BOCA RATON, Fla.–(BUSINESS WIRE)–Dec. 14, 2023– The GEO Group (NYSE: GEO) (“GEO” or the “Company”) announced today the closing of a Refinancing Revolving Credit Commitments Amendment (“Amendment”) to its Credit Agreement dated as of August 19, 2022, providing for the refinancing of all of GEO’s outstanding revolving credit facility commitments. The Amendment provides for approximately $265 million in refinancing revolving credit commitments maturing on March 23, 2027. Prior to the Amendment, a portion of the Company’s revolving credit commitments matured on May 17, 2024, and the balance of the Company’s revolving credit commitments matured on March 23, 2027. The Amendment further provides that interest will accrue on outstanding revolving credit loans at a rate determined with reference to the Company’s total leverage ratio. As of today, revolving credit loans accruing interest at a SOFR based rate would accrue interest at the term SOFR reference rate for the applicable interest period plus 3.00% per annum. All other terms governing the refinancing revolving credit commitments remain substantially consistent with those governing the revolving credit commitments being refinanced. GEO currently has no outstanding borrowings under its revolving credit facility, as amended.
George C. Zoley, Executive Chairman of GEO, said, “We are pleased with this recent refinancing transaction and the support for our Company’s future capital needs. This is an important step to continue achieving our long-term strategy to reduce debt and refinance our credit arrangements.”
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 100 facilities totaling approximately 81,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Use of forward-looking statements
This news release may contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the cautionary statements and risk factors contained in GEO’s filings with the U.S. Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2022, its Form 10-Qs for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, and its Form 8-K reports. All forward-looking statements speak only as of the date of this news release and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements and risk factors contained in GEO’s filings with the U.S. Securities and Exchange Commission, including those referenced above. GEO disclaims any obligation to update or revise any forward-looking statements, except as required by law.
ATLANTA, Nov. 27, 2023 (GLOBE NEWSWIRE) — DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading healthcare and human services provider to the federal government, will release financial results for its fiscal fourth quarter ended September 30, 2023 on December 6, 2023 after the market closes. DLH will then host a conference call for the investment community at 10:00 a.m. Eastern Time the following day, December 7, 2023, during which members of senior management will make a brief presentation focused on the financial results and operating trends. A question-and-answer session will follow.
Interested parties may listen to the conference call by dialing 888-347-5290 or 412-317-5256. Presentation materials will also be posted on the Investor Relations section of the DLH website prior to the commencement of the conference call. A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 877-344-7529 and entering the conference ID 4720443.
About DLH DLH (NASDAQ:DLHC) delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 3,200 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit http://www.DLHcorp.com.
INVESTOR RELATIONS Contact: Chris Witty Phone: 646-438-9385 Email: cwitty@darrowir.com
BRENTWOOD, Tenn., Nov. 16, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today it signed a new management contract with the state of Wyoming for the housing of up to 240 male inmates at the Company’s 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi. We previously housed inmates for Wyoming under a management contract that had not been utilized since 2019. The term of the new contract runs through June 30, 2026.
Additionally, CoreCivic signed a new management contract with Harris County, Texas, to house up to 360 male inmates at the Tallahatchie County Correctional Facility. Upon mutual agreement, the County may access an additional 360 beds at the Tallahatchie facility. The initial contract term begins on December 1, 2023, and ends November 30, 2024. The contract may be extended at the County’s option for four additional one-year terms.
Since September 2023, CoreCivic has added contracts with the State of Montana at the Saguaro Correctional Facility as well as with Hinds County (MS), Harris County (TX), and the State of Wyoming at the Tallahatchie County Correctional Facility. CoreCivic anticipates the combined annual revenue of these four contacts to be approximately $25 million.
Damon T. Hininger, President and Chief Executive Officer commented, “We are honored to once again assist the Wyoming Department of Corrections with their correctional needs, and believe this contract demonstrates the essential solutions that we provide to federal, state, and local government agencies. Harris County is a new partnership for CoreCivic, and we look forward to providing the County with a flexible capacity solution.”
Hininger continued, “These new contracts further reinforce the versatility of our real estate assets. Utilizing existing bed inventory is key to driving margin improvement at CoreCivic. These recent contract wins demonstrate both strong contracting progress and the high levels of interest in our services and assets from existing and new governmental partners.”
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
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, as amended. 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, 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, including as a consequence of the United States Department of Justice, or DOJ, not renewing contracts as a result of President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, impacting utilization primarily by the Federal Bureau of Prisons and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do 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; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the impact resulting from the termination of Title 42, the federal government’s policy to deny 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 the coronavirus and related variants, or COVID-19; (vii) government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns and changing funding priorities; (viii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (ix) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (x) the availability of debt and equity financing on terms that are favorable to us, or at all. 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.
We take 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.
Contact:
Investors: Michael Grant – Managing Director, Investor Relations – (615) 263-6957 Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the bottom of the report for important disclosures
More Funding? In testimony before the U.S. Senate Committee on Appropriations, U.S. Department of Homeland Security Secretary Mayorkas expounded on the Biden Administration’s $8.7 billion supplemental funding request for DHS to cover projected shortfalls, enhance enforcement, and hire additional personnel.
More Beds. One of the key items was increased surge capacity of up to 46,500 ICE detention beds. Recall, the current budgeted amount is 34,000 beds, although the most recent ICE report indicates nearly 37,000 beds were being used as of October 3rd and press reports indicate the current number is closer to 40,000. Additional funding for transportation and the Alternatives to Detention (ATD) program also was requested.
Surge Continues. In October 240,988 people were encountered at the Southwest border, up from 231,529 a year ago and down only modestly from the 269,735 encountered in September. For all of fiscal 2023, there were 2,475,669 border encounters. We would note, in his testimony, Secretary Mayorkas stated that since May 12th, or approximately 6 months, 336,000 individuals have been removed or returned, a fraction of the nearly 1.3 million encounters since then, not to mention the historic numbers prior. And, recall, encounters only represent a portion of total border crossings.
What Does It Mean for CXW and GEO. Assuming the funding is passed, it will have a positive impact on CoreCivic (CXW) and The GEO Group (GEO), at least in the short-term. With CXW and GEO receiving roughly one-third each of new detainees any increase in the overall number of detainees should positively impact operating results, especially given that as of the end of the third quarter, both companies had the majority of their respective ICE facilities at or above the guaranteed minimum level. If the increased number of beds is sticky, it is possible ICE will seek additional facility capacity, potentially enabling CXW and/or GEO to restart a currently idled facility. Finally, any increase in the use of the ISAP program will benefit GEO.
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ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE
Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.” FINRA licenses 7, 24, 63, 87
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New Contract and Contract Renewal Momentum Continues
BRENTWOOD, Tenn., Nov. 14, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today it signed a new management contract with the state of Montana for the housing of up to 120 inmates at the Company’s 1,896-bed Saguaro Correctional Facility in Eloy, Arizona.
The new management contract commences immediately and ends October 31, 2025. The contract may be extended by mutual agreement. The total term, including renewals, may not exceed seven years. We anticipate completing the receipt of the inmates from Montana at the Saguaro facility by December 31, 2023.
Damon T. Hininger, President and Chief Executive Officer commented, “We are grateful for our longstanding partnership with the Montana Department of Corrections and honored by the opportunity to meet their evolving needs at both our Crossroads Correctional Facility in Shelby, Montana as well as at our Saguaro Correctional Facility in Eloy, Arizona. Our modern Saguaro facility, built in 2007, will now care for incarcerated individuals for three different state partners.”
Hininger continued, “This new contract further reflects the attractiveness of our available bed capacity as well as the high level of service and trust for which CoreCivic is recognized. We continue to anticipate heightened need for our modern and flexible capacity from states and local agencies, as well as from Federal partners.”
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
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, as amended. 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, 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, including as a consequence of the United States Department of Justice, or DOJ, not renewing contracts as a result of President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, impacting utilization primarily by the Federal Bureau of Prisons and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do 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; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the impact resulting from the termination of Title 42, the federal government’s policy to deny 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 the coronavirus and related variants, or COVID-19; (vii) government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns and changing funding priorities; (viii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (ix) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (x) the availability of debt and equity financing on terms that are favorable to us, or at all. 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.
We take 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.
Contact:
Investors: Michael Grant – Managing Director, Investor Relations – (615) 263-6957
Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204
BOCA RATON, Fla.–(BUSINESS WIRE)–Nov. 7, 2023– The GEO Group, Inc. (NYSE: GEO) (“GEO”), a leading provider of support services for secure facilities, processing centers, and reentry centers, as well as enhanced in-custody rehabilitation, post-release support, and electronic monitoring programs, reported today its financial results for the third quarter and first nine months of 2023.
Third Quarter 2023 Highlights
Total revenues of $602.8 million
Net Income of $24.5 million
Net Income Attributable to GEO of $0.16 per diluted share
Adjusted Net Income of $0.19 per diluted share
Adjusted EBITDA of $118.7 million
Reduced Total Net Debt by $109 million to approximately $1.8 billion
For the third quarter 2023, we reported net income of $24.5 million, compared to net income of $38.3 million for the third quarter 2022. We reported total revenues for the third quarter 2023 of $602.8 million compared to $616.7 million for the third quarter 2022. Third quarter 2023 results reflect a year-over-year increase of $13.0 million in net interest expense as a result of the completed transactions to address the substantial majority of our outstanding debt, which closed on August 19, 2022, as well as the impact of higher interest rates. We reported third quarter 2023 Adjusted EBITDA of $118.7 million, compared to $136.2 million for the third quarter 2022.
George C. Zoley, Executive Chairman of GEO, said, “Our diversified business units continued to deliver steady operational and financial performance. We have also made further progress towards our objective of reducing our net debt, which remains a strategic priority for our company. During the third quarter of 2023, we reduced our total net debt by $109 million, ending the period with approximately $1.8 billion in total net debt. We believe that our ongoing efforts to reduce debt and deleverage our balance sheet will enhance value for our shareholders over time.”
