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
811-07168
The Henlopen Fund
-----------------
(Exact name of registrant as specified in charter)
Longwood Corporate Center South
415 McFarlan Road, Suite 213
Kennett Square, PA 19348
------------------------
(Address of principal executive offices) (Zip code)
Michael L. Hershey
Landis Associates LLC
Longwood Corporate Center South
Kennett Square, PA 19348
------------------------
(Name and address of agent for service)
(610) 925-0400
--------------
Registrant's telephone number, including area code:
Date of fiscal year end: 06/30/2003
Date of reporting period: 06/30/2003
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
THE HENLOPEN FUND
ANNUAL REPORT
JUNE 30, 2003
To My Fellow Shareholders:
For the quarter ended June 30, 2003, The Henlopen Fund increased 19.6%.
Annualized returns for the Fund for 1, 5 and 10 years are 8.0%, 4.1%, and 12.2%,
respectively. Since our inception on December 2, 1992, the Fund has an
annualized return of 13.0%.
The stock market continued the rally that started late last quarter, building
momentum throughout the quarter. Leadership appeared broader and of a higher
quality than recent rallies, as investors piled into companies showing strong
earnings and positive outlooks. The Fund's strong return in the quarter was
similarly broad based with stocks across a wide array of industries contributing
to performance, led by our holdings in technology and specialty retailing.
It appears a change in market psychology is taking place. The stock market's
bottom in the March quarter came with little fanfare; the lack of volume was
indicative not only of the complete unwillingness of investors to buy stocks but
also that most who wished to sell had already done so. Slowly, investors are
coming to believe that risk is worth taking. The passage of the tax package and
the Federal Reserve's commitment to providing stimulus have seemingly firmed
belief in the economic recovery. Concurrently, severe losses in the bond market
have awakened investors to the possibility that there is less risk in equities
than Treasuries at these levels.
Favorable investor sentiment and mildly improving company fundamentals provide a
decent backdrop for equities. The continuation of the recent rally will hinge
upon further signs of strength in the global economies, signs that have thus far
been sporadic and unconvincing. We continue to look at the current environment
as creating a "stock-picker's market" in which individual stock selection will
be paramount to solid investment returns. We remain comfortable with such a
scenario.
Sincerely yours,
/s/Michael L. Hershey /s/Bruce V. Vogenitz
Michael L. Hershey Bruce V. Vogenitz
President Vice President
MANAGED BY LANDIS ASSOCIATES LLC
WWW.HENLOPENFUND.COM
ONE YEAR COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE HENLOPEN FUND, S&P 500 INDEX AND LIPPER GROWTH FUND INDEX
Date The Henlopen Fund S&P 500 Index Lipper Growth Fund Index
---- ----------------- ------------- ------------------------
6/30/2002 $10,000 $10,000 $10,000
9/30/2002 $8,088 $8,272 $8,440
12/31/2002 $9,422 $8,970 $9,012
3/31/2003 $9,029 $8,687 $8,812
6/30/2003*<F1> $10,798 $10,025 $10,134
*<F1> Ending value represents increases of 7.98%, 0.25% and 1.34%, respectively.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The Henlopen Fund emphasizes investment in growing businesses. We look for
well-managed companies with competitive products and services capable of
generating strong revenues and earnings. In managing the portfolio, relative
sector weighting and specific capitalization size are of secondary importance to
us. Our rationale for growth investment is to participate for our shareholders
in the capital formation process.
For the year ended June 30, 2003, the Fund increased 8.0%. Over the last 5
years, the Fund has an average annual rate of return of 4.1%. For the last 10
years, the Fund has appreciated at an average annual rate of 12.2%. Since our
inception on December 2, 1992, the Fund has appreciated at an annual rate of
13.0%.
Fiscal year 2003, a year highlighted by the stock market's extreme volatility,
may well be looked back upon as containing the triple-bottom in the stock
indices that marked the end of the bear market. The year started the same way
our prior fiscal year ended, as the market continued its decline. Investors
finally capitulated with record mutual fund outflows, causing a market free-
fall. The Fund's performance reflected this sell-off with our holdings in
technology and energy being particularly hard-hit. A substantial bottom early
in that September quarter created a sharp but brief rally that quickly gave way
to a retest of lows the following quarter.
