N-30D 1 e-6010.txt SEMI-ANNUAL REPORT FOR THE PERIOD ENDED 10/31/2000 SEGALL BRYANT & HAMILL ---------------------- Mid Cap Fund [LOGO] Semi-Annual Report October 31, 2000 SEGALL BRYANT & HAMILL MID CAP FUND December 5, 2000 Dear Fellow Shareholder: For the one-year period ending October 31, 2000, the Segall Bryant & Hamill Mid Cap Fund's total return at NAV was 33.80 percent. This compares to the performance of the Russell Mid Cap Index of 23.46 percent. Year-to-date through October 31, 2000, the Fund returned 21.27 percent and the Russell Mid Cap Index returned 10.54 percent. As we communicated to you in the past, we feel that the opportunity for investing in the mid capitalization tier of the market is as attractive as it has been in the past decade. 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, especially in the first quarter of 2000, there has been a dramatic shift in the investment landscape. Several issues are worth mentioning. First, the speculation that drove the IPO market to unprecedented levels came to an end, as the market became more rational and started to focus on companies that have viable business models. Secondly, the mid capitalization tier of the market started to perform much better, due to a combination of valuation and better relative earnings growth. Although mid cap stocks have done well over the past year, the fundamental outlook is still strong. Mid cap stocks currently sell at a 30% valuation discount to the largest 100 equities in the market; historically they have traded at a premium. The Fund's outperformance of the Russell Mid Cap Index over the past year is a combination of several factors. During the first quarter, we increased our exposure in several technology stocks that had been depressed due to Y2K fears. Most of these investments were in computer service stocks such as payroll and credit card processors, wireless billing companies and outsourcing. These stocks tend to have recurring revenue bases and perform well in volatile markets. Secondly, as the economy started to slow, investors gravitated towards companies that have more consistent earning growth. These "high quality" companies tend to perform well in volatile investing environments. This volatile environment should continue to drive the market throughout the balance of the year as investors come to grip with slower earnings growth rates and the realization that 20% annual returns in the equity markets are not guaranteed. 2 SEGALL BRYANT & HAMILL MID CAP FUND Our outlook for the economy is for slower growth in 2001; this is a change from our former outlook of continued strength. The Fed's effort to slow the economy has worked, and may have gone too far. Over the past few months, the U.S. economy has started to slow dramatically, raising the possibility of a fed EASING sometime early in 2001. 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 overweighted in these sectors and focus less on the more cyclical sectors of the market. 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 is not indicative of future performance. Share value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than the original investment. The Russell Mid Cap Index measures the performance of the 800 smallest companies contained within the largest 1,000 companies of the Russell 3,000 Index - An Index which represents approximately 98% of the investable U.S. equity market. An Index does not incur expenses and is not available for investment. 3 SEGALL BRYANT & HAMILL MID CAP FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED) -------------------------------------------------------------------------------- Shares COMMON STOCKS: 97.33% Market Value -------------------------------------------------------------------------------- ADVERTISING: 1.17% 3,500 Catalina Marketing Corporation...................... $ 137,375 ----------- ADVERTISING AGENCIES: 2.49% 6,850 The Interpublic Group of Companies, Inc.*........... 294,122 ----------- BROADCASTING-MEDIA: 2.32% 7,150 Univision Communications Inc........................ 273,488 ----------- COMMERCIAL BANKS - EASTERN U.S.: 2.11% 10,867 Charter One Financial, Inc.*........................ 249,262 ----------- COMMERCIAL BANKS - MIDWEST U.S.: 2.07% 4,050 Comerica Incorporated............................... 244,266 ----------- COMPUTER SERVICES: 16.36% 4,800 Affiliated Computer Services, Inc.*................. 267,300 9,300 Ceridian Corp.*..................................... 232,500 4,300 Computer Sciences Corporation*...................... 270,900 9,500 Concord EFS, Inc.*................................ 392,469 7,250 Convergys Corporation............................... 315,828 8,800 SunGard Data Systems Inc.*.......................... 449,900 ----------- 1,928,897 ----------- COMPUTER SOFTWARE: 3.83% 8,000 Computer Associates International, Inc.............. 255,000 3,300 Rational Software Corporation....................... 