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 811-08191
Name of Fund: Bullfinch Fund, Inc.
Fund Address: 1370 Pittsford Mendon Road
Mendon, New York 14506
Name and address of agent for service: Christopher Carosa, President,
Bullfinch Fund, Inc., 1370 Pittsford Mendon Road,
Mendon, New York 14506
Mailing address: 1370 Pittsford Mendon Road
Mendon, New York 14506
Registrant's telephone number, including area code: (585) 624-3150
Date of fiscal year end: June 30
Date of reporting period: 07/01/04 - 12/31/04
Item 1 - Attach shareholder report
BULLFINCH FUND, INC.
1370 PITTSFORD MENDON ROAD
MENDON, NEW YORK 14506
(585) 624-3150
1-888-BULLFINCH
(1-888-285-5346)
Semi-Annual Report
December 31, 2004
(UNAUDITED)
Management's Discussion of Fund Performance
February 21, 2005
Dear Fellow Shareholders:
We are very proud to present the December 2004 Semi-Annual Report of the
Bullfinch Fund, Inc. This report contains the unaudited financial statements
for both the Unrestricted Series and the Western New York Series.
Last year was a "Goldilocks" year compared to 2003 ("too hot") and 2002 ("too
cold"). After a quick start, the market pulled back dramatically in the summer,
but recovered impressively once the election was decided. Indeed, the post-
election returns moved farther than most analysts expected, leaving some to
wonder if some of the air would be let out in early 2005.
When applying behavioral economics to the 2004 markets, it's easy to see in
hindsight why we experienced the roller coaster ride. As the drama of the
election unfolded, the media - and many investors - focused on very short-term
data. While this technique sells newspapers, behavioral economics teaches us it
often leads to disastrous trading results. Many commentators, as if on cue,
warned investors to avoid stocks just as opportunities were greatest.
More interestingly, those who remained invested during the course of the entire
year also did pretty well - despite the market's ups and downs. This proves,
once again, it's better to stay the course and identify specific attractive
securities for the long term rather than attempting to time the market one way
or another.
We are proud of our funds' returns over the last five years. We attribute our
success to our strict value discipline and our ability to incorporate the
lessons of behavioral finance into portfolio management.
This year will find many companies finding it more difficult to equal last
year's comparisons. So, is there any hope? Yes. First, we believe the economy
continues to improve. Second, the Iraqi elections scheduled for January 30
should remove another worry from the market. Third, the death of Yassar Arafat
has opened a door (at least temporarily) for Mid-East Peace. Fourth, while
overpriced, the market seems to have accepted the current price of oil (in the
mid-$40's) and any cyclical decline in the price of oil, if we are to believe
behavioral economics, should result in (at least short term) investor
enthusiasm. Finally, if the administration succeeds in making their earlier tax
cuts permanent and converting a small portion of Social Security into "Super
IRA" accounts, look for the market to expand in a manner similar to when
the tax cut bill passed in 2003. But while there's hope, don't be surprised if
this is a tough year for the market, stocks and equity funds in general.
Be sure to track both our funds on your favorite internet site. The ticker of
the Unrestricted Series is BUNRX and the ticker of the Western New York Series
is BWNYX.
We wish to thank our shareholders for expressing their confidence in us and
wish you continued good fortune in the coming year.
Best Regards,
Bullfinch Fund, Inc.
