Optibase Ltd. Announces Second Quarter Results

Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the second quarter ended June 30, 2012.

Revenues from fixed income real estate totaled $3.4 million for the quarter ended June 30, 2012, compared to revenues of $3.8 million for the second quarter of 2011 and $3.5 million for the first quarter of 2012.

Net loss for the second quarter ended June 30, 2012 was $289,000 or $0.02 per basic and diluted share, compared to a net loss of $113,000 or $0.01 per basic and diluted share for the second quarter of 2011 and to a net income of $904,000 or $0.05 per basic and diluted share for the first quarter of 2012.

Weighted average shares outstanding used in the calculation for the periods were approximately 19.1 million basic and diluted shares, 18.1 million basic and diluted shares and 19.1 million basic and diluted shares respectively.

For the six months ended June 30, 2012, net income was $615,000 or $0.03 per basic and diluted share, compared to a net income of $1.1 million or $0.07 per basic and diluted share for the six months ended June 30, 2011.

Weighted average shares outstanding used in the calculation were approximately 19.1 million basic and diluted shares for the second quarter of 2012 and 17.3 million basic and 17.4 million diluted shares for the second quarter of 2011.

As of June 30, 2012, we had cash, cash equivalents, restricted cash and other financial investments, net, of $25.9 million, and shareholders' equity of $62.3 million, compared with $25.8 million, and $64.6 million, respectively, as of March 31, 2012.

Commenting on the quarter, CEO of Optibase, Amir Philips, said, “We are pleased with our second quarter operating results as our operating fundamentals have remained stable and are in line with our expectations. Due to the fluctuation of the Swiss Franc against the USD, we have recorded financial expenses this quarter, compared to financial income in the previous quarter of 2012. Depending on the fluctuation of the Swiss Franc against the USD, our financial income, net may continue to fluctuate in the quarters to come. Our primary indicators for our real estate operations are FFO and Earnings Before Interest, Taxes, Depreciation and Amortization ('EBITDA')." FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. FFO should not be considered as a substitute for net income determined in accordance with U.S. GAAP as a measure of financial performance. Amir concluded, “We are still actively looking for additional investment opportunities. Nevertheless, current economic conditions and the tightening of loan criteria by financial institutions may reduce the availability of favorable financing for new transactions and affect their attractiveness."

About Optibase

Optibase invests in the fixed-income real estate field and currently holds properties in Switzerland and Miami, FL, 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 ("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, 2012
       
Six months ended Three months ended
June 30     June 30 June 30     June 30
2012 2011 2012 2011
$ $ $ $
Unaudited Unaudited Unaudited Unaudited
 
Fixed income real estate rent 6,918 5,139 3,431 3,775
 
Cost and expenses:
Cost of real estate operation 1,005 779 518 469
Real estate depreciation and amortization 1,286 923 623 607
 
General and administrative 928 504 504 549
Total cost and expenses 3,219 3,616 1,645 1,625
Operating income 3,699 1,523 1,786 2,150
 
Other income (loss) (100 ) 4,194 (100 ) -
Financial income (expenses), net (961 ) (2,217 ) (1,245 ) (1,769 )
 

Income before taxes on income

2,638
3,500

441
381
 
Taxes on income (872 ) (220 ) (339 ) (193 )
 
Net income from continuing operation 1,766 3,280 102 188
 
Net income (loss) from discontinued operation 28 (111 ) 65 (21 )
 
Net income 1,794 3,169 167 167
 
Net income attributable to non-controlling interests 1,179 2,021 456 280
 

Net income (loss) attributable to Optibase Ltd.
615 1,148 (289 ) (113 )
 
Net income (loss) per share from continuing operation:
Basic and Diluted $ 0.03 $ 0.07 ($0.02 ) ($0.01 )
 
Net loss per share from discontinuing operation:
Basic and Diluted $ 0.0 ($0.01 ) $ 0.00 ($0.00 )
 
Net income (loss) per share:
Basic and Diluted $ 0.03 $ 0.07 ($0.02 ) ($0.01 )
 
Number of shares used in computing

Earning per share
Basic 19,088 17,316 19,092 18,057
Diluted 19,088 17,371 19,092 18,057
Amount in thousands
 

Condensed Consolidated Balance Sheets
 
   

June 30, 2012
   

December 31, 2011

Unaudited
Audited

Assets
Current Assets:
Cash and cash equivalents 25,795 22,945
Restricted cash 128 131
Trade receivables 819 732
Other accounts receivables and prepaid expenses 156 1,260
Total assets attributed to discontinued operations 966 969
Total current assets 27,864 26,037
 
Long term investments 62 156
 
Equipment, net 5 7
Real Estate Property, net 187,929 192,173
Other assets, net 1,409 1,512
Total property equipment and other assets 189,343 193,692
 
Total assets 217,269 219,885
 

Liabilities and shareholders' equity
Current Liabilities:
Current maturities of long term loans 2,487 2,529
Trade payables 61 27
Other accounts payable and accrued expenses 4,500 4,130
Total liabilities attributed to discontinued operations 2,960 2,990
Total current liabilities 10,008 9,676
 
Long term liabilities:
Deferred tax liabilities 14,433 14,608
Land lease liability, net 7,017 7,175
Other long term liabilities 3,197 3,559
Long term loans, net of current maturities 120,278 123,606
Total long term liabilities 144,925 148,948
 

Total shareholders’ equity of Optibase Ltd.
45,352 45,099
Non-controlling interests 16,984 16,162
Total shareholders' equity 62,336 61,261
 
Total liabilities and shareholders’ equity 217,269 219,885
 
Amounts in thousands

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