to shareholders from:
Net investment income (233,034) (1,674,459)
Net realized gains (10,994,940) (1,159,994)
------------ -------------
Total distributions (11,227,974) (2,834,453)
------------ -------------
Capital share transactions (note 4):
Proceeds from sales 170,176,969 744,508,477
Payments for redemptions (71,020,673) (195,010,810)
Reinvestment of distributions 9,554,143 2,385,501
------------ -------------
Total increase from capital share transactions 108,710,439 551,883,168
------------ -------------
Total increase in net assets 152,222,707 594,434,464
------------ -------------
Net assets:
Beginning of period 638,762,577 44,328,113
------------ -------------
End of period $790,985,284 $ 638,762,577
============ =============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
FINANCIAL HIGHLIGHTS
The following information provides selected data for a share of the Hickory Fund
outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED MARCH 31,
SEPT. 30, 1999 ---------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996++ 1995
---------------- -------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 33.94 $ 29.41 $ 18.90 $ 15.56 $11.26 $ 12.23
-------- -------- ------- ------- ------ -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) 0.11 (0.01) 0.05 -- (0.01)
Net gains or losses on securities (realized and
unrealized) 2.97 4.96 12.50 4.33 4.50 (0.51)
-------- -------- ------- ------- ------ -------
Total from investment operations 2.95 5.07 12.49 4.38 4.50 (0.52)
-------- -------- ------- ------- ------ -------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.10) (0.07) -- (0.14) --
Distributions from realized gains (0.52) (0.44) (1.91) (1.04) (0.06) (0.45)
-------- -------- ------- ------- ------ -------
Total distributions (0.53) (0.54) (1.98) (1.04) (0.20) (0.45)
-------- -------- ------- ------- ------ -------
NET ASSET VALUE, END OF PERIOD $ 36.36 $ 33.94 $ 29.41 $ 18.90 $15.56 $ 11.26
======== ======== ======= ======= ====== =======
TOTAL RETURN 8.6% 17.4% 71.8% 28.2% 40.6% (4.2%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $790,985 $638,763 $44,328 $12,221 $6,658 $3,619
Ratio of net expenses to average net assets 1.23%* 1.30% 1.46% 1.50%+ 1.50%+ 1.50%
Ratio of net investment income (loss) to average
net assets (0.14%)* 0.48% (0.13%) 0.33% 0.02% (0.17%)
Portfolio turnover rate 11% 40% 29% 28% 28% 20%
</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.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
WEITZ SERIES FUND, INC. -- HICKORY FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
(1) ORGANIZATION
Weitz Series Fund, Inc. (the "Company") 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, 1999, the Company had
four series: the Hickory Fund, the Value Fund, the Fixed Income Fund, and
the Government Money Market Fund. The accompanying financial statements
present the financial position and results of operations of the Hickory Fund
(the "Fund").
The Fund's investment objective is capital appreciation. The Fund invests
principally in common stocks, preferred stocks and a variety of securities
convertible into equity such as rights, warrants, preferred stocks and
convertible bonds.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in accordance with
accounting policies generally accepted in the investment company industry.
(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 Company's Board of Directors.
When the Fund writes a call option, an amount equal to the premium
received by the Fund is included in the Fund'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
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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 Fund enters into a
closing purchase transaction, the Fund 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 Fund 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, 1999,
such options are authorized.
The risk in writing a call option is that the Fund gives up the
opportunity of profit if the market price of the security increases. The
Fund 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 Fund'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 Fund.
(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.
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(3) RELATED PARTY TRANSACTIONS
The Company and Fund have retained Wallace R. Weitz & Company (the
"Adviser") as their investment adviser. In addition, the Company has an
agreement with Weitz Securities, Inc. to act as distributor for the Fund's
shares. Certain officers and directors of the Company 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 Fund's
average daily net asset value. The Adviser has agreed to reimburse the Fund
up to the amount of advisory fees paid to the extent that total expenses
exceed 1.50% of the Fund's average 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 Company for which the
Adviser is being paid a monthly fee. During the six months ended
September 30, 1999, the fee was calculated at an average annual rate of .16%
of the Fund's average daily net assets.
Weitz Securities, Inc., as distributor, received no compensation for the
distribution of Fund shares.
(4) CAPITAL STOCK
The Company is authorized to issue a total of five billion shares of common
stock in series with a par value of $.001 per share. Seventy-five million of
these shares have been authorized by the Board of Directors to be issued in
the series designated Hickory Fund. The Board of Directors may authorize
additional shares in other series of the Company'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 Fund are summarized as follow:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, 1999 YEAR ENDED
(UNAUDITED) MARCH 31, 1999
------------------- ---------------
<S> <C> <C>
Transactions in shares:
Shares issued................................... 4,619,771 23,933,433
Shares redeemed................................. (1,940,056) (6,698,624)
Reinvested dividends............................ 255,869 77,585
---------- ----------
Net increase.................................. 2,935,584 17,312,394
========== ==========
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Fund, other than short-term securities, aggregated $219,512,283 and
$75,913,527, respectively. The cost of investments for Federal income tax
purposes is $715,909,658. At September 30, 1999, the
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aggregate gross unrealized appreciation and depreciation, based on cost for
Federal income tax purposes, were $206,055,007 and $130,552,679,
respectively.
