As filed with the Securities and Exchange Commission on February 28, 2013


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY



Investment Company Act file number (811-05037)



Professionally Managed Portfolios
(Exact name of registrant as specified in charter)



615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)



Eric W. Falkeis
Professionally Managed Portfolios
777 E Wisconsin Avenue, Fl 4
Milwaukee, WI 53202

(Name and address of agent for service)



(414) 765-5301
Registrant's telephone number, including area code



Date of fiscal year end: March  31

Date of reporting period:   December 31, 2012
 
 
 
 
 
 
Item 1. Schedule of Investments.
 
 
HODGES FUND
 
   
SCHEDULE OF INVESTMENTS at December 31, 2012 (Unaudited)
 
           
Shares
   
Value
 
COMMON STOCKS: 83.9%
     
Air Transportation: 3.4%
     
  180,000  
United Continental Holdings, Inc. *
  $ 4,208,400  
Apparel Manufacturing: 5.8%
       
  500,000  
Crocs, Inc. *
    7,195,000  
Broadcasting:10.3%
       
  1,300,000  
Belo Corp.
    9,971,000  
  950,000  
Sirius XM Radio, Inc. *
    2,745,500  
            12,716,500  
Employment Services: 3.1%
       
  70,000  
Workday, Inc. *
    3,815,000  
Food Services: 13.1%
       
  500,000  
Krispy Kreme Doughnuts, Inc. *
    4,690,000  
  1,345,000  
Luby's, Inc. * 1, 2
    8,998,050  
  178,900  
Rocky Mountain Chocolate Factory, Inc. 1
    1,889,184  
  10,000  
Starbucks Corp.
    536,200  
            16,113,434  
General Manufacturing: 11.8%
       
  514,300  
A.T. Cross Co. - Class A * 1
    5,544,154  
  100,000  
Texas Industries, Inc. *
    5,101,000  
  100,000  
Trinity Industries, Inc.
    3,582,000  
  30,700  
U.S. Concrete, Inc. *
    277,835  
            14,504,989  
Internet Services: 2.2%
       
  100,000  
Facebook, Inc. *
    2,663,000  
Mining, Oil & Gas Extraction: 8.5%
       
  150,000  
Chesapeake Energy Corp.
    2,493,000  
  30,000  
Halliburton Co.
    1,040,700  
  1,900,000  
HyperDynamics Corp. *
    1,136,010  
  35,000  
LinnCo, LLC *
    1,264,900  
  20,000  
National Oilwell Varco, Inc.
    1,367,000  
  500,000  
SandRidge Energy, Inc. *
    3,175,000  
            10,476,610  
Motor Vehicle Manufacturing: 1.1%
       
  15,000  
Toyota Motor Corp. - ADR
    1,398,750  
Movie Production & Theaters: 3.5%
       
  165,000  
Cinemark Holdings, Inc.
    4,286,700  
Publishing Industries: 3.8%
       
  1,020,000  
A.H. Belo Corp. - Class A 1
    4,743,000  
Rail Transportation: 6.6%
       
  50,000  
Kansas City Southern
    4,174,000  
  31,000  
Union Pacific Corp.
    3,897,320  
            8,071,320  
Retail Trade: 7.9%
       
  250,000  
Chico's FAS, Inc. *
    4,615,000  
  100,000  
Michael Kors Holdings Ltd. *
    5,103,000  
            9,718,000  
 
 
 
 
 
Transportation Equipment: 2.8%
       
  45,000  
The Boeing Co.
    3,391,200  
TOTAL COMMON STOCKS
       
(Cost $92,429,165)
    103,301,903  
PARTNERSHIP & TRUST: 11.9%
       
Land Ownership & Leasing: 11.9%
       
  273,100  
Texas Pacific Land Trust 1, 2
    14,591,733  
TOTAL PARTNERSHIP & TRUST
       
(Cost $8,135,719)
    14,591,733  
Contracts
       
(100 shares per contract)
       
