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Form N-CSRS PROFESSIONALLY MANAGED For: Mar 31

June 11, 2018 2:18 PM EDT

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


FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES




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)



Elaine E. Richards
Professionally Managed Portfolios
2020 E. Financial Way, Ste. 100
Glendora, CA 91741
(Name and address of agent for service)



(626) 914-7363
Registrant's telephone number, including area code



Date of fiscal year end: September 30



Date of reporting period:  March 31, 2018
 

Item 1. Report to Stockholders.

 



TCM SMALL CAP GROWTH FUND
 

 
 
 
 
 
 
 

 
SEMI-ANNUAL REPORT
 
 
 
TCM Small Cap Growth Fund
 
 
 
 
 
 
 
 
 

 

March 31, 2018



TCM SMALL CAP GROWTH FUND
 

Table of Contents
 
Performance Discussion
 
2
     
Performance
 
6
     
Fund Information
 
7
     
Schedule of Investments
 
8
     
Statement of Assets and Liabilities
 
11
     
Statement of Operations
 
12
     
Statements of Changes in Net Assets
 
13
     
Financial Highlights
 
14
     
Notes to Financial Statements
 
15
     
Fund Expense Example
 
21
     
Additional Information
 
23
     
Privacy Notice
 
24

1


TCM SMALL CAP GROWTH FUND

 PERFORMANCE DISCUSSION (Unaudited)

May 17, 2018
 
Dear Fellow Shareholder:
 
Thank you for your investment in the TCM Small Cap Growth Fund (the “Fund”).  This is the semi-annual report to shareholders of the Fund, covering the six months ended March 31, 2018, which is the first half of the Fund’s fiscal year.  The report includes a discussion of the factors that impacted the performance of the Fund for the period, as well as information on Fund expenses and holdings.
 
Performance Overview.  The performance of the Fund for the following periods was:
 
     
6 Months ended
 
4Q 2017
1Q 2018
3/31/2018
TCM Small Cap Growth Fund
3.82%
1.79%
5.68%
Russell 2000® Growth
4.59%
2.30%
6.99%
Lipper Small Cap Growth Average
5.20%
3.13%
8.61%
 
For longer term performance, please see the Average Annual returns table following this letter.
 
Performance Attribution – Six Months Ended March 31, 2018.  Below is a summary of performance attribution for the past two quarters.
 
Fourth Quarter 2017.  The fourth quarter was marked by continued strength in the equity markets supported by positive leading economic indicators, the passage of tax reform that delivered significant corporate tax rate reduction, and a global recovery in much of the developed and emerging markets.  In addition, the Federal Reserve raised rates by 0.25% and signaled that the strength of the economy supported an estimated three additional hikes in 2018 despite the fact that inflation fell short of expectations.  Central bankers worldwide were also seeing similar positive economic growth trends and continued their efforts to withdraw monetary support through reduced assets purchases.  The decrease in corporate tax rates under the recently adopted tax reform is meaningful to many small cap companies, which helped to contribute to a sector rotation in the fourth quarter, with industrial and energy stocks posting better returns and some profit taking occurring in the technology and healthcare sectors.
 
In that environment, the Fund lagged the Russell 2000® Growth Index by 0.77% based equally on stock selection and the effect of our sector weights.  In stock selection for the quarter, very positive selection in industrials, technology and energy was slightly offset by our selection in healthcare and consumer discretionary.  The slightly negative effect of our sector weights was attributable to an underweight to consumer discretionary (which rebounded after being weak all year) and an overweight to technology.
2

TCM SMALL CAP GROWTH FUND
 
 PERFORMANCE DISCUSSION (Unaudited) (Continued)
 
First Quarter 2018.  The first quarter was marked by a return of volatility with the CBOE Volatility Index (VIX) beginning the year at 9, hitting 37 in early February, only to end the quarter fluctuating around the low 20s.  After a sustained run through January, driven by tax cuts, regulatory relief, and positive earnings revisions, the equity markets were priced for perfection.  With the Federal Reserve committed to tightening monetary policy, the market started to react negatively to higher interest rates, very low unemployment, and initial signs of inflation (higher supply costs, price increases and wage growth).  Additionally, domestic and geopolitical turmoil, including an uncertain trade landscape, Russian election meddling and the upcoming mid-term elections, have resulted in an understandably choppy and nervous market.  The recently announced retaliatory tariffs by China that are in part aimed at the GOP base in the Midwest are only exacerbating the concerns that the pro-business and anti-regulatory gravy train has peaked and may be at risk.
 
During the first quarter, the only sectors in the Russell 2000 Growth Index to outperform the overall benchmark were technology and health care.  Our stock selection in the Fund was overall positive with strong selection in industrials, technology, financials and energy being offset somewhat by selection in materials and consumer discretionary.  However, the negative effect of our sector weights more than offset positive stock selection because of the portfolio’s underweight to healthcare and overweight to energy.
 
Top and Bottom Contributing Stocks.  The top and bottom five contributing stocks to absolute performance for the six months ended March 31, 2018 were:
 
 
Average
Contribution
Top Five
Weight (%)
to Return (%)
MuleSoft (integration software)
1.18
0.98
XPO Logistics (transportation and logistics services)
1.83
0.79
H&E Equipment Services
   
  (construction and industrial equipment)
2.57
0.77
Altair Engineering (enterprise engineering software)
1.07
0.75
Dycom Industries (specialty contracting services)
2.43
0.63
     
 
Average
Contribution
Bottom Five
Weight (%)
to Return (%)
Acadia Healthcare Company
   
  (psychiatric treatment facilities)
0.27
-0.61
Horizon Global Corp. (towing/trailer products)
0.49
-0.40
Liberty Expedia Holdings (on-line travel company)
0.64
-0.40
Ferroglobe (silicon-based metal alloys)
0.75
-0.37
Evolent Health
   
  (healthcare delivery and payment solutions)
0.22
-0.37

3

TCM SMALL CAP GROWTH FUND
 
 PERFORMANCE DISCUSSION (Unaudited) (Continued)
 
Individual companies are still delivering reasonably strong fundamental results and their success in continuing to do so is our focus in managing the Fund.  The full positive effects of the recently passed tax cuts and government stimulus are still on the horizon and overall economic growth is positive.  Although the recent weakness in the market has taken a good portion of the froth out of valuation levels and stomped on complacent mindsets, stocks are still “not cheap” based on historical averages.  Rising input costs and interest rates, and the widening of certain yield spreads (LIBOR), could be flashing yellow lights, but we believe that companies with quality balance sheets and strong growth prospects can continue to perform well in this environment.  While the risk of trade wars and their adverse economic consequences have risen and agitate the market, the tariff threats may turn out to be just bargaining chip “bluster” in a protracted negotiation to improve trade imbalances, barriers, and the protection of intellectual property rights.
 
