-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VcVaanXJ7tHeu7e7T9M+XZKHPhakkMaEyPKOoSAEwvPkGUZKxvxKV5VplbkF5Zgx o5yyGCLOeqQwmL8M+5pj7A== 0000318835-09-000018.txt : 20090522 0000318835-09-000018.hdr.sgml : 20090522 20090520150247 ACCESSION NUMBER: 0000318835-09-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20090331 FILED AS OF DATE: 20090520 DATE AS OF CHANGE: 20090520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSI REALTY INCOME FUND VI CENTRAL INDEX KEY: 0000318835 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953633566 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-68926 FILM NUMBER: 09842237 BUSINESS ADDRESS: STREET 1: 6700 E. PACIFIC COAST HWY STREET 2: SUITE 150 CITY: LONG BEACH STATE: CA ZIP: 90803 BUSINESS PHONE: 562 493-8881 MAIL ADDRESS: STREET 1: P.O. BOX 357 CITY: LONG BEACH STATE: CA ZIP: 90801 FORMER COMPANY: FORMER CONFORMED NAME: DSI REALTY INCOME FUND 81-I DATE OF NAME CHANGE: 19870812 10-Q 1 dsi006-10q2009.htm Corporate-Insiders.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities and Exchange Act of 1934

For the quarterly period ended March 31, 2009

[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________ to _______________

Commission File No. 2-68926.

DSI REALTY INCOME FUND VI

a California Limited Partnership

California


95-3633566

(State or other jurisdiction of incorporation or organization)


(I.R.S. Employer Identification No.)

6700 E. Pacific Coast Hwy., Long Beach, California 90803

(Address of principal executive offices)

Registrant’s telephone number, including area code (562) 493-8881


Indicate by check mark whether the issuer (l) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ] Accelerated filer [ ]  Non-accelerated filer [ ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The issuer is a limited partnership. All 23,753 limited partnership units originally sold for $500.00 per unit. There is no trading market for the limited partnership units.

Certain statements contained in this discussion or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words and phrases such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “designed to achieve”, variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements relating to rent and occupancy growth, general conditions in the geographic areas where we operate – are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Many of the factors that may affect outcomes and results are beyond our ability to control.


Page 1

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)
 

BALANCE SHEETS (UNAUDITED)


March 31,
2009


December 31, 2008
(Audited)

ASSETS:






Cash & Equivalents



$ 709,327


$ 653,434

Property Net



1,525,970


1,527,364

Uncollected Rental Revenue



66,223


101,762

Prepaid Advertising



61,029


81,372

Other Assets



43,831


22,000

TOTAL



$ 2,406,380


$ 2,385,932







LIABILITIES AND PARTNERS' EQUITY





LIABILITIES:






Distribution due to Partners



$ 209,938


$ 209,938

Incentive Management Fee Liability



26,226


30,748

Property Management Fee Liability



12,695


12,952

Capital Leases



-


-

Deferred Income



53,899


50,063

Accrued Expenses



25,612


32,983

Other Liabilities



33,742


19,299

Total Liabilities



362,112


355,983

PARTNERS' EQUITY:






General Partners



(70,744)


(70,887)

Limited Partners



2,115,011


2,100,836

Total Partners' Equity



2,044,268


2,029,949







TOTAL



$ 2,406,380


$ 2,385,932

The accompanying notes are an integral part of these Financial Statements





 

Page 2

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)
 

STATEMENTS OF INCOME (UNAUDITED)








March 31, 2009


March 31, 2008

REVENUES:






Self-storage rental income



$ 574,482


$ 597,001

Ancillary operating revenue



56,195


56,510

Interest and other income



154


25,170

TOTAL



$ 630,832


$ 678,681

EXPENSES:






Depreciation



1,394


11,455

Operating



249,119


231,828

General and administrative



89,878


77,178

Interest



-


-

General partners' incentive management fee



26,226


22,134

Property management fee



39,959


40,717

TOTAL



406,575


383,312

NET INCOME:



$ 224,257


$ 295,369







AGGREGATE INCOME ALLOCATED TO:





General partners



2,243


2,954

Limited partners



222,014


292,415

TOTAL



$ 224,257


$ 295,369







Weighted average limited partnership units outstanding


23,753


23,753

NET INCOME PER LIMITED PARTNERSHIP UNIT



$ 9.35


$ 12.31

The accompanying notes are an integral part of these Financial Statements






Page 3

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)


