-----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, QWDFx8PVhBiGRKYJKL73yZWmIYu88s13xmIMBvoN3JJ28fZpHoreGDewHyqSdK5W 0K8fo2oAzYspO7u1iEDDcg== 0000318835-02-000030.txt : 20021113 0000318835-02-000030.hdr.sgml : 20021113 20021113172648 ACCESSION NUMBER: 0000318835-02-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSI REALTY INCOME FUND VIII CENTRAL INDEX KEY: 0000743366 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 950050204 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-90168 FILM NUMBER: 02821030 BUSINESS ADDRESS: STREET 1: 3701 LONG BEACH BLVD STREET 2: C/O DSI PROPERTIES INC CITY: LONG BEACH STATE: CA ZIP: 90807 BUSINESS PHONE: 3105957711 MAIL ADDRESS: STREET 1: 3701 LONG BEACH BLVD CITY: LONG BEACH STATE: CA ZIP: 90807 10-Q 1 dsi08902.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 September 30, 2002 /___/ Transition report pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the transition period from ______________ to ________________. Commission File Number 2-90168 DSI REALTY INCOME FUND VIII, A California Limited Partnership (Exact name of registrant as specified in its charter) California_______________________________________33-0050204 (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 September 30, 2002, 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 September 30, 2002. 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 September 30, 2002. (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: October 31, 2002 DSI REALTY INCOME FUND VIII 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 there unto duly authorized. Dated: October 31, 2002 DSI REALTY INCOME FUND VIII 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 October 31, 2002 QUARTERLY REPORT TO THE LIMITED PARTNERS OF DSI REALTY INCOME FUND VIII DEAR LIMITED PARTNERS: We are pleased to enclose the Partnership's unaudited financial statements for the period ended September 30, 2002. The following is Management's discussion and analysis of the Partnership's financial condition and results of its operations. For the three-month periods ended September 30, 2002 and 2001, total revenues decreased 7.6% from $665,379 to $615,145 and total expenses in- creased 5.0% from $266,021 to $279,335 and other income decreased from $1,107 to $317. Equity in income of the real estate joint venture decreased 8.9% from $39,652 to $36,115. As a result, net income decreased 15.4% from $440,117 to $372,242 for the three-month period ended September 30, 2002, as compared to the same period in 2001. Rental revenue decreased as a result of lower occupancy and unit rental rates. Occupancy levels for the Partnership's five mini-storage facilities averaged 85.2% for the three-month period ended September 30, 2002 as compared to 90.2% for the same period in 2001. The Part- nership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses increased approx- imately $19,300 (9.5%) primarily as a result of higher workers compensation insurance, security and alarm services and postage expenses, partially offset by decreases in repairs and maintenance and salary and wages expenses. General and administrative expenses decreased approximately $5,600 (9.4%) primarily as a result of a decrease in incentive management fees partially offset by an increase in equipment and computer lease. Incentive management fees, which are based on cash available for distribution, decreased as a result of the de- crease in net income. Equity in income from the real estate joint venture de- creased as a result of lower rental revenue at that facility. For the nine-month periods ended September 30, 2002, and 2001, total revenues decreased 2.9% from $1,915,657 to $1,859,797 and total expenses increased 8.7% from $748,042 to $813,300 and other income decreased from $4,045 to $898. Equity in income of the real estate joint venture decreased 15.9% from $126,136 to $106,042. As a result, net income decreased 11.1% from $1,297,796 to $1,153,437 for the nine-month period ended September 30, 2002, as compared to the same period in 2001. Rental revenue decreased as a result of lower occupancy and unit rental rates. Operating expenses increased approximately $55,100 (10.0%) primarily as a result of increases in office supplies and workers compensation insurance, security and alarm services, bank and credit card fees and postage expenses, partially offset by decreases in advertising and repairs and maintenance expense. General and administrative expenses in- creased approximately $11,100 (5.1%) primarily as a result of higher legal and professional and equipment and computer lease expenses, partially offset