We continue, as we have done for over 20 years, to focus on finding relative value within growth companies; companies with strong balance sheets, visible earnings streams that can meet or beat expectations, and whose valuations are, in our opinion, sustainable or have opportunity to expand.  Thank you for your continued confidence and trust in managing your assets.
 
Sincerely,
   
   
Richard J. Johnson
Jeff B. Curtis
Chief Investment Officer
President
 
This material must be preceded or accompanied by a current prospectus.  Please refer to the prospectus for important information about the Fund, including investment objectives, risks and expenses.
 
Past performance is no guarantee of future results.
 
This report reflects our views, opinions and portfolio holdings as of March 31, 2018, the end of the reporting period.  These views are subject to change at any time based on market and other conditions and we disclaim any responsibility to update these views.  The views should not be relied on as investment advice or an indication of trading intent on behalf of the Fund.
 
Lipper Analytical Services, Inc. is an independent mutual fund research and ranking agency.  Each Lipper average represents a universe of funds with similar investment objectives.  The Russell 2000® Growth Index is an unmanaged index representing those Russell 2000® Index companies with higher price-to-book ratios and future projected earnings according to the Frank Russell Company.  One cannot invest directly in an index.
 
Return on equity is the amount of net income returned as a percentage of shareholder equity.
 
4

TCM SMALL CAP GROWTH FUND
 
 PERFORMANCE DISCUSSION (Unaudited) (Continued)
 
Return on invested capital is a profitability ratio that measures the return that an investment generates for those who have provided capital, i.e. bondholders and stockholders.
 
The CBOE Volatility Index shows the market’s expectation of 30-day volatility by using the implied volatilities of S&P Index options.
 
LIBOR is a benchmark rate that some of the world’s leading banks charge each other for long term loans.
 
Mutual fund investing involves risk, principal loss is possible.  The Fund invests in smaller companies, which involve additional risks such as limited liquidity and greater volatility than large capitalization companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater in emerging markets. Growth-oriented funds may underperform when value investing is in favor.
 
Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security.  Please refer to the Schedule of Investments for a complete listing of Fund holdings.
 
Quasar Distributors, LLC, Distributor
 


5

TCM SMALL CAP GROWTH FUND
 
 VALUE OF $10,000 VS. RUSSELL 2000® GROWTH INDEX (Unaudited)

 
 
Average Annual Returns for the periods ended March 31, 2018:
 
 
One
Three
Five
Ten
Since Inception
 
Year
Year
Year
Year
(10/1/2004)
TCM Small Cap Growth Fund
18.11%
10.74%
15.32%
  9.73%
10.79%
Russell 2000® Growth Index
18.63%
  8.77%
12.90%
10.95%
  9.75%
Lipper Small Cap Growth Average
19.99%
  8.74%
12.00%
10.33%
  9.38%
 
This chart illustrates the performance of a hypothetical $10,000 investment made on October 1, 2004, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital for a fund and dividends for an index.
 
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-536-3230.
 

 
6

TCM SMALL CAP GROWTH FUND
 
 FUND INFORMATION at March 31, 2018 (Unaudited)

 Basic Fund Facts

Ticker Symbol
TCMSX
Inception Date
10/1/04
Total Net Assets
$383 million
Total Operating Expenses*
0.96%

*
Tygh Capital Management, Inc. (the “Advisor”) has contractually agreed to reduce its fees and/or pay the Fund’s expenses (excluding interest expense in connection with investment activities, taxes, Acquired Fund Fees and Expenses and extraordinary expenses) in order to limit Total Annual Fund Operating Expenses to 0.95% of average net assets (the “Expense Cap”). The Expense Cap will remain in effect until at least January 31, 2019 and will continue for an indefinite period thereafter as determined by the Board. The Advisor is permitted to be reimbursed for fee reductions and/or expense payments made in the prior three years. This reimbursement may be requested if the aggregate amount actually paid by the Fund toward operating expenses for such period (taking into account any reimbursement) does not exceed lesser of the Expense Cap in place at the time of waiver or at the time of reimbursement. The Expense Cap may be terminated at any time by the Board of Trustees upon 60 days’ notice to the Advisor, or by the Advisor with the consent of the Board. The total operating expenses represents what investors have paid as of the prospectus dated January 29, 2018. Please see the Fund’s Financial Highlights for the most recent expense ratio.
 
 Top Ten Holdings (% of net assets)

MasTec, Inc.
2.8%
 
Cavco Industries, Inc.
2.1%
H&E Equipment Services, Inc.
2.7%
 
Altair Engineering, Inc. - Class A
1.9%
Kinsale Capital Group, Inc.
2.5%
 
Western Alliance Bancorp
1.7%
On Assignment, Inc.
2.2%
 
Rudolph Technologies, Inc.
1.7%
Bio-Techne Corp.
2.1%
 
Summit Materials, Inc. - Class A
1.7%
 
 Sector Allocation (% of net assets)
 

 
 
**  Cash equivalents and other assets in excess of liabilities.

7


 
TCM SMALL CAP GROWTH FUND
 
 SCHEDULE OF INVESTMENTS at March 31, 2018 (Unaudited)

 
Shares
     
Value
 
COMMON STOCKS - 95.1%
 
   
Air Freight & Logistics - 4.2%
 
   
271,136
 
Air Transport Services
     
       
  Group, Inc.(1)
 
$
6,322,891
 
   
58,822
 
Atlas Air Worldwide
       
       
  Holdings, Inc.(1)
   
3,555,790
 
   
61,191
 
XPO Logistics, Inc.(1)
   
6,229,856
 
             
16,108,537
 
Auto Components - 1.2%
 
   
38,516
 
Horizon Global Corp.(1)
   
317,372
 
   
38,498
 
Visteon Corp.(1)
   
4,244,019
 
             
4,561,391
 
Automobiles - 0.9%
 
   
92,731
 
Winnebago
       
       
  Industries, Inc.
   
