United States
Securities and Exchange Commission
Washington, DC 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-00179
Central Securities Corporation
(Exact name of registrant as specified in charter)
630 Fifth Avenue, Suite 820
New York, N.Y. 10111
(Address of principal executive offices)
Registrant's telephone number including area code: 212-698-2020
Date of fiscal year end: December 31
Date of reporting period: March 31, 2009
Item 1. Schedule of Investments.
CENTRAL SECURITIES CORPORATION
Statement of Investments
March 31, 2009
(Unaudited)
PORTFOLIO SECURITIES 88.2%
STOCKS (COMMON UNLESS SPECIFIED OTHERWISE)
Prin.Amt.
or Shares Value
---------- -----
Banking and Finance 5.6%
700,000 The Bank of New York Mellon Corporation........................................ $ 19,775,000
------------
150,000 Newstar Financial, Inc. (a).................................................... 348,000
20,123,000
------------
Business Services 0.2%
100,000 Heritage-Crystal Clean Inc. (a)................................................ 746,000
------------
Communications 0.4%
1,000,000 Arbinet-thexchange, Inc. (a)................................................... 1,600,000
------------
Electronics 18.5%
920,000 Agilent Technologies, Inc. (a)................................................. 14,140,400
370,000 Analog Devices, Inc............................................................ 7,129,900
830,000 Coherent, Inc. (a)............................................................. 14,317,500
630,000 Flextronics International Inc. (a)............................................. 1,820,700
809,600 Intel Corporation.............................................................. 12,168,288
300,000 Maxim Integrated Products, Inc................................................. 3,963,000
350,000 Motorola, Inc.................................................................. 1,480,500
1,000,000 Radisys Corporation (a)........................................................ 6,060,000
3,230,000 Sonus Networks, Inc. (a)....................................................... 5,071,100
------------
66,151,388
------------
Energy 10.4%
300,000 Berry Petroleum Company Class A................................................ 3,288,000
200,000 Devon Energy Corporation....................................................... 8,938,000
2,000,000 GeoMet, Inc. (a)............................................................... 1,160,000
670,000 McMoRan Exploration Co. (a).................................................... 3,149,000
350,000 Murphy Oil Corporation......................................................... 15,669,500
300,000 Nexen Inc..................................................................... 5,088,000
------------
37,292,500
------------
Health Care 1.5%
100,000 Abbott Laboratories............................................................ 4,770,000
260,000 Vical Inc. (a)................................................................. 501,800
------------
5,271,800
------------
Information Technology Services 5.1 %
1,730,800 Convergys Corporation (a)...................................................... 13,984,864
930,000 Xerox Corporation.............................................................. 4,231,500
------------
18,216,364
------------
Prin.Amt.
or Shares Value
---------- -----
Insurance 31.4%
10,000 Erie Indemnity Co. Class A..................................................... $ 341,800
70,000 The Plymouth Rock Company, Inc.
Class A (b)(c)(d).......................................................... 112,000,000
------------
112,341,800
------------
Manufacturing 13.5%
870,000 Brady Corporation Class A...................................................... 15,338,100
200,000 Carlisle Companies Inc......................................................... 3,926,000
400,000 Dover Corporation.............................................................. 10,552,000
200,000 General Electric Co............................................................ 2,022,000
100,000 Precision Castparts Corporation................................................ 5,990,000
250,000 Roper Industries, Inc.......................................................... 10,612,500
------------
48,440,600
------------
Retailing 1.6%
28,751 AeroGroup International, Inc. (a)(c)(d)........................................ 385,838
200,000 Walgreen Co.................................................................... 5,192,000
------------
5,577,838
------------
Total Portfolio Securities (cost $261,479,534).......................... 315,761,290
------------
SHORT-TERM INVESTMENTS 12.2%
U.S. Treasury Obligations 12.2%
31,130,000 U.S. Treasury Bills 0.04% due 4/9/09 - 4/23/09................................. 31,129,481
------------
12,500,000 U.S. Treasury Cash Management Bill 0.01% due 5/15/09........................... 12,499,847
------------
Total Short-Term Investments (cost $43,629,328)......................... 43,629,328
------------
Total Investments (cost $305,108,862) (100.4%).......................... 359,390,618
(cost $242,296,470)(100.0%) 361,797,954
Cash, receivables and other assets
less liabilities (0.4%)............................................... (1,315,360)
------------
Net Assets (100%)....................................................... $358,075,258
============
(a) Non-dividend paying.
