ANNUAL
REPORT
NOVEMBER 30, 1997
O.R.I.
GROWTH
FUND
Shareholder Services
1(800) 407-7298
OAK RIDGE INVESTMENTS, LLC
Investment Adviser
O.R.I. GROWTH FUND
LETTER TO SHAREHOLDERS
NOVEMBER 1997
Dear Shareholder:
It is a pleasure to report the O.R.I. Growth Fund's continued outperformance
of its benchmark, the Russell 2000 Stock Index. During the past fiscal year,
the Fund's Class A shares, on a no load basis, advanced 28.0% compared to 23.4%
for the Russell 2000. These results obscure the emergence of heightened market
volatility, which was particularly evident in smaller stocks.
In early 1997, the market experienced a normal correction, initiated by
Federal Reserve Chairman Greenspan's warning of an "irrational exuberance" in
the market. This occurred at a time when underlying economic fundamentals were
stable, and was followed by bargain hunting in sectors that continued to outpace
earnings expectations. The 554 point decline in the Dow Jones Industrial
Average on October 27 was infinitely more meaningful, as it was precipitated by
an external shock which created an awareness of U.S. exposure to the global
economy. The Asian financial crisis that triggered the selloff was not a short-
term event, and will continue to have global repercussions.
There is a significant and growing emphasis on multi-national business
relationships, which has more closely aligned the world's economies. As the
international business climate remains challenging, the U.S. should continue to
attract and retain investment dollars given its leadership role and relatively
high interest rates. Corporate profits should, however, experience downward
pressures due to sizable trade imbalances from weakened economies such as Japan.
A strong dollar enhances the appeal of imported goods and will likely threaten
the steady economic growth enjoyed since 1991.
A slowing economy stresses the importance of selective stock picking. The
market has unmercifully punished the most obvious candidates for downward
earnings revisions. This is primarily technology biased, but also includes
capital goods and energy stocks. Most street research now details a company's
Asian exposure, with a low percentage suggesting unencumbered earnings growth.
This seems very near sighted, as even a 100% domestic industry such as the HMO
group, will experience pricing pressures and the loss of customers if the
overall economy worsens.
Another dominant issue in 1998 will be the allocation of a large percentage
of many corporate IT budgets to the year 2000 problem. While a narrow industry
should derive significant business, many technology companies will suffer due to
postponement of less essential projects. There should be continued merger
activity, particularly among financial stocks, due in part to antiquated
computer systems. The issue is of greater concern in Europe, where only about
25% of all businesses employ a satisfactory solution. The demands will likely
delay the Euro currency conversion into the next century. The implications for
the European economy are similar to ours, but the U.S. dollar is likely to
remain strong, as it represents the world's most stable currency.
Market psychology remains the key variable in valuation. There will likely
be a broad reduction in earnings estimates in April, as first quarter numbers
begin to experience a trickle down effect of a more competitive global
environment. This may be challenging, as it will coincide with a seasonal
slowing of investment capital. Investors must adjust expectations to more
normalized returns of approximately 8% - 10% over the next several years.
Demographics favorable to equity markets continue, as individuals fund
retirement plans with a steady stream of mutual fund purchases. Productivity
gains have kept costs down and raised output, providing a favorable backdrop for
future earnings. This, coupled with a more stable political climate and a near
balanced federal budget, should prevent an economic collapse.
The best strategy is to remain consistent with long-term investment plans.
Powerful fundamental trends suggest an opportunity for outperformance in many
technology, healthcare and financial service companies. The Oak Ridge earnings
oriented research is well suited for the "stock pickers" market that should
emerge over the next twelve months.