3,486,686
 
                 
Banks - 3.6%
 
   
95,527
 
Bank of the Ozarks
   
4,611,088
 
   
51,199
 
Webster Financial Corp.
   
2,836,425
 
   
111,990
 
Western Alliance
       
       
  Bancorp(1)
   
6,507,739
 
             
13,955,252
 
Biotechnology - 1.8%
 
   
33,344
 
Ligand
       
       
  Pharmaceuticals, Inc.(1)
   
5,507,095
 
   
155,615
 
Natera, Inc.(1)
   
1,442,551
 
             
6,949,646
 
Building Products - 0.8%
 
   
48,082
 
Patrick Industries, Inc.(1)
   
2,973,872
 
                 
Chemicals - 0.8%
 
   
277,378
 
OMNOVA
       
       
  Solutions, Inc.(1)
   
2,912,469
 
                 
Commercial Services & Supplies - 2.7%
 
   
152,272
 
Casella Waste Systems,
       
       
  Inc. - Class A(1)
   
3,560,119
 
   
90,180
 
Mobile Mini, Inc.
   
3,922,830
 
   
35,602
 
MSA Safety, Inc.
   
2,963,511
 
             
10,446,460
 
Communications Equipment - 2.3%
 
   
79,008
 
Lumentum
       
       
  Holdings, Inc.(1)
   
5,040,710
 
   
373,597
 
Viavi Solutions, Inc.(1)
   
3,631,363
 
             
8,672,073
 
Construction & Engineering - 6.1%
 
   
49,440
 
Dycom Industries, Inc.(1)
   
5,321,227
 
   
47,032
 
Granite
       
       
  Construction, Inc.
   
2,627,208
 
   
231,391
 
MasTec, Inc.(1)
   
10,886,947
 
   
51,061
 
Quanta Services, Inc.(1)
   
1,753,945
 
   
242,557
 
Sterling Construction
       
       
  Co, Inc.(1)
   
2,779,703
 
             
23,369,030
 
Construction Materials - 2.8%
 
   
44,186
 
Eagle Materials, Inc.
   
4,553,368
 
   
209,733
 
Summit Materials,
       
       
  Inc. - Class A(1)
   
6,350,715
 
             
10,904,083
 
Distributors - 1.0%
 
   
25,540
 
Pool Corp.
   
3,734,459
 
                 
Diversified Consumer Services - 2.2%
 
   
53,912
 
Bright Horizons
       
       
  Family Solutions, Inc.(1)
   
5,376,104
 
   
29,513
 
Strayer Education, Inc.
   
2,982,289
 
             
8,358,393
 
Electronic Equipment,
 
  Instruments & Components - 1.9%
 
   
33,970
 
Belden, Inc.
   
2,341,892
 
   
23,371
 
Littelfuse, Inc.
   
4,865,375
 
             
7,207,267
 
Energy Equipment & Services - 2.7%
 
   
121,449
 
Patterson-UTI
       
       
  Energy, Inc.
   
2,126,572
 
   
95,182
 
ProPetro
       
       
  Holding Corp.(1)
   
1,512,442
 
   
334,017
 
Superior Energy
       
       
  Services, Inc.(1)
   
2,815,763
 
   
80,646
 
U.S. Silica Holdings, Inc.
   
2,058,086
 
   
86,357
 
Unit Corp.(1)
   
1,706,414
 
             
10,219,277
 

The accompanying notes are an integral part of these financial statements.

8

TCM SMALL CAP GROWTH FUND
 
 SCHEDULE OF INVESTMENTS at March 31, 2018 (Unaudited) (Continued)

 
Shares
     
Value
 
COMMON STOCKS - 95.1% (Continued)
 
   
Health Care Equipment & Supplies - 5.2%
 
   
78,660
 
Heska Corp.(1)
 
$
6,219,646
 
   
48,940
 
Nevro Corp.(1)
   
4,241,630
 
   
151,200
 
OraSure
       
       
  Technologies, Inc.(1)
   
2,553,768
 
   
86,401
 
Orthofix
       
       
  International NV(1)
   
5,078,651
 
   
95,497
 
Wright Medical
       
       
  Group NV(1)
   
1,894,660
 
             
19,988,355
 
Health Care Providers & Services - 2.4%
 
   
105,062
 
Amedisys, Inc.(1)
   
6,339,441
 
   
44,168
 
LHC Group, Inc.(1)
   
2,718,982
 
             
9,058,423
 
Health Care Technology - 1.5%
 
   
233,332
 
HMS Holdings Corp.(1)
   
3,929,311
 
   
48,920
 
Tabula Rasa
       
       
  HealthCare, Inc.(1)
   
1,898,096
 
             
5,827,407
 
Hotels, Restaurants & Leisure - 1.2%
 
   
184,816
 
Del Taco
       
       
  Restaurants, Inc.(1)
   
1,914,694
 
   
83,805
 
Eldorado Resorts, Inc.(1)
   
2,765,565
 
             
4,680,259
 
Household Durables - 3.9%
 
   
45,516
 
Cavco Industries, Inc.(1)
   
7,908,405
 
   
86,512
 
Century
       
       
  Communities, Inc.(1)
   
2,591,034
 
   
118,847
 
Hooker Furniture Corp.
   
4,361,685
 
             
14,861,124
 
Insurance - 2.5%
 
   
188,891
 
Kinsale Capital
       
       
  Group, Inc.
   
