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
811-03235
FMI Common Stock Fund, Inc.
---------------------------
(Exact name of registrant as specified in charter)
100 East Wisconsin Avenue, Suite 2200
Milwaukee, WI 53202
--------------------
(Address of principal executive offices) (Zip code)
Ted D. Kellner
Fiduciary Management, Inc.
100 East Wisconsin Avenue, Suite 2200
Milwaukee, WI 53202
--------------------
(Name and address of agent for service)
(414) 226-4555
--------------
Registrant's telephone number, including area code:
Date of fiscal year end: September 30
Date of reporting period: September 30, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
ANNUAL REPORT
SEPTEMBER 30, 2005
FMI
Common Stock
Fund, Inc.
A NO-LOAD
MUTUAL FUND
FMI
Common Stock
Fund, Inc.
October 17, 2005
Dear Fellow Shareholders:
The FMI Common Stock Fund's advance was slightly ahead of the Russell 2000's
increase of approximately 4.69% for the September quarter. For the nine months
ended September 30, 2005, the Fund's 5.69% return exceeded the Russell 2000 by
about 2.31%. Sectors aiding performance included producer manufacturing,
commercial services and distribution services. The takeover of York
International Corp. at a 35% premium by Johnson Controls was the marquee event
of the quarter. MPS Group, Inc. also reported another solid quarter and the
stock advanced significantly in the September period. Arrow Electronics, Inc.
continued to post good results in a subdued semiconductor market, and that stock
also excelled in the quarter. Werner Enterprises, Inc., The BISYS Group, Inc.
and Paxar Corp. detracted from results. Werner declined on fears of an economic
slowdown. BISYS announced the divestiture of their information services
division at an attractive price, but it resulted in some near-term earnings
dilution. Paxar reported a difficult second quarter as the apparel sector
slowed. In all three of these situations, we remain optimistic about the long-
term prospects.
The stock market performance was remarkable in view of extremely high
gasoline and energy costs, inflation, natural disasters, another rate hike and a
significant loss of consumer confidence. In fact, the stocks generally
considered to be the most aggressive-that is, those with the highest betas-
outperformed those with the lowest betas. Analyzing the Russell 2000
constituents' betas by quintiles shows the highest betas returning 9.9%
(unweighted) in the quarter compared to the lowest quintile's return of 0.3%.
On the margin, this data seems to suggest that investors are feeling more
confident about the future. Anecdotally, it also appears that so-called growth
funds outperformed value funds in the quarter. If the market continues to move
toward more aggressive stocks, or those that are popularly perceived as growth
stocks, then we are likely to underperform. We find the companies that are
growing sales or earnings rapidly to be extraordinarily expensive today.
We remain somewhat cautious on the outlook for returns in the foreseeable
future, primarily due to valuations, which remain high by historical standards.
Most valuations for the market are in the upper third of their long-term
averages. As you can see from the table below, your Fund trades at a
significant discount to the market. All figures are weighted averages as of
September 30, 2005.
P/E YEAR 1 PRICE/SALES EV/EBITDA PRICE/BOOK
---------- ----------- --------- ----------
FMI COMMON STOCK FUND, INC. 17.4 1.1 8.4 2.4
RUSSELL 2000 INDEX 32.8 3.5 15.2 4.3
Below we highlight a couple of new investments in the Fund, PETCO Animal
Supplies, Inc. and ScanSource, Inc., as well as an update on Global Imaging
Systems, Inc.
PETCO ANIMAL SUPPLIES, INC.
DESCRIPTION
- -----------
PETCO operates 716 specialty pet supply stores in 47 states. PETCO stores
average between 12-15,000 square feet and are typically found in suburban
shopping areas. The company competes through a high-low marketing strategy
offering a variety of supplies and small animals.
GOOD BUSINESS
- -------------
o Approximately 50% of PETCO's sales could reasonably be classified as
recurring consumables. The company is projecting that higher-margined
recurring services such as grooming will grow 20% annually to 10% of
total sales. This will serve to increase margins and traffic.
o PETCO's business is highly defendable with 75% of sales attributable to
the company's "PALS" (PETCO Animal Lovers Save) loyalty program,
ensuring repeat visits and increased competitive barriers.
o Industry leaders PETCO and PETsMART control less than 20% of the
industry, resulting in the opportunity to take share from smaller
independents. PETCO's business is also highly specialized with 90% of
sales coming from products that are not available in the mass merchant
channel.
o PETCO's business should be durable given that pet care is one of the
most economically insensitive subsections of retail.
o Return on investment capital (ROIC) has averaged 31% over the past four
years. On an operating lease adjusted basis this figure is 11%. The
company targets new stores to have a five-year ROIC of more than 20%,
which has historically been accomplished with profitability by the end
of year one.
o Inventory turns have improved in each of the past five years, finishing
2004 at 7.9 times, having improved from 6.2 in 1999. This has occurred
despite an ongoing mix shift away from food. The company's net trade
cycle has improved 6 days over this time period, falling to 27 days in
2004.
o Since re-emerging as a public company in 2002 PETCO has paid down
significant debt, finishing 2004 at 1.2 times debt-to-EBITDA (earnings
before interest, taxes, depreciation and amortization).
VALUATION
- ---------
o The 15.7 price-to-earnings (P/E) ratio on fiscal (January) earnings is
near the all time low of 14 since PETCO's re-emergence as a public
company in February 2002. Over this time the P/E multiple has averaged
22.6 and ranged from a low of 14 to a high of 30.
o On an enterprise value to sales (EV/Sales) basis PETCO currently trades
at 0.74, 38% below the company's historical average of 1.2, in a range
of 0.8 to 1.6.