196,969 ----------- 451,969 ----------- CONSUMER PRODUCTS - MISCELLANEOUS: 1.73% 13,800 Rayovac Corporation................................. 203,550 ----------- DIVERSIFIED MANUFACTURING: 3.20% 7,200 Littlefuse, Inc.*................................... 208,800 3,600 Mettler-Toledo International Inc.................... 168,075 ----------- 376,875 ----------- 4 SEGALL BRYANT & HAMILL MID CAP FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- ELECTRONIC - INSTRUMENTS: 3.82% 5,000 National Instruments Corporation*................... 233,438 1,850 PE Corporation - PE Biosystems Group................ 216,450 ----------- 449,888 ----------- ELECTRONICS: 3.33% 4,751 Molex Incorporated.................................. 186,774 1,800 Sanmina Corporation*................................ 205,763 ----------- 392,536 ----------- ELECTRONICS - SEMI: 3.66% 4,400 Altera Corporation.................................. 180,125 3,900 Linear Technology Corporation....................... 251,794 ----------- 431,919 ----------- FINANCIAL GUARANTEE INSURANCE: 3.64% 6,300 MGIC Investment Corporation*........................ 429,188 ----------- HC - DRUGS: 1.99% 2,900 ALZA Corporation*................................... 234,719 ----------- IDENTIFICATION SYSTEMS / DEVICES: 2.86% 7,425 Symbol Technologies, Inc............................ 337,373 ----------- INSURANCE-LIFE: 2.29% 3,700 AFLAC Incorporated.................................. 270,331 ----------- LIFE / HEALTH INSURANCE: 1.81% 9,250 Protective Life Corporation......................... 213,906 ----------- MANUFACTURE - DIVERSE: 4.29% 10,400 Gentex Corporation*................................. 257,400 6,900 Graco Inc........................................... 247,969 ----------- 505,369 ----------- MEDICAL INSTRUMENTS: 2.01% 6,550 Biomet, Inc......................................... 237,028 ----------- 5 SEGALL BRYANT & HAMILL MID CAP FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- OFFICE SUPPLIES AND FORMS: 2.46% 5,750 Avery Dennison Corporation*......................... 290,375 ----------- OIL - EXPLORATION & PRODUCTION: 1.67% 3,850 Stone Energy Corporation............................ 197,120 ----------- OIL & GAS / REFINE & MARKET: 2.03% 6,550 Santa Fe International Corporation.................. 239,075 ----------- PERSONAL CARE: 2.68% 6,800 The Estee Lauder Companies Inc...................... 315,775 ----------- RETAIL - DISCOUNT: 6.29% 8,100 BJ's Wholesale Club, Inc.*.......................... 266,794 12,787 Dollar General Corporation.......................... 198,199 5,100 Kohl's Corporation.................................. 276,356 ----------- 741,349 ----------- RETAIL-DRUG: 2.29% 5,100 CVS Corporation..................................... 269,981 ----------- SERVICES - COMMERCIAL: 6.90% 6,750 Cintas Corporation*................................. 313,031 6,500 DeVry Inc.*......................................... 240,094 6,650 Ecolab Inc.......................................... 260,597 ----------- 813,722 ----------- SERVICES - INTERNATIONAL: 1.94% 7,500 Robert Half International Inc....................... 228,750 ----------- TELECOM EQUIPMENT: 1.66% 9,170 ADC Telecommunications, Inc......................... 196,009 ----------- TELEPHONE: 2.58% 7,900 CenturyTel, Inc..................................... 304,150 ----------- 6 SEGALL BRYANT & HAMILL MID CAP FUND SCHEDULE OF INVESTMENTS AT OCTOBER 31, 2000 (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- TRANSPORTATION: 1.86% 4,000 C.H. Robinson Worldwide, Inc.*...................... 218,750 ----------- Total Common Stocks (Cost $9,546,020+).............. 11,477,115 ----------- Principal Amount SHORT-TERM INVESTMENTS: 5.95% Market Value -------------------------------------------------------------------------------- $701,410 Firstar Stellar Treasury Fund....................... $ 701,410 ----------- Total Investments in Securities (Cost $10,247,430): 103.28%....................... 12,178,525 Liabilities in Excess of Other Assets: (3.28%)...... (386,856) ----------- Total Net Assets: 100%.............................. $11,791,669 =========== * Non-income producing security. + Gross unrealized appreciation and depreciation of securities is as follows: Gross unrealized appreciation....................... $ 2,291,246 Gross unrealized depreciation....................... (360,152) ----------- Net unrealized appreciation..................... $ 1,931,094 =========== See accompanying Notes to Financial Statements. 7 SEGALL BRYANT & HAMILL MID CAP FUND STATEMENT OF ASSETS AND LIABILITIES AT OCTOBER 31, 2000 (UNAUDITED) -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost $10,247,430)............................... $12,178,525 Receivables Due from Advisor............................................ 21 Dividends and interest...................................... 4,545 Fund shares sold............................................ 1,875 Prepaid expenses ............................................. 