ANNUAL
REPORT
November 30, 1999
OAK RIDGE
FUNDS, INC.
Shareholder Services
1(800) 407-7298
OAK RIDGE INVESTMENTS, LLC
Investment Adviser
OAK RIDGE FUNDS
LETTER TO SHAREHOLDERS
DECEMBER, 1999
Dear Investor:
As the new millennium arrives there is more to celebrate than the changing
date on the calendar and the long awaited end to Y2K doomsday forecasts. Thanks
to an unprecedented fifth consecutive year of 20%+ returns for the S&P 500, the
average investor is feeling rather prosperous. Even the long abandoned group of
profitable small cap companies has participated over the past six months.
Surely many wonderful product innovations have spurred these returns.
Advancement in high powered computers has accelerated medical advances which
hold tremendous promise in gene therapy and drug research, and the development
of the Internet continues to change our lives every day. Technology has forced
whole industries to change nearly overnight or risk the almost certain fate of
obsolescence. High tech electronics will soon provide an all inclusive product
that will incorporate long distance telephone, Internet and entertainment
options at a reasonable price. These are the reasons market followers reference
a "new paradigm", or justification for P/E's well beyond historic norms or
future earnings growth rates.
As tempting as it may seem, history suggests that it is a mistake to
significantly overweight stocks at such inflated multiples. Greed has
eliminated healthy fears and created an extraordinary bubble in story stocks
mentioned on forums such as CNBC, often times purchased with retirement funds or
other moneys not deemed as highly speculative. Nearly every social gathering
today involves a discussion of hot stock ideas promoted by people who understand
nothing about a company other than that it is up five-fold and someone says it
is supposed to continue much higher. Margin balances in the United States have
more than tripled over the past five years, with over $40 billion in online
trading accounts. These are mostly inexperienced traders in shares of companies
with little institutional sponsorship and untested business plans. Despite
dynamic opportunities for many of these companies, the market can not sustain
excessive returns indefinitely and it is likely that 50% to 75% of these public
companies will decline 90% or more in five years.
A two tiered market has resulted from the narrow participation in this year's
advance. Seventy percent of all stocks on the New York Stock Exchange are
trading below their 200 day moving average, and over 50% of the S&P 500 members
are down for the year. The Nasdaq has advanced an unprecedented 52% through
November, reflecting the fact that technology stocks provided 100% of the gains
in many portfolios. The sector now represents nearly one third of the S&P 500
and trades at an eye popping 80 times trailing earnings.
Much of the market remains reasonably priced at P/E multiples of 20 to 25
times trailing earnings. Most of these companies have established, if
unspectacular, earnings histories and seasoned management. They will either be
discovered by investors or acquired by the high multiple darlings whose inflated
share prices provide valuable currency. In the near term, momentum will be the
catalyst that propels the technology sector.
Rising interest rates pushing the 30 year treasury yield over 6.5% will make
it nearly impossible to approach the returns of the past five years. These
levels should be tested as the Federal Reserve is expected to raise short-term
interest rates 50 basis points during the first half of 2000, but a less
aggressive posture is anticipated as the election year unfolds. Earnings remain
the focal point of the market, and should remain strong across most sectors.
Choppiness may occur in the first quarter, resulting from altered Y2K order
patterns and reduced travel schedules, but this should be offset by economic
strength in Asia and Europe.
Both the Oak Ridge Small-Cap and Large-Cap funds have enjoyed an excellent
recovery over the last few months. A more conservative approach was taken in
the belief that a Y2K panic would impact the typically vulnerable fall period,
creating an attractive opportunity to add to technology holdings, which have
been a cornerstone of our past success. By late October, the Small-Cap and
Large-Cap funds had increased technology exposure to a market weighting in well
positioned, profitable companies. While most of the group, including some Oak
Ridge holdings, is historically pricey, prospects for accelerated expenditure in
business to business E-commerce and customer service software are strong, as IT
budgets redeploy resources that had been dedicated to Y2K concerns.
We are pleased with the recent recovery in our performance, and believe that
our philosophy of buying earnings growth at reasonable valuations is the most
prudent strategy for investors seeking long-term appreciation.
