N-Q 1 dnq.htm HEARTLAND GROUP INC. Heartland Group Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

 

Investment Company Act file number 811-4982

 

 

Heartland Group, Inc.

(Exact name of registrant as specified in charter)

 

 

789 N. Water Street, Milwaukee, WI   53202
(Address of principal executive offices)   (Zip code)

 

 

Nicole J. Best, Treasurer and Principal Accounting Officer; Heartland Group, Inc.

789 N. Water Street, Milwaukee, WI 53202

(Name and address of agent for service)

 

 

Conrad Goodkind; Quarles & Brady LLP, 411 East Wisconsin Avenue, Milwaukee, WI 53202

(With a copy to:)

 

 

Registrant’s telephone number, including area code: (414) 347-7777

 

 

Date of fiscal year end: December 31

 

 

Date of reporting period: September 30, 2005

Item 1. Schedule of Investments.

Select Value Fund - Schedule of Investments    September 30, 2005 (Unaudited)

 

COMMON STOCKS (93.9%)

    Shares
     
 Value

Aerospace & Defense (4.0%)

            

Goodrich Corp.

    76,200    $ 3,378,708

Triumph Group, Inc. (a)

    60,000      2,230,200
         
            5,608,908

Air Freight & Logistics (2.0%)

            

Ryder System, Inc.

    80,000      2,737,600

Airlines (1.9%)

            

Southwest Airlines Co.

    175,000      2,598,750

Auto Components (1.9%)

            

BorgWarner, Inc.

    46,000      2,597,160

Building Products (1.8%)

            

ElkCorp

    71,400      2,553,978

Chemicals (3.4%)

            

Agrium, Inc. (CAD)(b)

    125,000      2,751,248

RPM International, Inc.

    110,200      2,027,680
         
            4,778,928

Commercial Banks (5.6%)

            

Marshall & Ilsley Corp.

    65,000      2,828,150

SunTrust Banks, Inc.

    40,000      2,778,000

Huntington Bancshares, Inc.

    100,000      2,247,000
         
            7,853,150

Communications Equipment (2.4%)

            

Motorola, Inc.

    154,100      3,404,069

Computers & Peripherals (4.0%)

            

Hewlett-Packard Co.

    125,000      3,650,000

Seagate Technology

    120,000      1,902,000
         
            5,552,000

Construction & Engineering (1.9%)

            

Washington Group International, Inc. (a)

    50,000      2,694,500

Containers & Packaging (1.7%)

            

Smurfit-Stone Container Corp. (a)

    225,000      2,331,000

Diversified Telecommunication Services (4.0%)

            

SBC Communications, Inc.

    120,000      2,876,400

Telefonos de Mexico SA de CV (ADR)

    125,000      2,658,750
         
            5,535,150

Electric Utilities (2.2%)

            

Allegheny Energy, Inc. (a)

    100,000      3,072,000

Electronic Equipment & Instruments (1.7%)

            

Avnet, Inc. (a)

    100,000      2,445,000

Energy Equipment & Services (4.2%)

            

Tidewater, Inc.

    61,300      2,983,471

Patterson-UTI Energy, Inc.

    80,000      2,886,400
         
            5,869,871

Food Products (5.3%)

            

Chiquita Brands International, Inc.

    105,000      2,934,750

Dean Foods Co. (a)

    60,000      2,331,600

Tyson Foods, Inc. (Class A)

    120,000      2,166,000
         
            7,432,350

Health Care Providers & Services (2.1%)

            

HCA, Inc.

    60,000      2,875,200

Hotels, Restaurants & Leisure (1.7%)

            

Ruby Tuesday, Inc.

    110,000      2,393,600

Independent Power Producers & Energy Traders (2.4%)

            

NRG Energy, Inc. (a)

    80,000      3,408,000

Industrial Conglomerates (1.8%)

            

Carlisle Cos., Inc.

    40,000      2,542,800

Insurance (6.6%)

            

UnumProvident Corp.

    150,000      3,075,000

Jefferson-Pilot Corp.

    60,000      3,070,200

The Allstate Corp.

    55,000      3,040,950
         
            9,186,150

Machinery (1.8%)

            

Wabash National Corp.

    125,000      2,457,500

Metals & Mining (3.0%)

            

Oregon Steel Mills, Inc. (a)

    150,000      4,185,000

Multi-Utilities (1.2%)

            

Wisconsin Energy Corp.

    42,000      1,676,640

Multiline Retail (1.5%)

            

Dollar Tree Stores, Inc. (a)

    100,000      2,165,000

Oil, Gas & Consumable Fuels (5.3%)

            

ConocoPhillips Co.

    56,000      3,914,960

Anadarko Petroleum Corp.

    35,700      3,418,275
         
            7,333,235

Paper & Forest Products (2.0%)

            

P.H. Glatfelter Co.

    200,000      2,818,000

Pharmaceuticals (4.2%)

            

Pfizer, Inc.

    120,000      2,996,400

Biovail Corp. (CAD)(a)(b)

    125,000      2,915,806
         
            5,912,206

Road & Rail (2.6%)

            

Union Pacific Corp.

    50,000      3,585,000

Semiconductors (4.6%)

            

MEMC Electronic Materials, Inc. (a)

    175,000      3,988,250

Applied Materials, Inc.

    140,000      2,374,400
         
            6,362,650

Specialty Retail (1.8%)

            

United Auto Group, Inc.

    75,000      2,478,000

Thrifts & Mortgage Finance (3.3%)

            

Washington Mutual, Inc.

    60,000      2,353,200

MGIC Investment Corp.

    35,000      2,247,000
         
            4,600,200
         

TOTAL COMMON STOCKS (Cost $101,877,207)

         $ 131,043,595

SHORT-TERM INVESTMENTS (5.3%)

     
 Par Amount
     
 Value

U.S. GOVERNMENT AND AGENCY SECURITIES (2.5%)

              

U.S. Treasury Bills, 10/20/05

    $ 3,500,000    $ 3,494,284

TIME DEPOSITS (2.8%) (+)

              

Brown Brothers Harriman, 3.31%

      3,879,527      3,879,527
           

TOTAL SHORT-TERM INVESTMENTS (Cost $7,374,097)

           $ 7,373,811

TOTAL INVESTMENTS (Cost $109,251,304) (99.2%)

           $ 138,417,406

Other assets and liabilities, net (0.8%)

             1,089,448
           

TOTAL NET ASSETS (100.0%)

           $ 139,506,854
           

 

(a) Non-income producing security.

 

(b) Foreign-denominated security.

 

(+) Time deposits are considered short-term obligations and are payable on demand. Interest rates change periodically on specified dates. The rates listed are as of September 30, 2005.

 

ADR – American Depositary Receipt.

 

CAD – Canadian issuer.

 

Effective as of March 31, 2005, industry and sector classifications for each security held are generally determined by referencing the Global Industry Classification Standard Codes (GICS) developed by Standard & Poor’s and Morgan Stanley Capital International. Prior to that time, Heartland Advisors, Inc. utilized other sources to determine industry and sector classifications.

 

The accompanying Notes to Schedules of Investments are an integral part of this Schedule.