by lower incentive management fees. The decrease in incentive management fees was discussed above. The decrease in equity in income from the real estate joint venture was also discussed above. On April 5, 2002, the General Partners received a copy of a hostile tender offer from MacKenzie Patterson, Inc. and associated corporations and limited partnerships to purchase all of the Units in the Partnership. This offer was also filed with the Securities and Exchange Commission on the same date. The General Partners have determined that the hostile tender offer was not in the best interests of the Limited Partners, that the tender offer was grossly inadequate given the performance history of the Limited Partnership and the inherent value of the Units, and recommended that the Limited Partners reject the hostile tender offer and not tender their Units pursuant thereto. The offer was subsequently increased and extended to June 30, 2002 and again to July 22, 2002. The General Partners' initial determination regarding the offer has not changed. Prior to the expiration date of the offer, Limited Partners tendered 36 Units representing 0.150% of the outstanding Units of the Partner- ship. 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 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 VIII, P.O. Box 357, Long Beach, California 90801. Very truly yours, DSI REALTY INCOME FUND VIII By: DSI Properties, Inc., as General Partner By /s/ Robert J. Conway ____________________________ ROBERT J. CONWAY, President DSI REALTY INCOME FUND VIII (A California Real Estate Limited Partnership) BALANCE SHEETS(UNAUDITED) SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 September 30, December 31, 2002 2001 ASSETS CASH AND CASH EQUIVALENTS $1,026,971 $ 619,194 PROPERTY, Net 2,288,636 2,287,427 INVESTMENT IN REAL ESTATE JOINT VENTURE 181,302 181,660 OTHER ASSETS 69,425 71,264 TOTAL $3,565,334 $3,159,545 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 706,156 $ 635,623 PARTNERS' EQUITY (DEFICIT): General Partners (79,190) (82,543) Limited Partners 2,938,368 2,606,465 Total partners' equity 2,859,178 2,523,922 TOTAL $3,565,334 $3,159,545 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 REVENUES: Rental $ 615,145 $ 665,379 EXPENSES: Operating 221,831 202,564 General and administrative 57,504 63,457 Total expenses 279,335 266,021 OPERATING INCOME 335,810 399,358 OTHER INCOME Interest 317 1,107 INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 336,127 400,465 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 36,115 39,652 NET INCOME $ 372,242 $ 440,117 AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 368,520 $ 435,716 General partners 3,722 4,401 TOTAL $ 372,242 $ 440,117 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 15.35 $ 18.15 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 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 REVENUES: Rental $1,859,797 $1,915,657 EXPENSES: Operating 606,099 550,975 General and administrative 207,201 197,067 Total expenses 813,300 748,042 OPERATING INCOME 1,046,497 1,167,615 OTHER INCOME Interest 898 4,045 INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 1,047,395 1,171,660 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 106,042 126,136 NET INCOME $1,153,437 $1,297,796 AGGREGATE NET INCOME ALLOCATED TO: Limited Partners 1,141,903 1,284,818 General Partners 11,534 12,978 TOTAL 1,153,437 1,297,796 NET INCOME PER LIMITED PARTNERSHIP UNIT $47.58 $53.53 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 NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2002 ($82,543) $2,606,465 $2,523,922 NET INCOME 11,534 1,141,903 1,153,437 DISTRIBUTIONS (8,181) (810,000) (818,181) BALANCE AT SEPTEMBER 30, 2002 ($79,190) $2,938,368 $2,859,178 See accompanying notes to consolidated financial statements(unaudited). STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 September 30, September 30, 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,153,437 $1,297,796 Adjustments to reconcile net income to net cash provided by operating activities: Equity in earnings of real estate joint venture (106,042) (126,136) Distributions from real estate joint venture 107,400 121,200 Changes in assets and liabilities: Increase in other assets 1,839 (6,000) (Decrease)increase in liabilities 70,533 43,328 Net cash provided by operating activities 1,227,167 1,330,188 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property (1,209) CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (818,181) (818,181) NET INCREASE IN CASH AND CASH EQUIVALENTS 407,777 512,007 CASH AND CASH EQUIVALENTS: At beginning of period 619,194 514,497 At end of period $1,026,971 $1,026,504 See accompanying notes to financial statements(unaudited). DSI REALTY INCOME FUND VIII (A California Real Estate Limited Partnership) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. GENERAL DSI Realty Income Fund VIII (the "Partnership"), a limited 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 September 30, 2002, and for the periods ended September 30, 2002, and 2001 is unaudited. Such financial information includes all adjustments considered necessary by the Partnership's management for a fair presentation of the results for the periods indicated. 