As filed with the Securities and Exchange Commission on August 30, 2004
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 811-08507
ICM SERIES TRUST
Two Portland Square
Portland, Maine 04101
207-879-1900
Warren J. Isabelle, President
Suite 240
21 Custom House Street
Boston, MA 02109
(800) 472-6114
Date of fiscal year end: DECEMBER 31, 2004
Date of reporting period: JUNE 30, 2004
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. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
ICM FUNDS [LOGO]
ICM SERIES TRUST
---------------------------------
ICM/ISABELLE SMALL CAP
VALUE FUND
Semi-Annual Report
June 30, 2004
ICM/ISABELLE
SMALL CAP VALUE FUND
TABLE OF CONTENTS
SHAREHOLDER LETTER .................................... 2
PORTFOLIO OF INVESTMENTS .............................. 9
STATEMENT OF ASSETS AND LIABILITIES ................... 13
STATEMENT OF OPERATIONS ............................... 14
STATEMENTS OF CHANGES IN NET ASSETS ................... 15
FINANCIAL HIGHLIGHTS .................................. 16
NOTES TO FINANCIAL STATEMENTS ......................... 20
SHAREHOLDER LETTER
July 2004
"SEEING THE FOREST THROUGH THE TREES"
FIRST HALF 2004 OVERVIEW
Corporate America, the central bank, the government and the consumer all took
actions to drive the stock market higher. Companies showed strong profit growth
and began hiring again. The Federal Reserve kept money essentially "free" with
interest rates at historic lows. So, too, the government obliged with highly
stimulative deficits, which were in part the work of 2003 tax cuts. Individual
investors poured money back into the market. So how did the market react? At
first with good follow through from 2003's rebound, but soon it just shrugged
its shoulders, often selling off on the release of good news. As the second
quarter progressed, there were several periods of up weeks only to be followed
by periods of down weeks, with the indices remaining relatively close to where
they started the beginning of the year. All in all, a lot of effort and expense
went toward moving stocks just a little.
It was apparent from the blase reaction that investors were looking past
decidedly favorable current news and saw less than exciting trends ahead. Gross
Domestic Product (GDP) and corporate earnings would continue to grow, but they
would not likely match the large gains of 2003. Moreover, earnings comparisons
going into the second half of the year and 2005 would be increasingly difficult.
Indeed, the Fed signaled investors that this new economic environment would
include higher interest rates sooner than investors had expected. Commodity
prices continued to rise. Geopolitical fears, too, could not be put out of mind,
what with the train bombings in Madrid, the assassination of the head of the
Iraqi governing body, fear of another terrorist attack on US soil, and mounting
U.S. casualties in Iraq. That combination of events sent oil prices to
twenty-year highs. Finally, with a presidential election victory no longer a
sure thing for the incumbent, uncertainty regarding potential new fiscal
policies weighed on the market.
2
Overall, the Russell 2000 Index advanced 6.76% during the first half of 2004
continuing to outpace (as it did all of last year) the larger cap, S&P 500 Index
that gained 3.58%. In the first half of 2004, Energy and Consumer Discretionary
sectors led the way with Biotechnology and Healthcare names also performing very
strongly. In addition, it appears that a pronounced style shift began. Higher
quality stocks, which had been lagging the more volatile, lower quality names,
reversed course and moved relatively higher. The ICM/Isabelle Small Cap Value
Fund Investment Class Shares outperformed the Russell 2000 Index by returning
7.97% during the first half of 2004, and, over the past year, has returned
37.33% versus 33.36% for the Russell 2000 Index. For a longer term perspective,
the Fund's 5-year and Since Inception (3/9/98) average annual returns as of June
30, 2004 were 12.70% and 6.92%, respectively. PERFORMANCE DATA QUOTED REPRESENTS
PAST PERFORMANCE AND IS NO GUARANTEE OF FUTURE RESULTS. CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN ORIGINAL COST. FOR THE MOST RECENT MONTH END
PERFORMANCE, PLEASE CALL (800) 472-6114.
PORTFOLIO ACTION
- ----------------
During the first half of 2004, we were actively taking profits in several stocks
that had performed exceptionally well. Companies such as Graphic Packaging,
Chattem, and Tesoro Petroleum exhibited strong earnings gains but not enough to
justify the sharp rise in share prices. Our investment philosophy dictates that
when the stock price reaches or exceeds the inherent economic value of the
underlying businesses as we understand them, then the target has been reached
and our mission has been accomplished.
The top performers for the first half of 2004 were Hypercom (+78%) followed by
two new holdings, PMA Capital (+76%) and Prime Medical Services (+69%). EnPro
Industries (+65%) and AM Castle (+47%), two industrials, also contributed to the
portfolio's solid performance. Our overweight Energy position provided gains
from Denbury Resources (+51%) and Harvest Natural Resources (+50%). Other solid
performers included Paxar (+46%) and Intercept (+45%). On the down side were
biotech companies NeoPharm (-43%) and Praecis Pharmaceutical (-41%), and
retailer Tweeter Home Entertainment (-43%).
3
During the first half of the year we added several new investments, consistent
with our long-term investment philosophy, which we believe represented real
economic values. These included: Sunterra Corp., Advanced Marketing Services,
and Genitope. We also invested in TeleTech Holdings and United Stationers, two
names which produced significant gains for us in the past, and appear to have
become undervalued situations once again.
WHAT DOES THE FUTURE HOLD?
