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, 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 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, 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 June 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 June 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: July 31, 2003 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, 2003 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, 2003
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, 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 June 30, 2003 and 2002, total revenues
decreased 2.6% from $605,710 to $589,816 and total expenses decreased 2.4%
from $271,652 to $265,108 and other income decreased from $299 to $159.
Equity in income of the real estate joint venture decreased 3.8% from
$32,739 to $31,505. As a result, net income decreased 3.0% from $367,096
to $356,372 for the three-month period ended June 30, 2003, as compared to
the same period in 2002. Rental revenue decreased as a result of lower unit
rental rates. Occupancy levels for the Partnership's five mini-storage
facilities averaged 88.7% for the three-month period ended June 30, 2003 as
compared to 85.2% 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 remained relatively constant. General
and administrative expenses decreased approximately $9,600 (13.4%) primarily
as a result of decreases in legal and professional and equipment and computer
lease expenses. Equity in income from the real estate joint venture remained
relatively constant.
For the six-month periods ended June 30, 2003, and 2002, total revenues
decreased 1.3% from $1,244,652 to $1,228,019 and total expenses increased
3.9% from $533,965 to $554,683 and other income decreased from $581 to $350.
Equity in income of the real estate joint venture decreased 0.3% from $69,927
to $69,689. As a result, net income decreased 4.8% from $781,195 to $743,375
for the six-month period ended June 30, 2003, as compared to the same period
in 2002. Rental revenue decreased as a result of lower unit rental rates.
Operating expenses increased approximately $29,700 (7.7%) primarily as a re-
sult of increases in repairs and maintenance, telephone, salaries and wages
and security and alarm service expenses, partially offset by a decrease in
workers compensation insurance expense. General and administrative expenses
decreased approximately $9,000 (6.0%) primarily as a result of lower legal
and professional and equipment and computer lease expenses. Equity in income
from the real estate joint venture remained relatively constant.
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 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 36 Units representing 0.150% 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 or approve the proposed
transfers. The Court has rejected all preliminary attempts to halt implemen-
tation of the amendment.
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, 2003 AND DECEMBER 31, 2002
June 30, December 31,
2003 2002
ASSETS
CASH AND CASH EQUIVALENTS $ 725,126 $ 502,070
PROPERTY, Net 2,288,638 2,288,638
INVESTMENT IN REAL ESTATE
JOINT VENTURE 185,782 180,293
OTHER ASSETS 102,393 102,393
TOTAL $3,301,939 $3,073,394
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 693,216 $ 662,592
PARTNERS' EQUITY (DEFICIT):
General Partners (81,694) (83,674)
Limited Partners 2,690,417 2,494,476
Total partners' equity 2,608,723 2,410,802
TOTAL $3,301,939 $3,073,394
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002
June 30, June 30,
2003 2002
REVENUES:
Rental $ 589,816 $ 605,710
EXPENSES:
Operating 203,314 200,283
General and administrative 61,794 71,369
Total expenses 265,108 271,652
OPERATING INCOME 324,708 334,058
OTHER INCOME
Interest 159 299
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 324,867 334,357
EQUITY IN INCOME OF REAL ESTATE
JOINT VENTURE 31,505 32,739
NET INCOME $ 356,372 $ 367,096
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $ 352,808 $ 363,425
General Partners 3,564 3,671
TOTAL $ 356,372 $ 367,096
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 14.70 $ 15.14
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, 2003 AND 2002
June 30, June 30,
2003 2002
REVENUES:
Rental $1,228,019 $1,244,652
EXPENSES:
Operating 413,980 384,268
General and Administrative 140,703 149,697
Total Expenses 554,683 533,965
OPERATING INCOME 673,336 710,687
OTHER INCOME 350 581
INCOME BEFORE EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 673,686 711,268
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 69,689 69,927
NET INCOME $ 743,375 $ 781,195
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners $ 735,941 $ 773,383
General Partners 7,434 7,812
TOTAL $ 743,375 $ 781,195
NET INCOME PER LIMITED PARTNERSHIP UNIT $30.66 $32.22
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, 2003
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2003 ($83,674) $2,494,476 $2,410,802
NET INCOME 7,434 735,941 743,375
DISTRIBUTIONS (5,454) (540,000) (545,454)
BALANCE AT JUNE 30, 2003 ($81,694) $2,690,417 $2,608,723
See accompanying notes to consolidated financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
June 30, June 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 743,375 $ 781,195
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in earnings of
real estate joint venture (69,689) (69,927)
Distributions from real
estate joint venture 64,200 67,500
Changes in assets and
liabilities:
Decrease in other assets 0 1,839
Increase in liabilities 30,624 27,004
Net cash provided by
operating activities 768,510 807,611
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (545,454) (545,454)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 223,056 262,157
CASH AND CASH EQUIVALENTS:
At beginning of period 502,070 619,194
At end of period $ 725,126 $881,351
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, 2003, and for
the periods ended June 30, 2003, and 2002 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, 2003,
is as follows:
Land $ 2,287,427
Buildings and improvements 7,126,999
Equipment 24,040
Total 9,438,466
Less: Accumulated Depreciation ( 7,149,828)
Property - Net $ 2,288,638
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, 2003, and 2002 is as follows:
2003 2002
Revenue $335,827 $345,223
Operating Expenses 103,531 112,134
Net Income $232,296 $233,089
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. 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 President and Chief Executive Officer.
The disclosure controls and procedures are designed to ensure that the inform-
ation 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
Commissions rules and forms, and that the information is communicated to the
certifying officers on a timely basis. Based on this evaluation, the Partner-
ship 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 sub-
sequent to the date of their evaluation.
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-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 con-
solidated 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:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, 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 in-
ternal 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: July 31, 2003
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-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 con-
solidated 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:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, 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 in-
ternal 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: July 31, 2003
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 June 30, 2003 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 31, 2003
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 June 30, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. 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.
Richard P. Conway
Vice President
July 31, 2003
ROBERT J. CONWAY, CEO RICHARD P. CONWAY, VP