Christopher Carosa, CTFA
President
UNRESTRICTED SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
December 31, 2004 (Unaudited)
UNRESTRICTED SERIES
(A SERIES WITHIN THE BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (UNAUDITED)
ASSETS
Investments in Securities, at Fair Value,
identified Cost of $2,886,949 $3,879,974
Cash 107,132
Accrued Interest and Dividends 6,608
Prepaid Expenses 9,326
----------
Total Assets $4,003,040
==========
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts Payable $ 10,020
----------
NET ASSETS
Net Assets (Equivalent to $15.19/share based
on 262,926.025 shares of stock outstanding) $3,993,020
----------
Total Liabilities and Net Assets $4,003,040
==========
COMPOSITION OF NET ASSETS
Shares of Common Stock - Par Value $.01;
10,000,000 Shares Authorized,
262,926.025 Shares Outstanding $3,214,502
Accumulated Net Investment Loss (214,508)
Net Unrealized Appreciation on Investments 993,025
----------
Net Assets at December 31, 2004 $3,993,020
==========
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
December 31, 2004 (UNAUDITED)
Historical
Common Stocks - 100% Shares Cost Value
Banking and Finance - 11.8%
BISYS Group Inc. 6,300 $ 83,378 $ 103,635
Fiserv, Inc. 3,000 75,229 120,570
National City Corp. 2,200 55,431 82,610
New York Community Bancorp 5,000 105,030 102,850
Trustco Bank Corp NY 4,400 47,300 60,676
--------- ---------
366,368 470,341
Computers - Software - 8.5%
Microsoft Corp. 3,850 97,289 102,872
Oracle 11,000 119,262 150,920
Synopsis, Inc. 4,300 99,496 84,065
--------- ---------
316,047 337,857
Pharmaceuticals - 6.6%
Mylan Laboratories Inc. 5,400 110,246 95,472
Pharmaceutical Product 4,100 106,313 169,289
Development Inc. --------- ---------
216,559 264,761
Food & Beverages - 6.2%
Conagra Foods, Inc. 4,100 89,953 120,745
Sensient Technologies 5,300 110,829 127,147
--------- ---------
200,782 247,892
Automotive - 6.0%
Delphi Corporation 10,600 118,618 95,612
Pep Boys - Manny, Moe & Jack 8,400 122,032 143,388
--------- ---------
240,650 239,000
Medical Products and Supplies - 5.7%
Polymedica Corporation 3,200 83,194 119,328
Serologicals Corp. 4,900 62,099 108,388
--------- ---------
145,292 227,716
Insurance - 5.5%
AmerUs Group Co. Cl A 3,000 91,169 135,900
Gallagher Arthur J & Co. 2,600 79,638 84,500
--------- ---------
170,807 220,400
Electrical Equipment - 4.9%
Corning Inc. 9,000 71,358 105,930
General Electric Co. 2,450 64,576 89,425
--------- ---------
135,934 195,355
Apparel - 3.6%
VF Corp. 2,600 110,625 143,988
Shoes & Leather - 3.6%
Genesco Inc. 4,600 69,893 143,244
Utilities - Natural Resources - 3.5%
Chesapeake Utilities 3,100 57,194 82,770
NiSource Inc. 2,500 46,325 56,950
--------- ---------
103,519 139,720
Computers - Hardware - 3.4%
Dell Corp. 3,250 79,273 136,955
Retail - General - 3.3%
Dollar General 6,300 95,632 130,851
Manufacturing - 3.2%
Lincoln Electric Holdings 3,700 70,781 127,798
Retail - Specialty - 3.1%
Christopher & Banks Corp. 6,700 110,081 123,615
Leisure & Recreational - 2.9%
Hasbro Inc. 1,400 16,142 27,132
Mattel Inc. 4,550 52,852 88,680
--------- ---------
68,994 115,812
Tobacco Products - 2.8%
Altria Group 1,850 40,459 113,035
Real Estate & Related - 2.6%
First American Financial 3,000 55,075 105,420
Semiconductors - 2.4%
Intel Corp. 4,100 96,931 95,899
Office Equipment - 2.3%
Diebold, Inc. 1,650 41,069 91,955
Computer - Networking - 1.8%
Cisco Systems, Inc. 3,800 55,371 73,416
Commercial Services, Inc. - 1.7%
Paychex, Inc. 2,000 64,090 68,160
Instruments - 1.7%
Checkpoint Systems, Inc. 3,700 32,717 66,785
------------ -----------
Total Investments in Securities $ 2,886,949 $ 3,879,974
=========== ===========
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES (A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004 AND
FOR THE YEARS ENDED JUNE 30, 2004, 2003 AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
INVESTMENT INCOME:
Dividends $ 43,481 $ 45,850 $ 29,972 $ 28,180
EXPENSES:
Management fees 20,325 35,915 23,194 20,086
Legal and Professional 5,688 9,048 7,465 6,375
Director's Fees 605 1,200 1,000 850
Amortization - - - 337
Fidelity Bond 472 1,400 1,106 863
D&O/E&O 655 - - -
Taxes 227 450 300 550
Telephone 130 226 - -
Registration Fees 461 1,024 511 1,080
Bank Services Charges 1,104 2,055 1,533 1,422
Dues and Subscriptions 724 2,162 752 750
-------------------------------------------
