<PAGE>
SEMIANNUAL REPORT MARCH 31, 2000
Prudential
Small Company Value Fund, Inc.
Fund Type Stock
Objective Capital growth
(GRAPHIC)
This report is not authorized for
distribution to prospective investors unless
preceded or accompanied by a current prospectus.
(LOGO)
<PAGE>
Investment Goals and Style
Prudential Small Company Value Fund invests in
stocks of small companies mostly located in the
United States. We consider companies to be small if
their total market value is less than the largest
total market value of any company in Standard &
Poor's SmallCap 600 Index. The gap between the
return on small companies and that on large
companies can be substantial in either direction in
any year. That is why investors are often advised
to own both for diversification.
We focus on stocks that we believe have above-
average prospects for earnings growth, but that
also can be purchased at below-average multiples of
their earnings or at discounts to their intrinsic
values. This approach is often referred to as GARP,
or "growth at a reasonable price." There can be no
assurance that the Fund will achieve its investment
objective.
Portfolio Composition
Expressed as a percentage of net assets as of
3/31/00
27.9% Consumer Growth
20.2 Industrial
19.4 Finance
16.7 Consumer Cyclicals
6.8 Energy
3.2 Technology
1.7 Utilities
4.1 Cash & Equivalents
Ten Largest Holdings
Expressed as a percentage of
net assets as of 3/31/00
3.3% Financial Security Assurance
Holdings, Ltd.
Insurance
2.1 SUPERVALU, Inc.
Food Distribution
2.0 Universal Health Services, Inc.
Hospital Management
1.8 Reinsurance Group of America, Inc.
Insurance
1.8 Stein Mart, Inc.
Retail
1.8 Arch Chemicals Inc.
Chemicals
1.7 Astoria Financial Corp.
Savings & Loan
1.7 Pioneer-Standard Electronics, Inc.
Electronics
1.7 Everest Re Group, Ltd.
Insurance
1.6 Amerus Life Holdings, Inc.
Insurance
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 3/31/00
Six One Five Ten Since
Months Year Years Years Inception2
Class A 5.90% 9.47% 69.25% 221.82% 227.59%
Class B 5.49 8.67 63.22 197.75 664.85
Class C 5.49 8.67 63.22 N/A 76.17
Class Z 6.06 9.77 N/A N/A 43.85
Lipper Small-Cap
Value Fund Avg.3 12.77 24.01 98.03 236.98 ***
Russell 2000
Value Index4 5.41 13.26 85.57 242.90 ****
Average Annual Total Returns1 As of 3/31/00
One Five Ten Since
Year Years Years Inception2
Class A 4.00% 9.96% 11.82% 11.79%
Class B 3.67 10.16 11.53 11.07
Class C 6.58 10.07 N/A 10.32
Class Z 9.77 N/A N/A 9.32
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Fund charges a
maximum front-end sales charge of 5% for Class A
shares. Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2 Inception dates: Class A, 1/22/90; Class B,
11/13/80; Class C, 8/1/94; and Class Z, 3/1/96.
3 Lipper average returns are for all funds in each
share class for the six-month, one-, five-, and
ten-year periods in the Small-Cap Value Fund
category. The Lipper average is unmanaged. Small-
Cap Value funds, by portfolio practice, invest at
least 75% of their equity assets in companies with
market capitalizations (on a three-year weighted
basis) of less than 250% of the dollar-weighted
median market capitalization of the S&P(R) SmallCap
600 Index. Small-Cap Value funds seek long-term
growth of capital by investing in companies that
are considered undervalued relative to a major
unmanaged stock index based on price-to-current
earnings, book value, asset value, or other
factors. These funds will normally have a below-
average price-to-earnings ratio, price-to-book
ratio, and three-year earnings growth figure.
4 The Russell 2000 Value Index is an unmanaged
weighted index that comprises securities in the
Russell 2000 Index with a less-than-average growth
orientation. Investors cannot invest directly in an
index.
S&P(R) is a registered trademark of the Standard &
Poor's Corporation.
****Lipper Since Inception returns are 255.18% for
Class A, 793.22% for Class B, 105.82% for Class C,
and 61.72% for Class Z, based on all funds in each
share class.
****The Russell 2000 Value Index Since Inception
returns are 312.60% for Class A, 992.88% for Class
B, 139.28% for Class C, and 75.11% for Class Z.
1
<PAGE>
Prudential Small Company Value Fund, Inc.
Message From the Fund's President May 16, 2000
Dear Shareholder,
For the six months ended March 31, 2000, Class A
shares of Prudential Small Company Value Fund
returned 5.90%, 0.60% to those paying the one-time
Class A share maximum sales charge. Although this
return exceeded the 5.41% Russell 2000 Value Index,
it trailed the 12.77% Lipper Small-Cap Value Fund
Average.
Effective May 30, 2000, the Fund will be renamed
Prudential Small Company Fund, without the modifier
Value, representing a substantial change in how it
is invested. Its strategy will be a blend style: It
will favor stocks that have above-average growth
potential, but that also are selling at either
below-average multiples of their earnings or at
discounts to their intrinsic value. The Fund will
focus more on attractive relative values across a
broad slice of the market, and not exclusively on
low absolute values. In recent years, the Fund's
deep value orientation has resulted in sharp swings
in performance and--in a long period of growth-style
dominance--underperformance. We expect these changes
to bring the Fund's return more in line with those
of its peers.
The Fund has been managed in a strict value style;
it owns little in the sectors that dominated market
performance over this reporting period. Moreover,
swings in market favor produced large differentials
in the Fund's return. For example, in February when
technology led returns, the Fund's Class A shares
declined 1.49%. In March when the market turned
toward value, they rose 11.96%, more than twice the
Lipper Average, and moved ahead for the first
quarter of 2000. As such market swings show, the
tendency of different investing styles to move
counter to one another can work in favor of either
value or growth stocks. A portfolio including some
stocks that would be favored by each style is
likely to be less volatile than one strongly style-
focused.
Sincerely,
John R. Strangfeld, President
Prudential Small Company Value Fund, Inc.
