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Optibase LTD. Announces Fourth Quarter Results

HERZLIYA, Israel, March 28, 2019 /PRNewswire/ -- Optibase Ltd. (OBAS) today announced financial results for the fourth quarter ended December 31, 2018.

Revenues from fixed income real estate totaled $4.1 million for the quarter ended December 31, 2018 compared to revenues of $4.2 million for the fourth quarter of 2017.

Net loss attributable to Optibase Ltd shareholders for the quarter ended December 31, 2018 was $804,000 or $0.16 per basic and diluted share compared to net loss of $518,000 or $0.10 per basic and diluted share for the fourth quarter of 2017.

For the year ended December 31, 2018 and December 31, 2017 revenues totaled $16.6 million. Net loss attributable to Optibase Ltd Shareholders for the year ended December 31, 2018 was $2.8 million or $0.54 per basic and diluted share, compared to a net loss of $1.1 million or $0.22 per basic and diluted share for the year ended December 31, 2017.

Weighted average shares outstanding used in the calculation for the periods were approximately 5.2 million basic and diluted shares for each period.

As of December 31, 2018, we had cash and cash equivalents of $13.8 million, and shareholders' equity of $73.4 million, compared with $20.3 million, and $77.1 million, respectively, as of December 31, 2017.

Amir Philips, Chief Executive Officer of Optibase commented on the fourth quarter results: "This quarter our fixed income real estate rent were stable compared to the fourth quarter of 2017 while our net loss had increased significantly compared to the fourth quarter of 2017. The increase in our net loss is mostly attributed to an increase in our Equity share in losses of associates, net, related to our investment in 300 River Holdings, LLC as well as an increase in our general and administrative expenses. For the year ended December 31, 2018, we generated NOI of $13.6 million representing an increase compared to the year ended December 31, 2017. In addition, for the year ended December 31, 2018, our Recurring FFO decreased to $3 million compared to Recurring FFO of $4 million for the year ended December 31, 2017. The decrease in our Recurring FFO is due to an increase in our Equity share in losses of associates, net, related to our investment in 300 River Holdings, LLC." Mr. Philips concluded: "We continue our work to maintain our basic parameters and to increase our financial stability as we progress through 2019."

ACCOUNTING AND OTHER DISCLOSURES

Non-GAAP Net Operating Income, or NOI, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is operating income, which, to calculate NOI, is adjusted to add back real estate depreciation, and amortization, general and administrative expenses and other operation expenses less gain on sale of operating properties. We use NOI internally as a performance measure and believe that NOI (when combined with the primary GAAP presentations) provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense item that are incurred at the property level.

We consider the NOI to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, to understand the core property operations prior to depreciation and amortization expenses and general and administrative costs. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, we consider the NOI to be a useful measure for determining the value of a real estate asset or groups of assets.

The metric NOI should only be considered as supplemental to the metric operating income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. NOI should also not be used as a supplement to, or substitute for, cash flow from operating activities (computed in accordance with generally accepted accounting principles in the United States).

Non-GAAP Funds from operation, or FFO, is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income, which, to calculate FFO, is adjusted to add back depreciation and amortization and after adjustments for unconsolidated associates. We make certain adjustments to FFO, which it refers to as Non-GAAP recurring FFO or recurring FFO, to account for items we do not believe are representative of ongoing operating results, including transaction costs associated with acquisitions. We use FFO internally as a performance measure and we believe FFO (when combined with the primary GAAP presentations) is a useful, supplemental measure of our operating performance as it's a recognized metric used extensively by the real estate industry. We also believe that Recurring FFO is a useful, supplemental measure of our core operating performance. The company believes that financial analysts, investors and shareholders are better served by the presentation of operating results generated from its FFO and Recurring FFO measures.

We consider the FFO and Recurring FFO to be an appropriate supplemental non-GAAP measure to operating income because it assists management, and thereby investors, in analyzing our operating performance.

The metric's FFO and Recurring FFO should only be considered as supplemental to the metric net income as a measure of our performance. FFO (i) does not represent cash flow from operations as defined by GAAP, (ii) is not indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is not an alternative to cash flow as a measure of liquidity, and (iv) should not be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating our operating performance.

 

 

 

Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data


A reconciliation of operating income to NOI is as follows:



Year ended

Three months ended


December 31

December 31

December 31

December 31


2018

2017

2018

2017


$

$

$

$


Audited

Audited

Unaudited

Unaudited






GAAP Operating income

5,800

6,623

1,378

1,667






Adjustments:





Real estate depreciation and amortization

4,317

4,209

1,084

995






General and administrative

3,500

2,698

932

738






Non-GAAP Net Operating Income NOI

13,617

13,530

3,394

3,400






 

 

 

A reconciliation of net income to FFO and Recurring FFO is as follows:



Year ended

Three months ended


December 31

December 31

December 31

December 31


2018

2017

2018

2017


$

$

$

$


Audited

Audited

Unaudited

Unaudited






GAAP Net loss attributable to Optibase LTD

(2,781)