This retest culminated in another major bottom in October, as the market edged
to a new low before surging to large gains on heavy volume in a classic reversal
day. The ensuing rally lasted until December, when investor skittishness over
impending war with Iraq and an imperceptible economic recovery sent the market
back on the defensive. The same two groups that hurt the Fund's performance the
previous quarter, technology and energy, led the Fund's sharp advance in the
December quarter. A surge in interest in small-cap names also aided performance
during the period.
The March quarter's downturn was especially grueling, grinding investor
psychology to the point where seemingly no one wanted to buy stocks. The market
tested the levels of the October decline but could only form a higher low on
muted volume. The bear market thus far appears to have ended with that whimper.
Specialty retailers performed well for the Fund but were offset by a correction
of the previous quarter's strong move in small-cap technology stocks.
Subsequent to the March downturn, the formal end of military actions in Iraq
turned investors' attention back to the economy and company fundamentals. The
passing of the President's tax initiative and the Federal Reserve's aggressive
stimulus has created greater optimism about an economic recovery that statistics
show has already been long underway. Company managements have firmed their
business outlooks and have begun to commit to prudent investment. The result
has been a strong market rally that provided impressive gains in our fourth
quarter and continues as of this writing. Leadership has been broad-based, with
the Fund benefiting from its positions in the specialty retailing, financial,
and technology sectors.
Looking ahead, evidence of a pickup in the strength of the economic recovery and
solid corporate earnings will be required to maintain the stock market's rally.
With such evidence will come the strong possibility of a major asset allocation
shift out of bonds back into the stock market. In the meantime, we will
continue to be opportunistic, diligently searching for attractive investments.
SINCE INCEPTION COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE HENLOPEN FUND, S&P 500 INDEX AND LIPPER GROWTH FUND INDEX
AVERAGE ANNUAL TOTAL RETURN
1-Year 5-Year 10-Year
------ ------ -------
7.98% 4.12% 12.21%
The Henlopen S&P 500 Lipper Growth
Date Fund Index**<F2> Fund Index***<F3>
---- ------------ ----------- -----------------
6/30/93 $10,000 $10,000 $10,000
6/30/94 $10,490 $10,130 $10,170
6/30/95 $13,406 $12,763 $12,519
6/30/96 $18,554 $16,107 $15,110
6/30/97 $19,481 $21,697 $18,677
6/30/98 $25,871 $28,271 $24,335
6/30/99 $30,114 $34,688 $29,616
6/30/00 $46,285 $37,186 $34,829
6/30/01 $33,344 $31,671 $26,996
6/30/02 $29,305 $25,974 $20,830
6/30/03 $31,644 $26,040 $21,107
Past performance is not predictive of future performance. The graph and the
table do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
**<F2> The S&P 500(R) is the Standard & Poor's Composite Index of 500 Stocks,
a widely recognized unmanaged index of common stock prices.
***<F3> The Lipper Growth Fund Index is an index of mutual funds having an
investment objective similar to the Fund's investment objective.
THE HENLOPEN FUND
STATEMENT OF NET ASSETS
June 30, 2003
SHARES OR
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
COMMON STOCKS -- 97.6% (A)<F5>
AEROSPACE & DEFENSE -- 1.3%
80,000 SI International Inc.*<F4> $ 911,380 $ 1,044,000
AUTO & TRUCK RELATED -- 0.8%
30,000 ArvinMeritor, Inc. 767,712 605,400
BASIC MATERIALS -- 0.5%
55,000 Universal Stainless &
Alloy Products, Inc.*<F4> 866,924 355,850
BUSINESS SERVICES -- 1.5%
100,000 Gevity HR, Inc. 766,193 1,178,000