Call Options Purchased: 2.8%
       
Apparel Manufacturing: 1.2%
       
  1,600  
Nike, Inc., Expiration: January, 2013, Exercise Price: $42.50
    1,472,000  
Motor Vehicle Manufacturing: 0.8%
       
  500  
Toyota Motor Corp., Expiration: July, 2013, Exercise Price: $75.00
    947,500  
Transportation Equipment: 0.8%
       
  500  
The Boeing Co., Expiration: February, 2013, Exercise Price: $65.00
    535,000  
  200  
Cummins, Inc., Expiration: June, 2013, Exercise Price: $85.00
    488,000  
            1,023,000  
TOTAL CALL OPTIONS PURCHASED
       
(Cost $2,858,690)
    3,442,500  
               
Shares
         
SHORT-TERM INVESTMENT: 0.0% 3
       
Money Market Fund: 0.0% 3
       
  316  
Fidelity Money Market Portfolio - Select Class, 0.09% 4
    316  
TOTAL SHORT-TERM INVESTMENT
       
(Cost $316)
    316  
TOTAL INVESTMENT IN SECURITIES: 98.6%
       
(Cost $103,423,890)
    121,336,452  
Other Assets in Excess of Liabilities: 1.4%
    1,751,628  
TOTAL NET ASSETS: 100.0%
  $ 123,088,080  
   
       
 
ADR
American Depositary Receipt
 
 
*
Non-income producing security.
 
 
1
Affiliated company as defined by the Investment Company Act of 1940.
 
 
2
A portion of this security is considered illiquid.  As of December 31, 2012, the total market value of the investments considered illiquid were $7,877,212 or 6.4% of total net assets.
 
3
Less than 0.05%.
 
 
4
Seven-day yield as of December 31, 2012.
 
 
 
 
 
 
 

The cost basis of investments for federal income tax purposes at December 31, 2012 was as follows + :
 
Cost of investments
  $ 103,423,890  
Gross unrealized appreciation
    29,780,891  
Gross unrealized depreciation
    (11,868,329 )
Net unrealized appreciation
  $ 17,912,562  
 
+ Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous fiscal year end.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.
 
 
 
 
 
 
 

Hodges Fund
Summary of Fair Value Exposure at December 31, 2012 (Unaudited)
         
The Hodges Fund (the "Fund") utilizes various methods to measure the fair value of most of its investments on a recurring basis.  U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.  The three levels of inputs are:
         
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
• Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
• Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
         
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2012. See Schedule of Investments for industry breakouts:
         
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Common Stocks
  $ 103,301,903     $ -     $ -     $ 103,301,903  
Partnership & Trust
    14,591,733       -       -       14,591,733  
Call Options Purchased
    -       3,442,500       -       3,442,500  
Short-Term Investment
    316       -       -       316  
Total Investments
  $ 117,893,952     $ 3,442,500     $ -     $ 121,336,452  
 
 
 
 
 
 

 

HODGES SMALL CAP FUND
 
   
SCHEDULE OF INVESTMENTS at December 31, 2012 (Unaudited)
 
           
Shares
   
Value
 
COMMON STOCKS: 91.9%
     
Advertising & Public Relations: 1.1%
     
  250,000  
National Cinemedia, Inc.
  $ 3,532,500  
Air Transportation: 2.9%
       
  400,000  
Jetblue Airways Corp. *
    2,284,000  
  500,000  
U.S. Airways Group, Inc. *
    6,750,000  
            9,034,000  
Apparel Manufacturing: 3.7%
       
  350,000  
Crocs, Inc. *
    5,036,500  
  160,000  
G-III Apparel Group Ltd. *
    5,476,800  
  553,177  
Heelys, Inc. * 1
    1,233,585  
            11,746,885  
Basic Materials Manufacturing: 2.3%
       
  150,000  
Commercial Metals Co.
    2,229,000  
  34,700  
PMFG, Inc. *
    315,423  
  288,300  
U.S. Silica Holdings, Inc. *
    4,823,259  
            7,367,682  
Broadcasting: 1.0%
       