(1,123)

(804)

(518)






Adjustments :





Real estate depreciation and amortization

4,317

4,209

1,084

995






Pro-rata share of real estate depreciation and         amortization from unconsolidated associates   

2,609

2,022

684

1,705






Non-controlling interests share in the above adjustments

(1,137)

(1,141)

(292)

(280)






Non-GAAP Fund From Operation (FFO)

3,008

3,967

672

1,902






Non-GAAP Recurring Fund From Operation (Recurring FFO)    

  

3,008

3,967

672

1,902











Amounts in thousands





About Optibase 

Optibase invests in the fixed-income real estate field and currently holds properties and beneficial interest in real-estate assets and projects in Switzerland, Germany,Texas, Philadelphia, PA,Miami, FL, and in Chicago, IL, USA and is currently looking for additional real estate investment opportunities. Optibase was previously engaged in the field of digital video technologies until the sale of its video solutions business to Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia in July 2010. For further information, please visit www.optibase-holdings.com.

This press release contains forward-looking statements concerning our marketing and operations plans. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. These statements involve a number of risks and uncertainties including, but not limited to, difficulties in finding suitable real-estate properties for investment, availability of financing for the acquisition of real-estate, difficulties in leasing of real-estate properties, insolvency of tenants, difficulties in the disposition of real-estate projects, risk relating to collaborative arrangements with our partners relating to our real-estate properties, risks relating to the full consummation of the transaction for the sale of our video solutions business, general economic conditions and other risk factors. For a more detailed discussion of these and other risks that may cause actual results to differ from the forward looking statements in this press release, please refer to Optibase's most recent annual report on Form 20-F. The Company does not undertake any obligation to update forward-looking statements made herein.

 

 

 


Optibase Ltd.

Condensed Consolidated Statement of Operations

For the Year Ended December 31, 2018



Year ended

Three months ended


December 31

December 31

December 31

December 31


2018

2017

2018

2017


$

$

$

$


Audited

Audited

Unaudited

Unaudited






Fixed income real estate rent

16,608

16,587

4,101

4,161

Cost and expenses:





Cost of real estate operation

2,991

3,057

707

761

Real estate depreciation and amortization

4,317

4,209

1,084

995

General and administrative

3,500

2,698

932

738

       Total cost and expenses

10,808

9,964

2,723

2,494

Operating income

5,800

6,623

1,378

1,667






Other Income

607

597

149

145

Financial expenses, net

(2,882)

(2,769)

(674)

(948)

Income before taxes on income

3,525

4,451

853

864

Taxes on income

(1,464)

(1,602)

(334)

(296)

Equity share in losses of associates, net

(2,765)

(1,677)

(846)

(513)











Net income (loss)

(704)

1,172

(327)

55






Net income attributable to non-controlling interests

2,077

2,295

477

573

Net loss attributable to Optibase LTD

(2,781)

(1,123)

(804)

(518)






Net loss per share :





Basic and Diluted

$(0.54)

$(0.22)

$(0.16)

$(0.10)











Number of shares used in computing earnings losses per share





Basic

5,185

5,180

5,186

5,180

Diluted

5,185

5,180

5,186

5,180











Amounts in thousands





 

 

 

Condensed Consolidated Balance Sheets



December 31,

2018

December 31,

2017


Audited

Audited

Assets






Current Assets:



Cash and cash equivalents

13,836

20,268

Restricted cash

31

292

Trade receivables, net

427

332

Other accounts receivables and prepaid expenses

320

506

Total current assets

14,614

21,398




Long term investments:



Other long term deposits

2,477

3,483

Investments in companies and associates

14,377

17,556

Total Long term investments

16,854

21,039




Property and other assets, net:



Real estate properties, net

212,349

216,726

Other assets, net

141

140

Total property and other assets

212,490

216,866




Total assets

243,958

259,303







Liabilities and shareholders' equity






Current Liabilities:



Current maturities of long term loans and bonds

5,788

6,048

Accounts payable and accrued expenses

4,103

4,362

Liabilities attributed to discontinued operations

2,061

2,061

Total current liabilities

11,952

12,471




Long term liabilities:



Deferred tax liabilities

13,752

14,042

Land lease liability, net

6,134

6,295

Other long term liabilities

206

294

Loan from controlling shareholder

2,476

4,886

Long term loans, net of current maturities

130,806

135,774

Long term bonds, net of current maturities

5,239

8,473

Total long term liabilities

158,613

169,764




Shareholders' equity:



Shareholders' equity of Optibase Ltd

53,559

57,037

Non-controlling interests

19,834

20,031

Total shareholders' equity

73,393

77,068




Total liabilities and shareholders' equity

243,958

259,303




Amounts in thousands



 

Media Contacts:
Amir Philips, CEO, Optibase Ltd.
011-972-73-7073-700
info@optibase-holdings.com  

Investor Relations Contact:
Marybeth Csaby, for Optibase
+1-917-664-3055
Marybeth.Csaby@gmail.com  

 

Cision

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