First Nine Months 2023 Highlights
Total revenues of $1.80 billion
Net Income of $82.0 million
Net Income Attributable to GEO of $0.55 per diluted share
Adjusted Net Income of $0.66 per diluted share
Adjusted EBITDA of $378.6 million
For the first nine months of 2023, we reported net income of $82.0 million, compared to net income of $130.2 million for the first nine months of 2022. We reported total revenues for the first nine months of 2023 of $1.80 billion compared to $1.76 billion for the first nine months of 2022.
Results for the first nine months of 2023 reflect a year-over-year increase of $66.2 million in net interest expense as a result of the completed transactions to address the substantial majority of our outstanding debt, which closed on August 19, 2022, as well as the impact of higher interest rates. For the first nine months of 2023, we reported Adjusted EBITDA of $378.6 million, compared to $393.7 million for the first nine months of 2022.
2023 Financial Guidance
Today, we updated our guidance for the full-year and fourth quarter of 2023 to reflect our updated expectations regarding the U.S. Department of Homeland Security’s Intensive Supervision and Appearance Program (“ISAP”).
Our previous guidance for the fourth quarter of 2023 assumed a moderate increase in ISAP participants during the quarter. While the ISAP participant count has remained relatively stable over the last three months, we have not experienced the moderate increase that was contemplated in our previous guidance. We believe that U.S. Immigration and Customs Enforcement (“ICE”) continues to face budgetary pressures, and the timing of the passage of federal appropriations bills for the fiscal year 2024 remains uncertain. As a result of these factors, we have updated our guidance assumptions and now assume for budget purposes that the ISAP participant count will be flat to slightly down for the balance of the year.
For the fourth quarter 2023, we expect GAAP Net Income to be in a range of $19 million to $24 million and quarterly revenues to be in a range of $590 million to $600 million. We expect fourth quarter 2023 Adjusted EBITDA to be in a range of $117 million to $122 million.
For the full-year 2023, we expect GAAP Net Income to be in a range of $100 million to $105 million on annual revenues of approximately $2.4 billion. We expect our full-year 2023 Adjusted EBITDA to be between $495 million and $500 million dollars. We expect our effective tax rate for the full-year 2023 to be approximately 29 percent, exclusive of any discrete items.
Our guidance does not include the potential reactivation of any of our remaining idle Secure Services facilities, which total approximately 9,000 beds.
Conference Call Information
We have scheduled a conference call and webcast for today at 11:00 AM (Eastern Time) to discuss our third quarter 2023 financial results as well as our outlook. The call-in number for the U.S. is 1-877-250-1553 and the international call-in number is 1-412-542-4145. In addition, a live audio webcast of the conference call may be accessed on the Webcasts section under the News, Events and Reports tab of GEO’s investor relations webpage at investors.geogroup.com. A replay of the webcast will be available on the website for one year. A telephonic replay of the conference call will be available through November 14, 2023, at 1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The participant passcode for the telephonic replay is 4528594.
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 100 facilities totaling approximately 81,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Reconciliation Tables and Supplemental Information
GEO has made available Supplemental Information which contains reconciliation tables of Net Income Attributable to GEO to Adjusted Net Income, and Net Income to EBITDA and Adjusted EBITDA, along with supplemental financial and operational information on GEO’s business and other important operating metrics. The reconciliation tables are also presented herein. Please see the section below titled “Note to Reconciliation Tables and Supplemental Disclosure – Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines these supplemental Non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures. GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental Information available on GEO’s investor webpage at investors.geogroup.com.
Note to Reconciliation Tables and Supplemental Disclosure – Important Information on GEO’s Non-GAAP Financial Measures
Adjusted Net Income, EBITDA, and Adjusted EBITDA are non-GAAP financial measures that are presented as supplemental disclosures. GEO has presented herein certain forward-looking statements about GEO’s future financial performance that include non-GAAP financial measures, including Net Debt, Net Leverage, and Adjusted EBITDA. The determination of the amounts that are included or excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period.
While we have provided a high level reconciliation for the guidance ranges for full year 2023, we are unable to present a more detailed quantitative reconciliation of the forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. The quantitative reconciliation of the forward-looking non-GAAP financial measures will be provided for completed annual and quarterly periods, as applicable, calculated in a consistent manner with the quantitative reconciliation of non-GAAP financial measures previously reported for completed annual and quarterly periods.
Net Debt is defined as gross principal debt less cash from restricted subsidiaries. Net Leverage is defined as Net Debt divided by Adjusted EBITDA.
EBITDA is defined as net income adjusted by adding provisions for income tax, interest expense, net of interest income, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (gain)/loss on asset divestitures, pre-tax, net loss attributable to non-controlling interests, stock-based compensation expenses, pre-tax, transaction related expenses, pre-tax, other non-cash revenue and expenses, pre-tax, and certain other adjustments as defined from time to time.
Given the nature of our business as a real estate owner and operator, we believe that EBITDA and Adjusted EBITDA are helpful to investors as measures of our operational performance because they provide an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures, and to fund other cash needs or reinvest cash into our business.
We believe that by removing the impact of our asset base (primarily depreciation and amortization) and excluding certain non-cash charges, amounts spent on interest and taxes, and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates and operating costs, providing a perspective not immediately apparent from net income.
The adjustments we make to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in income from continuing operations and which we do not consider to be the fundamental attributes or primary drivers of our business plan and they do not affect our overall long-term operating performance.
EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes.
Adjusted Net Income is defined as net income attributable to GEO adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure GEO’s actual operating performance, including for the periods presented (gain)/loss on asset divestitures, pre-tax, (gain)/loss on the extinguishment of debt, pre-tax, transaction related expenses, pre-tax, and tax effect of adjustments to net income attributable to GEO.
Safe-Harbor Statement
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially and adversely affect actual results, including statements regarding GEO’s financial guidance for the full-year and fourth quarter of 2023, statements regarding GEO’s efforts to market its current idle facilities, GEO’s focus on reducing net debt, and GEO’s assumptions regarding the number of ISAP participants during the fourth quarter of 2023. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” or “continue” or the negative of such words and similar expressions. Risks and uncertainties that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to meet its financial guidance for 2023 given the various risks to which its business is exposed; (2) GEO’s ability to deleverage and repay, refinance or otherwise address its debt maturities in an amount and on terms commercially acceptable to GEO, and on the timeline it expects or at all; (3) GEO’s ability to identify and successfully complete any potential sales of company-owned assets and businesses on commercially advantageous terms on a timely basis, or at all; (4) changes in federal and state government policy, orders, directives, legislation and regulations that affect public-private partnerships with respect to secure, correctional and detention facilities, processing centers and reentry centers, including the timing and scope of implementation of President Biden’s Executive Order directing the U.S. Attorney General not to renew the U.S. Department of Justice contracts with privately operated criminal detention facilities; (5) changes in federal immigration policy; (6) public and political opposition to the use of public-private partnerships with respect to secure correctional and detention facilities, processing centers and reentry centers; (7) the magnitude, severity, and duration of the COVID-19 global pandemic, its impact on GEO, GEO’s ability to mitigate the risks associated with COVID-19, and the efficacy and distribution of COVID-19 vaccines; (8) GEO’s ability to sustain or improve company-wide occupancy rates at its facilities in light of the COVID-19 global pandemic and policy and contract announcements impacting GEO’s federal facilities in the United States; (9) fluctuations in GEO’s operating results, including as a result of contract terminations, contract renegotiations, changes in occupancy levels and increases in GEO’s operating costs; (10) general economic and market conditions, including changes to governmental budgets and its impact on new contract terms, contract renewals, renegotiations, per diem rates, fixed payment provisions, and occupancy levels; (11) GEO’s ability to address inflationary pressures related to labor related expenses and other operating costs; (12) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (13) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (14) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (15) GEO’s ability to successfully pursue growth and continue to create shareholder value; (16) GEO’s ability to obtain financing or access the capital markets in the future on acceptable terms or at all; and (17) other factors contained in GEO’s Securities and Exchange Commission periodic filings, including its Form 10-K, 10-Q and 8-K reports, many of which are difficult to predict and outside of GEO’s control.
Third quarter and first nine months of 2023 financial tables to follow:
Condensed Consolidated Balance Sheets*(Unaudited)
As of
As of
September 30, 2023
December 31, 2022
(unaudited)
(unaudited)
ASSETS
Cash and cash equivalents
$
141,020
$
95,073
Accounts receivable, less allowance for doubtful accounts
356,501
416,399
Prepaid expenses and other current assets
41,138
43,536
Total current assets
$
538,659
$
555,008
Restricted Cash and Investments
130,729
111,691
Property and Equipment, Net
1,951,524
2,002,021
Operating Lease Right-of-Use Assets, Net
106,552
90,950
Assets Held for Sale
5,130
480
Deferred Income Tax Assets
8,005
8,005
Intangible Assets, Net (including goodwill)
893,449
902,887
Other Non-Current Assets
90,335
89,341
Total Assets
$
3,724,383
$
3,760,383
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
$
66,758
$
79,312
Accrued payroll and related taxes
78,568
53,225
Accrued expenses and other current liabilities
200,187
237,369
Operating lease liabilities, current portion
24,506
22,584
Current portion of finance lease obligations, and long-term debt
63,307
44,722
Total current liabilities
$
433,326
$
437,212
Deferred Income Tax Liabilities
75,849
75,849
Other Non-Current Liabilities
79,797
74,008
Operating Lease Liabilities
86,849
73,801
Finance Lease Liabilities
740
1,280
Long-Term Debt
1,789,273
1,933,145
Total Shareholders’ Equity
1,258,549
1,165,088
Total Liabilities and Shareholders’ Equity
$
3,724,383
$
3,760,383
* all figures in ‘000s
Condensed Consolidated Statements of Operations*(Unaudited)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
$
602,785
$
616,683
$
1,804,885
$
1,756,045
Operating expenses
440,667
436,210
1,302,287
1,233,162
Depreciation and amortization
31,173
32,330
94,787
100,284
General and administrative expenses
47,356
50,022
139,182
147,878
Operating income
83,589
98,121
268,629
274,721
Interest income
1,320
5,111
3,785
16,301
Interest expense
(55,777
)
(46,537
)
(165,081
)
(111,383
)
Loss on extinguishment of debt
(91
)
(37,487
)
(1,845
)
(37,487
)
Gain on asset divestitures
1,274
29,279
3,449
32,332
Income before income taxes and equity in earnings of affiliates
30,315
48,487
108,937
174,484
Provision for income taxes
6,521
11,246
30,036
48,106
Equity in earnings of affiliates, net of income tax provision
709
1,071
3,121
3,786
Net income
24,503
38,312
82,022
130,164
Less: Net loss attributable to noncontrolling interests
16
25
71
119
Net income attributable to The GEO Group, Inc.