- --------------------------
It was a busy first half of the year with a lot of emotional as well as
fundamental issues dominating the headlines. Bulls argued that the market had
absorbed substantial bad news in terms of a sharp rise in oil prices, increased
terrorist activity overseas, and a sharp rise in commodity prices, all without
breaking. Looking at the same facts, Bears argued that investors, in not
retreating from stocks more aggressively, had become terribly complacent. Bulls
responded that investors were overly negative, having ignored very strong
economic growth and three quarters of 20%+ earnings growth. Bears said that
while this may have been true, the rate of growth in earnings would be slowing
in the second half and beyond, especially in 2005. Bears also added that higher
inflation and interest rates would slow economic growth as well, while bulls
argued that the upward pace of inflation and interest rates simply tended to
confirm that the economy was strong. Who was (is) right?
At this writing, the Bears can make an early claim. The Russell 2000 has
retreated, now standing at a loss for the year-to-date. The issues the Bulls
thought the market had successfully coped with seem to have finally taken their
toll. The Bear case, near term then, looks to be the more accurate. Positive
news from the leading market players in 2003 and early 2004 is waning. Corporate
America, after a year of strong earnings growth will likely see profit growth
decelerate in late 2004 and 2005. The Fed has begun to raise rates. The winning
presidential candidate will have a huge budget and trade deficit to address in
2005. It is easy to understand, in the face of all this, why investors have
recently become big net sellers of stocks. Nonetheless, we believe that while
all of these negative factors may not disappear and significant risks remain,
they will ease in intensity, sufficient to improve investor sentiment and allow
better stock prices and a greater
4
appreciation of the positive fundamentals. Ultimately, the environment will turn
positive for equities but will be a far cry from that of 2003. This is not a bad
scenario. More moderate economic growth should be more sustainable.
The `forward mental compression' of perceived expectations which led to the
sharp run-up in the market well in advance of actual results will, over a period
of time, result in the formation of a new `base' from which future results can
be measured. Provided that the fundamentals remain positive, the market is
positioned to move in a more positive direction as well.
For the near term, we believe that the market will favor those companies with
strong cash flows, solid balance sheets and which will benefit from continued
economic growth (albeit a slower pace). To sum it up, quality will rule the day.
In light of this, we are revisiting the fundamentals of each and every one of
our holdings. As we have in the past, during more challenging periods, we will
pare weaker holdings in favor of the remaining stronger ones. Very simply, this
action results in a `leaner and meaner' portfolio that should be more responsive
to improving conditions. Having said that, we must remind all of our
shareholders that our investment horizon is longer term, measured in years, not
quarters. There will always be obstacles, risks, emotions and fundamentals to
encounter and overcome in selecting the best investments for our shareholders.
Whatever the economic and market environment is or will be, our job will remain
the same - to find unrecognized economic value in businesses built for the
long-term - to find the forest through the trees.
We will continue to work diligently in an effort to build those long-term
returns for our shareholders. We thank you for your continued trust and greatly
appreciate your support.
Sincerely,
/S/WARREN J. ISABELLE /S/ RICK L. DROSTER
- --------------------- --------------------
Warren J. Isabelle Rick L. Droster
5
BEFORE INVESTING YOU SHOULD CAREFULLY CONSIDER THE FUND'S INVESTMENT OBJECTIVES,
RISKS, CHARGES AND EXPENSES. THIS AND OTHER INFORMATION IS IN THE PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED BY CALLING (800) 472-6114 OR VISITING THE FUND'S
WEBSITE AT WWW.ICMFUNDS.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST.
INVESTMENTS IN SMALLER COMPANIES CARRY GREATER RISK THAN IS CUSTOMARILY
ASSOCIATED WITH LARGER COMPANIES FOR VARIOUS REASONS SUCH AS NARROWER PRODUCT
LINES, LIMITED FINANCIAL RESOURCES AND LESS DEPTH IN MANAGEMENT.
THE VIEWS IN THIS REPORT WERE THOSE OF THE FUND'S MANAGEMENT AS OF JUNE 30, 2004
AND MAY NOT REFLECT THEIR VIEWS ON THE DATE THIS REPORT IS FIRST PUBLISHED OR
ANYTIME THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND
IN UNDERSTANDING THEIR INVESTMENTS IN THE FUND AND DO NOT CONSTITUTE INVESTMENT
ADVICE. FORUM FUND SERVICES, LLC, DISTRIBUTOR. (08/04).
6
ICM/ISABELLE SMALL CAP VALUE FUND
Investment Class
ILLUSTRATION OF $10,000 INVESTMENT
The graph below reflects the change in value of a hypothetical $10,000
investment in the ICM/Isabelle Small Cap Value Fund (the "Fund") Investment
Class compared with a broad-based securities market index since the Investment
Class' inception. The Russell 2000 Index is composed of the 2,000 smallest
stocks in the Russell 3000 Index, a market weighted index of the 3,000 largest
U.S. publicly traded companies. The Fund is professionally managed while the
Index is unmanaged and not available for investment.
