N-30D 1 elvf-se.txt (EDGAR LOMAX VALUE FUND LOGO) EDGAR LOMAX VALUE FUND SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED APRIL 30, 2002 Semi-Annual Report April 30, 2002 Dear Fellow Shareholder: During the six months since we last reported to you, the Edgar Lomax Value Fund has performed well on all fronts. Total shareholder assets in the Fund have grown, through a combination of new investors and strong investment gains, to approximately $7.8 million--an increase of nearly $3 million. Additionally, from October 31, 2001 through this past April 30, the Fund returned 14.06% in comparison to an S&P 500 index gain of only 2.35%. Finally, in the 4 1/2 years since the Fund was launched, it has produced an average annual total return of 5.83% versus 4.15% for the S&P 500. Others have begun to take notice of these successes, as evidenced by the feature article highlighting the Fund in the April 1st issue of Barron's. Needless to say, we are pleased. Before reviewing the stock market environment, I thought you might appreciate a short reminder of just how we invest on your behalf. Our style of investing is technically termed "Large-cap Value." To break it down, "large-cap" (or, large market value) companies are those that are generally the most significant players in the overall economy. These firms tend to have long histories and include the likes of Exxon Mobil and General Motors. Their lengthy operating records often give them the advantage of experience, while size brings financial heft to help them survive difficult economic periods. The "value" classification means we are investing in companies whose stock prices, we believe, are unjustifiably low due to either a misunderstood negative condition or simply because investors at the moment are focused elsewhere, such as we saw during the recent dot-com craze. With respect to the stock market, prices are admittedly a bit volatile as of late. Investors are nervous about the direction of the economy, but they have also become sensitive, primarily as a result of Enron's bankruptcy, to even the rumor of another corporate scandal. You may wonder, then, why the Fund has performed so well. There are two reasons. First, the conservative approach we take to picking stocks and the characteristics we require of them (for example, low levels of debt on most of the companies' financial statements) have made our portfolio attractive to most stock investors. And, second, large-cap value stocks were so neglected in the technology-driven bull market of the late 1990s that their prices became relatively "cheap." You can be certain that the "popularity" currently enjoyed by value stocks will one day shift back to growth stocks. Such give-and-take between investment styles has always existed in the market. The key is not to worry about the theme that is driving stock prices at any given moment, but to consistently invest in solid companies at good (i.e., relatively low) prices. Regardless of which group the stock market favors in the short term, stock prices in the long run must reflect actual corporate financial results. That, fellow shareholders, is the philosophy that guides us. I hope you can tell, particularly if you have had direct contact with us, that we thoroughly enjoy the process of investing and greatly appreciate your confidence in us. As always, we remain committed to extending our best efforts on your behalf. Cordially, /s/Randall R. Eley /s/Phillip A. Titzer Randall R. Eley Phillip A. Titzer Chief Investment Officer Portfolio Manager Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Returns reflect reinvestment of dividends and capital gains. Fee waivers are in effect. In absence of fee waivers, returns would be reduced. Companies previously mentioned do not imply holdings in the Fund. Please refer to the "Schedule of Investments" for complete fund holdings. Fund holdings are subject to change at any time. 07/02 SCHEDULE OF INVESTMENTS AT APRIL 30, 2002 (UNAUDITED) Shares COMMONSTOCKS: 97.70% Market Value ------ --------------------- ------------ AUTOMOBILES & COMPONENTS: 4.76% 5,825 General Motors Corp. $ 373,674 ---------- BANKS: 1.32% 1,000 Bank of America Corp. 72,480 1,300 U.S. Bancorp 30,810 ---------- 103,290 ---------- CAPITAL GOODS: 18.28% 7,000 Caterpillar, Inc. 382,340 3,600 General Dynamics Corp. 349,524 9,200 Rockwell Automation, Inc. 197,524 6,400 The Boeing Co. 285,440 2,000 Tyco International Ltd. 36,900 2,600 United Technologies