HOUSTON, Aug. 6, 2009 (GLOBE NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) today reported results for the three and six months ended June 30, 2009.
James E. Hyman, Cornell's chairman, president and chief executive officer, said, "In the second quarter, we delivered yet another consecutive quarter of strong operating performance. Against the background of continuing budget turbulence among our customers, our attention to operational details and customer service positions us to maintain this growth through year end, and to leverage our spare capacity to sustain the growth into future years."
Second-Quarter Summary (in thousands, except per share data)
Three Months Ended Six Months Ended
------------------------------------------
As Reported 6/30/2009 6/30/2008 6/30/2009 6/30/2008
Revenue from operations $ 105,334 $ 94,646 $ 205,044 $ 190,038
Income from operations 19,590 14,914 35,376 29,404
Net income 7,628 5,345 13,360 9,979
Income available to
stockholders 7,230 5,345 12,487 9,979
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EPS - diluted $ 0.48 $ 0.36 $ 0.84 $ 0.67
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Diluted shares
outstanding used in per
share computation 14,970 14,854 14,952 14,840
Higher Net Income on Increased Revenues
Revenues grew 11.3 percent to $105.3 million for the second quarter of 2009 from $94.6 million in the 2008 period. Much of the increase came from the expansions of the Great Plains Correctional Facility (Great Plains) and the Walnut Grove Youth Correctional Facility (Walnut Grove), in the third quarter of 2008, as well as higher populations at the Regional Correctional Center (RCC). Average contract occupancy levels were 91.1 percent for our residential facilities compared with 93.0 percent in last year's second quarter. The increase in capacity from expanding Walnut Grove in the third quarter of 2008 and the second expansion of D. Ray James Prison in the second quarter of 2009, along with spare capacity at our two small male facilities in California, primarily accounted for this decrease in overall occupancy.
Income from operations of $19.6 million for the second quarter of 2009 improved from $14.9 million in the second quarter of 2008. This 31.4 percent increase was related in part to the higher revenues mentioned above. For the second quarter of 2009 the Company reported an increase in net income of 42.7 percent to $7.6 million, from net income of $5.3 million in last year's second quarter. For the second quarter of 2009 the Company reported an increase in income available to stockholders of 35.3 percent to $7.2 million, or $0.48 per diluted share, from income available to stockholders of $5.3 million, or $0.36 per diluted share, in last year's second quarter.
The Company capitalized no interest in the second quarter of 2009, compared with capitalized interest of $0.8 million (or $0.03 per diluted share, after taxes) in the second quarter of 2008.
Increased Revenues, Net Income for the Six-Months
For the six months ended June 30, 2009, revenues grew 7.9 percent to $205.0 million from $190.0 million for the first six months of 2008. The increase was principally related to the facility expansions and activations at those programs mentioned earlier. In addition, the 2008 period included approximately $1.5 million resulting from the guaranteed population contract at the RCC for the contract period ended March 2008.
Higher revenues increased income from operations to $35.4 million for the 2009 six month period compared with $29.4 million in the prior year's six month period. Net income was $13.4 million compared with net income of $10.0 million in the previous year's first six months. For the six months ended June 30, 2009, the Company reported an increase in income available to stockholders of 25.1 percent to $12.5 million, or $0.84 per diluted share, from income available to stockholders of $10.0 million, or $0.67 per diluted share, in last year's six month period. The Company capitalized interest of $0.7 million (or $0.03 per diluted share, after taxes) in the first six months of 2009. 2008 results included pre-tax capitalized interest of $1.3 million (or $0.05 or diluted share, after taxes), and revenues of approximately $1.5 million from the RCC true-up calculation mentioned earlier.
Earnings Outlook for Third and Fourth Quarters and Full Year 2009
Management expects 2009 earnings for the third quarter to range from $0.42 to $0.46 per share, and for the fourth-quarter to also be between $0.42 to $0.46 per share. For the full year, management has raised its earlier guidance by $0.06 per share to $1.68 to $1.76 per share, to account for the performance in the second quarter as well as forecasted continued operational strength across the portfolio.
