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Medical and Tech Giants to Apply AI to Records for Actionable Care Insights

 

Google (GOOG) and HCA Healthcare (HCA) just announced (May 26) a partnership to build on HCA Healthcare’s use of information technology to further their transformation to benefit from collected patient data. According to an HCA press release, “The partnership with Google Cloud is designed to help create a secure and dynamic data analytics platform for HCA Healthcare and enable the development of next generation operational models focused on actionable insights and improved workflows.”

Under the plan, HCA’s 2,000 locations in 21 states would consolidate and store digital health records along with information from internet-connected medical devices with Google Data. The multiyear agreement will require Google and HCA engineers to work to help improve operating efficiency, monitor patients and guide doctors’ decisions.

Patients Privacy and Providing Data

The company said, “While protecting patient privacy and the security of data, HCA Healthcare uses information from its 32 million annual encounters to identify opportunities to improve clinical care and support its 93,000 nurses and 47,000 active and affiliated physicians.” The data collected can be valuable for the hospital chain while at the same time serve to better inform global medical care.  HCA Healthcare has published studies in leading medical journals like the New England Journal of Medicine and The Lancet, developed algorithm-informed decision support tools for caregivers, and identified clinical practices that reduce infections and improve perinatal care. The partnership with Google Cloud is expected to enhance efforts by HCA to continue to improve and develop advanced decision support to promote quality, safety, and efficiency.

Data Science in Medicine

Data generated by hospitals places them in an enviable position as brokers of this information.  Patients under their care, being seen by doctors, labs, pharmacies, and monitored by medical devices, provide records of treatment, behavior, patterns, and results. This information, fed through algorithms developed by data-mining companies, can serve as a revenue source as it may be sold to pharmaceutical and technology companies. The data-mining companies involved include large companies like Google right down start-ups where the profits are more impactful on financials. The results, if done with strict control over privacy, can be win-win-win as patient care improves, hospitals benefit, and tech companies provide solutions.

 

 

Looking Toward the Future

“The cloud can be an accelerant for innovation in health, particularly in driving data interoperability, which is critical in streamlining operations and providing better quality of care to improve patient outcomes,” said Thomas Kurian, CEO, Google Cloud Sam Hazen, CEO of HCA healthcare stated, “Next-generation care demands data science-informed decision support so we can more sharply focus on safe, efficient and effective patient care.”  The cloud-based network is intended to allow clinicians to rely on it for on-the-fly decisions, as well as medical staff in more controlled settings.

HCA Healthcare has deployed 90,000 mobile devices that run tools created by the organization’s PatientKeeper and Mobile Heartbeat teams and other developers to empower caregivers. The partnership with Google Cloud is expected to empower physicians, nurses and others with workflow tools, analysis and alerts on their mobile devices to help clinicians respond quickly to changes in a patient’s condition.

This is an opportunity for both partnered companies to benefit while, with sufficient safety and security measures in place, positively impact care patients receive.

 

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Sources:

https://investor.hcahealthcare.com/news/news-details/2021/HCA-Healthcare-Partners-With-Google-Cloud-to-Accelerate-Digital-Transformation/default.aspx

https://www.wsj.com/articles/google-strikes-deal-with-hospital-chain-to-develop-healthcare-algorithms-11622030401?mod=hp_lead_pos1

 

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Zero-Trust Security: Assume Everyone and Everything on the Internet is Out to Get You

 

President Joe Biden’s cybersecurity executive order, signed May 12, 2021, calls for the federal government to adopt a “Zero Trust architecture.”

This raises a couple of questions. What is zero-trust security? And, if trust is bad for cybersecurity, why do most organizations in government and the private sector do it?

One consequence of too much trust online is the ransomware epidemic, a growing global problem that affects organizations large and small. High-profile breaches such as the one experienced by the Colonial Pipeline are merely the tip of the iceberg.

There were at least 2,354 ransomware attacks on local governments, health care facilities, and schools in the U.S. last year. Although estimates vary, losses to ransomware seem to have tripled in 2020 to more than $300,000 per incident. And ransomware attacks are growing more sophisticated. A recurring theme in many of these breaches is misplaced trust – in vendors, employees, software, and hardware. As a scholar of cybersecurity policy with a recent report on this topic, I have been interested in questions of trust. I’m also the executive director of the Ostrom Workshop. The Workshop’s Program on Cybersecurity and Internet Governance focuses on many of the tenets of zero-trust security by looking to analogies – including public health and sustainable development – to build resilience in distributed systems.

 

Security Without Trust

Trust in the context of computer networks refers to systems that allow people or other computers access with little or no verification of who they are and whether they are authorized to have access. Zero Trust is a security model that takes for granted that threats are omnipresent inside and outside networks. Zero Trust instead relies on continuous verification via information from multiple sources. In doing so, this approach assumes the inevitability of a data breach. Instead of focusing exclusively on preventing breaches, zero-trust security ensures that damage is limited and that the system is resilient and can quickly recover.

Using the public health analogy, a Zero-Trust approach to cybersecurity assumes that an infection is only a cough – or, in this case, a click – away, and focuses on building an immune system capable of dealing with whatever novel virus may come along. Put another way, instead of defending a castle, this model assumes that the invaders are already inside the walls.

It’s not hard to see the benefits of the Zero Trust model. If the Colonial Pipeline company had adopted it, for example, the ransomware attack would likely have failed, and people wouldn’t have been panic-buying gasoline in recent days. And if zero-trust security were widespread, the ransomware epidemic would be a lot less biting.

 

Four Obstacles
to Shedding Trust

But there are at least four main barriers to achieving Zero Trust in government and private computer systems.

First, legacy systems and infrastructure are often impossible to upgrade to become Zero Trust. Achieving Zero Trust security requires a layered defense, which involves building multiple layers of security, not unlike a stack of Swiss cheese. But this is challenging in systems that were not built with this goal in mind because it requires independent verification at every layer.

Second, even if it’s possible to upgrade, it’s going to cost you. It is costly, time-consuming and potentially disruptive to redesign and redeploy systems, especially if they are custom-made. The U.S. Department of Defense alone operates more than 15,000 networks in 4,000 installations spread across 88 countries.

Third, peer-to-peer technologies, like computers running Windows 10 on a local network, run counter to Zero Trust because they rely mostly on passwords, not real-time, multifactor authentication. Passwords can be cracked by computers rapidly checking many possible passwords – brute-force attacks – whereas real-time, multifactor authentication requires passwords and one or more additional forms of verification, typically a code sent by email or text. Google recently announced its decision to mandate multifactor authentication for all its users.

Fourth, migrating an organization’s information systems from in-house computers to cloud services can boost Zero Trust, but only if it’s done right. This calls for creating new applications in the cloud rather than simply moving existing applications into the cloud. But organizations have to know to plan for Zero Trust security when moving to the cloud. The 2018 DoD Cloud Strategy, for example, does not even reference “Zero Trust.”

 

Enter the
Biden Administration

The Biden administration’s executive order attempts to foster a layered defense to address the nation’s cybersecurity woes. The executive order followed several recommendations from the 2020 Cyberspace Solarium Commission, a commission formed by Congress to develop a strategic approach to defending the U.S. in cyberspace.