2
<PAGE>
www.prudential.com (800) 225-1852
Investment Adviser's Report
Dear Shareholder,
Averaged over the entire six-month reporting period
ended March 31, 2000, our return was slightly above
the Russell 2000 Value Index, but well below the
Lipper Average of Small-Cap Value funds. The
relative underperformance was due almost entirely
to our low technology weighting, and came in the
first half of the reporting period. Our return also
was hurt by our broadcasting companies,
particularly Young Broadcasting and (to a smaller
extent) Granite Broadcasting. Both companies were
hurt by a shifting of network affiliations in the
San Francisco television market. Among our largest
holdings, SUPERVALU shares lost ground (see
Comments on Largest Holdings).
Looking hard at technology stocks
For much of 1999 and in February 2000, investors
focused almost exclusively on technology stocks,
bidding up the prices with little attention to
other sectors and with no apparent regard for how
much they had to pay for these companies. Many
assumed that companies with new technological
services and products would be able to price them
at very profitable levels, and that earnings would
grow rapidly as new services penetrated global
markets. In this environment, it was very difficult
to find technology firms that were value-priced by
the Fund's former strict criteria, yet didn't have
problems that warranted a low price.
How did some of our value competitors find
technology stocks? It's hard to compare the
holdings of different funds because there is no
public listing of concurrent holdings. When we look
at the most recent publicly available data,
gathered by Morningstar, we estimate that our
technology weighting and average price/earnings
ratio were both well below the average for small-
company value funds. Given the very high valuations
(e.g., price/earnings ratios) on technology stocks,
we suspect that some managers used a looser
definition of what counted as a value stock.
(Because the S&P/Barra style indexes divide the
market in half by market capitalization, a
borderline stock can be reclassified from growth to
value when other firms increase substantially in
market capitalization.) Under the Fund's new
investment
3
<PAGE>
Prudential Small Company Value Fund, Inc.
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings As of 3/31/00
3.3% Financial Security Assurance Holdings,
Ltd./Insurance
Insures the payments on municipal bonds and asset-
backed securities. A well-managed company in a
stable business, FSA's net income grew 21% in 1999.
Book value (a good valuation measure for insurance
companies) rose every year since 1994, aggregating
72% growth. In March, Dexia, Europe's largest
municipal lender, agreed to buy FSA for $76 a
share.
2.1% SUPERVALU, Inc./Food Distribution
Food retailer and distributor. We took shares in
SUPERVALU for our Richfood Holdings stock upon its
acquisition last August. SUPERVALU's earnings were
up 16.8% to record levels for the fiscal year 2000.
Although its shares declined through much of our
reporting period together with the rest of the
supermarket group, they had almost made up all the
lost ground by the end of April.
2.0% Universal Health Services, Inc./Hospital
Management
The No. 3 for-profit hospital operator in the
United States. It is a focused company with 18%
earnings growth in 1998. The stock has begun to
recover from its lows, returning 89% over our
reporting period.
1.8% Reinsurance Group of America, Inc./Insurance
The stock became very inexpensive because
Reinsurance Group's parent company, which owns the
majority of its shares, went bankrupt. However, it
was bought by MetLife, which is in an excellent
position to provide the additional capital it
needed to compete.
1.8% Stein Mart, Inc./Retail
An off-price apparel company operating mostly in
the southeastern United States, with 15% sales
growth in 1999. It had good first-quarter 2000
sales. Although the stock rose 16% in our reporting
period, it still was a good value at 12.6 times
estimated 2000 earnings (on March 31).
4
<PAGE>
www.prudential.com (800) 225-1852
Investment Adviser's Report
strategy, such companies may be attractive because
their growth potential can warrant paying a higher
multiple of earnings.
We were not happy with the additional volatility
introduced to our returns by our substantial
underrepresentation of technology compared with the
overall small-cap market. The recent market
correction in technology brought the prices of many
more firms down to attractive levels. Among our
recent purchases (and positive contributors to this
period's return) were ESCO Electronics (filtration,
communication, and materials handling systems--16.7
times forward earnings); Deltek Systems (enterprise
software), and Harris (telecommunications
equipment, such as microwave products). (We
completed taking our profits on Harris in April.)
The Fund's change in investment strategy will
produce a portfolio that is more balanced across
economic sectors.
What we owned
At March 31, we had significant overweights
compared to our peers (as best we can determine) in
energy, healthcare, retail, industrials, and
financials. After technology, energy was the best-
performing market sector over our reporting period,
and we benefited from our focus there. Louis
Dreyfus Natural Gas and Vintage Petroleum were the
largest contributors, up about 50% or more over the
half-year. At period end, about 6.8% of our net
assets were in energy stocks, with an average gain
of 25%. The prospect of global energy shortages and
rising commodity prices is boosting stock prices in
the sector.
Our healthcare stocks--notably hospital managers
such as Universal Health Services, Health
Management Associates, and Triad Hospitals--were
among the largest contributors to our return, with
shares rising as much as 89% in a rebound from
earlier weakness.
5
<PAGE>
Prudential Small Company Value Fund, Inc.
Investment Adviser's Report
We also had a focus on selected retailers: clothing
stores in the cyclical sector and food retailers
and distributors among consumer growth stocks.
Shares of two off-price clothing stores--Ross Stores
and Stein Mart--rebounded when holiday sales proved
better than expected. Pier 1 Imports returned to
its value pricing strategy after a change in
management; sales, earnings, and the stock price
are all up. Stage Stores, which managed a change of
strategy poorly, and the food chain SUPERVALU were
among our poorest performers.
Another consumer cyclical company, Cameron Ashley,
returned 92% in the half-year. It is a supplier of
building materials that is the subject of a bidding
war between its management, who wishes to take the
firm private in a leveraged buyout, and an outside
bidder. Bidding hadn't stopped at period end.
Our industrials performed moderately well, on
average. Shorewood Packaging made a substantial
contribution to our return when it was bought by
International Paper in a deal worth about $850
million. We had a focus on specialty chemicals
companies, which benefited from the rapid pace of
economic growth. Over this reporting period, we
eliminated some weaker holdings--Ethyl and M. A.