Value Plus Fund - Schedule of Investments    September 30, 2005 (Unaudited)

 

COMMON STOCKS (92.2%)              

    Shares
     
 Value

Aerospace & Defense (1.1%)

            

Cubic Corp.

    200,000    $ 3,424,000

Auto Components (2.0%)

            

Standard Motor Products, Inc.

    550,000      4,460,500

Quantum Fuel Systems Technology Worldwide, Inc. (a)

    400,000      1,640,000
         
            6,100,500

Biotechnology (0.6%)

            

GTC Biotherapeutics, Inc. (a)

    1,303,122      1,811,340

Building Products (2.9%)

            

Apogee Enterprises, Inc.

    504,300      8,623,530

Chemicals (4.5%)

            

Lubrizol Corp.

    190,000      8,232,700

Agrium, Inc. (CAD)(b)

    240,000      5,282,395
         
            13,515,095

Commercial Banks (1.1%)

            

Chittenden Corp.

    125,000      3,313,750

Computers & Peripherals (3.1%)

            

Imation Corp.

    220,000      9,431,400

Electronic Equipment & Instruments (3.1%)

            

Nam Tai Electronics, Inc. (ADR)

    370,000      9,409,100

Energy Equipment & Services (9.5%)

            

TODCO (Class A)

    240,000      10,010,400

Tidewater, Inc.

    200,000      9,734,000

Helmerich & Payne, Inc.

    145,000      8,756,550
         
            28,500,950

Food Products (1.5%)

            

B & G Foods, Inc.

    350,000      4,427,500

Gas Utilities (3.1%)

            

NICOR, Inc.

    225,000      9,456,750

Health Care Equipment & Supplies (1.6%)

            

Orthovita, Inc. (a)

    1,128,572      4,830,288

Hotels, Restaurants & Leisure (1.5%)

            

Bob Evans Farms, Inc.

    200,000      4,542,000

Insurance (3.7%)

            

UnumProvident Corp.

    540,000      11,070,000

Internet Software & Services (0.4%)

            

Zix Corp. (a)(c)(d)(f)

    360,000      612,000

Zix Corp. (a)(c)(d)(e)(f)

    240,000      600,000
         
            1,212,000

IT Services (2.9%)

            

Perot Systems Corp. (Class A)(a)

    525,000      7,428,750

StarTek, Inc.

    94,000      1,240,800
         
            8,669,550

Leisure Equipment & Products (3.2%)

            

Oakley, Inc.

    550,000      9,537,000

Machinery (6.5%)

            

Federal Signal Corp.

    575,000      9,826,750

Barnes Group, Inc.

    270,000      9,682,200
         
            19,508,950

Metals & Mining (1.6%)

            

Gerdau Ameristeel Corp.

    900,000      4,680,000

Oil, Gas & Consumable Fuels (3.6%)

            

Callon Petroleum Co. (a)

    375,000      7,848,750

Brigham Exploration Co. (a)

    225,000      2,891,250
         
            10,740,000

Paper & Forest Products (2.3%)

            

Wausau-Mosinee Paper Corp.

    550,000      6,880,500

Personal Products (2.5%)

            

Nu Skin Enterprises, Inc. (Class A)

    400,000      7,620,000

Pharmaceuticals (5.1%)

            

Biovail Corp. (CAD)(a)(b)

    550,000      12,829,548

Par Pharmaceutical Cos., Inc. (a)

    100,000      2,662,000
         
            15,491,548

Real Estate (1.5%)

            

Government Properties Trust, Inc.

    475,000      4,655,000

Road & Rail (3.8%)

            

Swift Transportation Co., Inc. (a)

    350,000      6,195,000

Covenant Transport, Inc. (Class A) (a)

    442,981      5,360,070
         
            11,555,070

Software (10.1%)

            

Novell, Inc. (a)

    1,500,000      11,175,000

Parametric Technology Corp. (a)

    1,000,000      6,970,000

Mentor Graphics Corp. (a)

    750,000      6,450,000

Borland Software Corp. (a)

    1,000,000      5,820,000
         
            30,415,000

Specialty Retail (5.0%)

            

The Pep Boys - Manny, Moe & Jack

    600,000      8,304,000

Casual Male Retail Group, Inc. (a)

    1,000,000      6,880,000
         
            15,184,000

Textiles, Apparel & Luxury Goods (2.8%)

            

Stride Rite Corp.

    650,000      8,333,000

Thrifts & Mortgage Finance (1.6%)

            

Provident Financial Services, Inc.

    275,000      4,840,000
         

TOTAL COMMON STOCKS (Cost $237,507,733)

         $ 277,777,821
             

WARRANTS (0.7%)        

    Shares
     
 Value

Biotechnology (0.7%)

            

StemCells, Inc. (a)(c)(d)

    575,658    $ 2,083,882

Internet Software & Services (0.0%)

            

Zix Corp. (a)(c)(d)(f)

    118,800      —  

Zix Corp. (a)(c)(d)(e)(f)

    79,200      —  
         

TOTAL WARRANTS (Cost $0)

         $ 2,083,882

SHORT-TERM INVESTMENTS (5.2%)

     
 Par Amount
     
 Value
               

U.S. GOVERNMENT AND AGENCY SECURITIES (2.2%)

              

U.S. Treasury Bills, 10/20/05 (g)

    $ 6,500,000    $ 6,489,383

TIME DEPOSITS (3.0%) (+)

              

Brown Brothers Harriman, 3.31%

      9,034,650      9,034,650
           

TOTAL SHORT-TERM INVESTMENTS (Cost $15,524,564)

           $ 15,524,033

TOTAL INVESTMENTS (Cost $253,032,297) (98.1%)

           $ 295,385,736

Other assets and liabilities, net (1.9%)

             5,753,554
           

TOTAL NET ASSETS (100.0%)

           $ 301,139,290
           

 

(a) Non-income producing security.

 

(b) Foreign-denominated security.

 

(c) Illiquid security, pursuant to the guidelines established by the Board of Directors. See Note 2(g) in Notes to Schedule of Investments.

 

(d) Valued at fair value using methods determined by the Board of Directors. See Note 2(a) in Notes to Schedules of Investments.

 

(e) Security purchased on a when-issued basis. See Note 2(j) in Notes to Schedules of Investments. At September 30, 2005, the cost of the common stocks and warrants purchased on a when-issued basis was $600,000 and $0, respectively.

 

(f) Restricted Security. See Note 2(h) in Notes to Schedules of Investments.

 

(g) Segregated as collateral.

 

(+) Time deposits are considered short-term obligations and are payable on demand. Interest rates change periodically on specified dates. The rates listed are as of September 30, 2005.

 

ADR – American Depositary Receipt.

 

CAD – Canadian issuer.

 

Effective as of March 31, 2005, industry and sector classifications for each security held are generally determined by referencing the Global Industry Classification Standard Codes (GICS) developed by Standard & Poor’s and Morgan Stanley Capital International. Prior to that time, Heartland Advisors, Inc. utilized other sources to determine industry and sector classifications.

 

The accompanying Notes to Schedules of Investments are an integral part of this Schedule.

