10-Q 1 dsivii601.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q /_x_/ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2001 /___/ Transition report pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the transition period from ______________ to ________________. Commission File Number 2-83291 DSI REALTY INCOME FUND VII, A California Limited Partnership (Exact name of registrant as specified in its charter) California_______________________________________95-3871044 (State or other jurisdiction of (I.R.S. Employer incorporation) Identification No.) 6700 E. Pacific Coast Hwy, Long Beach, California 90803 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code-(562)493-8881 _________________________________________________________________ Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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__. PART I - FINANCIAL INFORMATION Item 1. Financial Statements. The information required by Rule 10-01 of Regulation S-X is included in the Quarterly Report to the Limited Partners of Registrant for the period ended June 30, 2001 which is attached hereto as Exhibit "20" and incorporated herein by this reference. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Registrant incorporates by this reference its Quarterly Report to Limited Partners for the period ended June 30, 2001. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8K. (a) Attached hereto as Exhibit "20" is Registrant's Quarterly Report to Limited Partners for the period ended June 30, 2001. (B) Registrant did not file any reports on Form 8-K for the period reported upon. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: July 31, 2001 DSI REALTY INCOME FUND VII A California Limited Partnership (Registrant) By____\s\ Robert J. Conway_____ DSI Properties, Inc., as General Partner by ROBERT J. CONWAY, President and Chief Financial Officer SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: July 31, 2001 DSI REALTY INCOME FUND VII A California Limited Partnership (Registrant) By__\s\ Robert J. Conway________ DSI Properties, Inc., as General Partner by ROBERT J. CONWAY, President and Chief Financial Officer July 31, 2001 QUARTERLY REPORT TO THE LIMITED PARTNERS OF DSI REALTY INCOME FUND VII DEAR LIMITED PARTNERS: We are pleased to enclose the Partnership's unaudited financial statements for the period ended June 30, 2001. The following is Management's discussion and analysis of the Partnership's financial condition and results of its operations. For the three month period ended June 30, 2001, and 2000, total revenues increased 10.0% from $584,337 to $642,992 and total expenses decreased 26.4% from $398,031 to $293,122 and other income decreased from $2,065 to $1,194. As a result, net income increased 86.4% from $188,371 for the three-month period ended June 30, 2000, to $351,064 for the same period in 2001. Rental revenue increased primarily as a result of higher occupancy and unit rental rates. Occupancy levels for the Partnership's six mini-storage facilities averaged 92.4% for the three-month period ended June 30, 2001 and 87.1% for the same period in 2000. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses decreased approximately $103,400 (30.2%) primarily as a result of decreases in depreciation and maintenance and repair expenses, partially off-set by increases property management fees and salaries and wage expenses. Property management fees, which are based on rental income, increased as a result of the increase in rental revenue. There was a substantial decrease in depreciation expense, as the Partnership's properties are fully depreciated. General and administrative expenses remained relatively constant. For the six month periods ended June 30, 2001, and 2000, total revenues increased 11.8% from $1,125,864 to $1,258,676 and total expenses decreased 25.7% from $790,475 to 587,466 and other income decreased from $3,773 to $2,644. As a result, net income increased 98.7% from $339,162 for the six months ended June 30, 2000, to $673,854 for the same period in 2001. Rental revenue increased primarily as a result of higher occupancy and unit rental rates. Operating expenses decreased approximately $200,900 (30.0%) primarily due to decreases in yellow pages advertising costs, workers compensation insurance expenses and depreciation, partially offset by increases in property management fees, salaries and wage and security alarm services expenses. The increase in property management fees and decrease in depreciation was discussed above. General and administrative expenses remained relatively constant. The General Partners will continue their policy of funding improvements and maintenance of Partnership properties with cash generated from operations. The