-----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, RIT6bqdkLwOP7ClyiA+RxpACxcZXHS058yJPzzz+vL0FvmQV9GqZQ40D1Id12XJR UXGYNJx2hpFDFUgUtsQzJQ== /in/edgar/work/0000935069-00-000588/0000935069-00-000588.txt : 20001107 0000935069-00-000588.hdr.sgml : 20001107 ACCESSION NUMBER: 0000935069-00-000588 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000831 FILED AS OF DATE: 20001106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05518 FILM NUMBER: 753396 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911791 MAIL ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 N-30D 1 0001.txt ANNUAL REPORT - -------------------------------------------------------------------------------- THE SCHNEIDER SMALL CAP VALUE FUND - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ANNUAL REPORT AUGUST 31, 2000 - -------------------------------------------------------------------------------- [SCHNEIDER CAPITAL MANAGEMENT LOGO OMITTED] SCHNIEDER CAPITAL MANAGEMENT SCHNEIDER SMALL CAP VALUE FUND ANNUAL INVESTMENT ADVISER'S REPORT AUGUST 31, 2000 Dear Fellow Shareholder: We are pleased to provide you with the report of the Schneider Small Cap Value Fund for the fiscal year ended August 31, 2000. The Fund earned a solid +14.84% total return (capital appreciation plus reinvested dividends) during the latest six month period ended August 31, 2000. Our since inception return continued to be excellent at 107.50%. As the table below illustrates, our fund's six-month, one year and since inception total returns have exceeded those of the unmanaged Russell 2000 Value Index.
Six-months 1 year Inception-to-date Schneider Small Cap Value Fund 14.84% 13.72% 107.50% Russell 2000 Value Index 10.57% 13.70% 27.23%
The U.S. broad market produced modest gains over the past six months despite extreme volatility during the period. As we expected, six rate increases have finally taken their toll as the U.S. economy began its much needed deceleration. In general, small cap stocks performed quite well during the period, outperforming large caps by a substantial margin. Healthcare and Energy were the top performing sectors within the Russell 2000 Value Index and the Fund benefitted from overweightings in these areas during the period. Two key holdings of the Fund in the healthcare sector, Coventry Healthcare and Foundation Health Systems, doubled in price over the period responding to receding HMO litigation worry and strong underlying fundamentals. The well publicized run-up in oil prices helped move stocks in our energy sector higher. The Fund was also overweighted with insurance and agriculture (equipment and fertilizer) stocks. Agriculture stocks were impacted by heavy rains that caused grain prices to fall, which has delayed their upside potential. However, commercial line insurance stocks performed well as pricing improved sharply for these companies. SCHNEIDER SMALL CAP VALUE FUND ANNUAL INVESTMENT ADVISER'S REPORT AUGUST 31, 2000 OUTLOOK We continue to add stocks within the hospitals and savings and loan industry to the fund. The hospital segment has been devastated by the effects of massive government cutbacks and with most of the industry losing money, it appears to us that the political winds have shifted and future legislation is likely to benefit the industry. Additionally, pricing to HMO's is accelerating after several years of declines. We believe savings and loans also show promise for the future. Earnings have been poor because of the inverted yield curve. We expect the yield curve to normalize which should help earnings rebound and push valuations higher. Domestically, it is our opinion that consumption must slow to correct the imbalances in the economy. We believe that a consumer savings rate of near zero, a record trade deficit exceeding 4% of GDP, and record private sector debt will prevent strong growth. The end of the speculative bubble in NASDAQ stocks we expect will further slow consumption. With a flat yield curve, our outlook is for a U.S. slowdown given the explosive growth of credit. However, we believe interest rates have likely peaked, a positive for small cap stocks. We are finding no shortage of excellent stocks that fit our strategy. We believe the Fund can continue its