BFS Saul Centers Inc

BETHESDA, Md., Aug. 8 /PRNewswire-FirstCall/ -- Saul Centers, Inc. (NYSE:BFS), an equity real estate investment trust (REIT), announced its operating results for the quarter ended June 30, 2007. Total revenue for the quarter ended June 30, 2007 increased 9.9% to $37,077,000 compared to $33,748,000 for the 2006 quarter. Operating income, defined as net income available to common stockholders before minority interests and preferred stock dividends, increased 14.8% to $11,077,000 for the 2007 quarter compared to $9,648,000 for the comparable 2006 quarter. Net income available to common stockholders was $6,926,000 or $0.39 per diluted share for the 2007 quarter, a per share increase of 14.7% compared to net income available to common stockholders of $5,797,000 or $0.34 per diluted share for the 2006 quarter. The operating income increase for the 2007 quarter was produced by (1) Lansdowne Town Center, the 188,000 square foot shopping center development near Leesburg, Virginia, which commenced operations during the fourth quarter 2006, (2) successful leasing activity at several core properties and (3) to a lesser extent other development properties. Same property revenue for the total portfolio increased 4.7% for the 2007 quarter compared to the 2006 quarter and same property operating income increased 3.7%. The same property comparisons exclude the results of operations of properties not in operation for each of the comparable reporting periods. Same property operating income in the shopping center portfolio increased 3.1% for the 2007 quarter compared to the prior year's quarter. Same property operating income in the office portfolio grew 5.9% for the 2007 quarter. Successful leasing activity at several core properties produced the significant portion of increased property operating income for the 2007 quarter. For the six month period ended June 30, 2007, total revenues increased 9.7% to $73,761,000 compared to $67,215,000 for the 2006 period. Operating income before minority interests and preferred stock dividends increased 15.3% to $22,086,000 compared to $19,157,000 for the comparable 2006 period. Net income available to common stockholders was $13,800,000 or $0.78 per diluted share for the 2007 period, a per share increase of 16.4% compared to $11,504,000 or $0.67 per diluted share for the 2006 period. Overall same property revenues for the total portfolio increased 5.0% for the 2007 six month period compared to the same period in 2006 and same property operating income increased 3.6%. Shopping center same property operating income increased 3.2% due to successful leasing activity at several core shopping centers and office same property operating income increased 4.9%. As of June 30, 2007, 95.7% of the operating portfolio was leased, compared to 96.6% a year earlier. The company's significant development property, the 188,000 square foot Lansdowne Town Center, was 91.3% leased at June 30, 2007. On a same property basis, 95.8% of the portfolio was leased, compared to the prior year level of 96.6%. Approximately half of the 2007 leasing percentage decrease resulted from the departure of a 32,000 square foot local grocery anchor at Belvedere shopping center in Baltimore, Maryland. Funds From Operations (FFO) available to common shareholders (after deducting preferred stock dividends) increased 10.9% to $15,580,000 in the 2007 quarter compared to $14,048,000 for the same quarter in 2006. On a diluted per share basis, FFO available to common shareholders increased 8.1% to $0.67 per share in 2007 compared to $0.62 per share for the 2006 quarter. 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. FFO increased in the 2007 quarter due to increased operating income from (1) Lansdowne Town Center, (2) successful leasing activity at several core properties and (3) to a lesser extent acquisition and development properties. FFO available to common shareholders for the 2007 six month period increased 11.1% to $31,037,000 from $27,933,000 during the 2006 period. FFO available to common shareholders increased 8.1% to $1.34 per diluted share for the 2007 six month period compared to $1.24 per diluted share for the 2006 period. Saul Centers is a self-managed, self-administered equity real estate investment trust headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio of 48 community and neighborhood