Hanna--and added the stronger FMC. Robbins & Myers,
a firm that supplies fluid handling equipment to
the specialty chemicals industry and pumps to oil
fields, also was among our better industrial
performers. Both of these business segments are
benefiting from strong global growth.
Our largest holding for a long time has been a
financial guarantee company: Financial Security
Assurance Holdings (see Comments on Largest
Holdings). It received a takeover offer at a
significant market premium and returned 43% over
the half-year. We had a smaller position in Everest
Re Group, which also appreciated dramatically.
Amerus Life Holdings was among our poorest
performers; it is completing a demutualization
(from a semiprivate status) that will increase the
supply of shares on the market and also faces
rising interest rates. Nonetheless, we expect the
quality of the company to raise demand for its
shares to the new level of supply.
6
<PAGE>
www.prudential.com (800) 225-1852
Looking Ahead
In March and April, stocks on the NASDAQ market
were as turbulent as at any time in their history.
We believe this extraordinary volatility signals a
heightened attention to investment value. Among
technology stocks, the more speculative issues have
lost their luster, while stocks of companies with
solid earnings growth are still attracting
investors. While we have been searching for sound
technology companies whose stocks have become less
expensive because of short-term issues, the move to
better value has focused renewed attention on our
nontechnology stocks. Over these two months, our
Class A shares have been among the top 10 in
Lipper's SmallCap Value Fund category (350 funds on
March 31). When investors look for strong earnings
at a low price, our value holdings are very
attractive.
Consequently, many of the portfolio's largest
holdings will remain under the new investment
style. However, we are selling many of the smaller
positions and trimming the exposure to certain
sectors that had been overrepresented in order to
add sectors that had been underrepresented, notably
technology. The sector profile will move much
closer to that of the overall market, while growth
potential will become a more prominent
characteristic.
Prudential Small Company Value Fund Management Team
7
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial
Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 95.9%
Common Stocks 95.5%
-------------------------------------------------------------------------------------
Aerospace/Defense 0.6%
443,600 Doncasters PLC (ADR) (United Kingdom)(a) $ 3,853,775
-------------------------------------------------------------------------------------
Apparel 2.2%
278,700 Kellwood Co. 4,894,669
221,700 Nautica Enterprises, Inc.(a) 2,604,975
762,500 Phillips-Van Heusen Corp. 5,861,719
--------------
13,361,363
-------------------------------------------------------------------------------------
Auto/Equipment Rental 0.4%
164,200 Rent-A-Center, Inc.(a) 2,463,000
-------------------------------------------------------------------------------------
Automotive 2.4%
113,800 Borg-Warner Automotive, Inc. 4,480,875
255,300 Dura Automotive Systems, Inc.(a) 4,387,969
147,900 Midas, Inc. 3,549,600
234,000 Simpson Industries, Inc. 2,296,125
--------------
14,714,569
-------------------------------------------------------------------------------------
Building & Construction 2.2%
361,300 Crossmann Communities, Inc.(a) 5,724,347
62,600 Nortek Inc.(a) 1,385,025
120,100 NVR, Inc.(a) 6,485,400
--------------
13,594,772
-------------------------------------------------------------------------------------
Building & Products 1.5%
365,100 Cameron Ashley Building Products, Inc.(a) 6,297,975
246,200 Hussmann International, Inc. 3,123,662
--------------
9,421,637
-------------------------------------------------------------------------------------
Chemicals 2.1%
292,100 Agrium, Inc. (Canada) 2,355,056
541,800 Arch Chemicals Inc. 10,836,000
--------------
13,191,056
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Commercial Services 0.9%
273,800 G & K Services, Inc., Class A $ 5,351,934
-------------------------------------------------------------------------------------
Computer Software & Services 0.4%
163,600 Deltek Systems, Inc.(a) 2,505,125
-------------------------------------------------------------------------------------
Containers & Packaging 0.6%
278,300 American National Can Group, Inc. 3,652,687
-------------------------------------------------------------------------------------
Dental Supplies 0.8%
163,900 DENTSPLY International Inc. 4,650,663
-------------------------------------------------------------------------------------
Diversified Manufacturing 1.2%
149,800 ESCO Electronics Corp.(a) 2,509,150
82,600 FMC Corp.(a) 4,666,900
--------------
7,176,050
-------------------------------------------------------------------------------------
Electrical Utilities 1.7%
116,300 Bangor Hydro-Electric Co. 2,013,444
552,500 El Paso Electric Co.(a) 5,732,187
207,804 Sierra Pacific Resources 2,597,550
--------------
10,343,181
-------------------------------------------------------------------------------------
Electrical Equipment 1.5%
339,500 Belden, Inc. 9,336,250
-------------------------------------------------------------------------------------
Electronics 1.7%
673,700 Pioneer-Standard Electronics, Inc. 10,610,775
-------------------------------------------------------------------------------------
Entertainment 1.5%
640,600 Aztar Corp.(a) 6,085,700
163,200 Harrah's Entertainment, Inc.(a) 3,029,400
--------------
9,115,100
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Financial Services 2.7%
149,300 Deluxe Corp. $ 3,956,450
109,500 Federated Investors, Inc., Class B 2,990,719
272,200 Heller Financial, Inc., Class A 6,294,625
81,600 Waddell & Reed Financial, Inc., Class B 3,182,400
--------------
16,424,194
-------------------------------------------------------------------------------------
Food Distribution 2.5%
187,300 Fleming Cos., Inc. 2,821,206
669,333 SUPERVALU, Inc. 12,675,494
--------------
15,496,700
-------------------------------------------------------------------------------------
Foods 2.9%
211,900 Aurora Foods Inc.(a) 635,700
292,000 Del Monte Foods Co.(a) 3,120,750
575,400 International Home Foods Inc.(a) 9,206,400
126,900 Suiza Foods Corp.(a) 5,107,725
--------------
18,070,575
-------------------------------------------------------------------------------------
Furniture 1.7%
354,800 Furniture Brands International, Inc.(a) 6,674,675
204,900 Stanley Furniture Company, Inc.(a) 3,969,937
--------------
