<PAGE>
[LOGO]
SEMI-ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS ENTERPRISE FUND
MARCH 31, 1995
<PAGE>
ADVANTUS ENTERPRISE FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 5
STATEMENT OF ASSETS AND LIABILITIES 8
STATEMENT OF OPERATIONS 9
STATEMENT OF CHANGES IN NET ASSETS 10
NOTES TO FINANCIAL STATEMENTS 11
SHAREHOLDER VOTING RESULTS 16
SHAREHOLDER SERVICES 17
<PAGE>
May 15, 1995
[PHOTO]
Dear Shareholders:
Practically everyone would like to annualize the first quarter results. Both
bonds and equities provided excellent returns for investors according to
Ibbotson Associates. For now, investors seem to have positive expectations on
interest rates and are enjoying the benefits on earnings attributed to the
declining dollar. Additionally, they have become increasingly confident in the
ability of the Federal Reserve to engineer a soft landing (i.e., low inflation
without a recession) for the economy.
For the last six months there was even more good news for the markets. The
November election results combined with two additional Federal Reserve moves to
raise short term interest rates and good news on inflation amid signs of slower
economic growth all helped restore investor confidence.
What can be confusing is that a soft landing and a recession often look very
much the same. The economy is on an unpredictable course, and experts seem to be
particularly divided in their opinions. (Opinions always seem to get farther
apart when markets set new highs.) Bulls argue that earnings are excellent and
will remain healthy because of stringent cost controls and improving overseas
operations. Bears believe the Dow is at its peak for the cycle. Also, the
consensus of a soft landing can be shaken badly if the Fed has to raise interest
rates to protect the dollar. Finally, all signs do not indicate inflation can
remain under control.
There is much evidence that we have entered a period where interest rates,
whether increasing or decreasing, are likely to trade in a narrower range.
Slower but steady economic growth, coupled with a moderate inflationary
environment should prove to be positive for fixed income investments. The
uncertainty in the economy over whether we are heading toward a recession or a
soft landing should create buying opportunities in the equity markets.
The saga of the dollar reaffirms the fact that most events are neither totally
positive nor totally negative. The dollar will buy less in Europe and Japan, but
will buy more in Mexico and Canada than a year ago. However, determining which
investments benefit and which suffer from any event is very difficult and
requires experienced professionals to make the best decisions.
Finally, as always, it is important to remember not to vary from your investment
plan and that diversification across asset types and geographic regions is
important because asset classes tend to perform differently from each other in
different market conditions.
Sincerely,
Paul Gooding, President
Advantus Capital Management, Inc.
<PAGE>
ADVANTUS ENTERPRISE FUND
PERFORMANCE UPDATE
[PHOTO]
JAMES P. TATERA, CFA
SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER
The Advantus Enterprise Fund is a mutual
fund designed for investors seeking
long-term accumulation of capital. In
pursuit of this objective, the Fund will
invest primarily in common and preferred
stocks issued by small companies, defined
in terms of either market capitalization
or gross revenues.
-Dividends paid quarterly
-Capital gains distributions paid annually.
PERFORMANCE
During the first quarter, the Enterprise Fund, which focuses most of its
holdings on smaller companies, returned a strong 6.3 percent for Class A shares
(Class B returned 6.0 percent for the same period)* which compares favorably to
the average Lipper Small Cap** fund's return of 5.6 percent. The Enterprise Fund
Class A returned 8.1 percent for the six months ended March 31, 1995 (Class B
returned 7.6 percent for the same period).
The small-cap part of the market was left behind as large-cap indices like the
S&P 500 were breaking records late in the first quarter. While the large-cap
indices returned almost 10 percent for the first quarter, small-cap indices were
lucky to return one half as much, with the Russell 2000+ showing a return of
only 4.2 percent.
PORTFOLIO RECAP
The relative underperformance of small company stocks versus the large companies
is a trend that has been in place for the past year. First quarter results show
that there was not a single industry where the return of the S&P 500 Small Cap
index beat that of the S&P Composite.