$
24,519
$
38,337
$
82,093
$
130,283
Weighted Average Common Shares Outstanding:
Basic
122,066
121,154
121,850
120,998
Diluted
123,433
122,426
123,479
121,907
Net income per Common Share Attributable to The GEO Group, Inc.** :
Basic:
Net income per share — basic
$
0.17
$
0.26
$
0.56
$
0.89
Diluted:
Net income per share — diluted
$
0.16
$
0.26
$
0.55
$
0.89
* All figures in ‘000s, except per share data
** In accordance with U.S. GAAP, diluted earnings per share attributable to GEO available to common stockholders is calculated under the if-converted method or the two-class method, whichever calculation results in the lowest diluted earnings per share amount, which may be lower than Adjusted Net Income Per Diluted Share.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA,and Net Income Attributable to GEO to Adjusted Net Income*(Unaudited)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net Income
$
24,503
$
38,312
$
82,022
$
130,164
Add:
Income tax provision **
6,588
11,435
30,617
48,570
Interest expense, net of interest income ***
54,548
78,913
163,141
132,569
Depreciation and amortization
31,173
32,330
94,787
100,284
EBITDA
$
116,812
$
160,990
$
370,567
$
411,587
Add (Subtract):
Gain on asset divestitures, pre-tax
(1,274
)
(29,279
)
(3,449
)
(32,332
)
Net loss attributable to noncontrolling interests
16
25
71
119
Stock based compensation expenses, pre-tax
3,116
3,141
12,052
13,010
Transaction related expenses, pre-tax
–
1,322
–
1,322
Other non-cash revenue & expenses, pre-tax
–
–
(687
)
–
Adjusted EBITDA
$
118,670
$
136,199
$
378,554
$
393,706
Net Income attributable to GEO
$
24,519
$
38,337
$
82,093
$
130,283
Add (Subtract):
Gain on asset divestitures, pre-tax
(1,274
)
(29,279
)
(3,449
)
(32,958
)
Loss on extinguishment of debt, pre-tax
91
37,487
1,845
37,487
Transaction related expenses, pre-tax
–
1,322
–
1,322
Tax effect of adjustment to net income attributable to GEO (1)
297
(7,697
)
403
(6,772
)
Adjusted Net Income
$
23,633
$
40,170
$
80,892
$
129,362
Weighted average common shares outstanding – Diluted
123,433
122,426
123,479
121,907
Adjusted Net Income per Diluted share
0.19
0.33
0.66
1.06
* all figures in ‘000s, except per share data
** including income tax provision on equity in earnings of affiliates
*** includes loss on extinguishment of debt
(1) Tax adjustment related to gain on asset divestitures and loss on extinguishment of debt.
2023 Outlook/Reconciliation (1)(In thousands, except per share data)(Unaudited)
FY 2023
Net Income
$
100,000
to
$
105,000
Net Interest Expense
217,000
217,000
Income Taxes (including income tax provision on equity in earnings of affiliates)
40,000
40,000
Depreciation and Amortization
127,000
127,000
Non-Cash Stock Based Compensation
15,700
15,700
Other Non-Cash
(4,700
)
(4,700
)
Adjusted EBITDA
$
495,000
to
$
500,000
Net Income Attributable to GEO Per Diluted Share
$
0.80
to
$
0.85
Weighted Average Common Shares Outstanding-Diluted
123,500
to
123,500
CAPEX
Growth
9,000
to
10,000
Technology
16,000
to
20,000
Facility Maintenance
45,000
to
50,000
Capital Expenditures
70,000
to
80,000
Total Debt, Net
$
1,820,000
$
1,780,000
Total Leverage, Net
3.66
3.58
(1) Total Net Leverage is calculated using the midpoint of Adjusted EBITDA guidance range.
BOCA RATON, Fla.–(BUSINESS WIRE)–Nov. 7, 2023– The GEO Group, Inc. (NYSE: GEO) (“GEO”), a leading provider of support services for secure facilities, processing centers, and reentry centers, as well as enhanced in-custody rehabilitation, post-release support, and electronic monitoring programs, reported today its financial results for the third quarter and first nine months of 2023.
Third Quarter 2023 Highlights
Total revenues of $602.8 million
Net Income of $24.5 million
Net Income Attributable to GEO of $0.16 per diluted share
Adjusted Net Income of $0.19 per diluted share
Adjusted EBITDA of $118.7 million
Reduced Total Net Debt by $109 million to approximately $1.8 billion
For the third quarter 2023, we reported net income of $24.5 million, compared to net income of $38.3 million for the third quarter 2022. We reported total revenues for the third quarter 2023 of $602.8 million compared to $616.7 million for the third quarter 2022. Third quarter 2023 results reflect a year-over-year increase of $13.0 million in net interest expense as a result of the completed transactions to address the substantial majority of our outstanding debt, which closed on August 19, 2022, as well as the impact of higher interest rates. We reported third quarter 2023 Adjusted EBITDA of $118.7 million, compared to $136.2 million for the third quarter 2022.
George C. Zoley, Executive Chairman of GEO, said, “Our diversified business units continued to deliver steady operational and financial performance. We have also made further progress towards our objective of reducing our net debt, which remains a strategic priority for our company. During the third quarter of 2023, we reduced our total net debt by $109 million, ending the period with approximately $1.8 billion in total net debt. We believe that our ongoing efforts to reduce debt and deleverage our balance sheet will enhance value for our shareholders over time.”
First Nine Months 2023 Highlights
Total revenues of $1.80 billion
Net Income of $82.0 million
Net Income Attributable to GEO of $0.55 per diluted share
Adjusted Net Income of $0.66 per diluted share
Adjusted EBITDA of $378.6 million
For the first nine months of 2023, we reported net income of $82.0 million, compared to net income of $130.2 million for the first nine months of 2022. We reported total revenues for the first nine months of 2023 of $1.80 billion compared to $1.76 billion for the first nine months of 2022.
Results for the first nine months of 2023 reflect a year-over-year increase of $66.2 million in net interest expense as a result of the completed transactions to address the substantial majority of our outstanding debt, which closed on August 19, 2022, as well as the impact of higher interest rates. For the first nine months of 2023, we reported Adjusted EBITDA of $378.6 million, compared to $393.7 million for the first nine months of 2022.
2023 Financial Guidance
Today, we updated our guidance for the full-year and fourth quarter of 2023 to reflect our updated expectations regarding the U.S. Department of Homeland Security’s Intensive Supervision and Appearance Program (“ISAP”).
Our previous guidance for the fourth quarter of 2023 assumed a moderate increase in ISAP participants during the quarter. While the ISAP participant count has remained relatively stable over the last three months, we have not experienced the moderate increase that was contemplated in our previous guidance. We believe that U.S. Immigration and Customs Enforcement (“ICE”) continues to face budgetary pressures, and the timing of the passage of federal appropriations bills for the fiscal year 2024 remains uncertain. As a result of these factors, we have updated our guidance assumptions and now assume for budget purposes that the ISAP participant count will be flat to slightly down for the balance of the year.
For the fourth quarter 2023, we expect GAAP Net Income to be in a range of $19 million to $24 million and quarterly revenues to be in a range of $590 million to $600 million. We expect fourth quarter 2023 Adjusted EBITDA to be in a range of $117 million to $122 million.
For the full-year 2023, we expect GAAP Net Income to be in a range of $100 million to $105 million on annual revenues of approximately $2.4 billion. We expect our full-year 2023 Adjusted EBITDA to be between $495 million and $500 million dollars. We expect our effective tax rate for the full-year 2023 to be approximately 29 percent, exclusive of any discrete items.
Our guidance does not include the potential reactivation of any of our remaining idle Secure Services facilities, which total approximately 9,000 beds.
Conference Call Information
We have scheduled a conference call and webcast for today at 11:00 AM (Eastern Time) to discuss our third quarter 2023 financial results as well as our outlook. The call-in number for the U.S. is 1-877-250-1553 and the international call-in number is 1-412-542-4145. In addition, a live audio webcast of the conference call may be accessed on the Webcasts section under the News, Events and Reports tab of GEO’s investor relations webpage at investors.geogroup.com. A replay of the webcast will be available on the website for one year. A telephonic replay of the conference call will be available through November 14, 2023, at 1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The participant passcode for the telephonic replay is 4528594.
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 100 facilities totaling approximately 81,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Reconciliation Tables and Supplemental Information
GEO has made available Supplemental Information which contains reconciliation tables of Net Income Attributable to GEO to Adjusted Net Income, and Net Income to EBITDA and Adjusted EBITDA, along with supplemental financial and operational information on GEO’s business and other important operating metrics. The reconciliation tables are also presented herein. Please see the section below titled “Note to Reconciliation Tables and Supplemental Disclosure – Important Information on GEO’s Non-GAAP Financial Measures” for information on how GEO defines these supplemental Non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures. GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental Information available on GEO’s investor webpage at investors.geogroup.com.
