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, 2002
/___/ 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.
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 June 30, 2002 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 June 30, 2002.
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 June 30, 2002.
(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 31, 2002 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: July 31, 2002 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
July 31, 2002
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VIII
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial
statements for the period ended June 30, 2002. 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, 2002 and 2001, total revenues
decreased 4.2% from $632,472 to $605,710 and total expenses increased 12.1%
from $242,426 to $271,652 and other income decreased from $1,377 to $299.
Equity in income of the real estate joint venture decreased 24.0% from
$43,090 to $32,739. As a result, net income decreased 15.5% from $434,513
to $367,096 for the three-month period ended June 30, 2002, as compared to
the same period in 2001. Rental revenue decreased as a result of lower
occupancy and unit rental rates. Occupancy levels for the Partnership's
five mini-storage facilities averaged 85.2% for the three-month period
ended June 30, 2002 as compared to 92.5% for the same period in 2001. The
Partnership is continuing its marketing efforts to attract and keep new
tenants in its various mini-storage facilities. Operating expenses increased
approximately $15,400 (8.3%) primarily as a result of higher repairs and
maintenance, office supplies and workers compensation insurance expenses,
partially offset by a decrease in advertising expense. General and admini-
strative expenses increased approximately $13,900 (24.2%) primarily as a
result of increases in legal and professional and equipment and computer
lease expenses, partially offset by a decrease in incentive management fees.
Incentive management fees, which are based on cash available for distribution,
decreased as a result of the decrease in net income. Equity in income from
the real estate joint venture decreased as a result of lower rental revenue
and higher operating expenses at that facility.
For the six month periods ended June 30, 2002, and 2001, total revenues
increased 0.5% from $1,250,278 to $1,244,652 and total expenses increased
10.8% from $482,021 to $533,965 and other income decreased from $2,938 to
$581. Equity in income of the real estate joint venture decreased 19.1% from
$86,484 to $69,927. As a result, net income decreased 8.9% from $857,679 to
$781,195 for the six-month period ended June 30, 2002, as compared to the
same period in 2001. Rental revenue decreased as a result of lower occupancy
and unit rental rates. Operating expenses increased approximately $35,900
(10.3%) primarily as a result of increases in repairs and maintenance, office
supplies and workers compensation insurance expenses, partially offset by
a decrease in advertising expense. General and administrative expenses in-
creased approximately $16,100 (12.0%) primarily as a result of higher legal
and professional and equipment and computer lease expenses, partially offset
by lower incentive management fees. The decrease in incentive management
fees was discussed above. The decrease in equity in income from the real
estate joint venture was also discussed above.
On April 5, 2002, the General Partners received a copy of a hostile tender
offer from MacKenzie Patterson, Inc. and associated corporation and limited
partnerships to purchase all of the Units in the Partnership. This offer was
also filed with the Securities and Exchange Commission on the same date. The
General Partners have determined that the hostile tender offer was not in
the best interests of the Limited Partners, that the tender offer was grossly
inadequate given the performance history of the Limited Partnership and the
inherent value of the Units, and recommendedthat 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 has not changed. Prior to the expiration date of the offer, Limited
Partners tendered 36 Units representing 0.150% of the outstanding Units of
the Partnership.
The General Partners will continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from
operations. The Partnership's financial resources appear to be adequate
to meet its needs. The General Partners anticipate distributions to the Limited
Partners to remain at the current level for the foreseeable future.