COMMUNICATIONS -- 1.8%
50,000 IDT Corp. - Cl B*<F4> 803,399 880,000
200,000 NMS Communications
Corp.*<F4> 2,405,787 394,200
301,000 Science
Dynamics Corp.*<F4> 2,771,553 18,060
500,000 U.S. Wireless Data Inc.*<F4> 1,413,507 70,000
----------- -----------
7,394,246 1,362,260
COMPUTER PERIPHERALS -- 2.0%
120,000 Dot Hill Systems Corp.*<F4> 702,808 1,572,000
CONSTRUCTION SERVICES -- 0.9%
10,000 Lennar Corp. 732,000 715,000
DISTRIBUTION -- 1.6%
75,000 D & K Healthcare
Resources, Inc. 1,390,547 1,210,500
FINANCIAL SERVICES -- 12.4%
45,000 ASTA Funding, Inc.*<F4> 883,076 1,080,000
75,000 BankAtlantic
Bancorp, Inc. 838,623 891,750
500 Berkshire Hathaway
Inc. Cl B*<F4> 1,219,655 1,215,000
50,000 Commercial Capital
Bancorp, Inc.*<F4> 702,710 774,500
55,000 Hub International Ltd. 743,977 940,500
10,000 Lehman Brothers
Holdings Inc. 673,500 664,800
136,000 Penn-America
Group, Inc. 1,177,310 1,530,000
100,000 Tradestation Group Inc.*<F4> 610,910 1,025,000
15,000 Wachovia Corp. 642,159 599,400
25,000 WSFS Financial Corp. 548,781 949,000
----------- -----------
8,040,701 9,669,950
FOOD & BEVERAGES -- 0.9%
50,000 Chiquita Brands
International, Inc.*<F4> 874,040 725,000
FURNITURE -- 1.4%
40,000 Stanley Furniture
Company, Inc. 848,598 1,094,800
HEALTHCARE PRODUCTS -- 13.7%
310,000 IGEN
International, Inc.*<F4> 5,109,762 9,712,300
160,000 PharmaNetics, Inc.*<F4> 2,272,750 928,000
----------- -----------
7,382,512 10,640,300
HEALTHCARE SERVICES -- 1.3%
40,000 Caremark Rx, Inc.*<F4> 977,450 1,027,200
LEISURE/ENTERTAINMENT -- 8.4%
150,000 Acres Gaming Inc.*<F4> 769,715 1,689,000
50,000 Alliance Gaming Corp.*<F4> 757,376 945,500
50,000 Aztar Corp.*<F4> 1,000,632 805,500
50,000 Boyd Gaming Corp.*<F4> 665,813 863,000
80,000 ebookers Plc - SP-ADR*<F4> 892,819 1,284,160
25,000 InterActiveCorp*<F4> 936,384 983,250
----------- -----------
5,022,739 6,570,410
MEDICAL PRODUCTS/SUPPLIES -- 2.4%
40,000 Kensey Nash Corp.*<F4> 934,800 1,024,800
50,000 Medical Action
Industries Inc.*<F4> 674,766 811,000
----------- -----------
1,609,566 1,835,800
MISCELLANEOUS MANUFACTURING -- 1.9%
150,000 Axsys
Technologies, Inc.*<F4> 4,046,085 1,446,000
OIL & GAS EXPLORATION/PRODUCTION -- 6.3%
100,000 Comstock
Resources, Inc.*<F4> 828,209 1,368,000
10,000 Devon Energy Corp. 535,246 534,000
40,000 Pioneer Natural
Resources Co.*<F4> 1,016,100 1,044,000
40,000 Spinnaker
Exploration Co.*<F4> 958,487 1,048,000
25,000 Valero Energy Corp. 1,168,086 908,250
----------- -----------
4,506,128 4,902,250
OILFIELD PRODUCTS/SERVICES -- 10.5%
75,000 Grant Prideco, Inc.*<F4> 1,593,380 881,250
600,000 Grey Wolf, Inc.*<F4> 3,887,199 2,424,000
50,000 Maverick Tube Corp.*<F4> 918,443 957,500
50,000 Patterson-UTI
Energy, Inc.*<F4> 2,013,748 1,618,500
110,000 Universal Compression
Holdings, Inc.*<F4> 3,613,692 2,294,600
----------- -----------
12,026,462 8,175,850
PHARMACEUTICALS -- 3.0%
20,000 American Pharmaceutical
Partners, Inc.*<F4> 737,691 678,000
160,000 Applied Molecular
Evolution, Inc.*<F4> 733,262 659,200
100,000 EntreMed, Inc.*<F4> 638,050 415,000
50,000 Hollis-Eden
Pharmaceuticals, Inc.*<F4> 588,728 621,500
----------- -----------
2,697,731 2,373,700
RESTAURANTS -- 1.8%
125,000 Checkers Drive-In
Restaurants, Inc.*<F4> 854,804 1,413,750
RETAILING -- 8.4%
25,000 Dollar Tree Stores, Inc.*<F4> 737,657 794,250
40,000 Gart Sports Co.*<F4> 1,292,784 1,134,800
23,000 Jos. A. Bank
Clothiers, Inc.*<F4> 401,545 771,420
50,000 Pep Boys-Manny,
Moe & Jack 587,940 675,500
400,000 Rite Aid Corp.*<F4> 3,075,398 1,780,000
75,000 TBC Corp.*<F4> 1,032,701 1,428,000
----------- -----------
7,128,025 6,583,970
SEMICONDUCTORS/RELATED -- 5.9%
125,000 ATI Technologies Inc.*<F4> 903,300 1,275,000
40,000 ATMI, Inc.*<F4> 1,283,210 998,000