  400,000  
Belo Corp.
    3,068,000  
Computer & Electronic Products: 5.2%
       
  60,000  
3D Systems Corp. *
    3,201,000  
  200,000  
Cirrus Logic, Inc. *
    5,794,000  
  78,302  
Interphase Corp. *
    202,802  
  260,000  
Kulicke & Soffa Industries, Inc. *
    3,117,400  
  300,000  
Omnivision Technologies, Inc. *
    4,224,000  
            16,539,202  
Construction: 1.4%
       
  300,000  
Primoris Services Corp.
    4,512,000  
Depository Credit Intermediation: 2.6%
       
  45,000  
Texas Capital BancShares, Inc. *
    2,016,900  
  300,000  
ViewPoint Financial Group, Inc.
    6,282,000  
            8,298,900  
Electrical Equipment: 1.6%
       
  130,000  
AZZ, Inc.
    4,995,900  
Financial Services: 0.5%
       
  75,000  
Southside Bancshares, Inc.
    1,579,500  
Food & Beverage Products: 1.5%
       
  365,000  
Smart Balance, Inc. *
    4,708,500  
Food Services: 4.8%
       
  115,000  
Cracker Barrel Old Country Store, Inc.
    7,389,900  
  600,000  
Krispy Kreme Doughnuts, Inc. *
    5,628,000  
  300,000  
Luby's, Inc. * 1
    2,007,000  
            15,024,900  
Freight Transportation: 1.6%
       
  220,000  
Saia, Inc. *
    5,086,400  
Furniture Manufacturing: 1.6%
       
  400,000  
Steelcase, Inc.
    5,096,000  
 
 
 
 
 
General Manufacturing: 10.5%
       
  290,400  
A.T. Cross Co. - Class A * 1
    3,130,512  
  140,000  
Curtiss-Wright Corp.
    4,596,200  
  170,000  
Encore Wire Corp.
    5,152,700  
  140,000  
Helen of Troy Ltd. *
    4,674,600  
  135,000  
Spectrum Brands Holdings, Inc.
    6,065,550  
  25,000  
Texas Industries, Inc. *
    1,275,250  
  225,000  
Trinity Industries, Inc.
    8,059,500  
            32,954,312  
Government Services: 2.7%
       
  304,124  
The GEO Group, Inc.
    8,576,305  
Health Care Services Pharmacy - 0.8%
       
  225,000  
BioScrip, Inc. *
    2,423,250  
               
Hotels, Restaurants & Leisure: 1.7%
       
  100,000  
Vail Resorts, Inc.
    5,409,000  
Insurance: 1.0%
       
  100,000  
Hallmark Financial Services, Inc. *
    939,000  
  160,000  
Hilltop Holdings, Inc. *
    2,166,400  
            3,105,400  
Internet Services: 2.2%
       
  125,000  
Copart, Inc. *
    3,687,500  
  300,000  
Points International Ltd. *
    3,342,000  
            7,029,500  
Machinery: 6.4%
       
  110,000  
Alamo Group, Inc.
    3,590,400  
  330,000  
Briggs & Stratton Corp.
    6,956,400  
  85,000  
Lufkin Industries, Inc.
    4,941,050  
  300,000  
Manitowoc, Inc.
    4,704,000  
            20,191,850  
Mining, Oil & Gas Extraction: 11.4%
       
  250,000  
Alpha Natural Resources, Inc. *
    2,435,000  
  130,000  
Atwood Oceanics, Inc. *
    5,952,700  
  160,000  
Bonanza Creek Energy, Inc. *
    4,446,400  
  100,000  
Hercules Offshore, Inc. *
    618,000  
  240,000  
Kodiak Oil & Gas Corp. *
    2,124,000  
  173,972  
LinnCo, LLC *
    6,287,348  
  363,500  
Matador Resources Co. *
    2,980,700  
  190,000  
Oasis Petroleum, Inc. *
    6,042,000  
  800,000  
SandRidge Energy, Inc. *
    5,080,000  
            35,966,148  
Motor Vehicle Parts Manufacturing: 1.8%
       