Thank you for your confidence and best wishes for a happy, healthy and
prosperous beginning to the new millennium.
Sincerely,
/s/ David M. Klaskin
David M. Klaskin
President
Average Annual Total Return
For the year ended November 30, 1999
Since
One Year Five Year Inception
-------- --------- ---------
Oak Ridge Small Cap Equity Fund _
Class A (no load)(1)<F29> 17.4% 17.6% 15.6%
Oak Ridge Small Cap Equity Fund _
Class A (load)(1)<F29> 12.4% 16.5% 14.7%
Oak Ridge Small Cap Equity Fund _
Class C(2)<F30> 16.6% n/a 9.2%
(1)<F29> January 3, 1994 inception.
(2)<F30> March 1, 1997 inception.
Oak Ridge Small Oak Ridge Small
Cap Equity Fund - Cap Equity Fund -
date Class A - No Load Class A - Load Russell 2000 Index
1/94 10,000 10,000 10,000
2/94 10,870 10,870 10,276
5/94 10,160 10,150 9,682
11/94 10,480 10,480 9,562
5/95 11,121 11,121 10,679
11/95 14,360 14,360 12,286
5/96 17,485 16,737 14,512
11/96 17,358 16,618 14,315
5/97 18,846 18,042 15,523
11/97 22,218 21,268 17,665
5/98 23,858 22,837 18,821
11/98 20,038 19,181 16,496
5/99 20,272 19,405 18,316
11/99 23,524 22,518 19,081
Average Annual Total Return
For the period ended November 30, 1999
Since
Inception(3)<F31>
-----------------
Oak Ridge Large Cap Equity Fund - Class A (no load)(4)<F32> 3.8%
Oak Ridge Large Cap Equity Fund - Class A (load)(4)<F32> (0.6)%
Oak Ridge Large Cap Equity Fund - Class C(5)<F33>, (6)<F34> (0.6)%
(3)<F31> Not annualized.
(4)<F32> March 1, 1999 inception.
(5)<F33> April 26, 1999 inception.
(6)<F34> All Class C shareholders redeemed their shares on 11/25/99. Effective
12/7/99 Oak Ridge Large Cap - Class C shares are not currently
available to investors.
Oak Ridge Large Oak Ridge Large
Cap Equity Fund - Cap Equity Fund -
date Class A - No Load Class A - Load S&P 500 Index
3/99 10,000 10,000 10,000
5/99 10,092 9,665 10,548
11/99 10,376 9,937 11,324
Each 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.
OAK RIDGE SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1999
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------- -----
COMMON STOCK -- 95.99%
BANKING -- 1.63%
8,000 Astoria Financial Corporation $ 252,250
-----------
CHEMICALS -- 2.64%
13,000 Cambrex Corporation 409,500
-----------
COMMERCIAL SERVICES -- 3.97%
12,000 F.Y.I. Incorporated*<F1> 384,000
5,000 NCO Group, Inc.*<F1> 231,875
-----------
615,875
-----------
COMMUNICATIONS -- 9.59%
6,500 Comverse Technology, Inc.*<F1> 785,688
8,000 Univision Communications, Inc.*<F1> 700,000
-----------
1,485,688
-----------
COMPUTERS - SOFTWARE -- 15.72%
13,000 Ardent Software, Inc.*<F1> 341,250
14,000 Genesys Telecommunications
Laboratories, Inc.*<F1> 718,375
7,000 MindSpring Enterprises, Inc.*<F1> 220,937
8,500 SeaChange International, Inc.*<F1> 214,625
19,000 Unify Corporation*<F1> 940,500
