<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholder,
This past year has been one of growth for the Fund in both assets and
shareholders. As of the end of our second year, September 30, 1995, net assets
totaled $7,616,334 and our shareholder base increased 52.5% to 639 with
registrations in twenty-four states.
As we closed the door on calendar 1994 we left a period in which the Federal
Reserve Board raised interest rates an unprecedented 175 basis points. This had
created an unfavorable market environment for small-cap stocks as investors
abandoned the potentially greater returns of this sector for the less volatile
large-cap arena. We, however, entered our second year focused upon our
investment strategy which identifies the long-term value in small-cap issues
undergoing corporate change, which are underfollowed and underowned by the
financial community.
Another important development this year has been the impact of the high-
technology sector on the market averages. Semiconductor stocks, along with
computer hardware and software developers, demonstrated unusual strength during
the first nine months of 1995. The double-digit performance of many of these
stocks helped to send many averages to new market highs. The Fund, however, did
not reap the benefits from this sector's spectacular performance as such issues
are typically absent from our portfolio holdings. We find this significant as
our returns still kept pace with the market despite our lack of ownership of
high-tech stocks. This commitment to our style resulted in the Fund's gain of
22.03% for the year versus a gain of 29.74% for the S&P 500 Index.
The Fund's marketing efforts continue to gain momentum with our thirty-nine,
primarily regional, broker-dealer firms and early penetration in the investment
counselor and 401(k) market.
Looking forward, we expect the Federal Reserve to continue its accommodative
stance which was accelerated in July by their 25 basis point reduction in
short-term interest rates. This coupled with the current atmosphere of modest
economic growth and low levels of inflation should lead to a positive stock
market environment and the continued reporting of positive corporate profits.
We will continue to be fully invested, primarily in a diversified list of
companies undergoing substantial change, such as companies involved in spin-
offs and recapitalizations, companies trading near or below actual or perceived
book-value, and companies emerging from a financial restructuring or
bankruptcy. We expect that American industry's continued downsizing and
emphasis on efficiency will provide ample, attractive investment opportunities,
thereby serving shareholders well over the long-term.
Thank you for your continuing support and interest in the Fund.
Sincerely yours,
/s/ John L. Keeley, Jr.
- -----------------------
John L. Keeley, Jr.
President
September, 1995
<PAGE>
Index Comparison
Quarterly Comparison of a Hypothetical $10,000 Investment
in the KSCVF* and S&P 500**
KSCVF S&P 500
--------------------------------
10/1/1993 10000.00 10000.00
DEC 1993 9981.32 10231.85
MAR 1994 9617.89 9843.85
JUN 1994 9235.83 9885.28
SEP 1994 9799.03 10368.6
DEC 1994 9111.48 10366.89
MAR 1995 10066.62 11376.27
JUN 1995 10849.59 12462.28
SEP 1995 11957.46 13452.66
--------------------------------
Average total returns***
for periods ended September 30, 1995
<TABLE>
<CAPTION>
12 MOS 2 YEARS
ENDED ENDED
9/30/95 9/30/95
------- -------
<S> <C> <C>
KSCVF +22.03% +11.89%
KSCVF (includes max 4 1/2%
front-end load) +16.57% +9.35%
S&P 500 +29.74% +15.99%
</TABLE>
* Performance graph includes deduuction of the 4 1/2% front end load.
** S&P 500 return is calculated with reinvested dividends and assumes no
transaction costs.
