FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-3627
Greenspring Fund, Incorporated
(Exact Name of Registrant as Specified in Charter)
2330 West Joppa Road, Suite 110
Lutherville, Maryland 21093-4641
(Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, including Area Code: (410)823-5353
Mr. Charles vK. Carlson, President
2330 West Joppa Road, Suite 110
Lutherville, Maryland 21093-4641
(Name and address of Agent for Service)
Date of fiscal year end: December 31, 2004
Date of reporting period: June 30, 2004
Form N-CSR is to be used by management companies to file reports with
the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to
stockholders under Rule 30e-1 under the Investment Company Act of 1940
(17 CFR 270.30e-1). The Commission may use the information provided on
Form N-CSR in its regulatory, disclosure review, inspection, and
policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A
registrant is not required to respond to the collection of information
contained in Form N-CSR unless the Form displays a currently valid
Office of Management and Budget ("OMB") control number. Please direct
any comments concerning the accuracy of the information collection
burden estimate and any suggestions for reducing the burden to
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. ss 3507.
Item 1. Reports to Stockholders.
The Greenspring Fund's Semi-Annual Report as transmitted to stockholders
pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1) is as follows:
GREENSPRING
FUND
SEMI-ANNUAL REPORT
JUNE 30, 2004
This report is authorized for distribution
only to shareholders who have received a
copy of the official Prospectus of the
Greenspring Fund, Incorporated.
Greenspring Fund
July 2004
Dear Fellow Shareholders:
Although quite a bit of activity took place in the Greenspring
Fund's portfolio during the second quarter of 2004, the performance was
relatively flat, as the Fund gained 1.2%. During the first six months of
2004, Greenspring Fund's net asset value has increased 2.7%. Stock
indexes also turned in unexciting, slightly positive performances
during the second quarter, as the Dow Jones Industrial Average, the
Standard & Poor's 500 Index, and the Russell 2000 gained 1.2%, 1.7%,
and 0.5%, respectively. The flat bottom-line performance of the stock
market indices masked quite a bit of individual stock volatility. Many
significant factors that have the potential to greatly impact the
financial markets - reports confirming or calling into question the
strength of the economic recovery, the continuing struggles in the
Middle East, the upcoming Presidential election, and the first interest
rate increase by the Federal Reserve since March of 2000 - all
influenced the markets from time to time throughout the quarter. Despite
the fact that these market-influencing factors are far from being
resolved, the financial markets have surprisingly taken this uncertainty
in stride.
During the second quarter of 2004, Greenspring Fund's performance
was dominated by small positive movements in many of the securities in
the portfolio as opposed to sharp movements in just a few securities.
The Fund benefited from positive performance from the equities in the
portfolio, led by our investments in Wabash National Corporation,
Michael Baker Corporation, and Energen Corporation. The Fund's bond
holdings, comprised of Busted Converts, provided a flat showing during
a period in which most fixed income investors struggled with the rise
in interest rates. As measured by the benchmark Lehman Brothers
Aggregate Bond Index, the bond market declined 2.4% during the second
quarter.
Some of the credit for Greenspring Fund's success so far this year
is attributable to our flexible style of investing. Our goal at the
Greenspring Fund has always been to strive, first, for the preservation
of capital during difficult market environments, and, secondly, for the
steady, consistent enhancement of capital during more buoyant times in
the markets. While steadfastly maintaining a hard-core "value" approach
to investing, whether it applies to our stock or bond selection, the
Fund utilizes a "flexible" style of investing. We adamantly refuse to be
pigeonholed into a single "style-box" of investing, strongly believing
that having the flexibility to invest in those areas that we feel are
temporarily undervalued is the best way to achieve our shareholders'
long-term investment goals. Many other investment firms limit their
mutual fund portfolio managers to specific styles, e.g. "small-cap
value" or "large-cap growth." The portfolio managers at such firms
1
often must remain fully invested in that particular investment
discipline, even if they personally believe that the sector is
overvalued. Consultants often criticize portfolio managers if they
stray from their assigned category (referred to as "style drift") by
buying a security outside of their assigned discipline or if they
hold significant amounts of cash.