We are not enclosing a copy of the Partnership Form 10-Q as filed with the
Securities and Exchange Commission since all the information set forth
therein is contained either in this letter or in the attached financial
statements. However, if you wish to receive a copy of said report, please
send a written request to DSI Realty Income Fund VIII, P.O. Box 357, Long
Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND VIII
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
JUNE 30, 2002 AND DECEMBER 31, 2001
June 30, December 31,
2002 2001
ASSETS
CASH AND CASH EQUIVALENTS $ 881,351 $ 619,194
PROPERTY, Net 2,287,427 2,287,427
INVESTMENT IN REAL ESTATE
JOINT VENTURE 184,087 181,660
OTHER ASSETS 69,425 71,264
TOTAL $3,422,290 $3,159,545
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 662,627 $ 635,623
PARTNERS' EQUITY (DEFICIT):
General Partners (80,185) (82,543)
Limited Partners 2,839,848 2,606,465
Total partners' equity 2,759,663 2,523,922
TOTAL $3,422,290 $3,159,545
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001
June 30, June 30,
2002 2001
REVENUES:
Rental $ 605,710 $ 632,472
EXPENSES:
Operating 200,283 184,909
General and administrative 71,369 57,517
Total expenses 271,652 242,426
OPERATING INCOME 334,058 390,046
OTHER INCOME
Interest 299 1,377
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 334,357 391,423
EQUITY IN INCOME OF REAL ESTATE
JOINT VENTURE 32,739 43,090
NET INCOME $ 367,096 $ 434,513
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $ 363,425 $ 430,168
General Partners 3,671 4,345
TOTAL $ 367,096 $ 434,513
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 15.14 $ 17.92
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
June 30, June 30,
2002 2001
REVENUES:
Rental $1,244,652 $1,250,278
EXPENSES:
Operating 384,268 348,411
General and Administrative 149,697 133,610
Total Expenses 533,965 482,021
OPERATING INCOME 710,687 768,257
OTHER INCOME 581 2,938
INCOME BEFORE EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 711,268 771,195
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 69,927 86,484
NET INCOME $ 781,195 $ 857,679
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $ 773,383 $ 849,102
General Partners 7,812 8,577
TOTAL $ 781,195 $ 857,679
NET INCOME PER LIMITED PARTNERSHIP UNIT $32.22 $35.38
LIMITED PARTNERSHIP UNITS USED
IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements (unaudited).
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2002
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2002 ($82,543) $2,606,465 $2,523,922
NET INCOME 7,812 773,383 781,195
DISTRIBUTIONS (5,454) (540,000) (545,454)
BALANCE AT JUNE 30, 2002 ($80,185) $2,839,848 $2,759,663
See accompanying notes to consolidated financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
June 30, June 30,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 781,195 $ 857,679
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in earnings of
real estate joint venture (69,927) (86,484)
Distributions from real
estate joint venture 67,500 80,400
Changes in assets and
liabilities:
Decrease(increase)in other assets 1,839 (6,000)
Increase(decrease)in liabilities 27,004 (3,397)
Net cash provided by
operating activities 807,611 842,198
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (545,454) (545,454)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 262,157 296,744
CASH AND CASH EQUIVALENTS:
At beginning of period 619,194 514,497
At end of period $ 881,351 $811,241
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VIII (the "Partnership"), a limited partnership, has
two general partners (DSI Properties, Inc., and Diversified Investors Agency)
and limited partners owning 24,000 limited partnership units. The
Partnership was formed under the California Uniform Limited Partnership
Act for the primary purpose of acquiring and operating real estate.
The accompanying financial information as of June 30, 2002, and for
the periods ended June 30, 2002, and 2001 is unaudited. Such financial
information includes all adjustments considered necessary by the
Partnership's management for a fair presentation of the results for the
periods indicated.
2. PROPERTY
The Partnership owns five mini-storage facilities located in Stockton,
Pittsburg, El Centro, Lompoc and Huntington Beach, California. The total
cost of property and accumulated depreciation at June 30, 2002,
is as follows:
Land $ 2,287,427
Buildings and improvements 7,126,997
Equipment 22,831
Total 9,437,255
Less: Accumulated Depreciation ( 7,149,828)
Property - Net $ 2,287,427
3. INVESTMENT IN REAL ESTATE JOINT VENTURE
The Partnership is involved in a joint venture with DSI Realty Income
Fund IX through which the Partnership has a 30% interest in a mini-storage
facility in Aurora, Colorado. Under the terms of the joint venture
agreement, the Partnership is entitled to 30% of the profits and losses of
the venture and owns 30% of the mini-storage facility as a tenant in common
with DSI Realty Income Fund IX, which has the remaining 70% interest in
the venture. Summarized income statement information for the six months
ended June 30, 2002, and 2001 is as follows:
2002 2001
Revenue $345,223 $389,206
Operating Expenses 112,134 100,926
Net Income $233,089 $288,280
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.
DSI REALTY INCOME FUND VIII
Form 10-Q
CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an officer of
DSI Properties Inc. (corporate General Partner) of DSI REALTY INCOME FUND VIII
(the "Partnership") that the Quarterly Report of the Partnership on Form 10-Q
for the periods ended June 30, 2002 fully complies with the requirements of
Section 13(a) of the Securities and Exchange Act of 1934 and that information
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