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 IX, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________33-0103989
(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 IX
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: October 31, 2003 DSI REALTY INCOME FUND IX
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 IX
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 10.6% from $787,933 to $704,751 and total expenses in-
creased 12.4% from $434,102 to $488,141 and other income decreased from $224
to $131. Minority interest in income of real estate joint venture decreased
16.6% from $36,115 to $30,124. As a result, net income decreased 41.3% from
$317,940 to $186,617 for the three-month period ended September 30, 2003, as
compared to the same period in 2002. Rental revenue decreased as a result
of lower occupancy and unit rental rates. Occupancy levels for the Partner-
ship's six mini-storage facilities averaged 78.3% for the three-month period
ended September 30, 2003 as compared to 83.3% 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 $15,700 (4.1%) due primarily to a decrease in property manage-
ment fee, office supplies, salaries and wages, travel and power and sweeping
expenses, partially offset by increases in advertising, real estate tax
expenses. General and administrative expenses increased approximately $69,800
(138.9%) primarily as a result of an increase in legal expense, partially
offset by a decrease in 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).
Minority interest in income of 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 7.5% from $2,359,578 to $2,182,906 and total expenses decreased 0.2%
from $1,387,028 to $1,384,727 and other income decreased from $635 to $278.
Minority interest in income of real estate joint venture decreased 5.9% from
$106,042 to $99,813. As a result, net income decreased 19.4% from $867,143
to $698,744 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
occupancy and unit rental rates. Operating expenses decreased approximately
$59,500 (5.0%) due primarily to decreases in maintenance and repair, property
management fees, office supplies, salaries and wages, workers compensation
insurance, security alarm services and travel expenses, partially offset by
increases in advertising, telephone and real estate tax expenses. General and
administrative expenses increased approximately $57,200 (27.7%) as a result of
increases in legal and professional expenses, partially offset by a decrease
in equipment and computer expenses. The increase in legal expenses was dis-
cussed above. Minority interest in income of real estate joint venture de-
creased as 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 in-
adequate 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 22 Units representing 0.072% 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 for approve the proposed
transfers. The Court has rejected all preliminary attempts to halt implement-
ation of the amnedment. Subsequently, the dissident Limited Partners who
initiated the legal proceedings decided not to pursue the matter any further.
The General Partners plan to continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from
operations. The Partnership's 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 IX, P.O. Box 357, Long
Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND IX
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND IX
(A California Real Estate Limited Partnership)
CONSOLIDATED BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
September 30, December 31,
2003 2002
ASSETS
CASH AND CASH EQUIVALENTS $ 785,470 $ 631,709
PROPERTY, Net 4,001,337 4,308,446
OTHER ASSETS 141,551 109,240
TOTAL $4,928,358 $5,049,395
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES $ 822,913 $ 718,214
MINORITY INTEREST IN
REAL ESTATE JOINT VENTURE 185,906 180,296
PARTNERS' EQUITY(DEFICIT):
General Partners (98,246) (95,932)
Limited Partners 4,017,785 4,246,817
Total partners' equity 3,919,539 4,150,885
TOTAL $4,928,358 $5,049,395
See accompanying notes to financial statements(unaudited).
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental $ 704,751 $ 787,933
EXPENSES:
Operating 368,122 383,859
General and administrative 120,019 50,243
Total expenses 488,141 434,102
OPERATING INCOME 216,610 353,831
OTHER INCOME
Interest 131 224
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 216,741 354,055
MINORITY INTEREST IN INCOME
OF REAL ESTATE JOINT VENTURE (30,124) (36,115)
NET INCOME $ 186,617 $ 317,940
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 184,751 $ 314,761
General partners 1,866 3,179
TOTAL $ 186,617 $ 317,940
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 6.02 $ 10.26
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 30,693 30,693
See accompanying notes to financial statements(unaudited).
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
September 30, September 30,
2003 2002
REVENUES:
Rental $2,182,906 $2,359,578
EXPENSES:
Operating 1,120,755 1,180,256
General and Administrative 263,972 206,772
Total Expenses 1,384,727 1,387,028
OPERATING INCOME 798,179 972,550
OTHER INCOME
Interest 378 635
INCOME BEFORE MINORITY INTEREST
IN INCOME OF REAL ESTATE
JOINT VENTURE 798,557 973,185
MINORITY INTEREST IN INCOME OF REAL
ESTATE JOINT VENTURE ( 99,813) (106,042)
NET INCOME $698,744 $867,143
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 691,757 858,472
General Partners 6,987 8,671
TOTAL 698,744 867,143
NET INCOME PER LIMITED
PARTNERSHIP UNIT $22.54 $27.97
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 30,693 30,693
See accompanying notes to financial statements(unaudited).
CONSOLIDATED 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 ($95,932) $4,246,817 $4,150,885
NET INCOME 6,987 691,757 698,744
DISTRIBUTIONS (9,301) (920,789) (930,090)
BALANCE AT SEPTEMBER 30, 2003 ($98,246) $4,017,785 $3,919,539
See accompanying notes to consolidated financial statements(unaudited).
CONSOLIDATED 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 $ 698,744 $ 867,143
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 313,606 322,173
Minority interest in income
of real estate joint venture 99,813 106,042
Changes in assets and
liabilities:
Increase(decrease)in other assets (32,311) 2,787
Increase in liabilities 104,699 1,073
Net cash provided by
operating activities 1,184,551 1,299,218
CASH FLOWS FROM INVESTING -
Additions to property (6,500) 0
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (930,090) (930,090)
Distributions paid to
minority interest in
real estate joint venture (94,200) (107,400)
Net cash used in financing activities (1,024,290) (1,037,490)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 153,761 261,728
CASH AND CASH EQUIVALENTS:
At beginning of period 631,709 633,503
At end of period $ 785,470 $895,231
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND IX
(A California Real Estate Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund IX (the "Partnership"), a limited partnership, has
three general partners (DSI Properties, Inc., Robert J. Conway and Joseph
W. Conway) and limited partners owning 30,693 limited partnership units.
The accompanying consolidated 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 which are 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 Monterey Park
and Azusa, California; Everett, Washington; and Romeoville and Elgin,
Illinois. The Partnership also owns a 70% interest in a mini-storage facility
in Aurora, Colorado. As of September 30, 2003, the total cost and accumulated
depreciation of the mini-storage facilities are as follows:
Land $ 2,729,790
Buildings and equipment 11,069,326
Total 13,799,116
Less: Accumulated Depreciation ( 9,797,779)
Property - Net $ 4,001,337
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.
4. 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 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 IX
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 IX
(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 IX;
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 IX;
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