Value Fund - Schedule of Investments    September 30, 2005 (Unaudited)

 

COMMON STOCKS (93.4%)

    Shares
     
 Value

Aerospace & Defense (1.1%)

            

AAR Corp. (a)

    500,000    $ 8,590,000

Ducommun, Inc. (a)

    271,700      5,977,400

Allied Defense Group, Inc. (a)(b)

    149,000      3,359,950
         
            17,927,350

Air Freight & Logistics (0.3%)

            

AirNet Systems, Inc. (a)(b)

    1,000,000      4,750,000

Airlines (1.3%)

            

Mesa Air Group, Inc. (a)

    1,000,000      8,250,000

Continental Airlines, Inc. (Class B)(a)

    774,600      7,482,636

Midwest Air Group, Inc. (a)(b)

    1,415,500      3,015,015

MAIR Holdings, Inc. (a)

    500,000      2,915,000
         
            21,662,651

Auto Components (0.6%)

            

Superior Industries International, Inc.

    200,000      4,303,999

Quantum Fuel Systems Technologies Worldwide, Inc. (a)

    911,799      3,738,376

Hy-Drive Technologies, Ltd. (CAD)(a)(c)(d)(e)(f)

    2,325,391      1,104,471

Hy-Drive Technologies, Ltd. (CAD)(a)(c)

    164,500      97,664
         
            9,244,510

Biotechnology (5.9%)

            

Discovery Laboratories, Inc. (a)(b)

    3,000,000      19,350,000

Sirna Therapeutics, Inc. (a)(d)(e)(f)

    4,000,000      14,960,000

Kendle International, Inc. (a)(b)

    450,000      12,663,000

OrthoLogic Corp. (a)(b)

    3,100,000      11,873,000

Genitope Corp. (a)(b)

    1,175,000      8,154,500

Isolagen, Inc. (a)(b)

    3,000,000      4,950,000

Keryx Biopharmaceuticals, Inc. (a)

    285,000      4,491,600

Sirna Therapeutics, Inc. (a)

    1,000,000      4,400,000

Discovery Partners International, Inc. (a)(b)

    1,058,000      3,406,760

Cambrex Corp.

    150,000      2,844,000

Senesco Technologies, Inc. (a)(b)

    1,300,000      2,249,000

AP Pharma, Inc. (a)

    1,175,051      2,044,589

Stratagene Corp. (a)

    183,216      1,650,776

Angiotech Pharmaceuticals, Inc. (a)

    100,000      1,402,000

Mannkind Corp. (a)

    65,000      889,850

Aphton Corp. (a)(b)

    1,357,596      868,861
         
            96,197,936

Building Products (0.6%)

            

Maezawa Kasei Industries Co., Ltd. (JPY)(c)

    200,000      3,416,740

Jacuzzi Brands, Inc. (a)

    400,000      3,224,000

Patrick Industries, Inc. (a)(b)

    293,525      3,140,718
         
            9,781,458

Capital Markets (1.7%)

            

Stifel Financial Corp. (a)

    400,000      14,360,000

LaBranche & Co., Inc. (a)

    500,000      4,345,000

FirstCity Financial Corp. (a)

    336,100      4,100,420

American Physicians Service Group, Inc. (b)

    185,649      2,270,487

Oppenheimer Holdings, Inc. (Class A)(CAD)(c)

    90,000      1,788,849
         
            26,864,756

Chemicals (1.9%)

          

Sensient Technologies Corp.

    1,000,000    18,950,000

LESCO, Inc. (a)

    403,599    6,397,044

Calgon Carbon Corp.

    400,000    3,160,000

A. Schulman, Inc.

    150,000    2,692,500
         
          31,199,544

Commercial Banks (3.0%)

          

Associated Banc-Corp.

    450,000    13,716,000

Sterling Financial Corp.

    600,000    13,530,000

Independent Bank Corp.

    186,500    5,665,870

AmeriServ Financial, Inc. (a)

    500,000    2,175,000

Simmons First National Corp. (Class A)

    75,100    2,141,852

AmeriServ Financial, Inc. (a)(d)(e)(f)

    500,000    1,848,750

Merchants & Manufacturers Bancorp., Inc. (d)

    46,095    1,763,134

PAB Bankshares, Inc.

    100,000    1,561,000

Capital Bank Corp.

    100,000    1,507,000

Summit Bank Corp. (d)

    100,000    1,482,000

Guaranty Financial Corp. (d)(e)

    10,388    1,454,320

SNB Bancshares, Inc. (a)

    100,000    1,125,000
         
          47,969,926

Commercial Services & Supplies (7.7%)

          

Barrett Business Services, Inc. (a)(b)

    667,422    15,250,592

Intersections, Inc. (a)(b)

    1,000,000    11,949,999

The Geo Group, Inc. (a)(b)

    386,900    10,252,850

FTI Consulting, Inc. (a)

    400,000    10,104,000

Exponent, Inc. (a)

    300,000    9,417,000

Fuel-Tech N.V. (a)(b)

    1,000,000    9,250,000

SITEL Corp. (a)

    3,261,900    9,133,320

TeleTech Holdings, Inc. (a)

    800,000    8,016,000

On Assignment, Inc. (a)

    909,000    7,771,950

Central Parking Corp.

    500,000    7,475,000

Outlook Group Corp. (b)

    323,138    5,137,894

PRG-Schultz International, Inc. (a)

    1,650,352    4,967,560

RCM Technologies, Inc. (a)(b)

    780,100    4,688,401

Bowne & Co., Inc.

    300,000    4,287,000

Volt Information Sciences, Inc. (a)

    147,200    2,991,104

CompuDyne Corp. (a)(b)

    500,000    2,900,000

The Standard Register Co.

    100,000    1,495,000
         
          125,087,670

Communications Equipment (4.9%)

          

InterDigital Communications Corp. (a)(b)

    3,000,000    58,920,000

Lantronix, Inc. (a)(b)

    5,000,000    6,900,000

Aastra Technologies, Ltd. (CAD)(a)(c)

    300,000    6,814,662

EMS Technologies, Inc. (a)

    350,000    5,729,500

Asia Pacific Wire & Cable Corp., Ltd. (ADR)(a)(b)(d)

    1,137,300    2,160,870
         
          80,525,032

Computers & Peripherals (1.1%)

          

McDATA Corp. (Class A)(a)(b)

    3,044,481    15,953,080

InFocus Corp. (a)

    500,000    1,725,000
         
          17,678,080

Construction & Engineering (1.8%)

          

URS Corp. (a)

    500,000    20,195,000

Comfort Systems USA, Inc. (a)

    750,000    6,607,500

Insituform Technologies, Inc. (Class A)(a)

    100,000    1,729,000
         
          28,531,500

Diversified Consumer Services (1.3%)

          

Regis Corp.

    400,000    15,128,000

The Princeton Review, Inc. (a)

    1,000,000    6,010,000
         
          21,138,000

Diversified Financial Services (0.1%)

          

eSPEED, Inc. (Class A) (a)

    300,000    2,274,000

Electrical Equipment (0.9%)

          

Xantrex Technology, Inc. (CAD)(a)(c)

    798,200    5,803,468

Powell Industries, Inc. (a)

    200,000    4,378,000

LSI Industries, Inc.

