HERZLIYA, Israel, April 1, 2020 /PRNewswire/ -- Optibase
Ltd. (NASDAQ: OBAS) today announced financial results for
the fourth quarter ended December 31,
2019.
Revenues from fixed income real estate totaled $4 million for the quarter ended December 31, 2019 compared to revenues of
$4.1 million for the fourth
quarter of 2018.
Net loss attributable to Optibase Ltd shareholders for the
quarter ended December 31, 2019 was
$1.1 million or $0.21 per basic and diluted share compared
to net loss of $804,000 million or
$0.16 per basic and diluted share for
the fourth quarter of 2018.
For the year ended December 31,
2019 revenues totaled $16.1
million compared to revenues of $16.6 million for the year ended
December 31, 2018. Net loss
attributable to Optibase Ltd Shareholders for the year ended
December 31, 2019 was $2 or $0.38 per basic and diluted share, compared
to a net loss of $2.8 million or
$0.54 per basic and diluted share for
the year ended December 31, 2018.
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 December 31, 2019, we had
cash and cash equivalents of $12.6
million, and shareholders' equity of $71.8 million, compared with $13.8 million, and $73.4
million, respectively, as of December
31, 2018.
Amir Philips, Chief Executive
Officer of Optibase commented on the fourth quarter results: "This
quarter our fixed income real estate rent stayed stable compared to
the fourth quarter of 2018 and our net loss has increased compared
to the fourth quarter of 2018. The increase in our net loss is
mostly attributed to an increase in our Equity share in losses of
associates, net, related to our investment in 300 River Holdings,
LLC. For the fourth quarter of 2019, we generated NOI of
$3.3 million representing a slight
decrease compared to the fourth quarter of 2018 duo to a slight
increase in our general and administrative expenses. For the year
ended December 31, 2019, we generated
NOI of $13.2 million representing a
slight decrease compared to the year ended December 31, 2018. In addition, for the year
ended December 31, 2019, our
Recurring FFO increased to $4.2
million compared to Recurring FFO of $3 million for the year ended December 31, 2018. The increase in our Recurring
FFO is due to a decrease in our general and administrative
expenses, decrease in our financial expenses and a decrease in our
Equity share in losses of associates, net, related to our
investment in 300 River Holdings, LLC. Mr. Philips concluded: "We
continue our work to maintain our basic parameters and to increase
our financial stability as we progress through 2020."
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.
|
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
|
|
2019
|
2018
|
2019
|
2018
|
|
$
|
$
|
$
|
$
|
|
Audited
|
Audited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
GAAP Operating
income
|
5,828
|
5,800
|
1,199
|
1,378
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Real estate
depreciation and amortization
|
4,321
|
4,317
|
1,083
|
1,084
|
|
|
|
|
|
|
General and
administrative
|
3,047
|
3,500
|
1,037
|
932
|
|
|
|
|
|
|
Non-GAAP Net
Operating Income NOI
|
13,196
|
13,617
|
3,319
|
3,394
|
|
|
|
|
|
|
A reconciliation of
net income to FFO and Recurring FFO is as
follows:
|
|
Nine months
ended
|
Three months
ended
|
|
December
31
|
December
31
|
December
31
|
December
31
|
|
2019
|
2018
|
2019
|
2018
|
|
$
|
$
|
$
|
$
|
|
Audited
|
Audited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
GAAP Net income
(loss) attributable to Optibase LTD
|
(1,993)
|
(2,781)
|
(1,118)
|
(804)
|
|
|
|
|
|
|
Adjustments
:
|
|
|
|
|
|
Real estate
depreciation and amortization
|
4,321
|
4,317
|
1,083
|
1,084
|
|
|
|
|
|
|
Pro-rata share of
real estate depreciation and
amortization from unconsolidated associates
|
3,085
|
2,609
|
851
|
684
|
|
|
|
|
|
|
Non-controlling
interests share in the above adjustments
|
(1,162)
|
(1,137)
|
(292)
|
(292)
|
|
|
|
|
|
|
Non-GAAP Fund From
Operation (FFO)
|
4,251
|
3,008
|
524
|
672
|
|
|
|
|
|
|
Non-GAAP Recurring
Fund From Operation
(Recurring FFO)
|
4,251
|
3,008
|
524
|
672
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
|
|
|
|
Optibase
Ltd.
