-----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, MnQnRcNzgVOGnoYvsORzEjH6eHD79slcyjqDg8iqncJgbGHjbJz1b7mz7Q2zv2tN SbZKNoaTsEy55kfb29f1yQ== 0000898531-03-000010.txt : 20030106 0000898531-03-000010.hdr.sgml : 20030106 20030106124212 ACCESSION NUMBER: 0000898531-03-000010 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021031 FILED AS OF DATE: 20030106 EFFECTIVENESS DATE: 20030106 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: 03504334 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 sb_hmcf-se.txt SEGALL BRYANT & HAMILL MID CAP FUND Semi-Annual Report October 31, 2002 November 15, 2002 Dear Fellow Shareholder: For the one-year period ending October 31, 2002, the Segall Bryant & Hamill Mid Cap Fund's total return at NAV was -10.36 percent. This compares to the performance of the Russell Mid Cap Index of -8.02 percent. Morningstar continues to list the Fund with a Four Star rating in the Mid Cap Growth Category (among 488 funds as of October 31, 2002). This ranking reflects the superior risk- adjusted performance over the past three years. Over the three-year period ending October 31, 2002, the Fund returned -1.66 percent annually vs. the Russell Mid Cap Index, which returned -6.71 percent annually. As we communicated to you in the past, we feel that the opportunity for investing in the mid capitalization tier of the market continues to be attractive. The past three years has seen a dramatic shift out of large capitalization companies and into mid capitalization companies. For the three- year period ending October 31, 2002, the S&P 500 Index (a proxy for the large cap market) has a negative 34.00 percent return while the Russell Mid Cap Index has a negative 9.00 percent return. While the valuation gap between the two market tiers has narrowed, there is still plenty of value to be found in mid cap stocks. We believe that we can find companies in this area of the market that meet our investment criteria and offer good value. Although we are focusing on smaller companies, the criteria which we use to select them remains unchanged: consistently high return on invested capital (ROI), double digit earnings growth and high levels of free cash flow. We continue to be owners of stocks and not renters, focusing on the long-term intrinsic value of their businesses. Over the past year, there has been a dramatic shift in the investment landscape. Several issues are worth mentioning. First, the Federal Reserve's aggressive easing to stimulate the economy is starting to take hold. The recovery is underway, but sporadic. Companies have been aggressively cutting costs to get their operating structures in-line with the current business environment. As the economy recovers, these companies will have significant earnings leverage, which in turn, should lead to strong earnings growth. This strong earnings growth should fuel a recovery in capital spending and lead the economy out of the recession. The Fund's performance over the past year is a combination of several factors. In late 2000, the Fund was positioned to take advantage of potential aggressive Fed easing and a rebound in the economy by the third quarter of 2001. Due to the events of September 11th, the rebound in the economy was delayed, but is now back on track. The Fund's increased exposure in several sectors of the market will continue to benefit from a rebounding economy and include semiconductors, industrials, media companies and retailers. These 'high quality' cyclical companies tend to anticipate a recovery in the economy well in advance and outperform even as near-term fundamentals deteriorate. Also, our focus on finding truly unique companies with consistent earning growth decreased the Fund's overall volatility during a very uncertain period. Our outlook for the economy is for accelerating growth during the balance of 2002. As of mid 2001, the economy had slipped into recession territory and the events of September 11th accelerated this slowdown. The aggressive easing that the Fed has undertaken and the recent fiscal stimulus packages should result in stronger economic growth as we exit 2002 and into 2003. The Fund is currently positioned for such a recovery. Our focus on high ROI mid capitalization stocks has led us to invest in very solid companies that operate in unique industry settings. This strategy leads us to concentrate the Fund on the growth