    200,000    3,800,000
         
          13,981,468

Electronic Equipment & Instruments (0.6%)

          

OSI Systems, Inc. (a)

    200,000    3,160,000

O.I. Corp. (a)(b)(d)

    245,900    2,618,835

Zomax, Inc. (a)

    770,000    2,471,700

MOCON, Inc.

    160,245    1,551,172
         
          9,801,707

Energy Equipment & Services (6.1%)

          

Input/Output, Inc. (a)

    2,742,400    21,884,352

Newpark Resources, Inc. (a)

    2,500,000    21,050,000

NATCO Group, Inc. (Class A)(a)

    700,000    17,724,000

FuelCell Energy, Inc. (a)

    1,000,000    10,970,000

Offshore Logistics, Inc. (a)

    200,000    7,400,000

Gulf Island Fabrication, Inc.

    201,982    5,806,983

GulfMark Offshore, Inc. (a)

    140,000    4,517,800

Matrix Service Co. (a)

    500,000    4,025,000

W-H Energy Services, Inc. (a)

    100,000    3,242,000

Global Industries, Ltd. (a)

    149,000    2,196,260
         
          98,816,395

Food Products (2.1%)

          

Riken Vitamin Co., Ltd. (JPY)(c)

    427,200    10,670,590

John B. Sanfilippo & Son, Inc. (a)(b)

    444,000    7,770,000

Hanover Foods Corp. (Class A)(d)(e)

    49,250    5,811,500

Poore Brothers, Inc. (a)(b)

    1,000,000    5,450,000

Monterey Gourmet Foods, Inc. (a)

    547,257    2,194,501

Tasty Baking Co.

    250,000    2,170,000
         
          34,066,591

Gas Utilities (0.0%)

          

Semco Energy, Inc. (a)

    110,400    727,536

Health Care Equipment & Supplies (3.9%)

          

Analogic Corp.

    334,600    16,867,186

Fukuda Denshi Co., Ltd. (JPY)(c)

    300,000    10,572,687

STAAR Surgical Co. (a)(b)

    1,809,000    9,967,590

Nissui Pharmaceutical Co., Ltd. (JPY)(c)(d)

    938,000    6,404,846

Osteotech, Inc. (a)(b)

    1,000,000    5,730,000

Lifecore Biomedical, Inc. (a)(b)

    400,000    4,836,000

Compex Technologies, Inc. (a)(b)

    1,000,000    4,320,000

Medwave, Inc. (a)(b)

    1,050,000    3,381,000

Sonic Innovations, Inc. (a)

    400,000    1,769,600
         
          63,848,909

Health Care Providers & Services (5.0%)

          

Specialty Laboratories, Inc. (a)

    1,000,000    13,230,000

PDI, Inc. (a)

    639,091    9,784,483

Hooper Holmes, Inc.

    2,360,000    9,274,800

Henry Schein, Inc. (a)

    200,000    8,524,000

Cross Country Healthcare, Inc. (a)

    398,794    7,401,617

BioScrip, Inc. (a)(b)

    1,000,000    6,500,000

PAREXEL International Corp. (a)

    300,000    6,027,000

National Home Health Care Corp. (b)

    441,000    4,992,120

Air Methods Corp. (a)

    400,000    4,528,000

SRI/Surgical Express, Inc. (a)(b)(d)

    600,000    3,792,000

MEDTOX Scientific, Inc. (a)(b)

    508,750    3,688,438

Omnicell, Inc. (a)

    315,000    3,064,950

Almost Family, Inc. (a)(b)(d)

    75,682    1,226,048
         
          82,033,456

Hotels, Restaurants & Leisure (2.4%)

          

Multimedia Games, Inc. (a)(b)

    1,345,000    13,059,950

Sunterra Corp. (a)

    750,000    9,847,500

Buca, Inc. (a)

    1,000,000    6,070,000

Smith & Wollensky Restaurant Group, Inc. (a)(b)

    574,400    3,676,160

Champps Entertainment, Inc. (a)

    503,800    3,486,296

Marcus Corp.

    99,100    1,985,964

Sholodge, Inc. (a)(b)(d)(e)

    447,700    1,678,875
         
          39,804,745

Household Durables (0.7%)

          

Global-Tech Appliances, Inc. (a)(b)

    1,181,200    5,917,812

Levitt Corp. (Class A)

    200,000    4,588,000

Warderly International Holdings, Ltd. (HK)(c)

    11,230,000    1,027,871
         
          11,533,683

Household Products (0.5%)

          

Oil-Dri Corp. of America (b)

    450,000    7,830,000

Independent Power Producers & Energy Traders (1.7%)

          

Dynergy, Inc. (Class A)(a)

    6,000,000    28,260,000

Insurance (5.5%)

          

Presidential Life Corp.

    1,000,000    18,000,000

Kingsway Financial Services, Inc. (CAD)(c)

    1,000,000    17,940,114

AmerUs Group Co.

    250,000    14,342,500

Assured Guaranty, Ltd.

    500,000    11,965,000

Scottish Re Group, Ltd.

    300,000    7,152,000

Meadowbrook Insurance Group, Inc. (a)

    1,000,000    5,600,000

SCPIE Holdings, Inc. (a)

    358,000    5,119,400

Vesta Insurance Group, Inc. (a)(b)

    2,000,000    4,060,000

Phoenix Cos., Inc.

    300,000    3,660,000

Financial Industries Corp. (a)(e)

    154,031    1,178,337
         
          89,017,351

Internet & Catalog Retail (0.0%)

          

PetMed Express, Inc. (a)

    70,686    732,307

Internet Software & Services (0.9%)

          

RealNetworks, Inc. (a)

    2,000,000    11,420,000

Digitas, Inc. (a)

    210,000    2,385,600
         
          13,805,600

IT Services (2.3%)

          

Tier Technologies, Inc. (Class B)(a)

    1,000,000    8,650,000

Forrester Research, Inc. (a)

    400,000    8,328,000

Clark, Inc.

    328,100    5,521,923

First Consulting Group, Inc. (a)

    949,700    5,508,260

Analysts International Corp. (a)(b)

    1,600,000    4,240,000

Anacomp, Inc. (Class A) (a)(b)(d)(e)

    350,000    3,762,500

Lionbridge Technologies, Inc. (a)

    130,049    877,831
         
          36,888,514

Leisure Equipment & Products (1.7%)

          

JAKKS Pacific, Inc. (a)

    700,000    11,361,000

K2, Inc. (a)

    700,000    7,980,000

Leapfrog Enterprises, Inc. (a)

    300,000    4,431,000

Excelligence Learning Corp. (a)

    364,100    2,413,983

Zindart, Ltd. (ADR) (a)(b)

    563,000    1,745,300
         
          27,931,283

Machinery (3.0%)

          

Stewart & Stevenson Services, Inc.

    700,000    16,695,000

Badger Meter, Inc. (b)

    400,000    15,736,000

Federal Signal Corp.

    500,000    8,545,000

Met-Pro Corp.

    300,000    4,653,000

MFRI, Inc. (a)(b)

    463,200    3,066,384

Robbins & Myers, Inc.