Total expense 30,392 53,480 35,861 32,313
-------------------------------------------
Net investment income (loss) 13,089 (7,630) (5,889) (4,133)
-------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (100,816) 102,654 (50,233) (1,324)
Unrealized appreciation (depreciation)
during the period 284,031 397,468 231,445 (191,148)
--------------------------------------------
Net gain (loss) on investments 183,215 500,122 181,212 (192,472)
--------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 196,304 $ 492,492 $ 175,323 $ (196,605)
============================================
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004 AND
FOR THE YEARS ENDED JUNE 30, 2004, 2003 AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ 13,089 $ (7,630) $ (5,889) $(4,133)
Net realized gain (loss) from
security transactions (100,816) 102,654 (50,233) (1,324)
Net change in unrealized appreciation
(depreciation) of investments 284,031 397,468 231,445 (191,148)
------------------------------------------
Increase (decrease) in net assets resulting
from operations 196,304 492,492 175,323 (196,605)
CAPITAL SHARE TRANSACTIONS:
Sales 195,858 1,026,695 443,128 796,385
Redemptions (331,436) (124,930) (76,112) (119,805)
------------------------------------------
Total capital share transactions (135,577) 901,765 367,016 676,580
------------------------------------------
Increase in net assets 60,727 1,394,257 542,339 479,975
NET ASSETS:
Beginning of period 3,932,293 2,538,036 1,995,697 1,515,722
-----------------------------------------
End of period $3,993,020 $3,932,293 $2,538,036 $1,995,697
The accompanying notes are an integral part of these statements.
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 (UNAUDITED)
NOTE A - SCOPE OF BUSINESS
The Unrestricted Series (the "Series") is a series within the Bullfinch
Fund,Inc. (the "Fund"), which was organized as a Maryland corporation registered
under the Investment Company Act of 1940 as an open-ended non-diversified
management investment company.
The investment objective of the Series is to seek conservative long-term growth
in capital. The Adviser seeks to achieve this objective by using an asset mix
consisting primarily of exchange listed securities and over-the-counter common
stocks as well as U.S. Government securities maturing within five years.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash - Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such amounts
and believes it is not exposed to any significant credit risk on cash.
Security Valuation - The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on those
exchanges and securities traded on over-the-counter markets are valued daily at
the closing bid prices. Short-term and money market securities are valued at
amortized cost, which approximates market value.
Income Taxes - It is the policy of the Fund to comply with the requirements of
Subchapter M of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. In addition, the Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
Organization Expenses - Organization expenses have been amortized over a 60-
month period.
Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date. The Series made a distribution of its net investment
income and net realized capital gains to its shareholders on June 29, 2004, in
the form of stock dividends equal to 7,145.311 shares of stock and the series
made a distribution of its net gain on securities to its shareholders on
December 28, 2004 in the form of stock dividends equal to 1,137.790 shares
of stock.
Other - The Series follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains and losses for financial statement and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results can differ from those estimates.
NOTE C - INVESTMENTS
For the period July 1, 2004 through December 31, 2004, the Series purchased
$283,183 common stock. During the same period, the Series sold $252,219 of
common stock.
For the year ended June 30, 2004, the Series purchased $1,807,912 of common
stock. During the same period, the Series sold $748,577 of common stock.
For the year ended June 30, 2003, the Series purchased $613,488 of common
stock. During the same period, the Series sold $155,491 of common stock.
For the year ended June 30, 2002, the Series purchased $681,874 of common
stock. During the same period, the Series sold $439,466 of common stock.