Among other things, it builds from Zero Trust frameworks propounded by the National Institute for Standards and Technology. It also taps the Department of Homeland Security to take the lead on implementing these Zero Trust techniques, including its cloud-based programs.

I believe that when coupled with other initiatives spelled out in the executive order – such as creating a Cybersecurity Safety Board and imposing new requirements for software supply chain security for federal vendors – zero-trust security takes the U.S. in the right direction.

However, the executive order applies only to government systems. It wouldn’t have stopped the Colonial Pipeline ransomware attack, for instance. Getting the country as a whole on a more secure footing requires helping the private sector adopt these security practices, and that will require action from Congress.

 

This article
was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic
experts.  Written by Scott Shackelford, Associate Professor of Business Law and Ethics; Executive
Director, Ostrom Workshop; Cybersecurity Program Chair, IU-Bloomington, Indiana
University

 

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Friday, May 14, 2021

Kelly Services Inc. (KELYA)
Improving Operating Environment; Raising PT

Kelly Services Inc is a provider of workforce solutions and consulting and staffing services. The company’s operations are divided into three business segments namely Americas Staffing, Global Talent Solutions (“GTS”) and International Staffing. It provides staffing solutions through its branch networks in Americas and International operations and also provides a suite of innovative talent fulfilment and outcome-based solutions through GTS segment. Americas Staffing generates maximum revenue from its operations.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q21. Revenue of $1.21 billion was down 4.4% year-over-year as the impact from COVID continued to moderate. Kelly reported operating earnings of $10.6 million compared to a loss in 1Q20 which was impacted by a goodwill impairment charges and a gain on the sale of assets. GAAP EPS for 1Q21 was $0.64 compared to an EPS loss of $3.91 in 1Q20. Adjusted EPS for the first quarter was $0.12 versus $0.20 last year. We had projected revenue of $1.18 billion and adjusted EPS of $0.16.


Improving Demand.  Kelly saw strong demand across all of its operating segments in the quarter. OCG reported positive 9.5% revenue growth in the quarter and the SET, Education, and International segments all reported sequential revenue improvement. P&I is seeing improved revenue growth rates …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Throwback Thursday – Most Watched Channelchek C-Suite Interviews from 2020

 

Viewership of the 139 Channelchek videos released on Channelchek in 2020 was (and still are) through the roof. Looking back, this makes sense. After all, 2020 brought many new investors to the financial markets – Channelchek’s purpose is to provide information to investors at all levels.  We’re thrilled people keep coming back.

During the year, we enhanced our video output. One video series we began during 2020 is C-Suite interviews; these are discussions between senior management of companies with high potential and veteran research analysts from Noble Capital Markets.

For THROWBACK THURSDAY, we compiled the top 10 most viewed C-Suite video interviews. These ten continue to have massive viewer traffic. Take a moment to scroll down and take a look to see which you may have missed and which you should watch.

 

#1 Gevo  (GEVO)

The increased attention to renewables has brought a great deal of traffic to this C-Suite video and all GEVO research on Channelchek. Gevo Inc. is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Watch Now

 

#2 Seanergy (SHIP)

The halt of overseas shipping as efforts to curtail the pandemic reached a peak brought interest in this sector as a recovery play. Seanergy Maritime Holdings Corp. is the only pure-play Capesize shipping company listed in the US capital markets. Seanergy provides marine dry bulk transportation services through a modern fleet of 11 Capesize vessels. Watch Now

 

#3 Onconova (ONTX)

Cancer breakthroughs have always brought out investors. In the past 18 months, information on medical breakthroughs has been even higher on people’s list of possible investment opportunities. Onconova Therapeutics is a biopharmaceutical company focused on discovering and developing novel products to treat cancer. Their stock enjoyed a good deal of activity, as did this C-Suite interview they are featured in. Watch Now

 

#4 One Stop Systems (OSS)

One Stop Systems is a technology company that is involved in edge computing. Their suite of products has what they call “AI on the Fly.” This allows smart machine decision-making to occur onboard in any environment, rather than having to wait for a signal to be sent outside the affected machine and returned with instructions. Their products are gaining more and more practical uses in the current tech age. Watch Now

 

#5 Kratos (KTOS)

Kratos Defense & Security Solutions, Inc. provides engineering, IT services, and warfighter solutions primarily in the United States. It operates in two segments, Kratos Government Solutions (KGS) and Public Safety and Security (PSS).  The company drew attention as the additional branch of the military. Space Force was added. It continues to get attention today as the focus on high tech defense is an ongoing priority. Watch Now

 

#6 Neovasc (NVCN and NVCN:CA)

Neovasc, Inc. develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Tiara for the transcatheter treatment of mitral valve disease and the Neovasc Reducer for the treatment of refractory angina. Neovasc is developing the Tiara for the treatment of mitral valve disease. Its business is focused on this one segment.
Watch Now

 

 

#7 CoreCivic (CXW)

Last year CoreCivic altered its business structure which caused income investors to reduce their position and growth investors to find the company more attractive. CXW continues to find itself adapting, which has investors making sure that they have the most current information and analysis available. As a government solutions company with the size and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic contracts with government partners in the area of corrections and detention management. Watch Now

#8 Energy Fuels (UUUU)

Energy Fuels is the largest uranium producer in the US and holds more production capacity and uranium resources than any other US producer. The company also produces vanadium. In August of 2020, Energy Fuels sat down with the Noble mining analyst and discussed prospects for the energy source and the company overall. A much more recent C-Suite interview was held with UUUU (April 2021); both continue to get a high volume of traffic as investors recognize that uranium may play a much more significant part alongside other low carbon-producing energy solutions. Watch Now

 

#9 Coeur Mining (CDE)

With increased interest in precious metals investment last year, there were a lot of investors interested in this space. Their CDEs videos and research reports received a lot of traffic. They’re a precious and base metals producer with five operations in North America. Discover more about Coeur direct from the CEO in this C-Suite interview. Watch Now

 

#10 Genprex (GNPX)

Genprex, Inc. is a U.S.-based clinical-stage gene therapy company. It’s engaged in developing a new approach to treating cancer, based on its novel proprietary technology platform, including the initial product candidate, Oncoprex immunogene therapy. Oncoprex, has a multimodal mechanism of action where it interrupts cell signaling pathways that cause replication of cancer cells, re-establishes pathways for apoptosis in cancer cells and modulates the immune response against cancer cells. Genprex has been one of the most researched stocks on Channelchek. Watch Now

 

More

There are new informative Channelchek videos each week where investors can hear directly from C-level management of high potential small companies. Stay informed by making sure you’re registered to receive email notifications and also click subscribe to our Youtube channel for more options.

 

 

 

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Monday, May 10, 2021

CoreCivic, Inc. (CXW)
Post Call Update

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by U.S. government agencies. The Company has been a flexible and dependable partner for government for more than 35 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A Fluid Situation. The situation in the Safety segment remains fluid. Again, the key issue is the USMS. We continue to believe there does not exist an acceptable and available alternative to the private industry. On the positive side, two facilities in which the USMS is currently exiting are in-demand from various State Department of Corrections. This should help mitigate the USMS impact, at least in the near-term.