***PERFORMANCE DATA quoted represents past performance which is not predictive
of future performance. The investment return and principal value of shares
will fluctuate and when redeemed, may be worth more or less than their
original cost.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $6,221,220) $7,605,381
Cash 14,964
Receivable for investments sold 45,586
Receivable for shares issued 45,349
Dividends and interest receivable 4,474
Due from Adviser 9,870
Organization costs, net of accumulated amortization 13,441
----------
Total Assets 7,739,065
----------
LIABILITIES:
Payable to Adviser 12,073
Payables for investments purchased 84,375
Payables for shares redeemed 1,053
Other accrued expenses 25,230
----------
Total Liabilities 122,731
----------
NET ASSETS $7,616,334
==========
NET ASSETS CONSIST OF:
Capital stock $6,275,279
Accumulated net realized loss on investments (43,106)
Unrealized net appreciation on investments 1,384,161
----------
Total Net Assets $7,616,334
==========
CAPITAL STOCK, $0.01 PAR VALUE
Authorized 10,000,000
Issued and outstanding 608,163
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $12.52
==========
OFFERING PRICE PER SHARE $13.11
==========
</TABLE>
See notes to the financial statements.
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 49,580
Interest income 7,486
----------
57,066
----------
EXPENSES:
Investment advisory fees 54,624
Administration fees 35,000
Transfer agent fees and expenses 29,226
Professional fees 23,899
Fund accounting fees 22,748
12b-1 fees 13,656
Federal and state registration fees 12,945
Custody fees 11,242
Amortization of organization costs 4,478
Directors' fees 3,000
Reports to shareholders 2,807
Other 1,856
----------
Total expenses before reimbursement 215,481
Less: Reimbursement and waiver of expenses (78,921)
----------
Net expenses 136,560
----------
NET INVESTMENT LOSS (79,494)
----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 101,874
Increase in unrealized appreciation on investments 1,225,751
----------
Net gain on investments 1,327,625
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,248,131
==========
</TABLE>
See notes to financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
COMMON STOCK 90.10%
BUILDING MATERIALS 1.15%
10,000 Nortek, Inc.* $ 87,500
----------
CHEMICALS 1.48%
6,000 Albemarle Corp. 112,500
----------
COMMUNICATIONS AND
MEDIA 10.97%
8,500 Ackerley Communications, Inc. 129,625
3,500 Airtouch Communications, Inc.* 107,187
4,600 Associated Group, Inc. Class A* 95,450
3,250 Citicasters, Inc.* 108,469
5,500 Cox Communications, Inc. Class A* 111,375
2,800 GC Companies, Inc.* 89,950
3,000 Lin Television Corp.* 93,000
6,000 Telemundo Group, Inc. Class A* 100,500
----------
835,556
----------
CONSUMER SERVICE 2.79%
6,500 Kinder Care Learning Centers, Inc.* 87,750
2,000 Pittway Corp. Class A 124,500
----------
212,250
----------
CONTAINERS 1.00%
4,000 Alltrista Corp.* 76,000
----------
DISTRIBUTORS - CONSUMER PRODUCTS 1.15%
9,500 Primesource Corp. 87,875
----------
ELECTRICAL EQUIPMENT 1.12%
5,000 AMETEK, Inc. 85,625
----------
ELECTRONICS 2.82%
6,000 Harris Computer Systems Corp.* 101,250
2,400 Western Atlas, Inc.* 113,700
----------
214,950
----------
ENERGY - RAW MATERIALS 1.53%
6,500 INDRESCO, Inc.* 116,188
----------
ENGINEERING AND CONSTRUCTION 1.82%
15,000 Emcor Group, Inc.* 138,750
----------
ENTERTAINMENT AND LEISURE 1.21%
11,000 Aztar Corp.* 92,125
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------- ----------
<S> <C> <C> <C>
ENVIRONMENTAL CONTROL 1.45%
7,000 Culligan Water Technologies, Inc.* 110,250
----------
FINANCE COMPANY 1.52%
5,000 Lehman Brothers Holdings, Inc. 115,625
----------
FINANCIAL SERVICES 5.94%
9,000 AmeriCredit Corp.* 133,875
7,500 Duff & Phelps Credit Rating Corp. 118,125
4,000 Signet Banking Corp. 105,000
2,600 White River Corp.* 95,550
----------
452,550
----------
FOOD, BEVERAGE AND TOBACCO 5.81%
8,000 Consolidated Products, Inc.* 120,000
6,000 Interstate Bakeries Corp. 126,750
6,500 Tasty Baking Co. 92,625
5,000 Whitman Corp. 103,125
----------
442,500
----------
FURNITURE/HOME APPLIANCES 1.71%