70,000 Fairchild Semiconductor
International, Inc.*<F4> 2,586,540 895,300
85,000 Lexar Media, Inc.*<F4> 650,184 804,100
350,000 Optical Communication
Products, Inc.*<F4> 1,373,520 626,500
----------- -----------
6,796,754 4,598,900
SOFTWARE & RELATED SERVICES -- 6.2%
370,500 Bitstream Inc.*<F4> 2,802,149 844,740
135,000 CyberGuard Corp.*<F4> 859,845 958,500
90,000 ILOG S.A. SP-ADR*<F4> 1,240,203 753,300
300,000 Level 8 Systems, Inc.*<F4> 2,248,528 84,000
50,000 Netegrity, Inc.*<F4> 347,950 299,500
150,000 Novell, Inc.*<F4> 514,215 466,500
350,000 ON Technology Corp.*<F4> 967,898 846,300
285,000 TeleCommunication
Systems, Inc.*<F4> 1,080,146 589,950
----------- -----------
10,060,934 4,842,790
TEXTILES -- 1.7%
100,000 Quaker Fabric Corp. 1,110,777 665,000
106,400 Unifi, Inc.*<F4> 1,360,972 659,680
----------- -----------
2,471,749 1,324,680
TRANSPORTATION -- 1.0%
90,000 Celadon Group, Inc.*<F4> 1,094,401 815,310
----------- -----------
Total common stocks 89,970,489 76,083,670
SHORT-TERM INVESTMENTS -- 4.0% (A)<F5>
VARIABLE RATE DEMAND NOTE
$3,094,471 U.S. Bank, N.A., 0.78% 3,094,471 3,094,471
----------- -----------
Total investments $93,064,960 79,178,141
-----------
-----------
Liabilities, less cash and
receivables -- (1.6%) (A)<F5> (1,221,041)
-----------
NET ASSETS $77,957,100
-----------
-----------
Net Asset Value Per Share
(No par value, unlimited
shares authorized), offering
and redemption price
($77,957,100 / 4,299,586
shares outstanding) $ 18.13
-----------
-----------
*<F4> Non-income producing security.
(a)<F5> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
THE HENLOPEN FUND
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2003
INCOME:
Dividends $ 368,091
Interest 40,912
------------
Total income 409,003
------------
EXPENSES:
Investment management fees 746,726
Transfer agent fees 114,437
Administrative services 103,983
Printing and postage expense 60,627
Professional fees 57,228
Insurance expense 37,230
Registration fees 26,856
Board of Trustees fees 21,000
Custodian fees 20,042
Other expenses 1,682
------------
Total expenses 1,189,811
------------
NET INVESTMENT LOSS (780,808)
------------
NET REALIZED LOSS ON INVESTMENTS (29,514,180)
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 34,345,585
------------
NET GAIN ON INVESTMENTS 4,831,405
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,050,597
------------
------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2003 and 2002
2003 2002
---------- ----------
OPERATIONS:
Net investment loss $ (780,808) $ (1,229,958)
Net realized loss on investments (29,514,180) (5,226,682)
Net increase (decrease) in unrealized appreciation on investments 34,345,585 (8,935,051)
------------ -------------
Net increase (decrease) in net assets resulting from operations 4,050,597 (15,391,691)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($0.04378 per share) -- (335,471)
------------ -------------
Total distributions -- (335,471)*<F6>
------------ -------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (4,106,479 and 3,930,681 shares, respectively) 61,986,610 72,085,797
Net asset value of shares issued in distributions (18,200 shares) -- 329,609
Cost of shares redeemed (5,484,134 and 6,151,163 shares, respectively) (83,494,575) (112,243,318)
Redemption fee 97,954 --
------------ -------------
Net decrease in net assets derived from Fund share activities (21,410,011) (39,827,912)
------------ -------------
TOTAL DECREASE (17,359,414) (55,555,074)
NET ASSETS AT THE BEGINNING OF THE YEAR 95,316,514 150,871,588
------------ -------------
NET ASSETS AT THE END OF THE YEAR $ 77,957,100 $ 95,316,514
------------ -------------
------------ -------------
*<F6> See Note 7.
