UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04014
Meridian Fund, Inc.(R)
------------------------------------------------------
(Exact name of registrant as specified in charter)
60 E. Sir Francis Drake Boulevard
Suite 306
Larkspur, CA 94939
------------------------------------------------------
(Address of principal executive offices) (Zip code)
Gregg B. Keeling
60 E. Sir Francis Drake Boulevard
Suite 306
Larkspur, CA 94939
------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 415-461-8770
Date of fiscal year end: June 30
Date of reporting period: December 31, 2006
Form N-CSR is to be used by management investment 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 comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS
The Report to Shareholders is attached herewith.
MERIDIAN FUND, INC.
January 3, 2007
To Our Shareholders:
Moderate inflation, stable interest rates and strong corporate profit growth
resulted in broad based stock gains in 2006. The S&P 500 index advanced 13.6%,
the NASDAQ 9.5% and the Russell 2000, representing smaller companies, did even
better with a 17.0% increase. Telecom, energy and utilities were among the best
performing sectors. The worst performing groups included healthcare, technology
and consumer goods. Interest rates increased somewhat. The yield on the ten-year
government bond advanced to 4.71% from 4.39% at the beginning of 2006.
Economic growth moderated from an annualized rate in excess of 5% in the first
quarter of 2006 to 2% in the third quarter. Home building and related industries
is the primary weak spot, while auto sales are soft and industrial production
has slowed. Consumer confidence, however, has recently improved and consumer
spending is showing continued growth due to stable oil prices, job growth, wage
increases and a rising stock market. Our outlook for 2007 is for GDP growth of
2.5%, modestly higher long-term interest rates, stable short-term rates,
inflation in the area of 2.0% and corporate profit growth in the mid single-
digit range. There are two risks to our outlook. First, a significant decline in
housing prices causing trouble in the mortgage market. Second, an international
crisis that restricts the supply of energy, pushing up substantially the price
of oil and related products.
We welcome those new shareholders who joined the Meridian Funds during the
quarter and appreciate the continued confidence of our existing shareholders.
We wish you a happy, healthy and prosperous New Year.
- -s- Richard F. Aster, Jr.
Richard F. Aster, Jr.
MERIDIAN EQUITY INCOME FUND(R) (MEIFX)
The Meridian Equity Income Fund's net asset value per share at December 31, 2006
was $12.24. This represents an increase of 19.6% for the calendar year. The
Fund's total return and average annual compound rate of return since inception,
January 31, 2005, were 26.7% and 13.2%, respectively.
On December 15, 2006, the Equity Income Fund paid a long-term capital gain
distribution of $0.04 per share, a short-term capital gain distribution of $0.07
per share and an income dividend of $0.17 per share. The Fund's assets at the
close of the quarter were invested 9.8% in cash and 90.2% in stocks. Total net
assets were $36,254,620 and there were 570 shareholders.
The Meridian Equity Income Fund continues to focus on companies with above
average yields and strong financial returns that, in our opinion, have the
ability to grow dividends. The portfolio is diversified with 36 positions
representing 25 different industry groups. At the end of the fourth quarter, the
portfolio's average holding had a 5-year-average return on equity of 19.2% and
an average dividend yield of 2.7%; both measures substantially higher than the
average S&P 500 stock. The average position had a market capitalization of $23.7
billion, a debt ratio of 31.6% and earnings per share that are expected to grow
11.7% during the next several years. We believe these financial characteristics
will lead to positive returns for the fund.
During the quarter we purchased shares of Carnival Corp., Federated Investors,
3M, Rohm & Haas and Stanley Works. We sold our shares in Briggs & Stratton,
Equity Residential, Eli Lilly, Mellon Financial and Newell Rubbermaid.
RPM International, a current holding, manufactures, markets and sells specialty
paints, protective coatings, sealants, adhesives and roofing systems for the
consumer and industrial markets. Products are sold in 151 countries and
territories. RPM has a good long-term track record in growing earnings and
dividends, and has solid financial characteristics. The company is expected to
grow earnings at 12% during the next 5 years and has a return on equity of 17%.
The shares are attractively valued, selling at 13.5 times estimated earnings and
yielding over 3%.
MERIDIAN GROWTH FUND(R) (MERDX)
The Meridian Growth Fund's net asset value per share at December 31, 2006 was
$39.24. This represents an increase of 15.8% for the calendar year. The Fund's
total return and average annual compound rate of return since inception, August
1, 1984, were 1,777.9% and 14.0%, respectively.
On December 15, 2006, the Growth Fund paid a long-term capital gain distribution
of $2.79 per share, a short-term capital gain distribution of $0.33 per share
and an income dividend of $0.01 per share. The Fund's assets at the close of the
quarter were invested 4.7% in cash and cash equivalents and 95.3% in stocks.
Total net assets were $1,867,776,872 and there were 74,669 shareholders.
2
The stock market is reasonably valued and we believe earnings growth will be in
the 5% to 7% range in 2007. This means stock selection will become more
important in achieving above average results as the business cycle becomes
mature. Our portfolio turn-over is less than 30%, which means we own stocks, on
average, in excess of three years. Our strategy is to research and own, at a
reasonable price, growth stocks that can do well for an extended period of time.
We continue to focus on small and medium-sized companies that address a market
that is conducive to growth and that have an important market share. A high
return on capital and capable management are also critical to our investment
strategy. We believe this criterion, along with a concern for valuation, is a
sound, long-term approach to investing.
During the quarter we purchased shares of Apria Healthcare Group, Annaly Capital
Management, United Stationers and Winnebago Industries. We sold our shares in
American Power Conversion, Getty Images, Host Hotels & Resorts and Mercury
Interactive.
Cerner Corp, a recent purchase, is the largest supplier of healthcare
information technology (HCIT) for physician offices, hospitals, clinics, labs
and pharmacies. The company offers the broadest solution set in the industry
resulting in 30% market share. The HCIT market is forecasted to grow 8% over the
next several years. The healthcare industry is compelled to continue investing
in information technology systems to improve efficacy and efficiency.
Approximately 25% of hospitals currently have a fully implemented electronic
medical record (EMR) system, indicating how under penetrated the market is.
Cerner is well positioned to benefit from this trend and, in our opinion, will
grow profits at double-digit rates over the next several years. The stock sells
at a reasonable valuation given its earnings growth potential, experienced
management team and positive long-term investment outlook.
MERIDIAN VALUE FUND(R) (MVALX)
The Wall Street Journal ranked the Meridian Value Fund the eighteenth best
performing stock fund for the ten-year period ending December 31, 2006. This is
out of a universe of approximately 2,000 funds. The Meridian Value Fund has
outperformed the S&P 500 index seven of the past eight years.
The Meridian Value Fund's net asset value per share at December 31, 2006 was
$35.60. This represents an increase of 18.7% for the calendar year. The Fund's
total return and average compounded annual rate of return since June 30, 1995,
were 669.9% and 19.4%, respectively. The comparable period returns for the S&P
500 with dividends were 215.9% and 10.5%, respectively.
On December 15, 2006, the Value Fund paid a long-term capital gain distribution
of $5.09 per share and an income dividend of $0.41 per share. The Fund's assets
at the close of the quarter were invested 5.2% in cash and cash equivalents and
94.8% in stocks. Total net assets were $1,752,686,124 and there were 77,479
shareholders.
Our investment strategy is unchanged. We continue to seek out-of-favor companies
that have defensible positions in their industries, strong or improving balance
sheets, reasonable valuations
3
and good prospects for earnings growth. We believe that over the long-term this
strategy will continue to outperform. In our opinion the portfolio is well
positioned, reasonably valued and diversified. We hold 64 positions,
representing 26 industry groups. We continue to invest in companies of all
market capitalizations and our largest areas of concentration are technology,
real estate and financials. We currently monitor, but don't yet own, a number of
solid companies that sell at reasonable valuations. The outlook for our
approach, in our view, is favorable at this time.
During the quarter we purchased shares of ABM Industries, Apria Healthcare
Group, Avon Products, Blount International, Cincinnati Financial, Helen of Troy,
Mine Safety Appliances, Stewart Information Services, Tuesday Morning and
Unisys. We sold our shares in The DIRECTV Group, Equity Residential, General
Electric, Hot Topic, Intersil, Jean Coutu Group, Manitowoc, Pearson and Symbol
Technologies.