1,566 ----------- Total assets.............................................. 12,186,532 ----------- LIABILITIES Payables Administration fees......................................... 2,548 Distribution fees........................................... 1,468 Fund shares repurchased..................................... 300 Securities purchased........................................ 365,661 Accrued expenses.............................................. 24,886 ----------- Total liabilities......................................... 394,863 ----------- NET ASSETS...................................................... $11,791,669 =========== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE [$ 11,791,669/ 733,425 shares outstanding; unlimited number of shares (par value $0.01) authorized]................ $ 16.08 =========== COMPONENTS OF NET ASSETS Paid-in capital............................................... $ 8,422,585 Accumulated net investment loss............................... (43,529) Accumulated net realized gain on investments.................. 1,481,519 Net unrealized appreciation on investments ................... 1,931,094 ----------- Net assets.................................................... $11,791,669 =========== See accompanying Notes to Financial Statements. 8 SEGALL BRYANT & HAMILL MID CAP FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED OCTOBER 31, 2000 (UNAUDITED) -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends................................................... $ 18,368 Interest.................................................... 15,843 ----------- Total income........................................... 34,211 ----------- Expenses Advisory fees (Note 3)...................................... 41,584 Administration fees (Note 3)................................ 15,123 Distribution fees (Note 4).................................. 13,861 Professional fees........................................... 13,519 Fund accounting fees........................................ 9,075 Registration fees........................................... 7,914 Transfer agent fees......................................... 6,554 Other....................................................... 4,013 Reports to shareholders..................................... 3,820 Custody fees................................................ 3,630 Trustee fees................................................ 2,168 ----------- Total expenses......................................... 121,261 Less, advisory fee waiver and absorption (Note 3)................................. (43,521) ----------- Net expenses........................................... 77,740 ----------- NET INVESTMENT LOSS ............................... (43,529) ----------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions.................. 840,287 Net change in unrealized appreciation on investments.......... 430,823 ----------- Net realized and unrealized gain on investments............. 1,271,110 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................. $ 1,227,581 =========== See accompanying Notes to Financial Statements. 9 SEGALL BRYANT & HAMILL MID CAP FUND STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------------------------------------------- Six Months May 1, 1999* ended through October 31, 2000# April 30, 1999 -------------------------------------------------------------------------------- INCREASE / (DECREASE) IN NET ASSETS FROM OPERATIONS: Net investment loss ........................ $ (43,529) $ (74,855) Net realized gain on security transactions ............................. 840,287 775,108 Net change in unrealized appreciation on investments .............. 430,823 591,738 ------------ ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ 1,227,581 1,291,991 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Net realized gain on security transactions ............................. -- (462,020) ------------ ------------ TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net increase in net assets derived from net change in outstanding shares (a) ............................... 373,825 927,329 ------------ ------------ TOTAL INCREASE IN NET ASSETS ............... 1,601,406 1,757,300 NET ASSETS Beginning of period .......................... 10,190,263 8,432,963 ------------ ------------ END OF PERIOD ................................ $ 11,791,669 $ 10,190,263 ============ ============ (a) A summary of shares transactions is as follows: Six Months ended May 1, 1999* through October 31, 2000# April 30, 1999 -------------------------- -------------------------- Shares Value Shares Value ----------- ----------- ----------- ----------- Shares sold ........ 41,845 $ 632,626 41,509 $ 534,032 Shares issued in reorganization (Note 6) ......... -- -- 606,336 7,570,605 Shares redeemed .... (17,549) (258,801) (6,259) (79,599) ----------- ----------- ----------- ----------- Net increase ....... 24,296 $ 373,825 641,586 $ 8,025,038 =========== =========== =========== =========== * Commencement of operations. # Unaudited. See accompanying Notes to Financial Statements. 10 SEGALL BRYANT & HAMILL MID CAP FUND FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