9,695,775
 
                 
Internet & Direct Marketing Retail - 0.5%
 
   
51,912
 
Liberty Expedia Holdings,
       
       
  Inc. - Class A(1)
   
2,039,103
 
                 
Internet Software & Services - 3.1%
 
   
77,717
 
Alteryx,
       
       
  Inc. - Class A(1)
   
2,653,258
 
   
234,145
 
Box, Inc. - Class A(1)
   
4,811,680
 
   
85,845
 
The Trade
       
       
  Desk, Inc. - Class A(1)
   
4,259,629
 
             
11,724,567
 
IT Services - 1.5%
 
   
37,708
 
WEX, Inc.(1)
   
5,905,827
 
   
Life Sciences Tools & Services - 5.8%
 
   
15,309
 
Bio-Rad Laboratories,
       
       
  Inc. - Class A(1)
   
3,828,475
 
   
53,935
 
Bio-Techne Corp.
   
8,146,342
 
   
49,743
 
ICON PLC(1)
   
5,876,638
 
   
53,488
 
PRA Health
       
       
  Sciences, Inc.(1)
   
4,437,365
 
             
22,288,820
 
Machinery - 4.3%
 
   
62,230
 
Albany International
       
       
  Corp. - Class A
   
3,901,821
 
   
87,653
 
Chart Industries, Inc.(1)
   
5,174,157
 
   
63,173
 
Standex
       
       
  International Corp.
   
6,023,546
 
   
20,087
 
Woodward, Inc.
   
1,439,434
 
             
16,538,958
 
Metals & Mining - 2.4%
 
   
102,789
 
Allegheny
       
       
  Technologies, Inc.(1)
   
2,434,043
 
   
297,868
 
Ferroglobe PLC(1)
   
3,196,124
 
   
91,061
 
Haynes
       
       
  International, Inc.
   
3,379,274
 
             
9,009,441
 
Oil, Gas & Consumable Fuels - 1.5%
 
   
97,338
 
Delek US Holdings, Inc.
   
3,961,656
 
   
64,057
 
Matador Resources Co.(1)
   
1,915,945
 
             
5,877,601
 
Pharmaceuticals - 0.7%
 
   
103,973
 
Collegium
       
       
  Pharmaceutical, Inc.(1)
   
2,656,510
 
   
Professional Services - 2.2%
 
   
103,736
 
On Assignment, Inc.(1)
   
8,493,904
 
                 
The accompanying notes are an integral part of these financial statements.

9

TCM SMALL CAP GROWTH FUND
 
 SCHEDULE OF INVESTMENTS at March 31, 2018 (Unaudited) (Continued)

 
Shares
     
Value
 
COMMON STOCKS - 95.1% (Continued)
 
   
Road & Rail - 1.5%
 
   
80,718
 
Genesee & Wyoming,
     
       
  Inc. - Class A(1)
 
$
5,714,027
 
                 
Semiconductors &
 
  Semiconductor Equipment - 4.6%
 
   
49,417
 
Ambarella, Inc.(1)
   
2,420,939
 
   
59,753
 
Diodes, Inc.(1)
   
1,820,076
 
   
116,041
 
FormFactor, Inc.(1)
   
1,583,960
 
   
30,852
 
Microsemi Corp.(1)
   
1,996,741
 
   
233,380
 
Rudolph
       
       
  Technologies, Inc.(1)
   
6,464,626
 
   
73,284
 
Silicon Motion
       
       
  Technology
       
       
  Corp. - ADR
   
3,526,426
 
             
17,812,768
 
Software - 11.0%
 
   
234,128
 
Altair Engineering,
       
       
  Inc. - Class A(1)
   
7,342,254
 
   
91,490
 
Globant S.A.(1)
   
4,715,395
 
   
66,709
 
Nice Ltd. - ADR(1)
   
6,265,976
 
   
4,545
 
PTC, Inc.(1)
   
354,555
 
   
110,057
 
RealPage, Inc.(1)
   
5,667,935
 
   
58,164
 
Tableau Software,
       
       
  Inc. - Class A(1)
   
4,700,814
 
   
25,770
 
Take-Two Interactive
       
       
  Software, Inc.(1)
   
2,519,791
 
   
121,864
 
Talend S.A. - ADR(1)
   
5,864,096
 
   
19,605
 
The Ultimate Software
       
       
  Group, Inc.(1)
   
4,777,739
 
             
42,208,555
 
Trading Companies & Distributors - 4.3%
 
   
276,394
 
Foundation Building
       
       
  Materials, Inc.(1)
   
4,121,035
 
   
268,099
 
H&E Equipment
       
       
  Services, Inc.
   
10,319,130
 
   
20,467
 
MSC Industrial Direct
       
       
  Co., Inc. - Class A
   
1,877,029
 
             
16,317,194
 
TOTAL COMMON STOCKS
 
(Cost $311,693,112)
   
364,557,513
 
                 
EXCHANGE TRADED FUNDS - 1.6%
 
   
69,597
 
SPDR S&P Biotech
   
6,105,745
 
   
TOTAL EXCHANGE TRADED FUNDS
 
  (Cost $4,975,079)
   
6,105,745
 
   
SHORT-TERM INVESTMENTS - 2.5%
 
   
Money Market Funds - 2.5%
 
   
9,686,220
 
Invesco Short-Term
       
       
  Investments Trust
       
       
  Government
       
       
  TaxAdvantage
       
       
  Portfolio - Institutional
       
       
  Class, 1.500%(2)
   
9,686,220
 
   
TOTAL SHORT-TERM INVESTMENTS
 
(Cost $9,686,220)
   
9,686,220
 
   
TOTAL INVESTMENTS
 
  IN SECURITIES - 99.2%
 
  (Cost $326,354,411)
   
380,349,478
 
Other Assets in
       
  Excess of Liabilities - 0.8%
   
2,940,298
 
TOTAL NET ASSETS - 100.0%
 
$
383,289,776
 

ADR
 
American Depositary Receipt
(1)
 
Non-income producing security.
(2)
 
Seven-day yield as of March 31, 2018.
 