The accompanying notes to financial statements are an integral part of these
statements.
THE HENLOPEN FUND
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each year)
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------------------------
2003 2002 2001 2000 1999
------ ------ ------ ------ ------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 16.79 $ 19.15 $ 28.39 $ 19.84 $ 17.04
Income from investment operations:
Net investment loss (a)<F7> (0.16) (0.18) (0.16) (0.25) (0.11)
Net realized and unrealized
gains (losses) on investments 1.50 (2.14) (7.85) 10.18 2.91
------- ------- ------- ------- -------
Total from investment operations 1.34 (2.32) (8.01) 9.93 2.80
Less distributions:
Dividend from net investment income -- -- -- -- --
Distributions from net realized gains -- (0.04) (1.23) (1.38) --
------- ------- ------- ------- -------
Total from distributions -- (0.04) (1.23) (1.38) --
------- ------- ------- ------- -------
Net asset value, end of year $ 18.13 $ 16.79 $ 19.15 $ 28.39 $ 19.84
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 7.98% (12.11)% (27.96)% 53.71% 16.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 77,957 95,317 150,872 240,106 63,009
Ratio of expenses to average net assets 1.58% 1.39% 1.28% 1.37% 1.46%
Ratio of net investment loss to average net assets (1.04)% (0.98)% (0.74)% (0.97)% (0.63)%
Portfolio turnover rate 90.06% 132.21% 287.66% 156.85% 162.11%
(a)<F7> Net investment loss per share is calculated using average shares
outstanding.
The accompanying notes to financial statements are an integral part of this
statement.
THE HENLOPEN FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of The
Henlopen Fund (the "Fund"), which is organized as a Delaware Business Trust
and is registered as a diversified open-end management company under the
Investment Company Act of 1940, as amended. The Fund commenced operations
on December 2, 1992. The investment objective of the Fund is long-term
capital appreciation.
(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which
the issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Securities for which quotations are not readily available
are valued at fair value as determined by the investment adviser under
the supervision of the Board of Trustees. Short-term investments with
maturities of 60 days or less are valued at cost which approximates
market value. For financial reporting purposes, investment transactions
are recorded on trade date.
(b) Net realized gains and losses on sales of securities are computed
on the identified cost basis.
(c) Dividend income is recorded on the ex-dividend date. Interest
income is recorded on the accrual basis.
(d) The Fund has investments in short-term variable rate demand notes,
which are unsecured instruments. The Fund may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on
its payment obligation. The Fund's policy is to monitor the
creditworthiness of the issuer and nonperformance by these
counterparties is not anticipated.
(e) Accounting principles generally accepted in the United States of
America ("GAAP") require that permanent differences between income for
financial reporting and tax purposes be reclassified in the capital
accounts.
(f) The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(g) Provision has not been made for Federal income taxes since the
Fund has elected to be taxed as a "regulated investment company" and
intends to distribute substantially all net investment company taxable
income and net capital gains to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies.
(h) Beginning December 1, 2002, the Fund imposes a 1.0% redemption fee
on the value of shares redeemed less than 30 days after purchase. The
redemption fee will not apply to shares purchased through reinvested
distributions (dividends and capital gains), shares held in retirement
plans or through the systematic withdrawal plan. The redemption fee is
designed to discourage short-term trading and any proceeds of the fee
will be credited to paid in capital.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Landis Associates LLC (the
"Adviser"), with whom certain officers and trustees of the Fund are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreement, the Fund will pay the Adviser a monthly management fee at
the annual rate of 1% on the daily net assets of the Fund.
The Fund has an administrative agreement with Fiduciary Management, Inc.
("FMI"), with whom an officer of the Fund is affiliated, to supervise all
aspects of the Fund's operations except those performed by the Adviser.
