<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders:
During the past six months, from October 1, 1998 through March 31, 1999, the
Fund's net assets grew from $39,746,837 to $44,489,166, an increase of 11.93%.
The number of shareholders grew 10.12% to 2,676. The Fund is registered in 50
states and the District of Columbia. Our broker-dealer network now totals 129
firms.
Performance Data Excluding 4.5% Maximum Up-Front Sales Charge*
For the six month period ended March 31, 1999, the Fund's total return was
+6.58% versus a return of +10.00% for the Russell 2000 Index and +27.34% for
the S&P 500 Index. For the quarter ended March 31, 1999, the Fund's total
return was -5.67% versus a return of -5.42% for the Russell 2000 Index and
+4.98% for the S&P 500 Index. For the one year ending March 31, 1999, the
Fund's average annual return was -16.64% versus -16.25% for the Russell 2000
Index and +18.46% for the S&P 500 Index. For the five years ending March 31,
1999, the Fund's average annual return was +16.18 versus +11.22 for the Russell
2000 Index and +26.25 for the S&P 500 Index. Since inception, the Fund's
average annual return was +14.75% versus +10.13% for the Russell 2000 Index and
+23.25% for the S&P 500 Index.
After a strong stock market rebound in the quarter ended December 31, 1998, led
by the narrow leadership in large capitalization technology, Internet and E-
commerce stocks, we expected a broadening of the general stock market in the
first quarter of 1999. However, despite continuing strength in the large
capitalization sector, investor concern over near term earnings prospects and
market liquidity considerations for small capitalization value companies caused
the group to decline in the first quarter of 1999.
We believe that a positive environment for small capitalization stocks should
begin to unfold in the second calendar quarter of 1999.
. While the S&P 500 Index is selling at 34 times trailing twelve month
earnings, seven times book value and yielding 1.3%, small cap equity
valuations are at the lowest relative valuations to large cap equity in 20 to
25 years. Given these valuations, we would expect an increase in acquisitions
by large cap companies of small cap companies as the former take advantage of
their relatively inflated stock valuations.
. Inflation is benign, the Federal Reserve System appears to be neutral as to
rate increases/decreases and the European Central Bank and the Bank of
England recently reduced interest rates. In addition, the U.S. economy is
continuing its strong growth.
. While some individual investors have been removing funds from small and mid
cap value stock funds, there is a growing interest in this sector by
consultants to the institutional pension/profit sharing market. This renewed
interest would suggest that the market is due for a rotation favoring the
small cap stock sector.
. In the first quarter of 1999, many financial magazines had articles about how
small cap value stocks should be avoided and momentum investing in large cap
technology companies is the right strategy. As contrarians, we believe this
is a significant development which will eventually tip the scale to our
sector.
At the time of this writing, the breath statistics (advancing stocks over
declining stocks) have begun to improve in the month of April. As the stock
market gains broaden out from large to small cap stocks, our performance has
seen improvement. In the quarter ended March 31, 1999, Fingerhut Co. a
portfolio holding, was acquired by Federated Department Stores, Inc.
Currently, the Fund's assets are in excess of $44 million. The growth of assets
has reduced the expense ratio to 1.99% for the six months ended March 31, 1999.
<PAGE>
Our investment strategy, which emphasizes corporate spin-offs, stocks trading
below actual or perceived book-value, and companies emerging from bankruptcy,
continues to provide good investment opportunities. Corporate America continues
to undergo the above-mentioned restructuring which, on average, has afforded
several good opportunities per quarter. We remain fully invested and confident
in our strategy which seeks investment opportunities in securities subject to
indiscriminate selling by investors with low expectations.
Thank you for your continued commitment to the Fund.
Sincerely yours,
[Signature of John L. Keeley, Jr.]
John L. Keeley, Jr.
President
*Performance Data Including 4.5% Maximum Up-Front Sales Charge
For the six month period ended March 31, 1999, the Fund's total return was
+1.80% versus a return of +10.00% for the Russell 2000 Index and +27.34% for
the S&P 500 Index. For the quarter ended March 31, 1999, the Fund's total
return was -9.93% versus a return of -5.42% for the Russell 2000 Index and
+4.98% for the S&P 500 Index. For the one year ending March 31, 1999, the
Fund's average annual return was -20.38% versus -16.25% for the Russell 2000
Index and +18.46% for the S&P 500 Index. For the five years ending March 31,
1999, the Fund's average annual return was +15.12 versus +11.22 for the Russell
2000 Index and +26.25 for the S&P 500 Index. Since inception, the Fund's
average annual return was +13.80% versus +10.13% for the Russell 2000 Index and
+23.25% for the S&P 500 Index.
