Optibase, Ltd. Reports First Quarter 2001 Results

Q1 In Line With Expectations



Apr 23, 2001, 01:00 ET from Optibase, Ltd.

    HERZLIYA, Israel, April 23 /PRNewswire Interactive Press Release/ --
 Optibase, Ltd. (Nasdaq:   OBAS), a leader in digital streaming solutions over
 broadband networks, today announced first quarter results for the period
 ending March 31, 2001.
     Revenues for the first quarter 2001 were 8.0 million, compared with
 $7.4 million in the same period a year ago, and a 13 percent increase from
 $7.1 million in the fourth quarter of 2000. Pro forma net loss for the
 first quarter, excluding the effects of acquisition-related costs and stock
 option charges was $1.0 million or $0.08 per diluted share, based on
 12.4 million weighted average shares outstanding, compared with pro forma net
 income of $1.29 million or $0.12 per diluted share, based on 10.4 million
 weighted average shares outstanding for the same quarter in 2000.
 Sequentially, pro forma net income, excluding the effects of
 acquisition-related costs and stock option charges decreased approximately
 1.6 million from $617,000, or $0.05 per diluted share. This decrease resulted
 mainly from increases in Research and Development and SG&A spending, primarily
 associated with the Company furthering its MediaGateway technologies and
 expanding its MGW line of products.
     Acquisition-related costs in the first quarter consisted of approximately
 $1.5 million of amortization of goodwill and other acquisition-related
 intangibles and costs. Stock option charges were $639,000 this quarter.
     Actual net loss for the first quarter, including the effects of
 acquisition-related costs and stock option charges was $3.2 million, or
 $0.26 per diluted share, compared with a net income of $1.26 million or
 $0.12 per diluted share for the same quarter in 2000.
     As of March 31, 2001 the Company had cash, and cash equivalents and other
 financial investments of $53.9 million, and stockholders' equity of
 $93.6 million.
     Commenting on the first quarter results, Ran Eisenberg, Chief Executive
 Officer and Chairman of Optibase, said, "We are pleased with our results for
 the first quarter. Considering market conditions during the first three months
 of 2001, Optibase managed to meet analyst expectations and maintain a strong
 cash position.
     "Despite weakness in the overall technology sector as well as the digital
 media industry, Optibase's influence has strengthened in relation to other
 companies. Through the acquisition of Viewgraphics, their technologies and
 product lines, and the technologies from ECI Telecom, as well as our
 concentration on the Media Gateway line of products, we believe that Optibase
 now possesses the breadth of products to continue to be a leading player."
     Mr. Eisenberg added, "Optibase remains very focused. As we stated over the
 course of the past several months, our business strategy today is to
 aggressively market and extend our new MGW line of products while continuing
 to attack the market for our current products. We also have stated that we
 have stepped up our R&D activities in order to ensure timely deployment of the
 MGW. As can be seen by today's announcement regarding our agreement with
 Nortel, we are executing on our plan and are succeeding."
     Mr. Eisenberg continued, "We are very optimistic about what the future
 holds for Optibase. We anticipated a slow quarter for the industry and despite
 the current economic climate, Optibase succeeded in concluding the quarter as
 anticipated. Still, it is difficult to predict the duration of the current
 economic situation and our visibility for the near future is therefore low.
     "Notwithstanding our results in Q1, from where we sit today and from what
 we have learned from our customers, we believe that our growth in the
 second quarter will be flat or we might even witness a slight decline. This
 will bring our EPS to a range of a $0.16-$0.20 loss for that quarter. For the
 year, we believe that we will see growth between 10 and 20 percent which will
 bring our EPS to a range of a $0.37-$0.49 loss for the year. This projection,
 however, should in no way be looked at as conclusive. In working to optimize
 our business operations, we believe that it is necessary to regularly evaluate
 what the near future holds so that we can be responsible in our fiscal
 controls. However, depending on how the economy affects our customers and what
 we learn in the months to come our projections could change considerably."
     He concluded, "I am confident that Optibase will be able to balance
 priorities and keep the Company strong. Possessing an excellent management
 team, we remain very confident with where we are as a company -- we have a
 solid plan and are well on our way to accomplishing our plan."
     Conference Call:  Optibase has scheduled a conference call for
 9:00 a.m. EDT, Tuesday, April 24, to discuss the first quarter results.
 Interested parties may access the conference call over the Internet through
 Vcall via their Web site, www.vcall.com. To listen to the live call, please go
 to the Vcall Web site at least 15 minutes early to register, download and
 install any necessary audio software.
 