Under the terms of the agreement, the Fund will pay FMI a monthly
administrative fee at the annual rate of 0.2% on the first $30,000,000 of
the daily net assets of the Fund, 0.1% on the daily net assets of the Fund
on the next $30,000,000 and 0.05% on the daily net assets of the Fund over
$60,000,000.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains, if any, are distributed to
shareholders at least annually.
(4) INVESTMENT TRANSACTIONS --
For the year ended June 30, 2003, purchases and proceeds of sales of
investment securities (excluding short-term securities) were $65,071,992
and $81,574,025, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of June 30, 2003, liabilities of the Fund included the following:
Payable to brokers for investments purchased $ 1,618,185
Payable to the Adviser for management fees 53,366
Payable to FMIfor administrative fees 8,129
Other liabilities 34,507
(6) SOURCES OF NET ASSETS --
As of June 30, 2003 the sources of net assets were as follows:
Fund shares issued and outstanding $127,402,803
Net unrealized depreciation on investments (13,886,819)
Accumulated net realized loss (35,558,884)
------------
$ 77,957,100
------------
------------
(7) INCOME TAX INFORMATION --
The following information for the Fund is presented on an income tax basis
as of June 30, 2003:
GROSS GROSS NET UNREALIZED DISTRIBUTABLE DISTRIBUTABLE
COST OF UNREALIZED UNREALIZED DEPRECIATION ORDINARY LONG-TERM
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL GAINS
----------- ------------ ------------ -------------- ------------- -------------
$93,073,466 $13,327,800 $27,223,125 $13,895,325 $ -- $ --
The difference, if any, between the cost amount for financial statement and
federal income tax purposes is due primarily to timing differences in
recognizing certain gains and losses in security transactions.
The tax components of dividends paid during the year ended June 30, 2003,
capital loss carryovers (expiring in 2011), as of June 30, 2003, and tax
basis post-October losses as of June 30, 2003, which are not recognized for
tax purposes until the first day of the following fiscal year are:
ORDINARY LONG-TERM NET CAPITAL
INCOME CAPITAL GAINS LOSS POST-OCTOBER
DISTRIBUTIONS DISTRIBUTIONS CARRYOVERS LOSSES
------------- ------------- ----------- ------------
$ -- $ -- $20,918,990 $14,631,388
The Fund has utilized $5,983,016 of its post-October losses from the prior
year to increase current year net capital losses.
Since there were no ordinary distributions paid for the year ended June 30,
2003, there were no distributions designated as qualifying for the
dividends received deduction for corporate shareholders.
During the year ended June 30, 2002, the Fund paid dividends of $335,471,
which were taxable at ordinary income tax rates to taxable shareholders.
THE HENLOPEN FUND
(PRICEWATERHOUSECOOPERS LOGO)
100 East Wisconsin Avenue Telephone 414 212 1600
Suite 1500
Milwaukee, WI 53202
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Trustees
of The Henlopen Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
The Henlopen Fund (the "Fund") at June 30, 2003, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/PricewaterhouseCoopers LLP
July 25, 2003
THE HENLOPEN FUND
TRUSTEES AND OFFICERS
# of
Portfolios Other
Term of in Fund Directorships
Position(s) Office and Complex held by
Held with Length of Principal Occupation(s) Overseen Trustee
Name, Address and Age the Fund Time Served During Past Five Years by Trustee or Officer
- --------------------- ----------- ----------- ---------------------- ---------- -------------
"DISINTERESTED PERSONS" OF THE FUND
Howard E. Cosgrove Trustee Indefinite, Retired; prior to August 1, 2000 1 None
c/o Conectiv, Inc. Trustee since Chairman and Chief Executive Officer
800 King Street 2002 of Conectiv, Inc., a regulated power
Wilmington, DE 19899 delivery and electric product/energy
Age: 60 merchant company.
Robert J. Fahey, Jr. Trustee Indefinite, Senior Director of Real Estate 1 None
1717 Arch Street, 30th Floor Trustee since Investment Banking for the Financial
Philadelphia, PA 19103 1992 Services Group of Cushman &
Age: 45 Wakefield, a commercial real
estate firm.