We recently invested in ABM Industries, a leader in the fragmented janitorial
services industry with related services such as parking, security, engineering
and lighting. ABM suffered earnings declines due to fewer high margin lighting
projects, some cost escalation on fixed price contracts and the underperformance
of its SSA security acquisition. The lighting division is now rebounding with
new business tied to energy tax credits and efforts to fix the security division
are yielding results. With the majority of revenues tied to the office market,
ABM should benefit from higher occupancy rates as white collar employment
continues to strengthen. We believe that earnings should grow to more than $1.50
per share in 2 to 3 years, up from $0.94 in 2006. ABM is reasonably valued at
less than 16.5 times normalized earnings, has a strong balance sheet with $2.70
per share in net cash and pays an attractive 2% dividend yield.
MISCELLANEOUS
The most cost effective method to purchase Meridian Fund shares is directly
through our transfer agent PFPC, instead of through third party platforms
offered by brokers that charge transaction fees. This is especially true for
long-term investors that make multiple purchases. The Meridian Funds are no-load
and there are no commissions charged when purchased directly through our
transfer agent, PFPC.
We have added a new E-mail Alerts feature to our website at
www.meridianfund.com. When you sign up for E-mail Alerts you will receive
notification of news items, shareholder reports, SEC filings, and other
information regarding the Meridian Funds.
4
MERIDIAN EQUITY INCOME FUND
SUMMARY OF PORTFOLIO HOLDINGS
DECEMBER 31, 2006 (UNAUDITED)
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- --------------------------------------------------------------------------------
<Table>
PORTFOLIO HOLDINGS BY CATEGORY (% OF TOTAL NET ASSETS)
Industrial Services......................................... 7.7% $ 2,779,028
Brokerage & Money Management................................ 5.1 1,852,644
Industrial Products......................................... 5.1 1,835,048
Electrical Equipment........................................ 5.0 1,823,869
Insurance................................................... 5.0 1,823,618
Diversified Operations...................................... 5.0 1,816,765
Paper/Forest Products....................................... 5.0 1,805,146
Banking..................................................... 5.0 1,802,078
Basic Materials............................................. 4.9 1,794,768
Retail...................................................... 4.8 1,728,652
Telecommunications Services................................. 2.6 938,667
Leisure & Amusement......................................... 2.6 929,498
Furniture & Fixtures........................................ 2.5 927,320
Chemicals................................................... 2.5 925,427
Oil & Gas................................................... 2.5 916,551
Consumer Products........................................... 2.5 913,306
Apparel..................................................... 2.5 906,163
Restaurants................................................. 2.5 905,123
Insurance Brokers........................................... 2.5 904,395
Healthcare Products......................................... 2.5 903,484
Office Supplies............................................. 2.5 901,771
Toys........................................................ 2.5 901,641
Business Services........................................... 2.5 898,273
Business Products........................................... 2.5 894,720
Auto Components............................................. 2.4 885,807
Cash & Other Assets, Less Liabilities....................... 9.8 3,540,858
----- -----------
100.0% $36,254,620
===== ===========
</Table>
The accompanying notes are an integral part of the financial statements
5
MERIDIAN GROWTH FUND
SUMMARY OF PORTFOLIO HOLDINGS
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
PORTFOLIO HOLDINGS BY CATEGORY (% OF TOTAL NET ASSETS)
Retail...................................................... 11.8% $ 219,754,801
Healthcare Services......................................... 8.7 161,821,801
Industrial Services......................................... 7.4 137,763,297
Healthcare Products......................................... 7.0 131,156,130
Banking..................................................... 5.5 102,973,931
Brokerage & Money Management................................ 4.5 83,943,252
Tech-Software............................................... 4.4 83,048,327
Industrial Products......................................... 4.4 82,542,842
Consumer Services........................................... 4.2 79,526,419
Leisure & Amusement......................................... 4.1 76,569,389
Restaurants................................................. 3.7 68,868,059
Cellular Communications..................................... 3.1 57,500,672
Insurance Brokers........................................... 2.7 50,945,150
Business Products........................................... 2.7 50,249,945
Insurance................................................... 2.4 45,858,015
Chemicals................................................... 2.4 45,197,813
Business Services........................................... 2.3 43,185,790
Apparel..................................................... 2.3 42,830,693
Aerospace/Defense........................................... 2.3 42,587,712
Hotels & Lodging............................................ 2.1 39,908,080
Construction................................................ 1.8 33,743,837
Tech-Hardware............................................... 1.7 31,118,305
U.S. Government Obligations................................. 1.6 29,864,732
Wholesale................................................... 1.6 29,760,673
Transportation.............................................. 1.2 21,633,298
Technology.................................................. 1.0 18,418,035
Cash & Other Assets, Less Liabilities....................... 3.1 57,005,874
----- --------------
100.0% $1,867,776,872
===== ==============
</Table>
The accompanying notes are an integral part of the financial statements
6
MERIDIAN VALUE FUND
SUMMARY OF PORTFOLIO HOLDINGS
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
PORTFOLIO HOLDINGS BY CATEGORY (% OF TOTAL NET ASSETS)
Consumer Products........................................... 8.4% $ 146,451,884
Industrial Services......................................... 8.1 141,519,051
Banking..................................................... 7.6 134,006,929
Retail...................................................... 7.3 127,435,452
Technology.................................................. 6.2 107,887,728
Healthcare Products......................................... 5.1 89,912,083
Industrial Products......................................... 5.1 88,713,936
Consumer Products/Food & Beverage........................... 4.6 81,425,996
Insurance................................................... 4.3 74,915,150
Energy...................................................... 3.9 68,759,512
Utilities................................................... 3.9 68,538,784
Real Estate................................................. 3.5 60,614,868
Pharmaceuticals............................................. 3.3 58,374,132
Insurance Brokers........................................... 2.6 45,745,920
Telecommunications Services................................. 2.3 39,402,720
Telecommunications Equipment................................ 2.1 37,628,576
Apparel..................................................... 2.1 37,605,938
Business Products........................................... 2.1 37,252,040
Information Technology Services............................. 2.1 37,108,828
Agriculture................................................. 2.0 35,044,083
Aerospace/Defense........................................... 1.9 33,936,120
Oil & Gas................................................... 1.8 31,981,048
U.S. Government Obligations................................. 1.7 29,864,731
Healthcare Services......................................... 1.5 26,433,400
Brokerage & Money Management................................ 1.4 24,304,710
Basic Materials............................................. 1.2 21,149,230
Restaurants................................................. 0.4 6,165,768
Cash & Other Assets, Less Liabilities....................... 3.5 60,507,507
----- --------------
100.0% $1,752,686,124
===== ==============
</Table>
The accompanying notes are an integral part of the financial statements
7
MERIDIAN FUND, INC.
DISCLOSURE OF FUND EXPENSES
FOR THE SIX MONTH PERIOD JULY 1, 2006 TO DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We believe it is important for you to understand the impact of fees and expenses
on your investment. All mutual funds have operating expenses. As a shareholder
of the Fund, you incur ongoing costs, which include costs for portfolio
management, administrative services, and shareholder reports (like this one),
among others. Operating expenses, which are deducted from a Fund's gross income,
directly reduce the investment return of the portfolio. A Fund's expenses are
expressed as a percentage of its average net assets. This figure is known as the
expense ratio. The following examples are intended to help you understand the
ongoing costs (in dollars) of investing in your Fund and to compare these costs
with those of other mutual funds. The examples are based on an investment of
$1,000 made at the beginning of the period shown and held for the entire period
and assume reinvestment of all dividends and distributions.
<Table>
<Caption>
Beginning Ending Expenses
Account Value Account Value Expense Paid During
07/01/06 12/31/06 Ratio(1) Period(2)
------------- ------------- -------- -----------
ACTUAL FUND RETURN
(See explanation below)
Meridian Equity Income Fund............. $1,000.00 $1,132.80 1.25%(4) $6.72
Meridian Growth Fund.................... $1,000.00 $1,098.90 0.85% $4.50
Meridian Value Fund..................... $1,000.00 $1,137.10 1.10% $5.93
HYPOTHETICAL 5% RETURN(3)
(See explanation below)
Meridian Equity Income Fund............. $1,000.00 $1,018.90 1.25%(4) $6.36
Meridian Growth Fund.................... $1,000.00 $1,020.92 0.85% $4.33
Meridian Value Fund..................... $1,000.00 $1,019.66 1.10% $5.60
</Table>
(1) Annualized, based on the Fund's most recent fiscal half-year expenses.
(2) Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by the number of
days in the most recent fiscal half-year, then divided by 365.
(3) Before expenses.
(4) See note 2 to Financial Statements.
8
MERIDIAN FUND, INC.
DISCLOSURE OF FUND EXPENSES (CONTINUED)
FOR THE SIX MONTH PERIOD JULY 1, 2006 TO DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The table above illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from the
Fund's ACTUAL return, the third column shows the period's annualized expense
ratio, and the last column shows the dollar amount that would have been paid by
an investor who started with $1,000 in the Fund at the beginning of the period.