The Global Industry Classification Standard (GICS®) was developed by MSCI, an independent provider of global indices and benchmark-related products and services, and Standard & Poor’s (S&P), an independent international financial data and investment services company. The GICS methodology has been widely accepted as an industry analysis framework for investment research, portfolio management and asset allocation.

The accompanying notes are an integral part of these financial statements.

10

TCM SMALL CAP GROWTH FUND
 
 STATEMENT OF ASSETS AND LIABILITIES at March 31, 2018 (Unaudited)

 ASSETS
     
Investments in securities, at value (cost $326,354,411) (Note 2)
 
$
380,349,478
 
Cash
   
16,639
 
Receivables:
       
Investment securities sold
   
4,772,667
 
Fund shares sold
   
1,953,701
 
Dividends and interest
   
33,261
 
Prepaid expenses
   
14,357
 
Total assets
   
387,140,103
 
         
 LIABILITIES
       
Payables:
       
Fund shares redeemed
   
53,759
 
Investment securities purchased
   
3,460,042
 
Investment advisory fees
   
264,091
 
Administration fees
   
31,764
 
Fund accounting fees
   
12,305
 
Custody fees
   
2,012
 
Transfer agent fees
   
3,690
 
Trustee fees
   
3,923
 
Chief Compliance Officer fees
   
1,488
 
Other accrued expenses
   
17,253
 
Total liabilities
   
3,850,327
 
NET ASSETS
 
$
383,289,776
 
Net Asset Value (unlimited shares authorized):
       
Net assets
 
$
383,289,776
 
Shares of beneficial interest issued and outstanding
   
11,220,048
 
Net asset value, offering and redemption price per share
 
$
34.16
 
         
 COMPONENTS OF NET ASSETS
       
Paid-in capital
 
$
306,436,069
 
Accumulated net investment loss
   
(1,062,906
)
Undistributed net realized gain on investments
   
23,921,546
 
Net unrealized appreciation of investments
   
53,995,067
 
Net assets
 
$
383,289,776
 

The accompanying notes are an integral part of these financial statements.

 
11

TCM SMALL CAP GROWTH FUND
 
 STATEMENT OF OPERATIONS For the Six Months Ended March 31, 2018 (Unaudited)

 INVESTMENT INCOME
     
Income
     
Dividends
 
$
644,725
 
Interest
   
63,671
 
Other income
   
554
 
Total investment income
   
708,950
 
         
 EXPENSES (Note 3)
       
Investment advisory fees
   
1,522,166
 
Administration fees
   
114,674
 
Fund accounting fees
   
41,410
 
Custody fees
   
17,937
 
Audit fees
   
13,379
 
Registration fees
   
11,726
 
Transfer agent fees
   
11,237
 
Miscellaneous expenses
   
9,133
 
Trustees fees
   
8,205
 
Reports to shareholders
   
5,153
 
Chief Compliance Officer fees
   
4,488
 
Legal fees
   
3,906
 
Insurance expenses
   
1,750
 
Total expenses
   
1,765,164
 
Plus: prior year fees waived subject to recoupment
   
6,692
 
Net expenses
   
1,771,856
 
Net investment loss
   
(1,062,906
)
         
 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
       
Net realized gain on investments
   
27,379,460
 
Change in net unrealized appreciation/depreciation on investments
   
(5,175,660
)
Net realized and unrealized gain on investments
   
22,203,800
 
Net increase in net assets resulting from operations
 
$
21,140,894
 

The accompanying notes are an integral part of these financial statements.

12

TCM SMALL CAP GROWTH FUND
 
 STATEMENTS OF CHANGES IN NET ASSETS

   
Six Months Ended
       
   
March 31, 2018
   
Year Ended
 
   
(Unaudited)
   
September 30, 2017
 
 INCREASE (DECREASE) IN NET ASSETS FROM:
           
             
 OPERATIONS
           
Net investment loss
 
$
(1,062,906
)
 
$
(1,825,395
)
Net realized gain on investments
   
27,379,460
     
66,460,598
 
Change in net unrealized
               
  appreciation/depreciation on investments
   
(5,175,660
)
   
12,839,840
 
Net increase in net assets
               
  resulting from operations
   
21,140,894
     
77,475,043
 
                 
 DISTRIBUTIONS TO SHAREHOLDERS
               
From net realized gain
   
(53,587,394
)
   
 
Total distributions to shareholders
   
(53,587,394
)
   
 
                 
 CAPITAL SHARE TRANSACTIONS
               
Net increase in net assets derived
               
  from net change in outstanding shares(1)
   
44,953,380
     
23,730,419
 
Total increase in net assets
   
12,506,880
     
101,205,462
 
                 
 NET ASSETS
               
Beginning of period/year
   
370,782,896
     
269,577,434
 
End of period/year
 
$
383,289,776
   
$
370,782,896
 
Accumulated net investment loss
 
$
(1,062,906
)
 
$
 

(1)
Summary of share transactions is as follows:
 
     
Six Months Ended
             
     
March 31, 2018
   
Year Ended
 
     
(Unaudited)
   
September 30, 2017
 
     
Shares
   
Value
   
Shares
   
Value
 
 
Shares Sold
   
891,484
   
$
31,440,902
     
2,624,770
   
$
90,832,891
 
 
Shares issued in
                               
 
  reinvested of
                               
 
  distributions
   
1,624,161
     
53,581,067
     
     
 
 
Shares redeemed
   
(1,152,722
)
   
(40,068,589
   
(2,082,537
)
   
(67,102,472
)
 
Net increase
   
1,362,923
   
$
44,953,380
     
542,233
   
$
23,730,419
 

The accompanying notes are an integral part of these financial statements.