At December 31, 2004, the gross unrealized appreciation for all securities
totaled $1,049,448 and the gross unrealized depreciation for all securities
totaled $56,423, or a net unrealized appreciation of $993,025. The aggregate
cost of securities for federal income tax purposes at December 31, 2004 was
$2,886,949.
At June 30, 2004, the gross unrealized appreciation for all securities totaled
$784,259 and the gross unrealized depreciation for all securities totaled
$75,265, or a net unrealized appreciation of $708,994. The aggregate cost of
securities for federal income tax purposes at June 30, 2004 was $2,956,801.
At June 30, 2003, the gross unrealized appreciation for all securities totaled
$401,497 and the gross unrealized depreciation for all securities totaled
$89,971, or a net unrealized appreciation of $311,526. The aggregate cost of
securities for federal income tax purposes at June 30, 2003 was $1,794,813.
At June 30, 2002, the gross unrealized appreciation for all securities totaled
$302,040 and the gross unrealized depreciation for all securities totaled
$222,175, or a net unrealized appreciation of $79,865. The aggregate cost of
securities for federal income tax purposes at June 30, 2002 was $1,387,048.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment advisor
to the Fund pursuant to an investment advisory agreement which was approved by
the Fund's board of directors. Carosa, Stanton & DePaolo Asset Management, LLC
is a Registered Investment Adviser under the Investment Advisers Act of 1940.
The Investment advisory agreement provides that Carosa, Stanton & DePaolo Asset
Management, LLC, subject to the supervision and approval of the Fund's board of
directors, is responsible for the day-to-day management of the Fund's
portfolio, which includes selecting investments and handling its business
affairs.
As compensation for its services to the Fund, the investment advisor receives
monthly compensation at an annual rate of 1.25% on the first $1 million of
daily average net assets and 1% on that portion of the daily average net assets
in excess of $1 million. These fees will be reduced by any sub-transfer agent
fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego sufficient
investment advisory fees to limit total expenses of the Fund to 2% of the first
$10 million in average assets and 1.5% of the next $20 million in average
assets.
During the period July 1, 2004 through December 31, 2004 and the fiscal years
ended June 30, 2004, 2003 and 2002, the fund paid investment advisory fees of
$20,325 $35,915, $23,194 and $20,086, respectively.
NOTE E - CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par value
per share. Each share has equal dividend, distribution and liquidation rights.
Transactions in capital stock of the Series were as follows:
Shares Amount
Balance at June 30, 2001 115,143.033 $ 1,284,424
----------- -----------
Shares sold during 2002 62,800.889 796,385
Shares redeemed during 2002 (10,370.596) (119,805)
----------- -----------
Balance at June 30, 2002 167,573.326 1,961,004
----------- -----------
Shares sold during 2003 38,498.370 443,127
Shares redeemed during 2003 (6,113.927) (76,112)
----------- -----------
Balance at June 30, 2003 199,957.769 $ 2,328,019
----------- -----------
Shares sold during 2004 72,954.003 1,026,695
Shares Redeemed during 2004 (8,718.448) (124,930)
Reinvestment of Distributions,
June 29, 2004 7,145.311 103,035
----------- -----------
Balance at June 30, 2004 271,338.635 $ 3,332,819
----------- -----------
Shares sold during period 13,534.399 195,858
Shares Redeemed during period (23,084.799) (331,436)
Reinvestment of Distributions,
December 28, 2004 1,137.790 17,260
----------- -----------
Balance at December 31, 2004 262,926.025 $ 3,214,502
----------- -----------
=========== ===========
UNRESTRICTED SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004 AND
FOR THE YEARS ENDED JUNE 30, 2004, 2003 AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
NET ASSET VALUE, beginning of period $14.49 $12.69 $11.91 $13.16
---------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.06 (0.03) (0.06) (0.06)
Net gain (loss) on securities both
realized and unrealized 0.58 1.44 0.84 (1.19)
--------------------------------
Total from investment operations 0.63 1.41 0.78 (1.25)
-------------------------------
DISTRIBUTIONS
Dividends .066 0.39 0.00 0.00
-------------------------------
NET ASSET VALUE, end of period $15.19 $14.49 $12.69 $11.91
=================================
NET ASSETS, end of period $3,993,020 $3,932,293 $2,538,036 $1,995,697
Actual* Actual Actual Actual
RATIO OF EXPENSES TO AVERAGE NET ASSETS 0.8%* 1.6 % 1.7 % 1.8 %
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 0.3%* (0.2)% (0.3)% (0.3)%
PORTFOLIO TURNOVER RATE 6.6%* 22.6 % 7.5 % 25.1 %
*The ratios presented were calculated using operating data for the six month
period from July 1, 2004 to December 31, 2004.
