-----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, BivJag2El6woMmKKR98IFmFeUOSnqS9u8J+loYb1Zz+XDJ0Vq+NWNf0O+AU3A3c4 VIK51HelabFVHpU5/cJ//g== 0001047469-97-005717.txt : 19971124 0001047469-97-005717.hdr.sgml : 19971124 ACCESSION NUMBER: 0001047469-97-005717 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971121 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAIRS & POWER GROWTH FUND INC CENTRAL INDEX KEY: 0000061628 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 416019924 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-00802 FILM NUMBER: 97725675 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 N-30B-2 - -------------------------------- ------------------ MAIRS AND POWER GROWTH FUND, INC. ------------------ 3RD QUARTER REPORT September 30, 1997 November 18, 1997 To Our Shareholders: On September 30, 1997, the net asset value per share of Mairs and Power Growth Fund was $87.01, an increase of 25.7% from the year-end valuation after adjustment for the June dividend. This compares with returns of 29.6% for the Standard and Poor's 500 Stock Index and 24.9% for the Dow Jones Industrial Average. In a study of mutual funds' performance by CDA/Wiesenberger, the Fund ranked 7th out of 639 long term growth funds for the three year period ended September 30, and 22nd out of 439 similar funds for the five year period. FORBES magazine, in the August 25 issue, presented its annual survey of mutual funds which included 1,795 funds. Each year the survey includes an Honor Roll of sixteen funds as measured by performance, preservation of capital in declining markets, and continuity of management. Mairs and Power Growth Fund appeared in first place on that list. In addition, FORBES also designated 15 stock funds as Best Buys based on superior performance coupled with low operating costs. The Fund appeared on that list as well. The U.S. economy performed admirably in the third quarter with G.D.P. rising 3.5%. In this seventh year of expansion, the economy remains remarkably well balanced. During the quarter, business spending and healthy exports led the expansion with investment in equipment increasing at a 22% annual rate. This should ensure a rising level of business productivity which augers well for continuing growth in the year ahead. The best news of all was the report that the G.D.P. price deflator, a key inflation indicator that measures the price of all goods and services produced in the U.S., rose at a scant 1.4% annual rate, the lowest level in 33 years. The unemployment rate is currently 4.9%, substantially below that of most industrialized countries and the lowest level we have experienced in 25 years. However, the tight labor market existing in most parts of the country has had little impact on labor costs which have remained remarkably stable, thus far. The Federal deficit in the fiscal year ended September 30 declined to $23 billion, the lowest level in 23 years. This represents a decline of over 90% from the peak level reached just six years ago. At that time, many observers in Washington as well as Wall Street regarded the Federal deficit as the country's leading economic problem. Some economists now believe that the federal budget will show a surplus in the current year which would be very well received by financial markets. The stock market experienced a correction of about 10% in October which was precipitated by a sharp downturn in several Asian stock markets. Those countries had experienced unusually rapid growth in recent years that led to excessive bank lending and speculative investment activity. It appears that economic growth will continue in these countries but at a much reduced rate and that the impact on the U.S. economy should be minimal. Earnings and interest rates are the two major factors that influence stock prices over the long term. Corporate earnings in the third quarter continued robust, rising about 12% before adjustment for non-recurring items. We believe that earnings will show further strength in 1998 and therefore provide the necessary underpinning for a firm stock market. Interest rates are influenced in part by actions on the part of the Federal Reserve as well as demand for funds on the part of borrowers. We believe that the Fed is unlikely to raise rates over the next several months which should provide a favorable environment for financial assets. Stocks are currently trading at 19-20 times estimated 1998 earnings which is a valuation level consistent with other periods of low inflation and moderate economic expansion. Mr. Charlton Dietz, retired Senior Vice President and General Counsel, Minnesota Mining and Manufacturing Company, was appointed a Director of the Fund at the last meeting of the Board of Directors on September 12, 1997. George A. Mairs SCHEDULE OF INVESTMENTS AT SEPTEMBER 30, 1997 - --------------------------------------------------------------------------------