record of strong performance, particularly if value and small-caps regain favor with the investing public. Thank your for your investment in the Schneider Small Cap Value Fund. /S/ SIGNATURE Arnold C. Schneider III, CFA Portfolio Manager Schneider Capital Management 2 SCHNEIDER SMALL CAP VALUE FUND ANNUAL INVESTMENT ADVISER'S REPORT AUGUST 31, 2000 Comparison of Change in Value of $10,000 Investment in Schneider Small Cap Value Fund (1)(2) vs. Russell 2000 Value Index [line graph omitted] plot points as follows: Schneider Russell 2000 Small Cap Value Value Index 9/2/98 . $10000 $10000 9/30/98 10000 10565 10/31/98 11930 10879 11/30/98 12410 11174 12/31/98 12471 11524 1/31/99 13786 11263 2/28/99 12531 10494 3/31/99 13007 10408 4/30/99 15222 11358 5/31/99 16233 11706 6/30/99 18044 12130 7/31/99 18731 11843 8/31/99 18246 11190 9/30/99 17518 10967 10/31/99 16760 10748 11/30/99 17457 10804 12/31/99 18341 11136 1/31/00 17833 10844 2/29/00 18069 11506 3/31/00 19392 11561 4/30/00 19392 11629 5/31/00 19770 11451 6/30/00 19841 11785 7/31/00 19734 12178 8/31/00 20750 12722
- -------------------------------------------------------------------------------------------------------------- Total Returns VALUE ON YEAR ENDED SINCE AUGUST 31, 2000 AUGUST 31, 2000 INCEPTION(3) -------------- --------------- ------------ Schneider Small Cap Value $20,750 13.72% 107.50% Russell 2000 Value Index $12,722 13.70% 27.23% - -------------------------------------------------------------------------------------------------------------- The Fund's total return is based on an increase in net asset value from $10.00 per share on September 2, 1998 to $17.57 per share on August 31, 2000, adjusted for dividends totaling $2.61 per share paid from net realized gains. - ----------------- (1) The chart assumes a hypothetical $10,000 initial investment in the Fund made on September 2, 1998 (inception) and reflects Fund expenses. Investors should note that the Fund is a professionally managed mutual fund while the indices are unmanaged, do not incur sales charges and/or expenses and are not available for investment. (2) Schneider Capital Management waived a portion of its advisory fee and agreed to reimburse a portion of the Fund's operating expenses, as necessary, to maintain the expense limitation, as set forth in the notes to the financial statements. Total returns shown include fee waivers and expense reimbursements, if any; total returns would have been lower had there been no assumption of fees and expenses in excess of expense limitations. Returns shown include the reinvestment of all dividends and other distributions. Past performance is not predictive of future performance. Investment return and principal value will fluctuate, so that your shares, when redeemed, may be worth more or less than their original cost. (3) Aggregate return for the period September 2, 1998 (commencement of operations) through August 31, 2000.
3 SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS AUGUST 31, 2000 Shares Value ------- ----------- COMMON STOCKS -- 94.4% AEROSPACE/DEFENSE -- 1.1% Orbital Sciences Corp.* ................ 24,000 $ 214,500 ----------- AGRICULTURE -- 1.7% Corn Products International, Inc. ...... 13,200 331,650 ----------- BANKS - REGIONAL -- 0.8% Riggs National Corp. ................... 13,100 156,381 ----------- CHEMICALS -- 1.9% Airgas, Inc.* .......................... 17,800 117,925 IMC Global, Inc. ....................... 16,600 243,812 ----------- 361,737 ----------- CHEMICALS & PLASTICS -- 1.0% Wellman, Inc. .......................... 16,100 194,206 ----------- COMMUNICATION SERVICES -- 1.0% Metromedia International Group, Inc.* ........................ 51,200 201,600 ----------- COMPUTER - SOFTWARE -- 0.5% MSC Software Corp.* .................... 10,500 100,275 ----------- DELIVERY SERVICES -- 1.1% Fritz Companies, Inc.* ................. 14,900 220,706 ----------- ELECTRICAL EQUIPMENT -- 3.1% Exide Corp. ............................ 29,300 263,700 Sensormatic Electronics Corp.* ......... 20,400 339,150 ----------- 602,850 ----------- ENGINEERING & CONSTRUCTION -- 1.0% Willbros Group, Inc.* .................. 28,200 197,400 ----------- FARM MACHINERY & EQUIPMENT -- 2.1% CNH Global N.V ......................... 