STATEMENTS OF PARTNERS' EQUITY (UNAUDITED)










General Partners


Limited Partners


Total













BALANCE AT DECEMBER 31, 2008

$ (70,887)


$ 2,100,836


$ 2,029,949







Net Income Allocation

2,243


222,014


$ 224,257

Distributions

(2,099)


(207,839)


$ (209,938)







BALANCE AT MARCH 31, 2009

$ (70,744)


$ 2,115,011


$ 2,044,268







The accompanying notes are an integral part of these Financial Statements







Page 4

DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)


STATEMENTS OF CASH FLOWS (UNAUDITED)






March 31, 2009


March 31, 2008

CASH FLOWS FROM OPERATING ACTIVITIES:






Net income



$ 224,257


$ 295,369

Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation



1,394


11,455

Changes in assets and liabilities:






Other assets



34,050


31,728

Incentive management fee payable to General Partners



(4,522)


22,134

Property management fees payable



(257)


254

Customer deposits and other liabilities



10,909


(102,452)

Net cash provided by operating activities



265,831


258,488







CASH FLOWS FROM FINANCING ACTIVITIES:






Distributions to partners



$ (209,938)


$ (209,938)

Payments on capital lease obligations



-


(10,595)

Net cash used in financing activities



(209,938)


(220,533)







NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

55,893


$ 37,955







CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR


653,434


670,913

CASH AND CASH EQUIVALENTS AT END OF PERIOD


709,327


708,868







SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION



Cash paid for interest



$ -


$ 655







NON CASH INVESTING AND FINANCING ACTIVITIES:





Distributions due partners included in partners' equity



209,938


209,938

The accompanying notes are an integral part of these Financial Statements

Page 5




DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2009

1. GENERAL

DSI Realty Income Fund VI, a California Limited Partnership (the "Partnership"), has two general partners (DSI Properties, Inc. and Diversified Investors Agency) and limited partners owning 23,753 limited partnership units, which were purchased for $500 per unit. The general partners have made no capital contributions to the Partnership and are not required to make any capital contributions in the future. The Partnership has a maximum life of 50 years and was formed on March 27, 1981, under the California Uniform Limited Partnership Act for the primary purpose of acquiring and operating real estate.

The Partnership owns mini-storage facilities located in Vallejo, California; Arvada, Federal Heights and Colorado Springs, Colorado; and two in Santa Rosa, California. All facilities were purchased from Dahn Corporation ("Dahn"). Dahn is not affiliated with the Partnership. Dahn is affiliated with other partnerships in which DSI Properties, Inc. is a general partner.

The accompanying interim financial statements have been prepared by the Company's management in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2008.

2. PROPERTY

Properties owned by the Partnership are all mini-storage facilities. Depreciation is calculated using the straight-line method over the estimated useful life of 20 years. Property under capital leases is amortized over the lives of the respective leases. The total cost of property and accumulated depreciation at March 31, 2009 is as follows:
 


March 31, 2009

December 31, 2008

Land

$ 1,512,000

$ 1,512,000

Buildings and improvements

7,515,006

7,515,006

Rental trucks under capital leases

161,181

161,181

Total

9,188,187

9,188,187

Less accumulated depreciation

(7,662,217)

(7,660,823)

Property – net

$ 1,525,970

$ 1,527,364


3. NET INCOME PER LIMITED PARTNERSHIP UNIT

Net income per limited partnership unit is calculated by dividing the net income allocated to the limited partners by the number of limited partnership units outstanding during the period.

Page 6

4. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE MANAGEMENT FEE

Under the Agreement of Limited Partnership, the general partners are to be allocated 1% of the net profits or losses from operations, and the limited partners are to be allocated the balance of the net profits or losses from operations in proportion to their limited partnership interests. The general partners are also entitled to receive a percentage, based on a predetermined formula, of any cash distribution from the sale, other disposition, or refinancing of the project.

In addition, the general partners are entitled to receive an incentive management fee for supervising the operations of the Partnership. The fee is to be paid in an amount equal to 9% per annum of the cash available for distribution on a cumulative basis, calculated as cash generated from operations less capital expenditures.