NUMBER OF SHARES COMMON STOCKS COST MARKET VALUE - --------- ------------------------------------------ ------------ ------------ CHEMICAL 4.3% 230,000 Ecolab, Inc. $ 6,693,336 $ 11,169,375 82,500 H. B. Fuller 4,627,813 4,470,469 ------------ ------------ 11,321,149 15,639,844 ------------ ------------ CONSUMER 10.4% 83,000 Darden Restaurants 676,113 959,688 157,000 General Mills, Inc. 7,860,603 10,823,187 330,000 Hormel Foods 8,393,143 10,580,625 202,610 Jostens, Inc. 4,056,191 5,495,796 250,000 The Toro Company 7,625,445 9,906,250 ------------ ------------ 28,611,495 37,765,546 ------------ ------------ DRUGS AND HOSPITAL SUPPLIES 8.5% 162,000 Baxter International, Inc. 7,160,107 8,464,500 185,000 Johnson & Johnson 7,491,991 10,660,625 196,000 Pfizer Inc. 3,960,945 11,772,250 ------------ ------------ 18,613,043 30,897,375 ------------ ------------ FINANCIAL 14.7% 120,000 U.S. Bancorp 4,477,341 11,580,000 190,000 Norwest Corporation 3,838,972 11,637,500 230,000 ReliaStar Financial Corporation 6,358,822 9,156,875 113,000 St. Paul Companies, Inc. 4,764,587 9,216,563 200,000 TCF Financial Corporation 9,451,273 11,687,500 ------------ ------------ 28,890,995 53,278,438 ------------ ------------ INFORMATION SERVICES 8.6% 300,000 Deluxe Corp. 8,784,870 10,068,750 257,000 Merrill Corporation 4,779,445 11,822,000 266,200 National Computer Systems Inc. 6,239,776 9,416,825 ------------ ------------ 19,804,091 31,307,575 ------------ ------------ MEDICAL DEVICES 5.9% 276,000 Medtronic, Incorporated 2,482,363 12,972,000 235,000 St. Jude Medical, Inc. 7,961,430 8,239,687 ------------ ------------ 10,443,793 21,211,687 ------------ ------------ RETAILING 4.6% 154,000 Dayton Hudson Corporation 3,110,286 9,230,375 194,000 SUPERVALU Inc. 5,388,967 7,614,500 ------------ ------------ 8,499,253 16,844,875 ------------ ------------ TECHNOLOGY 17.5% 180,000 Ceridian 6,645,275 6,660,000 248,050 Emerson Electric Co. 9,243,568 14,293,881 180,000 Honeywell Inc. 11,619,574 12,093,750 324,800 MTS Systems Corporation 4,783,285 11,855,200 143,000 Minnesota Mining & Manufacturing Company 9,325,228 13,227,500 578,500 T S I Inc. 3,983,874 5,423,438 ------------ ------------ 45,600,804 63,553,769 ------------ ------------ TELECOMMUNICATIONS 3.6% 399,000 ADC Telecommunications Inc. 6,299,899 12,967,500 ------------ ------------ OTHER INDUSTRIALS 16.9% 210,000 Bemis Company, Inc. 8,079,461 9,397,500 370,000 BMC Industries, Inc. 5,674,480 11,770,625 120,000 Burlington Northern Santa Fe 10,397,407 11,595,000 278,900 Graco Inc. 4,197,849 9,970,675 345,800 Imation Corporation 8,462,529 9,228,537 160,000 Weyerhaeuser Company 7,020,133 9,500,000 ------------ ------------ 43,831,859 61,462,337 ------------ ------------ TOTAL COMMON STOCKS 95.0% $221,916,381 $344,928,946 ------------ ------------ OTHER ASSETS IN EXCESS OF LIABILITIES 5.0% 18,200,860 ------------ NET ASSETS 100% $363,129,806 ------------ ------------
STATEMENT OF NET ASSETS AT SEPTEMBER 30, 1997 - -------------------------------------------------------------------------------- ASSETS Common stocks as annexed, at market value (cost $221,916,381).................................... $344,928,946 Cash............................................................................................. 20,376,380 Dividends receivable............................................................................. 277,106 Interest receivable.............................................................................. 81,199 Receivables for securities sold, not yet delivered............................................... 0 Prepaid expense.................................................................................. 33,667 ------------ $365,697,298 LIABILITIES Accrued management fee.................................................. $ 178,463 Accrued custodian and transfer agent fee................................ 49,854 Payable for securities purchased, not yet received...................... 2,339,175 2,567,492 ------------- ------------ NET ASSETS Equivalent to $87.01 per share on 4,173,232 shares outstanding................................... $363,129,806 ------------ ------------