segments of the economy such as Health Care, Technology and Finance. We will tend to be overweight in these sectors and focus less on the more cyclical sectors of the market. However, we have selectively increased our exposure to companies that will benefit from accelerating economic growth. We remain confident that our selection process will lead to above-average results over time. By focusing on mid cap growth companies with reasonable valuations, we believe that our shareholders will benefit from both the attractive valuation levels of this sector of the market and owning high quality growth companies. /s/David P. Kalis David P. Kalis, CFA 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. Sector allocations are subject to change at any time and are not recommendations to buy or sell any security. The Funds performance since inception (4/1/99) was -0.18% versus the Russell Mid Cap Index which returned -0.28%. For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM metric each month by subtracting the return on a 90-day U.S. Treasury Bill from the fund's load-adjusted return for the same period, and then adjusting this excess return for risk. The top 10% of funds in each broad asset class receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten- year (if applicable) Morningstar Rating metrics. As the Segall Bryant & Hamill Mid Cap Fund does not have 5 years of performance history, the Overall Morningstar Rating and the 3-Year Morningstar Rating are the same. (c) 2002 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. 01/03 SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2002 (UNAUDITED) Shares COMMON STOCKS: 93.95% Market Value ------ ---------------------- ------------ ADVERTISING: 1.22% 6,325 Catalina Marketing Corp.* $ 122,389 ----------- BANKS: 7.19% 4,400 Comerica, Inc. 192,104 3,000 North Fork Bancorporation, Inc. 115,380 10,300 SouthTrust Corp. 263,886 3,700 Zions Bancorporation 148,777 ----------- 720,147 ----------- BROADCASTING-MEDIA: 4.41% 17,050 Univision Communications, Inc. - Class A* 441,765 ----------- CHEMICALS: 1.94% 8,775 Engelhard Corp. 194,366 ----------- COMPUTER SERVICES: 7.61% 5,175 Affiliated Computer Services, Inc. - Class A* 238,309 18,776 Concord EFS, Inc.* 268,121 11,550 SunGard Data Systems, Inc.* 256,063 ----------- 762,493 ----------- CONSUMER PRODUCTS: 4.73% 12,575 Pactiv Corp.* 249,488 15,900 Rayovac Corp.* 224,190 ----------- 473,678 ----------- ELECTRONICS: 3.89% 13,175 Altera Corp.* 154,411 5,150 Linear Technology Corp. 142,346 3,250 National Instruments Corp.* 93,243 ----------- 390,000 ----------- FINANCIAL: 4.94% 2,750 Ambac Financial Group, Inc. 169,950 4,900 Eaton Vance Corp. 140,679 4,400 MGIC Investment Corp. 184,624 ----------- 495,253 ----------- FOOD: 3.38% 9,100 Performance Food Group Co.* 338,429 ----------- HEALTHCARE: 8.03% 10,700 Biomet, Inc. 315,222 7,925 MedImmune, Inc.* 202,484 5,030 Millipore Corp.* 171,070 3,625 Respironics, Inc.* 115,782 ----------- 804,558 ----------- INSURANCE: 4.27% 7,900 AFLAC, Inc. 240,476 3,230 Everest Re Group, Ltd.# 187,405 ----------- 427,881 ----------- MANUFACTURING: 12.97% 4,600 Danaher Corp. 266,110 8,725 Flowserve Corp.* 102,257 6,150 Gentex Corp.* 181,302 6,525 Graco, Inc. 178,459 9,100 Littelfuse, Inc.* 142,333 5,350 Mettler-Toledo International, Inc.* 160,233 6,975 Roper Industries, Inc. 269,235 ----------- 1,299,929 ----------- OFFICE SUPPLIES: 2.08% 3,350 Avery Dennison Corp. 208,504 ----------- PERSONAL CARE: 2.17% 7,475 The Estee Lauder Companies, Inc. - Class A 217,672 ----------- PETROLEUM: 4.28% 9,400 GlobalSantaFe Corp. 224,660 6,350 Stone Energy Corp.* 204,216 ----------- 428,876 ----------- PUBLISHING: 2.79% 6,330 Scholastic Corp.* 279,469 ----------- RETAIL: 2.50% 8,125 Family Dollar Stores, Inc. 250,169 ----------- SERVICES: 5.17% 2,275 Cintas Corp. 107,539 3,650 Ecolab, Inc. 176,113 4,950 Laboratory Corporation of America Holdings* 119,295 6,900 Robert Half International, Inc.* 115,230 ----------- 518,177 ----------- SCHOOLS: 1.15% 8,150 DeVry, Inc.* 115,730 ----------- TECHNOLOGY: 6.11% 7,325 Intuit, Inc.