Average Annual Return for the
period ending 6/30/04
One year .................... 37.33%
Five year ................... 12.70%
Inception (3/9/1998) ........ 6.92%
[EDGAR representation of line graph
ICM/Isabelle Russell 2000
Date Small Cap Value Fund Index
------- ------------------------ -------------
3/9/1998 10,000 10,000
3/31/1998 10,000 10,431
4/30/1998 9,900 10,488
5/31/1998 9,460 9,924
6/30/1998 9,040 9,944
7/31/1998 7,770 9,139
8/31/1998 5,910 7,365
9/30/1998 6,110 7,941
10/31/1998 6,480 8,265
11/30/1998 6,730 8,698
12/31/1998 6,910 9,236
1/31/1999 7,250 9,359
2/28/1999 6,920 8,601
3/31/1999 6,690 8,735
4/30/1999 7,550 9,518
5/31/1999 8,260 9,657
6/30/1999 8,390 10,094
7/31/1999 8,390 9,817
8/31/1999 8,390 9,453
9/30/1999 8,250 9,455
10/31/1999 8,370 9,563
11/30/1999 9,280 10,061
12/31/1999 10,330 11,199
1/31/2000 10,860 11,020
2/29/2000 11,690 12,839
3/31/2000 11,880 11,993
4/30/2000 11,740 11,271
5/31/2000 11,260 10,614
6/30/2000 11,690 11,540
7/31/2000 11,530 11,168
8/31/2000 11,710 12,020
9/30/2000 12,050 11,667
10/31/2000 11,300 11,146
11/30/2000 10,840 10,002
12/31/2000 11,129 10,861
1/31/2001 12,009 11,427
2/28/2001 11,835 10,677
3/31/2001 11,794 10,155
4/30/2001 12,347 10,949
5/31/2001 13,043 11,218
6/30/2001 14,067 11,605
7/31/2001 12,808 10,977
8/31/2001 12,224 10,623
9/30/2001 9,972 9,193
10/31/2001 10,545 9,731
11/30/2001 11,067 10,484
12/31/2001 12,101 11,131
1/31/2002 12,071 11,015
2/28/2002 11,886 10,713
3/31/2002 13,699 11,575
4/30/2002 13,955 11,680
5/31/2002 13,473 11,162
6/30/2002 13,658 10,608
7/31/2002 11,549 9,006
8/31/2002 10,965 8,983
9/30/2002 9,829 8,338
10/31/2002 9,798 8,605
11/30/2002 10,811 9,373
12/31/2002 9,992 8,851
1/31/2003 9,409 8,606
2/28/2003 8,559 8,346
3/31/2003 8,426 8,454
4/30/2003 9,378 9,255
5/31/2003 10,494 10,248
6/30/2003 11,108 10,434
7/31/2003 11,293 11,087
8/31/2003 12,081 11,595
9/30/2003 11,999 11,381
10/31/2003 12,736 12,337
11/30/2003 13,310 12,774
12/31/2003 14,129 13,034
1/31/2004 14,722 13,600
2/29/2004 15,040 13,722
3/31/2004 14,866 13,850
4/30/2004 14,907 13,143
5/31/2004 14,630 13,353
6/30/2004 15,255 13,915]
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE
DATA QUOTED. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
FOR THE MOST RECENT MONTH END PERFORMANCE, PLEASE CALL (800) 472-6114. THE
PERFORMANCE TABLE AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
TOTAL RETURN FIGURES INCLUDE THE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
SOME OF THE FUND'S FEES HAVE BEEN WAIVED OR EXPENSES REIMBURSED; OTHERWISE TOTAL
RETURN WOULD HAVE BEEN LOWER.
7
ICM/ISABELLE SMALL CAP VALUE FUND
Institutional Class
ILLUSTRATION OF $10,000 INVESTMENT
The graph below reflects the change in value of a hypothetical $10,000
investment in the ICM/Isabelle Small Cap Value Fund (the "Fund") Institutional
Class compared with a broad-based securities market index since the
Institutional Class' inception. The Russell 2000 Index is composed of the 2,000
smallest stocks in the Russell 3000 Index, a market weighted index of the 3,000
largest U.S. publicly traded companies. The Fund is professionally managed while
the Index is unmanaged and not available for investment.
Average Annual Return for the
period ending 6/30/04
One year .................... 37.75%
Five year ................... 13.09%
Inception (3/27/1998) ....... 7.29%
[EDGAR representation of line graph
ICM/Isabelle Russell 2000
Date Small Cap Value Fund Index
------- ------------------------ -------------
3/27/1998 10,000 10,000
3/31/1998 9,970 10,074
4/30/1998 9,870 10,130
5/31/1998 9,460 9,584
6/30/1998 9,040 9,605
7/31/1998 7,780 8,827
8/31/1998 5,920 7,113
9/30/1998 6,120 7,670
10/31/1998 6,480 7,982
11/30/1998 6,740 8,401
12/31/1998 6,920 8,920
1/31/1999 7,260 9,039
2/28/1999 6,940 8,307
3/31/1999 6,690 8,437
4/30/1999 7,560 9,193
5/31/1999 8,270 9,327
6/30/1999 8,400 9,749
7/31/1999 8,400 9,481
8/31/1999 8,400 9,130
9/30/1999 8,270 9,132
10/31/1999 8,390 9,236
11/30/1999 9,300 9,717
12/31/1999 10,360 10,817
1/31/2000 10,890 10,643
2/29/2000 11,720 12,400
3/31/2000 11,920 11,583
4/30/2000 11,780 10,886
5/31/2000 11,300 10,251
6/30/2000 11,740 11,145
7/31/2000 11,580 10,787
8/31/2000 11,760 11,610
9/30/2000 12,100 11,268
10/31/2000 11,350 10,765
11/30/2000 10,900 9,660
12/31/2000 11,179 10,490
1/31/2001 12,079 11,036
2/28/2001 11,905 10,312
3/31/2001 11,854 9,807
4/30/2001 12,417 10,575
5/31/2001 13,113 10,835
6/30/2001 14,147 11,209
7/31/2001 12,888 10,602
8/31/2001 12,315 10,260
9/30/2001 10,042 8,879
10/31/2001 10,636 9,398
11/30/2001 11,158 10,126
12/31/2001 12,233 10,751
1/31/2002 12,202 10,639
2/28/2002 12,018 10,347
3/31/2002 13,850 11,179
4/30/2002 14,116 11,281
5/31/2002 13,625 10,780
6/30/2002 13,820 10,245
7/31/2002 11,690 8,698
8/31/2002 11,107 8,676
9/30/2002 9,950 8,053
10/31/2002 9,930 8,311
11/30/2002 10,953 9,053
12/31/2002 10,124 8,549
1/31/2003 9,541 8,312
2/28/2003 8,681 8,061
3/31/2003 8,548 8,165
4/30/2003 9,510 8,939
5/31/2003 10,646 9,898
6/30/2003 11,281 10,077
7/31/2003 11,465 10,708
8/31/2003 12,264 11,199
9/30/2003 12,182 10,992
10/31/2003 12,939 11,915
11/30/2003 13,523 12,338
12/31/2003 14,362 12,588
1/31/2004 14,976 13,135
2/29/2004 15,294 13,253
3/31/2004 15,130 13,376
4/30/2004 15,171 12,694
5/31/2004 14,894 12,896
6/30/2004 15,539 13,439]
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NO GUARANTEE OF
FUTURE RESULTS. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE
DATA QUOTED. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
FOR THE MOST RECENT MONTH END PERFORMANCE, PLEASE CALL (800) 472-6114. THE
PERFORMANCE TABLE AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
TOTAL RETURN FIGURES INCLUDE THE REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
SOME OF THE FUND'S FEES HAVE BEEN WAIVED OR EXPENSES REIMBURSED; OTHERWISE TOTAL
RETURN WOULD HAVE BEEN LOWER.