Corp. 182,442 ---------- 1,434,170 ---------- CONSUMER DURABLES & APPAREL: 5.15% 11,475 Eastman Kodak Co. 369,610 700 The Black & Decker Corp. 34,076 ---------- 403,686 ---------- DIVERSIFIED FINANCIALS: 7.32% 2,400 Citigroup, Inc. 103,920 10,365 J.P. Morgan Chase & Co. 363,811 1,800 Lehman Brothers Holdings, Inc. 106,200 ---------- 573,931 ---------- ENERGY: 7.56% 9,400 Exxon Mobil Corp. 377,598 12,700 Halliburton Co. 215,773 ---------- 593,371 ---------- FOOD, BEVERAGE & TOBACCO: 6.51% 2,600 Anheuser-Busch Companies, Inc. 137,800 6,850 Philip Morris Companies, Inc. 372,845 ---------- 510,645 ---------- HEALTHCARE EQUIPMENT & SERVICES: 2.54% 1,825 CIGNA Corp. 198,925 ---------- HOTELS, RESTAURANTS, & LEISURE: 2.28% 6,300 McDonald's Corp. 178,920 ---------- HOUSEHOLD & PERSONAL PRODUCTS: 0.43% 600 Avon Products, Inc. 33,510 ---------- MATERIALS: 11.18% 3,300 Alcoa, Inc. 112,299 6,638 E. I. du Pont de Nemours and Co. 295,391 3,700 International Paper Co. 153,291 5,300 Weyerhaeuser Co. 315,933 ---------- 876,914 ---------- PHARMACEUTICALS & BIOTECHNOLOGY: 4.43% 6,400 Merck & Co., Inc. 347,776 ---------- RETAILING: 4.45% 11,300 Limited Brands 216,508 1,400 Sears, Roebuck and Co. 73,850 1,700 The May Department Stores Co. 58,956 ---------- 349,314 ---------- TELECOMMUNICATIONS: 5.91% 12,600 AT&T Corp. 165,312 9,600 SBC Communications, Inc. 298,176 ---------- 463,488 ---------- TRANSPORTATION: 4.46% 10,000 Burlington Northern Santa Fe Corp. 274,900 3,500 Norfolk Southern Corp. 75,005 ---------- 349,905 ---------- UTILITIES: 11.12% 4,475 American Electric Power Company, Inc. 204,955 700 Entergy Corp. 32,480 3,500 Exelon Corp. 190,050 11,325 The Southern Co. 321,064 6,500 The Williams Companies, Inc. 124,150 ---------- 872,699 ---------- Total Common Stocks (Cost $7,351,871) 7,664,218 ---------- SHORT-TERM INVESTMENTS: 4.68% ----------------------------- 367,062 Federated Cash Trust Money Market (Cost $367,062) 367,062 ---------- Total Investments in Securities (Cost $7,718,933): 102.38% 8,031,280 Liabilities in Excess of Other Assets: (2.38%) (186,397) ---------- Net Assets: 100.00% $7,844,883 ---------- ---------- See accompanying Notes to Financial Statements. STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 2002 (UNAUDITED) ASSETS Investments in securities, at value (identified cost of $7,718,933) $8,031,280 Receivables Dividends and interest 5,863 Due from advisor 3,534 Prepaid expenses 17,154 ---------- Total assets 8,057,831 ---------- LIABILITIES Payables Securities purchased 199,429 Administration fees 2,466 Accrued expenses 11,053 ---------- Total liabilities 212,948 ---------- NET ASSETS $7,844,883 ---------- ---------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE [$7,844,883 / 698,744 shares outstanding; unlimited number of shares (par value $0.01) authorized] $11.23 ------ ------ COMPONENTS OF NET ASSETS Paid-in capital $7,519,208 Undistributed net investment income 36,690 Accumulated net realized loss on investments (23,362) Net unrealized appreciation on investments 312,347 ---------- Net assets $7,844,883 ---------- ---------- See accompanying Notes to Financial Statements. STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 2002 (UNAUDITED) INVESTMENT INCOME Income Dividends $ 72,351 Interest 749 -------- Total income 73,100 -------- Expenses Advisory fees (Note 3) 29,581 Administration fees (Note 3) 14,876 Professional fees 11,407 Fund accounting fees 9,273 Transfer agent fees 6,695 Custody fees 2,776 Trustee fees 2,357 Shareholder Reporting 1,488 Miscellaneous 1,240 Insurance expense 718 Registration fees 697 -------- Total expenses 81,108 Less, advisory fee waiver (Note 3) (44,700) -------- Net expenses 36,408 -------- NET INVESTMENT INCOME 36,692 -------- REALIZED AND UNREALIZED GAIN / (LOSS) ON INVESTMENTS Net realized loss on investments (13,547) Net change in unrealized appreciation on investments 663,130 -------- Net realized and unrealized gain on investments 649,583 -------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $686,275 -------- -------- See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Six Months Ended Year April 30, 2002 Ended (Unaudited) October 31, 2001 -------------- ---------------- INCREASE / (DECREASE) IN NET ASSETS FROM: OPERATIONS Net investment income $ 36,692 $ 64,590 Net realized (loss) / gain on investments (13,547) 67,605 Net change in unrealized appreciation / (depreciation) on investments 663,130 (624,964) ---------- ---------- NET