10,644,612
-------------------------------------------------------------------------------------
Health Services 1.1%
835,500 Foundation Health Systems, Inc.(a) 6,684,000
-------------------------------------------------------------------------------------
Hospital Management 5.2%
265,400 Health Management Associates, Inc., Class A(a) 3,781,950
857,000 Quorum Health Group, Inc.(a) 8,623,562
438,500 Triad Hospitals, Inc.(a) 7,344,875
250,000 Universal Health Services, Inc., Class B(a) 12,250,000
--------------
32,000,387
-------------------------------------------------------------------------------------
Hotel/Motel 1.5%
1,005,100 Lodgian, Inc.(a) 3,769,125
744,200 Prime Hospitality Corp.(a) 5,395,450
--------------
9,164,575
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Insurance 13.8%
552,027 Amerus Life Holdings, Inc. $ 10,005,489
653,600 CNA Surety Corp. 9,109,550
551,400 Enhance Financial Services Group, Inc. 7,788,525
315,200 Everest Re Group, Ltd. 10,283,400
279,400 Financial Security Assurance Holdings, Ltd. 20,518,438
207,200 Harleysville Group, Inc. 3,004,400
264,400 Horace Mann Educators Corp. 4,874,875
206,500 Liberty Financial Co., Inc. 4,091,281
478,252 Reinsurance Group of America, Inc. 11,388,376
132,600 StanCorp Financial Group, Inc. 3,629,925
--------------
84,694,259
-------------------------------------------------------------------------------------
Machinery 2.6%
228,800 Applied Power Inc., Class A 6,520,800
418,600 Denison International PLC (ADR) (United Kingdom) (a) 5,441,800
228,700 Gardner Denver Inc.(a) 4,302,419
--------------
16,265,019
-------------------------------------------------------------------------------------
Media 2.6%
393,000 A. H. Belo Corp., Class A 7,024,875
209,390 Granite Broadcasting Corp.(a) 1,491,904
396,500 Sinclair Broadcast Group, Inc., Class A(a) 3,543,719
191,000 Young Broadcasting, Inc., Class A(a) 3,629,000
--------------
15,689,498
-------------------------------------------------------------------------------------
Miscellaneous Industrial 7.0%
245,850 Clarcor, Inc. 4,363,838
816,400 Coinmach Laundry Corp.(a) 8,112,975
164,800 Graco, Inc. 4,779,200
617,100 Griffon Corp.(a) 4,821,094
232,200 Pentair, Inc. 8,605,912
238,800 Regal Beloit Corp. 4,179,000
341,035 Robbins & Myers, Inc. 8,056,952
--------------
42,918,971
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Office Equipment & Supplies 0.5%
440,100 Ennis Business Forms, Inc. $ 3,190,725
-------------------------------------------------------------------------------------
Oil & Gas Exploration/Production 6.8%
789,400 Bellwether Exploration Co.(a) 5,476,463
134,500 Cabot Oil & Gas Corp., Class A 2,429,406
533,200 Comstock Resources, Inc.(a) 2,932,600
122,200 Devon Energy Corp. 5,934,337
236,900 Louis Dreyfus Natural Gas Corp.(a) 8,054,600
662,485 Santa Fe Snyder Corp.(a) 6,376,418
233,400 St. Mary Land & Exploration Co. 6,972,825
191,400 Vintage Petroleum, Inc.(a) 3,851,925
--------------
42,028,574
-------------------------------------------------------------------------------------
Paper & Packaging 1.0%
459,400 Schweitzer-Mauduit International, Inc. 5,943,488
-------------------------------------------------------------------------------------
Printing & Publishing 2.1%
137,900 ADVO, Inc.(a) 3,447,500
97,700 Central Newspapers, Inc., Class A 3,285,162
378,900 Mail-Well, Inc.(a) 3,291,694
75,600 Pulitzer Inc. 3,090,150
--------------
13,114,506
-------------------------------------------------------------------------------------
Regional Banks 1.9%
225,600 Community First Bankshares, Inc. 3,609,600
522,200 Peoples Heritage Financial Group 7,833,000
--------------
11,442,600
-------------------------------------------------------------------------------------
Restaurants 3.9%
484,500 Buffets, Inc.(a) 4,375,641
371,900 CBRL Group, Inc. 3,719,000
172,500 Ruby Tuesday, Inc. 3,018,750
780,200 Ryan's Family Steak Houses, Inc.(a) 7,460,662
263,489 VICORP Restaurants, Inc.(a) 5,500,333
--------------
24,074,386
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Retail 7.3%
461,800 Bon-Ton Stores, Inc.(a) $ 1,399,831
357,700 Casey's General Stores, Inc. 3,889,988
171,700 Movado Group, Inc. 1,727,731
97,800 Payless ShoeSource, Inc.(a) 5,079,487
736,000 Pier 1 Imports, Inc. 7,544,000
195,100 Regis Corp. 2,889,919
270,500 Ross Stores, Inc. 6,508,906
1,344,900 Stein Mart, Inc.(a) 11,095,425
299,000 The Wet Seal, Inc.(a) 4,709,250
--------------
44,844,537
-------------------------------------------------------------------------------------
Savings & Loan 1.7%
374,100 Astoria Financial Corp. 10,615,087
-------------------------------------------------------------------------------------
Security/Investigation Services 0.8%
494,600 Burns International Services Corp.(a) 5,193,300
-------------------------------------------------------------------------------------
Specialty Chemicals 1.8%
349,700 CK Witco Corp. 3,562,569
63,500 Great Lakes Chemical Corp. 2,159,000
430,600 Lilly Industries, Inc., Class A 5,328,675
--------------
11,050,244
-------------------------------------------------------------------------------------
Technology 0.8%
489,400 X-Rite, Inc. 4,955,175
-------------------------------------------------------------------------------------
Telecommunications Equipment 0.1%
17,000 Harris Corp. 587,563
-------------------------------------------------------------------------------------
Textiles 0.4%
397,500 Dan River Inc., Class A(a) 2,558,906
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Waste Management 1.1%
612,700 Republic Services, Inc., Class A(a) $ 6,701,406
17,500 Waste Connections, Inc.(a) 212,188
--------------
6,913,594
--------------
Total common stocks (cost $573,506,235) 587,907,412
--------------
CONVERTIBLE BOND 0.4%
Principal
Amount
(000)
-----------------------------------------------------------------------------------
2,679 Robbins & Myers, Inc.,
Convertible to 36.7 shares per 1,000 par until
9/1/03, 6.50%, 9/1/03 (Misc. Industrial)
(cost $2,679,000) 2,625,420
--------------
Total long-term investments
(cost $576,185,235) 590,532,832
--------------
SHORT-TERM INVESTMENT 1.4%
Repurchase Agreement
-------------------------------------------------------------------------------------
8,449 Joint Repurchase Agreement Account,
6.15%, 4/3/00
(cost $8,449,000; Note 5) 8,449,000
--------------
Total Investments 97.3%
(cost $584,634,235; Note 4) 598,981,832
Other assets in excess of liabilities 2.7% 16,885,070
--------------
Net Assets 100% $ 615,866,902
--------------
--------------
</TABLE>
------------------------------
ADR--American Depository Receipt.
