Report of Foreign Issuer (6-k)

Date : 03/28/2018 @ 1:01PM
Source : Edgar (US Regulatory)
Stock : Optibase Ltd. - Ordinary Shares (OBAS)
Quote : 8.6  0.0 (0.00%) @ 2:05AM

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: March 28, 2018
Commission File No.: 000-29992
 
OPTIBASE LTD.
(Translation of registrant’s name into English)

8 Hamenofim 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 ☒ 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 ☒
 
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 Announces Fourth 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: March 28, 2018
 
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 FOURTH QUARTER RESULTS

HERZLIYA, Israel, March 28, 2018 – Optibase Ltd. (NASDAQ: OBAS)   today announced financial results for the fourth quarter ended December 31, 2017.

Revenues from fixed income real estate totaled $4.2 million for the quarter ended December 31, 2017, compared to revenues of $4 million for the fourth quarter of 2016.

Net loss attributable to Optibase Ltd shareholders for the quarter ended December 31, 2017 was $518,000 or $0.10 per basic and diluted share compared to net loss of $1.6 million or $0.31 per share for the fourth quarter of 2016.

For the year ended December 31, 2017, revenues totaled $16.6 million, compared with $16.3 million for the year ended December 31, 2016. Net loss attributable to Optibase Ltd. Shareholders for the year ended December 31, 2017, was $1.1 million or $0.22 per share, compared to a net income of $195,000 or $0.04 per basic and diluted share for the year ended December 31, 2016.

Weighted average shares outstanding used in the calculation for the years ended December 31, 2017 and 2016, were approximately 5.2 million and 5.1 million basic and diluted shares, respectively.

As of December 31, 2017, we had cash and cash equivalents of $20.3 million, and shareholders' equity of $77.1 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 fourth quarter results: "We are pleased with our fourth quarter and full year performance maintaining stability, mostly in our fixed income real estate rent and operating income. Our yearly results are showing a net loss that is attributed mainly to equity share in losses of associates related to the investment in 300 River Holdings, LLC, which beneficially owns the rights to a 23-story Class A office building located at 300 South Riverside Plaza in Chicago, IL. While our NOI for the year ended December 31, 2017 increase to $13.5 million and by 2.7% over the same period in 2016, our recurring FFO decreased to $4 million and by 13.4% over the same period in 2016. The decrease in recurring FFO is primarily due to equity share in losses of associates related to the investment in 300 River Holdings, LLC. For the fourth quarter of 2017, our NOI increase to $3.4 million and our Recurring FFO increased to $1.9 million.” Mr. Philips concluded: “We will continue our work to maintain our basic parameters as we progress through 2018.”



 
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:

   
Year ended
   
Three months ended
 
   
December 31
   
December 31
   
December 31
   
December 31
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Audited
   
Audited
   
Unaudited
   
Unaudited
 
                                 
GAAP Operating income
   
6,623
     
6,320
     
1,667
     
1,272
 
                                 
Adjustments:
                               
Real estate depreciation and amortization
   
4,209
     
4,244
     
995
     
1,045
 
                                 
General and administrative
   
2,698
     
2,615
     
738
     
870
 
                                 
Non-GAAP Net Operating Income NOI
   
13,530
     
13,179
     
3,400
     
3,187
 
 
A reconciliation of net   income to FFO and Recurring FFO is as follows:

   
Year ended
   
Three months ended
 
   
December 31
   
December 31
   
December 31
   
December 31
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Audited
   
Audited
   
Unaudited
   
Unaudited
 
                                 
GAAP Net income (loss) attributable to Optibase LTD
   
(1,123
)
   
195
     
(518
)
   
(1,572
)
                                 
Adjustments :
                               
       Real estate depreciation and amortization
   
4,209
     
4,244
     
995
     
1,045
 
                                 
Prorata share of real estate depreciation and amortization from unconsolidated associates
   
2,022
     
1,282
     
1,705 (*
)
   
110
 
                                 
Non-controlling interests share in the above adjustments
   
(1,141
)
   
(1,142
)
   
(280
)
   
(281
)
                                 
Non-GAAP Fund From Operation (FFO))
   
3,967
     
4,579
     
1,902
     
(698
)
                                 
Non-GAAP Recurring Fund From Operation (Recurring FFO)
   