Sincerely,
/s/ David M. Klaskin
David M. Klaskin
President
O.R.I. Growth Fund O.R.I. Growth Fund S&P 500 Russell 2000
date Class A - No Load Class A - Load Stock Index Index
- ---- ----------------- -------------- ------------ -------
1/94 10,000 9,575 10,000 10,000
2/94 10,870 10,408 10,059 10,276
5/94 10,160 9,728 9,904 9,682
8/94 10,620 10,169 10,387 10,039
11/94 10,480 10,035 9,983 9,562
2/95 10,609 10,158 10,799 10,098
5/95 11,121 10,648 11,903 10,680
8/95 13,717 13,134 12,614 12,127
11/95 14,359 13,749 13,675 12,287
2/96 15,755 15,085 14,546 12,990
5/96 17,483 16,740 15,287 14,513
8/96 16,121 15,436 14,976 13,439
11/96 17,358 16,620 17,485 14,315
2/97 17,816 17,059 18,352 14,620
5/97 18,846 18,045 19,784 15,524
8/97 22,115 21,176 21,064 17,331
11/97 22,217 21,273 22,469 17,667
Average Annual Total Return*<F1>
For the period ended November 30, 1997
Since
One Year Inception**<F2>
--------- -----------
O.R.I. Growth Fund - Class A (no load) 28.0% 22.6%
O.R.I. Growth Fund - Class A (load) 22.5% 21.3%
O.R.I. Growth Fund - Class C -- 24.1%
*<F1>Periods less than a year are not annualized.
**<F2>Class A - January 3, 1994 inception. Class C - March 1, 1997 inception.
This chart assumes an initial gross investment of $10,000 made upon inception.
Returns shown include the reinvestment of all dividends. For Class A shares, a
4.25% maximum sales load took effect January 1, 1996. The load performance for
Class A has been restated to reflect the impact of the sales load as if the
sales load had been imposed since inception. Performance reflects expense
reimbursements and fee waivers in effect. Absent expense reimbursements and fee
waivers, total returns would be reduced. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
Russell 2000 Index - A stock market index comprised of the 2,000 smallest U.S.
domiciled publicly traded common stocks that are included in the Russell 3000
Index. These common stocks represent approximately 11% of the U.S. equity
market. The Russell 3000 Index is comprised of the 3,000 largest U.S. domiciled
publicly-traded common stocks by market capitalization representing
approximately 98% of the U.S. publicly traded equity market.
S&P 500 Stock Index - An unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes in
the aggregate market value of the 500 stocks which represent all major
industries.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1997
NUMBER OF
SHARES VALUE
- ---------- -----
COMMON STOCK -- 88.47%
AUTOMOTIVE & RELATED
PRODUCTS -- 0.23%
580 Borg-Warner Automotive, Inc. $27,332
-----------
BANKING -- 7.83%
6,178 Astoria Financial Corporation 340,562
3,300 BankBoston Corporation 294,112
15,000 BankUnited Financial
Corporation* <F3> 194,063
3,500 Kankakee Bancorp, Inc. 118,563
-----------
947,300
-----------
CHEMICALS -- 3.88%
4,500 Cambrex Corporation 204,187
10,000 Crompton & Knowles
Corporation 265,000
-----------
469,187
-----------
COMMUNICATIONS -- 1.85%
7,000 Mosaix, Inc.*<F3> 63,437
5,000 Worldcom, Inc.*<F3> 160,000
-----------
223,437
-----------
COMPUTERS - NETWORKING -- 7.89%
9,600 Comdisco, Inc. 280,800
25,000 Data Systems Network
Corporation*<F3> 287,500
6,000 MRV Communications, Inc.*<F3> 169,500
6,000 Sun Microsystems, Inc.*<F3> 216,000
-----------
953,800
-----------
COMPUTERS - SOFTWARE -- 5.34%
7,500 BancTec, Inc.* <F3> 185,625
2,500 Hyperion Software Corporation*<F3> 107,734
4,777 Sterling Commerce, Inc.*<F3> 166,001
3,000 Sterling Software, Inc.* <F3> 109,875
5,000 TSR, Inc. 76,875
-----------
646,110
-----------
COMPUTER SYSTEMS -- 1.92%
10,000 Sequent Computer
Systems, Inc.*<F3> 232,500
-----------
DEFENSE ELECTRONICS -- 1.16%
5,000 Tracor, Inc.*<F3> 140,313
-----------
DRUGS & MEDICAL -- 4.52%
3,000 Boron, LePore &
Associates, Inc.* <F3> 73,500
5,500 Express Scripts, Inc. *<F3> 324,500
5,000 Watson Pharmaceuticals, Inc.*<F3> 148,750
-----------
546,750
-----------
ELECTRONICS -- 4.96%
15,000 Alpha Industries, Inc.*<F3> 279,375
7,000 SCI Systems, Inc.* <F3> 320,688
