-----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, KjLGmKXbXwgrgCnAuL12eL4Qi2c2aM1XzQC3Jfe6iF4ZT+Ec0qeMsegauhZ9BcYM CSKjv6MLS9IRhPdaUMDXgA== 0000950147-99-000934.txt : 19990830 0000950147-99-000934.hdr.sgml : 19990830 ACCESSION NUMBER: 0000950147-99-000934 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVISORS SERIES TRUST CENTRAL INDEX KEY: 0001027596 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07959 FILM NUMBER: 99700536 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 SEMI-ANNUAL REPORT FOR PERIOD ENDING 6-30-99 THE AL FRANK FUND SEMI-ANNUAL REPORT JUNE 30, 1999 THE AL FRANK FUND 465 FOREST AVENUE, SUITE I LAGUNA BEACH, CA 92651 SHAREHOLDER SERVICES: (888) 263-6443 DAILY NAV: (877) 654-1325 WWW.ALFRANK.COM AL FRANK ASSET MANAGEMENT, INC. P.O. Box 1438, Laguna Beach, CA 92652 Phone 949-497-7657 Fax 949-497-7658 Dear Fund Shareholder, The Spanish have a saying that is particularly appropriate to successful investing and to our Fund. With patience, everything is possible. Never mind that what is possible is not always feasible or practical. Still, instant gratification is the enemy of development and fruition. In our newsletter, articles, books and seminars, we point out that simple value investing takes time to succeed, in many instances years. Stocks that are generally deeply undervalued--underpriced in the market--are usually so because their corporations are out of favor or some periodic market trauma has turned off many investors. No one knows how much an unloved stock will decline. Rarely obvious is when investors discover its intrinsic value and begin buying and bidding up a heretofore "dead money" stock. Likewise, no one knows how much a "discovered" bargain will advance or how long it will take to reach fair value, although fundamental analysis usually yields a reasonable fair-value price. Happily, our Fund had a terrific second quarter, after struggling for five quarters to overcome the major sell off of the Summer of 1998 and to come back to profitability. I am often surprised at how strong a move undervalued stocks can make, which turns a poor record into a worthwhile one. Here is a brief review of the Fund's history through 6/30/99. We compare our Fund's average annual total return with a baseline, The Russell 2000 Index (R2K):
Fund's Change Date NAV from 1/2/98 R2K Index R2K's Change Fund begins operations: 1/2/98 $10.00 437.02 Fund's high so far: 4/22/98 11.83 +18.30% 491.14 12.38% Fund's low so far: 10/8/98 6.54 -34.60 310.25 -29.01 Fund's first year: 12/31/98 9.07 - 9.30 421.96 - 3.45 Through First quarter 1999: 3/31/99 8.45 -15.50 397.63 - 9.01 Through Second quarter 1999: 6/30/99 11.35 +13.50 457.67 + 4.73 For the Second quarter 1999: +34.32% +15.10%
One of the heartaches of managing an open-end mutual fund, is to see Fund shareholders redeem shares when the Fund is down. Removing money from a fund near its low (and a market low) often causes a Fund to have to sell shares at a loss to meet redemptions. The table shows our Fund's low (NAV) of $6.54 on 10/8/98 and its close on 12/31/98 at $9.07. While down 9.30% for 1998, the Fund was up 38.69% from its low by year end. A shareholder who redeemed shares on 10/8/98 would have taken a 34.60% loss from the initial NAV of $10.00, or an even greater loss from buying at a higher price as its NAV hit $11.83 on 4/22/98. On the other hand, holding the Fund shares until 6/30/99, the shareholder realized a 73.55% gain from the Fund's low. For the same period, the R2K gained 47.52%. Just think, locking in a 34.60% or greater loss on 10/8/98 versus holding and seeing a 73.55% advance from that low, in just nine months, leading to a profit of 13.50%! This example does not intend to represent the gains that a typical investor might expect from the fund, but rather, is used merely to illustrate the idea that a long-term investor may ultimately be rewarded more so than an investor who attempts to "time" the market by selling shares. While we cannot recommend when you should buy or sell shares of the Fund, we certainly advocate a long-term approach to investing. THE AL FRANK FUND This real example is the kind of experience