-----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, Fpl1LaP+E+ZjveZ2I3SEJ18UesX9sRaV24pHhlAEuT4SqDEboDjZzWEPvcHuWFAu XOaOOghhWrJsDQHF2MZ2Jg== 0000318835-03-000034.txt : 20031114 0000318835-03-000034.hdr.sgml : 20031114 20031114153035 ACCESSION NUMBER: 0000318835-03-000034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031114 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: 031004079 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 dsi08903.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, 2003 /___/ 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, 2003, 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, 2003. 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, 2003. (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, 2003 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, 2003 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, 2003 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, 2003. 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, 2003 and 2002, total revenues decreased 0.5% from $615,145 to $612,173 and total expenses increased 11.0% from $279,335 to $310,009 and other income decreased from $317 to $186. Equity in income of the real estate joint venture decreased 16.6% from $36,115 to $30,124. As a result, net income decreased 10.7% from $372,242 to $332,474 for the three-m onth period ended September 30, 2003, as compared to the same period in 2002. Rental revenue decreased as a result of lower unit rental rates. Occupancy levels for the Partnership's five mini-storage facilities averaged 84.5% for the three-month period ended September 30, 2003 as compared to 85.2% for the same period in 2002. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses decreased approximately $12,100 (5.5%) primarily as a result of decreases in workers compensation insurance and security and alarm services expenses, partially offset by increases in repairs and mainten- ance and salaries and wages expenses. General and administrative expenses increased approximately $42,800 (74.44%) primarily as a result of an increase in legal and professional expenses, partially offset by decreases in incentive management fees and equipment and computer lease expenses. Legal expense increased as a result of legal challenges by dissident Limited Partners to a proposed amendment to the Partnership Agreement (see paragraph below). Equity in income from the real estate joint venture decreased as a result of lower rental revenue at that facility. For the nine-month periods ended September 30, 2003, and 2002, total revenues decreased 1.1% from $1,859,797 to $1,840,192 and total expenses increased 6.3% from $813,300 to $864,692 and other income decreased from $898 to $536. Equity in income of the real estate joint venture decreased 5.9% from $106,042 to $99,813. As a result, net income decreased 6.7% from $1,153,437 to $1,075,849 for the nine-month period ended September 30, 2003, as compared to the same period in 2002. Rental revenue decreased as a result of lower unit rental rates. Operating expenses increased approximately $17,600 (2.9%) primarily as a result of increases in repairs and maintenance, telephone, real estate tax, salaries and wages expenses, partially offset by a decrease in workers compensation insurance and security and alarm services expenses. General and administrative expenses increased approximately $33,800 (16.3%) primarily as a result of an increase in legal and professional, partially offset by a de- crease in incentive management fee and equipment and computer lease expenses. The increase in legal expense was discussed above. Equity in income from the real estate joint venture decreased as a result of lower rental revenue at that facility. 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 did not change. 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 Limited Partners have approved an amendment to the Partnership Agreement granting the General Partners ten days to review certain types of transfers during which the General Partners may match, exceed or approve the proposed transfers. The Court has rejected all preliminary attempts to halt implemen- tation of the amendment. Subsequently, the dissident Limited Partners who initiated the legal proceedings decided not to pursue the matter any further. 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, 2003 AND DECEMBER 31, 2002 September 30, December 31, 2003 2002 ASSETS CASH AND CASH EQUIVALENTS $ 921,768 $ 502,070 PROPERTY, Net 2,288,638 2,288,638 INVESTMENT IN REAL ESTATE JOINT VENTURE 185,906 180,293 OTHER ASSETS 102,393 102,393 TOTAL $3,498,705 $3,073,394 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 830,235 $ 662,592 PARTNERS' EQUITY (DEFICIT): General Partners (81,097) (83,674) Limited Partners 2,749,567 2,494,476 Total partners' equity 2,668,470 2,410,802 TOTAL $3,498,705 $3,073,394 See accompanying notes to financial statements(unaudited). STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 September 30, September 30, 2003 2002 REVENUES: Rental $ 612,173 $ 615,145 EXPENSES: Operating 209,748 221,831 General and administrative 100,261 57,504 Total expenses 310,009 279,335 OPERATING INCOME 302,164 335,810 OTHER INCOME Interest 186 317 INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 302,350 336,127 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 30,124 36,115 NET INCOME $ 332,474 $ 372,242 AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 329,149 $ 368,520 General partners 3,325 3,722 TOTAL $ 332,474 $ 372,242 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 13.71 $ 15.35 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, 2003 AND 2002 September 30, September 30, 2003 2002 REVENUES: Rental $1,840,192 $1,859,797 EXPENSES: Operating 623,728 606,099 General and administrative 240,964 207,201 Total expenses 864,692 813,300 OPERATING INCOME 975,500 1,046,497 OTHER INCOME Interest 536 898 INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 976,036 1,047,395 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 99,813 106,042 NET INCOME $1,075,849 $1,153,437 AGGREGATE NET INCOME ALLOCATED TO: Limited Partners 1,065,091 1,141,903 General Partners 10,758 11,534 TOTAL 1,075,849 1,153,437 NET INCOME PER LIMITED PARTNERSHIP UNIT $44.38 $47.58 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, 2003 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2003 ($83,674) $2,494,476 $2,410,802 NET INCOME 10,758 1,065,091 1,075,849 DISTRIBUTIONS (8,181) (810,000) (818,181) BALANCE AT SEPTEMBER 30, 2003 ($81,097) $2,749,567 $2,668,470 See accompanying notes to consolidated financial statements(unaudited). STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 September 30, September 30, 2003 2002 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,075,849 $1,153,437 Adjustments to reconcile net income to net cash provided by operating activities: Equity in earnings of real estate joint venture (99,813) (106,042) Distributions from real estate joint venture 94,200 107,400 Changes in assets and liabilities: Decrease in other assets 0 1,839 Increase in liabilities 167,643 70,533 Net cash provided by operating activities 1,237,879 1,227,167 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property (1,210) CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (818,181) (818,181) NET INCREASE IN CASH AND CASH EQUIVALENTS 419,698 407,776 CASH AND CASH EQUIVALENTS: At beginning of period 502,070 619,194 At end of period $ 921,768 $1,026,970 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, 2003, and for the periods ended September 30, 2003, and 2002 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, 2003, is as follows: Land $ 2,287,427 Buildings and improvements 7,126,999 Equipment 24,040 Total 9,438,466 Less: Accumulated Depreciation ( 7,149,828) Property - Net $ 2,288,638 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, 2003, and 2002 is as follows: 2003 2002 Revenue $485,333 $522,050 Operating Expenses 152,624 168,577 Net Income $332,709 $353,473 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, 2003 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 material weaknesses. Date: November, 2003 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 material weaknesses. Date: November, 2003 Richard Conway Vice President -----END PRIVACY-ENHANCED MESSAGE-----