shopping center and office properties totaling approximately 8.0 million square feet of leasable area. Over 80% of the Company's property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area. Saul Centers, Inc. Condensed Consolidated Balance Sheets ($ in thousands) June 30, December 31, 2007 2006 (Unaudited) Assets Real estate investments Land $157,830 $154,047 Buildings and equipment 652,201 631,797 Construction in progress 46,505 56,017 856,536 841,861 Accumulated depreciation (223,652) (214,210) 632,884 627,651 Cash and cash equivalents 11,535 8,061 Accounts receivable and accrued income, net 30,458 33,248 Deferred leasing costs, net 16,363 18,137 Prepaid expenses, net 1,349 2,507 Deferred debt costs, net 5,266 5,328 Other assets 9,012 5,605 Total assets $706,867 $700,537 Liabilities Mortgage notes payable $520,345 $487,443 Revolving credit facility - 35,000 Dividends and distributions payable 12,115 11,558 Accounts payable, accrued expenses and other liabilities 15,029 16,409 Deferred income 11,273 12,251 Total liabilities 558,762 562,661 Minority Interests 5,305 5,785 Stockholders' Equity Preferred stock 100,000 100,000 Common stock 176 173 Additional paid in capital 153,870 141,554 Accumulated deficit (111,246) (109,636) Total stockholders' equity 142,800 132,091 Total liabilities and stockholders' equity $706,867 $700,537 Saul Centers, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 (Unaudited) (Unaudited) Revenue Base rent $29,531 $27,190 $58,552 $54,090 Expense recoveries 6,282 5,407 12,880 10,920 Percentage rent 312 272 514 598 Other 952 879 1,815 1,607 Total revenue 37,077 33,748 73,761 67,215 Operating Expenses Property operating expenses 4,343 3,963 9,148 7,931 Provision for credit losses 103 107 215 187 Real estate taxes 3,538 2,994 7,064 6,046 Interest expense and amortization of deferred debt 8,325 8,072 16,619 16,091 Depreciation and amortization of deferred leasing costs 6,503 6,400 12,951 12,776 General and administrative 3,188 2,564 5,678 5,027 Total operating expenses 26,000 24,100 51,675 48,058 Operating Income 11,077 9,648 22,086 19,157 Minority Interests (2,151) (1,851) (4,286) (3,653) Net Income 8,926 7,797 17,800 15,504 Preferred Dividends (2,000) (2,000) (4,000) (4,000) Net Income Available to Common Stockholders $6,926 $5,797 $13,800 $11,504 Per Share Net Income Available to Common Stockholders: Diluted $0.39 $0.34 $0.78 $0.67 Weighted Average Common Stock Outstanding: Common stock 17,531 16,993 17,473 16,952 Effect of dilutive options 176 132 190 142 Diluted weighted average common stock 17,707 17,125 17,663 17,094 Saul Centers, Inc. Supplemental Information (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 (Unaudited) (Unaudited) Reconciliation of Net Income to Funds From Operations (FFO): (1) Net Income $8,926 $7,797 $17,800 $15,504 Add: Real property depreciation & amortization 6,503 6,400 12,951 12,776 Add: Minority interests 2,151 1,851 4,286 3,653 FFO 17,580 16,048 35,037 31,933 Less: Preferred dividend (2,000) (2,000) (4,000) (4,000) FFO available to common shareholders $15,580 $14,048 $31,037 $27,933 Weighted Average Shares Outstanding: Diluted weighted average common stock 17,707 17,125 17,663 17,094 Convertible limited partnership units 5,417 5,400 5,416 5,374 Diluted & converted weighted average shares 23,124 22,525 23,079 22,468 Per Share Amounts: FFO available to common shareholders $0.67 $0.62 $1.34 $1.24 Reconciliation of Net Income to Same Property Operating Income: Net Income $8,926 $7,797 $17,800 $15,504 Add: Interest expense and amortization of deferred debt 8,325 8,072 16,619 16,091 Add: Depreciation and amortization of deferred leasing costs 6,503 6,400 12,951 12,776 Add: General and administrative 3,188 2,564 5,678 5,027 Less: Interest income (143) (99) (238) (166) Add: Minority interests 2,151 1,851 4,286 3,653 Property operating income 28,950 26,585 57,096 52,885 Less: Acquisitions & developments (1,435) (64) (2,940) (617) Total same property operating income $27,515 $26,521 $54,156 $52,268 Total Shopping Centers $20,549 $19,940 $40,269 $39,034 Total Office Properties 6,966 6,581 13,887 13,234 Total same property operating income $27,515 $26,521 $54,156 $52,268 DATASOURCE: Saul Centers, Inc. CONTACT: Scott V. Schneider of Saul Centers, Inc., +1-301-986-6220 Web site: http://www.saulcenters.com/

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