-----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, V6WMZZPR3NCWM+DUkh2h6FaNXAAbF7q+l2B1S21S+1qWX0005Cfc4hdkqie+xnqt IDPALy3Mv4wYTtL/JH2dBg== 0001036050-97-000607.txt : 19970812 0001036050-97-000607.hdr.sgml : 19970812 ACCESSION NUMBER: 0001036050-97-000607 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIMOTHY PLAN CENTRAL INDEX KEY: 0000916490 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 597016828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08228 FILM NUMBER: 97654944 BUSINESS ADDRESS: STREET 1: 1304 W FAIRBANKS AVE CITY: WINTER PARK STATE: FL ZIP: 32789 BUSINESS PHONE: 4076441986 MAIL ADDRESS: STREET 1: 1304 W FAIRBANKS AVE CITY: WINTER PARK STATE: FL ZIP: 32789 N-30D 1 SEMI-ANNUAL REPORT PRESIDENT'S REPORT Dear Shareholder: I trust you are as pleased as we are with our new money management firm. Awad and Associates, which took over portfolio management responsibilities on January 1, 1997, brought a wealth of money management experience and expertise to the Timothy Plan. I encourage you to review Jim Awad's market commentary on the following page to get some perspective on where he sees your Timothy Plan positioned relative to present market conditions. It has been gratifying to see the acceleration in asset growth we are finally experiencing. We believe this is in no small part due to the confidence investment industry professionals have in our new money management firm. The Timothy Plan now has over $16 million in investor assets and is growing nicely. Although we take our responsibility to deliver competitive investment returns very seriously, nevertheless we have not and will not lose sight of our main commitment to our shareholders. That is, we refuse to invest any of our shareholders' money in any company that is actively undermining our nation's cultural moral values through their direct or indirect support of abortion, pornography, the production of alcohol, tobacco, or casino gambling or other companies whose corporate practices are found to be offensive, such as active promotion of the homosexual agenda. While we fully subscribe to the principle that offending companies in corporate America should be held accountable for their actions if they are contributing to the moral decline of our culture, our mission is not to "punish" those companies through our refusal to invest in their stock. Rather, our purpose is the pursuit of biblical obedience. Scripture clearly admonishes us to "come out from among them", "avoid participating in (or supporting) immoral enterprise", etc. We are, therefore, pleased to provide this investment alternative to you and all others who are concerned with the moral pollution in our land. Thank you again for your conviction that has led you to become a Timothy Plan investor. Sincerely, /s/ Arthur D. Ally Arthur D. Ally President June 30, 1997 AWAD & ASSOCIATES MARKET COMMENTARY JUNE 30, 1997 The economic news continues to be favorable: .U.S. corporations are low cost producers and technology leaders in virtually all high value added industries which are propelling worldwide economic growth. .As a result, corporate profits (which are the engine of equity prices) continue to surpass expectations continuously quarter after quarter. .The economy remains on a well-balanced path of sustainable growth. .Inflation remains benign. .Low inflation and shrinking federal deficits speak to gradually declining long term interest rates. .Demographic demand for equities continues to grow as aging baby boomers save for their retirement. .International investors continue to purchase U.S. financial assets due to our strong currency and excellent competitive economic condition. So, the building blocks of the bull market remain in place. Having said that, we would like to note that the largest stocks are not cheap anymore. The flood of money into index funds has created a situation where the performance of the 100 largest stocks, which dominate the S&P, has far exceeded that of the remaining 5,000 or so publicly traded companies. While the S&P was up over 20% in 1996, if one eliminated the 100 largest stocks, equities were up only 5.4%. Put another way, during the twelve months ending April 30, 1997, the S&P was up approximately 25%, while the Russell 2000, a broader index of small to mid capitalization equities, was unchanged. We have reached a situation where the 100 largest stocks are over-priced relative to the broad body of common stocks. Having managed portfolios for many years, we have seen many fads come and go. With this perspective, we believe that stocks should ultimately go to value and their prices will compensate for short term fads. Since the broad body of equities is attractively priced relative to the 100 largest stocks, the best price gains going forward could be in the small to mid cap stocks--the stocks that could be the best growing companies of the next 10--20 years. Today one can buy good growth at a value investor's price. Our portfolios are invested in the following conceptual areas: .core growth holdings .restructured companies whose future growth could surpass historical results .companies with temporary earnings problems which, in our opinion, have made the stocks cheap .takeover candidates in consolidating industries (our stocks are so cheap that we have had four takeovers this year) .emerging companies with exciting prospects Our portfolios have been appreciating nicely over the last several weeks. We look forward to making you money. We own some wonderful companies and believe investor interest will switch from index funds to where the value is. James D. Awad Chairman SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) - --------------------------------------------------------------------------------