Alabama.  The Alabama project continues to move forward, although it has been pushed to the right due to the Barclay’s situation. In addition, a lawsuit has been filed to stop the construction of the facilities. We would note again that the State is under Federal Court order to improve conditions at its facilities …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Friday, May 07, 2021

DLH Holdings Corp. (DLHC)
Post Call Commentary, Updated Models

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Two Down and One to Go. DLHC has now won recompetes on two of its three key contracts. We expect DLH to retain the VA logistics award after the protest and we believe the logistics win puts the Company in the drivers seat for the pharmacy services contract. Nailing down these three contracts positions the Company to add incremental organic growth from the recent acquisitions and any future acquisitions, in our view.


Expanded TAM.  DLH’s recent acquisitions, specifically S3 and IBA, have expanded the Company’s Total Addressable Market, in our view. Management continues to see significant opportunities going forward and we believe the Company’s increased size provides DLH with the breadth and depth to compete for an expanded menu of awards. We also believe the Company will be successful in competing for …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Friday, May 07, 2021

DLH Holdings Corp. (DLHC)
Post Call Commentary, Updated Models

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Two Down and One to Go. DLHC has now won recompetes on two of its three key contracts. We expect DLH to retain the VA logistics award after the protest and we believe the logistics win puts the Company in the drivers seat for the pharmacy services contract. Nailing down these three contracts positions the Company to add incremental organic growth from the recent acquisitions and any future acquisitions, in our view.


Expanded TAM.  DLH’s recent acquisitions, specifically S3 and IBA, have expanded the Company’s Total Addressable Market, in our view. Management continues to see significant opportunities going forward and we believe the Company’s increased size provides DLH with the breadth and depth to compete for an expanded menu of awards. We also believe the Company will be successful in competing for …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Thursday, May 06, 2021

CoreCivic, Inc. (CXW)
A Solid Quarter, After Brushing Away the Noise

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by U.S. government agencies. The Company has been a flexible and dependable partner for government for more than 35 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q21 Results. CoreCivic posted revenue of $454.7 million in the first quarter of 2021, compared to $491.1 million in the same period last year. EBITDA was $41.6 million versus $99.5 million, with 1Q21 adjusted EBITDA of $96.3 million versus $100.4 million. CoreCivic reported a GAAP loss of $125.5 million or $1.05 per share. Adjusted EPS was $0.24 compared to $0.30 last year or $0.23 on a proforma basis to reflect the adoption of a C-corp structure. We had projected revenue of $470 million and EPS of $0.24.


The Noise.  There was significant noise in the quarter that obscured a relatively solid quarter, in our view. For example, special items included a non-cash income tax expense of $114.2 million associated with the change in corporate tax structure and a $51.7 million charge to settle shareholder litigation. The Company also incurred some $1.6 million in COVID related expenses that were not in the …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

CoreCivic Reports First Quarter 2021 Financial Results

 

BRENTWOOD, Tenn., May 05, 2021 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the first quarter of 2021.

Financial Highlights – First Quarter 2021

• Total revenue of $454.7 million
  • CoreCivic Safety revenue of $409.8 million
  • CoreCivic Community revenue of $23.7 million
  • CoreCivic Properties revenue of $21.3 million
• Special items include income tax expense of $114.2 million primarily associated with change in corporate tax structure and $51.7 million for a shareholder litigation settlement
• Net loss attributable to common stockholders of $125.6 million
• Diluted loss per share of $1.05
• Adjusted diluted EPS of $0.24
• Normalized FFO per diluted share of $0.44
• Adjusted EBITDA of $96.3 million

Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “While our GAAP financial results were impacted by certain non-recurring charges related to our conversion from a REIT to a taxable C-corporation and a shareholder litigation settlement, we are pleased with the strong underlying performance of the business despite the challenges of operating during the COVID-19 pandemic. We continue to generate strong cash flows and remain focused on repaying debt to improve our credit profile. Following the revocation of our REIT status, in April we were able to successfully access the credit markets to extend our debt maturities by issuing unsecured senior notes.”

We are dedicated to helping those in our care be successful in their next step in life. Every day, our chaplains, counselors and instructors help nearly 1,500 inmates learn the life and vocational skills they need to find and keep employment once released. Every year, our dedicated teachers help more than 1,500 inmates earn a GED, which research shows makes them 30% less likely to return to prison after they’re released. We help our government partners solve some of their toughest challenges by providing flexibility to manage constantly changing needs and populations and delivering on proven reentry programs that fight recidivism and change lives.

First Quarter 2021 Financial Results Compared With First Quarter 2020

Net loss attributable to common stockholders in the first quarter of 2021 totaled $125.6 million, or $1.05 per diluted share, and was driven by $154.8 million, or $1.29 per share, of special items, compared with net income attributable to common stockholders generated in the first quarter of 2020 of $32.1 million, or $0.27 per diluted share. Adjusted for special items, net income in the first quarter of 2021 was $29.3 million, or $0.24 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the first quarter of 2020 of $37.2 million, or $0.30 per diluted share. Special items in the first quarter of 2021 included a non-recurring charge of $114.2 million in income taxes primarily associated with change in corporate tax structure, $51.7 million in shareholder litigation expense, $1.6 million in expenses associated with COVID-19, $1.3 million in asset impairments, less $14.1 million of income tax benefits for the aforementioned special items. Special items in the first quarter of 2020 included $3.1 million of deferred tax expenses related to our Kansas lease structure, $0.5 million in asset impairments, and $0.3 million of expenses associated with mergers and acquisitions.

Funds From Operations (FFO) was a loss of $100.9 million, or $0.83 per diluted share, in the first quarter of 2021, compared to $61.7 million, or $0.51 per diluted share, in the first quarter of 2020. Normalized FFO, which excludes the special items described above, was $53.0 million, or $0.44 per diluted share, in the first quarter of 2021, compared with $65.3 million, or $0.54 per diluted share, in the first quarter of 2020.

EBITDA was $41.6 million in the first quarter of 2021, compared with $99.5 million in the first quarter of 2020. Adjusted EBITDA, which excludes the special items described above, was $96.3 million in the first quarter of 2021, compared with $100.4 million in the first quarter of 2020, including a decrease of $2.3 million resulting from the sale of 42 properties sold in the fourth quarter of 2020.   

Adjusted financial results in the first quarter of 2021, compared with the first quarter of 2020, declined primarily because 2021 financial results reflect an income tax provision under our new corporate tax structure, compared with the prior year when we were entitled to a deduction for dividends paid as a real estate investment trust (REIT). As a REIT, therefore, we incurred very little income tax expense. Financial results in 2021 also reflected lower utilization under contracts with Immigration and Customs Enforcement (ICE) and modest occupancy declines across many of our state-level contracts due to the ongoing impact of COVID-19.