The Enterprise Fund's performance was positively impacted by a diverse group of
stocks. Key contributors included Fritz Companies (freight transportation and
logistics services), Lone Star Steakhouse (which has broken out of a two year
trading range), Fisher Scientific (manufacturer and distributor of scientific
lab equipment), Integrated Device Technology (integrated circuits) and United
Waste Systems (nonhazardous solid waste management company). Positive
performance was seen in many areas, from transportation and waste management to
health care and technology.
Stocks which performed poorly can be characterized as those that reflect concern
over consumer spending--namely auto-related (Stant Corp., Foamex International,
and Exide Corp.) or companies such as Sunbeam Corp. which has had trouble this
year after strong performance last year.
OUTLOOK
With the major averages such as the S&P 500 reaching new highs, investors have
focused on large multinational companies rather than smaller ones. Given the
uncertainty of the "soft landing" scenario and the potential for earnings
disappointments, it is natural for investors to be more defensive and seek
comfortable companies.
2
<PAGE>
ADVANTUS ENTERPRISE FUND
MARCH 31, 1995
We continue to be optimistic regarding the outlook for small growth companies.
With continued strong fundamentals and earnings growth prospects well above
average, we feel the rest of the year will be rewarding for smaller companies'
stocks. The fact that large cap growth issues have been the leaders in the past
year leads us to believe the malaise regarding small stocks will reverse itself
as the year progresses and their higher growth rates get reflected in the
market.
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 INVESTMENT IN ADVANTUS ENTERPRISE FUND,
WILSHIRE MIDCAP INDEX AND CONSUMER PRICE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN SINCE
CLASS A CLASS B WILLSHIRE MIDCAP INDEX CPI INCEPTION:
<S> <C> <C> <C> <C> <C> <C>
9/16/94 10000 10000 10000 10000 Class A 1.84%
9/30/94 9423 9910 9942 10128 Class B 1.66%
3/31/95 10184 9910 10512 10230
</TABLE>
On the chart above you can see how the Advantus Enterprise Fund's Class A and
Class B shares' total return compared to the Wilshire Midcap Index++ and the
Consumer Price Index. The four lines represent the cumulative total return of a
hypothetical $10,000 investment made on the inception date of the Advantus
Enterprise Fund Class A and Class B shares (September 16, 1994) through March
31, 1995.
The above chart is useful because it provides you with more information about
your investments. There are limitations, however. An index may reflect the
performance of securities that the Fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your Fund does. Performance presented for the Fund reflects the deduction of the
maximum 5 percent front-end sales charge for Class A and the maximum 5 percent
contingent deferred sales charge for
*Historical results are not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge. Class C commenced operations March 1, 1995, accordingly, performance is
not presented.
**Average return of 40 small cap funds according to Lipper Analytical Services,
Inc.
+The Russell 2000 represents the bottom two thirds of the largest 3,000 publicly
traded companies domiciled in the United States.
++The Wilshire Midcap Index is comprised of the bottom 750 companies of the
largest 1,250 U.S. domicile companies as measured by market capitalization.
3
<PAGE>
ADVANTUS ENTERPRISE FUND
MARCH 31, 1995
Class B. Sales charges pay for your financial adviser's investment advice.
Individuals cannot buy even an unmanaged index fund without incurring some
charges and expenses.
Historical results are not an indication of future performance.
