HERZLIYA, Israel, Nov. 30, 2020 /PRNewswire/ -- Optibase Ltd.
(NASDAQ: OBAS) (the "Company") today announces financial
results for the third quarter ended September 30, 2020.
Revenues from fixed income real estate totaled $3.5 million for the quarter ended September 30, 2020 compared to revenues of
$4 million for the third quarter of
2019.
Net Income attributable to Optibase Ltd shareholders for the
quarter ended September 30, 2020 was $5.2 million or $1
per basic and diluted share compared to loss of $496,000 or $0.1
per basic and diluted share for the third quarter of 2019.
For the nine months ended September 30,
2020 revenues totaled $11.4
million compared to revenues of $12.1 million for the nine months ended
September 30, 2019. Net income
attributable to Optibase Ltd Shareholders for the period was
$7.1 million or $1.36 per basic and diluted share, compared
to a loss of $875,000 or $0.17 per basic and diluted share for the nine
months ended September 30, 2019.
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, 2020, we had
cash and cash equivalents of $29.7
million, and shareholders' equity of $83.9 million, compared with $12.6 million, and $71.8
million, respectively, as of December
31, 2019.
On July 9,2020, the Company
announced the successful closing of a transaction to sell the
Company's portfolio in Germany
comprised of twenty seven (27) separate commercial properties,
located mostly in Bavaria, Germany, for a total consideration of
EUR 35 million (app. $38.9 million). For the nine months ended
September 30, 2020, the Company
recorded a gain of approximately $9.1
million resulting from the closing of the transaction. For
further details, see the Company's report on Form 6-K as filed with
the Securities and Exchange Commission on July 9, 2020.
Amir Philips, Chief Executive
Officer of Optibase commented on the third quarter results: "This
quarter our fixed income real estate rent has decreased compared to
the third quarter of 2019 mainly due to the sale of our portfolio
in Germany. This quarter we
generated net income of $5.2 million
attributed to the gain on sale of operating properties related to
our German portfolio sale transaction, compared to a loss of
$496,000 for the third quarter of
2019. For the third quarter of 2020, we generated NOI of
$3 million compared to $3.3 million for the third quarter of 2019. For
the third quarter of 2020, our Recurring FFO was $3.8
million compared to Recurring FFO of $3.7
million for the third quarter of 2019. Mr. Philips
concluded: "We are pleased with this quarter and year to date
results as we continue showing stability in our operating results
despite the uncertainty and the challenges facing our industry.
Furthermore, the recent sale of our German portfolio provides
evidence of our ability to produce accretive returns on our
investments and contribute to our liquidity position as well as
affording us financial flexibility going forward."
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 gains on sale net of tax and
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:
|
Nine months
ended
|
Three months
ended
|
|
September
30
|
September
30
|
September
30
|
September
30
|
|
2020
|
2019
|
2020
|
2019
|
|
$
|
$
|
$
|
$
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP Operating
income
|
14,056
|
4,629
|
8,558
|
1,531
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Real estate
depreciation and amortization
|
2,718
|
3,238
|
959
|
1,087
|
|
|
|
|
|
General and
administrative
|
1,800
|
2,010
|
288
|
671
|
|
|
|
|
|
Gain on sale of
operating properties
|
(9,127)
|
-
|
(6,810)
|
-
|
|
|
|
|
|
Non-GAAP Net
Operating Income NOI
|
9,447
|
9,877
|
2,995
|
3,289
|
|
|
|
|
|
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
|
|
2020
|
2019
|
2020
|
2019
|
|
$
|
$
|
$
|
$
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
GAAP Net income
(loss) attributable to Optibase LTD
|
7,058
|
(875)
|
5,164
|
(496)
|
|
|
|
|
|
Adjustments
:
|
|
|
|
|
Real estate
depreciation and amortization
|
2,718
|
3,238
|
959
|
1,087
|
|
|
|
|
|
Pro-rata share of
real estate depreciation and
amortization from unconsolidated associates
|
2,493
|
2,234
|
849
|
777
|
|
|
|
|
|
Non-controlling
interests share in the above adjustments
|
(912)
|
(870)
|
(314)
|
(293)
|
|
|
|
|
|
Non-GAAP Fund From
Operation (FFO)
|
11,357
|
3,727
|
6,658
|
1,075
|
|
|
|
|
|
Gain on sale of
operating properties, net
|
(7,557)
|
-
|
(5,473)
|
-
|
|
|
|
|
|
Non-GAAP Recurring
Fund From Operation (Recurring FFO)
|
3,800
|
3,727
|
1,185
|
1,075
|
|
|
|
|
|
|
|
|
|
|
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, 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
Optibase Ltd.