we have had for over 22 years, speculating and investing our own money as well as others', and why we claim that patience is probably the most important attribute one can have to be a successful value investor. We look forward to the balance of this year and next to see if we can't "catch up" to what we would consider a handsome total return for a 2-3 year investment. We do not see the Fund as a "trading vehicle" because of our long-term orientation. However, that does not mean one should avoid dollar-cost averaging down or up in the purchase of additional shares. We are not limited to buying any category or market capitalization size stock. We look forward to buying more large cap stocks when their valuation makes them undervalued bargains. Recent rotational buying in the stock market, e.g., some of the so-called cyclical stocks which had been out of favor, augurs well for the small capitalization stocks as well. Faithfully yours, /s/ Al Frank Al Frank Past performance is not predictive of future performance. Fund share values will fluctuate so that you may have a gain or loss when shares are redeemed. The Fund utilizes leverage which involves special risk considerations not prevalent in other Funds. The Russell 2000 Index is a widely regarded small cap index of the 2,000 smallest securities of the Russell 3000 Index which is comprised of the 3,000 largest U.S. securities as determined by total market capitalization. The Fund is distributed by First Fund Distributors, Inc., Phoenix, AZ. 2 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- Shares COMMON STOCKS: 106.83% Market Value - -------------------------------------------------------------------------------- AEROSPACE/DEFENSE - EQUIPMENT: 0.96% 11,000 Allied Research Corporation* ........................ $ 66,000 ---------- AIRLINES: 2.23% 600 AMR Corporation*..................................... 40,950 1,657 KLM Royal Dutch Airlines............................. 47,328 1,000 UAL Corporation*..................................... 65,000 ---------- 153,278 ---------- APPAREL MANUFACTURERS: 0.31% 2,200 Fruit of the Loom, Inc. Class A*..................... 21,450 ---------- APPLICATIONS SOFTWARE: 1.64% 10,000 American Software, Inc. Class A*..................... 44,375 2,200 Project Software & Development, Inc.*................ 68,750 ---------- 113,125 ---------- ATHLETIC EQUIPMENT: 3.27% 37,213 First Team Sports, Inc.*............................. 116,291 4,823 Saucony, Inc. Class B................................ 109,120 ---------- 225,411 ---------- ATHLETIC FOOTWEAR: 0.49% 1,800 Reebok International Ltd............................. 33,525 ---------- AUTO - CARS/LIGHT TRUCKS: 0.48% 374 DaimlerChrysler Corporation.......................... 33,239 ---------- AUTO/TRUCK PARTS - ORIGINAL EQUIPMENT MANAGER: 0.57% 1,186 Dura Automotive Systems, Inc.*....................... 39,435 ---------- AUTO/TRUCK PARTS AND EQUIPMENT: 2.21% 1,800 Meritor Automotive, Inc.............................. 45,900 7,200 OEA, Inc............................................. 63,900 6,000 TBC Corporation*..................................... 42,375 ---------- 152,175 ---------- BUILDING - MAINTENANCE AND SERVICE: 1.39% 14,500 C. H. Heist Corp.*................................... 96,063 ---------- See Notes to Financial Statements. 3 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- BUILDING - MOBILE HOME/MANUFACTURED HOUSES: 2.01% 2,900 Cavalier Homes, Inc.................................. $ 23,744 2,100 Oakwood Homes Corporation............................ 27,563 17,000 SMC Corporation*..................................... 87,125 ---------- 138,432 ---------- BUILDING - RESIDENTIAL/COMMERCIAL: 0.66% 3,500 Standard Pacific Corp................................ 45,281 ---------- BUILDING AND CONSTRUCTION PRODUCTS - MISCELLANEOUS: 0.27% 1,203 Patrick Industries, Inc.............................. 18,797 ---------- CAPACITORS: 3.89% 40,000 Aerovox Incorporated*................................ 105,000 7,100 KEMET Corporation*................................... 162,856 ---------- 267,856 ---------- CHEMICALS - PLASTICS: 0.37% 1,600 Wellman, Inc ........................................ 