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 811-09096
------------------
AmeriPrime Funds
(Exact name of registrant as specified in charter)
431 N Pennsylvania St. Indianapolis, IN 46204
- --------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Timothy Ashburn
Unified Fund Services
431 N. Pennsylvania St.
Indianapolis, IN 46204
- ------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 317-917-7000
Date of fiscal year end: 6/30
--------------------
Date of reporting period: 12/31/03
----------
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, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. 3507.
Item 1. Reports to Stockholders.
<page>
=================================================================
IMS Funds
=================================================================
Semi-Annual Report
December 31, 2003
(Unaudited)
Fund Advisor:
IMS Capital Management, Inc.
8995 S.E. Otty Road
Portland, Oregon 97266
Toll Free (800) 934-5550
<page>
IMSCX & IMSAX Letter to Shareholders
Dear Fellow Shareholders,
We are pleased to present our semi-annual report for the period ending December
31, 2003. The report covers the 6-month performance of the IMS Capital Value
Fund and the IMS Strategic Allocation Fund.
The IMS Capital Value Fund posted, what we think, are impressive results. For
the one year period ended December 31, 2003, the Fund had a total return of
56.07%. The Fund began 2003 with total assets of $16.1 million and ended the
year with $59.1 million. This growth was due to both performance and asset
inflows from performance-related recognition in the national media. For example,
in the last year, several publications have singled out the performance of the
IMS Capital Value Fund including the New York Times, Wall Street Journal,
BusinessWeek magazine, Investor's Business Daily and Kiplinger's Personal
Finance magazine. *
The IMS Strategic Allocation Fund also posted solid returns in 2003. The Fund
completed its first full calender year of operation with a 12-month return of
25.32%. Total assets grew from $2.0 million to $10.7 million. The IMS Strategic
Allocation Fund's unique investment approach allows it to strategically allocate
across a broad array of investment styles and asset classes in an effort to
manage risk and improve returns over a simple buy and hold approach. We believe
the Fund's first full year of operation was a success given the risk management
techniques that were in place and the results that were achieved.
The principals and employees of IMS Capital Management continue to invest the
majority of their assets in the IMS Family of Funds. We thank you for the
confidence and trust you have demonstrated by investing with us.
Sincerely,
/s/ Carl Marker /s/ Arthur Nunes
Carl W. Marker Arthur G. Nunes, CFP
Portfolio Manager Portfolio Manager
IMS Capital Value Fund IMS Strategic Allocation
Fund
IMS Strategic Allocation Fund
* References:
o New York Times, May 18, 2003, p Bu 7
o Wall Street Journal, Aug. 1, 2003, p C12
o BusinessWeek, Jan. 27, 2003, p 58
o Investor's Business Daily, Sep. 23, 2003, p A9
o Kiplinger's, Aug. 2003, p 51
The prospectus should be read carefully before investing. To request a
prospectus for more complete information, including fees and expenses, call
800-934-5550. Past performance does not guarantee future results. Shares when
redeemed may be worth more or less than original cost. Distributed by Unified
Financial Securities, Inc. Member NASD, SPIC.
IMS Capital IMS Strategic
Value Fund Allocation Fund
---------------- -------------------
1 Year 56.07% 25.32%
5 Year** 13.07% N/A
10 Year N/A N/A
Since Inception** 13.09% 20.56%
Inception Dates August 5, 1996 November 5, 2002
**Average annual returns
<page>
Management Discussion & Analysis
IMS Capital Value Fund
During the six-month period ending December 31, 2003 the IMS Capital
Value Fund had a gain of 22.74%. For the full year, the IMS Capital Value Fund
posted its best return ever, 56.07%, and beat its benchmark, the Russell Mid-Cap
Value Index, over all time periods.
The IMS Capital Value Fund continued to successfully identify
undervalued, seasoned stocks with positive business momentum. After holding up
extremely well during the worst years of the bear market, 2000, 2001 and 2002,
the Fund posted solid gains in the final six months of 2003. The IMS Capital
Value Fund's return was the result of successful stock picking and portfolio
management, driven by our proven research methods and investment discipline. We
say "proven" because IMS Capital Management, Inc., the investment advisor to the
Fund, recently completed its 15th full year of operation, and the basic research
process and investment disciplines have remained very consistent over that time.
The companies in the Fund's portfolio made a broad-based contribution to the
Fund's performance. Nineteen of the IMS Capital Value Fund's forty-nine holdings
at year-end, increased 20% or more during the final six months of the year.
Companies that more than doubled during the year included Computer Associates,
Cendant, Humana, Pacificare, Rite Aid, and Marvel, and three companies surged in
price due to acquisitions; Dial, Officemax and Airborne. The Fund also held some
companies, such as CenturyTel and Sprint (which returned 11% and 13%
respectively for the year), which underperformed the broad market by roughly
half.
Investment Returns
<table>
<s> <c> <c> <c> <c> <c>
- --------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns*
(for periods ended December 31, 2003)
Since Inception
Six Months One Year Three Year Five Year (August 5, 1996)
------------- ------------- -------------- -------------- -------------------
IMS Capital Value Fund 22.74% 56.07% 18.09% 13.07% 13.09%
Russell Mid-Cap Value Index** 22.06% 38.07% 8.48% 8.73% 12.85%
- --------------------------------------------------------------------------------------------------------------------
</table>
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their original
cost. Performance data quoted does not reflect the deduction of taxes that an
investor may pay on Fund distributions or the redemption of Fund shares. Past
performance is not indicative of future investment results. Due to market
volatility, current performance may be higher or lower than the performance
shown above.