You may use the information here, together with your account value, to estimate
the expenses that you paid over the period.
To do so, 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."
HYPOTHETICAL 5% RETURN: This section is intended to help you compare your Fund's
costs with those of other mutual funds. It assumes that the Fund had a return of
5% before expenses during the period shown, but that the expense ratio is
unchanged. In this case, because the return used is NOT the Fund's actual
return, the results do not apply to your investment. You can assess your Fund's
costs by comparing this 5% Return hypothetical example with the 5% Return
hypothetical examples that appear in shareholder reports of 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 short-term
redemption and exchange fees or sales and service charges you may pay third
party broker/dealers. Had these transactional costs been included, your costs
would have been higher. Therefore, the hypothetical section of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds.
9
MERIDIAN EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2006 (UNAUDITED)
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- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS - 90.2%
APPAREL - 2.5%
VF Corp. .......................... 11,040 $ 906,163
AUTO COMPONENTS - 2.4%
Autoliv, Inc. (Sweden)............. 14,690 885,807
BANKING - 5.0%
Comerica, Inc...................... 15,350 900,738
Regions Financial Corp............. 24,100 901,340
-----------
1,802,078
BASIC MATERIALS - 4.9%
PPG Industries, Inc................ 13,840 888,666
Rohm & Haas Co..................... 17,725 906,102
-----------
1,794,768
BROKERAGE & MONEY MANAGEMENT - 5.1%
Federated Investors, Inc. Class B.. 26,800 905,304
Waddell & Reed Financial, Inc.
Class A.......................... 34,625 947,340
-----------
1,852,644
BUSINESS PRODUCTS - 2.5%
Diebold, Inc....................... 19,200 894,720
BUSINESS SERVICES - 2.5%
R. R. Donnelley & Sons Co.......... 25,275 898,273
CHEMICALS - 2.5%
RPM International, Inc............. 44,300 925,427
CONSUMER PRODUCTS - 2.5%
Reynolds American, Inc. ........... 13,950 913,306
DIVERSIFIED OPERATIONS - 5.0%
3M Co.............................. 11,615 905,157
E.I. du Pont de Nemours & Co....... 18,715 911,608
-----------
1,816,765
ELECTRICAL EQUIPMENT - 5.0%
Emerson Electric Co................ 20,500 903,845
Hubbell, Inc. Class B.............. 20,350 920,024
-----------
1,823,869
FURNITURE & FIXTURES - 2.5%
Leggett & Platt, Inc............... 38,800 927,320
HEALTHCARE PRODUCTS - 2.5%
Johnson & Johnson.................. 13,685 903,484
INDUSTRIAL PRODUCTS - 5.1%
Bemis Co........................... 26,550 902,169
Stanley Works (The)................ 18,550 932,879
-----------
1,835,048
INDUSTRIAL SERVICES - 7.7%
ABM Industries, Inc................ 42,160 957,454
Genuine Parts Co................... 19,160 908,759
Waste Management, Inc.............. 24,825 912,815
-----------
2,779,028
INSURANCE - 5.0%
Lincoln National Corp.............. 13,825 917,980
Mercury General Corp............... 17,175 905,638
-----------
1,823,618
INSURANCE BROKERS - 2.5%
Willis Group Holdings, Ltd. (United
Kingdom)......................... 22,775 904,395
LEISURE & AMUSEMENT - 2.6%
Carnival Corp...................... 18,950 929,498
OFFICE SUPPLIES - 2.5%
Avery Dennison Corp. .............. 13,275 901,771
OIL & GAS - 2.5%
Chevron Corp....................... 12,465 916,551
PAPER/FOREST PRODUCTS - 5.0%
Kimberly-Clark Corp................ 13,235 899,318
Sonoco Products Co................. 23,800 905,828
-----------
1,805,146
</Table>
The accompanying notes are an integral part of the financial statements.
10
MERIDIAN EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2006 (UNAUDITED)
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- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS (continued)
RESTAURANTS - 2.5%
IHOP Corp.......................... 17,175 $ 905,123
RETAIL - 4.8%
Cato Corp. (The) Class A........... 36,800 843,088
Limited Brands, Inc................ 30,600 885,564
-----------
1,728,652
TELECOMMUNICATIONS SERVICES - 2.6%
BellSouth Corp..................... 19,925 938,667
TOYS - 2.5%
Mattel, Inc........................ 39,790 901,641
TOTAL INVESTMENTS - 90.2%
(Cost $28,817,435)................. 32,713,762
CASH AND OTHER ASSETS, LESS
LIABILITIES - 9.8%.................... 3,540,858
-----------
NET ASSETS - 100.0%..................... $36,254,620
===========
</Table>
The accompanying notes are an integral part of the financial statements.
11
MERIDIAN GROWTH FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS - 95.3%
AEROSPACE/DEFENSE - 2.3%
BE Aerospace, Inc.*................ 1,658,400 $ 42,587,712
APPAREL - 2.3%
Carter's, Inc.*.................... 1,679,635 42,830,693
BANKING - 5.5%
Annaly Capital Management, Inc.
REIT............................. 1,607,400 22,358,934
SVB Financial Group*............... 797,400 37,174,788
UCBH Holdings, Inc. ............... 2,473,816 43,440,209
--------------
102,973,931
BROKERAGE & MONEY MANAGEMENT - 4.5%
Affiliated Managers Group, Inc.*... 410,045 43,108,031
T. Rowe Price Group, Inc. ......... 932,950 40,835,221
--------------
83,943,252
BUSINESS PRODUCTS - 2.7%
Diebold, Inc. ..................... 1,078,325 50,249,945
BUSINESS SERVICES - 2.3%
CSG Systems International, Inc.*... 1,615,630 43,185,790
CELLULAR COMMUNICATIONS - 3.1%
American Tower Corp. Class A*...... 1,542,400 57,500,672
CHEMICALS - 2.4%
RPM International, Inc. ........... 2,163,610 45,197,813
CONSTRUCTION - 1.8%
Granite Construction, Inc. ........ 670,585 33,743,837
CONSUMER SERVICES - 4.2%
Regis Corp. ....................... 1,057,000 41,793,780
Rollins, Inc. ..................... 1,706,587 37,732,639
--------------
79,526,419
HEALTHCARE PRODUCTS - 7.0%
C. R. Bard, Inc. .................. 516,975 42,893,416
DENTSPLY International, Inc. ...... 1,526,000 45,551,100
Edwards Lifesciences Corp.*........ 907,985 42,711,614
--------------
131,156,130
HEALTHCARE SERVICES - 8.7%
Apria Healthcare Group, Inc.*...... 1,070,600 28,531,490
Cerner Corp.*...................... 935,230 42,552,965
DaVita, Inc.*...................... 839,100 47,728,008
Laboratory Corp. of America
Holdings*........................ 585,400 43,009,338
--------------
161,821,801
HOTELS & LODGING - 2.1%
Las Vegas Sands Corp.*............. 446,000 39,908,080
INDUSTRIAL PRODUCTS - 4.4%
Airgas, Inc. ...................... 1,009,675 40,912,031
Dionex Corp.*...................... 734,100 41,630,811
--------------
82,542,842
INDUSTRIAL SERVICES - 7.4%
Allied Waste Industries, Inc.*..... 2,983,025 36,661,377
EGL, Inc.*......................... 863,318 25,709,610
Republic Services, Inc. ........... 961,300 39,096,071
United Rentals, Inc.*.............. 1,427,300 36,296,239
--------------
137,763,297
INSURANCE - 2.4%
Mercury General Corp. ............. 869,676 45,858,015
INSURANCE BROKERS - 2.7%
Willis Group Holdings, Ltd. (United
Kingdom)......................... 1,282,930 50,945,150
LEISURE & AMUSEMENT - 4.1%
Royal Caribbean Cruises, Ltd. ..... 1,149,965 47,585,552
Winnebago Industries............... 880,700 28,983,837
--------------
76,569,389
</Table>
The accompanying notes are an integral part of the financial statements.
