HERZLIYA, Israel, May 25, 2017 /PRNewswire/ -- Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the first quarter ended March 31, 2017.
Revenues from fixed income real estate totaled $4 million for the quarter ended March 31, 2017, compared to revenues of $4 million for the first quarter of 2016.
Net loss attributable to Optibase Ltd shareholders for the quarter ended March 31, 2017 was $515,000 or $0.10 per basic and diluted share compared to net income of $718,000 or $0.14 per basic and diluted share for the first quarter of 2016.
Weighted average shares outstanding used in the calculation for the periods were approximately 5.1 million basic and diluted shares for each period.
As of March 31, 2017, we had cash and cash equivalents of $22.3 million, and shareholders' equity of $76.3 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 first quarter results: "This quarter results are stable compared to the previous quarter and the first quarter of 2016 in our fixed income real estate rent and operating income, while our net income has decreased somewhat due mostly to increased financial expenses and Equity share in losses of associates, net. For the first quarter of 2017 we generated NOI of $3.3 million representing a 3% increase over the same period in 2016. In addition, for the first quarter of 2017, our Recurring FFO decreased to 304,000 compared to the first quarter of 2016. The decrease in our Recurring FFO is primarily due to an increase in our equity share in losses of associates related to our investment in 300 River Holdings, LLC and increase in our financial expenses due to currency rate differences." Mr. Philips concluded: "We are working maintain our basic parameters and increase our financial stability as we progress through 2017."
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: Three months ended March 31 March 31 2017 2016 $ $ Unaudited Unaudited --------- --------- GAAP Operating income 1,643 1,571 Adjustments: Real estate depreciation and amortization 1,038 1,051 General and administrative 626 597 Non- GAAP Net Operating Income NOI 3,307 3,219
A reconciliation of net income to FFO and Recurring FFO is as follows: Three months ended March 31 March 31 2017 2016 $ $ Unaudited Unaudited --------- --------- GAAP Net income (loss) attributable to Optibase LTD (515) 718 Adjustments : Real estate depreciation and amortization 1,038 1,051 Prorata share of real estate depreciation and 60 447 amortization from unconsolidated associates Non controlling interests share in the above adjustments (279) (283) Non-GAAP Fund From Operation (FFO)) 304 1,933 Non-GAAP Recurring Fund From Operation 304 1,933 (Recurring FFO) 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 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 Ltd. Condensed Consolidated Statement of Operations For the Period Ended March 31, 2017 ----------------------------------- Three months ended March 31 March 31 2017 2016 $ $ Unaudited Unaudited --------- --------- Fixed income real estate rent 4,027 4,043 Cost and expenses: Cost of real estate operation 720 824 Real estate depreciation and amortization 1,038 1,051 General and administrative 626 597 Total cost and expenses 2,384 2,472 Operating income 1,643 1,571 Other Income 161 229 Financial expenses, net (890) (641) Income before taxes on income 914 1,159 Taxes on income (415) (392) Equity share in income (losses) of associates, net (492) 460 Net income 7 1,227 Net income attributable to non- controlling interests 522 509 Net income (loss) attributable to Optibase LTD (515) 718 Net income (loss) per share : Basic and Diluted ($0.10) $0.14 Number of shares used in computing earnings losses per share Basic 5,180 5,141 Diluted 5,180 5,141 Amounts in thousands
Condensed Consolidated Balance Sheets ------------------------------------- March 31, December 31, 2017 2016 Unaudited Audited --------- ------- Assets ------ Current Assets: Cash and cash equivalents 22,253 16,024 Trade receivables 628 220 Other accounts receivables and prepaid expenses 510 528 Total current assets 23,391 16,772 Long term investments: Other long term deposits and receivables 4,172 2,785 Investments in companies and associates 22,243 22,892 Total Long term investments 26,415 25,677 Property and other assets, net: Real estate properties, net 211,380 207,690 Other assets, net 199 245 Total property and other assets 211,579 207,935 Total assets 261,385 250,384 Liabilities and shareholders' equity -------------- Current Liabilities: Current maturities of long term loans and bonds 10,572 10,360 Accounts payable and accrued expenses 4,931 4,254 Total liabilities attributed to discontinued operations 2,061 2,061 Total current liabilities 17,564 16,675 Long term liabilities: Deferred tax liabilities 13,873 13,620 Land lease liability, net 6,240 6,133 Other long- term liabilities 337 407 Long term loans, net of current maturities 136,312 129,261 Long term bonds, net of current maturities 10,779 10,160 Total long term liabilities 167,541 159,581 Shareholders' equity: Shareholders' equity of Optibase Ltd 56,347 55,134 Non- controlling interests 19,933 18,994 Total shareholders' equity 76,280 74,128 Total liabilities and shareholders' equity 261,385 250,384 Amounts in thousands
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.