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A Series Within Bullfinch Fund, Inc.)
FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2004
(UNAUDITED)
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2004 (UNAUDITED)
ASSETS
Investments in securities, at fair value,
identified cost of $335,879 $ 488,472
Cash 50,609
Accrued interest and dividends 577
Prepaid expenses 1,400
Due from investment advisor 0
---------
Total assets $ 541,058
=========
LIABILITIES AND NET ASSETS
LIABILITIES
Accounts payable $ 2,011
Unsettled Trades 0
---------
NET ASSETS
Net assets (equivalent to $13.28 per shares based
on 40,588.975 shares of stock outstanding) $ 539,047
---------
Total Liabilities and Net Assets $ 541,058
=========
COMPOSITION OF NET ASSETS
Shares of common Stock - Par Value $.01;
10,000,000 Shares Authorized,
40,588.975 Shares Outstanding $ 403,820
Accumulated net investment loss (17,366)
Net unrealized appreciation on investments 152,593
---------
Net assets at December 31, 2004 $ 539,047
=========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 2004 (UNAUDITED)
Historical
Common Stocks - 100% Shares Cost Value
Electrical Equipment - 13.9%
Corning, Inc. 2,500 $ 15,652 $ 29,425
General Electric Co. 350 9,305 12,775
Ultralife Batteries, Inc. 1,700 6,766 33,065
-------- --------
31,723 75,265
Automotive - 7.8%
Delphi Corporation 1,400 15,726 12,628
Monro Muffler Brake Inc. 500 9,880 12,650
Pep Boys - Manny, Moe & Jack 1,000 14,532 17,070
-------- --------
40,138 42,348
Commercial Services - 6.6%
Harris Interactive, Inc. 2,600 8,918 20,540
Paychex, Inc. 450 11,885 15,336
-------- --------
20,803 35,876
Railroads - 4.7%
Genesee & Wyoming Class A 900 3,783 25,317
Aerospace - 3.9%
Moog, Inc. Class A 225 2,930 10,204
Northrop Grumman 200 2,536 10,872
-------- --------
5,466 21,076
Computers - Services - 3.8%
Computer Task Group Inc. 3,700 15,799 20,720
Leisure & Recreational - 3.6%
Mattel, Inc. 1,000 14,245 19,490
Real Estate & Related - 3.5%
Home Properties of New York, Inc. 200 5,624 8,600
Sovran Self Storage 250 6,892 10,535
-------- --------
12,516 19,135
Computers - Software - 3.5%
Oracle 1,300 16,642 17,836
Veramark Tech., Inc. 1,500 9,782 1,275
-------- --------
26,424 19,111
Food & Beverages - 3.4%
Constellation Brands Inc. 400 5,017 18,604
Steel - 3.3%
Gibraltar Steel Corp. 750 8,975 17,715
Retail - Specialty - 3.1%
Christopher & Banks Corp. 900 15,565 16,605
Metal Fabrication & Hardware - 2.7%
Graham Corp. 1,000 8,828 14,790
Computers - Hardware - 2.7%
Dell Corporation 350 10,734 14,749
Utilities - Natural Resources - 2.6%
National Fuel Gas Co. 500 11,250 14,170
Airlines - 2.6%
Southwest Airlines Co. 850 15,105 13,838
Retail - General - 2.5%
Dollar General 650 9,065 13,501
Photographic Equipment and Suppliers - 2.4%
Eastman Kodak Co. 400 11,746 12,900
Computers - Distributors - 2.3%
Ingram Micro 600 10,909 12,480
Tobacco Products - 2.3%
Altria Group 200 4,892 12,220
Computers - Networking - 2.1%
Performance Technologies, Inc. 1,200 12,851 11,160
Packaging and Containers - 1.7%
Mod Pac Corporation 715 3,461 9,123
Medical Products & Supplies - 1.5%