8
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004 (UNAUDITED)
MARKET
SHARES SECURITY VALUE
- ------ -------- -----
COMMON STOCK - 96.02%
CAPITAL GOODS - 2.15%
85,600 Lamson & Sessions Co.+ $ 688,224
139,700 Shaw Group, Inc.+ 1,415,161
-----------
2,103,385
-----------
CONSUMER DISCRETIONARY - 11.54%
57,900 4Kids Entertainment, Inc.+ 1,384,968
43,300 Advanced Marketing Services 559,003
173,200 First Consulting Group, Inc.+ 956,064
66,500 Navigant International, Inc.+ 1,183,035
69,900 Russell Corp. 1,255,404
60,400 Steven Madden Ltd.+ 1,206,188
134,800 Sunterra Corp. 1,698,480
205,100 Tweeter Home Entertainment Group+ 1,107,540
106,600 Visteon Corp. 1,244,022
130,500 Wet Seal, Inc. - Class A+ 682,515
-----------
11,277,219
-----------
CONSUMER STAPLES - 3.52%
83,400 Chiquita Brands International, Inc.+ 1,744,728
65,200 Interstate Bakeries 707,420
24,800 United Stationers, Inc.+ 985,056
-----------
3,437,204
-----------
ENERGY - 10.13%
98,800 Denbury Resources, Inc.+ 2,069,860
54,900 Harvest Natural Resources, Inc.+ 818,559
179,600 Magnum Hunter Resources, Inc.+ 1,864,248
259,000 Newpark Resources+ 1,605,800
48,800 Whiting Petroleum Corp.+ 1,227,320
153,500 Willbros Group, Inc.+ 2,313,245
-----------
9,899,032
-----------
FINANCIALS - 10.35%
51,200 Allmerica Financial Corp.+ 1,730,560
33,700 Brookline Bancorp, Inc. 494,379
27,800 Chittenden Corp. 977,170
20,200 First Community Bancorp, Inc. 776,488
33,800 Hilb Rogal & Hamilton Co. 1,205,984
The accompanying notes are an integral part of the financial statements.
9
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004 (Unaudited) (Continued)
MARKET
SHARES SECURITY VALUE
- ------ -------- -----
FINANCIALS (CONTINUED)
55,500 Investment Technology Group, Inc. $ 709,845
206,600 PMA Capital Corp. - Class A 1,859,400
33,500 Provident Bankshares Corp. 966,140
155,300 Rewards Network, Inc.+ 1,397,700
-----------
10,117,666
-----------
HEALTH CARE - 15.81%
409,700 ARIAD Pharmaceuticals, Inc.+ 3,068,653
426,600 Durect Corp.+ 1,488,834
19,700 EPIX Medical, Inc.+ 415,670
109,900 Gene Logic, Inc.+ 445,095
77,900 Genitope Corp.+ 768,951
64,100 Hanger Orthopedic Group, Inc.+ 751,252
82,100 Maxim Pharmaceuticals, Inc.+ 792,265
120,500 Maxygen, Inc.+ 1,273,685
77,800 Neopharm, Inc.+ 803,674
97,900 Neose Technologies, Inc.+ 815,507
400,100 PRAECIS Pharmaceuticals, Inc.+ 1,520,380
160,200 Prime Medical Services, Inc.+ 1,271,988
107,100 Theragenics Corp.+ 494,802
112,100 U.S. Physical Therapy, Inc.+ 1,536,891
-----------
15,447,647
-----------
INDUSTRIALS - 6.80%
102,300 GenCorp, Inc. 1,369,797
147,200 Global Power Equipment Group, Inc.+ 1,180,544
9,000 NACCO Industries, Inc. - Class A 855,000
216,800 Quanta Services, Inc.+ 1,348,496
26,004 Sypris Solutions, Inc. 499,017
186,100 Transpro, Inc.+ 1,071,936
20,769 Woodhead Industries, Inc. 321,089
-----------
6,645,879
-----------
INFORMATION TECHNOLOGY - 16.16%
195,100 ActivCard Corp.+ 1,416,426
132,300 Agilsys, Inc. 1,824,417
46,400 Analogic Corp. 1,968,752
292,700 Danka Business Systems plc, ADR+ 1,323,004
147,100 Hypercom Corp.+ 1,242,995
33,000 Imation Corp. 1,406,130
The accompanying notes are an integral part of the financial statements.
