PENFIELD PARTNERS, L.P.
Index to Financial Statements
June 30, 2000
PAGE(S)
Independent Accountants' Report 1
Statement of Assets and Liabilities 2
Statement of Operations 3
Statements of Changes in Partners' Capital 4
Schedule of Investments 6
Notes to Financial Statements 9
Page 1
Independent Accountant's Report
The Partners of
Penfield Partners, L.P.
We have reviewed the accompanying Statement of Assets and
Liabilities, including the Schedule of Investments of Penfield
Partners, L.P. as of June 30, 2000 and the related Statements of
Operations and Changes in Partners' Capital for the six months
then ended. These financial statements are the responsibility of
the Partnership's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying interim
period financial statements for them to be in conformity with
generally accepted accounting principles.
The Statement of Changes in Partners' Capital for the year
ended December 31, 1999 was audited by us, and we expressed an
unqualified opinion on it in our report dated January 14, 2000,
but we have not performed any audit procedures since that date.
Anchin, Block & Anchin LLP
New York, N.Y.
July 26, 2000
Page 2
PENFIELD PARTNERS, L.P.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
(Unaudited)
ASSETS
Investments in securities, at fair value $34,944,993
Cash equivalents 4,450,892
Receivable from broker 698,337
___________
TOTAL ASSETS $40,094,222
LIABILITIES
Securities sold short, at fair value $ 4,388,657
Payable to broker 918,263
Accrued expenses 82,821
Payable for capital withdrawals 412,176
___________
TOTAL LIABILITIES $ 5,801,917
PARTNERS' CAPITAL
General Partners 4,056,055
Limited Partners 30,236,250
___________
TOTAL PARTNERS' CAPITAL $34,292,305
TOTAL LIABILITIES AND PARTNERS' CAPITAL $40,094,222
___________
Net asset value per Limited Partners' Unit $ 25,000
___________
See Notes to Financial Statements
Page 3
PENFIELD PARTNERS, L.P.
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000
(Unaudited)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gains on investments, net $ 593,705
Unrealized gains on investments, net 5,588,745
___________
Total Realized and Unrealized Investment Gains $6,182,450
INVESTMENT LOSS
Income
Interest 58,922
Dividends 55,863
___________
114,785
Expenses
Administrator's fee 115,431
Independent General Partners' fees 10,000
Interest 60,592
Professional fees 52,711
Short dividend expense 2,550
___________
241,284
Investment Loss (126,499)
__________
NET INCOME $6,055,951
__________
See Notes to Financial Statements
Page 4
PENFIELD PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2000
(Unaudited)
<TABLE>
Corporate Individual
General General Limited
Total Partner Partners Partners
___________ __________ ________ ___________
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL
Beginning $26,248,530 $2,417,111 $16,248 $23,815,171
___________ ___________ ________ ___________
CHANGES IN CAPITAL FROM
Net Income 6,055,951 1,619,948 2,748 4,433,255
___________ ___________ ________ ___________
Partners' Transactions
Capital contributions 2,400,000 - - 2,400,000
Capital withdrawals (412,176) - - (412,176)
___________ ___________ ________ ___________
Net Increase 1,987,824 - - 1,987,824
___________ ___________ ________ ___________
Total Increase in
Partners Capital 8,043,775 1,619,948 2,748 6,421,079
___________ ___________ ________ ___________
PARTNERS' CAPITAL-
Ending $34,292,305 $4,037,059 $18,996 $30,236,250
___________ ___________ ________ ___________
Units Outstanding-
Beginning 1,049.94 96.68 .65 952.61
___________ ___________ ________ ___________
CHANGES IN UNITS
OUTSTANDING FROM
Units Sold 96.00 - - 96.00
Units Adjusted for
Net Income 242.24 64.80 0.11 177.33
Units Repurchased (16.49) - - (16.49)
___________ __________ ________ __________
Net Increase 321.75 64.80 0.11 256.84 ___________ __________ ________ ___________
Units Outstanding-
Ending 1,371.69 161.48 .76 1,209.45
___________ __________ ________ ___________
</TABLE>
See Notes to Financial Statements