Partnership's financial resources appear to be adequate to meet its needs. The General Partners anticipate distributions to the Limited Partners to remain at the current level for the foreseeable future. We are not enclosing a copy of the Partnership Form 10-Q as filed with the Securities and Exchange Commission since all the information set forth therein is contained either in this letter or in the attached financial statements. However, if you wish to receive a copy of said report, please send a written request to DSI Realty Income Fund VII, P.O. Box 357, Long Beach, California 90801. Very truly yours, DSI REALTY INCOME FUND VII By: DSI Properties, Inc., as General Partner By /s/ Robert J. Conway ____________________________ ROBERT J. CONWAY, President DSI REALTY INCOME FUND VII (A California Real Estate Limited Partnership) BALANCE SHEETS(UNAUDITED) JUNE 30, 2001 AND DECEMBER 31, 2000
June 30, December 31, 2001 2000 ASSETS CASH AND CASH EQUIVALENTS $ 611,017 $ 468,842 PROPERTY, Net 2,089,800 2,089,800 OTHER ASSETS 52,588 44,588 TOTAL $2,753,405 $2,603,230 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 582,557 $ 621,388 PARTNERS' EQUITY (DEFICIT): General Partners (86,059) (87,950) Limited Partners 2,256,907 2,069,792 Total partners' equity 2,170,848 1,981,842 TOTAL $2,753,405 $2,603,230 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000 June 30, June 30, 2001 2000 REVENUES: Rental income $ 642,992 $ 584,337 EXPENSES: Operating 238,910 342,332 General and administrative 54,212 55,699 Total expenses 293,122 398,031 OPERATING INCOME $ 349,870 $ 186,306 OTHER INCOME Interest 1,194 2,065 NET INCOME $ 351,064 $ 188,371 AGGREGATE NET INCOME ALLOCATED TO: Limited Partners $ 347,553 $ 186,487 General Partners 3,511 1,884 TOTAL $ 351,064 $ 188,371 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 14.48 $ 7.77 LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 24,000 24,000 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 June 30, June 30, 2001 2000 REVENUES: Rental $1,258,676 $1,125,864 EXPENSES: Operating 478,214 669,354 General and administrative 119,056 121,121 Total expenses 597,270 790,475 OPERATING INCOME $ 661,406 $ 335,389 OTHER INCOME Interest 2,644 3,773 NET INCOME $ 664,050 $ 339,162 AGGREGATE NET INCOME ALLOCATED TO: Limited Partners $ 667,115 $ 335,770 General Partners 6,739 3,392 TOTAL $ 673,854 $ 339,162 NET INCOME PER LIMITED PARTNERSHIP UNIT $27.80 $13.99 LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 24,000 24,000 See accompanying notes to financial statements (unaudited)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2000 ($86,270) $2,236,131 $2,149,861 NET INCOME 3,392 335,770 339,162 DISTRIBUTIONS (4,848) (480,000) (484,848) BALANCE AT JUNE 30, 2000 ($87,726) $2,091,901 $2,004,175 BALANCE AT JANUARY 1, 2001 ($87,950) $2,069,792 $1,981,842 NET INCOME 6,739 667,115 673,854 DISTRIBUTIONS (4,848) (480,000) (484,848) BALANCE AT JUNE 30, 2001 ($86,059) $2,256,907 $2,170,848 See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
June 30, June 30, 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 673,854 $ 339,162 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 0 254,653 Changes in assets and liabilities: Increase in other assets (8,000) 0 Decrease in liabilities (38,831) (19,956) Net cash provided by operating activities 619,219 573,859 CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (484,848) (484,848) NET INCREASE IN CASH AND CASH EQUIVALENTS 142,175 89,011 CASH AND CASH EQUIVALENTS: At beginning of period 468,842 525,003 At end of period $ 611,017 $ 614,014 See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND VII (A California Real Estate Limited Partnership) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. GENERAL DSI Realty Income Fund VII (the "Partnership"), has two general partners (DSI Properties, Inc., and Diversified Investors Agency) and limited partners owning 24,000 limited partnership units. The Partnership was formed under the California Uniform Limited Partnership Act for the primary purpose of acquiring and operating real estate. The accompanying financial information as of June 30, 2001, and for the periods ended June 30, 2001, and 2000, is unaudited. Such financial information includes all adjustments which are considered necessary by the Partnership's management for a fair presentation of the results for the periods indicated. 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 15 years. The total cost of property and accumulated depreciation at June 30, 2001, is as follows: Land $ 2,089,800 Buildings and equipment 7,685,522 Equipment 60,760 Total 9,836,082 Less: Accumulated Depreciation ( 7,746,282) Property - Net $ 2,089,800
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.