* Return figures reflect any change in price per share and assume the
reinvestment of all distributions.
** The Index is an unmanaged benchmark that assumes reinvestment of all
distributions and excludes the effect of taxes and fees. The Russell Mid-Cap
Value is a widely recognized unmanaged index of equity prices and is
representative of a broader market and range of securities than is found in the
Fund's portfolio.
<page>
IMS Strategic Allocation Fund
During the six-month period ending December 31, 2003 the IMS Strategic
Allocation Fund had a gain of 14.64%. For the full year, the IMS Strategic
Allocation Fund posted a return of 25.32%.
The IMS Strategic Allocation Fund's return for the six-month period slightly
trailed the return of the Fund's benchmark, the S & P 500 index. In addition to
its core holdings, the Fund held positions in small-cap stock index funds, the
NASDAQ 100 index, and various industry sector funds such as basic materials and
biotechnology. Unfortunately, the Fund had an underweighted position in mid-cap
value, one of the best performing sectors over the previous twelve months.
Investment Returns
- -------------------------------------------------------------------------------
Average Annual Total Returns
(for periods ended December 31, 2003)
Since Inception
Six Months One Year (November 5, 2002)
----------- ------------- ------------------
IMS Strategic Allocation Fund 14.64% 25.32% 17.79%
S&P 500 Index 15.13% 28.66% 20.56%
- -------------------------------------------------------------------------------
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their original
cost. Performance data quoted does not reflect the deduction of taxes that an
investor may pay on Fund distributions or the redemption of Fund shares. Past
performance is not indicative of future investment results. Due to market
volatility, current performance may be higher or lower than the performance
shown above.
* Return figures reflect any change in price per share and assume the
reinvestment of all distributions.
** The Index is an unmanaged benchmark that assumes reinvestment of all
distributions and excludes the effect of taxes and fees. The S&P 500 is a widely
recognized unmanaged index of equity prices and is representative of a broader
market and range of securities than is found in the Fund's portfolio.
<page>
Comparison of the Growth of a $10,000 Investment in the IMS Capital Value Fund
and the Russell Mid-Cap Value Index
IMS Capital Russell Mid-Cap
Value Fund Value Index
($24,876) ($24,494)
8/5/96 10,000.00 10,000.00
12/31/96 11,140.00 11,414.87
12/31/97 11,887.89 15,338.19
12/31/98 13,461.44 16,117.75
12/31/99 15,855.34 16,099.97
12/31/00 15,106.14 19,187.89
12/31/01 17,938.79 19,634.14
12/31/02 15,939.57 17,740.47
12/31/03 24,876.49 24,493.78
The chart above assumes an initial investment of $10,000 made on August 6, 1996
(commencement of Fund operations) and held through December 31, 2003. THE FUND'S
RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS. The
returns shown do not reflect deduction of taxes that a shareholder would pay on
Fund distributions or the redemption of Fund shares. Investment returns and
principal values will fluctuate so that your shares, when redeemed, may be worth
more or less than their original purchase price.
Comparison of the Growth of a $10,000 Investment in the IMS Strategic Allocation
Fund and the S&P 500 Index
IMS Strategic S&P 500
Allocation Fund Index
($12,106) ($12,407)
11/5/02 10,000.00 10,000.00
12/31/02 9,660.00 9,643.31
6/30/03 10,560.00 10,776.57
12/31/03 12,105.81 12,406.71
4
The chart above assumes an initial investment of $10,000 made on November 5,
2002 (commencement of Fund operations) and held through December 31, 2003. THE
FUND'S RETURN REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE FUTURE RESULTS.
The returns shown do not reflect deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares. Investment returns and
principal values will fluctuate so that your shares, when redeemed, may be worth
more or less than their original purchase price.
<page>
IMS Capital Value Fund
Schedule of Investments
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 97.52% Shares Value
------------ -----------------
Accident & Health Insurance - 1.75%
Aon Corp. 41,800 $ 1,000,692
-----------------
Bottled & Canned Soft Drinks & Carbonated Waters - 2.48%
PepsiAmericas, Inc. (a) 83,200 1,424,384
-----------------
Cable & Other Pay Television Services - 2.41%
Comcast Corp. Class A (a) 42,000 1,380,540
-----------------
Cleaning Preparations, Perfumes, Cosmetics - 2.18%
Dial Corp. 43,800 1,246,986
-----------------
Communication Equipment - 1.82%
UTStarcom, Inc. (a) 28,100 1,041,667
-----------------
Communication Services - 3.98%
XM Satellite Radio Holdings, Inc. - Class A (a) 86,600 2,282,776
-----------------
Dolls & Stuffed Toys - 2.24%
Marvel Enterprises, Inc. (a) 44,200 1,286,662
-----------------
Electric Services - 1.29%
Great Plains Energy, Inc. 23,300 741,406
-----------------
Electrical Industrial Apparatus - 2.05%
