N-30D 1 e-7056.txt SEMI-ANNUAL REPORT DATED 5/23/2001 [LOGO] ELC EDGAR LOMAX VALUE FUND SEMI-ANNUAL REPORT FOR THE PERIOD ENDED APRIL 30, 2001 EDGAR LOMAX VALUE FUND Semi-Annual Report May 23, 2001 Dear Fellow Shareholder: Things continue to go well for all of us as shareholders in the Edgar Lomax Value Fund. The Fund's assets have grown to over $5.6 million through a combination of additional investors and strong investment gains. In fact, from its December 12, 1997 inception through April 30, 2001, the Fund's average annual total return was 8.12%. Before discussing the recent investment results, let me first mention one significant action we took concerning ongoing Fund expenses. Effective this past January 1, The Edgar Lomax Company -- as investment advisor to the Fund -- began absorbing more of the Fund's expenses in lieu of those expenses being borne by the Fund and its shareholders. We intend to continue this program as needed to keep shareholder expenses no greater than 1.23% of Fund assets (previously 1.75%). The effect is that approximately 0.52% of additional Fund performance is passed on to you each year. Now, onto the market. About one year ago, my letter to you described a speculative stock market driven almost exclusively by technology stocks and their "promise" of extraordinary earnings sometime in the future. That was an environment in which stock prices of most successful "old economy" companies stagnated solely from investor neglect, even as their businesses were thriving. The latter are the companies we invested, and continue to invest, in -- bargains. Beginning in the second half of 2000, the heated rate of corporate earnings growth inevitably slowed. The stock market's clear response was an abrupt "flight to quality," boosting the prices of these unglamorous, but profitable, companies. And the results were stunning. Specifically, the Edgar Lomax Value Fund gained 15.51% during the year ended April 30, 2001, while the S&P 500 lost 12.97%. The fact is, we were always comfortable placing your hard-earned money in steady (some say "boring") companies. To get them at low prices made their outlook all the more appealing. We simply needed time --and your patience -- to see the value of our stocks recognized. While that process clearly has begun, we would not have predicted such strong gains in the face of a sharply declining overall market. Certainly, every period will not treat us this favorably, but you can rest assured that we will always do our best to bring you good long-term returns. Cordially, /s/ Randall R. Eley Randall R. Eley EDGAR LOMAX VALUE FUND SCHEDULE OF INVESTMENTS AT APRIL 30, 2001 (UNAUDITED) -------------------------------------------------------------------------------- Shares COMMON STOCKS: 99.23% Market Value -------------------------------------------------------------------------------- AEROSPACE/DEFENSE: 3.46% 2,500 General Dynamics Corporation ....................... $ 192,700 ----------- AIRLINES: 1.74% 2,200 Delta Air Lines, Inc. .............................. 96,866 ----------- ALUMINUM: 3.72% 5,000 Alcoa Inc. ......................................... 207,000 ----------- AUTOMOBILES: 1.99% 2,025 General Motors Corporation ......................... 110,990 ----------- BANKS - MAJOR REGIONAL: 1.36% 3,589 U.S. Bancorp ....................................... 76,015 ----------- CHEMICALS: 5.12% 4,038 E. I. du Pont de Nemours and Company ............... 182,477 3,075 The Dow Chemical Company ........................... 102,859 ----------- 285,336 ----------- COMPUTERS - HARDWARE: 1.83% 3,600 Hewlett-Packard Company ............................ 102,348 ----------- ELECTRIC COMPANIES: 7.93% 3,375 American Electric Power Company, Inc. .............. 166,523 1,000 Entergy Corp. ...................................... 40,500 2,355 Mirant Corp. ....................................... 96,084 5,925 The Southern Company ............................... 138,585 ----------- 441,692 ----------- ELECTRICAL EQUIPMENT: 2.26% 2,800 Rockwell International Corporation ................. 126,084 ----------- FINANCIAL - DIVERSIFIED: 6.63% 1,600 Citigroup Inc ...................................... 78,640 5,565 J.P. Morgan Chase .................................. 267,009 200 Morgan Stanley Dean Witter & Co. ................... 12,558 ----------- 358,207 ----------- 2 EDGAR LOMAX VALUE FUND SCHEDULE OF INVESTMENTS AT APRIL 30, 2001 (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- FOODS: 5.36% 7,600 Ralston Purina Co. ................................. $ 230,964 3,400 Sara Lee Corporation ............................... 