4Q 2017

10/1/2017 to 12/31/2017 Dow Jones: 10.96% S&P 500: 6.64% NASDAQ: 6.55% Russell 2000: 3.34% MSCI EAFE: 4.23% QUARTERLY COMMENTARY January 2018

“A handful of patience is worth more than a bushel of brains.” — Dutch Proverb

Dear Friends and Clients, The new year is always an excellent opportunity to reflect on the past year. In this particular business, we tally up the credits and debits to see what was added to (or subtracted from) our clients’ investment portfolios. I like the quote at the top of the page because I think it applies to me. I don’t claim to have an abnormally high level of intelligence compared to the average investor, but I have done my best to learn what Howard Marks calls “patient opportunism.” In reflecting on my investing life up to this point, I find that patience may be the most important ingredient for success, if not an absolute requirement. When I have been in too big of a hurry, I have generally paid the price for my haste. In my own portfolio, I look back and marvel at the $3,000 cost basis Mrs. Travis and I have in shares of Berkshire Hathaway, which we purchased in 1989, the year of our marriage. Today the class A shares of Mr. Buffett’s corporate empire fetch north of $310,000 apiece. I bring this up not to brag, but simply to note that this result took a very long time to achieve – 28 years, to be exact. That is roughly half of the existence of Berkshire Hathaway, which I date to 1965, when Warren Buffett acquired an ailing New England textile mill and set in motion the successful holding company it is today. I am afraid that in today’s world of iPhone X’s, Amazon Echos (guilty on both counts), and atrophied attention spans, most investors simply don’t have the patience required to achieve the kind of long-term successful outcome I have had the good fortune of reaping in Berkshire Hathaway. While it certainly has significant benefits, the trend toward virtually “free” investing, either via miniscule commissions or barely visible fees, also encourages hyperactivity, which is the bane of successful long-term investing. We use third-party performance measurement software at Intrepid that captures the results of both hyperactivity and sloth. I can tell you from scanning this software across our client base over a number of years, sloth usually wins. The aforementioned low-cost barrier to entry and exit gives those prone to hyperactivity a chance to zig, when they should have zagged. A large part of being a patient opportunist is recognizing the current state of the market and adjusting our decisions accordingly. Today, market conditions remain stubbornly – and excessively – expensive, so our decisions have become more defensive as the market has marched ever higher. To quote Mr. Marks in his timeless book “The Most Important Thing”: You simply cannot create investment opportunities when they’re not there. The dumbest thing you can do is to insist on perpetuating high returns – and give back your profits in the process. If it’s not there, hoping won’t make it so. When prices are high, it’s inescapable that prospective returns are low (and risks are high). That single sentence provides a great deal of guidance as to appropriate portfolio actions.

2 21 4Q 2017

So, where does that leave us today? About the same place we were this time last year and the year before that. For the businesses we own, we are waiting as they allocate resources and cash flows in a manner that will hopefully drive the current share price upward toward our best estimate of the “intrinsic value” of the business. For the remainder of the portfolio that is sitting in cash, T-bills and short-term investment grade bonds, the members of the analytical team at Intrepid Capital continue in their quest to uncover additional investments where they believe there to be a disconnect between “price” and “value.” My one request is that you please be patient with our process as we try to exercise patience ourselves. The process we have built at Intrepid isn’t designed to produce S&P-beating performance every month or every year (any manager who claims to be able to deliver that should be treated with strong suspicion), but we are confident that over a full market cycle, we should be able to deliver attractive risk-adjusted results. For the period ending December 31, 2017, the Intrepid Balanced Portfolio (the “Portfolio”) increased 3.64%, net-of-fees, for the quarter and 8.47%, net-of-fees, for the year, compared with the S&P 500 Index and ICE BofAML US High Yield Index, which returned 6.64% and 0.41% for the fourth quarter and 21.83% and 7.48% for the year, respectively. The Portfolio ended the quarter with 15.8% in cash, down meaningfully from last quarter thanks to several new positions purchased in Q4. For the quarter ending December 31, 2017, our most successful investments were businesses where management owned a significant stake in the enterprise. Please note that Berkshire Hathaway is included in this list. The top five contributors to the Portfolio for the fourth quarter were HNZ Group (ticker: HNZ CN), Syntel (ticker: SYNT), Teradata (ticker: TDC), Biglari Holdings (ticker: BH), and Berkshire Hathaway Class B (ticker: BRK/B). To be “fair and balanced,” as they say on Fox News, the five biggest detractors were Corus Entertainment (ticker: CJR/B CN), Oaktree Capital (ticker: OAK), Western Digital (ticker: WDC), Dundee Corp. (ticker: DC/A CN), and Stallergenes Greer (ticker: STAGR). Thank you for entrusting us with your hard-earned capital; it is not a position we take lightly. If there is anything we can do to serve you better, please don’t hesitate to call. Best regards,

Mark F. Travis President/CEO

SMALL CAP PORTFOLIO – COMMENTARY BY JAYME WIGGINS, CFA, CIO, PORTFOLIO MANAGER The capital markets are a lot like the German Autobahn, which has no mandated speed limit. You can act stupidly and have fun for a while, but eventually it could ruin your life. Bitcoin and other cryptocurrencies surged in spectacular fashion in the fourth quarter, even after paring gains near the end of the year. Many in the investment community say Bitcoin is an accident waiting to happen. Few express the same negativity toward the stock market, which enjoyed its own impressive run in Q4, for the year, and since 2009. We’ll spare you more opinions about Bitcoin, which is outside of our wheelhouse. On the stock market, we have a lot to say, but we’ll start with this: caveat emptor.

/Volumes/Transport/4thqtr2017/ICM_4Q17_NL_rd1 Folder/Links/Disciplined Value Risk Return since inception 123117 Risk-Reward.eps

2 2 4Q 2017

On December 20, 2017, Republicans muscled tax reform through Congress. One of the highlights of the package is a reduction in the federal corporate income tax rate from 35% to 21%. It seems like U.S. stocks have been repeatedly celebrating the passage of tax reform for the last thirteen months. Some sell-side analysts are gleefully modeling the 21.5% increase in net income that this fourteen-percentage point reduction in the federal tax rate implies.1 That only takes fourth grade math skills, and in our opinion, is lazy. We could begin our discussion by dredging up some points from the Endurance Portfolio’s (the “Portfolio”) fourth quarter 2016 letter to shareholders, such as noting that one-third of U.S. small cap firms are losing money and won’t benefit from tax cuts or that changes to the tax-deductibility of interest would negatively affect leveraged companies. We could point out how hundreds of U.S. small caps utilize tax loopholes or derive a significant percentage of revenue from overseas, so they already don’t pay the full U.S. tax rate. We could discuss how an even larger percentage of income than revenue has been attributed to foreign sources. Syntel (ticker: SYNT), a recent Endurance Portfolio holding, is a case in point. We could focus on the astonishing 152x P/E ratio of the Russell 2000 Index when using unadulterated trailing twelve-month GAAP earnings, as opposed to forward estimates or adjusted figures. At a triple-digit earnings multiple, we would argue that any earnings,earnings as opposed multiple, to weforward would estimates argue that or adjusted any benefits figures. from At lowera triple-digit taxes areearnings priced multiple,into stocks. we would We’ve argue said that any benefitsit all frombefore. lower So, taxes we willare saypriced something into stocks. new. We’ve said it all before. So, we will say something new. Syntel 2016 10-k Syntel 2016 10-k

First, we’ll start with the non-controversial: the value of a business depends on the spread between its First,return we’ll start on investedwith the non-controversial: capital and cost theof capital,value of ain business addition depends to its growth on the spreadrate. Companies between its returnwith high on invested returns capital and coston capital of capital, generate in addition significant to its growth free rate.cash Companiesflows and canwith expandhigh returns without on capital burdensome generate significantcapital commitments. free cash flows and can expandAt Intrepid, without weburdensome seek out capital these commitments. types of enterprises. At Intrepid, we Return seek out on these invested types of capital enterprises. (ROIC) Return can on beinvested capitaldecomposed (ROIC) can beinto decomposed three elements: into three operating elements: margin, operating tax margin,rate, and tax invested rate, and capital invested turnover. capital turnover.

EBIT Sales ROIC = x 1 – (Tax Rate) x Sales Invested Capital

ReducingReducing the corporate the corporate tax rate directlytax rate impacts directly ROIC impacts because ROIC companies because get companies to keep more get of totheir keep pre-tax more profits. of their Since pre a- higher ROICtax corresponds profits. Since to a more a higher valuable ROIC business, corresponds all else being to a moreequal, valuable the natural business, interpretation all else of taxbeing reform equal, is that the thenatural equities of Americaninterpretation corporations of are tax now reform worth moreis that than the before. equi ties However, of American we would corporationsargue that second are order now thinking worth is more important than here. before. However, we would argue that second order thinking is important here. There is no correlation between lower corporate tax rates and higher returns on capital. We plotted returns on tangible investedThere capital is againstno correlation tax rates for between over 7,000 lower companies corporate around taxthe world.rates2 and If lower higher tax rates returns (y-axis) on corresponded capital. We to higher 2 returnsplotted on capital returns (x-axis), on tangib then wele investedwould expect capital to see against a downward tax rates sloping for overtrend 7,000 line. Instead,companies the results around showed the world. a regression line thatIf lower was very tax slightlyrates (yincreasing-axis) corresponded. The r-squared, to or higher coefficient returns of determination,on capital (x -wasaxis), zero. then This we suggests would thatexpect tax ratesto see have no a downward sloping trend line. Instead, the results showed a regression line that was very slightly predictiveincreasing power. The for forecasting r-squared, returns or coefficient on capital. of determination, was zero. This suggests that tax rates have no predictive power for forecasting returns on capital. 1 (1 – 0.21) / (1 – 0.35) - 1 2 Bloomberg search for all profitable non-financial companies with a USD market cap exceeding $200 million and data easily available to compute effective tax rates and returns on tangible capital. Excluded outliers with effective tax rates exceeding 50% or returns on capital exceeding 100%. The exclusion of these firms does not materially alter the findings.

