EX-99.1 2 bfs-03312024xex991.htm EX-99.1 Document

Exhibit 99.1
SAUL CENTERS, INC.
7501 Wisconsin Avenue, Suite 1500E, Bethesda, Maryland 20814-6522
(301) 986-6200
Saul Centers, Inc. Reports First Quarter 2024 Earnings
May 2, 2024, Bethesda, MD.
Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust (“REIT”), announced operating results for the quarter ended March 31, 2024 (“2024 Quarter”). Total revenue for the 2024 Quarter increased to $66.7 million from $63.0 million for the quarter ended March 31, 2023 (“2023 Quarter”). Net income increased to $18.3 million for the 2024 Quarter from $17.7 million for the 2023 Quarter primarily due to (a) higher commercial base rent of $1.4 million and (b) higher residential base rent of $0.3 million, partially offset by (c) higher interest expense, net and amortization of deferred debt costs of $0.6 million and (d) higher general and administrative costs of $0.5 million. Net income available to common stockholders increased to $10.8 million, or $0.45 per basic and diluted share, for the 2024 Quarter from $10.7 million, or $0.45 per basic and diluted share, for the 2023 Quarter.
Same property revenue increased $3.6 million, or 5.8%, and same property operating income increased $1.8 million, or 3.8%, for the 2024 Quarter compared to the 2023 Quarter. The $3.6 million increase in same property revenue for the 2024 Quarter compared to the 2023 Quarter was primarily due to (a) higher commercial base rent of $1.4 million, (b) higher expense recoveries of $1.7 million and (c) higher residential base rent of $0.3 million. Shopping Center same property operating income for the 2024 Quarter totaled $36.0 million, a $1.0 million increase from the 2023 Quarter. Shopping Center same property operating income increased primarily due to higher base rent of $1.0 million. Mixed-Use same property operating income totaled $12.6 million, a $0.8 million increase from the 2023 Quarter. Mixed-Use same property operating income increased primarily due to (a) higher commercial base rent of $0.4 million and (b) residential base rent of $0.3 million. No properties were excluded from same property results. Reconciliations of (a) total revenue to same property revenue and (b) net income to same property operating income are attached to this press release.
Same property revenue and same property operating income are non-GAAP financial measures of performance and improve the comparability of these measures by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. We define same property revenue as total revenue minus the revenue of properties not in operation for the entirety of the comparable reporting periods. We define same property operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on early extinguishment of debt minus (f) gains on sale of property and (g) the results of properties not in operation for the entirety of the comparable periods.
Funds from operations (“FFO”) available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) increased to $27.5 million, or $0.80 per basic and diluted share, in the 2024 Quarter compared to $26.9 million, or $0.81 and $0.79 per basic and diluted share, respectively, in the 2023 Quarter. FFO is a non-GAAP supplemental earnings measure that the Company considers meaningful in measuring its operating performance. A reconciliation of net income to FFO is attached to this press release. The increase in FFO available to common stockholders and noncontrolling interests was primarily the result of (a) higher commercial base rent of $1.4 million and (b) higher residential base rent of $0.3 million, partially offset by (c) higher interest expense, net and amortization of deferred debt costs of $0.6 million and (d) higher general and administrative costs of $0.5 million.
As of March 31, 2024, 94.6% of the commercial portfolio was leased, compared to 93.9% as of March 31, 2023. As of March 31, 2024, the residential portfolio was 98.7% leased compared to 98.2% as of March 31, 2023.
Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 61 properties, which includes (a) 50 community and neighborhood shopping centers and seven mixed-use properties with approximately 9.8 million square feet of leasable area and (b) four non-operating land and development properties. Over 85% of the Saul Centers’ property operating income is generated by properties in the metropolitan
Washington, D.C./Baltimore area.