(a) Non-income producing security.
See Notes to Financial Statements 15
<PAGE>
Prudential Small Company Value Fund, Inc.
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
March 31, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $584,634,235) $ 598,981,832
Cash 41,966
Receivable for investments sold 13,477,877
Receivable for Fund shares sold 7,343,289
Dividends and interest receivable 312,652
Prepaid expenses 13,908
--------------
Total assets 620,171,524
--------------
LIABILITIES
Payable for Fund shares reacquired 2,442,869
Payable for investments purchased 645,437
Management fee payable 345,334
Distribution fee payable 260,014
Accrued expenses 610,968
--------------
Total liabilities 4,304,622
--------------
NET ASSETS $ 615,866,902
--------------
--------------
Net assets were comprised of:
Common stock, at par $ 484,354
Paid-in capital in excess of par 671,059,246
--------------
671,543,600
Net investment loss (539,335)
Accumulated net realized loss on investments (69,484,960)
Net unrealized appreciation on investments 14,347,597
--------------
Net assets, March 31, 2000 $ 615,866,902
--------------
--------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
March 31, 2000
--------------------------------------------------------------------------------------
<S> <C> <C>
Class A:
Net asset value and redemption price per share
($271,047,212 / 20,402,430 shares of common stock
issued and outstanding) $13.29
Maximum sales charge (5% of offering price) .70
--------------
Maximum offering price to public $13.99
--------------
--------------
Class B:
Net asset value, offering price and redemption price per
share
($231,578,227 / 19,447,451 shares of common stock
issued and outstanding) $11.91
--------------
--------------
Class C:
Net asset value and redemption price per share
($18,363,271 / 1,542,095 shares of common stock issued
and outstanding) $11.91
Sales charge (1% of offering price) .12
--------------
Offering price to public $12.03
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per
share
($94,878,192 / 7,043,389 shares of common stock issued
and outstanding) $13.47
--------------
--------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Prudential Small Company Value Fund, Inc.
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
March 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Dividends (net of foreign withholding taxes of $11,096) $ 4,159,658
Interest 1,055,821
-----------------
Total income 5,215,479
-----------------
Expenses
Management fee 2,362,612
Distribution fee--Class A 349,804
Distribution fee--Class B 1,393,572
Distribution fee--Class C 105,732
Transfer agent's fees and expenses 1,229,000
Reports to shareholders 137,000
Custodian's fees and expenses 65,000
Registration fees 50,000
Legal fees and expenses 24,000
Audit fees and expenses 13,000
Directors' fees and expenses 10,000
Miscellaneous 15,094
-----------------
Total expenses 5,754,814
-----------------
Net investment loss (539,335)
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investment transactions (59,384,896)
Net change in unrealized appreciation on investments 87,456,710
-----------------
Net gain on investments 28,071,814
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,532,479
-----------------
-----------------
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
March 31, 2000 September 31, 1999
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (539,335 ) $ (3,984,439)
Net realized gain (loss) on
investment transactions (59,384,896 ) 6,018,074
Net change in unrealized appreciation on
investments 87,456,710 13,126,457
-------------- ------------------
Net increase in net assets resulting from
operations 27,532,479 15,160,092
-------------- ------------------
Distributions from net realized gains on
investment transactions (Note 1)
Class A -- (41,109,661)
Class B -- (62,450,536)
Class C -- (3,389,932)
Class Z -- (14,727,094)
-------------- ------------------
-- (121,677,223)
-------------- ------------------
Fund share transactions (Note 6) (net of
share conversions)
Net proceeds from shares sold 254,796,526 556,701,257
Net asset value of shares issued to
shareholders in reinvestment of
distributions -- 117,928,503
Cost of shares reacquired (451,817,093 ) (814,921,695)
-------------- ------------------
Net decrease in net assets from Fund
share transactions (197,020,567 ) (140,291,935)
-------------- ------------------
Total decrease (169,488,088 ) (246,809,066)
NET ASSETS
Beginning of period 785,354,990 1,032,164,056
-------------- ------------------
End of period $ 615,866,902 $ 785,354,990
-------------- ------------------
-------------- ------------------
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited)
Prudential Small Company Value Fund, Inc. is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The investment objective of the Fund is capital growth. The Fund
invests in common stocks of small, less well-known companies that the investment
adviser believes are undervalued. Investment income is of incidental importance,
and the Fund may invest in securities which do not produce any income.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuations: Investments traded on a national securities
exchange are valued at the last reported sales price on the primary exchange on
which they are traded or, if there was no sale, at the mean between the last bid
and asked prices or at the bid price in the absence of an asked price.
