Optibase Ltd. Announces Third Quarter Results

Mittwoch, 30.11.2016 18:05 von

PR Newswire

HERZLIYA, Israel, November 30, 2016 /PRNewswire/ -- Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the third quarter ended September 30, 2016.

Revenues from fixed income real estate totaled $4.1 million for the quarter ended September 30, 2016, compared to revenues of $4.2 million for the third quarter of 2015.

Net income attributable to Optibase Ltd shareholders for the quarter ended September 30, 2016 was $116,000 or $0.02 per basic and diluted share compared to net income of $466,000 or $0.09 per basic and diluted share for the third quarter of 2015.

For the nine months ended September 30, 2016, revenues totaled $12.3 million, compared with $11.2 million for the nine months ended September 30, 2015. Net income attributable to Optibase Ltd Shareholders for the period was $1.8 million or $0.34 per basic and diluted share, compared to a net loss of $1.2 million or $0.23 per basic and diluted share for the nine months ended September 30, 2015.

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 September 30, 2016, we had cash and cash equivalents of $19.5 million, and shareholders' equity of $77.8 million, compared with $23.8 million, and $75.6 million, respectively, as of December 31, 2015.

Amir Philips, Chief Executive Officer of Optibase commented on the third quarter results: "This quarter and year to date results are in line with the stability of our operations over recent periods. For the period of nine months ended September 30, 2016 we generated NOI of $10 million and Recurring FFO of $5.3 million representing a 9% increase and a 50% increase respectively, over the same period in 2015. The increase in Recurring FFO is primarily due to the contribution of the supermarkets portfolio in Bavaria, Germany who's purchase was completed during the third quarter of 2015 and to the decrease in the acquisition-related costs incurred in 2015 related to this acquisition. For the third quarter of 2016, our NOI decreased to $3.4 million or by 3% and our Recurring FFO decreased to $1.3 million, or by 13% compared to the third quarter of 2015. The decrease in Recurring FFO is primarily due to an increase in financial expenses related to bonds offering in Israel issued on August 2015." Mr. Philips concluded: "We will continue our work to maintain this stability as we progress through 2016 and go into 2017."

ACCOUNTING AND OTHER DISCLOSURES

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).

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 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.

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

 

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

A reconciliation of operating income to NOI is as follows:






Nine months ended

Three months ended






September 30

September 30

September 30

September 30






2016

2015

2016

2015






$

$

$

$






Unaudited

Unaudited

Unaudited

Unaudited









GAAP Operating income

5,048

2,580

1,762

1,871









Adjustments:





Real estate depreciation and amortization

3,199

2,832

1,070

1,060






General and administrative

1,745

1,420

542

410






Other operating costs

-

2,317

-

152






Net Operating Income NOI (Non-GAAP)

9,992

9,149

3,374

3,493

 

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






Nine months ended

Three months ended






September 30

September 30

September 30

September 30






2016

2015

2016

2015






$

$

$

$






Unaudited

Unaudited

Unaudited

Unaudited







GAAP Net income (loss) attributable to Optibase LTD


1,767

(1,182)

116

466







Adjustments :






Real estate depreciation and amortization

3,199

2,832

1,070

1,060






Prorata share of real estate depreciation and
amortization from unconsolidated associates   

1,172

406

444

136






Non controlling interests share in the above
adjustments

(861)

(885)

(289)

(292)






Fund From Operation ("FFO") (Non-GAAP)

5,277

1,171

1,341

1,370






Other operating costs

-

2,317

-

152






Recurring Fund From Operation ("Recurring FFO")     (Non-GAAP)

5,277

3,488

1,341

1,522






Amounts in thousands










 

About Optibase

Optibase invests in the fixed-income real estate field and currently holds properties in Switzerland in Germany and in Miami, Texas, Philadelphia and Chicago, 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 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 September 30, 2016







Nine months ended

Three months ended






September 30

September 30

September 30

September 30






2016

2015

2016

2015






$

$

$

$






Unaudited

Unaudited

Unaudited

Unaudited









Fixed income real estate rent

12,324

11,186

4,109

4,192

Cost and expenses:





Cost of real estate operation

2,332

2,037

735

699

Real estate depreciation and amortization

3,199

2,832

1,070

1,060

General and administrative

1,745

1,420

542

410

Other operating costs

-

2,317

-

152

       Total cost and expenses

7,276

8,606

2,347

2,321

Operating income

5,048

2,580

1,762

1,871






Other Income

971

334

123

144

Financial expenses, net

(2,338)

(1,075)

(830)

(477)

Income before taxes on income

3,681

1,839

1,055

1,538

Taxes on income

(1,218)

(1,228)

(410)

(452)

Equity share in income (losses) of associates, net

883

(59)

1

(17)











Net income

3,346

552

646

1,069






Net income attributable to non-controlling interests

1,579

1,734

530

603

Net income (loss) attributable to Optibase LTD

1,767

(1,182)

116

466






Net income (loss) per share :





Basic and Diluted

$0.34

($0.23)

$0.02

$0.09











Number of shares used in computing earnings losses per share





Basic

5,142

5,133

5,143

5,133

Diluted

5,142

5,133

5,143

5,140

 

Amounts in thousands

 

 

Condensed Consolidated Balance Sheets






September 30,

2016

December 31,

2015





Unaudited

Audited

Assets












Current Assets:






Cash and cash equivalents

19,471

23,806

Trade receivables

132

177

Other accounts receivables and prepaid expenses

365

318

        Total current assets



19,968

24,301






Long term investments:





Other long term deposits and receivables



3,453

2,670

Investments in companies and associates



24,381

20,663

Total Long term investments



27,834

23,333







Property and other assets, net:






Real estate properties, net




217,784

214,840

Other assets, net




314

470

          Total property and other assets




218,098

215,310







Total assets




265,900

262,944









Liabilities and shareholders' equity




Current Liabilities:






Current maturities of long term loans and bonds


9,946

8,535

Accounts payable and accrued expenses


4,014

3,297





Total liabilities attributed to discontinued operations



2,061

2,109

        Total current liabilities



16,021

13,941






Long term liabilities:





Deferred tax liabilities



14,359

14,178

Land lease liability, net



6,473

6,412

Other long-term liabilities



584

264

Long term loans, net of current maturities



138,991

140,082

Long term bonds, net of current maturities



11,702

12,483

         Total long term liabilities



172,109

173,419






Shareholders' equity:





Shareholders' equity of Optibase Ltd



58,160

55,784

Non-controlling interests


19,610

19,800

       Total shareholders' equity


77,770

75,584





Total liabilities and shareholders' equity


265,900

262,944








Amounts in thousands


















 

 

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SOURCE Optibase Ltd.