MANAGEMENT
- ----------
o As a group, management and directors own roughly 6% of the shares
outstanding. The majority of the share ownership, roughly 5.2%,
resides with upper management.
o James M. Myers, 47, became the company's new Chief Executive Officer in
March of 2004. Myers has been with PETCO since May of 1990.
o Rodney Carter, 47, is a Senior Vice President and the company's Chief
Financial Officer. Carter is the newest member of PETCO's management,
having joined the company in March of 2004. From 2000 to 2003, Carter
was Executive Vice President and Chief Financial Officer of CEC
Entertainment, a very successful company.
INVESTMENT THESIS
- -----------------
PETCO has endured a perfect storm over the past several months as its stock
has declined by nearly 50%. Problems initially arose when management discovered
a distribution center accounting issue, which delayed their SEC filings.
Subsequently the company was impacted by a more difficult consumer spending
environment, primarily related to higher gasoline and energy prices.
Competition has also been more intense, putting pressure on prices. We feel
that the company is taking the right approach for the long haul by investing in
store remerchandising, remodels, two new distribution centers, and a new
advertising campaign. These efforts are pinching short-term earnings. Over
time the company will benefit from these investments and the decline in energy
costs. The valuation is attractive for investors with a long-term time horizon.
SCANSOURCE, INC.
DESCRIPTION
- -----------
ScanSource is a leading value-added distributor of "specialty technology"
products in North America, including automatic identification and collection
equipment (bar coding, scanning, mobile computing), point of sale terminals and
receipt printers, and telephony products (telephones, private branch exchanges,
voice mail systems and computer telephony integration). The company sells
approximately 29,000 products from 80+ vendors to 15,000 value-added resellers.
Key vendors include Symbol Technologies, Zebra Technologies, Intermec, Avaya and
IBM.
GOOD BUSINESS
- -------------
o As a distributor of technology products, ScanSource has a higher degree
of predictability and a lower degree of risk than inventors of
technology.
o ScanSource has over 15,000 reseller customers and strong relationships
with its 80+ vendors. No customer is greater than 6% of overall
revenues.
o ScanSource consistently generates a return on capital in the low teens,
which is greater than its cost of capital and exceeds most technology
enterprises.
o We anticipate that the company will continue to grow at a better than
average rate. Over the past five years, sales, earnings per share
(EPS) and cash flow have grown over 20% per annum.
o The balance sheet is modestly levered with a debt-to-total capital
ratio under 25%.
o The business requires very little capital to maintain and grow.
VALUATION
- ---------
o The share price has depreciated greater than 20% in 2005. This
decrease puts the P/E ratio near the low-end of its 10-year average
range of 15-28.
o The shares trade at less than 0.5 times revenues, which is near the
low-end of its 10-year average range of 0.45-0.90.
o The company trades at a discount to the major indices, despite better
growth prospects and a higher return on capital.
MANAGEMENT
- ----------
o The Chairman is Steven Owings, 51, who founded the company in 1992. He
has vast experience in technology distribution, including Gates.
o Michael Baur, 47, is President and Chief Executive Officer. Mr. Baur
also held management positions at Gates Corp.
o Richard Cleys, 53, has been ScanSource's Chief Financial Officer since
November 2002.
INVESTMENT THESIS
- -----------------
ScanSource is the largest distributor in the markets it serves. From its
infancy the company has focused on specialty niches of technology that are too
small for large wholesale computer distributors, but which likewise require
knowledge and expertise in complex products and systems. The markets that
ScanSource serves are growing at better-than-average rates while also benefiting
from a move from direct distribution to indirect. ScanSource should continue to
be a solid grower, with strong profitability. The modest valuation creates a
very attractive reward versus risk scenario.
GLOBAL IMAGING SYSTEMS, INC.
DESCRIPTION
- -----------
Global Imaging is a leading provider and system integrator of office
technology solutions, including digital and analog copiers, network integration,
electronic presentation systems and related products and services. The company
is the most profitable operator among public competitors. Its strategy has been
to grow in a controlled fashion by concentrating on the profitable middle market
customer segment and by making disciplined "bolt-on" acquisitions.
GOOD BUSINESS
- -------------
o Global Imaging provides an important product and service to a large,
diverse group of customers, with an emphasis on the middle market.
o Approximately 40% of total revenues are recurring in nature. This
recurring business includes service contracts, aftermarket inks,
toners, parts and maintenance agreements.
o Global's selling, general and administrative expense (SG&A) cost
structure is at least 400 basis points lower than the competition and
the company generates operating margins greater than 10%.
o Return on invested capital exceeds 11%.
o The balance sheet is appropriately levered.
VALUATION
- ---------
o At 14.0 and 12.8 times 2006 and 2007 (March) estimates, respectively,
Global Imaging is trading at an attractive valuation, both on an
absolute and relative basis.
o The shares trade at a substantial discount to the Russell 2000, despite
better-than-average fundamental and financial characteristics.
o Recent transactions in the industry have been at premiums to Global's
current valuation. Imigistics was recently acquired for approximately
9.5 times EBITDA and 20 times EPS.
MANAGEMENT
- ----------
Tom Johnson, President and Chief Executive Officer, founded Global Imaging
through a partnership with a buyout firm in 1994. Before Global Imaging,
Johnson spent a number of years as Danka Business Systems' Chief Operating
Officer (prior to that company going public) and at Alco Standard (now called
IKON). He is a graduate of Harvard Business School and owns approximately 2% of
the common stock. His tenure in this industry is over 25 years and includes
operating, managing and acquiring office equipment dealers.
