BFS Saul Centers Inc

BETHESDA, Md., Aug. 8 /PRNewswire-FirstCall/ -- Saul Centers, Inc. (NYSE:BFS), an equity real estate investment trust, announced its second quarter 2006 operating results. Total revenues for the quarter ended June 30, 2006 increased 9.7% to $33,748,000 compared to $30,752,000 for the 2005 quarter. Operating income before minority interests and preferred stock dividends increased 7.8% to $9,648,000 compared to $8,952,000 for the comparable 2005 quarter. Net income available to common stockholders was $5,797,000 or $0.34 per diluted share for the 2006 quarter, a per share increase of 17.2% compared to $4,871,000 or $0.29 per diluted share for the 2005 quarter. Successful leasing activity at several core shopping centers and operating income from development properties produced the significant portion of increased operating income for the 2006 quarter. Overall same property revenues for the total portfolio increased 4.1% for the 2006 second quarter compared to the same quarter in 2005 and same property operating income increased 4.0%. The same property comparisons exclude the results of operations of properties not in operation for each of the comparable reporting periods. Property operating income is calculated as total property revenue less property operating expenses, provision for credit losses and real estate taxes. Same property operating income in the shopping center portfolio increased 6.5% for the 2006 second quarter, compared to the prior year's quarter. Successful leasing activity at several core shopping centers was the primary contributor to the improvement in same property results. Same property operating income in the office portfolio declined 2.3% for the 2006 quarter, compared to the prior year's quarter, due to higher lease termination fees recognized in the 2005 quarter. For the six month period ended June 30, 2006, total revenues increased 10.1% to $67,215,000 compared to $61,059,000 for the 2005 period. Operating income before minority interests and preferred stock dividends increased 8.9% to $19,157,000 compared to $17,591,000 for the comparable 2005 period. Net income available to common stockholders was $11,504,000 or $0.67 per diluted share for the 2006 period, a per share increase of 17.5% compared to $9,481,000 or $0.57 per diluted share for the 2005 period. Overall same property revenues for the total portfolio increased 4.3% for the 2006 six month period compared to the same period in 2005 and same property operating income increased 4.4%. Shopping center same property operating income increased 6.5% due to successful leasing activity at several core shopping centers and office same property operating income declined 1.1% due to higher lease termination fees recognized in the 2005 period. As of June 30, 2006, 96.7% of the operating portfolio was leased, compared to 93.2% a year earlier. The 2005 leasing percentage was adversely affected by the combined impact of a 113,000 square foot vacancy at Great Eastern Plaza and 133,000 square feet of vacant space in the Lexington Mall which the Company was not leasing in anticipation of redeveloping the shopping center. Since September 30, 2005, the Company has been actively planning the redevelopment of Lexington and has taken the space out of service. On a same property basis, 96.8% of the portfolio was leased, compared to the prior year level of 94.8%. The increase in 2006 leasing percentage resulted from the lease-up of space at Great Eastern Plaza, Southside Plaza and Olde Forte Village and to a lesser extent, improved leasing at several other properties. Funds From Operations (FFO) available to common shareholders (after deducting preferred stock dividends) increased 12.5% to $14,048,000 in the 2006 second quarter compared to $12,484,000 for the same quarter in 2005. FFO, a widely accepted non-GAAP financial measure of operating performance for real estate investment trusts, is defined as net income, plus minority interests, extraordinary items and real estate depreciation and amortization, excluding gains and losses from property sales. On a diluted per share basis, FFO available to common shareholders increased 8.8% to $0.62 per share for the 2006 quarter compared to $0.57 per share for the 2005 quarter. FFO available to common shareholders for the 2006 six month period increased 12.9% to $27,933,000 from $24,738,000 during the 2005 period. Fully diluted per diluted share FFO available to common shareholders increased 9.7% to $1.24 per diluted share for the 2006 six month period compared to $1.13 per diluted share for the 2005 period. These increases resulted primarily from increased operating income from successful leasing activity at several core shopping centers and operating income from new developments. Saul Centers is a self-managed, self-administered equity real estate investment trust headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio of 46 community and neighborhood shopping center and office properties totaling approximately 7.7 million square feet of leaseable area. Over 80% of the Company's cash flow is generated from properties in the metropolitan Washington, DC/Baltimore area. Saul Centers, Inc. Condensed Consolidated Balance Sheets ($ in