<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholder,
At the end of the Fund's semi-annual period, March 31, 1996, net assets
increased 22.61% to $9,338,180 while the number of shareholders grew more than
40% to 897. By the end of June, 1996, we anticipate having in excess of 1,000
shareholders. This shareholder level will make the Fund eligible for inclusion
in the Nasdaq's News Media List. We expect this to result in the daily listing
of the Fund's NAV in the mutual fund tables of national newspapers.
The Fund is now registered in 46 states with the recent addition of Alabama,
North Dakota, Oregon and Vermont. In the past six months we have added five new
broker-dealer firms to our dealer network bringing the total to forty-five.
For the six months ended March 31, 1996 the Fund's total return increased
10.22%* versus 11.71% for the S&P 500 Index**. In the quarter ended March 31,
1996 the Fund's total return was 9.20%* versus 5.37% for the S&P 500 Index**.
As the broader market became more sensitive to the performance of individual
companies we believe our stock specific, value based strategy, allowed us to
keep pace with and, for our second fiscal quarter, outperform the market
averages. The Fund's average annual returns for the one year ended March 31,
1996 and since inception, October 1, 1993 through March 31, 1996, were 25.00%
and 11.67% respectively. These returns reflect the impact of the 4.5% sales
charge.
During this six month period, the market contended with a series of
disappointments; a government shutdown, failure to reach a budget agreement and
devastating weather, particularly in the eastern United States. Such events
suggested a serious economic slowdown despite the 25 basis point reduction in
interest rates by the Federal Reserve System in December, 1995 and January,
1996. Then, towards the end of the Fund's second fiscal quarter, the bond
market declined due to a strong February jobs report and escalating commodity
prices. Accordingly, the stock market appears to have begun a mild corrective
phase.
For the second half of our fiscal year we expect the Federal Reserve System to
keep interest rates at or near current levels as inflation remains under
control. However, the strengthening of the economy is expected to cause both
the equity and bond markets to remain volatile, although positive in direction.
We 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,
LOGO
John L. Keeley, Jr.
President
March, 1996
*Performance returns do not reflect deduction of the Fund's 4.5% sales charge.
**The S&P 500 Index is an unmanaged index of publicly traded stocks.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $7,358,909) $9,439,175
Cash 69
Receivables for shares issued 15,276
Dividends and interest receivable 6,190
Organization costs, net of accumulated amortization 11,201
----------
Total Assets 9,471,911
----------
LIABILITIES:
Payable to Adviser 4,249
Payables for shares redeemed 106,500
Other accrued expenses 22,982
----------
Total Liabilities 133,731
----------
NET ASSETS $9,338,180
==========
NET ASSETS CONSIST OF:
Capital stock $7,092,942
Accumulated net realized gain on investments 164,972
Unrealized net appreciation on investments 2,080,266
----------
Total Net Assets $9,338,180
==========
CAPITAL STOCK, $0.01 PAR VALUE
Authorized 10,000,000
Issued and outstanding 678,264
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $13.77
==========
OFFERING PRICE PER SHARE $14.42
==========
</TABLE>
See notes to the financial statements.
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 29,947
Interest income 6,870
--------
36,817
--------
EXPENSES:
Investment advisory fees 40,572
Administration fees 17,500
Transfer agent fees and expenses 15,574
Professional fees 14,598
Fund accounting fees 11,562
12b-1 fees 10,143
Federal and state registration fees 6,529
Custody fees 4,213
Reports to shareholders 2,734
Amortization of organization costs 2,240
Directors' fees 1,530
Other 717
--------
Total expenses before reimbursement 127,912
Less: Reimbursement and waiver of expenses (26,482)
--------
Net expenses 101,430
--------
Net Investment Loss (64,613)
--------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 225,231
Increase in unrealized appreciation on investments 696,105
--------
Net gain on investments 921,336
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $856,723
========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
COMMON STOCK 95.47%
BUILDING MATERIALS 1.36%
10,500 Nortek, Inc.* $ 127,313
----------
CHEMICALS 1.28%
3,000 Praxair, Inc. 119,625
----------
COMMUNICATIONS AND
MEDIA 11.26%
5,000 360 Communications Co.* 119,375
6,500 Ackerley Communications, Inc. 129,188
4,000 Airtouch Communications, Inc.* 124,500