3

2 Bloomberg search for all profitable non-financial companies with a USD market cap exceeding $200 million and data easily available to compute effective tax rates and returns on tangible capital. Excluded outliers with effective tax rates exceeding 50% or returns on capital exceeding 100%. The exclusion of these firms does not materially alter the findings. 4Q 2017

Our takeaway isn’t that no U.S. corporations will experience a lift in profitability in 2018. The initial impact of the cuts will boost the bottom lines of many businesses. Nevertheless, we believe the benefit from lower tax rates will be competed away in most industries. This is especially true for small caps, which are less likely to possess sustainable competitive advantages than larger companies and consequently enjoy lower returns on capital, on average. Take regional banks, one of the sectors most exposed to U.S. tax rates due to a domestic focus. Banking is a competitive space with limited barriers to entry. A reduced tax rate will enable management teams to sacrifice pre-tax margins to win business, while Our takeawaystill isn’tmaintaining that no theU.S. same corporations return on will equity. experience Rinse anda lift repeat in profitability for other industries.in 2018. The Admittedly, initial the extra dollars not being sent to impact of the cuts will boost the bottom lines of many businesses. Nevertheless, we believe lower tax rates will bethe competed government away might in mosthelp boost industries economic. This growth is especially rates, but true the for impact small caps,there whichis difficult are less to quantify. We believe it’s unlikely to be likely to possessdramatic. sustainable competitive advantages than larger companies and consequently enjoy lower returns on capital, on average. Take regional banks, one of the sectors most exposed to U.S. tax rates due to a domesticDon’t get focus. us wrong, Banking we is support a competitive measures space to withlet people limited keep barriers more to of entry. their ownA reduced money. tax People own companies, so reducing rate will enablebusiness management tax rates teamshelps accomplishto sacrifice thispre- objective.tax margins We to are win just business, not sold while on the still idea maintaining that the significant reduction in the U.S. federal the same return on equity. Rinse and repeat for other industries. Admittedly, the extra dollars not being sent to the rategovernment will create might a sizeable help lastingboost economicimpact on thegrowth profitability rates, but of theU.S. impactcorporations, there isespecially difficult givento where we are in the business cycle. quantify. We believe it’s unlikely to be dramatic. Tax reform will exacerbate the federal deficit, according to the Congressional Budget Office. One side of the aisle says that’s a Don’t get usgovernment wrong, we spending support measuresproblem, whileto let the people other keep side moresays it’s of atheir revenue own problem.money. PeopleWe can own all agree it’s a problem. The gargantuan companies, federalso reducing debt businessand unfunded tax rates liabilities helps accomplishwill become this a crushingobjective. burden We are for just younger not sold generations. on the These issues seem distant and idea that theuncertain significant enough reduction that professional in the U.S. investors federal rategenerally will createavoid factoringa sizeable them lasting into impacttheir investment on the decisions. However, at a minimum, profitability of U.S. corporations, especially given where we are in the business cycle. most would acknowledge that excessive debt will be a drag on long-term economic growth. Tax reform will exacerbate the federal deficit, according to the Congressional Budget Office. One side of the aisle saysThe that’sPortfolio’s a government fourth quarter spending and problem, full year while performance the other side significantly says it’s a revenue trailed problem. benchmarks. The Portfolio was up 1.44%, We can all net-of-fees,agree it’s a forproblem. the quarter The and gargantuan 2.60%, net-of-fees,federal debt for and the unfundedyear. In comparison, liabilities will the becomeRussell 2000, a Morningstar US Small Cap Index, crushing burdenand S&P for Small younger Cap generations.600 benchmarks These increased issues 3.34%,seem distant 4.78%, and and uncertain3.96%, respectively, enough that for the three months ending December professional investors generally avoid factoring them into their investment decisions. However, at a minimum, most31, 2017. would Foracknowledge all of 2017, that the excessive Russell 2000,debt will Morningstar be a drag onSmall long Cap,-term and economic S&P Small growth. Cap 600 indexes rose 14.65%, 15.03%, and 13.23%, respectively. The Portfolio’s holdings increased more than small cap benchmarks during the year, but The Fund’sthis fourth was quarter offset andby the full Portfolio’s year performance operating significantly expenses trailed and large benchmarks. position in cash and short-term Treasury bills. At The Fund was up 1.37% for the quarter and 2.15% for the year. In comparison, the Russell 2000, Morningstarthe US end Small of the Cap year, Index, 78.5% and of S&P the PortfolioSmall Cap was 600 held benchmarks in cash equivalents. increased Cash3.34%, declined 4.78%, slightly and in Q4 because of outflows and the 3.96%, respectively,purchase for of newthe three positions. months ending December 31, 2017. For all of 2017, the Russell 2000, Morningstar Small Cap, and S&P Small Cap 600 indexes rose 14.65%, 15.03%, and 13.23%, respectively. The Fund’sThe holdings Portfolio increased bought more three than new small securities cap benchmarks in the fourth during quarter: the year, Net but 1 UEPS this was Technologies (ticker: UEPS), Retail offset by theFood Fund’s Group operating (ticker: expenses RFG AU), and and large Hallmark position Financial in cash and (HALL). short- term We’ve Treasury gandered bills. at UEPS once or twice before, since it At the end hasof the historically year, 78. traded5% of atthe a Fundlow EBIT was multiple.held in cash However, equivalents. our looks Cash were declined always slightly superficial, in Q4 and we were scared off by the firm’s because of outflows and the purchase of new positions. outsized exposure to the South African government. Like Transformers, with UEPS there’s more than meets the eye. While UEPS The Fund derivesbought significant three new cashsecurities flow fromin the distributing fourth quarter: welfare Net payments 1 UEPS in Technologies South Africa and (ticker: has been informed it is losing this contract, UEPS), Retailmanagement Food Group is adamant (ticker: that RFG the AU),company’s and Hallmark payment technology Financial and(HALL). infrastructure We’ve willgandered have enduring value for other applications in at UEPS once or twice before, since it has historically traded at a low EBIT multiple. However, our looks were alwaysthe superficial, country and and elsewhere. we were scared More importantly,off by the firm’s UEPS outsizedhas an interesting exposure portfolioto the South of other African assets, including KSNET, one of the largest card payment processors in South Korea. The value of KSNET and UEPS’s investment portfolio could exceed the company’s market capitalization, even assuming the firm’s South African assets are worthless.

4 4Q 2017

Retail Food Group (RFG) is an Australian franchisor of quick service restaurants. The heavily-shorted shares plunged 63% from December 8th to December 20th after a series of newspaper articles trashed the company and its treatment of franchisees. Several members of Intrepid’s investment team have previously researched RFG, but the price never met our margin of safety. This is an example of our demanding valuation standards benefiting us. On balance, not “paying up” for stocks has hurt the Portfolio’s relative performance over the past five years. Franchise businesses are usually good businesses. They often generate copious free cash flow and are frequently awarded high multiples by investors for the stability inherent in the franchise model. In the U.S., Dunkin’ Brands trades for 18x EBIT. RFG was selling below 6x estimated forward EBIT when we bought it. RFG’s franchises sell donuts, other baked goods, coffee, and pizza. The firm also owns wholesale operations for coffee, cheese, and bakery products. Some of the franchise concepts are struggling, and the hostile press coverage claimed that a disproportionate number of RFG franchisees are trying to sell their stores compared to other franchise concepts. Our analysis indicates that the reporters exaggerated their claims. RFG may need to take steps to improve its relationship with franchisees, but we don’t see this business disintegrating at the rate implied by the stock action. Donut King and Gloria Jeans are strong brands in Australia, and a meaningful proportion of the company’s value is tied to these franchises and RFG’s wholesale operations. We entered our position near the lows, and the stock has recovered some lost ground already. Hallmark Financial Services is a specialty property and casualty insurance company that focuses on transportation-related niche commercial markets with a concentration of business in Texas. We were encouraged that Hallmark’s shareholder’s equity was only negatively impacted by 1.5% from Hurricane Harvey. Hallmark will underwrite accounts ignored by larger carriers due to the insured’s loss history, years in business, minimum premium size, or type of business. The firm derives a significant portion of premiums from trucking companies, which Hallmark has in common with Baldwin & Lyons (ticker: BWINB), another Endurance Portfolio holding. Hallmark has a decent long- term track record of growing book value per share, but underwriting losses and unfavorable reserve adjustments have saddled returns over the past two years. Management has worked to address problem areas by raising rates and exiting markets like personal automobile insurance, where Hallmark has failed to make money. The company is well-capitalized, and Hallmark’s bond portfolio carries a weighted- average credit rating of BBB+ with a three-year duration. This should help protect the balance sheet under a scenario of rising interest rates. We bought a small position in the stock at a discount to tangible book value.

5 4Q 2017

We exited our position in Greenhill (ticker: GHL) and sold all but a small piece of our stake in Syntel (ticker: SYNT) in Q4. Greenhill’s stock price moved higher after jumping late in the third quarter, when management announced a leveraged recapitalization. The company’s Q3 results, reported in October, were lower as expected, with improved results in the U.S. offset by significantly lower activity in Europe. Management reiterated their expectation of operating improvements in Q4, and we have seen evidence of this recently with Greenhill working on deals such as the $6 billion merger of McDermott International and Chicago Bridge & Iron. Greenhill’s higher stock price reduces our intrinsic value estimate because the firm will be repurchasing fewer shares than we had modeled. We took the quick win on the investment. Syntel’s shares rallied after the company reported third quarter earnings. Revenue increased sequentially even with an ongoing drag from American Express, and margins were better than expected. Excluding American Express, Syntel’s sales increased 3.1% year-over-year and 3.7% on a sequential basis. Revenue defined as “digital” was up 18% from Q316. While the third quarter report was a positive surprise and management revised guidance higher, the forecast still suggests a weak Q4. We don’t know whether management is sandbagging or if fourth quarter performance will deteriorate. Since the stock exceeded our valuation, we sold the vast majority of our holding. During the fourth quarter, the Portfolio’s main contributors to performance were Syntel, Baldwin & Lyons, and Retail Food Group. Baldwin is the Portfolio’s largest position and increased modestly this quarter. The stock’s reaction to Q3 results was muted, even though Baldwin’s small underwriting profit marked a major turnaround from the losses experienced in the first half of the year. Investment results added $1 per share to book value, bringing the stock’s P/B ratio to ~0.85x. Management is planning to grow market share as certain competitors exit the challenging commercial auto insurance space. Although we don’t expect Baldwin’s combined ratio to quickly return to levels from the glory days, we believe we’re owning a historically well-managed business at a substantial discount to the peer group. The primary detractors from the Portfolio’s Q4 results were Corus Entertainment and Dundee Corp. Canadian equities were less ebullient than their U.S. counterparts in 2017, but Corus and Dundee’s share prices underperformed local benchmarks. Corus delivered improved results in fiscal 2017 compared to the prior two fiscal years, as the firm succeeded in stabilizing advertising revenue. Nevertheless, the company’s ad results were slightly below expectations, and management has cautioned that the outlook for television advertising in Canada remains soft. Corus is holding its own in a tough environment and trades at a 10% dividend yield, but even this low valuation cannot withstand a resumption of top line declines. Corus and other TV network owners must work quickly to implement technology to deliver targeted advertising and more flexible viewing options to defend against the onslaught from over-the-top services. We’re watching closely. January 10, 2018 update: Corus just reported a 4% decline in television advertising revenues for its fiscal first quarter despite easy comparisons from the prior year. These results were significantly worse than management telegraphed shortly before the fiscal quarter ended, which further reduces their credibility. While the shares trade for a low multiple of cash flow, we have lost confidence in the revenue stabilization story. We believe management and the board overemphasize dividends at the expense of debt reduction. We sold our position at a loss. Dundee achieved two important milestones in the third quarter, including closing the sale of United Hydrocarbon (UHIC) to Delonex Energy and opening the Parq Vancouver casino and resort. The UHIC deal eliminates a $12 million annual cash drag to Dundee and offers the potential for a future royalty tied to Delonex’s Chadian oil production several years from now. Parq Vancouver is Dundee’s main opportunity for near-term cash flows, although this is dependent on refinancing the project’s prohibitively expensive construction debt. We believe Dundee should capitalize on the strong market for Vancouver hotel transactions and sell the two hotels attached to Parq Vancouver, with proceeds applied to reducing borrowings. Just when Dundee’s situation seemed to be incrementally brightening, the company reported in November that it suspended activities at Blue Goose’s Tender Choice chicken processing facility to address repairs required by the Canadian Food Inspection Agency. Weeks later, the facility burned down. While destructive fires are unpredictable (usually, and hopefully in this case),

6 better than expected. Excluding American Express, Syntel’s sales increased 3.1% year-over-year and 3.7% on a sequential basis. Revenue defined as “digital” was up 18% from Q316. While the third quarter report was a positive surprise and management revised guidance higher, the forecast still suggests a weak Q4. We don’t know whether management is sandbagging or if fourth quarter performance will deteriorate. We reduced our holding since the shares no long offer an attractive discount, in our view.