Note to Reconciliation Tables and Supplemental Disclosure – Important Information on GEO’s Non-GAAP Financial Measures
Adjusted Net Income, EBITDA, and Adjusted EBITDA are non-GAAP financial measures that are presented as supplemental disclosures. GEO has presented herein certain forward-looking statements about GEO’s future financial performance that include non-GAAP financial measures, including Net Debt, Net Leverage, and Adjusted EBITDA. The determination of the amounts that are included or excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period.
While we have provided a high level reconciliation for the guidance ranges for full year 2023, we are unable to present a more detailed quantitative reconciliation of the forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because management cannot reliably predict all of the necessary components of such GAAP measures. The quantitative reconciliation of the forward-looking non-GAAP financial measures will be provided for completed annual and quarterly periods, as applicable, calculated in a consistent manner with the quantitative reconciliation of non-GAAP financial measures previously reported for completed annual and quarterly periods.
Net Debt is defined as gross principal debt less cash from restricted subsidiaries. Net Leverage is defined as Net Debt divided by Adjusted EBITDA.
EBITDA is defined as net income adjusted by adding provisions for income tax, interest expense, net of interest income, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (gain)/loss on asset divestitures, pre-tax, net loss attributable to non-controlling interests, stock-based compensation expenses, pre-tax, transaction related expenses, pre-tax, other non-cash revenue and expenses, pre-tax, and certain other adjustments as defined from time to time.
Given the nature of our business as a real estate owner and operator, we believe that EBITDA and Adjusted EBITDA are helpful to investors as measures of our operational performance because they provide an indication of our ability to incur and service debt, to satisfy general operating expenses, to make capital expenditures, and to fund other cash needs or reinvest cash into our business.
We believe that by removing the impact of our asset base (primarily depreciation and amortization) and excluding certain non-cash charges, amounts spent on interest and taxes, and certain other charges that are highly variable from year to year, EBITDA and Adjusted EBITDA provide our investors with performance measures that reflect the impact to operations from trends in occupancy rates, per diem rates and operating costs, providing a perspective not immediately apparent from net income.
The adjustments we make to derive the non-GAAP measures of EBITDA and Adjusted EBITDA exclude items which may cause short-term fluctuations in income from continuing operations and which we do not consider to be the fundamental attributes or primary drivers of our business plan and they do not affect our overall long-term operating performance.
EBITDA and Adjusted EBITDA provide disclosure on the same basis as that used by our management and provide consistency in our financial reporting, facilitate internal and external comparisons of our historical operating performance and our business units and provide continuity to investors for comparability purposes.
Adjusted Net Income is defined as net income attributable to GEO adjusted for certain items which by their nature are not comparable from period to period or that tend to obscure GEO’s actual operating performance, including for the periods presented (gain)/loss on asset divestitures, pre-tax, (gain)/loss on the extinguishment of debt, pre-tax, transaction related expenses, pre-tax, and tax effect of adjustments to net income attributable to GEO.
Safe-Harbor Statement
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially and adversely affect actual results, including statements regarding GEO’s financial guidance for the full-year and fourth quarter of 2023, statements regarding GEO’s efforts to market its current idle facilities, GEO’s focus on reducing net debt, and GEO’s assumptions regarding the number of ISAP participants during the fourth quarter of 2023. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” or “continue” or the negative of such words and similar expressions. Risks and uncertainties that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to meet its financial guidance for 2023 given the various risks to which its business is exposed; (2) GEO’s ability to deleverage and repay, refinance or otherwise address its debt maturities in an amount and on terms commercially acceptable to GEO, and on the timeline it expects or at all; (3) GEO’s ability to identify and successfully complete any potential sales of company-owned assets and businesses on commercially advantageous terms on a timely basis, or at all; (4) changes in federal and state government policy, orders, directives, legislation and regulations that affect public-private partnerships with respect to secure, correctional and detention facilities, processing centers and reentry centers, including the timing and scope of implementation of President Biden’s Executive Order directing the U.S. Attorney General not to renew the U.S. Department of Justice contracts with privately operated criminal detention facilities; (5) changes in federal immigration policy; (6) public and political opposition to the use of public-private partnerships with respect to secure correctional and detention facilities, processing centers and reentry centers; (7) the magnitude, severity, and duration of the COVID-19 global pandemic, its impact on GEO, GEO’s ability to mitigate the risks associated with COVID-19, and the efficacy and distribution of COVID-19 vaccines; (8) GEO’s ability to sustain or improve company-wide occupancy rates at its facilities in light of the COVID-19 global pandemic and policy and contract announcements impacting GEO’s federal facilities in the United States; (9) fluctuations in GEO’s operating results, including as a result of contract terminations, contract renegotiations, changes in occupancy levels and increases in GEO’s operating costs; (10) general economic and market conditions, including changes to governmental budgets and its impact on new contract terms, contract renewals, renegotiations, per diem rates, fixed payment provisions, and occupancy levels; (11) GEO’s ability to address inflationary pressures related to labor related expenses and other operating costs; (12) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (13) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (14) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (15) GEO’s ability to successfully pursue growth and continue to create shareholder value; (16) GEO’s ability to obtain financing or access the capital markets in the future on acceptable terms or at all; and (17) other factors contained in GEO’s Securities and Exchange Commission periodic filings, including its Form 10-K, 10-Q and 8-K reports, many of which are difficult to predict and outside of GEO’s control.
Third quarter and first nine months of 2023 financial tables to follow:
Condensed Consolidated Balance Sheets*(Unaudited)
As of
As of
September 30, 2023
December 31, 2022
(unaudited)
(unaudited)
ASSETS
Cash and cash equivalents
$
141,020
$
95,073
Accounts receivable, less allowance for doubtful accounts
356,501
416,399
Prepaid expenses and other current assets
41,138
43,536
Total current assets
$
538,659
$
555,008
Restricted Cash and Investments
130,729
111,691
Property and Equipment, Net
1,951,524
2,002,021
Operating Lease Right-of-Use Assets, Net
106,552
90,950
Assets Held for Sale
5,130
480
Deferred Income Tax Assets
8,005
8,005
Intangible Assets, Net (including goodwill)
893,449
902,887
Other Non-Current Assets
90,335
89,341
Total Assets
$
3,724,383
$
3,760,383
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
$
66,758
$
79,312
Accrued payroll and related taxes
78,568
53,225
Accrued expenses and other current liabilities
200,187
237,369
Operating lease liabilities, current portion
24,506
22,584
Current portion of finance lease obligations, and long-term debt
63,307
44,722
Total current liabilities
$
433,326
$
437,212
Deferred Income Tax Liabilities
75,849
75,849
Other Non-Current Liabilities
79,797
74,008
Operating Lease Liabilities
86,849
73,801
Finance Lease Liabilities
740
1,280
Long-Term Debt
1,789,273
1,933,145
Total Shareholders’ Equity
1,258,549
1,165,088
Total Liabilities and Shareholders’ Equity
$
3,724,383
$
3,760,383
* all figures in ‘000s
Condensed Consolidated Statements of Operations*(Unaudited)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
$
602,785
$
616,683
$
1,804,885
$
1,756,045
Operating expenses
440,667
436,210
1,302,287
1,233,162
Depreciation and amortization
31,173
32,330
94,787
100,284
General and administrative expenses
47,356
50,022
139,182
147,878
Operating income
83,589
98,121
268,629
274,721
Interest income
1,320
5,111
3,785
16,301
Interest expense
(55,777
)
(46,537
)
(165,081
)
(111,383
)
Loss on extinguishment of debt
(91
)
(37,487
)
(1,845
)
(37,487
)
Gain on asset divestitures
1,274
29,279
3,449
32,332
Income before income taxes and equity in earnings of affiliates
30,315
48,487
108,937
174,484
Provision for income taxes
6,521
11,246
30,036
48,106
Equity in earnings of affiliates, net of income tax provision
709
1,071
3,121
3,786
Net income
24,503
38,312
82,022
130,164
Less: Net loss attributable to noncontrolling interests
16
25
71
119
Net income attributable to The GEO Group, Inc.
$
24,519
$
38,337
$
82,093
$
130,283
Weighted Average Common Shares Outstanding:
Basic
122,066
121,154
121,850
120,998
Diluted
123,433
122,426
123,479
121,907
Net income per Common Share Attributable to The GEO Group, Inc.** :
Basic:
Net income per share — basic
$
0.17
$
0.26
$
0.56
$
0.89
Diluted:
Net income per share — diluted
$
0.16
$
0.26
$
0.55
$
0.89
* All figures in ‘000s, except per share data
** In accordance with U.S. GAAP, diluted earnings per share attributable to GEO available to common stockholders is calculated under the if-converted method or the two-class method, whichever calculation results in the lowest diluted earnings per share amount, which may be lower than Adjusted Net Income Per Diluted Share.
