THE HENLOPEN FUND
SEMIANNUAL REPORT DECEMBER 31, 1995
MANAGED BY LANDIS ASSOCIATES, INC. (302) 654-3131
To My Fellow Shareholders:
Due to a confluence of robust corporate earnings, negligible inflationary
pressures, and declining interest rates, 1995 was a very favorable year for
financial markets. Indeed, the investment management industry was hard-pressed
to outperform market benchmarks. I am pleased to report that The Henlopen Fund,
with its 38.03% return, was among the select 15% of mutual funds that managed to
exceed the 37.5% increase posted by the S&P 500 Index on a total return basis.
The investment environment will be more challenging in 1996, as the market
adjusts to a slower growth scenario. Our investment philosophy, however, is
centered on searching for individual companies that will excel in terms of
growth and profitability regardless of the overall level of economic activity.
Furthermore, our eclectic growth approach gives us the flexibility to search for
attractive opportunities unencumbered by constraints such as market
capitalization.
Examples include Physician Computer Network, up 36% from purchase price;
National Media Corp., up 57%; Avondale Industries (shipbuilding), up 87%;
FirstMiss Gold, up 92% and Gandalf Technologies, recently sold for a 335% gain.
The common denominator of these very different companies is that they are quite
successful in their fields and are providing superior results to our clients.
We remain confident that our unwavering commitment to eclectic growth will
continue to hold our shareholders in good stead in the months ahead.
Sincerely yours,
/s/ Michael L. Hershey
Michael L. Hershey
President
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
The Henlopen Fund, S&P 500 Index and Lipper Growth Fund Index
The Henlopen Fund Lipper Growth Fund Index S&P 500 Index
12/2/92 $10,000 $10,000 $10,000
12/31/92 $10,010 $10,204 $10,162
3/31/93 $10,821 $10,507 $10,600
6/30/93 $11,562 $10,661 $10,643
9/30/93 $12,450 $11,173 $10,928
12/31/93 $12,999 $11,426 $11,183
3/31/94 $12,760 $11,084 $10,754
6/30/94 $12,126 $10,841 $10,792
9/30/94 $12,853 $11,373 $11,330
12/31/94 $12,644 $11,246 $11,325
3/31/95 $13,583 $12,059 $12,432
6/30/95 $15,493 $13,350 $13,600
9/30/95 $17,817 $14,562 $14,693
12/31/95 $17,443 $14,855 $15,576
THE HENLOPEN FUND
STATEMENT OF NET ASSETS
December 31, 1995 (Unaudited)
Quoted
Shares Cost Market Value
- ------ ------- ------------
LONG-TERM INVESTMENTS - 98.1% (a)<F2>
COMMON STOCKS - 97.5% (a)<F2>
ADVERTISING - 2.5%
20,000 National Media Corp.*<F1> $267,450 $420,000
AEROSPACE & DEFENSE - 1.3%
25,000 Talley Industries, Inc.*<F1> 252,750 215,625
APPAREL & SHOES - 3.5%
14,000 Donnkenny, Inc.*<F1> 233,625 253,750
18,000 Farah Inc.*<F1> 189,580 85,500
20,000 Hampshire Group, Ltd.*<F1> 127,225 240,000
-------- -------
550,430 579,250