INCREASE / (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 686,275 (492,769) ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (64,173) (46,639) From net realized gain (67,220) (115,338) ---------- ---------- Total dividends and distribution to shareholders (131,393) (161,977) ---------- ---------- TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net increase in net assets derived from net change in outstanding shares (a) 2,262,797 922,778 ---------- ---------- TOTAL INCREASE IN NET ASSETS 2,817,679 268,032 ---------- ---------- NET ASSETS Beginning of period 5,027,204 4,759,172 ---------- ---------- END OF PERIOD $7,844,883 $5,027,204 ---------- ---------- ---------- ----------
(a) A summary of share transactions is as follows: Six Months Ended Year April 30, 2002 Ended (Unaudited) October 31, 2001 ------------------------ ------------------------- Shares Paid in Capital Shares Paid in Capital ------ --------------- ------ --------------- Shares sold 192,747 $2,184,847 74,471 $795,884 Shares issued on reinvestments of distributions 12,390 131,331 13,856 161,977 Shares redeemed (4,702) (53,381) (3,083) (35,083) ------- ---------- ------ -------- Net increase 200,435 $2,262,797 85,244 $922,778 ------- ---------- ------ -------- ------- ---------- ------ --------
See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Six Months Ended December 12, 1997* April 30, 2002 Year Ended October 31, through (Unaudited) 2001 2000 1999 October 31, 1998 ---------------- ---- ---- ---- ---------------- Net asset value, beginning of period $10.09 $11.52 $11.85 $10.78 $10.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income 0.05 0.13 0.12 0.08 0.07 Net realized and unrealized gain on investments 1.35 (1.17) 0.26 1.10 0.72 ------ ------ ------ ------ ------ Total from investment operations 1.40 (1.04) 0.38 1.18 0.79 ------ ------ ------ ------ ------ Less distributions: From net investment income (0.13) (0.11) (0.10) (0.07) (0.01) From net realized gain on investments (0.13) (0.28) (0.61) (0.04) 0.00 ------ ------ ------ ------ ------ Total distributions (0.26) (0.39) (0.71) (0.11) (0.01) ------ ------ ------ ------ ------ Net asset value, end of period $11.23 $10.09 $11.52 $11.85 $10.78 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ TOTAL RETURN 14.06%++ (9.48%) 3.65% 11.05% 7.89%++ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $7,845 $5,027 $4,759 $4,267 $3,294 Ratio of expenses to average net assets: Before expense reimbursement 2.73%+ 2.99% 3.59% 3.63% 4.67%+ After expense reimbursement 1.23%+ 1.31% 1.75% 1.75% 1.75%+ Ratio of net investment income to average net assets After expense reimbursement 1.24%+ 1.24% 1.22% 0.81% 0.81%+ Portfolio turnover rate 32.83% 30.47% 47.43% 41.85% 32.71%
* Commencement of operations. + Annualized. ++ Not Annualized. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL STATEMENTS AT APRIL 30, 2002 (UNAUDITED) NOTE 1 - ORGANIZATION The Edgar Lomax Value Fund (the "Fund") is a series of shares of beneficial interest of Advisors Series Trust (the "Trust"), which is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund's investment objective is to seek growth of capital, with a secondary objective of providing income. The Fund began operations on December 12, 1997. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America. A. Security Valuation: The Fund's investments are carried at fair value. Securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ National Market System for which market quotations are readily available shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the- counter ("OTC") securities which are not traded in the NASDAQ National Market System shall be valued at the most recent trade price. Securities for which market quotations are not readily available, if any, are valued following procedures approved by the Board of Trustees. Short-term investments are valued at amortized cost, which approximates market value. B. Federal Income Taxes: It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. C. Security Transactions, Dividends and Distributions: Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. The amount of dividends and distributions to shareholders from net investment income and net realized capital gains is determined in accordance with Federal income tax regulations which differs from accounting principles generally accepted in the United States of America. To the extent these book/tax differences are permanent such amounts are reclassified within the capital accounts based on their Federal tax treatment. D. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets during the reporting period. Actual results could differ from those estimates. NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES For the six months ended April 30, 2002, The Edgar Lomax Company (the "Advisor") provided the Fund with investment management services under an Investment Advisory Agreement. The Advisor furnished all investment advice, office space, facilities, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 1.00% based upon the average daily net assets of the Fund. For the six months ended April 30, 2002, the Fund incurred $29,581 in Advisory Fees. The Fund is responsible for its own operating expenses. The Advisor has agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses to the extent necessary to limit the Fund's aggregate annual operating expenses to 1.23% of average net assets (the "expense cap"). Any such reduction made by the Advisor in its fees or payment of expenses which are the Fund's obligation are subject to reimbursement by the Fund to the Advisor, if so requested by the Advisor, in subsequent fiscal years if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the reimbursement) does not exceed the applicable limitation on Fund expenses. The Advisor is permitted to be reimbursed only for fee reductions and expense payments made in the previous three fiscal years, but is permitted to look back five years and four years, respectively, during the initial six years and seventh year of the Fund's operations. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund's payment of current ordinary operating expenses. For the six months ended April 30, 2002, the Advisor reduced its fees and absorbed Fund expenses in the amount of $44,700; no amounts were reimbursed to the Advisor. Cumulative expenses subject to recapture pursuant to the aforementioned conditions amounted to $342,070 at April 30, 2002. U.S. Bancorp Fund Services, LLC (the "Administrator") acts as the Fund's Administrator under an Administration Agreement. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund; prepares reports and materials to be supplied to the Trustees; monitors the activities of the Fund's custodian, transfer agent and accountants; coordinates the preparation and payment of the Fund's expenses and reviews the Fund's expense accruals. For its services, the Administrator receives a monthly fee at the following annual rate: Fund asset level Fee rate ---------------- -------- Less than $15 million $30,000 $15 million to less than $50 million 0.20% of average daily net assets $50 million to less than $100 million 0.15% of average daily net assets $100 million to less than $150 million 0.10% of average daily net assets More than $150 million 0.05% of average daily net assets Quasar Distributors, LLC (the "Distributor") acts as the Fund's principal underwriter in a continuous public offering of the Fund's shares. The Distributor is an affiliate of the Administrator. Certain officers of the Fund are also officers of the Administrator. NOTE 4 - PURCHASES AND SALES OF SECURITIES For the six months ended April 30, 2002, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $3,963,465 and $1,947,442, respectively. NOTE 5 - INCOME TAXES At April 30, 2002, the cost of securities for Federal income tax purposes was $7,728,689. Gross unrealized appreciation and depreciation of securities is as follows: Gross unrealized appreciation $861,663 Gross unrealized depreciation (559,072) -------- Net unrealized appreciation $302,591 -------- -------- ADVISOR The Edgar Lomax Company 6564 Loisdale Court, Suite 310 Springfield, Virginia 22150 www.edgarlomax.com DISTRIBUTOR Quasar Distributors, LLC 615 East Michigan Street, 2nd Floor Milwaukee, Wisconsin 53202 CUSTODIAN U.S. Bank, N.A. 425 Walnut Street Cincinnati, Ohio 45202 TRANSFER AGENT U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, Wisconsin 53202 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers, LLP 1177 Avenue of the Americas New York, New York 10036 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 55 Second Street, 24th Floor San Francisco, California 94105 This report is intended for the shareholders of the Fund and may not be used as sales literature unless preceded or accompanied by a current prospectus. To obtain a current prospectus please call 866-205-0524.