Aegis Value Fund, Inc.
Semi-Annual Report
February 28, 2006
Shareholders Letter
April 13, 2006
To the shareholders of the Aegis Value Fund:
We are pleased to present the Aegis Value Fund s semi-annual report for the six
months ended February 28, 2006.
We take this opportunity to provide a brief overview of the objectives and
strategy of the Fund:
The Aegis Value Fund seeks to achieve long-term, above market returns while
minimizing risk of capital loss. Our strategy is to invest in well-researched,
small-cap equities trading at a fraction of their intrinsic worth. We believe
the equity markets are often inefficient, and we are contrarian, bottom-up
stock selectors. We generally buy stocks trading at low price-to-book and
price-to-earnings ratios, a segment of the market where academic research shows
historical returns to be significantly higher than the overall market. We look
for indications of strong corporate governance and ethical stewardship as
evidenced by high insider ownership, proper use of corporate profits including
bargain-priced share repurchases, and appropriate executive salary and options
levels. We tend to purchase companies when they are misunderstood, out of
favor, or neglected, and hold these companies until share prices reach our
estimates of intrinsic value.
Since inception of the Aegis Value Fund on May 15, 1998, performance has been
strong relative to benchmark indices. The Fund has posted a cumulative gain
of 200.5 percent through April 13, 2006, compared to cumulative gains of
121.4 percent in our primary small-cap benchmark, the Russell 2000 Value
Index. During this period, the Russell 2000 Index of small-cap stocks posted
cumulative gains of 75.8 percent, and the S&P 500 posted cumulative gains of
31.3 percent.*
For the six months ended February 28, 2006, the Aegis Value Fund posted a gain
of 8.7 percent, versus a gain of 8.8 percent for the Russell 2000 Value Index.
The Russell 2000 Index returned 10.2 percent, while the S&P 500 Index returned
5.9 percent.
Our relative performance versus the Russell 2000 Value Index has been impacted
by the decision to maintain a defensive cash position in the Fund during a time
of rising stock values. Another significant factor in recent relative
performance has been the Fund s relatively low level of investment in
energy-related stocks. Generally, energy-related stocks have boosted index
performance in recent periods.
We look forward to serving as your investment partner in the coming year.
Aegis Financial Corporation
Scott L. Barbee, CFA
Managing Director, Portfolio Manager
* - Aegis Value Fund s one-year, three year, five year, and since inception
(5/15/1998) average annual returns for the period ending March 31, 2006
are 11.2%, 22.0%, 16.1%, and 15.2%, respectively. Returns include
reinvestment of dividends and capital gains. Russell 2000 Value Index
one-year, three-year, five-year, and since inception (AVALX-5/15/1998)
average annual returns for the period ending March 31, 2006 are 23.8%,
30.7%, 16.2%, and 10.9%. All historical performance returns shown in
this shareholders letter for the Aegis Value Fund Inc. are pre-tax returns.
This report does not constitute an offer or solicitation of any transaction
in any securities. The Aegis Value Fund is offered by prospectus only.
Investors are advised to consider the Fund s investment objectives, risks,
charges and expenses carefully before investing. The prospectus contains this
and other information about the Aegis Value Fund. For a prospectus and more
complete information, including charges and expenses, please call us at
1-800-528-3780, or visit our website at www.aegisvaluefund.com where an online
prospectus is provided. The prospectus should be read carefully before
investing.
Performance data quoted represents past performance. Past performance does
not guarantee future results. Investment return and principal value of an
investment will fluctuate so that an investor s shares, when redeemed, may be
worth more or less than their original cost. Current performance may be lower
or higher than the performance data quoted. Please call us at 1-800-528-3780
to obtain performance data current to the most recent month-end.
Disclosure of Fund Expenses (Unaudited)
As a shareholder of the Fund, you incur ongoing costs, including management
fees and other Fund expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of
the period and held for the entire semi-annual period, September 1, 2005
- - February 28, 2006.
