-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M9ovWA4O7ZwlHtvvBfAKmMo7yOjwdd2QYLC71YObzl8YRdjuZXJCgS6sbZRZwjlj H+bPbOgyiMnLkRnjnyzv3g== 0001047469-02-003776.txt : 20021120 0001047469-02-003776.hdr.sgml : 20021120 20021120152715 ACCESSION NUMBER: 0001047469-02-003776 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021120 EFFECTIVENESS DATE: 20021120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAIRS & POWER GROWTH FUND INC CENTRAL INDEX KEY: 0000061628 IRS NUMBER: 416019924 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-00802 FILM NUMBER: 02834754 BUSINESS ADDRESS: STREET 1: 332 MINNESOTA ST STE W-2062 STREET 2: FIRST NATIONAL BANK BUILDING CITY: ST PAUL STATE: MN ZIP: 55101 BUSINESS PHONE: 6122228478 MAIL ADDRESS: STREET 1: FIRST NATIONAL BANK BUILDING W-2062 STREET 2: 332 MINNESOTA STREET CITY: ST PAUL STATE: MN ZIP: 55101 FORMER COMPANY: FORMER CONFORMED NAME: MAIRS & POWER FUND INC DATE OF NAME CHANGE: 19680607 N-30B-2 1 a2093525zn-30b_2.txt N-30B-2 MAIRS AND POWER GROWTH FUND, INC. November 19, 2002 3RD QUARTER REPORT To Our Shareholders: September 30, 2002 Mairs and Power Growth Fund shares registered a decline of 14.8% for the nine month period ending September 30, 2002 after adjustment for the June dividend. This compares favorably with declines of 28.2% for Standard & Poor's 500 Stock Index and 23.2% for the Dow Jones Industrial Average. The average domestic diversified stock fund had a loss of 26.6% according to Lipper, Inc. Our ten year average annual return of 15.3% once again placed us on the WALL STREET JOURNAL list of the fifty best performing mutual funds for the past 10-year period and within that list we ranked 7th among the diversified stock funds. FORBES Magazine, in the September 16th issue, presented its annual survey of mutual funds. The survey includes an Honor Roll of ten funds measured by performance, preservation of capital in declining markets, tax efficiency and continuity of management. Mairs and Power Growth Fund appeared on this list, as it has in five of the past six years, and ranked second. In addition, FORBES listed 20 stock funds which they recommended as Best Buys based on relatively high risk-adjusted returns as well as low overhead costs. The Fund appeared on that list as well, where it has also appeared in five of the past six years, and ranked third. Economic growth strengthened in the third quarter to a 3.1% annual rate. While many observers have been disappointed by the pace of the economy, growth has been at an average rate of 3% since the recovery began in the fourth quarter of 2001. Consumer spending rose at a 4.2% rate in the quarter and personal income continues firm, which augers well for continued growth in the fourth quarter, albeit at a slower rate. In the months ahead, the economy should respond to both fiscal and monetary stimulus, which always takes time to be effective. Fiscal policy has shifted from a federal surplus of $270 billion in early 2001 to a current deficit of about $200 billion. This is a huge swing, equal to almost 5% of Gross Domestic Product. Consumer spending should also be supported by the fact that real disposable incomes are rising because wages are rising faster than consumer prices. Interest rates are currently at a forty year low, which has allowed consumers to refinance mortgage debt at much lower rates, reducing debt service costs as a percentage of disposable income. The major concern for the economy is the increase in business caution. Industrial production has declined for the past two months as did output in the factory sector alone. Businesses should look more favorably on the future, as long as consumers keep spending. Consumers continue to have enough faith in the future to commit a sizable amount of future income to the purchase of a home. Recent sales of new homes have fueled housing starts to the highest level since 1986. Furthermore, increases in home buying always lift consumer spending for home-related goods. Therefore, we believe that moderate economic growth will continue in 2003 accompanied by a gradual further increase in corporate earnings. The stock market will continue to reflect concerns over terrorism and conflict in the Middle East. However, valuation levels appear compelling based upon our long-term confidence in the strength and resiliency of the U.S. economy. J. Thomas Simonet has retired from our Board of Directors after ten years of distinguished service. Throughout that period, his wise counsel has been invaluable and has been deeply appreciated. We will continue to hold him in high esteem as both a colleague and a friend. We are pleased to announce that Hon. Edward C. Stringer has been elected to our Board of Directors after his recent retirement as Associate Justice of the Minnesota Supreme Court. He had previously served as Executive Vice President, General Counsel and Chief Administrative Officer of the Pillsbury Co. as well as Counsel to the U.S. Department of Education. George A. Mairs, President William B. Frels, Co-Manager