(b) Affiliate as defined in the Investment Company Act of 1940.
(c) Valued at estimated fair value.
(d) Restricted security. See footnote 3.
See accompanying notes to statement of investments.
CENTRAL SECURITIES CORPORATION
NOTES TO STATEMENT OF INVESTMENTS
1. Security Valuation - Securities are valued at the last sale price or, if
unavailable, at the closing bid price. Corporate discount notes are valued at
amortized cost, which approximates value. Securities for which no ready market
exists are valued at estimated fair value by the Board of Directors.
As of March 31, 2009, the tax cost of investments was $305,108,862. Net
unrealized appreciation was $54,282,771 consisting of gross unrealized
appreciation and gross unrealized depreciation of $170,830,466 and $116,547,695,
respectively.
2. Fair Value Measurements - Pursuant to FAS 157, the Corporation prioritizes
and ranks the level of market price observability used in determining the fair
value of investments as follows:
o Level 1 - Fair value is determined based on market data obtained
from independent sources; for example, quoted prices in active
markets for identical investments. The Corporation's Level 1
investments consist of equity securities listed on a national
securities exchange or NASDAQ National Market.
o Level 2 - Fair value is determined using other significant
observable assumptions obtained from independent sources; for
example, quoted prices for similar investments or the use of models
or other valuation methodologies. The Corporation's Level 2
instruments consist of short-term investments, carried at amortized
cost.
o Level 3 - Fair value is determined using significant unobservable
inputs including the Corporation's own assumptions based upon the
best information available. Investments categorized as Level 3
include situations in which there is little, if any, market
activity. The Corporation's Level 3 investments consist of The
Plymouth Rock Company, Inc. and Aerogroup International, Inc.
In certain cases, the inputs used to determine fair value may fall into
different levels of the fair value hierarchy. In such cases, an investment's
level within the hierarchy is based on the least observable input that is
significant to fair value. The inputs used for valuing securities are not
necessarily an indication of the risk associated with investing in those
securities.
The Corporation's investments as of March 31, 2009 are classified as follows:
Valuation Inputs Investments in Securities
---------------- -------------------------
Level 1 $203,375,452
Level 2 43,629,328
Level 3 112,385,838
------------
$359,390,618
============
The following is a reconciliation of assets in which significant unobservable
inputs (Level 3) were used in determining fair value:
Balance at December 31, 2008 $126,385,838
Change in unrealized appreciation of investments (14,000,000)
------------
Balance at March 31, 2009 $112,385,838
============
No Level 3 investments were purchased, sold or transferred to Level 1 or Level 2
during the three months ended March 31, 2009.
3. Restricted Securities - The Corporation has from time to time invested in
securities the resale of which is restricted. On March 31, 2009, such
investments had an aggregate value of $112,385,838, which was equal to 31.4% of
the Corporation's net assets. Investments in restricted securities at March 31,
2009 were:
Company Shares Security Date Purchased Cost
------- ------ -------- -------------- ----
AeroGroup International, Inc. 28,751 Common Stock 6/14/05 $17,200
The Plymouth Rock Company, Inc. 60,000 Class A Common Stock 12/15/82 1,500,000
The Plymouth Rock Company, Inc. 10,000 Class A Common Stock 6/9/84 699,986
The Corporation does not have the right to demand registration of the restricted
securities.
Item 2. Controls and Procedures.
(a) Disclosure Controls and Procedures. The Principal Executive and Financial
Officers have concluded that the Registrant's Disclosure Controls and Procedures
are effective based on their evaluation of the Disclosure Controls and
Procedures as of a date within 90 days of the filing date of this report.
(b) Internal Control Over Financial Reporting. During the last fiscal quarter,
there was no significant change in the Registrant's internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 3. Exhibits.
(a) Certifications.
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.
CENTRAL SECURITIES CORPORATION
By: /s/ Wilmot H. Kidd
------------------
President
Date: April 23, 2009
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: /s/ Wilmot H. Kidd
------------------
President
Date: April 23, 2009
By: /s/ Charles N. Edgerton
-------------------
Vice President and Treasurer
Date: April 23, 2009