Wilson Greatbatch Technologies 350 12,782 7,847
Electronics Components - 1.4%
Astronics Corp. 1,431 7,065 7,298
Chemical - 1.2%
CPAC, Inc. 1,200 7,236 6,480
Office Equipment - 0.7%
Xerox Corp. 225 5,582 3,827
Industrial Services - 0.3%
American Locker Group, Inc. 100 636 1,475
Machinery - 0.2%
Columbus McKinnon Corp. 100 2,344 867
Industrial Materials - 0.1%
Servotronics, Inc. 100 937 485
--------- ---------
Total Investments in Securities $ 335,879 $ 488,472
========= =========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004
FOR THE YEARS ENDED JUNE 30, 2004, 2003, AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
INVESTMENT INCOME:
Dividends $ 3,178 $ 4,786 $ 4,590 $ 4,698
EXPENSES:
Management fees 3,035 5,591 3,716 4,020
Reimbursement of Management Fees - (1,767) (1,000) (1,741)
Legal and Professional 654 1,049 1,275 1,290
Director's Fees 605 1,200 1,000 850
Amortization - - 17 666
Fidelity Bond 52 155 190 216
D&O/E&O 73 - - -
Taxes 377 250 300 350
Telephone 130 226 - -
Registration Fees 101 270 200 200
Bank Services Charges 155 705 (964) 405
Dues and Subscriptions 321 1,362 250 250
------ ------ ------ ------
Total expense 5,503 9,041 4,984 6,506
------ ------ ------ ------
Net investment income (loss) (2,325) (4,255) (394) (1,808)
------ ------ ------ ------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) from
securities transactions (3,884) (136) (5,051) (1,242)
Unrealized appreciation (depreciation)
during the period 49,674 95,527 28,678 (32,377)
------ ------ ------ ------
Net gain (loss) on investments 45,790 95,391 23,627 (33,619)
------ ------ ------ -------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 43,464 $ 91,136 $ 23,233 $(35,427)
======== ======== ======== =========
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004 AND
FOR THE YEARS ENDED JUNE 30, 2004, 2003, AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (2,325) $ (4,255) $ (394) $ (1,808)
Net realized gain (loss) from
security transactions (3,884) (136) (5,051) (1,242)
Net change in unrealized appreciation
(depreciation) of investments 49,674 95,527 28,678 (32,377)
------ ------ ------ ------
Increase (decrease) in net assets resulting
from operations 43,464 91,136 23,233 (35,427)
CAPITAL SHARE TRANSACTIONS:
Sales 6,778 41,948 2,000 81,125
Redemptions 1,778 (9,822) - (2,503)
------ ------- ----- ------
Total capital share transactions 5,000 32,126 2,000 78,622
------ ------- ----- ------
Increase in net assets 48,464 123,262 25,233 43,195
NET ASSETS:
Beginning of period 490,582 367,320 342,087 298,892
------- ------- ------- -------
End of period $539,047 490,582 367,320 342,087
======== ======= ======= =======
The accompanying notes are an integral part of these statements.
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 (UNAUDITED)
NOTE A - SCOPE OF BUSINESS
The Western New York Series (the "Series") is a series within the Bullfinch
Fund, Inc. (the "Fund"), which was organized as a Maryland corporation
registered under the Investment Company Act of 1940 as an open-ended non-
diversified management investment company.