INVESTMENT THESIS
- -----------------
Global Imaging is a well-managed, highly profitable office equipment company
that should produce better-than-average growth with a reasonable amount of
predictability. The company has a very good track record and should augment
internal growth with disciplined acquisitions. The valuation is reasonable and
should expand as the market recognizes the strength of this franchise.
As of October 27, 2005, our Board of Directors declared a distribution from
net short-term capital gains of $0.56803 per share, which will be treated as
ordinary income, and $1.71328 per share from net long-term capital gains,
payable October 28, 2005, to shareholders of record on October 26, 2005.
Thank you for your confidence in FMI Common Stock Fund, Inc.
Sincerely,
/s/Ted D. Kellner /s/Donald S. Wilson /s/Patrick J. English
Ted D. Kellner, CFA Donald S. Wilson, CFA Patrick J. English, CFA
President and Vice President Vice President and
Portfolio Manager Portfolio Manager
Opinions expressed are those of Fiduciary Management, Inc. and are subject to
change, are not guaranteed, and should not be considered investment advice.
10/05
100 E. Wisconsin Ave., Suite 2200 o Milwaukee, WI 53202 o 414-226-4555
www.fmifunds.com
FMI Common Stock Fund, Inc.
COST DISCUSSION
INDUSTRY SECTORS AS OF SEPTEMBER 30, 2005
Process Industries 17.0
Commercial Services 15.5
Distribution Services 10.1
Finance 8.8
Producer Manufacturing 6.6
Electronic Technology 5.8
Consumer Non-Durables 5.1
Retail Trade 5.0
Transportation 4.9
Technology Services 4.5
Health Technology 4.2
Consumer Durables 2.9
Industrial Services 2.9
Energy Minerals 2.4
Consumer Services 1.5
Utilities 0.9
Cash & Cash Equivalents 1.9
As a shareholder of the Fund you incur ongoing costs, including management fees
and other Fund expenses. You do not incur transaction costs such as sales
charges (loads) on purchase payments, reinvested dividends, or other
distributions; redemption fees; and exchange fees because the Fund does not
charge these fees. This example is intended to help you understand your ongoing
costs (in dollars) of investing in FMI Common Stock Fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from April 1, 2005 through September 30,
2005.
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
In addition to the costs highlighted and described below, the only Fund
transaction costs you might currently incur would be wire fees ($15 per wire),
if you choose to have proceeds from a redemption wired to your bank account
instead of receiving a check. Additionally, U.S. Bank charges an annual
processing fee ($15) if you maintain an IRA account with the Fund. To determine
your total costs of investing in the Fund, you would need to add any applicable
wire or IRA processing fees you've incurred during the period to the costs
provided in the example at the end of this article.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption or exchange fees. Therefore, the second line of the
table is useful in comparing ongoing costs only, and will not help you determine
the relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Ending Expenses Paid
Account Account During Period*<F1>
Value 4/01/05 Value 9/30/05 4/01/05-9/30/05
------------- ------------- ------------------
FMI Common Stock Fund Actual $1,000.00 $1,057.30 $6.34
Hypothetical (5% return before expenses) $1,000.00 $1,018.90 $6.23
*<F1> Expenses are equal to the Fund's annualized expense ratio of 1.23%,
multiplied by the average account value over the period, multiplied by
183/365 (to reflect the one-half year period between April 1, 2005 and
September 30, 2005).
FMI Common Stock Fund, Inc.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
During the fiscal year ended September 30, 2005, the FMI Common Stock Fund had a
total return of 16.11%. Health care, producer manufacturing and distribution
drove the performance of the Fund. Specifically, takeovers of Accredo Health,
Inc., Renal Care Group and York International Corp. added significantly to the
results. Process industries, commercial services and technology services
sectors hurt performance. Individual stocks contributing negatively included
Valspar Corp., The BISYS Group, Inc. and G&K Services, Inc. The Russell 2000
gained 17.95% in the fiscal year ending September 30, 2005. The Russell 2000 was
driven by the energy, producer manufacturing, and health services sectors.
Energy was particularly strong during the period. Within the Russell 2000,
financial stocks failed to keep pace with the returns of the overall index, but
remain overvalued in the manager's opinion. Financial stocks constitute a record
high 22% of the index. In the final fiscal quarter, higher beta stocks
significantly outperformed lower beta stocks. Beta is one measure of risk and
higher beta stocks are considered to be more risky than lower beta stocks.
Similarly, so-called growth funds outperformed value funds in the final quarter
of the fiscal year. To the extent the sentiment is favorable toward higher beta
stocks and growth funds, it would be unfavorable for the Fund. The Fund's
fundamental valuation characteristics, as measured by price-to-earnings, price-
to-book and price-to-sales ratios, respectively, remain at a discount to the
Russell 2000. Historically, lower valuation portfolios have outperformed higher
valuation portfolios over long-term (3-5 years) investment periods. Future
results, however, may differ from historical ones.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
FMI COMMON STOCK FUND AND THE RUSSELL 2000 INDEX(1)<F2>
Date FMI Common Stock Fund Russell 2000 Index
---- --------------------- ------------------
9/30/95 $10,000 $10,000
9/30/96 $11,270 $11,310
9/30/97 $15,598 $15,065
9/30/98 $12,849 $12,200
9/30/99 $14,954 $14,526
9/30/2000 $17,698 $17,924
9/30/2001 $19,645 $14,122
9/30/2002 $20,073 $12,809
9/30/2003 $23,641 $17,484
9/30/2004 $28,448 $20,766
9/30/2005 $33,031 $24,493
AVERAGE ANNUAL TOTAL RETURN
1-Year 5-Year 10-Year
------ ------ -------
16.11% 13.29% 12.70%
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.
