-----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, T5XwHCjRj5bSTLlpOJkrrycHVtD78gEDjznhH0ssmomPAGiXtjkpHsQ93HSUX4aO nIBdCU1J+00QK8HU1DUrhA== 0000764586-07-000002.txt : 20070830 0000764586-07-000002.hdr.sgml : 20070830 20070830112958 ACCESSION NUMBER: 0000764586-07-000002 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20070630 FILED AS OF DATE: 20070830 DATE AS OF CHANGE: 20070830 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14186 FILM NUMBER: 071089970 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/A 1 dsiix-607.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, 2007 /___/ 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 Limited Partnership) CONSOLIDATED BALANCE SHEETS(UNAUDITED) JUNE 30, 2007 AND DECEMBER 31, 2006 June 30, December 31, 2007 2006 ASSETS CASH AND CASH EQUIVALENTS $ 696,911 $ 635,667 PROPERTY, NET 2,683,404 2,918,479 OTHER ASSETS 194,647 174,959 ---------- ---------- TOTAL $3,574,962 $3,729,105 ========== ========== LIABILITIES AND PARTNERS' EQUITY LIABILITIES Distribution to Partners $232,523 $232,468 Property management fees payable 11,162 12,424 Customer depositis and other liabilities 42,019 134,123 Capital lease obligation 85,450 105,510 -------- -------- Total liabilities 371,154 484,525 -------- -------- MINORITY INTEREST IN REAL ESTATE JOINT VENTURE 199,575 191,503 -------- -------- PARTNERS' EQUITY (DEFICIT): General Partners (107,398) (106,910) Limited Partners (30,693 limited partnership units outstanding at June 30, 2007 and December 31, 2006) 3,111,631 3,159,987 --------- --------- Total partners' equity 3,004,233 3,053,077 --------- --------- TOTAL $3,574,962 $3,729,105 ========== ========== See accompanying notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006 June 30, June 30, 2007 2006 REVENUES: Rental $ 771,690 $ 732,405 ---------- ---------- EXPENSES: Operating 446,101 485,423 General and administrative 75,211 63,909 ---------- --------- Total expenses 521,312 549,332 ---------- --------- OPERATING INCOME 250,378 183,073 OTHER INCOME Interest 49 48 ---------- --------- INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 250,427 183,121 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE (30,559) (23,628) ---------- ---------- NET INCOME $ 219,868 $ 159,493 ========== ========== AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 217,669 $ 157,898 General partners 2,199 1,595 ---------- ---------- TOTAL $ 219,868 $ 159,493 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 7.09 $ 5.14 ========== ========== 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, 2007 AND 2006 June 30, June 30, 2007 2006 REVENUES: Rental $1,555,543 $1,470,017 ---------- ---------- EXPENSES: Operating 911,318 932,624 General and administrative 165,449 141,606 ---------- --------- Total expenses 1,076,767 1,074,230 ---------- --------- OPERATING INCOME 478,776 395,787 OTHER INCOME Interest 97 96 ---------- --------- INCOME BEFORE MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE 478,873 395,883 MINORITY INTEREST IN INCOME OF REAL ESTATE JOINT VENTURE (62,672) (54,230) ---------- ---------- NET INCOME $ 416,201 $ 341,653 ========== ========== AGGREGATE NET INCOME ALLOCATED TO: Limited partners $ 412,039 $ 338,236 General partners 4,162 3,417 ---------- ---------- TOTAL $ 416,201 $ 341,653 ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 13.42 $ 11.02 ========== ========== 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, 2007 GENERAL LIMITED PARTNERS PARTNERS TOTAL BALANCE AT JANUARY 1, 2007 ($106,910) $3,159,987 $3,053,077 NET INCOME 4,162 412,039 416,201 DISTRIBUTIONS (4,650) (460,395) (465,045) --------- ---------- ---------- BALANCE AT JUNE 30, 2007 ($107,398) $3,111,631 $3,004,233 ========= ========== ========== See accompanying notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006 June 30, June 30, 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 416,201 $ 341,653 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 235,075 235,908 Minority interest in income real estate joint venture 62,672 54,230 Changes in assets and liabilities: Increase in other assets (19,688) (2,541) Increase in incentive management fee payable to general partners - 20,927 (Decrease)Increase in property management fee payable (1,262) 292 Decrease in customer deposits and other liabilities (92,104) (92,323) -------- --------- Net cash provided by operating activities 600,894 558,146 -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES - Distributions to partners (464,990) (464,991) Distributions paid to minority interest in real estate joint venture (54,600) (54,900) Payments on capital lease obligations (20,060) (22,734) -------- --------- Net cash used in financing activities (539,650) (542,623) -------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 61,244 15,523 CASH AND CASH EQUIVALENTS: At beginning of period 635,667 520,071 --------- --------- At end of period $ 696,911 $ 535,594 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - Cash paid for interest $ 2,442 $ 4,266 ========= ========= NONCASH FINANCING ACTIVITIES - Distributions due partners included in partners' equity $ 232,523 $ 232,523 ========= ========= See accompanying notes to consolidated financial statements (unaudited). DSI REALTY INCOME FUND IX (A 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. 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 (see Note 4). The accompanying interim financial statements have been prepared by the Company's management in accordance with accounting principles generally accepted in the United States of America ("GAAP") and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regu- lations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature which are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2006. 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: June 30, December 31, 2007 2006 Land $ 2,729,790 $ 2,729,790 Buildings and equipment 11,129,105 11,129,105 Rental trucks under capital lease 210,138 210,138 ------------ ------------ Total 14,069,033 14,069,033 Less: Accumulated Depreciation (11,385,629) (11,150,554) ------------ ------------ Property - Net $ 2,683,404 $ 2,918,479
