N-CSR 1 d763210dncsr.htm N-CSR N-CSR
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

  Investment Company Act file number            811-04014                      
 

Meridian Fund, Inc.®

 
  (Exact name of registrant as specified in charter)  
 

100 Fillmore Street, Suite 325

Denver, CO 80206

 
  (Address of principal executive offices) (Zip code)  
 

David J. Corkins

100 Fillmore Street, Suite 325

Denver, CO 80206

 
  (Name and address of agent for service)  

Registrant’s telephone number, including area code: 303-398-2929

Date of fiscal year end:  June 30

Date of reporting period: June 30, 2014


Table of Contents
Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.


Table of Contents
LOGO   

Annual Report

June 30, 2014

 

Meridian Fund, Inc.

 

 

Meridian Growth Fund

Meridian Contrarian Fund

Meridian Equity Income Fund

Meridian Small Cap Growth Fund

 

 

 

 

LOGO


Table of Contents

MERIDIAN SHAREHOLDER LETTER

Annual Report, 6/30/2014

Dear Shareholder,

During the year ending June 30, 2014, the S&P 500 and the Russell 2500 (small and medium sized companies) returned over 24.6% and 25.5%, respectively. Continued accommodative Fed policy, along with improvements in housing, employment and manufacturing were all supportive macro-economic factors that drove an overall increase in earnings and valuation for the indices.

The current low interest rate environment and the longer-term trends of globalization and technology-enhanced productivity form a powerful recipe for cash flow generation and capital markets activity. In addition to helping drive strong US equity market returns over the past few years, these market forces are contributing to positive capital flows into equities, increased corporate debt and equity issuance—and a healthy pick-up in merger and acquisition activity (M&A). M&A has traditionally been a barometer of overall CEO confidence, and, according to Bloomberg, the dollar value of global M&A during the first half of 2014 increased 89% over the same period a year ago, suggesting investors are not alone in their sanguine view of the future.

While optimism abounds for the market as a whole, it is worth a reminder that the stock market is not the economy. Underlying economic data may not be as robust as stock prices would suggest. First half 2014 US GDP growth is set to come in around 1% (2% annualized) and significant slack remains in the labor market. Reforms and deleveraging in Europe create the specter of deflation in the region and widespread geopolitical tensions remain at the top of the list of overall global risks.

At Arrowpoint and the Meridian Funds, we are not economic prognosticators, nor traders; our value-add is fundamental research first and foremost. We seek to combine attractive asymmetric risk/reward investments within a risk-managed equity portfolio. The intended outcome is to preserve capital in volatile market environments without sacrificing upside participation in up markets.

As our first year as Investment Adviser to the Meridian Fund family comes to a close, we are excited about enhancements that have been made to the client service side of the business. This includes the establishment of quarterly commentaries and a new website with substantially improved data and functionality. Please visit us at www.meridianfund.com or Arrowpoint Partners at www.ap-am.com for more information on our strategies.

On behalf of all the Meridian and Arrowpoint team members, thank you for your continued trust, confidence and investment in the Meridian Fund family.

Respectfully,

David Corkins

President


Table of Contents

MERIDIAN FUND, INC.

Table of Contents

 

 

Shareholder Letter

     1   

Portfolio Performance and Composition

     3   

Fund Expenses

     16   

Performance and Expense Disclosures

     18   

Schedule of Investments

     19   

Statements of Assets and Liabilities

     27   

Statements of Operations

     28   

Statements of Changes in Net Assets

     29   

Financial Highlights

     31   

Notes to Financial Statements

     38   

Report of Independent Registered Public Accounting Firm

     46   

Information About the Directors and Officers

     47   

2014 Tax Notice to Shareholders

     48   

 

Meridian Funds    2    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Portfolio Performance and Composition (Unaudited)

 

Discussion of Fund Performance

On September 5, 2013, we began managing the Meridian Growth Fund. It is our distinct honor to take the helm of this venerable fund, which was founded by Richard Aster nearly 30 years ago. Through rigorous fundamental research, disciplined portfolio construction, and a focus on managing risk before reward, we hope to expand upon Meridian Growth Fund’s legacy. We will use the same process and philosophy that served us well managing another mutual fund for 7 years. Namely, our investment philosophy is centered on four key tenets:

 

  1. Employ fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital, and attractive risk-reward profiles.

 

  2. Build a durable portfolio that first and foremost protects capital in tough, turbulent markets and secondarily keeps up with the broader market in bull market environments.

 

  3. Always think about risk before reward. Almost 30 years of combined experience in small- and mid-cap markets have taught us the importance of sidestepping the landmines and pitfalls that trip up many other investors.

 

  4. Protect and grow your hard-earned savings. To this end, we believe strongly that it’s important that we eat our own cooking; we plan to allocate a significant percentage of our own net worth to Meridian Growth Fund.

In our opinion, this disciplined process combined with decades of experience, extensive resources, and a long-term investment horizon are the key ingredients required for consistent outperformance versus our peers and our benchmark. We look forward to many rewarding years stewarding your capital.

Performance Overview

The Meridian Growth Fund – Legacy Shares returned 17.31% during the twelve-month period ending June 30, 2014, underperforming its primary benchmark, the Russell 2500 Growth Index, which rose 26.26%. There were several factors that impacted performance during the period.

The first was the portfolio manager transition that occurred on September 6, 2013. Prior to our portfolio management responsibilities, the portfolio underperformed the index by 4.12%. As part of the transition, we repositioned some of the portfolio’s holdings to be consistent with our philosophy and process.

The relative underperformance during the second half of the fiscal year ending June 30, 2014 was driven by the low-quality characteristics, such as low returns on capital, low profit margins and often negative earnings per share, of the stocks that performed best early in 2014. This underperformance was partially offset by the strong relative performance (seen in the low downside capture rates) during the market sell-off from March to April 2014.

The Meridian Growth Fund seeks to invest in high-quality (defined by overall profitability) and attractively valued stocks, which means the fund may underperform in periods such as the first quarter of this year.

The second period of meaningful relative performance differential was the sell-off from the index’s peak in the first week of March through the low in early April. During that time the fund captured just 70% of the market’s decline, with the Russell 2500 Growth falling 9.17% and the fund falling 6.46%. This experience is consistent with our goal of capturing less downside than the market in turbulent, volatile environments. By putting risk and downside protection at the forefront of our process, we believe we will be better positioned to deliver strong long-term absolute and relative returns.

The top contributors to performance during the period were Trimble Navigation, Sensata Technologies, and Cadence Design Systems.

 

   

Trimble Navigation provides location-based solutions to its customers that enhance their productivity and profitability. The recovery in construction end markets and continued strong demand from the farm economy resulted in strong overall financial results for the company and a strong stock price. We trimmed the position as it began to exceed the upper end of the market cap range that we invest in.

 

   

Sensata Technologies develops, manufactures and sells sensors and controls. We are attracted to the company’s large growth opportunity, which is driven by increased sensor penetration in industries such as automobiles and general industrial opportunities. We find Sensata’s business model to be attractive given the stability of its revenues, strong operating leverage and excellent management team. During the period, the company benefited from a rebound in European automobile sales and deployed capital in several small accretive acquisitions. We have been trimming the position modestly as the stock approaches our price target.

 

Meridian Funds    3    www.meridianfund.com


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Meridian Growth Fund

Portfolio Performance and Composition (Unaudited) (continued)

 

 

   

Cadence Design Systems provides software technology, design and consulting services and technology. Its primary product is electronic design automation software for the semiconductor industry. The stock rose as the company and industry transition began to show in its operating results. Specifically, industry consolidation has resulted in an improvement in pricing power, Cadence has successfully transitioned to a recurring revenue model, and we expect it to begin deploying its capital via stock repurchases. We trimmed the position modestly during the quarter.

The top three detractors to performance during the period were VistaPrint, Sally Beauty Holdings and CHC Group.

 

   

VistaPrint declined during the period due to a business model transition that has weighed negatively on short-term financial performance. We continue to believe that after the transition the company will have lower customer churn, higher customer duration, higher average selling prices and higher reorder rates. All of these combined should drive high operating leverage and substantial earnings growth. We have been adding to the position on weakness.

 

   

Sally Beauty Holdings distributes and retails beauty products. During the period the stock declined due to the impact of weather and some overall weakness in consumer spending. We have been adding to the position as we believe the company is well positioned to grow domestically, expand internationally and continue buying back stock, which should drive strong earnings growth for the long term.

 

   

CHC Group is a service provider to the offshore oil and gas industry. The stock declined during the period as the company’s growth trajectory did not exceed investor expectations. We added to the position during the period as we remain confident it will achieve our long-term growth and cash flow targets. The overall industry continues to show strong growth, and the company’s own business is improving as it restructures contracts at higher prices with longer terms.

We remain committed to employing fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital and attractive risk-reward profiles. We seek to build a durable, all-weather portfolio that protects capital in tough, turbulent markets and keeps up with the broader market in bull market environments.

Thank you for your investment in Meridian Growth Fund and for your confidence in us.

Chad Meade and Brian Schaub

 

Total Return Based on a $10,000 investment for the Period Ended June 30, 2014

This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.

 

LOGO

 

*

Effective November 1, 2013, the Russell 2500® Growth Index has replaced the S&P 500® Index as a more appropriate benchmark for the Fund. The Russell 2000® Index continues to be a benchmark for the Fund.

Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.

 

Meridian Funds    4    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Portfolio Performance and Composition (Unaudited) (continued)

 

 

Average Annual Total Return as of 6.30.14

 

Share Class    Inception    1 Year      5 Year      10 Year      Since Inception  

Legacy Class (MERDX)

   8/1/84      17.31         18.98         9.23         12.79   

Investor Class (MRIGX)

   11/15/13                              5.92   

Advisor Class (MRAGX)

   11/15/13                              5.75   

Russell 2000® Index

   8/1/84      23.64         20.21         8.70         10.51   

Russell 2500® Growth Index

   8/1/84      26.26         21.65         9.94         N/A   

See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.

