HOUSTON, Nov. 5, 2009 (GLOBE NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) today reported results for the three and nine months ended September 30, 2009.
James E. Hyman, Cornell's chairman, president and chief executive officer, said, "In the third quarter, we performed to plan despite customer budget problems. As we previously announced, we received an award from the Alaska Department of Corrections to house up to 1,000 of their inmates at our new facility in Hudson, Colorado that we expect to ramp by the end of the year. Combined with our confidence to execute to plan across the rest of our operations through year end, we believe the Company will finish the year well positioned to continue our growth in 2010 despite another challenging budget year for customers."
Third-Quarter Summary (in thousands, except per share data)
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Three Months Ended Nine Months Ended
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As Reported 9/30/2009 9/30/2008 9/30/2009 9/30/2008
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Revenue from operations $103,279 $ 95,187 $308,323 $285,225
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Income from operations 18,594 14,037 53,972 43,442
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Net income 7,206 4,915 20,568 14,896
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Income available to
stockholders 6,693 4,828 19,182 14,809
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EPS - diluted $ 0.45 $ 0.32 $ 1.28 $ 1.00
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Diluted shares outstanding
used in per share
computation 14,995 14,915 14,968 14,867
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Higher Net Income on Increased Revenues
Revenues grew 8.5 percent to $103.3 million for the third quarter of 2009 from $95.2 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 90.6 percent for our residential facilities compared with 90.0 percent in last year's third quarter.
Income from operations of $18.6 million for the third quarter of 2009 improved from $14.0 million in the third quarter of 2008. This 32.5 percent increase was related in part to the higher revenues mentioned above. For the third quarter of 2009, the Company reported an increase in net income of 46.6 percent to $7.2 million, from net income of $4.9 million in last year's third quarter. In the third quarter of 2009 the Company also reported an increase in income available to stockholders of 38.6 percent to $6.7 million, or $0.45 per diluted share, from income available to stockholders of $4.8 million, or $0.32 per diluted share, in last year's third quarter.
The Company capitalized no interest in the third quarter of 2009, compared with capitalized interest of $1.0 million (or $0.04 per diluted share, after taxes) in the third quarter of 2008.
Increased Revenues, Net Income for the Nine-Months
For the nine months ended September 30, 2009, revenues grew 8.1 percent to $308.3 million from $285.2 million for the first nine months of 2008. The increase was principally related to the facility expansions and occupancy growth 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 $54.0 million for the 2009 nine month period compared with $43.4 million in the prior year's nine month period. Net income was $20.6 million compared with net income of $14.9 million in the previous year's first nine months. For the nine months ended September 30, 2009, the Company reported an increase in income available to stockholders of 29.5 percent to $19.2 million, or $1.28 per diluted share, from income available to stockholders of $14.8 million, or $1.00 per diluted share, in last year's nine month period. The Company capitalized interest of $0.7 million (or $0.03 per diluted share, after taxes) in the first nine months of 2009. 2008 results included pre-tax capitalized interest of $2.3 million (or $0.09 per diluted share, after taxes), and revenues of approximately $1.5 million from the RCC true-up calculation mentioned earlier.
Earnings Outlook for Fourth Quarter and Full Year 2009
As previously announced on September 30, 2009, we are activating our Hudson Correctional Facility for our contract with the State of Alaska Department of Corrections sooner than previously forecast. Though we did not incur material expenses for the activation in the third quarter, we expect to incur additional net start-up costs of approximately $0.11 to $0.12 per share in the fourth quarter. Aside from these start-up costs, there are no material changes to our guidance assumptions for the fourth quarter and full year 2009. As a result, management expects 2009 earnings for the fourth-quarter to range from $0.32 to $0.35 per share. For the full year, management anticipates earnings of $1.60 to $1.63 per share.
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 4175248. The replay will be available through Thursday, November 12, 2009 by phone and through Friday, November 5, 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 September 30, 2009, the Company had 69 facilities in 15 states and the District of Columbia and a total service capacity of 20,667.