(1)<F2> The Russell 2000 Index is an index comprised of 2,000 publicly traded
small capitalization common stocks that are ranked in terms of
capitalization below the large and mid-range capitalization sectors of
the United States equity market. The Russell 2000 Index is a
trademark/service market of the Frank Russell Company.
FMI Common Stock Fund
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
of FMI Common Stock Fund, Inc.
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
FMI Common Stock Fund, Inc. (the "Fund") at September 30, 2005, 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 the
standards of the Public Company Accounting Oversight Board (United States),
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 September 30, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
October 28, 2005
FMI Common Stock Fund, Inc.
STATEMENT OF NET ASSETS
September 30, 2005
SHARES OR
PRINCIPAL
AMOUNT COST VALUE
--------- ---- -----
COMMON STOCKS -- 98.1% (A)<F4>
COMMERCIAL SERVICES SECTOR -- 15.5%
- -----------------------------------
ADVERTISING/MARKETING SERVICES -- 2.6%
362,900 ADVO, Inc. $ 12,019,013 $ 11,355,141
MISCELLANEOUS COMMERCIAL SERVICES -- 6.6%
224,300 ABM Industries Inc. 3,382,970 4,667,683
288,300 FTI Consulting, Inc.*<F3> 6,018,506 7,282,458
203,100 G & K Services, Inc. 5,958,607 8,000,109
263,000 Global Imaging
Systems, Inc.*<F3> 6,652,708 8,955,150
------------ ------------
22,012,791 28,905,400
PERSONNEL SERVICES -- 6.3%
255,800 Korn/Ferry International*<F3> 4,150,375 4,192,562
1,143,600 MPS Group, Inc.*<F3> 9,941,128 13,494,480
375,000 Watson Wyatt &
Company Holdings 8,812,855 10,106,250
------------ ------------
22,904,358 27,793,292
CONSUMER DURABLES SECTOR -- 2.9%
- --------------------------------
TOOLS & HARDWARE -- 2.9%
355,300 Snap-on Inc. 11,144,257 12,833,436
CONSUMER NON-DURABLES SECTOR -- 5.1%
- ------------------------------------
APPAREL/FOOTWEAR -- 3.1%
345,000 Liz Claiborne, Inc. 10,636,791 13,565,400
FOOD: SPECIALTY/CANDY -- 2.0%
201,800 Lancaster Colony Corp. 8,208,668 8,677,400
CONSUMER SERVICES SECTOR -- 1.5%
- --------------------------------
PUBLISHING: NEWSPAPERS -- 1.5%
442,600 Journal
Communications, Inc. 6,989,749 6,594,740
DISTRIBUTION SERVICES SECTOR -- 10.1%
- -------------------------------------
ELECTRONICS DISTRIBUTORS -- 5.2%
515,400 Arrow Electronics, Inc.*<F3> 8,937,698 16,162,944
139,100 ScanSource, Inc.*<F3> 6,639,398 6,779,734
------------ ------------
15,577,096 22,942,678
WHOLESALE DISTRIBUTORS -- 4.9%
117,000 School Specialty, Inc.*<F3> 4,246,687 5,707,260
331,500 United Stationers Inc.*<F3> 14,046,897 15,865,590
------------ ------------
18,293,584 21,572,850
ELECTRONIC TECHNOLOGY SECTOR -- 5.8%
- ------------------------------------
COMPUTER PERIPHERALS -- 3.7%
376,700 Imation Corp. 13,314,971 16,149,129
ELECTRONIC EQUIPMENT/INSTRUMENTS -- 2.1%
556,500 Paxar Corp.*<F3> 7,398,017 9,377,025
ENERGY MINERALS SECTOR -- 2.4%
- ------------------------------
OIL & GAS PRODUCTION -- 2.4%
106,500 Newfield Exploration Co.*<F3> 2,114,550 5,229,150
150,600 St. Mary Land &
Exploration Co. 2,476,603 5,511,960
------------ ------------
4,591,153 10,741,110
FINANCE SECTOR -- 8.8%
- ----------------------
INSURANCE BROKERS/SERVICES -- 3.0%
451,400 Arthur J. Gallagher & Co. 13,119,820 13,004,834
LIFE/HEALTH INSURANCE -- 3.0%
325,000 Protective Life Corp. 10,221,439 13,383,500
PROPERTY/CASUALTY INSURANCE -- 2.8%
465,000 Old Republic
International Corp. 8,942,810 12,401,550
HEALTH TECHNOLOGY SECTOR -- 4.2%
- --------------------------------
MEDICAL SPECIALTIES -- 4.2%
69,700 Beckman Coulter, Inc. 4,461,999 3,762,406
357,900 Sybron Dental
Specialties, Inc.*<F3> 7,527,502 14,881,482
------------ ------------
11,989,501 18,643,888
INDUSTRIAL SERVICES SECTOR -- 2.9%
- ----------------------------------
ENVIRONMENTAL SERVICES -- 2.9%
41,100 Duratek Inc.*<F3> 697,475 751,308
340,000 Republic Services, Inc. 6,226,891 11,998,600
------------ ------------
6,924,366 12,749,908
PROCESS INDUSTRIES SECTOR -- 17.0%
- ----------------------------------
CHEMICALS: MAJOR DIVERSIFIED -- 2.7%
425,900 Engelhard Corp. 11,626,332 11,886,869
CHEMICALS: SPECIALTY -- 2.8%
330,500 Albemarle Corp. 9,538,935 12,459,850
CONTAINERS/PACKAGING -- 6.5%
306,000 AptarGroup, Inc. 10,236,012 15,241,860
534,700 Bemis Company, Inc. 14,306,525 13,207,090
------------ ------------
24,542,537 28,448,950
INDUSTRIAL SPECIALTIES -- 2.7%
62,000 Minerals