The investment objective of the Series is to seek capital appreciation through
the investment in common stock of companies with an important economic presence
in the Greater Western New York Region. The Adviser seeks to achieve this
objective by using an asset mix consisting primarily of exchange listed
securities and over-the-counter common stocks as well as U.S. Government
securities maturing within five years.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash - Cash consists of amounts deposited in money market accounts and is not
federally insured. The Series has not experienced any losses on such amounts
and believes it is not exposed to any significant credit risk on cash.
Security Valuation - The Series records its investments at fair value.
Securities traded on national securities exchanges or the NASDAQ National
Market System are valued daily at the closing prices of the securities on those
exchanges and securities traded on over-the-counter markets are valued daily at
the closing bid prices. Short-term and money market securities are valued at
amortized cost, which approximates market value.
Income Taxes - It is the policy of the Fund to comply with the requirements of
Subchapter M of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. In addition, the Fund intends to distribute an amount sufficient
to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision for federal income taxes or excise taxes has been made.
Organization Expenses - Organization expenses have been amortized over a 60-
month period.
Distributions to Shareholders - Distributions paid to shareholders are recorded
on the ex-dividend date. There were no distributions to shareholders during the
period from July 1, 2004 to December 31, 2004 or during the fiscal years ended
June 30, 2004, 2003 or 2002.
Other - The Series follows industry practice and records security transactions
on the trade date. The specific identification method is used for determining
gains and losses for financial statement and income tax purposes. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results can differ those estimates.
NOTE C - INVESTMENTS
For the period from July 1 to December 31, 2004, the Series purchased $36,284 of
common stock. During the same period, the Series sold $3,257 of common stock.
For the year ended June 30, 2004, the Series purchased $50,274 of common stock.
During the same period, the Series sold $70,284 of common stock.
For the year ended June 30, 2003, the Series purchased $34,755 of common stock.
During the same period, the Series sold $24,170 of common stock.
For the year ended June 30, 2002, the Series purchased $134,659 of common stock.
During the same period, the Series sold $90,260 of common stock.
At December 31, 2004, the gross unrealized appreciation for all securities
totaled $183,760 and the gross unrealized depreciation for all securities
totaled $31,167, or a net unrealized appreciation of $152,593. The aggregate
cost of securities for federal income tax purposes at December 31, 2004 was
$335,879.
At June 30, 2004, the gross unrealized appreciation for all securities totaled
$132,970 and the gross unrealized depreciation for all securities totaled
$29,900, or a net unrealized appreciation of $103,070. The aggregate cost of
securities for federal income tax purposes at June 30, 2004 was $306,734.
At June 30, 2003, the gross unrealized appreciation for all securities totaled
$82,696 and the gross unrealized depreciation for all securities totaled
$75,154, or a net unrealized appreciation of $7,542. The aggregate cost of
securities for federal income tax purposes at June 30, 2003 was $326,856.
At June 30, 2002, the gross unrealized appreciation for all securities totaled
$71,689 and the gross unrealized depreciation for all securities totaled
$92,825, or a net unrealized depreciation of $21,136. The aggregate cost of
securities for federal income tax purposes at June 30, 2002 was $321,346.
NOTE D - INVESTMENT ADVISORY AGREEMENT
Carosa, Stanton & DePaolo Asset Management, LLC serves as investment advisor
to the Fund pursuant to an investment advisory agreement which was approved by
the Fund's board of directors. Carosa, Stanton & DePaolo Asset Management, LLC
is a Registered Investment Adviser under the Investment Advisers Act of 1940.
The Investment advisory agreement provides that Carosa, Stanton & DePaolo Asset
Management, LLC, subject to the supervision and approval of the Fund's board of
directors, is responsible for the day-to-day management of the Fund's
portfolio, which includes selecting investments and handling its business
affairs.
As compensation for its services to the Fund, the investment advisor receives
monthly compensation at an annual rate of 1.25% on the first $1 million of
daily average net assets and 1% on that portion of the daily average net assets
in excess of $1 million. These fees will be reduced by any sub-transfer agent
fees incurred by the Fund.
Carosa, Stanton & DePaolo Asset Management, LLC has agreed to forego sufficient
investment advisory fees to limit total expenses of the Fund to 2% of the first
$10 million in average assets and 1.5% of the next $20 million in average
assets.