All major assumptions underlying this guidance remain unchanged from those discussed by management in their previous quarterly conference call, with the exception of two items:
* At the Company's D.Ray James facility, the Company assumes that the 700- beds of capacity added during the second quarter will not fill this year. As previously announced on May 20, 2009, this reduced forecast earnings by approximately $0.06 per share. * At the Company's 2000-bed Great Plains facility, the Arizona Department of Corrections (ADOC) has decided due to budget pressures to reduce the population by approximately 237 beds for the remainder of the contract year ending June 30, 2010. The estimated impact of this reduction for 2009 is up to approximately $0.07 per share.
Stock Repurchase Program
The Company also is announcing today that its Board of Directors has authorized a stock repurchase program for 2009 and 2010. Based on the Board's authorization, the Company anticipates a repurchase program of up to $10 million. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements and other market conditions.
Quarterly Webcast
Cornell's management will host a conference call and simultaneous webcast at 2:00 p.m. Eastern time today. The webcast may be accessed through Cornell's home page, www.cornellcompanies.com. An audio replay and podcast will be available on the above Website, or can otherwise be heard by dialing (800) 406-7325 or (303) 590-3030 and providing confirmation code 4119456. The replay will be available through Thursday, August 13, 2009 by phone and through Friday, August 6, 2010 on the Web site. This earnings release can be found on Cornell's Website under "Investor Relations - Press Releases."
Forward-Looking Statements
Statements regarding the Company's outlook for 2009, ability to succeed, growth for 2009, long-term demand, future earnings, facility expansions including those at D. Ray James Prison, new facility in Hudson, Colorado, results of operations and effective tax rate, as well as any other statements that are not historical facts, are forward-looking statements within the meaning of applicable securities laws that involve certain risks, uncertainties and assumptions. These include but are not limited to risks and uncertainties associated with general economic and market conditions, including the impact governmental budgets can have on our per diem rates and occupancy, Cornell's ability to perform according to its current expectations, changes in supply and demand, actions by government agencies and other third parties, access to capital and other risks and uncertainties detailed in the Company's most recent Form 10-K and other filings made by us from time to time with the Securities and Exchange Commission, which are available free of charge on the SEC's Web site at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from the statements made. All information set forth in this release is current as of the date of this release. Cornell undertakes no duty to update any statement in light of new information or future events.
About Cornell Companies
Cornell Companies, Inc. (http://www.cornellcompanies.com) is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education in an environment of dignity and respect, emphasizing community safety and rehabilitation in support of public policy. At June 30, 2009, the Company had 70 facilities in 15 states and the District of Columbia and a total service capacity of 20,892.
The Cornell Companies, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1468
CORNELL COMPANIES, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues $ 105,334 $ 94,646 $ 205,044 $ 190,038
Operating expenses 74,734 68,280 147,627 138,491
Depreciation and
amortization 4,740 4,220 9,633 8,377
General and
administrative expenses 6,270 7,232 12,408 13,766
--------- --------- --------- ---------
Income from operations 19,590 14,914 35,376 29,404
Interest expense, net 6,576 5,567 12,529 11,862
--------- --------- --------- ---------
Income before provision
for income taxes and
non-controlling
interest 13,014 9,347 22,847 17,542
Provision for income
taxes 5,386 4,002 9,487 7,563
--------- --------- --------- ---------
Net income 7,628 5,345 13,360 9,979
Non-controlling interest 398 -- 873 --
--------- --------- --------- ---------
Income available to
stockholders $ 7,230 $ 5,345 $ 12,487 $ 9,979
========= ========= ========= =========
Earnings per share:
- Basic $ 0.49 $ 0.36 $ 0.84 $ 0.68
- Diluted $ 0.48 $ 0.36 $ 0.84 $ 0.67
Number of shares used in
per share computation:
- Basic 14,881 14,707 14,878 14,700
- Diluted 14,970 14,854 14,952 14,840
Total service capacity
(end of period) 20,892 18,900 20,892 18,900
Contracted beds in operation
(end of period) 17,480 15,298 17,480 15,298
Average contract
occupancy (A) 91.1% 93.0% 92.2% 94.3%
(A) Average contract occupancy percentages are calculated based on
actual occupancy for the period as a percentage of the contracted
capacity for residential facilities in operation. These percentages
do not reflect the operations of non-residential community-based
programs. At certain residential facilities, our contracted capacity
is lower than the facility's service capacity. In addition, certain
facilities have and are currently operating above the contracted
capacity. As a result, average contract occupancy percentages can
exceed 100% if the average actual occupancy exceeded contracted
capacity.