25,500 ---------- CIRCUIT BOARDS: 0.36% 10,000 Circuit Systems, Inc.* .............................. 24,688 ---------- CIRCUITS: 3.31% 3,000 Hadco Corporation* .................................. 119,250 10,000 Integrated Device Technology, Inc.* ................. 108,750 ---------- 228,000 ---------- COMMUNICATIONS SOFTWARE: 0.47% 3,100 Digi International Inc.* ............................ 32,356 ---------- COMPUTER SOFTWARE: 0.29% 1,250 Software Spectrum, Inc.* ............................ 20,313 ---------- See Notes to Financial Statements. 4 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- COMPUTERS - MEMORY DEVICES: 2.68% 2,400 Dataram Corporation*.................................. $ 23,700 4,400 Exabyte Corporation*.................................. 17,050 800 Quantum Corporation*.................................. 19,300 9,777 Read-Rite Corporation*................................ 60,648 2,500 Seagate Technology, Inc............................... 64,063 ---------- 184,761 ---------- COMPUTERS - MICRO: 1.16% 4,500 Sequent Computer Systems, Inc. ....................... 79,875 ---------- COMPUTERS - PERIPHERAL EQUIPMENT: 8.77% 19,390 ESS Technology, Inc.*................................. 260,553 4,000 MicroTouch Systems, Inc.*............................. 59,500 3,000 S3 Incorporated*...................................... 27,281 5,000 SMART Modular Technologies, Inc.*..................... 86,875 18,475 Trident Microsystems, Inc.*........................... 169,739 ---------- 603,948 ---------- CONSULTING - SERVICES: 0.14% 600 Right Management Consultants, Inc.*................... 9,300 ---------- DIAMONDS/PRECIOUS STONES: 0.87% 2,500 De Beers Consolidated Mines Ltd. ADR.................. 59,688 ---------- DISPOSABLE MEDICAL PRODUCTS: 1.55% 13,774 Utah Medical Products, Inc.*.......................... 106,749 ---------- DISTRIBUTION/WHOLESALE: 0.35% 3,400 Allou Health & Beauty Care, Inc.*..................... 24,013 ---------- DIVERSIFIED OPERATOR/COMMERCIAL SERVICE: 1.31% 15,300 McRae Industries, Inc.*............................... 89,888 ---------- ELECTRIC PRODUCTS - MISCELLANEOUS: 1.17% 3,000 Kulicke and Soffa Industries, Inc..................... 80,438 ---------- See Notes to Financial Statements. 5 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- ELECTRONIC COMPONENTS - MISCELLANEOUS: 1.52% 8,289 Nam Tai Electronics, Inc. ............................ $ 104,649 ---------- ELECTRONIC COMPONENTS - SEMICONDUCTOR: 10.84% 4,000 Atmel Corporation*.................................... 104,750 1,500 Electroglas, Inc.*.................................... 30,000 3,500 International Rectifier Corporation*.................. 46,594 2,000 Lam Research Corporation*............................. 93,375 7,650 National Semiconductor Corporation*................... 193,641 6,500 Silicon Valley Group, Inc.*........................... 109,281 4,983 Siliconix Incorporated*............................... 170,668 ---------- 748,309 ---------- ELECTRONIC MEASURING INSTRUMENTS: 2.43% 2,500 Cohu, Inc............................................. 88,438 3,750 Vishay Intertechnology, Inc.*......................... 78,750 ---------- 167,188 ---------- ELECTRONIC SECURITY DEVICES: 0.50% 3,800 Vicon Industries, Inc.*............................... 34,200 ---------- FINANCE - INVESTMENT BANKERS/BROKERS: 1.25% 840 The Bear Stearns Companies Inc........................ 39,270 750 Lehman Brothers Holdings Inc.......................... 46,688 ---------- 85,958 ---------- FINANCE - LEASING: 0.57% 20,800 Prime Capital Corporation*............................ 39,000 ---------- FINANCE - MORTGAGE LOAN/BANKER: 0.56% 819 First Union Corporation............................... 38,493 ---------- FOOD - MISCELLANEOUS/DIVERSIFIED: 0.71% 2,500 Nabisco Group Holdings Corp.*......................... 48,906 ---------- FOOD - SUGAR AND REFINING: 1.31% 13,000 Imperial Holly Corporation............................ 90,188 ---------- See Notes to Financial Statements. 6 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- FOOTWEAR AND RELATED APPAREL: 1.29% 2,500 R. G. Barry Corporation* ............................. $ 20,625 1,000 The Timberland Company* .............................. 