Issuance of Senior Unsecured Notes

On April 14, 2021, we completed the offering of $450.0 million aggregate principal amount of 8.25% senior unsecured notes, due April 2026 (the new notes). The new notes priced at 99% of face value and as a result have an effective yield to maturity of 8.5%. We used net proceeds from the offering of the new notes of approximately $435.1 million, after deducting the original issuance, underwriting discounts, and estimated offering expenses, to redeem all $250.0 million principal amount of our outstanding 5.0% senior unsecured notes due 2022, which have been called for redemption on May 14, 2021 by a redemption notice issued on April 14, 2021, including the payment of the applicable make-whole amount and accrued interest. We used additional net proceeds from the offering to repay $149.0 million of the $350.0 million principal amount of our outstanding 4.625% senior unsecured notes due 2023 (the 2023 notes) at an aggregate purchase price of $151.2 million in privately negotiated transactions, reducing the outstanding balance of the 2023 notes to $201.0 million. The remaining net proceeds from the offering were used to pay-down a portion of the amounts outstanding under our revolving credit facility and for general corporate purposes.

Business Development Update

Update on Contracts with the United States Marshals Service.
Pursuant to President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO, the U.S. Marshals Service (“USMS”) has indicated that it has been advised by the Office of the Deputy Attorney General not to renew existing contracts, or enter into new contracts for private detention facilities. We currently have four contracts with the USMS that expire in 2021. The USMS has notified the Company that it will not be renewing its contract for our Northeast Ohio Correctional Center, which expires May 30, 2021. We continue to explore opportunities with various government agencies, including the state of Ohio, the primary user of the Northeast Ohio facility, to replace the capacity currently used by the USMS.   

In addition to the contract with the USMS for our Northeast Ohio Correctional Center, the USMS has full access to our 600-bed West Tennessee Detention Facility and our 1,033-bed Leavenworth Detention Center under direct contracts with the USMS that expire in September 2021 and December 2021, respectively. The USMS also utilizes less than 100 of the 664 beds at our Crossroads Correctional Center under a contract that was scheduled to expire in April 2021, but was extended through June 30, 2021, and is not expected to be renewed thereafter. We currently expect the USMS to relocate detainees at the Crossroads Correctional Center. The state of Montana, which utilizes the remaining capacity at the Crossroads facility, has expressed a desire to utilize the beds used by the USMS at the facility, and we currently expect to incorporate their utilization into a contract renewal that begins July 1, 2021, negating the financial impact of the USMS vacancy. We do not yet know if the USMS will relocate the detainees at our West Tennessee and Leavenworth facilities. We continue to work with the USMS to enable it to fulfill its mission, including at the Northeast Ohio, West Tennessee, and Leavenworth facilities. However, we can provide no assurance that we will be able to provide a solution that is acceptable to all parties that would be involved in such a solution.

Financial Guidance

At this time we are not providing 2021 financial guidance because of uncertainties associated with COVID-19, as well as uncertainties associated with the application of the administration’s various executive actions and policies related to immigration and criminal justice. We do not expect to provide financial guidance until we have further clarity around these uncertainties. Our business is very durable, and continues to generate cash flow even during these unprecedented disruptions to the economy and criminal justice system. This resiliency is due to the essential nature of our facilities and services in our Safety and Community segments, further enhanced by the stability of our Properties segment, all supported by payments from highly rated federal, state, and local government agencies.  

Supplemental Financial Information and Investor Presentations

We have made available on our website supplemental financial information and other data for the first quarter of 2021.   Interested parties may access this information through our website at http://ir.corecivic.com/ under “Financial Information” of the Investors section.   We do not undertake any obligation, and disclaim any duties to update any of the information disclosed in this report.  

Management may meet with investors from time to time during the second quarter of 2021.  Written materials used in the investor presentations will also be available on our website beginning on or about May 17, 2021.  Interested parties may access this information through our website at http://ir.corecivic.com/ under “Events & Presentations” of the Investors section.

Conference Call, Webcast and Replay Information

We will host a webcast conference call at 10:00 a.m. central time (11:00 a.m. eastern time) on Thursday, May 6, 2021, and will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. The live broadcast can also be accessed by dialing 800-367-2403 in the U.S. and Canada, including the confirmation passcode 7487376. An online replay of the call will be archived on our website promptly following the conference call. In addition, there will be a telephonic replay available beginning at 1:00 p.m. central time (2:00 p.m. eastern time) on May 6, 2021, through 1:00 p.m. central time (2:00 p.m. eastern time) on May 14, 2021. To access the telephonic replay, dial 888-203-1112 in the U.S. and Canada. International callers may dial +1 719-457-0820 and enter passcode 8097453.

About CoreCivic

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believes it is the largest private owner of real estate used by government agencies in the U.S. CoreCivic has been a flexible and dependable partner for government for more than 35 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.

Forward-Looking Statements

This press release contains statements as to our beliefs and expectations of the outcome of future events that are “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) changes in government policy (including the United States Department of Justice, or DOJ, not renewing contracts as a result of the Private Prison EO) (two agencies of the DOJ, the United States Federal Bureau of Prisons and the USMS utilize our services), legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or our business, in particular, including, but not limited to, the continued utilization of our correctional and detention facilities by the federal government, and the impact of any changes to immigration reform and sentencing laws (our company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention); (ii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of our services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as well as our ability to utilize available beds; (iv) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on our contract renewals and renegotiations, per diem rates, and occupancy; (v) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, contract renegotiations or terminations, increases in costs of operations, fluctuations in interest rates and risks of operations; (vi) the duration of the federal government’s denial of entry at the United States southern border to asylum-seekers and anyone crossing the southern border without proper documentation or authority in an effort to contain the spread of COVID-19; (vii) government and staff responses to staff or residents testing positive for COVID-19 within public and private correctional, detention and reentry facilities, including the facilities we operate; (viii)  restrictions associated with COVID-19 that disrupt the criminal justice system, along with government policies on prosecutions and newly ordered legal restrictions that affect the number of people placed in correctional, detention, and reentry facilities; (ix) whether revoking our REIT election, effective January 1, 2021, and our revised capital allocation strategy can be implemented in a cost effective manner that provides the expected benefits, including facilitating our planned debt reduction initiative and planned return of capital to shareholders; (x) our ability to identify and consummate the sale of additional non-core assets at attractive prices; (xi) our ability to successfully identify and consummate future development and acquisition opportunities and our ability to successfully integrate the operations of our completed acquisitions and realize projected returns resulting therefrom; (xii) increases in costs to develop or expand real estate properties that exceed original estimates, or the inability to complete such projects on schedule as a result of various factors, many of which are beyond our control, such as the effects of, and delays caused by, COVID-19, weather, the availability of labor and materials, labor conditions, delays in obtaining legal approvals, unforeseen engineering, archeological or environmental problems, and cost inflation, resulting in increased construction costs; (xiii) our ability to identify and initiate service opportunities that were unavailable under our former REIT structure; (xiv) our ability to have met and maintained qualification for taxation as a REIT for the years we elected REIT status; and (xv) the availability of debt and equity financing on terms that are favorable to us, or at all, including financing we are pursuing on behalf of the state of Alabama for the construction of two correctional facilities. Other factors that could cause operating and financial results to differ are described in the filings we make from time to time with the Securities and Exchange Commission.

CoreCivic takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.

CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

ASSETS		March 31, 2021				December 31, 2020
Cash and cash equivalents		$	168,141			$	113,219
Restricted cash			16,413				23,549
Accounts receivable, net of credit loss reserve of $6,105 and $6,103, respectively			259,620				267,705
Prepaid expenses and other current assets			27,681				33,243
Assets held for sale			281,523				279,406
Total current assets			753,378				717,122
Real estate and related assets:
Property and equipment, net of accumulated depreciation of $1,572,711 and $1,559,388, respectively			2,333,340				2,350,272
Other real estate assets			225,341				228,243
Goodwill			5,902				5,902
Non-current deferred tax assets			–				11,113
Other assets			395,843				396,663
Total assets		$	3,713,804			$	3,709,315
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses		$	346,494			$	274,318
Current portion of long-term debt			38,914				39,087
Total current liabilities			385,408				313,405
Long-term debt, net			1,719,115				1,747,664
Deferred revenue			22,804				18,336
Non-current deferred tax liabilities			85,356				–
Other liabilities			210,886				216,468
Total liabilities			2,423,569				2,295,873
Commitments and contingencies
Preferred stock ? $0.01 par value; 50,000 shares authorized; none issued and outstanding at March 31, 2021, and December 31, 2020, respectively			–				–
Common stock ? $0.01 par value; 300,000 shares authorized; 120,277 and 119,638 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively			1,203				1,196
Additional paid-in capital			1,838,066				1,835,494
Accumulated deficit			(572,305	)			(446,519	)
Total stockholders’ equity			1,266,964				1,390,171
Non-controlling interest – operating partnership			23,271				23,271
Total equity			1,290,235				1,413,442
Total liabilities and equity		$	3,713,804			$	3,709,315

CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

		For the Three Months Ended March 31,
			2021				2020
REVENUES:
Safety		$	409,769			$	437,765
Community			23,658				30,599
Properties			21,255				22,679
Other			36				58
			454,718				491,101
EXPENSES:
Operating
Safety			305,427				330,737
Community			21,100				24,449
Properties			6,274				6,954
Other			83				175
Total operating expenses			332,884				362,315
General and administrative			29,530				31,279
Depreciation and amortization			32,712				37,952
Shareholder litigation expense			51,745				–
Asset impairments			1,308				536
			448,179				432,082
OPERATING INCOME			6,539				59,019
OTHER (INCOME) EXPENSE:
Interest expense, net			18,428				22,538
Other (income) expense			148				(533	)
			18,576				22,005
INCOME (LOSS) BEFORE INCOME TAXES			(12,037	)			37,014
Income tax expense			(113,531	)			(3,776	)
NET INCOME (LOSS)		$	(125,568	)		$	33,238
Net income attributable to non-controlling interest			–				(1,181	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(125,568	)		$	32,057
BASIC EARNINGS (LOSS) PER SHARE		$	(1.05	)		$	0.27
DILUTED EARNINGS (LOSS) PER SHARE		$	(1.05	)		$	0.27

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS

	For the Three Months Ended March 31,
		2021				2020
Net income (loss) attributable to common stockholders	$	(125,568	)		$	32,057
Non-controlling interest		–				1,181
Diluted net income (loss) attributable to common stockholders	$	(125,568	)		$	33,238
Special items:
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Income taxes associated with change in corporate tax structure and other special tax items		114,249				3,085
Shareholder litigation expense		51,745				–
Asset impairments		1,308				536
Income tax benefit for special items		(14,060	)			–
Adjusted net income	$	29,272			$	37,197
Weighted average common shares outstanding – basic		119,909				119,336
Effect of dilutive securities:
Stock options		–				–
Restricted stock-based awards		115				47
Non-controlling interest – operating partnership units		1,342				1,342
Weighted average shares and assumed conversions – diluted		121,366				120,725
Adjusted Earnings Per Diluted Share	$	0.24			$	0.30

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS

	For the Three Months Ended March 31,
		2021				2020
Net income (loss)	$	(125,568	)		$	33,238
Depreciation and amortization of real estate assets		23,759				28,106
Impairment of real estate assets		1,308				405
Income tax benefit for special items		(350	)			–
Funds From Operations	$	(100,851	)		$	61,749
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Income taxes associated with change in corporate tax structure and other special tax items		114,249				3,085
Shareholder litigation expense		51,745				–
Goodwill and other impairments		–				131
Income tax benefit for special items		(13,710	)			–
Normalized Funds From Operations	$	53,031			$	65,303
Funds From Operations Per Diluted Share	$	(0.83	)		$	0.51
Normalized Funds From Operations Per Diluted Share	$	0.44			$	0.54

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF EBITDA AND ADJUSTED EBITDA

	For the Three Months Ended March 31,
		2021				2020
Net income (loss)	$	(125,568	)		$	33,238
Interest expense		20,925				24,555
Depreciation and amortization		32,712				37,952
Income tax expense		113,531				3,776
EBITDA	$	41,600			$	99,521
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Shareholder litigation expense		51,745				–
Asset impairments		1,308				536
Adjusted EBITDA	$	96,251			$	100,395

NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION

Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures. The Company believes that these measures are important operating measures that supplement discussion and analysis of the Company’s results of operations and are used to review and assess operating performance of the Company and its properties and their management teams. The Company believes that it is useful to provide investors, lenders and security analysts disclosures of its results of operations on the same basis that is used by management.   FFO, in particular, is a widely accepted non-GAAP supplemental measure of performance of real estate companies, grounded in the standards for FFO established by the National Association of Real Estate Investment Trusts (NAREIT).

NAREIT defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis.   EBITDA, Adjusted EBITDA, and Normalized FFO are useful as supplemental measures of performance of the Company’s properties because such measures do not take into account depreciation and amortization, or with respect to EBITDA, the impact of the Company’s tax provisions and financing strategies. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), this accounting presentation assumes that the value of real estate assets diminishes at a level rate over time.   Because of the unique structure, design and use of the Company’s properties, management believes that assessing performance of the Company’s properties without the impact of depreciation or amortization is useful. The Company may make adjustments to FFO from time to time for certain other income and expenses that it considers non-recurring, infrequent or unusual, even though such items may require cash settlement, because such items do not reflect a necessary or ordinary component of the ongoing operations of the Company.   Normalized FFO excludes the effects of such items. The Company calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt refinancing, M&A activity, and certain impairments and other charges that the Company believes are unusual or non-recurring to provide an alternative measure of comparing operating performance for the periods presented. Even though expenses associated with mergers and acquisitions may be recurring, the magnitude and timing fluctuate based on the timing and scope of M&A activity, and therefore, such expenses, which are not a necessary component of the ongoing operations of the Company, may not be comparable from period to period.

Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited.   Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and, where appropriate, their corresponding per share measures are not measures of performance under GAAP, and should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income as indicators of the Company’s operating performance or any other measure of performance derived in accordance with GAAP.   This data should be read in conjunction with the Company’s consolidated financial statements and related notes included in its filings with the Securities and Exchange Commission.

Contact:	Investors: Cameron Hopewell – Managing Director, Investor Relations – (615) 263-3024
	Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204

 

CoreCivic Reports First Quarter 2021 Financial Results

 

BRENTWOOD, Tenn., May 05, 2021 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the first quarter of 2021.