42,300 415,069 ----------- FINANCE -- 3.3% AmeriCredit Corp.* ..................... 16,400 453,050 Budget Group, Inc., Class A* ........... 39,800 179,100 ----------- 632,150 ----------- Shares Value ------- ----------- FOODS -- 4.3% International Multifoods Corp. ......... 25,400 $ 414,337 Suiza Foods Corp.* ..................... 5,000 250,000 Tate & Lyle PLC - ADR .................. 11,500 172,009 ----------- 836,346 ----------- FOODS - MEAT PROCESSING -- 2.4% Pilgrim's Pride Corp., Class A ......... 43,500 222,937 Smithfield Foods, Inc.* ................ 9,200 244,375 ----------- 467,312 ----------- FOOTWEAR -- 1.4% Barry (R.G.) Corp.* .................... 41,500 132,281 Finish Line, Inc., (The) Class A* ...... 18,000 142,875 ----------- 275,156 ----------- GOLD & SILVER ORES -- 0.0% Glamis Gold Ltd.* ...................... 1,500 2,437 ----------- HEALTHCARE -- 4.7% Coventry Health Care, Inc.* ............ 10,800 172,800 Foundation Health Systems, Inc.* ....... 13,600 238,850 Humana, Inc.* .......................... 30,000 256,875 Sierra Health Services, Inc.* .......... 44,500 122,375 United Wisconsin Services, Inc. ........ 23,600 123,900 ----------- 914,800 ----------- HEALTHCARE - FACILITIES -- 2.4% American Retirement Corp.* ............. 33,300 174,825 Sunrise Assisted Living, Inc.* ......... 14,300 284,213 ----------- 459,038 ----------- HEALTHCARE - HOSPITAL MANAGEMENT -- 1.2% Quorum Health Group, Inc.* ............. 17,600 226,600 ----------- HEALTHCARE - MISC. -- 0.5% Angelica Corp. ......................... 12,400 101,525 ----------- HOMEBUILDING -- 2.6% Champion Enterprises, Inc.* ............ 25,500 168,937 Clayton Homes, Inc. .................... 20,000 195,000 Oakwood Homes Corp. .................... 85,400 138,775 ----------- 502,712 ----------- The accompanying notes are an integral part of the financial statements. 4 SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2000 Shares Value ------- ----------- INSURANCE - PROPERTY & CASUALTY -- 11.0% American Financial Group, Inc. ......... 9,200 $ 228,275 E. W. Blanch Holdings, Inc. ............ 15,900 348,806 HCC Insurance Holdings, Inc. ........... 31,100 656,988 Navigators Group, Inc.* ................ 5,200 60,775 Professionals Group, Inc.* ............. 9,050 207,019 PXRE Group Ltd. ........................ 22,200 302,475 RenaissanceRe Holdings Ltd. ............ 3,500 167,563 Zenith National Insurance Corp. ........ 7,000 162,312 ----------- 2,134,213 ----------- INSURANCE - SPECIALTY -- 3.1% FPIC Insurance Group, Inc.* ............ 37,200 564,975 MIIX Group, Inc. (The) ................. 5,100 41,119 ----------- 606,094 ----------- MACHINERY - SPECIALIZED -- 2.1% Metso Oyj - ADR ........................ 16,800 199,500 Stewart & Stevenson Services, Inc. ..... 12,400 199,950 ----------- 399,450 ----------- MANUFACTURING - SPECIALTY -- 1.4% York International Corp. ............... 11,000 273,625 ----------- METAL MINING -- 1.1% Brush Wellman, Inc. .................... 9,000 210,375 ----------- NATURAL GAS - DISTRIBUTION -- 0.2% Star Gas Partners, L.P. ................ 4,321 35,378 ----------- OFFICE/PLANT AUTOMATION -- 0.5% Unova, Inc.* ........................... 13,000 97,500 ----------- OIL & GAS - REFINING -- 1.5% Tesoro Petroleum Corp.* ................ 11,700 112,613 Valero Energy Corp. .................... 6,000 180,750 ----------- 293,363 ----------- OIL & GAS - SERVICES -- 3.6% Friede Goldman Halter, Inc.* ........... 36,200 203,625 Smedvig ASA - ADR, Class B ............. 15,400 271,425 Trico Marine Services, Inc.* ........... 15,800 229,100 ----------- 704,150 ----------- Shares Value ------- ----------- PACKAGING/CONTAINERS -- 0.7% Gaylord Containers Corp., Class A* ..... 45,900 $ 126,225 ----------- PAPER -- 4.0% Longview Fibre Co. ..................... 23,000 261,625 Mercer International, Inc. ............. 51,500 508,563 ----------- 770,188 ----------- PLASTIC PRODUCTS -- 2.3% Tupperware Corp. ....................... 22,200 448,163 ----------- REAL ESTATE -- 1.7% American Real Estate Partners, L.P.* ... 16,800 149,625 Newhall Land & Farming Co. ............. 7,300 179,763 ----------- 329,388 ----------- RETAIL - GROCERY STORES -- 0.8% The Great Atlantic & Pacific Tea Co., Inc. ........................... 