Teradata’s better-than-expected third quarter earnings helped push the shares higher. The company’s recent performance broke from a multiyear trend of disappointment. Recurring revenue increased 8% in the quarter and now comprises over half of total revenue. Nevertheless, total revenue was still down 5% year-over-year, and Teradata’s reported profitability leaves much to be desired. We4Q believe 2017 management will need to show continued progress toward their long-term free cash flow targets in order The mainfor detractorsthe stock tfromo continue Q4 performance performing. were Corus Entertainment (ticker: CJR/B CN), Oaktree Capital (ticker: OAK), and DundeeThe main Corp. detractors(ticker: DC/A from CN). Q4 Canadian performance equities were were Corus less ebullient Entertainment than their (ticker: U.S. counterparts CJR/B CN), in 2017,Oaktree but Corus and Dundee’sCapital share(ticker: prices OAK), underperformed and Dundee Corp.local benchmarks. (ticker: DC/A Corus CN). delivered Canadian improved equities results were less in fiscal ebullient 2017 than compared to the priortheir twoU.S. fiscalcounterparts years, inas 20the17, firm but Corussucceeded and Dundee’sin stabilizing share advertising prices underperformed revenue. Nevertheless, local benchmarks. the company’s ad results Coruswere slightlydelivered below improved expectations, results and in fiscalmanagement 2017 compared has cautioned to the that prior the two outlook fiscal for years, television as the advertising firm in Canadasucceeded remains soft. in stabilizing Corus is advertisingholding its ownrevenue. in a tough Nevertheless, environment the andcompany’s trades at ad a resu10%lts dividend were slightly yield, belowbut even this expectations, and management has cautioned that the outlook for television advertising in Canada low valuationremains cannot soft. withstandCorus is holdinga resumption its own of topin a line tough declines. environment Corus and and other trades TV at network a 10% dividendowners must yield, work but quickly to implementeven this technology low valuation to deliver cannot targeted withstand advertising a resumption and more of flexibletop line viewingdeclines. options Corus to and defend other against TV network the onslaught from over-the-topowners must services. work quickly We’re watchingto implement closely. technology to deliver targeted advertising and more flexible viewing options to defend against the onslaught from over-the-top services. We’re watching closely. January 10, 2018 update: Corus just reported a 4% decline in television advertising revenues for its fiscal first quarter despiteJanuary easy comparisons 10, 2018 update from: theCorus prior just year. reported These a 4%results decline were in significantlytelevision advertising worse thanrevenues management for its fiscal telegraphedfirst quarter shortly before despitethe fiscal easy comparisonsquarter ended, from thewhich prior further year. reduces These results their were credibility. significantly While worse the than shares management trade for telegraphed a low multiple shortly of cash flow, beforewe have the lostfiscal confidencequarter ended, in which the revenuefurther reduces stabilization their credibility. story. While We believe the shares management trade for a low and multiple the board of cash overemphasize flow, dividendswe haveat the lost expense confidence of in debt the revenuereduction. stabilization We sold story our. position We believe at managementa loss. and the board overemphasize dividends at the expense of debt reduction. We sold our position at a loss. Dundee achieved two important milestones in the third quarter, including closing the sale of United Hydrocarbon (UHIC) to DelonexDundee Energy achievedand opening two the important Parq Vancouver milestones casino in andthe resort.third quarter, The UHIC including deal eliminates closing thea $12 sale million of United annual cash Hydrocarbon (UHIC) to Delonex Energy and opening the Parq Vancouver casino and resort. The UHIC drag to Dundee and offers the potential for a future royalty tied to Delonex’s Chadian oil production several years from deal eliminates a $12 million annual cash drag to Dundee and offers the potential for a future royalty tied now. Parqto Delonex’s Vancouver Chadian is Dundee’s oil mainproduction opportunity several for yearsnear-term from cash now. flows, Parq although Vancouver this is is dependent Dundee’s onmain refinancing the project’sopportunity prohibitively for near expensive-term cash construction flows, although debt. this We is believedependent Dundee on refinancing should capitalize the project’s on the prohibitively strong market for Vancouverexpensive hotel transactionsconstruction and debt. sell We the believe two hotels Dundee attached should to capitalize Parq Vancouver, on the strong with proceedsmarket for applied Vancouver to reducing borrowings.hotel transactions and sell the two hotels attached to Parq Vancouver, with proceeds applied to reducing borrowings. Just when Dundee’s situation seemed to be incrementally brightening, the company reported in November that it suspended activitiesJust at whenBlue Goose’s Dundee’s Tender situation Choice seemed chicken toprocessing be incrementally facility to brightening,address repairs the required company by thereported Canadian in Food InspectionNovember Agency. that Weeks it suspended later, the facility activities burned at down.Blue Goose’s While destructive Tender Choice fires arechicken unpredictable processing (usually, facility and to hopefully address repairs required by the Canadian Food Inspection Agency. Weeks later, the facility burned4Q down. 2017 in this case),While Dundee’sdestructive original fires arerationale unpredictable for purchasing (usually, Tender and Choicehopefully wasn’t in this strong. case), Management Dundee’s original claimed rationale Tender Choice wouldDundee’s helpfor purchasing originalBlue Goose rationale Tender expand for purchasing Choiceits organic wasn’t Tender brand strong. Choice into conventional Managementwasn’t strong. chicken claimedManagement and Tend they claimeder also Choice suggested Tender would Choice vertical help would Blue integration help Blue synergies,GooseGoose expand but expandthe its mainorganic its purpose organic brand into wasbrand conventional to intoacquire conventional EBITDAchicken, toand chickendilute they lossesalso and suggested theyat the also Blue vertical suggested Goose integration subsidiary. vertical synergies, integration This butis another the main disappointingpurposesynergies, was example to acquirebut the of EBITDAcapitalmain purpose allocationto dilute waslosses by Dundee’sto atacquire the Blue leadership. EBITDA Goose subsidiary. Withto dilute that lossessaid, This Dundee’sis at another the Blue stockdisappointing Goose already subsidiary. reflectsexample of nothing capital favorable,This as is it’s another trading disappoint at less thaning 25% example of tangible of capital book allocation value. If managementby Dundee’s canleadership. begin extracting With that cash said, flow from allocationDundee’s by Dundee’s stock leadership.already reflects With thatnothing said, Dundee’sfavorable, stock as it’s already trading reflects at less nothing than 25%favorable, of tangible as it’s trading book value.at less than 25% Parqof tangible VancouverIf management book in value. 2018, canIf managementDundee begin couldextracting can partially begin cash extractingstem flow its from ongoingcash Parq flow bleed Vancouverfrom inParq book Vancouver invalue. 2018 ,inDundee Dundee 2018, isDundee couldone of couldpartially the Portfolio’spartially stem smallestits ongoingstem positions. itsbleed ongoing in book bleed value. in Dundee book value. is not a Dundee material isposition one of for the the Fund’s Portfolio. smallest positions.

A Tale of Two Cities Parq Resort (Vancouver, BC) Tender Choice Foods (Burlington, Ontario)

Oaktree Capital’s shares fell during Q4. Core operating results were reasonably stable when the company We are reportedpleased that in November.we found a fewIncentive new ideas income this wasquarter, below however, last year’s the level,Portfolio although remains this mostly category uninvested is lumpy. as we wait for opportunitiesOaktree that hasmeet a oursignificant criteria. amount Our patience of undeployed is being tested capital by theas it second awaits longestbetter opportunitiesbull market in history,for distressed which has pumped valuationsdebt. for the High average yield stock spreads to all-time remain highs. tight and yields on C-rated debt are roughly half the level from their early 2016 peak. We like Oaktree’s countercyclical features and expect them to remain intelligent 19 In light ofallocators the Portfolio’s of investor relative capital. underperformance over the past five years, we have encountered a growing number of skeptics about our investment process. This is the same process that guided Intrepid through the tech and housing bubbles. Our investment Thank you for your investment. process is not designed to outperform consistently. It is not built to beat indexes over three or even five-year stretches. Our process is configuredSincerely, to exceed peers and benchmarks over a full market cycle, and that is our goal. We have not compromised our process in an attempt to “keep up” by purchasing securities that we believe are overpriced. In our opinion, the U.S. small cap market has been overvaluedJayme Wiggins, for several CFA years, and today’s nosebleed valuations are incompatible with a value-oriented investment approach. Chief Investment Officer We expectIntrepid the final Select phase Fund of Portfoliothis market Manager cycle to be very damaging to investors who ignore or deemphasize traditional valuation backstops such as free cash flow. Top 10 Holdings ICMTX as of 12/31/17 and disclosure. Discipline makes the difference. Thank you for your investment. Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to special DISCIPLINEDrisks including VALUE PORTFOLIO volatility due – COMMENTARYto investments inBY smaller MARK andTRAVIS, medium CEO, PRESIDENT,companies, whichPORTFOLIO involve MANAGER additional risks such as limited liquidity and greater volatility. The Fund is considered non- I would lovediversified to be able as to a announceresult of limitingto you that its we holdings had a quarter to a relatively where we smalloutperformed number the of market.positions If I anddid inmay this raging bull market, beI would more hope exposed you would to individual question to stock what typevolatility of investment than a diversifiedprocess you fund. had committed The Fund your may hard-earned invest in capital! I do think theforeign opportunity securities to make whichsuch an involve announcement greater is volatility drawing nearer and political,by the day. economic Our firm’s and objective currency is to participaterisks in an up and differences in accounting methods. There can be no assurance that a newly organized Fund market, willbut preserve grow to capital or maintain in a down an market.economically Unfortunately, viable size.in my opinion, most market participants think they can outrace the bull, much like the runners in Pamplona, Spain, and exit down a side alley to sit out the losses of the ensuing downturn. The Morningstar Small Cap Index tracks the performance of U.S. small-cap stocks that fall between 90th For me, andas a 97 lifetimeth percentile participant in market in the capitalization capital markets, of the I much investable prefer universe.steadily higher The Russellportfolio 2000 balances, Index withconsists small of but tolerable drawdownsthe insmallest my capital 2,000 base companies when adverse in a group conditions of 3,000 arise. U.S. The companies difficulty inis thethat Russellthe adverse 3000 conditionsIndex, as rankedalmost byalways surprise market participants.market capitalization. From a valuation The S&Pperspective, MidCap the 400 fuel Index for adverse seeks conditionsto track theis already performance here, with of cyclicallymid-cap highU.S. share prices equities, representing more than 7% of available U.S. market cap. You cannot invest directly in an index. acting as kerosene just waiting for a trigger event (the match). That trigger could be something as widely discussed and feared as a tradeYield war iswith the China, income a physicalreturn on war an withinvestment. North Korea, It refers or a torapid the rise interest in inflation. or dividends My guess received though, from is athat security whatever it is and and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value. Free Cash Flow measures the cash generating capability of a company by subtracting capital expenditures from cash flow from operations. Active Share measures the amount of overlap between a fund’s holdings and those of its benchmark. Loss Adjustment Expenses (LAE) are the expenses associated with investigating and settling insurance claims. 7

Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice or recommendations to buy or sell any security.

The Intrepid Capital Funds are distributed by Quasar Distributors, LLC.