MARKET SHARES VALUE ------ --------- COMMON STOCKS - 86.68% BUSINESS SERVICES - 8.64% 22,500 Comdisco, Inc. ............................................. $ 585,000 22,000 LanVision Systems, Inc.* ................................... 148,500 9,500 National Data Corp.......................................... 411,469 20,000 StarTek, Inc.* ............................................. 301,250 --------- 1,446,219 --------- CHEMICALS & ALLIED PRODUCTS - 6.08% 5,000 Georgia Gulf Corp. ......................................... 145,312 20,000 Lawter International, Inc. ................................. 252,500 11,500 Mississippi Chemical Corp. ................................. 238,625 25,000 Sano Corp.* ................................................ 381,250 --------- 1,017,687 --------- DEPOSITORY INSTITUTIONS - 5.44% 11,000 Dime Bancorp, Inc.* ........................................ 192,500 23,575 IBS Financial Corp. ........................................ 427,297 4,500 SIS Bancorp, Inc. .......................................... 131,625 8,000 Wayne Bancorp, Inc. ........................................ 159,000 --------- 910,422 --------- ELECTRIC, GAS & SANITARY SERVICES - 0.95% 10,000 Philip Services Corp.* ..................................... 158,750 --------- ELECTRONIC EQUIPMENT & COMPONENTS - 3.21% 6,500 Network Long Distance, Inc.* ............................... 60,937 14,000 Thermo Electron Corp.* ..................................... 476,000 --------- 536,937 --------- ENGINEERING, ACCOUNTING & RESEARCH MANAGEMENT - 2.42% 53 Morrison Knudsen Corp., Warrants* .......................... 331 15,500 Right Management Consultants* .............................. 176,313 15,000 Thermo Bioanalysis Corp.* .................................. 228,750 --------- 405,394 --------- FABRICATED METAL PRODUCTS - 2.02% 3,000 Harsco Corp. ............................................... 121,500 14,000 Material Sciences Corp.* ................................... 216,125 --------- 337,625 --------- FURNITURE & FIXTURES - 4.07% 22,600 Falcon Products, Inc. ...................................... 303,687 16,000 Furniture Brands International, Inc.* ...................... 310,000 5,000 LADD Furniture, Inc.* ...................................... 68,750 --------- 682,437 --------- HEALTH SERVICES - 2.07% 5,000 Alternative Living Services, Inc.* ......................... 112,188 10,000 American Retirement Corp.* ................................. 177,500 2,100 Assisted Living Concepts, Inc.* ............................ 58,012 --------- 347,700 --------- HOME FURNISHINGS & EQUIPMENT - 2.64% 22,500 Heilig-Meyers Co. .......................................... 441,563 --------- HOTELS - 1.23% 5,000 Doubletree Corp.* .......................................... 205,625 ---------
See accompanying notes to financial statements. SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) - --------------------------------------------------------------------------------
MARKET SHARES VALUE ------ ---------- COMMON STOCKS - CONTINUED INSURANCE CARRIERS - 1.01% 8,000 Danielson Holding Corp.* .................................. $ 63,000 7,000 Gryphon Holdings, Inc.* ................................... 106,750 ---------- 169,750 ---------- MACHINERY & COMPUTER EQUIPMENT - 6.49% 10,000 ITEQ, Inc.* ............................................... 95,000 24,500 JLG Industries, Inc. ...................................... 333,813 8,000 Middleby Corp.* ........................................... 74,000 11,500 Printronix, Inc.* ......................................... 172,500 17,000 Thermo Optek Corp.* ....................................... 199,750 15,000 TransAct Technologies, Inc.* .............................. 211,875 ---------- 1,086,938 ---------- MEASURING, ANALYZING & CONTROLLING INSTRUMENTS - 3.80% 14,000 Cooper Industries, Inc. ................................... 325,500 15,000 Metrika Systems Corp.* .................................... 233,438 5,000 ThermoQuest Corp.* ........................................ 77,500 ---------- 636,438 ---------- MISCELLANEOUS MANUFACTURING INDUSTRY - 1.32% 7,000 K2, Inc. .................................................. 221,812 ---------- OIL & GAS EXTRACTION - 6.67% 13,000 Brown (Tom), Inc.* ........................................ 