10
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004 (Unaudited) (Continued)
MARKET
SHARES SECURITY VALUE
- ------ -------- -----
INFORMATION TECHNOLOGY (CONTINUED)
95,500 infoUSA, Inc.+ $ 968,370
62,100 Intercept, Inc.+ 1,017,198
88,800 MagneTek, Inc.+ 740,592
62,000 Mentor Graphics Corp.+ 959,140
358,544 SoftBrands, Inc.+ 439,216
303,400 Sycamore Networks, Inc.+ 1,283,382
137,200 TeleTech Holdings, Inc.+ 1,203,244
-----------
15,792,866
-----------
MATERIALS - 17.55%
164,800 Castle (AM) & Co.+ 1,771,600
188,400 Commonwealth Industries, Inc.+ 1,948,056
477,100 Crompton Corp. 3,005,730
24,800 EnPro Industries, Inc.+ 569,904
150,800 Material Sciences Corp.+ 1,606,020
63,500 Olin Corp. 1,118,870
51,000 Paxar Corp.+ 995,520
459,700 PolyOne Corp.+ 3,420,168
112,500 Strategic Diagnostics, Inc.+ 472,500
87,700 Wausau-Mosinee Paper Corp. 1,517,210
105,800 Western Silver Corp.+ 714,150
-----------
17,139,728
-----------
OTHER - 0.78%
270,000 Westaff, Inc.+ 764,100
-----------
TELECOMMUNICATION SERVICES - 1.23%
215,300 Lightbridge, Inc.+ 1,205,680
-----------
TOTAL COMMON STOCK (COST $76,653,941) $93,830,406
===========
The accompanying notes are an integral part of the financial statements.
11
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004 (Unaudited) (Continued)
PRINCIPAL
REPURCHASE AGREEMENT - 3.47%
$3,393,270 Fifth Third Bancorp, 0.60%, 7/1/04,
to be repurchased at $3,393,388, collateralized
by US Government Obligations (Cost $3,393,270) $ 3,393,270
-----------
TOTAL INVESTMENTS (COST $80,047,211)* - 99.49% 97,223,676
OTHER ASSETS NET OF LIABILITIES - 0.51% 495,938
-----------
NET ASSETS - 100.00% $97,719,614
===========
- -------------
ADR American Depositary Receipt.
+ Non-income producing security.
* Cost for federal income tax purposes is the same as for financial
statement purposes and net unrealized appreciation consists of:
Gross Unrealized Appreciation . . . . . . . . . $ 19,343,049
Gross Unrealized Depreciation . . . . . . . . . (2,166,584)
-------------
Net Unrealized Appreciation . . . . . . . . . . $ 17,176,465
=============
The accompanying notes are an integral part of the financial statements.
12
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (Unaudited)
ASSETS:
Investments in securities at market value
(cost $76,653,941) $ 93,830,406
Investments in repurchase agreements
(cost $3,393,270) 3,393,270
Receivable for securities sold 331,097
Receivable for Fund shares sold 520,537
Interest and dividends receivable 10,912
Prepaid expenses 28,206
------------
TOTAL ASSETS 98,114,428
------------
LIABILITIES:
Payable for securities purchased 175,917
Due to custodian 32,007
Payable to adviser 76,962
Other accrued expenses 109,928
------------
TOTAL LIABILITIES 394,814
------------
NET ASSETS $ 97,719,614
============
NET ASSETS CONSIST OF:
Paid-in-Capital 78,568,121
Accumulated net investment income (loss) (587,235)
Accumulated net realized gain (loss)
on investments 2,562,263
Net unrealized appreciation (depreciation)
of investments 17,176,465
------------
NET ASSETS $ 97,719,614
============
INVESTMENT CLASS SHARES:
Net Assets (unlimited shares of $0.001
par beneficial interest authorized;
5,512,495 shares outstanding) $ 82,154,489
============
Net asset value, offering and
redemption price per Investment
Class Share $ 14.90
============
INSTITUTIONAL CLASS SHARES:
Net Assets (unlimited shares of
$0.001 par beneficial interest
authorized; 1,025,504 shares outstanding) $ 15,565,125
============
Net asset value, offering and redemption price
per Institutional Class Share $ 15.18
============
The accompanying notes are an integral part of the financial statements.
13
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED
JUNE 30, 2004
(UNAUDITED)
----------------
INVESTMENT INCOME
Dividends $ 177,625
Interest 23,136
-----------
TOTAL INCOME 200,761
-----------
EXPENSES
Investment advisory fees 444,718
Administration fees 44,471
Transfer agent fees
Investment Class Shares 49,825
Institutional Class Shares 6,961
Distribution fees
Investment Class Shares 90,426
Accounting fees 31,179
Custodian fees 17,675
Professional fees 59,272
Registration fees 16,701
Trustees' fees and expenses 6,847
Miscellaneous fees 34,139
-----------
TOTAL EXPENSES 802,214
Expenses reimbursed (14,218)
-----------
NET EXPENSES 787,996
-----------
NET INVESTMENT INCOME (LOSS) (587,235)
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on investments 6,086,307
Net increase from payment by affiliate 21,855
Net change in unrealized appreciation
(depreciation) of investments 1,576,154
-----------
Net realized and unrealized gain (loss)
on investments 7,684,316
-----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 7,097,081
===========
The accompanying notes are an integral part of the financial statements.