AUTO & TRUCK RELATED - 1.7%
34,100 Supreme Industries Inc.*<F1> 267,552 285,587
BASIC RESOURCES - 3.7%
20,000 FirstMiss Gold Inc.*<F1> 232,225 445,000
3,000 Reynolds Metals Co. 191,055 169,875
------- -------
423,280 614,875
COMMUNICATIONS - 0.7%
6,000 Comcast Corp. Special Cl A NV 144,191 109,128
COMPUTER SYSTEMS - 5.6%
5,000 EMC Corporation (Mass.)*<F1> 102,175 76,875
30,000 Harris Computer Systems Corp.*<F1> 392,125 405,000
50,000 Physician Computer
Network, Inc.*<F1> 330,000 450,000
------- -------
824,300 931,875
CONSUMER DURABLES - 3.6%
15,000 Fedders Corp. 65,671 86,250
13,125 Fedders Corp. Class A 52,104 55,781
12,000 Koss Corp.*<F1> 136,106 72,000
37,000 Phoenix Gold International, Inc.*<F1> 365,500 379,250
------- -------
619,381 593,281
DISTRIBUTION - 2.3%
10,000 D & K Wholesale Drug, Inc.*<F1> 77,544 72,500
10,000 Vishay Intertechnology, Inc.*<F1> 319,350 315,000
------- -------
396,894 387,500
DIVERSIFIED OPERATIONS - 0.5%
1,000 ITT Corporation*<F1> 47,081 53,000
1,000 ITT Industries, Inc.*<F1> 21,767 24,000
------- -------
68,848 77,000
ELECTRONICS/EQUIPMENT MANUFACTURING - 12.2%
20,000 Advanced Technology
Materials, Inc.*<F1> 265,625 200,000
10,000 Electroglas, Inc.*<F1> 340,125 245,000
30,000 IKOS Systems, Inc.*<F1> 352,500 333,750
30,000 Nanometrics Inc.*<F1> 194,063 221,250
15,000 Quickturn Design Systems*<F1> 151,500 150,000
13,000 Semiconductor Packaging
Materials Co., Inc.*<F1> 120,654 120,250
20,000 SubMicron Systems Corp.*<F1> 140,625 187,500
7,000 Teradyne, Inc.*<F1> 191,520 175,000
20,000 Tylan General, Inc.*<F1> 308,629 245,000
10,000 Veeco Instruments Inc.*<F1> 210,625 145,000
--------- ---------
2,275,866 2,022,750
ENGINEERING & CONSTRUCTION - 0.7%
5,500 American Buildings Co.*<F1> 121,000 122,375
FINANCE/SAVINGS & LOANS - 1.2%
10,000 Roosevelt Financial Group, Inc. 182,500 193,750
FINANCIAL SERVICES - 9.5%
5,500 Capital One Financial Corp. 133,705 131,312
10,000 First Financial Caribbean Corp. 185,625 187,500
5,000 Markel Corp.*<F1> 309,875 377,500
42,500 Mego Financial Corp.*<F1> 332,025 302,813
10,000 Olympic Financial Ltd.*<F1> 217,500 162,500
15,000 Pioneer Group, Inc. 306,550 408,750
--------- ---------
1,485,280 1,570,375
FOOD & BEVERAGES - 1.2%
1,300 Hart Brewing, Inc.*<F1> 24,700 19,825
4,900 Seneca Foods Corp. Class A*<F1> 63,075 85,750
4,900 Seneca Foods Corp. Class B 63,075 95,550
-------- --------
150,850 201,125
HEALTH & BEAUTY - 0.9%
10,000 Stephan Co. 185,693 156,250
HEALTHCARE SERVICES - 4.2%
35,000 MedPlus, Inc.*<F1> 343,750 301,875
15,000 National Dentex Corp.*<F1> 261,250 367,500
700 Total Renal Care Holdings, Inc.*<F1> 10,850 20,650
-------- -------
615,850 690,025
INSURANCE - 1.3%
1,000 ITT Hartford Group, Inc.*<F1> 46,837 48,375
10,000 Philadelphia Consolidated
Holding Corp.*<F1> 172,500 162,500
------- -------
219,337 210,875