Technologies Inc. 2,497,726 3,547,020
369,800 Valspar Corp. 8,613,414 8,268,728
------------ ------------
11,111,140 11,815,748
TEXTILES -- 2.3%
280,000 Albany
International Corp. 8,522,249 10,323,600
PRODUCER MANUFACTURING SECTOR -- 6.6%
- -------------------------------------
BUILDING PRODUCTS -- 3.9%
304,100 York International Corp. 11,791,535 17,050,887
ELECTRICAL PRODUCTS -- 1.6%
239,800 Acuity Brands, Inc. 6,615,316 7,114,866
INDUSTRIAL MACHINERY -- 1.1%
119,900 IDEX Corp. 2,231,602 5,101,745
RETAIL TRADE SECTOR -- 5.0%
- ---------------------------
FOOD RETAIL -- 3.2%
330,600 Casey's General
Stores, Inc. 3,532,763 7,669,920
268,400 Ruddick Corp. 5,563,142 6,186,620
------------ ------------
9,095,905 13,856,540
SPECIALTY STORES -- 1.8%
379,100 PETCO Animal
Supplies, Inc.*<F3> 8,638,268 8,021,756
TECHNOLOGY SERVICES SECTOR -- 4.5%
- ----------------------------------
DATA PROCESSING SERVICES -- 4.5%
796,800 The BISYS Group, Inc.*<F3> 11,590,992 10,701,024
482,800 eFunds Corp.*<F3> 8,954,518 9,091,124
------------ ------------
20,545,510 19,792,148
TRANSPORTATION SECTOR -- 4.9%
- -----------------------------
AIR FREIGHT/COURIERS -- 2.3%
377,000 Pacer International, Inc. 7,463,463 9,937,720
TRUCKING -- 2.6%
662,000 Werner Enterprises, Inc. 12,737,307 11,445,980
UTILITIES SECTOR -- 0.9%
- ------------------------
ELECTRIC UTILITIES -- 0.9%
220,600 Pike Electric Corp.*<F3> 3,093,616 4,131,838
------------ ------------
Total common stocks 351,842,099 432,079,778
SHORT-TERM INVESTMENTS -- 3.3% (A)<F4>
VARIABLE RATE DEMAND NOTE -- 3.3%
$14,706,367 U.S. Bank, N.A., 3.59% 14,706,367 14,706,367
------------ ------------
Total short-term
investments 14,706,367 14,706,367
------------ ------------
Total investments $366,548,466 446,786,145
------------
------------
Liabilities, less cash and
receivables -- (1.4%) (A)<F4> (6,116,840)
------------
NET ASSETS $440,669,305
------------
------------
Net Asset Value Per Share
($0.01 par value, indefinite
shares authorized), offering
and redemption price
($440,669,305 / 16,576,494
shares outstanding) $26.58
------
------
*<F3> Non-income producing security.
(A)<F4> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
FMI Common Stock Fund, Inc.
STATEMENT OF OPERATIONS
For the Year Ended September 30, 2005
INCOME:
Dividends $ 4,115,359
Interest 824,819
-----------
Total income 4,940,178
-----------
EXPENSES:
Management fees 4,293,914
Transfer agent fees 385,261
Administrative services 229,695
Custodian fees 89,140
Printing and postage expense 82,145
Professional fees 44,039
Registration fees 34,601
Insurance expense 19,881
Board of Directors fees 10,219
Other expenses 19,114
-----------
Total expenses 5,208,009
-----------
NET INVESTMENT LOSS (267,831)
-----------
NET REALIZED GAIN ON INVESTMENTS 37,746,046
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 25,863,930
-----------
NET GAIN ON INVESTMENTS 63,609,976
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $63,342,145
-----------
-----------
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended September 30, 2005 and 2004
2005 2004
---------- ----------
OPERATIONS:
Net investment loss $ (267,831) $ (1,176,639)
Net realized gain on investments 37,746,046 22,007,079
Net increase in unrealized appreciation on investments 25,863,930 36,044,266
------------ ------------
Net increase in net assets resulting from operations 63,342,145 56,874,706
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($1.2121 and $0.48428 per share, respectively) (20,047,301)*<F5> (5,724,994)*<F5>
------------ ------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (2,346,370 and 8,487,388 shares, respectively) 58,819,177 189,927,760
Net asset value of shares issued in distributions reinvested
(832,834 and 259,919 shares, respectively) 19,454,999 5,514,081
Cost of shares redeemed (3,248,869 and 2,942,275 shares, respectively) (81,763,402) (67,646,756)
------------ ------------
Net (decrease) increase in net assets derived from Fund share activities (3,489,226) 127,795,085
------------ ------------
TOTAL INCREASE 39,805,618 178,944,797
NET ASSETS AT THE BEGINNING OF THE YEAR 400,863,687 221,918,890
------------ ------------
NET ASSETS AT THE END OF THE YEAR
(Includes undistributed net investment loss of $0 and ($3,966), respectively) $440,669,305 $400,863,687
------------ ------------
------------ ------------
*<F5> See Note 7
The accompanying notes to financial statements are an integral part of these
statements.