Actual expenses
The table below provides information about actual account values and
actual expenses:
Actual
======
Beginning Ending Expenses
Account Value Account Value Paid During
Fund (09/01/2005) (02/28/2006) (1) Period (2)
- ---- ------------- -------------- ------------
Aegis Value Fund $1,000.00 $1,086.89 $7.30
Hypothetical
(5% annual return before expenses)
==================================
Beginning Ending Expenses
Account Value Account Value Paid During
Fund (09/01/2005) (02/28/2006) Period (2)
- ---- ------------- -------------- ------------
Aegis Value Fund $1,000.00 $1,017.80 $7.05
(1) The actual ending account value is based on the actual total return
of the Fund for the period September1, 2005 to February 28, 2006 after
actual expenses and will differ from the hypothetical ending account value
which is based on the Fund s actual expense ratio and a hypothetical annual
return of 5% before expenses. The actual cumulative return at net asset
value for the period September 1, 2005 to February 28, 2006 was 8.69%.
(2) Expenses are equal to the Fund s annualized expense ratio (1.41%)
multiplied by the average account value over the period, multiplied
by 181/365 (to reflect the period between 09/01/2005 and 02/28/2006).
See performance data disclosure on pages 1-2.
You may use the information in this table, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the
table under the heading entitled Actual Expenses Paid During Period to
estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table above also provides information about hypothetical account
values and hypothetical expenses based on the Fund s actual expense ratio
and an assumed rate of return of 5% per year before expenses, which is not
the Fund s actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing
costs of investing in the Fund and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds. Please note that the expenses
shown in the table are meant to highlight your ongoing costs only. The
Fund is a pure no-load fund and does not charge any sales charges (loads),
distribution or service fees, or redemption fees.
Key statistics
Results of a $10,000 Investment
[Chart showing growth of an investment of $10,000 in the Aegis
Value Fund at inception compared to the growth of the Russell
2000 Value Index]
Russell 2000
AVALX Value Index
----- ------------
5/15/98 $10,000 $10,000
8/31/98 8,210 7,564
8/31/99 10,990 8,629
8/31/00 11,964 9,811
8/31/01 16,521 11,581
8/31/02 17,760 10,933
8/31/03 21,954 13,521
8/31/04 25,591 16,157
8/31/05 28,070 19,810
2/28/06 30,509 21,554
Average Annual Total Returns (As of February 28, 2006)
Russell 2000
AVALX Value Index
----- ------------
Trailing 5 Year 15.7% 14.8%
Trailing 3 Year 22.3% 29.1%
Trailing 1 Year 10.5% 15.6%
Since inception (May 15, 1998) 15.4% 10.4%
See performance data disclosures on pages 1-2.
Industry Breakdown
- ------------------
Common Stocks % of the Fund assets
Finance and Real Estate 16.7%
Agriculture 13.9%
Transportation 10.0%
Industrial Cyclicals 8.2%
Retail and Entertainment 7.6%
Basic Materials 5.5%
Technology 4.5%
Energy and Natural Resources 4.1%
Textiles and Apparel 2.5%
Consumer Non-Durables 2.5%
Capital Goods 1.6%
Consumer Durables 1.2%
Wholesale and Distribution 0.6%
Healthcare 0.1%
Commercial Services 0.0%
Preferred Stocks 0.0%
Warrants 0.2%
Cash and Short-Term Investment 20.8%
-----
Total Assets 100.0%
Aegis Value Fund, Inc.