12
MERIDIAN GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS (continued)
RESTAURANTS - 3.7%
CBRL Group, Inc. .................. 976,688 $ 43,716,555
Ruby Tuesday, Inc. ................ 916,600 25,151,504
--------------
68,868,059
RETAIL - 11.8%
Bed Bath & Beyond, Inc.*........... 1,078,900 41,106,090
Claire's Stores, Inc. ............. 1,020,340 33,814,068
Foot Locker, Inc. ................. 1,612,825 35,369,252
PetSmart, Inc. .................... 1,341,000 38,701,260
Ross Stores, Inc. ................. 1,323,200 38,769,760
Zale Corp.*........................ 1,134,150 31,994,371
--------------
219,754,801
TECHNOLOGY - 1.0%
Zebra Technologies Corp. Class A*.. 529,406 18,418,035
TECH-HARDWARE - 1.7%
Vishay Intertechnology, Inc.*...... 2,298,250 31,118,305
TECH-SOFTWARE - 4.4%
Advent Software, Inc.*............. 1,066,438 37,634,597
Cognos. Inc. (Canada)*............. 1,069,565 45,413,730
--------------
83,048,327
TRANSPORTATION - 1.2%
AirTran Holdings, Inc.*............ 1,842,700 21,633,298
WHOLESALE - 1.6%
United Stationers, Inc.*........... 637,410 29,760,673
TOTAL COMMON STOCKS - 95.3%
(Cost $1,421,630,861)............................... 1,780,906,266
--------------
U.S. GOVERNMENT OBLIGATIONS - 1.6%
U.S. Treasury Bill @ 5.037%**
due 01/11/07
(Face Value $15,000,000)............................ 14,979,542
U.S. Treasury Bill @ 5.019%**
due 03/01/07
(Face Value $15,000,000)............................ 14,885,190
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $29,859,329).................................. 29,864,732
--------------
TOTAL INVESTMENTS - 96.9%
(Cost $1,451,490,190)............................... 1,810,770,998
CASH AND OTHER ASSETS, LESS LIABILITIES - 3.1%........... 57,005,874
--------------
NET ASSETS - 100.0%...................................... $1,867,776,872
==============
</Table>
REIT - Real Estate Investment Trust
* Non-income producing securities
** Annualized yield at date of purchase
The accompanying notes are an integral part of the financial statements.
13
MERIDIAN VALUE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS - 94.8%
AEROSPACE/DEFENSE - 1.9%
BE Aerospace, Inc.*................ 1,321,500 $ 33,936,120
AGRICULTURE - 2.0%
Bunge, Ltd. ....................... 483,300 35,044,083
APPAREL - 2.1%
Liz Claiborne, Inc. ............... 865,300 37,605,938
BANKING - 7.6%
AMVESCAP PLC ADR (United Kingdom).. 926,900 22,848,085
Annaly Capital Management, Inc.
REIT............................. 2,149,200 29,895,372
JPMorgan Chase & Co. .............. 920,000 44,436,000
Regions Financial Corp. ........... 912,000 34,108,800
Stewart Information Services
Corp. ........................... 62,700 2,718,672
--------------
134,006,929
BASIC MATERIALS - 1.2%
Barrick Gold Corp. (Canada)........ 688,900 21,149,230
BROKERAGE & MONEY MANAGEMENT - 1.4%
Federated Investors, Inc. Class B.. 719,500 24,304,710
BUSINESS PRODUCTS - 2.1%
Diebold, Inc. ..................... 799,400 37,252,040
CONSUMER PRODUCTS - 8.4%
Avon Products, Inc. ............... 650,200 21,482,608
Blount International, Inc.*........ 443,300 5,966,818
Helen of Troy, Ltd.* (Bermuda)..... 76,700 1,860,742
Newell Rubbermaid, Inc. ........... 1,242,800 35,979,060
Pactiv Corp.*...................... 1,409,800 50,315,762
Universal Corp. ................... 629,400 30,846,894
--------------
146,451,884
CONSUMER PRODUCTS/FOOD & BEVERAGE - 4.6%
Anheuser-Busch Cos., Inc. ......... 794,600 39,094,320
International Flavors & Fragrances,
Inc. ............................ 861,100 42,331,676
--------------
81,425,996
ENERGY - 3.9%
El Paso Corp. ..................... 1,174,300 17,943,304
GlobalSanteFe Corp. ............... 286,400 16,834,592
Hanover Compressor Co.*............ 1,046,000 19,758,940
Tidewater, Inc. ................... 294,100 14,222,676
--------------
68,759,512
HEALTHCARE PRODUCTS - 5.1%
Baxter International, Inc. ........ 952,300 44,177,197
Beckman Coulter, Inc. ............. 583,500 34,893,300
Thoratec Corp.*.................... 616,700 10,841,586
--------------
89,912,083
HEALTHCARE SERVICES - 1.5%
AmerisourceBergen Corp. ........... 118,000 5,305,280
Apria Healthcare Group, Inc.*...... 792,800 21,128,120
--------------
26,433,400
INDUSTRIAL PRODUCTS - 5.1%
Cabot Corp. ....................... 457,900 19,950,703
Dionex Corp.*...................... 326,587 18,520,749
Mine Safety Appliances Co. ........ 10,600 388,490
Sealed Air Corp. .................. 540,100 35,063,292
Spartech Corp. .................... 564,100 14,790,702
--------------
88,713,936
INDUSTRIAL SERVICES - 8.1%
ABM Industries, Inc. .............. 420,400 9,547,284
Allied Waste Industries, Inc.*..... 3,716,200 45,672,098
Sysco Corp. ....................... 1,055,200 38,789,152
Waste Management, Inc. ............ 1,292,100 47,510,517
--------------
141,519,051
INFORMATION TECHNOLOGY SERVICES - 2.1%
BearingPoint, Inc.*................ 2,448,400 19,268,908
Unisys Corp.*...................... 2,275,500 17,839,920
--------------
37,108,828
INSURANCE - 4.3%
Cincinnati Financial Corp. ........ 378,600 17,154,366
Everest Re Group, Ltd. (Barbados).. 270,000 26,489,700
XL Capital, Ltd. Class A
(Bermuda)........................ 434,200 31,271,084
--------------
74,915,150
</Table>
The accompanying notes are an integral part of the financial statements.
14
MERIDIAN VALUE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Value
Shares (Note 1)
--------------- ---------------
COMMON STOCKS (continued)
INSURANCE BROKERS - 2.6%
Willis Group Holdings, Ltd. (United
Kingdom)......................... 1,152,000 $ 45,745,920
OIL & GAS - 1.8%
Kinder Morgan Management, LLC*..... 700,111 31,981,048
PHARMACEUTICALS - 3.3%
MedImmune, Inc.*................... 885,200 28,653,924
Schering-Plough Corp. ............. 1,257,200 29,720,208
--------------
58,374,132
REAL ESTATE - 3.5%
Apartment Investment & Management
Co. Class A REIT................. 602,700 33,763,254
Healthcare Realty Trust, Inc.
REIT............................. 679,100 26,851,614
--------------
60,614,868
RESTAURANTS - 0.4%
Ruby Tuesday, Inc. ................ 224,700 6,165,768
RETAIL - 7.3%
Rent-A-Center, Inc.*............... 980,900 28,946,359
Ross Stores, Inc. ................. 1,073,900 31,465,270
Safeway, Inc. ..................... 1,486,300 51,366,528
Tuesday Morning Corp. ............. 1,006,900 15,657,295
--------------
127,435,452
TECHNOLOGY - 6.2%
Analog Devices, Inc. .............. 550,000 18,078,500
Entegris, Inc.*.................... 2,448,700 26,494,934
Tektronix, Inc. ................... 297,900 8,689,743
Western Digital Corp.*............. 927,300 18,972,558
Xilinx, Inc. ...................... 540,300 12,864,543
Zebra Technologies Corp. Class A*.. 655,000 22,787,450
--------------
107,887,728
TELECOMMUNICATIONS EQUIPMENT - 2.1%
Nokia Oyj ADR (Finland)............ 1,851,800 37,628,576
TELECOMMUNICATIONS SERVICES - 2.3%
Alltel Corp. ...................... 651,500 39,402,720
UTILITIES - 3.9%
Dynegy, Inc. Class A*.............. 3,235,300 23,423,572
Hawaiian Electric Industries,
Inc. ............................ 611,275 16,596,116
TECO Energy, Inc. ................. 1,655,200 28,519,096
--------------
68,538,784
TOTAL COMMON STOCKS - 94.8%
(Cost $1,406,575,080).................................. 1,662,313,886
--------------
U.S. GOVERNMENT OBLIGATIONS - 1.7%
U.S. Treasury Bill @ 5.037%**
due 01/11/07
(Face Value $15,000,000)............................ 14,979,541
U.S. Treasury Bill @ 5.019%**
due 03/01/07
(Face Value $15,000,000)............................ 14,885,190
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $29,859,329).................................. 29,864,731
--------------
TOTAL INVESTMENTS - 96.5%
(Cost $1,436,434,409)............................... 1,692,178,617
CASH AND OTHER ASSETS, LESS LIABILITIES - 3.5%........... 60,507,507
--------------
NET ASSETS - 100.0%...................................... $1,752,686,124
==============
</Table>
ADR - American Depository Receipt
REIT - Real Estate Investment Trust
* Non-income producing securities
** Annualized yield at date of purchase
The accompanying notes are an integral part of the financial statements.