Reconciliation of Net Income to EBITDA and Adjusted EBITDA,and Net Income Attributable to GEO to Adjusted Net Income*(Unaudited)
Q3 2023
Q3 2022
YTD 2023
YTD 2022
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net Income
$
24,503
$
38,312
$
82,022
$
130,164
Add:
Income tax provision **
6,588
11,435
30,617
48,570
Interest expense, net of interest income ***
54,548
78,913
163,141
132,569
Depreciation and amortization
31,173
32,330
94,787
100,284
EBITDA
$
116,812
$
160,990
$
370,567
$
411,587
Add (Subtract):
Gain on asset divestitures, pre-tax
(1,274
)
(29,279
)
(3,449
)
(32,332
)
Net loss attributable to noncontrolling interests
16
25
71
119
Stock based compensation expenses, pre-tax
3,116
3,141
12,052
13,010
Transaction related expenses, pre-tax
–
1,322
–
1,322
Other non-cash revenue & expenses, pre-tax
–
–
(687
)
–
Adjusted EBITDA
$
118,670
$
136,199
$
378,554
$
393,706
Net Income attributable to GEO
$
24,519
$
38,337
$
82,093
$
130,283
Add (Subtract):
Gain on asset divestitures, pre-tax
(1,274
)
(29,279
)
(3,449
)
(32,958
)
Loss on extinguishment of debt, pre-tax
91
37,487
1,845
37,487
Transaction related expenses, pre-tax
–
1,322
–
1,322
Tax effect of adjustment to net income attributable to GEO (1)
297
(7,697
)
403
(6,772
)
Adjusted Net Income
$
23,633
$
40,170
$
80,892
$
129,362
Weighted average common shares outstanding – Diluted
123,433
122,426
123,479
121,907
Adjusted Net Income per Diluted share
0.19
0.33
0.66
1.06
* all figures in ‘000s, except per share data
** including income tax provision on equity in earnings of affiliates
*** includes loss on extinguishment of debt
(1) Tax adjustment related to gain on asset divestitures and loss on extinguishment of debt.
2023 Outlook/Reconciliation (1)(In thousands, except per share data)(Unaudited)
FY 2023
Net Income
$
100,000
to
$
105,000
Net Interest Expense
217,000
217,000
Income Taxes (including income tax provision on equity in earnings of affiliates)
40,000
40,000
Depreciation and Amortization
127,000
127,000
Non-Cash Stock Based Compensation
15,700
15,700
Other Non-Cash
(4,700
)
(4,700
)
Adjusted EBITDA
$
495,000
to
$
500,000
Net Income Attributable to GEO Per Diluted Share
$
0.80
to
$
0.85
Weighted Average Common Shares Outstanding-Diluted
123,500
to
123,500
CAPEX
Growth
9,000
to
10,000
Technology
16,000
to
20,000
Facility Maintenance
45,000
to
50,000
Capital Expenditures
70,000
to
80,000
Total Debt, Net
$
1,820,000
$
1,780,000
Total Leverage, Net
3.66
3.58
(1) Total Net Leverage is calculated using the midpoint of Adjusted EBITDA guidance range.
BRENTWOOD, Tenn., Nov. 06, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the third quarter of 2023.
Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “We are pleased with our third quarter results, and are optimistic that the post-pandemic environment will continue to result in increasing opportunities to serve our government partners. Federal, state, and local government agencies are experiencing an increase in the need for the solutions that we provide.”
Hininger continued, “We also continue to execute on our capital allocation strategy, repaying nearly $140 million of debt net of the change in cash so far this year, and reducing leverage, measured by net debt to EBITDA, to 2.8x using the trailing twelve months. Our debt reduction strategy has contributed to a meaningful reduction to interest expense from the prior year, despite an increasing interest rate environment. The amendment and extension of our bank credit facility obtained subsequent to quarter-end, which included an increase in size and an extension of the maturity to 2028, provides us with additional flexibility to execute on our long-term capital allocation strategy, including share repurchases.”
Financial Highlights – Third Quarter 2023
Total revenue of $483.7 million
CoreCivic Safety revenue of $443.3 million
CoreCivic Community revenue of $29.8 million
CoreCivic Properties revenue of $10.5 million
Net Income of $13.9 million
Diluted earnings per share of $0.12
Adjusted Diluted EPS of $0.14
Normalized Funds From Operations per diluted share of $0.35
Adjusted EBITDA of $75.2 million
Third Quarter 2023 Financial Results Compared With Third Quarter 2022
Net income in the third quarter of 2023 totaled $13.9 million, or $0.12 per diluted share, compared with net income in the third quarter of 2022 of $68.3 million, or $0.58 per diluted share. Among other special items, net income in the prior year quarter included gains on sales of real estate assets of $83.8 million, or $0.53 per share, including a $77.5 million gain on the sale of our McRae Correctional Facility. Adjusted for special items, adjusted net income in the third quarter of 2023 was $15.6 million, or $0.14 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the third quarter of 2022 of $9.7 million, or $0.08 per diluted share, representing a per share increase of 75%. Special items for each period are presented in detail in the calculation of Adjusted Net Income and Adjusted Diluted EPS in the Supplemental Financial Information following the financial statements presented herein.
The $0.06 per share increase in Adjusted Diluted EPS primarily resulted from higher federal and state populations, combined with lower interest expense resulting from our debt reduction strategy. These earnings increases were partially offset by the expiration of our contract with the Federal Bureau of Prisons (BOP) at the McRae Correctional Facility on November 30, 2022, and the lease with the Oklahoma Department of Corrections (ODC) at our North Fork Correctional Facility on June 30, 2023. We sold the McRae facility to the state of Georgia in August 2022, but continued to lease the facility so that we could fulfill our obligations to the BOP through the expiration date of the contract.
While we continue to experience ongoing labor market pressures and continue to incur temporary incentives and related incremental operating expenses at certain facilities, we have achieved notable improvements in our attraction and retention rates as a result of our staffing strategies and due to an overall improvement in the hiring environment. We believe the investments in our staffing have positioned us to manage the increased number of residents we have begun to experience now that the remaining occupancy restrictions caused by the COVID-19 pandemic have been removed, most notably Title 42, which ended May 11, 2023. Under Title 42, asylum-seekers and anyone crossing the border without proper documentation or authority were denied entry at the United States border in an effort to contain the spread of COVID-19. Since May 11, 2023 through September 25, 2023, the number of individuals in the custody of U.S. Immigration and Customs Enforcement (ICE) has increased 66%. Since May 11, 2023 through September 30, 2023, ICE detention populations within our facilities have increased by 4,729, or 84%, which we believe was possible, in part, because of our investments in staffing.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $72.8 million in the third quarter of 2023, compared with $147.9 million in the third quarter of 2022. Adjusted EBITDA, which excludes special items, was $75.2 million in the third quarter of 2023, compared with $68.4 million in the third quarter of 2022, an increase of 10.0%. The increase in Adjusted EBITDA was attributable to an increase in occupancy, combined with a general reduction in temporary staffing incentives, partially offset by the expiration of the contract with the BOP at the McRae facility and the lease with the ODC at the North Fork facility. The contract expirations at the McRae and North Fork facilities resulted in an aggregate reduction to EBITDA of $4.8 million from the third quarter of 2022.
Funds From Operations (FFO) was $38.5 million, or $0.34 per diluted share, in the third quarter of 2023, compared to $33.3 million, or $0.28 per diluted share, in the third quarter of 2022. Normalized FFO, which excludes special items, was $40.5 million, or $0.35 per diluted share, in the third quarter of 2023, compared with $33.9 million, or $0.29 per diluted share, in the third quarter of 2022, representing an increase in Normalized FFO per share of 21%. Normalized FFO was impacted by the same factors that affected Adjusted EBITDA, further improved by a reduction in interest expense as a result of our debt reduction strategy that isn’t reflected in Adjusted EBITDA.
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share amounts, are measures calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP). Please refer to the Supplemental Financial Information and the note following the financial statements herein for further discussion and reconciliations of these measures to net income, the most directly comparable GAAP measure.
Business Updates
Capital Strategy
Debt Repayments. We continued to make progress on our debt reduction strategy, increasing our total debt repaid for the nine months ended September 30, 2023, to $137.7 million, net of the change in cash, including $65.0 million during the third quarter of 2023. We have no debt maturities until April 2026 when our 8.25% Senior Notes, which have an outstanding principal balance of $593.1 million, are scheduled to mature.
Amendment and Extension of Bank Credit Facility. On October 11, 2023, we entered into a Fourth Amended and Restated Credit Agreement (New Bank Credit Facility) in an aggregate amount of $400.0 million, effectively replacing our Third Amended and Restated Credit Agreement dated May 12, 2022, which was an aggregate amount of $350.0 million. The New Bank Credit Facility, among other things, increases the available borrowings under the revolving credit facility from $250.0 million to $275.0 million and increases the size of the term loan from an initial balance of $100.0 million to $125.0 million, extends the maturity date to October 11, 2028 from May 12, 2026, and makes conforming changes to replace the Bloomberg Short-Term Bank Yield Index to the Secured Overnight Financing Rate. Further, financial covenants were modified to remove the $100.0 million limit of netting unrestricted cash and cash equivalents when calculating the consolidated total leverage ratio and the consolidated secured leverage ratio. At the closing of the New Bank Credit Facility, we received $33.8 million of net borrowings before transaction costs as a result of the increased size of the term loan, and the revolving credit facility remains undrawn, except for $17.4 million in outstanding letters of credit.
Share Repurchases. On May 12, 2022, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $150.0 million of our common stock. On August 2, 2022, our Board of Directors authorized an increase in our share repurchase program of up to an additional $75.0 million in shares of our common stock, or a total of up to $225.0 million. During the nine months ended September 30, 2023, we repurchased 2.6 million shares of our common stock, at an aggregate purchase price of $25.6 million, excluding fees, commissions and other costs related to the repurchases. Since the share repurchase program was authorized, through September 30, 2023, we have repurchased a total of 9.2 million shares at an aggregate price of $100.1 million, excluding fees, commissions and other costs related to the repurchases. We did not repurchase any shares of our common stock during the third quarter of 2023.
As of September 30, 2023, we had $124.9 million remaining under the share repurchase program authorized by the Board of Directors. Additional repurchases of common stock will be made in accordance with applicable securities laws and may be made at management’s discretion within parameters set by the Board of Directors from time to time in the open market, through privately negotiated transactions, or otherwise. The share repurchase program has no time limit and does not obligate us to purchase any particular amount of our common stock. The authorization for the share repurchase program may be terminated, suspended, increased or decreased by our Board of Directors in its discretion at any time.