 

Meridian Funds    5    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Portfolio Composition (Unaudited)

 

Top 10 Common Stock Holdings as of 6.30.14     
      

Sensata Technologies Holding N.V. (Netherlands)

   2.84%

Gartner, Inc.

   2.67%

Cadence Design Systems, Inc.

   2.56%

SS&C Technologies Holdings, Inc.

   2.36%

Jones Lang Lasalle, Inc.

   2.35%

Clean Harbors, Inc.

   2.33%

HEICO Corp. Class A

   2.32%

Wolverine World Wide, Inc.

   2.31%

Cooper Cos., Inc. (The)

   2.28%

VistaPrint, N.V. (Netherlands)

   2.19%

Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.

Sector Allocation as of 6.30.14

 

LOGO

Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.

For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.

 

 

Meridian Funds    6    www.meridianfund.com


Table of Contents

Meridian Contrarian Fund

Portfolio Performance and Composition (Unaudited)

 

Discussion of Fund Performance

The Meridian Contrarian Fund-Legacy Shares returned 23.31% during the twelve-month period ending June 30, 2014, which compares to the primary benchmark, the Russell 2500 Index, which returned 25.58%. The strategy’s secondary benchmark, the S&P 500 Index, returned 24.61%.

The Meridian Contrarian Fund’s investment strategy remains unchanged. We continue to seek out-of-favor companies that we believe, despite suffering temporary problems, have good long-term prospects for earnings growth supported by defensible positions in their industries, attractive return on capital and strong or improving balance sheets. Over the long term we believe this contrarian investing process can outperform the market.

Holdings in the financial sector were the largest contributor to the fund’s underperformance. The fund was underweight in the financial sector by 12.9%, which negatively impacted the portfolio. The information technology sector was our largest contributor to performance. The fund benefited from an 8.5% overweight as well as individual stock selection that outperformed the sector in the benchmark by an average of 2.8%. Industrials were another positive contributor, with both an overweight relative to the benchmark and strong individual stock performance. As it relates to stock selection, the portfolio was underweight in REITs, which were strong performers for the index overall, driven by the decline in interest rates in the first half of 2014. Utilities benefited from the same decline in interest rates and our under allocation was another detractor to the portfolio.

Our top three contributors to performance were Broadridge, EOG Resources, and Ubiquiti Networks.

 

   

Broadridge is a leading provider of investor communication and securities processing services. This has been a long-term investment for the Contrarian Fund. There has been limited change in the company’s stock price for a number of years due to softness in event-driven investor communications and continued investments in future growth that lowered current profitability. In 2013 these headwinds waned, leading to renewed earnings growth, multiple expansion, and strong stock performance.

 

   

Long-term holding EOG Resources is a large, diversified oil and gas exploration and production company. The stock fell out of favor when the company made poorly timed investments to expand natural gas production just prior to a precipitous drop in natural gas prices. We saw this as an opportunity because the company possessed both the management acumen and attractive resource base to efficiently pivot production away from natural gas to oil. EOG continues to execute this strategy with better than expected oil production and higher oil prices driving strong stock performance during the fiscal year. We maintain our position in the stock.

 

   

Ubiquiti Networks designs and manufactures wireless broadband infrastructure equipment and other communications. Ubiquiti initially came to our attention in early 2013 after suffering declines in earnings. While being optimistic about overall market demand, our research led us to conclude that the problems facing the company were temporary and we invested in the stock. Management executed on the turnaround, which drove both revenue and earnings growth. As a result the stock has more than doubled from our initial purchase price.

The top three detractors from performance were Aeropostale, Haemonetics and Compass Minerals.

 

   

Aeropostale operates a chain of apparel stores aimed at young teenagers. The company had successfully operated a fast fashion model for many years that drove strong growth and returns on capital. The company suffered declining earnings in 2012 as its customers shifted their fashion preferences and struggling competitors cut prices. We believed that Aeropostale would benefit as improving inventory positions at competitors eased price competition and as the addition of a new head of design improved the company’s fashion offerings. This did not materialize, however, and the company has continued to struggle. We sold the position at a loss in August 2013.

 

   

Haemonetics is the leader in blood separation and blood management products for collection centers and hospitals. The company hit our screen after two minor product recalls negatively impacted earnings. We believed the impact would prove short-lived, and that earnings growth would reaccelerate with the introduction of a new blood collection system. However, the company ended up losing a large contract, which was not in harmony with our thesis, and we sold the stock.

 

Meridian Funds    7    www.meridianfund.com


Table of Contents

Meridian Contrarian Fund

Portfolio Performance and Composition (Unaudited) (continued)

 

 

   

Compass Minerals is a leading producer of rock salt and specialty potash fertilizer. Its unique collection of resource assets has helped the company generate historically high returns on capital. We invested in Compass as we believed that earnings were due to turn after four years of weak road salt demand driven by mild Northeast winters and production problems at its potash mines. During 2013 the potash industry was rocked by the potential collapse of a European cartel, which led to falling potash prices. Facing significant uncertainty for the future of the potash market, we sold the stock.

We continue to remain focused on individual stock selection and portfolio construction that identifies quality companies that we believe are experiencing temporary disruptions to their businesses. These disruptions enable us to buy the businesses at attractive prices and provide the portfolio with what we believe is an attractive risk-reward profile for our shareholders.

Thank you for your continued investment in the Meridian Contrarian Fund.

Jamie England, Larry Cordisco and Jim O’Connor

 

Total Return Based on a $10,000 investment for the Period Ended June 30, 2014

This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.

LOGO

Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.

 

Average Annual Total Return as of 6.30.14

 

Share Class    Inception    1 Year      5 Year      10 Year      Since Inception  

Legacy Class (MVALX)

   2/10/94      23.31         17.94         8.30         13.54   

Investor Class (MFCIX)

   11/15/13                              7.08   

Advisor Class (MFCAX)

   11/15/13                              6.91   

Russell 2500® Index

   2/10/94      25.58         21.63         9.78         10.75   

S&P 500® Index

   2/10/94      24.61         18.83         7.78         9.21   

See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.

The statements and opinions expressed are those of the author and are as of the date of this report. All information is

historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.

 

Meridian Funds    8    www.meridianfund.com


Table of Contents

Meridian Contrarian Fund

Portfolio Composition (Unaudited)

 

Top 10 Common Stock Holdings as of

6.30.14

    
      

Verint Systems, Inc.

   2.87%

Apple, Inc.

   2.64%

Hawaiian Electric Industries, Inc.

   2.61%

Gildan Activewear, Inc. (Canada)

   2.45%

Norfolk Southern Corp.

   2.40%

Lazard Ltd.

   2.37%

Alexander & Baldwin, Inc.

   2.35%

Yum! Brands, Inc.

   2.34%

Genesee & Wyoming, Inc. Class A

   2.29%

Humana, Inc.

   2.18%

Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.

Sector Allocation as of 6.30.14

 

LOGO

Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.

For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.

 

 

Meridian Funds    9    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Portfolio Performance and Composition (Unaudited)

 

Discussion of Fund Performance

The Meridian Equity Income Fund – Legacy Shares returned 20.04% during the twelve-month period ending June 30, 2014, which compares to the benchmark, the S&P 500 Index, which returned 24.61%.

The largest contributor to the fund’s underperformance was the financial sector. The fund was underweight in the sector, including an underweight in REITs, which were strong performers for the index overall, driven by the decline in interest rates in the first half of 2014. Utilities benefited from the same decline in interest rates and our under allocation was another detractor to the portfolio. The information technology sector was our largest contributor to performance. The fund benefited from an 8.50% overweight as well as individual stock selection that outperformed the sector in the benchmark by an average of 2.80%. Industrials were another positive contributor with both an overweight relative to the benchmark and strong individual stock performance.

The top three contributors to performance for the fiscal year were Lockheed Martin, Broadridge and Apple.

 

   

Lockheed Martin, a leading defense company, was a strong performer for the fund in 2013. The company fared well as earnings grew better than expected despite budget-related pressures on the defense industry. Lockheed is expected to have continued earnings growth, and its low payout ratio indicates a strong possibility of future dividend increases.

 

   

Broadridge is a leading provider of investor communication and securities processing services. Over half of the company’s revenues are recurring in nature with a renewal rate of over 95%. Broadridge has a strong balance sheet with net debt at less than 25% of total capital and a low payout ratio of 37%, as of June 30, 2014. The stock performed well during the fiscal year as previous investments in systems and customer acquisition led to accelerated earnings growth. The current yield of 2% is at the low end of our portfolio, but we continue to own the stock as we believe the company will continue to grow its dividend, which has tripled over the past five years.

 

   

Apple leads the consumer electronics industry with its family of iPhone, iPad and Mac products. The company benefits from the enduring value of the Apple ecosystem and appears likely to continue developing innovative products. With a sound earnings growth outlook, a comparatively low dividend payout ratio and sizable cash on its balance sheet, Apple is poised for further dividend increases after demonstrating an 11% compound annual dividend growth rate over the last two years. Apple’s outperformance in the second quarter of 2014 came from improved profit margins, China iPhone growth and a larger commitment to returning cash to shareholders. We maintain our position in the stock.

The top three detractors to fiscal year performance were Flower Foods, Campus Crest Communities and Meredith Corp.

 

   

Flower Foods, Inc., is a leading bakery company. Since the 2012 bankruptcy of competitor Hostess, Flower has benefited from market share gains and by acquiring Hostess assets at attractive prices. During the first quarter of 2014, however, Flower posted disappointing results as it encountered operational challenges in handling the additional volume from share gains and experienced difficulty integrating the acquired assets. Prior to these issues the yield had declined due to the company’s success, and given the current problems we decided the lower yield and high valuation did not compensate us for the diminished visibility into earnings and dividend growth. Accordingly, we sold the stock.

 

   

Campus Crest Communities is a REIT specializing in student housing in second-tier university markets. Our investment suffered as we underestimated the supply growth outlook for this sector and the resulting pressure on results and investor sentiment. We sold the stock at a loss in 2013.

 

   

Meredith Corp. is a media and marketing company with key assets in women’s magazines and local television stations. The stock underperformed in early 2014 due to weak quarterly results and guidance that was below expectations. The most recent results served as confirmation to concerns we had related to potential secular declines in the company’s businesses. With less conviction in Meredith’s ability to grow both earnings and dividends over the long term, we sold the stock.