13

TCM SMALL CAP GROWTH FUND
 
 FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period/year

   
Six Months Ended
                               
   
March 31, 2018
   
Year Ended September 30,
 
   
(Unaudited)
   
2017
   
2016
   
2015
   
2014
   
2013
 
Net asset value,
                                   
  beginning of period/year
 
$
37.62
   
$
28.94
   
$
31.00
   
$
34.25
   
$
39.38
   
$
29.72
 
                                                 
INCOME FROM INVESTMENT OPERATIONS:
                                               
Net investment loss(1)
   
(0.10
)
   
(0.21
)
   
(0.12
)
   
(0.14
)
   
(0.17
)
   
(0.12
)
Net realized and unrealized
                                               
  gain on investments
   
2.04
     
8.89
     
2.60
     
1.96
     
3.91
     
10.48
 
Total from investment
                                               
  operations
   
1.94
     
8.68
     
2.48
     
1.82
     
3.74
     
10.36
 
                                                 
LESS DISTRIBUTIONS:
                                               
From net realized gain
   
(5.40
)
   
     
(4.54
)
   
(5.07
)
   
(8.87
)
   
(0.70
)
Total distributions
   
(5.40
)
   
     
(4.54
)
   
(5.07
)
   
(8.87
)
   
(0.70
)
Paid-in capital from
                                               
  redemption fees (Note 2)(2)
   
     
     
(3) 
   
(3) 
   
(3) 
   
 
Net asset value, end
                                               
  of period/year
 
$
34.16
   
$
37.62
   
$
28.94
   
$
31.00
   
$
34.25
   
$
39.38
 
Total return
   
5.68
%(4)
   
29.99
%
   
8.42
%
   
5.17
%
   
10.09
%
   
35.77
%
                                                 
SUPPLEMENTAL DATA:
                                               
Net assets, end of
                                               
  period/year (millions)
 
$
383.3
   
$
370.8
   
$
269.6
   
$
254.2
   
$
274.4
   
$
257.8
 
Portfolio turnover rate
   
67
%(4)
   
139
%
   
134
%
   
137
%
   
149
%
   
137
%
                                                 
RATIOS OF EXPENSES TO AVERAGE NET ASSETS: 
Before fees waived/recouped
   
0.93
%(5)
   
0.95
%
   
0.95
%
   
0.93
%
   
0.92
%
   
0.93
%
After fees waived/recouped
   
0.93
%(5)
   
0.95
%
   
0.95
%
   
0.93
%
   
0.92
%
   
0.93
%
                                                 
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS: 
Before fees waived/recouped
   
(0.56
)%(5)
   
(0.62
)%
   
(0.44
)%
   
(0.41
)%
   
(0.46
)%
   
(0.38
)%
After fees waived/recouped
   
(0.56
)%(5)
   
(0.62
)%
   
(0.44
)%
   
(0.41
)%
   
(0.46
)%
   
(0.38
)%

 
(1)
Calculated using average shares outstanding method.
 
(2)
Effective January 29, 2016 the 1.00% redemption fee was eliminated.
 
(3)
Does not round to $0.01 or $(0.01) per share, as applicable.
 
(4)
Not annualized.
 
(5)
Annualized.

The accompanying notes are an integral part of these financial statements.



14

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited)

 NOTE 1 – ORGANIZATION
 
The TCM Small Cap Growth Fund (the “Fund”) is a diversified series of shares of beneficial interest of Professionally Managed Portfolios (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.” The Fund commenced operations on October 11, 2004.
 
The Fund’s investment objective is to seek long-term capital appreciation.
 
 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
 
 
A.
Security Valuation. All equity securities, which may include Real Estate Investment Trusts (“REITs”), Business Development Companies (“BDCs”), and Master Limited Partnerships (“MLPs”), that are traded on U.S. national or foreign securities exchanges, are valued either at the last reported sale price on the exchange on which the security is principally traded or the exchange’s official closing price, if applicable. If, on a particular day, an exchange-traded security does not trade, then the mean between the most recent quoted bid and asked prices will be used. All equity securities which may include REITs, BDCs and MLPs that are not traded on a listed exchange are valued at the last sale price in the over-the-counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid and asked price will be used.
 
   
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Valuation Committee. When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board of Trustees. Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations.
 
   
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a

 
15

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited) (Continued)

   
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 speeds, 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 availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
     
   
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
     
   
The following is a summary of the inputs used to value the Fund’s investments as of March 31, 2018. See the Schedule of Investments for the industry breakout.
 
     
Level 1
   
Level 2
   
Level 3
   
Total
 
 
Common Stocks
 
$
364,557,513
   
$
   
$
   
$
364,557,513
 
 
Exchange Traded Funds
   
6,105,745
     
     
     
6,105,745
 
 
Short-Term Investments
   
9,686,220
     
     
     
9,686,220
 
 
Total Investments
                               
 
  in Securities
 
$
380,349,478
   
$
   
$
   
$
380,349,478
 

 

16

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited) (Continued)

   
It is the Fund’s policy to recognize transfers between levels at the end of the Fund’s reporting period. There were no transfers into or out of Level 1 or 2 as of March 31, 2018.
 
 
B.
Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provision for federal income taxes or excise taxes has been made.
 
   
In order to avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare as dividends in each calendar year at least 98.0% of its net investment income (earned during the calendar year) and at least 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
 
   
Net capital losses incurred after October 31 and net investment losses incurred after December 31, and within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year. As of September 30, 2017, the Fund had no late year losses and no post October losses. As of September 30, 2017, there were no Capital Loss Carryovers for the Fund.
 
   
As of March 31, 2018, the Fund did not have any tax positions that did not meet the threshold of being sustained by the applicable tax authority. Generally, tax authorities can examine all the tax returns filed for the last three years. The Fund identifies its major tax jurisdiction as U.S. Federal and the Commonwealth of Massachusetts; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially.
 
 
C.
Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Dividends received from REITs generally are comprised of ordinary income, capital gains and may include return of capital. Interest income is recorded on an accrual basis. Other non-cash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates.

 
17

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited) (Continued)

 
D.
Distributions to Shareholders. Distributions to shareholders from net investment income and net realized gains on securities for the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date.
 
 
E.
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
 
F.
Share Valuation. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the New York Stock Exchange is closed for trading. The offering and redemption price is equal to the Fund’s NAV per share. The Fund charged a 1.00% redemption fee on shares held less than 60 days; however, effective January 29, 2016, the redemption fee was eliminated. This fee was deducted from the redemption proceeds otherwise payable to the shareholder. The Fund retained the fee charged as paid-in capital and such fees became part of the Fund’s daily NAV calculation.
 