LEISURE/ENTERTAINMENT - 2.3%
10,000 Action Performance Cos. Inc.*<F1> 125,805 137,500
18,500 Moovies, Inc.*<F1> 214,322 249,750
------- -------
340,127 387,250
MISCELLANEOUS MANUFACTURING - 5.5%
10,000 American Biltrite Inc. 234,757 217,500
13,000 Avondale Industries, Inc.*<F1> 100,750 188,500
10,000 Brenco, Inc. 123,437 102,500
17,000 Middleby Corp.*<F1> 120,724 161,500
10,000 Ultralife Batteries, Inc.*<F1> 204,219 240,000
------- -------
783,887 910,000
MEDICAL PRODUCTS/SUPPLIES - 1.5%
10,000 Advanced Technology
Laboratories, Inc.*<F1> 241,250 245,000
OIL, GAS & CHEMICALS - 2.0%
30,000 Nabors Industries, Inc.*<F1> 331,500 333,750
PUBLISHING - 1.7%
10,000 Cadmus Communication Corp. 270,000 270,000
100 CKS Group, Inc.*<F1> 1,700 3,900
------- -------
271,700 273,900
SEMICONDUCTORS - 7.8%
5,000 Altera Corp.*<F1> 262,800 248,750
10,000 ANADIGICS, Inc.*<F1> 288,750 212,500
20,000 Integrated Circuit Systems, Inc.*<F1> 315,875 247,500
3,000 Intel Corp. 200,250 170,250
6,000 Oak Technology, Inc.*<F1> 307,500 253,500
5,000 Xilinx, Inc.*<F1> 213,750 152,500
--------- ---------
1,588,925 1,285,000
SPECIALTY CHEMICALS - 1.3%
25,000 CFC International, Inc.*<F1> 240,000 215,625
SPECIALTY RETAILING - 4.3%
16,000 Insight Enterprises, Inc.*<F1> 212,500 200,000
10,000 Pep Boys-Manny, Moe & Jack 258,850 256,250
17,000 Schultz Sav-O Stores, Inc. 212,813 250,750
------- -------
684,163 707,000
SOFTWARE - 11.7%
5,000 BBN Corporation*<F1> 191,625 205,625
9,500 CMG Information Services, Inc.*<F1> 249,745 882,313
25,000 ForeFront Group, Inc.*<F1> 200,000 209,375
5,000 Macromedia, Inc.*<F1> 269,375 261,250
8,000 Open Environment Corp.*<F1> 165,000 110,000
5,000 Sybase, Inc.*<F1> 188,125 180,000
5,000 TCSI Corp.*<F1> 75,000 92,500
--------- ---------
1,338,870 1,941,063
TECHNOLOGY - 2.8%
10,000 Innovex, Inc. 191,375 152,500
10,000 Planar Systems, Inc.*<F1> 192,500 191,250
10,000 Spacetec IMC Corporation*<F1> 100,000 117,500
------- -------
483,875 461,250
Total common stocks 15,355,749 16,141,484
PREFERRED STOCKS - 0.6% (a)<F2>
2,500 AMC Entertainment Inc.
$1.75 Cum. Conf. Pfd.
$0.66 2/3 par $62,500 $101,875
--------- ---------
Total long-term
investments 15,418,249 16,243,359
---------- ----------
SHORT-TERM INVESTMENTS - 3.0% (a)<F2>
VARIABLE RATE DEMAND NOTES
$300,000 Southwestern Bell
Telephone Co. 300,000 300,000
189,706 Wisconsin Electric Power Co. 189,706 189,706
---------- ---------
Total variable rate
demand notes 489,706 489,706
Total investments $15,907,955 16,733,065
----------
----------
Liabilities, less cash and
receivables (1.1%) (a)<F2> (177,184)
----------
NET ASSETS $16,555,881
----------
----------
Net Asset Value Per Share
($0.01 par value, unlimited
shares authorized), offering
and redemption price
($16,555,881 / 1,164,044
shares outstanding) $14.22
------
------
*<F1>Non-income producing security.