11,000 154,000 ----------- RETAIL - SPECIALTY -- 1.9% J. Baker, Inc. ......................... 28,100 140,500 Intertan, Inc.* ........................ 15,650 217,144 ----------- 357,644 ----------- SAVINGS & LOAN ASSOCIATIONS -- 7.7% Bank Plus Corp.* ....................... 49,500 167,063 Bay View Capital Corp. ................. 42,800 417,300 FirstFed Financial Corp.* .............. 15,200 273,600 Republic Security Financal Corp. ....... 19,700 84,956 Washington Federal, Inc. ............... 9,500 197,125 Westcorp, Inc. ......................... 27,600 360,525 ----------- 1,500,569 ----------- SEMICONDUCTORS - EQUIPMENT -- 2.1% Ultratech Stepper, Inc.* ............... 22,800 410,400 ----------- SEMICONDUCTORS - TECHNOLOGY -- 1.0% General Semiconductor, Inc.* ........... 12,700 184,944 ----------- SERVICES - SPECIALTY -- 0.7% Billing Concepts Corp.* ................ 10,300 33,475 Policy Management Systems Corp.* ....... 8,000 108,000 ----------- 141,475 ----------- The accompanying notes are an integral part of the financial statements. 5 SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) AUGUST 31, 2000 Shares Value ------- -------- SHIPPING -- 3.7% Kirby Corp.* ........................... 10,000 $ 235,625 Overseas Shipholding Group, Inc. ....... 7,600 223,725 Sea Containers Ltd., Class A ........... 5,000 142,500 Tidewater, Inc. ........................ 2,800 113,050 ----------- 714,900 ----------- STEEL - SPECIALTY -- 1.6% NS Group, Inc.* ........................ 18,000 317,250 ----------- TIRES & INNER TUBES -- 0.8% Titan International, Inc. .............. 29,600 149,850 ----------- UTILITIES -- 2.8% Avista Corp. ........................... 9,700 178,844 Sierra Pacific Resources ............... 10,700 189,256 Unisource Energy Corp. ................. 10,600 164,962 ----------- 533,062 ----------- TOTAL COMMON STOCKS (Cost $16,797,317) .................. 18,306,656 ----------- CANADIAN COMMON STOCK -- 1.9% Boardwalk Equities, Inc.* .............. 29,000 235,007 Canadian Hotel Income Properties, REIT .................... 18,661 122,117 Fairfax Financial Holdings Ltd.* ....... 100 13,427 ----------- TOTAL CANADIAN COMMON STOCK (Cost $376,935) ................... 370,551 ----------- FRENCH COMMON STOCK -- 2.3% Compagnie Francaise d'Etudes de Construction Technip ................ 3,500 454,610 ----------- TOTAL FRENCH COMMON STOCK (Cost $377,538) ................... 454,610 ----------- Par (000) Value ------- ----------- CONVERTIBLE BONDS -- 1.1% PAPER -- 1.1% Asia Pulp & Paper Convertible (B3, CCC+) 3.500%, 04/30/03 .................... $320 $ 209,280 ----------- TOTAL CONVERTIBLE BONDS (Cost $168,763) ................... 209,280 ----------- SHORT-TERM INVESTMENTS -- 0.5% Wilmington Fund Cash Sweep 6.230%, 09/01/00 .................... 86 86,256 ----------- TOTAL SHORT-TERM INVESTMENTS (COST $86,256) .................... 86,256 ----------- TOTAL INVESTMENTS -- 100.2% (Cost $17,806,809) ..................... 19,427,360 ----------- LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%) ........... (33,667) ----------- NET ASSETS -- 100.0% .................... $19,393,693 =========== - ------------------ * Non-income producing. ADR - American Depository Receipt REIT - Real Estate Investment Trust The Moody's Investor Service, Inc. and Standard and Poor's Ratings Group's ratings indicated are the most recent ratings available at August 31, 2000 and are unaudited. The accompanying notes are an integral part of the financial statements. 6 SCHNEIDER SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) AUGUST 31, 2000 ASSETS Investments, at value (cost-- $17,806,809) .......... $19,427,360 Receivable for investments sold ..................... 319,335 Dividends and interest receivable ................... 15,722 Prepaid expenses and other assets ................... 117 ----------- Total Assets ...................................... 19,762,534 ----------- LIABILITIES Payable for investments purchased ................... 344,191 Accrued expenses payable and other liabilities ...... 24,650 ----------- Total Liabilities ................................. 368,841 ----------- NET ASSETS Capital stock, $0.001 par value ..................... 