Balance Sheet Data:
------------------
(in thousands) June 30, December 31,
2009 2008
----------- -----------
Cash and cash equivalents $16,620 $14,613
Working capital 63,160 49,385
Property and equipment, net 450,850 450,354
Total assets 643,946 636,921
Long-term debt 306,156 308,070
Total debt 318,569 320,482
Stockholders' equity 243,241 228,167
CORNELL COMPANIES, INC.
OPERATING STATISTICS FROM CONTINUING OPERATIONS
For the Three and Six Months Ended June 30, 2009 and 2008
Three Months Ended June 30,
----------------------------------
2009 2008
---------------- ---------------
% %
--------- --- --------- ---
Contracted beds in operation (A):
---------------------------------
Adult Secure Services 13,493 77% 11,200 74%
Adult Community-based Services 2,625 15% 2,661 17%
Abraxas Youth & Family Services 1,362 8% 1,437 9%
--------- --- --------- ---
Total 17,480 100% 15,298 100%
========= === ========= ===
Number of billed mandays:
-------------------------
Adult Secure Services 1,072,158 66% 941,827 63%
Adult Community-based Services:
Residential 266,263 16% 253,914 17%
Non-residential (B) 53,547 3% 59,337 4%
Abraxas Youth & Family Services:
Residential 110,777 7% 107,096 7%
Non-residential (B) 136,337 8% 131,522 9%
--------- --- --------- ---
Total 1,639,082 100% 1,493,696 100%
========= === ========= ===
Revenues (in 000's):
--------------------
Adult Secure Services $ 59,272 56% $ 50,305 53%
Adult Community-based Services:
Residential 17,801 17% 16,706 18%
Non-residential 554 1% 749 1%
Abraxas Youth & Family Services:
Residential 21,549 20% 20,398 21%
Non-residential 6,158 6% 6,488 7%
--------- --- --------- ---
Total $ 105,334 100% $ 94,646 100%
========= === ========= ===
Average revenue per diem:
-------------------------
Adult Secure Services $ 55.28 $ 53.41
Adult Community-based Services:
Residential $ 66.85 $ 65.80
Non-residential (B) $ 10.35 $ 12.62
Abraxas Youth & Family Services:
Residential $ 194.53 $ 190.46
Non-residential (B) $ 45.17 $ 49.33
--------- ---------
Total $ 64.26 $ 63.36
--------- ---------
Six Months Ended June 30,
----------------------------------
2009 2008
---------------- ---------------
% %
--------- --- --------- ---
Contracted beds in operation (A):
---------------------------------
Adult Secure Services 13,493 77% 11,200 74%
Adult Community-based Services 2,625 15% 2,661 17%
Abraxas Youth & Family Services 1,362 8% 1,437 9%
--------- --- --------- ---
Total 17,480 100% 15,298 100%
========= === ========= ===
Number of billed mandays:
-------------------------
Adult Secure Services 2,129,981 66% 1,839,952 62%
Adult Community-based Services:
Residential 513,130 16% 510,669 17%
Non-residential (B) 115,407 3% 119,300 4%
Abraxas Youth & Family Services:
Residential 212,873 7% 218,965 8%
Non-residential (B) 258,984 8% 268,053 9%
--------- --- --------- ---
Total 3,230,375 100% 2,956,939 100%
========= === ========= ===
Revenues (in 000's):
--------------------
Adult Secure Services $ 116,130 56% $ 100,204 52%
Adult Community-based Services:
Residential 34,403 17% 33,641 18%
Non-residential 1,112 1% 1,534 1%
Abraxas Youth & Family Services:
Residential 41,714 20% 41,309 22%
Non-residential 11,685 6% 13,350 7%
--------- --- --------- ---
Total $ 205,044 100% $ 190,038 100%
========= === ========= ===
Average revenue per diem:
-------------------------
Adult Secure Services $ 54.52 $ 54.46
Adult Community-based Services:
Residential $ 67.05 $ 65.88
Non-residential (B) $ 9.64 $ 12.86
Abraxas Youth & Family Services:
Residential $ 195.96 $ 188.66
Non-residential (B) $ 45.12 $ 49.80
--------- ---------
Total $ 63.47 $ 64.27
========= =========
(A) Residential contract capacity only.
(B) Non-residential "mandays" includes a mix of day units and hourly
units. Mental health facilities are reported in hours.