Schedule of Portfolio Investments
February 28, 2006
(Unaudited)
Common Stock - 79.0% Shares Market Value
- -------------------- ------ ------------
Industrial Cyclicals - 8.2%
Allied Defense Group, Inc.* 223,600 $5,120,440
American Pacific Corp.* (1) 670,534 3,842,160
Ampco-Pittsburgh Corporation 12,800 259,968
International Aluminum Corp. 32,300 1,275,850
Pope & Talbot, Inc.* 415,500 3,145,335
Quipp, Inc. (1) 78,300 841,725
Ryerson Inc. 456,100 11,511,964
Superior Industries International Inc. 625,600 13,481,680
----------
39,479,122
Wholesale and Distribution - 0.6%
Advanced Marketing Services Inc.* 78,300 313,200
John B. Sanfilippo & Son Inc.* 170,056 2,482,818
----------
2,796,018
Finance and Real Estate - 16.7%
Acceptance Insurance Companies, Inc.* 229,400 574
BKF Capital Group* 111,200 1,490,080
Boykin Lodging Company* 100,000 1,278,000
California First National Bank Corp. (1) 577,892 7,801,542
Ceres Group, Inc.* 11,457 61,982
Lodgian Inc.* 158,300 1,985,082
Medallion Financial Corp. 250,140 3,036,700
Meristar Hospitality Inc.* 111,300 1,147,503
MI Developments Inc. 123,000 4,175,850
The MIIX Group Inc.* (1) 720,000 8,280
PMA Capital Corp. Class A* (1) 2,784,719 26,788,997
Prospect Energy Corp. 296,218 4,899,446
PXRE Group Ltd.* 857,300 2,914,820
Quanta Capital Holdings Ltd.* 133,604 621,259
SCPIE Holdings, Inc.* (1) 733,500 16,679,790
Specialty Underwriters Alliance* 161,389 1,015,121
SWS Group Inc. 170,600 4,157,522
Winthrop Realty Trust 557,676 3,000,297
----------
81,062,843
Textiles and Apparel - 2.5%
Delta Apparel, Inc. 342,000 5,301,000
Delta Woodside Industries* (1) 428,700 132,897
Quaker Fabric Corporation* (1) 1,600,000 4,528,000
Tandy Brands Accessories 182,743 1,975,452
----------
11,937,349
Transportation - 10.0%
Air France ADR.* 436,700 10,153,275
Exide Technologies* 600,000 2,490,000
International Shipholding Corp.* 95,700 1,491,963
Mair Holdings, Inc.* (1) 1,210,922 6,187,811
National RV Holdings* 431,600 2,796,768
Sea Containers Ltd. - Class A* (1) 1,928,500 25,359,775
----------
48,479,592
Energy & Natural Resources - 4.1%
Avista Corporation 24,490 480,004
PNM Resources, Inc. 255,000 6,311,250
Reliant Energy Inc.* 690,300 7,013,448
USEC Inc. 497,250 6,185,790
----------
19,990,492
Commercial Services - 0.0%
LQ Corporation* 52,115 92,504
----------
92,504
Agriculture - 13.9%
Alliance One International Inc. (1) 6,971,400 31,022,730
CF Industries Holdings, Inc.* 533,700 9,403,794
Imperial Sugar (1) 1,030,583 27,001,275
----------
67,427,799
Consumer Durables - 1.2%
Bassett Furniture Industries, Inc. 306,654 5,915,356
----------
5,915,356
Technology - 4.5%
Audiovox Corporation - Class A* 1,024,295 13,080,247
IDT Corporation* 10,000 118,300
IDT Corporation - Class B* 86,000 1,022,540
Integrated Telecom Express Inc.* (2) 308,300 30,830
Pemstar Inc.* (1) 3,136,155 7,338,603
Technology Solutions Company* 41,429 336,403
----------
21,926,923
Retail and Entertainment - 7.6%
Books-A-Million Inc. (1) 974,778 11,248,938
Bowl America Inc. - Class A 9,481 134,156
Dillards Inc. Class A 603,400 14,885,878
Duckwall-ALCO Stores, Inc.* 140,100 3,398,826
Luby's, Inc.* 203,867 3,039,657
Marsh Supermarkets, Inc. - Class B 238,209 1,862,794
Nathan's Famous, Inc.* 132,400 1,621,900
Village Super Market Inc. 9,330 497,364
----------
36,689,513
Basic Materials - 5.5%
Adams Resources and Energy Inc. 38,700 1,017,423
Olympic Steel Inc. 473,907 12,492,189
Northern Orion Resources Inc.* 28,000 103,320
Royal Group Technologies* 1,108,100 10,859,380
Terra Industries Inc.* 272,500 1,932,025
----------
26,404,337
Capital Goods - 1.6%
Dominion Homes Inc.* (1) 820,000 7,872,000
----------
7,872,000
Consumer Non-Durables - 2.5%
CPAC, Inc. (1) 306,998 1,246,412
Enesco Group* (1) 1,473,300 2,755,071
Head N.V.* (1) 1,881,000 7,317,090