Performance data quoted represents past performance and the investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
Index Comparison
Quarterly Comparison of a Hypothetical $10,000 Investment
in the KSCVF*, S&P 500** and Russell 2000**
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
KSCVF S&P 500 Russell 2000
----- ------- ------------
<S> <C> <C> <C>
10/1 1993 9,551 10,000 10,000
SEP 1994 9,799 10,369 10,267
SEP 1995 11,958 13,453 12,666
SEP 1996 13,899 16,188 14,330
SEP 1997 21,336 22,736 19,086
SEP 1998 19,097 24,792 15,456
MAR 1999 20,354 31,571 17,002
</TABLE>
Average annual total returns***
for periods ended March 31, 1999
<TABLE>
<CAPTION>
Since Commencement
12 mos ended 5 Yrs ended of Operation
3/31/99 3/31/99 10/1/93 to 3/31/99
------------ ----------- ------------------
<S> <C> <C> <C>
KSCVF -16.64% +16.18% +14.75%
KSCVF (includes max 4 1/2% front-
end load) -20.38% +15.12% +13.80%
S&P 500 Index +18.46% +26.25% +23.25%
Russell 2000 Index -16.25% +11.22% +10.13%
</TABLE>
* Performance graph includes deduction of the 4 1/2% front end load.
** The S&P 500 Index is a broad market-weighted index dominated by blue-chip
stocks. The Russell 2000 Index is comprised of the smallest 2000 companies in
the Russell 3000 Index. The Russell 3000 Index is comprised of the 3000
largest U.S. companies based on market capitalization. All Indexes are
unmanaged and returns include reinvested dividends.
***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
March 31, 1999
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $40,903,348) $44,776,594
Cash 99
Receivables for shares issued 106,158
Dividends and interest receivable 27,356
Prepaid expenses 16,166
-----------
Total Assets 44,926,373
-----------
LIABILITIES:
Payable to Adviser 37,827
Payables for securities purchased 113,250
Payables for shares redeemed 228,230
Other accrued expenses 57,900
-----------
Total Liabilities 437,207
-----------
NET ASSETS $44,489,166
===========
NET ASSETS CONSIST OF:
Capital stock $40,660,441
Accumulated net realized loss on investments (44,521)
Unrealized net appreciation on investments 3,873,246
-----------
TOTAL NET ASSETS $44,489,166
===========
CAPITAL STOCK, $0.01 par value
Authorized 10,000,000
Issued and outstanding 2,323,856
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $19.14
===========
MAXIMUM OFFERING PRICE PER SHARE $20.04
===========
</TABLE>
See notes to the financial statements.
KEELEY Small Cap Value Fund, Inc.
STATEMENT OF OPERATIONS
For The Six Months Ended March 31, 1999
(Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 240,623
Interest income 48,681
Other 1,011
----------
290,315
----------
EXPENSES:
Investment advisory fees 225,170
12b-1 fees 56,292
Professional fees 35,890
Administration fees 33,776
Transfer agent fees and expenses 29,066
Reports to shareholders 20,110
Federal and state registration fees 16,351
Custody fees 14,251
Fund accounting fees 12,512
Directors' fees 2,999
Other 1,811
----------
Net expenses 448,228
----------
Net investment loss (157,913)
----------
REALIZED AND UNREALIZED GAINS:
Net realized gain on investments 83,680
Increase in net unrealized appreciation on investments 2,776,224
----------
Net gain on investments 2,859,904
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,701,991
==========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
SCHEDULE OF INVESTMENTS
March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
COMMON STOCKS 96.75%
Aerospace 0.62%
27,000 The Fairchild Corp., Class A* $ 275,063
-----------
Automotive Related Industry 0.67%
19,200 Meritor Automotive, Inc. 297,600
-----------
Building Materials 1.47%
53,000 Homebase, Inc.* 235,187
17,000 Nortek, Inc.* 420,750
-----------
655,937
-----------
Business Service 4.32%
29,500 R.H. Donnelley Corp. 455,406
13,000 NCR Corporation* 650,000
33,000 Nielsen Media Research, Inc. 814,688