|
|
Condensed
Consolidated Statement of Operations
|
|
For the Year Ended
December 31, 2019
|
|
|
Year
ended
|
Three months
ended
|
|
December
31
|
December
31
|
December
31
|
December
31
|
|
2019
|
2018
|
2019
|
2018
|
|
$
|
$
|
$
|
$
|
|
Audited
|
Audited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
|
Fixed income real
estate rent
|
16,144
|
16,608
|
4,050
|
4,101
|
|
Cost and
expenses:
|
|
|
|
|
|
Cost of real estate
operation
|
2,948
|
2,991
|
731
|
707
|
|
Real estate
depreciation and amortization
|
4,321
|
4,317
|
1,083
|
1,084
|
|
General and
administrative
|
3,047
|
3,500
|
1,037
|
932
|
|
Total cost and
expenses
|
10,316
|
10,808
|
2,851
|
2,723
|
|
Operating
income
|
5,828
|
5,800
|
1,199
|
1,378
|
|
|
|
|
|
|
Other
Income
|
722
|
607
|
144
|
149
|
|
Financial expenses,
net
|
(2,630)
|
(2,882)
|
(594)
|
(674)
|
|
Income before taxes
on income
|
3,920
|
3,525
|
749
|
853
|
|
Taxes on
income
|
(1,472)
|
(1,464)
|
(330)
|
(334)
|
|
Equity share in
losses of associates, net
|
(2,321)
|
(2,765)
|
(1,051)
|
(846)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
127
|
(704)
|
(632)
|
(327)
|
|
|
|
|
|
|
Net income
attributable to non-controlling interests
|
2,120
|
2,077
|
486
|
477
|
|
Net loss attributable
to Optibase LTD
|
(1,993)
|
(2,781)
|
(1,118)
|
(804)
|
|
|
|
|
|
|
Net loss per share
:
|
|
|
|
|
|
Basic and
Diluted
|
$(0.38)
|
$(0.54)
|
$(0.21)
|
$(0.16)
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares used
in computing earnings losses
per share
|
|
|
|
|
|
Basic
|
5,186
|
5,185
|
5,186
|
5,186
|
|
Diluted
|
5,186
|
5,185
|
5,186
|
5,186
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
December
31,
2019
|
December
31,
2018
|
|
Audited
|
Audited
|
|
Assets
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
12,564
|
13,836
|
|
Restricted
cash
|
32
|
31
|
|
Trade receivables,
net
|
536
|
427
|
|
Other accounts
receivables and prepaid expenses
|
628
|
320
|
|
Property held for
sale
|
29,727
|
-
|
|
Total current
assets
|
43,487
|
14,614
|
|
|
|
|
Long term
investments:
|
|
|
|
Other long term
deposits and other assets
|
2,678
|
2,477
|
|
Right-of-use
assets
|
376
|
-
|
|
Investments in
companies and associates
|
11,657
|
14,377
|
|
Total Long term
investments
|
14,711
|
16,854
|
|
|
|
|
Property and other
assets, net:
|
|
|
|
Real estate
properties, net
|
181,109
|
212,349
|
|
Other assets,
net
|
-
|
141
|
|
Total property and
other assets
|
181,109
|
212,490
|
|
|
|
|
Total
assets
|
239,307
|
243,958
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Current maturities of
long term loans and bonds
|
28,803
|
5,788
|
|
Accounts payable and
accrued expenses and other
|
5,170
|
4,103
|
|
Liabilities
attributed to discontinued operations
|
2,061
|
2,061
|
|
Total current
liabilities
|
36,034
|
11,952
|
|
|
|
|
Long term
liabilities:
|
|
|
|
Deferred tax
liabilities
|
13,801
|
13,752
|
|
Land lease liability,
net
|
6,110
|
6,134
|
|
Lease
liabilities
|
257
|
-
|
|
Other long term
liabilities
|
-
|
206
|
|
Loan from controlling
shareholder
|
-
|
2,476
|
|
Long term loans, net
of current maturities
|
108,406
|
130,806
|
|
Long term bonds, net
of current maturities
|
2,845
|
5,239
|
|
Total long term
liabilities
|
131,419
|
158,613
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Shareholders' equity
of Optibase Ltd
|
51,844
|
53,559
|
|
Non-controlling
interests
|
20,010
|
19,834
|
|
Total shareholders'
equity
|
71,854
|
73,393
|
|
|
|
|
Total liabilities and
shareholders' equity
|
239,307
|
243,958
|
|
|
|
|
Amounts in
thousands
|
|
|
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, Texas, Philadelphia,
PA, Miami, FL, and in
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.
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
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SOURCE Optibase Ltd.