-----------
2,435,687
-----------
CONSULTING SERVICES -- 2.33%
15,000 Comdisco, Inc. 361,875
-----------
DATA PROCESSING - MANAGEMENT -- 2.13%
17,000 Reynolds and Reynolds
Company - Class A 329,375
-----------
DRUGS & MEDICAL -- 9.40%
4,500 Express Scripts, Inc.*<F1> 228,375
13,500 Jones Pharma, Inc. 467,437
12,000 Shire Pharmaceuticals Group
PLC - ADR*<F1> +<F2> 368,250
8,000 Waters Corporation*<F1> 392,000
-----------
1,456,062
-----------
ELECTRONICS -- 13.21%
16,000 Audiovox Corporation - Class A*<F1> 476,000
9,800 DII Group, Inc.*<F1> 618,625
6,000 Sanmina Corporation*<F1> 576,750
10,000 Universal Electronics, Inc.*<F1> 376,250
-----------
2,047,625
-----------
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL -- 1.52%
21,000 EarthCare Company*<F1> 236,250
-----------
FINANCE - LEASING COMPANY -- 2.06%
15,000 First Sierra Financial, Inc.*<F1> 319,688
-----------
FINANCIAL SERVICES -- 5.18%
14,000 Heller Financial, Inc. 309,750
14,000 Legg Mason, Inc. 492,625
-----------
802,375
-----------
HEALTH CARE COST CONTAINMENT -- 1.80%
9,800 MedQuist, Inc.*<F1> 279,300
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 2.74%
16,000 Coherent, Inc.*<F1> 424,000
-----------
HOSPITALS & HEALTH CARE -- 3.65%
15,000 America Service Group, Inc.*<F1> 208,125
7,400 Capital Senior Living Corporation*<F1> 37,000
20,000 United Payors &
United Providers, Inc.*<F1> 320,000
-----------
565,125
-----------
INFORMATION MANAGEMENT SERVICES -- 4.69%
20,000 Convergys Corporation*<F1> 546,250
25,000 TeleSpectrum Worldwide, Inc.*<F1> 181,250
-----------
727,500
-----------
INSTRUMENTS - SCIENTIFIC -- 2.02%
15,000 Varian, Inc.*<F1> 313,125
-----------
MACHINERY - PRINT TRADE -- 2.92%
7,500 Zebra Technologies Corporation*<F1> 452,812
-----------
METAL - DIVERSIFIED -- 0.27%
5,000 Lindberg Corporation 42,500
-----------
OIL - FIELD SERVICES -- 2.54%
11,500 Hanover Compressor Company*<F1> 393,875
-----------
RETAIL - DISCOUNT -- 2.89%
12,000 BJ's Wholesale Club, Inc.*<F1> 448,500
-----------
WHOLESALE -- 3.09%
14,250 Insight Enterprises, Inc.*<F1> 478,266
-----------
Total Common Stock
(cost $10,479,585) 14,877,253
-----------
SHORT-TERM INVESTMENTS -- 4.42%
VARIABLE RATE DEMAND NOTES -- 4.42%
$621,477 Firstar Bank U.S.A., N.A. 621,477
14,734 Pitney Bowes, Inc. 14,734
20,704 Warner-Lambert Company 20,704
27,887 Wisconsin Corporate Central
Credit Union 27,887
-----------
Total Short-Term Investments
(cost $684,802) 684,802
-----------
Total Investments -- 100.41%
(cost $11,164,387) 15,562,055
-----------
Liabilities, less Other
Assets -- (0.41%) (63,158)
-----------
NET ASSETS -- 100.00% $15,498,897
-----------
-----------
*<F1> Non-income producing security.
+<F2> Foreign security.
See Notes to the Financial Statements.