-----------
600,063
-----------
ENTERTAINMENT & LEISURE -- 1.44%
6,000 Hasbro, Inc. 174,375
-----------
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL -- 3.77%
7,500 Culligan Water
Technologies, Inc.*<F3> 336,562
6,000 Newpark Resources, Inc.*<F3> 119,625
-----------
456,187
-----------
FINANCIAL SERVICES -- 4.84%
10,500 First Alliance Corporation 217,875
4,000 FIRSTPLUS Financial
Group, Inc.*<F3> 152,500
20,000 Long Beach Financial
Corporation*<F3> 215,000
-----------
585,375
-----------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 2.59%
4,000 Coherent, Inc.*<F3> 150,000
3,300 Maxxim Medical, Inc.* <F3> 72,187
3,500 Sabratek Corporation*<F3> 91,438
-----------
313,625
-----------
HOSPITALS & HEALTH CARE -- 7.91%
15,000 America Service Group Inc.*<F3> 256,875
6,840 Healthsouth Corporation*<F3> 179,550
6,750 Tenet Healthcare Corporation* <F3> 213,891
17,000 United Payors &
United Providers, Inc.*<F3> 306,000
-----------
956,316
-----------
HOUSEHOLD PRODUCTS -- 3.57%
8,500 Nortek, Inc.*<F3> 207,187
7,000 Triangle Pacific Corp.*<F3> 224,875
-----------
432,062
-----------
INFORMATION MANAGEMENT
SERVICES -- 1.37%
20,000 Donnelley Enterprise
Solutions Inc.*<F3> 165,000
-----------
INVESTMENT COMPANIES -- 2.38%
14,000 Consolidated Capital
Corporation* <F3> 287,875
-----------
METAL - DIVERSIFIED -- 1.16%
10,000 Lindberg Corporation 140,000
-----------
MISCELLANEOUS -- 7.12%
6,000 Personnel Group of
America, Inc.*<F3> 219,375
21,000 RCM Technologies, Inc.* <F3> 329,438
11,000 Thomas Group, Inc.* <F3> 132,000
7,000 U.S. Rentals, Inc.*<F3> 179,813
-----------
860,626
-----------
OIL & GAS -- 5.09%
8,000 Global Marine, Inc.*<F3> 210,500
10,000 Magnum Hunter
Resources, Inc.* <F3> 57,500
7,500 Oceaneering International, Inc.* <F3> 154,687
5,000 Seitel, Inc.* <F3> 192,500
-----------
615,187
-----------
REAL ESTATE INVESTMENT TRUST -- 2.23%
10,000 Glenborough Realty Trust, Inc. 270,000
-----------
RETAIL - GROCERY -- 2.57%
8,000 Dominick's Supermarkets, Inc.*<F3> 311,000
-----------
TELECOMMUNICATIONS
EQUIPMENT & SERVICES -- 1.06%
11,000 Allstar Systems, Inc.*<F3> 53,625
10,000 Amplidyne, Inc.* <F3> 35,000
6,000 View Tech, Inc.* <F3> 39,750
-----------
128,375
-----------
UTILITIES -- 1.79%
6,500 Calenergy Company, Inc.*<F3> 216,125
-----------
Total Common Stock
(cost $7,543,572) 10,698,920
-----------
PRINCIPAL
AMOUNT VALUE
--------- -----
SHORT-TERM INVESTMENTS -- 13.93%
VARIABLE RATE DEMAND NOTES -- 13.93%
$524,643 American Family Financial
Services, Inc. 524,643
603,940 Johnson Controls, Inc. 603,940
556,128 Warner-Lambert Co. 556,128
-----------
Total Short-Term Investments
(cost $1,684,711) 1,684,711
-----------
Total Investments -- 102.40%
(cost $9,228,283) 12,383,631
-----------
Liabilities, less
Other Assets -- (2.40%) (290,062)
-----------
NET ASSETS -- 100.00% $12,093,569
===========
*<F3>Non-income producing security
See Notes to the Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
ASSETS:
Investments, at market value (cost $9,228,283) $12,383,631
Cash 39,161
Organizational expenses, net of accumulated amortization 9,401
Prepaid expenses 2,810
Interest and dividends receivable 9,184
-----------
Total Assets 12,444,187
-----------
LIABILITIES:
Payable to Adviser 27,892
Payable for securities purchased 280,000
Accrued other expenses 42,726
-----------
Total Liabilities 350,618
-----------
NET ASSETS $12,093,569
===========
NET ASSETS CONSIST OF:
Capital stock $6,096
Paid-in-capital in excess of par 8,162,030
Undistributed net realized gain on investments 770,095
Net unrealized appreciation on investments 3,155,348
-----------
Net Assets $12,093,569
===========
CLASS A:
Net assets $11,758,733
Shares authorized ($.01 par value) 50,000,000
Shares issued and outstanding 592,594
Net asset value and redemption price per share $19.84
=======
Maximum offering price per share $20.72
======
CLASS C:
Net assets $334,836
Shares authorized ($.01 par value) 50,000,000
Shares issued and outstanding 16,956
