-----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, Jg1gnnbKJ3B9PQ9qg19IRP20Su2B6gEI4Fq5ggCr0BQ20KI3egmI2J0RsAEqGlJV 4lV00un8vNdyMdcO8IqO0w== 0000318835-03-000035.txt : 20031114 0000318835-03-000035.hdr.sgml : 20031114 20031114153053 ACCESSION NUMBER: 0000318835-03-000035 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 IX CENTRAL INDEX KEY: 0000764586 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330103989 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14186 FILM NUMBER: 031004085 BUSINESS ADDRESS: STREET 1: 3701 LONG BEACH BLVD CITY: LONG BEACH STATE: CA ZIP: 90807 BUSINESS PHONE: 2135957711 MAIL ADDRESS: STREET 1: 3710 LONG BEACH BLVD STREET 2: P O BOX 357 CITY: LONG BEACH STATE: CA ZIP: 90807 10-Q 1 dsi09903.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 IX, A California Limited Partnership (Exact name of registrant as specified in its charter) California_______________________________________33-0103989 (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 IX 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, 2003 DSI REALTY INCOME FUND IX 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 IX 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 10.6% from $787,933 to $704,751 and total expenses in- creased 12.4% from $434,102 to $488,141 and other income decreased from $224 to $131. Minority interest in income of real estate joint venture decreased 16.6% from $36,115 to $30,124. As a result, net income decreased 41.3% from $317,940 to $186,617 for the three-month period ended September 30, 2003, as compared to the same period in 2002. Rental revenue decreased as a result of lower occupancy and unit rental rates. Occupancy levels for the Partner- ship's six mini-storage facilities averaged 78.3% for the three-month period ended September 30, 2003 as compared to 83.3% 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 $15,700 (4.1%) due primarily to a decrease in property manage- ment fee, office supplies, salaries and wages, travel and power and sweeping expenses, partially offset by increases in advertising, real estate tax expenses. General and administrative expenses increased approximately $69,800 (138.9%) primarily as a result of an increase in legal expense, partially offset by a decrease in 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). Minority interest in income of 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 7.5% from $2,359,578 to $2,182,906 and total expenses decreased 0.2% from $1,387,028 to $1,384,727 and other income decreased from $635 to $278. Minority interest in income of real estate joint venture decreased 5.9% from $106,042 to $99,813. As a result, net income decreased 19.4% from $867,143 to $698,744 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 occupancy and unit rental rates. Operating expenses decreased approximately $59,500 (5.0%) due primarily to decreases in maintenance and repair, property management fees, office supplies, salaries and wages, workers compensation insurance, security alarm services and travel expenses, partially offset by increases in advertising, telephone and real estate tax expenses. General and administrative expenses increased approximately $57,200 (27.7%) as a result of increases in legal and professional expenses, partially offset by a decrease in equipment and computer expenses. The increase in legal expenses was dis- cussed above. Minority interest in income of real estate joint venture de- creased as 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 in- adequate 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 22 Units representing 0.072% of the outstanding Units of the Partnership. 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 for approve the proposed transfers. The Court has rejected all preliminary attempts to halt implement- ation of the amnedment. Subsequently, the dissident Limited Partners who initiated the legal proceedings decided not to pursue the matter any further. The General Partners plan to continue their policy of funding improvements and maintenance of Partnership properties with cash generated from operations. The Partnership's 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 IX, P.O. Box 357, Long Beach, California 90801. Very truly yours, DSI REALTY INCOME FUND IX By: DSI Properties, Inc., as General Partner By /s/ Robert J. Conway ____________________________ ROBERT J. CONWAY, President DSI REALTY INCOME FUND IX (A California Real Estate Limited Partnership) CONSOLIDATED BALANCE SHEETS(UNAUDITED) SEPTEMBER 30, 2003 AND DECEMBER 31, 2002 September 30, December 31, 2003 2002 ASSETS CASH AND CASH EQUIVALENTS $ 785,470 $ 631,709 PROPERTY, Net 