67,694 ----------- 298,658 ----------- HEALTH CARE - MANAGED CARE: 2.34% 1,225 CIGNA Corporation .................................. 130,708 ----------- INSURANCE - LIFE/HEALTH: 0.39% 500 American General Corporation ....................... 21,805 ----------- INSURANCE - MULTI-LINE: 3.12% 2,800 The Hartford Financial Services Group, Inc ......... 173,880 ----------- INVESTMENT BANKING/BROKERAGE: 1.69% 700 Lehman Brothers Holdings Inc. ...................... 50,925 700 Merrill Lynch & Co., Inc. .......................... 43,190 ----------- 94,115 ----------- MACHINERY - DIVERSIFIED: 4.78% 5,300 Caterpillar Inc. ................................... 266,060 ----------- MANUFACTURING - DIVERSIFIED: 6.35% 2,300 Minnesota Mining and Manufacturing Company ......... 273,723 1,500 Tyco International Ltd. ............................ 80,055 ----------- 353,778 ----------- OIL - INTERNATIONAL INTEGRATED: 4.85% 3,050 Exxon Mobil Corp. .................................. 270,230 ----------- PAPER & FOREST PRODUCTS: 7.12% 6,800 International Paper Company ........................ 266,424 2,300 Weyerhaeuser Company ............................... 130,018 ----------- 396,442 ----------- PHOTOGRAPHY/IMAGING: 4.82% 6,175 Eastman Kodak Company .............................. 268,613 ----------- RAILROADS: 3.64% 6,900 Burlington Northern, Inc. .......................... 202,860 ----------- 3 EDGAR LOMAX VALUE FUND SCHEDULE OF INVESTMENTS AT APRIL 30, 2001 (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- Shares Market Value -------------------------------------------------------------------------------- RESTAURANTS: 1.68% 3,400 McDonald's Corporation ............................. $ 93,500 ----------- RETAIL - DEPARTMENT STORES: 0.40% 600 The May Department Stores Company .................. 22,350 ----------- RETAIL - GENERAL MERCHANDISE: 1.52% 2,300 Sears Roebuck & Co. ................................ 84,755 ----------- RETAIL - SPECIALTY/RETAIL: 2.03% 6,700 The Limited, Inc. .................................. 113,364 ----------- TELECOMMUNICATIONS - LONG DISTANCE: 2.64% 6,600 AT&T Corp. ......................................... 147,048 ----------- TELEPHONE: 5.31% 4,100 SBC Communications Inc. ............................ 169,125 2,300 Verizon Corp. ...................................... 126,661 ----------- 295,786 ----------- TOBACCO: 5.18% 5,750 Philip Morris Companies Inc. ....................... 288,133 ----------- Total Common Stocks (Cost $5,069,042) .............. 5,519,323 ----------- Principal Amount SHORT-TERM INVESTMENTS: 0.72% -------------------------------------------------------------------------------- $ 40,324 Firstar Stellar Treasury Fund (Cost $40,324) ....... 40,324 ----------- Total Investments in Securities (Cost $5,109,366+): 99.95% ....................... 5,559,647 Other Assets less Liabilities: 0.05% ............... 2,748 ----------- Net Assets: 100.00% ................................ $ 5,562,395 =========== + Gross unrealized appreciation and depreciation of securities is as follows: Gross unrealized appreciation ...................... $ 706,062 Gross unrealized depreciation ...................... (255,781) ----------- Net unrealized appreciation ...................... $ 450,281 =========== See accompanying Notes to Financial Statements. 4 EDGAR LOMAX VALUE FUND STATEMENT OF ASSETS AND LIABILITIES AT APRIL 30, 2001 (UNAUDITED) -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost of $5,109,366) ............................ $ 5,559,647 Receivables Dividends and interest ..................................... 4,826 Due from advisor ........................................... 6,901 Prepaid expenses ............................................. 266 ----------- Total assets ......................................... 5,571,640 ----------- LIABILITIES Payables Administration fees ........................................ 2,466 Accrued expenses ............................................. 6,779 ----------- Total liabilities .................................... 9,245 ----------- NET ASSETS ..................................................... $ 5,562,395 =========== NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE [$5,562,395 / 475,860 shares outstanding; unlimited number of shares (par value $0.01) authorized] ..... $ 11.69 =========== COMPONENTS OF NET ASSETS Paid-in capital .............................................. $ 5,025,731 Undistributed net investment income .......................... 20,038 Accumulated net realized gain on investments ................. 