Report of Foreign Issuer (6-k)

Date : 08/30/2018 @ 10:02AM
Source : Edgar (US Regulatory)
Stock : Optibase Ltd. - Ordinary Shares (OBAS)
Quote : 8.5925  -0.1075 (-1.24%) @ 4:04PM

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: August 30, 2018
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 ☒ 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 Ltd. announces second 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: August 30, 2018

 
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 SECOND QUARTER RESULTS

HERZLIYA, Israel, August 30, 2018 – Optibase Ltd. (NASDAQ: OBAS)   today announced financial results for the second quarter ended June 30, 2018.

Revenues from fixed income real estate for the quarter ended June 30, 2018 and June 30, 2017 totaled $4.1 million.

Net loss attributable to Optibase Ltd shareholders for the quarter ended June 30, 2018 was $1.1 million or $0.21 per basic and diluted share compared to net loss of $35,000 or $0.01 per basic and diluted share for the second quarter of 2017.

For the six months ended June 30, 2018 revenues totaled $8.4 million compared to revenues of $8.2 million for the six months ended June 30, 2017 . Net loss 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 $550,000 or $0.11 per basic and diluted share for the six months ended June 30, 2017.

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 June 30, 2018, we had cash and cash equivalents of $16.9 million, and shareholders' equity of $75.3 million, compared with $20.3 million, and $77.1 million, respectively, as of December 31, 2017.
 
Amir Philips, Chief Executive Officer of Optibase commented on the second quarter results: ”This quarter our fixed income real estate rent are stable compared to the second quarter of 2017 while our net loss has increased significantly compared to the second quarter of 2017 mostly due to increased Equity share in losses of associates, net and due to increase in our general and administrative expenses. For the second quarter of 2018, we generated NOI of $3.3 million representing stability compared to the same period in 2017. In addition, for the second quarter of 2018, our Recurring FFO decreased to $348,000 compared to Recurring FFO of $806,000 for the second   quarter of 2017. The decrease in our Recurring FFO is due to an increase in our Equity share in losses of associates, net, related to our investment in 300 River Holdings, LLC and an increase in our general and administrative expenses." Mr. Philips concluded: “We are working to maintain our basic parameters and to increase our financial stability as we progress through 2018.”
 
 


 
OPTIBASE REPORTS/2
 
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.
 
 


OPTIBASE REPORTS/3
 
Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data
 
A reconciliation of operating income to NOI is as follows:
 
   
Six months ended
   
Three months ended
 
   
June 30
   
June 30
   
June 30
   
June 30
 
   
2018
   
2017
   
2018
   
2017
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Operating income
   
2,905
     
3,328
     
1,242
     
1,685
 
                                 
Adjustments:
                               
Real estate depreciation and amortization
   
2,152
     
2,099
     
1,055
     
1,061
 
                                 
General and administrative
   
1,826
     
1,224
     
1,050
     
598
 
                                 
Non-GAAP Net Operating Income NOI
   
6,883
     
6,651
     
3,347
     
3,344
 
 
A reconciliation of net   income to FFO and Recurring FFO is as follows:

   
Six months ended
   
Three months ended
 
   
June 30
   
June 30
   
June 30
   
June 30
 
   
2018
   
2017
   
2018
   
2017
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
GAAP Net income (loss) attributable to Optibase LTD
   
(1,758
)
   
(550
)
   
(1,086
)
   
(35
)
                                 
Adjustments :
                               
Real estate depreciation and amortization
   
2,152
     
2,099
     
1,055
     
1,061
 
                                 
Pro-rata share of real estate depreciation and amortization from unconsolidated associates
   
1,252
     
123
     
650
     
63
 
                                 
Non-controlling interests share in the above adjustments
   
(558
)
   
(562
)
   
(271
)
   
(283
)
                                 
Non-GAAP Fund From Operation (FFO)
   
1,088
     
1,110
     
348
     
806
 
                                 
Non-GAAP Recurring Fund From Operation (Recurring FFO)
   
1,088
     
1,110
     
348
     
806
 
 
Amounts in thousands

 

 

OPTIBASE REPORTS/4
 
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.