American Power Conversion, Inc. 48,000 1,173,600
-----------------
Fire, Marine & Casualty Insurance - 1.84%
Loews Corp. 21,300 1,053,285
-----------------
Hospital & Medical Service Plans - 5.86%
Humana, Inc. (a) 78,900 1,802,865
PacifiCare Health Systems, Inc. (a) 23,000 1,554,800
-----------------
3,357,665
-----------------
Investment Advice - 2.05%
Alliance Capital Management Holding LP 34,900 1,177,875
-----------------
Life Insurance - 4.64%
Lincoln National Corp. 30,700 1,239,359
Nationwide Financial Services, Inc. - Class A 42,900 1,418,274
-----------------
2,657,633
-----------------
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Capital Value Fund
Schedule of Investments - continued
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 97.52% - continued Shares Value
------------ -----------------
Miscellaneous Chemical Products - 1.68%
Cytec Industries, Inc. (a) 25,100 $ 963,589
-----------------
Miscellaneous Furniture & Fixtures - 2.06%
Hillenbrand Industries, Inc. 19,000 1,179,140
-----------------
National Commercial Banks - 2.28%
First Tennessee National Corp. 29,700 1,309,770
-----------------
Ophthalmic Goods - 2.13%
Bausch & Lomb, Inc. 23,500 1,219,650
-----------------
Petroleum Refining - 2.03%
Amerada Hess Corp. 21,900 1,164,423
-----------------
Pharmaceutical Preparations - 2.50%
Watson Pharmaceuticals, Inc. (a) 31,200 1,435,200
-----------------
Poultry Slaughtering & Processing - 6.18%
Tyson Foods, Inc. 267,400 3,540,376
-----------------
Radio & Tv Broadcasting & Communications Equipment - 1.93%
Harris Corp. 29,200 1,108,140
-----------------
Refuse Systems - 2.47%
Republic Services, Inc. 32,100 822,723
Waste Management, Inc. 20,000 592,000
-----------------
1,414,723
-----------------
Retail - Catalog & Mail - Order Houses - 0.82%
Schein Henry, Inc. (a) 7,000 473,060
-----------------
Retail - Drug Stores & Proprietary Stores - 2.80%
Rite Aid Corp. (a) 266,000 1,606,640
-----------------
Security & Commodity Brokers, Dealers, Exchanges Services - 2.23%
T. Rowe Price Associates, Inc. 27,000 1,280,070
-----------------
Security Brokers, Dealers & Flotation Companies - 2.46%
E*Trade Group, Inc. (a) 111,300 1,407,945
-----------------
Semiconductors & Related Devices - 2.17%
LSI Logic Corp. (a) 140,000 1,241,800
-----------------
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Capital Value Fund
Schedule of Investments - continued
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
Common Stocks - 97.52% - continued Shares Value
------------ -----------------
Services - Computer Integrated Systems Design - 4.18%
Computer Sciences Corp. (a) 18,900 $ 835,947
Convergys Corp. (a) 46,900 818,874
Unisys Corp. (a) 50,000 742,500
-----------------
2,397,321
-----------------
Services - Computer Processing & Data Preparation - 1.45%
SunGard Data Systems, Inc. (a) 30,000 831,300
-----------------
Services - Computer Programming Services - 1.83%
Amdocs Ltd. (a) 46,700 1,049,816
-----------------
Services - Health Services - 2.29%
Gentiva Health Services, Inc. (a) 103,900 1,313,296
-----------------
Services - Personal Services - 7.26%
Cendant Corp. (a) 55,100 1,227,077
H & R Block, Inc. 22,300 1,234,751
Service Corporation International (a) 314,900 1,697,311
-----------------
4,159,139
-----------------
Services - Prepackaged Software - 3.04%
Computer Associates International, Inc. 38,300 1,047,122
Symantec Corp. (a) 20,000 693,000
-----------------
1,740,122
-----------------
Services - Skilled Nursing Care Facilities - 1.51%
Manor Care, Inc. 25,000 864,250
-----------------
Services-Home Health Care Services - 1.44%
Apria Healthcare Group, Inc. (a) 28,900 822,783
-----------------
Specialty Cleaning, Polishing and Sanitation Preparations - 1.30%
Clorox Corp. 15,300 742,968
-----------------
Surgical & Medical Instruments & Apparatus - 1.54%
Guidant Corp. 14,700 884,940
-----------------
Telephone Communications (No Radiotelephone) - 3.35%
Centurytel, Inc. 31,000 1,011,220
Sprint Corp. 55,200 906,384
-----------------
1,917,604
-----------------
TOTAL COMMON STOCKS (Cost $43,614,849) 55,893,236
-----------------
</table>
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Capital Value Fund
Schedule of Investments - continued
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
Principal
Preferred Stocks - 0.07% Amount Value
------------ -----------------
Metropolitan Mortgage & Securities, 9.9984% (c) $ 25,000 $ 37,047
-----------------
TOTAL PREFERRED STOCKS (Cost $482,325) 37,047
-----------------
Money Market Securities - 5.54%
Huntington Money Market Fund - Investment Shares, 0.20% (b) 3,176,080 3,176,080
-----------------
TOTAL MONEY MARKET SECURITIES (Cost $3,176,080) 3,176,080
-----------------
TOTAL INVESTMENTS (Cost $47,273,254) - 103.13% $ 59,106,363
-----------------
Liabilities in excess of cash and other assets - (3.13)% (1,793,960)
-----------------
TOTAL NET ASSETS - 100.00% $ 57,312,403
=================
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the rate at
December 31, 2003.