-------------------------------------------------------------------------------------- Six Months May 1, 1999 April 1, 1999* ended through through Oct. 31, 2000# Apr. 30, 2000 Apr. 30, 1999 -------------------------------------------------------------------------------------- Net asset value, beginning of period .................. $ 14.37 $ 13.14 $ 12.49 ---------- ---------- ---------- Income from investment operations: Net investment loss ............... (0.06) (0.11) -- Net realized and unrealized gain on investments ................... 1.77 1.99 0.65 ---------- ---------- ---------- Total from investment operations ....... 1.71 1.88 0.65 ---------- ---------- ---------- Less distributions: Dividends from net realized gain .. -- (0.65) -- ---------- ---------- ---------- Net asset value, end of period ......... $ 16.08 $ 14.37 $ 13.14 ========== ========== ========== Total return ........................... 11.90%++ 20.91% 5.20%++ Ratios/supplemental data: Net assets, end of period (thousands) .. $ 11,792 $ 10,190 $ 8,433 Ratio of expenses to average net assets: Before expense reimbursement ...... 2.19%+ 2.51% 7.35%+ After expense reimbursement ....... 1.40%+ 1.40% 1.34%+ Ratio of net investment income to average net assets: After expense reimbursement ....... (0.78%)+ (0.78%) (0.23%)+ Portfolio turnover rate ................ 47.37% 114.39% 18.02%
* Commencement of operations. + Annualized. ++ Not Annualized. # Unaudited. See accompanying Notes to Financial Statements. 11 SEGALL BRYANT & HAMILL MID CAP FUND NOTES TO FINANCIAL STATEMENTS (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 generally accepted accounting principles. 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. Dividend income and 12 SEGALL BRYANT & HAMILL MID CAP FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Realized gains and losses on securities sold are determined on the basis of identified cost. D. 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 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, 2000, 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, 2000, the Fund incurred $41,584 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 reductions 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 13 SEGALL BRYANT & HAMILL MID CAP FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- 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 October 31, 2000, the Advisor reduced its fees and absorbed Fund expenses in the amount of $43,521; no amounts were reimbursed to the Advisor. Investment Company Administration, L.L.C. (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 First Fund Distributors, Inc. (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 and/or directors of the Administrator and the Distributor. 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 14 SEGALL BRYANT & HAMILL MID CAP FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- coordination agreement adopted under the Plan, distribution fees are paid to the Advisor as "Distribution Coordinator". For the six months ended October 31, 2000, the Fund paid the Distribution Coordinator in the amount of $13,861. NOTE 5 - PURCHASES AND SALES OF SECURITIES For the six months ended October 31, 2000, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $5,003,544 and $5,004,312, respectively. NOTE 6 - REORGANIZATION On April 1, 1999 the Fund issued shares in exchange for shares of the Segall Bryant & Hamill Growth and Income Fund in a reorganization. The following is a summary of shares issued, net assets on the date of reorganization, net asset value per share and unrealized appreciation on that date: Shares ................................................ 606,335 Net Assets ............................................ $ 7,570,605 Net Asset Value Per Share ............................. $ 12.49 Final Distribution Per Share Paid April 14, 1999 ...... 1.37 ----------- Exchange Price Per Share .............................. $ 13.86 ----------- Unrealized Appreciation ............................... 462,558 See accompanying Notes to Financial Statements. 15 ADVISOR Segall Bryant & Hamill 10 South Wacker Drive, Suite 2150 Chicago, Illinois 60606 www.sbhic.com DISTRIBUTOR First Fund Distributors, Inc. 4455 East Camelback Road, Suite 261E Phoenix, Arizona 85018 CUSTODIAN Firstar Institutional Custody Services 425 Walnut Street Cincinnati, Ohio 45202 CUSTOMER SERVICE / TRANSFER AGENT American Data Services 150 Motor Parkway, Suite 109 Hauppauge, New York 11788 877-829-8413 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP 345 California Street, 29th Floor San Francisco, California 94104