-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F1v56JcSKYlBK2MfP9Aevb7O8u7g0NGQa7JiC/A9iZQd2J3EN/6vSgjhbY5qvmxp WIaVfXq69YC7joPs6ZlMyQ== 0000898531-02-000424.txt : 20021108 0000898531-02-000424.hdr.sgml : 20021108 20021108153251 ACCESSION NUMBER: 0000898531-02-000424 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020831 FILED AS OF DATE: 20021108 EFFECTIVENESS DATE: 20021108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVISORS SERIES TRUST CENTRAL INDEX KEY: 0001027596 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07959 FILM NUMBER: 02814205 BUSINESS ADDRESS: STREET 1: 2020 E FINANCIAL WAY SUITE 100 CITY: GLENDORA STATE: CA ZIP: 91741 BUSINESS PHONE: 8188521033 MAIL ADDRESS: STREET 1: 2020 E FINANCIAL WAY STREET 2: SUITE 100 CITY: GLENDORA STATE: CA ZIP: 91741 N-30D 1 tataf-se.txt The American Trust Allegiance Fund One Court Street Lebanon, New Hampshire 03766 SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED AUGUST 31, 2002 November, 2002 Dear Fellow Shareholder, We are pleased to send you the American Trust Allegiance Fund's Semi-Annual Report for the six months ending August 31, 2002. The Fund's total assets equaled $21.6 million as of August 31, 2002. Over the past 30 months, investors have suffered through the worst bear market since the Great Depression. The confluence of accounting irregularities, the over valuation of stock prices, an economic recession, the largest ever drop in technology capital spending, and the shock of terrorist attacks have pummeled stock prices. There has been no place for stock investors to hide from the punishing decline of the past few years. Just as no one forecast the precipitous fall in stock prices, it is impossible to predict the bottom of this bear market. However, an understanding of economic history and the business cycle can provide investors with a useful perspective. A reading of the macroeconomic indicators strongly suggests that the U.S. is in the recovery phase, albeit a muted one. Interest rates and inflation are both at historic lows and hence, should help to strengthen economic activity. The expansionary phase of the business cycle will assert itself, just as it has every time over the past 75 years. As corporate cash flow and profitability improves, the financial markets will respond accordingly. At the end of the day, we believe that stock prices are driven by corporate earnings and profitability is inextricably linked to the business cycle. The Allegiance Fund continues to focus on a well-diversified portfolio of high quality common stocks. We look for companies that have demonstrated a relatively high level of consistent profitability and operating momentum. During this period of economic and financial market distress, we prefer the more dominant companies in each industry and sector. We believe companies in the U.S. remain the most globally innovative and offer attractive long-term growth potential. We also believe that investors will once again come to appreciate these long-term growth opportunities, leading to better performance for our financial markets. We thank you for your support and look forward to helping you achieve your financial goals. Sincerely, /s/Jeffrey M. Harris /s/Paul H. Collins Jeffrey M. Harris, CFA Paul H. Collins Mutual Fund investing involves risk; loss of principal is possible. SCHEDULE OF INVESTMENTS AT AUGUST 31, 2002 (UNAUDITED) Shares COMMON STOCKS: 92.3% Market Value ------ --------------------- ------------ AEROSPACE/DEFENSE: 2.5% 1,400 General Dynamics Corp. $ 110,096 6,900 United Technologies Corp. 409,791 ----------- 519,887 ----------- AIR FREIGHT & COURIERS: 0.9% 6,800 Expeditors International of Washington, Inc. 179,180 ----------- ALUMINUM: 0.8% 6,600 Alcoa, Inc. 165,594 ----------- AUTO PARTS AND EQUIPMENT: 2.1% 5,100 Johnson Controls, Inc. 440,079 ----------- BANKS: 9.9% 3,300 Commerce Bancorp, Inc. 156,453 4,900 Fifth Third Bancorp 328,398 10,400 Mellon Financial Corp. 287,560 8,700 Northern Trust Corp. 371,838 16,000 The Bank of New York Company, Inc. 562,400 10,500 Washington Mutual, Inc. 397,005 ----------- 2,103,654 ----------- CHEMICALS - SPECIALTY: 1.8% 8,400 Ecolab, Inc. 378,336 ----------- COMPUTER HARDWARE: 2.6% 15,000 Dell Computer Corp.