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- - -------------------------------- ----------- --------- ---------------
<S> <C> <C> <C>
First Financial Management...... 6,000 $ 433,500 3.2%
Gartner......................... 9,400 404,200 3.0%
United Waste Systems, Inc....... 13,300 375,725 2.8%
Sunbeam-Oster Company........... 16,400 375,150 2.8%
R. P. Scherer Corporation....... 7,425 373,106 2.8%
Tommy Hilfiger Corporation...... 16,900 371,800 2.7%
Pyxis Corporation............... 17,300 358,975 2.6%
DSC Communications.............. 10,700 348,419 2.6%
Barnes & Noble Inc.............. 11,400 346,275 2.6%
Idexx Laboratories Inc.......... 8,200 340,300 2.5%
--------- ---
$3,727,450 27.6%
--------- ---
--------- ---
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Goods 9.9
Consumer Goods and Services 45.3
Credit Sensitive 6
Intermediate Goods and
Services 9.2
Technology 15.9
Cash and other
Assets/Liabilities 13.7
</TABLE>
4
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES
MARCH 31, 1995
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- - --------- ------------
<C> <S> <C>
COMMON STOCKS (86.3%)
CAPITAL GOODS (9.9%)
Machinery (9.9%)
8,900 AES China Generating
Co Ltd. (c)......... $ 76,762
3,100 Blount
Incorporated........ 137,950
11,500 Elsag Bailey Process
Automation (b)(c)... 322,000
8,000 Huaneng Power
International Inc.
(b)(c).............. 127,000
5,700 J Ray McDermott
Holdings
Incorporated (b).... 153,900
17,300 Pyxis Corporation
(b)................. 358,975
13,300 United Waste Systems,
Inc. (b)............ 375,725
------------
1,552,312
------------
CONSUMER GOODS AND SERVICES (45.3%)
Consumer Goods (13.6%)
7,585 Columbia/HCA
Healthcare
Corporation......... 326,155
11,300 Fisher Scientific
International
Inc................. 336,175
8,200 Idexx Laboratories
Inc. (b)............ 340,300
2,400 Medtronic Inc........ 166,500
7,425 R.P. Scherer
Corporation (b)..... 373,106
7,500 RightCHOICE Managed
Care, Inc. (b)...... 135,000
4,500 United Heath Care.... 210,375
6,300 Value Health
Incorporated........ 240,975
------------
2,128,586
------------
<CAPTION>
MARKET
SHARES VALUE(A)
- - --------- ------------
<C> <S> <C>
CONSUMER GOODS AND SERVICES--CONTINUED
Consumer Services (13.7%)
9,200 Carmike Cinemas Inc.
(b)................. $ 181,700
6,398 CUC International
Inc. (b)............ 248,722
12,900 Danka Business
Systems (c)......... 338,625
9,400 Gartner (b).......... 404,200
7,600 GTECH Holdings
Corporation (b)..... 164,350
9,400 Harveys Casino
Resorts............. 173,900
5,600 International House
of Pancakes......... 164,850
5,800 Lone Star Steakhouse
& Saloon, Inc.
(b)................. 157,325
4,700 Manpower............. 150,988
7,900 Sola International
Inc. (b)............ 169,850
------------
2,154,510
------------
Retail (8.4%)
11,400 Barnes & Noble Inc.
(b)................. 346,275
16,600 Casey's General
Stores Inc.......... 263,525
6,600 The Home Depot,
Inc................. 292,050
1,700 Kohl's Inc. (b)...... 75,225
12,600 Office Depot, Inc.
(b)................. 307,125
2,900 Orchard Supply
Hardware (b)........ 28,275
------------
1,312,475
------------
Consumer Cyclicals (9.6%)
6,509 Exide Corporation.... 239,206
11,000 Foamex International
Inc. (b)............ 88,000
8,500 Natuzzi Industries
(c)................. 313,437
9,200 Stant Corporation.... 126,500
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- - --------- ------------
CONSUMER GOODS AND SERVICES--CONTINUED
<C> <S> <C>
16,400 Sunbeam-Oster Co..... $ 375,150
16,900 Tommy Hilfiger
Corporation
(b)(c).............. 371,800
------------
1,514,093
------------
CREDIT SENSITIVE (6.0%)
Finance (6.0%)
2,400 First Data Corp...... 124,500
6,000 First Financial
Management.......... 433,500
1,900 MGIC Investment
Corporation......... 77,425
19,000 Roosevelt Financial
Group, Inc.......... 299,250
------------
934,675
------------
INTERMEDIATE GOODS AND SERVICES (9.2%)
Materials (2.7%)
3,900 Atchison Casting
Corporation......... 58,987
13,700 Citation Corporation
(b)................. 181,525
8,170 McWhorter Technology
Inc. (b)............ 130,720
1,400 The Valspar
Corporation......... 51,975
------------
423,207
------------
Transportation (6.5%)
13,500 American Freightways
(b)................. 307,125
4,700 Fritz Companies
(b)................. 301,975
10,800 Greenbrier Companies
Inc................. 160,650
<CAPTION>
MARKET
SHARES VALUE(A)
- - --------- ------------
<C> <S> <C>
INTERMEDIATE GOODS AND SERVICES-- CONTINUED
6,300 Landstar System, Inc.
