<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1997
(Unaudited)
Value
Shares (note 1)
-------- --------
COMMON STOCKS - 98.13%
Agriculture - 3.07%
AGCO Corporation ....................................................................... 2,350 $ 74,906
Case Corporation ....................................................................... 1,400 82,600
--------
157,506
--------
Advertising - 2.84%
(a) Outdoor Systems, Inc. .................................................................. 4,400 145,750
--------
Automotive - 2.67%
(a) AutoZone, Inc. ......................................................................... 5,850 136,743
--------
Chemicals - 7.59%
Air Products and Chemicals, Inc. ....................................................... 2,000 155,500
IMC Global, Inc. ....................................................................... 3,600 140,850
M.A. Hanna Company ..................................................................... 4,000 92,500
--------
388,850
--------
Computers - 1.42%
(a) Hutchinson Technology, Inc. ............................................................ 2,650 72,875
--------
Computer Software & Services - 7.39%
Autodesk, Inc. ......................................................................... 2,100 81,637
(a) Legato Systems, Inc. ................................................................... 11,000 220,000
Reynolds & Reynolds Company ............................................................ 3,300 77,138
--------
378,775
--------
Electrical Equipment - 2.61%
Belden, Inc. ........................................................................... 3,675 133,678
--------
Electronics - 1.84%
(a) Teradyne, Inc. ......................................................................... 2,300 94,300
--------
Electronics - Semiconductor - 8.34%
(a) Integrated Device Technology, Inc. ..................................................... 5,000 70,313
Helix Technology Corporation ........................................................... 2,000 81,000
(a) Lattice Semiconductor Corporation ...................................................... 1,300 75,400
(a) Photronics, Inc. ....................................................................... 2,100 93,712
(a) PRI Automation, Inc. ................................................................... 2,800 106,750
--------
427,175
--------
Financial - Banks, Commercial - 2.90%
First Security Corporation ............................................................. 6,075 148,838
--------
Food - Processing - 3.11%
Dole Food Company, Inc. ................................................................ 3,750 159,375
--------
(Continued)
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1997
(Unaudited)
Value
Shares (note 1)
------ --------
Food - Wholesale - 3.03%
Richfood Holdings, Inc. ................................................................ 6,712 $155,215
--------
Homebuilders - 5.40%
(a) Champion Enterprises, Inc. ............................................................. 3,800 69,825
Clayton Homes, Inc. .................................................................... 4,562 69,000
Leggett & Platt, Inc. .................................................................. 3,650 137,787
--------
276,612
--------
Lodging - 2.75%
(a) Promus Hotel Corporation ............................................................... 3,900 140,888
--------
Medical Supplies - 5.50%
(a) Sola International, Inc. ............................................................... 4,800 137,400
(a) Sybron International Corporation ....................................................... 4,000 144,500
--------
281,900
--------
Miscellaneous - Manufacturing - 2.69%
Fisher Scientific International ........................................................ 3,800 137,750
--------
Oil & Gas - Equipment & Services - 10.28%
(a) Diamond Offshore Drilling, Inc. ........................................................ 1,100 78,238
(a) ENSCO International Incorporated ....................................................... 1,900 94,763
(a) EVI, Inc. .............................................................................. 4,000 150,500
(a) Nabors Industries, Inc. ................................................................ 2,900 65,068
Transocean Offshore Inc. ............................................................... 2,000 138,000
--------
526,569
--------
Real Estate Investment Trust - 5.80%
Crescent Real Estate Equities Company .................................................. 5,500 149,875
Spieker Properties, Inc. ............................................................... 4,000 147,500
--------
297,375
--------
Telecommunications - 3.10%
(a) Clear Channel Communications, Inc. ..................................................... 3,000 158,625
--------
Toys - 2.73%
Mattel, Inc. ........................................................................... 4,675 139,666
--------
Transportation - Rail - 2.57%
Illinois Central Corporation ........................................................... 3,650 131,856
--------
(Continued)
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
PORTFOLIO OF INVESTMENTS
May 31, 1997
(Unaudited)
Utilities - Electric - 10.50%
(a) AES Corporation ........................................................................ 1,700 $ 121,975
Idaho Power Company .................................................................... 4,650 139,500
Pacific Enterprises .................................................................... 4,050 132,638
Washington Water Power Company ......................................................... 8,000 144,000
-----------
538,113
-----------
Total Common Stocks (Cost $4,178,040) ....................................................... 5,028,434
-----------
INVESTMENT COMPANY - 5.22%
Evergreen Money Market Treasury Institutional