4,001,337 4,308,446 OTHER ASSETS 141,551 109,240 TOTAL $4,928,358 $5,049,395 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES $ 822,913 $ 718,214 MINORITY INTEREST IN REAL ESTATE JOINT VENTURE 185,906 180,296 PARTNERS' EQUITY(DEFICIT): General Partners (98,246) (95,932) Limited Partners 4,017,785 4,246,817 Total partners' equity 3,919,539 4,150,885 TOTAL $4,928,358 $5,049,395 See accompanying notes to financial statements(unaudited). CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 September 30, September 30, 2003 2002 REVENUES: Rental $ 704,751 $ 787,933 EXPENSES: Operating 368,122 383,859 General and administrative 120,019 50,243 Total expenses 488,141 434,102 OPERATING INCOME 216,610 353,831 OTHER INCOME Interest 131 224 INCOME BEFORE EQUITY IN INCOME OF REAL ESTATE JOINT VENTURE 216,741 354,055 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE (30,124) (36,115) NET INCOME $ 186,617 $ 317,940 AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 184,751 $ 314,761 General partners 1,866 3,179 TOTAL $ 186,617 $ 317,940 NET INCOME PER LIMITED PARTNERSHIP UNIT $ 6.02 $ 10.26 LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 30,693 30,693 See accompanying notes to financial statements(unaudited). CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 September 30, September 30, 2003 2002 REVENUES: Rental $2,182,906 $2,359,578 EXPENSES: Operating 1,120,755 1,180,256 General and Administrative 263,972 206,772 Total Expenses 1,384,727 1,387,028 OPERATING INCOME 798,179 972,550 OTHER INCOME Interest 378 635 INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 798,557 973,185 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE ( 99,813) (106,042) NET INCOME $698,744 $867,143 AGGREGATE NET INCOME ALLOCATED TO: Limited Partners 691,757 858,472 General Partners 6,987 8,671 TOTAL 698,744 867,143 NET INCOME PER LIMITED PARTNERSHIP UNIT $22.54 $27.97 LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 30,693 30,693 See accompanying notes to financial statements(unaudited). CONSOLIDATED 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 ($95,932) $4,246,817 $4,150,885 NET INCOME 6,987 691,757 698,744 DISTRIBUTIONS (9,301) (920,789) (930,090) BALANCE AT SEPTEMBER 30, 2003 ($98,246) $4,017,785 $3,919,539 See accompanying notes to consolidated financial statements(unaudited). CONSOLIDATED 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 $ 698,744 $ 867,143 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 313,606 322,173 Minority interest in income of real estate joint venture 99,813 106,042 Changes in assets and liabilities: Increase(decrease)in other assets (32,311) 2,787 Increase in liabilities 104,699 1,073 Net cash provided by operating activities 1,184,551 1,299,218 CASH FLOWS FROM INVESTING - Additions to property (6,500) 0 CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (930,090) (930,090) Distributions paid to minority interest in real estate joint venture (94,200) (107,400) Net cash used in financing activities (1,024,290) (1,037,490) NET INCREASE IN CASH AND CASH EQUIVALENTS 153,761 261,728 CASH AND CASH EQUIVALENTS: At beginning of period 631,709 633,503 At end of period $ 785,470 $895,231 See accompanying notes to financial statements(unaudited). DSI REALTY INCOME FUND IX (A California Real Estate Limited Partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. GENERAL DSI Realty Income Fund IX (the "Partnership"), a limited partnership, has three general partners (DSI Properties, Inc., Robert J. Conway and Joseph W. Conway) and limited partners owning 30,693 limited partnership units. The accompanying consolidated 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 which are 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 Monterey Park and Azusa, California; Everett, Washington; and Romeoville and Elgin, Illinois. The Partnership also owns a 70% interest in a mini-storage facility in Aurora, Colorado. As of September 30, 2003, the total cost and accumulated depreciation of the mini-storage facilities are as follows: Land $ 2,729,790 Buildings and equipment 11,069,326 Total 13,799,116 Less: Accumulated Depreciation ( 9,797,779) Property - Net $ 4,001,337 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. 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 Partnership's President and the Chief Executive Officer. These disclosure controls and procedures are designed 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 IX 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 IX (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 IX; 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 IX; 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-----