(b)................. $ 198,450
2,063 Railtex, Incorporated
(b)................. 53,638
------------
1,021,838
------------
TECHNOLOGY (15.9%)
6,900 Avid Technology, Inc.
(b)................. 208,725
7,800 The Bisys Group Inc.
(b)................. 176,475
11,600 Cognex Corporation
(b)................. 333,500
2,683 Computer Associates
International....... 159,303
168 Datastream (b)....... 3,402
10,700 DSC Communications
(b)................. 348,419
4,100 Informix Corporation
(b)................. 140,938
6,200 Integrated Device
Technology, Inc.
(b)................. 229,400
1,900 Intel................ 161,263
8,800 Newbridge Networks
Corporation
(b)(c).............. 288,200
6,100 Oracle Systems
Corporation (b)..... 190,625
6,600 Telephone and Data
Systems, Inc........ 260,700
------------
2,500,950
------------
Total common stocks
(cost:
$11,662,346)........ 13,542,646
------------
</TABLE>
See accompanying notes to investments in securities.
6
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- - --------- ------------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (14.7%)
$ 200,000 FNMA Discount note......................... 6.090% 05/08/95 $ 198,746
375,000 U.S. Treasury Bill......................... 5.660%-5.730% 04/06/95 374,640
550,000 U.S. Treasury Bill......................... 5.830%-5.930% 05/11/95 546,430
1,200,000 U.S. Treasury Bill......................... 5.850%-5.870% 06/01/95 1,188,165
------------
Total short-term securities (cost: $2,308,011)....................... 2,307,981
------------
Total investments in securities (cost: $13,970,357) (d).............. $ 15,850,627
------------
------------
<FN>
Notes to Investments in Securities
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 11.7% of net assets in foreign securities as of March 31,
1995.
(d) At March 31, 1995 the cost of securities for federal income tax purposes
was $13,970,357. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation........... $ 2,138,166
Gross unrealized depreciation........... (257,896)
---------------
Net unrealized appreciation............. $ 1,880,270
---------------
---------------
</TABLE>
7
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value--see accompanying
schedule for detailed listing (identified cost: $13,970,357)...... $15,850,627
Cash in bank on demand deposit..................................... 22,514
Receivable for Fund shares sold.................................... 1,726
Receivable for investment securities sold.......................... 21,541
Dividends receivable............................................... 642
Organizational costs............................................... 48,066
-----------
Total assets................................................... 15,945,116
-----------
LIABILITIES
Payable for investment securities purchased........................ 184,315
Payable for Fund shares repurchased................................ 2,650
Payable to Adviser................................................. 66,154
-----------
Total liabilities.............................................. 253,119
-----------
Net assets applicable to outstanding capital stock................. $15,691,997
-----------
-----------
Represented by:
Capital stock--$.01 par value (note 1)........................... $ 13,187
Additional paid-in capital....................................... 13,652,148
Undistributed net investment loss................................ (13,714)
Accumulated net realized gains from investments.................. 160,106
Unrealized appreciation of investments........................... 1,880,270
-----------
Total--representing net assets applicable to outstanding
capital stock................................................. $15,691,997
-----------
-----------
Net assets applicable to outstanding Class A shares................ $15,085,617
-----------
-----------
Net assets applicable to outstanding Class B shares................ $ 592,651
-----------
-----------
Net assets applicable to outstanding Class C shares................ $ 13,729
-----------
-----------
Shares outstanding and net asset value per share:
Class A--Shares outstanding 1,267,485............................ $ 11.90
-----------
-----------
Class B--Shares outstanding 50,058............................... $ 11.84
-----------
-----------
Class C--Shares outstanding 1,160................................ $ 11.84
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF OPERATIONS
PERIOD FROM OCTOBER 1, 1994 TO MARCH 31, 1995
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest.......................................................... $ 54,480
Dividends......................................................... 21,602
----------
76,082
----------
Expenses (note 4):
Investment advisory fee........................................... 55,918
Distribution fees--Class A........................................ 20,488
Distribution fees--Class B........................................ 1,597
