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, 2005.
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 2-68926
DSI REALTY INCOME FUND VI, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________95-3633566
(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.
DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED), SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
September 30, December 31,
2005 2004
ASSETS
CASH AND CASH EQUIVALENTS $ 563,217 $ 602,345
PROPERTY, Net 1,658,547 1,949,719
OTHER ASSETS 86,488 86,488
---------- ----------
TOTAL $2,308,252 $2,638,552
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $ 203,536 $ 269,920
Capital lease obligation 112,237 162,616
Other liabilities 148,947 134,089
---------- ----------
Total liabilities 464,720 566,625
---------- ----------
PARTNERS' EQUITY (DEFICIT):
General Partners (72,358) (72,566)
Limited Partners 1,915,890 2,144,493
---------- ----------
Total partners' equity 1,843,532 2,071,927
---------- ----------
TOTAL $2,308,252 $2,638,552
========== ==========
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental $604,784 $560,996
-------- --------
EXPENSES:
Operating 302,509 280,491
General and administrative 47,880 38,814
-------- --------
Total expenses 350,389 319,305
-------- --------
OPERATING INCOME 254,395 241,691
OTHER INCOME
Interest 197 211
---------- ---------
INCOME FROM OPERATIONS
BEFORE DISCONTINUED
OPERATIONS 254,592 241,902
---------- ---------
DISCONTINUED OPEATIONS:
Net (loss) income from
operations of
discontinued operations (13,739) 46,157
Gain from sale of
discontinued operations 4,342,497
---------- ----------
TOTAL INCOME FROM
DISCONTINUED OPEATIONS 4,328,758 46,157
---------- ----------
NET INCOME $4,583,350 $ 288,059
---------- ----------
AGGREGATE NET INCOME
ALLOCATED TO:
Limited Partners $4,535,024 $285,178
General Partners 48,326 2,881
---------- --------
TOTAL $4,583,350 $288,059
========== ========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 190.92 $ 12.01
======== ========
LIMITED PARTNERSHIP
UNITS USED IN PER
UNIT CALCULATION 23,753 23,753
====== ======
See accompanying notes to financial statements.
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
REVENUES:
Rental $1,769,664 $1,728,815
---------- ----------
EXPENSES:
Operating 890,242 773,575
General and administrative 192,387 183,893
---------- ----------
Total expenses 1,082,629 957,468
---------- ----------
OPERATING INCOME 687,035 771,347
OTHER INCOME
Interest 615 628
---------- ----------
INCOME FROM OPERATIONS
BEFORE DISCONTINUED
OPERATIONS 687,650 771,975
---------- ----------
DISCONTINUED OPERATIONS:
Net income from operations
of discontinued operations 82,763 121,222
Gain on sale of
discontinued operations 4,342,497
---------- ----------
TOTAL INCOME FROM
DISCONTINUED OPERATIONS 4,425,260 121,222
---------- ----------
NET INCOME $5,112,910 $893,197
========== ========
AGGREGATE NET INCOME
ALLOCATED TO:
Limited Partners $5,059,289 $884,265
General Partners 53,621 8,932
---------- --------
TOTAL $5,112,910 $893,197
========== ========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $213.00 $37.23
======= ======
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 23,753 23,753
====== ======
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2005 ($72,566) $2,144,493 $2,071,927
NET INCOME 53,621 5,059,289 5,112,910
DISTRIBUTIONS (53,413) (5,287,892) (5,341,305)
-------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2005 ($72,358) $1,915,890 $1,843,532
======== ========== ==========
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
September 30, September 30,
2005 2004
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $5,112,910 $ 893,197
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 25,684
Gain on sale of
discontinued operations (4,342,497)
Changes in assets and liabilities:
Decrease in liabilities (101,905) (26,925)
Net cash provided by operating --------- ---------
activities 694,192 866,272
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES -
Proceeds from sale of
discontinued operations 4,607,985
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (5,341,305) (809,760)
---------- ---------
NET (DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS (39,128) 56,512
CASH AND CASH EQUIVALENTS:
At beginning of period 602,345 656,745
--------- ---------
At end of period $ 563,217 $ 713,257
========= =========
See accompanying notes to financial statements.