Net asset value, redemption price and offering price per share $19.75
======
See Notes to the Financial Statements.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1997
INVESTMENT INCOME:
Interest $34,129
Dividends 29,705
----------
63,834
----------
EXPENSES:
Fund administration and accounting fees 56,966
Investment advisory fees 97,117
Professional fees 52,298
Shareholder servicing fees and expenses 40,091
Reports to shareholders 2,590
Federal and state registration fees 11,136
Amortization of organizational expenses 8,800
Directors' fees 2,335
Custody fees 7,040
12b-1 fees -- Class A 161
12b-1 fees -- Class C 842
Other 543
----------
Total expenses before waiver and reimbursement 279,919
Less: Waiver of expenses by Adviser (85,111)
----------
Net expenses 194,808
----------
NET INVESTMENT (LOSS) (130,974)
----------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investment transactions 895,701
Change in unrealized appreciation on investments 1,610,223
----------
Net gain on investments 2,505,924
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,374,950
==========
See Notes to the Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
----------------- -----------------
OPERATIONS:
Net investment (loss) $(130,974) $(75,533)
Net realized gain on investments 895,701 579,775
Change in unrealized appreciation
on investments 1,610,223 615,635
----------- ---------
Net increase in net assets resulting
from operations 2,374,950 1,119,877
----------- ---------
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,932,978 2,818,792
Shares issued to holders in reinvestment
of dividends 476,916 164,945
Shares redeemed (907,674) (382,732)
----------- ---------
Net increase 2,502,220 2,601,005
----------- ---------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net realized gains (508,673)(1)<F4> (178,056)
----------- ---------
TOTAL INCREASE IN NET ASSETS 4,368,497 3,542,826
NET ASSETS:
Beginning of year 7,725,072 4,182,246
----------- ---------
End of year $12,093,569 $7,725,072
=========== ==========
(1)<F4>10% of the dividends paid during the fiscal year ended November 30,
1997, qualifies for the dividend received deduction available to corporate
shareholders.
See Notes to the Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JANUARY 3, 1994(1)
YEAR ENDED NINE MONTHS ENDED YEAR ENDED YEAR ENDED <F5>TO
NOVEMBER 30, 1997 NOVEMBER 30, 1997(2)<F6>NOVEMBER 30, 1996 NOVEMBER 30, 1995 NOVEMBER 30, 1994
------------------ -------------------- ----------------- ----------------- ------------------
CLASS A CLASS C CLASS A CLASS A CLASS A
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value,
beginning of period $16.57 $15.91 $14.32 $10.48 $10.00
Income from investment
operations:
Net investment (loss)(3)<F7> (0.22) (0.13) (0.16) (0.13) (0.07)
Net realized and unrealized
gains on investments 4.58 3.97 3.01 4.00 0.55
------- ------- ------- ------- -------
Total from investment
operations 4.36 3.84 2.85 3.87 0.48
------- ------- ------- ------- -------
Less distributions:
Distributions from
capital gains (1.09) -- (0.60) (0.03) --
------- ------- ------- ------- -------
Net asset value,
end of period $19.84 $19.75 $16.57 $14.32 $10.48
======= ======== ======= ======= =======
Total Return 28.0%(5)<F9> 24.1%(4)<F8> 20.9%(5)<F9> 37.0% 4.8%(4)
Supplemental data and ratios: <F8>
Net assets, end of period $11,758,733 $334,836 $7,725,072 $4,182,246 $2,708,546
Ratio of expenses to average
net assets:
Before expense reimbursement 2.9% 3.6%(6)<F10> 3.5% 6.5% 9.0%(6)
<F10>
After expense reimbursement 2.0% 2.8%(6)<F10> 2.0% 2.0% 2.0%(6)
Ratio of net investment (loss) <F10>
to average net assets:
Before expense reimbursement (2.2)% (3.0)%(6)<F10> (2.7)% (5.8)% (8.1)%(6)
<F10>
After expense reimbursement (1.3)% (2.2)%(6)<F10> (1.2)% (1.3)% (1.1)%(6)
<F10>
Portfolio turnover rate(7)<F11> 55% 55% 71% 109% 80%
Average commission
rate paid per share(7)<F11> $0.0560 $0.0560 $0.0512
(1)<F5>Commencement of operations.
