New ETF Book by Larry Connors - Click here to read more
--Confirms 4Q Pro Forma EPS Guidance - $0.38 to $0.39 and Increases full-year pro forma EPS Guidance - $1.40 to $1.41
The GEO Group (NYSE: GEO | Quote | Chart | News | PowerRating) ("GEO") today reported third quarter 2009 financial results. GEO reported third quarter 2009 GAAP income from continuing operations of $19.3 million, or $0.37 per diluted share, compared to $15.5 million, or $0.30 per diluted share, in the third quarter of 2008. Third quarter 2009 pro forma income from continuing operations increased to $19.9 million, or $0.38 per diluted share, from pro forma income from continuing operations of $17.3 million, or $0.33 per diluted share, in the third quarter of 2008.
For the first nine months of 2009, GEO reported GAAP income from continuing operations of $50.8 million, or $0.98 per diluted share, compared to $41.2 million, or $0.80 per diluted share, for the first nine months of 2008. Pro forma income from continuing operations for the first nine months of 2009 increased to $52.8 million, or $1.02 per diluted share, from pro forma income from continuing operations of $45.7 million, or $0.88 per diluted share, for the first nine months of 2008.
George C. Zoley, Chairman and Chief Executive Officer of GEO, said: "Our strong third quarter earnings results and confirmed outlook for the fourth quarter continue to be driven by sound operational and financial results through our diversified business units. Our already strong balance sheet has been further strengthened by our recent refinancing transactions, and we are now well positioned to take advantage of the robust demand for correctional, detention, and residential treatment beds in our core market segments."
Pro forma income from continuing operations excludes start-up/transition expenses, international bid and proposal costs, and other items as set forth in the table below, which presents a reconciliation of pro forma income from continuing operations to GAAP income from continuing operations for the third quarter and first nine months of 2009. Please see the section of this press release below entitled "Important Information on GEO's Non-GAAP Financial Measures" for information on how GEO defines pro forma income from continuing operations.
Table 1. Reconciliation of Pro Forma Income from Continuing
Operations to GAAP Income from Continuing Operations
(In thousands except per share data) 13 Weeks Ended 13 Weeks Ended 39 Weeks Ended 39 Weeks Ended
27-Sep-09 28-Sep-08 27-Sep-09 28-Sep-08
Income from continuing operations $ 19,258 $ 15,497 $ 50,820 $ 41,237
Start-up/transition expenses, net of tax 634 1,769 1,708 4,224
International bid and proposal expenses, net of tax - 51 306 246
Pro forma income from continuing operations $ 19,892 $ 17,317 $ 52,834 $ 45,707
Diluted earnings per share
Income from Continuing Operations $ 0.37 $ 0.30 $ 0.98 $ 0.80
Start-up/transition expenses, net of tax 0.01 0.03 0.03 0.08
International bid and proposal expenses, net of tax - - 0.01 -
Diluted pro forma earnings per share $ 0.38 $ 0.33 $ 1.02 $ 0.88
Weighted average common shares outstanding-diluted 51,950 51,803 51,847 51,820
Business Segment Results
The following table presents a summary of GEO's segment financial results for the third quarter and first nine months of 2009.