  220,000  
Cooper Tire & Rubber Co.
    5,579,200  
Movie Production & Theaters: 1.7%
       
  200,000  
Cinemark Holdings, Inc.
    5,196,000  
Nondepository Credit Intermediation: 2.0%
       
  200,000  
Nationstar Mortgage Holdings, Inc. *
    6,196,000  
Petroleum Products: 1.8%
       
  638,500  
Aegean Marine Petroleum Network, Inc.
    3,371,280  
  125,000  
Alon USA Energy, Inc.
    2,261,250  
            5,632,530  
 
 
 
 
 
Rail Transportation: 0.8%
       
  30,000  
Kansas City Southern
    2,504,400  
Residential Building Construction: 1.1%
       
  220,000  
KB Home
    3,476,000  
Retail Trade: 12.1%
       
  300,000  
Chico's FAS, Inc. *
    5,538,000  
  105,000  
Group 1 Automotive, Inc.
    6,508,950  
  120,000  
Jos. A. Bank Clothiers, Inc. *
    5,109,600  
  125,000  
Lithia Motors, Inc.
    4,677,500  
  70,000  
Michael Kors Holdings Ltd. *
    3,572,100  
  100,000  
Sally Beauty Holdings, Inc. *
    2,357,000  
  300,000  
Shoe Carnival, Inc.
    6,147,000  
  170,000  
Titan Machinery, Inc. *
    4,199,000  
            38,109,150  
Software Publishers: 0.7%
       
  900,000  
Glu Mobile, Inc. *
    2,061,000  
Transportation & Warehousing: 1.4%
       
  70,000  
Kirby Corp. *
    4,332,300  
TOTAL COMMON STOCKS
       
(Cost $256,318,863)
    289,332,714  
PARTNERSHIPS & TRUSTS: 3.8%
       
Land Ownership & Leasing: 1.7%
       
  100,000  
Texas Pacific Land Trust 1
    5,343,000  
Real Estate Investment Trusts: 2.1%
       
  700,000  
FelCor Lodging Trust, Inc. *
    3,269,000  
  300,000  
Medical Properties Trust, Inc.
    3,588,000  
            6,857,000  
TOTAL PARTNERSHIPS & TRUSTS
       
(Cost $10,242,498)
    12,200,000  
SHORT-TERM INVESTMENTS: 4.9%
       
Money Market Funds 4.9%
       
  10,798,554  
Fidelity Money Market Portfolio - Select Class, 0.09% 2
    10,798,554  
  4,484,519  
Invesco Short-Term Portfolio - Institutional Class, 0.09% 2
    4,484,519  
            15,283,073  
TOTAL SHORT-TERM INVESTMENTS
       
(Cost $15,283,073)
    15,283,073  
TOTAL INVESTMENTS IN SECURITIES: 100.6%
       
(Cost $281,844,434)
    316,815,787  
Liabilities in Excess of Other Assets: (0.6)%
    (1,991,694 )
TOTAL NET ASSETS: 100.0%
  $ 314,824,093  
   
       
 
*
Non-income producing security.
 
 
1
Affiliated company as defined by the Investment Company Act of 1940.
 
 
2
Seven-day yield as of December 31, 2012.
 
 
 

 
 
 
 

The cost basis of investments for federal income tax purposes at December 31, 2012 was as follows + :
 
       
Cost of investments
  $ 281,887,305  
Gross unrealized appreciation
    40,260,731  
Gross unrealized depreciation
    (5,332,249 )
Net unrealized appreciation
  $ 34,928,482  
         
 
+ Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous fiscal year end.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.
 