15
MERIDIAN FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity
Income Fund Growth Fund Value Fund
----------- -------------- --------------
ASSETS
Investments (Cost $28,817,435,
$1,451,490,190 and $1,436,434,409,
respectively)..................... $32,713,762 $1,810,770,998 $1,692,178,617
Cash................................. 1,442,594 55,150,381 53,437,189
Receivable for:
Capital shares purchased.......... 2,077,750 1,326,105 439,543
Dividends......................... 62,311 1,253,627 2,685,207
Interest.......................... 6,442 220,974 186,942
Securities sold................... 916,074 5,436,791 14,039,593
Prepaid expenses..................... 5,331 20,935 19,789
----------- -------------- --------------
TOTAL ASSETS...................... 37,224,264 1,874,179,811 1,762,986,880
----------- -------------- --------------
LIABILITIES
Payable for:
Capital shares sold............... -- 659,825 1,104,638
Securities purchased.............. 909,721 4,173,770 7,170,412
Accrued expenses:
Investment advisory fees.......... 26,297 1,204,877 1,492,681
Directors fees.................... -- 6,714 13,947
Other payables and accrued
expenses........................ 33,626 357,753 519,078
----------- -------------- --------------
TOTAL LIABILITIES................. 969,644 6,402,939 10,300,756
----------- -------------- --------------
NET ASSETS............................. $36,254,620 $1,867,776,872 $1,752,686,124
=========== ============== ==============
Capital shares issued and outstanding,
par value $0.01 (500,000,000,
500,000,000 and 500,000,000 shares
authorized, respectively)............ 2,963,047 47,596,262 49,228,939
=========== ============== ==============
Net asset value per share (offering and
redemption price).................... $12.24 $39.24 $35.60
=========== ============== ==============
Net Assets consist of:
Paid in capital...................... 32,014,459 1,463,418,630 1,454,809,287
Accumulated net realized gain........ 312,160 44,641,459 53,504,307
Net unrealized appreciation on
investments....................... 3,896,327 359,280,808 255,744,208
Accumulated undistributed net
investment income (loss).......... 31,674 435,975 (11,371,678)
----------- -------------- --------------
$36,254,620 $1,867,776,872 $1,752,686,124
=========== ============== ==============
</Table>
The accompanying notes are an integral part of the financial statements.
16
MERIDIAN FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity
Income Fund Growth Fund Value Fund
----------- ------------ ------------
INVESTMENT INCOME
Dividends (net of foreign taxes
withheld of $0, $0 and $18,040,
respectively)....................... $ 408,191 $ 6,278,278 $ 13,857,274
Interest............................... 30,699 2,193,568 2,096,805
---------- ------------ ------------
Total investment income........... 438,890 8,471,846 15,954,079
---------- ------------ ------------
EXPENSES
Investment advisory fees............... 135,922 6,764,076 8,587,004
Transfer agent fees.................... 14,168 287,776 317,584
Reports to shareholders................ -- 151,984 184,184
Custodian fees......................... 4,277 190,185 195,378
Pricing fees........................... 15,824 105,248 115,368
Professional fees...................... 14,720 18,400 27,600
Registration and filing fees........... 6,949 18,252 19,338
Miscellaneous expenses................. 1,907 13,448 15,033
Directors' fees and expenses........... 552 5,888 5,888
---------- ------------ ------------
Total expenses.................... 194,319 7,555,257 9,467,377
Expenses waived and reimbursed by
Advisor (Note 2).................... (11,202) -- --
---------- ------------ ------------
Net expenses...................... 183,117 7,555,257 9,467,377
---------- ------------ ------------
Net investment income.................. 255,773 916,589 6,486,702
---------- ------------ ------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments....... 678,273 120,821,338 126,753,521
Net change in unrealized appreciation
on investments...................... 2,647,804 45,468,684 86,454,499
---------- ------------ ------------
Net gain on investments................ 3,326,077 166,290,022 213,208,020
---------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS..................... $3,581,850 $167,206,611 $219,694,722
========== ============ ============
</Table>
The accompanying notes are an integral part of the financial statements.
17
MERIDIAN FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity Income Fund Growth Fund
--------------------------------- ----------------------------------
Six Months Ended Six Months Ended
December 31, 2006 Year Ended December 31, 2006 Year Ended
(Unaudited) June 30, 2006 (Unaudited) June 30, 2006
----------------- ------------- ----------------- --------------
OPERATIONS
Net investment income
(loss)..................... $ 255,773 $ 314,806 $ 916,589 $ (502,511)
Net realized gain on
investments................ 678,273 1,824 120,821,338 69,915,840
Net increase in unrealized
appreciation of
investments................ 2,647,804 1,235,646 45,468,684 86,155,525
----------- ----------- -------------- --------------
Net increase in net assets
from operations......... 3,581,850 1,552,276 167,206,611 155,568,854
----------- ----------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from ordinary
income..................... (437,139) (152,533) (480,614) --
Distributions from net
realized capital gains..... (298,676) (12,482) (138,884,292) (35,405,369)
----------- ----------- -------------- --------------
Net distributions.......... (735,815) (165,015) (139,364,906) (35,405,369)
----------- ----------- -------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of
shares..................... 7,556,897 16,180,179 161,742,862 353,645,898
Reinvestment of
distributions.............. 677,132 137,665 117,741,740 29,835,577
Redemption fees.............. 195 681 8,270 22,490
Less: redemptions of shares.. (276,341) (666,928) (128,932,023) (507,856,910)
----------- ----------- -------------- --------------
Increase (decrease)
resulting from capital
share transactions...... 7,957,883 15,651,597 150,560,849 (124,352,945)
----------- ----------- -------------- --------------
Total increase (decrease) in
net assets................. 10,803,918 17,038,858 178,402,554 (4,189,460)
----------- ----------- -------------- --------------
NET ASSETS
Beginning of period.......... 25,450,702 8,411,844 1,689,374,318 1,693,563,778
----------- ----------- -------------- --------------
End of period................ $36,254,620 $25,450,702 $1,867,776,872 $1,689,374,318
=========== =========== ============== ==============
Undistributed Net Investment
Income at end of period.... $ 31,674 $ 213,040 $ 435,975 $ --
=========== =========== ============== ==============
</Table>
The accompanying notes are an integral part of the financial statements.
18
MERIDIAN FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
Value Fund
----------------------------------
Six Months Ended
December 31, 2006 Year Ended
(Unaudited) June 30, 2006
----------------- --------------
OPERATIONS
Net investment income........................... $ 6,486,702 $ 9,730,158
Net realized gain on investments................ 126,753,521 173,580,142
Net increase (decrease) in unrealized
appreciation of investments................... 86,454,499 (37,832,024)
-------------- --------------
Net increase in net assets from operations.... 219,694,722 145,478,276
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from ordinary income.............. (17,858,380) (16,078,058)
Distributions from net realized capital gains... (223,659,312) (216,870,523)
-------------- --------------
Net distributions............................. (241,517,692) (232,948,581)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales of shares................... 79,448,386 200,186,023
Reinvestment of distributions................... 205,961,738 195,949,460
Redemption fees................................. 7,142 45,193
Less: redemptions of shares..................... (197,782,227) (893,314,233)
-------------- --------------
Increase (decrease) resulting from capital
share transactions......................... 87,635,039 (497,133,557)
-------------- --------------
Total increase (decrease) in net assets......... 65,812,069 (584,603,862)
-------------- --------------
NET ASSETS
Beginning of period............................. 1,686,874,055 2,271,477,917
-------------- --------------
End of period................................... $1,752,686,124 $1,686,874,055
============== ==============
Undistributed Net Investment Income at end of
period........................................ $ -- $ --
============== ==============
</Table>
The accompanying notes are an integral part of the financial statements.