We continue to remain focused on individual stock selection and portfolio construction that will preserve capital and generate above-market yield and dividend growth.

Thank you for your continued investment in the Meridian Equity Income Fund.

Jamie England, Larry Cordisco and Jim O’Connor

 

Meridian Funds    10    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Portfolio Performance and Composition (Unaudited) (continued)

 

Total Return Based on a $10,000 investment for the Period Ended June 30, 2014

This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.

 

LOGO

 

* Inception date.

Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.

 

Average Annual Total Return as of 6.30.14

 

Share Class    Inception    1 Year      5 Year      Since Inception  

Legacy Class (MEIFX)

   1/31/05      20.04         18.69         7.50   

Investor Class (MRIEX)

   11/15/13                      6.87   

Advisor Class (MRAEX)

   11/15/13                      6.69   

S&P 500® Index

   1/31/05      24.61         18.83         7.77   

See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.

 

Meridian Funds    11    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Portfolio Composition (Unaudited)

 

Top 10 Common Stock Holdings as of

6.30.14

    
      

Eaton Corp., Plc (Ireland)

   2.51%

Occidental Petroleum Corp.

   2.48%

Microchip Technology, Inc.

   2.39%

Kimberly-Clark Corp.

   2.37%

Leggett & Platt, Inc.

   2.37%

Apple, Inc.

   2.36%

Enbridge Energy Partners LP

   2.34%

Broadridge Financial Solutions, Inc.

   2.25%

Linear Technology Corp.

   2.25%

Hasbro, Inc.

   2.23%

Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.

Sector Allocation as of 6.30.14

 

LOGO

Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.

For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.

 

 

Meridian Funds    12    www.meridianfund.com


Table of Contents

Meridian Small Cap Growth Fund

Portfolio Performance and Composition (Unaudited)

 

Discussion of Fund Performance

We launched the Meridian Small Cap Growth Fund on December 16, 2013. We are excited to offer you an opportunity to invest in a fund that focuses on high-quality, small cap growth businesses with predictable and recurring revenues, high returns on capital and attractive risk-reward profiles.

The Meridian Small Cap Growth Fund – Legacy Shares have returned 16.50% since the fund’s inception, outperforming its primary benchmark, the Russell 2000 Growth Index, which rose 6.64%.

The top contributors to performance during the period were Revance Therapeutics, Inc., TriNet Group and Malibu Boats.

 

   

Revance Therapeutics, Inc., was a strong performer during the first half due to encouraging data surrounding its long-lasting botulinum toxin products in aesthetic and therapeutic dermatology. We continue to hold the stock as we believe the company’s products to be differentiated with the ability to take the majority of a large market over the long term.

 

   

TriNet Group is a professional employment organization providing human resource and consulting services. Recent changes to healthcare regulations are driving a strong demand environment for its services. We also like its focus on high-value, niche segments of the industry. We continue to hold the stock.

 

   

Malibu Boats designs, manufactures and markets sports boats. Malibu has several characteristics of highly successful past investments in similarly cyclical businesses such as Polaris Industries, which has been a successful, longtime holding of ours. We are attracted to Malibu’s low share of the market, but dominant position in the fastest-growing segment. We like its asset-light business model that generates strong margins, returns on capital and cash flow. Lastly, we think the industry is at its cyclical bottom with the overall market still fifty percent below its prior peak. We continue to hold the stock.

The top three detractors to performance during the period were VistaPrint, Wolverine World Wide and National Research Corporation.

 

   

VistaPrint declined during the quarter as the first calendar quarter represented what we believe will be one of the worst quarters for the company as it transitions away from low-duration to high-value, high-duration customers. We continue to believe that after the transition the company will have lower customer churn, higher customer duration, higher average selling prices and higher reorder rates. All of these combined should drive high operating leverage and substantial earnings growth. We have been adding to the position on weakness.

 

   

Wolverine World Wide manufactures and markets branded footwear in the U.S. and internationally. The stock declined during the quarter as investors continued to wait for a turnaround in one of its key brands, Sperry. We continue to be attracted to the company’s strong portfolio of brands, near-term turnaround opportunity at Sperry, long-term international growth potential and strong management team. We trimmed our position size during the quarter; however, we still maintain a large position in the stock.

 

   

National Research Corporation provides performance measurement, analysis and tracking services to the healthcare industry. The stock declined during the period as overall growth in the business came in below expectations. We believe this is a temporary issue and continue to be attracted to its high level of recurring revenue and new growth opportunities. We added to the position.

We remain committed to employing fundamental research to identify high-quality growth businesses with predictable and recurring revenues, high returns on invested capital and attractive risk-reward profiles.

Thank you for your confidence in the Meridian Small Cap Growth Fund.

Chad Meade and Brian Schaub

 

Meridian Funds    13    www.meridianfund.com


Table of Contents

Meridian Small Cap Growth Fund

Portfolio Performance and Composition (Unaudited) (continued)

 

 

Total Return Based on a $10,000 investment for the Period Ended June 30, 2014

This graph shows the change in value of a hypothetical investment of $10,000 in Legacy Class Shares of the Fund of the period indicated. For comparison, the same investment is shown in the indicated index.

 

LOGO

 

* Inception date.

Past performance is not predictive of future performance. The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares and do not reflect the imposition of a 2% redemption fee on shares held 60 days or less to deter market timers. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost.

 

Average Annual Total Return as of 6.30.14

 

Share Class    Inception    6 Months    Since Inception  

Legacy Class (MSGGX)

   12/16/13    11.48      16.50   

Investor Class (MISGX)

   12/16/13    11.48      16.50   

Advisor Class (MSGAX)

   12/16/13    11.29      16.30   

Russell 2000® Growth Index

   12/16/13    2.22      6.64   

See “Disclosures Regarding Fund Performance” on page 18 for important information regarding reported performance.

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. It should not be assumed that an investment in the securities mentioned will be profitable in the future. This information is not a recommendation to buy or sell.

 

Meridian Funds    14    www.meridianfund.com


Table of Contents

Meridian Small Cap Growth Fund

Portfolio Composition (Unaudited)

 

Top 10 Common Stock Holdings as of

6.30.14

    
      

Cadence Design Systems, Inc.

   2.21%

HEICO Corp. Class A

   2.14%

Wolverine World Wide, Inc.

   2.14%

Carter’s, Inc.

   2.13%

Heritage-Crystal Clean, Inc.

   2.03%

Clean Harbors, Inc.

   2.02%

Corporate Executive Board Co. (The)

   1.93%

Measurement Specialties, Inc.

   1.92%

National CineMedia, Inc.

   1.87%

VistaPrint, N.V. (Netherlands)

   1.84%

Portfolio holdings are subject to change. Top ten holdings are reported as a percentage of total investments excluding cash or cash equivalents.

Sector Allocation as of 6.30.14

 

LOGO

Sector allocations are subject to change. Sector allocations are reported as a percentage of total investments excluding cash or cash equivalents.

For compliance purposes, the Fund’s industry classifications may refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease.

 

 

Meridian Funds    15    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Fund Expenses

June 30, 2014 (Unaudited)

 

Expense Example

 

Actual   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MERDX)

    0.85   $ 1,000.00      $ 1,016.70      $ 4.25   

Investor Class (MRIGX)

    1.30   $ 1,000.00      $ 1,014.80      $ 6.49   

Advisor Class (MRAGX)

    1.55   $ 1,000.00      $ 1,013.40      $ 7.74   
       
Hypothetical2   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MERDX)

    0.85   $ 1,000.00      $ 1,020.58      $ 4.26   

Investor Class (MRIGX)

    1.30   $ 1,000.00      $ 1,018.35      $ 6.51   

Advisor Class (MRAGX)

    1.55   $ 1,000.00      $ 1,017.11      $ 7.75   

 

1 

Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365.

 

2

Hypothetical 5% return before expenses.

The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.

See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.

Meridian Contrarian Fund

Fund Expenses

June 30, 2014 (Unaudited)

 

Expense Example

 

Actual   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MVALX)

    1.13   $ 1,000.00      $ 1,035.70      $ 5.70   

Investor Class (MFCIX)

    1.35   $ 1,000.00      $ 1,034.60      $ 6.81   

Advisor Class (MFCAX)

    1.60   $ 1,000.00      $ 1,033.00      $ 8.07   
       
Hypothetical2   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MVALX)

    1.13   $ 1,000.00      $ 1,019.19      $ 5.66   

Investor Class (MFCIX)

    1.35   $ 1,000.00      $ 1,018.10      $ 6.76   

Advisor Class (MFCAX)

    1.60   $ 1,000.00      $ 1,016.86      $ 8.00   

 

1

Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365.

 

2

Hypothetical 5% return before expenses.

The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.

See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.

 

Meridian Funds    16    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Fund Expenses

June 30, 2014 (Unaudited)

 

Expense Example

 

Actual   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MEIFX)

    1.25   $ 1,000.00      $ 1,045.90      $ 6.34   

Investor Class (MRIEX)

    1.35   $ 1,000.00      $ 1,045.80      $ 6.85   

Advisor Class (MRAEX)

    1.60   $ 1,000.00      $ 1,044.40      $ 8.11   
       
Hypothetical2   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MEIFX)

    1.25   $ 1,000.00      $ 1,018.60      $ 6.26   

Investor Class (MRIEX)

    1.35   $ 1,000.00      $ 1,018.10      $ 6.76   

Advisor Class (MRAEX)

    1.60   $ 1,000.00      $ 1,016.86      $ 8.00   

 

1

Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365.

 

2

Hypothetical 5% return before expenses.

The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.

See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.

