BETHESDA, Md., May 3 /PRNewswire-FirstCall/ -- Saul Centers, Inc. , an equity real estate investment trust (REIT), announced its operating results for the quarter ended March 31, 2010. Total revenue for the three months ended March 31, 2010 ("2010 Quarter") increased 10.0% to $43,648,000 compared to $39,689,000 for the three months ended March 31, 2009 ("2009 Quarter"). Operating income, which is net income available to common stockholders before income attributable to the noncontrolling interest and preferred stock dividends, increased 8.9% to $12,574,000 for the 2010 Quarter compared to $11,550,000 for the 2009 Quarter. Net income available to common stockholders was $6,768,000, or $0.37 per diluted share, for the 2010 Quarter compared to net income available to common stockholders of $5,956,000, or $0.33 per diluted share, for the 2009 Quarter.
Same property revenue for the total portfolio increased 8.6% for the 2010 Quarter compared to the 2009 Quarter and same property operating income increased 4.2%. The same property comparisons exclude the results of operations of properties not in operation for each of the comparable reporting quarters. Same property operating income in the shopping center portfolio increased 7.3% for the 2010 Quarter compared to the 2009 Quarter. The primary cause of this increase was the collection of rents and other past due charges from a former anchor tenant. Excluding this one-time revenue, same property shopping center operating income declined 1.3% from the prior year. Same property operating income in the office portfolio decreased 5.7% for the 2010 Quarter compared to the 2009 Quarter primarily due to a decrease in lease termination fees.
As of March 31, 2010, 91.6% of the operating portfolio was leased compared to 92.9% at March 31, 2009. On a same property basis, 92.7% of the portfolio was leased, compared to the prior year level of 93.3%. The 2010 leasing percentages decreased due to a net decrease of approximately 52,000 square feet of leased space, of which approximately 30,000 square feet was attributable to Avenel Business Park.
Funds from operations (FFO) available to common shareholders (after deducting preferred stock dividends) increased 7.1% to $15,862,000 in the 2010 Quarter compared to $14,806,000 for the 2009 Quarter. On a diluted per share basis, FFO available to common shareholders increased 4.7% to $0.67 per share for the 2010 Quarter compared to $0.64 per share for the 2009 Quarter. FFO, a widely accepted non-GAAP financial measure of operating performance for REITs, is defined as net income plus real estate depreciation and amortization, and excluding gains from property dispositions and extraordinary items. FFO increased in the 2010 Quarter primarily due to the collection of rents and other past due charges from a former anchor tenant ($1,939,000 or $0.08 per diluted share) offset in part by a decline in property operating income largely due to snow removal expense, net of tenant recoveries, from severe winter storms impacting the Mid-Atlantic region primarily in February 2010 (approximately $1,200,000 or $0.05 per diluted share).
Saul Centers is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio of 52 community and neighborhood shopping center and office properties totaling approximately 8.4 million square feet of leasable area. Over 80% of the Company's property operating income is generated from properties in the metropolitan Washington, DC/Baltimore area.
Saul Centers, Inc. Condensed Consolidated Balance Sheets ($ in thousands) December March 31, 31, 2010 2009 Assets (Unaudited) Real estate investments Land $223,286 $223,193 Buildings and equipment 742,471 740,442 Construction in progress 165,400 147,589 1,131,157 1,111,224 Accumulated depreciation (282,271) (276,310) 848,886 834,914 Cash and cash equivalents 19,432 20,607 Accounts receivable and accrued income, net 38,599 37,503 Deferred leasing costs, net 15,191 15,609 Prepaid expenses, net 2,532 3,096 Deferred debt costs, net 7,291 7,537 Other assets 8,454 6,308 Total assets $940,385 $925,574 Liabilities Mortgage notes payable $572,236 $576,069 Construction loans payable 71,760 60,737 Dividends and distributions payable 12,260 12,220 Accounts payable, accrued expenses and other liabilities 26,923 23,395 Deferred income 26,952 27,090 Total liabilities 710,131 699,511 Stockholders' equity Preferred stock 179,328 179,328 Common stock 181 180 Additional paid-in capital 173,239 169,363 Accumulated deficit (123,925) (124,167) Total Saul Centers, Inc. stockholders' equity 228,823 224,704 Noncontrolling interest 1,431 1,359 Total stockholders' equity 230,254 226,063 ------- ------- Total liabilities and stockholders' equity $940,385 $925,574 ======== ======== Saul Centers, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) Three Months Ended March 31, ------------------ 2010 2009 ---- ---- Revenue (Unaudited) Base rent $31,695 $30,665 Expense recoveries 8,727 7,580 Percentage rent 358 233 Other 2,868 1,211 Total revenue 43,648 39,689 Operating expenses Property operating expenses 7,679 5,370 Provision for credit losses 197 327 Real estate taxes 4,685 4,416 Interest expense and amortization of deferred debt costs 8,591 8,196 Depreciation and amortization of deferred leasing costs 7,073 7,041 General and administrative 2,849 2,789 Total operating expenses 31,074 28,139 Net income 12,574 11,550 Income attributable to the noncontrolling interest (2,021) (1,809) Net income attributable to Saul Centers, Inc. 10,553 9,741 Preferred dividends (3,785) (3,785) Net income available to common stockholders $6,768 $5,956 Per share net income available to common stockholders : Diluted $0.37 $0.33 ===== ===== Weighted average common stock : Common stock 18,084 17,870 Effect of dilutive options 82 30 Diluted weighted average common stock 18,166 17,900 ====== ====== Saul Centers, Inc. Supplemental Information (In thousands, except per share amounts) Three Months Ended ------------------ March 31, --------- 2010 2009 ---- ---- Reconciliation of net income to FFO available to common shareholders: (1) (Unaudited) Net income $12,574 $11,550 Add: Real property depreciation and amortization 7,073 7,041 ----- ----- FFO 19,647 18,591 Less: Preferred dividends (3,785) (3,785) FFO available to common shareholders $15,862 $14,806 ======= ======= Weighted average shares : Diluted weighted average common stock 18,166 17,900 Convertible limited partnership units 5,416 5,416 Diluted & converted weighted average shares 23,582 23,316 ====== ====== Per share amounts: FFO available to common shareholders (diluted) $0.67 $0.64 ===== ===== Reconciliation of net income to same property operating income: Net income $12,574 $11,550 Add: Interest expense and amortization of deferred debt costs 8,591 8,196 Add: Depreciation and amortization of deferred leasing costs 7,073 7,041 Add: General and administrative 2,849 2,789 Less: Interest income - (3) Property operating income 31,087 29,573 Less: Acquisitions & developments (301) (22) ---- --- Total same property operating income $30,786 $29,551 ======= ======= Total shopping centers $24,052 $22,410 Total office properties 6,734 7,141 Total same property operating income $30,786 $29,551 ======= ======= (1) The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income- producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by NAREIT as net income, computed in accordance with GAAP, plus real estate depreciation and amortization, and excluding extraordinary items and gains or losses from property dispositions. 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 Company's Consolidated Statements of Cash Flows for the applicable periods. There are no material legal or functional restrictions on the use of FFO. 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 meaningful supplemental measure of operating performance because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time (i.e. depreciation), which is contrary to what we believe occurs with our assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.
Saul Centers, Inc.
CONTACT: Scott V. Schneider, Saul Centers, Inc., +1-301-986-6220
Web Site: http://www.saulcenters.com/
