-----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, Jur5f5+Q4YlSlVLdtraRXsa3GPuHBdGGvUz6F874rTzCOSxh3NW1dU43vyR4OWUG M07QdPw0zeqV5/195LY1Wg== 0000719581-05-000007.txt : 20051114 0000719581-05-000007.hdr.sgml : 20051111 20051114152537 ACCESSION NUMBER: 0000719581-05-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 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: 051200904 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 dsiviii-905.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, 2005 /___/ 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_______________________________________95-0050204 (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. DSI REALTY INCOME FUND VIII (A California Real Estate Limited Partnership) BALANCE SHEETS(UNAUDITED) SEPTEMBER 30, 2005 AND DECEMBER 31, 2004 September 30, December 31, 2005 2004 ASSETS CASH AND CASH EQUIVALENTS $ 890,487 $ 620,452 PROPERTY, Net 2,394,492 2,410,252 INVESTMENT IN REAL ESTATE JOINT VENTURE 182,058 179,700 OTHER ASSETS 71,550 71,550 ---------- ---------- TOTAL $3,538,587 $3,281,954 ========== ========== LIABILITIES AND PARTNERS' EQUITY LIABILITIES Distribution to Partners $ 272,727 $ 272,727 Capital lease obligation 77,319 97,569 Other liabilities 441,746 380,559 ---------- ---------- Total liabilities 791,792 750,855 ---------- ---------- PARTNERS' EQUITY (DEFICIT): General Partners (80,313) (82,471) Limited Partners 2,827,108 2,613,570 ---------- ---------- Total partners' equity 2,746,795 2,531,099 ---------- ---------- TOTAL $3,538,587 $3,281,954 ========== ========== See accompanying notes to financial statements. STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 September 30, September 30, 2005 2004 REVENUES: Rental $ 628,189 $ 596,859 ---------- ---------- EXPENSES: Operating 232,384 218,486 General and administrative 52,856 46,711 ---------- ---------- Total expenses 285,240 265,197 ---------- ---------- OPERATING INCOME 342,949 331,662 OTHER INCOME Interest 188 187 ---------- ---------- INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 343,137 331,849 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 30,634 28,698 ---------- ---------- NET INCOME $ 373,771 $ 360,547 ========== ========== AGGREGATE NET INCOME ALLOCATED TO: Limited Partners $ 370,033 $ 356,942 General Partners 3,738 3,605 ---------- ---------- TOTAL $ 373,771 $ 360,547 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 15.42 $ 14.87 ========== ========== LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 24,000 24,000 ====== ====== See accompanying notes to financial statements. STATEMENTS OF INCOME (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 September 30, September 30, 2005 2004 REVENUES: Rental $1,856,832 $1,779,018 ---------- ---------- EXPENSES: Operating 710,656 653,042 General and Administrative 195,614 181,204 ---------- ---------- Total Expenses 906,270 834,246 ---------- ---------- OPERATING INCOME 950,562 944,772 OTHER INCOME 557 555 ---------- ---------- INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 951,119 945,327 EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 82,758 87,923 ---------- ---------- NET INCOME $1,033,877 $1,033,250 ========== ========== AGGREGATE NET INCOME ALLOCATED TO: Limited Partners $1,023,538 $1,022,918 General Partners 10,339 10,332 ---------- ---------- TOTAL $1,033,877 $1,033,250 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT $42.65 $42.62 ====== ====== LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 24,000 24,000 ====== ====== See accompanying notes to financial statements. STATEMENT OF CHANGES IN PARTNERS' EQUITY (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2005 ($82,471) $2,613,570 $2,531,099 NET INCOME 10,339 1,023,538 1,033,877 DISTRIBUTIONS (8,181) (810,000) (818,181) -------- ---------- ---------- BALANCE AT SEPTEMBER 30, 2005 ($80,313) $2,827,108 $2,746,795 ======== ========== ========== See accompanying notes to consolidated financial statements. STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 September 30, September 30, 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $1,033,877 $1,033,250 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 15,760 Equity in earnings of real estate joint venture (82,758) (87,923) Distributions from real estate joint venture 80,400 87,300 Changes in assets and liabilities: Increase in other assets (29) Increase in liabilities 40,937 46,274 --------- --------- Net cash provided by operating activities 1,088,216 1,078,872 CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (818,181) (818,181) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 270,035 260,691 CASH AND CASH EQUIVALENTS: At beginning of period 620,452 713,429 --------- --------- At end of period $ 890,487 $ 974,120 ========= ========= 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 Partnership has acquired five mini-storage facilities located in Stockton, Pittsburgh, El Centro, Huntington Beach, and Lompoc, California. The Partnership has also entered into a joint venture with DSI Realty Income Fund IX, a related party, through which the Partnership has a 30% interest in a mini-storage facility in Aurora, Colorado (see Note 3). All facilities were acquired 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 mini-storage facilities are operated for the Partnership by Dahn under various agreements that are subject to renewal annually. Under the terms of the agreements, the Partnership is required to pay Dahn a property management fee equal to 5% of gross revenue from operations, defined as the entire amount of all receipts from the renting or leasing of storage compartments and sale of locks. The Partnership and DSI Realty Income Fund IX both have DSI Properties, Inc. as one of the general partners and both of their facilities are managed by Dahn. The accompanying financial information as of September 30, 2005, and for the periods ended September 30, 2005, and 2004 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 is as follows: September 30, 2005 December 31, 2004 Land $ 2,287,427 $ 2,287,427 Buildings and improvements 7,127,000 7,127,000 Equipment 148,837 148,837 ------------ ------------ Total 9,563,264 9,563,264 Less: Accumulated Depreciation ( 7,168,772) ( 7,153,012) ------------ ------------ Property - Net $ 2,394,492 $ 2,410,252 ============ ============ 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 with DSI Realty Income Fund IX, owning the remaining 70% interest in the venture. Summarized income statement information for the joint venture the nine months ended September 30, 2005, and 2004 is as follows: 2005 2004 Revenue $461,730 $456,390 Operating Expenses 185,871 163,313 -------- -------- Net Income $275,859 $293,077 ======== ======== 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. 