Money Market Fund Institutional Service Shares ......................................... 267,621 267,621
-----------
(Cost $267,621)
Total Value of Investments (Cost $4,445,661 (b)) ................................................... 103.50% 5,296,055
Liabilities In Excess of Other Assets .............................................................. (3.50%) (171,912)
------- -----------
Net Assets .................................................................................. 100.00% $ 5,124,143
======= ===========
</TABLE>
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax
purposes is the same. Unrealized appreciation (depreciation) of
investments for financial reporting and federal income tax purposes
is as follows:
Unrealized appreciation $879,234
Unrealized depreciation (28,840)
----------------
Net unrealized appreciation $850,394
================
See accompanying notes to financial statements
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1997
(Unaudited)
ASSETS
Investments, at value (cost $4,445,661) .................................................................. $5,296,055
Income receivable ........................................................................................ 3,136
Receivable for investments sold .......................................................................... 23,850
Receivable for fund shares sold .......................................................................... 246,816
Due from advisor (note 2) ................................................................................ 572
Other assets ............................................................................................. 12,246
----------
Total assets ........................................................................................ 5,582,675
----------
LIABILITIES
Accrued expenses ......................................................................................... 5,827
Payable for investment purchases ......................................................................... 452,705
----------
Total liabilities ................................................................................... 458,532
----------
NET ASSETS ...................................................................................................... $5,124,143
==========
NET ASSETS CONSIST OF
Paid-in capital .......................................................................................... $3,903,958
Undistributed net realized gain on investments ........................................................... 369,791
Net unrealized appreciation on investments ............................................................... 850,394
----------
$5,124,143
==========
INSTITUTIONAL CLASS
Net asset value and offering price per share ($4,316,836 / 282,044 shares outstanding) ................... $ 15.31
==========
INVESTOR CLASS
Net asset value ($807,307 / 52,893 shares outstanding) ................................................... $ 15.26
==========
Maximum offering price per share (100 / 97 of $15.26) .................................................... $ 15.73
==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL MANAGEMENT MID-CAP FUND
STATEMENT OF OPERATIONS
Period ended May 31, 1997
(Unaudited)
INVESTMENT INCOME
Income
Dividends ..................................................................................... $ 28,346
Interest ...................................................................................... 5,370
---------
Total income ............................................................................. 33,716
---------
Expenses
Investment advisory fees (note 2) ............................................................. 21,966
Fund administration fees (note 2) ............................................................. 4,393
Distribution and service fees - Investor Class (note 3) ....................................... 2,816
Custody fees .................................................................................. 2,402
Registration and filing administration fees ................................................... 1,795
Fund accounting fees (note 2) ................................................................. 16,500
Audit fees .................................................................................... 4,630
Legal fees .................................................................................... 4,775
Securities pricing fees ....................................................................... 2,216
Shareholder recordkeeping fees ................................................................ 272
Shareholder servicing expenses ................................................................ 1,991
Registration and filing expenses .............................................................. 2,692
Printing expenses ............................................................................. 1,955
Trustee fees and meeting expenses ............................................................. 4,804
Other operating expenses ...................................................................... 1,367
---------
Total expenses ........................................................................... 74,574
---------
Less:
Expense reimbursements (note 2) .................................................... (25,324)
Investment advisory fees waived (note 2) ........................................... (21,966)
Fund administration fees waived (note 2) ........................................... (9)
---------
Net expenses ............................................................................. 27,275
---------
Net investment income .............................................................. 6,441
---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions ..................................................... 359,339