(c) Variable rate security; the rate shown represents the rate at December 31,
2003.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Strategic Allocation Fund
Schedule of Investments
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
Exchanged Traded Funds - 95.26% Shares Value
------------ -----------------
Broadband HOLDRS Trust 40,000 538,000
iShares S&P MidCap 400 / BARRA Growth Index Fund 7,900 937,730
iShares Dow Jones U.S. Basic Materials Sector Index Fund 11,100 506,049
iShares Dow Jones U.S. Consumer Cyclical Sector Index Fund 8,600 476,440
iShares Dow Jones U.S. Financial Sector Index Fund 5,000 440,200
iShares S&P MidCap 400 / BARRA Value Index Fund 4,800 530,352
iShares Dow Jones U.S. Energy Sector Index Fund 10,800 535,140
iShares Goldman Sachs Networking Index Fund 17,000 469,370
iShares Goldman Sachs Software Index Fund (a) 12,500 472,000
iShares MSCI Japan Index Fund 28,000 269,920
iShares S&P 500 / BARRA Value Index Fund 9,100 504,322
iShares S&P SmallCap 600 / BARRA Value Index Fund 9,700 974,753
iShares S&P SmallCap 600 / BARRA Growth Index Fund 13,100 1,161,970
iShares S&P 500 / BARRA Growth Index Fund 8,700 483,720
Semiconductor HOLDRS Trust 13,000 538,200
Wireless HOLDRS Trust 7,400 357,198
iShares S&P Global Energy Sector Index Fund 5,000 294,200
NASDAQ-100 Index Tracking Stock 15,000 546,300
-----------------
TOTAL EXCHANGE TRADED FUNDS (Cost $8,847,730) 10,035,864
-----------------
Mutual Funds - 4.82%
Rydex Series - Biotechnology Fund 25,747 508,496
-----------------
TOTAL MUTUAL FUNDS (Cost $500,000) 508,496
-----------------
Principal
Money Market Securities - 1.68% Amount
------------
Huntington Money Market Fund - Class A, 0.20% (b) $ 176,642 176,642
-----------------
TOTAL MONEY MARKET SECURITIES (Cost $176,642) 176,642
-----------------
TOTAL INVESTMENTS (Cost $9,524,372) - 101.76% $ 10,721,002
-----------------
Liabilities in excess of cash and other assets - (1.76)% (190,609)
-----------------
TOTAL NET ASSETS - 100.00% $ 10,530,393
=================
</table>
(a) Non-income producing.
(b) Variable rate security; the coupon rate shown represents the yield at
December 31, 2003.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Funds
Statement of Assets and Liabilities
December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
IMS Capital IMS Strategic
Value Fund Allocation Fund
Assets
Investments in securities, at value $ 59,106,363 $ 10,721,002
(cost $47,273,254 and $9,524,372 respectively)
Cash - 21,542
Interest receivable 392 44
Dividends receivable 44,072 3,340
Receivable for fund shares sold 236,107 51,000
Receivable from advisor - 4,666
Other assets 11,590 1,627
------------------- -----------------
Total assets 59,398,524 10,803,221
------------------- -----------------
Liabilities
Payable to advisor 67,591 -
Payable for investments purchased 1,857,455 168,000
Payable for fund shares redeemed 138,541 92,449
Other payables and accrued expenses 22,509 12,379
Payable to custodian 25 -
------------------ -----------------
Total liabilities 2,086,121 272,828
------------------ -----------------
Net Assets: $ 57,312,403 $ 10,530,393
================== =================
Shares outstanding 3,418,721 878,703
------------------ -----------------
Net Assets consist of:
Paid in capital $ 44,891,295 $ 9,406,018
Accumulated undistributed net investment income (loss) (131,539) (38,054)
Accumulated net realized gain (loss) on investments 717,202 (34,201)
Net unrealized appreciation (depreciation) on investments 11,835,445 1,196,630
------------------ -----------------
$ 57,312,403 $ 10,530,393
================== =================
Net asset value and offering
price per share $ 16.76 $ 11.98
================== =================
Redemption price per share (a) $ 16.68 $ 11.92
================== =================
</table>
(a) The redemption price per share reflects a redemption fee of 0.50% on shares
redeemed within 90 days of purchase.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Funds
Statement of Operations
Six Months ended December 31, 2003 (Unaudited)
<table>
<s> <c> <c>
IMS Capital IMS Strategic
Value Fund Allocation Fund
---------------------- ----------------------
Investment Income
Dividend income $ 214,129 $ 29,811
Interest income 2,503 783
---------------------- ----------------------
Total Income 216,632 30,594
---------------------- ----------------------
Expenses
Investment advisor fee 275,773 43,949
Administration expenses 21,962 11,664
Transfer agent expenses 15,699 8,704
Fund accounting expenses 12,621 8,065
Registration expenses 9,626 1,599
Legal expenses 9,302 5,455
Custodian expenses 9,146 2,216
Auditing expenses 5,870 4,967
Insurance expenses 2,322 319
Pricing expenses 2,127 1,359
Miscellaneous expenses 1,151 1,252
Printing expenses 978 2,426
Trustee expenses 496 638
---------------------- ----------------------
Total Expenses 367,073 92,613
Reimbursed expenses (a) (18,902) (23,965)
---------------------- ----------------------
Total operating expenses 348,171 68,648
---------------------- ----------------------
Net Investment Income (Loss) (131,539) (38,054)
---------------------- ----------------------
Realized & Unrealized Gain (Loss)
Net realized gain (loss) on investment securities 2,599,693 28,688
Net realized gain (loss) on option transactions 104,521 -
Change in net unrealized appreciation (depreciation)
on investment securities 6,231,033 976,092
---------------------- ----------------------
Net realized and unrealized gain (loss) on investment securities 8,935,247 1,004,780
---------------------- ----------------------