Securities traded in the over-the-counter market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) are valued by
an independent pricing agent or principal market maker and listed securities for
which the primary market is believed to be over-the-counter are valued at the
mean between the last reported bid and asked prices. Any security for which a
reliable market quotation is unavailable is valued at fair value as determined
in good faith by or under the direction of the Fund's Board of Directors.
Short-term securities which mature in more than 60 days are valued based upon
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.
In connection with transactions in repurchase agreements with U.S.
financial institutions, it is the Fund's policy that its custodian or designated
subcustodians under triparty repurchase agreements, as the case may be, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction, including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
All securities are valued as of 4:15 p.m., New York time.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses on sales
of investments are calculated on the identified cost basis. Dividend income is
recorded on the ex-dividend
20
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited)
date; interest income is recorded on the accrual basis. Expenses are recorded on
the accrual basis which may require the use of certain estimates by management.
Net investment income (loss), other than distribution fees, and unrealized
and realized gains or losses are allocated daily to each class of shares of the
Fund based upon the relative proportion of net assets of each class at the
beginning of the day.
Taxes: It is the Fund's policy to continue to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income to its shareholders. Therefore, no
federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income, if any, semi-annually and make distributions at least
annually of any net capital gains. Dividends and distributions are recorded on
the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. Pursuant to a subadvisory agreement between PIFM and The Prudential
Investment Corporation ('PIC'), PIC furnishes investment advisory services in
connection with the management of the Fund. PIFM pays for the services of PIC,
the cost of compensation of officers of the Fund, occupancy and certain clerical
and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid PIFM is computed daily and payable monthly, at an
annual rate of .70 of 1% of the Fund's average daily net assets.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
Class B, Class C and Class Z shares. The Fund compensates PIMS for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution (the 'Class A, B and C Plans'), regardless of expenses actually
incurred. The distribution
See Notes to Financial Statements 21
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
fees are accrued daily and payable monthly. No distribution or service fees are
paid to PIMS as distributor of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensated PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%,
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, Class B and Class C shares, respectively, for the six
months ended March 31, 2000.
PIMS has advised the Fund that it received approximately $47,400 and
$7,500 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the six months ended March 31, 2000. From these
fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the six months ended March 31, 2000, it
received approximately $589,100 and $10,600 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIC, PIFM and PIMS are wholly owned subsidiaries of The Prudential
Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date of the SCA is March 9, 2001.
Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused portion
of the credit facility. The Fund did not borrow any amounts pursuant to the SCA
during the six months ended March 31, 2000.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the six months ended March 31, 2000,
the Fund incurred fees of approximately $860,800 for the services of PMFS. As of
March 31, 2000, approximately $137,700 of such fees were due to PMFS. Transfer
22
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited)
agent fees and expenses in Statement of Operations include certain out-of-pocket
expenses paid to nonaffiliates.
For the six months ended March 31, 2000, PSI earned approximately $12,515
in brokerage commissions from portfolio transactions executed on behalf of the
Fund.
Note 4. Portfolio Securities
Purchases and sales of investment securities of the Fund, other than short-term
investments, for the six months ended March 31, 2000 were $152,093,154 and
$316,882,704, respectively.
The cost basis of investments for federal income tax purposes as of March
31, 2000 was $585,127,974 and, accordingly, net unrealized depreciation of
investments for federal income tax purposes was $13,853,858 (gross unrealized
appreciation--$87,654,056; gross unrealized depreciation--$73,800,198).
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Government or federal agency obligations. As of March 31, 2000, the Fund
had a 1.3% undivided interest in the joint account. The undivided interest of
the Fund represented $8,449,000 in principal amount. As of such date, each
repurchase agreement in the joint account and value of the collateral therefor
was as follows:
Bear, Stearns & Co. Inc., 6.10%, in the principal amount of $120,000,000,
repurchase price $120,061,000, due 04/3/00. The value of the collateral
including accrued interest was $123,642,827.
Credit Suisse First Boston Corp., 6.10%, in the principal amount of
$130,000,000, repurchase price $130,066,083, due 04/3/00. The value of the
collateral including accrued interest was $134,450,258.
Greenwich Capital Markets, Inc., 6.15%, in the principal amount of
$100,000,000, repurchase price $100,051,250, due 04/3/00. The value of the
collateral including accrued interest was $102,005,200.
Goldman, Sachs & Co., 6.09%, in the principal amount of $100,000,000,
repurchase price $100,050,750, due 04/3/00. The value of the collateral
including accrued interest was $102,000,425.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 6.25%, in the principal
amount of $207,289,000, repurchase price $207,396,963, due 04/3/00. The value of
the collateral including accrued interest was $211,435,308.
See Notes to Financial Statements 23
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to to 5%. Class B shares are sold with
a contingent deferred sales charge which declines from 5% to zero depending upon
the period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualify to purchase Class A
shares at net asset value. Class Z shares are not subject to any sales or
redemption charge and are offered exclusively for sale to a limited group of
investors.
There are 1 billion shares of common stock authorized at $.01 par value
per share, divided into four classes, designated Class A, Class B, Class C and
Class Z common stock. Class A, Class B, Class C and Class Z shares each consist
of 250 million authorized shares.
Transactions in shares of common stock for the six months ended March 31,
2000 and the year ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
---------------------------------------------------------- ----------- -------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 13,872,152 $ 170,494,861
Shares reacquired (20,254,048) (247,972,362)
----------- -------------
Net decrease in shares outstanding before conversion (6,381,896) (77,477,501)
Shares issued upon conversion from Class B 1,290,649 15,474,298
----------- -------------
Net decrease in shares outstanding (5,091,247) $ (62,003,203)
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 21,652,787 $ 283,748,336
Shares issued in reinvestment of distributions 2,977,458 39,600,186
Shares reacquired (28,149,832) (366,651,014)
----------- -------------
Net decrease in shares outstanding before conversion (3,519,587) (43,302,492)
Shares issued upon conversion from Class B 2,514,601 32,509,648
----------- -------------
Net decrease in shares outstanding (1,004,986) $ (10,792,844)
----------- -------------
----------- -------------
<CAPTION>
Class B
----------------------------------------------------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 4,335,693 $ 47,995,485
Shares reacquired (13,138,204) (144,448,898)
----------- -------------
Net decrease in shares outstanding before conversion (8,802,511) (96,453,413)
Shares reacquired upon conversion into Class A (1,438,201) (15,474,298)
----------- -------------
Net decrease in shares outstanding (10,240,712) $(111,927,711)
----------- -------------
----------- -------------
</TABLE>
24
<PAGE>
Prudential Small Company Value Fund, Inc.