276,250 23,000 Comstock Resources, Inc.* ................................. 240,062 13,000 Patina Oil & Gas Corp.* ................................... 105,625 9,000 Petsec Energy Ltd., ADR* .................................. 204,750 6,000 Precision Drilling Corp.* ................................. 290,250 ---------- 1,116,937 ---------- PHOTOGRAPHIC, WATCHES, OPTICAL & MEDICAL GOODS - 4.66% 46,000 Angeion Corp.* ............................................ 198,375 45,000 ATS Medical, Inc.* ........................................ 225,000 48,000 Somanetics Corp.* ......................................... 168,000 12,000 Thermedics, Inc.* ......................................... 188,250 ---------- 779,625 ---------- PRINTING & PUBLISHING - 4.78% 7,500 Houghton Mifflin Co. ...................................... 500,625 4,500 Waverly, Inc. ............................................. 96,750 6,000 Wiley (John) & Sons, Inc., Class A ........................ 203,250 ---------- 800,625 ---------- REITS & HOLDING COMPANIES - 14.90% 21,000 Alexander Haagen Properties, Inc. ......................... 341,250 18,000 Arden Realty Group, Inc. .................................. 468,000 5,000 Beacon Properties Corp. ................................... 166,875 26,000 LTC Properties, Inc. ...................................... 471,250 17,000 Meridian Industrial Trust, Inc. ........................... 399,500 8,000 OMEGA Healthcare Investors, Inc. .......................... 261,500 9,000 Prentiss Properties Trust ................................. 230,625 11,000 United Dominion Realty Trust, Inc. ........................ 156,063 ---------- 2,495,063 ----------
See accompanying notes to financial statements. SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED) - --------------------------------------------------------------------------------
MARKET SHARES VALUE ------ ----------- COMMON STOCKS - CONTINUED SOCIAL SERVICES - 3.74% 5,000 Arbor Health Care Co.* .............................. $ 155,000 23,000 ARV Assisted Living, Inc.* .......................... 253,000 10,500 Sun Healthcare Group, Inc.* ......................... 218,531 ----------- 626,531 ----------- TEXTILE MILL PRODUCTS - 0.54% 5,000 Culp, Inc. .......................................... 90,625 ----------- TOTAL COMMON STOCKS (COST $13,438,358)............... 14,514,703 ----------- PRINCIPAL AMOUNT --------- SHORT-TERM INVESTMENTS - 18.54% $3,105,263 The Bank of New York Cash Reserve, 4.60% ............ 3,105,263 ----------- TOTAL SHORT TERM INVESTMENTS (COST $3,105,263) ...... 3,105,263 ----------- TOTAL INVESTMENTS (COST $16,543,621)** - 105.22%..... 17,619,966 LIABILITIES, LESS CASH AND OTHER ASSETS - (5.22%).... (874,979) ----------- NET ASSETS - 100.00%................................. $16,744,987 =========== * Non-income producing security ** Cost for Federal income tax purposes is $16,543,621 and net unrealized appreciation consists of: Gross unrealized appreciation........................ $ 1,452,387 Gross unrealized depreciation........................ (376,042) ----------- Net unrealized appreciation.......................... $ 1,076,345 ===========
See accompanying notes to financial statements. STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS Investments in securities at market value (identified cost $16,543,621) (Note 1)............................................ $17,619,966 Cash.............................................................. 33,262 Receivables: Dividends and interest........................................... 31,105 Capital stock sold............................................... 33,585 Deferred organization costs (Note 1).............................. 21,274 Other assets...................................................... 1,827 ----------- TOTAL ASSETS.................................................... 17,740,929 ----------- LIABILITIES Payables: Investment securities purchased.................................. 976,932 Due to Advisor (Note 3).......................................... 12,323 Accrued distribution expense..................................... 6,123 Accrued service fee.............................................. 564 ----------- TOTAL LIABILITIES............................................... 995,942 ----------- NET ASSETS......................................................... $16,744,987 =========== INSTITUTIONAL SHARES: Net assets (Unlimited shares of $0.001 par beneficial interest authorized; 733,731 shares outstanding)................ $ 9,311,823 =========== Net asset value, offering and redemption price per Institutional Share ($9,311,823/733,731 shares)............................... $ 12.69 =========== RETAIL SHARES: Net assets (Unlimited shares of $0.001 par beneficial interest authorized; 589,469 shares outstanding)................ $ 7,433,164 =========== Net asset value and redemption price per Retail Share ($7,433,164/589,469 shares)..................................... $ 12.61 =========== Offering price per share ($12.61/0.9825)......................... $ 12.83 =========== SOURCE OF NET ASSETS At June 30, 1997, net assets consisted of: Paid-in capital.................................................. $13,902,637 Accumulated undistributed net investment income.................. 19,070 Accumulated net realized gain on investments..................... 1,746,935 Net unrealized appreciation on investments....................... 1,076,345 ----------- NET ASSETS...................................................... $16,744,987 ===========
