-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, MY1SYt0kIKxPb7kPBVcr1NlcnvvztpS7rG6U8JI5AsMVos1jua25LmLL2iOHIvTn sx/m0ZXGSZ+eXIzgEq0+Ng== 0000950144-95-001246.txt : 19950712 0000950144-95-001246.hdr.sgml : 19950712 ACCESSION NUMBER: 0000950144-95-001246 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORRECTIONS CORPORATION OF AMERICA CENTRAL INDEX KEY: 0000739404 STANDARD INDUSTRIAL CLASSIFICATION: 8744 IRS NUMBER: 621156308 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13560 FILM NUMBER: 95536290 BUSINESS ADDRESS: STREET 1: 102 WOODMONT BLVD STE 800 CITY: NASHVILLE STATE: TN ZIP: 37205 BUSINESS PHONE: 6152923100 10-Q 1 CORRECTION CORPORATION 10-Q 03-31-95 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) SECURITIES EXCHANGE ACT OT 1934 FOR THE TRANSACTION PERIOD FROM TO . ---------- ---------- COMMISSION FILE NUMBER: 0-15719 ------- CORRECTIONS CORPORATION OF AMERICA ---------------------------------- (Exact name of Registrant as specified in its charter) DELAWARE 62-1156308 ------------------------------------------------- ---------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 102 WOODMONT BLVD., SUITE 800 NASHVILLE, TENNESSEE 37205 - - -------------------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) (615) 292-3100 - - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NONE - - ----------------------------------------------------------------------------- (Former name, address and fiscal year if changed since last report.) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 14,707,965 - - ----------------------------------------------------------------------------- (Outstanding shares of the issuer's common stock as of May 1, 1995.) THERE IS NO EXHIBIT INDEX Total number of sequentially numbered pages is 10. 2 CORRECTIONS CORPORATION OF AMERICA INDEX
Page PART I. FINANCIAL INFORMATION: Number ------ Item 1. Financial Statements Consolidated Balance Sheets March 31, 1995 (Unaudited) and December 31, 1994 3 Consolidated Statements of Operations Three months ended March 31, 1995 and 1994 (Unaudited) 4 Consolidated Statements of Cash Flows Three months ended March 31, 1995 and 1994 (Unaudited) 5-6 Notes to Consolidated Financial Statements (Unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Changes in Securities 9 Item 3. Default Upon Senior Securities 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 9
2 3 CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands)
March 31, December 31, 1995 1994 ----------- ------------ ASSETS (Unaudited) ------ Current assets: Cash, cash equivalents and restricted cash $ 7,335 $ 4,126 Accounts receivable, less allowance for doubtful accounts of 24,811 22,922 $61 in 1995 and $181 in 1994 Prepaid expenses 784 1,026 Deferred taxes 2,522 3,132 Other 982 775 --------- --------- Total current assets 36,434 31,981 Restricted investments 69 69 Other assets 9,856 9,430 Property and equipment, net 79,158 78,402 Investment in direct financing lease 10,032 10,118 --------- --------- $ 135,549 $ 130,000 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable $ 4,384 $ 6,217 Accrued salaries and wages 1,448 1,785 Accrued property taxes 707 1,335 Other accrued expenses 5,584 4,699 Current portion of long-term debt 5,730 3,853 --------- --------- Total current liabilities 17,853 17,889 Long-term debt, net of current portion 43,978 46,492 Deferred taxes 3,682 3,627 Other long-term liabilities 2,722 3,670 --------- --------- Total liabilities 68,235 71,678 --------- --------- Stockholders' equity: Common stock 13,295 12,800 Additional paid-in capital 50,949 44,138 Retained earnings 3,736 1,692 Treasury stock, at cost (666) (308) --------- --------- Total stockholders' equity 67,314 58,322 --------- --------- $ 135,549 $ 130,000 ========= =========
3 4 CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data)
Three months ended March 31 ------------------------ 1995 1994 ----------- ----------- Revenues $ 34,606 $ 27,404 Expenses: Operating 25,447 21,793 Depreciation and amortization 1,068 1,035 ----------- ----------- 26,515 22,828 ----------- ----------- Contribution from operations 8,091 4,576 Other expenses: General and administrative 2,872 2,116 Interest, net 808 911 ----------- ----------- 3,680 3,027 ----------- ----------- Income before income taxes 4,411 1,549 Income taxes 1,737 168 ----------- ----------- Net income 2,674 1,381 Preferred stock dividends - 106 ----------- ----------- Net income allocable to common stockholders $ 2,674 $ 1,275 =========== =========== Net income per share: Primary $ 0.17 $ 0.10 =========== =========== Fully diluted $ 0.17 $ 0.10 =========== =========== Weighted average shares outstanding: Primary 15,618 12,475 =========== =========== Fully diluted 16,115 12,762 =========== ===========