OAK RIDGE LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1999
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------- -----
COMMON STOCK -- 83.47%
COMMUNICATIONS -- 12.08%
800 ALLTEL Corporation $ 69,200
750 Lucent Technologies, Inc. 54,797
575 MCI WorldCom, Inc.*<F3> 47,545
600 Univision Communications, Inc.*<F3> 52,500
----------
224,042
----------
COMPUTERS - MICRO -- 6.77%
950 Sun Microsystems, Inc.*<F3> 125,638
----------
COMPUTERS - NETWORKING -- 2.40%
500 Cisco Systems, Inc.*<F3> 44,594
----------
COMPUTERS - SOFTWARE -- 3.19%
650 Microsoft Corporation*<F3> 59,180
----------
COSMETICS & TOILETRIES -- 6.15%
900 Kimberly-Clark Corporation 57,488
525 Procter & Gamble Company 56,700
----------
114,188
----------
DIVERSIFIED MANUFACTURING -- 6.77%
550 General Electric Company 71,500
1,350 Tyco International Ltd. 54,084
----------
125,584
----------
DRUGS & MEDICAL -- 10.93%
1,100 Cardinal Health, Inc. 57,544
775 Forest Laboratories, Inc.*<F3> 39,670
1,100 Medtronic, Inc. 42,763
700 Warner-Lambert Company 62,781
----------
202,758
----------
ELECTRIC - GENERATION -- 2.81%
900 AES Corporation 52,144
----------
ELECTRONIC COMPONENTS -- 6.00%
700 Intel Corporation 53,681
700 Solectron Corporation*<F3> 57,663
----------
111,344
----------
FINANCE - CREDIT CARD -- 2.85%
350 American Express Company 52,959
----------
FINANCIAL SERVICES -- 2.13%
1,000 Household International, Inc. 39,562
----------
INVESTMENT COMPANIES -- 1.63%
375 Merrill Lynch & Company 30,234
----------
MEDICAL PRODUCTS -- 3.36%
600 Johnson & Johnson 62,250
----------
OIL - INTEGRATED -- 5.29%
1,000 Coastal Corporation 35,250
2,400 Conoco, Inc. - Class B 62,850
----------
98,100
----------
PIPELINES -- 2.62%
1,275 Enron Corporation 48,530
----------
PRINTERS & RELATED PRODUCTS -- 2.68%
600 Lexmark International Group, Inc.*<F3> 49,800
----------
RETAIL - DISCOUNT -- 2.48%
800 Wal-Mart Stores, Inc. 46,100
----------
RETAIL - DRUGS -- 2.20%
1,400 Walgreen Company 40,775
----------
TOBACCO -- 1.13%
800 Philip Morris Companies, Inc. 21,050
----------
Total Common Stock
(cost $1,396,545) 1,548,832
----------
SHORT-TERM INVESTMENTS -- 17.35%
VARIABLE RATE DEMAND NOTES -- 17.35%
$22,731 American Family 22,731
80,353 Firstar Bank U.S.A., N.A. 80,353
46,293 General Mills, Inc. 46,293
64,743 Warner-Lambert Company 64,743
63,632 Wisconsin Corporate Central
Credit Union 63,632
44,053 Wisconsin Electric Company 44,053
----------
Total Short-Term Investments
(cost $321,805) 321,805
----------
Total Investments -- 100.82%
(cost $1,718,350) 1,870,637
----------
Liabilities, less Other
Assets -- (0.82)% (15,154)
----------
NET ASSETS -- 100.00% $1,855,483
----------
----------
*<F3> Non-income producing security.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1999
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND
----------- -----------
ASSETS:
Investments, at market value*<F4> $15,562,055 $ 1,870,637
Receivable from Adviser -- 7,295
Interest and dividends receivable 7,659 2,232
Prepaid expenses 5,698 6,204
----------- -----------
Total Assets 15,575,412 1,886,368
----------- -----------
LIABILITIES:
Payable to Adviser 4,304 --
Payable for 12b-1 fees 7,861 767
Payable for capital shares purchased 6,722 --
Accrued other expenses 57,628 30,118
----------- -----------
Total Liabilities 76,515 30,885
----------- -----------
NET ASSETS $15,498,897 $ 1,855,483
----------- -----------
----------- -----------
NET ASSETS CONSIST OF:
Capital stock $ 7,921 $ 1,491
Paid-in-capital in excess of par 11,256,726 1,810,123
Accumulated net realized loss on investments (163,418) (108,418)
Net unrealized appreciation on investments 4,397,668 152,287
----------- -----------
Net Assets $15,498,897 $ 1,855,483
----------- -----------
----------- -----------
CLASS A:
Net assets $14,001,255 $ 1,855,483
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 714,272 149,061
Net asset value and redemption price per share $19.60 $12.45
------ ------
------ ------
Maximum offering price per share $20.47 $13.00
------ ------
------ ------
CLASS C:
Net assets $ 1,497,642 $ --
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 77,853 --
Net asset value, redemption price and
offering price per share $19.24 $ --
------ ------
------ ------
*<F4> Cost of investments $11,164,387 $ 1,718,350
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1999
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND*<F5>
----------- ----------------
INVESTMENT INCOME:
Interest $ 37,590 $ 9,524