68,063 ---------- 88,688 ---------- GOLF: 1.13% 2,200 Callaway Golf Company ................................ 32,175 3,600 Coastcast Corporation* ............................... 45,900 ---------- 78,075 ---------- INSTRUMENTS - SCIENTIFIC: 0.71% 4,002 MTS Systems Corporation .............................. 48,774 ---------- LEISURE AND RECREATION PRODUCTS: 0.81% 2,000 Brunswick Corporation ................................ 55,750 ---------- LIFE/HEALTH INSURANCE: 0.95% 2,153 Conseco, Inc. ........................................ 65,532 ---------- MEDICAL - HOSPITALS: 0.23% 2,000 Integrated Health Services, Inc. 16,000 ---------- MEDICAL INFORMATION SYSTEMS: 1.30% 10,000 HCIA Inc.* 89,375 ---------- MEDICAL INSTRUMENTS: 0.88% 2,500 Empi, Inc.*........................................... 60,938 ---------- MEDICAL LASER SYSTEMS: 0.91% 2,850 Summit Technology, Inc.*.............................. 62,700 ---------- MEDICAL PRODUCTS: 0.64% 9,000 BioSource International, Inc.*........................ 44,156 ---------- MEDICAL/OUTPATIENT - HOME CARE: 0.12% 2,700 Genesis Health Ventures, Inc.*........................ 8,100 ---------- See Notes to Financial Statements. 7 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- METAL - DIVERSIFIED: 3.04% 5,100 ASARCO Incorporated................................... $ 95,944 7,487 Cyprus Amax Minerals Company.......................... 113,709 ---------- 209,653 ---------- METAL PROCESSORS AND FABRICATION: 0.30% 2,500 SIFCO Industries, Inc................................. 20,625 ---------- MISCELLANEOUS MANUFACTURING: 0.49% 1,000 Trinity Industries, Inc............................... 33,500 ---------- NETWORK SOFTWARE: 1.57% 50,000 Netmanage, Inc.* ..................................... 107,812 ---------- NETWORKING PRODUCTS: 6.49% 2,150 3Com Corporation*..................................... 57,378 3,000 Adaptec, Inc.*........................................ 105,938 2,000 Bel Fuse Inc. Class B*................................ 52,000 9,500 Cabletron Systems, Inc.*.............................. 123,500 2,500 Standard Microsystems Corporation*.................... 18,906 16,510 Zoom Telephonics, Inc.*............................... 89,257 ---------- 323,479 ---------- OIL - FIELD SERVICES: 0.70% 3,000 Oceaneering International, Inc.*...................... 48,375 ---------- OIL AND GAS DRILLING: 0.52% 2,300 Global Marine Inc.*................................... 35,506 ---------- OIL REFINING AND MARKETING: 0.39% 2,700 Giant Industries, Inc................................. 26,831 ---------- PAPER AND RELATED PRODUCTS: 0.99% 5,650 Pope & Talbot, Inc.................................... 68,153 ---------- PHYSICAL THERAPY/REHABILITATION CENTERS: 0.72% 3,300 HEALTHSOUTH Corporation*.............................. $ 49,293 ---------- See Notes to Financial Statements. 8 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- PROPERTY/CASUALTY INSURANCE: 0.49% 2,200 Frontier Insurance Group, Inc.*....................... 33,825 ---------- REITS - MORTGAGE: 0.32% 4,000 Capstead Mortgage Corporation......................... 21,750 ---------- RESTAURANTS: 0.41% 3,500 Landry's Seafood Restaurants, Inc.*................... 28,000 ---------- RETAIL - APPAREL/SHOE: 4.50% 2,800 Gadzooks, Inc.*....................................... 44,800 41,800 One Price Clothing Stores, Inc.*...................... 198,550 3,000 Syms Corp............................................. 24,375 4,000 The Gymboree Corporation*............................. 42,000 ---------- 309,725 ---------- RETAIL - MISCELLANEOUS/DIVERSIFIED: 1.50% 351 Ryerson Tull, Inc..................................... 7,919 26,230 Tandycrafts, Inc.*.................................... 95,084 ---------- 103,003 ---------- RUBBER AND PLASTICS: 2.26% 15,705 Applied Extrusion Technology, Inc.*................... 119,751 6,000 The Lamson & Sessions Co.*............................ 36,000 ---------- 155,751 ---------- S & L/THRIFTS - WESTERN: 0.70% 2,200 Golden State Bancorp Inc.*............................ 48,400 ---------- SHIPBUILDING: 0.33% 3,400 Halter Marine Group, Inc.