(2)<F6>Effective March 1, 1997, the Fund offered a second class of shares, Class
C.
(3)<F7>Net investment (loss) per share is calculated using the ending balance of
undistributed net investment (loss) prior to consideration of adjustments for
permanent book and tax differences.
(4)<F8>Not annualized.
(5)<F9>Effective January 1, 1996 the Fund instituted a maximum 4.25% front end
sales load. The total return calculation does not reflect the 4.25% front end
sales load.
(6)<F10>Annualized.
(7)<F11>Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. Disclosure not required prior to 1996.
See Notes to the Financial Statements.
</TABLE>
NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION
O.R.I. Growth Funds, Inc. (the "Corporation") was incorporated on October 15,
1993 as a Maryland corporation. The O.R.I. Growth Fund (the "Fund") is a series
of the Corporation and is registered as an open-end diversified management
investment company under the Investment Company Act of 1940 ("1940 Act"). The
Fund's investment objective is capital appreciation. Oak Ridge Investments, LLC
(the "Adviser") is the Fund's investment adviser. The Fund commenced operations
on January 3, 1994.
Costs incurred in connection with the organization, initial registration and
public offering of shares aggregated $44,002. These costs are being amortized
over a period of not more than five years from the Fund's commencement of
operations. The proceeds of any redemption of the initial shares by the
original shareholders or any transferee will be reduced by a pro rata portion of
any then unamortized organizational 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 Fund has issued two classes of shares: Class A and Class C. The Class A
shares are subject to a 0.25% distribution fee and an initial sales charge
imposed at the time of purchase, in accordance with the Fund's prospectus. The
maximum sales charge is 4.25% of the offering price or 4.44% of the net asset
value. The Class C shares are subject to a shareholder servicing fee of 0.25%
and distribution fees of 0.75% pursuant to Rule 12b-1. Each class of shares of
the Fund has identical rights and privileges except that each class bears
differing expenses and exclusive voting rights on matters pertaining to the
distribution plan for that class.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation -- Common stocks and other equity-type securities are
valued at the last sales price on a national securities exchange or Nasdaq on
which securities are primarily traded; provided, however, securities traded on
an exchange or Nasdaq for which there were no transactions on a given day, and
securities not listed on an exchange or Nasdaq, are valued at the most recent
bid price. Debt securities (other than short-term instruments) are valued at
prices furnished by a pricing service, subject to review by the Adviser and
determination of the appropriate price whenever a furnished price is
significantly different from the previous day's furnished price. Debt
securities having remaining maturities of 60 days or less when purchased are
valued by the amortized cost method. Any securities or other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors.
b) Federal Income Taxes -- It is the Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and the
Fund intends to distribute investment company net taxable income and net capital
gains to shareholders. Therefore, no federal income tax provision is required.
c) Distribution to Shareholders -- The Fund pays dividends of net investment
income annually. Distributions of net realized capital gains, if any, will be
declared at least annually. Distributions to shareholders are recorded on the
ex-dividend date.