See accompanying notes to financial statements. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME Dividends........................................................... $ 74,446 Interest............................................................ 62,544 Other income........................................................ 6,267 ---------- TOTAL INCOME....................................................... 143,277 ---------- EXPENSES Investment advisory fees (Note 3)................................... 57,730 Transfer agent fees................................................. 32,946 Administration fees................................................. 28,344 Registration fees................................................... 24,537 Distribution fees - Retail Class (Note 3)........................... 19,423 Accounting fees..................................................... 15,531 Distribution fees - Institutional Class (Note 3).................... 10,505 Custodian fees...................................................... 9,110 Amortization of organization costs (Note 1)......................... 6,121 Miscellaneous expense............................................... 4,583 Service fees - Retail Class (Note 3)................................ 2,590 ---------- TOTAL EXPENSES..................................................... 211,420 Expenses waived and reimbursed by Advisor (Note 3)................ (87,213) ---------- NET EXPENSES....................................................... 124,207 ---------- NET INVESTMENT INCOME.............................................. 19,070 ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions........................ 1,582,513 Net change in unrealized appreciation of investments................ 156,672 ---------- Net realized and unrealized gain on investments..................... 1,739,185 ---------- Net increase in net assets resulting from operations................ $1,758,255 ==========
See accompanying notes to financial statements. STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 1997 YEAR ENDED (UNAUDITED) DECEMBER 31, 1996 ---------------- ----------------- OPERATIONS Net investment income...................... $ 19,070 $ 84,542 Net realized gain on investments........... 1,582,513 164,422 Net change in unrealized appreciation of investments............................... 156,672 903,008 ----------- ----------- Net increase in net assets resulting from operations............................... 1,758,255 1,151,972 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Institutional Shares...................... 0 (66,939) Retail Shares............................. 0 (23,283) ----------- ----------- Net decrease in net assets resulting from distributions............................ 0 (90,222) ----------- ----------- CAPITAL SHARE TRANSACTIONS Shares sold: Institutional Shares...................... 1,034,551 2,096,319 Retail Shares............................. 2,988,637 3,317,594 Shares redeemed: Institutional Shares...................... (534,151) (1,323,483) Retail Shares............................. (191,497) (302,910) Shares reinvested: Institutional Shares...................... 0 63,849 Retail Shares............................. 0 22,639 ----------- ----------- Increase in net assets derived from capital share transactions (a).................... 3,297,540 3,874,008 ----------- ----------- Total increase in net assets.............. 5,055,795 4,935,758 ----------- ----------- NET ASSETS Beginning of period........................ 11,689,192 6,753,434 ----------- ----------- End of period (including undistributed net investment income of $19,070, and $0, respectively)............................. $16,744,987 $11,689,192 =========== =========== (a)Transactions in capital stock were: Shares sold: Institutional Shares..................... 89,458 201,664 Retail Shares............................ 255,944 314,924 Shares redeemed: Institutional Shares..................... (45,974) (126,226) Retail Shares............................ (16,699) (28,244) Shares reinvested: Institutional Shares..................... 0 5,687 Retail Shares............................ 0 2,022 ----------- ----------- Increase in shares outstanding............ 282,729 369,827 =========== ===========
See accompanying notes to financial statements. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The table below sets forth financial data for one share of capital stock outstanding throughout each period presented.