Net increase (decrease) in net assets resulting from operations $ 8,803,708 $ 966,726
====================== ======================
</table>
(a) See note 3 to the financial statements.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Funds
Statements of Changes In Net Assets
<table>
<s> <c> <c> <c> <c>
IMS Capital IMS Strategic
Value Fund Allocation Fund
Six Months ended Six Months ended
December 31, 2003 Year ended December 31, 2003 Period ended
Increase (Decrease) in Net Assets (Unaudited) June 30, 2003 (Unaudited) June 30, 2003 (a)
----------------- -------------- ----------------- ----------------
Operations
Net investment income (loss) $ (131,539) $ (61,015) $ (38,054) $ (13,066)
Net realized gain (loss) on investment securities 2,599,693 320,703 28,688 47,861
Net realized gain (loss) on option transactions 104,521 (236,581) - -
Change in net unrealized appreciation (depreciation) 6,231,033 4,174,278 976,092 220,538
----------------- ------------- ------------------ ----------------
Net increase (decrease) in net assets resulting from operations 8,803,708 4,197,385 966,726 255,333
----------------- ------------- ------------------ ----------------
Distributions
From net investment income - (39,209) - -
From net realized gain (1,560,781) - (97,684) -
From return of capital - (31,729) - -
----------------- ------------- ------------------ ----------------
Total distributions (1,560,781) (70,938) (97,684) -
----------------- ------------- ------------------ ----------------
Capital Share Transactions
Proceeds from shares sold 20,013,380 14,575,612 6,071,278 4,095,810
Reinvestment of distributions 1,544,187 68,638 96,390 -
Amount paid for shares repurchased (2,892,889) (4,509,797) (406,679) (450,781)
----------------- ------------- ------------------ ----------------
Net increase (decrease) in net assets resulting
from share transactions 18,664,678 10,134,453 5,760,989 3,645,029
----------------- ------------- ------------------ ----------------
Total Increase (Decrease) in Net Assets 25,907,605 14,260,900 6,630,031 3,900,362
----------------- ------------- ------------------ ----------------
Net Assets
Beginning of period 31,404,798 17,143,898 3,900,362 -
----------------- ------------- ------------------ ----------------
End of period $ 57,312,403 $ 31,404,798 $ 10,530,393 $ 3,900,362
================= ============= ================== ================
Accumulated undistributed net
investment income (loss) included
in net assets at end of period $ (131,539) $ - $ (38,054) $ -
----------------- ------------- ------------------ ----------------
Capital Share Transactions
Shares sold 1,275,040 1,185,162 536,581 416,154
Shares issued in reinvestment of distributions 93,986 6,063 8,210 -
Shares repurchased (185,440) (393,648) (35,605) (46,638)
----------------- ------------- ------------------ ----------------
Net increase (decrease) from capital transactions 1,183,586 797,577 509,186 369,516
================= ============= ================== ================
</table>
(a) For period of November 5, 2002 (commencement of operations) through June 30,
2003.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Capital Value Fund
Financial Highlights
<table>
<s> <c> <c> <c> <c> <c> <c> <c>
Six Months ended
December 31, 2003 Year ended Year ended Year ended Year ended Period ended Year ended
(Unaudited) June 30,2003 June 30,2002 June 30,2001 June 30,2000 June 30,1999(a) Oct. 31, 1998
---------------- ----------- ----------- ----------- ----------- ----------- -----------
Selected Per Share Data
Net asset value, beginning
of period $ 14.05 $ 11.93 $ 13.87 $ 13.91 $ 14.56 $ 11.28 $ 12.06
--------------- ----------- ----------- ----------- ----------- ----------- -----------
Income from investment operations
Net investment income
(loss) (0.05) (0.04) 0.04 (0.05) (0.05) - (0.06)
Net realized and unrealized
gain (loss) 3.23 2.21 (0.19) 0.50 0.88 3.28 0.12
--------------- ----------- ----------- ----------- ----------- ---------- -----------
Total from investment operations 3.18 2.17 (0.15) 0.45 0.83 3.28 0.06
--------------- ----------- ----------- ----------- ----------- ----------- -----------
Less Distributions to shareholders:
From net investment income - (0.03) - - - - (0.03)
From net realized gain (0.48) - (1.79) (0.49) (1.48) - (0.81)
From return of capital - (0.02) - - - - -
-------------- ----------- ----------- ----------- ----------- ----------- -----------
Total distributions (0.48) (0.05) (1.79) (0.49) (1.48) - (0.84)
-------------- ----------- ----------- ----------- ----------- ---------- -----------
Net asset value, end of period $ 16.76 $ 14.05 $ 11.93 $ 13.87 $ 13.91 $ 14.56 $ 11.28
============== =========== =========== =========== ====== =========== ===========
Total Return 22.74% (b) 18.28% -1.05% 3.72% 6.39% 29.08%(b) 2.27%
Ratios and Supplemental Data
Net assets, end of period (000) $ 57,312 $ 31,405 $ 17,144 $ 11,488 $ 11,585 $ 11,608 $ 11,524
Ratio of expenses to average
net assets 1.59% 1.59% 1.59% 1.59% 1.59% 1.59%(c) 1.73%
Ratio of expenses to average
net assets before waiver
& reimbursement 1.68% 2.05% 2.23% 2.28% 2.08% 2.50%(c) 2.34%
Ratio of net investment income
to average net assets (0.60)% (0.34)% 0.29% (0.39)% (0.36)% (0.04)(c) (0.53)%
Ratio of net investment income
to average net assets before
waiver & reimbursement (0.69)% (0.79)% (0.35)% (1.09)% (0.84)% (0.95)(c) (1.14)%
Portfolio turnover rate 16.17% 44.72% 33.40% 77.87% 75.69% 45.19% 81.74%
(a) For the period November 1, 1998 through June 30, 1999.
(b) For periods of less than a full year, total return is not annualized.