New Management Contracts
New Management Contract With Hinds County, Mississippi. On September 25, 2023, we announced that we signed a new management contract with Hinds County, Mississippi for up to 250 adult male pre-trial detainees at our 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi. The initial contract term is for two years, which may be extended for an additional year upon mutual agreement. We currently care for approximately 200 residents from Hinds County at the Tallahatchie facility, in addition to over 400 residents from the U.S. Marshals Service, Vermont, South Carolina, the U.S. Virgin Islands, and Tallahatchie County.
Intent to Award New Management Contract From State of Montana. On October 11, 2023, we were notified by the state of Montana of its intent to award us a new management contract for up to 120 inmates at our 1,896-bed Saguaro Correctional Facility in Eloy, Arizona. We expect to execute the contract in the short-term and begin accepting residents from Montana later in the fourth quarter of 2023. We currently care for approximately 875 residents from Hawaii and nearly 600 residents from the state of Idaho at the Saguaro Correctional Facility. We also manage the fully occupied company-owned Crossroads Correctional Center in Shelby, Montana for the State pursuant to a separate management contract.
2023 Financial Guidance
Based on current business conditions, we are providing the following update to our financial guidance for the full year 2023:
Guidance Full Year 2023
Prior Guidance Full Year 2023
• Net income
$58.7 million to $64.9 million
$58.4 million to $66.4 million
• Adjusted net income
$62.3 million to $68.5 million
$59.5 million to $67.5 million
• Diluted EPS
$0.51 to $0.57
$0.51 to $0.58
• Adjusted Diluted EPS
$0.54 to $0.60
$0.52 to $0.59
• FFO per diluted share
$1.37 to $1.43
$1.36 to $1.44
• Normalized FFO per diluted share
$1.40 to $1.46
$1.37 to $1.45
• EBITDA
$298.8 million to $303.0 million
$297.0 million to $303.0 million
• Adjusted EBITDA
$302.5 million to $306.8 million
$297.3 million to $303.3 million
During 2023, we expect to invest $66.0 million to $69.0 million in capital expenditures, consisting of $36.0 million to $37.0 million in maintenance capital expenditures on real estate assets, $25.0 million to $26.0 million for maintenance capital expenditures on other assets and information technology, and $5.0 million to $6.0 million for other capital investments.
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the third quarter of 2023. 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 fourth quarter of 2023. Written materials used in the investor presentations will also be available on our website beginning on or about November 29, 2023. 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 11:00 a.m. central time (12:00 p.m. eastern time) on Tuesday, November 7, 2023, which will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. To participate via telephone and join the call live, please register in advance here https://register.vevent.com/register/BI3e522c1e25f444ec98977db80437da4f. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode.
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
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, as amended. 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, 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, including as a consequence of the United States Department of Justice not renewing contracts as a result of President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, impacting utilization primarily by the BOP and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do 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; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the impact resulting from the termination of Title 42, the federal government’s policy to deny 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 the coronavirus and related variants, or COVID-19; (vii) government budget uncertainty, the impact of the debt ceiling and the potential for government shutdowns and changing funding priorities; (viii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (ix) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (x) the availability of debt and equity financing on terms that are favorable to us, or at all. 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.
We take 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, except as may be required by law.
CORECIVIC, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS
September 30, 2023
December 31, 2022
Cash and cash equivalents
$
103,697
$
149,401
Restricted cash
14,214
12,764
Accounts receivable, net of credit loss reserve of $7,358 and $8,008, respectively
269,416
312,435
Prepaid expenses and other current assets
32,638
32,134
Assets held for sale
–
6,936
Total current assets
419,965
513,670
Real estate and related assets:
Property and equipment, net of accumulated depreciation of $1,798,675 and $1,716,283, respectively
2,127,800
2,176,098
Other real estate assets
204,096
208,181
Goodwill
4,844
4,844
Other assets
311,903
341,976
Total assets
$
3,068,608
$
3,244,769
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses
$
290,385
$
285,226
Current portion of long-term debt
13,982
165,525
Total current liabilities
304,367
450,751
Long-term debt, net
1,055,588
1,084,858
Deferred revenue
18,869
22,590
Non-current deferred tax liabilities
98,124
99,618
Other liabilities
133,358
154,544
Total liabilities
1,610,306
1,812,361
Commitments and contingencies
Preferred stock ― $0.01 par value; 50,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022, respectively
–
–
Common stock ― $0.01 par value; 300,000 shares authorized; 113,605 and 114,988 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
1,136
1,150
Additional paid-in capital
1,792,481
1,807,689
Accumulated deficit
(335,315
)
(376,431
)
Total stockholders’ equity
1,458,302
1,432,408
Total liabilities and stockholders’ equity
$
3,068,608
$
3,244,769
CORECIVIC, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2023
2022
2023
2022
REVENUE:
Safety
$
443,324
$
423,186
$
1,282,717
$
1,253,788
Community
29,791
26,379
84,569
76,269
Properties
10,477
14,587
37,888
43,704
Other
113
59
215
135
483,705
464,211
1,405,389
1,373,896
EXPENSES:
Operating
Safety
350,946
342,190
1,015,070
987,472
Community
23,268
22,022
68,888
63,531
Properties
3,067
3,902
9,752
10,561
Other
42
80
158
259
Total operating expenses
377,323
368,194
1,093,868
1,061,823
General and administrative
33,927
30,194
99,218
92,808
Depreciation and amortization
32,526
31,931
95,183
96,218
Shareholder litigation expense
–
–
–
1,900
Asset impairments
2,710
3,513
2,710
3,513
446,486
433,832
1,290,979
1,256,262
OTHER INCOME (EXPENSE):
Interest expense, net
(17,886
)
(20,793
)
(55,305
)
(65,381
)
Expenses associated with debt repayments and refinancing transactions
(100
)
(783
)
(326
)
(7,588
)
Gain on sale of real estate assets, net
368
83,828
343
87,149
Other income (expense)
(74
)
(71
)
(43
)
934
INCOME BEFORE INCOME TAXES
19,527
92,560
59,079
132,748
Income tax expense
(5,635
)
(24,242
)
(17,957
)
(34,865
)
NET INCOME
$
13,892
$
68,318
$
41,122
$
97,883
BASIC EARNINGS PER SHARE
$
0.12
$
0.59
$
0.36
$
0.82
DILUTED EARNINGS PERSHARE
$
0.12
$
0.58
$
0.36
$
0.82
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 September 30,
For the Nine Months Ended September 30,
2023
2022
2023
2022
Net income
$
13,892
$
68,318
$
41,122
$
97,883
Special items:
Expenses associated with debt repayments and refinancing transactions
100
783
326
7,588
Income tax expense associated with change in corporate tax structure
–
–
930
–
Gain on sale of real estate assets, net
(368
)
(83,828
)
(343
)
(87,149
)
Shareholder litigation expense
–
–
–
1,900
Asset impairments
2,710
3,513
2,710
3,513
Income tax expense (benefit) for special items
(709
)
20,959
(784
)
19,543
Adjusted net income
$
15,625
$
9,745
$
43,961
$
43,278
Weighted average common shares outstanding – basic
113,605
116,569
113,919
119,282
Effect of dilutive securities:
Restricted stock-based awards
802
881
686
774
Weighted average shares and assumed conversions – diluted
114,407
117,450
114,605
120,056
Adjusted Diluted EPS
$
0.14
$
0.08
$
0.38
$
0.36
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 September 30,
For the Nine Months Ended September 30,
2023
2022
2023
2022
Net income
$
13,892
$
68,318
$
41,122
$
97,883
Depreciation and amortization of real estate assets
24,837
24,158
73,206
72,825
Impairment of real estate assets
–
3,513
–
3,513
Gain on sale of real estate assets, net
(368
)
(83,828
)
(343
)
(87,149
)
Income tax expense for special items
107
21,165
100
22,073
Funds From Operations
$
38,468
$
33,326
$
114,085
$
109,145
Expenses associated with debt repayments and refinancing transactions
100
783
326
7,588
Income tax expense associated with change in corporate tax structure
–
–
930
–
Shareholder litigation expense
–
–
–
1,900
Other asset impairments
2,710
–
2,710
–
Income tax benefit for special items
(816
)
(206
)
(884
)
(2,530
)
Normalized Funds From Operations
$
40,462
$
33,903
$
117,167
$
116,103
Funds From Operations Per Diluted Share
$
0.34
$
0.28
$
1.00
$
0.91
Normalized Funds From Operations Per Diluted Share
$
0.35
$
0.29
$
1.02
$
0.97
CALCULATION OF EBITDA AND ADJUSTED EBITDA
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2023
2022
2023
2022
Net income
$
13,892
$
68,318
$
41,122
$
97,883
Interest expense
20,734
23,455
64,037
73,139
Depreciation and amortization
32,526
31,931
95,183
96,218
Income tax expense
5,635
24,242
17,957
34,865
EBITDA
$
72,787
$
147,946
$
218,299
$
302,105
Expenses associated with debt repayments and refinancing transactions
100
783
326
7,588
Gain on sale of real estate assets, net
(368
)
(83,828
)
(343
)
(87,149
)
Shareholder litigation expense
–
–
–
1,900
Asset impairments
2,710
3,513
2,710
3,513
Adjusted EBITDA
$
75,229
$
68,414
$
220,992
$
227,957
CORECIVIC, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
GUIDANCE — CALCULATION OF ADJUSTED NET INCOME, FUNDS FROM OPERATIONS, EBITDA & ADJUSTED EBITDA
For the Year Ending December 31, 2023
Low End of Guidance
High End of Guidance
Net income
$
58,672
$
64,922
Expenses associated with debt repayments and refinancing transactions
1,363
1,363
Income tax expense associated with change in corporate tax structure
930
930
Gain on sale of real estate assets, net
(343
)
(343
)
Asset impairments
2,710
2,710
Income tax benefit for special items
(1,082
)
(1,082
)
Adjusted net income
$
62,250
$
68,500
Net income
$
58,672
$
64,922
Depreciation and amortization of real estate assets
98,000
98,500
Gain on sale of real estate assets, net
(343
)
(343
)
Income tax expense for special items
100
100
Funds From Operations
$
156,429
$
163,179
Expenses associated with debt repayments and refinancing transactions
1,363
1,363
Income tax expense associated with change in corporate tax structure
930
930
Other asset impairments
2,710
2,710
Income tax benefit for special items
(1,182
)
(1,182
)
Normalized Funds From Operations
$
160,250
$
167,000
Diluted EPS
$
0.51
$
0.57
Adjusted Diluted EPS
$
0.54
$
0.60
FFO per diluted share
$
1.37
$
1.43
Normalized FFO per diluted share
$
1.40
$
1.46
Net income
$
58,672
$
64,922
Interest expense
85,500
84,500
Depreciation and amortization
128,000
128,000
Income tax expense
26,598
25,598
EBITDA
$
298,770
$
303,020
Expenses associated with debt repayments and refinancing transactions
1,363
1,363
Gain on sale of real estate assets, net
(343
)
(343
)
Asset impairments
2,710
2,710
Adjusted EBITDA
$
302,500
$
306,750
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 securities 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. As a company with extensive real estate holdings, we believe FFO and FFO per share are important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs and other real estate operating companies, many of which present FFO and FFO per share when reporting results. EBITDA, Adjusted EBITDA, and 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 provision 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 repayments and refinancing transactions, 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.