 
G.
Guarantees and Indemnifications. In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
 
 
H.
Subsequent Events. In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The Fund has determined that there are no subsequent events that would need to be disclosed in the Fund’s financial statements.
 
 NOTE 3 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
 
Tygh Capital Management, Inc. (the “Advisor”), provides the Fund with investment management services under an Investment Advisory Agreement (the “Agreement”). Under the Agreement, the Advisor furnishes all investment advice, office space, certain administrative services, and provides most of the personnel needed by the Fund. As compensation for its services, the Advisor is entitled to a monthly fee at the annual rate of 0.80% based upon the average daily net assets of the Fund. The amount of investment advisory fees incurred by the Fund for the six
 

 
18

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited) (Continued)

months ended March 31, 2018 is disclosed in the Statement of Operations. The investment advisory fees incurred are paid monthly to the Advisor, net of any monthly waiver or reimbursement discussed below.
 
The Advisor has contractually agreed to limit the Fund’s annual ratio of expenses to 0.95% of the Fund’s average daily net assets. The Operating Expenses Limitation Agreement has an indefinite term and may be terminated at any time, and without payment of any penalty, by the Board of Trustees of the Trust, on behalf of the Fund, upon sixty (60) days’ written notice to the Advisor. Any fees waived and/or any Fund expenses absorbed by the Advisor pursuant to an agreed upon expense cap shall be reimbursed by the Fund to the Advisor, if so requested by the Advisor, any time before the end of the third year following the period to which the fee waiver and/or expense absorption relates, provided the aggregate amount of the Fund’s current operating expenses for such period does not exceed the lesser expense cap in place at the time of waiver or at the time of reimbursement. The Fund must pay its current ordinary operating expenses before the Advisor is entitled to any reimbursements of fees and/or expenses. Any such reimbursement is also contingent upon Board of Trustees review and approval. Amounts due from the Advisor are paid monthly to the Fund, if applicable. For the six months ended March 31, 2018, the Advisor did not waive any fees or reimburse expenses.
 
U.S. Bancorp Fund Services, LLC (“USBFS”), an indirect wholly-owned subsidiary of U.S. Bancorp, serves as the Fund’s administrator, fund accountant and transfer agent. In those capacities USBFS maintains the Fund’s books and records, calculates the Fund’s NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board of Trustees. The officers of the Trust and the Chief Compliance Officer are also employees of USBFS. Fees paid by the Fund to USBFS for these services for the six months ended March 31, 2018, are disclosed in the Statement of Operations.
 
Quasar Distributors, LLC (the “Distributor”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. U.S. Bank N.A. (the “Custodian”) serves as custodian to the Fund. Both the Distributor and Custodian are affiliates of USBFS.
 
 NOTE 4 – PURCHASES AND SALES OF SECURITIES
 
For the six months ended March 31, 2018, the cost of purchases and proceeds from the sales of securities, excluding short-term investments, were $248,243,092 and $246,113,128, respectively.
 
There were no purchases or sales of long-term U.S. Government securities for the six months ended March 31, 2018.
 

 
19

TCM SMALL CAP GROWTH FUND
 
 NOTES TO FINANCIAL STATEMENTS – March 31, 2018 (Unaudited) (Continued)

 NOTE 5 – DISTRIBUTIONS TO SHAREHOLDERS
 
The tax character of distributions paid during the six months ended March 31, 2018, and the year ended September 30, 2017, were as follows:
 
 
Distributions paid from:
March 31, 2018
September 30, 2017
 
Net investment income
$            —
$        —
 
Long-term capital gain
  53,587,394
          —
 
As of September 30, 2017, the components of accumulated earnings/(losses) on a tax basis were as follows:

 
Cost of investments(a)
 
$
298,453,286
 
 
Gross tax unrealized appreciation
   
61,971,328
 
 
Gross tax unrealized depreciation
   
(3,928,306
)
 
Net tax unrealized appreciation
   
58,043,022
 
 
Undistributed ordinary income
   
9,573,613
 
 
Undistributed long-term capital gain
   
41,683,572
 
 
Total distributable earnings
   
51,257,185
 
 
Other accumulated gain (loss)
   
 
 
Total accumulated gain
 
$
109,300,207
 
 
(a)  At September 30, 2017, the difference between book and tax-basis unrealized appreciation was attributable primarily to the treatment of wash sales.
 
 NOTE 6 – CREDIT FACILITY
 
U.S. Bank N.A. has made available to the Fund a credit facility pursuant to a separate Loan and Security Agreement for temporary or extraordinary purposes. Loan activity for the six months ended March 31, 2018 was as follows:
 
 
Maximum available credit
$20,000,000
 
Largest amount outstanding on an individual day
 
Average daily loan outstanding
 
Credit facility outstanding as of March 31, 2018
 
Average interest rate

20

TCM SMALL CAP GROWTH FUND
 
 EXPENSE EXAMPLE For the Six Months Ended March 31, 2018 (Unaudited)

As a shareholder of the Fund, you incur ongoing costs, including investment advisory fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (10/1/17 – 3/31/18).
 
Actual Expenses
 
The first line of the following table provides information about actual account values based on actual returns and actual expenses. Although the Fund charges no sales load or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently, a $15.00 fee is charged by the Fund’s transfer agent. To the extent the Fund invests in shares of other investment companies as part of its investment strategy, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Fund invests in addition to the expenses of the Fund. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example. The example includes, but is not limited to, investment advisory fees, fund accounting, fund administration, custody and transfer agent fees. However, the example does not include portfolio trading commissions and related expenses, interest expense or dividends on short positions taken by the Fund. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
 
Hypothetical Example for Comparison Purposes
 
The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
 


21

TCM SMALL CAP GROWTH FUND
 
 EXPENSE EXAMPLE For the Six Months Ended March 31, 2018 (Unaudited) (Continued)

 
Beginning
Ending
Expenses Paid
 
Account Value
Account Value
During the Period
 
10/1/17
3/31/18
10/1/17 – 3/31/18*
Actual
$1,000.00
$1,056.80
$4.77
Hypothetical (5% return
     
  before expenses)
$1,000.00
$1,020.29
$4.68
 
 
*
Expenses are equal to the Fund’s annualized expense ratio for the most recent six-month period of 0.93% (reflecting fee recoupments in effect) multiplied by the average account value over the period multiplied by 182/365 (to reflect one-half year period).