Meridian Small Cap Growth Fund

Fund Expenses

June 30, 2014 (Unaudited)

 

Expense Example

 

Actual   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MSGGX)

    1.20   $ 1,000.00      $ 1,114.80      $ 6.29   

Investor Class (MISGX)

    1.35   $ 1,000.00      $ 1,114.80      $ 7.08   

Advisor Class (MSGAX)

    1.60   $ 1,000.00      $ 1,112.90      $ 8.38   
       
Hypothetical2   Annualized
Expense Ratio
    Beginning Account
Value January 1, 2014
    Ending Account Value
June 30, 2014
    Expenses Paid During
the Period1
 

Legacy Class (MSGGX)

    1.20   $ 1,000.00      $ 1,018.84      $ 6.01   

Investor Class (MISGX)

    1.35   $ 1,000.00      $ 1,018.10      $ 6.76   

Advisor Class (MSGAX)

    1.60   $ 1,000.00      $ 1,016.86      $ 8.00   

 

1

Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181 days, the number of days in the most recent fiscal half-year, then divided by 365.

 

2

Hypothetical 5% return before expenses.

The above “Annualized Expense Ratios” reflect waivers and/or reimbursements of expenses by the Fund’s Adviser. Such waivers and/or reimbursements may not be withdrawn earlier than one year after the date of the current prospectus. The “Financial Highlights” included within the Fund’s financial statements shows the gross expense ratios for each share class.

See “Disclosure Regarding Fund Expenses” on page 18 for further information on how the above examples were calculated.

 

Meridian Funds    17    www.meridianfund.com


Table of Contents

Meridian Fund, Inc.

Performance and Expense Disclosures

June 30, 2014

 

 

Disclosures Regarding Fund Performance

Past performance is not predictive of future performance. Current performance may be lower or higher than the quoted past performance. Reported performance assumes reinvestment of Fund distributions. Reported performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, nor does it reflect the 2% redemption fee on shares sold within 60 days of original purchase date. If reflected, the taxes and fees would reduce the performance quoted. Net asset value, investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. You can obtain the most current month-end performance at www.meridianfund.com.

Performance for Funds in existence prior to 9.5.13 reflects performance under the management of Aster Investment Management Co. using similar investment strategies.

Legacy class shares are no longer offered to the public effective 3.1.14, except under certain limited circumstances.

Indices are typically unmanaged, and do not reflect deductions for fees or expenses. You cannot invest directly in an index.

 

Disclosures Regarding Fund Expenses

As a shareholder of the Fund, you incur certain costs which include: 1) transaction related costs, such as redemption fees for sales made within 60 days of original purchase; and 2) operating costs, such as investment advisory fees, administrative fees, service and distribution (12b-1) fees, and other Fund expenses.

Operating costs, which are deducted from a Fund’s gross income, directly reduce the investment return of the portfolio. The Fund Expense examples reported on the previous pages are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds.

The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period and assume reinvestment of all dividends and distributions.

The first section of the example describes actual expenses and account values for the 6 month period reported. To use this information to calculate the expenses you paid for your investment in the Fund, divide your account value by $1,000 then multiply the result by the number reported under “Expenses Paid During the Period”.

The second section of the example describes hypothetical expenses and account values using the Fund’s actual expense ratio and an assumed 5% return. These hypothetical expenses and returns should be used to compare the Fund’s expenses to other mutual funds’ reported hypothetical expenses and not to calculate your actual expenses paid during the period.

The expense examples do not reflect any transactional costs, such as the 2% redemption fee charged on sales made within 60 days of original purchase. Therefore, the information reported within these expense examples are meant to highlight on-going costs of owning Fund shares and will not reflect the total relative costs of owning different mutual funds. If these transactional costs were included, the reported expenses would have been higher.

Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus contains this and other information relevant to an investment in any of the Meridian Funds. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.796.3434 or access our website at www.meridianfund.com.

 

Meridian Funds    18    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Schedule of Investments

June 30, 2014

 

     Shares     Value  

Common Stocks - 92.5%

   

Consumer Discretionary - 18.9%

  

Distributors - 0.5%

  

LKQ Corp.*

    368,262      $ 9,828,913   

Diversified Consumer Services - 0.5%

  

ServiceMaster Global Holdings, Inc.*

    573,758        10,459,608   

Hotels, Restaurants & Leisure - 1.2%

  

Dunkin’ Brands Group, Inc.

    413,757        18,954,208   

Popeyes Louisiana Kitchen, Inc.*

    134,466        5,877,509   
   

 

 

 
              24,831,717   

Leisure Equipment & Products - 0.5%

  

Polaris Industries, Inc.

    79,016        10,291,044   

Media - 2.1%

  

Markit Ltd.

    160,240        4,323,275   

National CineMedia, Inc.

    2,233,692        39,111,947   
   

 

 

 
              43,435,222   

Specialty Retail - 8.3%

  

DSW, Inc. Class A

    848,664        23,711,672   

Five Below, Inc.*

    529,847        21,146,194   

Hibbett Sports, Inc.*

    383,928        20,797,380   

Michaels Cos, Inc.*

    240,102        4,093,739   

Monro Muffler Brake, Inc.

    365,632        19,447,966   

PetSmart, Inc.

    424,877        25,407,645   

Sally Beauty Holdings, Inc.*

    1,609,788        40,373,483   

Ulta Salon Cosmetics & Fragrance, Inc.*

    177,720        16,245,385   
   

 

 

 
              171,223,464   

Textiles, Apparel & Luxury Goods - 5.8%

  

Carter’s, Inc.

    591,285        40,757,275   

Tumi Holdings, Inc.*

    1,654,726        33,309,634   

Wolverine World Wide, Inc.

    1,680,242        43,787,107   
   

 

 

 
      117,854,016   
   

 

 

 

Total Consumer Discretionary

            387,923,984   

Consumer Staples - 1.3%

  

Food & Staples Retailing - 1.3%

  

Susser Holdings Corp.*

    341,478        27,564,104   
   

 

 

 

Total Consumer Staples

            27,564,104   

Energy - 5.5%

  

Energy Equipment & Services - 5.0%

  

CHC Group Ltd.*

    3,087,555        26,058,964   

Core Laboratories N.V. (Netherlands)

    47,324        7,905,947   

Dresser-Rand Group, Inc.*

    486,307        30,992,345   

Dril-Quip, Inc.*

    90,124        9,845,146   

Rignet, Inc.*

    501,211        26,975,176   
   

 

 

 
              101,777,578   
     Shares     Value  

Oil, Gas & Consumable Fuels - 0.5%

  

World Fuel Services Corp.

    200,913      $ 9,890,947   
   

 

 

 

Total Energy

            111,668,525   

Financials - 7.1%

  

Capital Markets - 3.0%

  

Financial Engines, Inc.

    215,856        9,773,960   

LPL Financial Holdings, Inc.

    811,762        40,377,042   

WisdomTree Investments, Inc.*

    896,475        11,080,431   
   

 

 

 
              61,231,433   

Commercial Banks - 1.9%

  

Bank of the Ozarks, Inc.

    498,960        16,690,212   

East West Bancorp., Inc.

    629,061        22,010,844   
   

 

 

 
              38,701,056   

Real Estate Management & Development - 2.2%

  

Jones Lang Lasalle, Inc.

    351,227        44,391,580   
   

 

 

 

Total Financials

            144,324,069   

Health Care - 13.8%

  

Biotechnology - 4.3%

  

Alnylam Pharmaceuticals, Inc.*

    176,364        11,140,914   

Clovis Oncology, Inc.*

    242,086        10,024,781   

Exact Sciences Corp.*

    918,218        15,637,253   

Medivation, Inc.*

    145,842        11,241,501   

Neurocrine Biosciences, Inc.*

    742,192        11,014,129   

NPS Pharmaceuticals, Inc.*

    400,613        13,240,260   

Synageva BioPharma Corp.*

    146,831        15,387,889   
   

 

 

 
              87,686,727   

Health Care Providers & Services - 5.8%

  

Cooper Cos., Inc. (The)

    318,603        43,180,265   

DexCom, Inc.*

    441,885        17,525,159   

Endologix, Inc.*

    1,627,355        24,752,070   

Insulet Corp.*

    367,364        14,573,330   

Novadaq Technologies, Inc.*

    519,490        8,561,195   

Quidel Corp.*

    464,858        10,278,010   
   

 

 

 
              118,870,029   

Health Care Technology - 2.0%

  

athenahealth, Inc.*

    98,179        12,285,138   

IMS Health Holdings, Inc.*

    75,000        1,926,000   

Medidata Solutions, Inc.*

    359,047        15,370,802   

Spectranetics Corp. (The)*

    447,950        10,249,096   
   

 

 

 
              39,831,036   

Pharmaceuticals - 1.7%

  

Prestige Brands Holdings, Inc.*

    752,389        25,498,463   

Revance Therapeutics, Inc.*

    309,077        10,508,618   
   

 

 

 
      36,007,081   
   

 

 

 

Total Health Care

            282,394,873   

Industrials - 24.5%

  

Aerospace & Defense - 2.1%

  

HEICO Corp. Class A

    1,079,430        43,824,858   
 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    19    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Schedule of Investments (continued)

June 30, 2014

 

     Shares     Value  

Air Freight & Logistics - 1.5%

  

Expeditors International of Washington, Inc.

    460,482      $ 20,334,885   

Spirit Airlines, Inc.*

    179,100        11,326,284   
   

 

 

 
              31,661,169   

Commercial Services & Supplies - 3.2%

  

Clean Harbors, Inc.*

    686,055        44,079,034   

Ritchie Bros. Auctioneers, Inc. (Canada)

    856,575        21,114,574   
   

 

 

 
              65,193,608   

Electrical Equipment - 3.9%

  

Polypore International, Inc.*

    534,446        25,509,108   

Sensata Technologies Holding N.V. (Netherlands)*

    1,148,575        53,730,338   
   

 

 

 
              79,239,446   

Machinery - 4.3%

  

Kennametal, Inc.

    478,442        22,142,296   

Proto Labs, Inc.*

    157,599        12,910,510   

Tennant Co.

    394,710        30,124,267   

Woodward, Inc.

    455,240        22,843,943   
   

 

 

 
              88,021,016   

Marine - 1.1%

  

Kirby Corp.*

    198,495        23,251,704   

Professional Services - 3.2%

  

Advisory Board Co. (The)*

    387,122        20,052,920   

Corporate Executive Board Co. (The)

    528,172        36,031,894   

IHS, Inc. Class A*

    76,429        10,369,122   
   

 

 

 
              66,453,936   

Road & Rail - 3.3%

  

J.B. Hunt Transport Services, Inc.