The Greenspring Fund's approach is to manage our shareholders'
assets as if they were our own. The entire research staff of the Fund
has a large portion of their personal investment assets invested in the
Greenspring Fund. Thus, we have a strong vested interest in the
performance of the Fund. We purchase securities that will help us
attain our fellow shareholders' goals, regardless of the securities'
classification. Some investors may consider this an old-fashioned
approach, but it is a time-tested and successful one. We are patient
and deliberate in our analytical approach. If we believe that a certain
stock is undervalued and has the potential to perform well in the
anticipated market environment, then we will purchase it for the Fund,
regardless of whether it is a small-cap, mid-cap, or large-cap security.
Similarly, if we believe that the Greenspring Fund would be well-served
by investing in undervalued special situation fixed income investments,
such as Busted Converts, then we do not hesitate to invest in that
category. Our goal is to provide steady, consistent, non-volatile
performance for the Greenspring Fund's shareholders. Whether that
performance is achieved by investing in small, mid, or large-cap value
stocks, preferred stocks, fixed income securities, or by holding cash
reserves is not as important as achieving the Fund's desired objectives.
We have been active repositioning the Greenspring Fund's portfolio
amidst the volatility in certain individual stocks and the overall bond
market. We have taken advantage of the volatility in some stocks to
increase our exposure to equities. We remain very confident in our
Busted Converts holdings, but have been selling some to raise cash for
more promising equity investments. Furthermore, we have sold some of
our Busted Convert holdings in order to raise cash to purchase other
Busted Converts that have superior total return prospects. During the
generally rising interest rate environment of the last several months,
our Busted Converts have matched or exceeded our expectations. While we
anticipate further upside from many of the Busted Converts, several have
traded up to par value or above and offer little potential for further
price gains absent strong appreciation in the underlying common stock.
However, they continue to provide a very attractive income stream and
can easily be liquidated if necessary. As we uncover additional equities
or bonds that we believe are capable of providing superior total
returns, we will continue to sell selected bonds.
We believe that the markets may continue to be slow moving
during the remaining summer months. The old Wall Street maxim of "sell
in May and go away" comes to mind. At this point, we believe that the
stock market may perk up in the fall once the factors that were
mentioned earlier - events in the Middle East, the Presidential
election, the impact of rising interest rates, and the economic
recovery - are closer to being resolved. Hopefully, the outcomes
will emerge within Wall Street's range of acceptable expectations.
Mounting evidence suggest that the econmomic recovery is broad
2
and sustainable, if less powerful than many economists had
forecasted. Early in the year, certain sectors of the stock market
(in particular semiconductor stocks) seemed to have anticipated
a recovery that was stronger or faster than later seemed likely
(with stocks climbing sharply, and then sinking to more realistic
levels). Volatility within certain sectors of the stock market,
combined with conflicting reports concerning the economic recovery,
and periodic negative news from the Middle East, have caused market
fluctuations that have provided us with the opportunity to purchase
some stocks at very reasonable valuations. We will continue to look
for more of these opportunities.
Long-time shareholders will note that the Greenspring Fund
has been much more fully invested than it has been historically.
This is not the result of a change in investment philosophy or policy,
as we still believe that it is wise to hold significant amounts of cash
reserves when we cannot find enough securities that meet the Fund's
investment criteria. This willingness to hold cash reserves has helped
the Greenspring Fund weather many a difficult storm in the past and has
given us the "dry powder" to act quickly when opportunities are
uncovered. The fact that the Greenspring Fund is close to fully
invested is a sign that we have been able to find a large number of
stocks and bonds that we believe will help us in our pursuit of the
steady, consistent performance results that our shareholders expect
from us.
We always welcome questions and comments from our fellow
shareholders. Our website is frequently updated with new information
and we encourage you to visit the site. We hope that you are
enjoying a pleasant and relaxing summer.