16,500 Interco, Inc.* 129,937
----------
HOUSEHOLD PRODUCTS 1.30%
3,000 Aptargroup, Inc. 99,375
----------
HOUSING 3.88%
7,500 Kaufman & Broad Home Corp. 94,687
15,500 MDC Holdings, Inc. 118,188
6,500 Walter Industries, Inc.* 82,875
----------
295,750
----------
INSURANCE 1.46%
2,500 Finova Group, Inc. 111,250
----------
LODGING 4.61%
11,000 Host Marriott Corp.* 136,125
3,000 Marriott International, Inc. 112,125
10,000 Prime Hospitality Corp.* 102,500
----------
350,750
----------
MACHINERY 4.46%
7,000 Gardner Denver Machinery, Inc.* 119,000
11,500 IMO Industries, Inc.* 106,375
8,000 Strattec Security Corp.* 114,000
----------
339,375
----------
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
MECHANICS AND SOFTWARE 1.06%
14,000 Triad Systems Corp.* 80,500
----------
MISCELLANEOUS 2.58%
10,500 Rexel, Inc.* 106,312
4,700 Whittaker Corp.* 90,475
----------
196,787
----------
OIL AND GAS - EQUIPMENT & SERVICES 2.95%
5,000 Cooper Cameron Corp.* 129,375
10,000 Lone Star Technologies, Inc.* 95,000
----------
224,375
----------
PAPER PRODUCTS 0.88%
3,000 Crown Vantage, Inc.* 66,750
----------
PHARMACEUTICALS AND HEALTHCARE PRODUCTS 1.71%
2,900 McKesson Corp. 130,500
----------
PRINTING AND PUBLISHING 3.23%
3,000 Media General, Inc. - Class A 107,250
3,500 Meredith Corp. 139,125
----------
246,375
----------
RAILROAD 5.76%
2,500 Illinois Central Corp. - Series A 97,813
3,000 Kansas City Southern Industries, Inc. 136,500
11,700 Katy Industries, Inc. 111,150
11,500 Providence and Worcester Railroad Co. 93,437
----------
438,900
----------
RETAIL 8.81%
30,000 Ames Department Stores, Inc.* 78,750
12,500 Best Products Co.* 106,250
7,000 Grand Union Co.* 91,000
2,400 Harcourt General, Inc. 100,500
14,000 Phar-Mor, Inc.* 112,000
8,000 Shopko Stores, Inc. 99,000
6,000 Zale Corp.* 83,250
----------
670,750
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
SOFTWARE 1.25%
6,000 Wang Laboratories, Inc.* 95,250
----------
TEXTILE AND APPAREL 1.36%
12,000 Griffon Corp.* 103,500
----------
TRUCKING 1.33%
4,000 Ryder System, Inc. 101,500
----------
TOTAL COMMON STOCKS 6,861,868
----------
(cost $5,512,028)
WARRANTS 4.50%
9,000 BJ Services Co.* 49,500
7,000 Federated Department Stores - Series C* 63,875
6,000 Fleet Financial Group, Inc.* 47,250
7,500 Lone Star Industries, Inc.* 62,812
7,500 U.S. Home Corp. - Class B* 66,563
7,000 Viacom Inc. - Class B* 52,938
----------
TOTAL WARRANTS 342,938
----------
(cost $308,617)
<CAPTION>
PAR VALUE VALUE
--------- ----------
<C> <S> <C> <C>
DEMAND NOTES 5.26%
$ 35,000 General Mills, Inc. 35,000
52,900 Pitney Bowes Credit Corp. 52,900
176,675 Sara Lee Corp. 176,675
95,000 Southwestern Bell Telephone Co. 95,000
41,000 Warner-Lambert Co. 41,000
----------
TOTAL DEMAND NOTES 400,575
----------
(cost $400,575)
TOTAL INVESTMENTS 99.86%
(cost $6,221,220) 7,605,381
Cash and Other Assets,
Less Liabilities 0.14% 10,953
----------
NET ASSETS 100.00% $7,616,334
==========
*Non-income producing
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
OPERATIONS:
Net investment loss ($79,494) ($27,357)
Net realized gain (loss) on investments 101,874 (144,980)
Increase in unrealized appreciation on investments 1,225,751 158,410
---------- ----------
Net increase (decrease) in net assets resulting from
operations 1,248,131 (13,927)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from 187,949 and 450,261 shares issued,
respectively 2,054,266 4,630,280
Cost of 18,472 and 21,575 shares redeemed,
respectively (188,727) (213,689)
---------- ----------
Net increase from capital share transactions 1,865,539 4,416,591
---------- ----------
TOTAL INCREASE IN NET ASSETS 3,113,670 4,402,664
NET ASSETS:
Beginning of year 4,502,664 100,000
---------- ----------
End of year $7,616,334 $4,502,664
========== ==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 (1)
------------------ ----------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.26 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.13) (0.06)
Net realized and unrealized gains on
investments 2.39 0.32
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 2.26 0.26