INSTITUTIONAL SHARES --------------------------------------------------------- SIX MONTHS FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED JUNE 30, 1997 DECEMBER 31, DECEMBER 31, DECEMBER 31, (UNAUDITED) 1996 1995 1994 * ------------- ------------ ------------ -------------- NET ASSET VALUE, BEGINNING OF PERIOD.... $ 11.24 $ 10.07 $ 9.66 $10.00 ------- ------- ------ ------ Income From Investment Operations: Net investment income............... 0.03 0.10 0.11 0.06 Net gains (losses) on securities (both realized and unrealized).......... 1.42 1.17 0.66 (0.34) ------- ------- ------ ------ Total from investment operations.......... 1.45 1.27 0.77 (0.28) ------- ------- ------ ------ Less Distributions Distributions from net investment income: Institutional Shares.............. 0.00 (0.10) (0.11) (0.06) Retail Shares........ 0.00 0.00 0.00 0.00 Distributions from net capital gains: Institutional Shares.............. 0.00 0.00 (0.25) 0.00 Retail Shares........ 0.00 0.00 0.00 0.00 ------- ------- ------ ------ Total distributions.. 0.00 (0.10) (0.36) (0.06) ------- ------- ------ ------ NET ASSET VALUE, END OF PERIOD................. $ 12.69 $ 11.24 $10.07 $ 9.66 ======= ======= ====== ====== TOTAL RETURN............ 12.90% 12.59% 7.93% (2.84%) RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in 000s)...... $ 9,312 $ 7,760 $6,133 $2,217 Ratio of expenses to average net assets: Before expense reimbursement........ 2.88% /1/ 3.70% 5.84% 18.62% /1/ After expense reimbursement........ 1.60% /1/ 1.60% 1.60% 1.60% /1/ Ratio of net investment income to average net assets: Before expense reimbursement........ (0.77%)/1/ (1.05%) (2.96%) (15.49%)/1/ After expense reimbursement........ 0.51% /1/ 1.05% 1.28% 1.53% /1/ Portfolio turnover rate.................. 120.89% 93.08% 34.12% 8.31% Average commission rate paid.................. $0.0568 $0.0593 N/R /2/ N/R /2/
* The Institutional Shares commenced investment operations on March 21, 1994. /1/Annualized /2/Not Required See accompanying notes to financial statements. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The table below sets forth financial data for one share of capital stock outstanding throughout each period presented.