 
22

TCM SMALL CAP GROWTH FUND
 
 INFORMATION ABOUT PROXY VOTING (Unaudited)

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (800) 536-3230 or by accessing the Fund’s website at www.tyghcap.com. Furthermore, you can obtain the description on the SEC’s website at www.sec.gov.
 
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12 months ending June 30 is available without charge, upon request, by calling (800) 536-3230 or by accessing the SEC’s website at www.sec.gov.
 
 INFORMATION ABOUT THE PORTFOLIO HOLDINGS (Unaudited)

The Fund files its complete schedule of portfolio holdings for its first and third fiscal quarters with the SEC on Form N-Q. The Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained  by calling (800) SEC-0330.  The Fund’s Form N-Q is available without charge, upon request, by calling (800) 536-3230. Furthermore, you can obtain the Form N-Q on the SEC’s website at www.sec.gov.
 
 INFORMATION ABOUT HOUSEHOLDING (Unaudited)

In an effort to decrease costs, the Fund will reduce the number of duplicate prospectuses, proxy statements and annual and semi-annual reports that you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Transfer Agent reasonably believes are from the same family or household. If you would like to discontinue householding for your account, please call the transfer agent toll free at (800) 536-3230 to request individual copies of these documents. The Fund will begin sending individual copies 30 days after receiving your request. This policy does not apply to account statements.
 
 INFORMATION ABOUT THE FUND’S TRUSTEES (Unaudited)

The Statement of Additional Information (“SAI”) includes additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 536-3230. Furthermore, you can obtain the SAI on the SEC’s website at www.sec.gov or the Fund’s website at www.tyghcap.com.
 
23

TCM SMALL CAP GROWTH FUND
 
 PRIVACY NOTICE

The Fund collects non-public information about you from the following sources:
 
•   Information we receive about you on applications or other forms;
 
•   Information you give us orally; and
 
•   Information about your transactions with us or others.
 
We do not disclose any non-public personal information about our shareholders or former shareholders without the shareholder’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated parties and unaffiliated third parties with whom we have contracts for servicing the Fund. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibility. We maintain physical, electronic and procedural safeguards to protect your non-public personal information and require third parties to treat your non-public information with the same high degree of confidentiality.
 
In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
 
24



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Investment Advisor
Tygh Capital Management, Inc.
1211 SW Fifth Avenue, Suite 2100
Portland, Oregon  97204

Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400
Philadelphia, Pennsylvania  19103-3638

Legal Counsel
Schiff Hardin LLP
666 Fifth Avenue, Suite1700
New York, New York  10103

Custodian
U.S. Bank N.A.
Custody Operations
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin  53212

Transfer Agent, Fund Accountant
and Fund Administrator
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin  53202
1-800-536-3230

Distributor
Quasar Distributors, LLC
777 East Wisconsin Avenue, 6th Floor
Milwaukee, Wisconsin  53202



TCM Small Cap Growth Fund
Symbol – TCMSX
CUSIP – 742935455


Item 2. Code of Ethics.

Not applicable for semi-annual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semi-annual reports.

Item 4. Principal Accountant Fees and Services.

Not applicable for semi-annual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Investments.

Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

The registrant has adopted a nominating committee charter that contains the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.  There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees for the period.

Item 11. Controls and Procedures.

(a)
The Registrant’s President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934.  Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.

(b)
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

Not applicable to open-end investment companies.

Item 13. Exhibits.

(a)
(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Incorporated by reference to previous Form N-CSR filing.

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.  Not applicable to open-end investment companies.

(b)
Certification pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.  Furnished 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/Elaine E. Richards
Elaine E. Richards, President/Principal Executive Officer

Date    June 11, 2018



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/Elaine E. Richards
Elaine E. Richards, President/Principal Executive Officer

Date    June 11, 2018

By (Signature and Title)      /s/Aaron J. Perkovich
Aaron J. Perkovich, Treasurer/Principal Financial Officer

Date    June 8, 2018

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





CERTIFICATIONS

I, Elaine E. Richards, certify that:

 
1.
 
I have reviewed this report on Form N-CSR of Professionally Managed Portfolios;
 
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
 
4.
 
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
(a)
 
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)
 
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)
 
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)
 
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
 
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
(a)
 
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
 
(b)
 
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    June 11, 2018
 
 
 
/s/Elaine E. Richards
Elaine E. Richards
President/Principal Executive Officer



CERTIFICATIONS

I, Aaron J. Perkovich, certify that:

 
1.
 
I have reviewed this report on Form N-CSR of Professionally Managed Portfolios;
 
2.
 
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
 
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
 
4.
 
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
 
(a)
 
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)
 
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)
 
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
 
(d)
 
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
 
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
(a)
 
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
 
(b)
 
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:    June 8, 2018
 
 
 
/s/Aaron J. Perkovich
Aaron J. Perkovich
Treasurer/Principal Financial Officer

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Professionally Managed Portfolios, does hereby certify, to such officer’s knowledge, that the report on Form N-CSR of the Professionally Managed Portfolios for the period ended March 31, 2018 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Professionally Managed Portfolios for the stated period.


/s/Elaine E. Richards
Elaine E. Richards
President/Principal Executive Officer, Professionally Managed Portfolios
 
/s/Aaron J. Perkovich
Aaron J. Perkovich
Treasurer/Principal Financial Officer, Professionally Managed Portfolios
Dated:    June 11, 2018
Dated:    June 8, 2018


This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by Professionally Managed Portfolios for purposes of Section 18 of the Securities Exchange Act of 1934.




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