    23,600    530,528
         
          49,225,912

Media (2.6%)

          

Alliance Atlantis Communications, Inc. (Class B)(CAD)(a)(c)

    1,000,000    27,620,031

Horipro, Inc. (JPY)(c)

    700,000    7,394,714

Emak Worldwide, Inc. (a)(b)

    500,000    3,795,000

SPAR Group, Inc. (a)(b)

    1,228,000    2,026,200

Opinion Research Corp. (a)

    211,939    1,403,036
         
          42,238,981

Metals & Mining (2.4%)

          

High River Gold Mines, Ltd. (CAD)(a)(b)(c)

    7,501,400    9,488,090

Western Silver Corp. (CAD)(a)(c)

    1,000,400    8,418,441

LionOre Mining International, Ltd. (CAD)(a)(c)

    1,500,000    7,292,204

Northwest Pipe Co. (a)

    250,000    6,472,500

Aleris International, Inc. (a)

    150,000    4,117,500

Grande Cache Coal Corp. (CAD)(a)(c)

    500,000    3,183,617
         
          38,972,352

Multiline Retail (0.6%)

          

Duckwall-ALCO Stores, Inc. (a)(b)

    400,000    9,264,000

Oil, Gas & Consumable Fuels (7.2%)

          

Sherritt International Corp. (CAD)(c)

    3,000,000    28,265,359

Clayton Williams Energy, Inc. (a)(b)

    600,000    25,920,000

Harvest Natural Resources, Inc. (a)

    1,500,000    16,095,000

Swift Energy Co. (a)

    287,500    13,153,125

Plains Exploration & Production Co. (a)

    300,000    12,846,000

Whiting Petroleum Corp. (a)

    200,000    8,768,000

Far East Energy Corp. (a)(d)(e)(f)

    5,000,000    6,562,500

Abraxas Petroleum Corp. (a)

    400,000    3,172,000

Clear Energy, Inc. (CAD)(a)(c)

    500,000    2,404,922
         
          117,186,906

Personal Products (0.8%)

          

Nature’s Sunshine Products, Inc.

    448,000    10,411,520

Natrol, Inc. (a)(b)

    1,076,500    2,529,775
         
          12,941,295

Pharmaceuticals (1.1%)

          

Andrx Corp. (a)

    400,000    6,172,000

Teikoku Hormone Manufacturing Co., Ltd. (JPY)(c)

    500,000    5,220,264

Fuji Pharmaceutical Co., Ltd. (JPY)(c)

    499,000    4,774,573

Access Pharmaceuticals, Inc. (a)(b)

    1,253,400    1,102,992
         
          17,269,829

Real Estate (0.8%)

          

Capital Lease Funding, Inc.

    400,000    4,140,000

Government Properties Trust, Inc.

    416,200    4,078,760

Medical Properties Trust, Inc. (144A)(d)(e)(f)

    482,800    4,021,724

Medical Properties Trust, Inc.

    117,200    1,148,560
         
          13,389,044

Road & Rail (1.9%)

          

Marten Transport, Ltd. (a)

    500,000    12,650,000

Dollar Thrifty Automotive Group, Inc. (a)

    200,000    6,734,000

AMERCO (a)

    100,000    5,819,000

SCS Transportation, Inc. (a)

    250,000    3,927,500

U.S. Xpress Enterprises, Inc. (a)

    100,000    1,166,000

Smithway Motor Xpress Corp. (Class A)(a)

    129,676    927,183
         
          31,223,683

Software (3.2%)

          

Quovadx, Inc. (a)(b)

    3,677,400    11,142,522

Borland Software Corp. (a)

    1,500,000    8,730,000

Actuate Corp. (a)(b)

    3,395,900    8,591,627

EPIQ Systems, Inc. (a)

    303,500    6,622,370

WatchGuard Technologies, Inc. (a)(b)

    1,396,100    5,989,269

PLATO Learning, Inc. (a)

    750,000    5,707,500

OPNET Technologies, Inc. (a)

    350,000    2,947,000

MetaSolv, Inc. (a)

    500,000    1,635,000

ePlus, Inc. (a)

    78,100    1,019,205
         
          52,384,493

Specialty Retail (0.8%)

          

Shoe Carnival, Inc. (a)

    500,000    7,955,000

Mothers Work, Inc. (a)(b)

    400,000    4,000,000

Bombay Co., Inc. (a)

    300,000    1,323,000
         
          13,278,000

Textiles, Apparel & Luxury Goods (1.1%)

                

Hampshire Group, Ltd. (a)(b)(d)

      500,000      11,800,000  

Ashworth, Inc. (a)(b)

      608,431      4,155,584  

Phoenix Footwear Group, Inc. (a)(b)

      421,100      2,669,774  
           
              18,625,358  

Thrifts & Mortgage Finance (0.1%)

                

Franklin Bank Corp. (a)

      100,000      1,615,000  

Water Utilities (0.2%)

                

Pure Cycle Corp. (a)

      500,000      3,400,000  
           

TOTAL COMMON STOCKS (Cost $1,056,604,504)

           $ 1,520,926,811  

CONVERTIBLE PREFERRED STOCKS (0.3%)

    
 Shares
     
 Value
  

Household Durables (0.3%)

                

Ronco Corp. 5.00% (a)(d)(e)(f)

      1,500,000    $ 5,655,000  
           

TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $5,655,000)

           $ 5,655,000  

WARRANTS (0.2%)

     
 Shares
     
 Value
  

Auto Components (0.0%)

                

Hy-Drive Technologies, Ltd. (CAD)(a)(c)(d)(e)(f)

      1,395,234    $ —    

Biotechnology (0.2%)

                

Senesco Technologies, Inc. (b)(d)(e)

      50,000      —    

Sirna Therapuetics, Inc. (d)(e)(f)

      1,440,000      3,035,520  

Commercial Services & Supplies (0.0%)

                

Waste Services, Inc. (a)(d)(e)

      75,000      —    

Software (0.0%)

                

VocalTec Communications, Ltd. (a)(d)(e)

      222,500      —    
           

TOTAL WARRANTS (Cost $0)

           $ 3,035,520  

CONVERTIBLE BONDS (0.2%)

     
 Par Amount
     
 Value
  

Biotechnology (0.1%)

                

Aphton Corp. (b)(d)(e) 6.00%, 04/01/08

    $ 5,000,000    $ 1,280,000  

Electronic Equipment & Instruments (0.1%)

                

Parlex Corp. (d)(e) 7.00%, 07/28/07

      1,500,000      1,620,000  
           

TOTAL CONVERTIBLE BONDS (Cost $6,020,090)

           $ 2,900,000  
                 

SHORT-TERM INVESTMENTS (6.7%)

     
 Par Amount
     
 Value
  

U.S. GOVERNMENT AND AGENCY SECURITIES (4.6%)

                

U.S. Treasury Bills, 10/20/05

    $ 75,000,000    $ 74,877,502  

TIME DEPOSITS (2.1%) (+)

                

Brown Brothers Harriman, 3.31%

      33,353,665      33,353,665  
           

TOTAL SHORT-TERM INVESTMENTS (Cost $108,237,290)

           $ 108,231,167  

TOTAL INVESTMENTS (Cost $1,176,516,884) (100.8%)

           $ 1,640,748,498  

Other assets and liabilities, net (-0.8%)

             (12,317,744 )
           

TOTAL NET ASSETS (100.0%)

           $ 1,628,430,754  
           

 

(a) Non-income producing security.

