EX-99.1 2 g95414exv99w1.htm PRESS RELEASE Press Release
 

Exhibit 99.1

N E W S    R E L E A S E

One Park Place, Suite 700 n 621 Northwest 53rd Street n Boca Raton, Florida 33487 n www.thegeogroupinc.com

CR-05-11

THE GEO GROUP, INC. REPORTS FIRST QUARTER 2005 RESULTS

  •   Achieved Quarterly EPS of $0.29 — Net Income of $2.9 Million
 
  •   Revenue Increased to $154.0 Million from $146.1 Million

Boca Raton, Fla. — May 13, 2005 — The GEO Group, Inc. (NYSE: GGI) (“GEO”) today reported first quarter 2005 earnings of $2.9 million, or $0.29 per share, based on 10.0 million diluted weighted average shares outstanding, compared with $2.3 million, or $0.24 per share, based on 9.7 million diluted weighted average shares outstanding, in the first quarter of 2004. First quarter 2005 earnings include income from continuing operations of $2.8 million, or $0.28 per share, compared to $2.0 million, or $0.21 per share for the same period in 2004. First quarter 2005 earnings also include after-tax income from discontinued operations of $0.1 million, or $0.01 per share, related to GEO’s former contract with the Department of Immigration and Multicultural and Indigenous Affairs (“DIMIA”) in Australia, compared with income of $0.2 million net of tax, or $0.03 per share, for the same period in 2004.

Revenues for the first quarter of 2005 increased to $154.0 million compared with $146.1 million in the first quarter of 2004. First quarter 2005 revenues reflect the strengthening of the Australian dollar and the South African Rand from 2004; higher construction revenue related to the expansion of GEO’s South Bay Correctional Facility in Florida; higher revenues as a result of GEO’s Reeves County Detention Complex and Sanders Estes Unit in Texas being operational for the entire period; the reopening of GEO’s McFarland Community Correctional Facility in California in January of 2005; and contractual adjustments for inflation.

George C. Zoley, Chairman and Chief Executive Officer of GEO, said, “We are pleased with our first quarter financial and operating results, and we are optimistic about our future business opportunities in the areas of correctional and mental health management services. We are specially honored to have been recently selected by the State of Florida to negotiate for the management of the 200-bed South Florida Treatment and Evaluation Center located in Miami, Florida and the development of a new state-of-the-art forensic hospital in its place. The operations contract for the Center is expected to start January 1, 2006 and achieve annual revenue during the first two years of approximately $24 million. With this new contract and other opportunities, we believe that our mental health services will rapidly become a significant portion of our Company’s revenues.”

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Contact: Pablo E. Paez
                Director, Corporate Relations
  1-866-301-4436


 

2005 Guidance

GEO is revising its second quarter 2005 guidance. GEO expects second quarter 2005 revenues to be in the range of $148 million to $154 million and second quarter 2005 earnings per share to be in the range of $0.40 to $0.42. Second quarter projected earnings per share reflect a tax benefit of $0.17 from the repatriation of foreign earnings in the fourth quarter of 2004 as a result of the American Jobs Creation Act of 2004. Realization of this tax benefit is subject to the passing of pending legislation in the United States Congress clarifying certain technical provisions in the original law. GEO expects income from continuing operations to be in the range of $0.23 to $0.25 per share.

The revision in projected earnings from operations in the second quarter of 2005 is due to a lower census at GEO’s San Diego, California detention facility; increased staff and business development expenses related to GEO’s wholly-owned subsidiary Atlantic Shores Healthcare, Inc. (“ASH”); and a few extraordinary inmate medical cases. GEO is not revising its guidance for the third and fourth quarters of 2005.

“We are revising our second quarter guidance primarily because of a lower census at our San Diego detention facility and a substantial investment that we are making in increased corporate staff and business development activities related to mental health opportunities. While we are disappointed in the present weakness in the census at our facility in San Diego, California, we expect to begin sole source negotiations for a new five-year contract by the end of this month which we anticipate will be finalized early in the third quarter. The increased resources being committed to ASH are necessary for its continued growth and success,” Zoley added.

Conference Call Information

GEO has scheduled a conference call and simultaneous webcast at 2:00 PM (Eastern Time) today to discuss GEO’s 2005 first quarter financial results as well as its progress and outlook. The call-in number for the U.S. is 1-888-396-2298 and the international call-in number is 1-617-847-8708. The participant pass-code for the conference call is 26405330. 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.thegeogroupinc.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 June 13, 2005 at 1-888-286-8010 (U.S.) and 1-617-801-6888 (International). The pass-code for the telephonic replay is 33258171.

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Contact: Pablo E. Paez
                Director, Corporate Relations
  1-866-301-4436

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About The GEO Group, Inc.