Distribution fees--Class C........................................ 9
Administrative services fee....................................... 19,200
Custodian fees.................................................... 3,012
Auditing and accounting services.................................. 3,583
Legal fees........................................................ 3,768
Amortization of organizational costs.............................. 5,441
Directors' fees................................................... 122
Registration fees................................................. 19,243
Printing and shareholder reports.................................. 3,193
Insurance......................................................... 2,980
Other............................................................. 3,300
----------
Total expenses................................................ 141,854
Less fees and expenses waived or absorbed:
Class A distribution fees....................................... (13,658)
Other fund expenses............................................. (32,959)
----------
Total fees and expenses waived or absorbed.................... (46,617)
----------
Total net expenses............................................ 95,237
----------
Investment loss--net.......................................... (19,155)
----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3)........................ 206,902
Net change in unrealized appreciation or depreciation on
investments...................................................... 953,118
----------
Net gains on investments...................................... 1,160,020
----------
Net increase in net assets resulting from operations................ $1,140,865
----------
----------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF CHANGES IN NET ASSETS
PERIOD FROM OCTOBER 1, 1994 TO MARCH 31, 1995 AND
PERIOD FROM JUNE 20, 1994 TO SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Operations:
Investment loss--net................................................ $ (19,155) $ (6,282)
Net realized gains (losses) on investments.......................... 206,902 (23,671)
Net change in unrealized appreciation or depreciation of
investments........................................................ 953,118 927,152
----------- -----------
Increase in net assets resulting from operations................ 1,140,865 897,199
----------- -----------
Distributions to shareholders from:
Net realized gains on investments:
Class A........................................................... (22,651) --
Class B........................................................... (474) --
----------- -----------
Total distributions............................................... (23,125) --
----------- -----------
Capital share transactions (notes 4 and 6):
Proceeds from sales:
Class A........................................................... 1,063,440 12,075,000
Class B........................................................... 463,995 88,098
Class C........................................................... 13,536 --
Shares issued as a result of reinvested dividends:
Class A........................................................... 865 --
Class B........................................................... 474 --
Payments for redemption of shares:
Class A........................................................... (28,227) --
Class B........................................................... (118) (5)
----------- -----------
Increase in net assets from capital share transactions............ 1,513,965 12,163,093
----------- -----------
Total increase in net assets...................................... 2,631,705 13,060,292
Net assets at beginning of period..................................... 13,060,292 --
----------- -----------
Net assets at end of period (including undistributed net investment
income (loss) of ($19,155) and $0 respectively)...................... $15,691,997 $13,060,292
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
(1) ORGANIZATION
Advantus Enterprise Fund, Inc. (the Fund) was incorporated on January 27,
1994. The Fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. On February
14, 1995 shareholders of the Fund approved a name change to Advantus Enterprise
Fund, Inc. (effective March 1, 1995). Prior to March 1, 1995 the Fund was known
as MIMLIC Small Company Fund, Inc.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee than
Class A shares. Both Class B and Class C shares automatically convert to Class A
shares at net asset value after a specified holding period. Such holding period
declines as the amount of the purchase increases and ranges from 28 to 84 months
after purchase for Class B shares and 40 to 96 months after purchase for Class C
shares. All three classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that the level of
distribution fees charged differs between Class A, Class B and Class C shares.