Financial Highlights – First Quarter 2021

• Total revenue of $454.7 million
  • CoreCivic Safety revenue of $409.8 million
  • CoreCivic Community revenue of $23.7 million
  • CoreCivic Properties revenue of $21.3 million
• Special items include income tax expense of $114.2 million primarily associated with change in corporate tax structure and $51.7 million for a shareholder litigation settlement
• Net loss attributable to common stockholders of $125.6 million
• Diluted loss per share of $1.05
• Adjusted diluted EPS of $0.24
• Normalized FFO per diluted share of $0.44
• Adjusted EBITDA of $96.3 million

Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “While our GAAP financial results were impacted by certain non-recurring charges related to our conversion from a REIT to a taxable C-corporation and a shareholder litigation settlement, we are pleased with the strong underlying performance of the business despite the challenges of operating during the COVID-19 pandemic. We continue to generate strong cash flows and remain focused on repaying debt to improve our credit profile. Following the revocation of our REIT status, in April we were able to successfully access the credit markets to extend our debt maturities by issuing unsecured senior notes.”

We are dedicated to helping those in our care be successful in their next step in life. Every day, our chaplains, counselors and instructors help nearly 1,500 inmates learn the life and vocational skills they need to find and keep employment once released. Every year, our dedicated teachers help more than 1,500 inmates earn a GED, which research shows makes them 30% less likely to return to prison after they’re released. We help our government partners solve some of their toughest challenges by providing flexibility to manage constantly changing needs and populations and delivering on proven reentry programs that fight recidivism and change lives.

First Quarter 2021 Financial Results Compared With First Quarter 2020

Net loss attributable to common stockholders in the first quarter of 2021 totaled $125.6 million, or $1.05 per diluted share, and was driven by $154.8 million, or $1.29 per share, of special items, compared with net income attributable to common stockholders generated in the first quarter of 2020 of $32.1 million, or $0.27 per diluted share. Adjusted for special items, net income in the first quarter of 2021 was $29.3 million, or $0.24 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the first quarter of 2020 of $37.2 million, or $0.30 per diluted share. Special items in the first quarter of 2021 included a non-recurring charge of $114.2 million in income taxes primarily associated with change in corporate tax structure, $51.7 million in shareholder litigation expense, $1.6 million in expenses associated with COVID-19, $1.3 million in asset impairments, less $14.1 million of income tax benefits for the aforementioned special items. Special items in the first quarter of 2020 included $3.1 million of deferred tax expenses related to our Kansas lease structure, $0.5 million in asset impairments, and $0.3 million of expenses associated with mergers and acquisitions.

Funds From Operations (FFO) was a loss of $100.9 million, or $0.83 per diluted share, in the first quarter of 2021, compared to $61.7 million, or $0.51 per diluted share, in the first quarter of 2020. Normalized FFO, which excludes the special items described above, was $53.0 million, or $0.44 per diluted share, in the first quarter of 2021, compared with $65.3 million, or $0.54 per diluted share, in the first quarter of 2020.

EBITDA was $41.6 million in the first quarter of 2021, compared with $99.5 million in the first quarter of 2020. Adjusted EBITDA, which excludes the special items described above, was $96.3 million in the first quarter of 2021, compared with $100.4 million in the first quarter of 2020, including a decrease of $2.3 million resulting from the sale of 42 properties sold in the fourth quarter of 2020.   

Adjusted financial results in the first quarter of 2021, compared with the first quarter of 2020, declined primarily because 2021 financial results reflect an income tax provision under our new corporate tax structure, compared with the prior year when we were entitled to a deduction for dividends paid as a real estate investment trust (REIT). As a REIT, therefore, we incurred very little income tax expense. Financial results in 2021 also reflected lower utilization under contracts with Immigration and Customs Enforcement (ICE) and modest occupancy declines across many of our state-level contracts due to the ongoing impact of COVID-19.

Issuance of Senior Unsecured Notes

On April 14, 2021, we completed the offering of $450.0 million aggregate principal amount of 8.25% senior unsecured notes, due April 2026 (the new notes). The new notes priced at 99% of face value and as a result have an effective yield to maturity of 8.5%. We used net proceeds from the offering of the new notes of approximately $435.1 million, after deducting the original issuance, underwriting discounts, and estimated offering expenses, to redeem all $250.0 million principal amount of our outstanding 5.0% senior unsecured notes due 2022, which have been called for redemption on May 14, 2021 by a redemption notice issued on April 14, 2021, including the payment of the applicable make-whole amount and accrued interest. We used additional net proceeds from the offering to repay $149.0 million of the $350.0 million principal amount of our outstanding 4.625% senior unsecured notes due 2023 (the 2023 notes) at an aggregate purchase price of $151.2 million in privately negotiated transactions, reducing the outstanding balance of the 2023 notes to $201.0 million. The remaining net proceeds from the offering were used to pay-down a portion of the amounts outstanding under our revolving credit facility and for general corporate purposes.

Business Development Update

Update on Contracts with the United States Marshals Service.
Pursuant to President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO, the U.S. Marshals Service (“USMS”) has indicated that it has been advised by the Office of the Deputy Attorney General not to renew existing contracts, or enter into new contracts for private detention facilities. We currently have four contracts with the USMS that expire in 2021. The USMS has notified the Company that it will not be renewing its contract for our Northeast Ohio Correctional Center, which expires May 30, 2021. We continue to explore opportunities with various government agencies, including the state of Ohio, the primary user of the Northeast Ohio facility, to replace the capacity currently used by the USMS.   

In addition to the contract with the USMS for our Northeast Ohio Correctional Center, the USMS has full access to our 600-bed West Tennessee Detention Facility and our 1,033-bed Leavenworth Detention Center under direct contracts with the USMS that expire in September 2021 and December 2021, respectively. The USMS also utilizes less than 100 of the 664 beds at our Crossroads Correctional Center under a contract that was scheduled to expire in April 2021, but was extended through June 30, 2021, and is not expected to be renewed thereafter. We currently expect the USMS to relocate detainees at the Crossroads Correctional Center. The state of Montana, which utilizes the remaining capacity at the Crossroads facility, has expressed a desire to utilize the beds used by the USMS at the facility, and we currently expect to incorporate their utilization into a contract renewal that begins July 1, 2021, negating the financial impact of the USMS vacancy. We do not yet know if the USMS will relocate the detainees at our West Tennessee and Leavenworth facilities. We continue to work with the USMS to enable it to fulfill its mission, including at the Northeast Ohio, West Tennessee, and Leavenworth facilities. However, we can provide no assurance that we will be able to provide a solution that is acceptable to all parties that would be involved in such a solution.

Financial Guidance

At this time we are not providing 2021 financial guidance because of uncertainties associated with COVID-19, as well as uncertainties associated with the application of the administration’s various executive actions and policies related to immigration and criminal justice. We do not expect to provide financial guidance until we have further clarity around these uncertainties. Our business is very durable, and continues to generate cash flow even during these unprecedented disruptions to the economy and criminal justice system. This resiliency is due to the essential nature of our facilities and services in our Safety and Community segments, further enhanced by the stability of our Properties segment, all supported by payments from highly rated federal, state, and local government agencies.  