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 revenues and expenses
during the reporting period. Actual results could differ from those estimates.
e) Other -- Investment and shareholder transactions are recorded on the trade
date. The Fund determines the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. The Fund's basis in investments is the same for income tax
and financial reporting purposes. Dividend income is recognized on the ex-
dividend date and interest income is recognized on an accrual basis. Generally
accepted accounting principles require that permanent differences between the
financial reporting and tax basis of the Fund's assets and liabilities be
reclassified to capital stock. The primary difference in 1997 relates to the
reclassification of the net investment loss to undistributed net realized gain
on investments.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
CLASS A
---------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
----------------- ------------------
AMOUNT SHARES AMOUNT SHARES
------- ------ ------- ------
Shares sold $2,578,553 144,595 $2,818,792 186,455
Shares issued to holders in
reinvestment of dividends 476,916 30,262 164,945 12,356
Shares redeemed (865,801) (48,465) (382,732) (24,753)
----------- -------- ---------- --------
Net increase $2,189,668 126,392 $2,601,005 174,058
========== ======= ========= =======
CLASS C
--------------------
NINE MONTHS ENDED
NOVEMBER 30, 1997
-------------------
AMOUNT SHARES
-------- ------
Shares sold $354,425 18,955
Shares issued to holders in
reinvestment of dividends -- --
Shares redeemed (41,873) (1,999)
--------- -------
Net increase $312,552 16,956
========= ======
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an agreement with the Adviser, with whom certain
officers and directors of the Fund are affiliated, to furnish investment
advisory services to the Fund. Under the terms of this agreement, the Fund will
pay the Adviser a monthly fee at the annual rate of 1.00% on average daily net
assets.
For the fiscal year ending November 30, 1997, the Adviser voluntarily waived its
management fee to ensure that total operating expenses (exclusive of interest,
taxes, brokerage commissions and other costs incurred in connection with the
purchase or sale of portfolio securities, and extraordinary items) for (i) Class
A shares did not exceed 2.00% of the class' average daily net assets and (ii)
Class C shares did not exceed 2.75% of the class' average daily net assets.
For the year ended November 30, 1997, the Fund paid Oak Ridge Investments, Inc.
(the "Distributor") $8,021 of brokerage commissions. The Fund was advised that
the Distributor also received front-end sales charges on Class A shares of
$11,998 for the year ended November 30, 1997.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the year ended November 30, 1997, were $5,715,722
and $4,967,382 respectively. There were no purchases or sales of long-term U.S.
Government securities.
At November 30, 1997, gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
Appreciation $3,427,135
(Depreciation) (271,787)
----------
Net unrealized appreciation on investments $3,155,348
==========
At November 30, 1997, the cost of investments for federal income tax purposes
was $9,228,283.
6. DISTRIBUTION PLAN
The Fund has adopted a plan of distribution for each class of shares (the "Class
A Plan" and the "Class C Plan") in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution and/or service fees are paid. Under the
Class A Plan, the Fund is required to pay the Distributor a distribution fee of
up to 0.25% of the average daily net assets of the Fund attributable to the
Class A shares computed on an annual basis, for the promotion and distribution
of the Class A shares. The Class C Plan requires the Fund to pay the
Distributor (i) a distribution fee of up to 0.75% of the average daily net
assets of the Fund attributable to the Class C shares, computed on an annual
basis, and (ii) a service fee for personal services provided to shareholder
accounts of up to 0.25% of the average daily net assets of the Fund attributable
to the Class C shares, computed on an annual basis. Distribution fees incurred
by Class A shares for the year ended November 30, 1997 were $161. Distribution
and service fees incurred by Class C shares for the nine months ended November
30, 1997 were $842.
7. DISTRIBUTION
On December 31, 1996, a distribution of $1.08714 per share (including $0.51952
taxable to shareholders as ordinary income dividends and $0.56762 applicable to
long-term capital gains), aggregating $508,673, was paid to the shareholders of
record on December 30, 1996.
On December 29, 1997, a distribution of $1.25587 per share (including $0.08282
taxable to shareholders as ordinary income dividends and $1.17305 applicable to
long-term capital gains), aggregating $748,752 and $21,346 for Class A and Class
C respectively, was paid to the shareholders of record on December 26, 1997.
34.42% of the long-term capital gain distribution is taxed at the 20% rate.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
O.R.I. Growth Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of O.R.I. Growth Fund (the "Fund") at
November 30, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 1997 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
/S/ Price Waterhouse LLP
Milwaukee, Wisconsin
December 18, 1997
TABLE OF CONTENTS
Page
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Letter to Shareholders 1
Schedule of Investments 3
Statement of Assets and Liabilities 6
Statement of Operations 7
Statement of Changes in Net Assets 8
Financial Highlights 9
Notes to the Financial Statements 10
Report of Independent Accountants 14
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