Dividends 39,905 9,026
---------- ---------
77,495 18,550
---------- ---------
EXPENSES:
Investment advisory fees 121,928 7,865
Fund administration and accounting fees 75,007 46,580
Professional fees 55,477 11,234
Shareholder servicing fees and expenses 47,271 18,358
Reports to shareholders 7,484 1,370
Federal and state registration fees 16,599 6,302
Directors' fees 2,922 2,192
Custody fees 6,938 4,932
12b-1 fees -- Class A 33,341 3,265
12b-1 fees -- Class C 12,232 33
Service fees -- Class C 4,077 11
Amortization of organizational expenses 601 --
Other 2,190 --
---------- ---------
Total expenses before waiver 386,067 102,142
Less: Waiver of expenses by Adviser (74,488) (75,906)
---------- ---------
Net expenses 311,579 26,236
---------- ---------
NET INVESTMENT LOSS (234,084) (7,686)
---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (163,418) (108,418)
Change in net unrealized
appreciation on investments 2,694,909 152,287
---------- ---------
Net gain on investments 2,531,491 43,869
---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,297,407 $ 36,183
---------- ---------
---------- ---------
*<F5> Commenced operations March 1, 1999.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
OAK RIDGE
OAK RIDGE LARGE CAP
SMALL CAP EQUITY FUND EQUITY FUND*<F6>
------------------------------- ----------------
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1999 1998 1999
------------ ------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment loss $ (234,084) $ (156,945) $ (7,686)
Net realized gain (loss) on investments (163,418) 44,069 (108,418)
Change in net unrealized appreciation on investments 2,694,909 (1,452,588) 152,287
----------- ----------- ----------
Net increase (decrease) in net assets resulting from operations 2,297,407 (1,565,464) 36,183
----------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,796,013 5,962,931 1,927,992
Shares issued to holders in reinvestment of dividends 29,855 744,988 --
Shares redeemed (4,064,776) (1,994,697) (108,692)
----------- ----------- ----------
Net increase (decrease) in net assets resulting from
capital share transactions (1,238,908) 4,713,222 1,819,300
----------- ----------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net realized gains (27,998) (748,752) --
----------- ----------- ----------
Total distributions to Class A shareholders (27,998) (748,752) --
----------- ----------- ----------
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net realized gains (2,833) (21,346) --
----------- ----------- ----------
Total distributions to Class C shareholders (2,833) (21,346) --
----------- ----------- ----------
TOTAL INCREASE IN NET ASSETS 1,027,668 2,377,660 1,855,483
NET ASSETS:
Beginning of period 14,471,229 12,093,569 --
----------- ----------- ----------
End of period $15,498,897 $14,471,229 $1,855,483
----------- ----------- ----------
----------- ----------- ----------
</TABLE>
*<F6> Commenced operations March 1, 1999.
See Notes to the Financial Statements.
OAK RIDGE SMALL CAP EQUITY FUND -- CLASS A
FINANCIAL HIGHLIGHTS
<TABLE>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOV. 30, '99 NOV. 30, '98 NOV. 30, '97 NOV. 30, '96 NOV. 30, '95
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning
of period $16.73 $19.84 $16.57 $14.32 $10.48
Income from investment operations:
Net investment loss (0.27)(2)<F8> (0.18)(2)<F8> (0.22)(2)<F8> (0.16)(2)<F8> (0.13)(2)<F8>
Net realized and unrealized
gains (losses) on investments 3.18 (1.67) 4.58 3.01 4.00
------ ------ ------ ------ ------
Total from investment operations 2.91 (1.85) 4.36 2.85 3.87
------ ------ ------ ------ ------
Less distributions:
Distributions from net realized gains (0.04) (1.26) (1.09) (0.60) (0.03)
------ ------ ------ ------ ------
Net asset value, end of period $19.60 $16.73 $19.84 $16.57 $14.32
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 17.4%(4)<F10> (9.8)%(4)<F10> 28.0%(4)<F10> 20.9%(4)<F10> 37.0%
Supplemental data and ratios:
Net assets, end of period $14,001,255 $13,215,299 $11,758,733 $7,725,072 $4,182,246
Ratio of expenses to
average net assets:
Before expense waiver 2.5% 2.7% 2.9% 3.5% 6.5%
After expense waiver 2.0% 1.9% 2.0% 2.0% 2.0%
Ratio of net investment loss
to average net assets:
Before expense waiver (2.0)% (1.9)% (2.2)% (2.7)% (5.8)%
After expense waiver (1.5)% (1.1)% (1.3)% (1.2)% (1.3)%
Portfolio turnover rate(7)<F13> 64% 57% 55% 71% 109%
</TABLE>
(1)<F7> Effective March 1, 1997, the Fund offered a second class of shares,
Class C.