1,104 Additional Paid-in capital .......................... 15,110,324 Undistributed net investment income ................. 56,821 Accumulated net realized gain from investments and foreign exchange transactions, if any ......... 2,604,893 Net unrealized appreciation on investments and foreign exchange transactions, if any ............. 1,620,551 ----------- Net assets applicable to shares outstanding ......... $19,393,693 =========== Shares outstanding ..................................... 1,103,922 =========== Net asset value, offering and redemption price per share $17.57 =========== The accompanying notes are an integral part of the financial statements. 7 SCHNEIDER SMALL CAP VALUE FUND STATEMENT OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2000 --------------- Investment Income Dividends .............................................. $ 221,853* Interest ............................................... 19,727 ---------- 241,580 ---------- Expenses Advisory fees .......................................... 156,943 Administration fees .................................... 105,223 Transfer agent fees and expenses ....................... 26,395 Administrative service fees ............................ 23,541 Printing ............................................... 19,660 Custodian fees and expenses ............................ 19,426 Federal and state registration fees .................... 10,713 Audit and legal fees ................................... 9,340 Directors fees ......................................... 553 Other .................................................. 1,490 ---------- Total expenses before waivers ........................ 373,284 Less: Waivers .......................................... (200,647) ---------- Total expenses after waivers ......................... 172,637 ---------- Net investment income ..................................... 68,943 ---------- Net realized and unrealized gain/(loss) on investments and foreign exchange transactions: Net realized gain from: Investments .......................................... 2,907,534 Foreign currency transactions ........................ 33 Net change in unrealized appreciation/(depreciation) on: Investments .......................................... (658,926) Foreign currency transactions ........................ 6 ---------- Net realized and unrealized gain on investments and foreign exchange transactions ...................... 2,248,647 ----------- Net increase in net assets resulting from operations ...... $2,317,590 ========== - ---------- *Net of foreign withholding taxes of $7,783. The accompanying notes are an integral part of the financial statements. 8 SCHNEIDER SMALL CAP VALUE FUND STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE PERIOD YEAR ENDED SEPTEMBER 2, 1998* AUGUST 31, 2000 THROUGH AUGUST 31, 1999 --------------- ----------------------- INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS Net investment income/(loss) ........................................... $ 68,943 $ (12,155) Net realized gain from investments and foreign currency transactions, if any ................................ 2,907,567 1,815,110 Net change in unrealized appreciation/(depreciation) on investments and foreign currency transactions, if any ................................ (658,920) 2,279,471 ----------- ----------- Net increase in net assets resulting from operations .................. 2,317,590 4,082,426 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income .................................................. -- -- Net realized capital gains ............................................. (2,065,468) (52,283) Total dividends and distributions to shareholders .................... (2,065,468) (52,283) ----------- ----------- INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (SEE NOTE 4) 6,217,845 8,893,583 ----------- ----------- Total increase in net assets ......................................... 6,469,967 12,923,726 NET ASSETS Beginning of period .................................................... 12,923,726 -- ----------- ----------- End of period .......................................................... $19,393,693 $12,923,726 =========== =========== - ---------- *Commencement of operations.