    265,651        19,599,731   

RoadRunner Transportation Systems, Inc.*

    582,326        16,363,361   

Saia, Inc.*

    658,438        28,925,181   
   

 

 

 
              64,888,273   

Trading Companies & Distributors - 1.9%

  

MSC Industrial Direct Co. Class A

    191,041        18,271,161   

WESCO International, Inc.*

    247,559        21,384,146   
   

 

 

 
      39,655,307   
   

 

 

 

Total Industrials

            502,189,317   

Information Technology - 20.1%

  

Electronic Equipment, Instruments - 1.4%

  

Measurement Specialties, Inc.*

    326,208        28,076,723   
     Shares     Value  

Internet Software & Services - 3.8%

  

CoStar Group, Inc.*

    63,523      $ 10,047,433   

Demandware, Inc.*

    225,439        15,638,703   

SPS Commerce, Inc.*

    145,070        9,166,973   

VistaPrint N.V. (Netherlands)*

    1,024,678        41,458,472   
   

 

 

 
              76,311,581   

IT Services - 3.5%

  

Euronet Worldwide, Inc.*

    443,387        21,388,989   

Gartner, Inc.*

    716,923        50,557,410   
   

 

 

 
              71,946,399   

Software - 10.5%

  

ANSYS, Inc.*

    257,635        19,533,886   

Blackbaud, Inc.

    464,420        16,598,371   

Cadence Design Systems, Inc.*

    2,763,892        48,340,471   

Qlik Technologies, Inc.*

    342,188        7,740,293   

RealPage, Inc.*

    694,714        15,617,171   

SolarWinds, Inc.*

    1,051,550        40,652,923   

Solera Holdings, Inc.

    315,773        21,204,157   

SS&C Technologies Holdings, Inc.*

    1,011,788        44,741,265   
   

 

 

 
              214,428,537   

Technology Hardware, Storage & Peripherals - 0.9%

  

Stratasys Ltd.*

    167,392        19,020,753   
   

 

 

 

Total Information Technology

            409,783,993   

Materials - 1.3%

  

Chemicals - 1.3%

  

Valspar Corp. (The)

    341,651        26,030,390   
   

 

 

 

Total Materials

            26,030,390   

Total Investments - 92.5%

  

(Cost $1,667,631,898)

            1,891,879,255   

Cash And Other Assets, Less
Liabilities - 7.5%

   

    152,970,312   
   

 

 

 

Net Assets - 100.0%

  

  $ 2,044,849,567   
   

 

 

 
 

 

 

N.V.-Naamloze Vennootschap is the Dutch term for limited liability company

 

* Non-income producing securities

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    20    www.meridianfund.com


Table of Contents

Meridian Contrarian Fund

Schedule of Investments

June 30, 2014

 

     Shares     Value  

Common Stocks - 92.2%

  

Consumer Discretionary - 14.9%

  

Diversified Consumer Services - 1.1%

  

Regis Corp.

    326,000      $ 4,590,080   

ServiceMaster Global Holdings, Inc.*

    215,588        3,930,169   
   

 

 

 
              8,520,249   

Hotels, Restaurants & Leisure - 4.3%

  

Del Frisco’s Restaurant Group, Inc.*

    231,400        6,377,384   

Denny’s Corp.*

    1,533,600        9,999,072   

Yum! Brands, Inc.

    203,800        16,548,560   
   

 

 

 
              32,925,016   

Leisure Equipment & Products - 1.3%

  

Polaris Industries, Inc.

    79,000        10,288,960   

Specialty Retail - 3.0%

  

Children’s Place, Inc. (The)

    75,000        3,722,250   

Monro Muffler Brake, Inc.

    153,100        8,143,389   

Select Comfort Corp.*

    534,500        11,042,770   
   

 

 

 
              22,908,409   

Textiles, Apparel & Luxury Goods - 5.2%

  

Gildan Activewear, Inc. (Canada)

    294,000        17,310,720   

PVH Corp.

    73,000        8,511,800   

Wolverine World Wide, Inc.

    531,000        13,837,860   
   

 

 

 
      39,660,380   
   

 

 

 

Total Consumer Discretionary

            114,303,014   

Consumer Staples - 1.0%

  

Food Products - 1.0%

  

Chiquita Brands International, Inc.*

    720,100        7,813,085   
   

 

 

 

Total Consumer Staples

            7,813,085   

Energy - 6.7%

  

Energy Equipment & Services - 1.7%

  

CARBO Ceramics, Inc.

    28,400        4,377,008   

National Oilwell Varco, Inc.

    109,400        9,009,090   
   

 

 

 
              13,386,098   

Oil, Gas & Consumable Fuels - 5.0%

  

EOG Resources, Inc.

    130,600        15,261,916   

Halcon Resources Corp.*

    1,117,801        8,148,769   

Occidental Petroleum Corp.

    147,700        15,158,451   
   

 

 

 
      38,569,136   
   

 

 

 

Total Energy

            51,955,234   

Financials - 10.9%

  

Commercial Banks - 6.9%

  

Bank of Hawaii Corp.

    196,000        11,503,240   

BOK Financial Corp.

    182,654        12,164,757   

Hancock Holding Co.

    347,500        12,273,700   

Lazard Ltd.

    324,400        16,726,064   
   

 

 

 
              52,667,761   
     Shares     Value  

Insurance - 1.8%

  

Arthur J Gallagher & Co.

    301,100      $ 14,031,260   

Real Estate Management & Development - 2.2%

  

Alexander & Baldwin, Inc.

    401,200        16,629,740   
   

 

 

 

Total Financials

            83,328,761   

Health Care - 8.2%

  

Health Care Equipment & Supplies - 2.9%

  

Accuray, Inc.*

    844,600        7,432,480   

CR Bard, Inc.

    49,500        7,078,995   

Neurocrine Biosciences, Inc.*

    512,300        7,602,532   
   

 

 

 
              22,114,007   

Health Care Providers & Services - 3.0%

  

Endologix, Inc.*

    493,447        7,505,329   

Humana, Inc.

    120,900        15,441,348   
   

 

 

 
              22,946,677   

Life Sciences Tools & Services - 1.4%

  

ICON, Plc*

    221,500        10,434,865   

Pharmaceuticals - 0.9%

  

Impax Laboratories, Inc.*

    232,500        6,972,675   
   

 

 

 

Total Health Care

            62,468,224   

Industrials - 21.9%

  

Air Freight & Logistics - 1.0%

  

Hub Group, Inc. Class A*

    149,000        7,509,600   

Building Products - 2.7%

  

Lennox International, Inc.

    154,900        13,874,393   

NCI Building Systems, Inc.*

    334,300        6,495,449   
   

 

 

 
              20,369,842   

Commercial Services & Supplies - 5.5%

  

Clean Harbors, Inc.*

    203,200        13,055,600   

Copart, Inc.*

    326,800        11,751,728   

Ritchie Bros Auctioneers, Inc.

    305,000        7,518,250   

Steelcase, Inc. Class A

    657,000        9,940,410   
   

 

 

 
              42,265,988   

Electrical Equipment - 2.5%

  

GrafTech International, Ltd.*

    420,800        4,401,568   

Regal-Beloit Corp.

    189,900        14,918,544   
   

 

 

 
              19,320,112   

Industrial Conglomerates - 0.7%

  

Raven Industries, Inc.

    155,000        5,136,700   

Machinery - 3.7%

  

Lindsay Corp.

    58,500        4,941,495   

Stanley Black & Decker, Inc.

    95,000        8,342,900   

Xylem, Inc.

    387,500        15,143,500   
   

 

 

 
              28,427,895   

Road & Rail - 4.3%

  

Genesee & Wyoming, Inc. Class A*

    154,400        16,212,000   

Norfolk Southern Corp.

    164,700        16,969,041   
   

 

 

 
              33,181,041   
 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    21    www.meridianfund.com


Table of Contents

Meridian Contrarian Fund

Schedule of Investments (continued)

June 30, 2014

 

     Shares     Value  

Trading Companies & Distributors - 1.5%

  

MSC Industrial Direct Co., Inc. Class A

    123,600      $ 11,821,104   
   

 

 

 

Total Industrials

            168,032,282   

Information Technology - 22.0%

  

Communications Equipment - 1.5%

  

Sonus Networks, Inc.*

    2,171,000        7,793,890   

Ubiquiti Networks, Inc.*

    83,000        3,750,770   
   

 

 

 
              11,544,660   

Electronic Equipment, Instruments - 2.7%

  

FLIR Systems, Inc.

    273,051        9,483,061   

National Instruments Corp.

    344,398        11,155,051   
   

 

 

 
              20,638,112   

IT Services - 3.0%

  

Acxiom Corp.*

    186,200        4,038,678   

Broadridge Financial Solutions, Inc.

    356,400        14,840,496   

CACI International, Inc. Class A*

    55,000        3,861,550   
   

 

 

 
              22,740,724   

Semiconductors - 5.7%

  

Linear Technology Corp.

    306,200        14,412,834   

Mellanox Technologies Ltd.*

    132,000        4,601,520   

NVIDIA Corp.

    772,357        14,319,499   

Power Integrations, Inc.

    173,900        10,006,206   
   

 

 

 
              43,340,059   

Software - 6.7%

  

Barracuda Networks, Inc.*

    124,700        3,868,194   

Fortinet, Inc.*

    387,000        9,725,310   

Informatica Corp.*

    371,600        13,247,540   

Silver Spring Networks, Inc.*

    293,000        3,905,690   

Verint Systems, Inc.*

    413,500        20,282,175   
   

 

 

 
              51,028,909   

Technology Hardware, Storage & Peripherals - 2.4%

  

Apple, Inc.

    200,900        18,669,637   
   

 

 

 

Total Information Technology

            167,962,101   

Materials - 3.7%

  

Chemicals - 1.9%

  

Scotts Miracle-Gro Co. (The) Class A

    256,491        14,584,078   

Containers & Packaging - 1.5%

  

Aptargroup, Inc.