Respectfully,
/s/Charles vK. Carlson
Charles vK. Carlson
President
3
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
COMMON STOCKS (41.6%)
Shares Value
------ -----
Banks - Regional (2.3%)
6,100 Columbia Bancorp $ 178,242
26,190 Provident Bankshares Corporation 755,320
14,476 SunTrust Banks 940,795
33,900 Yardville National Bancorp 847,500
------------
2,721,857
------------
Business and Professional Services (2.3%)
165,450 *FTI Consulting 2,729,925
------------
2,729,925
------------
Communication Equipment (0.6%)
93,800 *Radyne ComStream Inc. 750,400
------------
750,400
------------
Computer Storage Devices (1.9%)
55,000 Imation Corporation 2,343,550
------------
2,343,550
------------
Construction Services (3.2%)
44,700 *Emcor Group 1,965,906
62,800 *Insituform Technologies 1,021,756
112,113 *U.S. Home Systems 801,608
------------
3,789,270
------------
Diversifed Natural Gas (2.2%)
54,200 Energen Corp. 2,601,058
------------
2,601,058
------------
4
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
COMMON STOCKS (CON'T)
Shares Value
------ -----
Electrical Equipment (0.5%)
8,700 Emerson Electric Co. $ 552,885
------------
552,885
------------
Engineering Services (2.0%)
155,525 *Michael Baker Corporation 2,373,312
------------
2,373,312
------------
Financial Services (0.7%)
23,000 CIT Group Inc. 880,670
------------
880,670
------------
Healthcare (2.0%)
165,600 *Nabi Biopharmaceuticals 2,354,832
------------
2,354,832
------------
Insurance (5.4%)
17,500 ALFA Corp. 245,000
11,300 Assurant, Inc. 298,094
34,450 PartnerRe, Ltd. 1,954,349
190,800 *United National Group Ltd. 2,882,988
24,700 W.R. Berkley Corporation 1,060,865
------------
6,441,296
------------
Insurance - Brokerage (2.0%)
12,000 Hilb Rogal and Hobbs Co. 428,160
128,800 *USI Holdings Corp. 2,035,040
------------
2,463,200
------------
5
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
COMMON STOCKS (CON'T)
Shares Value
------ -----
Manufacturing (0.2%)
13,600 Tredegar Corporation $ 219,368
------------
219,368
------------
Multi-Industry (1.3%)
38,400 *Griffon Corporation 855,552
20,000 Pentair, Inc. 672,800
------------
1,528,352
------------
Oil and Gas Exploration/Production (2.8%)
7,800 Burlington Resources Inc. 282,204
11,140 EOG Resources 665,169
96,000 Suncor Energy 2,458,560
------------
3,405,933
------------
Oil and Gas Service (0.8%)
109,300 *Key Energy Services 1,031,792
------------
1,031,792
------------
Real Estate (0.9%)
28,600 Gladstone Commercial Corporation 471,900
9,300 First Potomac Realty Trust 178,281
6,353 !*Nomas Corp. 635
27,500 Urstadt Biddle Properties Inc., Class A 407,275
------------
1,058,091
------------
Savings Institutions (1.0%)
30,000 Washington Mutual 1,159,200
------------
1,159,200
------------
6
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
COMMON STOCKS (CON'T)
Shares Value
------ -----
Solid Waste Services (2.0%)
96,400 Allied Waste Industries $ 1,270,552
108,500 Waste Industries USA 1,210,860
------------
2,481,412
------------
Transportation (4.9%)
33,200 *Celadon Group 584,320
28,200 *SCS Transportation 744,198
163,500 *Wabash National Corp. 4,504,425
------------
5,832,943
------------
Utilities - Electric (1.9%)
49,500 PPL Corporation 2,272,050
------------
2,272,050
------------
Utilities - Natural Gas (0.7%)
42,000 NiSource Inc. 866,040
------------
866,040
------------
Total Common Stocks (Cost $37,588,803) 49,857,436
============
INVESTMENT IN REGISTERED INVESTMENT
COMPANY (0.4%)
57,400 John Hancock Bank & Thrift
Opportunity Fund 530,376
------------
Total Investment in Registered
Investment Company (Cost $412,008) 530,376
============
7
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
PREFERRED STOCK (0.7%)
Shares/
Principal
Amount Value
------ -----
28,100 Corporate Office Properties Trust 10.25% $ 768,535
-----------
Total Preferred Stock (Cost $775,182) 768,535
===========
CONVERTIBLE BONDS (53.5%)
$5,485,000 Akamai Technologies, 5.5%, 7/1/07 5,553,562
4,051,000 Amkor Technology, 5.75%, 6/1/06 3,947,193
1,850,000 ANADIGICS, Inc., 5%, 11/15/06 1,787,562
1,167,000 Aspen Technology, 5.25%, 6/15/05 1,170,647
5,868,000 Atmel Corp., 0%, 5/23/21 2,602,094
6,186,000 BISYS Group, 4%, 3/15/06 6,025,554
2,600,000 Brocade Communications, 2%, 1/1/07 2,368,439
3,500,000 Brooks Automation, 4.75%, 6/1/08 3,412,500