---------- ----------
NET ASSET VALUE, END OF PERIOD $ 12.52 $ 10.26
========== ==========
TOTAL RETURN (2) 22.03% 2.60%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $7,616,334 $4,502,664
Ratio of net expenses to average net
assets (3) 2.50% 2.49%
Ratio of net investment loss to
average net
assets (3) (1.46)% (0.96)%
Portfolio turnover rate 70.59% 63.20%
</TABLE>
(1) The Fund commenced operations on October 1, 1993.
(2) The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
(3) Without fees waived, the ratio of net expenses and net investment loss to
average net assets would have been 3.94% and (2.90)% for the year ended
September 30, 1995 and 5.98% and (4.45)% for the year ended September 30,
1994.
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1.ORGANIZATION
The KEELEY Small Cap Value Fund, Inc. (the "Fund") was incorporated on May
17, 1993 as a Maryland Corporation and is registered as a diversified open-
end investment company under the Investment Company Act of 1940 (the "1940
Act"). The Fund commenced operations on October 1, 1993. The Fund initially
issued and sold 10,000 shares of its capital stock to a shareholder of
Keeley Asset Management Corp. (the "Adviser") and Keeley Investment Corp.
(the "Distributor").
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized stock
exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded or at the last sale price on a
national securities exchange. Exchange-traded securities for which there
were no transactions are valued at the current bid prices. Securities traded
on only over-the-counter markets are valued on the basis of closing over-
the-counter bid prices when there is no last sale price available. Debt
securities which are purchased within 60 days of their stated maturity date
are valued at amortized cost, which approximates current value. Securities
for which quotations are not readily available and other assets are valued
at fair value as determined in good faith by the Board of Directors.
b) Federal Income Taxes - No provision for federal income taxes has been
made since the Fund has complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intends to
continue to so comply in future years.
c) Distributions to Shareholders - Dividends from net investment income will
be declared and paid annually. Distributions of net realized capital gains,
if any, will be declared and paid annually. Distributions to shareholders
are recorded on the ex-dividend date. The Fund may periodically make
reclassifications among certain of its capital accounts as a result of the
timing and characterization of certain income and capital gains
distributions determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. Accordingly,
at September 30, 1995, reclassifications were recorded from accumulated net
investment losses to reduce capital stock by $79,494.
d) Other - Investment transactions are recorded on the trade date plus one.
The Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on the ex-dividend date
and interest income is recognized on an accrual basis.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
3.INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with the Adviser, with whom certain officers and
directors of the Fund are affiliated, to furnish investment advisory
services to the Fund. Under the terms of this agreement, the Fund will pay
the Adviser a monthly fee at the annual rate of 1.00% of the Fund's average
net assets. Under the investment advisory agreement, if the aggregate annual
operating expenses (excluding interest, taxes, brokerage commissions and
other costs incurred in connection with the purchase or sale of portfolio
securities, and extraordinary items) exceed the lowest limitations imposed
by state securities administrators, the Adviser will reimburse the Fund for
the amount of such excess. Accordingly, for the year ended September 30,
1995, the Adviser reimbursed the Fund $78,921. As of September 30, 1995,
John Keeley, Jr., President of the Adviser, controlled either directly or
indirectly 33.9% of the Fund's outstanding shares.