    173,400        11,619,534   

Metals & Mining - 0.3%

  

Sesa Sterlite Ltd. ADR

    125,000        2,420,000   
   

 

 

 

Total Materials

            28,623,612   
     Shares     Value  

Telecommunication Services - 0.5%

  

Diversified Telecommunications - 0.5%

  

Iridium Communications, Inc.*

    467,000      $ 3,950,820   
   

 

 

 

Total Telecommunication Services

            3,950,820   

Utilities - 2.4%

  

Electric Utilities - 2.4%

  

Hawaiian Electric Industries, Inc.

    729,375        18,467,775   
   

 

 

 

Total Utilities

            18,467,775   

Total Investments - 92.2%

  

(Cost $549,083,718)

            706,904,908   

Cash and Other Assets, Less
Liabilities - 7.8%

   

    60,002,954   
   

 

 

 

Net Assets - 100.0%

    $ 766,907,862   
   

 

 

 
 

 

ADR-American Depositary Receipt

Plc-Public Limited Company

 

* Non-income producing securities

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    22    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Schedule of Investments

June 30, 2014

 

     Shares     Value  

Common Stocks - 98.1%

  

Consumer Discretionary - 14.2%

  

Distributors - 2.0%

  

Genuine Parts Co.

    7,785      $ 683,523   

Hotels, Restaurants & Leisure - 5.8%

   

Einstein Noah Restaurant Group, Inc.

    36,000        578,160   

Extended Stay America, Inc.

    28,500        660,060   

McDonald’s Corp.

    7,000        705,180   
   

 

 

 
              1,943,400   

Household Durables - 4.2%

   

Leggett & Platt, Inc.

    22,825        782,441   

Tupperware Brands Corp.

    7,500        627,750   
   

 

 

 
              1,410,191   

Leisure Equipment & Products - 2.2%

  

 

Hasbro, Inc.

    13,900        737,395   
   

 

 

 

Total Consumer Discretionary

            4,774,509   

Consumer Staples - 6.4%

  

Food & Staples Retailing - 1.9%

   

SYSCO Corp.

    17,200        644,140   

Household Products - 2.3%

   

Kimberly-Clark Corp.

    7,050        784,101   

Tobacco - 2.2%

   

Reynolds American, Inc.

    12,150        733,253   
   

 

 

 

Total Consumer Staples

            2,161,494   

Energy - 8.6%

  

Oil, Gas & Consumable Fuels - 8.6%

   

Chevron Corp.

    4,700        613,585   

Enbridge Energy Partners LP

    21,000        775,530   

Occidental Petroleum Corp.

    8,000        821,040   

Spectra Energy Corp.

    16,400        696,672   
   

 

 

 

Total Energy

            2,906,827   

Financials - 13.7%

  

Capital Markets - 2.1%

   

BlackRock, Inc.

    2,200        703,120   

Commercial Banks - 5.9%

   

Bank of Hawaii Corp.

    11,100        651,459   

Hancock Holding Co.

    18,700        660,484   

Wells Fargo & Co.

    13,100        688,536   
   

 

 

 
              2,000,479   

Insurance - 1.8%

   

Arthur J. Gallagher & Co.

    13,200        615,120   

Real Estate Investment Trusts - 3.9%

   

American Realty Capital Properties, Inc. REIT

    58,032        727,141   

Chatham Lodging Trust REIT

    26,400        578,160   
   

 

 

 
      1,305,301   
   

 

 

 

Total Financials

            4,624,020   
     Shares     Value  

Health Care - 7.6%

  

Health Care Equipment & Supplies - 1.8%

  

 

Baxter International, Inc.

    8,600      $ 621,780   

Health Care Technology - 1.9%

   

Computer Programs & Systems, Inc.

    10,300        655,080   

Pharmaceuticals - 3.9%

   

Johnson & Johnson

    6,485        678,460   

Sanofi, ADR

    11,800        627,406   
   

 

 

 
      1,305,866   
   

 

 

 

Total Health Care

            2,582,726   

Industrials - 12.4%

  

Aerospace & Defense - 1.9%

   

Lockheed Martin Corp.

    4,000        642,920   

Air Freight & Logistics - 2.1%

   

United Parcel Service, Inc. Class B

    6,815        699,628   

Commercial Services & Supplies - 1.8%

  

 

Steelcase, Inc. Class A

    40,000        605,200   

Electrical Equipment - 4.5%

   

Eaton Corp. Plc (Ireland)

    10,740        828,913   

Emerson Electric Co.

    10,700        710,052   
   

 

 

 
              1,538,965   

Road & Rail - 2.1%

   

Norfolk Southern Corp.

    6,800        700,604   
   

 

 

 

Total Industrials

            4,187,317   

Information Technology - 17.0%

  

Communications Equipment - 2.1%

   

Cisco Systems, Inc.

    28,000        695,800   

IT Services - 4.2%

   

Broadridge Financial Solutions, Inc.

    17,900        745,356   

Paychex, Inc.

    16,400        681,584   
   

 

 

 
              1,426,940   

Semiconductors - 4.6%

   

Linear Technology Corp.

    15,800        743,706   

Microchip Technology, Inc.

    16,200        790,722   
   

 

 

 
              1,534,428   

Software - 3.8%

   

CA, Inc.

    19,700        566,178   

Microsoft Corp.

    17,295        721,202   
   

 

 

 
              1,287,380   

Technology Hardware, Storage & Peripherals - 2.3%

  

Apple, Inc.

    8,400        780,612   
   

 

 

 

Total Information Technology

            5,725,160   

Materials - 10.0%

  

Chemicals - 7.9%

   

Agrium, Inc.

    7,000        641,410   

Air Products & Chemicals, Inc.

    5,400        694,548   

EI du Pont de Nemours & Co.

    9,780        640,003   
 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    23    www.meridianfund.com


Table of Contents

Meridian Equity Income Fund

Schedule of Investments (continued)

June 30, 2014

 

     Shares     Value  

Scotts Miracle-Gro Co. (The) Class A

    12,400      $ 705,064   
   

 

 

 
              2,681,025   

Metals & Mining - 2.1%

   

Compass Minerals International, Inc.

    7,300        698,902   
   

 

 

 

Total Materials

            3,379,927   

Telecommunication Services - 2.0%

  

Diversified Telecommunication - 2.0%

  

 

Verizon Communications, Inc.

    13,700        670,341   
   

 

 

 

Total Telecommunication Services

            670,341   

Utilities - 6.2%

  

Electric Utilities - 2.1%

   

Hawaiian Electric Industries, Inc.

    27,300        691,236   

Gas Utilities - 2.0%

   

Questar Corp.

    27,700        686,960   

Water Utilities - 2.1%

   

American Water Works Co., Inc.

    14,000        692,300   
   

 

 

 

Total Utilities

            2,070,496   

Total Investments - 98.1%

   

(Cost $25,027,718)

            33,082,817   

Cash and Other Assets, Less
Liabilities - 1.9%

   

    624,483   
   

 

 

 

Net Assets - 100.0%

    $ 33,707,300   
   

 

 

 
 

 

ADR-American Depositary Receipt

Plc-Public Limited Company

REIT-Real Estate Investment Trust

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    24    www.meridianfund.com


Table of Contents

Meridian Small Cap Growth Fund

Schedule of Investments

June 30, 2014

 

     Shares     Value  

Common Stocks - 89.8%

  

Consumer Discretionary - 21.0%

  

Auto Components - 0.6%

  

Dorman Products, Inc.*

    2,120      $ 104,558   

Diversified Consumer Services - 2.7%

  

2U, Inc.*

    10,952        184,103   

Grand Canyon Education, Inc.*

    4,763        218,955   

ServiceMaster Global Holdings, Inc.*

    4,909        89,491   
   

 

 

 
              492,549   

Hotels, Restaurants & Leisure - 2.7%

  

Del Frisco’s Restaurant Group, Inc.*

    3,733        102,881   

Papa Murphy’s Holdings, Inc.*

    14,103        135,107   

Popeye’s Louisiana Kitchen, Inc.*

    4,007        175,146   

Texas Roadhouse, Inc.

    3,099        80,574   
   

 

 

 
              493,708   

Household Durables - 1.3%

  

GoPro, Inc. Class A*

    6,106        247,598   

Internet & Catalog Retail - 0.7%

  

Coupons.com, Inc.*

    4,826        126,972   

Leisure Equipment & Products - 1.7%

  

Arctic Cat, Inc.

    4,529        178,534   

Malibu Boats, Inc., Class A*

    6,722        135,112   
   

 

 

 
              313,646   

Media - 2.4%

  

National CineMedia, Inc.

    17,725        310,365   

Rentrak Corp.*

    2,631        137,996   
   

 

 

 
              448,361   

Multiline Retail - 0.2%

  

Gordmans Stores, Inc.

    6,851        29,459   

Specialty Retail - 3.5%

  

Five Below, Inc.*

    4,662        186,060   

Hibbett Sports, Inc.*

    3,227        174,807   

Monro Muffler Brake, Inc.

    1,581        84,093   

Sportsman’s Warehouse Holdings, Inc.*

    15,376        123,008   

Winmark Corp.

    1,238        86,202   
   

 

 

 
              654,170   

Textiles, Apparel & Luxury Goods - 5.2%

  

Carter’s, Inc.

    5,136        354,024   

Tumi Holdings, Inc.*

    12,646        254,564   

Wolverine World Wide, Inc.

    13,661        356,006   
   

 

 

 
      964,594   
   

 

 

 

Total Consumer Discretionary

            3,875,615   

Consumer Staples - 0.8%

  

Food & Staples Retailing - 0.8%

  

Susser Holdings Corp.*

    1,876        151,431   
   

 

 

 

Total Consumer Staples

            151,431   

Energy - 4.2%

  

Energy Equipment & Services - 2.8%

  

CHC Group Ltd.*

    15,763        133,040   

Newpark Resources, Inc.*

    7,307        91,045   
     Shares     Value  

RigNet, Inc.*

    5,581      $ 300,369   
   

 

 

 
              524,454   

Oil, Gas & Consumable Fuels - 1.4%

  

Evolution Petroleum Corp.