4 5 CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three months ended March 31 ----------------------- 1995 1994 ----------- ---------- Cash Flows from Operating Activities: Net income $ 2,674 $ 1,381 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,303 1,285 Deferred income taxes 975 - Loss (gain) on disposal of property and equipment (12) 6 Changes in assets and liabilities: Accounts receivable (1,880) (232) Prepaid expenses 241 167 Other current assets (207) (78) Accounts payable (1,833) 556 Accrued expenses (80) 477 ----------- ---------- Net cash provided by operating activities 1,181 3,562 ----------- ---------- Cash Flows from Investing Activities: Increase in restricted and escrow cash (118) (123) Increase in other assets (956) (570) Acquisition of property and equipment (1,623) (1,461) Proceeds from disposals of property and equipment 21 - Payments received on direct financing leases 77 69 ----------- ---------- Net cash used in investing activities (2,599) (2,085) ----------- ---------- Cash Flows from Financing Activities: Proceeds from issuance of long-term debt 7,519 350 Payments on long-term debt (1,456) (1,511) Payments of short-term obligations refinanced by long-term (700) - debt Payment of international placement fees (248) - Payments of dividends on preferred stock - (106) Proceeds from exercise of stock options 24 51 Repurchase of stock warrants (630) - ----------- ---------- Net cash provided by (used in) financing activities 4,509 (1,216) ----------- ---------- Net increase in cash 3,091 261 CASH AND CASH EQUIVALENTS, beginining of period 3,802 5,992 ----------- ---------- CASH AND CASH EQUIVALENTS, end of period $ 6,893 $ 6,253 =========== ==========
5 6 CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three months ended March 31 -------------------------- 1995 1994 -------------- -------------- Supplemental Disclosures of Cash Flow Information: Cash paid during the period for: Interest $ 475 $ 715 ============== ============== Income taxes $ 657 $ 39 ============== ============== Supplemental Schedule of Noncash Investing and Financing Activities: The Company acuired treasury stock and issued common stock through the exercise of stock options: Common stock $ (49) $ (20) Additional paid-in capital (310) (75) Retained earnings (deficit) - 9 Treasury stock, at cost 359 86 -------------- -------------- $ - $ - ============== ============== Long term debt was converted into common stock: Other assets $ (86) $ - Long-term debt 6,700 - Common Stock (444) - Additional paid-in capital (6,170) - -------------- -------------- $ - $ - ============== ==============
6 7 CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheet as of March 31, 1995, and the consolidated statements of operations and cash flows for the three month periods ended March 31, 1995 and 1994, have been prepared by the Company in accordance with the accounting policies described in its 1994 Annual Report and should be read in conjunction with the notes thereto. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial positions, results of operations and changes in cash flows at March 31, 1995 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The results of operations for the period ended March 31, 1995, are not necessarily indicative of the operating results for the full year. 2. LONG-TERM DEBT In March 1995, the Company converted $6,700,000 of convertible subordinated notes into 443,692 shares of common stock. The notes had been outstanding since 1989 and had earned 8.5% interest. The conversion prices ranged from $14.33 to $16.74 and included a provision which permitted the Company to require conversion after the stock had a market value of 150% of the conversion price for a specified period. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS REVENUES AND EXPENSES FROM FACILITY OPERATIONS Revenues for the first quarter of 1995 increased 26% over the comparable period of 1994. Management revenues increased $6,855,000 and transportation revenues increased $347,000 in the first three months of 1995 as compared to the same period in 1994. The increase in management revenues was due to average occupancy increasing 3.5% along with compensated mandays increasing by 25%. The Company opened the Central Arizona Detention Facility in Florence, Arizona, in the fourth quarter of 1994 and also realized the full period effect of 1994 expansions to existing facilities. The 19% increase in