OPTIBASE REPORTS/5
 
Optibase Ltd.
Condensed Consolidated Statement of Operations
For the Period Ended June 30, 2018

   
Six months ended
   
Three months ended
 
   
June 30
   
June 30
   
June 30
   
June 30
 
   
2018
   
2017
   
2018
   
2017
 
   
$
   
$
   
$
   
$
 
   
Unaudited
   
Unaudited
   
Unaudited
   
Unaudited
 
                                 
Fixed income real estate rent
   
8,417
     
8,176
     
4,111
     
4,149
 
Cost and expenses:
                               
Cost of real estate operation
   
1,534
     
1,525
     
764
     
805
 
Real estate depreciation and amortization
   
2,152
     
2,099
     
1,055
     
1,061
 
General and administrative
   
1,826
     
1,224
     
1,050
     
598
 
       Total cost and expenses
   
5,512
     
4,848
     
2,869
     
2,464
 
Operating income
   
2,905
     
3,328
     
1,242
     
1,685
 
                                 
Other Income
   
310
     
308
     
149
     
147
 
Financial expenses, net
   
(1,503
)
   
(1,546
)
   
(776
)
   
(656
)
Income before taxes on income
   
1,712
     
2,090
     
615
     
1,176
 
Taxes on income
   
(740
)
   
(827
)
   
(358
)
   
(412
)
Equity share in losses of associates, net
   
(1,662
)
   
(734
)
   
(842
)
   
(242
)
                                 
Net income (loss)
   
(690
)
   
529
     
(585
)
   
522
 
                                 
Net income attributable to non-controlling interests
   
1,068
     
1,079
     
501
     
557
 
Net loss attributable to Optibase LTD
   
(1,758
)
   
(550
)
   
(1,086
)
   
(35
)
                                 
Net loss per share :
                               
Basic and Diluted
 
$
(0.34
)
 
$
(0.11
)
 
$
(0.21
)
 
$
(0.01
)
                                 
Number of shares used in computing earnings losses per share
                               
Basic
   
5,184
     
5,180
     
5,186
     
5,172
 
Diluted
   
5,184
     
5,180
     
5,186
     
5,172
 

Amounts in thousands



OPTIBASE REPORTS/6
 
Condensed Consolidated Balance Sheets

   
June 30,
2018
   
December 31,
2017
 
   
Unaudited
   
Audited
 
Assets
           
             
Current Assets:
           
Cash and cash equivalents
   
16,888
     
20,268
 
Restricted cash
   
51
     
292
 
Trade receivables, net
   
376
     
332
 
Other accounts receivables and prepaid expenses
   
505
     
506
 
Total current assets
   
17,820
     
21,398
 
                 
Long term investments:
               
Other long term deposits
   
2,894
     
3,483
 
Investments in companies and associates
   
15,712
     
17,556
 
Total Long term investments
   
18,606
     
21,039
 
                 
Property and other assets, net:
               
Real estate properties, net
   
211,704
     
216,726
 
Other assets, net
   
137
     
140
 
Total property and other assets
   
211,841
     
216,866
 
                 
Total assets
   
248,267
     
259,303
 
                 
Liabilities and shareholders' equity
               
                 
Current Liabilities:
               
Current maturities of long term loans and bonds
   
6,854
     
6,048
 
Accounts payable and accrued expenses
   
3,991
     
4,362
 
Liabilities attributed to discontinued operations
   
2,061
     
2,061
 
Total current liabilities
   
12,906
     
12,471
 
                 
Long term liabilities:
               
Deferred tax liabilities
   
13,701
     
14,042
 
Land lease liability, net
   
6,133
     
6,295
 
Other long term liabilities
   
268
     
294
 
Loan from controlling shareholder
   
2,429
     
4,886
 
Long term loans, net of current maturities
   
130,826
     
135,774
 
Long term bonds, net of current maturities
   
6,713
     
8,473
 
Total long term liabilities
   
160,070
     
169,764
 
                 
Shareholders’ equity:
               
Shareholders’ equity of Optibase Ltd
   
54,565
     
57,037
 
Non-controlling interests
   
20,726
     
20,031
 
Total shareholders' equity
   
75,291
     
77,068
 
                 
Total liabilities and shareholders’ equity
   
248,267
     
259,303
 
 
Amounts in thousands
 


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