Increase in unrealized appreciation on investments ................................................. 173,697
---------
Net realized and unrealized gain on investments ............................................... 533,036
---------
Net increase in net assets resulting from operations ..................................... $ 539,477
=========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL MANAGEMENT MID-CAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Year ended
May 31, November 30,
1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income ............................................................... $ 6,441 $ 66,810
Net realized gain from investment transactions ...................................... 359,339 124,864
Increase in unrealized appreciation on investments .................................. 173,697 477,699
----------- -----------
Net increase in net assets resulting from operations ............................. 539,477 669,373
----------- -----------
Distributions to shareholders from
Net investment income - Institutional Class ......................................... (14,969) (55,272)
Net investment income - Investor Class .............................................. (3,132) (10,130)
Net realized gain from investment transactions - Institutional Class ................ (86,260) (33,645)
Net realized gain from investment transactions - Investor Class ..................... (18,316) (9,945)
----------- -----------
Decrease in net assets resulting from distributions .............................. (122,677) (108,992)
----------- -----------
Capital share transactions
Increase in net assets resulting from capital share transactions (a) ................ 458,992 1,304,649
----------- -----------
Total increase in net assets .................................................. 875,792 1,865,030
NET ASSETS
Beginning of period .................................................................... 4,248,351 2,383,321
----------- -----------
End of period (including undistributed net investment income ........................... $ 5,124,143 $ 4,248,351
of $11,660 at November 30, 1996) =========== ===========
(a) A summary of capital share activity follows:
- --------------------------------------------------------------------------------------------------------------
Period ended Year ended
May 31, 1997 November 30, 1996
Shares Value Shares Value
- --------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Shares sold 24,474 $364,401 98,149 $1,190,936
Shares issued for reinvestment of distributions 7,367 101,229 7,179 88,917
------- --------- ------- ----------
31,841 465,630 105,328 1,279,853
Shares redeemed (65) (900) (5,786) (76,867)
------- --------- ------- ----------
Net increase 31,776 $464,730 99,542 $1,202,986
======= ========= ======= ==========
- --------------------------------------------------------------------------------------------------------------
Period ended Year ended
May 31, 1997 November 30, 1996
Shares Value Shares Value
- --------------------------------------------------------------------------------------------------------------
INVESTOR CLASS
Shares sold 1,731 $25,529 11,424 $148,294
Shares issued for reinvestment of distributions 1,565 21,448 1,635 20,075
------- -------- ------- --------
3,296 46,977 13,059 168,369
Shares redeemed (3,867) (52,715) (5,154) (66,706)
------- -------- ------- --------
Net increase (decrease) (571) $(5,738) 7,905 $101,663
======= ======== ======= ========
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CAPITAL MANAGEMENT MID-CAP FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout the Period)
(Unaudited)
------------------------------------------- -----------------------------------------
INSTITUTIONAL CLASS INVESTOR CLASS
------------------------------------------- -----------------------------------------
For the For the
period from period from
January 27, 1995 January 27, 1995
(commencement (commencement
Period ended Year ended of operations) to Period ended Year ended of operations)
May 31, November 30, November 30, May 31, November 30, November 30,
1997 1996 1995 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $13.99 $12.16 $10.00 $13.96 $12.09 $11.07
Income from investment operations
Net investment income 0.02 0.23 0.20 0.02 0.24 0.11
Net realized and unrealized gain on investments 1.70 2.08 2.10 1.68 2.06 1.02
---- ---- ---- ---- ---- ----
Total from investment operations 1.72 2.31 2.30 1.70 2.30 1.13
---- ---- ---- ---- ---- ----
Distributions to shareholders from
Net investment income (0.06) (0.26) (0.14) (0.06) (0.21) (0.11)
Net realized gain from investment transactions (0.34) (0.22) 0.00 (0.34) (0.22) 0.00
----- ----- ---- ----- ----- ----
Total distributions (0.40) (0.48) (0.14) (0.40) (0.43) (0.11)
----- ----- ----- ----- ----- -----
Net asset value, end of period $15.31 $13.99 $12.16 $15.26 $13.96 $12.09
====== ====== ====== ====== ====== ======
Total return (a) 12.67 % 19.57 % 23.00 % 12.55 % 19.61 % 10.24 %
===== ===== ===== ===== ===== =====
Ratios/supplemental data
Net assets, end of period $4,316,836 $3,502,215 $1,832,507 $807,307 $746,136 $550,814
========== ========== ========== ======== ======== ========
Ratio of expenses to average net assets
Before expense reimbursements and waived 3.29 %(b) 3.70 % 7.20 %(b) 4.05 %(b) 4.45 % 7.18% (b)
After expense reimbursements and waived fees 1.25 %(b) 0.00 % 0.31 %(b) 1.25 %(b) 0.00 % 1.06% (b)
Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived (1.75)%(b) (1.77)% (4.45)%(b) (2.50)%(b) (2.50)% (4.23)%(b)
After expense reimbursements and waived fees 0.29 %(b) 1.94 % 2.44 %(b) 0.31 %(b) 1.95 % 1.89% (b)
Portfolio turnover rate 42.27 % 82.30 % 47.74 % 42.27 % 82.30 % 47.74%
Average brokerage commission per share (c) $0.06 $0.06 N/A $0.06 $0.06 N/A
</TABLE>
(a) Total return does not reflect payment of a sales charge.