* 399,300 2,100 International Business Machines Corp. 158,298 ----------- 557,598 ----------- CONSTRUCTION & ENGINEERING: 1.8% 11,300 Jacobs Engineering Group, Inc.* 381,488 ----------- CONSUMER FINANCE: 2.5% 26,250 MBNA Corp. 530,250 ----------- COSMETICS: 3.6% 8,900 Alberto-Culver Co. - Class B 438,414 6,700 Avon Products, Inc. 326,558 ----------- 764,972 ----------- DEPARTMENT STORES: 1.3% 4,000 Kohl's Corp.* 278,880 ----------- DIVERSE FINANCIAL SERVICES: 6.3% 4,800 Fannie Mae 363,744 17,000 Federated Investors, Inc. - Class B 496,400 11,100 State Street Corp. 480,852 ----------- 1,340,996 ----------- ELECTRICAL COMPONENT: 0.7% 3,100 Emerson Electric Co. 151,218 ----------- ELECTRICAL UTILITIES: 1.1% 2,000 Dominion Resources, Inc. 125,420 2,000 FPL Group, Inc. 114,160 ----------- 239,580 ----------- FOOD DISTRIBUTORS: 4.6% 12,300 Performance Food Group Co.* 426,195 19,400 Sysco Corp. 550,184 ----------- 976,379 ----------- FOREST PRODUCTS: 0.8% 2,900 Weyerhaeuser Co. 158,079 ----------- HOUSEHOLD PRODUCTS: 3.3% 6,550 Colgate-Palmolive Co. 357,302 7,900 The Clorox Co. 340,174 ----------- 697,476 ----------- INSURANCE - BROKERS: 2.7% 11,850 Marsh & McLennan Companies, Inc. 576,503 ----------- INSURANCE - MULTI-LINE: 2.4% 7,967 American International Group, Inc. 500,328 ----------- IT CONSULTING & SERVICES: 2.7% 8,700 Affiliated Computer Services, Inc. - Class A* 387,150 7,200 SunGard Data Systems, Inc.* 177,480 ----------- 564,630 ----------- MACHINERY INDUSTRIAL: 2.9% 2,400 Danaher Corp. 144,360 6,900 Illinois Tool Works, Inc. 472,788 ----------- 617,148 ----------- MOTORCYCLE MANUFACTURERS: 1.7% 7,400 Harley-Davidson, Inc. 364,302 ----------- NETWORKING EQUIPMENT: 1.7% 26,020 Cisco Systems, Inc.* 359,596 ----------- OIL AND GAS - EQUIPMENT/SERVICE: 1.2% 5,800 Schlumberger Ltd.# 250,618 ----------- OIL AND GAS - INTEGRATED: 2.8% 3,300 ChevronTexaco Corp. 252,879 6,600 Exxon Mobil Corp. 233,970 2,300 Royal Dutch Petroleum Co.# 103,960 ----------- 590,809 ----------- PACKAGED FOODS/MEATS: 1.7% 3,400 General Mills, Inc. 143,106 7,000 Kellogg Co. 225,120 ----------- 368,226 ----------- PUBLISHING: 2.6% 8,700 The McGraw-Hill Companies, Inc. 551,667 ----------- RESTAURANTS: 3.7% 21,200 Darden Restaurants, Inc. 543,356 10,500 Sonic Corp.* 246,225 ----------- 789,581 ----------- RETAIL - APPAREL: 1.4% 16,800 Chico's FAS, Inc.* 294,672 ----------- RETAIL - COMPUTERS AND ELECTRONICS: 0.7% 6,850 Best Buy Company, Inc.* 145,220 ----------- RETAIL - HOME IMPROVEMENT: 0.7% 3,800 Lowes Companies, Inc. 157,244 ----------- SEMICONDUCTOR EQUIPMENT: 0.7% 11,600 Applied Materials, Inc.* 154,976 ----------- SEMICONDUCTORS: 2.0% 5,800 Analog Devices, Inc.* 139,780 10,000 Intel Corp. 166,700 6,200 Texas Instruments, Inc. 122,140 ----------- 428,620 ----------- SERVICES - DATA PROCESSING: 4.4% 4,200 Automatic Data Processing, Inc. 158,634 12,300 Concord EFS, Inc.* 251,043 14,700 First Data Corp. 510,825 ----------- 920,502 ----------- SERVICES - DIVERSE/COMMERCIAL: 4.7% 13,400 Apollo Group, Inc. - Class A* 560,522 9,900 Cintas Corp. 435,699 ----------- 996,221 ----------- SPECIALTY STORES: 2.4% 15,500 Bed Bath & Beyond, Inc.* 496,930 ----------- SYSTEMS SOFTWARE: 1.7% 7,250 Microsoft Corp.* 355,830 ----------- TELEPHONE - INTEGRATED: 0.9% 4,000 SBC Communications, Inc. 98,960 3,100 Verizon Communications, Inc. 96,100 ----------- 195,060 ----------- TOTAL COMMON STOCKS (Cost $21,303,727) 19,542,329 ----------- Principal Amount SHORT-TERM INVESTMENTS: 7.6% --------- ----------------------------- $1,616,698 Federated Cash Trust Money Market Fund (Cost $1,616,698) 1,616,698 ----------- Total Investments in Securities (Cost $22,920,425): 99.9% 21,159,027 Other Assets less Liabilities: 0.1% 7,032 ----------- Net Assets: 100.0% $21,166,059 ----------- ----------- * Non-income producing security. # ADR - American Depository Receipt See accompanying Notes to Financial