4Q 2017

whenever it occurs, it will come out of left field and surprise most investors. As Carl Richards once said, “Risk is what’s left over when you think you’ve thought of everything.” The Disciplined Value Portfolio (the “Portfolio”) is now well over 20 years old. The beauty of the Portfolio is the disciplined team behind it. As I review the last two decades of the Portfolio’s performance, I marvel at the consistency of the outcome. For the one-, five-, ten-, fifteen- and twenty-year periods ending December 31, 2017, the Portfolio increased 7.04%, 8.33%, 7.17%, 8.04%, and 7.75%, net-of-fees, respectively. In comparison, the S&P 500 Index returned 21.83%, 15.79%, 8.50%, 9.92%, and 7.20% for the same periods, respectively. Although the Portfolio’s performance numbers are substantially behind its 100% equity benchmark for the 1- and 5-year periods, the tradeoff has been substantially less risk incurred when you look at the since inception performance (see chart below). Cash at the end of the quarter was 29.2%, lower than it has been in quite a while thanks in part to several purchases made during the period. These include a new position in Cheesecake Factory (ticker: CAKE) and additions to our Coach (ticker: COH) and Leucadia National (ticker: LUK) holdings. The Portfolio increased 1.90%, net-of-fees, for the fourth quarter, compared with an increase of 6.64% in the S&P 500 Index. Again, the Portfolio’s performance for the quarter was substantially less than the equity index but so was the risk incurred during the period. As mentioned before, we would expect this drastic performance gap to close when volatility eventually returns to the market. The top five performers for the fourth quarter were Teradata (ticker: TDC), Royal Mail (ticker: RMG), Apple (ticker: AAPL), Cheesecake Factory (ticker: CAKE), and Northern Trust (ticker: NTRS). The five major detractors for the quarter were Oaktree Capital (ticker: OAK), Corus Entertainment (ticker: CJR/B CN), Western Digital (ticker: WDC), Contango Oil & Gas (ticker: MCF), and Dundee (ticker: DC/A CN). Thank you for investing with us. If there is anything we can do to serve you better, please let us know. The Net Return % for the Disciplined Value portfolio was stated incorrectly in the prior version of this commentary for the period ending December 31, 2017. This version has been revised to show the correct Net Return % for all periods stated for the Disciplined Value portfolio. INCOME PORTFOLIO – COMMENTARY BY JASON LAZARUS, CFA, PORTFOLIO MANAGER My wife and I recently celebrated our ten-year anniversary. We traded the standard island locale for cold weather and hiking in Zion National Park in Utah. Zion is in an oasis in the middle of the desert. The location is quite remote. Visitors arriving from the nearest metropolis (Las Vegas) drive 2.5 hours through Nevada, into Arizona, then into Utah to arrive at the town of Springdale. As of the 2010 Census, Springdale had 529 residents. The nearest McDonald’s is 35 minutes away. Mobile phone service is spotty at best. Yet, a sticker on the window of a local Mexican restaurant made it difficult to completely forget the cryptocurrency madness occurring back in the connected world.

8 4Q 2017

We at Intrepid have no opinion on the value of Bitcoin, or Litecoin, or Ethereum, or any of the other hundreds of cryptocurrencies. We aren’t sure we could ever have confidence in estimating the intrinsic value of these “securities,” but honestly, we have not dedicated the time to even form an opinion. Nearly all of our time is spent searching for appropriate securities for our clients, which no cryptocurrency would qualify for. We hope passing along our very limited knowledge gives you some entertainment or even something to discuss at your next cocktail party. Many of you have probably heard of Bitcoin after its meteoric 1,300% gain in 2017. If not, Bitcoin and other cryptocurrencies are digital assets that are “mined” by computers solving mathematical problems. The total number of units that can be mined is often fixed (but not always), thereby giving a currency perceived value based on its scarcity. Bitcoin was the first cryptocurrency created and was initially used anonymously in online black market transactions. Some cryptocurrencies are now accepted for everyday transactions, like Bitcoin at the Mexican restaurant in Zion, but most are not and must be exchanged back into an accepted currency before use. In 2010, a bitcoin owner paid 10,000 bitcoins for two Papa John’s pizzas. At the time of this writing (the price of Bitcoin can fluctuate wildly), those bitcoins are worth nearly $150 million. The crypto craze has spread by monumental proportions over the last few months. There are now over 1,000 different cryptocurrencies. Two of the most comical, in my opinion, are Dogecoin, which was initially created as a joke with an internet dog as its logo (pictured), and WeedCoin. Dogecoin now has a $2 billion market cap and has doubled since the beginning of 2018. Weedcoin was apparently created to take advantage of the hysterias of cryptocurrencies and legalization of marijuana at the same time. Due to the complete lack of regulation, initial coin offerings (ICOs) have taken the place of traditional capital raises for the most suspect of companies, many of which will turn out to be complete scams. Publicly traded companies have even begun to change their names to include cryptocurrency-related terms, such as blockchain, which is the technology many digital currencies are built on. Upon the name changes, the market capitalizations have soared, often by hundreds of percent. Recently the Long Island Iced Tea company changed its named to Long Blockchain Corp. LTEA generated about $5 million in revenues in 2016 through the sale of non-alcoholic beverages. In December, the firm announced that it would be changing its corporate strategy to seek investments in cryptocurrency and blockchain related technologies. The share price rose as much as 500% the following day. Can anyone say 1999? The Intrepid Income Portfolio (the “Portfolio”) performed well in the fourth quarter ended December 31, 2017. The Portfolio gained 1.04%, net-of-fees, in the period, besting the ICE BofAML US High Yield Index’s (the “High Yield Index”) 0.41% return and the Bloomberg Barclays US Aggregate’s (the “Aggregate”) 0.39% return. We have recently started to include the ICE BofAML 1-5 Year BB-B Cash Pay High Yield Index (the “1-5 Year BB-B Index”) in our commentary, as we believe this index is more closely representative of the duration and credit quality of the Portfolio. This index gained 0.30% in the quarter. Lastly, the longer- duration, investment-grade ICE BofAML US Corporate Index (the “US Corporate Index”) posted an enviable 1.12% return in the quarter as investment-grade spreads tightened inside of 100 basis points to the lowest level since 2007. The Income Portfolio benefited significantly from its equity and convertible bond positions. Most of our B and BB rated holdings (we do not currently own CCC or lower issues) outperformed the high-yield indexes cited here. Our relative performance for all of 2017 is significantly less favorable. Exposure to credit risk was rewarded in 2017 as a result of the stable economic environment, low unemployment, and the prospect of tax reform. Default rates remained well below average in 2017, which resulted in strong high-yield returns. The High Yield Index rose 7.48% in the calendar year, while the 1-5 year BB-B Index gained 5.37%. Higher government bond yields would normally coincide with the positive economic backdrop. However, the yield curve has instead flattened as the Fed’s rate hikes put upward pressure on short-term yields while low wage growth has kept a lid on inflation. The flattening could also be construed as bond market participants worrying about a recession.

9 4Q 2017

Whatever the reason, long-duration corporates benefited from the decline in long-term rates. The US Corporate Index returned a healthy 6.48% in 2017. The Aggregate has a lower duration and less credit risk than the Corporate Index, so its annual return was lower at 3.54%. The Intrepid Income Portfolio increased 3.95%, net-of-fees, in 2017. The Portfolio outperformed the Aggregate due to higher exposure to credit risk, but underperformed both high-yield indexes due to more defensive posturing. Approximately 16% of the Portfolio’s assets were allocated to T-Bills and cash during 2017, and short-term investment grade bonds accounted for another 28%. The benefit of the jump in front end rates is that we have been able to deploy what was once 0% yielding cash into assets producing at least some income, however little.

US Government Yield Curve Two convertible bonds and an equity security were 3.5% the top contributors to the Portfolio’s performance in 2017. Consolidated-Tomoka Land Company’s 3.0% 4.5% convertible bonds (ticker: CTO) were one 2.5% of the Portfolio’s best performers and constituted a larger position in the Portfolio. The notes rose 2.0% significantly in price as the company’s common 1.5% stock appreciated by nearly 20% in the year. The

1.0% convertible feature of the bond therefore became more valuable. CTO’s management has done 0.5% an admirable job disposing of its land holdings – around the I-95 corridor in Daytona Beach, Florida 0 5 10 15 20 25 30 Tenor (years) and redeploying the capital into income-producing properties. The sales have come at a faster pace 12/31/2017 12/31/2016 than we anticipated, which caused us to increase Source: Bloomberg US Treasury BVAL Curve our estimate of the firm’s intrinsic value.

TwoEZCORP’s convertible bonds2.125% and anconvertible equity security bonds were (ticker:the top contributors EZPW) also to thebenefited Fund’s performance from the in strong performance of the underlying equity in the 2017. Consolidated-Tomoka Land Company’s 4.5% convertible bonds (ticker: CTO) were one of the Fund’ssecond best performers half of the and year. constituted We have a larger discussed position in this the Fund.investment The notes on roseseveral significantly occasions in over the past few years, but to quickly refresh, priceEZCORP as the company’s is one common of the stockU.S.’s appreciated largest byowners nearly 20% of pawn in the year. shops. The convertible It had been feature struggling of through several non-pawn-related issues. the bond therefore became more valuable. CTO’s management has done an admirable job disposing of its landThese holding issuess around included the I-95 accounting corridor in Daytona irregularities Beach, Floridaat a troubled and redeploying Mexican the subsidiary capital into that was eating the cash generated by the pawn income-producing properties. The sales have come at a faster pace than we anticipated, which caused us to increasebusiness. our estimate The bondsof the firm’s traded intrinsic at distressedvalue. levels in late-2015 and early-2016. At the time, it was Intrepid’s largest firm-wide EZCORP’sposition. 2.125% Our convertible belief was bonds that (ticker: the core EZPW) pawn also business benefited fromhad thesignificantly strong performance more ofvalue than the market was assigning. As it became the clearunderlying that equity the Mexicanin the second business’s half of the issues year. Wewere have manageable, discussed this investmentand a sale on ofseveral that business was announced, the bonds recovered occasions over the past few years, but to quickly refresh, EZCORP is one of the U.S.’s largest owners of pawnclose shops. to Itpar. had Withbeen strugglingthe stock through trading several above non our-pawn estimated-related issues. valuation, These issueswe believed included that the likelihood of further upside in the bonds accounting irregularities at a troubled Mexican subsidiary that was eating the cash generated by the pawn business.was limited.The bonds Additionally, traded at distressed we levelsbelieved in late the-2015 sale and ofearly the-2016. Mexican At the time,business it was Intrepid’shad an above-average risk of falling through, so we took largestthe firm opportunity-wide position. to Ourreduce belief ourwas thatexposure. the core pawn We businessentered had 2017 significantly with lessmore thanvalue than1% of the Income Portfolio’s assets invested in the the market was assigning. As it became clear that the Mexican business’s issues were manageable, and a sale convertibleof that business bonds. was announced, the bonds recovered close to par. With the stock trading above our estimated valuation, we believed that the likelihood of further upside in the bonds was limited. AddEZCORPitionally, we wasbelieved able the tosale close of the Mexicanthe divestiture business had on an what above -weaverage believe risk of to falling be through,very favorable terms. This substantially de-risked an so we took the opportunity to reduce our exposure. We entered 2017 with less than 1% of the Income Fund’sinvestment assets invested in the in the firm, convertible in our bonds. opinion. Yet, the equity slipped nearly 30% early in 2017. The convertible bonds were also under EZCpressure.ORP was able We to used close the the opportunity divestiture on to what triple we our believe position to be size.very favorableOur timing terms. was This lucky. EZCORP shares crossed $12 last month, substantially de-risked an investment in the firm, in our opinion. Yet, the equity slipped nearly 30% early in 2017.up from The convertible less than bonds $8 inwere July. also underThe Portfoliopressure. We sold used its the entire opportunity position to triple in the our convertibleposition bonds at prices near $102. size. Our timing was lucky. EZCORP shares crossed $12 last month, up from less than $8 in July. The TheFund timing sold its ofentire our position investment in the convertiblein Dominion bonds Diamond at prices near common $102. stock (ticker: DDC) was also fortuitous. As discussed in our previous commentary, Dominion received a buyout offer shortly after we purchased the stock. The acquisition closed in November.