Contact:    Carlos L. Heard
    (301) 986-7737


www.SaulCenters.com
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Safe Harbor Statement
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on (i) Form 10-K for the year ended December 31, 2023 and (ii) our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and include the following: (i) the ability of our tenants to pay rent, (ii) our reliance on shopping center “anchor” tenants and other significant tenants, (iii) our substantial relationships with members of the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members, (iv) risks of financing, such as increases in interest rates, restrictions imposed by our debt, our ability to meet existing financial covenants and our ability to consummate planned and additional financings on acceptable terms, (v) our development activities, (vi) our access to additional capital, (vii) our ability to successfully complete additional acquisitions, developments or redevelopments, or if they are consummated, whether such acquisitions, developments or redevelopments perform as expected, (viii) adverse trends in the retail, office and residential real estate sectors, (ix) risks relating to cybersecurity, including disruption to our business and operations and exposure to liabilities from tenants, employees, capital providers, and other third parties, (x) risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, the relative illiquidity of real estate and environmental risks, and (xi) risks related to our status as a REIT for federal income tax purposes, such as the existence of complex regulations relating to our status as a REIT, the effect of future changes to REIT requirements as a result of new legislation and the adverse consequences of the failure to qualify as a REIT. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and risk factors included in (i) our Annual Report on Form 10-K for the year ended December 31, 2023 and (ii) our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

www.SaulCenters.com
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Saul Centers, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands, except per share amounts)March 31,
2024		December 31,
2023
Assets
Real estate investments
Land$511,529 $511,529 
Buildings and equipment1,599,887 1,595,023 
Construction in progress557,711 514,553 
2,669,127 2,621,105 
Accumulated depreciation(739,406)(729,470)
Total real estate investments, net1,929,721 1,891,635 
Cash and cash equivalents7,079 8,407 
Accounts receivable and accrued income, net53,814 56,032 
Deferred leasing costs, net23,931 23,728 
Other assets15,761 14,335 
Total assets$2,030,306 $1,994,137 
Liabilities
Mortgage notes payable, net$927,256 $935,451 
Revolving credit facility payable, net272,909 274,715 
Term loan facility payable, net99,568 99,530 
Construction loans payable, net108,917 77,305 
Accounts payable, accrued expenses and other liabilities62,988 57,022 
Deferred income21,610 22,748 
Dividends and distributions payable23,127 22,937 
Total liabilities1,516,375 1,489,708 
Equity
Preferred stock, 1,000,000 shares authorized:
Series D Cumulative Redeemable, 30,000 shares issued and outstanding
75,000 75,000 
Series E Cumulative Redeemable, 44,000 shares issued and outstanding
110,000 110,000 
Common stock, $0.01 par value, 40,000,000 shares authorized, 24,099,077 and 24,082,887 shares issued and outstanding, respectively
241 241 
Additional paid-in capital450,781 449,959 
Distributions in excess of accumulated net income(292,213)(288,825)
Accumulated other comprehensive income3,278 2,014 
Total Saul Centers, Inc. equity347,087 348,389 
Noncontrolling interests166,844 156,040 
Total equity513,931 504,429 
Total liabilities and equity$2,030,306 $1,994,137 

www.SaulCenters.com
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Saul Centers, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended March 31,
20242023
Revenue(unaudited)
Rental revenue$65,299 $61,829 
Other1,393 1,220 
Total revenue66,692 63,049 
Expenses
Property operating expenses10,545 8,785 
Real estate taxes7,623 7,495 
Interest expense, net and amortization of deferred debt costs12,448 11,821 
Depreciation and amortization of deferred leasing costs12,029 12,017 
General and administrative5,784 5,268 
Total expenses48,429 45,386 
Net Income18,263 17,663 
Noncontrolling interests
Income attributable to noncontrolling interests(4,633)(4,161)
Net income attributable to Saul Centers, Inc.13,630 13,502 
Preferred stock dividends(2,798)(2,798)
Net income available to common stockholders$10,832 $10,704 
Per share net income available to common stockholders
Basic and diluted$0.45 $0.45 


www.SaulCenters.com
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Reconciliation of net income to FFO available to common stockholders and
noncontrolling interests (1)
Three Months Ended March 31,
(In thousands, except per share amounts)20242023
Net income$18,263 $17,663 
Add:
Real estate depreciation and amortization12,029 12,017 
FFO30,292 29,680 
Subtract:
Preferred stock dividends(2,798)(2,798)
FFO available to common stockholders and noncontrolling interests$27,494 $26,882 
Weighted average shares and units:
Basic34,348 33,323 
Diluted (2)
34,352 34,031 
Basic FFO per share available to common stockholders and noncontrolling interests$0.80 $0.81 
Diluted FFO per share available to common stockholders and noncontrolling interests$0.80 $0.79 