Table 2. Business Segment Results
13 Weeks Ended 13 Weeks Ended 39 Weeks Ended 39 Weeks Ended
27-Sep-09 28-Sep-08 27-Sep-09 28-Sep-08
Revenues
U.S. Corrections $ 192,606 $ 177,930 $ 576,640 $ 520,029
International Services 36,668 33,896 92,217 102,927
GEO Care 27,722 28,794 84,185 89,063
Construction 37,869 13,485 77,263 74,534
$ 294,865 $ 254,105 $ 830,305 $ 786,553
Operating Expenses
U.S. Corrections $ 137,397 $ 129,645 $ 418,861 $ 381,863
International Services 34,477 31,058 85,539 93,809
GEO Care 24,635 25,180 74,104 78,380
Construction 37,899 13,369 77,088 74,222
$ 234,408 $ 199,252 $ 655,592 $ 628,274
Depreciation & Amortization Expense
U.S. Corrections $ 8,899 $ 8,542 $ 26,955 $ 24,918
International Services 376 415 1,039 1,201
GEO Care 341 372 1,068 1,404
Construction - - - -
$ 9,616 $ 9,329 $ 29,062 $ 27,523
Compensated Mandays
U.S. Corrections 3,584,062 3,325,492 10,708,144 9,794,737
International Services 548,821 525,161 1,599,143 1,575,482
GEO Care 133,094 133,048 400,032 408,869
4,265,977 3,983,701 12,707,319 11,779,088
Revenue Producing Beds
U.S. Corrections 42,088 39,599 42,088 39,599
International Services 6,031 5,771 6,031 5,771
GEO Care 1,516 1,528 1,516 1,528
49,635 46,898 49,635 46,898
Average Occupancy
U.S. Corrections 93.6 % 96.0 % 94.0 % 95.9 %
International Services 100.0 % 100.0 % 100.0 % 100.0 %
GEO Care 96.5 % 100.0 % 96.7 % 100.0 %
94.5 % 96.6 % 94.8 % 96.6 %
Adjusted EBITDA
Third quarter 2009 Adjusted EBITDA increased to $46.7 million from $41.3 million in the third quarter of 2008. For the first nine months of 2009, Adjusted EBITDA increased to $130.7 million from $114.8 million for the first nine months of 2008. Please see the section of this press release below entitled "Important Information on GEO's Non-GAAP Financial Measures" for information on how GEO defines Adjusted EBITDA. The following table presents a reconciliation from Adjusted EBITDA to GAAP Net income for the third quarter and first nine months of 2009.
Table 3. Reconciliation from Adjusted EBITDA to GAAP Net
Income
(In thousands) 13 Weeks Ended 13 Weeks Ended 39 Weeks Ended 39 Weeks Ended
27-Sep-09 28-Sep-08 27-Sep-09 28-Sep-08
Net income $ 19,258 $ 15,859 $ 50,474 $ 42,465
Interest expense, net 5,309 5,431 16,978 16,087
Income tax provision 11,493 8,430 30,324 23,616
Depreciation and amortization 9,616 9,329 29,062 27,523
EBITDA $ 45,676 $ 39,049 $ 126,838 $ 109,691
Adjustments, pre-tax
Discontinued operations, (income) loss - (710 ) 562 (2,103 )
Start-up/transition expenses 1,034 2,844 2,785 6,829
International bid and proposal expenses - 82 499 394
Adjusted EBITDA $ 46,710 $ 41,265 $ 130,684 $ 114,811
Adjusted Free Cash Flow
Adjusted Free Cash Flow for the third quarter of 2009 increased to $32.1 million from $25.3 million for the third quarter of 2008. For the first nine months of 2009, Adjusted Free Cash Flow increased to $87.3 million from $67.2 million for the first nine months of 2008. Please see the section of this press release below entitled "Important Information on GEO's Non-GAAP Financial Measures" for information on how GEO defines Adjusted Free Cash Flow. The following table presents a reconciliation from Adjusted Free Cash Flow to GAAP income from continuing operations for the third quarter and first nine months of 2009.
Table 4. Reconciliation of Adjusted Free Cash Flow to GAAP
Income from Continuing Operations
(In thousands) 13 Weeks Ended 13 Weeks Ended 39 Weeks Ended 39 Weeks Ended
27-Sep-09 28-Sep-08 27-Sep-09 28-Sep-08
Income from Continuing Operations $ 19,258 $ 15,497 $ 50,820 $ 41,237
Depreciation and Amortization 9,616 9,329 29,062 27,523
Income Tax Provision 11,493 8,430 30,324 23,616
Income Taxes Paid (7,551 ) (7,850 ) (23,963 ) (26,056 )
Stock Based Compensation 976 1,103 3,357 2,906
Maintenance Capital Expenditures (3,000 ) (4,051 ) (6,679 ) (9,272 )
Equity in Earnings of Affiliates, Net of Income Tax (904 ) (778 ) (2,407 ) (2,009 )
Amortization of Debt Costs and Other Non-Cash Interest 1,167 720 3,471 2,055
Start-up/transition expenses 1,034 2,844 2,785 6,829
International bid and proposal expenses - 82 499 394
Adjusted Free Cash Flow $ 32,089 $ 25,326 $ 87,269 $ 67,223
Financial Guidance
GEO confirmed its financial guidance for the fourth quarter 2009. For the fourth quarter 2009, GEO expects total revenues to be in the range of $313 million to $318 million, including approximately $25 million in construction revenues, and earnings to be in a range of $0.38 to $0.39 per diluted share, excluding $0.08 per diluted share in a one-time, after-tax charge related to the early extinguishment of debt associated with the redemption of GEO's $150 million, 81/4% senior unsecured notes due 2013 as well as $0.03 per diluted share in after-tax start-up/transition expenses.