19
MERIDIAN EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
For the Six For the fiscal
Months Ended For the period from
December 31, Year Ended January 31, 2005
2006 June 30, through June 30,
(Unaudited) 2006 2005+
------------ ---------- ----------------
Net Asset Value -- Beginning of Period............ $ 11.05 $ 10.10 $ 10.00
------- ------- -------
Income from Investment Operations
- --------------------------------
Net Investment Income*............................ 0.08 0.15 0.06
Net Gains on Investments (both realized and
unrealized)..................................... 1.39 0.93 0.04
------- ------- -------
Total From Investment Operations.................. 1.47 1.08 0.10
------- ------- -------
Less Distributions
- ------------------
Distributions from Net Investment Income.......... (0.17) (0.12) 0.00
Distributions from Net Realized Capital Gains..... (0.11) (0.01) 0.00
------- ------- -------
Total Distributions............................... (0.28) (0.13) 0.00
------- ------- -------
Net Asset Value -- End of Period.................. $ 12.24 $ 11.05 $ 10.10
======= ======= =======
Total Return...................................... 13.28%(1) 10.75% 1.00%(1)
======= ======= =======
Ratios/Supplemental Data
- -----------------------
Net Assets, End of Period (000's)................. $36,255 $25,451 $ 8,412
Ratio of Expenses to Average Net Assets
Before expense reimbursement.................... 1.33%(2) 1.67% 3.96%(2)
After expense reimbursement(3).................. 1.25%(2) 1.25% 1.25%(2)
Ratio of Net Investment Income (Loss) to Average
Net Assets
Before expense reimbursement.................... 1.68%(2) 1.38% (0.60%)(2)
After expense reimbursement..................... 1.76%(2) 1.80% 2.11%(2)
Portfolio Turnover Rate........................... 26%(1) 60% 25%
</Table>
* Net Investment Income per share has been computed before adjustments for
book/tax differences.
+ The Fund commenced investment operations on January 31, 2005.
(1) Not Annualized.
(2) Annualized.
(3) See note 2 to Financial Statements.
The accompanying notes are an integral part of the financial statements.
20
MERIDIAN GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
For the Six
Months
Ended
December 31, For the Fiscal Year Ended June 30,
2006 ----------------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 2002 2001
------------ ---------- ---------- ---------- -------- -------- --------
Net Asset Value - Beginning of Period............. $ 38.54 $ 35.77 $ 35.38 $ 27.24 $ 28.10 $ 31.30 $ 29.45
---------- ---------- ---------- ---------- -------- -------- --------
Income from Investment Operations
- ---------------------------------
Net Investment Income (Loss)*..................... 0.02 (0.01) (0.07) (0.04) (0.08) (0.12) 2.26
Net Gains (Losses) on Investments (both realized
and unrealized)................................. 3.81 3.58 1.02 9.10 (0.11) (0.24) 3.89
---------- ---------- ---------- ---------- -------- -------- --------
Total From Investment Operations.................. 3.83 3.57 0.95 9.06 (0.19) (0.36) 6.15
---------- ---------- ---------- ---------- -------- -------- --------
Less Distributions
- ------------------
Distributions from Net Investment Income.......... (0.01) 0.00 0.00 0.00 (0.06) 0.00 (2.44)
Distributions from Net Realized Capital Gains..... (3.12) (0.80) (0.56) (0.92) (0.61) (2.84) (1.86)
---------- ---------- ---------- ---------- -------- -------- --------
Total Distributions............................... (3.13) (0.80) (0.56) (0.92) (0.67) (2.84) (4.30)
---------- ---------- ---------- ---------- -------- -------- --------
Net Asset Value - End of Period................... $ 39.24 $ 38.54 $ 35.77 $ 35.38 $ 27.24 $ 28.10 $ 31.30
========== ========== ========== ========== ======== ======== ========
Total Return...................................... 9.89%(1) 10.08% 2.65% 33.65% (0.20%) 0.42% 23.34%
========== ========== ========== ========== ======== ======== ========
Ratios/Supplemental Data
- -----------------------
Net Assets, End of Period (000's)................. $1,867,777 $1,689,374 $1,693,564 $1,273,302 $448,393 $310,659 $182,117
Ratio of Expenses to Average Net Assets........... 0.85%(2) 0.85% 0.86% 0.88% 0.95% 1.02% 1.04%
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.10%(2) (0.03%) (0.21%) (0.21%) (0.47%) (0.62%) (0.26%)
Portfolio Turnover Rate........................... 19%(1) 29% 32% 19% 27% 26% 43%
<Caption>
For the Fiscal Year Ended June 30,
--------------------------------------
2000 1999 1998 1997
-------- -------- -------- --------
Net Asset Value - Beginning of Period............. $ 26.28 $ 33.26 $ 33.20 $ 32.21
-------- -------- -------- --------
Income from Investment Operations
- ---------------------------------
Net Investment Income (Loss)*..................... 0.11 0.16 0.27 0.40
Net Gains (Losses) on Investments (both realized
and unrealized)................................. 4.99 (0.50) 4.92 3.71
-------- -------- -------- --------
Total From Investment Operations.................. 5.10 (0.34) 5.19 4.11
-------- -------- -------- --------
Less Distributions
- ------------------
Distributions from Net Investment Income.......... (0.15) (0.14) (0.32) (0.36)
Distributions from Net Realized Capital Gains..... (1.78) (6.50) (4.81) (2.76)
-------- -------- -------- --------
Total Distributions............................... (1.93) (6.64) (5.13) (3.12)
-------- -------- -------- --------
Net Asset Value - End of Period................... $ 29.45 $ 26.28 $ 33.26 $ 33.20
======== ======== ======== ========
Total Return...................................... 21.45% 3.05% 16.92% 13.92%
======== ======== ======== ========
Ratios/Supplemental Data
- -----------------------
Net Assets, End of Period (000's)................. $140,990 $185,683 $296,803 $353,029
Ratio of Expenses to Average Net Assets........... 1.09% 1.01% 0.95% 0.96%
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.31% 0.49% 0.76% 1.23%
Portfolio Turnover Rate........................... 28% 51% 38% 37%
</Table>
* Net Investment Income (Loss) per share has been computed before adjustments
for book/tax differences.
(1) Not Annualized.
(2) Annualized.
The accompanying notes are an integral part of the financial statements.
21
MERIDIAN VALUE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<Table>
<Caption>
For the Six
Months
Ended
December 31, For the fiscal year ended June 30,
2006 ----------------------------------------------------------
(Unaudited) 2006 2005 2004 2003 2002
------------ ---------- ---------- ---------- ---------- ----------
Net Asset Value - Beginning of Period............. $ 36.14 $ 38.11 $ 40.35 $ 31.65 $ 30.34 $ 30.98
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
- ---------------------------------
Net Investment Income (Loss)**.................... 0.17 0.18 0.19 0.00 (0.03) (0.05)
Net Gains (Losses) on Investments (both realized
and unrealized)................................. 4.79 2.45 2.96 8.70 1.34 (0.51)
---------- ---------- ---------- ---------- ---------- ----------
Total From Investment Operations.................. 4.96 2.63 3.15 8.70 1.31 (0.56)
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions
- ------------------
Distributions from Net Investment Income.......... (0.41) (0.32) (0.28) 0.00 0.00 (0.04)
Distributions from Net Realized Capital Gains..... (5.09) (4.28) (5.11) 0.00 0.00 (0.04)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions............................... (5.50) (4.60) (5.39) 0.00 0.00 (0.08)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value - End of Period................... $ 35.60 $ 36.14 $ 38.11 $ 40.35 $ 31.65 $ 30.34
========== ========== ========== ========== ========== ==========
Total Return...................................... 13.71%(1) 7.35% 8.00% 27.49% 4.32% (1.78%)
========== ========== ========== ========== ========== ==========
Ratios/Supplemental Data
- -----------------------
Net Assets, End of Period (000's)................. $1,752,686 $1,686,874 $2,271,478 $2,226,590 $1,456,552 $1,297,207
Ratio of Expenses to Average Net Assets........... 1.10%(2) 1.09% 1.08% 1.09% 1.11% 1.12%
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.76%(2) 0.49% 0.48% 0.01% (0.12%) (0.22%)
Portfolio Turnover Rate........................... 34%(1) 58% 59% 81% 60% 54%
<Caption>
For the fiscal year ended June 30,
--------------------------------------------
2001 2000 1999 1998 1997
-------- ------- ------- ------- -------
Net Asset Value - Beginning of Period............. $ 25.88 $ 22.29 $ 19.30 $ 17.40 $ 15.32
-------- ------- ------- ------- -------
Income from Investment Operations
- ---------------------------------
Net Investment Income (Loss)**.................... 1.12 0.05 (0.10) (0.19) (0.26)
Net Gains (Losses) on Investments (both realized
and unrealized)................................. 5.75 5.91 3.56 4.32 3.20
-------- ------- ------- ------- -------
Total From Investment Operations.................. 6.87 5.96 3.46 4.13 2.94
-------- ------- ------- ------- -------
Less Distributions
- ------------------
Distributions from Net Investment Income.......... (1.09) 0.00 0.00 0.00 0.00
Distributions from Net Realized Capital Gains..... (0.68) (2.37) (0.47) (2.23) (0.86)
-------- ------- ------- ------- -------
Total Distributions............................... (1.77) (2.37) (0.47) (2.23) (0.86)
-------- ------- ------- ------- -------
Net Asset Value - End of Period................... $ 30.98 $ 25.88 $ 22.29 $ 19.30 $ 17.40
======== ======= ======= ======= =======
Total Return...................................... 27.95% 29.63% 18.92% 26.05% 20.55%+
======== ======= ======= ======= =======
Ratios/Supplemental Data
- -----------------------
Net Assets, End of Period (000's)................. $768,559 $87,930 $24,912 $12,196 $ 7,340
Ratio of Expenses to Average Net Assets........... 1.10% 1.41% 1.63% 2.16% 2.51%*
Ratio of Net Investment Income (Loss) to Average
Net Assets...................................... 0.60% 0.39% (0.65%) (1.35%) (1.96%)*
Portfolio Turnover Rate........................... 76% 86% 124% 133% 144%
</Table>
+ The total returns would have been lower had certain expenses not been
reduced during the periods shown.