On June 20, 1994, MIMLIC Asset Management Company (MIMLIC Management)
purchased 7,500 Class A shares and 7,500 Class B shares. Operations of the Fund
did not formally commence until September 16, 1994 when the shares became
effectively registered under the Securities Exchange Act of 1933. The Minnesota
Mutual Life Insurance Company (Minnesota Mutual), the parent of MIMLIC
Management, purchased 1,167,726 Class A shares for $12 million prior to
commencement of operations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on a national exchange are valued at the
last sales price on that exchange prior to the time when assets are valued;
securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued on the basis of the last current
bid price. When market quotations are not readily available, securities are
valued at fair value as determined in good faith by the Board of Directors. Such
fair values are determined using pricing services or prices quoted by
independent brokers. Short-term securities are valued at market.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified-cost basis. Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond premium and discount computed on
a level yield basis, is accrued daily.
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of temporary book-to-tax
differences. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, a reclassification adjustment was made to increase
undistribution net investment income (loss) and decrease additional paid-in
capital by $5,441.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly in cash
or reinvested in additional shares. Realized gains, if any, are paid annually.
(3) INVESTMENT SECURITY TRANSACTIONS
For the period from October 1, 1994 to March 31, 1995, purchases of
securities and proceeds from sales, other than temporary investments in
short-term securities, aggregated $4,106,072 and $2,631,732, respectively.
(4) EXPENSES AND RELATED PARTY TRANSACTIONS
On February 14, 1995 shareholders of the Fund approved a new investment
advisory agreement, effective March 1, 1995, with Advantus Capital Management,
Inc. (Advantus Capital or the Adviser). Advantus Capital is a wholly-owned
subsidiary of MIMLIC Management which, prior to March 1, 1995, served as
investment adviser to the Fund. Under the agreement, Advantus Capital manages
the Fund's assets and provides research, statistical and advisory services and
pays related office rental and executive expenses and salaries. In addition, as
part of the advisory fee, Advantus Capital pays the expenses of the Fund's
transfer, dividend disbursing and redemption agent ( Minnesota Mutual). The fee
for investment management and advisory services is based on the average daily
net assets of the Fund at the annual rate of .80 percent, which is the same as
under the old agreement with MIMLIC Management.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund, to be used to pay certain expenses
incurred in the distribution, promotion and servicing of the Fund's shares. The
Class A Plan provides for a fee up to .30 percent of average daily net assets of
Class A shares. The Class B Plan provides for a fee up to 1.00 percent of
average daily net assets of Class B shares. The Class B 1.00 percent fee is
comprised of a .75 percent distribution fee and a .25 percent service fee. The
Class C Plan provides for a fee of up to 1.00 percent of average daily net
assets of Class C shares. The Class C 1.00 percent fee is comprised of a .75
percent distribution fee and a .25 percent service fee. MIMLIC Sales is
currently waiving that portion of Class A distribution fees which exceeds, as a
percentage of average daily net assets, .10 percent.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, organizational costs and other
miscellaneous expenses.
The Fund pays an administrative services fee to Minnesota Mutual for
accounting, auditing, legal and other administrative services which Minnesota
Mutual provides. Prior to February 1, 1995, the administrative service fee was
$3,250 per month. Effective February 1, 1995, the administrative service fee is
$3,100 per month.
Advantus Capital (MIMLIC Management prior to March 1, 1995) directly incurs
and pays the above operating expenses and the Fund in turn reimburses Advantus
Capital. During the period from October 1, 1994 to March 31, 1995, Advantus
Capital and MIMLIC Management voluntarily agreed to absorb $32,959 in expenses
that were otherwise payable by the Fund.
Sales charges received by MIMLIC Sales for distributing the Fund's three
classes of shares amounted to $28,319.