Page 5
PENFIELD PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the Year Ended December 31, 1999
<TABLE>
CORPORATE INDIVIDUAL
GENERAL GENERAL LIMITED
TOTAL PARTNER PARTNERS PARTNERS
___________ ___________ ________ ____________
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL-
Beginning $21,515,968 $1,578,916 $13,864 $19,923,188
___________ ___________ ________ ____________
CHANGES IN CAPITAL FROM
Net Income 4,588,845 957,989 2,384 3,628,472
___________ ___________ ________ ____________
Partners' Transactions
Capital contributions 1,450,000 25,000 - 1,425,000
Capital transfers - (144,794) - 144,794
Capital withdrawals (1,306,283) - - (1,306,283)
___________ ___________ ________ ____________
Net Increase/Decrease 143,717 (119,794) - 263,511
___________ ___________ ________ ____________
Total Increase in
Partners' Capital 4,732,562 838,195 2,384 3,891,983
___________ ___________ ________ ____________
PARTNERS' CAPITAL-
Ending $26,248,530 $2,417,111 $16,248 $23,815,171 ____________ ___________ ________ ____________
Units Outstanding-
Beginning 860.64 63.15 0.56 796.93
____________ ___________ ________ ____________
CHANGES IN UNITS
OUTSTANDING FROM
Units Sold 58.00 1.00 - 57.00
Units Transferred - (5.79) - 5.79
Units Adjusted for
Net Income 183.55 38.32 0.09 145.14
Units Repurchased (52.25) - - (52.25)
________ _______ ______ ________
Net Increase 189.30 38.53 0.09 155.68
________ _______ ______ ________
UNITS OUTSTANDING-
ENDING 1,049.94 96.68 0.65 952.61
________ _______ ______ ________
</TABLE>
See Notes to Financial Statements
Page 6
PENFIELD PARTNERS, L.P.
SCHEDULE OF INVESTMENTS
June 30, 2000
(Unaudited)
INVESTMENT IN SECURITIES
NUMBER FAIR
OF SHARES DESCRIPTION VALUE
COMMON STOCKS 101.90%
BASIC INDUSTRY 4.70%
100,000 RTI International Metals, Inc. $1,137,500
22,500 Sea Containers, Ltd. 475,312
__________
1,612,812
CAPITAL GOODS 3.35%
56,200 CTB International Corp. 379,350
14,700 General Electric Co. 769,912
__________
1,149,262
CONSUMER CYCLICAL 14.46%
60,000 Deb Shops, Inc. 750,000
28,124 99 Cents Only Stores 1,121,445
200,000 WMS Industries, Inc. 3,087,500
__________
4,958,945
COMMUNICATIONS 2.72%
20,000 Liberty Digital, Inc. 600,000
140,000 Relm Wireless Corp. 332,500
__________
932,500
ENERGY 1.69%
15,000 Chesapeake Energy Corp. 118,125
50,000 Transnational Industries, Inc. (a) 343,750
31,760 Transnational Industries, Inc.
Restricted (a) 117,600
__________
579,475
FINANCIAL SERVICES 3.13%
90,000 MFC Bancorp, Ltd. 675,000
50,000 R & G Financial Corp. 396,875
__________
1,071,875
See Notes of Financial Statements
Page 7
PENFIELD PARTNERS, L.P.
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2000
(Unaudited)
COMMON STOCKS (CONTINUED)
NUMBER FAIR
OF SHARES DESCRIPTION VALUE
HEALTHCARE 29.27%
120,000 Accuhealth, Inc. (a) 16,875
266,527 Accuhealth, Inc. Restricted (a) 37,480
8,953 Cardiac Control Systems, Inc. Restricted -
22,500 Impath, Inc. 1,220,625
40,000 Jones Pharma, Inc. 1,597,500
25,000 Laboratory Corporation of America 1,928,125
34,022 Medtronic, Inc. 1,694,721
130,000 Rehabcare Group, Inc. 3,542,500
__________
10,037,826
MISCELLANEOUS 19.98%
55,000 Action Performance Co., Inc. 398,750
2,150 Centennial Technologies, Inc. 17,066
40,000 Delta & Pine Land Co. 1,001,875
60,000 Forward Industries, Inc. 127,500
50,000 Iron Mountain, Inc. 1,700,000
220,000 Laser Pacific Media Corp. 1,031,250
20,000 Meade Instruments Corp. 502,500
55,000 Noble Learning Communities, Inc. 433,125
75,000 Northeast Utilities 1,631,250
__________
6,843,316
TECHNOLOGY 22.63%
375,000 Casino Data Systems 2,402,345
70,000 Cognitronics Corp. 905,625
33,000 Evercel, Inc. 453,750
30,000 Measurement Specialties, Inc. 1,151,250
55,000 Media 100, Inc. 1,416,250
53,700 Nu Horizons Electronics Corp. 1,429,762
__________
7,758,982
TOTAL INVESTMENT IN SECURITIES
(COST $21,129,192) $34,944,993
a) Affiliated issuer under the Investment Company Act of 1940,
in as much as the Fund owns more than 5% of the voting
securities of the issuer.