National Presto Industries, Inc. 15,000 656,250
----------
11,974,823
Healthcare - 0.1%
OCA Inc.* 1,514,400 575,472
----------
575,472
----------
Total Common Stocks - (Cost $334,611,834) 382,624,142
Preferred Stocks - 0.0% Shares Market Value
- ----------------------- ------- ------------
Glenborough Realty Trust
7.75% Convertible Preferred 5,260 131,816
----------
Total Preferred Stocks - (Cost $99,694) 131,816
Warrants - 0.2% Shares Market Value
- --------------- ------- ------------
Air France ADW* 397,000 837,670
----------
Total Warrants - (Cost $627,260) 837,670
Short-Term Investments - 14.4% Face Value Market Value
- ------------------------------ ---------- ------------
U.S. Treasury Bill due 03/02/06 $30,000,000 29,996,526
U.S. Treasury Bill due 03/09/06 20,000,000 19,981,044
U.S. Treasury Bill due 03/16/06 10,000,000 9,982,090
U.S. Treasury Bill due 03/30/06 10,000,000 9,966,074
----------
Total Short-Term Investments - (Cost $69,925,734) 69,925,734
----------
Total Investments - 93.6% (Cost $405,264,522) # 453,519,362
-----------
Other Assets and Liabilities - 6.4% 30,789,014
-----------
Net Assets - 100.0% $484,308,376
============
* Non-income producing securities
# Aggregate cost for tax purposes of $405,264,522
(1) Affiliated Company - see Note 6
(2) Company is in liquidation and security is being fair valued by the
Fund Board of Directors.
See accompanying notes to the financial statements
Aegis Value Fund, Inc.
Statement of Assets and Liabilities
February 28, 2006
(Unaudited)
Assets
Investments in unaffiliated companies/securities
at market value (cost $257,837,944) $289,664,192
Investments in affiliated companies
at market value (cost $171,544,503) 187,973,095
------------
Total investments at market value (cost $429,382,448) 477,637,288
Cash 2,993,101
Receivable for fund shares sold 51,820
Receivable for investment securities sold 5,518,196
Interest and dividends receivable 220,262
------------
Total assets 486,420,666
Liabilities
Payable for investment securities purchased 495,521
Payable for fund shares redeemed 1,079,460
Accrued expenses 537,309
------------
Total liabilities 2,112,290
Net assets (26,983,229 shares of $0.001 par
value capital stock outstanding; 100,000,000 shares
authorized) $484,308,376
============
Net assets consist of:
Capital stock at par value $26,983
Paid-in capital 369,217,145
Undistributed net investment income 4,659,098
Accumulated net realized gain 62,150,310
Net unrealized appreciation 48,254,840
------------
Net assets $484,308,376
------------
Net asset value per share $17.95
======
See accompanying notes to the financial statements
Aegis Value Fund, Inc.
Statement of Operations
For Six Months Ended February 28, 2006
(Unaudited)
Investment Income
Dividends from unaffiliated companies* $1,480,939
Dividends from affiliated companies 3,060,250
Interest 2,449,976
----------
Total income 6,991,165
Expenses
Investment advisory fees 3,222,830
Transfer agency and administration fees 417,023
Registration fees 18,590
Custody fees 28,490
Printing and postage costs 27,124
Legal and accounting fees 38,900
Directors fees 5,337
Insurance and other 31,536
----------
Gross expenses 3,789,832
Less: fees paid indirectly (7,114)
----------
Net expenses 3,782,718
----------
Net investment income 3,208,448
Realized and unrealized gain on investments
Net realized gain on investments - unaffiliated companies 64,979,705
Net realized gain on investments - affiliated companies 2,067,609
Change in unrealized appreciation of
investments for the period (32,983,225)
----------
Net realized and unrealized gain on investments 34,064,089
Net increase in net assets resulting from operations $37,272,537
===========
*Net of foreign tax withholdings of $6,089
See accompanying notes to the financial statements
Aegis Value Fund, Inc.
