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Optibase LTD. Announces Fourth Quarter and Year- End Results

^{Published on 2009-02-25 04:21:47, Last Modified on 2009-02-25 04:24:13 - Market Wire}
 

HERZLIYA, Israel--([ BUSINESS WIRE ])--Optibase Ltd. (NASDAQ:OBAS) ("Optibase" or the "Company"), a leader in advanced digital video solutions, today announced financial results for the fourth quarter and year ended December 31, 2008.

Revenues for the fourth quarter ended December 31, 2008 were $3.6 million compared with $6.6 million for the third quarter of 2008 and $5.6 million for the fourth quarter of 2007.

Net loss for the quarter ended December 31, 2008, was $2.5 million or $0.15 per basic and fully diluted share. This compares with a net loss of $1.8 million or $0.11 per basic and fully diluted share for the third quarter of 2008, and a net loss of $1.7 million or $0.12 per basic and fully diluted share for the fourth quarter of 2007. Weighted average shares outstanding used in the calculation were approximately 16.5 million basic and fully diluted for the fourth quarter of 2008, 16.5 million basic and fully diluted for the third quarter of 2008 and 13.6 million basic and fully diluted for the fourth quarter of 2007.

For the year ended December 31, 2008, revenues totaled $19.9 million, compared with $23 million for the year ended December 31, 2007. Net loss for the year ended December 31, 2008 was $9.3 million or $0.61 per basic and fully diluted share, compared to a net loss of $7.2 million or $0.53 per basic and fully diluted share for the year ended December 31, 2007. Weighted average shares outstanding used in the calculation for the periods were approximately 15.2 million basic and fully diluted and 13.6 million basic and fully diluted respectively.

As of December 31, 2008, the Company had cash, cash equivalents, and other financial investments, net, of $11.4 million, and shareholders' equity of $35.3 million, compared with $18.4 million, and $39.2 million as of December 31, 2007 respectively.

Commenting on the quarter, CFO of Optibase, Amir Philips, said, "While revenue in both the quarter and year-end periods were down, we view this as a reflection of these difficult economic times. We have already begun responding with measures to streamline our business in anticipation that this is a protracted crisis. However, we continue to believe in the long-term potential of the Enterprise, Government and IPTV markets and our position within this industry.

During the last quarter of 2008 we have witnessed the impact of the credit crunch and the over all down turn in the economy as our sales cycle had expanded beyond its normal course. The impact is more apparent within the commercial market as our customers and prospects are experiencing difficulties in financing their operations and business expansions. To respond to what we are seeing in the market, we have taken several steps in order to streamline our business and costs, including decreasing our headcount by 22% accompanied by a decrease of approximately 18% in direct personnel costs and overhead. All cost reduction measures have been implemented while minimizing any potential damage to our future business.

The government markets we serve have not been impacted quite as extensively as the public sector, and we believe there is potential for our products in both the Enterprise and Government markets in the United States. We have already had a fair amount of success in these areas and we believe that a more concentrated effort within these markets will enable us to better compete for new contracts. Therefore, the Company has decided to focus on the Government market and allocate more of its resources towards those target markets. We also believe there are opportunities in the Far East and Europe, and we are working to leverage our presence in these markets as well."

He concluded by saying, "Our goals for the near-term will be to conduct our business in a fiscally responsible manner, place more effort into the markets that we believe will yield the highest results and continue to enhance and improve upon our technology. We believe that Optibase currently has the right set of technology and market presence to achieve these goals and we look forward to the challenges that lie ahead."

About Optibase

Optibase provides video over IP solutions, specializing in video encoding, decoding and streaming for federal and state government agencies, Telco operators, enterprise organizations and the world's leading broadcast service providers. With a collection of open, standards-based products, Optibase enables its customers to take full advantage of video distribution over their IP network, ensuring superb video quality in a scale of bit-rates for simple and effective video streaming to desktops, STBs and VOD applications. For further information, please visit [ www.optibase.com ]

Conference Call:

Optibase has scheduled a conference call for 9:00 a.m. EST, February 25, 2009 to discuss the fourth quarter and year-end results. For those unable to participate, there will be replay available from 11:00 a.m. EST on February 25, 2009 through 11:59 p.m. EST, March 4, 2009.Please call: +(800) 642-1687 (Domestic) and +(706) 645-9291 (International). REPLAY CODE: 867275277.

Interested parties may access the conference call over the Internet via, [ www.kcsa.com ]. To listen to the live call, please go to the KCSA Web site at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software.

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 and estimates, 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, risks related to Optibase's business operations, including the evolving market for digital video in general and the infancy of the IPTV market in particular, competition and decrease in sales of video technologies products, general economic conditions and the current global economic crises, potential litigation 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 news 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.

This release and prior releases are available on the Company's Web site at [ www.optibase.com ].

This release and prior releases are also available on the KCSA Public Relations Worldwide Web site at [ www.kcsa.com ].