Notes to Financial Statements (Unaudited)
<TABLE>
<CAPTION>
Class B Shares Amount
---------------------------------------------------------- ----------- -------------
Year ended September 30, 1999:
<S> <C> <C>
Shares sold 12,427,779 $ 148,785,336
Shares issued in reinvestment of distributions 5,000,512 60,256,172
Shares reacquired (25,651,226) (300,425,348)
----------- -------------
Net decrease in shares outstanding before conversion (8,222,935) (91,383,840)
Shares reacquired upon conversion into Class A (2,785,771) (32,509,648)
----------- -------------
Net decrease in shares outstanding (11,008,706) $(123,893,488)
----------- -------------
----------- -------------
<CAPTION>
Class C
----------------------------------------------------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 895,027 $ 9,814,904
Shares reacquired (1,586,728) (17,434,838)
----------- -------------
Net decrease in shares outstanding (691,701) $ (7,619,934)
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 1,537,225 $ 18,451,563
Shares issued in reinvestment of distributions 278,300 3,353,512
Shares reacquired (1,703,303) (19,969,646)
----------- -------------
Net increase in shares outstanding 112,222 $ 1,835,429
----------- -------------
----------- -------------
<CAPTION>
Class Z
----------------------------------------------------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 2,126,138 $ 26,491,276
Shares reacquired (3,377,207) (41,960,995)
----------- -------------
Net decrease in shares outstanding (1,251,069) $ (15,469,719)
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 7,908,673 $ 105,716,022
Shares issued in reinvestment of distributions 1,095,136 14,718,633
Shares reacquired (9,747,471) (127,875,687)
----------- -------------
Net decrease in shares outstanding (743,662) $ (7,441,032)
----------- -------------
----------- -------------
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(a):
Net asset value, beginning of period $ 12.54
----------------
Income from investment operations
Net investment income (loss) 0.01
Net realized and unrealized gain (loss) on investment
transactions 0.74
----------------
Total from investment operations 0.75
----------------
Less distributions
Distributions from net realized gains --
----------------
Net asset value, end of period $ 13.29
----------------
----------------
TOTAL RETURN(b): 5.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $271,047
Average net assets (000) $279,843
Ratios to average net assets:
Expenses, including distribution fees 1.41%(c)
Expenses, excluding distribution fees 1.16%(c)
Net investment income (loss) 0.14%(c)
Portfolio turnover rate 24%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Annualized.
26 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 13.79 $ 18.95 $ 15.30 $ 14.18 $ 12.40
---------------- ---------------- ---------------- ---------------- ----------------
(.01) -- .02 .04 .05
.29 (3.31) 6.06 1.75 2.57
---------------- ---------------- ---------------- ---------------- ----------------
.28 (3.31) 6.08 1.79 2.62
---------------- ---------------- ---------------- ---------------- ----------------
(1.53) (1.85) (2.43) (.67) (.84)
---------------- ---------------- ---------------- ---------------- ----------------
$ 12.54 $ 13.79 $ 18.95 $ 15.30 $ 14.18
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
1.48% (18.90)% 45.92% 13.38% 23.29%
$319,779 $365,431 $412,980 $237,306 $242,231
$360,707 $443,189 $287,894 $223,091 $174,449
1.27% 1.17% 1.21% 1.24% 1.33%
1.02% .92% .96% .99% 1.08%
(.09)% -- .15% .33% .30%
39% 36% 58% 53% 64%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(a):
Net asset value, beginning of period $ 11.28
----------------
Income from investment operations
Net investment loss (0.03)
Net realized and unrealized gain (loss) on investment
transactions 0.66
----------------
Total from investment operations 0.63
----------------
Less distributions
Distributions from net realized gains --
----------------
Net asset value, end of period $ 11.91
----------------
----------------
TOTAL RETURN(b): 5.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $231,578
Average net assets (000) $278,715
Ratios to average net assets:
Expenses, including distribution fees 2.16%(c)
Expenses, excluding distribution fees 1.16%(c)
Net investment loss (0.61)%(c)
Portfolio turnover rate 24%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Annualized.
28 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 12.63 $ 17.64 $ 14.49 $ 13.56 $ 11.99
---------------- ---------------- ---------------- ---------------- ----------------
(.10) (.12) (.09) (.06) (.06)
.28 (3.04) 5.67 1.66 2.47
---------------- ---------------- ---------------- ---------------- ----------------
.18 (3.16) 5.58 1.60 2.41
---------------- ---------------- ---------------- ---------------- ----------------
(1.53) (1.85) (2.43) (.67) (.84)
---------------- ---------------- ---------------- ---------------- ----------------
$ 11.28 $ 12.63 $ 17.64 $ 14.49 $ 13.56
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
0.74% (19.52)% 44.91% 12.56% 22.37%
$335,013 $514,159 $645,579 $378,861 $361,873
$444,747 $678,462 $443,761 $355,636 $349,929
2.02% 1.92% 1.96% 1.99% 2.08%
1.02% .92% .96% .99% 1.08%
(.82)% (.75)% (.60)% (.42)% (.51)%
39% 36% 58% 53% 64%
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(a):
Net asset value, beginning of period $ 11.28
--------
Income from investment operations
Net investment loss (0.03)
Net realized and unrealized gain (loss) on investment
transactions 0.66
--------
Total from investment operations 0.63
--------
Less distributions
Distributions from net realized gains --
--------
Net asset value, end of period $ 11.91
--------
--------
TOTAL RETURN(b): 5.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 18,364
Average net assets (000) $ 21,146
Ratios to average net assets:
Expenses, including distribution fees 2.16%(c)
Expenses, excluding distribution fees 1.16%(c)
Net investment loss (0.62)%(c)
Portfolio turnover rate 24%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Annualized.