*............................ 22,525 ---------- STEEL - PRODUCERS: 2.69% 3,700 Bethlehem Steel Corporation*.......................... 28,444 9,046 Rouge Industries, Inc. Class A........................ 87,068 10,477 The LTV Corporation................................... 70,065 ---------- 185,577 ---------- STEEL PIPE AND TUBE: 1.52% 7,500 Maverick Tube Corporation*............................ $ 104,531 ---------- See Notes to Financial Statements. 9 THE AL FRANK FUND SCHEDULE OF INVESTMENTS AT JUNE 30, 1999 (UNAUDITED), CONTINUED - -------------------------------------------------------------------------------- Shares Market Value - -------------------------------------------------------------------------------- TELECOM EQUIPMENT: 1.13% 5,000 Advanced Fibre Communications, Inc.*.................. 78,125 ---------- TELECOMMUNICATIONS EQUIPMENT: 0.22% 8,000 RF Industries, Ltd.*.................................. 15,000 ---------- TEXTILE - HOME FURNISHINGS: 0.41% 4,961 Conso Products Company*............................... 28,526 ---------- TEXTILE PRODUCTS: 0.62% 5,000 The Dixie Group, Inc.................................. 42,422 ---------- TOBACCO: 0.38% 833 R.J. Reynolds Tobacco Holdings, Inc.*................. 26,240 ---------- TOOLS - HAND HELD: 0.98% 7,000 P & F Industries, Inc. Class A*....................... 67,594 ---------- TRANSPORT - MARINE: 1.06% 1,200 Sea Containers Limited Class A*....................... 40,275 1,900 Stolt-Nielsen S.A. ADR*............................... 32,530 ---------- 73,113 ---------- WIRELESS EQUIPMENT: 0.26% 5,000 Glenayre Technologies, Inc.*.......................... 17,969 ---------- Total Common Stocks (cost $6,908,486): 106.83%........ 7,357,058 Liabilities in excess of other assets: (6.83%)........ (470,594) ---------- Total Net Assets: 100.00%............................. $6,886,464 ========== *Non-income producing security. See accompanying Notes to Financial Statements. 10 THE AL FRANK FUND STATEMENT OF ASSETS AND LIABILITIES AT JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS Investments in securities, at value (identified cost of $6,908,486) ....................................... $ 7,357,058 Cash ........................................................ 7,188 Receivables: Dividends ............................................. 1,392 Due from Advisor ...................................... 4,321 Fund shares sold ...................................... 100,000 Deferred organization costs ................................. 24,566 Prepaid expenses ............................................ 26,496 ----------- Total assets ....................................... 7,521,021 ----------- LIABILITIES Payables: Administration fees ................................... 2,466 Loan payable (Note 6) ................................. 612,726 Accrued expenses ............................................ 19,365 ----------- Total liabilities .................................. 634,557 ----------- NET ASSETS .................................................... $ 6,886,464 =========== Net asset value, offering and redemption price per share ($6,886,464/606,724 shares outstanding; unlimited number of shares authorized, par value $0.01) ............... $ 11.35 =========== COMPONENTS OF NET ASSETS Paid-in capital ............................................. $ 6,445,646 Accumulated net investment loss ............................. (110,573) Accumulated net realized gain on investments ................ 102,819 Net unrealized appreciation on investments .................. 448,572 ----------- Net assets ............................................ $ 6,886,464 =========== See accompanying Notes to Financial Statements. 11 THE AL FRANK FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME Income Dividends .................................................. $ 22,875 ----------- Total income ......................................... 22,875 ----------- Expenses Advisory fees (Note 3) ..................................... 30,855 Interest expense (Note 6) .................................. 24,911 Administration fees (Note 3) ............................... 