(c) Annualized.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Strategic Allocation Fund
Financial Highlights
<table>
<s> <c> <c>
Six Months ended
December 31, 2003 Period ended
(Unaudited) June 30, 2003 (a)
------------------------ ----------------
Selected Per Share Data
Net asset value, beginning of period $ 10.56 $ 10.00
------------------------ ----------------
Income from investment operations
Net investment income (loss) (0.06) (0.05)
Net realized and unrealized gain (loss) 1.59 0.61
------------------------ ----------------
Total from investment operations 1.53 0.56
------------------------ ----------------
Less Distributions to shareholders:
From net investment income - -
From net realized gain (0.11) -
------------------------ ----------------
Total distributions (0.11) -
------------------------ ----------------
Net asset value, end of period $ 11.98 $ 10.56
======================== ================
Total Return (b) 14.64% 5.60%
Ratios and Supplemental Data
Net assets, end of period (000) $ 10,530 $ 3,900
Ratio of expenses to average net assets (c) 1.96% 1.96%
Ratio of expenses to average net assets
before waiver & reimbursement (c) 2.65% 4.75%
Ratio of net investment income to
average net assets (c) (1.09)% 0.85%
Ratio of net investment income to
average net assets before waiver & reimbursement (c) (1.78)% (3.65)%
Portfolio turnover rate 43.45% 226.36%
</table>
(a) For the period November 5, 2002 (Commencement of operations) through June
30, 2003.
(b) For periods of less than a full year, total return is not annualized.
(c) Annualized.
See accompanying notes which are an integral part of the financial statements.
<page>
IMS Funds
Notes to Financial Statements
December 31, 2003 (Unaudited)
NOTE 1. ORGANIZATION
IMS Capital Value Fund (the "Capital Value Fund") was organized as a
diversified series of AmeriPrime Funds (the "Trust") on July 25, 1996 and
commenced operations on August 5, 1996. The IMS Strategic Allocation Fund (the
"Strategic Allocation Fund") was organized as a non-diversified series of the
Trust on September 30, 2002 and commenced operations on November 5, 2002. The
Trust is an open-end investment company established under the laws of Ohio by an
Agreement and Declaration of Trust dated August 8, 1995 (the "Trust Agreement").
The Trust Agreement permits the Trustees to issue an unlimited number of shares
of beneficial interest of separate series without par value. Each Fund is one of
a series of funds currently authorized by the Trustees. The investment objective
of the Capital Value Fund is to provide long-term growth from capital
appreciation, dividends and interest. The investment objective of the Strategic
Allocation Fund is to provide long-term growth from capital appreciation,
dividends and interest. The investment advisor of each Fund is IMS Capital
Management, Inc. (the "Advisor").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
each Fund in the preparation of its financial statements.
Securities Valuations - Equity securities generally are valued by using
market quotations, but may be valued on the basis of prices furnished by a
pricing service when the Advisor believes such prices accurately reflect the
fair market value of such securities. Securities that are traded on any stock
exchange are generally valued by the pricing service at the last quoted sale
price. Lacking a last sale price, an exchange traded security is generally
valued by the pricing service at its last bid price. Securities traded in the
NASDAQ over-the-counter market are generally valued by the pricing service at
the NASDAQ Official Closing Price. When market quotations are not readily
available, when the Advisor determines that the market quotation or the price
provided by the pricing service does not accurately reflect the current market
value or when restricted or illiquid securities are being valued, such
securities are valued as determined in good faith by the Advisor, in conformity
with guidelines adopted by and subject to review of the Board of Trustees of the
Trust.
Fixed income securities generally are valued by using market quotations,
but may be valued on the basis of prices furnished by a pricing service when the
Advisor believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. If the Advisor decides that a price
provided by the pricing service does not accurately reflect the fair market
value of the securities, when prices are not readily available from a pricing
service, or when restricted or illiquid securities are being valued, securities
are valued at fair value as determined in good faith by the Advisor, subject to
review of the Board of Trustees. Short term investments in fixed income
securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Option writing - When each Fund writes an option, an amount equal to the
premium received by each Fund is recorded as a liability and is subsequently
adjusted to the current fair value of the option written. Premiums received from
writing options that expire unexercised are treated by each Fund on the
expiration date as realized gains from investments. The difference between the
premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain, or if the
premium is less than the amount paid for the closing purchase transaction, as a
realized loss. If a call option is exercised, the premium is added to the
proceeds from the sale of the underlying security
<page>
IMS Funds
Notes to Financial Statements
December 31, 2003 (Unaudited) - continued
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - continued
or currency in determining whether each Fund has realized a gain or loss.
If a put option is exercised, the premium reduces the cost basis of the
securities purchased by each Fund. Each Fund as writer of an option bears the
market risk of an unfavorable change in the price of the security underlying the
written option.
Federal Income Taxes- There is no provision for federal income tax. Each
Fund intends to continue to qualify each year as a "regulated investment
company" under subchapter M of the Internal Revenue Code of 1986, as amended, by
distributing substantially all of its net investment income and net realized
capital gains.
Security Transactions and Related Income- Each Fund follows industry
practice and records security transactions on the trade date. The specific
identification method is used for determining gains or losses for financial
statements and income tax purposes. Dividend income is recorded on the
ex-dividend date and interest income is recorded on an accrual basis. Discounts
and premiums on securities purchased are amortized over the life of the
respective securities.