3,817,000 Ciena Corporation, 3.75%, 2/1/08 3,342,261
4,058,000 CuraGen Corporation, 6%, 2/2/07 4,007,275
5,618,000 E*Trade Financial Corp., 6%, 2/1/07 5,751,427
1,850,000 Human Genome Sciences, 5%, 2/1/07 1,778,313
591,000 Key Energy Group, 5%, 9/15/04 582,135
3,933,000 Mercury Interactive Corp., 4.75%, 7/1/07 3,894,901
1,419,000 Photronics, Inc., 4.75%, 12/15/06 1,418,557
280,000 PMC-Sierra, Inc., 3.75%, 8/15/06 278,163
4,782,000 Quanta Services, 4%, 7/1/07 4,333,687
3,221,000 RF Micro Devices, 3.75%, 8/15/05 3,211,943
1,978,000 Safeguard Scientific, 5%, 6/15/06 1,986,037
7,628,000 Sanmina Corporation, 0%, 9/12/20 3,990,397
2,827,000 Wind River Systems, 3.75%, 12/15/06 2,742,190
------------
Total Convertible Bonds
(Cost $63,687,649) 64,184,837
============
8
GREENSPRING FUND, INCORPORATED
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004
(UNAUDITED)
SHORT-TERM INVESTMENTS (3.8%)
Shares Value
------ -----
4,591,197 Temporary Investment Fund, Inc. $ 4,591,197
------------
Total Short-Term Investments
(Cost $4,591,197) 4,591,197
============
Total Investments (100%)
(Cost $107,054,839) 119,932,381
Other Assets less Liabilities (0%) (44,586)
------------
Total Net Assets (100%) $119,887,795
============
* Non-income producing securities
! Illiquid, valued by the Board of Directors
9
GREENSPRING FUND, INCORPORATED
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004
(UNAUDITED)
ASSETS
Investments, at market value (Cost $107,054,839) $119,932,381
Interest receivable 795,261
Receivable for Fund shares 430,053
Dividends receivable 50,499
Other assets 2,813
------------
121,211,007
------------
LIABILITIES
Payable for securities purchased 1,156,461
Accrued expenses 84,273
Due to investment adviser 79,188
Payable for Fund shares repurchased 3,290
------------
1,323,212
------------
NET ASSETS
Capital stock, $.01 par value, authorized 60,000,000
shares, issued and outstanding, 5,848,414 $119,887,795
============
NET ASSETS CONSIST OF:
Capital stock at par value 58,484
Paid in capital 102,641,053
Unrealized appreciation of investments 12,877,542
Undistributed net realized gains 2,869,063
Undistributed net investment income 1,441,653
------------
$119,887,795
============
NET ASSET VALUE PER SHARE $ 20.50
============
The accompanying notes are an integral part of these financial
statements.
10
GREENSPRING FUND, INCORPORATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
NET INVESTMENT INCOME
Income
Interest $ 1,971,103
Dividend 294,425
------------
Total Income 2,265,528
------------
Expenses
Investment advisory fees 431,154
Transfer agent fees 57,945
Professional fees 39,733
Administrative fees 37,995
Registration fees 28,424
Reports to shareholders 15,072
Miscellaneous fees 11,363
Custody fees 10,915
Directors fees 10,750
------------
Total Expenses 643,351
------------
Net Investment Income 1,622,177
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 2,274,932
Net change in unrealized appreciation/depreciation of
investments (881,928)
------------
1,393,004
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,015,181
============
The accompanying notes are an integral part of these financial
statements.
11
GREENSPRING FUND, INCORPORATED
STATEMENTS OF CHANGES IN NET ASSETS
Six Months
Ended
June 30, Year Ended
2004 December 31,
(Unaudited) 2003
----------- ----
OPERATIONS:
Net investment income $ 1,622,177 $ 2,522,694
Net realized gain/loss from
investments 2,274,932 8,198,186
Net change in unrealized
appreciation/depreciation of
investments (881,928) 9,884,421
------------ ------------
3,015,181 20,605,301
------------ ------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income - (2,903,784)
Net realized gain on investments - -
------------- ------------
- (2,903,784)
------------- ------------
CAPITAL STOCK TRANSACTIONS:
Sale of 1,261,500 and 3,135,756
shares 25,536,329 56,144,899
Distributions reinvested of 0 and
142,432 shares - 2,665,219
Redemption of 890,621 and
1,065,597 shares* (18,006,720) (18,421,198)
------------- ------------
7,529,609 40,388,920
------------- ------------
TOTAL INCREASE IN NET ASSETS 10,544,790 58,090,437
NET ASSETS AT BEGINNING OF PERIOD 109,343,005 51,252,568
------------- ------------
NET ASSETS AT END OF PERIOD** $119,887,795 $109,343,005
============ ============
*Net of redemption fees of $8,914 and $10,788 in 2004 and 2003,
respectively.