 
 
 
 
 
 
 
Hodges Small Cap Fund
Summary of Fair Value Exposure at December 31, 2012 (Unaudited)
         
The Hodges Small Cap Fund (the "Fund") utilizes various methods to measure the fair value of most of its investments on a recurring basis.  U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.  The three levels of inputs are:
         
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
• Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
• Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
         
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2012. See Schedule of Investments for industry breakouts:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Common Stocks
  $ 289,332,714     $ -     $ -     $ 289,332,714  
Partnerships & Trusts
    12,200,000       -       -       12,200,000  
Short-Term Investments
    15,283,073       -       -       15,283,073  
Total Investments
  $ 316,815,787     $ -     $ -     $ 316,815,787  
 
 
 
 
 
 
 

 
HODGES BLUE CHIP 25 FUND
 
   
SCHEDULE OF INVESTMENTS at December 31, 2012 (Unaudited)
 
           
Shares
   
Value
 
COMMON STOCKS: 93.3%
     
Basic Materials Manufacturing: 2.7%
     
  6,700  
United States Steel Corp.
  $ 159,929  
Business Services: 6.9%
       
  2,700  
Visa, Inc.
    409,266  
Communications Equipment Manufacturing: 2.1%
       
  2,000  
QUALCOMM, Inc.
    124,040  
Depository Credit Intermediation: 2.8%
       
  3,750  
Texas Capital BancShares, Inc. *
    168,075  
Entertainment: 2.8%
       
  3,300  
Walt Disney Co.
    164,307  
Food & Beverage Products: 10.9%
       
  8,000  
The Coca-Cola Co.
    290,000  
  5,000  
The Hershey Co.
    361,100  
            651,100  
Media: 3.4%
       
  4,000  
DIRECTV *
    200,640  
Mining, Oil & Gas Extraction: 21.5%
       
  3,200  
Continental Resources, Inc. *
    235,168  
  1,200  
EOG Resources, Inc.
    144,948  
  11,000  
Halliburton Co.
    381,590  
  4,000  
National Oilwell Varco, Inc.
    273,400  
  5,500  
Transocean Ltd.
    245,575  
            1,280,681  
Motor Vehicle Manufacturing: 2.3%
       
  1,500  
Toyota Motor Corp. - ADR
    139,875  
Petroleum Products: 2.7%
       
  1,500  
Chevron Corp.
    162,210  
Pharmaceuticals: 4.7%
       
  4,000  
Johnson & Johnson
    280,400  
Rail Transportation: 4.2%
       
  2,000  
Union Pacific Corp.
    251,440  
Retail Trade: 19.4%
       
  6,500  
The Home Depot, Inc.
    402,025  
  3,800  
Costco Wholesale Corp.
    375,326  
  5,500  
Wal-Mart Stores, Inc.
    375,265  
            1,152,616  
Transportation Equipment: 6.9%
       
  4,000  
The Boeing Co.
    301,440  
  1,000  
Cummins, Inc.
    108,350  
            409,790  
TOTAL COMMON STOCKS
       
(Cost $5,053,865)
    5,554,369  
PARTNERSHIP & TRUST: 4.5%
       
Land Ownership & Leasing: 4.5%
       
  5,000  
Texas Pacific Land Trust 1
    267,150  
 
 
 
 
 
 
TOTAL PARTNERSHIP & TRUST
       
(Cost $169,793)
    267,150  
SHORT-TERM INVESTMENT: 1.4%
       
Money Market Fund: 1.4%
       
  85,274  
Fidelity Money Market Portfolio - Select Class, 0.09% 2
    85,274  
TOTAL SHORT-TERM INVESTMENT
       
(Cost $85,274)
    85,274  
TOTAL INVESTMENTS IN SECURITIES: 99.2%
       
(Cost $5,308,932)
    5,906,793  
Other Assets in Excess of Liabilities: 0.8%
    44,910  
TOTAL NET ASSETS: 100.0%
  $ 5,951,703  
   
 
 
 ADR
American Depositary Receipt
 
 
*
Non-income producing security.
 
 
1
Affiliated company as defined by the Investment Company Act of 1940.
 
 
2
Seven-day yield as of December 31, 2012.
 
 
 
 
 
 
 
 
 
 

The cost basis of investments for federal income tax purposes at December 31, 2012 was as follows+:
   
 
Cost of investments
  $ 5,308,943  
Gross unrealized appreciation
    857,330  
Gross unrealized depreciation
    (259,480 )
Net unrealized appreciation
  $ 597,850  
 
+Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous fiscal year end.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.
 