As of March 31, 1995, Minnesota Mutual and subsidiaries, and the directors
and officers of the Fund as a whole own the following shares:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
SHARES OWNED
--------- ----------
<S> <C> <C>
Class A.................................................. 1,175,239 92.7%
Class B.................................................. 7,513 15.0%
Class C.................................................. 863 74.4%
</TABLE>
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $3,384.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(5) ORGANIZATIONAL COSTS
The Fund incurred organizational expenses in connection with the start-up
and initial registration. These costs will be amortized over 60 months on a
straight-line basis beginning with the commencement of operations. If any or all
of the shares held by MIMLIC Management, or any other holder, representing
initial capital of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by the pro rata portion (based on the ratio
that the number of initial shares redeemed bears to the total number of
outstanding initial shares of the Fund at the date of redemption) of the
unamortized organizational cost balance.
(6) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the period from October 1, 1994 to March 31, 1995
and the period from June 20, 1994 to September 30, 1994 for Class A and Class B
shares and the period from March 1, 1995 to March 31, 1995 for Class C shares
were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------- ---------------------- -----------
1995 1994 1995 1994 1995
--------- --------- --------- ----- -----------
<S> <C> <C> <C> <C> <C>
Sold............................................... 94,695 1,175,226 41,327 8,700 1,160
Issued for reinvested distributions................ 79 -- 43 -- --
Redeemed........................................... (2,515) -- (11) (1) --
--------- --------- --------- ----- -----
92,259 1,175,226 41,359 8,699 1,160
--------- --------- --------- ----- -----
--------- --------- --------- ----- -----
</TABLE>
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(7) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
----------------------------- ----------------------------- -------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 1, SEPTEMBER 16, OCTOBER 1, SEPTEMBER 16, MARCH 1,
1994 TO 1994(A) TO 1994 TO 1994(A) TO 1995(A) TO
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31,
1995 1994 1995 1994 1995
------------ -------------- ------------ -------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 11.03 $ 11.12 $ 11.02 $ 11.12 $ 11.58
------ ------ ------ ------ ------
Income from investment operations:
Net investment loss................... (.09) -- (.06) (.01) (.01)
Net gains or losses on securities
(both realized and unrealized)....... .98 (.09) .90 (.09) .27
------ ------ ------ ------ ------
Total from investment operations.... .89 (.09) .84 (.10) .26
------ ------ ------ ------ ------
Less distributions:
Distributions from capital gains...... (.02) -- (.02) -- --
------ ------ ------ ------ ------
Total distributions................. (.02) -- (.02) -- --
------ ------ ------ ------ ------
Net asset value, end of period.......... $ 11.90 $ 11.03 $ 11.84 $ 11.02 $ 11.84
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return (b)........................ 8.07%(c) (.81)%(d) 7.62%(c) (.90)%(d) 1.84%(e)
Net assets, end of period (in
thousands)............................. $15,086 $12,964 $593 $96 $14
Ratio of expenses to average daily net
assets (f)............................. 1.34%(g) .05%(h) 2.25%(g) .09%(h) .19%(h)
Ratio of net investment loss to average
daily net assets (f)................... (.25)%(g) (.02)%(h) (1.16)%(g) (.06)%(h) (.09)%(h)
Portfolio turnover rate (excluding
short-term securities)................. 21.86% 4.98% 21.86% 4.98% 21.86%
<FN>
- - ----------
(a) Commencement of operations.
(b) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of sales charges.
(c) Total return is presented for the period from October 1, 1994 to March 31,
1995.
(d) Total return is presented for the period from September 16, 1994,
commencement of operations, to September 30, 1994.
(e) Total return is presented for the period from March 1, 1995, commencement
of operations, to March 31, 1995.
(f) The Fund's Distributor and Adviser voluntarily waived or absorbed $46,617
and $1,430 in expenses for the periods ended March 31, 1995 and September
30, 1994, respectively. If the Fund had been charged for theses expenses,
the ratio of expenses to average daily net assets would have been 2.01% and
.06% for Class A shares, respectively, 2.67% and .10% for Class B shares,
respectively and .20% for Class C shares. The ratio of net investment
income to average daily net assets would have been (.93)% and (.59)% for
Class A shares, respectively, (1.58)% and .27% for Class B shares,
respectively and (.10)% for Class C shares.
