BETHESDA, Md., April 23 /PRNewswire-FirstCall/ -- Saul Centers, Inc. ( NYSE:BFS ) , an equity real estate investment trust (REIT), announced its operating results for the quarter ended March 31, 2008. Total revenue for the three months ended March 31, 2008 ("2008 Quarter") increased 5.6% to $38,722,000 compared to $36,684,000 for the three months ended March 31, 2007 ("2007 Quarter"). Operating income, which is net income available to common stockholders before gain on property disposition, minority interests and preferred stock dividends, increased 0.6% to $11,073,000 for the 2008 Quarter compared to $11,009,000 for the 2007 Quarter. Net income available to common stockholders was $7,033,000 or $0.39 per diluted share for the 2008 Quarter, compared to net income available to common stockholders of $6,874,000 or $0.39 per diluted share for the 2007 Quarter.

   Same property revenue for the total portfolio increased 4.2% for the 2008 Quarter compared to the 2007 Quarter and same property operating income increased 3.2%. 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 4.5% for the 2008 Quarter compared to the 2007 Quarter. The stabilization of Lansdowne Town Center produced approximately 65% of the quarter over quarter growth. Rental rate growth at several core properties produced the remainder of the shopping center operating income increase. Same property operating income in the office portfolio remained relatively stable, decreasing 0.6% for the 2008 Quarter.

   As of March 31, 2008, 95.4% of the operating portfolio was leased compared to 95.9% for March 31, 2007. On a same property basis, 95.3% of the portfolio was leased, compared to the prior year level of 95.9%. The 2008 leasing percentages decreased due to a net decrease of approximately 45,000 square feet of leased space. The majority of the leasing decrease, approximately 20,000 square feet, occurred in the office portfolio at Avenel Business Park where the percentage leased decreased from 99.1% in 2007 to 94.2% in 2008. There was also an 18,000 square foot decrease at South Dekalb Plaza in Atlanta, Georgia.

   Funds from operations (FFO) available to common shareholders (after deducting preferred stock dividends) increased 3.0% to $15,919,000 in the 2008 Quarter compared to $15,457,000 for the 2007 Quarter. On a diluted per share basis, FFO available to common shareholders increased 1.5% to $0.68 per share for the 2008 Quarter compared to $0.67 per share for the 2007 Quarter. FFO, a widely accepted non-GAAP financial measure of operating performance for REITs, is defined as net income plus minority interests, extraordinary items and real estate depreciation and amortization, excluding gains from property dispositions. FFO increased in the 2008 Quarter primarily due to increased net rental income from the lease-up of Lansdowne Town Center and to a lesser extent, rental rate growth at other core properties, partially offset by an increase in general and administrative expense.

   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 51 community and neighborhood shopping center and office properties totaling approximately 8.2 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)

                                             March 31,       December 31,
                                              2008               2007
  Assets                                             (Unaudited)
     Real estate investments
       Land                                   $215,421          $167,007
       Buildings and equipment                 709,543           673,328
       Construction in progress                 52,382            49,592
                                               977,346           889,927
       Accumulated depreciation               (238,423)         (232,669)
                                               738,923           657,258
     Cash and cash equivalents                  29,007             5,765
     Accounts receivable and accrued
      income, net                               37,991            33,967
     Deferred leasing costs, net                18,099            16,190
     Prepaid expenses, net                       2,483             2,571
     Deferred debt costs, net                    6,402             6,264
     Other assets                                6,851             5,428
           Total assets                       $839,756          $727,443

  Liabilities
     Mortgage notes payable                   $554,377          $524,726
     Revolving credit facility                      -              8,000
     Dividends and distributions payable        12,998            12,887
     Accounts payable, accrued expenses
      and other liabilities                     18,059            13,159
     Deferred income                            24,668            15,147
           Total liabilities                   610,102           573,919

     Minority interests                          4,347             4,745

  Stockholders' equity
     Preferred stock                           179,328           100,000
     Common stock                                  179               178
     Additional paid-in capital                160,139           161,618
     Accumulated deficit                      (114,339)         (113,017)
         Total stockholders' equity            225,307           148,779

         Total liabilities and
          stockholders' equity                $839,756          $727,443



                            Saul Centers, Inc.
             Condensed Consolidated Statements of Operations
                 (In thousands, except per share amounts)

                                              Three Months Ended March 31,
                                                 2008             2007
  Revenue                                              (Unaudited)
     Base rent                                 $30,382           $29,021
     Expense recoveries                          7,133             6,598
     Percentage rent                               314               202
     Other                                         893               863
            Total revenue                       38,722            36,684

  Operating expenses
     Property operating expenses                 4,985             4,805
     Provision for credit losses                   183               112
     Real estate taxes                           4,011             3,526
     Interest expense and amortization of
      deferred debt                              8,604             8,294
     Depreciation and amortization of
      deferred leasing costs                     6,943             6,448
     General and administrative                  2,923             2,490
            Total operating expenses            27,649            25,675
  Operating income                              11,073            11,009
     Gain on property disposition                  205                 -
     Minority interests                         (2,148)           (2,135)
  Net income                                     9,130             8,874
     Preferred dividends                        (2,097)           (2,000)
  Net income available to common stockholders   $7,033            $6,874

  Per share net income available to common
   stockholders:
      Diluted                                    $0.39             $0.39

  Weighted average common stock:
      Common stock                              17,767            17,415
      Effect of dilutive options                   176               203
      Diluted weighted average common stock     17,943            17,618



                            Saul Centers, Inc.
                         Supplemental Information
                 (In thousands, except per share amounts)

                                                          Three Months Ended
                                                              March 31,
                                                            2008     2007
  Reconciliation of net income to funds from
   operations (FFO):                                (1)       (Unaudited)

          Net Income                                       $9,130    $8,874
          Less:   Gain on property disposition               (205)       -
          Add:    Real property depreciation &amortization  6,943     6,448
          Add:    Minority interests                        2,148     2,135
              FFO                                          18,016    17,457
          Less:   Preferred dividends                      (2,097)   (2,000)
              FFO available to common shareholders        $15,919   $15,457

  Weighted average shares:
          Diluted weighted average common stock            17,943    17,618
          Convertible limited partnership units             5,417     5,416
          Diluted & converted weighted average shares      23,360    23,034

  Per share amounts:
          FFO available to common shareholders (diluted)    $0.68     $0.67

  Reconciliation of net income to same property
   operating income:
          Net income                                       $9,130    $8,874
          Add:    Interest expense and amortization
                   of deferred debt                         8,604     8,294
          Add:    Depreciation and amortization of
                   deferred leasing costs                   6,943     6,448
          Add:    General and administrative                2,923     2,490
          Less:   Gain on property disposition               (205)       -
          Less:   Interest income                             (67)      (95)
          Add:    Minority interests                        2,148     2,135
              Property operating income                    29,476    28,146
          Less:   Acquisitions & developments                (418)       -
              Total same property operating income        $29,058   $28,146

          Total shopping centers                          $22,181   $21,225
          Total office properties                           6,877     6,921
              Total same property operating income        $29,058   $28,146

Source: Saul Centers, Inc.