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Optibase Ltd. Announces First Quarter Results

^{Published on 2011-06-15 08:18:28 - Market Wire}
 

HERZLIYA, Israel--([ BUSINESS WIRE ])--Optibase Ltd. (NASDAQ: OBAS) today announced financial results for the first quarter ended March 31, 2011.

"We are continuously exploring acquisition opportunities while focusing our efforts in the target markets in which we believe we can bring our added value into play."

Revenues from fixed income real estate totaled $1.4 million for the quarter ended March 31, 2011, compared with $396,000 for the first quarter of 2010 and $447,000 for the fourth quarter of 2010.

Net income for first quarter ended March 31, 2011 was $1.3 million or $0.08 per basic and diluted share, compared with a net loss of $672,000 or $0.04 per basic and diluted share for the first quarter of 2010 and with a net loss of $806,000 or $0.05 per basic and diluted share for the fourth quarter of 2010.

Weighted average shares outstanding used in the calculation for the periods were approximately 16.6 million basic and diluted.

On March 2, 2011, we completed through our subsidiary, the acquisition of an office building complex in Geneva, Switzerland known as Center des Technologies Nouvelles ("CTN"). The transaction was based on a property value of CHF 126.5 million. The acquisition was undertaken by OPCTN S.A., a Luxembourg subsidiary of the company owned 51% by Optibase and 49% by the Phoenix Group. OPCTN undertook the transaction by acquiring all of the ownership interest in the property owner Eldista GmbH, a Swiss company. For further details please see our announcement dated March 3, 2011.

The results for the first quarter of 2011 include a one-time other income of $4.2 million which is based on a preliminary purchase price allocation study, deriving from negative goodwill, and $909,000 of transaction costs. The negative goodwill is a result of the excess of the purchased asset fair value over the total consideration paid.

As of March 31, 2011, we had cash, cash equivalents, and other financial investments, net, of $10.4 million, and shareholders' equity of $66.1 million, compared with $30.3 million, and $40.1 million, respectively, as of December 31, 2010.

Commenting on the quarter, CEO of Optibase, Amir Philips, said, aWe are pleased with our first quarter operating results. During the quarter, we continued executing on our strategy of diversifying and upgrading the quality of our real estate portfolio by completing the acquisition of CTN and joining forces with one of Israela™s leading insurance companies. During the first quarter our EBITDA and FFO from our existing portfolio kept stable. The results of our operations for the first quarter include only one month of the CTN results as the transaction took place on the last month of the quarter which also includes approximately $909,000 transaction costs and, thus, will be better reflected in our second quarter results. Our primary indicators for our real estate operations are FFO and Earnings Before Interest, Taxes, Amortization and Depreciation ("EBITDA")." FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. FFO should not be considered as a substitute for net income determined in accordance with U.S. GAAP as a measure of financial performance. Amir concluded, aWe are continuously exploring acquisition opportunities while focusing our efforts in the target markets in which we believe we can bring our added value into play."

About Optibase

Optibase invests in the fixed-income real estate field and currently holds properties in Switzerland and Miami, FL, 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 ("Vitec") 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 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.