Dividends and Distributions- Each Fund intends to distribute substantially
all of its net investment income as dividends to its shareholders on at least an
annual basis. Each Fund intends to distribute its net realized long term capital
gains and its net realized short term capital gains at least once a year. The
treatment for financial reporting purposes of distributions made to shareholders
during the year from net investment income or net realized capital gains may
differ from their ultimate treatment for federal income tax purposes. These
differences are caused primarily by differences in the timing of the recognition
of certain components of income, expense or realized capital gain for federal
income tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of the net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassifications
will have no effect on net assets, results of operations or net asset values per
share of the Fund.
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund retains IMS Capital Management, Inc. to manage the Fund's
investments. Under the terms of the respective management agreements (the
"Agreement"), the Advisor manages each Fund's investments subject to approval of
the Board of Trustees. As compensation for its management services, the Fund is
obligated to pay the Advisor a fee computed and accrued daily and paid monthly
at an annual rate of 1.26% of the average daily net assets of each Fund. For the
six months ended December 31, 2003, the Advisor earned a fee of $275,773 from
the Capital Value Fund. For the six months ended December 31, 2003, the Advisor
earned a fee of $43,949 from the Strategic Allocation Fund.
The Advisor has contractually agreed to waive all or a portion of its fees
and/or reimburse expenses of each Fund, but only to the extent necessary to
maintain total operating expenses (excluding brokerage costs, borrowing costs,
taxes and extraordinary expenses) at 1.59% of average daily net assets with
respect to the Capital Value Fund, and 1.96% of average daily net assets with
respect to the Strategic Allocation Fund, through October 31, 2006. For the six
months ended December 31, 2003, the Advisor reimbursed expenses of $18,902 for
the Capital Value Fund. For the six months ended December 31, 2003, the Advisor
reimbursed expenses of $23,965 for the Strategic Allocation Fund. With respect
to the Strategic Allocation Fund, any waiver or reimbursement of organizational
or operating expenses by the Advisor is subject to repayment by the Fund within
the three fiscal years following the year ending June 30, 2003, if the Fund is
able to make the payment without exceeding the above described expense
limitations. At December 31, 2003, the Capital Value Fund owed the Advisor
$67,591 for its advisory services and the Strategic Allocation Fund was owed
$4,666 from the Advisor.
<page>
IMS Funds
Notes to Financial Statements
December 31, 2003 (Unaudited) - continued
NOTE 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - continued
Each Fund retains Unified Fund Services, Inc. ("Unified"), a wholly owned
subsidiary of Unified Financial Services, Inc., to manage the Fund's business
affairs and provide the Fund with administrative services, including all
regulatory reporting and necessary office equipment and personnel. For those
services Unified receives a monthly fee from each Fund equal to an annual rate
of 0.10% of the Fund's average daily net assets under $50 million, 0.07% of the
Fund's average daily net assets from $50 million to $100 million, and 0.05% of
the Fund's average daily net assets over $100 million (subject to a minimum fee
of $2,500 per month). For the six months ended December 31, 2003, Unified earned
$21,962 from the Capital Value Fund and $11,664 from the Strategic Allocation
Fund.
Each Fund also retains Unified to act as each Fund's transfer agent and
fund accountant. For its services as transfer agent, Unified receives a monthly
fee from each Fund of $1.25 per shareholder (subject to a minimum monthly fee of
$1,250) for these transfer agency services. For the six months ended December
31, 2003, Unified received fees of $9,698 from the Capital Value Fund and $5,699
from the Strategic Allocation Fund for transfer agent services provided to the
Funds and $6,001 and $3,005 from the Capital Value Fund and Strategic Allocation
Fund, respectively, in reimbursement for out-of-pocket expenses incurred in
providing transfer agent services to the Fund. For its services as fund
accountant, Unified receives an annual fee from each Fund equal to 0.05% of the
Fund's assets up to $50 million, 0.04% of the Fund's assets from $50 million to
$100 million, and 0.03% of the Fund's assets from $100 million to $150 million,
and 0.02% of the Fund's net assets over $150 million (subject to a monthly
minimum fee of $1,667). For the six months ended December 31, 2003, Unified
earned $12,621 from the Capital Value Fund and $8,065 from the Strategic
Allocation Fund. Certain Trustees and the officers of the Trust are members of
management and employees of Unified, and/or shareholders of Unified Financial
Services, Inc.
Each Fund retains Unified Financial Securities, Inc., (the "Distributor") a
wholly owned subsidiary of Unified Financial Services, Inc., to act as the
principal distributor of its shares. There were no payments made to the
Distributor for the six months ended December 31, 2003 from the Capital Value
Fund or the Strategic Allocation Fund. A Trustee and certain officers of the
Trust are a director and/or officers of the Distributor and of Unified Financial
Services, Inc. (the parent company of the Distributor and Unified), and may be
deemed to be affiliates of the Distributor.
NOTE 4. INVESTMENTS
For the six months ended December 31, 2003, purchases and sales of
investment securities, other than short-term investments and short-term U.S.
government obligations were as follows:
Capital Value Strategic Allocation
Fund Fund
---------------- -----------------------
Purchases
U.S. Government Obligations $ - $ -
Other 25,272,947 9,284,572
Sales
U.S. Government Obligations $ - $ -
Other 6,801,708 2,782,439
<page>
IMS Funds
Notes to Financial Statements
December 31, 2003 (Unaudited) - continued
NOTE 4. INVESTMENTS - continued
As of December 31, 2003, the net unrealized appreciation of investments for
tax purposes was as follows:
Capital Value Strategic Allocation
Fund Fund
--------------- -----------------------
Gross Appreciation $ 12,662,872 $ 1,196,630
Gross (Depreciation) (827,427) -
-------------- -----------------------
Net Appreciation on Investments $11,835,445 $ 1,196,630
=============== =======================
At December 31, 2003, the aggregate cost of securities for federal income tax
purposes was $47,253,254 and $9,524,372 for the Capital Value Fund and the
Strategic Allocation Fund, respectively.