* Not representative of expenses incurred by the Fund as the Adviser waived
its fee and/or paid certain expenses of the Fund. As indicated in Note 2,
the Adviser may reduce a portion of its fee and absorb certain expenses of
the Fund. Had these fees and expenses not been reduced and absorbed, the
ratio of expenses to average net assets would have been 2.80% and the
ratio of net investment income to average net assets would have been a
loss of 2.25% for the period ended June 30, 1997.
** Net Investment Income (Loss) per share has been computed before
adjustments for book/tax differences.
(1) Not Annualized.
(2) Annualized.
The accompanying notes are an integral part of the financial statements.
22
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES: Meridian Fund, Inc., (the
"Meridian Funds"), is comprised of the Meridian Equity Income Fund (the
"Equity Income Fund"), the Meridian Growth Fund (the "Growth Fund") and the
Meridian Value Fund (the "Value Fund"). The Equity Income Fund, the Growth
Fund and the Value Fund (each a "Fund" and collectively, the "Funds") are
registered under the Investment Company Act of 1940, as no-load,
diversified, open-end management investment companies. The Equity Income
Fund began operations and was registered on January 31, 2005. The Growth
Fund began operations and was registered on August 1, 1984. The Value Fund
began operations on February 10, 1994 and was registered on February 7,
1994.
The primary investment objective of the Equity Income Fund is to seek long-
term growth of capital along with income as a component of total return.
The primary investment objective of the Growth Fund is to seek long-term
growth of capital. Originally named Meridian Fund, the name was changed
effective April 20, 2001 to Meridian Growth Fund, to more closely reflect
the investment style. There was no change in how the Fund is managed.
The primary investment objective of the Value Fund is to seek long-term
growth of capital.
The following is a summary of significant accounting policies for all of the
Funds:
a. INVESTMENT VALUATIONS: Marketable securities are valued at the closing
price or last sales price on the principal exchange or market on which
they are traded; or, if there were no sales that day, at the last
reported bid price. Securities and other assets for which reliable
market quotations are not readily available or for which a significant
event has occurred since the time of the most recent market quotation,
will be valued at their fair value as determined by the Adviser under
the guidelines established by, and under the general supervision and
responsibility of, the Funds' Board of Directors. Short-term debt
securities with original or remaining maturities in excess of 60 days
are valued at the mean of their quoted bid and asked prices. Short-term
debt securities with 60 days or less to maturity are amortized to
maturity based on their cost.
b. FEDERAL INCOME TAXES: It is the Funds' policy to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable to regulated investment companies and
to distribute all of their taxable income to their shareholders;
therefore, no federal income tax provision is required.
c. SECURITY TRANSACTIONS: Security transactions are accounted for on the
date the securities are purchased or sold (trade date). Realized gains
and losses on security transactions are determined on the basis of
specific identification for both financial statement and federal income
tax purposes. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
23
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
d. CASH AND CASH EQUIVALENTS: All highly liquid investments with an
original maturity of three months or less are considered to be cash
equivalents. Available funds are automatically swept into a Cash Reserve
account, which preserves capital with a consistently competitive rate of
return. Interest accrues daily and is credited by the third business day
of the following month.
e. EXPENSES: Expenses arising in connection with a Fund are charged
directly to that Fund. Expenses common to the Funds are generally
allocated to each Fund in proportion to their relative net assets.
f. USE OF ESTIMATES: The preparation of financial statements in accordance
with accounting principals generally accepted in the United States of
America requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and revenue and
expenses at the date of the financial statements. Actual amounts could
differ from those estimates.
g. DISTRIBUTIONS TO SHAREHOLDERS: The Funds record distributions to
shareholders on the ex-dividend date. The amount of distributions from
net investment income and net realized capital gains are determined in
accordance with federal income tax regulations which may differ from
generally accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent
these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. The amount and
character of tax-basis distributions and composition of net assets are
finalized at fiscal year-end; accordingly, tax basis balances have not
been determined as of December 31, 2006.
Distributions which exceed net investment income and net realized
capital gains are reported as distributions in excess of net investment
income or distributions in excess of net realized capital gains for
financial reporting purposes but not for tax purposes. To the extent
they exceed net investment income and net realized capital gains for tax
purposes, they are reported as distributions of paid-in-capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purposes of
calculating net investment income (loss) per share in the Financial
Highlights. The amount and character of tax-basis distributions and
composition of net assets are finalized at fiscal year end.
24
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
h. GUARANTEES AND INDEMNIFICATION: Under the Funds' organizational
documents, its Officers and Directors are indemnified against certain
liability arising out of the performance of their duties to the Funds.
Additionally, in the normal course of business, the Funds enter into
contracts with service providers that contain general indemnification
clauses. The Funds' maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against
the Funds that have not yet occurred. However, based on experience, the
Funds expect the risk of loss to be remote.
i. NEW ACCOUNTING PRONOUNCEMENTS: In July 2006, the Financial Accounting
Standards Board issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109"
(the "Interpretation"). The Interpretation establishes for all entities,
including pass-through entities such as the Funds, a minimum threshold
for financial statement recognition of the benefit of positions taken in
filing tax returns (including whether an entity is taxable in a
particular jurisdiction), and requires certain expanded tax disclosures.
The Interpretation is to be implemented no later than June 29, 2007, and
is to be applied to all open tax years as of the date of effectiveness.
Management has recently begun to evaluate the application of the
Interpretation to the Funds, and is not in a position at this time to
estimate the significance of its impact, if any, on the Funds' financial
statements.
In addition, in September 2006, the Financial Accounting Standards Board
(FASB) issued Statement on Financial Accounting Standards (SFAS) No.
157, "Fair Value Measurements" (the "Statement"). This standard
establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and requires additional disclosures
about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS
No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those
fiscal years. The changes to current generally accepted accounting
principles from the application of this Statement relate to the
definition of fair value, the methods used to measure fair value, and
the expanded disclosures about fair value measurements. The Funds have
recently begun to evaluate the application of the Fair Value
Measurements to the Funds. However, as of December 31, 2006, the Funds
do not believe the adoption of SFAS No. 157 will impact the amounts
reported in the financial statements.
25
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. RELATED PARTIES: The Funds have entered into a management agreement with
Aster Investment Management Company, Inc. (the "Investment Adviser").
Certain Officers and/or Directors of the Funds are also Officers and/or
Directors of the Investment Adviser. Beneficial ownership in the Funds by
Richard F. Aster, Jr., President, as of December 31, 2006 were as follows:
<Table>
Equity Income Fund..................... 39.49%
Growth Fund............................ 1.04%
Value Fund............................. 1.02%
</Table>
The Investment Adviser receives from the Equity Income Fund, as compensation
for its services, an annual fee of 1% of the first $10,000,000 of the Equity
Income Fund's net assets, 0.90% of the next $20,000,000 of the Equity Income
Fund's net assets, 0.80% of the next $20,000,000 of the Equity Income Fund's
net assets and 0.70% of the Equity Income Fund's net assets in excess of
$50,000,000. The fee is paid monthly and calculated based on that month's
daily average net assets.
The Investment Adviser receives from the Growth Fund, as compensation for
its services, an annual fee of 1% of the first $50,000,000 of the Growth
Fund's net assets and 0.75% of the Growth Fund's net assets in excess of
$50,000,000. The fee is paid monthly and calculated based on that month's
daily average net assets.
The Investment Adviser receives from the Value Fund, as compensation for its
services, an annual fee of 1% of the Value Fund's net assets. The fee is
paid monthly and calculated based on that month's daily average net assets.