The GEO Group, Inc. (“GEO”) is a world leader in the delivery of correctional and detention management, health and mental health, and other diversified 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, New Zealand, and Canada managing 41 facilities with a total design capacity of approximately 36,000 beds.

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 earnings guidance for 2005 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.

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First quarter financial tables to follow:

Contact: Pablo E. Paez
                Director, Corporate Relations
  1-866-301-4436

3


 

The GEO Group, Inc.
Consolidated Statements of Income
For the thirteen weeks ended April 3, 2005
and the thirteen weeks ended March 28, 2004

(In thousands except per share data)

                 
    13 Weeks     13 Weeks  
    Ended     Ended  
    April 3, 2005     March 28, 2004  
            Restated  
Revenues
  $ 154,030     $ 146,058  
 
               
Operating Expenses
    130,953       123,845  
 
               
Depreciation and Amortization
    3,803       3,457  
 
               
General and Administrative Expenses
    11,401       11,191  
 
           
 
               
Operating Income
    7,873       7,565  
 
           
 
               
Interest Income
    2,336       2,388  
 
               
Interest Expense
    (5,454 )     (5,840 )
Income Before Taxes, Equity in Earnings
               
of Affiliates, Discontinued Operations
               
and Minority Interest
    4,755       4,113  
Provision for Income Taxes
    1,854       1,746  
Minority Interest
               
Equity in Earnings of Affiliates, net of
    (184 )     (174 )
income tax (benefit) of $(16) and $(107)
    49       (148 )
 
           
Income from Continuing Operations
    2,766       2,045  
Income (loss) from Discontinued Operations, net
           
of tax (benefit) of $56 and $107
    130       249  
 
           
 
               
Net Income
  $ 2,896     $ 2,294  
 
           
 
               
Basic EPS
               
Income from Continuing Operations
  $ 0.29     $ 0.22  
Income (loss) from Discontinued Operations
    0.01       0.03  
 
           
Earnings per share — Basic
  $ 0.30     $ 0.25  
 
           
 
               
Basic Weighted Average Shares Outstanding
    9,525       9,333  
Diluted EPS
               
Income from Continuing Operations
  $ 0.28     $ 0.21  
Income (loss) from Discontinued Operations
    0.01       0.03  
 
           
Earnings per share — Diluted
  $ 0.29     $ 0.24  
 
           
 
               
Diluted Weighted Average Shares Outstanding
    10,002       9,712  

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Contact: Pablo E. Paez
                Director, Corporate Relations
  1-866-301-4436

4


 

The GEO Group, Inc.
Operating Data
(1)

                 
    13 Weeks     13 Weeks  
    Ended     Ended  
    April 3, 2005     March 28, 2004  
*Revenue-producing beds
    35,266       34,648  
*Compensated man-days
    3,416,381       3,162,763  
*Average occupancy
    99.0 %     99.6 %

(1) Does not include discontinued operations

* Includes South Africa

The GEO Group, Inc.
Consolidated Balance Sheets
April 3, 2005 and January 2, 2005

(In thousands)

                 
    April 3, 2005     January 2, 2005  
            Restated  
ASSETS
               
Current Assets
               
Cash and cash equivalents
  $ 103,148     $ 92,801  
Short-term investments
          10,000  
Accounts receivable, less allowance for doubtful accounts
               
of $1,266 and $1,170
    82,334       94,028  
Deferred income tax asset
    12,245       12,771  
Other current assets
    18,101       12,386  
Current assets of discontinued operations
          660  
 
           
Total current assets
    215,828       222,646  
 
           
Restricted Cash
    3,857       3,908  
Property and Equipment, Net
    194,743       196,744  
Direct Finance Lease Receivable
    41,972       42,953  
Other Non Current Assets
    13,093       13,895  
 
           
 
  $ 469,493     $ 480,146  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current Liabilities
               
Accounts payable
  $ 18,802     $ 21,874  
Accrued payroll and related taxes
    26,923       25,026  
Accrued expenses
    43,552       53,077  
Current portion of deferred revenue
    1,844       1,844  
Current portion of long-term debt and non-recourse debt
    13,683       13,736  
Current liabilities of discontinued operations
    1,454       1,609  
 
           
Total current liabilities
    106,258       117,166  
 
           
Deferred Revenue
    3,859       4,320  
Deferred Tax Liability
    2,345       1,489  
Minority Interest
    1,294       1,194  
Other Non Current Liabilities
    19,441       20,724  
Long-Term Debt
    184,563       185,452  
Non-Recourse Debt
    41,972       42,953  
Total shareholders’ equity
    109,761       106,848  
 
           
 
  $ 469,493     $ 480,146  
 
           

- End -

Contact: Pablo E. Paez
                Director, Corporate Relations
  1-866-301-4436

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