-----------
1,920,094
-----------
Communications and Media 11.25%
24,000 The Ackerley Group, Inc. 406,500
17,500 Anacomp, Inc.* 281,094
7,500 Associated Group, Inc., Class A* 371,719
15,000 CBS Corp. 614,063
6,000 Cox Communications, Inc., Class A* 453,750
8,200 GC Companies, Inc.* 257,788
20,000 Information Resources, Inc.* 128,750
8,500 Media General, Inc., Class A 395,250
40,000 Paxson Communications* 342,500
82,000 Price Communications Corp.* 912,250
19,000 Sprint Corp. (PCS Group)* 841,937
-----------
5,005,601
-----------
Consumer Products 0.54%
22,000 Justin Industries, Inc. 242,000
-----------
Consumer Service 2.23%
12,000 Chemed Corp. 309,000
24,000 Coinmach Laundry Corp.* 246,000
16,500 Pittway Corp., Class A 437,250
-----------
992,250
-----------
Containers 2.15%
18,500 Alltrista Corp.* 360,750
10,000 Greif Brothers Corp., Class A 220,000
10,500 Premark International, Inc. 345,844
2,000 U.S. Can Corp.* 29,500
-----------
956,094
-----------
Electronics 1.31%
19,000 Kollmorgen Corp. 237,500
9,600 Moog, Inc., Class B* 345,600
-----------
583,100
-----------
Engineering and Construction 1.89%
16,000 Commercial Intertech Corp. 178,000
15,500 Emcor Group, Inc.* 266,406
40,000 Morrison Knudsen Corp.* 397,500
-----------
841,906
-----------
Entertainment and Leisure 3.65%
13,500 Gaylord Entertainment 327,375
31,500 On Command Corp.* 287,437
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares Value
--------- ------------
<C> <S> <C> <C>
Entertainment and Leisure (continued)
7,000 SFX Entertainment, Inc., Class A* $ 451,937
72,500 WMS Industries, Inc.* 557,344
------------
1,624,093
------------
Environmental Control 1.10%
100,000 Aqua Alliance, Inc.* 225,000
19,000 Cuno, Inc.* 266,000
------------
491,000
------------
Finance Company 5.46%
17,000 Alliance Bancorp, Inc. 301,750
36,500 Boston Private Financial Holdings, Inc.* 269,188
34,500 Brookline Bancorp, Inc. 392,437
37,000 CFS Bancorp, Inc. 388,500
5,500 Finova Group, Inc. 285,313
33,000 Harbor Florida Bancshares, Inc. 420,750
34,000 Hudson River Bancorp, Inc.* 371,875
------------
2,429,813
------------
Financial Services 5.81%
26,500 AG Services of America, Inc.* 389,219
4,500 Duff & Phelps Credit Rating Corp. 235,687
11,100 Federal Agricultural Mortgage Corp., Class C* 584,137
6,000 Jefferies Group, Inc. 284,625
54,500 Phoenix Investment Partners, Ltd. 470,063
16,500 Pioneer Group, Inc. 244,406
18,400 Waddell & Reed Financial, Inc. 377,200
------------
2,585,337
------------
Food, Beverage and Tobacco 9.28%
12,000 Earthgrains Co. 266,250
37,000 General Cigar Holdings, Inc.* 344,562
62,600 ICH Corp.* 528,187
43,000 M & F Worldwide Corp.* 301,000
73,000 Nathans Famous, Inc.* 255,500
22,500 Ralcorp Holdings, Inc.* 427,500
34,500 Shells Seafood Restaurants, Inc.* 138,000
15,000 Sodexho Marriott Services, Inc. 330,938
23,500 Tasty Baking Co. 261,437
9,000 Tricon Global Restaurants, Inc.* 632,250
18,500 Vlasic Foods International, Inc.* 239,344
23,500 Whitman Corp. 403,906
------------
4,128,874
------------
Forestry 1.94%
17,500 Deltic Timber Corp. 415,625
18,500 St. Joe Corp. 448,625
------------
864,250
------------
Furniture/Home Appliances 0.87%
17,500 Furniture Brands International, Inc.* 387,187
------------
Healthcare Products 0.09%
26,000 BEI Medical Systems Co., Inc.* 39,000
------------
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
SCHEDULE OF INVESTMENTS (continued)
March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
Household Products 2.29%
8,500 Chesapeake Corp. $ 230,562
14,000 Masco Corp. 395,500
24,000 U.S. Industries, Inc. 394,500
-----------
1,020,562
-----------
Housing 4.13%
17,000 Kaufman & Broad Home Corp. 383,563
19,500 Lennar Corp. 436,312
19,500 MDC Holdings, Inc. 280,312
13,000 U.S. Home Corp.* 424,125
28,000 Walter Industries, Inc.* 315,000
-----------
1,839,312
-----------
Insurance 5.21%