DSI REALTY INCOME FUND VI
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VI (the "Partnership"), a limited partnership, has two
general partners (DSI Properties, Inc., and Diversified Investors Agency)
and limited partners owning 23,753 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 Partnership owns six mini-storage facilities located in Vallejo,
California; Arvada, Federal Heights and Colorado Springs, Colorado; and
two in Santa Rosa, California. All facilities were purchased from
Dahn Corporation ("Dahn"). Dahn is not affiliated with the Partnership.
Dahn is affiliated with other partnerships in which DSI Properties,
Inc. is a general partner. The mini-storage facilities are operated
for the Partnership by Dahn under various agreements that are subject
to renewal annually. Under the terms of the agreements, the Partnership
is required to pay Dahn a property management fee equal to 6% of gross
revenue from operations, defined as the entire amount of all receipts
from the renting or leasing of storage compartments and sale of locks.
The accompanying financial information as of September 30, 2005, and for
the periods ended September 30, 2005 and 2004, 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 20 years. The total cost of property and accumulated
depreciation is as follows:
September 30, 2005 December 31, 2004
Land $ 1,512,000 $ 1,759,000
Buildings and improvements 7,445,231 8,579,426
Equipment 199,103 227,029
----------- -----------
Total 9,156,334 10,565,455
Less: Accumulated Depreciation ( 7,497,787) (8,615,736)
----------- -----------
Property - Net $ 1,658,547 $ 1,949,719
=========== ===========
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. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of limited Partnership, the general partners are to
be allocated 1% of the net profits or losses from operations, and the
limited partners are to be allocated the balance of the net profits or
losses from operations in proportion to their limited partnership
interests.
The General Partners are also entitled to receive a percentage, based on
a predetermined formula, of any cash distribution from the sale, other
disposition or refinancing of the project.
In addition, the General Partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is to be paid in an amount equal to 9% per annum of the cash available
for distribution on a cumulative basis, calculated as cash generated from
operations less capital expenditures.
5. DISCONTINUED OPERATIONS
In accordance with Statement of Financial Accounting Standards No. 144,
the net income and the net gain on disposition of a mini-storage facility
located in Las Vegas, Nevada, which was sold on August 1, 2005, is re-
flected in the combined statement of operations as discontinued operations
for all periods presented. The mini-storage facility was sold for a sales
price of $5,400,000. The mini-storage facility was sold together with an
adjacent mini-storage facility owned by DSI Realty Income Fund IV, for a
combined sales price of $10 million. The sales price was allocated to
the properties using the relative fair values. The relative fair values
were determined by the general partners using historical net income from
operations. In August 2005, the proceeds in the amount of $4,545,612
were distributed to the Limited Partners. The net gain on the sale of
the facility is $4,342,497, which is net of fees paid to the General
Partners in accordance with the partnership agreement amounting
to $788,500.