    23,769        260,271   
   

 

 

 

Total Energy

            784,725   

Financials - 2.6%

  

Capital Markets - 1.7%

  

Financial Engines, Inc.

    1,917        86,802   

Pennantpark Investment Corp.

    11,730        134,426   

WisdomTree Investments, Inc.*

    8,157        100,821   
   

 

 

 
              322,049   

Commercial Banks - 0.9%

  

Bank of the Ozarks, Inc.

    5,144        172,067   
   

 

 

 

Total Financials

            494,116   

Health Care - 15.5%

  

Biotechnology - 4.1%

  

Alnylam Pharmaceuticals, Inc.*

    1,300        82,121   

Clovis Oncology, Inc.*

    1,307        54,123   

Exact Sciences Corp.*

    8,196        139,578   

Neurocrine Biosciences, Inc.*

    5,173        76,767   

NPS Pharmaceuticals, Inc.*

    2,911        96,209   

Repligen Corp.*

    6,033        137,492   

Synageva BioPharma Corp.*

    940        98,512   

Versartis, Inc.*

    2,597        72,820   
   

 

 

 
              757,622   

Health Care Equipment & Supplies - 5.2%

  

DexCom, Inc.*

    2,695        106,884   

Endologix, Inc.*

    14,467        220,043   

Insulet Corp.*

    2,147        85,171   

Merit Medical Systems, Inc.*

    12,297        185,685   

Novadaq Technologies, Inc.*

    8,490        139,915   

Quidel Corp.*

    4,318        95,471   

Spectranetics Corp. (The)*

    5,699        130,393   
   

 

 

 
              963,562   

Health Care Providers & Services - 1.1%

  

National Research Corp.*

    14,851        207,765   

Health Care Technology - 2.2%

  

Castlight Health, Inc., Class B*

    2,752        41,830   

Computer Programs & Systems, Inc.

    1,416        90,058   

Imprivata, Inc.*

    11,169        182,948   

Medidata Solutions, Inc.*

    2,137        91,485   
   

 

 

 
              406,321   

Life Sciences Tools & Services - 0.5%

  

Fluidigm Corp.*

    3,170        93,198   

Pharmaceuticals - 2.4%

  

MediWound Ltd.*

    8,000        91,040   

Prestige Brands Holdings, Inc.*

    7,541        255,564   

Revance Therapeutics, Inc.*

    2,749        93,466   
   

 

 

 
      440,070   
   

 

 

 

Total Health Care

            2,868,538   
 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    25    www.meridianfund.com


Table of Contents

Meridian Small Cap Growth Fund

Schedule of Investments (continued)

June 30, 2014

 

     Shares     Value  

Industrials - 24.6%

  

Aerospace & Defense - 1.9%

  

HEICO Corp. Class A

    8,771      $ 356,103   

Air Freight & Logistics - 0.7%

  

Park-Ohio Holdings Corp.

    2,213        128,597   

Commercial Services & Supplies - 5.8%

  

Clean Harbors, Inc.*

    5,220        335,385   

Heritage-Crystal Clean, Inc.*

    17,208        337,793   

Ritchie Bros Auctioneers, Inc.

    7,075        174,399   

SP Plus Corp.*

    10,312        220,574   
   

 

 

 
              1,068,151   

Electrical Equipment - 1.4%

  

Polypore International, Inc.*

    2,654        126,675   

Power Solutions International, Inc.*

    1,870        134,584   
   

 

 

 
              261,259   

Industrial Conglomerates - 0.7%

  

Raven Industries, Inc.

    3,936        130,439   

Machinery - 4.4%

  

Kennametal, Inc.

    2,189        101,307   

Luxfer Holdings, Plc

    7,781        147,450   

Proto Labs, Inc.*

    1,822        149,258   

voxeljet AG ADR*

    5,496        115,086   

Tennant Co.

    3,859        294,519   
   

 

 

 
              807,620   

Professional Services - 4.4%

  

Advisory Board Co. (The)*

    2,978        154,260   

Corporate Executive Board Co. (The)

    4,713        321,521   

TriNet Group, Inc.*

    9,093        218,869   

TrueBlue, Inc.*

    4,396        121,198   
   

 

 

 
              815,848   

Road & Rail - 3.6%

  

Heartland Express, Inc.

    10,608        226,375   

Roadrunner Transportation Systems, Inc.*

    9,584        269,310   

Saia, Inc.*

    4,025        176,818   
   

 

 

 
              672,503   

Trading Companies & Distributors - 1.7%

  

Titan Machinery, Inc.*

    11,081        182,393   

WESCO International, Inc.*

    1,458        125,943   
   

 

 

 
      308,336   
   

 

 

 

Total Industrials

            4,548,856   

Information Technology - 20.1%

  

Electronic Equipment, Instruments - 2.9%

  

DTS, Inc.*

    4,384        80,709   

Measurement Specialties, Inc.*

    3,714        319,664   
     Shares     Value  

RealD, Inc.*

    10,310      $ 131,556   
   

 

 

 
              531,929   

Internet Software & Services - 7.5%

  

Amber Road, Inc.*

    4,303        69,407   

Angie’s List, Inc.*

    7,519        89,777   

Carbonite, Inc.*

    15,105        180,807   

ChannelAdvisor Corp.*

    6,182        162,958   

Dealertrack Technologies, Inc.*

    1,293        58,625   

LivePerson, Inc.*

    13,909        141,176   

Q2 Holdings, Inc.*

    6,599        94,102   

Reis, Inc.

    4,076        85,922   

SciQuest, Inc.*

    2,690        47,586   

SPS Commerce, Inc.*

    2,418        152,793   

VistaPrint N.V. (Netherlands)*

    7,538        304,987   
   

 

 

 
              1,388,140   

IT Services - 1.9%

  

Cass Information Systems, Inc.

    1,732        85,699   

Euronet Worldwide, Inc.*

    5,408        260,882   
   

 

 

 
              346,581   

Semiconductors - 0.4%

  

NVE Corp.*

    1,445        80,328   

Software - 7.4%

  

Advent Software, Inc.

    5,280        171,970   

Blackbaud, Inc.

    2,270        81,130   

Cadence Design Systems, Inc.*

    20,976        366,870   

Callidus Software, Inc.*

    10,660        127,280   

Exa Corp.*

    9,496        106,925   

RealPage, Inc.*

    3,690        82,951   

SolarWinds, Inc.*

    6,735        260,375   

SS&C Technologies Holdings, Inc.*

    3,897        172,325   
   

 

 

 
      1,369,826   
   

 

 

 

Total Information Technology

            3,716,804   

Materials - 1.0%

  

Chemicals - 1.0%

  

Balchem Corp.

    1,612        86,339   

Landec Corp.*

    7,375        92,114   
   

 

 

 

Total Materials

            178,453   

Total Investments - 89.8%

  

(Cost $15,733,797)

            16,618,538   

Cash and Other Assets, Less Liabilities - 10.2%

      1,878,910   
   

 

 

 

Net Assets - 100.0%

    $ 18,497,448   
   

 

 

 
 

 

ADR-American Depositary Receipt

N.V.-Naamloze Vennootschap is the Dutch term for limited liability company

Plc-Public Limited Company

 

* Non-income producing securities

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    26    www.meridianfund.com


Table of Contents

Meridian Fund, Inc.

Statements of Assets and Liabilities

 

June 30, 2014   Meridian
Growth Fund
    Meridian
Contrarian Fund
    Meridian
Equity
Income Fund
    Meridian
Small Cap
Growth Fund
 

Assets

                               

Investments, at value1

  $ 1,891,879,255      $ 706,904,908      $ 33,082,817      $ 16,618,538   

Cash

    158,495,917        56,818,116        619,502        2,076,594   

Receivables and other assets:

       

Fund shares purchased

    206,448        32,087        —          305,023   

Investments sold

    14,487,650        13,454,386        —          —     

Dividends

    143,574        423,360        63,511        5,425   

Prepaid expenses

    48,728        31,295        23,703        29,121   
 

 

 

 

Total assets

    2,065,261,572        777,664,152        33,789,533        19,034,701   
 

 

 

 
       

Liabilities

                               

Payables and other accrued expenses:

       

Fund shares sold

    1,391,902        1,088,471        4,908        —     

Investments purchased

    17,445,973        8,870,755        —          455,443   

Investment advisory fees

    1,265,737        623,348        22,352        37,425   

Service plan fees

    5,968        238        74        1,545   

Professional fees

    111,158        73,636        48,368        35,333   

Directors’ fees

    18,671        6,890        302        136   

Transfer agent fees

    69,766        44,940        1,636        1,011   

Other

    102,830        48,012        4,593        6,360   
 

 

 

 

Total liabilities

    20,412,005        10,756,290        82,233        537,253   
 

 

 

 

Net Assets

  $ 2,044,849,567      $ 766,907,862      $ 33,707,300      $ 18,497,448   
       

Net Assets Consist of

                               

Paid in capital

  $ 1,669,349,407      $ 512,728,386      $ 25,632,721      $ 16,540,663   

Accumulated net realized gain (loss) on investments and foreign currency transactions

    151,252,803        96,208,286        (462,333     1,072,044   

Net unrealized appreciation on investments and foreign currency translations

    224,247,357        157,821,190        8,055,099        884,741   

Undistributed (distributions in excess of) net investment income

    —          150,000        481,813        —     
 

 

 

 

Net Assets

  $ 2,044,849,567      $ 766,907,862      $ 33,707,300      $ 18,497,448   
 

 

 

 
       

Net Asset Value

                               

Legacy Class

       

Net assets

  $ 2,021,196,533      $ 764,882,157      $ 33,649,016      $ 9,838,522   

Shares outstanding2

    53,387,953        16,802,901        2,305,672        844,538   
 

 

 

 

Net asset value per share (offering and redemption price)

  $ 37.86      $ 45.52      $ 14.59      $ 11.65   
 

 

 

 

Investor Class

       

Net assets

  $ 18,749,167      $ 1,564,093      $ 45,402      $ 2,135,120   

Shares outstanding2

    496,299        34,400        3,109        183,305   
 

 

 

 

Net asset value per share (offering and redemption price)

  $ 37.78      $ 45.47      $ 14.60      $ 11.65   
 

 

 

 

Advisor Class

       

Net assets

  $ 4,903,867      $ 461,612      $ 12,882      $ 6,523,806   

Shares outstanding2

    130,020        10,165        883        560,933   
 

 

 

 

Net asset value per share (offering and redemption price)

  $ 37.72      $ 45.41      $ 14.58 3    $ 11.63   
 

 

 

 

1 Investments, at cost

  $ 1,667,631,898      $ 549,083,718      $ 25,027,718      $ 15,733,797   

2 500,000,000 shares authorized, $0.01 par value

       

3 Calculated NAV may not equal actual NAV shown due to rounding of the net assets and shares.

  

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    27    www.meridianfund.com


Table of Contents

Meridian Fund, Inc.