(b) Annualized
(c) Represents total commission paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged. This
disclosure is required for fiscal years beginning on or after September 1,
1995.
See accompanying notes to financial statements
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Capital Management Mid-Cap Fund (the "Fund"), formerly known as The Capital
Management Equity Fund, is a diversified series of shares of beneficial interest
of the Capital Management Investment Trust (the "Trust"). The Trust, an open-end
investment company, was organized on October 18, 1994 as a Massachusetts
Business Trust and is registered under the Investment Company Act of 1940, as
amended. The Fund began operations on January 27, 1995. The investment objective
of the fund is to seek capital appreciation principally through investments in
equity securities, consisting of common and preferred stocks and securities
convertible into common stocks. The Fund has an unlimited number of authorized
shares, which are divided into two classes - Institutional Shares and Investor
Shares. Only Institutional Shares were offered by the Fund prior to April 7,
1995.
Each class of shares has equal rights as to assets of the Fund, and the classes
are identical except for differences in their sales charge structures and
ongoing distribution and service fees. Income, expenses (other than distribution
and service fees, which are only attributable to the Investor Class), and
realized and unrealized gains or losses on investments are allocated to each
class of shares based upon its relative net assets. Investor Shares purchased
are subject to a maximum sales charge of three percent. Both classes have equal
voting privileges, except where otherwise required by law or when the Board of
Trustees determines that the matter to be voted on affects only the interests of
the shareholders of a particular class. The following is a summary of
significant accounting policies followed by the Fund.
A. Security Valuation - The Fund's investments in securities are carried at
value. Securities listed on an exchange or quoted on a national market
system are valued at 4:00 p.m., New York time. Other securities traded in
the over-the-counter market and listed securities for which no sale was
reported on that date are valued at the most recent bid price. Securities
for which market quotations are not readily available, if any, are valued
by using an independent pricing service or by following procedures approved
by the Board of Trustees. Short-term investments are valued at cost which
approximates value.
B. Federal Income Taxes - No provision has been made for federal income taxes
since it is the policy of the Fund to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
make sufficient distributions of taxable income to relieve it from all
federal income taxes.
C. Investment Transactions - Investment transactions are recorded on trade
date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an accrual
basis. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
D. Distributions to Shareholders - The Fund may declare dividends quarterly,
payable in March, June, September, and December on a date selected by the
Trust's Trustees. In addition, distributions may be made annually in
December out of net realized gains through October 31 of that year.
Distributions to shareholders are recorded on the ex-dividend date. The
Fund may make a supplemental distribution subsequent to the end of its
fiscal year ending November 30.
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(Unaudited)
E. 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 amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
F. Repurchase Agreements - The fund may acquire U.S. Government Securities or
corporate debt securities subject to repurchase agreements. A repurchase
agreement transaction occurs when the Fund acquires a security and
simultaneously resells it to the vendor (normally a member bank of the
Federal Reserve or a registered Government Securities dealer) for delivery
on an agreed upon future date. The repurchase price exceeds the purchase
price by an amount which reflects an agreed upon market interest rate
earned by the Fund effective for the period of time during which the
repurchase agreement is in effect. Delivery pursuant to the resale
typically will occur within one to five days of the purchase. The Fund will
not enter into a repurchase agreement which will cause more than 10% of its
net assets to be invested in repurchase agreements which extend beyond
seven days. In the event of the bankruptcy of the other party to a
repurchase agreement, the Fund could experience delays in recovering its
cash or the securities lent. To the extent that in the interim the value of
the securities purchased may have declined, the Fund could experience a
loss. In all cases, the creditworthiness of the other party to a
transaction is reviewed and found satisfactory by the Advisor. Repurchase
agreements are, in effect, loans of Fund assets. The Fund will not engage
in reverse repurchase transactions, which are considered to be borrowings
under the Investment Company Act of 1940, as amended.
NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to an investment advisory agreement, Capital Management Associates,
Inc. (the "Advisor"), provides the fund with a continuous program of supervision
of the Fund's assets, including the composition of its portfolio, and furnishes
advice and recommendations with respect to investments, investment policies, and
the purchase and sale of securities. As compensation for its services, the
Advisor receives a fee at the annual rate of 1.00% of the first $100 million of
the Fund's average daily net assets, 0.90% of the next $150 million, 0.85% of
the next $250 million, and 0.80% of all assets over $500 million.
Currently, the Fund does not offer its shares for sale in states which require
limitations to be placed on its expenses. The Advisor currently intends to
voluntarily waive all or a portion of its fee and to reimburse expenses of the
Fund to limit total Fund operating expenses to a maximum of 1.50% of the average
daily net assets of the Fund's Institutional Class and a maximum of 2.25% of the
average daily net assets of the Fund's Investor Class. There can be no assurance
that the foregoing voluntary fee waivers or reimbursements will continue. The
Advisor has voluntarily waived its fee amounting to $21,966 ($0.07 per share)
and reimbursed $25,324 of the operating expenses incurred by the Fund for the
period ended May 31, 1997.
All organization expenses of the Fund were incurred and paid by the Advisor. At
May 31, 1997, the Advisor owned 11,055 Institutional Shares and 117 Investor
Shares of the Fund.
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(Unaudited)
The Fund's administrator, The Nottingham Company (the "Administrator"), provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of the Fund pursuant to an accounting and
administrative agreement with the Trust. As compensation for its services, the
Administrator receives a fee at the annual rate of 0.20% of the Fund's first $50
million of average daily net assets, 0.175% of the next $50 million, and 0.15%
of average daily net assets over $100 million. The Administrator also receives a
monthly fee of $2,000 for accounting and record keeping services for the initial
class of shares and $750 per month for each additional class of shares.
Additionally, the Administrator charges the Fund for servicing of shareholder
accounts and registration of the Fund's shares. The contract with the
Administrator provides that the aggregate fees for the aforementioned
administration, accounting, and recordkeeping services shall not be less than
$3,000 per month. The Administrator also charges the Fund for certain expenses
involved with the daily valuation of portfolio securities.
Shields & Company, Inc. (the "Distributor"), an affiliate of the Advisor, serves
as the Fund's principal underwriter and distributor. The Distributor receives
any sales charges imposed on purchases of Investor Shares and re-allocates a
portion of such charges to dealers through whom the sale was made, if any. For
the period ended May 31, 1997, the Distributor retained sales charges in the
amount of $53. At May 31, 1997, the Distributor owned 133,055 Institutional
Shares of the Fund.
Certain Trustees and officers of the Trust are also officers or directors of the
Advisor, the Distributor, or the Administrator.
NOTE 3 - DISTRIBUTION AND SERVICE FEES
The Board of Trustees, including the Trustees who are not "interested persons"
of the Trust as defined in the Investment Company Act of 1940 (the "Act"),
adopted a distribution and service plan pursuant to Rule 12b-1 of the Act (the
"Plan") applicable to the Investor Shares. The Act regulates the manner in which
a regulated investment company may assume costs of distributing and promoting
the sales of its shares and servicing of its shareholder accounts.
The Plan provides that the Fund may incur certain costs, which may not exceed
0.75% per annum of the Investor Shares' average daily net assets for each year
elapsed subsequent to adoption of the Plan, for payment to the Distributor and
others for items such as advertising expenses, selling expenses, commissions,
travel, or other expenses reasonably intended to result in sales of Investor
Shares in the Fund or support servicing of Investor Share shareholder accounts.
Such expenditures incurred as service fees may not exceed 0.25% per annum of the
Investor Shares' average daily net assets. The Fund incurred $2,816 of such
expenses under the Plan for the period ended May 31, 1997.
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than short-term investments,
aggregated $2,217,587 and $1,792,951, respectively, for the period ended May 31,
1997.
<PAGE>
CAPITAL MANAGEMENT MID-CAP FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1997
(Unaudited)
NOTE 5 - DISTRIBUTIONS TO SHAREHOLDERS
For federal income tax purposes, the Fund must report distributions from net
realized gain from investment transactions that represent long-term capital gain
to its shareholders. Of the total $0.34 per share distributions for the period
ended May 31, 1997, $0.16 per share represents long-term capital gain and $0.18
per share represents short-term capital gain. Shareholders should consult a tax
advisor on how to report distributions for state and local income tax purposes.