STATEMENT OF CHANGES IN NET ASSETS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 - -------------------------------------------------------------------------------- NET ASSETS, December 31, 1996.................................................................... $150,161,759 Net investment income, per statement below.............................. $ 1,866,574 Net accrued income in price of shares sold and repurchased.............. 425,671 ------------- 2,292,245 Distribution to Shareholders............................................ (1,018,063) Reversal of Capital Gain Distribution Paid.............................. (364) 1,273,818 ------------- Fund shares issued and repurchased: Received for 2,237,058 shares issued.................................. 173,964,240 Paid for 225,073 shares repurchased................................... (17,558,801) 156,405,439 ------------- Increase in unrealized net appreciation (depreciation) of investments............................ 55,204,158 Net gain or (loss) realized from sales of securities............................................. 84,632 Distribution from net realized gain.............................................................. 0 ------------ NET ASSETS, September 30, 1997................................................................... $363,129,806 ------------ ------------
STATEMENT OF NET INVESTMENT INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 - -------------------------------------------------------------------------------- INVESTMENT INCOME Dividends........................................................................................ $ 2,836,244 Interest......................................................................................... 573,065 ------------ 3,409,309 EXPENSES Management fee (Note A)................................................. $ 1,138,651 Fees and expenses of custodian, transfer agent and dividend disbursing agent (Note A)......................................................... 200,415 Legal and auditing fees and expenses.................................... 22,519 Insurance............................................................... 8,023 Other Fees and Expenses................................................. 173,127 1,542,735 ------------- ------------ NET INVESTMENT INCOME............................................................................ $ 1,866,574 ------------ ------------
NOTE A: The investment advisory 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 adviser. Investment advisory fees are paid to the adviser pursuant to an advisory agreement approved by the Directors of the Fund. The advisor fee is computed each month and is 1/20th of one percent of the net asset value of the Fund on the last valuation day of the month. The transfer agent fee was paid to Firstar Trust Company which serves as transfer agent. SUPPLEMENTARY INFORMATION: 1) Each director of the Fund not affiliated with Mairs and Power, Inc. received compensation for meetings attended during this nine month period in the amount of $8,100. 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, 1997 aggregated $148,288,719 and $114,668 respectively. --------------------------------------------------------------------- MAIRS AND POWER GROWTH FUND, INC. --------------------------- A NO-LOAD FUND W-2062 FIRST NATIONAL BANK BUILDING, 332 MINNESOTA STREET, ST. PAUL, MINNESOTA 55101 612-222-8478 SHAREHOLDER INFORMATION: 800-304-7404 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 or 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, 1977 1,057,928 13,145,624 12.43 0.33 Dec. 31, 1978 998,265 13,282,487 13.31 0.35 Dec. 31, 1979 914,635 14,104,765 15.42 0.45 Dec. 31, 1980 840,882 14,540,014 17.29 0.55 Dec. 31, 1981 861,678 13,148,158 15.26 $ 0.74 0.60 Dec. 31, 1982 850,942 16,784,217 19.72 0.58 0.50 Dec. 31, 1983 881,592 18,972,177 21.52 0.70 0.48 Dec. 31, 1984 872,069 17,304,204 19.84 0.76 0.46 Dec. 31, 1985 856,738 21,553,457 25.16 0.86 0.46 Dec. 31, 1986 893,850 22,235,453 24.88 2.74 0.40 Dec. 31, 1987 914,139 19,816,097 21.68 2.29 0.48 Dec. 31, 1988 929,039 20,630,251 22.21 1.21 0.41 Dec. 31, 1989 866,584 22,630,081 26.11 1.83 0.43 Dec. 31, 1990 867,432 22,501,587 25.94 0.70 0.42 Dec. 31, 1991 904,023 31,440,529 34.78 1.58 0.39 Dec. 31, 1992 956,814 34,363,306 35.91 1.16 0.40 Dec. 31, 1993 1,006,285 39,081,010 38.84 1.22 0.43 Dec. 31, 1994 1,064,019 41,889,850 39.37 0.98 0.65 Dec. 31, 1995 1,245,325 70,536,880 56.64 1.51 0.56 Dec. 31, 1996 2,161,246 150,161,759 69.48 1.39 0.71 Sept. 30, 1997 4,173,232 363,129,806 87.01 0.30
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 (PERIODS ENDED SEPTEMBER 30, 1997) ARE AS FOLLOWS: 1 YEAR: +35.7% 5 YEARS: +24.7% 10 YEARS: +16.9% 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 Secretary and Vice-President and Treasurer Director Director Director Charlton Dietz Donald E. Garretson J. Thomas Simonet Director Director Director
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