 
 
 
 
 
 
 
 
 
Hodges Blue Chip 25 Fund
Summary of Fair Value Exposure at December 31, 2012 (Unaudited)
         
The Hodges Blue Chip 25 Fund (the "Fund") utilizes various methods to measure the fair value of most of its investments on a recurring basis.  U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.  The three levels of inputs are:
         
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
• Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
• Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
         
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2012. See Schedule of Investments for industry breakouts:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Common Stocks
  $ 5,554,369     $ -     $ -     $ 5,554,369  
Partnership & Trust
    267,150       -       -       267,150  
Short-Term Investment
    85,274       -       -       85,274  
Total Investments
  $ 5,906,793     $ -     $ -     $ 5,906,793  
 
 
 

 
 
 
 

HODGES EQUITY INCOME FUND
 
   
SCHEDULE OF INVESTMENTS at December 31, 2012 (Unaudited)
 
           
Shares
   
Value
 
COMMON STOCKS: 94.5%
     
Advertising & Public Relations: 2.3%
     
  25,000  
National CineMedia, Inc.
  $ 353,250  
Chemical Manufacturing: 4.0%
       
  9,000  
Procter & Gamble Co.
    611,010  
Computer & Electronic Products: 9.3%
       
  3,000  
International Business Machines Corp.
    574,650  
  50,000  
Taiwan Semiconductor Manufacturing Co. Ltd. - ADR
    858,000  
            1,432,650  
Conglomerates: 3.4%
       
  25,000  
General Electric Co.
    524,750  
Food & Beverage Products: 7.9%
       
  18,000  
The Coca-Cola Co.
    652,500  
  5,000  
Kraft Foods Group, Inc. *
    227,350  
  5,000  
Pepsico, Inc.
    342,150  
            1,222,000  
Food Services: 2.9%
       
  7,000  
Cracker Barrel Old Country Store, Inc.
    449,820  
General Manufacturing: 5.1%
       
  4,000  
Caterpillar, Inc.
    358,320  
  5,000  
Kimberly-Clark Corp.
    422,150  
            780,470  
Government Services: 3.1%
       
  17,006  
The GEO Group, Inc.
    479,559  
Mining, Oil & Gas Extraction: 11.0%
       
  6,000  
Cliffs Natural Resources, Inc.
    231,360  
  3,000  
Diamond Offshore Drilling, Inc.
    203,880  
  23,000  
LinnCo, LLC *
    831,220  
  8,000  
Targa Resources Corp.
    422,720  
            1,689,180  
Movie Production & Theaters: 3.7%
       
  22,000  
Cinemark Holdings, Inc.
    571,560  
Petroleum Products: 9.2%
       
  3,500  
Chevron Corp.
    378,490  
  6,000  
Exxon Mobil Corp.
    519,300  
  11,000  
HollyFrontier Corp.
    512,050  
            1,409,840  
Pharmaceuticals: 13.0%
       
  5,000  
Abbott Laboratories
    327,500  
  10,000  
Eli Lilly & Co.
    493,200  
  8,000  
Johnson & Johnson
    560,800  
  15,000  
Merck & Co., Inc.
    614,100  
            1,995,600  
Rail Transportation: 1.6%
       
  2,000  
Union Pacific Corp.
    251,440  
Retail Trade: 3.6%
       
  9,000  
The Home Depot, Inc.
    556,650  
 
 
 
 
 
Software Publishers: 1.2%
       
  7,000  
Microsoft Corp.
    187,110  
Telecommunications: 7.5%
       
  15,000  
AT&T, Inc.
    505,650  
  15,000  
Verizon Communications, Inc.
    649,050  
            1,154,700  
Transportation Equipment: 2.0%
       
  4,000  
The Boeing Co.
    301,440  
Utilities: 3.7%
       
  12,000  
CenterPoint Energy, Inc.
    231,000  
  5,333  
Duke Energy Corp.
    340,246  
            571,246  
TOTAL COMMON STOCKS
       
(Cost $12,499,667)
    14,542,275  
PARTNERSHIPS & TRUSTS: 4.2%
       
Real Estate Investment Trusts: 4.2%
       
  20,000  
Medical Properties Trust, Inc.
    239,200  
  16,000  
Mesabi Trust
    407,200  
TOTAL PARTNERSHIPS & TRUSTS
       
(Cost $658,774)
    646,400  
Principal
         
CORPORATE BOND: 1.8%
       
General Manufacturing: 1.8%%
       
     
Texas Industries, Inc.
       
