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 March 31, 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 2-83291
DSI REALTY INCOME FUND VII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________95-3871044
(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 March 31, 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 March 31, 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 March 31, 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: April 26, 2002 DSI REALTY INCOME FUND VII
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: April 26, 2002 DSI REALTY INCOME FUND VII
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
April 26, 2002
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VII
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended March 31, 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 March 31, 2002 and 2001, total revenues
increased 9.1% from $615,684 to $671,743, total expenses increased 7.9% from
$294,344 to $317,483 and other income decreased from $1,450 to $244. As a
result, net income increased 9.8% from $322,790 for the three-month period
ended March 31, 2001, to $354,504 for the same period in 2002. Occupancy levels
for the Partnership's six mini-storage facilities averaged 87.3% for the three
month period ended March 31, 2002, and 90.7% for the period in 2001. Rental
revenue increased as a result of higher unit rental rates. The Partnership
is continuing its marketing effort to attract and keep new tenants in its
various mini-storage facilities. Operating expenses increased approximately
$17,600 (7.7%) primarily as a result of increases in property management
fees, office supplies, salaries and wages and workers compensation insurance
expenses, partially offset by decreases in repairs and maintenance and
security alarm services expenses. General and administrative expenses
increased approximately $5,600 (8.6%) primarily as a result of increases in
incentive management fees and equipment and computer lease expenses.
On April 5, 2002, the General Partners received a copy of a hostile tender
offer from ManKenzie Patterson, Inc. and associated corporations and limited
partnerships to purchase all of the units in the Partnership. The General
Partners have determined that the hostile tender offer is not in the best
interests of the Limited Partners, that the tender offer is grossly inadequate
given the performance history of the Limited Partnership and the inherent
value of the units, and recommend that the Limited Partners reject the hostile
tender offer and not tender their Units pursuant thereto.
The General Partners will continue their policy of funding the continuing
improvement 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 VII, P.O. Box 357,
Long Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND VII
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
MARCH 31, 2002 AND DECEMBER 31, 2001
March 31, December 31,
2002 2001
ASSETS
CASH AND CASH EQUIVALENTS $ 625,280 $ 530,721
PROPERTY, NET 2,089,800 2,089,800
OTHER ASSETS 76,413 76,413
TOTAL $2,791,493 $2,696,934
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 592,852 $ 610,373
PARTNERS' EQUITY (DEFICIT):
General Partners (85,782) (86,903)
Limited Partners 2,284,423 2,173,464
Total partners' equity 2,198,641 2,086,561
TOTAL $2,791,493 $2,696,934
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
March 31, March 31,
2002 2001
REVENUES:
Rental Income $ 671,743 $ 615,684
EXPENSES:
Operating 247,053 229,500
General and administrative 70,430 64,844
Total expenses 317,483 294,344
OPERATING INCOME $ 354,260 $ 321,340
OTHER INCOME
Interest 244 1,450
NET INCOME $ 354,504 $ 322,790
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 350,959 $ 319,562
General partners 3,545 3,228
TOTAL $ 354,504 $ 322,790
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 14.62 $ 13.32
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 THREE MONTHS ENDED MARCH 31, 2002
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2002 ($86,903) $2,173,464 $2,086,561
NET INCOME 3,545 350,959 354,504
DISTRIBUTIONS (2,424) (240,000) (242,424)
BALANCE AT MARCH 31, 2002 ($85,782) $2,284,423 $2,198,641
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
March 31, March 31,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 354,504 $ 322,790
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 0 1,000
Changes in assets and
liabilities:
(Decrease)increase in
liabilities (17,521) 30,886
Net cash provided by
operating activities 336,983 354,676
CASH FLOWS FROM INVESTING ACTIVITIES -
Additions to property
and equipment (18,124)
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (242,424) (242,424)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 94,559 94,128
CASH AND CASH EQUIVALENTS:
At beginning of period 530,721 468,842
At end of period $ 625,280 $ 562,970
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VII (the "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 March 31, 2002, and for
the periods ended March 31, 2002, and 2001 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
Properties owned by the Partnership are all mini-storage facilities.
Depreciation is calculated using the straight line method over the
estimated useful life of 15 years. The total cost of property and
accumulated depreciation at March 31, 2002, is as follows:
Land $ 2,089,800
Buildings and improvements 7,685,522
Equipment 60,760
Total 9,836,082
Less: Accumulated Depreciation ( 7,746,282)
Property - Net $ 2,089,800
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.