Statement of Changes in Net Assets
For Six Months Ended February 28, 2006
And Fiscal Year Ended August 31, 2005
(Unaudited)
Six months ended Year ended
February 28, 2006 August 31, 2005
----------------- ---------------
Increase in net assets from operations
Net investment income (loss) $3,208,448 $2,918,408
Net realized gain on investments 67,047,314 49,307,579
Change in unrealized appreciation (32,983,225) 17,107,138
----------- ----------
Net increase in net assets
resulting from operations 37,272,537 69,333,125
----------- ----------
Distributions
Investment income - net (5,250,475) 0
Realized capital gains (46,148,914) (37,826,835)
----------- ----------
Total distributions (51,399,388) (37,826,835)
Capital share transactions*
Subscriptions 21,999,579 225,375,283
Distributions reinvested 47,217,395 34,350,915
Redemptions (246,678,936) (317,572,328)
----------- -----------
Total capital share transactions (177,461,962) (57,846,130)
----------- -----------
Total increase (decrease) in (191,588,814) (26,339,840)
net assets
Net assets at beginning of period 675,897,190 702,237,030
----------- -----------
Net assets at end of period (including
undistributed net investment income
of $4,659,098 and $2,918,408,
respectively) $484,308,376 $675,897,190
*Share information
Subscriptions 1,241,094 12,438,936
Distributions reinvested 2,844,421 1,916,700
Redemptions (13,904,412) (17,553,910)
----------- -----------
Net increase (decrease) (9,818,897) (3,198,274)
See accompanying notes to the financial statements
Aegis Value Fund, Inc.
Financial Highlights
For Six Months Ended February 28, 2006
And Fiscal Year Ended August 31, 2005
(Unaudited)
The table below sets forth the financial data for a share of the Fund
outstanding throughout each period presented:
Six months ended Year ended
February 28, 2006 August 31, 2005
----------------- ---------------
Per share data:
Net asset value - beginning of period $18.37 $17.56
Income from investment operations-
Net investment income 0.12 0.08
Net realized and unrealized gain
on investments 1.32 1.60
------ ------
Total from investment operations 1.44 1.68
Less distributions declared to shareholders-
Net investment income (0.19) 0.00
Net realized capital gains (1.67) (0.87)
------ ------
Total distributions (1.86) (0.87)
------ ------
Net asset value - end of period $17.95 $18.37
====== ======
Total investment return 8.7% 9.7%
Ratios (to average net assets)/supplemental data:
Expenses after reimbursement/recoupment and
fees paid indirectly (1) 1.40% 1.42%
Expenses before reimbursement/recoupment and
fees paid indirectly 1.41% 1.41%
Net investment income (loss) 1.20% 0.39%
Portfolio turnover 17% 29%
Net assets at end of year (000's) $484,308 $675,897
(1) Ratio after expense reimbursement/recoupment, before fees paid
indirectly, is 1.41% in 2005.
See accompanying notes to the financial statements
Aegis Value Fund, Inc.
Notes to Financial Statements
February 28, 2006
1. The Organization
- --------------------
Aegis Value Fund, Inc. (the Fund) is registered under the Investment Company
Act of 1940 as a diversified open-end management company. The Fund was
incorporated October 22, 1997 in the State of Maryland and commenced
operations May 15, 1998. The Fund s principal investment goal is to seek
long-term capital appreciation by investing primarily in common stocks that
are believed to be significantly undervalued relative to the market based on
a company s book value, revenues, or cash flow. Refer to a current
Prospectus for additional information about the Fund.
2. Summary of Significant Accounting Policies
- ----------------------------------------------
Security valuation. Investments in securities traded on a national
securities exchange (or reported on the NASDAQ National Market) are stated
at the last reported sales price or a market s official close price on the
day of valuation; other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are stated at
the last quoted bid price, or the average of bid and ask price for NASDAQ
National Market securities. Short-term notes are stated at amortized cost,
which is equivalent to value. Restricted securities and other securities for
which market quotations are not readily available are valued at fair value as
determined by the Advisor under the supervision of the Board of Directors.
The valuation assigned to fair valued securities for purposes of calculating
the Fund s NAV may differ from the security s most recent closing market
price and from the prices used by other mutual funds to calculate their NAVs.
Federal income taxes. The Fund s policy is to continue to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute all its taxable income to
shareholders. Therefore, no federal income tax provision is required.
Expenses paid indirectly. Credits earned on temporarily uninvested cash
balances at the custodian are used to reduce the Fund s custody charges.
Custody expense in the statement of operations is presented before the
reduction for credits, which were $7,114 for six months ended
February 28, 2006.
Distributions to shareholders. Distributions to Fund shareholders, which
are determined in accordance with income tax regulations, are recorded on
the ex-dividend date. Distributions of net investment income, if any, are
made at least annually. Net realized gains from investment transactions,
if any, will be distributed to shareholders at least annually.