 

(b) Affiliated company. See Note 5 in Notes to Schedules of Investments.

(c) Foreign-denominated security.

 

(d) Illiquid security, pursuant to the guidelines established by the Board of Directors. See Note 2(g) in Notes to Schedules of Investments.

 

(e) Valued at fair value using methods determined by the Board of Directors. See Note 2(a) in Notes to Schedules of Investments.

 

(f) Restricted security. See Note 2(h) in Notes to Schedules of Investments.

 

(+) Time deposits are considered short-term obligations and are payable on demand. Interest rates change periodically on specified dates. The rates listed are as of September 30, 2005.

 

ADR –  American Depositary Receipt.

 

CAD –  Canadian issuer.

 

HK –  Hong Kong issuer.

 

JPY – Japanese issuer.

 

Effective as of March 31, 2005, industry and sector classifications for each security held are generally determined by referencing the Global Industry Classification Standard Codes (GICS) developed by Standard & Poor’s and Morgan Stanley Capital International. Prior to that time, Heartland Advisors, Inc. utilized other sources to determine industry and sector classifications.

 

The accompanying Notes to Schedules of Investments are an integral part of this Schedule.

NOTES TO SCHEDULES OF INVESTMENTS

September 30, 2005 (Unaudited)

 

(1) Organization

 

Heartland Group, Inc. (the “Corporation”) is registered as an open-end management investment company under the Investment Company Act of 1940. The capital shares of the Select Value Fund, Value Plus Fund and Value Fund (the “Funds”), each of which is a diversified fund, were issued by the Corporation at September 30, 2005.

 

Under the Corporation’s organizational documents, its Officers and Directors are indemnified against certain liabilities arising out of the performance of their duties to the Corporation. In addition, in the normal course of business, the Corporation enters into contracts with their vendors and others that provide for general indemnifications. The Corporation’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Corporation.

 

(2) Summary of Significant Accounting Policies

 

The following is a summary of significant accounting policies followed by the Funds in the preparation of the Schedules of Investments:

 

  (a) Portfolio securities traded on a national securities exchange or in the over-the-counter market are valued at the closing price on the principal exchange or market as of the close of regular trading hours on the day the securities are being valued, or, lacking any sales, at the latest bid price. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using exchange rates as of the close of the New York Stock Exchange. Debt securities are stated at fair value as furnished by an independent pricing service based primarily upon information concerning market transactions and dealer quotations for similar securities, or by dealers who make markets in such securities. Debt securities having maturities of 60 days or less may be valued at acquisition cost, plus or minus any amortized discount or premium. Securities and other assets for which quotations are not readily available are valued at their fair value using methods determined by the Board of Directors. The Pricing Committee for the Corporation may also make a fair value determination if it reasonably determines that a significant event, which materially affects the value of a security, occurs after the time at which the market price for the security is determined, but prior to the time at which a Fund’s net asset value is calculated. Fair valuation of a particular security is an inherently subjective process, with no single standard to utilize when determining a security’s fair value. As such, different mutual funds could reasonably arrive at a different fair value for the same security. In each case where a security is fair valued, consideration is given to the facts and circumstances relevant to the particular situation. This consideration includes reviewing various factors set forth in the pricing procedures adopted by the Board of Directors and other factors as warranted. In making a fair value determination, factors that may be considered, among others, include: the type and structure of the security; unusual events or circumstances relating to the security’s issuer; general market conditions; prior day’s valuation; fundamental analytical data; size of the holding; cost of the security on the date of purchase; nature and duration of any restriction on disposition; trading activities and prices of similar securities or financial instruments. At September 30, 2005, 1.1% and 3.3% of the Value Plus and Value Funds’ net assets, respectively, were valued at their fair value using methods determined by the Board of Directors.

 

  (b) The Funds’ policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of their taxable income to their shareholders. The Funds accordingly paid no Federal income taxes, and no Federal income tax provision is recorded.

 

  (c) The Funds record security transactions no later than one business day after trade date. However, for financial reporting purposes, security transactions are accounted for on trade date. Net realized gains and losses on investments are computed on the identified cost basis. The portion of security gains and losses resulting from changes in foreign exchange rates is included with net realized and unrealized gains or losses from investments. The Funds amortize premium and accrete discount on investments utilizing the effective interest method.

 

  (d) Each Fund may enter into futures contracts for hedging purposes, such as to protect against declines in the market value of its portfolio securities or to manage exposure to changing interest rates. The Fund receives from or pays to the broker, on a daily basis, an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as “variation margin,” and are recorded by the Fund as unrealized gains or losses. When the futures contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

 

The predominant risk is that the movement of a futures contract’s price may result in a loss, which could render a Fund’s hedging strategy unsuccessful. There were no open future contracts at September 30, 2005.

 

  (e)

A short sale is a transaction in which a Fund sells a security it does not own (but has borrowed) in anticipation of a decline in the market value of that security. To complete a short sale, a Fund must borrow the security to deliver to the buyer. A Fund then is obligated to replace the security borrowed by purchasing it in the open market at a later date. A

 

Fund will incur a loss, which could be substantial and potentially unlimited, if the market price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. A Fund will realize a gain if the security declines in value between those dates. A Fund must pay any dividends or interest payable to the lender of the security. All short sales must be collateralized in accordance with the applicable exchange or broker requirements. A Fund maintains the collateral in a segregated account with its custodian or broker, consisting of cash, obligations of the U.S. Government, it’s agencies or instrumentalities, or equity securities sufficient to collateralize its obligation on the short positions.

 

  (f) The Funds may write covered call options for which premiums received are recorded as liabilities and are subsequently adjusted to the current value of the options written. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options, which are either exercised or closed, are offset against the proceeds received or amount paid on the transaction to determine realized gains or losses. The Funds may enter into options transactions for hedging purposes, and will not use these instruments for speculation. There were no option transactions for the nine-month period ending on September 30, 2005.

 

  (g) At September 30, 2005, 1.1% and 5.2% of the Value Plus and Value Fund’s net assets, respectively, were illiquid as defined pursuant to guidelines established by the Board of Directors of the Corporation.

