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 VIII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________33-0050204
(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 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 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 there unto duly authorized.
Dated: October 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
October 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 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 0.5% from $615,145 to $612,173 and total expenses increased
11.0% from $279,335 to $310,009 and other income decreased from $317 to $186.
Equity in income of the real estate joint venture decreased 16.6% from $36,115
to $30,124. As a result, net income decreased 10.7% from $372,242 to $332,474
for the three-m onth period ended September 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 84.5% for the three-month period ended September 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 decreased approximately $12,100 (5.5%) primarily
as a result of decreases in workers compensation insurance and security and
alarm services expenses, partially offset by increases in repairs and mainten-
ance and salaries and wages expenses. General and administrative expenses
increased approximately $42,800 (74.44%) primarily as a result of an increase
in legal and professional expenses, partially offset by decreases in incentive
management fees and 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). Equity
in income from the 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 1.1% from $1,859,797 to $1,840,192 and total expenses increased 6.3%
from $813,300 to $864,692 and other income decreased from $898 to $536. Equity
in income of the real estate joint venture decreased 5.9% from $106,042 to
$99,813. As a result, net income decreased 6.7% from $1,153,437 to $1,075,849
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 unit rental
rates. Operating expenses increased approximately $17,600 (2.9%) primarily
as a result of increases in repairs and maintenance, telephone, real estate
tax, salaries and wages expenses, partially offset by a decrease in workers
compensation insurance and security and alarm services expenses. General and
administrative expenses increased approximately $33,800 (16.3%) primarily as
a result of an increase in legal and professional, partially offset by a de-
crease in incentive management fee and equipment and computer lease expenses.
The increase in legal expense was discussed above. Equity in income from the
real estate joint venture decreased as a result of lower rental revenue at
that facility.
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
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 Partner-
ship.
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. Subsequently, the dissident Limited Partners who
initiated the legal proceedings decided not to pursue the matter any further.
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 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)
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
September 30, December 31,
2003 2002
ASSETS
CASH AND CASH EQUIVALENTS $ 921,768 $ 502,070
PROPERTY, Net 2,288,638 2,288,638
INVESTMENT IN REAL ESTATE
JOINT VENTURE 185,906 180,293
OTHER ASSETS 102,393 102,393
TOTAL $3,498,705 $3,073,394
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 830,235 $ 662,592
PARTNERS' EQUITY (DEFICIT):
General Partners (81,097) (83,674)
Limited Partners 2,749,567 2,494,476
Total partners' equity 2,668,470 2,410,802
TOTAL $3,498,705 $3,073,394
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental $ 612,173 $ 615,145
EXPENSES:
Operating 209,748 221,831
General and administrative 100,261 57,504
Total expenses 310,009 279,335
OPERATING INCOME 302,164 335,810
OTHER INCOME
Interest 186 317
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 302,350 336,127
EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 30,124 36,115
NET INCOME $ 332,474 $ 372,242
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 329,149 $ 368,520
General partners 3,325 3,722
TOTAL $ 332,474 $ 372,242
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 13.71 $ 15.35
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 NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental $1,840,192 $1,859,797
EXPENSES:
Operating 623,728 606,099
General and administrative 240,964 207,201
Total expenses 864,692 813,300
OPERATING INCOME 975,500 1,046,497
OTHER INCOME
Interest 536 898
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 976,036 1,047,395
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 99,813 106,042
NET INCOME $1,075,849 $1,153,437
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 1,065,091 1,141,903
General Partners 10,758 11,534
TOTAL 1,075,849 1,153,437
NET INCOME PER LIMITED
PARTNERSHIP UNIT $44.38 $47.58
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 (DEFICIT)(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2003 ($83,674) $2,494,476 $2,410,802
NET INCOME 10,758 1,065,091 1,075,849
DISTRIBUTIONS (8,181) (810,000) (818,181)
BALANCE AT SEPTEMBER 30, 2003 ($81,097) $2,749,567 $2,668,470
See accompanying notes to consolidated financial statements(unaudited).
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 $1,075,849 $1,153,437
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in earnings of
real estate joint venture (99,813) (106,042)
Distributions from
real estate joint venture 94,200 107,400
Changes in assets and
liabilities:
Decrease in other assets 0 1,839
Increase in liabilities 167,643 70,533
Net cash provided by
operating activities 1,237,879 1,227,167
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property (1,210)
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (818,181) (818,181)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 419,698 407,776
CASH AND CASH EQUIVALENTS:
At beginning of period 502,070 619,194
At end of period $ 921,768 $1,026,970
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 September 30, 2003, and for
the periods ended September 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 September 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 nine months
ended September 30, 2003, and 2002 is as follows:
2003 2002
Revenue $485,333 $522,050
Operating Expenses 152,624 168,577
Net Income $332,709 $353,473
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 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 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 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 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 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 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 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 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