Use of estimates. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
period. Actual results could differ from those estimates.
Other. The Fund records security transactions based on the trade date.
Dividend income is recognized on the ex-dividend date, and interest
income is recognized on the accrual basis and includes accretion of
discounts and amortization of premiums. Withholding taxes on foreign
dividends have been provided for in accordance with the Fund s
understanding of the applicable country s tax rules and rates.
In the normal course of business, the Fund enters into contracts that
contain a variety of representations, which provide general
indemnifications. The Fund s maximum exposure under these arrangements
is unknown as this would involve future claims that may be made against
the Fund that have not yet occurred. However, based on experience, the
Fund expects the risk of loss to be remote.
3. Advisory Fees and Other Transactions with Affiliates
- --------------------------------------------------------
The Fund entered into an investment management and advisory services
agreement (the Agreement) with Aegis Financial Corporation, (the Advisor)
that provides for fees to be computed at an annual rate of 1.20% of the
Fund s average daily net assets. The Agreement provides for an expense
reimbursement from the Advisor if the Fund s expenses, exclusive of taxes,
interest, fees incurred in acquiring or disposing of portfolio securities,
and extraordinary expenses, exceed 1.50% of the Fund s average daily net
assets. The Agreement shall remain in force through March 31, 2007.
Either party may terminate the Agreement anytime upon sixty (60) days
written notice to the other party. During the six months ended
February 28, 2006, there were no Advisor reimbursements.
As part of the expense limitation agreement, the Fund has agreed to
repay the Advisor for amounts waived or reimbursed by the Advisor
provided that such repayment does not cause the Fund s expenses,
exclusive of taxes, interest, fees incurred in acquiring or disposing
of portfolio securities, and extraordinary expenses, to exceed 1.50% and
the repayment is made within three years after the year in which the
Advisor incurred the expense. The Advisor recaptured previously
reimbursed amounts of $59,322 during the year ended August 31, 2005.
There are no remaining allowable recapturable amounts as of that date.
The Fund has an agreement with BGB Fund Services, Inc. to provide fund
accounting, administration, transfer agency and shareholder services
to the Fund for a fee of 0.25% on Fund assets up to $200 million and
0.10% on Fund assets in excess of $200 million.
BGB Securities, Inc., a registered broker/dealer, executes portfolio
transactions on behalf of the Fund. Brokerage commissions paid to
BGB Securities amounted to $42,560 for the six months ended
February 28, 2006.
Certain officers and directors of the Fund are also officers and
directors of the Advisor, BGB Fund Services, Inc. and BGB Securities,
Inc. The Fund pays each director not affiliated with the Advisor fees
in cash or Fund shares of $1,000 for each attended board meeting and
$500 for each attended committee meeting.
4. Investment Transactions
- ---------------------------
Purchases and sales of investment securities were $32,317,118 and
$118,485,079, respectively, for six months ended February 28, 2006.
The specific identification method is used to determine tax cost basis
when calculating realized gains and losses.
5. Distributions to Shareholders and Tax Components of Net Assets
- ------------------------------------------------------------------
The tax character of distributions paid during the tax years
ended August 31, 2005 and 2004 were as follows:
2005 2004
Distribution paid from:
Ordinary income $ 3,913,122 $ 2,164,116
Long-term capital gain 33,913,713 8,926,977
----------- -----------
$ 37,826,835 $ 11,091,093
For the tax year ended August 31, 2005, the components of net assets
on a tax basis were as follows:
Undistributed ordinary income $4,407,057
Undistributed long-term gain 39,763,262
Unrealized appreciation 119,009,805
Unrealized depreciation (37,771,465)
Shares of capital stock 550,488,531
-----------
Total $675,897,190
Temporary book/tax differences are a result of differing treatments of
short-term capital gains.
6. Investments in Affiliated Companies
- ---------------------------------------
An affiliated company is a company in which the Fund has ownership of at
least 5% of the voting securities. Companies which are affiliates of the
Fund at year-end are noted in the Fund s schedule of portfolio investments.
