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, 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_______________________________________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, 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 September 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 September 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: October 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 there unto duly authorized.
Dated: October 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
October 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 September 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 September 30, 2002 and 2001, total
revenues decreased 7.6% from $665,379 to $615,145 and total expenses in-
creased 5.0% from $266,021 to $279,335 and other income decreased from $1,107
to $317. Equity in income of the real estate joint venture decreased 8.9%
from $39,652 to $36,115. As a result, net income decreased 15.4% from $440,117
to $372,242 for the three-month period ended September 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
September 30, 2002 as compared to 90.2% for the same period in 2001. The Part-
nership is continuing its marketing efforts to attract and keep new tenants
in its various mini-storage facilities. Operating expenses increased approx-
imately $19,300 (9.5%) primarily as a result of higher workers compensation
insurance, security and alarm services and postage expenses, partially offset
by decreases in repairs and maintenance and salary and wages expenses. General
and administrative expenses decreased approximately $5,600 (9.4%) primarily
as a result of a decrease in incentive management fees partially offset by an
increase in equipment and computer lease. Incentive management fees, which are
based on cash available for distribution, decreased as a result of the de-
crease in net income. Equity in income from the real estate joint venture de-
creased as a result of lower rental revenue at that facility.
For the nine-month periods ended September 30, 2002, and 2001, total revenues
decreased 2.9% from $1,915,657 to $1,859,797 and total expenses increased
8.7% from $748,042 to $813,300 and other income decreased from $4,045 to $898.
Equity in income of the real estate joint venture decreased 15.9% from
$126,136 to $106,042. As a result, net income decreased 11.1% from $1,297,796
to $1,153,437 for the nine-month period ended September 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
$55,100 (10.0%) primarily as a result of increases in office supplies and
workers compensation insurance, security and alarm services, bank and credit
card fees and postage expenses, partially offset by decreases in advertising
and repairs and maintenance expense. General and administrative expenses in-
creased approximately $11,100 (5.1%) 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 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
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 Partner-
ship.
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, 2002 AND DECEMBER 31, 2001
September 30, December 31,
2002 2001
ASSETS
CASH AND CASH EQUIVALENTS $1,026,971 $ 619,194
PROPERTY, Net 2,288,636 2,287,427
INVESTMENT IN REAL ESTATE
JOINT VENTURE 181,302 181,660
OTHER ASSETS 69,425 71,264
TOTAL $3,565,334 $3,159,545
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 706,156 $ 635,623
PARTNERS' EQUITY (DEFICIT):
General Partners (79,190) (82,543)
Limited Partners 2,938,368 2,606,465
Total partners' equity 2,859,178 2,523,922
TOTAL $3,565,334 $3,159,545
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
September 30, September 30,
2002 2001
REVENUES:
Rental $ 615,145 $ 665,379
EXPENSES:
Operating 221,831 202,564
General and administrative 57,504 63,457
Total expenses 279,335 266,021
OPERATING INCOME 335,810 399,358
OTHER INCOME
Interest 317 1,107
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 336,127 400,465
EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 36,115 39,652
NET INCOME $ 372,242 $ 440,117
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 368,520 $ 435,716
General partners 3,722 4,401
TOTAL $ 372,242 $ 440,117
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 15.35 $ 18.15
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, 2002 AND 2001
September 30, September 30,
2002 2001
REVENUES:
Rental $1,859,797 $1,915,657
EXPENSES:
Operating 606,099 550,975
General and administrative 207,201 197,067
Total expenses 813,300 748,042
OPERATING INCOME 1,046,497 1,167,615
OTHER INCOME
Interest 898 4,045
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 1,047,395 1,171,660
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 106,042 126,136
NET INCOME $1,153,437 $1,297,796
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 1,141,903 1,284,818
General Partners 11,534 12,978
TOTAL 1,153,437 1,297,796
NET INCOME PER LIMITED
PARTNERSHIP UNIT $47.58 $53.53
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, 2002 AND 2001
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2002 ($82,543) $2,606,465 $2,523,922
NET INCOME 11,534 1,141,903 1,153,437
DISTRIBUTIONS (8,181) (810,000) (818,181)
BALANCE AT SEPTEMBER 30, 2002 ($79,190) $2,938,368 $2,859,178
See accompanying notes to consolidated financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
September 30, September 30,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,153,437 $1,297,796
Adjustments to reconcile net
income to net cash provided
by operating activities:
Equity in earnings of
real estate joint venture (106,042) (126,136)
Distributions from
real estate joint venture 107,400 121,200
Changes in assets and
liabilities:
Increase in other assets 1,839 (6,000)
(Decrease)increase in liabilities 70,533 43,328
Net cash provided by
operating activities 1,227,167 1,330,188
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property (1,209)
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (818,181) (818,181)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 407,777 512,007
CASH AND CASH EQUIVALENTS:
At beginning of period 619,194 514,497
At end of period $1,026,971 $1,026,504
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, 2002, and for
the periods ended September 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 September 30, 2002,
is as follows:
Land $ 2,287,427
Buildings and improvements 7,126,997
Equipment 24,040
Total 9,438,464
Less: Accumulated Depreciation ( 7,149,828)
Property - Net $ 2,288,636
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, 2002, and 2001 is as follows:
2002 2001
Revenue $522,050 $590,984
Operating Expenses 168,577 170,530
Net Income $353,473 $420,454
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, 2002 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 materinal weaknesses.
Date: November, 2002
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 materinal weaknesses.
Date: November, 2002
Richard Conway
Vice President