Nov. 4, 2020, 5:03 p.m. EST

CoreCivic Reports Third Quarter 2020 Financial Results

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BRENTWOOD, Tenn., Nov 04, 2020 (GLOBE NEWSWIRE via COMTEX) -- CoreCivic, Inc. /zigman2/quotes/200590180/composite CXW -1.17% (the Company) announced today its financial results for the third quarter of 2020.

Financial Highlights - Third Quarter 2020

-- Total revenue of $468.3 million

    -- CoreCivic Safety revenue of $420.0 million

    -- CoreCivic Safety revenue of $420.0 million

    -- CoreCivic Community revenue of $24.1 million

    -- CoreCivic Properties revenue of $24.1 million

    -- Net income attributable to common stockholders of $26.7 million

    -- Diluted EPS of $0.22

    -- Adjusted diluted EPS of $0.28

    -- Normalized FFO per diluted share of $0.52

    -- Adjusted EBITDA of $94.6 million

    -- Repaid $102.2 million in total debt, net of the change in cash

    Damon T. Hininger, CoreCivic's President and Chief Executive Officer, said, "Our business and our dedicated professionals continue to perform admirably through the COVID-19 pandemic, working diligently to provide essential services while attentively implementing and adhering to protocols designed to protect each other and those in our care. We remain a critical solution to our government partners who are also facing pandemic-related challenges. Our cash flow generation remains strong, and we are executing on our revised capital allocation strategy of prioritizing our substantial free cash flow to reduce debt. In the third quarter alone we repaid over $100 million in long-term debt, net of the change in cash, increasing our financial flexibility. We are committed to using our free cash flow in a manner that serves the long-term best interest of our shareholders, our business, our government partners, and the people and communities we together serve, and we are pleased with our progress. Finally, we continue to evaluate the potential sale of certain non-core real estate assets in our Properties segment, and are optimistic with the interest expressed to date. Generating net proceeds from these asset sales should enable us to accelerate our revised capital allocation strategy.

    "In continuation of an initiative we began three years ago, we're also pleased to have announced last month our support for a slate of new policies, including the restoration of Pell Grants for incarcerated individuals, the restoration of voting rights for the formerly incarcerated, and licensure reform to make it easier for the formerly incarcerated to find and keep jobs. With the legislative progress that's been made, we believe now is the time to step up - not slow down - our commitment to programs and policies that reduce recidivism," added Hininger.

    Third Quarter 2020 Financial Results Compared With Third Quarter 2019

    Net income attributable to common stockholders generated in the third quarter of 2020 totaled $26.7 million, or $0.22 per diluted share, compared with $49.0 million, or $0.41 per diluted share, in the third quarter of 2019. Adjusted for special items, net income in the third quarter of 2020 was $34.1 million, or $0.28 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the third quarter of 2019 of $55.9 million, or $0.47 per diluted share. Special items in the third quarter of 2020 included $4.7 million in expenses associated with changes in our corporate tax structure, $2.8 million in expenses associated with COVID-19, $0.8 million of asset impairments, $0.6 million in contingent consideration for acquisition of businesses, and a $1.6 million gain on the sale of real estate assets, net of taxes. Special items in the third quarter of 2019 included $6.8 million in start-up expenses and $0.1 million of expenses associated with mergers and acquisitions (M&A).

    Funds From Operations (FFO) was $53.4 million, or $0.44 per diluted share, in the third quarter of 2020, compared to $76.3 million, or $0.64 per diluted share, in the third quarter of 2019. Normalized FFO, which excludes the special items described above, was $62.3 million, or $0.52 per diluted share, in the third quarter of 2020, compared with $83.1 million, or $0.70 per diluted share, in the third quarter of 2019.

    EBITDA was $87.8 million in the third quarter of 2020, compared with $108.5 million in the third quarter of 2019. Adjusted EBITDA was $94.6 million in the third quarter of 2020, compared with $115.4 million in the third quarter of 2019. Adjusted EBITDA excludes the special items described above.

    Financial results in the third quarter of 2020, compared with the third quarter of 2019, decreased primarily because of lower utilization of our existing contracts with Immigration and Customs Enforcement, or ICE, and modest utilization declines across many of our state-level contracts due to the ongoing impact of COVID-19. Financial results were also negatively impacted by the transition at our Cimarron Correctional Facility in Oklahoma from state populations to the U.S. Marshals Service, or USMS, resulting from a new contract executed in September 2020. Further, per share results in the third quarter of 2019 include $0.03, net of tax, for the favorable settlement of a contractual dispute with respect to revenues that would have been recognized during the previous several years, and $0.02 per share for a bonus award earned under one of our contracts with the Federal Bureau of Prisons, or BOP, for exceptional operating performance.

    The declines in contract utilization were partially offset by utilization under new contracts executed in 2019 with (i) the USMS, to activate our previously idle 1,422-bed Eden Detention Center in Texas, (ii) ICE to activate our previously idle 910-bed Torrance County Detention Facility in New Mexico and to utilize capacity at our 2,232-bed Adams County Correctional Center in Mississippi, and (iii) the states of Mississippi, Kansas and Idaho to utilize available capacity at our 2,672-bed Tallahatchie County Correctional Facility in Mississippi and our 1,896-bed Saguaro Correctional Facility in Arizona. Financial results in our Properties segment were also favorably impacted by the commencement of new leases in July 2020 with the Commonwealth of Kentucky at our Southeast Correctional Complex, and in January 2020 with the state of Kansas at our newly constructed Lansing Correctional Facility.