5. RELATED-PARTY TRANSACTIONS

The Partnership has entered into a management agreement with Dahn to operate its mini-storage facilities. The management agreement provides for a management fee equal to 6% of gross revenue from operations, which is defined as the entire amount of all receipts from the renting or leasing of storage compartments and sale of locks. The management agreement is renewable annually. Dahn earned management fees equal to $39,959 and $40,717, for the three month period ended March 31, 2009 and March 31, 2008, respectively. Amounts payable to Dahn at March 31, 2009 and March 31, 2008, were $12,695 and $12,952, respectively.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Critical Accounting Policies

Revenue recognition - Revenue is recognized using the accrual method based on contractual amounts provided for in the lease agreements, which approximates recognition on a straight-line basis. The term of the lease agreements is usually less than one year.

RESULTS OF OPERATIONS

2009 COMPARED TO 2008

For the three-month periods ended March 31, 2009 and 2008, revenues decreased 7.1% from $678,681 to $630,832, total expenses increased 6.1% from $383,312 to $406,575, resulting in a decrease in net income of 24.1% from $295,369 for the three-month period ended March 31, 2008, to $224,257 for the same period in 2009. Rental revenues decreased primarily as a result of lower occupancy and unit rental rates.

Occupancy levels for the Partnership's mini-storage facilities averaged 74.1% for the three-month period ended March 31, 2009, compared to 80.8% for the same period in 2008. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses increased approximately $17,291 (7.5%) primarily due to increases in advertising and real estate tax expenses. General and administrative expenses increased approximately $12,700 (16.5%) primarily as a result of an increase in legal and professional expenses.

The General Partners plan to continue their policy of funding the continuing improvement and maintenance of Partnership properties with cash generated from operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required.

ITEM 4. CONTROLS AND PROCEDURES

No response required.

Page 7

ITEM 4T. CONTROLS AND PROCEDURES

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of DSI Properties, Inc., its General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.  

Changes in Internal Control over Financial Reporting.

There have been no significant changes in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2009 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Registrant is not a party to any material pending legal proceedings.

ITEM 1A. RISK FACTORS

Not required.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits

31.1 Rule 13a-14(a)/15d-14(a) Certification: Principal Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification: Principal Financial Officer
32.1 Section 1350 Certification: Principal Executive Officer
32.2 Section 1350 Certification: Principal Financial Officer


Page 8

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


DSI REALTY INCOME FUND VI,

a California Limited Partnership
by: DSI Properties, Inc., a California Corporation, as General Partner


/s/ ROBERT J. CONWAY

By_____________________________

Dated: May 20, 2009

ROBERT J. CONWAY, President
(Chief Executive Officer, Chief
Financial Officer and Director)


/s/ JOSEPH W. CONWAY

By_____________________________

Dated: May 20, 2009

JOSEPH W. CONWAY, (Executive
Vice President and Director)



Page 9

EXHIBIT 31.1
Rule 13a-14(a)/15d-14(a) Certification

I, Robert J. Conway, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DSI Realty Income Fund VI;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which

such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ ROBERT J. CONWAY

___________________________________

Robert J. Conway
President of DSI Properties, Inc.,
General Partner (chief executive officer)

May 20, 2009

EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification

I, Richard P. Conway, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DSI Realty Income Fund VI;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which

such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ RICHARD P. CONWAY

__________________________________

Richard P. Conway
Senior Vice President of DSI Properties, Inc.,
General Partner (chief financial officer)

May 20, 2009

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of DSI Realty Income Fund VI (the "Partnership") on Form 10-Q for the period ending March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert J. Conway, President of DSI Properties, Inc., General Partner of the Partnership, and performing the functions of chief executive officer of the Partnership, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.


/s/ ROBERT J. CONWAY

___________________________________

Robert J. Conway
President of DSI Properties, Inc.,
General Partner (chief executive officer)

May 20, 2009

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of DSI Realty Income Fund VI (the "Partnership") on Form 10-Q for the period ending March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard P. Conway, Senior Vice President of DSI Properties, Inc., General Partner of the Partnership, and performing the functions of chief financial officer of the Partnership, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.


/s/ RICHARD P. CONWAY

__________________________________

Richard P. Conway
Senior Vice President of DSI Properties, Inc.,
General Partner (chief financial officer)

May 20, 2009

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