14
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 2004 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2003
----------- -----------------
OPERATIONS
Net investment income (loss) $ (587,235) $ (931,264)
Net realized gain (loss) on investments 6,086,307 1,415,100
Net increase from payment by affiliate 21,855
Net change in unrealized appreciation
(depreciation) of investments 1,576,154 27,090,438
------------ ------------
Increase (decrease) in net assets
resulting from operations 7,097,081 27,574,274
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares subscribed:
Investment Class 32,221,874 45,238,558
Institutional Class 1,001,308 74,529,769
Redemption of shares
Investment Class (23,829,818) (63,195,562)
Institutional Class (5,006,525) (83,383,754)
------------ ------------
Increase (Decrease) in net assets
from capital share transactions (a) 4,386,839 (26,810,989)
------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 11,483,920 763,285
NET ASSETS
Beginning of period 86,235,694 85,472,409
------------ ------------
End of period (including
accumulated net investment loss
of $587,235 and $-, respectively) $ 97,719,614 $ 86,235,694
============ ============
(a) Transactions in capital stock were:
Investment Class
Shares sold 2,240,261 4,213,982
Shares redeemed (1,653,859) (5,902,574)
------------ ------------
Increase (Decrease) in shares
outstanding 586,402 (1,688,592)
============ ============
Institutional Class
Shares sold 69,456 7,762,501
Shares redeemed (344,585) (8,576,722)
------------ ------------
Increase (Decrease) in shares
outstanding (275,129) (814,221)
============ ============
The accompanying notes are an integral part of the financial statements.
15
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each year or period indicated.
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2004 DECEMBER 31,
INVESTMENT CLASS (UNAUDITED) 2003
- ---------------- ---------------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.80 $ 9.76
---------- -----------
Increase (decrease) from
investment operations:
Net investment loss (0.10)* (0.13)*
Net realized and unrealized
gains (losses) on investments 1.20* 4.17*
---------- -----------
NET INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS 1.10 4.04
---------- -----------
Less distributions from
net realized gains -- --
---------- -----------
NET ASSET VALUE, END OF PERIOD $ 14.90 $ 13.80
========== ===========
TOTAL RETURN ** 7.97% 41.39%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000s) $ 82,155 $ 67,983
Ratio of expenses to average net assets:
Before waivers and/or 1.83%*** 1.94%
reimbursements
After waivers and/or 1.80%*** 1.88%
reimbursements
Ratio of net investment income
(loss) to average net assets:
Before waivers and/or (1.38)%*** (1.32)%
reimbursements
After waivers and/or (1.35)%*** (1.26)%
reimbursements
Portfolio turnover rate 42.60% 51.70%
- -----------------
* Based on average shares outstanding.
** Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions and the complete redemption of
the investment at the end of the period. Total return reflects
performance based on net operating expenses. During any period in which
fees were waived or expenses reimbursed, total return would have been
lower if expenses had not been reduced.
*** Annualized.
The accompanying notes are an integral part of the financial statements.
16
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS (Continued)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2002 2001 2000 1999
---- ---- ---- ----
$ 11.82 $ 10.87 $ 10.33 $ 6.91
- --------- --------- ------------ --------
(0.14) (0.08) (0.05) (0.12)*
(1.92) 1.03 0.84 3.54*
- --------- --------- ------------ --------
(2.06) 0.95 0.79 3.42
- --------- --------- ------------ --------
-- -- (0.25) --
- --------- --------- ------------ --------
$ 9.76 $ 11.82 $ 10.87 $ 10.33
========= ========= ============ ========
(17.43)% 8.74% 7.73% 49.49%
$ 64,552 $ 85,386 $ 75,327 $ 9,993
1.80% 1.74% 1.82% 4.79%
1.71% 1.74% 1.81% 1.95%
(1.17)% (0.61)% (0.44)% (4.23)%
(1.08)% (0.61)% (0.43)% (1.39)%
50.41% 43.16% 53.91% 84.30%
The accompanying notes are an integral part of the financial statements.
17
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each year or period indicated.
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2004 DECEMBER 31,
INSTITUTIONAL CLASS (UNAUDITED) 2003
- ------------------- ---------------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.03 $ 9.89
---------- --------
Increase (decrease) from
investment operations:
Net investment loss (0.08)* (0.10)*
Net realized and unrealized
gains (losses) on investments 1.23* 4.24*
---------- --------
NET INCREASE (DECREASE) FROM
INVESTMENT OPERATIONS 1.15 4.14
---------- --------
Less distributions from
net realized gains -- --
---------- --------
NET ASSET VALUE, END OF PERIOD $ 15.18 $ 14.03
========== ========
Total Return ** 8.20% 41.86%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000s) $ 15,565 $ 18,253
Ratio of expenses to average net assets:
Before waivers and/or 1.60%*** 1.61%
reimbursements
After waivers and/or 1.56%*** 1.55%
reimbursements
Ratio of net investment income
(loss) to average net assets:
Before waivers and/or (1.14)%*** (0.98)%
reimbursements
After waivers and/or (1.10)%*** (0.93)%
reimbursements
Portfolio turnover rate 42.60% 51.70%
- -----------------
* Based on average shares outstanding.
** Assumes initial investment at net asset value at the beginning of each
period, rein- vestment of all distributions and the complete redemption
of the investment at the end of the period. Total return reflects
performance based on net operating expenses. During any period in which
fees were waived or expenses reimbursed, total return would have been
lower if expenses had not been reduced.
*** Annualized.
The accompanying notes are an integral part of the financial statements.