Transactions during the period with companies which are or were affiliates
are as follows:
Value Value
Beginning Sales Dividend End of
of Period Purchases Proceeds Income Period
========== ========= ======== ======== ===========
Alliance One Intl. $25,595,600 $2,056,406 - $194,943 $31,022,730
Amer. Pacific Corp. 4,204,248 - - - 3,842,160
Books-A-Million, Inc. 9,450,480 477,103 - 48,739 11,248,938
Calif. Fst Natl Bank 7,801,542 - - 115,578 7,801,542
CPAC, Inc. 1,458,241 - - 21,490 1,246,412
Delta Woodside Ind. 325,812 - - - 132,897
Dominion Homes, Inc. 13,944,000 203,544 - - 7,872,000
Enesco Group 1,887,768 538,634 - - 2,755,071
Head N.V. 5,868,720 - - - 7,317,090
Imperial Sugar 14,278,250 77,935 - 2,675,585 27,001,275
MAIR Holdings Inc. 9,017,053 1,258,944 - - 6,187,811
MIIX Group Inc. 9,720 - - - 8,280
Pemstar Inc. 3,261,601 - - - 7,338,603
PMA Capital Corp.- A 23,532,582 900,037 - - 26,788,997
Quaker Fabric Corp. 5,152,000 - - - 4,528,000
Quipp, Inc. 959,175 - - 3,915 841,725
SCPIE Holdings 13,708,500 - 5,217,433 - 16,679,790
Sea Containers-Cl A. 18,402,120 2,329,816 - - 25,359,775
---------- --------- --------- --------- ----------
Total $158,857,411 $7,842,419 $5,217,433 $3,060,250 $187,973,095
Aegis Value Fund, Inc.
Fund Directors and Secretary (Unaudited)
February 28, 2006
Fund Directors
==============
Name, Age and Business Experience and Directorships
Address Position During the Past 5 Years
===================== ======== ===================================
William S. Berno* (52) President, President and Managing Director of
1100 North Glebe Road Director Aegis Financial Corporation since
Suite 1040 1994;President and Trustee of the
Arlington, Virginia 22201 Aegis Funds since 2003; President
and Director of the Fund since 1997.
Scott L. Barbee * (34) Treasurer, Treasurer and Managing Director of
1100 North Glebe Road Director Aegis Financial Corporation since
Suite 1040 1997; Treasurer and Trustee of the
Arlington, Virginia 22201 Aegis Funds since 2003; Treasurer
and Director of the Fund since 1997.
Edward P. Faberman (59) Director Attorney with the firm of Wiley Rein
Wiley Rein & Fielding LLP & Fielding LLP since 2005; Attorney
1776 K Street N.W. with the firm of Ungaretti & Harris
Washington, DC 20006 1996-2005; Trustee of the Aegis Funds
since 2003; Director of the Fund
since 1997.
David A. Giannini (52) Director Institutional equity sales and
30 Rockefeller Plaza research with Scarsdale Equities
Suite 4250 since 2006; institutional equity
New York, NY 10112 sales and research with Sanders
Morris Harris, 1997-2006. Trustee
of the Aegis Funds since 2006;
Director of the Fund since 2006.
Albert P. Lindemann III (43) President and founder of Redan
201 N. Tryon St. Director Capital Partners (real estate
Suite 2680 investments) since 2006. Real
Charlotte, North Carolina estate analyst with Faison
28202 Enterprises, 2000-2006; Trustee
of the Aegis Funds since 2003;
Director of the Fund since 2000.
Eskander Matta (35) Director Senior VP of Enterprise Internet
Wells Fargo & Co. Services, Wells Fargo & Co. since
550 California Street 2002; Director of Strategic
2nd Floor Consulting with Cordiant
San Francisco, California Communications, 2001-2002; Trustee
94111 of the Aegis Funds since 2003;
Director of the Fund since 1997.
Fund Officers
=============
Paul Gambal* (46) Secretary Chairman, Secretary and Managing
1100 North Glebe Road Director of Aegis Financial Corp-
Suite 1040 oration since 1994; Secretary of
Arlington, Virginia 22201 the Aegis Funds since 2003; Sec-
retary of the Fund since 1997.
Skyler S. Showell* (31) Chief Compliance Officer of
1100 North Glebe Road Compliance Aegis Financial Corporation since
Suite 1040 Officer 2003; Compliance Consultant,
Arlington, Virginia 22201 2002-2003; Law Student, 2001; Chief
Compliance Officer of the Fund
since 2004.
