The financial report for the second quarter of 2006 that Optibase Ltd. (Nasdaq: OBAS) published today could be called a slight improvement compared with the preceding quarter, but worse than the results for the corresponding quarter of last year. This was the first full quarter for Optibase chairman and president Tom Wyler, who is serving as interim CEO, since replacing CEO Uzi Breier. Breier left the company over management disagreements with the company’s board.
Optibase provides IPTV and streaming solutions for video broadcasts for telecommunications and service providers, broadcasting companies and content producers. The company posted $4.3 million revenue for the second quarter, 7.6% more than for the preceding quarter, but 33% less than for the corresponding quarter of last year.
Obtibase’s gross profit margin improved compared with the corresponding quarter. The company posted a gross profit of $2.4 million for the corresponding quarter, 56.7% of turnover, compared with 55% for the corresponding quarter of last year and 57.3% for the preceding quarter.
Obtibase cut its R&D, administrative and marketing expenses, but was still unable to make an operating profit for the second quarter, posting an operating loss of $1.3 million. The company posted a net loss of $1.1 million for the quarter, or $0.08 per share, compared with a net profit of $113,000 for the corresponding quarter. The company reduced its net loss by 11.7% compared with the preceding quarter.
At the end of the second quarter, Obtibase had $40.9 million in cash. It has a market cap of $45 million, after its share fell 34% since the beginning of the year.
Optibase CFO Danny Lustiger said a quarter of the company’s revenue during the second quarter came from IPTV and the rest from the company’s other broadcasting and compressing products. "As the emerging IPTV market evolves, we believe Optibase has the right technology and the right solution to grow in tandem with the industry."
“Globes”: When do you think that Optibase will achieve a breakthrough in the IPTV market?
Lustiger: “This is a new market right now. Compared with last year, we’re already seeing a lot more opportunities. The world is now building IPTV infrastructures, the first stage for creating the market. The technology is ready, and we’re now offering MPEG-4 technology that provides the same quality at half the bandwidth. Naturally, there’s a process of adapting to the new technology, and I believe that everything will be ready next year, and the market will grow.”
Published by Globes [online], Israel business news - www.globes.co.il - on July 24, 2006
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