1,938 Alleghany Corp.* 356,350
13,000 American Financial Group, Inc. 457,438
9,500 Chicago Title Corp. 345,563
15,000 The MONY Group, Inc. 373,125
16,500 Superior National Insurance Group, Inc.* 313,500
15,000 Unitrin, Inc. 468,750
-----------
2,314,726
-----------
Lodging 2.33%
32,000 Choice Hotels International, Inc.* 450,000
36,000 Host Marriott Services Corp.* 243,000
53,000 Meristar Hotels & Resorts, Inc.* 145,750
53,000 Sunburst Hospitality Corp.* 198,750
-----------
1,037,500
-----------
Machinery 1.19%
9,200 Chicago Rivet & Machine Co. 211,600
24,000 Unova, Inc.* 316,500
-----------
528,100
-----------
Manufacturing 3.22%
37,000 Griffon Corp.* 254,375
27,000 Hussmann International, Inc. 396,563
12,000 ITT Industries, Inc. 424,500
19,000 Thomas Industries, Inc. 356,250
-----------
1,431,688
-----------
Oil and Gas--Equipment & Services 1.97%
20,000 Evergreen Resources, Inc.* 400,000
54,000 Getty Petroleum Marketing, Inc.* 155,250
26,000 Pennzoil-Quaker State Co. 321,750
-----------
877,000
-----------
Pharmaceuticals and Healthcare 1.91%
17,500 Covance, Inc.* 438,594
23,000 Morrison Health Care, Inc. 411,125
-----------
849,719
-----------
Printing and Publishing 3.87%
8,500 Meredith Corp. 267,219
28,500 Penton Media, Inc. 641,250
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares Value
--------- -----------
<C> <S> <C> <C>
Printing and Publishing (continued)
35,500 Primesource Corp. $ 199,687
28,500 Ziff-Davis, Inc.* 612,750
-----------
1,720,906
-----------
Railroad 3.98%
12,500 Kansas City Southern Industries, Inc. 712,500
20,000 Katy Industries, Inc. 260,000
28,500 Providence and Worcester Railroad Co. 317,063
9,000 Union Pacific Corp. 480,937
-----------
1,770,500
-----------
Real Estate 0.66%
23,500 Getty Realty Corp. 293,750
-----------
Retail 4.16%
9,000 Harcourt General, Inc. 398,813
8,500 The Limited, Inc. 336,813
20,000 Midas, Inc. 667,500
13,000 Zale Corp.* 444,437
-----------
1,847,563
-----------
Semiconductors 0.75%
12,000 Conexant Systems, Inc.* 332,250
-----------
Software 1.45%
11,500 BARRA, Inc.* 283,187
18,500 Wang Laboratories, Inc.* 363,063
-----------
646,250
-----------
Textile and Apparel 1.00%
24,000 Shaw Industries, Inc. 444,000
-----------
Transportation 2.95%
48,000 Avalon Holdings Corp., Class A* 291,000
13,000 MotivePower Industries, Inc.* 326,625
13,500 Pittston Brink's Group 317,250
13,000 Sea Containers Ltd., Class A 375,375
-----------
1,310,250
-----------
Utilities 1.03%
59,000 Citizens Utilities Co., Class B* 457,250
-----------
Total Common Stocks
(cost $39,443,129) 43,040,525
-----------
WARRANTS 1.36%
18,500 Golden State Bancorp, Inc.* 296,000
24,300 Jacor Communications* 244,519
1,500 Lone Star Industries, Inc.* 65,250
-----------
Total Warrants
(cost $329,919) 605,769
-----------
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
SCHEDULE OF INVESTMENTS (continued)
March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -----------
<C> <S> <C> <C>
SHORT TERM INVESTMENTS 2.54%
$1,130,300 Firstar Bank Demand Note,
4.6887%, 4/1/99 $ 1,130,300
-----------
Total Short Term Investments
(cost $1,130,300) 1,130,300
-----------
Total Investments 100.65%
(cost $40,903,348) 44,776,594
Liabilities less Cash and Other Assets (0.65)% (287,428)
-----------
NET ASSETS 100.00% $44,489,166
===========
</TABLE>
*Non-income producing
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended
March 31, 1999 Year Ended
(Unaudited) September 30, 1998
---------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (157,913) $ (359,668)
Net realized gain on investments 83,680 1,250,693
Increase (decrease) in net unrealized
appreciation on investments 2,776,224 (7,451,002)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 2,701,991 (6,559,977)
----------- -----------
DISTRIBUTIONS:
Net realized gains (892,529) (1,025,487)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from 577,440 and 1,382,316 shares