For the full-year 2009, GEO expects total revenues to be in the range of $1.143 billion to $1.148 billion, including approximately $102 million in construction revenues, and GEO increased its earnings guidance to a pro forma range of $1.40 to $1.41 per diluted share, excluding $0.08 per diluted share in a one-time, after-tax charge related to the early extinguishment of debt associated with the redemption of GEO's $150 million, 81/4% senior unsecured notes due 2013 as well as $0.07 per diluted share in after-tax start-up/transition expenses and international bid and proposal costs.
GEO's guidance is based on a number of assumptions related to GEO's business including the continued operation of GEO's current contracts at projected occupancy levels and the activation of GEO's announced projects under development as scheduled.
Conference Call Information
GEO has scheduled a conference call and simultaneous webcast at 11:00 AM (Eastern Time) today to discuss GEO's third quarter 2009 financial results as well as its progress and outlook. The call-in number for the U.S. is 1-866-804-6925 and the international call-in number is 1-857-350-1671. The participant pass-code for the conference call is 50426075. In addition, a live audio webcast of the conference call may be accessed on the Conference Calls/Webcasts section of GEO's investor relations home page at www.geogroup.com. A replay of the audio webcast will be available on the website for one year. A telephonic replay of the conference call will be available until December 2, 2009 at 1-888-286-8010 (U.S.) and 1-617-801-6888 (International). The pass-code for the telephonic replay is 52882628. GEO will discuss Non-GAAP ("Pro Forma") basis information on the conference call. A reconciliation from Non-GAAP ("Pro Forma") basis information to GAAP basis results may be found on the Conference Calls/Webcasts section of GEO's investor relations home page at www.geogroup.com.
About The GEO Group, Inc.
The GEO Group, Inc. ("GEO") is a world leader in the delivery of correctional, detention, and residential treatment services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, and the United Kingdom. GEO's worldwide operations include the management and/or ownership of 62 correctional and residential treatment facilities with a total design capacity of approximately 60,000 beds, including projects under development.
Important Information on GEO's Non-GAAP Financial Measures
Pro forma income from continuing operations, Adjusted EBITDA, and Adjusted Free Cash Flow are non-GAAP financial measures. Pro forma income from continuing operations is defined as income from continuing operations excluding start-up/transition expenses, international bid and proposal expenses, and other items as set forth in Table 1 above. Adjusted EBITDA is defined as EBITDA excluding start-up/transition expenses, international bid and proposal expenses, and other items as set forth in Table 3 above. Adjusted Free Cash Flow is defined as income from continuing operations after giving effect to the items set forth in Table 4 above. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measurements of these items is included above in Tables 1, 3, and 4, respectively. GEO believes that these financial measures are important operating measures that supplement discussion and analysis of GEO's financial results derived in accordance with GAAP. These non-GAAP financial measures should be read in conjunction with GEO's consolidated financial statements and related notes included in GEO's filings with the Securities and Exchange Commission.
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 affect actual results, including statements regarding estimated earnings, revenues and costs and our ability to maintain growth and strengthen contract relationships. Factors 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 2009 given the various risks to which its business is exposed; (2) GEO's ability to successfully pursue further growth and continue to enhance shareholder value; (3) GEO's ability to access the capital markets in the future on satisfactory terms or at all; (4) risks associated with GEO's ability to control operating costs associated with contract start-ups; (5) 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; (6) GEO's ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (7) GEO's ability to obtain future financing on acceptable terms; (8) GEO's ability to sustain company-wide occupancy rates at its facilities; and (9) other factors contained in GEO's Securities and Exchange Commission filings, including the forms 10-K, 10-Q and 8-K reports.