The Investment Adviser has contractually agreed to waive its fee and
reimburse expenses, at least until November 1, 2007, to the extent that
total annual operating expenses for the Equity Income Fund exceeds 1.25%.
The Investment Adviser has voluntarily agreed to limit the operating
expenses of the Growth and Value Funds to 2.50%. With respect to these
limits, the Investment Adviser reimbursed the Equity Income Fund $11,203,
but did not reimburse the Growth and Value Funds, during the six months
ended December 31, 2006. Subject to the approval of the Board of Directors
of the Fund, the Fund will repay the Investment Adviser the amount of its
reimbursement for the Equity Income Fund for up to three years following the
reimbursement to the extent the Equity Income Fund's expenses drop below
1.25%, after giving effect to repayment by the Fund. Either the Fund or the
Investment Adviser can modify or terminate this arrangement at any time.
26
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. CAPITAL SHARES TRANSACTIONS: Transactions in capital shares for the six
months ended December 31, 2006 and the year ended June 30, 2006 were as
follows:
<Table>
<Caption>
Equity Income Fund
------------------------------
December 31, June 30,
2006 2006
------------ ---------
Shares sold....................................... 627,147 1,518,742
Shares reinvested on reinvestment of
distributions................................... 55,411 12,963
------- ---------
682,558 1,531,705
Shares redeemed................................... (23,419) (61,043)
------- ---------
Net increase...................................... 659,139 1,470,662
------- ---------
</Table>
<Table>
<Caption>
Growth Fund
-------------------------------
December 31, June 30,
2006 2006
------------ -----------
Shares sold...................................... 4,038,324 9,349,992
Shares reinvested on reinvestment of
distributions.................................. 2,980,047 805,510
---------- -----------
7,018,371 10,155,502
Shares redeemed.................................. (3,254,115) (13,664,615)
---------- -----------
Net increase (decrease).......................... 3,764,256 (3,509,113)
---------- -----------
</Table>
<Table>
<Caption>
Value Fund
-------------------------------
December 31, June 30,
2006 2006
------------ -----------
Shares sold...................................... 2,130,700 5,344,976
Shares reinvested on reinvestment of
distributions.................................. 5,777,328 5,630,731
---------- -----------
7,908,028 10,975,707
Shares redeemed.................................. (5,352,178) (23,900,160)
---------- -----------
Net increase (decrease).......................... 2,555,850 (12,924,453)
---------- -----------
</Table>
4. COMPENSATION OF DIRECTORS AND OFFICERS: Directors and Officers of the Funds
who are Directors and/or Officers of the Investment Adviser receive no
compensation from the Funds. Directors of the Funds who are not interested
persons, as defined in the Investment Company Act of 1940, receive
compensation in the amount of $3,000 per annum and a $2,000 purchase in one
of the Funds, plus reimbursed expenses and a $1,000 purchase in one of the
Funds for each additional Board of Directors meeting attended other than the
annual meeting.
27
MERIDIAN FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. COST OF INVESTMENTS: The cost of investments purchased and the proceeds
from sales of investments, excluding short-term obligations, for the six
months ended December 31, 2006, were as follows:
<Table>
<Caption>
Purchases Proceeds from Sales
------------ -------------------
Equity Income Fund............................ $ 12,118,540 $ 7,097,395
Growth Fund................................... 326,450,885 314,588,016
Value Fund.................................... 547,217,117 696,183,360
</Table>
6. DISTRIBUTION INFORMATION: Income and long-term capital gains distributions
are determined in accordance with federal income tax regulations, which may
differ from generally accepted accounting principles accepted in the United
States. The tax character of distributions made during the fiscal years
ended June 30, 2006 and June 30, 2005 were as follows:
2006 TAXABLE DISTRIBUTIONS
<Table>
<Caption>
Net
Ordinary Long-Term Total
Fund Income Capital Gains Distributions
---- ----------- ------------- -------------
Equity Income Fund....................... $ 165,015 $ -- $ 165,015
Growth Fund.............................. -- 35,405,369 35,405,369
Value Fund............................... 26,262,428 206,686,153 232,948,581
</Table>
2005 TAXABLE DISTRIBUTIONS
<Table>
<Caption>
Net
Ordinary Long-Term Total
Fund Income Capital Gains Distributions
---- ----------- ------------- -------------
Equity Income Fund....................... $ -- $ -- $ --
Growth Fund.............................. 10,056,382 13,674,732 23,731,114
Value Fund............................... 15,996,704 288,644,525 304,641,229
</Table>
7. FEDERAL INCOME TAXES: The aggregate cost of investments, which are book
figures that approximate federal income tax basis, were as follows:
<Table>
<Caption>
Aggregate Aggregate
Gross Gross
Unrealized Unrealized Net Unrealized
Aggregate Cost Appreciation Depreciation Appreciation
-------------- ------------ ------------ --------------
Equity Income Fund............ $ 28,817,435 $ 3,997,561 $ (101,234) $ 3,896,327
Growth Fund................... 1,451,490,190 369,055,170 (9,774,362) 359,280,808
Value Fund.................... 1,436,434,409 261,652,409 (5,908,201) 255,744,208
</Table>
Post-October losses represent losses realized on investment transactions
from November 1, 2005 through June 30, 2006 that, in accordance with
Federal income tax regulations, the Funds have elected to defer and treat
as having arisen in the following fiscal year. As of June 30, 2006, the
Equity Income Fund had Post-October loss deferrals of $6,670.
28
MERIDIAN FUND, INC.
ADDITIONAL INFORMATION
FOR THE SIX MONTHS ENDED DECEMBER 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. PROXY VOTING RECORD AND PROXY VOTING POLICIES AND PROCEDURES: A description
of the policies and procedures that each Fund uses to determine how to vote
proxies relating to portfolio securities along with information regarding
how the Fund voted proxies relating to portfolio securities during the most
recent 12 month period ended June 30, 2006 is available (i) without charge,
upon request, by calling (800) 446-6662; (ii) on our website at
http://www.meridianfund.com; and (iii) on the Securities and Exchange
Commission ("SEC") website at http://www.sec.gov.
2. INFORMATION ON FORM N-Q: Each Fund files its complete schedule of portfolio
holdings with the SEC for the first and third quarters of each fiscal year
on Form N-Q within sixty days after the end of the period. The Meridian
Fund, Inc. Form N-Q is available on the SEC's website at http://www.sec.gov,
and may be reviewed and copied at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the Public Reference Room
may be obtained by calling 1-800-732-0330.
29
MERIDIAN FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THIS REPORT IS SUBMITTED FOR
THE INFORMATION OF SHAREHOLDERS OF
MERIDIAN FUND, INC. IT IS NOT
AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS
PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
---------------------------------
Officers and Directors
RICHARD F. ASTER, JR.
President and Director
RALPH CECHETTINI
MICHAEL S. ERICKSON
HERBERT C. KAY
JAMES B. GLAVIN
MICHAEL STOLPER
Directors
GREGG B. KEELING
Chief Financial Officer
Treasurer and Secretary
Chief Compliance Officer
Custodian
PFPC TRUST COMPANY
Philadelphia, Pennsylvania
Transfer Agent and Disbursing Agent
PFPC INC.
King of Prussia, Pennsylvania
(800) 446-6662
Counsel
MORRISON & FOERSTER LLP
Washington, D.C.
Auditors
PRICEWATERHOUSECOOPERS LLP
San Francisco, California
MERIDIAN EQUITY INCOME FUND(R)
MERIDIAN GROWTH FUND(R)
MERIDIAN VALUE FUND(R)
SEMI-ANNUAL REPORT
[MERIDIAN FUND LOGO]
60 E. Sir Francis Drake Blvd.
Wood Island, Suite 306
Larkspur, CA 94939
www.meridianfund.com
Telephone (800) 446-6662
DECEMBER 31, 2006
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is 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. 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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph, based on their evaluation
of these controls and procedures required by Rule 30a-3(b) under the
1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b)
under the Securities Exchange Act of 1934, as amended (17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Meridian Fund, Inc.(R)
By (Signature and Title)* /s/ Richard F. Aster, Jr.
-------------------------------
Richard F. Aster, Jr., President & CEO
(principal executive officer)
Date 2/26/07
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Richard F. Aster, Jr.
--------------------------------
Richard F. Aster, Jr., President & CEO
(principal executive officer)
Date 2/26/07
By (Signature and Title)* /s/ Gregg B. Keeling
--------------------------------
Gregg B. Keeling, CFO & Treasurer
(principal financial officer)
Date 2/26/07
* Print the name and title of each signing officer under his or her signature.