issued, respectively 11,096,566 30,360,643
Proceeds from 45,208 and 50,348 shares of
distributions reinvested, respectively 864,849 1,013,504
Cost of 469,676 and 231,423 shares
redeemed, respectively (9,028,548) (4,865,957)
----------- -----------
Net increase from capital stock
transactions 2,932,867 26,508,190
----------- -----------
TOTAL INCREASE IN NET ASSETS 4,742,329 18,922,726
Beginning of period 39,746,837 20,824,111
----------- -----------
NET ASSETS:
End of period $44,489,166 $39,746,837
=========== ===========
</TABLE>
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months
Ended
March 31, Year Ended Year Ended Year Ended Year Ended Year Ended
1999 September 30, September 30, September 30, September 30, September 30,
(Unaudited) 1998 1997 1996 1995 1994(2)
----------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA(1)
Net asset value,
beginning of period $ 18.31 $ 21.48 $ 14.52 $ 12.52 $10.26 $10.00
Income from investment
operations:
Net investment loss (0.07) (0.16) (0.25) (0.19) (0.13) (0.06)
Net realized and
unrealized gains on
investments 1.28 (2.00) 7.77 2.22 2.39 0.32
------- ------- ------- ------- ------ ------
Total from investment
operations 1.21 (2.16) 7.52 2.03 2.26 0.26
------- ------- ------- ------- ------ ------
Less distributions:
Net realized gains (0.38) (1.01) (0.56) (0.03) -- --
------- ------- ------- ------- ------ ------
Net asset value, end of
period $ 19.14 $ 18.31 $ 21.48 $ 14.52 $12.52 $10.26
======= ======= ======= ======= ====== ======
Total return(3)(4) 6.58% (10.50)% 53.51% 16.23% 22.03% 2.60%
Supplemental data and
ratios:
Net assets, end of
period
(in 000's) $44,489 $39,747 $20,824 $10,815 $7,616 $4,503
Ratio of expenses to
average net assets,
before waivers(5) 1.99% 2.02% 2.45% 2.94% 3.94% 5.98%
Ratio of net investment
loss to average net
assets, before
waivers(5) (0.70)% (1.17)% (1.66)% (2.05)% (2.90)% (4.45)%
Ratio of expenses to
average net assets, net
of waivers(5) 1.99% 2.02% 2.45% 2.50% 2.50% 2.49%
Ratio of net investment
loss to average net
assets, net of
waivers(5) (0.70)% (1.17)% (1.66)% (1.61)% (1.46)% (0.96)%
Portfolio turnover
rate(4) 20.22% 33.40% 36.40% 52.43% 70.59% 63.20%
</TABLE>
(1) Per share data is for a share outstanding throughout the period.
(2) The Fund commenced operations on October 1, 1993.
(3) The total return calculation does not reflect the 4.50% sales load imposed
on the purchase of shares.
(4) Not annualized for the six months ended March 31, 1999.
(5) Annualized for the six months ended March 31, 1999.
See notes to the financial statements.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
NOTES TO THE FINANCIAL STATEMENTS
March 31, 1999
(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").
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
("GAAP"). The presentation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates and
assumptions.
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 last sale price,
or 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 fair
value. Securities for which quotations are not readily available 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 under
Subchapter M of the Internal Revenue Code available to regulated investment
companies and intends to continue to so comply.
c) Distributions to Shareholders -- Dividends from net investment income, if
any, will be declared and paid annually. Distributions of net realized
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 realized gain
distributions determined annually in accordance with federal tax regulations
that may differ from generally accepted accounting principles. Accordingly,
at March 31, 1999, reclassifications were recorded from accumulated net
investment losses to reduce capital stock by $95,332 and accumulated net
realized gain on investments by $62,581.