     About Optibase
     Optibase, Ltd. provides high-quality, cost effective products that enable
 the preparation and delivery of MPEG-based digital media over broadband
 networks. Optibase has created a breadth of product offerings used in
 applications, such as:  Video-on-demand, real-time video streaming, digital
 video archiving, distance learning and business television. Headquartered in
 Israel, Optibase operates through its fully-owned subsidiary in San Jose,
 California and offices in the U.K., France Japan and China. Optibase products
 are marketed in over 40 countries through a combination of direct sales,
 independent distributors, system integrators and OEM partners. For more
 information, visit www.optibase.com.
     This news release contains forward-looking statements concerning our
 marketing and operations plans. These statements involve a number of risks and
 uncertainties including, but not limited to, risks related to the evolving
 market for digital video, competition, our ability to manage growth and
 expansion, 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 Registration Statement on Form F-1 filed with the United States
 Securities and Exchange Commission.
     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.
 
                                 Optibase Ltd.
            Pro Forma Condensed Consolidated Statement of Operations
                      For the First Quarter Ended March 31
 
         (Excluding acquisition-related costs and stock option charges)
 
 
                                                      March 31,      March 31
                                                       2001            2000
                                                     Unaudited       Unaudited
 
     Revenues                                          $8,014         $7,404
     Gross profit                                       4,443          4,196
     Operating expenses:
       Research and development, net                    2,845          1,038
       Selling, general and
        administrative                                  3,640          2,381
 
         Total operating expenses                       6,485          3,419
     Operating income(loss)                           (2,042)            777
 
     Financial income net                               1,038            512
     Net income(loss)                                $(1,004)         $1,289
     Net income(loss) per share:
       Fully diluted                                  $(0.08)          $0.12
     Weighted average of shares
      used in computing earnings
      per share (fully diluted)                        12,360         10,386
 
    Note:  Amounts in thousands, except net income per share
 
    The above pro forma amounts have been adjusted to exclude the following
    items:
 
     Amortization of goodwill and other
      acquisition-related charges                       1,533
     Stock option charges                                 639             30
 
     Net effect of pro forma adjustments                2,172             30
 
                                 Optibase Ltd.
                 Condensed Consolidated Statement of Operations
                      For the First Quarter Ended March 31
 
                                                      March 31,      March 31,
                                                       2001           2000
                                                     Unaudited      Unaudited
 
     Revenues                                          $8,014         $7,404
     Gross profit                                       4,443          4,196
     Operating expenses:
       Research and development, net                    4,408          1,038
       Selling, general and administrative              4,249          2,411
 
         Total operating expenses                       8,657          3,449
 
     Operating income(loss)                           (4,214)            747
 
     Financial income, net                              1,038            512
     Net income(loss)                                $(3,176)         $1,259
     Net income(loss) per share:
       Fully diluted                                  $(0.26)          $0.12
     Weighted average of shares used in
      computing earnings per share
      (fully diluted)                                  12,360         10,386
 
    Note:  Amounts in thousands, except net income per share
 
                                 Optibase Ltd.
                     Condensed Consolidated Balance Sheets
 
                                                     March 31,    December 31,
                                                       2001           2000
                                                     Unaudited       Audited
 
     Assets
     Current Assets:
       Cash, cash equivalents
        and short term investments                    $53,882        $59,446
       Trade receivables net of bad debts               7,102          6,762
       Inventories                                      5,383          4,408
       Other receivables and prepaid expenses           2,410          3,135
         Total current assets                          68,777         73,751
     Long-term investments in marketable
      securities and bank deposits                          0          1,011
     Other long-term investments                        2,734          2,743
                                                        2,734          3,754
     Fixed assets, net                                  3,284          3,326
     Other assets, net                                 33,660         35,188
     Total assets                                    $108,455       $116,019
 
     Liabilities and shareholders' equity
     Current Liabilities:
     Current Maturities                                  $478           $465
     Trade payables                                     4,167          6,767
       Accrued expenses and other liabilities           8,281          9,634
         Total current liabilities                     12,926         16,866
     Accrued severance pay                              1,652          1,467
     Long term lease                                      286            271
     Total shareholders' equity                        93,591         97,415
     Total liabilities and shareholder's equity      $108,455       $116,019
 