The following table summarizeds the revenue and expense components that
comprise discontinued operations:
FOR THE THREE MONTHS ENDED
9/30/05 9/30/04
------- -------
REVENUE $ 16,052 $ 82,782
EXPENSES
Operating 29,791 36,605
-------- --------
NET OPERATING
INCOME FROM
DISCONTINUED
OPERATIONS (13,739) 46,157
Net gain on sale
of property 4,342,497
---------- ---------
Net income from
discontinued operations $4,328,758 $ 46,157
========== =========
FOR THE NINE MONTHS ENDING
9/30/05 9/30/04
------- -------
REVENUE $188,190 $218,488
EXPENSES
Operating 105,427 97,266
-------- --------
NET OPERATING
INCOME FROM
DISCONTINUED
OPERATIONS 82,763 121,222
Gain on sale
of property 4,342,497
--------- --------
Net income from
discontinued operations $4,425,260 $121,222
========== ========
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended September 30, 2005. 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, 2005, and 2004,total revenues
increased 7.8% from $560,996 to $604,784 and total expenses increased 9.7%
from $319,305 to $350,389, and other income decreased from $211 to $197. Net
income from discontinued operations increased from $46,157 to $4,328,758 due
to the sale of the mini-storage facility in Las Vegas (see footnote 5). As a
result, net income increased 0.1% from $288,059 for the three-month period
ended September 30, 2004, to $4,583,350 for the same period in 2005. The
revenue increase can be attributed to an increase in rental income as a result
of higher occupancy and unit rental rates. Occupancy levels for the Partner-
ship's six mini-storage facilities averaged 82.0% for the three-month period
ended September 30, 2005, compared to 80.7% for the same period in 2004. The
Partnership is continuing its marketing efforts to attract and keep new tenants
in its various mini-storage facilities. Operating expenses increased approxi-
mately $22,000 (7.8%) primarily due to increases in salaries and wages, truck
insurance and maintenance and depreciation expenses, partially offset by a
decrease in advertising expense and maintenance and repair expenses. General
and administrative expenses increased approximately $9,100 (23.4%) primarily
as a result of increases in incentive management fee and equipment and
computer lease expenses.
For the nine-month period ended September 30, 2005, and 2004, total revenues
increased 2.4% from $1,728,815 to $1,769,664, total expenses increased 13.1%
from $957,468 to $1,082,629, and other income decreased from $628 to
$615. Net income from discontinued operations increased from $121,222 to
$4,425,260 due to the sale of the mini-storage facility in Las Vegas (see
footnote 5). As a result, net income increased from $893,197 for the nine
months ended September 30, 2004, to $5,112,910 for the same period in 2005.
The revenue increase can be attributed to an increase in rental revenue as a
result of higher occupancy and unit rental rates. Operating expenses increased
approximately $116,700 (15.1%) primarily due to increases in depreciation,
maintenance and repair, purchase of locks and packing materials, salaries
and wages and truck insurance and maintenance and bank and credit card fees
expenses, partially offset by a decrease in advertising, security alarm
services and postage expenses. General and administrative expenses increased
approximately $8,500 (4.6%) primarily as a result of increases in legal and
professional and equipment and computer lease expenses, partially offset by a
decrease in state tax payments.
On June 10, 2005, a purchase agreement was signed with Station Casinos,
whereby they would acquire the Partnerships' mini-storage facility in Las
Vegas, Nevada for a gross sales price of $5,400,000. The mini-storage
facility was sold together with an adjacent mini-storage facility owned by
DSI Realty Income Fund IV, for a combined sales price of $10 million. The
sales price was allocated to the properties using the relative fair values.
The relative fair values were determined by the general partners using
historical net income from operations. Escrow closed on August 1, 2005
and the sale proceeds were transferred to the Partnership on August 2, 2005.
On August 8, 2005, proceeds in the amount of $4,545,612 was distributed
to the Limited Partners. The gain on sale of the facility is
approximately $4,342,000.
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 the Limited
Partners to remain at the current level for the foreseeable future.
Item 3. Quantative and Qualitative Disclosures About Market Risk
NONE
Item 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 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 iscommunicated 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 sub-
sequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
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, 2005.
(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, 2005 DSI REALTY INCOME FUND VI
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, 2005 DSI REALTY INCOME FUND VI
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
CERTIFICATIONS
I, Robert J. Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund VI;
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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; 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 over financial reporting.
Date: October 31, 2005
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 VI;
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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; 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 over financial reporting.
Date: October 31, 2005
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 VI (the
"Partnership") on Form 10-Q for the period ending September 30, 2005 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
October 31, 2005
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 VI (the
"Partnership") on Form 10-Q for the period ending September 30, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Vice President of the Corporate General Partner, 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
October 31, 2005