    Balance Sheet and Liquidity as of September 30, 2020

    As of September 30, 2020, cash on hand was $282.5 million, with an additional $329.2 million available under our revolving credit facility. Net cash provided by operating activities was $107.2 million during the third quarter of 2020, compared with $75.4 million and $98.9 million in the first and second quarters of 2020, respectively. Net cash provided by operating activities enabled us to repay $102.2 million of total debt during the third quarter of 2020, net of the change in cash and cash equivalents, increasing our financial flexibility. We have no material capital commitments, and no debt maturities until October 2022, when $250.0 million of 5.0% unsecured notes matures. We currently expect to repay these notes upon maturity with cash on hand.

    Business Development Update

    New Management Contract with the United States Marshals Service at the Cimarron Correctional Facility. On September 15, 2020, we entered into a new contract under an Intergovernmental Agreement between the city of Cushing, Oklahoma and the USMS to utilize the Company's 1,692-bed Cimarron Correctional Facility in Cushing, Oklahoma. The Company previously announced the intention to idle the Cimarron Correctional Facility during the third quarter of 2020, largely due to a lower number of inmate populations from the state of Oklahoma resulting from COVID-19, combined with the consequential impact of COVID-19 on the State's budget. The new management contract commenced on September 15, 2020, and has an initial term of three years, with unlimited 24-month extension options following the initial term upon mutual agreement. As of September 30, 2020, we cared for 693 USMS detainees at the Cimarron facility. During 2019, and for the nine months ended September 30, 2020, this facility generated facility net operating income of $2.4 million and incurred an operating loss of $2.8 million, respectively. We expect an improvement in facility net operating income at this facility as a result of the new contract, with annual revenues increasing to approximately $30 million at current utilization levels, and an operating margin that approximates the average CoreCivic Safety operating margin percentage.

    New Management Contract with the state of Idaho. On August 17, 2020, we entered into a new contract with the Idaho Department of Correction, or IDOC, to care for up to 1,200 adult male inmates at our 1,896-bed Saguaro Correctional Facility. Subject to available capacity, we may also care for IDOC inmates at our 4,128-bed Central Arizona Florence Correctional Complex under terms of the contract. The new management contract with the IDOC commenced on August 18, 2020, and has an initial term of five years, with unlimited extension options thereafter upon mutual agreement. We began accepting inmate populations into the Saguaro facility on August 18, 2020.

    New Management Contract with the Federal Bureau of Prisons for Reentry Services. On October 1, 2020, we were awarded a new contract by the BOP for residential reentry and home confinement services at our 289-bed Turley Residential Center in Tulsa, Oklahoma and our 494-bed Oklahoma Reentry Opportunity Center in Oklahoma City, Oklahoma. As a result, we expect to reactivate the Turley Residential Center during the first quarter of 2021 and provide the BOP additional reentry services at our Oklahoma Reentry Opportunity Center which will supplement existing utilization by the state of Oklahoma.

    Financial Guidance

    On April 1, 2020, we withdrew our financial guidance because of uncertainties associated with COVID-19, and do not expect to provide financial guidance until we have further clarity around the uncertainties which continue to exist. Our business is very durable, and continues to generate cash flow even during these unprecedented disruptions to the economy and criminal justice system. This resiliency is due to the essential nature of our facilities and services in our Safety and Community segments, further enhanced by the diversification and stability of our Properties segment, all supported by payments from highly rated federal, state, and local government agencies.

    Supplemental Financial Information and Investor Presentations

    We have made available on our website supplemental financial information and other data for the third quarter of 2020. 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 2020. Written materials used in the investor presentations will also be available on our website beginning on or about November 16, 2020. Interested parties may access this information through our website at http://ir.corecivic.com/ under "Events & Presentations" of the Investors section.

    Conference Call, Webcast and Replay Information

    We will host a webcast conference call at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, November 5, 2020, to discuss our third quarter 2020 financial results and business outlook. Interested parties may access this information through our website at http://ir.corecivic.com/ under "Events & Presentations" of the Investors page. The live broadcast can also be accessed by dialing 800-367-2403 in the U.S. and Canada, including the confirmation passcode 9125625. The conference call will be archived on our website following the completion of the call. In addition, there will be a telephonic replay available beginning at 1:00 p.m. central time (2:00 p.m. eastern time) on November 5, 2020, through 1:00 p.m. central time (2:00 p.m. eastern time) on November 13, 2020. To access the telephonic replay, dial 888-203-1112 in the U.S. and Canada. International callers may dial +1 719-457-0820 and enter passcode 8097453.

    /zigman2/quotes/200590180/composite
    US : U.S.: NYSE
    $ 7.63
    -0.09 -1.17%
    Volume: 466,592
    May 13, 2021 12:38p
    P/E Ratio
    N/A
    Dividend Yield
    0.00%
    Market Cap
    $928.54 million
    Rev. per Employee
    $153,482
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