-----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, Q1/0xAm9SxY8dBAhDt8+6xSiMq/svUOTiPddvkxlaoddoO4UFRxJ9SZTSbq4dd6V 6MNxnNAHMCJ/Zk9UDS3uSg== 0000719581-05-000003.txt : 20050815 0000719581-05-000003.hdr.sgml : 20050815 20050815165457 ACCESSION NUMBER: 0000719581-05-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050815 DATE AS OF CHANGE: 20050815 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: 051027507 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 dsiix-605.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q /_x_/ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 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 2-96364 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. DSI REALTY INCOME FUND IX (A California Real Estate Limited Partnership) CONSOLIDATED BALANCE SHEETS(UNAUDITED) JUNE 30, 2005 AND DECEMBER 31, 2004 June 30, December 31, 2005 2004 ASSETS CASH AND CASH EQUIVALENTS $ 335,777 $ 486,736 PROPERTY, NET 3,440,639 3,670,725 OTHER ASSETS 89,322 81,403 ---------- ---------- TOTAL $3,865,738 $4,238,864 ========== ========== LIABILITIES AND PARTNERS' EQUITY (DEFICIT) LIABILITIES Distribution to Partners 232,523 $ 310,030 Capital lease obligation 179,388 195,138 Other liabilities 302,982 341,066 ---------- ---------- $ 714,893 $ 846,234 ---------- ---------- MINORITY INTEREST IN REAL ESTATE JOINT VENTURE 185,027 179,703 PARTNERS' EQUITY (DEFICIT): General Partners (107,783) (105,312) Limited Partners 3,073,601 3,318,239 ---------- ---------- Total partners' equity 2,965,818 3,212,927 TOTAL $3,865,738 $4,238,864 ========== ========== See accompanying notes to consolidated financial statements(unaudited). CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED JUNE 30, 2005 AND 2004 June 30, June 30, 2005 2004 REVENUES: Rental $ 658,264 $ 646,417 ---------- ---------- EXPENSES: Operating 505,804 404,224 General and administrative 55,845 75,134 ---------- ---------- Total expenses 561,649 479,358 ---------- ---------- OPERATING INCOME 96,615 167,059 OTHER INCOME Interest 64 130 ---------- ----------- INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 96,679 167,189 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE (23,973) (27,284) ---------- ---------- NET INCOME $ 72,706 $ 139,905 ========== ========== AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 71,979 $ 138,506 General partners 727 1,399 ---------- ---------- TOTAL $ 72,706 $ 139,905 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 2.35 $ 4.51 ========== ========== LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 30,693 30,693 ====== ====== See accompanying notes to consolidated financial statements(unaudited). CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004 June 30, June 30, 2005 2004 REVENUES Rental $1,322,225 $1,350,449 ---------- ---------- EXPENSES: Operating 917,962 777,389 General and administrative 134,396 145,679 ---------- ---------- Total expenses 1,052,358 923,068 ---------- ---------- OPERATING INCOME 269,867 427,381 OTHER INCOME Interest 193 260 ---------- ---------- INTEREST BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 270,060 427,641 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE (52,124) (59,225) --------- --------- NET INCOME $ 217,936 $ 368,416 ========= ========= AGGREGATE NET INCOME ALLOCATED TO: Limited Partners 215,757 364,732 General Partners 2,179 3,684 --------- --------- TOTAL $ 217,936 $ 368,416 ========= ========= NET INCOME PER LIMITED PARTNERSHIP UNIT $ 7.03 $ 11.88 ========= ========= LIMITED PARTNERSHIP UNITS USED IN PER UNIT CALCULATION 30,693 30,693 ====== ====== See accompanying notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2005 ($105,312) $3,318,239 $3,212,927 NET INCOME 2,179 215,757 217,936 DISTRIBUTIONS (4,650) (460,395) (465,045) --------- ---------- ---------- BALANCE AT JUNE 30, 2005 ($107,783) $3,073,601 $2,965,818 ========= ========== ========== See accompanying notes to consolidated financial statements(unaudited). CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004 June 30, June 30, 2005 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 217,936 $ 368,416 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 230,086 209,072 Minority interest in income real estate joint venture 52,124 59,225 Changes in assets and liabilities: Increase in other assets (7,919) (19,124) Decrease in liabilities (131,341) (127,898) -------- -------- Net cash provided by operating activities 360,886 489,691 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (465,045) (658,814) Distributions paid to minority interest in real estate joint venture (46,800) (59,100) -------- -------- Net cash used in financing activities (511,845) (717,914) -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (150,959) (228,223) CASH AND CASH EQUIVALENTS: At beginning of period 486,736 732,355 --------- --------- At end of period $ 335,777 $ 504,132 ========= ========= See accompanying notes to consolidated 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 