66,345 Net unrealized appreciation on investments ................... 450,281 ----------- Net assets ........................................... $ 5,562,395 =========== See accompanying Notes to Financial Statements. 5 EDGAR LOMAX VALUE FUND STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED APRIL 30, 2001 (UNAUDITED) -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends ................................................... $ 62,777 Interest .................................................... 1,227 ----------- Total income ............................................. 64,004 ----------- Expenses Advisory fees (Note 3) ...................................... 24,668 Administration fees (Note 3) ................................ 14,876 Professional fees ........................................... 10,787 Fund accounting fees ........................................ 9,273 Transfer agent fees ......................................... 6,695 Custody fees ................................................ 2,777 Trustee fees ................................................ 2,132 Shareholder Reporting ....................................... 1,488 Registration fees ........................................... 1,307 Other ....................................................... 1,240 Insurance expense ........................................... 733 ----------- Total expenses ........................................... 75,976 Less, advisory fee waiver and absorption (Note 3) ........ (41,356) ----------- Net expenses ............................................. 34,620 ----------- NET INVESTMENT INCOME ................................. $ 29,384 ----------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain on investments .............................. 67,618 Net change in unrealized appreciation on investments .......... 176,100 ----------- Net realized and unrealized gain on investments ............. 243,718 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .. $ 273,102 =========== See accompanying Notes to Financial Statements. 6 EDGAR LOMAX VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------ Six Months Year Ended Ended April 30, 2001# October 31, 2000 ------------------------------------------------------------------------------------------------ INCREASE IN NET ASSETS FROM: OPERATIONS Net investment income .................................... $ 29,384 $ 47,227 Net realized gain on investments ......................... 67,618 116,193 Net change in unrealized appreciation on investments ..... 176,100 15,417 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 273,102 178,838 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income ............................... (46,639) (36,575) From net realized gain ................................... (115,338) (218,064) ----------- ----------- Total dividends and distibution to shareholders ........ (161,977) (254,639) ----------- ----------- TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST Net increase in net assets derived from net change in outstanding shares (a) .............................. 692,098 568,395 ----------- ----------- TOTAL INCREASE IN NET ASSETS ............................. 803,223 492,594 ----------- ----------- NET ASSETS Beginning of period ........................................ 4,759,172 4,266,578 ----------- ----------- END OF PERIOD .............................................. $ 5,562,395 $ 4,759,172 =========== =========== (a) A summary of share transactions is as follows: Six Months Year Ended Ended April 30, 2001# October 31, 2000 ------------------------------ ---------------------------- Shares Paid in Capital Shares Paid in Capital ----------- --------------- ----------- --------------- Shares sold ........................ 51,827 $ 562,973 78,917 $ 840,168 Shares issued on reinvestments of distributions ................. 13,856 161,978 4,763 51,488 Shares redeemed .................... (2,887) (32,853) (30,703) (323,261) ----------- ----------- ----------- ----------- Net increase ....................... 62,796 $ 692,098 52,977 $ 568,395 =========== =========== =========== ===========