3,967
     
4,579
     
1,902
     
(698
)
 
Amounts in thousands
                               
 
(*) include adjustment related to previous quarters in 2017
 
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 Year Ended December 31, 2017

   
Year ended
   
Three months ended
 
   
December 31
   
December 31
   
December 31
   
December 31
 
   
2017
   
2016
   
2017
   
2016
 
   
$
   
$
   
$
   
$
 
   
Audited
   
Audited
   
Unaudited
   
Unaudited
 
                                 
Fixed income real estate rent
   
16,587
     
16,338
     
4,161
     
4,014
 
Cost and expenses:
                               
Cost of real estate operations
   
3,057
     
3,159
     
761
     
827
 
Real estate depreciation and amortization
   
4,209
     
4,244
     
995
     
1,045
 
General and administrative
   
2,698
     
2,615
     
738
     
870
 
       Total cost and expenses
   
9,964
     
10,018
     
2,494
     
2,742
 
Operating income
   
6,623
     
6,320
     
1,667
     
1,272
 
                                 
Other Income
   
597
     
1,116
     
145
     
145
 
Financial expenses, net
   
(2,769
)
   
(3,366
)
   
(948
)
   
(1,028
)
Income before taxes on income
   
4,451
     
4,070
     
864
     
389
 
Taxes on income
   
(1,602
)
   
(1,627
)
   
(296
)
   
(409
)
Equity share in losses of associates, net
   
(1,677
)
   
(323
)
   
(513
)
   
(1,206
)
                                 
Net income
   
1,172
     
2,120
     
55
     
(1,226
)
                                 
Net income attributable to non-controlling interests
   
2,295
     
1,925
     
573
     
346
 
Net income (loss) attributable to Optibase LTD
   
(1,123
)
   
195
     
(518
)
   
(1,572
)
                                 
Net income (loss) per share :
                               
Basic and Diluted
 
(0.22
)
 
$
0.04
   
(0.10
)
 
(0.31
)
                                 
Number of shares used in computing earnings losses per share
                               
Basic
   
5,180
     
5,147
     
5,180
     
5,144
 
Diluted
   
5,180
     
5,157
     
5,180
     
5,154
 
 
 Amounts in thousands

7


Condensed Consolidated Balance Sheets

   
December 31,
2017
   
December 31,
2016
 
    $     $  
   
Audited
   
Audited
 
Assets
           
             
Current Assets:
           
Cash and cash equivalents
   
20,268
     
16,024
 
Restricted cash
   
292
     
-
 
Trade receivables, net
   
332
     
220
 
Other accounts receivables and prepaid expenses
   
506
     
528
 
        Total current assets
   
21,398
     
16,772
 
                 
Long term investments:
               
Other long term deposits
   
3,483
     
2,785
 
Investments in companies and associates
   
17,556
     
22,892
 
Total Long term investments
   
21,039
     
25,677
 
                 
Property and other assets, net:
               
Real estate properties, net
   
216,726
     
207,690
 
Other assets, net
   
140
     
245
 
          Total property and other assets
   
216,866
     
207,935
 
                 
Total assets
   
259,303
     
250,384
 
                 
Liabilities and shareholders' equity
               
                 
Current Liabilities:
               
Current maturities of long term loans and bonds
   
6,048
     
10,360
 
Other accounts payable and accrued expenses
   
4,362
     
4,254
 
                 
Total liabilities attributed to discontinued operations
   
2,061
     
2,061
 
        Total current liabilities
   
12,471
     
16,675
 
                 
Long term liabilities:
               
Deferred tax liabilities
   
14,042
     
13,620
 
Land lease liability, net
   
6,295
     
6,133
 
Other long-term liabilities
   
294
     
407
 
Loan from controlling shareholder
   
4,886
     
-
 
Long term loans, net of current maturities
   
135,774
     
129,261
 
Long term bonds, net of current maturities
   
8,473
     
10,160
 
         Total long term liabilities
   
169,764
     
159,581
 
                 
Shareholders’ equity:
               
Shareholders’ equity of Optibase Ltd
   
57,037
     
55,134
 
Non-controlling interests
   
20,031
     
18,994
 
       Total shareholders' equity
   
77,068
     
74,128
 
                 
Total liabilities and shareholders’ equity
   
259,303
     
250,384
 

Amounts in thousands
 
8

 

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