(a)<F2>Percentages of various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
THE HENLOPEN FUND
Statement of Operations
For the Period Ended December 31, 1995 (Unaudited)
INCOME:
Dividends $30,416
Interest 17,907
-------
Total income 48,323
-------
EXPENSES:
Investment management fees 73,372
Registration fees 20,025
Administrative services 14,675
Transfer agent fees 11,003
Professional fees 10,111
Amortization of organizational expenses 5,596
Custodian fees 5,549
Printing and postage expense 3,851
Other expenses 2,563
--------
Total expenses 146,745
--------
NET INVESTMENT LOSS (98,422)
---------
NET REALIZED GAIN ON INVESTMENTS 2,017,110
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (331,775)
---------
NET GAIN ON INVESTMENTS 1,685,335
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,586,913
---------
---------
STATEMENTS OF CHANGES IN NET ASSETS
For the Period Ended December 31, 1995 (Unaudited) and for the Year Ended June
30, 1995
December 31, 1995June 30, 1995
OPERATIONS:
Net investment loss $(98,422) $(112,976)
Net realized gain on investments 2,017,110 1,260,401
Net (decrease) increase in unrealized
appreciation on investments (331,775) 1,267,108
--------- ---------
Net increase in net assets resulting
from operations 1,586,913 2,414,533
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains
($2.26126 and $0.188 per share, respectively) (2,150,393) (139,259)
----------- ---------
Total distributions (2,150,393) (139,259)*<F3>
----------- ---------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (240,886 and
226,243 shares, respectively) 3,609,115 2,781,299
Net asset value of shares issued in
distributions (148,396 and 11,661 shares,
respectively) 2,133,157 139,116
Cost of shares redeemed (20,996 and 24,581
shares, respectively) (308,292) (307,817)
--------- ---------
Net increase in net assets derived from
Fund share activities 5,433,980 2,612,598
--------- ---------
TOTAL INCREASE 4,870,500 4,887,872
NET ASSETS AT THE BEGINNING OF THE PERIOD 11,685,381 6,797,509
---------- ----------
NET ASSETS AT THE END OF THE PERIOD $16,555,881 $11,685,381
---------- ----------
---------- ----------
*<F3>Total distributions include $10,370 of ordinary income, of which 5% is
eligible for the corporate dividends received deduction.
The accompanying notes to financial statements are an integral part of these
statements.
<TABLE>
THE HENLOPEN FUND
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each period)
<CAPTION>
(Unaudited)
For the For the Period
Period Ended For the Years Ended From 12/2/92*<F4>
----------------------
12/31/95 6/30/95 6/30/94 to 6/30/93
------------ --------- ------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $14.68 $11.67 $11.55 $10.00
Income from investment operations:
Net investment loss (0.02) (0.11) (0.07) (0.02)
Net realized and unrealized gains on investments 1.82 3.31 0.64 1.58
------ ------ ------ ------
Total from investment operations 1.80 3.20 0.57 1.56
Less distributions:
Dividend from net investment income - 0 - - 0 - - 0 - (0.01)
Distributions from net realized gains (2.26) (0.19) (0.45) - 0 -
------ ------ ------ ------
Total from distributions (2.26) (0.19) (0.45) (0.01)
------ ------ ------ ------
Net asset value, end of period $ 14.22 $ 14.68 $ 11.67 $ 11.55
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN 26.6%**<F5> 27.8% 4.9% 28.5%**<F5>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $16,556 $11,685 $6,798 $1,062
Ratio of expenses (after reimbursement) to average net assets***<F6> 2.0%**<F5> 2.0% 2.0% 2.0%**<F5>
Ratio of net investment loss to average net assets****<F7> (1.3)%**<F5> (1.2)% (1.3)% (0.7)%**<F5>
Portfolio turnover rate 96.4% 147.8% 63.0% 54.0%
*<F4>Commencement of Operations.
**<F5>Annualized.
***<F6>Computed after giving effect to adviser's expense limitation undertaking.
If the Fund had paid all of its expenses, the ratio would have been 3.0% for
the year ended June 30, 1994 and 11.5%** for the period ended June 30, 1993.
****<F7>The ratio of net investment loss prior to the adviser's expense
limitation undertaking to average net assets would have been (2.2%) for the
year ended June 30, 1994 and (10.2%)** for the period ended June 30, 1993.
The accompanying notes to financial statements are an integral part of this
statement.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
The following is a summary of significant accounting policies of The Henlopen
Fund (the ''Fund''), which was organized as a Delaware Business Trust on
September 17, 1992 and is registered as an open-end management company under
the Investment Company Act of 1940. The Fund commenced operations on December
2, 1992.
(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which the
issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest bid
price. Securities for which quotations are not readily available are
valued at fair value as determined by the investment adviser under the
supervision of the Board of Trustees. Short-term investments are valued at
cost which approximates quoted market value. Investment transactions are
recorded no later than the first business day after the trade date. Cost
amounts, as reported on the statement of net assets, are the same for
Federal income tax purposes.
(b) Net realized gains and losses on common stock are computed on the
basis of the cost of specific certificates.