RETAIL SHARES ---------------------------------------------- SIX MONTHS FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED JUNE 30, 1997 DECEMBER 31 DECEMBER 31, (UNAUDITED) 1996 1995 * ------------- ------------ -------------- NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 11.22 $ 10.08 $10.49 ------- ------- ------ Income From Investment Operations: Net investment income........ 0.00 0.07 0.11 Net gains (losses) on securities (both realized and unrealized)............. 1.39 1.14 (0.16) ------- ------- ------ Total from investment operations................. 1.39 1.21 (0.05) ------- ------- ------ Less Distributions Distributions from net investment income: Institutional Shares........ 0.00 0.00 0.00 Retail Shares............... 0.00 (0.07) (0.11) Distributions from net capital gains: Institutional Shares........ 0.00 0.00 0.00 Retail Shares............... 0.00 0.00 (0.25) ------- ------- ------ Total distributions......... 0.00 (0.07) (0.36) ------- ------- ------ NET ASSET VALUE, END OF PERIOD........................ $ 12.61 $ 11.22 $10.08 ======= ======= ====== TOTAL RETURN................... 12.39% /1/ 11.98% /1/ (0.46%)/1/ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in 000s)........................ $ 7,433 $ 3,929 $ 620 Ratio of expenses to average net assets: Before expense reimbursement............... 3.48% /2/ 4.30% 6.44% /2/ After expense reimbursement.. 2.20% /2/ 2.20% 2.20% /2/ Ratio of net investment income to average net assets: Before expense reimbursement............... (1.37%)/2/ (1.65%) (3.56%)/2/ After expense reimbursement.. (0.09%)/2/ 0.45% 0.68% /2/ Portfolio turnover rate....... 120.89% 93.08% 34.12% Average commission rate paid.. $0.0568 $0.0593 N/R /3/
* The Retail Shares commenced investment operations on August 25, 1995. /1/Total return calculation does not reflect sales load. /2/Annualized /3/Not Required See accompanying notes to financial statements. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) - ------------------------------------------------------------------------------- NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The Timothy Plan (the "Fund" ) is organized as a series Delaware business trust pursuant to a trust agreement dated December 16, 1993. The Fund is registered under the Investment Company Act of 1940, as amended, as an open- end diversified management investment company. The Fund's primary objective is long-term capital growth, with a secondary objective of current income. The Fund seeks to achieve its investment objective by investing primarily in common stocks and ADRs while abiding by ethical standards established for investments by the Fund. The Fund currently consists of one series comprised of two separate classes of shares (Institutional Class shares and Retail Class shares) which vary with respect to sales charges, distribution costs, voting rights and dividends. Shareholders of Retail Class shares are subject to a sales charge and each class is subject to different 12b-1 Plan expenses. 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. Investments in securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the period. Unlisted securities, or listed securities in which there were no sales, are valued at the mean of the closing bid and ask prices. Short-term obligations with remaining maturities of 60 days or less are valued at cost plus accrued interest which approximates market value. B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS. Security 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 and distributions to shareholders are 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 the capital stock of the Fund is determined daily as of the close of trading on the New York Stock Exchange by dividing the value of its net assets by the number of Fund shares outstanding. Net Asset Value is calculated separately for each class of the Fund based on expenses applicable to a particular class. The net asset value of the classes may differ because of different fees and expenses charged to each class. D. ORGANIZATION COSTS. Organization costs are being amortized on a straight line basis over five years from inception. E. FEDERAL INCOME TAXES. It is the policy of the Fund to comply with all requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. F. 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 $17,799,055 and $13,595,123 respectively, for the six months ended June 30, 1997. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) - ------------------------------------------------------------------------------- NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Timothy Partners, LTD., ("TPL") is the investment advisor for the Fund pursuant to an investment advisory agreement (the "Agreement") effective March 21, 1994, as amended August 28, 1995. Under the terms of the Agreement, TPL receives a fee, accrued daily and paid monthly, at an annual rate of 0.85% of the average daily net assets of the Fund. TPL has voluntarily agreed to waive its fees to the extent total annualized expenses, inclusive of distribution expenses, exceed 1.60%, with respect to the Institutional Class, and 2.20%, with respect to the Retail Class, of the Fund's average daily net assets. For the six months ended June 30, 1997, advisory fees of $57,730 were waived by TPL and TPL reimbursed the Fund $87,213. Effective July 1, 1997 the Fund is engaging TPL to act as sole underwriter and accordingly revised the distribution plans (the "Plans") on behalf of each class pursuant to Rule 12b- 1 under the Investment Company Act of 1940, as amended. The revised Plans provide that the Fund will reimburse TPL or others for expenses actually incurred in the promotion or distribution of shares. Under the Institutional Class Plan, the Fund will reimburse TPL a fee at an annual rate of 0.25%, payable monthly, of the average daily net assets attributable to such class of shares. Under the Retail Class Plan, the Fund will reimburse TPL a fee at an annual rate of 0.85%, payable monthly, of which, 0.25% may be a service fee, of the average daily net assets attributable to such class of shares. Prior to July 1, 1997, FPS Broker Services, Inc. ("FPSB") acted as sole underwriter to the Fund and the previous plans provided that the Fund would reimburse FPSB or others for expenses actually incurred in the promotion and distribution of shares at the same annual rates noted above. For the six months ended June 30, 1997, the Fund reimbursed FPSB $32,518 for distribution costs incurred. Certain Officers and Trustees of the Fund are affiliated persons of TPL. NOTE 4--SPECIAL MEETING OF SHAREHOLDERS A special meeting of shareholders was held on January 31, 1997, to elect the seven members to the Board of Trustees, to vote on a new sub-investment advisory agreement among the Fund, Timothy Partners, LTD., and Awad & Associates, a division of Raymond James & Associates, Inc., and to vote on a revised 12b-1 distribution plan on behalf of the Retail Class only. The results were as follows: FOR THE ELECTION OF THE SEVEN MEMBERS TO THE BOARD OF TRUSTEES:
VOTES VOTES FOR WITHHELD Arthur D. Ally 514,374 9,727 Joseph E. Boatwright 514,638 9,463 Daniel D. Busby 514,839 9,462 Philip B. Crosby 514,537 9,564 Wesley W. Pennington 514,840 9,261 Mark Schweizer 514,840 9,261 Jock M. Sneddon 514,537 9,564
FOR THE ELECTION OF THE NEW SUB-INVESTMENT ADVISORY AGREEMENT: GRANT: 512,562 WITHHOLD: 11,539
NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997 (UNAUDITED) - ------------------------------------------------------------------------------- FOR THE ELECTION OF THE REVISED 12B-1 DISTRIBUTION PLAN ON BEHALF OF THE RETAIL CLASS ONLY (WHICH IS TO BECOME EFFECTIVE UPON IMPLEMENTATION OF A CDSC. AS OF JUNE 30, 1997, THE REVISION IS NOT IN EFFECT): GRANT: 166,112 WITHHOLD: 4,272
At a meeting held March 4, 1997, the Board of Trustees appointed a new independent Trustee to fill the vacancy created by the death of Mr. Mark Schweizer. Following a review of possible candidates, the current independent Trustees nominated and the full Board subsequently elected Mr. Scott Fehrenbacher as a Trustee, to serve in such capacity, unless earlier removed or until the election and qualification of his successor. THE TIMOTHY PLAN 1304 West Fairbanks Avenue Winter Park, FL 32789 BOARD OF TRUSTEES Arthur D. Ally Joseph E. Boatwright Daniel D. Busby Philip B. Crosby Scott Fehrenbacher Wesley W. Pennington Jock M. Sneddon OFFICERS Arthur D. Ally, President Joseph E. Boatwright, Secretary Wesley W. Pennington, Treasurer INVESTMENT ADVISOR Timothy Partners, LTD. 1304 West Fairbanks Avenue Winter Park, FL 32789 DISTRIBUTOR Timothy Partners, LTD. 1304 West Fairbanks Avenue Winter Park, FL 32789 TRANSFER AGENT FPS Services, Inc. 3200 Horizon Drive King of Prussia, PA 19406 AUDITORS Tait, Weller & Baker Two Penn Center Plaza, Suite 700 Philadelphia, PA 19102 LEGAL COUNSEL Stradley, Ronon, Stevens, & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103 For additional information or a prospectus, please call: 1-800-846-7526 Visit the Timothy Plan web site on the Internet at: WWW.TIMOTHYPLAN.COM This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus which includes details regarding the Fund's objectives, policies, expenses and other information. (ART) SEMI-ANNUAL REPORT June 30, 1997 -----END PRIVACY-ENHANCED MESSAGE-----