**Includes (over)/under distributed net investment income of $1,441,653 and
($180,524) in 2004 and 2003, respectively.
The accompanying notes are an integral part of these financial
statements.
12
GREENSPRING FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(UNAUDITED)
Note 1 - Significant Accounting Policies
Greenspring Fund, Incorporated (the "Fund") is a diversified open-end
management investment company registered under the Investment Company
Act of 1940, as amended.
The preparation of the financial statements in accordance with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
Investment transactions and related investment income - Investment
transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date and interest income, including
amortization of premiums and accretion of discounts, is recorded on
the accrual basis. Dividends determined to be a return of capital
are recorded as a reduction of the cost basis of the security.
Realized gains and losses from investment transactions are reported
on an identified cost basis.
Valuation of investments - Securities listed on a national securities
exchange or the NASDAQ National Market are valued at the last reported
sale price or the official closing price for certain markets on the
exchange of major listing as of the close of the regular session of
the New York Stock Exchange.
Securities that are traded principally in the over-the-counter market,
listed securities for which no sale was reported on the day of
valuation, and listed securities whose primary market is believed by
Corbyn Investment Management (the "Adviser") to be over-the-counter
are valued at the mean of the closing bid and asked prices obtained
from sources that the Adviser deems appropriate.
Short-term investments are valued at amortized cost which approximates
fair market value. The value of securities that mature, or have an
announced call, within 60 days will be amortized on a straight line
basis from the market value one day preceding the beginning of the
amortization period.
Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by the Adviser as
directed by the Board of Directors.
13
GREENSPRING FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2004
(UNAUDITED)
Note 1 - Significant Accounting Policies (Con't)
In determining fair value, the Adviser, as directed by the Board of
Directors, considers all relevant qualitative and quantitative
information available. These factors are subject to change over time
and are reviewed periodically. The values assigned to fair value
investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts
depend on future developments inherent in long-term investments.
Further, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would
have been used had a ready market of the investments existed, and the
differences could be material.
Dividends and distributions to stockholders - The Fund records
dividends and distributions to stockholders on the ex-dividend date.
Redemption fees - The Fund is intended for long-term investors.
"Market-timers" who engage in frequent purchases and redemptions over a
short period can disrupt the Fund's investment program and create
additional transaction costs that are borne by all shareholders.
Therefore, the Fund imposes a 2% redemption fee for shares held 60 days
or less. The fee is deducted from the seller's redemption proceeds and
deposited into the Fund to help offset brokerage commissions, market
impact, and other costs associated with fluctuations in Fund asset
levels and cash flow caused by short-term trading.
The "first-in, first-out" method is used to determine the holding period.
Under this method, the date of redemption will be compared with the
earliest purchase date of shares held in the account. If the holding
period for shares purchased is 60 days or less, the fee will be charged.
The redemption fee may be modified or discontinued at any time, in which
case shareholders will be notified.
The fee does not apply to shares acquired through the reinvestment of
dividends or distributions, or shares redeemed pursuant to a systematic
withdrawal plan.
Risk of loss arising from indemnifactions - In the normal course of
business, the Fund enters into contracts that contain a variety of
representations, which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not
yet occurred. However, based on experience, the Fund expects the risk
of loss to be remote.
14
GREENSPRING FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2004
(UNAUDITED)
Note 2 - Dividends and Distributions
It is the Fund's policy to declare dividends from net investment
income and distributions from net realized gains as determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. Accordingly, periodic reclassifications
are made within the portfolio's capital accounts to reflect income and
gains available for distribution under income tax regulations.
These dividends are either distributed to shareholders or reinvested by
the Fund in additional shares of common stock, which are issued to
shareholders. For those shareholders reinvesting the dividends, the
number of shares issued is based on the net asset value per share as of
the close of business on the business day previous to the payment date.
Note 3 - Purchases and Sales of Investments
For the six months ended June 30, 2004, purchases and sales of
investments, other than short-term investments, aggregated $47,101,833
and $24,190,174, respectively.
