Report of Foreign Issuer (6-k)

Date : 11/30/2017 @ 12:02PM
Source : Edgar (US Regulatory)
Stock : Optibase Ltd. - Ordinary Shares (OBAS)
Quote : 9.318  0.0 (0.00%) @ 4:00PM

Report of Foreign Issuer (6-k)


 
FORM 6-K
  
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
Date of Report: November 30, 2017
Commission File No.: 000-29992
 
OPTIBASE LTD.
(Translation of registrant’s name into English)

8 Hamanofim Street
Herzliya 4672559, Israel
+972-73-7073700
 (Address of principal executive offices)
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F S  Form 40-F £
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____ 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____ 
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. 
 
Yes £  No S
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________   
 
Attached hereto and incorporated by way of reference herein is a press release issued by the Registrant and entitled “Optibase Ltd. announces third quarter results”.
 

Signatures  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 
 
 
 
OPTIBASE LTD.
(the “Registrant”)

By: /s/ Amir Philips
——————————————
Amir Philips
Chief Executive Officer
 
Date: November 30, 2017
2

 
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

 
OPTIBASE LTD. ANNOUNCES THIRD QUARTER RESULTS

HERZLIYA, Israel, November 30, 2017 – Optibase Ltd. (NASDAQ: OBAS)   today announced financial results for the third quarter ended September 30, 2017.

Revenues from fixed income real estate totaled $4.3 million for the quarter ended September 30, 2017, compared to revenues of $4.1 million for the third quarter of 2016.

Net loss attributable to Optibase Ltd shareholders for the quarter ended   September 30, 2017 was $55,000 or $0.01 per share compared to net income of $116,000 or $0.02 per basic and diluted share for the third quarter of 2016.

For the nine months ended September 30, 2017 revenues totaled 12.4 million, compared with $12.3 million for the nine months ended September 30, 2016. Net loss attributable to Optibase Ltd Shareholders for the period was $605,000 or $0.12 per share, compared to a net income of $1.8 million or $0.34 per basic and diluted share for the nine months ended September 30, 2016.

Weighted average shares outstanding used in the calculation for the periods were approximately 5.2 million basic and diluted shares for each period.

As of September 30, 2017, we had cash and cash equivalents of $20.7 million, and shareholders' equity of $76.7 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 third quarter results: ”This quarter results are stable compared to the third quarter of 2016 in our fixed income real estate revenues and operating income, while our net income has decreased mostly due to an increase of Equity share in losses related to our investment in 300 River Holdings, LLC associates. For the third quarter of 2017 we generated NOI of $3.5 million representing a slight  increase compared to the same period in 2016. In addition, for the third quarter of 2017, our Recurring FFO decreased to $955,000 compared to $1.3 million in the third   quarter of 2016. The decrease in our Recurring FFO is mainly due to an increase in our share in Equity losses of our investment in 300 River Holdings, LLC. Recently, we have successfully refinanced the loan related to our condominium units in Miami, Florida and in addition financed our investment in 300 River Holdings, LLC. For more information, please refer to our 6K reports filed with the SEC on November 24, 2017 and November 28, 2017 respectively.” Mr. Philips concluded: “Further to the recent refinancing, we continue our efforts to maintain the stability of our operating results and to increase our financial stability.”

3
 
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.
 
4

 
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
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Operating income
   
4,956
     
5,048
     
1,628
     
1,762
 
                                 
Adjustments:
                               
Real estate depreciation and amortization
   
3,214
     
3,199
     
1,115
     
1,070
 
                                 
General and administrative
   
1,960
     
1,745
     
736
     
542
 
                                 
Non-GAAP Net Operating Income NOI
   
10,130
     
9,992
     
3,479
     
3,374
 
 
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
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Net income (loss) attributable to Optibase LTD
   
(605
)
   
1,767
     
(55
)
   
116
 
                                 
Adjustments :
                               
Real estate depreciation and amortization
   
3,214
     
3,199
     
1,115
     
1,070
 
                                 
Prorata share of real estate depreciation and amortization from unconsolidated associates
   
317
     
1,172
     
194
     
444
 
                                 
Non controlling interests share in the above adjustments
   
(861
)
   
(861
)
   
(299
)
   
(289
)
                                 
Non-GAAP Fund From Operation (FFO))
   
2,065
     
5,277
     
955
     
1,341
 
                                 
Non-GAAP Recurring Fund From Operation (Recurring FFO)
   
2,065
     
5,277
     
955
     
1,341
 
 
Amounts in thousands

5

 
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.