All percentages are relative to Partners' Capital
Page 8
PENFIELD PARTNERS, L.P.
SCHEDULE OF INVESTMENTS (CONTINUED)
June 30, 2000
(Unaudited)
SECURITIES SOLD SHORT
NUMBER FAIR
OF SHARES DESCRIPTION VALUE
COMMON STOCKS 12.80%
CONSUMER CYCLICAL 3.61%
42,500 Cutter & Buck, Inc. $ 337,344
10,000 Kohls Corp. 556,250
27,500 Wild Oats Markets, Inc. 345,468
__________
1,239,062
ENERGY .34%
15,000 Chesapeake Energy Corp. 118,125
HEALTHCARE 3.94%
27,500 Call Pathways, Inc. 646,250
10,200 Gliatech, Inc. 206,550
50,000 Sunrise Technologies, Inc. 500,000
__________
1,352,800
FINANCIAL SERVICES 2.72%
27,500 Southwest Securities Group Inc. 931,250
TECHNOLOGY 2.18%
1,250 Centennial Technologies, Inc. 9,920
40,000 Valence Technology, Inc. 737,500
__________
747,420
TOTAL SECURITIES SOLD SHORT
(PROCEEDS $5,617,309) $4,388,657
All percentages are relative to Partners' Capital
See Notes to Financial Statements
Page 9
PENFIELD PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Information Subsequent to December 31, 1999 is Unaudited)
ORGANIZATION Penfield Partners, L.P.("the Fund") was organized
in November 1988 in the State of Delaware as a
limited partnership for the purpose of trading in
securities. The Fund will continue until December
31, 2028 unless sooner terminated as provided for
in the Partnership Agreement. The Fund's
investment objective is to seek long-term capital
appreciation by investing and trading primarily in
equity securities and securities with equity
features of publicly listed companies.
Effective July 1, 1994, the Fund registered under
the Investment Company Act of 1940 ("1940 Act") to
operate as a nondiversified management company
and a closed-end interval fund.
REPURCHASE The Fund has adopted certain policies for its
POLICIES repurchases of units from partners as fundamental
policies which, under Rule 23c-3 promulgated under
the 1940 Act, may not be changed without the vote
of the holders of a majority of the outstanding
units (as determined under the 1940 Act). These
repurchase policies are as follows:
(a) The Fund will offer to repurchase units at
intervals of six months in accordance with the
Partnership Agreement.
(b) The Fund will allow its partners to submit
requests for repurchases of units by June 16th and
December 17th of each year.
(c) The Fund will establish a maximum of
fourteen days between each deadline for
repurchase requests and the applicable repurchase
date such that repurchases of units shall occur on
June 30th and December 31st of each year.
The Individual General Partners are authorized
under the Partnership Agreement to establish other
policies relating to repurchases of units that are
consistent with the 1940 Act. The repurchase of
units by the Fund allows partners to redeem units
semi-annually, subject to the terms and
limitations set forth in the Partnership
Agreement.
Page 10
PENFIELD PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Information Subsequent to December 31, 1999 is Unaudited)
REPURCHASE On May 19, 2000, the Fund offered to repurchase up
POLICIES to 25% of the outstanding units. Partners holding
(CONTINUED) 1.19% of the units outstanding prior to the
repurchases on June 30, 2000 equal to $412,176
elected to tender their units to the Fund for
repurchase.