10 The timing of our investment in Dominion Diamond common stock (ticker: DDC) was also fortuitous. As discussed in our previous commentary, Dominion received a buyout offer shortly after we purchased the stock. The acquisition closed in November. Not all of our convertible bond investments have worked out as well as Consolidated-Tomoka and EZCORP. The Income Fund had just one material detractor in 2017. Primero Mining 5.75% convertible bonds due 2/28/2020 cost the fund about 10 basis points, which is just at the cusp of what we classify as material. Primero was discussed at length last quarter by Endurance Fund Portfolio Manager Jayme Wiggins. 4Q 2017 There was a moderate amount of portfolio activity in the fourth quarter. As mentioned, we exited our position in EZCORP’s convertible bonds entirely. This was one of the Fund’s larger weights. Our second largest position, Nathan’s Famous 10% due 3/15/2020, was called by the company. Nathan’s Not all of our convertible bond investments have worked(ticker: NATH)out as wellreplaced as Consolidated-Tomokathe bond with a new issue anddue inEZCORP. 2025, in which The weIncome initiated Portfolio a small p osition. had just one material detractor in 2017. Primero MatchMining Group 5.75% called convertible its issue that bonds was due due to mature2/28/2020 in 2022. cost Lastly, the several portfolio of our about investment 10 grade bonds matured in the quarter. We rolled the incoming cash into new short-term investment grade bonds basis points, which is just at the cusp of what we classifyand added as to material. existing high Primero-yield positions was discussed. at length last quarter by Endurance Portfolio Manager Jayme Wiggins. The Fund’s most notable new holding is the common stock of Retail Food Group (ticker: RFG AU). RFG is an Australian restaurant franchisor with several concepts operating in the bakery, coffee, and There was a moderate amount of portfolio activitypizza in categories.the fourth The quarter. portfolio Asconsists mentioned, of roughly we 1,500 exited restaurants. our position Our interest in EZCORP’s in the company was piqued this summer by the languishing stock price (see below), which declined from a high of nearly convertible bonds entirely. This was one of the Portfolio’sAUD 7 tolarger just above weights. AUD 4Our per secondshare. We largest declined position, to get involved Nathan’s until FamousDecember 10%when thedue stock was 3/15/2020, was called by the company. Nathan’sslamm (ticker:ed by NATH) a negative replaced report fromthe bonda media with outlet a newon the issue company’s due intreatment 2025, of in franchisees. which we About a week later, the firm put out a press release stating earnings would be lower than expected. The stock lost initiated a small position. Match Group called its issuemore thatthan washalf of due its tovalue mature in ten in days. 2022. To beLastly, sure, severalsome of ofthe our negativity investment is probably grade deserved. Nevertheless, our belief was that the company was trading far too cheaply at 6x estimated forward EBIT. bonds matured in the quarter. We rolled the incomingWe bought cash very into close new to short-term the low, and investmentRFG’s shares grade gained bondsabout 50% and in added the final to days existing of 2017. As a high-yield positions. result, the position was the top contributor to the Fund in the fourth quarter.

The Portfolio’s most notable new holding is the common stock of Retail Food Group (ticker: RFG AU). RFG is an Retail Food Group Share Price Australian restaurant franchisor with several concepts AUD 8.00 operating in the bakery, coffee, and pizza categories. AUD 7.00 The portfolio consists of roughly 1,500 restaurants. Our AUD 6.00 interest in the company was piqued this summer by the AUD 5.00 languishing stock price (see below), which declined from AUD 4.00 a high of nearly AUD 7 to just above AUD 4 per share. We AUD 3.00 declined to get involved until December when the stock AUD 2.00 was slammed by a negative report from a media outlet on AUD 1.00 the company’s treatment of franchisees. About a week AUD 0.00 later, the firm put out a press release stating earnings Jan-17 Dec-17 would be lower than expected. The stock lost more Source: Bloomberg As of 12/31/17: 1 USD = 1.27984 AUD than half of its value in ten days. To be sure, some of the negativity is probably deserved. Nevertheless, our belief was that the company was trading far too cheaply at 6x estimated forward EBIT. We bought very close to the low, and RFG’s shares gained about 50% in the final days of 2017. As a result, the position was the top contributor to the Portfolio in the fourth quarter.

The highlight of our Zion experience was our hike through The Narrows. The entire hike is done wading through the waters of the Virgin River, which cut a slot canyon through the rock over 18 million years. The most breathtaking section located three miles upriver is called Wall Street, named for the 1500-foot walls on both side of the canyon. I have probably spent more time at Zion’s Wall Street than I ever have at New York’s. Intrepid’s offices are far from New York City. We like to think that this helps us maintain a more independent view. Every portfolio Intrepid manages aims to be different. We are not in the business of simply gathering assets to charge a fee. There is no point in creating another index-hugging product. We truly believe we are offering you something unique. We believe our investment philosophy is aligned with your best interests, and we are invested right alongside you. We wish you a prosperous 2018. Thank you for your investment.

11 4Q 2017

INTERNATIONAL PORTFOLIO – COMMENTARY BY BEN FRANKLIN, CFA, PORTFOLIO MANAGER “A portfolio that contains too little risk can make you underperform in a bull market, but no one ever went bust from that; there are far worse fates.” — Howard Marks

The fourth quarter of 2017 marks the first time the Intrepid International Portfolio (the “Portfolio”) has had three calendar years of performance. Due to this milestone, we will be reviewing more than just the quarter and will give an update on our investment philosophy. To start, the Portfolio returned 6.78%, net-of-fees, in the fourth quarter of 2017, compared to 4.23% for the MSCI EAFE Index (the “Index”). The outperformance can be attributed to two buyouts in the period, as well as purchasing a security that was in free fall, which subsequently regained some of its loss. Putting the record on repeat, we do not expect to outperform in a strong upward market. However, despite this being a short time period, we were pleased with the outcome. For the 2017 calendar year, the Portfolio returned 14.93%, net-of-fees, compared to the Index’s return of 25.03%. The Index was helped by appreciating currencies, which we did not benefit from due to our strategy of remaining almost entirely hedged. By comparison, the MSCI EAFE Hedged Index returned 16.84% in 2017. This year has been one filled with a positive outlook around the world, which helped buoy stocks higher. For the three calendar years ending December 31, 2017, the Portfolio returned 9.08%, net-of-fees, annually compared to the Index’s return of 7.80%. In the Portfolio’s first quarter of 2015, we were left unhedged as we waited for our FX trading account to be set up. During this time, foreign currencies declined significantly against the USD. We estimate that the impact of remaining unhedged negatively impacted the performance by over 2%. Despite this, we kept up with the market in this three-year time-period. Simply “keeping up” is not what we aim for; however, there are more pieces to the puzzle than just a return number. The return must be compared to the risk, some of which is quantitative and some of which is qualitative. To begin with the quantitative measure, the monthly standard deviation of the Portfolio over the previous three years was 7.8%, compared to our Bloomberg Peer Group’s 11.1%, and the Index’s 12.0%. That is, our returns were less volatile than both our peers and the index. We would like to note that the past three years have been a relatively calm period, which we think artificially lowers the Peer Group and Index’s reading. While volatility is one measure, most investors want to know what their risk exposure is when markets decline. Here we believe our large cash balances will help cushion any blow. Additionally, many of our investments are defensive businesses that should hold up well in an adverse environment. We believe there are multiple risks associated with the large shift towards passive investing in index funds that track the market. At some point, just as with any other asset that has investors pouring in, there is a risk that the exit door will be narrow. We do not know where that level is, but we have minimum exposure since most of our securities are not included in major indexes or held in the passive investment funds that track them. To summarize, overall, the three-year results were within our expectations. This does not, however, mean we cannot do better – we expect to! Reviewing the previous three calendar year performance of the portfolio is important, but we think a refresher on our philosophy and our research process is equally valuable. Rather than giving long-winded abstract descriptions, we will provide a brief overview and use companies we’ve studied or owned to provide concrete examples. Beginning with the types of securities that are attractive to us, our overarching theme is to search for undervalued securities that offer an attractive risk/reward profile. For us, undervalued securities are those that we can buy at a discount of at least 20% to our estimated value. This is a firm-wide philosophy; investing internationally simply gives us a wider opportunity set. We typically derive our estimated intrinsic value through a discounted cash flow model, but will sometimes value a company based on its net assets.

12 4Q 2017

The ideal candidate is a mature, stable business that is relatively easy to value. Often, these types of businesses are already priced appropriately and thus do not provide us with an investment opportunity. When this is the case, we dig down deeper to find securities in the dusty corners of the world. More specifically, we have found these ideas in the following types of securities: Out-of-favor, Overlooked, Unique, Illiquid, and Deep Value. While these are specific types of securities, it should be stated that our philosophy is not constrained into a few buckets. In fact, it may be more important to explain the types of investments we avoid. This via negativa philosophy, typically used to describe theology, is a good model for understanding our strategy. The list of items that fall in this “avoid” pile is long: those that we cannot value with a high degree of confidence, over- leveraged firms, complex investments (but not necessarily complicated), competitive industries, budding industries, and cyclical industries. We also avoid using relative valuations, macro investing, and generally avoid the outside opinions of the sell-side. This exhaustive list requires a caveat: Many of the ideas we proclaim to avoid can become attractive if the security falls enough for us to evaluate the business as being worth much more than the trading price. This compact description with long lists may be difficult to follow; we believe the reader will make more sense of it after reading some of the descriptions of individual securities below. Security analysis is an important part of the picture; however, portfolio management is just as important. Any analyst can claim a security is undervalued, but there must also be courage to act on his conviction. This area becomes difficult to describe in quantitative terms because it is more qualitative in nature. Nevertheless, beginning with the quantitative side, ideally, we’d like the portfolio to consist of 25 equally weighted securities of 4%. This will likely never happen for many reasons. More important to performance is our emotional discipline. This is perhaps the most important asset of our strategy; however, it is symbiotic with our security analysis. When a security we own is declining, our conviction is tested. It’s important to avoid buying something because it is falling, but to understand the risks associated and make an informed decision. With this said, we are typically contrarian in our trading philosophy and often buy on weakness. We describe this as our “buy high, sell low” strategy. Yes, you read that right. We buy when our conviction is high, and sell when our estimated discount to intrinsic value is low. We prefer this description because investing when we believe we are getting a good deal is more of a high for us than a low. While the Portfolio is still young, management is not. We look forward to being tested, and expect our investors to judge our poise in such an environment. An important requirement for managing a portfolio in the fashion we do is to have ample cash available. Since the inception of the portfolio, the quarterly average cash level has been close to 30%. This cash is a drag to performance when markets are booming, but we believe it is more than worth the cost when markets decline. We thrive on this flexibility. We have consistently expressed our focus on long-term investing, but the proof is in the pudding. We do not consider three years a long time, but we can give an update on where we stand today. As of the end of the quarter, 10 of the 25 securities held were owned at the launch of the Portfolio. This is equivalent to over one-third of the assets. We tend to have long holding periods because it can take time for our thesis to work out. Additionally, we think our patience gives us an advantage over our competitors. For many of our securities, this has worked to our advantage with the occasional buyout. In fact, of the 42 securities we have purchased since the inception of the Portfolio,3 eight have been bought out while we owned them and two more were acquired after we sold the securities. At face value, having roughly 20% of our securities acquired by another firm appears desirable. However, in some cases we would have rather held that company for a long period of time, potentially in perpetuity. We are frequently asked about the risks and costs of investing internationally. Some of the additional highly cited risks include political, accounting, and currency hazards. We typically avoid areas with geopolitical concerns unless the security is trading at a large discount, and even then, we typically just dip our toe in. No place is completely safe from accounting

3 The 42 securities include multiple securities from some issuers. For example, we purchased four different securities in Dundee Corp.’s capital structure.