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2002 - ---------------------------------------------------------------------------------------------- NUMBER OF SHARES COMMON STOCKS MARKET VALUE - ----------------- -------------------------------- ------------------- BASIC INDUSTRIES 11.8% 728,100 BMC Industries, Inc. $ 873,720 450,000 Bemis Company, Inc. 22,230,000 520,000 Ecolab, Inc. 21,699,600 804,000 H. B. Fuller 21,386,400 632,500 The Valspar Corporation 23,592,250 ------------------- 89,781,970 ------------------- CAPITAL GOODS 11.6% 763,600 Donaldson Company, Inc. 26,214,388 1,131,662 Graco Inc. 28,065,218 1,280,100 MTS Systems Corporation 12,121,267 580,000 Pentair, Inc. 21,558,600 ------------------- 87,959,473 ------------------- CONSUMER CYCLICAL 8.8% 114,000 Arbitron, Inc. * 3,887,400 1,210,000 Target Corporation 35,719,200 485,800 The Toro Company 27,326,250 ------------------- 66,932,850 ------------------- CONSUMER STAPLE 10.4% 744,000 General Mills, Inc. 33,048,480 1,240,000 Hormel Foods Corporation 27,131,200 1,200,000 SUPERVALU Inc. 19,380,000 ------------------- 79,559,680 ------------------- DIVERSIFIED 6.0% 800,000 General Electric Company 19,720,000 233,000 3M Company 25,623,010 ------------------- 45,343,010 ------------------- FINANCIAL 16.0% 670,000 St. Paul Companies, Inc. 19,242,400 890,000 TCF Financial Corporation 37,673,700 1,300,350 U.S. Bancorp 24,160,503 840,000 Wells Fargo & Company 40,454,400 ------------------- 121,531,003 ------------------- HEALTH CARE 21.2% 760,000 Baxter International, Inc. 23,218,000 560,000 Johnson & Johnson 30,284,800 940,000 Medtronic, Incorporated 39,592,800 375,000 Merck & Co. 17,141,250 980,000 Pfizer Inc. 28,439,600 630,000 St. Jude Medical, Inc. * 22,491,000 ------------------- 161,167,450 ------------------- TECHNOLOGY 8.9% 2,100,000 ADC Telecommunications Inc. * 2,415,000 1,150,000 Ceridian * 16,387,500 1,200,000 Corning, Inc. * 1,920,000 1,287,030 eFunds Corp. * 12,073,628 488,050 Emerson Electric Co. 21,444,917 628,750 Honeywell International Inc. 13,618,725 ------------------- 67,859,770 ------------------- UTILITIES 1.8% 490,000 Verizon Communications 13,445,600 ------------------- TOTAL COMMON STOCKS 96.5% 733,580,806 SHORT TERM INVESTMENTS 3.6% 16,976,194 First American Prime Obligation Fund Class I 16,976,194 10,467,969 Merrill Lynch Institutional Money Market Fund 10,467,969 ------------------- 27,444,163 ------------------- TOTAL INVESTMENTS 100.1% 761,024,969 OTHER ASSETS AND LIABILITIES (NET) -0.1% (871,766) ------------------- NET ASSETS 100% $760,153,203 ===================
* Non-income producing
STATEMENT OF NET ASSETS AT SEPTEMBER 30, 2002 - ----------------------------------------------------------------------------------------------------------------------- ASSETS Investments at market value (cost $643,631,280) $ 733,580,806 Cash 27,444,163 Dividends receivable 1,056,762 Receivables for securities sold, not yet delivered 0 Prepaid expense 148,105 -------------- 762,229,836 LIABILITIES Accrued management fee $ 391,134 Accrued custodian and transfer agent fee 110,217 Payable for securities purchased, not yet received 1,575,282 2,076,633 ------------ -------------- NET ASSETS Equivalent to $46.17 per share on 16,462,673 shares outstanding $ 760,153,203 ==============
STATEMENT OF CHANGES IN NET ASSETS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 - ----------------------------------------------------------------------------------------------------------------------- NET ASSETS, December 31, 2001 $ 679,026,689 Net investment income, per statement below $ 5,008,586 Distribution to shareholders (3,149,355) 1,859,231 Fund shares issued and repurchased: ------------ Received for 5,477,760 shares issued 301,870,685 Paid for 1,506,052 shares repurchased (79,190,514) 222,680,171 Decrease in unrealized net appreciation of investments ------------ (145,657,487) Net gain realized from sales of securities 2,244,599 -------------- NET ASSETS, September 30, 2002 $ 760,153,203 ==============