(c) Provision has not been made for Federal income taxes since the Fund
has elected to be taxed as a ''regulated investment company'' and intends
to distribute substantially all income to its shareholders and otherwise
comply with the provisions of the Internal Revenue Code applicable to
regulated investment companies.
(d) Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
(e) The Fund has investments in short-term variable rate demand notes,
which are unsecured instruments. The Fund may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on its
payment obligation. The Fund's policy is to monitor the creditworthiness
of the issuer and does not anticipate nonperformance by these
counterparties.
(f) Generally accepted accounting principles require that permanent
financial reporting and tax differences for overdistributed net investment
income be reclassified to capital stock. In connection with the adoption
of this accounting method in 1995, cumulative permanent book and tax
differences in overdistributed net investment income were reclassified to
capital stock. This change had no effect on the Fund's net assets, net
asset value per share, the change in net assets resulting from operations,
or on the amount of income available for distribution to shareholders.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES -
The Fund has a management agreement with Landis Associates, Inc. (the
''Adviser''), with whom certain officers and directors of the Fund are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreement, the Fund will pay the Adviser a monthly management fee at the
annual rate of 1% on the daily net assets of the Fund.
(3) DISTRIBUTION TO SHAREHOLDERS -
Net investment income and net realized gains, if any, are distributed to
shareholders. On December 28, 1995, the Fund distributed $1,014,621 from net
short-term realized gains ($0.9382 per share) and $155,494 from net long-term
realized gains ($0.144 per share). The distributions were paid on December
29, 1995, to shareholders of record on December 27, 1995. The Fund incurred
$26,556 of post-October losses during 1995, which will be used to offset
future realized capital gains.
(4) DEFERRED EXPENSES -
Organizational expenses were deferred and are being amortized on a straight-
line basis over a period of not more than five years beginning with the date
of sales of shares to the public. These expenses were advanced by the Adviser
who will be reimbursed by the Fund over a period of not more than five years.
The proceeds of any redemption of the initial shares by the original
shareholder will be reduced by a pro-rata portion of any then unamortized
deferred expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares outstanding at the time
of such redemption. The unamortized organizational expenses at December 31,
1995 were $21,453.
(5) INVESTMENT TRANSACTIONS -
For the period ended December 31, 1995, purchases and proceeds of sales of
investment securities (excluding short-term securities) were $16,737,673 and
$13,721,594, respectively.
(6) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES -
As of December 31, 1995, liabilities of the Fund included the following:
Payable to brokers for investments purchased $131,875
Payable to the Adviser for management fees
and deferred expenses 35,245
Other liabilities 36,705
(7) SOURCES OF NET ASSETS -
As of December 31, 1995, the sources of net assets were as follows:
Fund shares issued and outstanding $14,910,791
Net unrealized appreciation on investments 825,110
Undistributed net realized gains and losses 819,980
----------
$16,555,881
----------
----------
Aggregate net unrealized appreciation as of December 31, 1995, consisted of
the following:
Aggregate gross unrealized appreciation $2,205,201
Aggregate gross unrealized depreciation (1,380,091)
----------
Net unrealized appreciation $825,110
----------
----------
BOARD OF TRUSTEES
ROBERT J. FAHEY, JR. MICHAEL L. HERSHEY
Director of Real Estate Investment Banking Chairman, Landis Associates, Inc.
Cushman &Wakefield of Pennsylvania, Inc. Wilmington, Delaware
Philadelphia, Pennsylvania
STEPHEN L. HERSHEY, M.D. P. COLEMAN TOWNSEND, JR.
President of President/CEO, Townsends, Inc.
First State Orthopaedic Consultants, P.A. Millsboro, Delaware
Newark, Delaware
Investment Adviser Independent Accountants
LANDIS ASSOCIATES, INC. PRICE WATERHOUSE LLP
Custodian, Transfer Agent Legal Counsel
FIRSTAR TRUST COMPANY FOLEY & LARDNER
THE HENLOPEN FUND
SUITE 100
400 WEST NINTH STREET
WILMINGTON, DELAWARE 19801
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of The Henlopen Fund unless accompanied or preceded by
the Fund's current prospectus.