5,100 Associated Group, Inc. Class A* 98,175
5,000 Cox Communications, Inc. Class A* 109,375
3,300 GC Companies, Inc.* 125,400
3,500 Lin Television Corp.* 123,375
5,500 Telemundo Group, Inc. Class A* 108,625
5,500 U.S. West Media Group, Inc.* 113,438
----------
1,051,451
----------
CONSUMER SERVICE 2.66%
8,000 Kinder Care Learning Centers, Inc.* 100,000
3,000 Pittway Corp. Class A 148,500
----------
248,500
----------
CONTAINERS 1.41%
5,500 Alltrista Corp.* 131,312
----------
DISTRIBUTORS - CONSUMER PRODUCTS 0.71%
11,000 Primesource Corp. 66,000
----------
ELECTRICAL EQUIPMENT 2.37%
6,000 AMETEK, Inc. 105,750
6,000 Westinghouse Electric Corp. 115,500
----------
221,250
----------
ELECTRONICS 3.04%
6,500 Moog, Inc. Class B* 121,875
2,700 Western Atlas, Inc.* 162,000
----------
283,875
----------
ENGINEERING AND CONSTRUCTION 1.30%
10,000 Emcor Group, Inc.* 121,250
----------
ENTERTAINMENT AND LEISURE 1.09%
12,000 Aztar Corp.* 102,000
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
ENVIRONMENTAL CONTROL 1.22%
3,500 Culligan Water Technologies, Inc.* $ 113,750
----------
FINANCE COMPANY 1.43%
5,000 Lehman Brothers Holdings, Inc. 133,750
----------
FINANCIAL SERVICES 3.11%
7,000 Duff & Phelps Credit Rating Corp. 112,000
3,000 Signet Banking Corp. 74,625
2,800 White River Corp.* 104,300
----------
290,925
----------
FOOD, BEVERAGE AND TOBACCO 5.94%
6,050 Consolidated Products, Inc.* 99,825
9,000 Darden Restaurants, Inc. 121,500
5,000 Interstate Bakeries Corp. 122,500
7,000 Tasty Baking Co. 77,875
5,500 Whitman Corp. 133,375
----------
555,075
----------
FURNITURE/HOME APPLIANCES 1.09%
11,000 Furniture Brands International, Inc.* 101,750
----------
HOUSEHOLD PRODUCTS 2.78%
3,000 Aptargroup, Inc. 124,500
6,500 U.S. Industries, Inc.* 134,875
----------
259,375
----------
HOUSING 3.91%
8,500 Kaufman & Broad Home Corp. 136,000
15,500 MDC Holdings, Inc. 112,375
8,500 Walter Industries, Inc.* 116,875
----------
365,250
----------
INSURANCE 8.60%
3,500 American Financial Group, Inc. 105,875
4,500 Equitable Companies, Inc. 109,125
2,000 Finova Group, Inc. 109,250
6,500 Highlands Insurance Group* 128,375
2,500 ITT Hartford Group, Inc. 122,500
2,700 Transport Holdings, Inc. Class A* 112,725
2,500 Unitrin, Inc. 115,000
----------
802,850
----------
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
LODGING 5.41%
9,500 Host Marriott Corp.* $ 128,250
16,900 Host Marriott Services Corp.* 118,300
3,000 Marriott International, Inc. 142,500
8,500 Prime Hospitality Corp.* 115,812
----------
504,862
----------
MACHINERY 7.45%
6,000 Gardner Denver Machinery, Inc.* 142,500
7,000 Giddings & Lewis, Inc. 133,000
5,000 Global Industrial Technologies, Inc.* 120,000
15,000 IMO Industries, Inc.* 95,625
6,000 Strattec Security Corp.* 99,000
13,000 TransPro, Inc. 105,625
----------
695,750
----------
MANUFACTURING 2.59%
6,300 ACX Technologies, Inc. 114,187
5,000 ITT Industries, Inc. 127,500
----------
241,687
----------
MECHANICS AND SOFTWARE 1.01%
16,000 Triad Systems Corp.* 94,000
----------
MISCELLANEOUS 1.26%
5,000 Whittaker Corp.* 117,500
----------
OIL AND GAS - EQUIPMENT & SERVICES 2.47%
3,000 Cooper Cameron Corp.* 126,000
10,000 Lone Star Technologies, Inc.* 105,000
----------
231,000
----------
PHARMACEUTICALS AND HEALTHCARE PRODUCTS 1.91%
2,500 McKesson Corp. 128,125
3,000 Morrison Health Care, Inc. 50,250
----------
178,375
----------
PRINTING AND PUBLISHING 3.67%
3,500 Media General, Inc. Class A 135,625
2,800 Meredith Corp. 115,500
5,000 Bowne & Co., Inc. 91,250
----------
342,375
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------- ----------
<C> <S> <C> <C>
RAILROAD 3.62%
2,000 Kansas City Southern Industries, Inc. $ 93,000
10,500 Katy Industries, Inc. 143,062
12,000 Providence and Worcester Railroad Co. 102,000
----------
338,062
----------
REAL ESTATE 0.79%
4,500 Castle & Cooke, Inc.* 73,687
----------
RETAIL 5.34%
3,000 Harcourt General, Inc. 136,125
16,000 Phar-Mor, Inc.* 116,000
9,000 Shopko Stores, Inc. 126,000
7,000 Zale Corp.* 120,312
----------
498,437
----------
SOFTWARE 1.40%
5,500 Wang Laboratories, Inc.* 130,625
----------
TEXTILE AND APPAREL 1.25%
12,500 Griffon Corp.* 117,188
----------
TRANSPORTATION 1.43%
5,000 Pittston Brink's Group 133,750
----------
TRUCKING 1.31%
4,500 Ryder System, Inc. 122,625
----------
TOTAL COMMON STOCKS 8,915,224
----------
(cost $6,984,372)
WARRANTS 4.67%
9,000 BJ Services Co.* 101,250
7,000 Federated Department Stores
Series C* 86,625
4,000 Fleet Financial Group, Inc.* 43,500
7,500 Lone Star Industries, Inc.* 105,938
7,500 U.S. Home Corp. Class B* 62,813
3,000 USG Corp.* 35,625
----------
TOTAL WARRANTS 435,751
----------
(cost $286,337)
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
(UNAUDITED)
See notes to the financial statements.