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. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. DSI REALTY INCOME FUND VIII (A California Real Estate Limited Partnership) We are pleased to enclose the Partnership's unaudited financial statements for the period ended September 30, 2005. 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 September 30, 2005 and 2004, total revenues increased 5.3% from $596,859 to $628,189 and total expenses increased 7.6% from $265,197 to $285,240 and other income increased from $187 to $188. Equity in income of the real estate joint venture increased 6.7% from $28,698 to $30,634. As a result, net income increased 3.7% from $360,547 to $373,771 for the three-month period ended September 30, 2005, as compared to the same period in 2004. Rental revenue increased as a result of higher unit rental rates. Occupancy levels for the Partnership's five mini-storage facilities averaged 85.7% for the three-month period ended September 30, 2005 as compared to 86.2% for the same period in 2004. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses increased approximately $13,900 (6.4%) primarily as a result of increases in purchase of locks and packing materials, salaries and wages, depreciation and truck insurance and maintenance expenses, partially offset by a decrease in repairs and maintenance and workers compensation in- surance expenses. General and administrative expenses increased approximately $6,100 (13.1%) primarily as a result of an increase in equipment and computer lease expense. Equity in income from the real estate joint venture increased as a result of higher rental revenue at that facility. For the nine-month period ended September 30, 2005, and 2004, total revenues increased 4.4% from $1,779,018 to $1,856,832 and total expenses increased 8.6% from $834,246 to $906,270 and other income increased from $555 to $557. Equity in income of the real estate joint venture decreased 5.9% from $87,923 to $82,758. As a result, net income increased 0.1% from $1,033,250 to $1,033,877 for the nine-month period ended Setpember 30, 2005, as compared to the same period in 2004. Rental revenue increased as a result of higher unit rental rates. Operating expenses increased approximately $57,600 (8.8%) primarily as a result of increases in advertising, purchase of locks and packing materials, property management fees, real estate tax, salaries and wages, truck insurance and maintenance and depreciation expenses, partially offset by a decrease in repairs and maintenance workers compensation insurance expenses. General and administrative expenses increased approximately $14,400 (7.9%) primarily as a result of an increase in legal and professional and equipment and computer lease expenses. Equity in income from the real estate joint venture decreased as a result of higher operating expenses at that facility. 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 in needs. The General Partners anticipate distributions to the Limited Partners to remain at the current level for the foreseeable future. Item 3. Quantative and Qualitative Disclosures About Market Risk NONE Item 4. 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 President and Chief Executive Officer. These disclosure controls and pro- cedures are designed to ensure that the information required to be disclosed by the Partnership in its periodic reports filed with the Securities and Ex- change Commission (the Commission) is recorded, processed, summarized and reported, within the time periods specified by the Commissions rules and forms and that the information is communicated to the certifying officers on a timely basis. Based on this evaluation, the Partnership concluded 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 signifi- cantly affect the internal controls subsequent to the date of their evaluation. PART II - OTHER INFORMATION Item 1. Legal Proceedings Registrant is not a party to any material pending legal proceedings. 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 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, 2005. (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, 2005 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 thereunto duly authorized. Dated: October 31, 2005 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 CERTIFICATIONS I, Robert J. 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 cover- ed 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-15e and 15d-15e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our super- vision, 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 quarterly report is being prepared; b) 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 c) 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 our annual report) that has materially affected, or is control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to affect the registrant's ability to record, pro- cess, 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 in- ternal controls over financial reporting. Date: October 31, 2005 Robert J. Conway Chief Executive Officer CERTIFICATIONS I, Richard P. 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 cover- ed 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-15e and 15d-15e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our super- vision, 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 quarterly report is being prepared; b) 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 c) 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 our annual report) that has materially affected, or is control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors: a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to affect the registrant's ability to record, pro- cess, 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 in- ternal controls over financial reporting. Date: October 31, 2005 Richard P. Conway Vice President 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 VIII (the "Partnership") on Form 10-Q for the period ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert J. Conway, 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. Robert J. Conway Chief Executive Officer October 31, 2005 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 VIII (the "Partnership") on Form 10-Q for the period ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard P. Conway, Vice President of the Corporate General Partner, 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. Richard P. Conway Vice President October 31, 2005 -----END PRIVACY-ENHANCED MESSAGE-----