* 380,314 26,837 Symbol Technologies, Inc. 232,140 ----------- 612,454 ----------- TRANSPORTATION: 3.12% 10,575 C.H. Robinson Worldwide, Inc. 312,703 ----------- Total Common Stocks (Cost $10,612,965) 9,414,642 ----------- Shares SHORT-TERM INVESTMENTS: 6.33% Market Value ------ ------------------------------ ------------ 634,297 Federated Cash Trust Money Market (Cost $634,297) 634,297 ----------- Total Investments in Securities (Cost $11,247,262): 100.28% 10,048,939 Liabilities in Excess of Other Assets: (0.28%) (27,709) ----------- Net Assets: 100.00% $10,021,230 ----------- ----------- * Non-income producing security. # U.S. exchange traded security of a foreign issuer. See accompanying Notes to Financial Statements. STATEMENTS OF ASSETS AND LIABILITIES AT OCTOBER 31, 2002 (UNAUDITED) ASSETS Investments in securities, at value (identified cost $11,247,262) $10,048,939 Cash 690 Receivables Dividends 2,310 Due from Advisor 7,662 Prepaid expenses 8,608 ----------- Total assets 10,068,209 ----------- LIABILITIES Payables Administration fees 2,548 Accrued expenses 44,431 ----------- Total liabilities 46,979 ----------- NET ASSETS $10,021,230 ----------- ----------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE [$10,021,230 / 1,033,647 shares outstanding; unlimited number of shares (par value $0.01) authorized] $9.70 ----- ----- COMPONENTS OF NET ASSETS Paid-in capital $12,240,356 Accumulated net investment loss (44,331) Accumulated net realized loss on investments (976,471) Net unrealized depreciation on investments (1,198,324) ----------- Net assets $10,021,230 ----------- ----------- See accompanying Notes to Financial Statements. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 (UNAUDITED) INVESTMENT INCOME Income Dividend Income $ 32,899 ----------- Expenses Advisory fees (Note 3) 41,402 Administration fees (Note 3) 15,123 Distribution fees (Note 4) 13,800 Fund accounting fees 12,006 Professional fees 11,596 Transfer agent fees 9,487 Reports to shareholders 4,033 Custody fees 3,630 Registration fees 2,959 Miscellaneous fees 2,470 Trustee fees 2,469 Insurance fees 629 ----------- Total expenses 119,604 Less: advisory fee waiver (Note 3) (42,374) ----------- Net expenses 77,230 ----------- NET INVESTMENT LOSS (44,331) ----------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS Net realized loss from security transactions (338,756) Net change in unrealized depreciation on investments (2,177,892) ----------- Net realized and unrealized loss on investments (2,516,648) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(2,560,979) ----------- ----------- See accompanying Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS Six Months Ended October 31, 2002 Year Ended (Unaudited) April 30, 2002 ---------------- -------------- DECREASE IN NET ASSETS FROM: OPERATIONS Net investment loss $ (44,331) $ (86,844) Net realized loss on security transactions (338,756) (608,042) Net change in unrealized (depreciation) / appreciation on investments (2,177,892) 179,480 ----------- ----------- Net decrease in net assets resulting from operations (2,560,979) (515,406) ----------- ----------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Net realized gain on security transactions -- (533,525) ----------- ----------- TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net (decrease) / increase in net assets derived from net change in outstanding shares (a) (70,594) 2,248,971 ----------- ----------- TOTAL (DECREASE) / INCREASE IN NET ASSETS (2,631,573) 1,200,040 ----------- ----------- NET ASSETS Beginning of period 12,652,803 11,452,763 ----------- ----------- END OF PERIOD $10,021,230 $12,652,803 ----------- ----------- ----------- ----------- (a) A summary of share transactions is as follows: Six Months Ended October 31, 2002 Year Ended (Unaudited) April 30, 2002 --------------------- -------------------- Shares Value Shares Value -------- -------- -------- -------- Shares sold 95,272 $1,026,457 427,039 $5,125,666 Shares issued in reinvestment of distributions -- -- 43,496 514,998 Shares redeemed (104,237) (1,097,051) (293,786) (3,391,693) -------- ---------- -------- ---------- Net (decrease)/increase (8,965) $ (70,594) 176,749 $2,248,971 -------- ---------- -------- ---------- -------- ---------- -------- ---------- See accompanying Notes to Financial Statements. FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD Six Months Ended October 31, April 1, 1999* 2002 Year Ended April 30, through (Unaudited) 2002 2001 2000 April 30, 1999 ---------- ------ ------ ------ -------------- Net asset value, beginning of period $12.14 $13.23 $14.37 $13.14 $12.49 ------ ------ ------ ------ ------ Income from investment operations: Net investment loss (0.04) (0.08) (0.09) (0.11) -- Net realized and unrealized (loss)/gain on investments (2.40) (0.46) 1.25 1.99 0.65 ------ ------ ------ ------ ------ Total from investment operations (2.44) (0.54) 1.16 1.88 0.65 ------ ------ ------ ------ ------ Less distributions: Dividends from net realized gain -- (0.55) (2.30) (0.65) -- ------ ------ ------ ------ ------ Net asset value, end of period $ 9.70 $12.14 $13.23 $14.37 $13.14 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total return (20.10%)++ (3.99%) 7.13% 14.93% 5.20%++ Ratios/supplemental data: Net assets, end of period (thousands) $10,021 $12,653 $11,453 $10,190 $8,433 Ratio of expenses to average net assets: Before expense reimbursement 2.17%+ 2.14% 2.17% 2.51% 7.35%+ After expense reimbursement 1.40%+ 1.40% 1.40% 1.40% 1.34%+ Ratio of net investment loss to average net assets: After expense reimbursement (0.80%)+ (0.73%) (0.72%) (0.78%) (0.23%)+ Portfolio turnover rate 12.95% 63.38% 89.84% 114.39% 18.02%
* Commencement of operations. + Annualized. ++ Not Annualized. See accompanying Notes to Financial Statements. NOTES TO FINANCIAL HIGHLIGHTS AT OCTOBER 31, 2002 (UNAUDITED) NOTE 1 - ORGANIZATION The Segall Bryant & Hamill Mid Cap 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 began operations on April 1, 1999. The Fund's objective is to seek growth of capital by investing in medium-capitalization ("mid-cap") companies with income as a secondary objective. 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 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 October 31, 2002, Segall Bryant & Hamill (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 0.75% based upon the average daily net assets of the Fund. For the six months ended October 31, 2002, the Fund incurred $41,402 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 1.40% 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 six months ended October 31, 2002, the Advisor reduced its fees and absorbed Fund expenses in the amount of $42,374; no amounts were reimbursed to the Advisor. Cumulative expenses subject to recapture pursuant to the aforementioned conditions amounted to $359,845 at October 31, 2002. Accumulative expenses subject to recapture expire as follows: Year Amount ---- ------ 2004 $ 38,382 2005 $106,079 2006 $ 84,989 2007 $ 88,021 2008 $ 42,374 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 - DISTRIBUTION COSTS The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 (the "Plan"). The Plan permits the Fund to pay for distribution and related expenses at an annual rate of up to 0.25% of the Fund's average daily net assets annually. The expenses covered by the Plan may include the cost of preparing and distributing prospectuses and other sales material, advertising and public relations expenses, payments to financial intermediaries and compensation of personnel involved in selling shares of the Fund. Payments made pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred. Pursuant to a distribution coordination agreement adopted under the Plan, distribution fees are paid to the Advisor as "Distribution Coordinator". For the six months ended October 31, 2002, the Fund paid the Distribution Coordinator $13,800. NOTE 5 - PURCHASES AND SALES OF SECURITIES For the six months ended October 31, 2002, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $1,416,640 and $1,369,766 respectively. NOTE 6 - 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 October 31, 2002, the components of net assets on a tax basis were as follows: Cost of investments $11,355,794 Gross tax unrealized appreciation 779,189 Gross tax unrealized depreciation (2,086,046) ----------- Net tax unrealized appreciation $(1,306,855) ----------- ----------- Capital loss carryforward expiring in 2010 $ (409,189) ----------- ----------- ADVISOR Segall, Bryant & Hamill 10 South Wacker Drive, Suite 2150 Chicago, Illinois 60606 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, 2nd Floor Milwaukee, Wisconsin 53202 877-829-8413 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers, LLP 1177 Avenue of the Americas New York, New York 10036 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker, LLP 515 South Flower Street, 25th Floor Los Angeles, California 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 1-877-829-8413. 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-----