$ 250,000  
9.250%, 8/15/20
    269,375  
TOTAL CORPORATE BOND
       
(Cost $224,893)
    269,375  
Shares
         
SHORT-TERM INVESTMENT: 0.7%
       
Money Market Fund: 0.7%
       
  110,525  
Fidelity Money Market Portfolio - Select Class, 0.09% 1
    110,525  
TOTAL SHORT-TERM INVESTMENT
       
(Cost $110,525)
    110,525  
TOTAL INVESTMENTS IN SECURITIES: 101.2%
       
(Cost $13,493,859)
    15,568,575  
Liabilities in Excess of Other Assets: (1.2)%
    (180,818 )
TOTAL NET ASSETS: 100.0%
  $ 15,387,757  
   
               
 
 ADR
American Depositary Receipt
 
 
*
Non-income producing security.
 
 
1
Seven-day yield as of December 31, 2012.
 
 

 
 
 
 

The cost basis of investments for federal income tax purposes at December 31, 2012 was as follows+:
     
 
Cost of investments
  $ 13,493,859  
Gross unrealized appreciation
    2,213,105  
Gross unrealized depreciation
    (138,389 )
Net unrealized appreciation
  $ 2,074,716  
 
+Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous  fiscal year end.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.
 
 

 
 
 
 

Hodges Equity Income Fund
Summary of Fair Value Exposure at December 31, 2012 (Unaudited)
         
The Hodges Equity Income Fund (the "Fund") utilizes various methods to measure the fair value of most of its investments on a recurring basis.  U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.  The three levels of inputs are:
         
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
• Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
• Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
         
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2012. See Schedule of Investments for industry breakouts.:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Common Stocks
  $ 14,542,275     $ -     $ -     $ 14,542,275  
Partnerships & Trusts
    646,400       -       -       646,400  
Corporate Bond
    -       269,375       -       269,375  
Short-Term Investment
    110,525       -       -       110,525  
Total Investments
  $ 15,299,200     $ 269,375     $ -     $ 15,568,575  
 
 
 

 
 
 
 

HODGES PURE CONTRARIAN FUND
 
   
SCHEDULE OF INVESTMENTS at December 31, 2012 (Unaudited)
 
           
Shares
   
Value
 
COMMON STOCKS: 97.1%
     
Apparel Manufacturing: 7.9%
     
  37,000  
Crocs, Inc. *
  $ 532,430  
Broadcasting: 17.8%
       
  50,000  
Belo Corp.
    383,500  
  280,000  
Sirius XM Radio, Inc. *
    809,200  
            1,192,700  
Computer & Electronic Products: 1.6%
       
  217,379  
Intrusion, Inc. * 1, 2
    106,472  
Food Services: 20.2%
       
  8,000  
Diamond Foods, Inc.
    109,360  
  5,400  
Green Mountain Coffee Roasters, Inc. *
    223,344  
  60,000  
Krispy Kreme Doughnuts, Inc. *
    562,800  
  69,000  
Luby's, Inc. * 1
    461,610  
            1,357,114  
Furniture Manufacturing: 1.1%
       
  70,000  
Furniture Brands International, Inc. *
    74,200  
General Manufacturing: 10.2%
       
  10,000  
Encore Wire Corp.
    303,100  
  3,000  
Texas Industries, Inc. *
    153,030  
  25,000  
U.S. Concrete, Inc. *
    226,250  
            682,380  
Internet Services: 5.0%
       