2. PROPERTY The Partnership owns five mini-storage facilities located in Stockton, Pittsburg, El Centro, Lompoc and Huntington Beach, California. The total cost of property and accumulated depreciation at September 30, 2002, is as follows: Land $ 2,287,427 Buildings and improvements 7,126,997 Equipment 24,040 Total 9,438,464 Less: Accumulated Depreciation ( 7,149,828) Property - Net $ 2,288,636 3. INVESTMENT IN REAL ESTATE JOINT VENTURE The Partnership is involved in a joint venture with DSI Realty Income Fund IX through which the Partnership has a 30% interest in a mini-storage facility in Aurora, Colorado. Under the terms of the joint venture agreement, the Partnership is entitled to 30% of the profits and losses of the venture and owns 30% of the mini-storage facility as a tenant in common with DSI Realty Income Fund IX, which has the remaining 70% interest in the venture. Summarized income statement information for the nine months ended September 30, 2002, and 2001 is as follows: 2002 2001 Revenue $522,050 $590,984 Operating Expenses 168,577 170,530 Net Income $353,473 $420,454 The Partnership accounts for its investment in the real estate joint venture under the equity method of accounting. 4. 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. 5. CONTROLS AND PROCEDURES Within 90 days prior to the date of this report, the Partnership evaluated the effectiveness of its disclosure controls and procedures. This evaluation was performed by the Partnership's Controller with the assistance of the Partnership's President and the Chief Executive Officer. These disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Partnership in its periodic reports filed with the Securities and Exchange Commission (the "Commission") is recorded, processed, summarized and reported, within the time periods specified by the Commission's rules and forms, and that the information is communicated to the certifying officers on a timely basis. Based on this evaluation, the Partnership con- cluded that its disclosure controls and procedures were effective. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation. DSI REALTY INCOME FUND VIII Form 10-Q CERTIFICATION Each of the undersigned hereby certifies in his capacity as an officer of DSI Properties, Inc. (corporate General Partner) of DSI REALTY INCOME FUND VIII (the "Partnership") that the Quarterly Report of the Partnership on Form 10-Q for the periods ended September 30, 2002 fully complies with the requirements of Section 13(a) of the Securities and Exchange Act of 1934 and that inform- ation contained in such report fairly presents, in all material respects, the financial condition of the Partnership at the end of such periods and the results of operations of the Partnership for such periods. ROBERT J. CONWAY, CEO RICHARD P. CONWAY, VP CERTIFICATIONS I, Robert Conway, certify that: 1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income Fund VIII; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consoli- dated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effec- tiveness of the disclosure controls and procedures based on our evalu- ation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit com- mitee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls sub- sequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and materinal weaknesses. Date: November, 2002 Robert Conway President CERTIFICATIONS I, Richard Conway, certify that: 1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income Fund VIII; 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consoli- dated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effec- tiveness of the disclosure controls and procedures based on our evalu- ation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit com- mitee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls sub- sequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and materinal weaknesses. Date: November, 2002 Richard Conway Vice President -----END PRIVACY-ENHANCED MESSAGE-----