13 fraud; however, in our experience investing in the developed markets has added no additional accounting risk than here in the United States. We do not want our performance to be the result of currency swings; thus, we try to hedge our currency exposure so long as it is not too expensive to do so. We believe the risks associated with the companies we invest in are not as high as one would think considering these additional concerns. Lastly, we believe all these risks are significantly reduced through diversification. Investing internationally is more expensive than it is domestically. There are higher trading commissions, hedging costs, payments to be on multiple exchanges, and withholding taxes on dividends. We’ll highlight a couple of these costs that are easier to quantify. Trading commissions have historically been approximately 0.25% of the principal traded. This results in a 0.50% total hit when accounting for both the buying and selling of a security. Withholding taxes on dividends are typically 15% in the countries we are currently invested in, except for the UK, which has no withholding tax. These taxes are a burden on some of our higher dividend yielding investments. All the costs mentioned are represented in our historical performance. We believe these costs are offset by the larger pool of opportunities from which to find attractive investments. However, we are cognizant of these costs and strive to keep them low whenever possible. After all, we’re heavily invested in the Portfolio as well. One other risk we’ll mention is liquidity risk. We discuss this last because we believe this risk is often accounted for with an asymmetric higher potential reward, which gives us access to an inefficient corner of the market. Additionally, many other larger competitors with more resources often overlook these ideas. For these reasons, we research quite a few of the smaller, more illiquid securities in the market. The following discussion on the contributors, detractors, new investments and securities sold will highlight which parts of our philosophy were applied. Our top three contributors during the period were HNZ Group (ticker: HNZ CN), Retail Food Group (ticker: RFG AU), and Tox Free Group (ticker: TOX AU). Our three largest detractors during the fourth quarter were Dundee Corp (ticker: DC/A CN), Corus Entertainment (ticker: CJR/B CN), and Noranda Income Fund (ticker: NIF-U CN). During the period we initiated positions in Berentzen Gruppe AG (ticker: BEZ GR) and Retail Food Group. We also exited Dominion Diamond (ticker: DDC) as the previously announced buyout was completed. HNZ is a Canadian helicopter operator that we wrote about last quarter. As is often the case in investing, HNZ was a top contributor this quarter after being a top detractor in the prior quarter. On October 31st, the company announced it would be acquired by its CEO and competing helicopter operator PHI. CEO Don Wall acquired the Canadian segment of the business, while PHI bought the offshore operations conducted in New Zealand and southeast Asia. The $18.70 acquisition price was a 43% premium to where the stock closed the previous day, and was very close to our $19.00 estimate of intrinsic value. Considering the challenges facing helicopter operators today, we believe the buyout price was fair. The transaction was completed on January 3rd, and we received cash for our holdings, resulting in more cash in the portfolio than is presented on our fact sheet. HNZ had several attributes that made it attractive to us. Originally, the company was struggling due to a large contract with the US Military that expired. This caused earnings to fall, as well as the share price. This is when we became interested, as we saw it as a company that had significant asset value given their fleet of helicopters owned. This was likely the case because the current earnings were low, causing investors to overlook the value of the assets in a normal operating environment. However, we felt the trading price was such a large discount to the asset value that we could hold on while they either replaced the contract or sold the assets. Additionally, as the stock price fell the security became illiquid, causing additional selling pressure by those who do not want to hold such an asset. Despite our attraction, HNZ was more cyclical than the typical stable business we like. Consequently, our initial position was small. Later, the stock fell precipitously to an even lower level, which we felt gave us a larger “margin of safety.” At this point, we tripled our weight due to the large disconnect between price and value. This emotional discipline is given credit for our positive return; had we not been aggressive when the stock fell, we likely would have made little to no money on the investment. However, when it did decline, we felt we were buying “high,” as described above.

14 4Q 2017

Retail Food Group is an Australian franchisor of restaurants in the bakery, coffee and quick service pizza categories. We initially researched the company in August, but concluded that the price was not cheap enough given the challenges plaguing franchisees in several of the company’s core brands. Things got interesting in December when a bombshell investigative media report was released that alleged systemic wage fraud, foreign worker exploitation, struggling franchisees, and a brutal system of franchisee abuse. To make matters worse, RFG released a statement days later that their earnings were anticipated to come in below previous expectations. The stock plummeted over 60% in the days following the media report and earnings warnings. True to our “Intrepid” namesake, we began buying aggressively as the stock was in free fall. In our view, the market panic ignored key areas of value for the company. In our estimation, a large part of RFG’s value rests in its non- franchise divisions. For instance, RFG has a large coffee wholesale business and recently acquired a significant commercial food distribution business. Once the value of these divisions was accounted for, the implied price of the remaining franchise businesses was remarkably cheap. And while we acknowledge that RFG’s franchises have important problems, they certainly have some value. To be clear, we don’t condone any of the practices alleged in the news report, and we typically avoid investing in businesses or management teams that appear unethical. In this case, we believe the issues raised in the report are probably not as widespread as the article suggested. Additionally, the owners of the individual franchises are given the freedom to run their business how they desire, and it is unsurprising that a small group took shortcuts. After speaking with the company’s management team, we are confident that they are taking the appropriate steps to right the ship. The timing of our purchase proved to be fortuitous. The stock rallied 40% from our average purchase price in the days following our investment. Even after this rebound, we still believe the stock is undervalued and have maintained a position. This purchase highlights our approach to trading securities. When a stock falls by over 60% in a week and a half, buying is often considered foolish and criticized as trying to “catch a falling knife.” In many cases, this is correct. However, if we feel we have done our homework and think the value is higher, then we believe we have a good set of protective gloves on when catching the knife. This was also an example of us buying a stable business. We were able to purchase it at a discount due to what we see as temporary problems. Tox Free is an Australian hazardous and toxic waste disposal company. The company does not own any landfills, and focuses on treating difficult hazardous waste material. The facilities used for hazardous waste disposal require approval from the government. Furthermore, no local community wants hazardous waste anywhere near their residences. This makes it difficult to construct new facilities. Fortunately, existing locations can be expanded significantly. We believe this gives Tox Free a competitive advantage, and one that bigger competitors may desire. Additionally, the company has a traditional industrial waste management business. Traditional waste management businesses benefit significantly from scale; a higher density route allows the company to spread costs of operating a depot across a larger volume of trucks and waste. Again, we felt this was another attribute of an attractive buyout candidate. In addition to these qualities, overhead could easily be cut in the case of a buyout. While we believed this created a potential catalyst, we were primarily focused on purchasing this defensive business (trash never goes away) at a discount to our estimate of intrinsic value, even if a buyout never happened. The stock price had languished when we began researching the company at the end of the 2016 summer due to concerns about their exposure to the cyclically weak resource sector. The concerns were real; revenue and earnings had declined significantly. However, due to this decline, the company’s exposure to the volatile resource sector had also been reduced. Furthermore, the company acquired a business in the healthcare disposal sector at what we thought was an attractive price. Based on our valuation, we felt we were making a prudent purchase when we initiated our position in September of 2016 at a price of approximately AUD 2.35 per share. Since then, the company weakened due in part to not receiving an important contract that originally appeared to be a done deal. However, the remaining business still appeared significantly undervalued, especially when considering the synergies of a potential buyout. On December 11th, the company announced that competitor Cleanaway (ticker: CWY AU) will acquire the firm at a price of AUD 3.43 per share.

15 4Q 2017

Tox Free had several characteristics of a business we like. We believed it was an overlooked security that was a stable business and was relatively easy to value. The company was overlooked due to its historical exposure to the resource sector, which represented 60% of revenue in 2013. In fact, the sell-side analysts who follow the company were typically the same ones who covered Oil and Gas! However, going forward, less than one third of revenue would be from Resources, similar to the Australian economy as a whole. We believed the existing business was not as cyclical, and had long-term contracts with favorable industry dynamics resulting in consistent demand. First, trash is not going away. Second, governments in developed countries like Australia are using technical equipment to help “Reduce, Reuse, Recycle” as the kid’s slogan here in the United States goes. Due to this stability, we felt it was fairly easy to value. Our three largest detractors were all Canadian firms. Corus’s stock price continues to be weighed down by the concern that the television market will shift towards over-the-top. The concerns are valid, but we believe firms like Corus with high-quality content will adapt eventually. This may be at lower profitability, but the current valuation implies significantly more degradation in the results. We are currently evaluating whether further weakness is priced in to the stock. Without a doubt, Corus fits into the out-of-favor box. It has been out of favor for a long time, and it may remain so for even longer. One attribute that we believe offsets some of the decline in the share price is the large 10% dividend. Holding company Dundee has been making strides toward eliminating their current level of cash burn, but they appear to be holding tight to Murphy’s law. Their chicken processing facility, which was not even operating at the time, burned down during the quarter. We still believe the net assets of the company are worth significantly more than where the stock is currently trading. Like Corus, Dundee is currently out-of-favor. However, we feel there are significant assets backing up the value. While we do not like all of the assets it holds, it is fairly diversified, and the discount to the asset value is so large that all of the assets would have to be significantly impaired in order for us to feel our investment had lost value. Additionally, the stock struggled throughout 2017, and we believe investors may have been taking tax losses in the fourth quarter on the few shares that declined in value. Noranda Income Fund is a Canadian zinc smelter. The company has been struggling with multiple woes of late, although we received good news with regards to one trouble area. Over half of the workforce had been on strike, but the company came to an agreement to get them working again. The company has not been making money in the current environment, so the recent strike has not been as detrimental as one would think. Despite this good news that the union was going back to work, we believe the overall negative sentiment surrounding the company is what led to the 7% decline in the period. Noranda is a small, illiquid company. Furthermore, it has a complicated capital structure whereby the resource behemoth Glencore (ticker: GLEN LN) owns 25% of the trust via different share classes. We think this, coupled with being in an out-of- favor zinc industry with the labor dispute, causes this security to be overlooked. This company may also have been plagued by tax loss selling. The Berentzen-Gruppe is a small German beverage company with a long history. They have been producing grain schnapps since 1758, but today only a little over half of their earnings are derived from alcohol. They also sell non-alcoholic beverages like waters and teas, as well as fresh juice systems to cafes, restaurants and hotels. We like the current valuation of this business, as well as the recurring revenue model that we believe provides stability, and makes it relatively easy to value. As we look forward, cash remains high in the portfolio. However, there are some attractive investment candidates out there waiting for us. We will continue to be patient, ensuring that our research is solid before committing capital. With valuations high around the globe, we think patience is even more important. We believe our strategy is one that can withstand an adverse environment. We strive to have attractive risk-adjusted returns over an extended period of time, and we look forward to being tested in all market environments. Thank you for entrusting us with your capital.

