Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the second quarter ended June 30, 2010.

On June 16, 2010 Optibase announced entering into an asset purchase agreement with Optibase Technologies Ltd., a wholly owned subsidiary of VITEC Multimedia ("Vitec") pursuant to which Optibase Ltd. and its subsidiary Optibase Inc. (“Optibase”) will sell their entire video business to Vitec. On July 1, 2010 Optibase announced the closing of the sale of its video solutions business. For more information, please see press releases issued by Optibase on those dates.

Until June 30, 2010, Optibase developed, manufactured and sold video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and world's leading broadcast service providers and had also engaged in the fixed income real estate business. Following the closing of the transaction with Vitec on July 1, 2010, Optibase is no longer active in the video business and such activity is presented in Optibase’s financial reports as discontinued operations activity.

Revenues from fixed income real estate totaled $408,000 for the quarter ended June 30, 2010, compared with $396,000 for the previous quarter. Net income for the quarter ended June 30, 2010 was $262,000 or $0.02 per basic and diluted share, compared with a net loss of $86,000 or $0.01 per basic and diluted share for the first quarter of 2010.

For the period of six months ended on June 30, 2010, revenues, net income and earnings per basic and diluted share totaled $804,000, $176,000 and $0.01 respectively.

The net loss of Optibase’s discontinued operations for the quarter ended on June 30, 2010 was $261,000 or $0.02 per basic and fully diluted share, compared with a net loss of $586,000 or $0.04 per basic and diluted share for the first quarter of 2010 and with a net loss of $1.2 million or $0.07 per basic and diluted share for the second quarter of 2009. Weighted average shares outstanding used in the calculation for the periods were approximately 16.6 million basic and diluted for the second quarter of 2010 and for the first quarter of 2010, and approximately 16.5 million basic and diluted for the second quarter of 2009.

For the six months ended June 30, 2010, net loss from discontinued operations was $847,000 or $0.05 per basic and diluted share, compared to a net income of $1.9 million or $0.12 per basic and $0.11 per diluted share for the six months ended June 30, 2009. Weighted average shares outstanding used in the calculation for the periods were approximately 16.6 million basic and diluted and 16.5 million basic and diluted respectively.

As of June 30, 2010, the Company had cash, cash equivalents, and other financial investments, net, of $31.8 million, and shareholders' equity of $34.4 million, compared with $32.9 million, and $34.4 million as of March 31, 2010. To date following the closing of the sale of its video solutions business the company has cash, cash equivalents, and other financial investments of approximately $39 million.

Commenting on the quarter, CFO of Optibase, Amir Philips, said, "The second quarter was the last quarter in which we operated in the digital video arena and we hope the continued transition of the business to the Vitec group will be a smooth and productive one. We are actively seeking to enhance our real estate portfolio and are building a pipeline of transactions and investment opportunities to be executed when the right opportunity is found."

About Optibase

Optibase invests in the fixed-income real estate field and currently holds a commercial property in Rumlang, Switzerland 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 ("Vitec") 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 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.
 
Optibase Ltd.
Condensed Consolidated Statement of Operations

For the Period Ended June 30, 2010
       
Six months ended Three months ended
June 30   June 30 June 30   June 30
2010 2009 2010 2009
$ $ $ $
Unaudited Unaudited Unaudited Unaudited
 
Fixed income real estate 804 - 408 -
 
Cost and expenses:
Cost of real estate operation 27 - 13 -
Real estate depreciation and amortization 327 - 162 -
 
General and administrative 737 354 350 180
Total cost and expenses 1,091 354 525 180
Operating loss (287 ) (354 ) (117 ) (180 )
 
Financial income, net 463 378 379 394
 
Net income form continuing operation 176 24 262 214
 
Net income (loss) form discontinued operation

(847

)
1,902

(261

)
(1,194 )
 
Net income (loss) (671 ) 1,926 1 (980 )
 
Net income per share from continuing operation:
Basic and Diluted $ 0.01 $ 0 $ 0.02 $ 0.01
 
Net income (loss) per share from discontinuing operation:
Basic ($0.05 ) $ 0.12 ($0.02 ) ($0.07 )
Diluted ($0.05 ) $ 0.11 ($0.02 ) ($0.07 )
 
Net income (loss) per share:
Basic and Diluted ($0.04 ) $ 0.12 $ 0 ($0.06 )
 
Number of shares used in computing

Earning per share
Basic 16,553 16,531 16,557 16,534
Diluted 16,553 16,547 16,557 16,534
 
Amount in thousands except per share data
 
Optibase Ltd.

Condensed Consolidated Balance Sheets
   

 

 
     

 

 

June 30, 2010 Unaudited

December 31, 2009 Unaudited

Assets
Current Assets:
Cash, cash equivalents and short term investments, net 31,760 28,651
 
 
Other receivables and prepaid expenses 178 4,113
Assets related to discontinued operation 4,880 7,172
Total current assets 36,818 39,936
 
Other long term investments 700 700
 
Fixed assets, net 3 -
Other assets, net 540 634
Property, net 20,688 22,080
Total assets 58,749 63,350
 

Liabilities and shareholders' equity
Current Liabilities:
Current maturities 347 365
Trade payables 154 29
Accrued expenses and other liabilities 1,820 1,908
Liabilities related to discontinued operations 5,214 7,913
Total current liabilities 7,535 10,215
 
Long term liabilities:
Long term loans, net of current maturities 16,808 17,897
 
Total shareholders’ equity 34,406 35,238
Total liabilities and shareholders’ equity 58,749 63,350
 
Amounts in thousands

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