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, 2006.
/___/ 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, 2006 AND DECEMBER 31, 2005
September 30, December 31,
2006 2005
ASSETS
CASH AND CASH EQUIVALENTS $ 754,178 $ 481,960
PROPERTY,NET 1,634,794 1,665,658
OTHER ASSETS 96,741 96,741
---------- ----------
TOTAL $2,485,713 $2,244,359
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $209,938 $209,938
Capital lease obligation 88,125 116,527
Other liabilities 129,417 124,122
-------- --------
Total liabilities 427,480 450,587
-------- --------
PARTNERS' EQUITY (DEFICIT):
General Partners (70,604) (73,249)
Limited Partners 2,128,837 1,867,021
--------- ---------
Total partners' equity 2,058,233 1,793,772
--------- ---------
TOTAL $2,485,713 $2,244,359
========= =========
See accompanying notes to financial statements (unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
September 30, September 30,
2006 2005
REVENUES:
Rental $688,863 $604,784
-------- --------
EXPENSES:
Operating 320,225 302,509
General and administrative 49,415 47,880
-------- --------
Total expenses 369,640 350,389
-------- --------
OPERATING INCOME 319,223 254,395
OTHER INCOME
Interest 193 197
-------- --------
Income from operations
before discontinued
operations 319,416 254,592
-------- --------
DISCONTINUED OPERATIONS:
Net (loss) income from
operations of
discontinued operations 0 (13,739)
Gain from sale of
discontinued operations 0 4,342,497
-------- ---------
TOTAL INCOME FROM
DISCONTINUED OPERATIONS 0 4,328,758
-------- ---------
NET INCOME $319,416 $4,583,350
======== ==========
AGGREGATE NET INCOME ALLOCATED TO :
Limited partners $316,222 $4,535,024
General partners 3,194 48,326
-------- ----------
TOTAL $319,416 $4,583,350
======== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT $13.31 $190.92
====== =======
LIMITED PARTNERSHIP
UNITS USED IN PER
UNIT CALCULATION 23,753 23,753
====== ======
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
September 30, September 30,
2006 2005
REVENUES:
Rental $1,967,640 $1,769,664
---------- ----------
EXPENSES:
Operating 872,605 890,242
General and administrative 201,338 192,387
---------- ----------
Total expenses 1,073,943 1,082,629
---------- ----------
OPERATING INCOME 893,697 687,035
OTHER INCOME
Interest 578 615
Income from operations
before discontinued
operations 894,275 687,650
---------- ----------
Net income from operations
of discontinued operations 0 82,763
Gain on sale of
discontinued operations 0 4,342,497
---------- ----------
TOTAL INCOME FROM
DISCONTINUED OPERATIONS 0 4,425,260
---------- ----------
NET INCOME $ 894,275 $5,112,910
========== ==========
AGGREGATE NET INCOME
ALLOCATED TO:
Limited Partners $885,332 $5,059,289
General Partners 8,943 53,621
---------- ----------
TOTAL $894,275 $5,112,910
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $37.27 $213.00
====== =======
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 23,753 23,753
====== ======
See accompanying notes to financial statements (unaudited).
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2006 ($73,249) $1,867,021 $1,793,772
NET INCOME 8,943 885,332 894,275
DISTRIBUTIONS (6,298) (623,516) (629,814)
-------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2006 ($70,604) $2,128,837 $2,058,233
======== ========== ==========
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
September 30, September 30,
2006 2005
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 894,275 $5,112,910
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 30,864 25,684
Gain on sale of
discontinued operations (4,342,497)
Changes in assets and liabilities:
Increase (decrease) in
other liabilities 5,295 (101,905)
Net cash provided by operating --------- ---------
activities 930,434 694,192
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES-
Proceeds from the sale
of discontinued operations 4,607,985
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (629,814) (5,341,305)
Payments on capital
lease obligations (28,402)
--------- ---------
Net cash used in
financing activities (658,216) (5,341,305)
-------- ---------
NET INCREASE(DECREASE) IN CASH AND
CASH EQUIVALENTS 272,218 (39,128)
CASH AND CASH EQUIVALENTS:
At beginning of period 481,960 602,345
--------- ---------
At end of period $ 754,178 $ 563,217
========= =========
See accompanying notes to financial statements (unaudited).