transportation revenues was due to a marketing effort resulting in an expanded customer base and therefore increased compensated mileage. Operating expenses for the first quarter of 1995 increased 17% over the comparable quarter in 1994. This increase was due to the increased compensated mandays and compensated mileage that the Company realized in 1995 as previously mentioned. Depreciation and amortization remained relatively flat with only a 3% increase in the first quarter of 1995 as compared to the first quarter of 1994. While increasing in dollar amount depreciation and amortization actually decreased as a percentage of revenue. This is a result of 7 8 the trend in new contracts moving towards the government financing and owning the fixed assets while contracting out the operations with the private sector. OTHER EXPENSES General and administrative expenses increased 36% for the first quarter of 1995 as compared to the comparable quarter of 1994. The increased expenses were incurred in order to manage the new beds being brought on line in 1995 and 1996. The Company is in the process of bringing 6,210 beds on line over the next eighteen months. As these facilities open then general and administrative cost will again decrease as a percentage of revenues. Interest expense, net, decreased 11% from the first quarter of 1994 to the first quarter of 1995. This is due to the Company making regularly scheduled debt payments, the reduction of $9,800,000 of debt in June 1994, with proceeds from an equity issuance and the conversion of $6,700,000 convertible subordinated notes in March 1995. Income taxes increased from $167,000 in the first quarter of 1994 to $1,737,000 in the first quarter of 1995. This increase is due to the Company's complete utilization of net operating loss carryforwards and therefore being subject to the full statutory tax rates. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Company's business is capital intensive. The Company's efforts to obtain contracts, construct additional facilities, and maintain its day-to-day operations have required the continued acquisition of funds through borrowings and equity offerings. Thus far the Company has financed these activities through the sale of capital stock, subordinated convertible notes and senior secured debt, through the issuance of taxable and tax-exempt bonds, by bank borrowings, and by assisting governmental agencies in the issuance of municipal bonds. The Company has a working capital revolving credit facility with a bank which provides for borrowings of up to $15,000,000. The facility requires interest payments to be made monthly and bears interest, at the election of the Company, of either the Bank's prime rate or LIBOR plus 2%, 9.0% and 8.13%, respectively at March 31, 1995. The facility consists of a working capital line, which includes letters of credit. As of March 31, 1995, There were no amounts borrowed against the facility but $7,361,000 of letters of credit had been issued leaving the unused commitment at $7,639,000. Future expansion and the acquisition and construction of additional facilities may require further financing, the form of which will vary depending upon prevailing market and other conditions. The trend in growth opportunities has been a movement towards the government financing and owning the fixed assets while contracting out the operations with the private sector. Management believes that cash flow from operations, borrowing capacity and access to alternative financing techniques are adequate to meet its future financial requirements. 8 9 PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Default Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a) 27 Financial Data Schedule (for SEC use only) b) A current report on Form 8-K dated January 12, 1995, reporting the acquisition of TransCor America, Inc., was filed during the quarter for which this quarterly report is filed. 9 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CORRECTIONS CORPORATION OF AMERICA Registrant May 9 , 1995 /s/ Darrell K. Massengale - - --------------------------------------- ---------------------------- Date Darrell K. Massengale Chief Financial Officer Secretary, Treasurer Principal Accounting Officer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF CORRECTIONS CORPORATION OF AMERICA FOR THE THREE MONTHS ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 7,335 0 24,811 61 0 36,434 79,158 0 135,549 17,853 43,978 13,295 0 0 54,019 135,549 0 34,606 0 26,515 2,872 0 808 4,411 1,737 2,674 0 0 0 2,674 .17 .17
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