Third quarter and first nine months 2009 financial tables to follow:
THE GEO GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN AND THIRTY-NINE WEEKS ENDED
SEPTEMBER 27, 2009 AND SEPTEMBER 28, 2008
(In thousands, except per share data)
(UNAUDITED)
Thirteen Weeks Ended Thirty-nine Weeks Ended
September 27, 2009 September 28, 2008 September 27, 2009 September 28, 2008
Revenues $ 294,865 $ 254,105 $ 830,305 $ 786,553
Operating expenses 234,408 199,252 655,592 628,274
Depreciation and amortization 9,616 9,329 29,062 27,523
General and administrative expenses 15,685 16,944 49,936 51,825
Operating income 35,156 28,580 95,715 78,931
Interest income 1,224 1,878 3,520 5,580
Interest expense (6,533 ) (7,309 ) (20,498 ) (21,667 )
Income before income taxes, equity in earnings of affiliate and 29,847 23,149 78,737 62,844
discontinued operations
Provision for income taxes 11,493 8,430 30,324 23,616
Equity in earnings of affiliate, net of income tax provision of 904 778 2,407 2,009
$352, $276, $936 and $819
Income from continuing operations 19,258 15,497 50,820 41,237
Income (loss) from discontinued operations, net of tax provision -- 362 (346 ) 1,228
(benefit) of $0, $348, $(216) and $875
Net income $ 19,258 $ 15,859 $ 50,474 $ 42,465
Weighted-average common shares outstanding:
Basic 50,900 50,626 50,800 50,495
Diluted 51,950 51,803 51,847 51,820
Income per common share:
Basic:
Income from continuing operations $ 0.38 $ 0.31 $ 1.00 $ 0.82
Income from discontinued operations -- -- (0.01 ) 0.02
Net income per share-basic $ 0.38 $ 0.31 $ 0.99 $ 0.84
Diluted:
Income from continuing operations $ 0.37 $ 0.30 $ 0.98 $ 0.80
Income (loss) from discontinued operations -- 0.01 (0.01 ) 0.02
Net income per share-diluted $ 0.37 $ 0.31 $ 0.97 $ 0.82
THE GEO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 27, 2009 AND DECEMBER 28, 2008
(In thousands, except share data)
September 27, 2009 December 28, 2008
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 24,299 $ 31,655
Restricted cash 13,219 13,318
Accounts receivable, less allowance for doubtful accounts of $549 224,638 199,665
and $625
Deferred income tax asset, net 17,340 17,340
Other current assets 13,347 12,911
Current assets of discontinued operations -- 7,031
Total current assets 292,843 281,920
Restricted Cash 21,821 19,379
Property and Equipment, Net 969,218 878,616
Assets Held for Sale 4,348 4,348
Direct Finance Lease Receivable 36,822 31,195
Deferred Income Tax Assets, Net 4,417 4,417
Goodwill 22,339 22,202
Intangible Assets, Net 11,596 12,393
Other Non-Current Assets 37,688 33,942
Non-Current Assets of Discontinued Operations -- 209
$ 1,401,092 $ 1,288,621
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 65,338 $ 56,143
Accrued payroll and related taxes 22,934 27,957
Accrued expenses 92,887 82,442
Current portion of capital lease obligations, long-term debt and 19,186 17,925
non-recourse debt
Current liabilities of discontinued operations -- 1,459
Total current liabilities 200,345 185,926
Deferred Income Tax Liability 14 14
Other Non-Current Liabilities 33,155 28,876
Capital Lease Obligations 14,601 15,126
Long-Term Debt 408,579 378,448
Non-Recourse Debt 102,415 100,634
Total shareholders' equity 641,983 579,597
$ 1,401,092 $ 1,288,621
SOURCE: The GEO Group
The GEO Group Pablo E. Paez, 866-301-4436 Director, Corporate Relations
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.