14,876 Transfer agent fees ........................................ 11,591 Professional fees .......................................... 8,653 Distribution fees (Note 4) ................................. 7,714 Fund accounting fees ....................................... 7,091 Registration fees .......................................... 4,436 Custody fees ............................................... 3,761 Amortization of deferred organization costs ................ 3,472 Reports to shareholders .................................... 3,096 Miscellaneous expense ...................................... 1,645 Trustee fees ............................................... 1,528 Insurance expense .......................................... 1,469 ----------- Total expenses ........................................... 125,098 Less, advisory fee waiver and absorption (Note 3) ........ (56,169) ----------- Net expenses ............................................. 68,929 ----------- NET INVESTMENT LOSS .................................... (46,054) ----------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions ................ 169,734 Net change in unrealized appreciation on investments ........ 1,242,456 ----------- Net realized and unrealized gain on investments ........... 1,412,190 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 1,366,136 =========== See Notes to Financial Statements. 12 THE AL FRANK FUND
STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------------------------- Six Months January 2, 1998* Ended through June 30, 1999# December 31, 1998 -------------- ----------------- NET INCREASE (DECREASE) IN ASSETS FROM OPERATIONS Net investment income (loss) ............................. $ (46,054) $ (64,518) Net realized gain (loss) on security transactions ........ 169,734 (66,916) Net change in unrealized appreciation (depreciation) on investments ........................................ 1,242,456 (793,884) ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,366,136 (925,318) ----------- ----------- CAPITAL SHARE TRANSACTIONS Net increase in net assets derived from net change in outstanding shares (a) ............................. (1,521,639) 7,967,285 ----------- ----------- TOTAL INCREASE IN NET ASSETS ............................. (155,503) 7,041,967 NET ASSETS Beginning of period ............................................ 7,041,967 0 ----------- ----------- END OF PERIOD .................................................. $ 6,886,464 $ 7,041,967 =========== ===========
(a) A summary of capital shares transactions is as follows: Six Months January 2, 1998* Ended through June 30, 1999# December 31, 1998 -------------------------- -------------------------- Shares Paid in Capital Shares Paid in Capital ------ --------------- ------ --------------- Shares sold .......... 75,450 $ 733,857 919,730 $9,297,418 Shares redeemed....... (245,143) (2,255,496) (143,313) (1,330,133) -------- ----------- ------- ---------- Net increase.......... (169,693) $(1,521,639) 776,417 $7,967,285 ======== =========== ======= ========== *Commencement of operations. #Unaudited. See Notes to FInancial Statements. 13 THE AL FRANK FUND
FINANCIAL HIGHLIGHTS - FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD - --------------------------------------------------------------------------------------- Six Months January 2, 1998* Ended through June 30, 1999# December 31, 1998 - --------------------------------------------------------------------------------------- Net asset value, beginning of period................. $ 9.07 $10.00 ------ ------ Income from investment operations: Net investment gain (loss)......................... 0.01 (0.08) Net realized and unrealized gain on investments.... 2.27 (0.85) ------ ------ Total from investment operations..................... 2.28 (0.93) ------ ------ Net asset value, end of period....................... $11.35 $ 9.07 ====== ====== Total return......................................... 25.14%++ (9.30%)++ Ratios/supplemental data: Net assets, end of period (thousands)................ $6,886 $7,042 Ratio of expenses to average net assets: Before expense reimbursement....................... 4.05%+ 3.74%+ After expense reimbursement........................ 2.25%+ 2.25%+ Ratio of net investment loss to average net assets After expense reimbursement........................ (1.49%)+ (1.28%)+ Portfolio turnover rate.............................. 0.61% 5.82%