Statements. STATEMENT OF ASSETS AND LIABILITIES AT AUGUST 31, 2002 (UNAUDITED) ASSETS Investments in securities, at value (cost $22,920,425) $21,159,027 Receivables: Securities sold 405,993 Dividends and interest 20,870 Prepaid expenses 5,059 Other assets 113 ----------- Total assets 21,591,062 ----------- LIABILITIES Payables: Securities purchased 315,717 Fund shares purchased 24,974 Accrued advisory fee 6,928 Due to custodian 39,680 Accrued expenses 37,704 ----------- Total liabilities 425,003 ----------- NET ASSETS $21,166,059 ----------- ----------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE [$21,166,059 / 1,716,327 shares outstanding; unlimited number of shares (par value $0.01) authorized] $12.33 ------ ------ COMPONENTS OF NET ASSETS Paid-in capital $30,947,469 Accumulated net investment loss (44,066) Accumulated net realized loss on investments (7,975,946) Net unrealized depreciation on investments (1,761,398) ----------- Net assets $21,166,059 ----------- ----------- See accompanying Notes to Financial Statements. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 31, 2002 (UNAUDITED) INVESTMENT INCOME Income Dividends (net of foreign tax $864) $ 124,554 Interest 9,191 ----------- Total income 133,745 ----------- Expenses Advisory fees (Note 3) 116,576 Administration fees (Note 3) 24,814 Transfer agent fees 18,600 Registration fees 10,711 Audit fees 10,328 Reports to shareholders 8,884 Fund accounting fees 8,322 Legal fees 7,601 Custody fees 3,909 Trustee fees 3,676 Insurance expense 1,279 Miscellaneous 776 Deferred organization expense 96 ----------- Total expenses 215,572 Less: advisory fee waiver (Note 3) (37,761) ----------- Net expenses 177,811 ----------- NET INVESTMENT LOSS (44,066) ----------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS Net realized loss on investments (1,055,793) Net change in unrealized depreciation on investments (2,056,887) ----------- Net realized and unrealized loss on investments (3,112,680) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(3,156,746) ----------- ----------- See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Six Months Ended August 31, 2002 Year Ended (unaudited) February 28, 2002 ---------------- ----------------- (DECREASE) / INCREASE IN NET ASSETS FROM: OPERATIONS Net investment loss $ (44,066) $ (145,697) Net realized loss on investments (1,055,793) (6,372,357) Net unrealized (depreciation) appreciation on investments (2,056,887) 2,111,359 ----------- ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (3,156,746) (4,406,695) ----------- ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Net realized gain on security transactions -- (709,246) ----------- ----------- TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net decrease in net assets derived from net change in outstanding shares (1,752,895) (765,630) ----------- ----------- TOTAL DECREASE IN NET ASSETS (4,909,641) (5,881,571) NET ASSETS Beginning of period 26,075,700 31,957,271 ----------- ----------- END OF PERIOD $21,166,059 $26,075,700 ----------- ----------- ----------- -----------
(a) A summary of share transactions is as follows: Six Months Ended August 31, 2002 Year Ended (unaudited) February 28, 2002 ------------------------ ------------------------- Shares Value Shares Value ------ ----- ------ ----- Shares sold 67,278 $ 898,598 245,748 $3,673,475 Shares issued in reinvestment of distributions -- -- 49,283 692,922 Shares redeemed (206,605) (2,651,493) (345,925) (5,132,027) -------- ----------- -------- ---------- Net decrease (139,327) $(1,752,895) (50,894) $ (765,630) -------- ----------- -------- ---------- -------- ----------- -------- ----------
