- -
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, 2007.
/___/ 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 Limited Partnership)
BALANCE SHEETS(UNAUDITED), MARCH 31, 2007 AND DECEMBER 31, 2006
March 31, December 31,
2007 2006
ASSETS
CASH AND CASH EQUIVALENTS $ 709,231 $ 622,755
PROPERTY,NET (Note 2) 1,606,760 1,618,705
OTHER ASSETS 215,017 206,259
---------- ----------
TOTAL $2,531,008 $2,447,719
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $209,938 $209,938
Incentive management fee
payable to general partners 31,477 0
Property management
fee payable 14,830 12,564
Customer deposits and
other liabilities 75,635 110,638
Capital lease obligation 71,504 81,067
-------- --------
Total liabilities 403,384 414,207
-------- --------
PARTNERS' EQUITY (DEFICIT):
General Partners (69,910) (70,851)
Limited Partners (23,753
limited partnership
units outstanding at
March 31, 2007 and
December 31, 2006) 2,197,534 2,104,363
--------- ---------
Total partners' equity 2,127,624 2,033,512
--------- ---------
TOTAL $2,531,008 $2,447,719
========= =========
See accompanying notes to financial statements (unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED March 31, 2007 AND 2006
March 31, March 31,
2007 2006
REVENUES:
Rental $686,527 $638,104
-------- --------
EXPENSES:
Operating 295,905 258,806
General and administrative 86,765 77,928
-------- --------
Total expenses 382,670 336,734
-------- --------
OPERATING INCOME 303,857 301,370
OTHER INCOME
Interest 193 192
-------- --------
NET INCOME $304,050 $301,562
======== ========
AGGREGATE NET INCOME ALLOCATED TO :
Limited partners $301,010 $298,546
General partners 3,040 3,016
-------- --------
TOTAL $304,050 $301,562
======== ========
NET INCOME PER
LIMITED PARTNERSHIP UNIT $12.67 $12.57
====== ======
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 THREE MONTHS ENDED MARCH 31, 2007
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2007 ($70,851) $2,104,363 $2,033,512
NET INCOME 3,040 301,010 304,050
DISTRIBUTIONS (2,099) (207,839) (209,938)
-------- ---------- ----------
BALANCE AT MARCH 31, 2007 ($69,910) $2,197,534 $2,127,624
======== ========== ==========
See accompanying notes to financial statements (unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
March 31, March 31,
2007 2006
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 304,050 $ 301,562
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 11,945 7,505
Changes in assets and liabilities:
Increase in other assets (8,758) 0
Increase in incentive
management fees payable
to general partners 31,477 30,618
Increase in property
management fee payable 2,266 520
Decrease in customer deposits
and other liabilities (35,003) (48,716)
--------- --------
Net cash provided by operating
activities 305,977 291,489
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES-
Distributions to partners (209,938) (209,938)
Payments on capital
lease obligations (9,563) (9,710)
--------- ---------
Net cash used in
financing obligations (219,501) (219,648)
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 86,476 71,841
CASH EQUIVALENTS:
At beginning of period 622,755 481,960
--------- ---------
At end of period $ 709,231 $ 553,801
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION -
Cash paid for interest $ 1,171 $ 1,701
========= =========
NONCASH FINANCING ACTIVITIES:
Distributions due partners
included in partners' equity $ 209,938 $ 209,938
========= =========
See accompanying notes to financial statements (unaudited).
DSI REALTY INCOME FUND VI
(A 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 (Note 5).
The accompanying interim financial statements have been prepared by the
Company's management in accordance with accounting principles generally
accepted in the United States of America ("GAAP") and in conjunction with
the rules and regulations of the Securities and Exchange Commission ("SEC").
Certain information and footnote disclosures required for annual financial
statements have been condensed or excluded pursuant to SEC rules and regu-
lations. Accordingly, the interim financial statements do not include all
of the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, the accompanying interim financial
statements reflect all adjustments of a normal and recurring nature which are
considered necessary for a fair presentation of the results for the interim
periods presented. However, the results of operations for the interim periods
are not necessarily indicative of the results that may be expected for the
year ending December 31, 2007. These financial statements should be read in
conjunction with the audited consolidated financial statements and notes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 2006.
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:
March 31, December 31,
2007 2006
Land $ 1,512,000 $ 1,512,000
Buildings and improvements 7,515,836 7,515,836
Rental trucks
under capital leases 161,181 161,181
----------- -----------
Total 9,189,017 9,189,017
Less: Accumulated Depreciation ( 7,582,257) ( 7,570,312)
----------- -----------
Property - Net $ 1,606,760 $ 1,618,705
=========== ===========
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. RELATED-PARTY TRANSACTIONS
The Partnership has entered into a management agreement with Dahn to
operate its mini-storage facilities. The management agreement provides
for a management fee equal to 6% of gross revenue from operations, which
is defined as the entire amount of all receipts from the renting or
leasing of storage compartments and sale of locks. The management
agreement is renewable annually. Dahn earned management fees equal to
$41,210 and $38,286, for the three month periods ended March 31, 2007
and 2006, respectively. Amounts payable to Dahn at March 31, 2007 and
December 31, 2006, were $14,830 and $12,564, respectively.
In 2004, the Partnership entered into truck lease agreements with KMD
Trucks, LLC ("KMD"). The president of Dahn, Brian Dahn, is also a
member of KMD. Trucks are leased under 48-month leases with total
monthly payments in the amount of $3,457.
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 March 31, 2007. 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, 2007 and 2006, revenues increased
7.6% from $638,104 to $686,527, total expenses increased 13.6% from $336,734
to $382,670 and other income increased from $192 to $193. As a result, net
income increased 0.8% from $301,562 for the three-month period ended March 31,
2006, to $304,050 for the same period in 2007. 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 Partnership's six mini-storage
facilities averaged 82.9% for the three-month period ended March 31, 2007,
compared to 81.5% for the same period in 2006. The Partnership is continuing
its marketing efforts to attract and keep new tenants in its various mini-
storage facilities. Operating expenses increased approximately $37,100 (14.3%)
primarily due to increases in legal, maintenance and repair, office supplies,
real estate tax and property management fee expenses, partially offset by
decreases in advertising expense. Property management fees, which are based
on rental revenue, increased as a result of the increase in said revenue.
General and administrative expenses increased approximately $8,800 (11.3%)
as a result of an increase in administrative fee and legal and professional
expenses.
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. Quantitative 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 30,
2007. 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
March 31, 2007.
(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: May 15, 2007 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: May 15, 2007 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 report on Form 10-Q for the quarter ended
March 31, 2007 of DSI Realty Income Fund VI;
2. Based on my knowledge, this 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 report.
3. Based on my knowledge, the financial statements and other financial
information included in this 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 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: May 15, 2007
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. Conway, certify that:
1. I have reviewed this report on Form 10-Q for the quarter ended
March 31, 2007 of DSI Realty Income Fund VI;
2. Based on my knowledge, this 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 report.
3. Based on my knowledge, the financial statements and other financial
information included in this 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 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: May 15, 2007
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 March 31, 2007 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
May 15, 2007
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 March 31, 2007 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
May 15, 2007