The accompanying notes are an integral part of the financial statements. 9 SCHNEIDER SMALL CAP VALUE FUND FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the period. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
FOR THE FOR THE PERIOD YEAR ENDED SEPTEMBER 2, 1998* AUGUST 31, 2000 THROUGH AUGUST 31, 1999 --------------- ----------------------- PER SHARE OPERATING PERFORMANCE** Net asset value, beginning of period ......................... $ 18.04 $ 10.00 Net investment income/(loss)(1) .............................. 0.07 (0.02) Net realized and unrealized gain on investments and foreign exchange transactions, if any(2) .................. 1.94 8.19 ------- ------- Net increase in net assets resulting from operations ......... 2.01 8.17 ------- ------- Dividends and distributions to shareholders from: Net realized capital gains ................................... (2.48) (0.13) ------- ------- Total dividends and distributions to shareholders ............ (2.48) (0.13) ------- ------- Net asset value, end of period ............................... $ 17.57 $ 18.04 ======= ======= Total investment return(3) ................................... 13.72% 82.46% ======= ======= RATIO/SUPPLEMENTAL DATA Net assets, end of period (000's omitted) .................... $19,394 $12,924 Ratio of expenses to average net assets(1) ................... 1.10% 1.10%(4) Ratio of expense to average net assets without waivers and expense reimbursements .................................... 2.37% 3.90%(4) Ratio of net investment income/(loss) to average net assets(1) 0.44% (0.17)%(4) Portfolio turnover rate ...................................... 84.93% 145.99% - ---------- * Commencement of operations. ** Calculated based on shares outstanding on the first and last day of the respective period, except for dividends and distributions, if any, which are based on actual shares outstanding on the dates of distributions. (1) Reflects waivers and reimbursements. (2) The amounts shown for each share outstanding throughout the respective period are not in accord with the changes in the aggregate gains and losses on investments during the respective period because of the timing of sales and repurchases of Fund shares in relation to fluctuating net asset value during the respective period. (3) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each period reported and includes reinvestments of dividends and distributions, if any. Total investment returns are not annualized. (4) Annualized.
The accompanying notes are an integral part of the financial statements. 10 SCHNEIDER SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of Maryland on February 29, 1988 and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund", which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently RBB has fourteen investment portfolios, including the Schneider Small Cap Value Fund (the "Fund") which commenced investment operations on September 2, 1998. As of the date hereof, the Fund offers the Institutional Class. RBB has authorized capital of thirty billion shares of common stock of which 19.88 billion are currently classified into ninety-seven classes. Each class represents an interest in one of fourteen investment portfolios of RBB. The classes have been grouped into fourteen separate "families", nine of which have begun investment operations, including the Schneider Small Cap Value Fund. PORTFOLIO VALUATION -- The net asset value of the Fund is determined as of 4:00 p.m. Eastern Standard Time on each business day. The Fund's securities are valued at the last reported sales price on the national securities exchange or national securities market on which such shares are primarily traded. If no sales are reported, as in the case of some securities traded over-the-counter, portfolio securities are valued at the mean between the last reported bid and asked prices. Securities for which market quotations are not readily available are valued at fair market value as determined in good faith by or under the direction of RBB's Board of Directors. With the approval of the RBB's Board of Directors, the Fund may use a pricing service, bank or broker-dealer experienced in such matters to value its securities. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates market value. Expenses and fees, including investment advisory and administration fees are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. 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 and disclosure of contingent 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. REPURCHASE AGREEMENTS -- The Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker/dealers which Schneider Capital Management, LP (the Fund's investment adviser or "SCM") considers creditworthy. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. SCM marks to market daily the value of the collateral, and, if necessary, requires the seller to maintain additional securities, to ensure that the value is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. 11 SCHNEIDER SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. FOREIGN CURRENCY TRANSLATION -- Foreign securities, other assets and liabilities are valued using the foreign currency exchange rate effective at the end of the reporting period. Cost of investments is translated at the currency exchange rate effective at the trade date. The gain or loss resulting from a change in currency exchange rates between the trade and settlement dates of a portfolio transaction is treated as a gain or loss on foreign currency. Likewise, the gain or loss resulting from a change in currency exchange rates, between the date income is accrued and paid, is treated as a gain or loss on foreign currency. The Fund does not separate that portion of the results of operations arising from changes in exchange rates and that portion arising from changes in the market prices of securities. DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income, if any, are declared and paid at least annually to shareholders. Distributions from net realized capital gains, if any, are distributed at least annually. Income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from generally accepted accounting principles. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, partnerships, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. U.S. FEDERAL TAX STATUS -- No provision is made for U.S. federal income taxes as it is the Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from U.S. federal income and excise taxes. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES SCM serves as the Fund's investment adviser. For its advisory services, SCM is entitled to receive 1.00% of the Fund's average daily net assets, computed daily and payable monthly. The adviser has agreed to limit the Fund's total operating expenses for the current fiscal year to the extent that such expenses exceeded 1.10% of the Fund's average daily net assets. As necessary, this limitation is effected in waivers of advisory fees and reimbursements of other fund expenses. For the year ended August 31, 2000, investment advisory fees and waivers of expenses were as follows: GROSS ADVISORY WAIVERS NET ADVISORY -------------- ---------- ------------ Schneider Small Cap Value Fund $156,943 $(119,814) $37,129 The Fund will not pay SCM at a later time for any amounts it may waive or any amounts that SCM has assumed. 12 SCHNEIDER SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) AUGUST 31, 2000 PFPC Trust Co. serves as custodian of the Fund. PFPC Inc. ("PFPC"), serves as administrator for the Fund. Both PFPC Trust Co. and PFPC are wholly- owned subsidiaries of PFPC Worldwide, Inc., an indirect majority-owned subsidiary of the PNC Financial Services Group, Inc. For providing administrative services PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of the Fund's average daily net assets, subject to a minimum monthly fee of $8,333 per Fund plus out of pocket expenses. For the year ended August 31, 2000, PFPC, at its discretion, voluntarily agreed to waive a portion of its administration fees for the Fund. During this period, PFPC's administration fees and related waivers were as follows: GROSS ADMINISTRATION NET ADMINISTRATION FEES WAIVERS FEES -------------- ---------- ------------------ Schneider Small Cap Value Fund $105,223 $(50,000) $55,223 In addition, PFPC serves as the Fund's transfer and disbursing agent. PFPC, at its discretion, voluntarily agreed to waive a portion of its transfer agency fees for the Fund. During the year ended August 31, 2000, transfer agency fees and waivers were as follows: GROSS TRANSFER NET TRANSFER AGENCY FEES WAIVERS AGENCY FEES -------------- --------- -------------- Schneider Small Cap Value Fund $26,395 $(12,000) $14,395 Provident Distributors, Inc. (PDI) provides certain administrative services to the Fund. As compensation for such administrative services, PDI is entitled to receive a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. For the year ended August 31, 2000, PDI has, at its discretion, voluntarily agreed to waive a portion of its administrative services fees for the Fund. During this period, administrative services fees and waivers were as follows: GROSS ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------- --------- ------------------ Schneider Small Cap Value Fund $23,541 $(18,833) $4,708 These fees are accrued daily and paid monthly. 