18
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS (Continued)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2002 2001 2000 1999
---- ---- ---- ----
$ 11.95 $ 10.92 $ 10.36 $ 6.92
- --------- --------- -------- --------
(0.11) (0.05) (0.02) (0.10)*
(1.95) 1.08 0.83 3.54*
- --------- --------- -------- --------
(2.06) 1.03 0.81 3.44
- --------- --------- -------- --------
-- -- (0.25) --
- --------- --------- -------- --------
$ 9.89 $ 11.95 $ 10.92 $ 10.36
======== ========= ======== ========
(17.24)% 9.43% 7.90% 49.71%
$ 20,920 $ 29,502 $ 26,225 $ 7,448
1.49% 1.49% 1.57% 4.54%
1.44% 1.49% 1.56% 1.70%
(0.86)% (0.36)% (0.18)% (4.14)%
(0.82)% (0.36)% (0.17)% (1.30)%
50.41% 43.16% 53.91% 84.30%
The accompanying notes are an integral part of the financial statements.
19
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
ICM/Isabelle Small Cap Value Fund (the "Fund") is a series of the ICM Series
Trust (the "Trust"), which was organized as a Massachusetts business trust
pursuant to a Declaration of Trust dated November 18, 1997. The Trust is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund offers two classes of shares, Investment Class shares and
Institutional Class shares (collectively, the "Shares"), each of which has equal
rights as to class and voting privileges. The Investment Class has exclusive
voting rights with respect to its distribution plan pursuant to Rule 12b-1 under
the 1940 Act ("12b-1 Plan") and is subject to 12b-1 Plan expenses. The Fund
commenced operations on March 9, 1998 (March 27, 1998 for the Institutional
Class). The investment objective of the Fund is to seek capital appreciation by
investing primarily in relatively undervalued common stocks of domestic small
market capitalization companies. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles for investment companies.
A. SECURITY VALUATION. Exchange traded securities for which market quotations
are readily available are valued using the last reported sales price
provided by independent pricing services as of the close of trading on the
New York Stock Exchange (normally 4:00 p.m. Eastern time), on each Fund
business day. In the absence of a sale, such securities are valued at the
mean of the last bid and asked price. Non-exchange traded securities for
which over-the-counter quotations are available are generally valued at the
mean between the closing bid and asked prices. Money market instruments
that mature in sixty days or less may be valued at amortized cost unless
the Fund's investment adviser believes another valuation is more
appropriate. Investments in other open-ended regulated investment companies
are valued at net asset value.
20
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited) (Continued)
The Fund values securities at fair value pursuant to procedures adopted by
the Board if (1) market quotations are insufficient or not readily
available or (2) the Adviser believes that the prices or values available
are unreliable due to, among other things, the occurrence of events after
the close of the securities markets on which the Fund's securities
primarily trade but before the time as of which the Fund calculates its net
asset value.
B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS. Securities transactions are
accounted for on the date the securities are purchased or sold (trade
date). Cost is determined and gains and losses are based on the identified
cost basis for both financial statement and federal income tax purposes.
Dividend income is reported on the ex-dividend date. Interest income and
expenses are accrued daily.
C. NET ASSET VALUE PER SHARE. Net asset value per share of each class of
shares of the Fund is determined daily as of the close of trading on the
New York Stock Exchange by dividing the value of the total assets, less
liabilities attributable to that class, by the number of outstanding shares
of that class. The net asset value of the classes may differ because of
different fees and expenses charged to each class.
D. FEDERAL INCOME TAXES. The Trust intends to continue to qualify each year as
a regulated investment company by complying with all requirements of the
Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies including, among other things, distributing
substantially all of its earnings to its shareholders. Therefore, no
federal income tax provision is required. The characterization of
distributions to shareholders for financial reporting purposes is
determined in accordance with federal income tax rules
E. INCOME AND EXPENSES. Expenses directly attributable to a particular class
are charged directly to such class. In calculating net asset value per
share of each class, investment income, realized and unrealized gains
21
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited) (Continued)
and losses and expenses, other than class specific expenses, are allocated
daily to each class of shares based on the proportion of net assets of each
class at the beginning of that day.
F. REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. The
Fund will also require the financial institution to maintain collateral at
all times with a value equal to the amount the Fund paid for the
securities. In the event of default, the Fund may have difficulties
disposing of such securities.
G. DISTRIBUTIONS TO SHAREHOLDERS. The Fund will distribute substantially all
of its net investment income and capital gains, if any, at least annually.
Distributions to shareholders are recorded on the ex-dividend date. Income
and capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting
principles.
H. USE OF ESTIMATES. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments, aggregated
$44,464,298 and $34,961,455, respectively, for the six months ended June 30,
2004.
NOTE 3 - ADVISORY FEES, SERVICING FEES, AND OTHER TRANSACTIONS WITH RELATED
PARTIES
INVESTMENT ADVISER - Ironwood Capital Management, LLC ("ICM") serves as the
investment adviser for the Fund pursuant to an investment advisory agreement
(the "Agreement"). Under the terms of the Agreement,
22
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited) (Continued)
ICM receives a fee from the Fund, accrued daily and paid monthly, at an annual
rate of 1.00% of the average daily net assets of the Fund. Pursuant of the terms
of the Agreement, ICM is obligated for as long as the Agreement remains in
effect, to limit total Fund expenses, including its investment advisory fee, to
1.95% of the average daily net assets annually for the Investment Class and
1.70% of the average daily net assets annually for the Institutional Class, and
to waive such fees and reimburse expenses to the extent that they exceed these
amounts. For the six months ended June 30, 2004, no advisory fees were waived
nor other expenses reimbursed by ICM.
ADMINISTRATION AND OTHER SERVICES - Citigroup Global Transaction Services,
through its various affiliates (collectively "Citigroup"), provides
administration, portfolio accounting and transfer agency services to the Fund.
In addition, the Fund has entered into separate transfer agency and operating
agreements with Charles Schwab & Co., Inc. ("Schwab") and Fidelity Capital
Markets ("FCM"), whereby Schwab and FCM make shares of the Fund available to
their clients in exchange for a servicing fee. These fees are included as part
of the Transfer Agency fees on the statement of operations. For the six months
ended June 30, 2004, the Fund was reimbursed expenses of $13,233 by FCM.
