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Optibase Ltd. Announces First Quarter Results

Optibase Ltd. (NASDAQ:OBAS) a leader in advanced digital video solutions today announced financial results for the first quarter ended March 31, 2010.

Total revenues for the first quarter ended March 31, 2010 were $2.6 million compared with $3.6 million for the first quarter of 2009 and $3.4 million for the fourth quarter of 2009. From total revenues for the first quarter of 2010 an amount of $396,000 relates to real estate income compared to $272,000 for the fourth quarter of 2009.

Net loss for the first quarter ended March 31, 2010, was $672,000 or $0.04 per basic and fully diluted share, compared with a net income of $2.9 million or $0.18 per basic and fully diluted share for the first quarter of 2009 and with a net loss of $1.1 million or $0.07 per basic and fully diluted share for the fourth quarter of 2009. Weighted average shares outstanding used in the calculation for the periods were approximately 16.5 million basic and fully diluted for the first quarter of 2010, the first quarter of 2009, and for the fourth quarter of 2009.

As of March 31, 2010, the Company had cash, cash equivalents, and other financial investments, net, of $32.9 million, and shareholders' equity of $34.4 million, compared with $28.7 million, and $35.2 million as of December 31, 2009.

Commenting on the quarter, CFO of Optibase, Amir Philips, said; “During the first quarter revenue from our real estate business was as we expected, while our video business continued to decline. At the same time, our operating loss decreased compared to the previous quarter and the first quarter of 2009 due to our efforts to manage costs.” Commenting on recent events he added; “Following the signing of an asset purchase agreement to sell our video business to Vitec, our shareholders approved the transaction in a special general meeting on May 6 th. We are currently working with Vitec towards closing this transaction and smoothly transitioning the business.”

About Optibase

Optibase provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world's leading broadcast service providers. With a collection of open, standards-based products, Optibase enables its customers to take full advantage of video distribution over their IP network, ensuring superb video quality in a scale of bit-rates for simple and effective video streaming to desktops, STBs and VOD applications. Optibase has recently started operating in the fixed-income real-estate sector. On March 16, 2010, Optibase announced that it has entered into an asset purchase agreement with Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia ("Vitec") pursuant to which Optibase will sell its video business to Vitec. For further information, please visit www.optibase.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, risks related to the video technologies market in general, and the evolving IPTV market in particular, competition, our ability to manage growth and expansion, 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, 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 news 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.

This release and prior releases are available on the Company’s Web site at www.optibase.com .

Optibase Ltd.

Condensed Consolidated Statement of Operations

For the Period Ended March 31, 2010

 
Three months ended
March 31   March 31
2010 2009
$ $

Unaudited

Unaudited

Revenues:
Video solutions 2,221 3,593
Fixed income real estate 396 -
Total revenues 2,617 3,593
 
Cost and expenses:
Cost of video solution operation 882 1,966
Research and development, net 510 1,263
Selling, general and administrative 1,803 2,220
Cost of real estate operation 14 -
Real estate depreciation and amortization 165 -
Total cost and expenses 3,374 5,449
Operating loss (757) (1,856)
Other income - 4,778
Financial income (loss), net 85 (16)
Net Income (loss) (672) 2,906
 
 
Net loss per share:
Basic ($0.04) ($0.18)
Diluted ($0.04) ($0.18)
 

 

Number of shares used in computing earning per share

 
Basic 16,550 16,529
Diluted 16,550 16,544
 
 
Amount in thousands except per share data
 
Optibase Ltd.
Condensed Consolidated Balance Sheets
   

March 31, 2010

December 31, 2009

Unaudited

Unaudited

Assets

Current Assets:
Cash, cash equivalents and short term investments, net 32,905 28,651
Trade receivables net of allowance for bad debts 1,490 2,438
Inventories

2,225

2,356
Other receivables and prepaid expenses 601 4,492
 
Total current assets 37,221 37,937
 
Other long term investments 2,082 2,163
 
Fixed assets, net 509 636
Other assets, net 582 634
Property, net 21,225 22,080
Total assets 61,619 63,450
 

Liabilities and shareholders' equity

Current Liabilities:
 
Current maturities 353 365
Trade payables 615 1,095
Accrued expenses and other liabilities 7,191 6,962
Total current liabilities 8,159 8,422
Long term liabilities:
Long term loans, net of current maturities 17,227 17,897
Liabilities Related To Discontinued Operations 162 162
Total long term liabilities 17,389 18,059
Accrued severance pay 1,628 1,731
Total shareholders’ equity 34,443 35,238
Total liabilities and shareholders’ equity 61,619 63,450
 
Amounts in thousands
 




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