<PAGE>
KEELEY Small Cap Value Fund, Inc.
NOTES TO THE FINANCIAL STATEMENTS (continued)
March 31, 1999
(Unaudited)
d) Other -- Investment transactions are recorded on the trade date for
financial statement purposes. 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.
3.INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with Keeley Asset Management Corp. (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 pays 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 2.50%, the Adviser will reimburse the Fund for
the amount of such excess.
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 Keeley
Investment Corp. (the "Distributor"), with whom certain officers and
directors of the Fund are affiliated, 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, 1998 to March 31, 1999,
the Fund paid $29,768 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, 1998 to March 31,
1999, were $14,771,629 and $8,721,975, respectively. For the period from
October 1, 1998 to March 31, 1999, the Fund paid $73,600 of brokerage
commissions on trades of securities to the Distributor.
At March 31, 1999, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $41,061,725,
were as follows:
<TABLE>
<S> <C>
Appreciation $ 9,291,342
Depreciation (5,576,473)
-----------
Net appreciation on
investments $ 3,714,869
===========
</TABLE>
<PAGE>
KEELEY Small Cap Value Fund, Inc.
NOTES TO THE FINANCIAL STATEMENTS (continued)
March 31, 1999
(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 Sales Charge Dealer Reallowance
Amount of Single as a Percentage of as a Percentage of as a Percentage of
Transaction Offering Price Net Amount Invested Offering Price
---------------- ------------------ ------------------- ------------------
<S> <C> <C> <C>
Less than
$50,000 4.50% 4.71% 4.00%
$50,000 but less
than $100,000 4.00% 4.17% 3.50%
$100,000 but
less than
$250,000 3.00% 3.09% 2.50%
$250,000 but
less than
$500,000 2.50% 2.56% 2.00%
$500,000 and
over 2.00% 2.04% 1.50%
</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, 1998 to March 31, 1999, the Fund was advised that the
Distributor received $40,676 of sales charges.
As specified in the Fund's Prospectus, reduced sales charges are available
through a letter of intent or a right of accumulation and certain sales of
Fund shares can be made at net asset value per share.
<PAGE>
Results of the Shareholder Meeting
A meeting of the shareholders of the Fund was held on May 11, 1999. Directors
elected by the shareholders at the meeting were as follows: John L. Keeley,
Jr., John F. Lesch, John G. Kyle, Elwood P. Walmsley, Jerome J. Klingenberger,
and Sean W. Lowry. The matters voted on by the shareholders of record as of
March 9, 1999 and the results of the shareholders' vote at the May 11, 1999
meeting were as follows:
Proposal No. 1 - Election of Directors
<TABLE>
<CAPTION>
For Withheld
<S> <C> <C>
John L. Keeley, Jr. 2,057,900.902 17,214,206
John F. Lesch 2,058,408.902 16,706,206
John G. Kyle 2,058,408.902 16,706,206
Elwood P. Walmsley 2,058,408.902 16,706,206
Jerome J. Klingenberger 2,058,201.902 16,913,206
Sean W. Lowry 2,057,014.462 18,100.646
</TABLE>
Proposal No. 2 - Ratification of the Selection of Independent Accountants
<TABLE>
<CAPTION>
For Against Abstentions
<S> <C> <C> <C>
PricewaterhouseCoopers LLP 2,062,857.386 6,243.509 6,014.213
</TABLE>
<PAGE>
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<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Investment Adviser
KEELEY ASSET MANAGEMENT CORP.
Chicago, Illinois
Distributor
KEELEY INVESTMENT CORP.
Chicago, Illinois
Custodian
FIRSTAR BANK MILWAUKEE, N.A.
Milwaukee, Wisconsin
800-338-1579
Transfer Agent and Dividend Disbursing Agent
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
800-338-1579
Auditors
PRICEWATERHOUSECOOPERS, LLP
Milwaukee, Wisconsin
Counsel
SCHWARTZ & FREEMAN
Chicago, Illinois
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
KEELEY Small Cap Value Fund, Inc.
Semi-Annual Report
March 31, 1999
