Exhibit 99.1
SAUL CENTERS, INC.
7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522
(301) 986-6200
Saul Centers, Inc. Reports First Quarter Earnings
April 23, 2003, Bethesda, MD.
Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust
(REIT), announced its first quarter operating results. Total revenues for the
quarter ended March 31, 2003 increased 2.9% to $23,870,000 compared to
$23,191,000 for the 2002 quarter. Operating income before gain on property sold
and minority interests decreased 5.6% to $6,539,000 compared to $6,926,000 for
the comparable 2002 quarter. The Company reported net income of $4,519,000 or
$.29/share for the 2003 quarter, a per share decrease of 32% compared to net
income of $6,335,000 or $0.43/share for the 2002 quarter (basic & diluted). In
the 2002 quarter, the Company recognized a gain on property sold of $1,426,000
when it received final proceeds from the District of Columbia's condemnation and
purchase of the Company's Park Road property.
Overall same property net operating income for the total portfolio
decreased 2.3% for the 2003 first quarter compared to the same period in 2002.
The same property comparisons exclude the Ashburn Village Phase IV development,
placed in service during the summer of 2002, as well as Kentlands Square, which
was acquired in September 2002. Net operating income is calculated as total
revenue less property operating expenses, provision for credit losses and real
estate taxes. Same center net operating income in the shopping center portfolio
decreased 6.5% for the quarter. The decrease was primarily attributable to
increased current year snow removal expenses and decreased tenant termination
fees. Same center net operating income in the office portfolio grew 7.3% for the
2003 first quarter primarily due to the Company's Washington Square property,
now in its second year of operations.
As of March 31, 2003, 93.0% of the portfolio was leased, compared to 94.2%
a year earlier. This decrease in leasing percentage is largely due to the 74,000
square feet of space remaining to lease at 601 Pennsylvania Avenue after the
expiration of a major tenant lease.
Saul Centers
www.SaulCenters.com
Funds From Operations (FFO), a widely accepted non-GAAP financial measure
of operating performance for real estate investment trusts, decreased 4.2% to
$10,581,000 in the 2003 first quarter compared to $11,048,000 for the same
quarter in 2002. On a fully diluted per share basis, FFO was $0.52 per share for
the 2003 quarter, a 7.4% decrease from $0.56 per share for the same quarter last
year. The decrease was primarily attributable to three items:
o A decrease in lease termination fees,
o A decrease in net operating income at the Company's 601 Pennsylvania
Avenue office building due to the expiration of a major tenant lease,
and
o An increase in snow removal expenses, net of tenant recoveries.
FFO is presented on a fully converted basis and is defined as net income
before minority interests, extraordinary items, gains and losses on property
sales and real estate depreciation and amortization.
Saul Centers is a self-managed, self-administered equity real estate
investment trust headquartered in Bethesda, Maryland. Saul Centers currently
operates and manages a real estate portfolio of 35 community and neighborhood
shopping center and office properties totaling approximately 6.5 million square
feet of leasable area. Over 80% of the Company's cash flow is generated from
properties in the metropolitan Washington, DC/Baltimore area.
Contact: Scott V. Schneider
(301) 986-6220
Saul Center
www.SaulCenters.com
Saul Centers, Inc.
Condensed Consolidated Balance Sheets
($ in thousands)
March 31, December 31,
2003 2002
------------ -------------
Assets
Real estate investments
Land......................................................... $ 90,469 $ 90,469
Buildings.................................................... 408,628 405,153
Construction in progress..................................... 10,985 8,292
---------- ----------
510,082 503,914
Accumulated depreciation..................................... (153,622) (150,286)
---------- ----------
356,460 353,628
Cash and cash equivalents......................................... 1,962 1,309
Accounts receivable and accrued income, net....................... 10,682 12,505
Prepaid expenses.................................................. 15,238 15,712
Deferred debt costs, net.......................................... 4,467 4,125
Other assets...................................................... 3,259 1,408
---------- ----------
Total assets................................................. $392,068 $388,687
========== ==========
Liabilities
Notes payable..................................................... $379,868 $380,743
Accounts payable, accrued expenses and other liabilities.......... 18,290 16,727
Deferred income................................................... 3,984 4,484
---------- ----------
Total liabilities............................................ 402,142 401,954
Stockholders' Equity (Deficit)
Common stock...................................................... 154 152
Additional paid in capital........................................ 83,826 79,131
Accumulated deficit............................................... (94,054) (92,550)
---------- ----------
Total stockholders' equity (deficit)......................... (10,074) (13,267)
---------- ----------
Total liabilities and stockholders' equity (deficit) ........ $392,068 $388,687
========== ==========
Saul Centers, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended March 31,
----------------------------
2003 2002
--------- ---------
Revenue
Base rent..................................... $19,051 $18,353
Expense Recoveries............................ 3,805 3,105
Percentage Rent............................... 449 549
Other ........................................ 565 1,184
--------- ---------
Total revenue............................ 23,870 23,191
--------- ---------
Operating Expenses
Property operating expenses................... 3,029 2,359
Provision for credit losses................... 36 155
Real estate taxes............................. 2,131 1,998
Interest expense.............................. 6,494 6,259
Amortization of deferred debt expense......... 198 163
Depreciation and amortization................. 4,042 4,122
General and administrative.................... 1,401 1,209
--------- ---------
Total operating expenses................. 17,331 16,265
--------- ---------
Operating Income.................................. 6,539 6,926
Gain on property disposition...................... - 1,426
Minority Interests................................ (2,020) (2,017)
--------- ---------
Net Income........................................ $ 4,519 $ 1,335
========= =========
Per Share Amounts (basic and fully diluted):
Net income.................................... $ 0.29 $ 0.43
========= =========
Weighted average common stock outstanding:
Common stock.................................. 15,330 14,649
Effect of dilutive options.................... 9 14
--------- ---------
Fully diluted weighted average common stock... 15,339 14,663
========= =========
Saul Centers, Inc.
Supplemental Information
(In thousands, except per share amounts)
Three Months Ended March 31,
----------------------------
2003 2002
-------- ---------
Funds From Operations (1)
Net Income..................................................... $ 4,519 $ 6,335
Less: Gain on sale of property............................ - (1,426)
Add: Real property depreciation & amortization............ 4,042 4,122
Add: Minority Interests................................... 2,020 2,017
------- -------
Funds from operations..................................... $10,581 $11,048
======= =======
Per Share Amounts (basic and fully diluted):
Funds From Operations.......................................... $ 0.52 $ 0.56
======= =======
Weighted average shares outstanding :
Fully diluted weighted average common stock.................... 15,339 14,663
Convertible limited partnership units.......................... 5,177 5,172
------- -------
Fully diluted & converted weighted average shares.............. 20,516 19,835
======= =======
(1) FFO is a widely accepted non-GAAP financial measure of operating performance
of real estate investment trusts. FFO, as defined by the National Association of
Real Estate Investment Trusts (NAREIT), is net income before gains or losses
from property sales, extraordinary items, and before real estate depreciation
and amortization. FFO does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and may
not be 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 meaningful, additional measure of
operating performance primarily because it excludes the assumption that the
value of real estate assets diminishes predictably over time, and because
industry analysts have accepted it as a performance measure. Our presentation of
FFO, which follows the NAREIT definition, may not be comparable to similarly
titled measures employed by other REITs.