John H. Remer Trustee Indefinite, Retired. 1 None
c/o Landis Associates LLC Trustee since
Longwood Corporate 2002
Center South, Suite 213
415 McFarlan Road
Kennett Square, PA 19348
Age: 78
"INTERESTED PERSONS" OF THE FUND*<F8>
Michael L. Hershey Trustee Indefinite, Chairman, President, Treasurer and 1 None
Longwood Corporate Trustee since Secretary of Landis Associates LLC.
Center South, Suite 213 1992
415 McFarlan Road President One year term,
Kennett Square, PA 19348 President since
Age: 64 1992
Stephen L. Hershey, M.D. Trustee Indefinite, Orthopaedic surgeon. 1 None
4745 Stanton-Ogleton Road Trustee since
Suite 225 1992
Newark, DE 19713
Age: 62
Bruce V. Vogenitz, C.F.A. Vice-President One year term, Vice President of Landis Associates N/A None
Longwood Corporate and Secretary Vice President LLC.
Center South, Suite 213 and Secretary
415 McFarlan Road since 1998
Kennett Square, PA 19348
Age: 38
Camille F. Wildes Vice-President/ One year term, Vice President of Fiduciary N/A None
c/o Fiduciary Compliance Vice President/ Management,Inc.
Management, Inc. Officer and Compliance Officer
225 East Mason Street Treasurer since 1994 and
Milwaukee, WI 53202 Treasurer since 2001
Age: 50
*<F8> Messrs. Michael L. Hershey and Vogenitz are "interested persons" of the
Fund because they are officers of the Fund and the Adviser. Dr. Stephen
L. Hershey is an "interested person" of the Fund because he is the
brother of Mr. Michael L. Hershey. (Dr. Hershey resigned as a trustee
effective June 30, 2002 in order for the Fund to comply with certain
Securities and Exchange Commission regulations requiring the Fund to
have a majority of its trustees consist of persons who are not
"interested persons" of the Fund. He was subsequently reelected to the
Board of Trustees on October 15, 2002.) Ms. Wildes is an "interested
person" of the Fund because she is an officer of the Fund.
For additional information about the Trustees and Officers, please call (866)
880-0032 and request a Statement of Additional Information. One will be mailed
to you free of charge.
THE HENLOPEN FUND
LANDIS ASSOCIATES LLC
Investment Adviser
U.S. BANCORP FUND SERVICES, LLC
Transfer Agent and
Dividend Disbursing Agent
U.S. BANK, N.A.
Custodian
PRICEWATERHOUSECOOPERS LLP
Independent Auditors
FOLEY & LARDNER
Legal Counsel
THE HENLOPEN FUND
LONGWOOD CORPORATE CENTER SOUTH
415 MCFARLAN ROAD, SUITE 213
KENNETT SQUARE, PENNSYLVANIA 19348
(610-925-0400)
WWW.HENLOPENFUND.COM
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of The Henlopen Fund unless accompanied or preceded by
the Fund's current prospectus.
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable to annual reports filed for periods ending before July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- -----------------------------------------
Not applicable to annual reports filed for periods ending before July 15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not required for annual reports filed for periods ending before December 15,
2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable.
ITEM 6. [RESERVED]
- ------------------
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES
- -------------------------------
Not applicable.
ITEM 8. [RESERVED]
- ------------------
ITEM 9. CONTROLS AND PROCEDURES.
- --------------------------------
(a) The disclosure controls and procedures of The Henlopen Fund are
periodically evaluated. As of July 25, 2003, the date of the last
evaluation, we concluded that our disclosure controls and procedures are
adequate.
(b) The internal controls of The Henlopen Fund are periodically evaluated.
Since, July 25, 2003, the date of the last evaluation, there have been no
significant changes in The Henlopen Fund's internal controls or in other
factors that could have had a significant effect on such controls. There
have also been no significant deficiencies or material weaknesses
identified since the last evaluation that required any corrective action.
ITEM 10. EXHIBITS.
- ------------------
(a) Any code of ethics or amendment thereto. Not applicable to annual reports
for periods ending before July 15, 2003.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
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.
The Henlopen Fund
-----------------
Registrant
By /s/Michael L. Hershey
------------------------------------------------
Michael L. Hershey, Principal Executive Officer
Date 8-18-03
-----------
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.
The Henlopen Fund
-----------------
Registrant
By /s/Michael L. Hershey
------------------------------------------------
Michael L. Hershey, Principal Financial Officer
Date 8-18-03
-----------