FMI Common Stock Fund, Inc.
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each year)
YEARS ENDED SEPTEMBER 30,
----------------------------------------------------------------
2005 2004 2003 2002 2001
---- ---- ---- ---- ----
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of year $24.08 $20.47 $17.38 $19.60 $18.77
Income from investment operations:
Net investment (loss) income*<F6> (0.02) (0.08) (0.09) (0.01) 0.00
Net realized and unrealized
gains on investments 3.73 4.17 3.18 0.47**<F7> 1.90
------ ------ ------ ------ ------
Total from investment operations 3.71 4.09 3.09 0.46 1.90
Less distributions:
Dividend from net investment income -- -- -- -- --
Distributions from net realized gains (1.21) (0.48) -- (2.68) (1.07)
------ ------ ------ ------ ------
Total from distributions (1.21) (0.48) -- (2.68) (1.07)
------ ------ ------ ------ ------
Net asset value, end of year $26.58 $24.08 $20.47 $17.38 $19.60
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL RETURN 16.11% 20.33% 17.78% 2.18% 10.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 440,669 400,864 221,919 93,336 52,049
Ratio of expenses to average net assets 1.21% 1.23% 1.25% 1.14% 1.23%
Ratio of net investment (loss) income
to average net assets (0.06%) (0.33%) (0.46%) (0.03%) 0.00%
Portfolio turnover rate 34.2% 39.4% 34.0% 28.8% 46.8%
*<F6> In 2005, 2004, 2003 and 2002, net investment loss per share is
calculated using average shares outstanding.
**<F7> The amount shown may not correlate with the aggregate gains and losses
of portfolio securities due to the timing of subscriptions and
redemptions of Fund shares.
The accompanying notes to financial statements are an integral part of this
statement.
NOTES TO FINANCIAL STATEMENTS
September 30, 2005
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the
FMI Common Stock Fund, Inc. (the "Fund"), which is registered as a
diversified, open-end management investment company under the Investment
Company Act of 1940, as amended. The Fund was incorporated under the laws
of Wisconsin on July 29, 1981. Effective April 15, 2004, the Fund closed
to new investors. The investment objective of the Fund is to produce long-
term capital appreciation principally through investing in common stocks.
(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. Securities that are traded on the Nasdaq National
Market or the Nasdaq SmallCap Market are valued at the Nasdaq Official
Closing Price 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 Directors. The fair value of a
security is the amount which the Fund might reasonably expect to
receive upon a current sale. The fair value of a security may differ
from the last quoted price and the Fund may not be able to sell a
security at the fair value. Market quotations may not be available,
for example, if trading in particular securities was halted during the
day and not resumed prior to the close of trading on the New York
Stock Exchange. Short-term investments with maturities of 60 days or
less are valued at amortized cost, which approximates value. For
financial reporting purposes, investment transactions are recorded on
the 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 an 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) No provision has 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.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Fiduciary Management, Inc.
("FMI"), with whom certain officers and directors of the Fund are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreement, the Fund will pay FMIa monthly management fee at the annual
rate of 1% of the daily net assets of the Fund. The Fund has an
administrative agreement with FMI to supervise all aspects of the Fund's
operations except those performed by FMI pursuant to the management
agreement. Under the terms of the agreement, the Fund will pay FMI a
monthly administrative fee at the annual rate of 0.1% of the daily net
assets up to and including $30,000,000 and 0.05% of the daily net assets of
the Fund in excess of $30,000,000.
Under the management agreement, FMI will reimburse the Fund for
expenses over 1.3% of the daily net assets of the Fund. No such
reimbursements were required for the year ended September 30, 2005.
In the normal course of business the Fund enters into contracts with
service providers that contain general indemnification clauses. 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.
(3) DISTRIBUTIONS TO SHAREHOLDERS --
Net investment income and net realized gains, if any, are distributed
to shareholders at least annually. On October 27, 2005, the Fund
distributed $9,326,038 from net short-term realized gains ($0.56803 per
share) and $28,129,275 from long-term realized gains ($1.71328 per share).
The distributions were paid on October 28, 2005 to shareholders of record
on October 26, 2005.
(4) INVESTMENT TRANSACTIONS --
For the year ended September 30, 2005, purchases and proceeds of sales
of investment securities (excluding short-term investments) were
$138,969,395 and $136,840,596, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of September 30, 2005, liabilities of the Fund included the
following:
Payable to brokers for investments purchased $6,094,154
Payable to FMI for management and administrative fees 338,328
Due to custodian 224,470
Payable to shareholders for redemptions 10,118
Other liabilities 71,250
(6) SOURCES OF NET ASSETS --
As of September 30, 2005, the sources of net assets were as follows:
Fund shares issued and outstanding $323,035,579
Net unrealized appreciation on investments 80,237,679
Undistributed net realized gains on investments 37,396,047
------------
$440,669,305
------------
------------
(7) INCOME TAX INFORMATION --
The following information for the Fund is presented on an income tax
basis as of September 30, 2005:
GROSS GROSS NET UNREALIZED DISTRIBUTABLE DISTRIBUTABLE
COST OF UNREALIZED UNREALIZED APPRECIATION ORDINARY LONG-TERM
INVESTMENTS APPRECIATION DEPRECIATION ON INVESTMENTS INCOME CAPITAL GAINS
----------- ------------ ------------ -------------- ------------- -------------
$366,607,734 $88,383,004 $8,204,593 $80,178,411 $9,326,038 $28,129,275
The difference between the cost amount for financial statement and
federal income tax purposes is due primarily to timing differences in
recognizing certain gains and losses on security transactions.