 

  (h) A restricted security is a security that has been purchased through a private offering and cannot be resold to the general public without prior registration under the Securities Act of 1933 (the “Act”) or pursuant to the resale limitations provided by Rule 144 under the Act, or an exemption from the registration requirements of the Act. Whether a restricted security is illiquid is determined pursuant to guidelines established by the Board of Directors. Not all restricted securities are considered to be illiquid. At September 30, 2005, the Value Plus and Value Funds’ held restricted securities representing 0.4% and 2.3%, respectively, of net assets. The restricted securities held as of September 30, 2005 are identified below:

 

SECURITY    

    ACQUISITION DATE
    ACQUISITION COST
    SHARES
    FAIR VALUE

Value Fund

                        

AmeriServ Financial, Inc. (Common Stock)

    9/27/05    $ 2,175,000    500,000    $ 1,848,750

Far East Energy Corp. (Common Stock)

    9/22/05      4,500,000    5,000,000      6,562,500

Hy-Drive Technologies, Ltd. (Common Stock)

    6/27/05      1,209,566    2,325,391      1,104,471

Hy-Drive Technologies, Ltd. (Warrants)

    6/27/05      —      1,395,234      —  

Medical Properties Trust, Inc. (144A)

    3/31/04      4,828,000    482,800      4,021,474

Ronco Corp. (Convertible Preferred Stock)

    6/24/05      5,655,000    1,500,000      5,655,000

Sirna Therapeutics, Inc. (Common Stock)

    7/5/05      6,400,000    4,000,000      14,960,000

Sirna Therapeutics, Inc. (Warrants)

    7/5/05      —      1,440,000      3,035,520

Value Plus Fund

                        

Zix Corp. (Common Stock - when issued)

    8/10/05      600,000    240,000      600,000

Zix Corp. (Common Stock)

    8/10/05      900,000    360,000      612,000

Zix Corp. (Warrants - when issued)

    8/10/05      —      79,200      —  

Zix Corp. (Warrants)

    8/10/05      —      118,800      —  

 

  (i) The Funds invest in foreign equity securities, whose values are subject to changes in market conditions, as well as changes in political and regulatory environments. Realized and unrealized gains or losses from investments include the effects of foreign exchange rates on investments. The Funds may utilize forward currency exchange contracts for the purpose of hedging foreign currency risk. Under these contracts, the Funds are obligated to exchange currencies at specific future dates. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movements in currency values.

 

  (j)

Each Fund may purchase securities on a when-issued basis. Payment and interest terms of these securities are set out at the time a Fund enters into the commitment to purchase, but generally the securities are not issued, and delivery and payment for such obligations does not occur until a future date that may be a month or more after the purchase date. Obligations purchased on a when-issued basis involve a risk of loss if the value of the security purchased declines prior to the settlement date, and may increase fluctuation in a Fund’s net asset value. On the date a Fund enters into an agreement to purchase securities on a when-issued basis, it will record the transaction and reflect the value of the obligation in determining its net asset value. In addition, the respective Fund will segregate cash, obligations of the U.S.

 

Government, it’s agencies or instrumentalities, or equity securities having a value at least equal to the Fund’s obligation under the position.

 

(3) Investment Transactions and Income Tax Basis Information

 

During the nine-month period ended September 30, 2005, the cost of purchases and proceeds from sales of securities, other than short-term obligations, are noted below. During the same period there were no purchases or sales of long-term U.S. Government securities.

 

Fund    

    Cost of Purchases
    Proceeds from Sales

Select Value Fund

    $ 54,138,855    $ 36,100,062

Value Plus Fund

      74,871,473      190,097,101

Value Fund

      399,131,255      737,094,092

 

Fund    

    Tax Cost of
Investments
    Gross Unrealized
Appreciation
    Gross Unrealized
Depreciation
    

Net Unrealized

Appreciation
on Investments

Select Value Fund

    $ 109,251,304    $ 30,811,878    $ (1,645,776 )   $ 29,166,102

Value Plus Fund

      253,134,289      56,528,888      (14,277,441 )     42,251,447

Value Fund

      1,189,597,302      515,520,263      (64,369,067 )     451,151,196

 

(4) Litigation

 

On July 18, 2002, pursuant to a stipulation and following a fairness hearing, the U.S. District Court for the Eastern District of Wisconsin approved a settlement of a consolidated class action brought by shareholders of the Heartland High-Yield Municipal Bond Fund and the Short Duration High-Yield Municipal Fund (together, the “High-Yield Funds”), in which the Corporation, the Advisor, the High-Yield Funds and certain other parties were named as defendants. The litigation arose out of a repricing of the securities in the High-Yield Funds in October 2000. Under the terms of the settlement, the Corporation, the Advisor, the High-Yield Funds and certain related parties were dismissed and released from all claims in the class action upon establishment of a settlement fund for the benefit of the class plaintiffs. Neither the Corporation nor any of its separate funds, directors, or officers were required to contribute to the settlement fund (although an affiliate of the Advisor did make a substantial contribution to facilitate settlement). Subsequently, all other suits filed by persons who opted out of the class action settlement were also settled without any contribution from the Corporation, its Funds, directors or officers. The High-Yield Funds, which had been in receivership since March 2001, were liquidated in December 2004.

 

On December 11, 2003, the SEC filed a civil complaint in United States District Court for the Eastern District of Wisconsin (Civil Action No. 03C1427) relating to the High-Yield Funds against the Advisor; William J. Nasgovitz, President of the Advisor, President and a director of the Corporation and member of the Heartland Value Plus and Value Fund portfolio management team; Paul T. Beste, Chief Operating Officer of the Advisor and Vice President of the Corporation; Kevin D. Clark, an officer of the Advisor; Hugh Denison, a former director of the Corporation who presently serves as Senior Vice President of the Advisor and as a member of the portfolio management team for the Heartland Select Value Fund; certain former officers of the Advisor; and others.

 

The SEC alleges various violations of the federal securities laws with respect to: the pricing of securities owned by the High-Yield Funds and the related calculation of the High-Yield Funds’ net asset value per share from March 2000 to March 2001; disclosures in the prospectus; other SEC filings and promotional materials for the High-Yield Funds relating to risk management, credit quality, liquidity and pricing; breach of fiduciary duty; the sale in September and October 2000 by certain individual defendants of shares of the High-Yield Funds while in possession of material, non-public information about those funds; and the disclosure of material, non-public information to persons who effected such sales. The SEC seeks civil penalties and disgorgement of all gains received by the defendants as a result of the conduct alleged in the complaint, a permanent injunction against the defendants from further violations of the applicable federal securities laws, and such other relief as the court deems appropriate.

 

In February 2004, the Advisor and Messrs. Nasgovitz, Beste, Denison, and Clark filed their answers to the SEC’s complaint, denying the allegations and claims made therein and raising affirmative defenses.

 

The complaint does not involve the Corporation, the Heartland Select Value, Value Plus or Value Funds, any portfolio manager of the Funds (other than Mr. Nasgovitz and Mr. Denison) or any of the current independent directors of the Corporation. However, an adverse outcome for the Advisor and/or its officers named in the complaint could result in an injunction that would bar the Advisor from serving as investment advisor to the Funds or bar such officers from continuing to serve in their official capacities for the Advisor. The Advisor has advised the Fund that, if these results occur, the Advisor will seek exemptive relief from the SEC to permit it to continue serving as investment advisor to the Funds. There is no assurance that the SEC will grant such exemptive relief.

(5) Transactions with Affiliates

 

The following companies are “affiliated” (as defined in Section (2)(a)(3) of the Investment Company Act of 1940) with the Value Fund; that is, the Fund held 5% or more of the outstanding voting securities during the nine-month period ended September 30, 2005:

 

Value Fund

 

Security Name

    Share
Balance at
January 1, 2005
     Purchases
    Sales
    Share
Balance at
September 30, 2005
    Dividends
    Realized
Gains
(Losses)
  

Access Pharmaceuticals, Inc.

    1,253,400     0    0    1,253,400    $ 0    $ 0  

Actuate Corp.

    350,000     3,045,900    0    3,395,900      0      0  

AirNet Systems, Inc.