16 4Q 2017

SELECT PORTFOLIO – COMMENTARY BY JAYME WIGGINS, CFA, CIO, PORTFOLIO MANAGER The Intrepid Select Portfolio (the “Portfolio”) appreciated 5.51%, net-of-fees, in the fourth quarter and 15.64%, net-of- fees, for 2017. The Russell 2000, Morningstar Small Cap Total Return, and S&P MidCap 400 indexes returned 3.34%, 4.78%, and 6.25%, respectively, for the fourth quarter. For the full calendar year, the Russell 2000, Morningstar Small Cap, and S&P MidCap 400 were up 14.65%, 15.03%, and 16.24%, respectively. The Portfolio’s performance was similar to benchmarks despite holding an average of around 12.5% of Portfolio assets in cash over the course of the year. Our holdings increased in price more than benchmarks. At the end of the year, 11.4% of the Portfolio was held in cash equivalents. The Select Portfolio experienced inflows near the end of December, which raised the level of cash. The Portfolio purchased three new securities in the fourth quarter: Discovery Communications (ticker: DISCK), Net 1 UEPS Technologies (ticker: UEPS), and Retail Food Group (ticker: RFG AU). Discovery Communications is one of the world’s largest providers of television programming. The TV industry is facing considerable pressure in the U.S. as viewers shift to over-the-top (OTT) options. Traditional cable networks are experiencing decreases in subscribers due to cord-cutting and cord-shaving, which has been offset to date by increases in pricing. This can’t continue indefinitely. Television advertising could soon be under siege as marketers direct more funds to digital platforms supplied by Google and Facebook. Discovery’s management is not complacent about the threats to their business. The company is in the process of acquiring Scripps Networks Interactive, the owner of HGTV and Food Network. The union with Scripps will give the combined firm a 20% share of U.S. cable TV viewership and should make Discovery’s networks more likely to be included in new OTT skinny bundles, which would help mitigate the impact of cord-shaving. Discovery and Scripps own nearly all their own content, in contrast to many other major media companies. This better positions Discovery to go direct to the consumer if legacy cable bundles fracture beyond repair. Discovery has already made inroads into developing more direct “digital” relationships with viewers. The company’s TV Everywhere apps are helping mitigate advertising pressures, Discovery and Scripps own popular online content targeting millennials, and the company currently offers multiple streaming services in Europe, including what they believe is a nascent “Sports Netflix.” Additionally, networks like Discovery Channel and HGTV mainly feature unscripted programming, which competes for eyeballs less directly with services like Netflix that specialize in big-budget scripted fare. Discovery is present in over 220 countries and derives 47% of revenue from international regions. The company’s content travels well and the exposure to less mature overseas markets helps hedge the business model against the rapidly changing U.S. Pay TV landscape. Discovery’s stock dropped 40% after announcing the Scripps acquisition in July and disclosing greater-than-expected declines in U.S. subscribers. The Select Portfolio owned Scripps when the takeover announcement was made. The Scripps purchase will stretch Discovery’s balance sheet to Net Debt/EBITDA of 4.6x, but management intends to quickly deleverage. Insiders such as billionaire John Malone have been loading up on shares for the first time in Discovery’s history as a public company. Discovery was trading for less than 7x expected free cash flow when we purchased the name in November, and the stock rebounded as the year closed out. We’ve gandered at Net 1 UEPS once or twice before, since it has historically traded at a low EBIT multiple. However, our looks were always superficial, and we were scared off by the firm’s outsized exposure to the South African government. Like Transformers, with UEPS there’s more than meets the eye. While UEPS derives significant cash flow from distributing welfare payments in South Africa and has been informed it is losing this contract, management is adamant that the company’s payment technology and infrastructure will have enduring value for other applications in the country and elsewhere. More importantly, UEPS has an interesting portfolio of other assets, including KSNET, one of the largest card payment processors in South Korea. The value of KSNET and UEPS’s investment portfolio could exceed the company’s market capitalization, even assuming the firm’s South African assets are worthless.

17 While UEPS derives significant cash flow from distributing welfare payments in South Africa and has been informed it is losing this contract, management is adamant that the company’s payment technology and infrastructure will have enduring value for other applications in the country and elsewhere. More 4Q4Q 20172017 importantly, UEPS has an interesting portfolio of other assets, including KSNET, one of the largest card payment processors in South Korea. The value of KSNET and UEPS’s investment portfolio could exceed the company’sRetailRetail FoodFood market GroupGroup capitalization, (RFG)(RFG) isis anevenan Australian Australianassuming the franchisorfranchisor firm’s South ofof African quickquick serviceassetsservice are restaurants. restaurants.worthless. TheThe heavily-shortedheavily-shorted sharesshares plungedplunged

Retail Food63% 63%Group from from (RFG) December December is an Australian 8th 8th to to franchisorDecember December of 20th 20thquick after afterservice a a series restaurants.series of of newspaper newspaper The heavily articles articles-shorted trashed trashed the the company company and and its its treatment treatment of of shares plungedfranchisees.franchisees. 63% from December ThreeThree differentdifferent 8th to December membersmembers 20 th ofof after Intrepid’sIntrepid’s a series investmentofinvestment newspaper team teamarticles havehave trashed previouslypreviously the independentlyindependently researchedresearched RFG,RFG, butbut company and its treatment of franchisees. Three different members of Intrepid’s investment team have previously independentlythethe price price never never researched met met our our RFG, margin margin but theof of safety. pricesafety. never met our margin of safety. Franchise Franchise businesses businesses are are usually usually good good businesses. businesses. TheyThey oftenoften generategenerate copiouscopious freefree cashcash flowflow andand areare frequently frequently awarded awarded high high multiples multiples by by investors investors forfor the the stability stability inherent inherent in in the the franchise franchise model. model. In In thethe U.S., U.S., Dunkin’ Dunkin’ Brands Brands trades trades for for 18x 18x EBIT. EBIT. RFG RFG waswas selling selling below below 6x 6x estimated estimated forward forward EBIT EBIT when when wewe boughtbought it.it. RFG’sRFG’s franchisesfranchises sellsell donuts,donuts, otherother bakedbaked goods,goods, coffee,coffee, andand pizza.pizza. TheThe firmfirm alsoalso ownsowns wholesale wholesale operations operations for for coffee, coffee, cheese, cheese, and and bakerybakery products. products. Some Some of of the the franchise franchise concepts concepts areare struggling,struggling, andand thethe hostilehostile presspress coveragecoverage claimedclaimed thatthat aa disproportionatedisproportionate numbernumber ofof RFGRFG franchiseesfranchisees are are trying trying to to sell sell their their stores stores compared compared Franchise businesses are usually good businesses. They often generate copious free cash flow and are frequently awardedtoto otherother high franchisefranchise multiples concepts.concepts. by investors OurOur for analysis analysisthe stability indicatesindicates inherent that thatin the thethe franchise reportersreporters model. exaggeratedexaggerated In the theirtheir claims.claims. RFGRFG maymay needneed toto taketake U.S., Dunkistepsn’steps Brands toto improvetradesimprove for its18xits relationshiprelationship EBIT. RFG withwaswith selling franchisees,franchisees, below 6x but butestimated wewe don’tdon’t forward seesee EBIT thisthis businesswhenbusiness we disintegratingdisintegrating atat thethe raterate impliedimplied byby thethe bought it. RFG’s franchises sell donuts, other baked goods, coffee, and pizza. The firm also owns wholesale operationsstockstock action. action. for coffee, Donut Donut cheese,King King and andand Gloria Gloriabakery Jeans Jeansproducts. are are strong Somestrong ofbrands brands the franchise in in Australia, Australia, concepts and and are a a meaningful meaningful proportion proportion of of the the company’s company’s struggling, andvaluevalue the is hostileis tiedtied topressto thesethese coverage franchisesfranchises claimed andthatand a RFG’s RFG’sdisproportionate wholesalewholesale number operations.operations. of RFG WefranchiseesWe enteredentered are ourour positionposition nearnear thethe lows,lows, andand thethe stockstock trying to sellhashas their recovered recovered stores compared some some tolost lost other ground ground franchise already. already. concepts. Our analysis indicates that the reporters exaggerated their claims. RFG may need to take steps to improve its relationship with franchisees, but we don’t seeTheThe this Portfolio Portfoliobusiness disintegratingexited exited its its position position at the ratein in Dominion Dominionimplied by Diamond theDiamond stock action.(ticker: (ticker: Donut DDC) DDC) King during during and Q4 Q4Gloria after after the the completion completion of of Dominion’s Dominion’s takeover takeover Jeans are strong brands in Australia, and a meaningful proportion of the company’s value is tied to these franchises andbyby TheRFG’sThe WashingtonWashington wholesale operations. Companies.Companies. We entered WeWe diddid our notnot position completelycompletely near the sellsell lows, outout ofandof any anythe otherstockother has holdings.holdings. Nevertheless,Nevertheless, thethe PortfolioPortfolio ownsowns recovered someseveralseveral lost namesgroundnames already. thatthat areare fullyfully valuedvalued andand areare candidatescandidates forfor disposaldisposal whenwhen wewe findfind aa betterbetter opportunity.opportunity.Unlike Unlike otherother

The Fund exitedproductsproducts its position managed managed in Dominion by by Intrepid Intrepid Diamond Capital, Capital, (ticker: DDC)the the Portfolio Portfolio during Q4 aims aims after theto to be completionbe 90% 90% invested. invested. of It It hasn’t hasn’t been been easy. easy. We We must must Dominion’sweigh weightakeover the the by tradeoffs tradeoffsThe Washington between between Companies. holding holding We fully fully did notvalued valued completely names names sell we weout know knowof any well,well,other increasing increasing weightings weightings in in stocks stocks we we holdings. Nevertheless,thinkthink are are undervalued, theundervalued, Fund owns several or or purchasing purchasing names that are new new fully securities valuedsecurities and are for for candidates which which forwe we disposal haven’t haven’t finished finished ourour research.research. Despite Despite our our when we find a better opportunity. Unlike other products managed by Intrepid Capital, the Fund aims to beself-imposed self-imposed90% invested. cash cash It hasn’t constraint, constraint, been easy.our our goal goal We is ismust to to deliver deliverweigh totheto you, you, tradeoffs our our shareholders, shareholders, between holding a a differentiated differentiated investment investment product. product. fully valued names we know well, increasing weightings in stocks we think are undervalued, or purchasingTheThe new Select Select securities Portfolio’s Portfolio’s for which main main we contributors contributors haven’t finished in in the the our fourth fourth research. quarter quarter Despite were were ourSyntel Syntel self -(ticker: imposed(ticker: SYNT), SYNT), Teradata Teradata (ticker: (ticker: TDC), TDC), and and Retail Retail cash constraint,FoodFood our Group.Group. goal is to Syntel’sSyntel’s deliver sharestoshares you, our ralliedrallied shareholders, afterafter thethe a companydifferentiatedcompany reportedreported investment thirdthird product. quarterquarter earnings.earnings. RevenueRevenue increasedincreased sequentiallysequentially

The Select evenFund’seven with withmain an an contributors ongoing ongoing drag dragin the from from fourth American American quarter wereExpress, Express, Syntel and and(ticker: margins margins SYNT), were were Teradata better better (ticker: than than expected. expected. Excluding Excluding American American Express, Express, TDC), and Syntel’sRetailSyntel’s Food sales sales Group. increased increased Syntel’s 3.1% 3.1%shares year-over-year year-over-yearrallied after the companyand and 3.7% 3.7% reported on on a a sequential thirdsequential quarter basis. basis.earnings. Revenue Revenue defined defined asas “digital”“digital” waswas upup 18%18% Revenue increased sequentially even with an ongoing drag from American Express, and margins were fromfrom Q316. Q316. While While the the third third quarter quarter report report was was a a positive positive surprise surprise and and management management revised revised guidance guidance higher, higher, the the forecast forecast stillstill suggestssuggests aa weakweak Q4.Q4. WeWe don’tdon’t knowknow whetherwhether managementmanagement isis sandbaggingsandbagging oror ifif fourthfourth quarterquarter performanceperformance willwill deteriorate.deteriorate. We We reduced reduced our our holding holding since since the the shares shares no no longer longer offer offer an an attractive attractive discount, discount, in in our our view. view. Teradata’sTeradata’s better-than-expected better-than-expected third third quarter quarter earnings earnings helped helped push push the the shares shares higher. higher. The The company’s company’s recent recent performance performance brokebroke from from a a multiyear multiyear trend trend of of disappointment. disappointment. Recurring Recurring revenue revenue increased increased 8% 8% in in the the quarter quarter and and now now comprises comprises over over halfhalf ofof totaltotal revenue.revenue. Nevertheless,Nevertheless, totaltotal revenuerevenue waswas stillstill downdown 5%5% year-over-year,year-over-year, andand Teradata’sTeradata’s reportedreported profitabilityprofitability leavesleaves muchmuch toto bebe desired.desired. WeWe believebelieve managementmanagement willwill needneed toto showshow continuedcontinued progressprogress towardtoward theirtheir long-termlong-term freefree cashcash flow flow targets targets in in orderorder for for the the stockstock to to continuecontinue performing.performing.