The tax components of dividends paid during the years ended September
30, 2005 and 2004, capital loss carryovers, which may be used to offset
future capital gains, subject to Internal Revenue Code limitations, as of
September 30, 2005, and tax basis post-October losses as of September 30,
2005, which are not recognized for tax purposes until the first day of the
following fiscal year are:
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
--------------------------------------------------------- -----------------------------
ORDINARY LONG-TERM NET CAPITAL ORDINARY LONG-TERM
INCOME CAPITAL GAINS LOSS POST-OCTOBER INCOME CAPITAL GAINS
DISTRIBUTIONS DISTRIBUTIONS CARRYOVERS LOSSES DISTRIBUTIONS DISTRIBUTIONS
------------- ------------- ---------- ------------ ------------- -------------
$11,746,220 $8,301,081 $-- $-- $938,273 $4,786,721
For corporate shareholders in the Fund, the percentage of dividend
income distributed for the year ended September 30, 2005 which is
designated as qualifying for the dividends received deduction is 22%
(unaudited).
For shareholders in the Fund, the percentage of dividend income
distributed for the year ended September 30, 2005 which is designated as
qualified dividend income under the Jobs and Growth Tax Relief Act of 2003,
is 22% (unaudited).
FMI Common Stock Fund, Inc.
DIRECTORS AND OFFICERS
OTHER
TERM OF PRINCIPAL # OF FUNDS DIRECTORSHIPS
POSITION OFFICE AND OCCUPATION(S) IN COMPLEX HELD BY
NAME, AGE HELD WITH LENGTH OF DURING PAST OVERSEEN DIRECTOR
AND ADDRESS THE FUND TIME SERVED FIVE YEARS BY DIRECTOR OR OFFICER
- ----------- --------- ----------- ------------- ----------- -------------
NON-INTERESTED DIRECTORS
Barry K. Allen, 57 Director Indefinite Term Mr. Allen is Executive Vice President 4 Harley-Davidson,
1801 California Street Since October of Qwest Communications International, Inc., FMI Funds,
Denver, CO 80202 1996 Inc. (Denver, CO) a global Inc. and
communications company, since FMI Mutual Funds,
September 2002. From July 2000 to Inc.
September 2002, Mr. Allen was President
of Allen Enterprises, LLC, (Brookfield,
WI) a private equity investments
management company he founded after
retiring from Ameritech (Chicago, IL)
in July 2000.
George D. Dalton, 77 Director Indefinite Term Mr. Dalton is Chairman and Chief 4 Clark Consulting,
20825 Swenson Drive Since January Executive Officer of NOVO1 Inc., FMI Funds, Inc.,
Waukesha, WI 53186 1998 (f/k/a Call_Solutions.com, Inc.,) and FMI Mutual
(Waukesha, WI) a privately held company Funds, Inc.
specializing in teleservices call centers
since January 2000.
Gordon H. Director Indefinite Term Mr. Gunnlaugsson retired from M&I 4 Renaissance Learning
Gunnlaugsson, 61 Since March Corporation (Milwaukee, WI). He was Systems, Inc., FMI
c/o Fiduciary 2001 employed by M&I Corporation from Funds, Inc. and FMI
Management, Inc. June 1, 1970 to December 31, 2000 where Mutual Funds, Inc.
100 E. Wisconsin Ave. he most recently held the positions of
Suite 2200 Executive Vice President and Chief
Milwaukee, WI 53202 Financial Officer.
Paul S. Shain, 42 Director Indefinite Term Mr. Shain is Chief Executive Officer of 4 FMI Funds, Inc. and
5520 Research Since March Berbee Information Networks (Madison, FMI Mutual Funds,
Park Drive 2001 WI) a leading provider of e-business Inc.
Madison, WI 53711 development, infrastructure integration
and application hosting services, and has
been employed by such firm in various
capacities since January 2000.
INTERESTED DIRECTORS
Patrick J. English,*<F8> 44 Director Indefinite Term Mr. English is President of Fiduciary 3 FMI Funds, Inc.
c/o Fiduciary Since January Management, Inc. and has been employed
Management, Inc. 1998 by the Adviser in various capacities
100 E. Wisconsin Ave. Vice One Year Term since December, 1986.
Suite 2200 President Since 1996
Milwaukee, WI 53202
Ted D. Kellner,*<F8> 59 Director Indefinite Term Mr. Kellner is Chairman of the Board 3 Marshall & Ilsley
c/o Fiduciary Since July 1981 and Chief Executive Officer of Fiduciary Corporation and
Management, Inc. President One Year Term Management, Inc. which he co-founded FMI Funds, Inc.
100 E. Wisconsin Ave. and Since 1981 in 1980.
Suite 2200 Treasurer
Milwaukee, WI 53202
Donald S. Wilson,*<F8> 62 Director Indefinite Term Mr. Wilson is Vice Chairman, Treasurer 2 FMI Mutual Funds,
c/o Fiduciary Since July 1981 and Chief Compliance Officer of Inc.
Management, Inc. Vice One Year Term Fiduciary Management, Inc.
100 E. Wisconsin Ave. President Since 1981 which he co-founded in 1980.
Suite 2200 and
Milwaukee, WI 53202 Secretary
OTHER OFFICERS
Kathleen M. Lauters, 53 Chief At Discretion Ms. Lauters has been the Fund's Chief N/A None
c/o Fiduciary Compliance of Board Compliance Officer since September 2004.