Note 4 - Federal Income Taxes
It is the policy of the Fund to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies.
Accordingly, the Fund intends to distribute substantially all of its
taxable income. Therefore, no federal income tax provision is required.
Required Fund distributions are based on income and capital gain amounts
determined in accordance with federal income tax regulations, which
differ from net investment income and realized gains recognized for
financial reporting purposes. Accordingly, the composition of net
assets and distributions on a tax basis differ from those reflected
in the accompanying financial statements.
For federal income tax purposes, the cost of investments owned at
June 30, 2004, is $107,054,839. Net unrealized appreciation of such
investments aggregated $12,877,542, which is composed of appreciation of
$14,307,042 for those securities having an excess of value over cost, and
depreciation of $1,429,500 for those securities having an excess of cost
over value.
15
GREENSPRING FUND, INCORPORATED
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2004
(UNAUDITED)
Note 5 - Transactions with Related Parties
Corbyn Investment Management serves as the Fund's investment adviser.
Under an agreement between the Fund and Corbyn, the Fund pays Corbyn a
fee of 0.75% of the first $250 million of average daily net assets, 0.70%
of average daily net assets between $250 million and $500 million and 0.65%
of average daily net assets in excess of $500 million, which is computed
daily and paid monthly. At June 30, 2004, investment advisory fees payable
amounted to $72,805.
Corbyn also serves as the Fund's administrator. As administrator, Corbyn
provides administrative services and personnel for fund accounting,
regulatory reporting and other administrative matters. As compensation,
the Fund pays Corbyn a fee of $2,500 a month plus 0.04% of average daily
net assets up to $250 million, 0.03% of average daily net assets between
$250 million and $500 million and 0.025% of average daily net assets in
excess of $500 million, which is computed daily and paid monthly.
At June 30, 2004, administrative fees payable amounted to $6,383.
As of June 30, 2004, investors for whom Corbyn Investment Management was
investment adviser held 642,660 shares of the Fund's common stock.
16
GREENSPRING FUND, INCORPORATED
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Six
Months
Ended
6/30/04
(Unaudited) 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99
---------- -------- -------- -------- -------- --------
Net Asset Value,
Beginning of Period $19.96 $15.70 $17.74 $16.98 $15.41 $16.10
------ ------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income 0.28 0.53 0.88 0.93 0.85 1.16
Net Realized and Unrealized
Gain/(Loss) on Investments 0.26 4.34 (1.98) 0.79 1.51 (0.73)
------ ------ ------- ------ ------ -------
Total From Investment Operations 0.54 4.87 (1.10) 1.72 2.36 0.43
------ ------ ------- ------ ------ -------
Less Distributions
Net Investment Income ( - ) ( 0.61) (0.94) (0.96) (0.79) (1.12)
Net Realized Gain on Investments ( - ) ( - ) ( - ) ( - ) ( - ) ( - )
------- ------- ------- ------- ------ ------
Total Distributions ( - ) ( 0.61) (0.94) (0.96) (0.79) (1.12)
------- ------- ------- ------- ------ ------
Net Asset Value,
End of Period $20.50 $19.96 $15.70 $17.74 $16.98 $15.41
====== ====== ======= ====== ====== ======
Total Return 2.71% 31.34% (5.99%) 10.23% 15.64% 2.64%
====== ====== ======= ====== ====== ======
Ratios/Supplemental Data
- ------------------------
Net Assets,
End of Period (000's) $119,888 $109,343 $51,253 $50,692 $46,717 $60,813
======== ======== ======= ======= ======= =======
Ratio of Expenses to
Average Net Assets* 1.12% 1.14% 1.19% 1.19% 1.24% 1.08%
======== ======= ======= ======= ======= =======
Ratio of Net Investment
Income to Average Net Assets* 2.81% 3.44% 5.33% 5.04% 4.83% 6.10%
======= ======= ======= ======= ======= =======
Portfolio Turnover 22.33% 102.43% 78.58% 89.41% 100.78% 91.27%
======= ======= ======= ======= ======= =======
*Annualized
17
GREENSPRING FUND, INCORPORATED
PERFORMANCE SINCE INCEPTION
(CHART)
7/1/83 $10,000
12/31/83 11,223
12/31/84 12,692
12/31/85 15,238
12/31/86 17,668
12/31/87 19,304
12/31/88 22,389
12/31/89 24,762
12/31/90 23,149
12/31/91 27,626
12/31/92 32,190
12/31/93 36,906
12/31/94 37,952
12/31/95 45,082
12/31/96 55,291
12/31/97 68,532
12/31/98 57,585
12/31/99 59,108
12/31/00 68,354
12/31/01 75,345
12/31/02 70,835
12/31/03 93,036
06/30/04 95,553
*Figures include changes in principal value, reinvested dividends
and capital gains distributions. Cumulative total return represents
past performance. Past expense limitations increased the Fund's
return. Investment returns and principal value will vary and shares
will be worth more or less at redemption than at original purchase.