Partnership has acquired five mini-storage facilities located in Monterey Park and Azusa, California; Everett, Washington;and Romeoville and Elgin, Illinois. The Partnership has also entered into a joint venture with DSI Realty Income Fund VIII through which the Partnership has a 70% interest in a mini-storage facility in Aurora, Colorado. The Partnership is a general partner in the joint venture. The facilities were acquired from Dahn Corporation ("Dahn"). Dahn is not affiliated with the Partner- ship. Dahn is affiliated with other partnerships in which DSI Properties, Inc., Robert J. Conway and Joseph W. Conway are the general partners. The mini-storage facilities are operated for the Partnership by Dahn under various agreements which 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 accompanying consolidated financial information as of June 30, 2005, and for the periods ended June 30, 2005 and 2004 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. The total cost and accumulated depreciation of the mini-storage facilities are as follows: Land $ 2,729,790 $ 2,729,790 Buildings and equipment 11,032,676 11,032,676 Equipment 275,042 275,042 ------------ ------------ Total 14,037,508 14,037,508 Less: Accumulated Depreciation (10,596,869) (10,366,783) ------------ ------------ Property - Net $ 3,440,639 $ 3,670,725 ============ ============ 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. 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. We are pleased to enclose the Partnership's unaudited consolidated financial statements for the period ended June 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 periods ended June 30, 2005 and 2004, total revenues increased 1.8% from $646,417 to $658,264 and total expenses increased 17.2% from $479,358 to $561,649 and other income decreased from $130 to $64. Minority interest in income of real estate joint venture decreased 12.1% from $27,284 to $23,973as a result of lower rental revenue at that facility. As a result, net income decreased 48.0% from $139,905 to $72,706 for the three- month period ended June 30, 2005, as compared to the same period in 2004. Rental revenue remained constant. Occupancy levels for the Partnership's six mini-storage facilities averaged 74.7% for the three-month period ended June 30, 2005 as compared to 73.8% for the same period in 2004. The Partner- ship is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses increased approxi- mately $101,600 (25.1%) due primarily to an increase in advertising, maintenance and repair, purchase of locks, real estate tax, salaries and wages, truck insurance and depreciation. General and administrative expenses decreased approximately $19,300 (25.7%) primarily as a result of a decrease in incentive management fees, legal and professional expense. Minority interest in income of real estate joint venture decreased as a result of lower rental revenue at that facility. For the six-months period ended June 30, 2005, and 2004, total revenues decreased 2.1% from $1,350,449 to $1,322,225 and total expenses increased 14.0% from $923,068 to $1,052,358 and other income decreased from $260 to $193. Minority interest in income of real estate joint venture increased 12.0% from $59,225 to $52,124. As a result, net income decreased 40.8% from $368,416 to $217,936 for the six-month period ended June 30, 2005, as compared to the same period in 2004. Rental revenue decreased as a result of lower occupancy rates. Operating expenses increased approximately $140,600 (18.1%) due primarily to increases in advertising, maintenance and repair, purchase of locks, real estate tax, salaries and wages, truck insurance and depreciation expenses. General and administrative expenses decreased approximately $11,300 (7.8%) primarily as a result of a decrease in incentive management fees, partially offset by an increase in equipment and computer lease expense. Minority interest in income of real estate joint venture decreased as discussed above. 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 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 June 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: July 29, 2005 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: July 29, 2005 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 CERTIFICATIONS I, Robert J. 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 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: July 29, 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 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 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: July 29, 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 IX (the "Partnership") on Form 10-Q for the period ending June 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 July 29, 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 IX (the "Partnership") on Form 10-Q for the period ending June 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 July 29, 2005 -----END PRIVACY-ENHANCED MESSAGE-----