The custodian, Fifth Third Bank (the "Custodian"), has agreed to compensate the
Fund and decrease custody fees for interest on any cash balances left
uninvested. For the six months ended June 30, 2004, the Fund's custodian
expenses were reduced by $985, which are disclosed as expenses reimbursed on the
accompanying statement of operations.
DISTRIBUTOR - Forum Fund Services, LLC is the Fund's distributor (the
"Distributor). The Distributor is not affiliated with ICM or with Citigroup or
its affiliated companies. The Distributor receives no compensation from the Fund
for its distribution services.
23
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited) (Continued)
No Trustee, officer or employee of ICM, or Citigroup, or any affiliate thereof,
receives any compensation from the Trust for serving as a Trustee or officer of
the Trust.
NOTE 4 - LINE OF CREDIT
The Fund has entered into a line of credit agreement with the Custodian to be
used for temporary purposes, primarily for financing redemptions. The agreement
provides that the Fund may borrow up to $5,000,000. The aggregate outstanding
principal amount of all loans may not exceed $5,000,000. Interest is charged to
the Fund, based on its borrowings, at a rate equal to the rate of interest on
overnight facilities which the Custodian is offering to other borrowers and
potential borrowers of comparable financial condition on the business day that a
loan is made pursuant to the agreement.
During the six months ended June 30, 2004, the Fund was charged $203 from
borrowings under the line of credit. As of June 30, 2004, the Fund had no loans
outstanding under the line of credit.
NOTE 5 - DISTRIBUTION PLAN
The Trustees of the Fund have adopted a 12b-1 Plan with respect to the
Investment Class shares pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder, which permits the Fund to pay certain expenses associated with the
distribution of its Investment Class shares. Under the 12b-1 Plan, the Fund
compensates the Distributor, at a fee calculated at an annual rate of up to
0.25% of the value of the average annual net assets attributable to the
Investment Class shares for distribution expenses borne, or paid to others, by
the Distributor. For the six months ended June 30, 2004, the Fund incurred
$90,426 in distribution costs for Investment Class shares.
24
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 - (Unaudited) (Continued)
NOTE 6 - INVESTMENT RESTRICTION VIOLATIONS
For the six months ended June 30, 2004, the Adviser made a contribution to the
Fund to offset a trading investment restriction violation. As a result of the
trading investment restriction, the Fund sold the violating securities at a
loss. The Adviser made a contribution to the Fund to offset this loss. This
amount is reflected as payment by affiliate on the Statement of Operations and
Statements of Changes in Net Assets. This payment had no effect on the total
return of the Fund.
NOTE 7 - PROXY VOTING INFORMATION
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to securities held in the Fund's portfolio and the
Fund's proxy voting record for the twelve-month period ended June 30, 2004 are
available, without charge and upon request, by calling (800) 472-6114. This
information is also available from the EDGAR database on the SEC's Web site at
http://www.sec.gov.
NOTE 8 - LITIGATION
On April 9, 2004 Ironwood Capital, Ltd. (the "Plaintiff") filed a complaint in
U.S. District Court, District of Massachusetts Eastern Division against the
Adviser, the Fund and Ironwood Partners, LLC (collectively, the "Defendants")
alleging trademark infringement resulting from the use of the "Ironwood" mark.
The Plaintiff seeks to refrain the Defendants from using the "Ironwood" mark and
to pay damages to be determined. The Adviser has committed to absorbing any
costs associated with legal fees and settlement that may result from this
matter. As a result, it is not anticipated that this litigation will have any
financial impact on the Fund or its shareholders.
25
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IRONWOOD CAPITAL MANAGEMENT, LLC
AND ICM FUNDS
THE IRONWOOD TREE
is a small, hardy tree, which yields a very useful and solid wood. Patiently,
these trees remain under the forest canopy until taller neighbors fall.
Once given the opportunity, the Ironwood grows quickly to reach its
full potential. We believe this imagery is appropriate for our firm as
well as our investment style.
IRONWOOD CAPITAL MANAGEMENT, LLC,
the investment manager of the ICM/Isabelle Small Cap Value Fund,
is an independent investment management firm specializing in
investing in small company stocks.
ICM Series Trust
Two Portland Square
Portland, ME 04101
1-800-472-6114
- --------------------------------------------------------------------------------
There are risks associated with investing in funds of this type that invest in
stocks of small-sized companies, which tend to be more volatile and less liquid
than stocks of larger companies. Past Fund performance is not indicative of
future results.
FOR ACCOUNT INFORMATION, CURRENT PERFORMANCE AND PRICES, CALL 1-800-472-6114
BETWEEN THE HOURS OF 9:00 A.M. AND 5:00 P.M. (EASTERN TIME), MONDAY THROUGH
FRIDAY.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES
(a) The Registrant's President and Treasurer have concluded that the
Registrant's disclosure controls and procedures (as defined in rule
30a-3(c) under the Act) are effective, based on their evaluation of
these disclosure controls and procedures required by Rule 30a-3(b) as
of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in rule 30a-3(d) under the Act) 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) Code of Ethics (Not applicable).
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (Exhibit filed herewith).
(a)(3) Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Exhibit 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 ICM SERIES TRUST
By /s/ Warren J. Isabelle
-----------------------------
Warren J. Isabelle, President
Date 8/27/04
-------
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/ Warren J. Isabelle
-----------------------------
Warren J. Isabelle, President
Date 8/27/04
-------
By /s/ Gary S. Saks
-----------------------
Gary S. Saks, Treasurer
Date 8/27/04
-------