Supplemental Financial Information and Investor Presentations

We have made available on our website supplemental financial information and other data for the first quarter of 2021.   Interested parties may access this information through our website at http://ir.corecivic.com/ under “Financial Information” of the Investors section.   We do not undertake any obligation, and disclaim any duties to update any of the information disclosed in this report.  

Management may meet with investors from time to time during the second quarter of 2021.  Written materials used in the investor presentations will also be available on our website beginning on or about May 17, 2021.  Interested parties may access this information through our website at http://ir.corecivic.com/ under “Events & Presentations” of the Investors section.

Conference Call, Webcast and Replay Information

We will host a webcast conference call at 10:00 a.m. central time (11:00 a.m. eastern time) on Thursday, May 6, 2021, and will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. The live broadcast can also be accessed by dialing 800-367-2403 in the U.S. and Canada, including the confirmation passcode 7487376. An online replay of the call will be archived on our website promptly following the conference call. In addition, there will be a telephonic replay available beginning at 1:00 p.m. central time (2:00 p.m. eastern time) on May 6, 2021, through 1:00 p.m. central time (2:00 p.m. eastern time) on May 14, 2021. To access the telephonic replay, dial 888-203-1112 in the U.S. and Canada. International callers may dial +1 719-457-0820 and enter passcode 8097453.

About CoreCivic

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believes it is the largest private owner of real estate used by government agencies in the U.S. CoreCivic has been a flexible and dependable partner for government for more than 35 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good.

Forward-Looking Statements

This press release contains statements as to our beliefs and expectations of the outcome of future events that are “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) changes in government policy (including the United States Department of Justice, or DOJ, not renewing contracts as a result of the Private Prison EO) (two agencies of the DOJ, the United States Federal Bureau of Prisons and the USMS utilize our services), legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or our business, in particular, including, but not limited to, the continued utilization of our correctional and detention facilities by the federal government, and the impact of any changes to immigration reform and sentencing laws (our company does not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention); (ii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of our services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as well as our ability to utilize available beds; (iv) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on our contract renewals and renegotiations, per diem rates, and occupancy; (v) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, contract renegotiations or terminations, increases in costs of operations, fluctuations in interest rates and risks of operations; (vi) the duration of the federal government’s denial of entry at the United States southern border to asylum-seekers and anyone crossing the southern border without proper documentation or authority in an effort to contain the spread of COVID-19; (vii) government and staff responses to staff or residents testing positive for COVID-19 within public and private correctional, detention and reentry facilities, including the facilities we operate; (viii)  restrictions associated with COVID-19 that disrupt the criminal justice system, along with government policies on prosecutions and newly ordered legal restrictions that affect the number of people placed in correctional, detention, and reentry facilities; (ix) whether revoking our REIT election, effective January 1, 2021, and our revised capital allocation strategy can be implemented in a cost effective manner that provides the expected benefits, including facilitating our planned debt reduction initiative and planned return of capital to shareholders; (x) our ability to identify and consummate the sale of additional non-core assets at attractive prices; (xi) our ability to successfully identify and consummate future development and acquisition opportunities and our ability to successfully integrate the operations of our completed acquisitions and realize projected returns resulting therefrom; (xii) increases in costs to develop or expand real estate properties that exceed original estimates, or the inability to complete such projects on schedule as a result of various factors, many of which are beyond our control, such as the effects of, and delays caused by, COVID-19, weather, the availability of labor and materials, labor conditions, delays in obtaining legal approvals, unforeseen engineering, archeological or environmental problems, and cost inflation, resulting in increased construction costs; (xiii) our ability to identify and initiate service opportunities that were unavailable under our former REIT structure; (xiv) our ability to have met and maintained qualification for taxation as a REIT for the years we elected REIT status; and (xv) the availability of debt and equity financing on terms that are favorable to us, or at all, including financing we are pursuing on behalf of the state of Alabama for the construction of two correctional facilities. Other factors that could cause operating and financial results to differ are described in the filings we make from time to time with the Securities and Exchange Commission.

CoreCivic takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.

CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

ASSETS		March 31, 2021				December 31, 2020
Cash and cash equivalents		$	168,141			$	113,219
Restricted cash			16,413				23,549
Accounts receivable, net of credit loss reserve of $6,105 and $6,103, respectively			259,620				267,705
Prepaid expenses and other current assets			27,681				33,243
Assets held for sale			281,523				279,406
Total current assets			753,378				717,122
Real estate and related assets:
Property and equipment, net of accumulated depreciation of $1,572,711 and $1,559,388, respectively			2,333,340				2,350,272
Other real estate assets			225,341				228,243
Goodwill			5,902				5,902
Non-current deferred tax assets			–				11,113
Other assets			395,843				396,663
Total assets		$	3,713,804			$	3,709,315
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses		$	346,494			$	274,318
Current portion of long-term debt			38,914				39,087
Total current liabilities			385,408				313,405
Long-term debt, net			1,719,115				1,747,664
Deferred revenue			22,804				18,336
Non-current deferred tax liabilities			85,356				–
Other liabilities			210,886				216,468
Total liabilities			2,423,569				2,295,873
Commitments and contingencies
Preferred stock ? $0.01 par value; 50,000 shares authorized; none issued and outstanding at March 31, 2021, and December 31, 2020, respectively			–				–
Common stock ? $0.01 par value; 300,000 shares authorized; 120,277 and 119,638 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively			1,203				1,196
Additional paid-in capital			1,838,066				1,835,494
Accumulated deficit			(572,305	)			(446,519	)
Total stockholders’ equity			1,266,964				1,390,171
Non-controlling interest – operating partnership			23,271				23,271
Total equity			1,290,235				1,413,442
Total liabilities and equity		$	3,713,804			$	3,709,315

CORECIVIC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

		For the Three Months Ended March 31,
			2021				2020
REVENUES:
Safety		$	409,769			$	437,765
Community			23,658				30,599
Properties			21,255				22,679
Other			36				58
			454,718				491,101
EXPENSES:
Operating
Safety			305,427				330,737
Community			21,100				24,449
Properties			6,274				6,954
Other			83				175
Total operating expenses			332,884				362,315
General and administrative			29,530				31,279
Depreciation and amortization			32,712				37,952
Shareholder litigation expense			51,745				–
Asset impairments			1,308				536
			448,179				432,082
OPERATING INCOME			6,539				59,019
OTHER (INCOME) EXPENSE:
Interest expense, net			18,428				22,538
Other (income) expense			148				(533	)
			18,576				22,005
INCOME (LOSS) BEFORE INCOME TAXES			(12,037	)			37,014
Income tax expense			(113,531	)			(3,776	)
NET INCOME (LOSS)		$	(125,568	)		$	33,238
Net income attributable to non-controlling interest			–				(1,181	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(125,568	)		$	32,057
BASIC EARNINGS (LOSS) PER SHARE		$	(1.05	)		$	0.27
DILUTED EARNINGS (LOSS) PER SHARE		$	(1.05	)		$	0.27