(6) AFFILIATED ISSUERS
Affiliated issuers, as defined under the Investment Company Act of 1940, are
those in which the Company's holdings of an issuer represent 5% or more of
the outstanding voting securities of the issuer. A summary of the Company's
holdings in the securities of such issuers is set forth below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES HELD VALUE DIVIDEND REALIZED
NAME OF ISSUER SEPT. 30, 1999 SEP. 30, 1999 INCOME GAINS/LOSSES
- ------------------------------------------- -------------- -------------- -------- ------------
<S> <C> <C> <C> <C>
American Classic Voyages Co................ 1,523,200 $ 34,938,400 $ 0 $ 0
Data Transmission Network Corp............. 1,465,200 36,538,425 0 0
Dynex Capital, Inc......................... 968,113 6,534,763 0 0
Imperial Credit Industries, Inc............ 4,983,600 21,803,250 0 0
Insurance Auto Auctions, Inc............... 1,275,700 18,976,037 0 0
LabOne, Inc................................ 608,850 5,707,969 227,763 4,548
NovaStar Financial, Inc.................... 520,000 1,820,000 0 0
NovaStar Financial, Inc.,
Warrants Expiring 2/03/01................. 260,000 32,500 0 0
NovaStar Financial, Inc. 7% Pfd.
Class B Cumulative........................ 871,429 6,100,003 113,867 0
Resource Bancshares Mtg. Grp., Inc......... 1,492,500 7,415,859 328,350 0
United Panam Financial Corp................ 1,086,000 2,104,125 0 0
------------ -------- ------
Totals..................................... $141,971,331 $669,980 $4,548
============ ======== ======
</TABLE>
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WEITZ SERIES FUND, INC.
WEITZ HICKORY FUND
YEAR 2000 UPDATE
Wallace R. Weitz & Company ("Weitz"), investment adviser and administrator
for the Weitz Funds, has developed a plan to address whether its systems will
operate correctly after December 31, 1999. The plan has been reviewed by Weitz's
management and by the Board of Directors of Weitz Series Fund, Inc. and Weitz
Partners, Inc. Weitz has assigned one employee to take the lead on Year 2000
issues and is also working with a consulting firm to assist in the remediation
of hardware and software systems. Regular reports are made to the Board of
Directors. Weitz has agreed to commit the resources necessary to address the
Year 2000 issue.
Weitz's local area network is comprised of a single file server, two
application servers, and individual workstations with desktop machines, related
peripherals and software developed by third parties. Such software is a
combination of off-the-shelf applications and accounting or industry specific
applications developed by third party vendors. Weitz has no internally developed
or modified software applications. Due to the recent growth of the Weitz Funds,
Weitz has replaced its entire network within the past two years. These changes
have all been effected with Year 2000 compliance issues in mind. Weitz has been
in communication with critical third party service providers who have provided
assurances to us that they are either Year 2000 compliant or are in the final
stages of testing. Because of recent growth and the need for certain increased
efficiencies and technological capabilities, Weitz has recently changed some of
its third party service providers. This process has involved obtaining
assurances about the Year 2000 readiness of the new providers.
With respect to the companies in which the Weitz Funds invest, Weitz
intends to review the disclosure included in regular filings with the Securities
and Exchange Commission for certain of those companies in which the funds have a
significant investment. In addition, Weitz receives and will continue to receive
Y2K readiness information from securities analysts and from certain of the
issuing companies themselves. Such information is reviewed as it becomes
available. Weitz and the Weitz Funds have no reason to believe that these steps
will not be sufficient to avoid any material adverse impact on the Funds,
although there can be no assurance of this.
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WEITZ SERIES FUND, INC.
WEITZ HICKORY FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On August 13, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as
independent auditors of the Fund pursuant to an agreement by
PricewaterhouseCoopers, LLP ("PwC") to acquire McGladrey's investment company
practice. The McGladrey partners and professionals serving the Fund at the time
of the acquisition joined PwC. The reports of McGladrey on the financial
statements of the Fund during the past two fiscal years contained no adverse
opinion or disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope or accounting principles. In connection with its audits
for the two most recent fiscal years and through August 13, 1999, there were no
disagreements with McGladrey on any matter of accounting principle or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of McGladrey would have
caused it to make reference to the subject matter of disagreement in connection
with its report. On July 30, 1999, the Fund, with the approval of its Board of
Directors and its Audit Committee, engaged PwC as its independent auditors.
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