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: David Garfinkle – Chief Financial Officer – (615) 263-3008 Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204
Reported record revenues of $1.0 billion, up 5% y/y
Awarded bookings of $1.3 billion, increasing backlog to a record high of $13.3 billion
Reported operating income of $21.0 million; adjusted operating income1 of $59.5 million
Adjusted EBITDA1 of $64.7 million with a margin1 of 6.5%
Diluted EPS1 of ($0.21); Adjusted diluted EPS1 of $0.73
Reported year-to-date cash flow from operations of $135.2 million, and reduced net debt $88.9 million
MCLEAN, Va., Nov. 6, 2023 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced third quarter 2023 financial results.
“We achieved record revenue in the third quarter of approximately $1 billion, which demonstrates our unwavering commitment to our clients and the missions we support,” said Chuck Prow, President and Chief Executive Officer of V2X. “Bookings activity in the quarter was strong at $1.3 billion in awards. This yielded total backlog of $13.3 billion, an all-time high for the company and provides solid revenue visibility moving into 2024. Importantly, we are executing the “Expand the Base” component of our strategic framework and were successful in achieving extended scope through client engagement initiatives on existing business, which has yielded $332 million of awards in the quarter and $1.2 billion year-to-date. We are also leveraging our converged capabilities to pursue new business and currently have a robust pipeline of opportunities, which includes ~$19 billion of bids we plan to submit over the next twelve months and over $6 billion submitted and in evaluation.”
Mr. Prow continued, “During the quarter, we had notable success capturing several key pursuits that are representative of V2X’s differentiated ability to deliver technology and operational solutions across the mission lifecycle. For example, we secured a $190 million five-year, fixed price contract to continue providing training and range operations services to the U.S. Army in the Middle East. Our team will provide training support services as well as instruction, operation, and maintenance of training aids, devices, simulators, and simulations; fixed ranges; deployable ranges; and numerous training facilities. This successful capture leverages our decades of experience providing high consequence training as well as our global scale and will allow V2X to bring our Army client unparalleled service delivery in support of enhancing the warfighting skills via the use of live and virtual training. We continue to invest in the future and are developing the next generation of training capabilities, techniques, and enablers.”
“We have also made remarkable progress organically growing V2X’s environmental capabilities and were recently awarded an $85 million two-year contract to support the recovery and remediation of drinking water. This win builds on V2X’s original work to support the Department of Defense with the establishment of a water supply system for military housing at Red Hill, Hawaii. Our ability to deliver solutions that generate tangible results and public health benefits have led to incremental work and are now helping to deliver safe drinking water to the local communities. We have also successfully leveraged this capability to win similar work in Japan. We are proud to be supporting such an important environmental mission and believe there is significant opportunity to expand our efforts to other geographic areas both within and outside of the Pacific region.”
“Finally, subsequent to the end of the quarter, we were awarded a $458 million five-year, fixed price program to provide depot site standup as well as organizational, selected intermediate and limited depot level maintenance, and logistics support for the F-5 Adversary aircraft with the Navy and Marine Corps. The F-5 contract, combined with our Naval Test Wing Pacific and Atlantic awards, equates to over $1.7 billion in new work V2X has won with the U.S. Navy over the past ~18 months. I’d like to thank our teams for their commitment to delivering unique and value-added solutions that provide differentiation and enhanced client outcomes.”
Mr. Prow concluded, “We are pleased with our continued revenue growth and record backlog which is supported by the momentum generated through our efforts to converge solutions across our clients’ mission lifecycle. V2X is differentiating its capability offerings through the intersection of technology and operations, which we believe will continue to create value for our shareholders.”
Third Quarter 2023 Results
Revenue of $1.0 billion, up 4.5% y/y
Operating income of $21.0 million, including merger and integration related costs of $15.8 million, and amortization of acquired intangible assets of $22.6 million
Adjusted operating income1 of $59.5 million
Adjusted EBITDA1 of $64.7 million with a 6.5% adjusted EBITDA margin1
Diluted EPS1 of ($0.21); Adjusted Diluted EPS1 of $0.73
Net debt as of September 29, 2023 of $1.1 billion
Total backlog as of September 29, 2023 of $13.3 billion
“V2X reported revenue of $1.0 billion in the quarter, which represents 4.5% year-over-year growth,” said Shawn Mural, Senior Vice President and Chief Financial Officer. “Revenue growth in the quarter was achieved through continued program execution on existing programs, plus the phase-in of recent awards, including our first task order win with the Department of State, which reached full operational capability approximately two weeks ahead of schedule and has since expanded in size. We were also successful in continuing to defend our core and have won over $1 billion in recompete programs year to date.”
“For the quarter, the Company reported operating income of $21.0 million and adjusted operating income1 of $59.5 million. Adjusted EBITDA1 was $64.7 million with a margin of 6.5%, which was influenced by contract mix and performance on certain integrated electronic security programs. Third quarter diluted EPS was ($0.21), due primarily to merger and integration related costs, amortization of acquired intangible assets, and interest expense. Adjusted diluted EPS1 for the quarter was $0.73.”
“Cash generation was strong and net cash provided by operating activities was $135.2 million year to date. Adjusted net cash provided by operating activities1 year to date was $83.6 million, adding back $20.9 million of M&A and integration costs with $13.4 million of CARES act payments, and removing the contribution of the master accounts receivable purchase or MARPA facility of $85.8 million.”
“At the end of the quarter, net debt for V2X was $1,131.8 million. Our solid cash generation has enabled V2X to reduce its total debt by $88.9 million year to date. Net consolidated indebtedness to EBITDA1 (net leverage ratio) was 3.46x. Additionally, our strong fundamentals and cash flow profile allowed us to reprice our Term Loan B shortly after the quarter close. We expect the new pricing to reduce annual interest expense by $2 million,” said Mr. Mural.
Total backlog as of September 29, 2023, was $13.3 billion. Funded backlog was $3.2 billion. Bookings in the quarter were $1.3 billion, resulting in a book-to-bill of 1.3x. The trailing twelve-month book-to-bill was 1.1x.
2023 Guidance Mr. Mural concluded, “Based on what we are seeing in the business we are raising the low end and mid-point of our full year revenue projections. Given third-quarter results and our outlook, we are lowering the ranges for adjusted EBITDA and adjusted diluted EPS. This change incorporates year-to-date results, including the program performance mentioned earlier and timing of activities associated with national security support. We are reaffirming guidance for adjusted net cash provided by operating activities.” The Company is adjusting its 2023 guidance and is as follows:
$ millions, except for per share amounts
2023 Guidance (Updated)
2023 Mid-Point (Updated)
Revenue
$3,900
$3,950
$3,925
Adjusted EBITDA1
$285
$295
$290
Adjusted Diluted Earnings Per Share1
$3.50
$3.75
$3.62
Adjusted Net Cash Provided by Operating Activities 1
$115
$135
$125
Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.
Third Quarter 2023 Conference Call
Management will conduct a conference call with analysts and investors at 8:00 a.m. ET on Monday, November 6, 2023. U.S.-based participants may dial in to the conference call at 877-407-3982, while international participants may dial 201-493-6780. A live webcast of the conference call as well as an accompanying slide presentation will be available here: https://app.webinar.net/gAed3AVKra2
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through November 20, 2023, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13742132.
Presentation slides that will be used in conjunction with the conference call will also be made available online in advance on the “investors” section of the company’s website at https://gov2x.com/. V2X recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under the U.S. Securities and Exchange Commission (“SEC”) Regulation FD.
Footnotes: 1 See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.
About V2X V2X builds smart solutions designed to integrate physical and digital infrastructure – from base to battlefield – by aligning people, actions, and outputs. Formed by the merger of Vectrus and Vertex, we bring a combined 120 years of successful mission support. Our lifecycle solutions improve security, streamline logistics, and enhance readiness.
The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training, and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, all the statements and items listed under “2023 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2023 performance outlook, revenue, contract opportunities, and any discussion of future operating or financial performance.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management.
These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside our management’s control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and uncertainties that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC.
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Key Performance Indicators and Non-GAAP Measures
The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income, and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.