============ ============ 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. 5. RELATED-PARTY TRANSACTIONS The Partnership has entered into a management agreement with Dahn to operate its mini-storage facilities. The management agreement provides for a management fee equal to 5% of gross revenue from operations, which is defined as the entire amount of all receipts from the renting or leasing of storage compartments and sale of locks. The management agreement is renewable annually. Dahn earned management fees equal to $38,651 and $36,620, for the three month periods ended June 30, 2007 and 2006, respectively, and $77,864 and $73,501 for the six month period ended June 30, 2007 and 2006, respectively. Amounts payable to Dahn at June 30, 2007 and December 31, 2006, were $11,162 and $12,424, respectively. In 2004, the Partnership entered into truck lease agreements with KMD Trucks, LLC ("KMD"). The president of Dahn, Brian Dahn, is also a member of KMD. Trucks are leased under 48-month leases with total monthly payments in the amount of $4,500. 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, 2007. 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, 2007 and 2006, total revenues increased 5.4% from $732,405 to $771,690 and total expenses decreased 5.1% from $549,332 to $521,312 and other income increased from $48 to $49. Minority interest in income of real estate joint venture increased 29.3% from $23,628 to $30,559. As a result, net income increased 37.9% from $159,493 to $219,868 for the three-month period ended June 30, 2007, as compared to the same period in 2006. Rental revenue increased as a result of higher unit rental rates. The Partnership is continuing its marketing efforts to attract and keep new tenants in its various mini-storage facilities. Operating expenses decreased approximately $39,300 (8.1%) due primarily to a decrease in advertising and maintenance and repair expenses, partially off-set by an increase in salaries and wages expense. General and administrative expense increased approximately $11,300 (17.7%) primarily as a result of increases in legal and professional and administrative expenses. Minority interest in income of real estate joint venture increased as a result of the higher net income at that facility. For the six-month periods ended June 30, 2007 and 2006, total revenues increased 5.8% from $1,470,017 to $1,555,543 and total expenses increased 0.2% from $1,074,230 to $1,076,767 and other income increased from $96 to $97. Minority interest in income of real estate joint venture increased 15.6% from $54,230 to $62,672. As a result, net income increased 21.8% from $341,653 to $416,201 for the six-month period ended June 30, 2007, as compared to the same period in 2006. Rental revenue increased as a result of higher unit rental rates. Operating expenses decreased approximately $21,300 (2.3%) due primarily to decreases in advertising and maintenance and repair expenses, partially offset by increases in legal, property management fee and salaries and wages expenses. Property management fees, which are based on rental revenue, increased as a result of the increase in rental revenue. General and administrative expenses increased approxi- mately $23,800 (16.8%) primarily as a result of an increase in legal and professional and administrative expenses. Minority interest in income of real estate joint venture increased as discussed above. The General Partners plan to continue their policy of funding the continuing improvement 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. Quantitative and Qualitative Disclosures About Market Risk NONE Item 4. CONTROLS AND PROCEDURES 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 inform- ation 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 significantly 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 1A. Risk Factors Please refer to the risk factors disclosed by the partnership in response to Item 1A, part I of the Form 10-K filed on March 30, 2007. There has been no material change to the risk factors disclosed therein. 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, 2007. (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: August 14, 2007 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: August 14, 2007 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 report on Form 10-Q for the quarter ended June 30, 2007 of DSI Realty Income Fund IX; 2. Based on my knowledge, this 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 report. 3. Based on my knowledge, the financial statements and other financial information included in this 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 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 annual 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 reasonably likely to materially affect, the registrant's internal 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 and general partners (or persons performing the equivalent functions): 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: August 14, 2007 Robert J. Conway Chief Executive Officer CERTIFICATIONS I, Richard P. Conway, certify that: 1. I have reviewed this report on Form 10-Q for the quarter ended June 30, 2007 of DSI Realty Income Fund IX; 2. Based on my knowledge, this 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 report. 3. Based on my knowledge, the financial statements and other financial information included in this 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 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 annual 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 reasonably likely to materially affect, the registrant's internal 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 and general partners (or persons performing the equivalent functions): 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: August 14, 2007 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, 2007 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 August 14, 2007 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, 2007 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 August 14, 2007 -----END PRIVACY-ENHANCED MESSAGE-----