Management, Inc. Officer Since September From June 1995 to September 2004 Ms.
100 E. Wisconsin Ave. 2004 Lauters was employed by Strong Capital
Suite 2200 Management, most recently as Senior
Milwaukee, WI 53202 Compliance Analyst.
Camille F. Wildes, 53 Vice One Year Term Ms. Wildes is a Vice-President of N/A None
c/o Fiduciary President Since December Fiduciary Management, Inc. and has
Management, Inc. and 1999 been employed by the Adviser in various
100 E. Wisconsin Ave. Assistant capacities since December, 1982.
Suite 2200 Treasurer
Milwaukee, WI 53202
*<F8> Messrs. English, Kellner and Wilson are interested directors of the Fund
because they are officers of the Fund and the Adviser.
For additional information about the Directors and Officers or for a description
of the policies and procedures that the Fund uses to determine how to vote
proxies relating to portfolio securities, please call (800) 811-5311 and request
a Statement of Additional Information. One will be mailed to you free of
charge. The Statement of Additional Information is also available on the
website of the Securities and Exchange Commission (the "Commission") at
http://www.sec.gov. Information on how the Fund voted proxies relating to
portfolio securities is available on the Fund's website at
http://www.fmifunds.com or the website of the Commission no later than August 31
for the prior 12 months ending June 30. The Fund files its complete schedule of
portfolio holdings with the Commission for the first and third quarters of each
fiscal year on Form N-Q. The Fund's Form N-Q is available on the Commission's
website. The Fund's Form N-Q may be reviewed and copied at the Commission's
Public Reference Room in Washington, D.C., and that information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
FMI COMMON STOCK FUND, INC.
100 East Wisconsin Avenue, Suite 2200
Milwaukee, Wisconsin 53202
www.fmifunds.com
414-226-4555
BOARD OF DIRECTORS
BARRY K. ALLEN
GEORGE D. DALTON
PATRICK J. ENGLISH
GORDON H. GUNNLAUGSSON
TED D. KELLNER
PAUL S. SHAIN
DONALD S. WILSON
INVESTMENT ADVISER
AND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
100 East Wisconsin Avenue, Suite 2200
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
800-811-5311
or
414-765-4124
CUSTODIAN
U.S. BANK, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRICEWATERHOUSECOOPERS LLP
100 East Wisconsin Avenue, Suite 1800
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER LLP
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of FMI Common Stock Fund unless accompanied or preceded
by the Fund's current prospectus. Performance data quoted represents past
---------------------------------------
performance; past performance does not guarantee future results. The investment
- ---------------------------------------------------------------
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Current performance of the Fund may be lower or higher than the performance
quoted. Performance data current to the most recent month end may be obtained by
visiting www.fmifunds.com.
ITEM 2. CODE OF ETHICS.
- -----------------------
Registrant has adopted a code of ethics. See attached Exhibit 12 (a).
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- ----------------------------------------
Registrant's Board of Directors has determined that Mr. Gordon Gunnlaugsson, a
member of its audit committee, is an audit committee financial expert. Mr.
Gunnlaugsson is "independent" as such term is defined in Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
(a) Audit Fees
$15,000 (FY 2005) and $14,050 (FY 2004) are the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant to the registrant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Audit-Related Fees
There were no fees billed in each of the last two fiscal years for Audit-Related
Fees.
(c) Tax Fees
$5,000 (FY 2005) and $4,505 (FY 2004) are the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant to the registrant for tax compliance, tax advice, tax planning and
tax return preparation.
There were no fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant to registrant's investment adviser
for tax compliance, tax advice and tax planning that were required to be
approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X.
(d) All Other Fees
There were no fees billed in each of the last two fiscal years for products and
services provided by the principal accountant to the registrant, other than the
services reported in paragraphs (a) - (c) of this Item 4.
There were no fees billed in each of the last two fiscal years for products and
services provided by the principal accountant to registrant's investment
adviser, which were required to be approved by the audit committee pursuant to
paragraph (c)(7)(ii) or Rule 2-01 or Regulation S-X.
(e) (1) None
(e) (2) None
(f) Not applicable.
(g) See the tax fees disclosed in paragraph (c) of this Item 4.
(h) Not applicable, as no non-audit services were provided to registrant's
investment adviser.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
- ----------------------------------------------
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
- --------------------------------
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- -------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES
- -------------------------------
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
- -------------------------------------------------------------------------
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
- --------------------------------------------------------------------------
COMPANY AND AFFILIATED PURCHASERS.
- ----------------------------------
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
None.
Item 11. Controls and Procedures.
- ---------------------------------
(a) The disclosure controls and procedures of the FMI Common Stock Fund, Inc.
are periodically evaluated. As of October 7, 2005, the date of the last
evaluation, we concluded that our disclosure controls and procedures are
adequate.
(b) The internal controls of the FMI Common Stock Fund, Inc. are periodically
evaluated. There were no changes to FMI Common Stock Fund's internal
control over financial reporting that occurred during the second fiscal
quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, such controls.
ITEM 12. EXHIBITS.
- -----------------
(a) Any code of ethics or amendment thereto. Filed herewith.
(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.
FMI Common Stock Fund, Inc.
---------------------------
Registrant
By /s/Ted D. Kellner
-------------------------------------------
Ted D. Kellner, Principal Executive Officer
Date November 21, 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.
FMI Common Stock Fund, Inc.
---------------------------
Registrant
By /s/Ted D. Kellner
--------------------------------------------
Ted D. Kellner, Principal Financial Officer
Date November 21, 2005
------------------------------------------