FINANCIAL The preparation of financial statements in
STATEMENT conformity with generally accepted accounting
ESTIMATES principles may require 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 revenues and expenses during the
reporting period. Actual results could differ
from those estimates.
VALUATION OF Purchases and sales of securities are recorded on
SECURITIES a trade date basis.
Investments in securities and securities sold
short which are traded on a national securities
exchange or listed on NASDAQ are valued at the
last reported sales price on the last business day
of the year. Investments in securities and
securities sold short which are traded in the
over-the-counter market are valued at the average
of the bid and asked prices on the last trade
date.
Securities for which market quotations are not
readily available are valued at their fair value
as determined in good faith by the Individual
General Partners.
INCOME TAXES The Fund is not subject to income taxes. The
partners report their distributive share of
realized income or loss on their own tax returns.
CUSTODY The Partnership maintains a brokerage account with
CONCENTRATIONS ING Barings LLC. The Securities Investor
Protection Corporation (SIPC) insures the
brokerage account to the extent of $500,000
(including up to $100,000 for cash). Amounts in
excess of these limits are covered by additional
insurance maintained by the broker.
Page 11
PENFIELD PARTNERS, L.P.
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000
(Information Subsequent to December 31, 1999 is Unaudited)
SECURITIES The Fund is subject to certain inherent risks
SOLD SHORT arising from its activities of selling securities
short. The ultimate cost to the Fund to acquire
these securities may exceed the liability
reflected in the financial statements. In
addition, the Fund is required to maintain
collateral with the broker to secure these short
positions.
ALLOCATION OF The net income of the Fund is allocated
INCOME (LOSS) semiannually on June 30th and December 31st,
20% to the Corporate General Partner and 80% to
all partners in proportion to the number of units
held by each. A net loss is allocated among the
partners in proportion to the number of units
owned by each. If there is a loss for an
accounting period, the 20% allocation to the
Corporate General Partner will not apply to the
future periods until the loss has been recovered.
For the semiannual period ended June 30, 2000,
income was allocated in accordance with the 20%
- 80% formula.
All net income allocated to partners is
reinvested. In order to maintain a $25,000 price
per unit, the number of units held by each partner
at the close of each semiannual period is adjusted
to equal the partner's capital account divided by
$25,000.
RELATED The Administrative Agreement provides for fees
PARTY payable to the Fund's administrator, the general
TRANSACTIONS partner of the Corporate General Partner. The
administrator's fee is calculated at a rate of
.0625% of the net asset value of the Fund at the
beginning of each month (.75% per annum).
A fee is payable to each of the Independent
Individual General Partners at $10,000 per annum,
plus out-of-pocket expenses incurred by them in
performing their duties under the Partnership
Agreement.
The accompanying Statement of Assets and
Liabilities includes unpaid fees to the
administrator of $59,261.
Page 12
PENFIELD PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(Information Subsequent to December 31, 1999 is Unaudited)
RELATED PARTY At June 30, 2000 the Fund has an investment in
TRANSACTIONS Transnational Industries, a private placement
(CONTINUED) security in which an Individual General Partner is
a director and an investor through another entity.
The investment is valued at $461,350.
PURCHASES AND Purchases and sales of securities aggregated
SALES OF $26,249,988 and $30,264,472, respectively.
SECURITIES
SUBSEQUENT Effective July 1, 2000 partners' capital of
CAPITAL approximately $1,500,000 was contributed to
TRANSACTIONS to the Fund.
<TABLE>
SELECTED Six
FINANCIAL Months
INFORMATION Ended Years Ended
June 30, December 31,
____________________________________________
2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Ratio of Total
Expenses to
Average Net Assets 1.58%* 3.10% 1.85% 1.94% 1.53% 2.18%
Ratio of Investment
Loss to
Average Net Assets (.83)%* (.67)% (.78)% (.96)% (.48)% (1.12)%
Ratio of Net Income to
Average Net Assets 39.75%* 18.49% .96% 19.28% 10.89% 9.59%
Portfolio Turnover
Rate .82 1.78 2.39 2.10 1.82 1.19
Total Return 21.12% 20.24% .68% 21.89% 13.41% 10.14%
* Annualized
</TABLE>