Condensed
Consolidated Statement of Operations
For the
Period Ended September 30,
2020
|
Nine months
ended
|
Three months
ended
|
|
September
30
|
September
30
|
September
30
|
September
30
|
|
2020
|
2019
|
2020
|
2019
|
|
$
|
$
|
$
|
$
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
|
|
|
|
|
Fixed income real
estate rent
|
11,431
|
12,094
|
3,536
|
3,987
|
Cost and
expenses:
|
|
|
|
|
Cost of real estate
operation
|
1,984
|
2,217
|
541
|
698
|
Real estate
depreciation and amortization
|
2,718
|
3,238
|
959
|
1,087
|
General and
administrative
|
1,800
|
2,010
|
288
|
671
|
Total cost and
expenses
|
6,502
|
7,465
|
1,788
|
2,456
|
|
|
|
|
|
Gain on sale of
operating properties
|
9,127
|
-
|
6,810
|
-
|
|
|
|
|
|
Operating
income
|
14,056
|
4,629
|
8,558
|
1,531
|
|
|
|
|
|
Other
Income
|
301
|
578
|
153
|
130
|
Financial expenses,
net
|
1,758
|
2,036
|
594
|
670
|
Income before taxes
on income
|
12,599
|
3,171
|
8,117
|
991
|
Taxes on
income
|
1,665
|
1,142
|
1,560
|
374
|
Equity share in
losses of associates, net
|
1,569
|
1,270
|
627
|
563
|
|
|
|
|
|
|
|
|
|
|
Net income
|
9,365
|
759
|
5,930
|
54
|
|
|
|
|
|
Net income
attributable to non-controlling interests
|
2,307
|
1,634
|
766
|
550
|
Net income (loss)
attributable to Optibase LTD
|
7,058
|
(875)
|
5,164
|
(496)
|
|
|
|
|
|
Net income (loss) per
share :
|
|
|
|
|
Basic and
diluted
|
$1.36
|
$(0.17)
|
$1
|
$(0.10)
|
|
|
|
|
|
|
|
|
|
|
Number of shares used
in computing earnings losses per share
|
|
|
|
|
Basic
|
5,186
|
5,186
|
5,186
|
5,186
|
Diluted
|
5,186
|
5,186
|
5,186
|
5,186
|
|
|
|
|
|
|
|
|
|
|
Amounts in
thousands.
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
September
30,
2020
|
December
31,
2019
|
|
$
|
$
|
|
Unaudited
|
Audited
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
Cash and cash
equivalents
|
29,676
|
12,564
|
Restricted
cash
|
912
|
32
|
Trade receivables,
net
|
366
|
536
|
Other accounts
receivables and prepaid expenses
|
840
|
628
|
Property held for
sale
|
-
|
29,727
|
Total current
assets
|
31,794
|
43,487
|
|
|
|
Long term
investments:
|
|
|
Other long term
deposits and other assets
|
2,495
|
2,678
|
Right-of-use
assets
|
283
|
376
|
Investments in
companies and associates
|
9,890
|
11,657
|
Total long term
investments
|
12,668
|
14,711
|
|
|
|
Real estate
properties, net
|
185,560
|
181,109
|
|
|
|
Total
assets
|
230,022
|
239,307
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
Current maturities of
long term loans and bonds
|
6,137
|
28,803
|
Other accounts
payable and accrued expenses
|
6,412
|
5,170
|
Liabilities
attributed to discontinued operations
|
2,061
|
2,061
|
Total current
liabilities
|
14,610
|
36,034
|
|
|
|
Long term
liabilities:
|
|
|
Deferred tax
liabilities
|
14,208
|
13,801
|
Land lease liability,
net
|
6,759
|
6,110
|
Operating lease
liabilities
|
159
|
257
|
Long term loans, net
of current maturities
|
108,960
|
108,406
|
Long term bonds, net
of current maturities
|
1,434
|
2,845
|
Total long term
liabilities
|
131,520
|
131,419
|
|
|
|
Shareholders'
equity:
|
|
|
Shareholders' equity
of Optibase Ltd
|
60,439
|
51,844
|
Non-controlling
interests
|
23,453
|
20,010
|
Total shareholders'
equity
|
83,892
|
71,854
|
|
|
|
Total liabilities and
shareholders' equity
|
230,022
|
239,307
|
|
|
|
Amounts in
thousands
|
|
|
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SOURCE Optibase Ltd.