Average annual total returns for the one, three, five and ten year
periods ended June 30, 2004 were 18.78%, 8.41%, 9.71% and 9.74%,
respectively. Average annual returns for more than one year assume a
compounded rate of return and are not the Fund's year-by-year results,
which fluctuated over the periods shown. Returns do not reflect taxes
that shareholders may pay on Fund distributions or redemptions of Fund
shares.
18
Greenspring Fund, Incorporated
2330 West Joppa Road, Suite 110
Lutherville, MD 21093
(410) 823-5353
(800) 366-3863
www.greenspringfund.com
The Fund's proxy voting policies and procedures and proxy voting record
are available upon request by calling the Fund at (800) 366-3863 or by
e-mailing the Fund at llochner@greenspringfund.com or
bwhite@greenspringfund.com. The Fund's proxy voting record is also
available by accessing the SEC's website at http://www.sec.gov.
DIRECTORS
Charles vK. Carlson, Chairman
William E. Carlson
David T. Fu
Sean T. Furlong
Michael J. Fusting
Michael T. Godack
Richard Hynson, Jr.
Michael P. O'Boyle
OFFICERS
Charles vK. Carlson
President and Chief Executive Officer
Michael J. Fusting
Sr. Vice President and Chief Financial Officer
Michael T. Godack
Sr. Vice President
Elizabeth Agresta Swam
Secretary and Treasurer
INVESTMENT ADVISER
Corbyn Investment Management, Inc.
2330 West Joppa Road, Suite 108
Lutherville, MD 21093-7207
TRANSFER AGENT
PFPC Inc.
760 Moore Rd.
King of Prussia, PA 19406
(800) 576-7498
ADMINISTRATOR
Corbyn Investment Management, Inc.
2330 West Joppa Road, Suite 108
Lutherville, MD 21093-7207
CUSTODIAN
PFPC Trust Company
8800 Tinicum Blvd.
Third Floor, Suite 200
Philadelphia, PA 19153
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
250 W. Pratt Street
Baltimore, MD 21201-2304
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036-1800
Item 2. Code of Ethics.
Not applicable for Semi-Annual Report.
Item 3. Audit Committee Financial Expert.
Not applicable for Semi-Annual Report.
Item 4. Principal Accountant Fees and Services.
Not applicable for Semi-Annual Report.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments
Included as part of the report to shareholders filed under Item 1
of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies.
Not applicable.
Item 8. Purchase of Equity Securities by Closed-End Management
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 10. Controls and Procedures.
(a) The Fund's principal executive and principal financial officers have
evaluated the Fund's disclosure controls and procedures within 90 days of
this filing and have concluded that the Fund's disclosure controls and
procedures were effective, as of this date, in ensuring that information
required to be disclosed by the Fund in this Form N-CSR was recorded,
processed, summarized and reported timely.
(b) The Fund's principal exective and principal financial officers are aware
of no changes in the Fund's internal control over finanical reporting that
occurred during the Fund's second fiscal half-year that has materially
affected, or is reasonably likely to materially affect, the Fund's internal
control over financial reporting.
Item 11. Exhibits.
(a)(2) A separate certification for each principal executive and
principal financial officer of the Fund as required by Rule 30a-2(a)
under the Act (17 CFR 270.30a-2(a)).
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934
and the Investment Company Act of 1940, the Fund has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Greenspring Fund, Incorporated
By: /s/Charles vK. Carlson
----------------------------
Charles vK. Carlson
Principal Executive Officer
August 4, 2004
Pursuant to the requirements of the Securities and 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 Fund and in the capacities and
on the dates indicated.
Greenspring Fund, Incorporated
By: /s/Charles vK. Carlson
----------------------------
Charles vK. Carlson
Principal Executive Officer
August 4, 2004
By: /s/ Michael J. Fusting
----------------------------
Michael J. Fusting
Chief Financial Officer
August 4, 2004