HOUSTON, Sept. 30, 2009 (GLOBE NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) announced today that Cornell Corrections of Alaska, Inc. ("Cornell Alaska"), its wholly owned subsidiary, has entered into a contract with the State of Alaska Department of Corrections ("Alaska DOC") to house up to 1,000 state prisoners at its Hudson Correctional Facility (the "Facility") located in Hudson, Colorado. The contract is pursuant to the previously announced Notice of Intent to Award by Alaska DOC. The Facility, which will have a service capacity of 1,250 beds, is presently under construction and is expected to be completed in November 2009.
The contract became effective on September 16, 2009 and has an initial term through June 30, 2012, with annual renewal options for the period July 1, 2012 through October 31, 2019. Under the contract, the Alaska DOC will house up to 1,000 adult male inmates at the Facility, with an agreed-upon 800-bed guarantee. The intake of approximately 850 inmates is expected to commence in late November 2009 and be completed by late December 2009.
James E. Hyman, Cornell's chairman, president and chief executive officer, said, "We are very pleased to have received this contract from our Alaska customer, and look forward to the successful ramp of their inmates at our Hudson facility by the end of this year. By activating the facility sooner than previously forecast, we will incur additional net start-up costs across the third and fourth quarters of 2009 of approximately eleven cents per share. These additional net start-up costs would otherwise have occurred primarily during the first quarter of 2010. The impact per share will be approximately one to two cents per share in the third quarter and nine to ten cents per share in the fourth quarter. We will provide updated guidance for the fourth quarter and full year earnings as part of our third quarter earnings call that we anticipate having in early November. On that call, we will address the net start-up costs and any other matters affecting our forecast. We believe that activating Hudson by the end of 2009 will establish a strong platform to grow earnings in 2010."
Forward-Looking Statements
Statements regarding the anticipated population and operating revenues at the Facility, completion of construction at the Facility, anticipated financial impacts, 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, 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 September 30, 2009, the Company had 70 facilities in 15 states and the District of Columbia and a total service capacity of 20,892.
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