  12,500  
Facebook, Inc. *
    332,875  
Mining, Oil & Gas Extraction: 20.3%
       
  12,000  
Chesapeake Energy Corp.
    199,440  
  350,000  
HyperDynamics Corp. *
    209,265  
  80,000  
SandRidge Energy, Inc. *
    508,000  
  10,000  
Transocean Ltd.
    446,500  
            1,363,205  
Publishing Industries: 4.2%
       
  60,000  
A.H. Belo Corp. - Class A 1
    279,000  
Retail Trade: 8.8%
       
  17,500  
Chico's FAS, Inc. *
    323,050  
  13,500  
J.C. Penney Co., Inc.
    266,085  
            589,135  
TOTAL COMMON STOCKS
       
(Cost $6,292,989)
    6,509,511  
PARTNERSHIP & TRUST: 2.4%
       
Land Ownership & Leasing: 2.4%
       
  3,000  
Texas Pacific Land Trust 1
    160,290  
TOTAL PARTNERSHIP & TRUST
       
(Cost $109,969)
    160,290  
 
 
 
 
 
 
SHORT-TERM INVESTMENT: 0.5%
       
Money Market Fund: 0.5%
       
  31,966  
Fidelity Money Market Portfolio - Select Class, 0.09% 3
    31,966  
TOTAL SHORT-TERM INVESTMENT
       
(Cost $31,966)
    31,966  
TOTAL INVESTMENTS IN SECURITIES: 100.0%
       
(Cost $6,434,924)
    6,701,767  
Liabilities in Excess of Other Assets: 0.0% 4
    (1,712 )
TOTAL NET ASSETS: 100.0%
  $ 6,700,055  
   
               
               
 
 
*
Non-income producing security.
 
 
1
Affiliated company as defined by the Investment Company Act of 1940.
 
 
2
A portion of this security is considered illiquid. As of December 31, 2012, the total market value of the investments considered illiquid were $88,927 or 1.3% of total net assets.
 
3
Seven-day yield as of December 31, 2012.
 
 
4
Less than 0.05%.
 
 
 
 
 
 
 
 
 
The cost basis of investments for federal income tax purposes at December 31, 2012 was as follows+:
 
 
       
Cost of investments
     
Gross unrealized appreciation
  $ 6,434,924  
Gross unrealized depreciation
    863,185  
Net unrealized appreciation
    (596,342 )
    $ 266,843  
 
+Because tax adjustments are calculated annually, the above table reflects the tax adjustments outstanding at the Fund’s previous fiscal year end.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent semi-annual or annual report.
 
 
 
 
 
 
 
Hodges Pure Contrarian Fund
Summary of Fair Value Exposure at December 31, 2012 (Unaudited)
         
The Hodges Pure Contrarian Fund (the "Fund") utilizes various methods to measure the fair value of most of its investments on a recurring basis.  U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.  The three levels of inputs are:
         
• Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
• Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment spreads, credit risk, yield curves, default rates and similar data.
• Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
         
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2012. See Schedule of Investments for industry breakouts.:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Total
 
                         
Common Stocks
  $ 6,509,511     $ -     $ -     $ 6,509,511  
Partnership & Trust
    160,290       -       -       160,290  
Short-Term Investment
    31,966       -       -       31,966  
Total Investments
  $ 6,701,767     $ -     $ -     $ 6,701,767  

 
 
 
 
 
 
 
 
Item 2. Controls and Procedures.
 
(a)
The Registrant’s President and Treasurer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) (17 CFR 270.30a-3(c)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)) .

(b)
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

 
Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)).   Filed herewith.
 

 
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)   Professionally Managed Portfolios                                             

 
By (Signature and Title               /s/ Eric W. Falkeis                                          
                   Eric W. Falkeis, President

Date           2/26/13                                                                                                    



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*            /s/ Eric W. Falkeis                                          
                   Eric W. Falkeis, President

Date           2/26/13                                                                                                    

 
By (Signature and Title)*             /s/ Patrick J. Rudnick                                   
Patrick J. Rudnick, Treasurer
 
Date           2/25/13                                                                                                    

* Print the name and title of each signing officer under his or her signature.

 
 
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