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS

	For the Three Months Ended March 31,
		2021				2020
Net income (loss) attributable to common stockholders	$	(125,568	)		$	32,057
Non-controlling interest		–				1,181
Diluted net income (loss) attributable to common stockholders	$	(125,568	)		$	33,238
Special items:
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Income taxes associated with change in corporate tax structure and other special tax items		114,249				3,085
Shareholder litigation expense		51,745				–
Asset impairments		1,308				536
Income tax benefit for special items		(14,060	)			–
Adjusted net income	$	29,272			$	37,197
Weighted average common shares outstanding – basic		119,909				119,336
Effect of dilutive securities:
Stock options		–				–
Restricted stock-based awards		115				47
Non-controlling interest – operating partnership units		1,342				1,342
Weighted average shares and assumed conversions – diluted		121,366				120,725
Adjusted Earnings Per Diluted Share	$	0.24			$	0.30

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS

	For the Three Months Ended March 31,
		2021				2020
Net income (loss)	$	(125,568	)		$	33,238
Depreciation and amortization of real estate assets		23,759				28,106
Impairment of real estate assets		1,308				405
Income tax benefit for special items		(350	)			–
Funds From Operations	$	(100,851	)		$	61,749
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Income taxes associated with change in corporate tax structure and other special tax items		114,249				3,085
Shareholder litigation expense		51,745				–
Goodwill and other impairments		–				131
Income tax benefit for special items		(13,710	)			–
Normalized Funds From Operations	$	53,031			$	65,303
Funds From Operations Per Diluted Share	$	(0.83	)		$	0.51
Normalized Funds From Operations Per Diluted Share	$	0.44			$	0.54

CORECIVIC, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

CALCULATION OF EBITDA AND ADJUSTED EBITDA

	For the Three Months Ended March 31,
		2021				2020
Net income (loss)	$	(125,568	)		$	33,238
Interest expense		20,925				24,555
Depreciation and amortization		32,712				37,952
Income tax expense		113,531				3,776
EBITDA	$	41,600			$	99,521
Expenses associated with mergers and acquisitions		–				338
Expenses associated with COVID-19		1,598				–
Shareholder litigation expense		51,745				–
Asset impairments		1,308				536
Adjusted EBITDA	$	96,251			$	100,395

NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION

Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures. The Company believes that these measures are important operating measures that supplement discussion and analysis of the Company’s results of operations and are used to review and assess operating performance of the Company and its properties and their management teams. The Company believes that it is useful to provide investors, lenders and security analysts disclosures of its results of operations on the same basis that is used by management.   FFO, in particular, is a widely accepted non-GAAP supplemental measure of performance of real estate companies, grounded in the standards for FFO established by the National Association of Real Estate Investment Trusts (NAREIT).

NAREIT defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis.   EBITDA, Adjusted EBITDA, and Normalized FFO are useful as supplemental measures of performance of the Company’s properties because such measures do not take into account depreciation and amortization, or with respect to EBITDA, the impact of the Company’s tax provisions and financing strategies. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), this accounting presentation assumes that the value of real estate assets diminishes at a level rate over time.   Because of the unique structure, design and use of the Company’s properties, management believes that assessing performance of the Company’s properties without the impact of depreciation or amortization is useful. The Company may make adjustments to FFO from time to time for certain other income and expenses that it considers non-recurring, infrequent or unusual, even though such items may require cash settlement, because such items do not reflect a necessary or ordinary component of the ongoing operations of the Company.   Normalized FFO excludes the effects of such items. The Company calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt refinancing, M&A activity, and certain impairments and other charges that the Company believes are unusual or non-recurring to provide an alternative measure of comparing operating performance for the periods presented. Even though expenses associated with mergers and acquisitions may be recurring, the magnitude and timing fluctuate based on the timing and scope of M&A activity, and therefore, such expenses, which are not a necessary component of the ongoing operations of the Company, may not be comparable from period to period.

Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited.   Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and, where appropriate, their corresponding per share measures are not measures of performance under GAAP, and should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income as indicators of the Company’s operating performance or any other measure of performance derived in accordance with GAAP.   This data should be read in conjunction with the Company’s consolidated financial statements and related notes included in its filings with the Securities and Exchange Commission.

Contact:	Investors: Cameron Hopewell – Managing Director, Investor Relations – (615) 263-3024
	Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204

 

Monday, April 26, 2021

Driven By Stem (STMH)(STEM:CA)
Stem Holdings: Farm-to-Home Cannabis Provider

Stem Holdings Inc is engaged in the purchasing, improving, and leasing of properties and finance assets which are operated by third parties and are used for the cultivation and retail sale of marijuana. Its properties includes 42nd Street, and Mulino Farm which are used for agriculture. The company generates its revenue in the form of rental income from tenants.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating Coverage. We are initiating research coverage on Stem Holdings. We believe the Company’s recent merger with Driven Deliveries has established Stem as the first cannabis cultivator and technology omnichannel retailer with e-commerce ordering and express and next-day delivery.


From Farm-to-Home.  With 22 licenses spanning cultivation, processing, edibles, and distribution, Stem is truly a “farm-to-home” cannabis operator. The new home delivery business can leverage off Stem’s existing manufacturing and dispensary business and vice versa, while the Company’s award winning brands and proprietary genetics provide a competitive edge …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

Monday, April 26, 2021

DLH Holdings Corp. (DLHC)
Awarded VA-CMOP Logistics

DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

CMOP Award. On Friday, DLH announced its had won the follow-on contract for CMOP medical logistics for the VA. This contract had originally been targeted for small businesses but the VA eventually removed all set-aside tiers and awarded the contract to incumbent DLH. This program processed over 120 million prescriptions in 2020 from seven geographical locations nationwide. We believe Friday’s announcement positions the Company to win the remaining CMOP award for pharmacy services still outstanding.


Contract Details.  The contract includes a base period of one year, with four one year options. Total value of the contract, assuming all options are exercised is $202 million. The contract value is in-line with the previous contracts, which generated $43.7 million and $39.4 million of revenue in fiscal 2020 and fiscal 2019 for DLH …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision. 

CoreCivic Announces 2021 First Quarter Earnings Release and Conference Call Dates

 

BRENTWOOD, Tenn., April 23, 2021 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today that it will release its 2021 first quarter financial results after the market closes on Wednesday, May 5, 2021.  

A live broadcast of CoreCivic’s conference call will begin at 10:00 a.m. central time (11:00 a.m. eastern time) on Thursday, May 6, 2021, and will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. The live broadcast can also be accessed by dialing 800-367-2403 in the U.S. and Canada, including the confirmation passcode 7487376. An online replay of the call will be archived on our website promptly following the conference call. In addition, there will be a telephonic replay available beginning at 1:00 p.m. central time (2:00 p.m. eastern time) on May 6, 2021, through 1:00 p.m. central time (2:00 p.m. eastern time) on May 14, 2021. To access the telephonic replay, dial 888-203-1112 in the U.S. and Canada. International callers may dial +1 719-457-0820 and enter passcode 8097453.

About CoreCivic

CoreCivic is a diversified government solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. CoreCivic provides a broad range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. CoreCivic is the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believes it is the largest private owner of real estate used by government agencies in the U.S. CoreCivic has been a flexible and dependable partner for government for more than 35 years. CoreCivic’s employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. 

Contact:		Investors: Cameron Hopewell – Managing Director, Investor Relations – (615) 263-3024
		Media: Steve Owen – Vice President, Communications – (615) 263-3107