30 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 12.63 $ 17.64 $ 14.49 $13.56 $11.99
-------- -------- -------- ------- -------
(.10) (.12) (.09) (.06) (.06)
.28 (3.04) 5.67 1.66 2.47
-------- -------- -------- ------- -------
.18 (3.16) 5.58 1.60 2.41
-------- -------- -------- ------- -------
(1.53) (1.85) (2.43) (.67) (.84)
-------- -------- -------- ------- -------
$ 11.28 $ 12.63 $ 17.64 $14.49 $13.56
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
0.74% (19.52)% 44.91% 12.56% 22.37%
$ 25,207 $ 26,804 $ 22,049 $4,323 $1,545
$ 27,813 $ 29,259 $ 8,762 $2,786 $ 784
2.02% 1.92% 1.96% 1.99% 2.08%
1.02% .92% .96% .99% 1.08%
(.83)% (.75)% (.60)% (.42)% (.46)%
39% 36% 58% 53% 64%
</TABLE>
See Notes to Financial Statements 31
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
----------------
Six Months
Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(a):
Net asset value, beginning of period $ 12.70
--------
Income from investment operations
Net investment income 0.02
Net realized and unrealized gain (loss) on investment
transactions 0.75
--------
Total from investment operations 0.77
--------
Less distributions
Distributions from net realized gains --
--------
Net asset value, end of period $ 13.47
--------
--------
TOTAL RETURN(b): 6.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 94,878
Average net assets (000) $ 95,328
Ratios to average net assets:
Expenses, including distribution fees 1.16%(c)
Expenses, excluding distribution fees 1.16%(c)
Net investment income 0.38%(c)
Portfolio turnover rate 24%
</TABLE>
------------------------------
(a) Calculated based upon weighted average shares outstanding during the period.
(b) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods less than a full
year are not annualized.
(c) Annualized.
(d) Commencement of offering of Class Z shares.
32 See Notes to Financial Statements
<PAGE>
Prudential Small Company Value Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
-------------------------------------------------------------------------------------
March 1, 1996(d)
Year Ended September 30, through September 30,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 13.92 $ 19.04 $ 15.32 $ 13.69
---------------- ---------------- ---------------- --------
.02 .04 .06 .05
.29 (3.31) 6.09 1.58
---------------- ---------------- ---------------- --------
.31 (3.27) 6.15 1.63
---------------- ---------------- ---------------- --------
(1.53) (1.85) (2.43) --
---------------- ---------------- ---------------- --------
$ 12.70 $ 13.92 $ 19.04 $ 15.32
---------------- ---------------- ---------------- --------
---------------- ---------------- ---------------- --------
1.70% (18.58)% 46.38% 11.91%
$105,355 $125,770 $151,215 $ 68,516
$131,013 $154,623 $ 97,310 $ 66,228
1.02% .92% .96% .99%(c)
1.02% .92% .96% .99%(c)
.16% .25% .40% .58%(c)
39% 36% 58% 53%
</TABLE>
See Notes to Financial Statements 33
<PAGE>
<PAGE>
Prudential Small Company Value Fund, Inc.
Prudential Mutual Fund Family
Prudential offers a broad range
of mutual funds designed to meet your individual
needs. For information about these funds, contact
your financial adviser or call us at (800) 225-
1852. Read the prospectus carefully before you
invest or send money.
STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Stock Index Fund
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund
Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
-Prudential Jennison International Growth Fund
Global Utility Fund, Inc.
Target Funds
International Equity Fund
Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
<PAGE>
www.prudential.com (800) 225-1852
BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Target Funds
Total Return Bond Fund
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.
Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
<PAGE>
Prudential Small Company Value Fund, Inc.Getting
the Most From Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds,
you receive financial advice from a Prudential
Securities Financial Advisor or Pruco Securities
registered representative. Your advisor or
representative can provide you with the following
services:
There's No Reward Without Risk; but Is This Risk
Worth It?
Your financial advisor or registered representative
can help you match the reward you seek with the
risk you can tolerate. Risk can be difficult to
gauge--sometimes even the simplest investments bear
surprising risks. The educated investor knows that
markets seldom move in just one direction. There
are times when a market sector or asset class will
lose value or provide little in the way of total
return. Managing your own expectations is easier
with help from someone who understands the markets
and who knows you!
Keeping Up With the Joneses
A financial advisor or registered representative
can help you wade through the numerous available
mutual funds to find the ones that fit your
individual investment profile and risk tolerance.
While the newspapers and popular magazines are full
of advice about investing, they are aimed at
generic groups of people or representative
individuals--not at you personally. Your financial
advisor or registered representative will review
your investment objectives with you. This means you
can make financial decisions based on the assets
and liabilities in your current portfolio and your
risk tolerance--not just based on the current
investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at
the bottom are among the most common investor
mistakes. But sometimes it's difficult to hold on
to an investment when it's losing value every
month. Your financial advisor or registered
representative can answer questions when you're
confused or worried about your investment, and
should remind you that you're investing for the
long haul.
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Directors
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
Robin B. Smith
John R. Strangfeld
Louis A. Weil, III
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
Marguerite E. H. Morrison, Secretary
William V. Healey, Assistant Secretary
Stephen M. Ungerman, Assistant Treasurer
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
194 Wood Avenue South
Iselin, NJ 08830
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
Fund Symbols NASDAQ CUSIP
Class A PGOAX 743968109
Class B CHNDX 743968208
Class C PSCCX 743968307
Class Z PSCZX 743968406
The views expressed
in this report and information about the Fund's
portfolio holdings are for the period covered by
this report and are subject to change thereafter.
The accompanying financial statements as of March
31, 2000, were not audited and, accordingly, no
opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
BULK RATE
U.S. POSTAGE
PAID
Permit 6807
New York, NY
MF109E2 743968109 743968208 743968307 743968406
(LOGO)Printed on Recycled Paper