1818 better than expected. Excluding American Express, Syntel’s sales increased 3.1% year-over-year and 3.7% on a sequential basis. Revenue defined as “digital” was up 18% from Q316. While the third quarter report was a positive surprise and management revised guidance higher, the forecast still suggests a weak Q4. We don’t know whether management is sandbagging or if fourth quarter performance will deteriorate. We reduced our holding since the shares no long offer an attractive discount, in our view.

Teradata’s better-than-expected third quarter earnings helped push the shares higher. The company’s recent performance broke from a multiyear trend of disappointment. Recurring revenue increased 8% in the quarter and now comprises over half of total revenue. Nevertheless, total revenue was still down 5% year-over-year, and Teradata’s reported profitability leaves much to be desired. We4Q believe 2017 management will need to show continued progress toward their long-term free cash flow targets in order The mainfor detractorsthe stock tfromo continue Q4 performance performing. were Corus Entertainment (ticker: CJR/B CN), Oaktree Capital (ticker: OAK), and DundeeThe main Corp. detractors(ticker: DC/A from CN). Q4 Canadian performance equities were were Corus less ebullient Entertainment than their (ticker: U.S. counterparts CJR/B CN), in 2017,Oaktree but Corus and Dundee’sCapital share(ticker: prices OAK), underperformed and Dundee Corp.local benchmarks. (ticker: DC/A Corus CN). delivered Canadian improved equities results were less in fiscal ebullient 2017 than compared to the priortheir twoU.S. fiscalcounterparts years, inas 20the17, firm but Corussucceeded and Dundee’sin stabilizing share advertising prices underperformed revenue. Nevertheless, local benchmarks. the company’s ad results Coruswere slightlydelivered below improved expectations, results and in fiscalmanagement 2017 compared has cautioned to the that prior the two outlook fiscal for years, television as the advertising firm in Canadasucceeded remains soft. in stabilizing Corus is advertisingholding its ownrevenue. in a tough Nevertheless, environment the andcompany’s trades at ad a resu10%lts dividend were slightly yield, belowbut even this expectations, and management has cautioned that the outlook for television advertising in Canada low valuationremains cannot soft. withstandCorus is holdinga resumption its own of topin a line tough declines. environment Corus and and other trades TV at network a 10% dividendowners must yield, work but quickly to implementeven this technology low valuation to deliver cannot targeted withstand advertising a resumption and more of flexibletop line viewingdeclines. options Corus to and defend other against TV network the onslaught from over-the-topowners must services. work quickly We’re watchingto implement closely. technology to deliver targeted advertising and more flexible viewing options to defend against the onslaught from over-the-top services. We’re watching closely. January 10, 2018 update: Corus just reported a 4% decline in television advertising revenues for its fiscal first quarter despiteJanuary easy comparisons 10, 2018 update from: theCorus prior just year. reported These a 4%results decline were in significantlytelevision advertising worse thanrevenues management for its fiscal telegraphedfirst quarter shortly before despitethe fiscal easy comparisonsquarter ended, from thewhich prior further year. reduces These results their were credibility. significantly While worse the than shares management trade for telegraphed a low multiple shortly of cash flow, beforewe have the lostfiscal confidencequarter ended, in which the revenuefurther reduces stabilization their credibility. story. While We believe the shares management trade for a low and multiple the board of cash overemphasize flow, dividendswe haveat the lost expense confidence of in debt the revenuereduction. stabilization We sold story our. position We believe at managementa loss. and the board overemphasize dividends at the expense of debt reduction. We sold our position at a loss. Dundee achieved two important milestones in the third quarter, including closing the sale of United Hydrocarbon (UHIC) to DelonexDundee Energy achievedand opening two the important Parq Vancouver milestones casino in andthe resort.third quarter, The UHIC including deal eliminates closing thea $12 sale million of United annual cash Hydrocarbon (UHIC) to Delonex Energy and opening the Parq Vancouver casino and resort. The UHIC drag to Dundee and offers the potential for a future royalty tied to Delonex’s Chadian oil production several years from deal eliminates a $12 million annual cash drag to Dundee and offers the potential for a future royalty tied now. Parqto Delonex’s Vancouver Chadian is Dundee’s oil mainproduction opportunity several for yearsnear-term from cash now. flows, Parq although Vancouver this is is dependent Dundee’s onmain refinancing the project’sopportunity prohibitively for near expensive-term cash construction flows, although debt. this We is believedependent Dundee on refinancing should capitalize the project’s on the prohibitively strong market for Vancouverexpensive hotel transactionsconstruction and debt. sell We the believe two hotels Dundee attached should to capitalize Parq Vancouver, on the strong with proceedsmarket for applied Vancouver to reducing borrowings.hotel transactions and sell the two hotels attached to Parq Vancouver, with proceeds applied to reducing borrowings. Just when Dundee’s situation seemed to be incrementally brightening, the company reported in November that it suspended activitiesJust at whenBlue Goose’s Dundee’s Tender situation Choice seemed chicken toprocessing be incrementally facility to brightening,address repairs the required company by thereported Canadian in Food InspectionNovember Agency. that Weeks it suspended later, the facility activities burned at down.Blue Goose’s While destructive Tender Choice fires arechicken unpredictable processing (usually, facility and to hopefully address repairs required by the Canadian Food Inspection Agency. Weeks later, the facility burned down. in this case),While Dundee’sdestructive original fires arerationale unpredictable for purchasing (usually, Tender and Choicehopefully wasn’t in this strong. case), Management Dundee’s original claimed rationale Tender Choice would helpfor purchasing Blue Goose Tender expand Choiceits organic wasn’t brand strong. into conventional Management chicken claimed and Tend theyer also Choice suggested would vertical help Blue integration synergies,Goose but expandthe main its purpose organic wasbrand to intoacquire conventional EBITDA to chickendilute losses and theyat the also Blue suggested Goose subsidiary. vertical integration This is another disappointingsynergies, example but the of capitalmain purpose allocation was by Dundee’sto acquire leadership. EBITDA Withto dilute that lossessaid, Dundee’s at the Blue stock Goose already subsidiary. reflects nothing favorable,This as is it’s another trading disappoint at less thaning 25% example of tangible of capital book allocation value. If managementby Dundee’s canleadership. begin extracting With that cash said, flow from Dundee’s stock already reflects nothing favorable, as it’s trading at less than 25% of tangible book value. Parq VancouverIf management in 2018, can Dundee begin couldextracting partially cash stem flow its from ongoing Parq bleed Vancouver in book invalue. 2018 ,Dundee Dundee is couldone of partially the Portfolio’s smalleststem positions. its ongoing bleed in book value. Dundee is one of the Fund’s smallest positions.

A Tale of Two Cities Parq Resort (Vancouver, BC) Tender Choice Foods (Burlington, Ontario)

Oaktree Capital’s shares fell during Q4. Core operating results were reasonably stable when the company reported in November. Incentive income was below last year’s level, although this category is lumpy. Oaktree has a significant amount of undeployed capital as it awaits better opportunities for distressed debt. High yield spreads remain tight and yields on C-rated debt are roughly half the level from their early 2016 peak. We like Oaktree’s countercyclical features and expect them to remain intelligent 19 allocators of investor capital.

Thank you for your investment.

Sincerely,

Jayme Wiggins, CFA Chief Investment Officer Intrepid Select Fund Portfolio Manager

Top 10 Holdings ICMTX as of 12/31/17 and disclosure.

Mutual fund investing involves risk. Principal loss is possible. The Fund is subject to special risks including volatility due to investments in smaller and medium companies, which involve additional risks such as limited liquidity and greater volatility. The Fund is considered non- diversified as a result of limiting its holdings to a relatively small number of positions and may be more exposed to individual stock volatility than a diversified fund. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. There can be no assurance that a newly organized Fund will grow to or maintain an economically viable size.

The Morningstar Small Cap Index tracks the performance of U.S. small-cap stocks that fall between 90th and 97th percentile in market capitalization of the investable universe. The Russell 2000 Index consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000 Index, as ranked by market capitalization. The S&P MidCap 400 Index seeks to track the performance of mid-cap U.S. equities, representing more than 7% of available U.S. market cap. You cannot invest directly in an index.

Yield is the income return on an investment. It refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value. Free Cash Flow measures the cash generating capability of a company by subtracting capital expenditures from cash flow from operations. Active Share measures the amount of overlap between a fund’s holdings and those of its benchmark. Loss Adjustment Expenses (LAE) are the expenses associated with investigating and settling insurance claims.

Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice or recommendations to buy or sell any security.

The Intrepid Capital Funds are distributed by Quasar Distributors, LLC.

4Q 2017

Oaktree Capital’s shares fell during Q4. Core operating results were reasonably stable when the company reported in November. Incentive income was below last year’s level, although this category is lumpy. Oaktree has a significant amount of undeployed capital as it awaits better opportunities for distressed debt. High yield spreads remain tight and yields on C-rated debt are roughly half the level from their early 2016 peak. We like Oaktree’s countercyclical features and expect them to remain intelligent allocators of investor capital. Thank you for your investment.

20 4Q 2017 Risk Adjusted Returns Trailing 15 Year risk/return December 31, 2002 to December 31, 2017 15%

12% 60% S&P 500 Nasdaq BofA ML 40% BofA ML HY Index HY Index Russell 9% S&P 500 2000 Intrepid Total Return Intrepid Income Intrepid Disciplined Balanced Small Cap 6% Value

Annualized Returns (net of fees) of (net Returns Annualized 3%

0% 4% 8% 12% 16% 20%

Annualized Standard Deviation of Monthly Returns • Past performance is no guarantee of future results. Intrepid composite returns are presented net of investment advisory fees and all returns are presented annualized for the 15-year period ending December 31, 2017. Returns reflect the reinvestment of dividends and other earnings. The volatility of the listed benchmarks may differ materially from the volatility of any Intrepid composite. As of December 31, 2004, the firm changed its fixed income benchmark from the Salomon High Yield Short-Term Index to the Merrill Lynch High Yield Master II Index which, in 2016, had a name change to the BofA Merrill Lynch High Yield Index.

Introduction Firm Overview Macro View Equity Holding Bond Holding Conclusion Page ‹#› Annualized Performance Trailing 15 Year risk/return December 31, 2002 to December 31, 2017 15%

12% 11.17% 9.62% 9.92% 8.61% 8.89% 9% 8.38% 8.04% 6.12% 6%

3%

0% Balanced v. 60% S&P 500 40% Disciplined Value v. S&P 500 Small Cap v. Russell 2000 Income v. BofA ML HY Index BofA ML HY Index Total Return

• Past performance is no guarantee of future results. Intrepid composite returns are presented net of investment advisory fees and all returns are presented annualized for the 15-year period ending December 31, 2017. Returns reflect the reinvestment of dividends and other earnings. The volatility of the listed benchmarks may differ materially from the volatility of any Intrepid composite. As of December 31, 2004, the firm changed its fixed income benchmark from the Salomon High Yield Short-Term Index to the Merrill Lynch High Yield Master II Index which, in 2016, had a name change to the BofA Merrill Lynch High Yield Index.

Introduction Firm Overview Macro View Equity Holding Bond Holding Conclusion Page ‹#›

21