During the period from July 1, 2004 through December 31, 2004 and the fiscal
years ended June 30, 2004, 2003 and 2002, the fund paid investment advisory
fees of $3,035, $3,824, $2,716 and $2,279, respectively.
NOTE E - CAPITAL SHARE TRANSACTIONS
The Fund has authorized 10,000,000 shares of common stock at $0.01 par value
per share. Each share has equal dividend, distribution and liquidation rights.
Transactions in capital stock of the Series were as follows:
Shares Amount
Balance at June 30, 2001 29,538.211 $ 286,072
---------- ---------
Shares sold during 2002 7,943.301 81,125
Shares redeemed during 2002 (242.034) (2,503)
---------- ---------
Balance at June 30, 2002 37,239.478 364,694
---------- ---------
Shares sold during 2003 242.130 2,000
Shares redeemed during 2003 - -
---------- ---------
Balance at June 30, 2003 37,481.608 $ 366,694
---------- ---------
Shares sold during 2004 3,460.239 41,948
Shares redeemed during 2004 (786.365) (9,822)
---------- ---------
Balance at June 30, 2004 40,155.482 $ 398,820
---------- ---------
Shares sold during period 569.390 6,778
Shares redeemed during period (135.897) (1,778)
---------- ---------
Balance at December 31, 2004 40,588.975 $ 403,820
========== =========
WESTERN NEW YORK SERIES
(A SERIES WITHIN BULLFINCH FUND, INC.)
FINANCIAL HIGHLIGHTS
(SUPPLEMENTAL DATA FOR A SHARE OUTSTANDING)
FOR THE PERIOD FROM JULY 1, 2004 TO DECEMBER 31, 2004 AND
FOR THE YEARS ENDED JUNE 30, 2004, 2003, AND 2002 (UNAUDITED)
12/2004 6/2004 6/2003 6/2002
NET ASSET VALUE, beginning of period $12.22 $ 9.80 $ 9.19 $10.12
------ ------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.06) (0.11) (0.03) (0.34)
Net gain (loss) on securities both
realized and unrealized 1.12 2.53 0.64 (0.59)
------ ------ ------ ------
Total from investment operations 1.06 2.42 0.61 (0.93)
DISTRIBUTIONS
Dividends - - - -
----- ------ ----- ------
NET ASSET VALUE, end of period $13.28 $12.22 $ 9.80 $ 9.19
====== ====== ====== =======
NET ASSETS, end of period $539,047 $490,582 $367,320 $342,087
======= ======== ========= =========
Actual* Actual Actual Actual
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.1%* 2.0 % 1.6 % 2.0 %
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS (0.5)%* (1.0)% 0.0 % (1.4)%
PORTFOLIO TURNOVER RATE 0.7%* 11.3 % 7.7 % 28.0 %
*The ratios presented were calculated using operating data for the six month
period from July 1, 2004 to December 31, 2004.
The accompanying notes are an integral part of these statements.
Item 2 - CODE OF ETHICS.
Not applicable (only annually for funds)
Item 3 - AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable (only annually for funds)
Item 4 - PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable (only annually for funds)
Item 5 - AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment companies.
Item 6 - Reserved
Item 7 - DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
Item 8 - PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES.
Not applicable to open-end investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 10(a) -The registrant's principal executive and principal financial
officer has determined that the registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) are effective based on the evaluation of
these controls and procedures are effective as of a date within 90
days prior to the filing date of this report.
Item 10(b) -There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) that occurred during the
registrant's last fiscal half-year (the registrant's second fiscal
half-year in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11 - EXHIBITS.
(a)(1) Code of Ethics - Not applicable (only annually for funds).
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002 are attached hereto.
(b) Certifications pursuant to 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.
Bullfinch Fund, Inc.
By: /s/ Christopher Carosa
----------------------------------------
Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: February 24, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Christopher Carosa
----------------------------------------
Christopher Carosa,
President of Bullfinch Fund, Inc.
Date: February 24, 2005