<TABLE>
<CAPTION>
PAR
VALUE VALUE
----- ----------
<C> <S> <C> <C>
DEMAND NOTES 0.94%
$ 88,200 Pitney Bowes Credit Corp. 88,200
----------
TOTAL DEMAND NOTES 88,200
----------
(cost $88,200)
TOTAL INVESTMENTS 101.08%
(cost $7,358,909) 9,439,175
Liabilities less
Cash and Other Assets (1.08)% (100,995)
----------
NET ASSETS 100.00% $9,338,180
==========
*Non-income producing
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30, 1995
---------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment loss ($64,613) ($79,494)
Net realized gain on investments 225,231 101,874
Increase in unrealized appreciation on
investments 696,105 1,225,751
---------- ----------
Net increase in net assets resulting from
operations 856,723 1,248,131
---------- ----------
DISTRIBUTIONS PAID FROM:
Capital gains (17,153) --
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from 101,802 and 187,949 shares
issued, respectively 1,291,637 2,054,266
Proceeds from 1,327 and 0 shares of
dividends reinvested, respectively 16,410 --
Cost of 33,028 and 18,472 shares redeemed,
respectively (425,771) (188,727)
---------- ----------
Net increase from capital share
transactions 882,276 1,865,539
---------- ----------
TOTAL INCREASE IN NET ASSETS 1,721,846 3,113,670
NET ASSETS:
Beginning of period 7,616,334 4,502,664
---------- ----------
End of period $9,338,180 $7,616,334
========== ==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1996 SEPTEMBER 30, 1995 SEPTEMBER 30, 1994(1)
---------------- ------------------ ---------------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 12.52 $ 10.26 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.09) (0.13) (0.06)
Net realized and
unrealized gains on
investments 1.37 2.39 0.32
---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 1.28 2.26 0.26
---------- ---------- ----------
LESS DISTRIBUTIONS FROM:
Capital gains (0.03) -- --
---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $ 13.77 $ 12.52 $ 10.26
========== ========== ==========
TOTAL RETURN (2) 10.22% 22.03% 2.60%
SUPPLEMENTAL DATA AND
RATIOS:
Net assets, end of
period $9,338,180 $7,616,334 $4,502,664
Ratio of net expenses to
average net assets (3) 2.50% 2.50% 2.49%
Ratio of net investment
loss to average net
assets (3) (1.59)% (1.46)% (0.96)%
Portfolio turnover rate 26.23% 70.59% 63.20%
Average commission rate
paid on portfolio
investment transactions $ 0.0498 N/A N/A
</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 3.15% and (2.24)% for the six months ended
March 31, 1996, 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
MARCH 31, 1996
(UNAUDITED)
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.
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
MARCH 31, 1996
(UNAUDITED)
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 six months ended March 31,
1996, the Adviser waived $26,482. As of March 31, 1996, John Keeley, Jr.,
President of the Adviser, controlled either directly or indirectly 33.4% 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, 1995 to March 31, 1996, the Fund paid $7,869 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, 1995 to March 31,
1996, were $3,313,075 and $2,088,242, respectively. For the period from
October 1, 1995 to March 31, 1996, the Fund paid $11,095 of brokerage
commissions on trades of securities to the Distributor.
At March 31, 1996, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $7,358,909,
were as follows:
<TABLE>
<S> <C>
Appreciation $2,280,559
(Depreciation) (200,293)
----------
Net appreciation on
investments $2,080,266
==========
</TABLE>
<PAGE>
KEELEY SMALL CAP VALUE FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
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, 1995 to March 31, 1996, the Fund was advised that the
Distributor received $24,911 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>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Investment Adviser
KEELEY ASSET MANAGEMENT CORP.
Chicago, Illinois
Distributor
KEELEY INVESTMENT CORP.
Chicago, Illinois
Custodian, Transfer Agent and Dividend
Dispersing 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) 533-5344 . (312) 786-5003 (FAX)
KEELEY SMALL CAP VALUE FUND, INC.
SEMI-ANNUAL REPORT
MARCH 31, 1996