(2)<F8> 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.
(3)<F9> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the year.
(4)<F10> Effective January 1, 1996, the Fund instituted a maximum 4.25% front
end sales load on Class A shares. The total return calculation does
not reflect the 4.25% sales load.
(5)<F11> Not annualized.
(6)<F12> Annualized.
(7)<F13> Calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See Notes to the Financial Statements.
OAK RIDGE SMALL CAP EQUITY FUND -- CLASS C
NINE MONTHS
YEAR ENDED YEAR ENDED ENDED
NOV. 30, '99 NOV. 30, '98 NOV. 30, '97(1)<F14>
------------ ------------ --------------------
$16.54 $19.75 $16.20
(0.46)(2)<F15> (0.34)(3)<F16> (0.13)(2)<F15>
3.20 (1.61) 3.68
------ ------ ------
2.74 (1.95) 3.55
------ ------ ------
(0.04) (1.26) --
------ ------ ------
$19.24 $16.54 $19.75
------ ------ ------
------ ------ ------
16.6% (10.4)% 21.9%(5)<F18>
$1,497,642 $1,255,930 $334,836
3.3% 3.4% 3.6%(6)<F19>
2.8% 2.6% 2.8%(6)<F19>
(2.7)% (2.6)% (3.0)%(6)<F19>
(2.2)% (1.9)% (2.2)%(6)
64% 57% 55%
(1)<F14> Effective March 1, 1997, the Fund offered a second class of shares,
Class C.
(2)<F15> 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.
(3)<F16> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the year.
(4)<F17> Effective January 1, 1996, the Fund instituted a maximum 4.25% front
end sales load on Class A shares. The total return calculation does
not reflect the 4.25% sales load.
(5)<F18> Not annualized.
(6)<F19> Annualized.
(7)<F20> Calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See Notes to the Financial Statements.
OAK RIDGE LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
MARCH 1, '99(1)<F21> APRIL 26, '99(1)<F21>(2)<F22>
THROUGH THROUGH
NOV. 30, '99 NOV. 25, '99
-------------------- -----------------------------
CLASS A CLASS C
------- -------
<S> <C> <C>
Per share data:
Net asset value, beginning of period $12.00 $12.66
Income from investment operations:
Net investment loss (0.05)(3)<F23> (0.10)(3)<F23>
Net realized and unrealized gains on investments 0.50 0.03
------ ------
Total from investment operations 0.45 (0.07)
------ ------
Less distributions:
Distributions from net realized gains -- --
------ ------
Net asset value, end of period $12.45 $12.59
------ ------
------ ------
Total Return 3.8%(4)<F24>(5)<F25> (0.6)%(4)<F24>
Supplemental data and ratios:
Net assets, end of period $1,855,483 $0
Ratio of expenses to average net assets:
Before expense waiver 7.8%(6)<F26> 7.2%(6)<F26>
After expense waiver 2.0%(6)<F26> 2.8%(6)<F26>
Ratio of net investment loss to average net assets:
Before expense waiver (6.4)%(6)<F26> (5.8)%(6)<F26>
After expense waiver (0.6)%(6)<F26> (1.4)%(6)<F26>
Portfolio turnover rate(7)<F27> 52% 52%
</TABLE>
(1)<F21> Commencement of Operations
(2)<F22> Effective April 26, 1999, the Fund offered a second class of shares
(Class C). All Class C shareholders redeemed their shares on
November 25, 1999. The Fund has subsequently filed and distributed
to all shareholders, a supplement to the Prospectus dated March 1,
1999, as supplemented July 20, 1999, which noted that, effective
immediately (December 7, 1999), the Large Cap Equity Fund's Class C
shares are not currently available to investors. If the Fund should
decide to offer the Class C shares in the future, a shareholder
notification will be provided at that time.
