OPTIBASE LTD ILS0.65 HERZLIYA, Israel, May 25, 2017 /PRNewswire/ -- Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the first quarter ended March 31, 2017.
Revenues from fixed income real estate totaled $4 million for the quarter ended March 31, 2017, compared to revenues of $4 million for the first quarter of 2016.
Net loss attributable to Optibase Ltd shareholders for the quarter ended March 31, 2017 was $515,000 or $0.10 per basic and diluted share compared to net income of $718,000 or $0.14 per basic and diluted share for the first quarter of 2016.
Weighted average shares outstanding used in the calculation for the periods were approximately 5.1 million basic and diluted shares for each period.
As of March 31, 2017, we had cash and cash equivalents of $22.3 million, and shareholders' equity of $76.3 million, compared with $16 million, and $74.1 million, respectively, as of December 31, 2016.
Amir Philips, Chief Executive Officer of Optibase commented on the first quarter results: "This quarter results are stable compared to the previous quarter and the first quarter of 2016 in our fixed income real estate rent and operating income, while our net income has decreased somewhat due mostly to increased financial expenses and Equity share in losses of associates, net. For the first quarter of 2017 we generated NOI of $3.3 million representing a 3% increase over the same period in 2016. In addition, for the first quarter of 2017, our Recurring FFO decreased to 304,000 compared to the first quarter of 2016. The decrease in our Recurring FFO is primarily due to an increase in our equity share in losses of associates related to our investment in 300 River Holdings, LLC and increase in our financial expenses due to currency rate differences." Mr. Philips concluded: "We are working maintain our basic parameters and increase our financial stability as we progress through 2017."
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:
Three months ended
March 31 March 31
2017 2016
$ $
Unaudited Unaudited
--------- ---------
GAAP
Operating
income 1,643 1,571
Adjustments:
Real
estate
depreciation
and
amortization 1,038 1,051
General
and
administrative 626 597
Non-
GAAP
Net
Operating
Income
NOI 3,307 3,219
A reconciliation of net income to FFO and Recurring FFO is as follows:
Three months ended
March 31 March 31
2017 2016
$ $
Unaudited Unaudited
--------- ---------
GAAP Net income
(loss)
attributable to
Optibase LTD (515) 718
Adjustments :
Real estate
depreciation
and
amortization 1,038 1,051
Prorata share of
real estate
depreciation
and 60 447
amortization from
unconsolidated associates
Non controlling
interests share
in the above
adjustments (279) (283)
Non-GAAP Fund
From Operation
(FFO)) 304 1,933
Non-GAAP
Recurring Fund
From Operation 304 1,933
(Recurring FFO)
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 and in Texas, Philadelphia, PA and Miami, FL, 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 Period Ended March 31, 2017
-----------------------------------
Three months ended
March 31 March 31
2017 2016
$ $
Unaudited Unaudited
--------- ---------
Fixed income
real estate
rent 4,027 4,043
Cost and expenses:
Cost of real
estate
operation 720 824
Real estate
depreciation
and
amortization 1,038 1,051
General and
administrative 626 597
Total cost and
expenses 2,384 2,472
Operating income 1,643 1,571
Other Income 161 229
Financial
expenses, net (890) (641)
Income before
taxes on income 914 1,159
Taxes on income (415) (392)
Equity share in
income (losses)
of associates,
net (492) 460
Net income 7 1,227
Net income
attributable to
non-
controlling
interests 522 509
Net income
(loss)
attributable to
Optibase LTD (515) 718
Net income (loss) per share :
Basic and
Diluted ($0.10) $0.14
Number of shares used in computing earnings
losses per share
Basic 5,180 5,141
Diluted 5,180 5,141
Amounts in thousands
Condensed Consolidated Balance Sheets
-------------------------------------
March 31, December 31,
2017 2016
Unaudited Audited
--------- -------
Assets
------
Current
Assets:
Cash and
cash
equivalents 22,253 16,024
Trade
receivables 628 220
Other
accounts
receivables
and prepaid
expenses 510 528
Total
current
assets 23,391 16,772
Long term
investments:
Other long
term
deposits
and
receivables 4,172 2,785
Investments
in
companies
and
associates 22,243 22,892
Total Long
term
investments 26,415 25,677
Property and
other
assets,
net:
Real estate
properties,
net 211,380 207,690
Other
assets, net 199 245
Total
property
and other
assets 211,579 207,935
Total assets 261,385 250,384
Liabilities
and
shareholders'
equity
--------------
Current
Liabilities:
Current
maturities
of long
term loans
and bonds 10,572 10,360
Accounts
payable and
accrued
expenses 4,931 4,254
Total
liabilities
attributed
to
discontinued
operations 2,061 2,061
Total
current
liabilities 17,564 16,675
Long term
liabilities:
Deferred tax
liabilities 13,873 13,620
Land lease
liability,
net 6,240 6,133
Other long-
term
liabilities 337 407
Long term
loans, net
of current
maturities 136,312 129,261
Long term
bonds, net
of current
maturities 10,779 10,160
Total long
term
liabilities 167,541 159,581
Shareholders'
equity:
Shareholders'
equity of
Optibase
Ltd 56,347 55,134
Non-
controlling
interests 19,933 18,994
Total
shareholders'
equity 76,280 74,128
Total
liabilities
and
shareholders'
equity 261,385 250,384
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
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SOURCE Optibase Ltd.