*Indicates persons who are affiliated with Aegis Financial Corporation, the
Fund s investment advisor, and are therefore considered to be interested
persons under the Investment Company Act of 1940, Section (2)(a).
The Fund s Statement of Additional Information includes additional
information about Fund directors and is available, without charge, by
calling the Fund s toll-free phone number, (800) 528-3780.
Aegis Value Fund, Inc.
Other Information (Unaudited)
February 28, 2006
Shareholder Tax Information:
Certain tax information regarding the Fund is required to be provided to
shareholders based upon the Fund s income and distributions for the
taxable year ended August 31, 2005. The information and distributions
reported herein may differ from information and distributions taxable
to the shareholders for the calendar year ended December 31, 2004.
During the fiscal year ended August 31, 2005, the Fund paid distributions
per share of $0.09 and $0.78 for ordinary income and long-term capital
gains, respectively. During the fiscal year ended August 31, 2005, the
Fund paid distributions from ordinary income and long-term capital gain
of $3,913,122 and $33,913,713, respectively.
Fund Holdings:
The complete schedules of Fund holdings for the second and fourth quarters
of each fiscal year are contained in the Fund s semi-annual and annual
shareholder reports, respectively. The Fund files complete schedules of
Fund holdings with the SEC for the first and third quarters of each fiscal
year on Form N-Q within 60 days after the end of the period. Copies of
the Fund s Form N-Q are available without charge, upon request, by
contacting the Fund at 1-800-528-3780 and on the SEC s website at
http://www.sec.gov. You may also review and copy Form N-Q at the SEC s
Public Reference Room in Washington, D.C. For more information about
the operation of the Public Reference Room, please call the SEC
at 1-800-SEC-0330.
Code of Ethics:
The Fund has adopted a code of ethics applicable to its principal
executive officer and principal financial officer. A copy of this code
is available without charge, by calling the Fund at 800-528-3780.
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, by calling the Fund at 800-528-3780.
Information regarding how the Fund voted proxies, if any, relating to
portfolio securities during the most recent 12-month period ended
June 30, 2005 is available upon request, without charge, by calling
800-528-3780. The Fund s proxy voting policies and procedures and
voting record are also available on the Commission s website at
http://www.sec.gov.
Aegis Value Fund, Inc.
1100 North Glebe Road, Suite 1040
Arlington, Virginia 22201
Phone: (800) 528-3780
Fax: (703) 528-1395
Internet: www.aegisvaluefund.com
Board of Directors
Scott L. Barbee
William S. Berno
Edward P. Faberman
David A. Giannini
Albert P. Lindemann III
Eskander Matta
Officers
William S. Berno, President
Scott L. Barbee, Treasurer
Paul Gambal, Secretary
Skyler S. Showell, Chief Compliance Officer
Investment Advisor
Aegis Financial Corporation
1100 North Glebe Road, Suite 1040
Arlington, Virginia 22201
Custodian
UMB Bank, n.a.
928 Grand Boulevard
Kansas City, Missouri 64106
Independent Auditors
Briggs, Bunting & Dougherty, LLP
Two Penn Center Plaza, Suite 820
Philadelphia, Pennsylvania 19102-1732
Counsel
Seward & Kissel, LLP
1200 G Street, N.W.
Washington, D.C. 20005
ITEM 11. CONTROLS AND PROCEDURES
(a) The registrant s principal executive officer and principal financial
officer have concluded that the registrant s disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company
Act of 1940, as amended are effective based on their evaluation of
these controls and procedures as of a date within 90 days of the filing
date of this document.
(b) There were no changes in the registrant's internal controls over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the 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) Code of ethics, or any amendment thereto, that is the subject
of disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(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.
Registrant: Aegis Value Fund, Inc.
------------------------
Signature and Title: /s/ William S. Berno, President
---------------------------------
Date: May 1, 2006
---------------
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/ William S. Berno
-----------------------------
William S. Berno, President
Date: May 1, 2006
----------------
By: /s/ Scott L. Barbee
-----------------------------
Scott L. Barbee, Treasurer
Date: May 1, 2006
----------------