6


Optibase Ltd.
Condensed Consolidated Statement of Operations
For the Period Ended September 30, 2017

   
Nine months ended
   
Three months ended
 
   
September 30
   
September 30
   
September 30
   
September 30
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
Fixed income real estate rent
   
12,426
     
12,324
     
4,250
     
4,109
 
Cost and expenses:
                               
Cost of real estate operation
   
2,296
     
2,332
     
771
     
735
 
Real estate depreciation and amortization
   
3,214
     
3,199
     
1,115
     
1,070
 
General and administrative
   
1,960
     
1,745
     
736
     
542
 
       Total cost and expenses
   
7,470
     
7,276
     
2,622
     
2,347
 
Operating income
   
4,956
     
5,048
     
1,628
     
1,762
 
                                 
Other Income
   
452
     
971
     
144
     
123
 
Financial expenses, net
   
(1,821
)
   
(2,338
)
   
(275
)
   
(830
)
Income before taxes on income
   
3,587
     
3,681
     
1,497
     
1,055
 
Taxes on income
   
(1,306
)
   
(1,218
)
   
(479
)
   
(410
)
Equity share in income (losses) of associates, net
   
(1,164
)
   
883
     
(430
)
   
1
 
                                 
Net income
   
1,117
     
3,346
     
588
     
646
 
                                 
Net income attributable to non-controlling interests
   
1,722
     
1,579
     
643
     
530
 
Net income (loss) attributable to Optibase LTD
   
(605
)
   
1,767
     
(55
)
   
116
 
                                 
Net income (loss) per share :
                               
Basic and Diluted
 
$
(0.12
)
 
$
0.34
   
$
(0.01
)
 
$
0.02
 
                                 
Number of shares used in computing earnings losses per share
                               
Basic
   
5,180
     
5,142
     
5,180
     
5,143
 
Diluted
   
5,180
     
5,142
     
5,180
     
5,143
 

Amounts in thousands

7

 
Condensed Consolidated Balance Sheets

   
September 30,
2017
   
December 31,
2016
 
   
Unaudited
   
Audited
 
Assets
           
             
Current Assets:
           
Cash and cash equivalents
   
20,716
     
16,024
 
Trade receivables
   
237
     
220
 
Other accounts receivables and prepaid expenses
   
327
     
528
 
        Total current assets
   
21,280
     
16,772
 
                 
Long term investments:
               
Other long term deposits and receivables
   
3,426
     
2,785
 
Investments in companies and associates
   
21,208
     
22,892
 
Total Long term investments
   
24,634
     
25,677
 
                 
Property and other assets, net:
               
Real estate properties, net
   
217,775
     
207,690
 
Other assets, net
   
96
     
245
 
          Total property and other assets
   
217,871
     
207,935
 
                 
Total assets
   
263,785
     
250,384
 
                 
Liabilities and shareholders' equity
               
                 
Current Liabilities:
               
Current maturities of long term loans and bonds
   
8,271
     
10,360
 
Accounts payable and accrued expenses
   
6,313
     
4,254
 
                 
Total liabilities attributed to discontinued operations
   
2,061
     
2,061
 
        Total current liabilities
   
16,645
     
16,675
 
                 
Long term liabilities:
               
Deferred tax liabilities
   
14,176
     
13,620
 
Land lease liability, net
   
6,363
     
6,133
 
Other long-term liabilities
   
331
     
407
 
Long term loans, net of current maturities
   
139,877
     
129,261
 
Long term bonds, net of current maturities
   
9,721
     
10,160
 
         Total long term liabilities
   
170,468
     
159,581
 
                 
Shareholders’ equity:
               
Shareholders’ equity of Optibase Ltd
   
57,093
     
55,134
 
Non-controlling interests
   
19,579
     
18,994
 
       Total shareholders' equity
   
76,672
     
74,128
 
                 
Total liabilities and shareholders’ equity
   
263,785
     
250,384
 
                 
Amounts in thousands
               

8

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