Statements of Operations

 

For the Year Ended June 30, 2014    Meridian
Growth Fund
    Meridian
Contrarian Fund
    Meridian
Equity
Income Fund
    Meridian
Small Cap
Growth Fund1
 

Investment Income

                                

Dividends

   $ 12,547,403      $ 8,712,606      $ 957,981      $ 41,136   

Foreign taxes withheld

     (126,382     (56,874     (9,359     (394
  

 

 

 

Total investment income

     12,421,021        8,655,732        948,622        40,742   
  

 

 

 
        

Expenses

                                

Investment advisory fees

     16,109,269        7,530,269        292,467        68,401   

Custodian fees

     202,392        76,915        6,551        10,354   

Distribution and service plan fees:

        

Investor Class

     14,431        185        57        262   

Advisor Class

     7,978        448        34        5,638   

Directors’ fees and expenses

     282,539        100,284        4,198        557   

Pricing fees

     207,940        86,940        24,257        12,574   

Audit and tax fees

     37,735        37,688        18,386        28,605   

Legal fees

     468,695        146,789        5,835        2,180   

Registration and filing fees

     61,141        45,012        71,789        38,113   

Shareholder communications

     247,315        132,303        3,773        3,400   

Transfer agent fees

     542,249        366,023        13,624        4,195   

Miscellaneous expenses

     104,997        40,159        8,169        5,414   
  

 

 

 

Total expenses

     18,286,681        8,563,015        449,140        179,693   

Less waivers and/or reimbursements (Note 4)

     (7,178     (16,794     (54,486     (89,308
  

 

 

 

Net expenses

     18,279,503        8,546,221        394,654        90,385   
  

 

 

 

Net investment income/(loss)

     (5,858,482     109,511        553,968        (49,643
  

 

 

 
        

Realized and Unrealized Gain (Loss)

                                

Net realized gain on investments and foreign currency transactions

     556,304,765        157,634,506        2,242,362        1,120,438   

Net change in unrealized appreciation (depreciation) on investments and foreign currency translations

     (212,344,132     (1,572,341     2,899,378        884,741   
  

 

 

 

Total realized and unrealized gain

     343,960,633        156,062,165        5,141,740        2,005,179   
  

 

 

 

Net Increase in Net Assets Resulting from Operations

   $ 338,102,151      $ 156,171,676      $ 5,695,708      $ 1,955,536   
  

 

 

 

 

1 

Represents the period December 16, 2013 (Inception) to June 30, 2014.

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    28    www.meridianfund.com


Table of Contents

Meridian Fund, Inc.

Statements of Changes in Net Assets

 

    Meridian Growth Fund     Meridian Contrarian Fund  
Changes in Net Assets From:   Year Ended
June 30, 2014
    Year Ended
June 30, 2013
    Year Ended
June 30, 2014
    Year Ended
June 30, 2013
 

Operations

                               

Net investment income/(loss)

  $ (5,858,482   $ 2,512,776      $ 109,511      $ 2,832,635   

Net realized gain on investments and foreign currency transactions

    556,304,765        363,025,066        157,634,506        101,659,072   

Net change in unrealized appreciation (depreciation) on investments and foreign currency translations

    (212,344,132     (55,210,405     (1,572,341     32,364,704   
 

 

 

 

Net increase in net assets resulting from operations

    338,102,151        310,327,437        156,171,676        136,856,411   
 

 

 

 
       

Distributions to Shareholders From:

                               

Net investment income:

       

Legacy Class

    (1,246     (6,998,656     (3,275,946     (2,282,630

Investor Class

    —          —          (41     —     

Advisor Class

    —          —          (51     —     

Net realized gains:

       

Legacy Class

    (598,507,009     (312,972,771     (2,568,833     —     

Investor Class

    —          —          —          —     

Advisor Class

    —          —          —          —     
 

 

 

 

Decrease in net assets from distributions

    (598,508,255     (319,971,427     (5,844,871     (2,282,630
 

 

 

 
       

Fund Share Transactions

                               

Net increase (decrease) in net assets resulting from fund share transactions (Note 2)

    192,310,546        (361,494,718     (87,941,564     (118,698,620
 

 

 

 

Total increase (decrease) in net assets

    (68,095,558     (371,138,708     62,385,241        15,875,161   
 

 

 

 
       

Net Assets

                               

Beginning of year

    2,112,945,125        2,484,083,833        704,522,621        688,647,460   
 

 

 

 

End of year*

  $ 2,044,849,567      $ 2,112,945,125      $ 766,907,862      $ 704,522,621   
 

 

 

 

* Includes accumulated undistributed (distributions in excess of) net investment income

  $ —        $ (1,074,678   $ 150,000      $ 2,833,352   
 

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    29    www.meridianfund.com


Table of Contents

Meridian Fund, Inc.

Statements of Changes in Net Assets

 

    Meridian Equity Income Fund     Meridian Small Cap
Growth Fund
 
Changes in Net Assets From:   Year Ended
June 30, 2014
    Year Ended
June 30, 2013
    For the Period
December 16, 2013
to June 30, 2014
 

Operations

                       

Net investment income/(loss)

  $ 553,968      $ 570,782      $ (49,643

Net realized gain on investments and foreign currency transactions

    2,242,362        1,655,567        1,120,438   

Net change in unrealized appreciation (depreciation) on investments and foreign currency translations

    2,899,378        2,402,213        884,741   
 

 

 

 

Net increase in net assets resulting from operations

    5,695,708        4,628,562        1,955,536   
 

 

 

 
     

Distributions to Shareholders From:

                       

Net investment income:

     

Legacy Class

    (500,908     (639,477     —     

Investor Class

    (148     —          —     

Advisor Class

    (145     —          —     

Net realized gains:

     

Legacy Class

    —          —          —     

Investor Class

    —          —          —     

Advisor Class

    —          —          —     
 

 

 

 

Decrease in net assets from distributions

    (501,201     (639,477     —     
 

 

 

 
     

Fund Share Transactions

                       

Net increase (decrease) in net assets resulting from fund share transactions (Note 2)

    (184,365     (6,035,663     16,541,912   
 

 

 

 

Total increase (decrease) in net assets

    5,010,142        (2,046,578     18,497,448   
 

 

 

 
     

Net Assets

                       

Beginning of period

    28,697,158        30,743,736        —     
 

 

 

 

End of period*

  $ 33,707,300      $ 28,697,158      $ 18,497,448   
 

 

 

 

* Includes accumulated undistributed (distributions in excess of) net investment income

  $ 481,813      $ 449,323      $ —     
 

 

 

 

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    30    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Financial Highlights

 

    For the Fiscal Year Ended June 30,  
Legacy Class   2014     2013     2012     2011     2010  

Per Share Operating Performance

                                       

Net asset value, beginning of period

  $ 44.31      $ 45.06      $ 47.61      $ 33.94      $ 27.89   
 

 

 

 

Income (loss) from investment operations:

         

Net investment income (loss)1

    (0.11     0.05        0.10        0.08        0.08   

Net realized and unrealized gain

    6.89        6.23        0.69        13.67        6.11   
 

 

 

 

Net increase from investment operations

    6.78        6.28        0.79        13.75        6.19   
 

 

 

 

Less distributions to shareholders:

         

Distributions from net investment income

    (0.00 )2      (0.15     (0.07     (0.07     (0.12

Distributions from net realized capital gains

    (13.23     (6.88     (3.27     (0.01     0.00   

Distributions from paid in capital

    0.00        0.00        0.00        0.00        (0.02
 

 

 

 

Total distributions to shareholders

    (13.23     (7.03     (3.34     (0.08     (0.14
 

 

 

 

Net asset value, end of period

  $ 37.86      $ 44.31      $ 45.06      $ 47.61      $ 33.94   
 

 

 

 

Total return

    17.31%        15.54%        2.45%        40.51%        22.18%   
 

 

 

 
         

Ratios to Average Net Assets

                                       

Ratio of net investment income (loss) to average net assets

    (0.27%     0.11%        0.22%        0.18%        0.24%   

Ratio of expenses to average net assets

    0.86%        0.87%        0.85%        0.81%        0.84%   
         

Supplemental Data

                                       

Net Assets, End of Period (000’s)

  $ 2,021,197      $ 2,112,945      $ 2,484,084      $ 2,615,082      $ 1,438,266   

Portfolio Turnover Rate

    96%        37%        25%        26%        37%   

 

1 

Per share net investment income has been calculated using the average daily shares method.

 

2 

Less than $0.005 per share.

 

The accompanying notes are an integral part of the financial statements.

 

Meridian Funds    31    www.meridianfund.com


Table of Contents

Meridian Growth Fund

Financial Highlights

 

    For the Period Ended
June 30, 2014
 
    Investor
Class1
     Advisor
Class1
 

Per Share Operating Performance

                

Net asset value, beginning of period

  $ 35.67       $ 35.67   
 

 

 

 

Income (loss) from investment operations:

    

Net investment loss2

    (0.16      (0.21

Net realized and unrealized gain

    2.27         2.26   
 

 

 

 

Net increase from investment operations

    2.11         2.05   
 

 

 

 

Less distributions to shareholders:

    

Distributions from net investment income

    (0.00 )3