*Commencement of operations. +Annualized. ++Not Annualized. #Unaudited. See Notes to Financial Statements. 14 THE AL FRANK FUND NOTES TO FINANCIAL STATEMENTS AT JUNE 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- NOTE 1 - ORGANIZATION The Al Frank Fund (the "Fund") is a series of shares 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 January 2, 1998. The investment objective of the Fund is to seek growth of capital. The Fund seeks to achieve its objective by investing in out of favor and undervalued equity securities. 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 distributions to shareholders are recorded on the ex-dividend date. Realized gains and losses on securities sold are determined on the basis of identified cost. D. Deferred Organization Costs: The Fund has incurred expenses of $35,000 in connection with its organization. These costs have been deferred and are being amortized on a straight-line basis over a period of sixty months from the date the Fund commenced investment operations E. 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 period ended June 30, 1999, Al Frank Asset Management, Inc. (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 15 THE AL FRANK FUND NOTES TO FINANCIAL STATEMENTS AT JUNE 30, 1999 (UNAUDITED) CONTINUED - -------------------------------------------------------------------------------- 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 period ended June 30, 1999, the Fund incurred $30,855 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 2.25% 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 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 period ended June 30, 1999, the Advisor reduced its fees and absorbed Fund expenses in the amount of $56,169; 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 annual rate of 0.20% of average daily net assets, subject to a minimum fee of $30,000 annually. 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 Trust has adopted a Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the 1940 Act. The Plan provides that the Fund may pay a fee to the Advisor, acting as Distribution Coordinator, at an annual rate of 0.25% of the average daily net assets of the Fund. The fee is paid to the Distribution Coordinator as a reimbursement for, or in anticipation of, expenses incurred for distribution-related activity. During the period ended June 30, 1999, the Fund paid Distribution Coordinator in the amount of $7,713. NOTE 5 - SECURITIES TRANSACTIONS For the period ended June 30, 1999, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were $41,293 and $1,292,565, respectively. 16 NOTE 6 - LINE OF CREDIT At December 31, 1998, the Fund has established an uncommitted line of credit agreement in the amount of $750,000 with Firstar Bank, N.A., the Fund's custodian of assets. The current annual interest rate on any borrowing under the agreement in equal to the Broker Call Rate, as published in the Wall Street Journal as the Call Money Rate, plus 0.50%, payable monthly, in arrears. The purpose of the agreement is to either meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities from the Fund's portfolio, or for leverage purposes. Borrowing money by the Fund involves special risk considerations that are more fully outlined in the Fund's prospectus. At June 30, 1999, the Fund has borrowed $612,726 under the agreement. 17 ADVISOR Al Frank Asset Management, Inc. 465 Forest Avenue, Suite I Laguna Beach, California 92651 DISTRIBUTOR First Fund Distributors, Inc. 4455 E. Camelback Road, Suite 261-E Phoenix, Arizona 85018 CUSTODIAN Firstar Bank, N.A. 425 Walnut Street, M/L 6118 Cincinnati, Ohio 45202 TRANSFER AGENT American Data Services, Inc. 150 Motor Parkway, Suite 109 Hauppauge, New York 11788 LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP 345 California Street San Francisco, California 94104 -----END PRIVACY-ENHANCED MESSAGE-----