4.DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. The Plan is designed to reimburse the Distributor
for certain promotional and other sales related costs and to permit the Fund
to employ other dealers of its shares. Unreimbursed amounts may be carried
forward and paid in a subsequent year. The Fund paid to the Distributor and
each dealer a monthly fee at the rate of 0.25% per annum of the aggregate
daily net asset value of the Fund shares beneficially owned by the
Distributor's and each dealer's existing brokerage clients. For the period
from October 1, 1994 to September 30, 1995, the Fund paid $10,667 of
distribution fees to the Distributor.
5.INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the period from October 1, 1994 to September
30, 1995, were $5,223,474 and $3,779,143, respectively. For the period from
October 1, 1994 to September 30, 1995, the Fund paid $20,414 of brokerage
commissions on trades of securities to the Distributor.
At September 30, 1995, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $6,241,932,
were as follows:
<TABLE>
<S> <C>
Appreciation $1,497,102
(Depreciation) (133,653)
----------
Net appreciation on
investments $1,363,449
==========
</TABLE>
At September 30, 1995, the Fund had an accumulated net realized capital
loss carryforward of $22,394, expiring September 30, 2002. To the extent the
Fund realizes future net capital gains, taxable distributions to its
shareholders will be offset by any unused capital loss carryforward.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
6.OFFERING PRICE PER SHARE
The public offering price is the net asset value plus a sales charge which
varies in accordance with the amount of the purchase as follows:
<TABLE>
<CAPTION>
SALES CHARGE
AS A PERCENTAGE OF
AMOUNT OFFERING PRICE
------ ------------------
<S> <C>
Less than $50,000 4.50%
$50,000 but less
than $100,000 4.00%
$100,000 but less
than $250,000 3.00%
$250,000 but less
than $500,000 2.50%
$500,000 and over 2.00%
</TABLE>
The Distributor retains the entire sales charge when it makes sales
directly to the public. Otherwise, when sales are made through dealers, the
Distributor receives a portion of the related sales charge. For the period
from October 1, 1994 to September 30, 1995, the Fund was advised that the
Distributor received $26,899 of sales charges.
Reduced sales charges are available through a right of accumulation and
certain sales of Fund shares are made at net asset value per share, as
specified in the Fund's Prospectus.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
KEELEY Small Cap Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
KEELEY Small Cap Value Fund, Inc., including the schedule of investments, as of
September 30, 1995, and the related statement of operations for the year then
ended, and the statements of changes in net assets and the financial highlights
for each of the two years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
KEELEY Small Cap Value Fund, Inc., as of September 30, 1995, and the results of
its operations for the year then ended, and the changes in its net assets and
financial highlights for each of the two years in the period then ended, in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
Milwaukee, Wisconsin
October 19, 1995
<PAGE>
Investment Adviser
KEELEY ASSET MANAGEMENT CORP.
Chicago, Illinois
Distributor
KEELEY INVESTMENT CORP.
Chicago, Illinois
Custodian, Transfer Agent and Dividend
Disbursing Agent
FIRSTAR TRUST COMPANY
Milwaukee, Wisconsin
800-338-1579
Auditors
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
Performance information is historical and is no guarantee of future results.
The investment return and principal value of shares will fluctuate and when
redeemed, may be worth more or less than the investor's original cost. This
material may only be used when preceded or accompanied by the Fund's
prospectus.
401 South LaSalle Street . Suite 1201 . Chicago . Illinois . 60605
(312) 786-5050 . (800) 553-5344 . (312) 786-5003
KEELEY SMALL CAP VALUE FUND, INC.
ANNUAL REPORT
SEPTEMBER 30, 1995