# Unaudited. See accompanying Notes to Financial Statements. 7 EDGAR LOMAX VALUE FUND FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
------------------------------------------------------------------------------------------------------------------------------ Six Months Year Year December 12, 1997* Ended Ended Ended through April 30, 2001# October 31, 2000 October 31, 1999 October 31, 1998 ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period ................... $11.52 $11.85 $10.78 $10.00 ------ ------ ------ ------ Income from investment operations: Net investment income ................................ 0.04 0.12 0.08 0.07 Net realized and unrealized gain on investments ........................................ 0.52 0.26 1.10 0.72 ------ ------ ------ ------ Total from investment operations ....................... 0.56 0.38 1.18 0.79 ------ ------ ------ ------ Less distributions: From net investment income ........................... (0.11) (0.10) (0.07) (0.01) From net realized gain on investments ................ (0.28) (0.61) (0.04) 0.00 ------ ------ ------ ------ Total distributions .................................... (0.39) (0.71) (0.11) (0.01) ------ ------ ------ ------ Net asset value, end of period ......................... $11.69 $11.52 $11.85 $10.78 ====== ====== ====== ====== TOTAL RETURN ........................................... 4.88%++ 3.65% 19.81% 7.89%++ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (thousands) .................. $5,562 $4,759 $4,267 $3,294 Ratio of expenses to average net assets: Before expense reimbursement ......................... 1.52%+ 3.59% 3.63% 4.67%+ After expense reimbursement .......................... 1.23%+ 1.75% 1.75% 1.75%+ Ratio of net investment income to average net assets After expense reimbursement .......................... 0.59%+ 1.22% 0.81% 0.81%+ Portfolio turnover rate ................................ 31.40% 47.43% 41.85% 32.71%
* Commencement of operations. + Annualized. ++ Not Annualized. See accompanying Notes to Financial Statements. 8 EDGAR LOMAX VALUE FUND NOTES TO FINANCIAL STATEMENTS AT APRIL 30, 2001 (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 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. 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. To the extent these book/tax differences are permanent such amounts are reclassified within the capital accounts based on their Federal tax treatment. The reclassification relates primarily to the net operating loss of the Fund which is not deductible for tax purposes and was reclassified to paid-in capital. 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. 9 EDGAR LOMAX VALUE FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- NOTE 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES For the six months ended April 30, 2001, 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, 2001, the Fund incurred $24,668 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, 2001, the Advisor reduced its fees and absorbed Fund expenses in the amount of $41,356; no amounts were reimbursed to the Advisor. Cumulative expenses subject to recapture pursuant to the aforementioned conditions amounted to $251,453 at April 30, 2001. 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. 10 EDGAR LOMAX VALUE FUND NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- NOTE 4 - PURCHASES AND SALES OF SECURITIES For the six months ended April 30, 2001, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $2,147,395 and $1,566,530, respectively. NOTE 5 - PRIVACY NOTICE The Edgar Lomax Value Fund and The Edgar Lomax Company collect non-public information about you from the following sources: * Information we receive about you on applications or other forms; * Information you give us orally; and * Information about your transactions with us or others. We do not disclose any non-public personal information about our customers or former customers without the customer's authorization, except as required by law or in response to inquiries from governmental authorities. We restrict access to your personal and account information to those employees who need to know that information to provide products and services to you. We also may disclose that information to unaffiliated third parties (such as to brokers or custodians) only as permitted by law and only as needed for us to provide agreed services to you. We maintain physical, electronic and procedural safeguards to guard your non-public personal information. 11 ADVISOR The Edgar Lomax Company 6564 Loisdale Court, Suite 310 Springfield, VA 22150 www.edgarlomax.cihost.com DISTRIBUTOR First Fund Distributors, Inc. 4455 E. Camelback Rd., Ste. 261E Phoenix, AZ 85018 CUSTODIAN Firstar Institutional Custody Services 425 Walnut Street Cincinnati, OH 45202 TRANSFER AGENT ICA Fund Services Corp. 4455 E. Camelback Rd., Ste. 261E Phoenix, AZ 85018 (800) 385-7003 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP 345 California Street, 29th Floor San Francisco, CA 94104