(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 impairment charges on real estate assets and gains or losses from real estate 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 the Company believes occurs with its 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.
(2)    Beginning March 5, 2021, fully diluted shares and units includes 1,416,071 limited partnership units that were held in escrow related to the contribution of Twinbrook Quarter. Half of the units held in escrow were released on October 18, 2021. The remaining units held in escrow were released on October 18, 2023.

www.SaulCenters.com
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Reconciliation of revenue to same property revenue (1)
(in thousands)Three Months Ended March 31,
20242023
(unaudited)
Total revenue$66,692 $63,049 
Less: Acquisitions, dispositions and development properties— — 
Total same property revenue$66,692 $63,049 
Shopping Centers$46,932 $44,225 
Mixed-Use properties19,760 18,824 
Total same property revenue$66,692 $63,049 
Total Shopping Center revenue$46,932 $44,225 
Less: Shopping Center acquisitions, dispositions and development properties— — 
Total same Shopping Center revenue$46,932 $44,225 
Total Mixed-Use property revenue$19,760 $18,824 
Less: Mixed-Use acquisitions, dispositions and development properties— — 
Total same Mixed-Use property revenue$19,760 $18,824 

(1)     Same property revenue is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. Same property revenue adjusts property revenue by subtracting the revenue of properties not in operation for the entirety of the comparable reporting periods. Same property revenue is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole. Same property revenue should not be considered as an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company’s operating performance. Management considers same property revenue a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company’s funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company’s properties. Management believes the exclusion of these items from same property revenue is useful because the resulting measure captures the actual revenue generated by operating the Company’s properties. Other REITs may use different methodologies for calculating same property revenue. Accordingly, the Company’s same property revenue may not be comparable to those of other REITs.


Mixed-Use same property revenue is composed of the following:
Three Months Ended March 31,
(In thousands)20242023
Office mixed-use properties (1)$9,753 $9,145 
Residential mixed-use properties (residential activity) (2)8,838 8,532 
Residential mixed-use properties (retail activity) (3)1,169 1,147 
Total Mixed-Use same property revenue$19,760 $18,824 
(1)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square
(2)Includes Clarendon South Block, The Waycroft and Park Van Ness
(3)Includes The Waycroft and Park Van Ness


www.SaulCenters.com
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Reconciliation of net income to same property operating income (1)
Three Months Ended March 31,
(In thousands)20242023
(unaudited)
Net income$18,263 $17,663 
Add: Interest expense, net and amortization of deferred debt costs12,448 11,821 
Add: Depreciation and amortization of deferred leasing costs12,029 12,017 
Add: General and administrative5,784 5,268 
Property operating income48,524 46,769 
Less: Acquisitions, dispositions and development properties— — 
Total same property operating income$48,524 $46,769 
Shopping Centers$35,969 $34,965 
Mixed-Use properties12,555 11,804 
Total same property operating income$48,524 $46,769 
Shopping Center operating income$35,969 $34,965 
Less: Shopping Center acquisitions, dispositions and development properties— — 
Total same Shopping Center operating income$35,969 $34,965 
Mixed-Use property operating income$12,555 $11,804 
Less: Mixed-Use acquisitions, dispositions and development properties— — 
Total same Mixed-Use property operating income$12,555 $11,804 


(1) Same property operating income is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. Same property operating income adjusts property operating income by subtracting the results of properties that were not in operation for the entirety of the comparable periods. Same property operating income is a measure of the operating performance of the Company’s properties but does not measure the Company’s performance as a whole. Same property operating income should not be considered as an alternative to property operating income, its most directly comparable GAAP measure, as an indicator of the Company’s operating performance. Management considers same property operating income a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company’s funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of the Company’s properties. Management believes the exclusion of these items from property operating income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company’s properties. Other REITs may use different methodologies for calculating same property operating income. Accordingly, same property operating income may not be comparable to those of other REITs.

Mixed-Use same property operating income is composed of the following:
Three Months Ended March 31,
(In thousands)20242023
Office mixed-use properties (1)$6,221 $5,708 
Residential mixed-use properties (residential activity) (2)5,472 5,289 
Residential mixed-use properties (retail activity) (3)862 807 
Total Mixed-Use same property operating income$12,555 $11,804 
(1)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square
(2)Includes Clarendon South Block, The Waycroft and Park Van Ness
(3)Includes The Waycroft and Park Van Ness

www.SaulCenters.com
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