STATEMENT OF NET INVESTMENT INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 - ----------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Dividends $ 9,559,043 Other income 838 -------------- 9,559,881 EXPENSES Management fee (Note A) $ 3,653,365 Fees and expenses of custodian, transfer agent and dividend disbursing agent (Note A) 481,913 Legal and auditing fees and expenses 23,596 Insurance 10,906 Other Fees and Expenses 381,515 4,551,295 ------------ -------------- NET INVESTMENT INCOME $ 5,008,586 ==============
NOTE A: The investment management fee was paid to Mairs and Power, Inc., which is owned by individuals who are directors and officers of the Fund, for its services as investment manager. Investment management fees are paid to the manager pursuant to an advisory agreement approved by the Directors of the Fund. The management fee is computed each month at an annual rate of 0.60% of the net asset value of the Fund on the last valuation day of the month. The transfer agent fee was paid to U.S. Bancorp Fund Services, LLC which serves as transfer agent. SUPPLEMENTARY INFORMATION: 1) The directors of the Fund not affiliated with Mairs and Power, Inc. received a total of $80,750 for meetings scheduled during this nine month period. No compensation was paid to any other director or officer of the Fund. 2) No provision has been made for federal income taxes as it is the intention of the Fund to comply with the provisions of the Internal Revenue Code available to investment companies and to make distributions of income and security profits which will be sufficient to relieve it from all or substantially all income taxes. 3) Purchases and sales of investment securities during the nine months ended September 30, 2002 aggregated $227,585,527 and $5,055,782, respectively. MAIRS AND POWER GROWTH FUND, INC. A NO-LOAD FUND W1520 First National Bank Building, 332 Minnesota Street, St. Paul, Minnesota 55101-1363 Investment Manager: 651-222-8478 Shareholder Information: 800-304-7404 www.mairsandpower.com
SUMMARY OF FINANCIAL INFORMATION This table covers a period of generally rising common stock prices. The results shown should not be considered as a representation of the dividend income and capital gain or loss which may result from an investment made in the Fund today.
PER SHARE --------------------------------------------- DISTRIBUTIONS DIVIDENDS OF REALIZED FROM NET SHARES TOTAL NET NET ASSET SECURITIES INVESTMENT DATES OUTSTANDING ASSETS VALUE GAINS INCOME - ------------- ----------- ------------ ---------- ------------- ---------- Dec. 31, 1982 1,701,884 $ 16,784,217 $ 9.86 $ 0.29 $ 0.25 Dec. 31, 1983 1,763,184 18,972,177 10.76 0.35 0.24 Dec. 31, 1984 1,744,138 17,304,204 9.92 0.38 0.23 Dec. 31, 1985 1,713,476 21,553,457 12.58 0.43 0.23 Dec. 31, 1986 1,787,700 22,235,453 12.44 1.37 0.20 Dec. 31, 1987 1,828,278 19,816,097 10.84 1.15 0.24 Dec. 31, 1988 1,858,078 20,630,251 11.11 0.61 0.21 Dec. 31, 1989 1,733,168 22,630,081 13.06 0.92 0.22 Dec. 31, 1990 1,734,864 22,501,587 12.97 0.35 0.21 Dec. 31, 1991 1,808,046 31,440,529 17.39 0.79 0.20 Dec. 31, 1992 1,913,628 34,363,306 17.96 0.58 0.20 Dec. 31, 1993 2,012,570 39,081,010 19.42 0.61 0.22 Dec. 31, 1994 2,128,038 41,889,850 19.69 0.49 0.33 Dec. 31, 1995 2,490,650 70,536,880 28.32 0.76 0.28 Dec. 31, 1996 4,322,492 150,161,759 34.74 0.70 0.36 Dec. 31, 1997 9,521,030 412,590,619 43.34 0.96 0.39 Dec. 31, 1998 12,525,664 580,460,523 46.34 0.68 0.36 Dec. 31, 1999 11,771,794 546,836,085 46.46 2.74 0.47 Dec. 31, 2000 10,891,038 581,668,419 53.41 4.82 0.55 Dec. 31, 2001 12,490,964 679,026,689 54.36 2.00 0.51 Sep. 30, 2002 16,462,673 760,153,203 46.17 - 0.20
The above data has been adjusted to reflect the 2-for-1 stock split paid to shareholders on October 10, 2001. No adjustment has been made for any income tax payable by shareholders on capital gain distributions accepted in shares. This report is not to be used in connection with the offering of shares of the Fund unless accompanied or preceded by an effective Prospectus. Please call or write if you desire further information. AVERAGE ANNUAL TOTAL RETURNS THE AVERAGE ANNUAL TOTAL RETURNS FOR THE FUND (PERIOD ENDED SEPTEMBER 30, 2002) ARE AS FOLLOWS: 1 YEAR: -4.8% 5 YEARS: +6.6% 10 YEARS: +15.3% PAST INVESTMENT RESULTS SHOULD NOT BE TAKEN AS NECESSARILY REPRESENTATIVE OF FUTURE PERFORMANCE. THE 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. OFFICERS AND DIRECTORS
George A. Mairs, III William B. Frels Peter G. Robb Lisa J. Hartzell President and Director Secretary and Director Vice-President and Director Treasurer Norbert J. Conzemius Charlton Dietz Charles M. Osborne J. Thomas Simonet Director Director Director Director
-----END PRIVACY-ENHANCED MESSAGE-----