(3)<F23> 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)<F24> Not annualized.
(5)<F25> The total return calculation does not reflect the 4.25% sales load.
(6)<F26> Annualized.
(7)<F27> Calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 30, 1999
1. ORGANIZATION
Oak Ridge Funds, Inc. (the "Corporation") was incorporated on October 15, 1993
as a Maryland corporation. The Corporation is registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act") and consists of two series of portfolios: the Oak Ridge
Small Cap Equity Fund (formerly known as the Oak Ridge Growth Fund) and the Oak
Ridge Large Cap Equity Fund (the "Funds"). The Funds' investment objectives are
capital appreciation. Oak Ridge Investments, LLC (the "Adviser") is the Funds'
investment adviser. The Funds commenced operations on January 3, 1994 (Oak
Ridge Small Cap Equity Fund) and March 1, 1999 (Oak Ridge Large Cap Equity
Fund).
The Funds have issued two classes of shares: Class A and Class C. The Class A
shares are subject to a 0.25% distribution fee pursuant to Rule 12b-1 and an
initial sales charge imposed at the time of purchase, in accordance with the
Funds' 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 Funds has identical rights and privileges except
that each class bears differing Rule 12b-1 expenses and exclusive voting rights
on matters pertaining to the distribution plan for that class. Effective
December 7, 1999 and until further notice, the Oak Ridge Large Cap Equity Fund
discontinued issuing Class C shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of the 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 such 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 each Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment company net
taxable income and net capital gains to shareholders. Therefore, no federal
tax provision is required.
c) Distributions to Shareholders -- The Funds pay dividends of net investment
income, if any, 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 Funds determine the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Each 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 income and expenses be reclassified in the
capital accounts.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds were as follows:
<TABLE>
OAK RIDGE SMALL CAP EQUITY FUND
CLASS A
---------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1999 NOVEMBER 30, 1998
------------------------ ----------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold $ 2,017,616 117,504 $4,911,232 272,175
Shares issued to holders in
reinvestment of dividends 27,109 1,668 723,642 40,038
Shares redeemed (3,320,277) (194,852) (1,952,591) (114,855)
----------- --------- ---------- --------
Net increase (decrease) $(1,275,552) (75,680) $3,682,283 197,358
----------- --------- ---------- --------
----------- --------- ---------- --------
CLASS C
--------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1999 NOVEMBER 30, 1998
------------------------ ----------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 778,397 45,756 $1,051,699 59,962
Shares issued to holders in
reinvestment of dividends 2,746 170 21,346 1,187
Shares redeemed (744,499) (43,989) (42,106) (2,189)
----------- --------- ---------- --------
Net increase $ 36,644 1,937 $1,030,939 58,960
----------- --------- ---------- --------
----------- --------- ---------- --------
OAK RIDGE LARGE CAP EQUITY FUND
CLASS A CLASS C
------------------------ ----------------------
MARCH 1, 1999*<F28> APRIL 26, 1999*<F28>
THROUGH THROUGH
NOVEMBER 30, 1999 NOVEMBER 25, 1999
------------------------ ----------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $1,920,112 157,498 $7,880 624
Shares redeemed (100,836) (8,437) (7,856) (624)
----------- --------- ---------- --------
Net increase $1,819,276 149,061 $ 24 --
----------- --------- ---------- --------
----------- --------- ---------- --------
</TABLE>
*<F28> Commencement of operations.
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an agreement with the Adviser, with whom certain
officers and directors of the Funds are affiliated, to furnish investment
advisory services to the Funds. Under the terms of this agreement, the Oak
Ridge Small Cap Equity Fund pays the Adviser an annual management fee, effective
March 1, 1999, of 0.75% (prior to March 1, 1999, the fee was 1.00%) and the Oak
Ridge Large Cap Equity Fund pays the Adviser an annual fee of 0.60% of the
respective Fund's average daily net assets. The advisory fee is accrued daily
and paid monthly.