3. INVESTMENT IN SECURITIES For U.S.federal income tax purposes, the cost of securities owned at August 31, 2000 was $17,808,430. Accordingly, the net unrealized appreciation/ (depreciation) of investments was as follows: NET APPRECIATION/ APPRECIATION DEPRECIATION (DEPRECIATION) ------------ ------------ ----------------- Schneider Small Cap Value Fund $3,269,340 $(1,650,410) $1,618,930 13 SCHNEIDER SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONCLUDED) AUGUST 31, 2000 For the year ended August 31, 2000, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ----------------- -------------- Schneider Small Cap Value Fund $17,625,819 $13,298,838 4. CAPITAL SHARE TRANSACTIONS As of August 31, 2000 the Fund has 100,000,000 shares of $0.001 par value common stock authorized. Transactions in capital shares for the year ended August 31, 2000 were as follows: SCHNEIDER SMALL CAP VALUE FUND -------------------------- SHARES AMOUNT ----------- ------------- Sales 415,055 $ 6,766,242 Reinvest 136,509 2,018,967 Repurchases (163,983) (2,567,364) -------- ----------- Net increase 387,581 $ 6,217,845 ======= =========== On August 31, 2000, three shareholders held approximately 28% of the outstanding shares of the Schneider Small Cap Value Fund. One of the shareholders, an officer of the advisor, owns approximately 10% of the outstanding shares. 14 SCHNEIDER SMALL CAP VALUE FUND REPORT OF INDEPENDENT ACCOUNTANTS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF THE RBB FUND, INC.: In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schneider Small Cap Value Fund, a separately managed portfolio of The RBB Fund, Inc. (the "Fund"), at August 31, 2000, the results of its operations for the year then ended, and the changes in its net assets and the financial highlights for the year then ended and for the period September 2, 1998 (commencement of operations) through August 31, 1999, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. /S/SIGNATURE PricewaterhouseCoopersLLP PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, Pennsylvania October 20, 2000 15 SCHNEIDER SMALL CAP VALUE FUND SHAREHOLDER TAX INFORMATION (UNAUDITED) Each Fund is required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise its shareholders within 60 days of each Fund's fiscal year end (August 31, 2000) as to the U.S. federal tax status of distributions received by each Fund's shareholders in respect of such fiscal year. During the fiscal year ended August 31, 2000, the following dividends and distributions per share were paid by each of the Funds: SHORT-TERM GAINS LONG-TERM GAINS -------------------- -------------------- Schneider Small Cap Value Fund $2.42 $0.06 These amounts were reported to shareholders as income in 1999. Because each Fund's fiscal year is not the calendar year, another notification will be sent with respect to calendar year 2000. The second notification, which will reflect the amount, if any, to be used by calendar year taxpayers on their U.S. federal income tax returns, will be made in conjunction with Form 1099-DIV and will be mailed in January 2001. Foreign shareholders will generally be subject to U.S. withholding tax on the amount of their dividend. They will generally not be entitled to a foreign tax credit or deduction for the withholding taxes paid by the Funds, if any. In general, dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not be reported as taxable income for U.S. federal income tax purposes. However, some retirement trusts (e.g., corporate, Keogh and 403(b)(7) plans) may need this information for their annual information reporting. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in the Funds. 16 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] INVESTMENT ADVISER Schneider Capital Management 460 E. Swedesford Road Wayne, PA 19087 ADMINISTRATOR/TRANSFER AGENT PFPC Inc. 400 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR Provident Distributors, Inc. 3200 Horizon Dr. King of Prussia, PA 19046 CUSTODIAN PFPC Trust Company 8800 Tinicum Blvd. Suite 200 Philadelphia, PA 19153 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP Two Commerce Square, Suite 1700 2001 Market Street Philadelphia, PA 19103-7042 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103-6996 This report is submitted for the general information of the shareholders of the Fund. It is not authorized for the distribution to prospective investors in the Fund unless it is preceded or accompanied by a current prospectus which includes details regarding the Fund's objectives, policies and other information. Total investment return is based on historical results and is not intended to indicate future performance. The investment return and principal value of an investment in the Fund will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than original cost. -----END PRIVACY-ENHANCED MESSAGE-----