See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD Six Months Ended Year Year Year Year 3/11/97* 8/31/02 Ended Ended Ended Ended through (unaudited) 2/28/02 2/28/01 2/29/00 2/28/99 2/28/98 ---------- ------- ------- ------- ------- ------- Net asset value, beginning of period $14.05 $16.76 $25.56 $16.93 $13.48 $10.00 ------ ------ ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS: Net investment loss (0.03) (0.08) (0.16) (0.11) (0.07) (0.03) Net realized and unrealized (loss)/gain on investments (1.69) (2.24) (8.10) 8.74 3.74 3.51 ------ ------ ------ ------ ------ ------ Total from investment operations (1.72) (2.32) (8.26) 8.63 3.67 3.48 ------ ------ ------ ------ ------ ------ Less distributions: From net realized gain -- (0.39) (0.54) -- (0.22) -- ------ ------ ------ ------ ------ ------ Net asset value, end of period $12.33 $14.05 $16.76 $25.56 $16.93 $13.48 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total return (12.24)%++ (13.86)% (32.68)% 50.97% 27.47% 34.80%++ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) $21,166 $26,076 $31,957 $36,932 $13,329 $6,360 Ratio of expenses to average net assets: Before expense reimbursement 1.76%+ 1.80% 1.56% 1.75% 2.30% 4.04%+ After expense reimbursement 1.45%+ 1.45% 1.45% 1.45% 1.45% 1.45%+ Ratio of net investment loss to average net assets: After fees waived and expenses absorbed (0.36)%+ (0.52)% (0.77)% (0.73)% (0.57)% (0.42)%+ Portfolio turnover rate 44.47%++ 73.96% 86.13% 39.81% 40.99% 27.65%++
* Commencement of operations. + Annualized. ++ Not Annualized. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2002 (UNAUDITED) NOTE 1 - ORGANIZATION The American Trust Allegiance 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 investment objective of the Fund is to seek capital appreciation. The Fund began operations on March 11, 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 generally accepted accounting principles. D. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 August 31, 2002, American Trust 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 0.95% based upon the average daily net assets of the Fund. For the six months ended August 31, 2002, the Fund incurred $116,576 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 1.45% 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 August 31, 2002, the Advisor reduced its fees and absorbed Fund expenses in the amount of $37,761; no amounts were reimbursed to the Advisor. Cumulative expenses subject to recapture pursuant to the aforementioned conditions amounted to $421,631 at August 31, 2002. Cumulative expenses subject to recapture expire as follows: Year Amount ---- ------ 2003 $174,965 2004 109,256 2005 99,649 2006 37,761 -------- $421,631 -------- -------- 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 August 31, 2002, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $10,150,695 and $12,597,824, respectively. NOTE 5 - INCOME TAXES Net investment income and net realized gains differ for financial statement and tax purposes due to differing treatments of wash sale losses deferred and losses realized subsequent to October 31 on the sale of securities. As of August 31, 2002, the components of net assets on a tax basis were as follows: Cost of investments $22,952,149 Gross tax unrealized appreciation 849,124 Gross tax unrealized depreciation (2,642,246) ----------- Net tax unrealized depreciation $(1,793,122) ----------- ----------- Capital loss carryforward, expiring in 2010 $ 5,489,082 At August 31, 2002, the Fund had deferred capital losses occurring subsequent to October 31, 2001 of $1,399,347. For tax purposes, such losses will be reflected in the year ending February 28, 2003. ADVISOR American Trust Investment Advisers, LLC One Court Street Lebanon, NH 03766 1-800-788-8806 DISTRIBUTOR Quasar Distributors, LLC 615 E. Michigan Street, 2nd Floor Milwaukee, WI 53202 CUSTODIAN U.S. Bank, N.A. 425 Walnut Street Cincinnati, OH 45202 TRANSFER AGENT Orbitex Data Services 4020 S. 147th Street, Suite 2 Omaha, NE 68137 1-800-385-7003 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers, LLP 1177 Avenue of the Americas New York, NY 10036 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 515 S. Flower Street, 25th Floor Los Angeles, CA 90071 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. For a current prospectus please call 1-800-385-7003. Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change. -----END PRIVACY-ENHANCED MESSAGE-----