thousands) June 30, December 31, 2006 2005 Assets (Unaudited) Real estate investments Land $149,863 $139,421 Buildings and equipment 607,119 575,504 Construction in progress 62,577 47,868 819,559 762,793 Accumulated depreciation (205,122) (195,376) 614,437 567,417 Cash and cash equivalents 3,045 8,007 Accounts receivable and accrued income, net 23,136 23,410 Leasing costs, net 19,698 19,834 Prepaid expenses, net 1,473 2,540 Deferred debt costs, net 5,845 5,875 Other assets 6,995 4,386 Total assets $674,629 $631,469 Liabilities Mortgage notes payable $487,242 $471,931 Revolving credit facility 26,000 10,500 Dividends and distributions payable 11,418 11,319 Accounts payable, accrued expenses and other liabilities 17,909 13,679 Deferred income 12,546 9,558 Total liabilities 555,115 516,987 Minority Interests 6,194 3,068 Stockholders' Equity Preferred stock 100,000 100,000 Common stock 170 169 Additional paid in capital 128,009 123,339 Accumulated deficit (114,859) (112,094) Total stockholders' equity 113,320 111,414 Total liabilities and stockholders' equity $674,629 $631,469 Saul Centers, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Revenue (Unaudited) (Unaudited) Base rent $27,190 $24,509 $54,090 $48,641 Expense recoveries 5,407 4,700 10,920 9,680 Percentage rent 272 507 598 1,011 Other 879 1,036 1,607 1,727 Total revenue 33,748 30,752 67,215 61,059 Operating Expenses Property operating expenses 3,963 3,483 7,931 7,256 Provision for credit losses 107 79 187 133 Real estate taxes 2,994 2,757 6,046 5,340 Interest expense and amortization of deferred debt 8,072 7,615 16,091 15,024 Depreciation and amortization of leasing costs 6,400 5,532 12,776 11,147 General and administrative 2,564 2,334 5,027 4,568 Total operating expenses 24,100 21,800 48,058 43,468 Operating Income 9,648 8,952 19,157 17,591 Minority Interests (1,851) (2,081) (3,653) (4,110) Net Income 7,797 6,871 15,504 13,481 Preferred Dividends (2,000) (2,000) (4,000) (4,000) Net Income Available to Common Stockholders $5,797 $4,871 $11,504 $9,481 Per Share Net Income Available to Common Stockholders: Diluted $0.34 $0.29 $0.67 $0.57 Weighted Average Common Stock Outstanding: Common stock 16,993 16,613 16,952 16,540 Effect of dilutive options 132 94 142 92 Diluted weighted average common stock 17,125 16,707 17,094 16,632 Saul Centers, Inc. Supplemental Information (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Reconciliation of Net Income (Unaudited) (Unaudited) to Funds From Operations (FFO)(1) Net Income $7,797 $6,871 $15,504 $13,481 Add: Real property depreciation & amortization 6,400 5,532 12,776 11,147 Add: Minority interests 1,851 2,081 3,653 4,110 FFO 16,048 14,484 31,933 28,738 Less: Preferred dividends (2,000) (2,000) (4,000) (4,000) FFO available to common shareholders $14,048 $12,484 $27,933 $24,738 Weighted Average Shares Outstanding: Diluted weighted average common stock 17,125 16,707 17,094 16,632 Convertible limited partnership units 5,400 5,201 5,374 5,201 Diluted & converted weighted average shares 22,525 21,908 22,468 21,833 Per Share Amounts: FFO available to common shareholders $0.62 $0.57 $1.24 $1.13 Reconciliation of Net Income to Same Property Operating Income: Net Income $7,797 $6,871 $15,504 $13,481 Add: Interest expense and deferred debt amortization 8,072 7,615 16,091 15,024 Add: Depreciation and amortization 6,400 5,532 12,776 11,147 Add: General and administrative 2,564 2,334 5,027 4,568 Less: Interest income (99) (157) (166) (297) Add: Minority interests 1,851 2,081 3,653 4,110 Property operating income 26,585 24,276 52,885 48,033 Less: Acquisitions & developments (1,417) (45) (3,307) (460) Less: Lexington property operating income 17 (23) (2) (79) Total same property operating income $25,185 $24,208 $49,576 $47,494 Total Shopping Centers $18,604 $17,475 $36,342 $34,112 Total Office Properties 6,581 6,733 13,234 13,382 Total same property operating income $25,185 $24,208 $49,576 $47,494 (1) FFO is a widely accepted non-GAAP financial measure of operating performance of real estate investment trusts ("REITs"). FFO is defined by the National Association of Real Estate Investment Trusts as net income, computed in accordance with GAAP, plus minority interests, extraordinary items and real estate depreciation and amortization, excluding gains or losses from property sales. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Consolidated Statements of Cash Flows in the Company's SEC reports for the applicable periods. FFO should not be considered as an alternative to net income, its most directly comparable GAAP measure, as an indicator of the Company's operating performance, or as an alternative to cash flows as a measure of liquidity. Management considers FFO a supplemental measure of operating performance and along with cash flow from operating activities, financing activities and investing activities, it provides investors with an indication of the ability of the Company to incur and service debt, to make capital expenditures and to fund other cash needs. FFO may not be comparable to similarly titled measures employed by other REITs. DATASOURCE: Saul Centers, Inc. CONTACT: Scott V. Schneider of Saul Centers, Inc., +1-301-986-6220 Web site: http://www.saulcenters.com/

Copyright