For the fiscal year ended November 30, 1999, the Adviser agreed to waive its
management fee and/or reimburse the Funds' operating expenses 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. The Adviser has agreed to extend
these caps on the Funds' operating expenses through March 31, 2001. After this
date, the Adviser may elect to continue, modify or terminate the limitation on
Fund operating expenses. Further, under the terms of this agreement, any Fund
expenses waived or reimbursed after March 1, 1999 may be recouped by the Adviser
from the Fund to the extent actual operating expenses for a period are less than
the expense limitation caps, provided that the Adviser may only be entitled to
recoup such amounts for a period of three years from the fiscal year such
amounts were waived or reimbursed. At November 30, 1999, expense waivers and
reimbursements that may potentially be recouped by the Adviser through November
30, 2002 are $53,135 for the Oak Ridge Small Cap Equity Fund and $75,906 for Oak
Ridge Large Cap Equity Fund.
For the year ended November 30, 1999, Oak Ridge Small Cap Equity Fund and Oak
Ridge Large Cap Equity Fund paid Oak Ridge Investments, Inc. (the "Distributor")
$23,688 and $2,584, respectively, of brokerage commissions. The Funds were
advised that the Distributor also received front-end sales charges on Class A
shares of $1,607 for the Oak Ridge Small Cap Equity Fund and $610 for the Oak
Ridge Large Cap Equity Fund.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Oak Ridge Small Cap Equity Fund for the year ended November
30, 1999 were $9,165,731 and $10,730,277, respectively. The aggregate purchases
and sales of securities, excluding short-term investments, for the Oak Ridge
Large Cap Equity Fund for the period ended November 30, 1999 were $2,309,303 and
$804,340, respectively. There were no purchases or sales of long-term U.S.
Government securities.
At November 30, 1999, cost and gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
<TABLE>
COST APPRECIATION (DEPRECIATION) NET APPRECIATION
----------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Oak Ridge Small Cap Equity Fund $11,164,387 $5,019,396 $(621,728) $4,397,668
Oak Ridge Large Cap Equity Fund 1,718,350 206,610 (54,323) 152,287
</TABLE>
At November 30, 1999, the Oak Ridge Small Cap Equity Fund and Oak Ridge Large
Cap Equity Fund had capital loss carryforwards of $163,418 and $108,418,
respectively, which the Funds intend to use to reduce future net capital gains.
These carryforwards, if unused, expire on November 30, 2007.
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 Funds are required to pay the Distributor a distribution fee
of 0.25% of the average daily net assets of the Funds 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 Funds to pay the Distributor (i)
a distribution fee of 0.75% of the average daily net assets of the Funds
attributable to the Class C shares, computed on an annual basis, and (ii) a
service fee for personal services provided to shareholder accounts of 0.25% of
the average daily net assets of the Funds attributable to Class C shares,
computed on an annual basis. Distribution fees incurred by the Oak Ridge Small
Cap Equity Fund and Oak Ridge Large Cap Equity Fund Class A shares for the
periods ended November 30, 1999 were $33,341 and $3,265, respectively.
Distribution fees incurred by the Oak Ridge Small Cap Equity Fund and Oak Ridge
Large Cap Equity Fund Class C shares for the periods ended November 30, 1999
were $12,232 and $33, respectively. Service fees for the Oak Ridge Small Cap
Equity Fund and Oak Ridge Large Cap Equity Fund Class C shares for the periods
ended November 30, 1999 were $4,077 and $11, respectively.
OAK RIDGE FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Oak Ridge Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 the Oak Ridge Small Cap Equity Fund
and the Oak Ridge Large Cap Equity Fund (constituting Oak Ridge Funds, Inc.,
hereafter referred to as the "Funds") at November 30, 1999, and the results of
each of their operations, the changes in each of their net assets 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 Funds' 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, 1999 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ PricewaterhouseCoopers LLP
January 6, 2000
Milwaukee, Wisconsin
TABLE OF CONTENTS
Page
----
Letter to Shareholders 1
Schedule of Investments 4
Statement of Assets and Liabilities 8
Statement of Operations 9
Statement of Changes in Net Assets 10
Financial Highlights 12
Notes to the Financial Statements 15
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