We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management’s assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.
In addition to the key performance measures discussed above, we consider adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations, and other disclosures.
Adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted net cash provided by (used in) operating activities, and pro forma revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for financial measures determined in accordance with GAAP. Definitions and reconciliations of these items are provided below.
Pro forma revenue is defined as the combined results of our operations as if the Merger had occurred on January 1, 2021.
Adjusted operating income is defined as operating income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA is defined as operating income, adjusted to exclude depreciation and amortization of intangible assets, and items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
Adjusted net income is defined as net income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration and related costs, amortization of acquired intangible assets, amortization of debt issuance costs, and loss on extinguishment of debt.
Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
Cash interest, net is defined as interest expense, net adjusted to exclude amortization of debt issuance costs.
Adjusted net cash provided by (used in) operating activities is defined as net cash provided by (or used in) operating activities adjusted to exclude infrequent non-operating items, such as M&A payments and related costs.
Net leverage ratio is defined as net debt (or total debt less unrestricted cash) divided by trailing twelve-month (TTM) bank EBITDA.
In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP measure can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. The occurrence, timing, and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact the Company’s fiscal 2023 GAAP results.
CONTACT:
V2X, Inc. Mike Smith, CFA 719-637-5773 ir@gov2x.com
BRENTWOOD, Tenn., Oct. 18, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today that it will release its 2023 third quarter financial results after the market closes on Monday, November 6, 2023. A live broadcast of CoreCivic’s conference call will begin at 11:00 a.m. central time (12:00 p.m. eastern time) on Tuesday, November 7, 2023.
To participate via telephone and join the call live, please register in advance here https://register.vevent.com/register/BI3e522c1e25f444ec98977db80437da4f. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode.
Participants may access the audio-only webcast of the conference call from the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. A replay of the webcast will be available for seven days.
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
Contact:
Investors: David Garfinkle – Chief Financial Officer – (615) 263-3008
Media: Steve Owen – Vice President, Communications – (615) 263-3107
Earnings Release Scheduled for Tuesday, November 7, 2023 Before the Market Opens
Conference Call Scheduled for Tuesday, November 7, 2023 at 11:00 AM (Eastern Time)
BOCA RATON, Fla.–(BUSINESS WIRE)–Oct. 17, 2023– The GEO Group, Inc. (NYSE:GEO) (“GEO”) will release its third quarter 2023 financial results on Tuesday, November 7, 2023 before the market opens. GEO has scheduled a conference call and simultaneous webcast for 11:00 AM (Eastern Time) on Tuesday, November 7, 2023.
Hosting the call for GEO will be George C. Zoley, Executive Chairman of the Board, Jose Gordo, Chief Executive Officer, Brian R. Evans, Senior Vice President and Chief Financial Officer, Wayne Calabrese, Senior Vice President and Chief Operating Officer, and James Black, President, GEO Secure Services.
To participate in the teleconference, please contact one of the following numbers 5 minutes prior to the scheduled start time:
In addition, a live audio webcast of the conference call may be accessed on the Webcasts section of GEO’s investor relations home page at investors.geogroup.com. A webcast replay will remain available on the website for one year.
A telephonic replay will also be available through November 14, 2023. The replay numbers are 1-877-344-7529 (U.S.) and 1-412-317-0088 (International). The passcode for the telephonic replay is 4528594. If you have any questions, please contact GEO at 1-866-301-4436.
BRENTWOOD, Tenn., Oct. 12, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today it entered into a Fourth Amended and Restated Credit Agreement dated October 11, 2023, by and among CoreCivic, as Borrower, certain lenders party thereto from time to time, and the administrative agent for the lenders, or the New Bank Credit Facility. The New Bank Credit Facility effectively replaces CoreCivic’s Third Amended and Restated Credit Agreement dated May 12, 2022. The New Bank Credit Facility is in the aggregate principal amount of $400 million, consisting of a $125 million term loan and a $275 million revolving credit facility.
The New Bank Credit Facility, among other things, increases the available borrowings under the revolving credit facility from $250 million to $275 million and increases the size of the term loan from an initial balance of $100 million to $125 million, extends the maturity date to October 11, 2028 from May 12, 2026, and makes conforming changes to replace the Bloomberg Short-Term Bank Yield Index, or BSBY, to the secured overnight financing rate, or SOFR. Further, financial covenants were modified to remove the $100 million limit of netting unrestricted cash and cash equivalents when calculating the consolidated total leverage ratio, the consolidated secured leverage ratio, and to increase the consolidated total leverage ratio resulting in a “springing lien” event from 4:00 to 1.00 to 4.25 to 1.00. At the closing of the New Bank Credit Facility, CoreCivic received approximately $33.8 million of net borrowings before transaction costs as a result of the increased size of the term loan, and the revolving credit facility remains undrawn except for approximately $17.4 million in outstanding letters of credit.
David M. Garfinkle, Executive Vice President and Chief Financial Officer, stated, “We are very pleased with the support from our new and existing financial partners enabling us to further extend our overall debt maturity profile, maintain a similar pricing structure, while providing us with greater financial flexibility.”
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
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, as amended. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding CoreCivic’s financial flexibility. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made including, but not limited to, risks and uncertainties associated with economic conditions affecting the corrections and detention industry. 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.
Except as required by applicable law, CoreCivic does not undertake any 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.
Contact
Investors: David Garfinkle – Chief Financial Officer – (615) 263-3008
Financial Media: David Gutierrez, Dresner Corporate Services – (312) 780-7204
BOCA RATON, Fla.–(BUSINESS WIRE)–Sep. 28, 2023– The GEO Group, Inc. (NYSE: GEO) (“GEO” or the “Company”) published today the Company’s fifth annual Human Rights and Environmental, Social & Governance (ESG) report. The report includes enhanced disclosures related to our Board oversight of human rights and ESG matters, employee diversity and training programs, corporate governance, and environmental sustainability, including updated metrics and statistics for the calendar year 2022, in accordance with the Universal Standards of the Global Reporting Initiative.
The report also highlights GEO’s continued commitment to providing enhanced rehabilitation and post-release support services through our award-winning GEO Continuum of Care® (CoC) program. During 2022, our CoC facilities delivered approximately 3.5 million hours of enhanced rehabilitation programming. The CoC program integrates enhanced offender rehabilitation, including cognitive behavioral treatment, with post-release support services to address basic community needs of released individuals, including housing, transportation, food, clothing, and job placement assistance.
GEO’s Executive Chairman, George C. Zoley, said: “The publication of our fifth annual Human Rights and ESG report highlights our long-standing commitment to respecting the human rights and improving the lives of those entrusted to our care. To reinforce this important commitment, we have restructured our Board to include three new committees: a standing committee to oversee Criminal Justice and Rehabilitation, a standing committee to oversee Human Rights, and a standing committee to oversee Cyber Security and Environmental matters. In 2022, we also undertook a Human Rights Due Diligence Assessment, which included engagement with multiple internal and external stakeholder groups. Moving forward, we expect to evaluate additional human rights initiatives, including a future review of our Global Human Rights Policy and its implementation.”
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 102 facilities totaling approximately 82,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Use of forward-looking statements
This news release may contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s continued commitment and future initiatives relating to human rights and the GEO Continuum of Care® program. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the cautionary statements and risk factors contained in GEO’s filings with the U.S. Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2022, its Form 10-Qs for the quarters ended March 31, 2023 and June 30, 2023 and its Form 8-K reports. All forward-looking statements speak only as of the date of this news release and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements and risk factors contained in GEO’s filings with the U.S. Securities and Exchange Commission, including those referenced above. GEO disclaims any obligation to update or revise any forward-looking statements, except as required by law.
Continues Momentum to Increase Utilization Through Existing and New Contracts
BRENTWOOD, Tenn., Sept. 25, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today it signed a new management contract with Hinds County, Mississippi for up to 250 adult male pre-trial detainees at the Company’s 2,672-bed Tallahatchie County Correctional Facility in Tutwiler, Mississippi. The initial contract term is for two years, which may be extended for an additional year upon mutual agreement.
Damon T. Hininger, President and Chief Executive Officer commented, “We are pleased to enter into a new management contract with Hinds County and are honored to be entrusted with the care of a portion of their detainee population.”
CoreCivic currently cares for residents at the Tallahatchie County Correctional Facility from the United States Marshals Service, Vermont, South Carolina, the U.S. Virgin Islands, and Tallahatchie County.
Hininger continued, “We continue to see increasing demand for our correctional and detention solutions, evidenced by the new contract with Hinds County. The Tallahatchie County Correctional Facility is a flexible facility, which has capacity to accommodate additional government customers. We have been in discussions with additional federal, state, and local government agencies to utilize capacity in numerous of our facilities, including at the Tallahatchie facility. We have recently accepted approximately 160 additional residents from the state of Idaho under an existing contract at our Saguaro Correctional Facility in Arizona to meet their increasing needs. We have also recently signed contract extensions with the state of Vermont at the Tallahatchie facility, which was scheduled to expire September 30, 2023, with U.S. Immigration & Customs Enforcement at our Elizabeth Detention Center in New Jersey, and with the Texas Department of Criminal Justice for five residential reentry centers in Texas, all of which expired August 31, 2023, and with the state of Montana at our Crossroads Correctional Center in Montana, which expired June 30, 2023.”
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. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 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. Learn more at www.corecivic.com.
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, as amended. 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, 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, including as a consequence of the United States Department of Justice, or DOJ, not renewing contracts as a result of President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, impacting utilization primarily by the BOP and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do 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; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the impact resulting from the termination of Title 42, the federal government’s policy to deny 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 the coronavirus and related variants, or COVID-19; (vii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (viii) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (ix) the availability of debt and equity financing on terms that are favorable to us, or at all. 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.
We take 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.