     Note:  Amounts in thousands
 
                      MAKE YOUR OPINION COUNT - Click Here
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SOURCE Optibase, Ltd.
    HERZLIYA, Israel, April 23 /PRNewswire Interactive Press Release/ --
 Optibase, Ltd. (Nasdaq:   OBAS), a leader in digital streaming solutions over
 broadband networks, today announced first quarter results for the period
 ending March 31, 2001.
     Revenues for the first quarter 2001 were 8.0 million, compared with
 $7.4 million in the same period a year ago, and a 13 percent increase from
 $7.1 million in the fourth quarter of 2000. Pro forma net loss for the
 first quarter, excluding the effects of acquisition-related costs and stock
 option charges was $1.0 million or $0.08 per diluted share, based on
 12.4 million weighted average shares outstanding, compared with pro forma net
 income of $1.29 million or $0.12 per diluted share, based on 10.4 million
 weighted average shares outstanding for the same quarter in 2000.
 Sequentially, pro forma net income, excluding the effects of
 acquisition-related costs and stock option charges decreased approximately
 1.6 million from $617,000, or $0.05 per diluted share. This decrease resulted
 mainly from increases in Research and Development and SG&A spending, primarily
 associated with the Company furthering its MediaGateway technologies and
 expanding its MGW line of products.
     Acquisition-related costs in the first quarter consisted of approximately
 $1.5 million of amortization of goodwill and other acquisition-related
 intangibles and costs. Stock option charges were $639,000 this quarter.
     Actual net loss for the first quarter, including the effects of
 acquisition-related costs and stock option charges was $3.2 million, or
 $0.26 per diluted share, compared with a net income of $1.26 million or
 $0.12 per diluted share for the same quarter in 2000.
     As of March 31, 2001 the Company had cash, and cash equivalents and other
 financial investments of $53.9 million, and stockholders' equity of
 $93.6 million.
     Commenting on the first quarter results, Ran Eisenberg, Chief Executive
 Officer and Chairman of Optibase, said, "We are pleased with our results for
 the first quarter. Considering market conditions during the first three months
 of 2001, Optibase managed to meet analyst expectations and maintain a strong
 cash position.
     "Despite weakness in the overall technology sector as well as the digital
 media industry, Optibase's influence has strengthened in relation to other
 companies. Through the acquisition of Viewgraphics, their technologies and
 product lines, and the technologies from ECI Telecom, as well as our
 concentration on the Media Gateway line of products, we believe that Optibase
 now possesses the breadth of products to continue to be a leading player."
     Mr. Eisenberg added, "Optibase remains very focused. As we stated over the
 course of the past several months, our business strategy today is to
 aggressively market and extend our new MGW line of products while continuing
 to attack the market for our current products. We also have stated that we
 have stepped up our R&D activities in order to ensure timely deployment of the
 MGW. As can be seen by today's announcement regarding our agreement with
 Nortel, we are executing on our plan and are succeeding."
     Mr. Eisenberg continued, "We are very optimistic about what the future
 holds for Optibase. We anticipated a slow quarter for the industry and despite
 the current economic climate, Optibase succeeded in concluding the quarter as
 anticipated. Still, it is difficult to predict the duration of the current
 economic situation and our visibility for the near future is therefore low.
     "Notwithstanding our results in Q1, from where we sit today and from what
 we have learned from our customers, we believe that our growth in the
 second quarter will be flat or we might even witness a slight decline. This
 will bring our EPS to a range of a $0.16-$0.20 loss for that quarter. For the
 year, we believe that we will see growth between 10 and 20 percent which will
 bring our EPS to a range of a $0.37-$0.49 loss for the year. This projection,
 however, should in no way be looked at as conclusive. In working to optimize
 our business operations, we believe that it is necessary to regularly evaluate
 what the near future holds so that we can be responsible in our fiscal
 controls. However, depending on how the economy affects our customers and what
 we learn in the months to come our projections could change considerably."
     He concluded, "I am confident that Optibase will be able to balance
 priorities and keep the Company strong. Possessing an excellent management
 team, we remain very confident with where we are as a company -- we have a
 solid plan and are well on our way to accomplishing our plan."
     Conference Call:  Optibase has scheduled a conference call for
 9:00 a.m. EDT, Tuesday, April 24, to discuss the first quarter results.
 Interested parties may access the conference call over the Internet through
 Vcall via their Web site, www.vcall.com. To listen to the live call, please go
 to the Vcall Web site at least 15 minutes early to register, download and
 install any necessary audio software.
 