(g) Adjusted to an annual basis.
(h) Ratios presented for the periods from March 1, 1995 to March 31, 1995 and
September 16, 1994 to September 30, 1994 are not annualized as they are not
indicative of anticipated results.
</TABLE>
15
<PAGE>
SHAREHOLDER VOTING RESULTS
On February 14, 1995, a regular shareholder meeting was held. Shareholders
of record on December 19, 1994 were entitled to vote on the proposals described
below. All classes of shares (only Class A and Class B were in existence on
December 19, 1994) of the Fund were entitled to vote on each proposal, and all
shares were voted in the aggregate for each proposal and not by class.
(1) To elect a Board of Directors as follows:
<TABLE>
<CAPTION>
VOTES VOTES
DIRECTOR FOR WITHHELD
---------------------- --------- --------
<S> <C> <C>
Paul H. Gooding........................................ 1,210,709 793
Frederick P. Feuerherm................................. 1,210,709 793
Ralph D. Ebbott........................................ 1,210,709 1,245
Ellen S. Berscheid..................................... 1,210,709 1,245
Charles E. Arner....................................... 1,210,709 793
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES VOTING
-------------------------------------
FOR AGAINST ABSTAIN
--------- ------------- -----------
<S> <C> <C> <C> <C>
(2) To ratify or reject the selection by the Board
of Directors of KPMG Peat Marwick LLP as the
independent public accountant for the Fund for
the fiscal year ending September 30, 1995..... 1,210,704 579 219
(3) To approve or reject the proposal to amend the
Fund's Articles of Incorporation to change the
name of the Fund from MIMLIC Small Company
Fund, Inc. to Advantus Enterprise Fund,
Inc........................................... 1,209,185 777 1,541
(4) To approve or disapprove a new Investment
Advisory Agreement with Advantus Capital
Management, Inc., a wholly-owned subsidiary of
MIMLIC Asset Management Company, the previous
investment adviser of the Fund................ 1,210,632 574 296
</TABLE>
16
<PAGE>
SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund:
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value. (Exchanges from the Money Market Fund will incur the
applicable sales charge, if not previously subjected to the charge.)
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from you fund account--subject to minimum guidelines.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money from your Advantus Money Market account to
another Advantus Fund to diversify your investment portfolio and take advantage
of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of your Advantus Money Market account.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets.) One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or saving account.
IRAS, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPs, profit
sharing, money purchase or defined benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
17
<PAGE>
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. Amounts
over $1,000 will be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. Amounts for less
than $1,000 will be mailed to your bank on your behalf. To set this up, please
send a voided check from your bank.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus's non money market funds.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semiannual and annual reports will provide you
with portfolio information, fund performance data and the current investment
outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from MIMLIC Sales Corporation, call 1-800-443-3677. Our
voice response system is available from 7 a.m. to 3 a.m. Monday through Friday,
and 8 a.m. to 5 p.m. on Saturday. This system allows you to access current net
asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the eight Advantus Funds through your local
registered representative of MIMLIC Sales Corporation, distributor of the Funds.
Contact your representative for information and a prospectus for any of the
Advantus Funds you are interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc.'s six portfolio managers manage eight
mutual funds containing $215 million in assets in addition to $1.8 billion in
assets for other clients. Advantus Capital's seasoned portfolio managers average
more than 10 years of investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
18
<PAGE>
This report has been prepared for shareholders and may be distributed
to others only if preceded or accompanied by a current prospectus.
[LOGO]
MIMLIC SALES CORPORATION
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-443-3677
<PAGE>
MIMLIC SALES CORPORATION BULK RATE
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING AND RETURN POSTAGE GUARANTEED,
ADDRESS CORRECTION REQUESTED
F.48646 5-95