    1,000,000     0    0    1,000,000      0      0  

Allied Defense Group, Inc.

    300,000     0    151,000    149,000      0      994,373  

Almost Family, Inc.

    250,000     0    174,318    75,682      0      1,622,002  

American Physicians Service Group, Inc.

    185,649     0    0    185,649      46,412      0  

Anacomp, Inc. (Class A)

    350,000     0    0    350,000      0      0  

Analysts International Corp.

    1,400,000     200,000    0    1,600,000      0      0  

Aphton Corp.

    1,962,872     191,318    796,594    1,357,596      0      (6,417,737 )

Ashworth, Inc.

    700,000     0    91,569    608,431      0      352,890  

Asia Pacific Wire & Cable Corp., Ltd.

    1,137,300     0    0    1,137,300      0      0  

Badger Meter, Inc.

    400,000     0    0    400,000      200,000      0  

Barrett Business Services, Inc.

    734,978 (2)   0    67,556    667,422      0      1,077,679  

BioScrip, Inc.(1)

    840,000     160,000    0    1,000,000      0      0  

Clayton Williams Energy, Inc.

    500,000     100,000    0    600,000      0      0  

Compex Technologies, Inc.

    600,000     400,000    0    1,000,000      0      0  

CompuDyne Corp.

    0     500,000    0    500,000      0      0  

Discovery Laboratories, Inc.

    2,895,556     104,444    0    3,000,000      0      0  

Discovery Partners International, Inc.

    1,000,000     700,000    642,000    1,058,000      0      (1,810,003 )

Duckwall-ALCO Stores, Inc.

    400,000     0    0    400,000      0      0  

Emak Worldwide, Inc.

    17,956     482,044    0    500,000      0      0  

Fuel-Tech N.V.

    1,000,000     0    0    1,000,000      0      0  

Genitope Corp.

    1,350,000     275,000    450,000    1,175,000      0      (2,659,217 )

The Geo Group, Inc.

    505,400     0    118,500    386,900      0      2,451,810  

Global-Tech Appliances, Inc.

    1,186,800     0    5,600    1,181,200      0      6,509  

Hampshire Group, Ltd.

    551,474 (4)   0    51,474    500,000      0      982,940  

High River Gold Mines, Ltd.

    7,501,400     0    0    7,501,400      0      0  

Industrial & Financial Systems (Class B)

    6,000,000     0    6,000,000    0      0      2,335,693  

InterDigital Communications Corp.

    3,000,000     0    0    3,000,000      0      0  

Intersections, Inc.

    228,400     771,600    0    1,000,000      0      0  

Isolagen, Inc.

    1,250,000     1,750,000    0    3,000,000      0      0  

John B. Sanfilippo & Son, Inc.

    300,000     144,000    0    444,000      0      0  

Kendle International, Inc.

    1,000,000     0    550,000    450,000      0      9,153,923  

Lantronix, Inc.

    5,000,000     0    0    5,000,000      0      0  

Lifecore Biomedical, Inc.

    1,000,000     100,000    700,000    400,000      0      8,153,868  

McDATA Corp. (Class A)

    2,495,000 (3)   1,000,000    450,519    3,044,481      0      (2,114,946 )

MEDTOX Scientific, Inc.

    558,750     0    50,000    508,750      0      62,664  

Medwave, Inc.

    900,000     150,000    0    1,050,000      0      0  

MFRI, Inc.

    463,200     0    0    463,200      0      0  

Midwest Air Group, Inc.

    1,557,500     0    142,000    1,415,500      0      (685,307 )

Mothers Work, Inc.

    200,000     200,000    0    400,000      0      0  

Multimedia Games, Inc.

    1,250,000     750,000    655,000    1,345,000      0      (6,374,112 )

National Home Health Care Corp.

    441,000     0    0    441,000      99,225      0  

Natrol, Inc.

    500,000     576,500    0    1,076,500      0      0  

O.I. Corp.

    245,900     0    0    245,900      0      0  

Oil-Dri Corp. of America

    450,000     0    0    450,000      148,500      0  

OrthoLogic Corp.

    2,500,000     600,000    0    3,100,000      0      0  

Osteotech, Inc.

    1,000,000     0    0    1,000,000      0      0  

Outlook Group Corp.

    350,000     0    26,862    323,138      63,000      190,910  

Patrick Industries, Inc.

    293,525     0    0    293,525      0      0  

Phoenix Footwear Group, Inc.

    0     421,100    0    421,100      0      0  

Poore Brothers, Inc.

    951,800     457,600    409,400    1,000,000      0      1,138,226  

Quovadx, Inc.

    3,677,400     0    0    3,677,400      0      0  

RCM Technologies, Inc.

    780,100     0    0    780,100      0      0  

Senesco Technologies, Inc.

    1,225,000     75,000    0    1,300,000      0      0  

Sholodge, Inc.

    450,000     0    2,300    447,700      0      (12,524 )

Smith & Wollensky Restaurant Group, Inc.

    700,000     0    125,600    574,400      0      (130,364 )

SPAR Group, Inc.

    1,300,000     0    72,000    1,228,000      0      135,115  

SRI/Surgical Express, Inc.

    600,000     0    0    600,000      0      0  

STAAR Surgical Co.

    950,000     859,000    0    1,809,000      0      0  

Superior Consultant Holdings Corp.

    1,000,000     0    1,000,000    0      0      5,127,388  

Vesta Insurance Group, Inc.

    2,000,000     0    0    2,000,000      0      0  

WatchGuard Technologies, Inc.

    2,000,000     0    603,900    1,396,100      0      (2,109,070 )

Zindart, Ltd. (ADR)

    563,000     0    0    563,000      0      0  
                         
  
                          $ 557,137    $ 11,472,710  
                         
  

 

(1) Formerly known as Chronimed, Inc., merged on 3/14/05 with an adjusted share balance.

 

(2) 2:1 Stock Split on 5/20/05.

 

(3) Formerly known as Computer Network Technologies Corp., merged on 6/1/05 with an adjusted share balance.

 

(4) 2:1 Stock Split on 6/29/05.

Item 2. Controls and Procedures.

 

(a) The registrant’s management, with the participation of its principal executive officer and principal financial officer has evaluated effectiveness of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940), as conducted within 90 days of the filing date of this report. Based on such evaluation, the Registrant’s principal executive and financial officers have concluded that the design and operation of the Registrant’s disclosure controls and procedures are effective in providing reasonable assurance that the information required to be disclosed on Form N-Q is recorded, processed, summarized and reported within the applicable time periods.

 

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the Registrant’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 3. Exhibits.

 

Certifications pursuant to Rule 30a-2(a) are attached hereto.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) Heartland Group, Inc.

        
By (Signature and Title)*   /s/    ERIC J. MILLER                    
    Eric J. Miller,            
    Chief Executive Officer            

Date November 16, 2005

            

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*   /s/    ERIC J. MILLER                    
    Eric J. Miller,        
    Chief Executive Officer        

Date November 16, 2005

            
By (Signature and Title)*   /s/    NICOLE J. BEST                    
    Nicole J. Best,            
    Treasurer and Principal Accounting Officer            

Date November 16, 2005

            

 

* Print the name and title of each signing officer under his or her signature.