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 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, December 31,
2006 2005
Land $ 1,512,000 $ 1,512,000
Buildings and improvements 7,515,009 7,515,009
Rental trucks
under capital leases 161,181 161,181
----------- -----------
Total 9,188,190 9,188,190
Less: Accumulated Depreciation ( 7,553,396) ( 7,522,532)
----------- -----------
Property - Net $ 1,634,794 $ 1,665,658
=========== ===========
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 of a mini-storage facility located in Las Vegas, Nevada,
which was sold on August 1, 2005, is reflected in the combined statement
of operations as discontinued operations for the period ended September 30,
2005.
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, 2006. 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, 2006 and 2005, total revenues
increased 13.9% from $604,784 to $688,863 and total expenses increased 5.5%
from $350,389 to $369,640 and other income decreased from $4,328,955 to $193
primarily due to the absence of income and gain from discontinued operations
of the Las Vegas property. As a result, net income decreased from $4,583,350
for the three-month period ended September 30, 2005, to $319,416 for the same
period in 2006. The rental revenue increase can be attributed to an increase
in rental revenue as a result of higher occupancy and unit rental rates.
Occupancy levels for the Partnership's six mini-storage facilities averaged
87.3% for the three-month period ended September 30, 2006, compared to 82.0%
for the same period in 2005. The Partnership is continuing its marketing
efforts to attract and keep new tenants in its various mini-storage facilities.
Operating expenses increased approximately $17,700 (5.9%) primarily as a result
of increases in advertising, legal, property management fees, and salaries and
wages expenses, partially offset by a decrease in repair and maintenance,
purchase of locks and packing material and truck maintenance expenses. Property
management fees, which are based on revenue, increased as a result of the in-
crease in rental revenue. General and administrative expenses remained constant
as an increase in legal and professional expense was offset by a decrease in
equipment and computer lease expense.
For the nine-month periods ended September 30, 2006 and 2005, total revenues
increased 11.7% from $1,769,664 to $1,976,640, total expenses decreased
0.8% from $1,082,629 to $1,073,943 and other income decreased from $4,425,875
to $578 primarily due to the absence of income and gain from discontinued
operations of the Las Vegas property. As a result, net income decreased from
$5,112,910 for the nine months ended September 30, 2005, to $894,275 for the
same period in 2006. The revenue increase can be attributed to an increase
in rental revenue as a result of higher occupancy and unit rental rates.
Operating expenses decreased approximately $17,600 (2.0%) primarily due to
decreases in advertising, repair and maintenance, purchase of locks and pack-
ing materials, office supplies and truck maintenance expenses, partially off-
set by increases in legal, property management fees, real estate tax and
salaries and wages expenses. Property management fees, which are based on
revenue, increased as a result of the increase in rental revenue. General
and administrative expenses increased approximately $9,000 (4.7%) primarily as
a result of increases in incentive management fee and legal and professional
expenses, partially offset by decreases in equipment and computer lease ex-
penses and state tax payments.
On August 1, 2005, escrow closed on the sale of the Partnership's Las Vegas,
Nevada property. Net income from that property for the prior year three and
nine-month periods ended September 30, 2005 is shown under other income as
net income from discontinued operations in order not to distort comparisons
with current operating activities.
The General Partners plan to continue their policy of funding the continuing
improvement and maintenance of Partnership properties with cash generated
from operations. The Partnership's resources appear to be adequate to meet
its needs for the next twelve months and beyond. The General Partners anti-
cipate 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
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 inform-
ation is communicated to the certifying officers on a timely basis. Based on
this evaluation, the Partnership concluded 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 1A. Risk Factors
Please refer to the risk factors disclosed by the partnership in
response to Item 1A, part I of the Form 10-K filed on March 27,
2006. There has been no material change to the risk factors
disclosed therein.
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
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended
September 30, 2006.
(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, 2006 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, 2006 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
annual 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
reasonably likely to materially affect, the registrant's internal
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 and general partners (or persons performing
the equivalent functions):
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, 2006
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
annual 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
reasonably likely to materially affect, the registrant's internal
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 and general partners (or persons performing
the equivalent functions):
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, 2006
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, 2006 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, 2006
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, 2006 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, 2006