NOTE 5. ESTIMATES
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 6. RELATED PARTY TRANSACTIONS
The beneficial ownership, either directly or indirectly, of more than 25% of the
voting securities of a fund creates a presumption of control of the fund, under
Section 2(a)(9) of the Investment Company Act of 1940. As of December 31, 2003,
National Financial Securities Corp. held 40.32% of the Capital Value Fund in an
omnibus account for the benefit of others. As of December 31, 2003, National
Financial Securities Corp. held 74.64% of the Strategic Allocation Fund in an
omnibus account for the benefit of others.
NOTE 7. CALL OPTIONS WRITTEN
As of December 31, 2003, the Capital Value Fund held no options. Transactions in
options written during the six months ended December 31, 2003 for the Capital
Value Fund were as follows:
Number
of Premiums
Contracts Received
---------- ------------
Options outstanding at June 30, 2003 758 $104,521
Options written - -
Options terminated in closing purchase transactions - -
Options expired - -
Options exercised (758) (104,521)
---------- ------------
Options outstanding at December 31, 2003 - $ -
========== ============
<page>
IMS Funds
Notes to Financial Statements
December 31, 2003 (Unaudited) - continued
NOTE 8. DISTRIBUTIONS TO SHAREHOLDERS
Capital Value Fund. The Capital Value Fund distributions for the fiscal
years ended June 30, 2003 and 2002 were as follows:
Distributions paid from: 2003 2002
------------- ---------------
Ordinary income $39,209 $ -
Short-term Capital Gain - 194,339
Long-term Capital Gain - 1,296,845
Return of Capital 31,729 -
------------ ---------------
$70,938 $ 1,491,184
============= ===============
On December 18, 2003, the Capital Value Fund paid capital gains distributions of
$0.4759 per share to shareholders of record on December 17, 2003.
The Capital Value Fund distributions for the six months ended December 31, 2003
and the fiscal year ended June 30, 2003 were as follows:
Distributions paid from: December 31, 2003 June 30, 2003
----------------------- ----------------
Ordinary income $ - $ 39,209
Short-term Capital Gain 680,525 -
Long-term Capital Gain 880,256 -
Return of Capital - 31,729
---------------------- ----------------
$ 1,560,781 $ 70,938
======================= ================
Strategic Allocation Fund. The Strategic Allocation Fund paid no distributions
for the period ended June 30, 2003.
On December 18, 2003, the Strategic Allocation Fund paid a short-term
capital gain distribution of $0.1134 per share to shareholders of record on
December 17, 2003.
Distributions paid from: December 31, 2003 June 30, 2003
----------------------- ----------------
Ordinary income $ - $ -
Short-term Capital Gain 97,684 -
Long-term Capital Gain - -
- ---------------------- ----------------
$ 97,684 $ -
======================= ================
PROXY VOTING
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling the Fund at (800) 934-5550.
<page>
20
TRUSTEES
Timothy L. Ashburn, Chairman
Gary E. Hippenstiel
Stephen A. Little
Daniel J. Condon
Ronald C. Tritschler
OFFICERS
Timothy L. Ashburn, President and Asst. Secretary
Thomas G. Napurano, Chief Financial Officer and Treasurer
Carol J. Highsmith, Secretary
INVESTMENT ADVISOR
IMS Capital Management, Inc.
8995 S.E. Otty Road
Portland, OR 97266
DISTRIBUTOR
Unified Financial Securities, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
INDEPENDENT ACCOUNTANTS
McCurdy & Associates CPA's, Inc.
27955 Clemens Rd.
Westlake, OH 44145
LEGAL COUNSEL
Thompson Hine, LLP
312 Walnut St., Suite 1400
Cincinnati, OH 45202
CUSTODIAN
U.S. Bank, N.A.
425 Walnut St.
Cincinnati, OH 45202
ADMINISTRATOR, TRANSFER AGENT
AND FUND ACCOUNTANT
Unified Fund Services, Inc.
431 N. Pennsylvania Street
Indianapolis, Indiana 46204
This report is intended only for the information of shareholders or those who
have received the Fund's prospectus which contains information about the Fund's
management fee and expenses. Please read the prospectus carefully before
investing.
Distributed by Unified Financial Securities, Inc.
Member NASD/SIPC
<page>
Item 2. Code of Ethics. N/A
Item 3. Audit Committee Financial Expert. N/A
Item 4. Principal Accountant Fees and Services. N/A
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders. N/A
Item 10. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of January 9, 2004, the disclosure controls and procedures are
reasonably designed to ensure that the information required in filings on Forms
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
half-year that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 11. Exhibits.
(a)(1) N/A
(a)(2) Certifications by the registrant's principal executive officer and
principal financial officer, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment
Company Act of 1940 are filed herewith.
(a)(3) N/A
(b) Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 is 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.
(Registrant) AmeriPrime Funds
By
* /s/ Timothy Ashburn
-------------------------------------------
Timothy Ashburn, President
Date March 10, 2004
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
* /s/ Timothy Ashburn
-------------------------------------------
Timothy Ashburn, President
Date March 10, 2004
By
* Thomas Napurano
-------------------------------------------------------------
Thomas Napurano, Treasurer and Chief Financial Officer
Date February 26, 2004
<page>