     About Optibase
     Optibase, Ltd. provides high-quality, cost effective products that enable
 the preparation and delivery of MPEG-based digital media over broadband
 networks. Optibase has created a breadth of product offerings used in
 applications, such as:  Video-on-demand, real-time video streaming, digital
 video archiving, distance learning and business television. Headquartered in
 Israel, Optibase operates through its fully-owned subsidiary in San Jose,
 California and offices in the U.K., France Japan and China. Optibase products
 are marketed in over 40 countries through a combination of direct sales,
 independent distributors, system integrators and OEM partners. For more
 information, visit www.optibase.com.
     This news release contains forward-looking statements concerning our
 marketing and operations plans. These statements involve a number of risks and
 uncertainties including, but not limited to, risks related to the evolving
 market for digital video, competition, our ability to manage growth and
 expansion, 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 Registration Statement on Form F-1 filed with the United States
 Securities and Exchange Commission.
     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.
 
                                 Optibase Ltd.
            Pro Forma Condensed Consolidated Statement of Operations
                      For the First Quarter Ended March 31
 
         (Excluding acquisition-related costs and stock option charges)
 
 
                                                      March 31,      March 31
                                                       2001            2000
                                                     Unaudited       Unaudited
 
     Revenues                                          $8,014         $7,404
     Gross profit                                       4,443          4,196
     Operating expenses:
       Research and development, net                    2,845          1,038
       Selling, general and
        administrative                                  3,640          2,381
 
         Total operating expenses                       6,485          3,419
     Operating income(loss)                           (2,042)            777
 
     Financial income net                               1,038            512
     Net income(loss)                                $(1,004)         $1,289
     Net income(loss) per share:
       Fully diluted                                  $(0.08)          $0.12
     Weighted average of shares
      used in computing earnings
      per share (fully diluted)                        12,360         10,386
 
    Note:  Amounts in thousands, except net income per share
 
    The above pro forma amounts have been adjusted to exclude the following
    items:
 
     Amortization of goodwill and other
      acquisition-related charges                       1,533
     Stock option charges                                 639             30
 
     Net effect of pro forma adjustments                2,172             30
 
                                 Optibase Ltd.
                 Condensed Consolidated Statement of Operations
                      For the First Quarter Ended March 31
 
                                                      March 31,      March 31,
                                                       2001           2000
                                                     Unaudited      Unaudited
 
     Revenues                                          $8,014         $7,404
     Gross profit                                       4,443          4,196
     Operating expenses:
       Research and development, net                    4,408          1,038
       Selling, general and administrative              4,249          2,411
 
         Total operating expenses                       8,657          3,449
 
     Operating income(loss)                           (4,214)            747
 
     Financial income, net                              1,038            512
     Net income(loss)                                $(3,176)         $1,259
     Net income(loss) per share:
       Fully diluted                                  $(0.26)          $0.12
     Weighted average of shares used in
      computing earnings per share
      (fully diluted)                                  12,360         10,386
 
    Note:  Amounts in thousands, except net income per share
 
                                 Optibase Ltd.
                     Condensed Consolidated Balance Sheets
 
                                                     March 31,    December 31,
                                                       2001           2000
                                                     Unaudited       Audited
 
     Assets
     Current Assets:
       Cash, cash equivalents
        and short term investments                    $53,882        $59,446
       Trade receivables net of bad debts               7,102          6,762
       Inventories                                      5,383          4,408
       Other receivables and prepaid expenses           2,410          3,135
         Total current assets                          68,777         73,751
     Long-term investments in marketable
      securities and bank deposits                          0          1,011
     Other long-term investments                        2,734          2,743
                                                        2,734          3,754
     Fixed assets, net                                  3,284          3,326
     Other assets, net                                 33,660         35,188
     Total assets                                    $108,455       $116,019
 
     Liabilities and shareholders' equity
     Current Liabilities:
     Current Maturities                                  $478           $465
     Trade payables                                     4,167          6,767
       Accrued expenses and other liabilities           8,281          9,634
         Total current liabilities                     12,926         16,866
     Accrued severance pay                              1,652          1,467
     Long term lease                                      286            271
     Total shareholders' equity                        93,591         97,415
     Total liabilities and shareholder's equity      $108,455       $116,019
 
     Note:  Amounts in thousands
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X75161252
 
 SOURCE  Optibase, Ltd.