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 Nine Months Ended
September 30, September 30,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenues $103,279 $ 95,187 $308,323 $285,225
Operating expenses 74,419 71,234 222,044 209,723
Depreciation and amortization 4,460 4,466 14,093 12,843
General and administrative
expenses 5,806 5,450 18,214 19,217
-------- -------- -------- --------
Income from operations 18,594 14,037 53,972 43,442
Interest expense, net 6,376 5,754 18,905 17,615
-------- -------- -------- --------
Income before provision for
income taxes and
non-controlling interest 12,218 8,283 35,067 25,827
Provision for income taxes 5,012 3,368 14,499 10,931
-------- -------- -------- --------
Net income 7,206 4,915 20,568 14,896
Non-controlling interest 513 87 1,386 87
-------- -------- -------- --------
Income available to
stockholders $ 6,693 $ 4,828 $ 19,182 $ 14,809
======== ======== ======== ========
Earnings per share:
- Basic $ 0.45 $ 0.33 $ 1.29 $ 1.01
- Diluted $ 0.45 $ 0.32 $ 1.28 $ 1.00
Number of shares used in per
share computation:
- Basic 14,886 14,734 14,880 14,715
- Diluted 14,995 14,915 14,968 14,867
Total service capacity (end
of period) 20,667 20,191 20,667 20,191
Contracted beds in operation
(end of period) 17,480 17,017 17,480 17,017
Average contract occupancy (A) 90.6% 90.0% 91.6% 92.7%
(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) September 30, December 31,
2009 2008
------------ -----------
Cash and cash equivalents $ 4,972 $ 14,613
Working capital 56,789 49,385
Property and equipment, net 451,944 450,354
Total assets 635,948 636,921
Long-term debt 292,798 308,070
Total debt 306,211 320,482
Stockholders' equity 251,478 228,167
MCF Reserve Balances:
---------------------
Bond Fund Payment Account 3,907 10,286
Debt Service Reserve Fund 23,370 23,750
CORNELL COMPANIES, INC.
OPERATING STATISTICS FROM CONTINUING OPERATIONS
For the Three and Nine Months Ended September 30, 2009 and 2008
Three Months Ended September 30,
---------------------------------
2009 2008
--------------- ---------------
% %
---------- --- ---------- ---
Contracted beds in
operation(1):
------------------
Adult Secure Services 13,493 77% 12,793 75%
Adult Community-based Services 2,625 15% 2,671 16%
Abraxas Youth & Family Services 1,362 8% 1,553 9%
---------- --- ---------- ---
Total 17,480 100% 17,017 100%
========== === ========== ===
Number of billed mandays:
-------------------------
Adult Secure Services 1,073,856 66% 969,014 65%
Adult Community-based Services:
Residential 274,811 17% 245,031 16%
Non-residential(2) 52,966 3% 59,643 4%
Abraxas Youth & Family Services:
Residential 109,456 7% 106,567 7%
Non-residential(2) 114,434 7% 122,880 8%
---------- --- ---------- ---
Total 1,625,523 100% 1,503,135 100%
========== === ========== ===
Revenues (in 000's):
--------------------
Adult Secure Services $ 57,686 56% $ 51,470 54%
Adult Community-based Services:
Residential 18,267 17% 16,776 17%
Non-residential 647 1% 710 1%
Abraxas Youth & Family Services:
Residential 21,425 21% 20,662 22%
Non-residential 5,254 5% 5,569 6%
---------- --- ---------- ---
Total $ 103,279 100% $ 95,187 100%
========== === ========== ===
Average revenue per diem:
-------------------------
Adult Secure Services $ 53.72 $ 53.12
Adult Community-based Services:
Residential $ 66.47 $ 68.46
Non-residential(2) $ 12.22 $ 11.90
Abraxas Youth & Family Services:
Residential $ 195.74 $ 193.89
Non-residential(2) $ 45.91 $ 45.32
---------- ----------
Total $ 63.54 $ 63.33
========== ==========
Income from Operations
(in 000's)(3):
----------------------
Adult Secure Services $ 15,932 $ 13,896
Adult Community-based Services 6,469 4,603
Abraxas Youth & Family Services 2,289 1,696
Nine Months Ended September 30,
---------------------------------
2009 2008
--------------- ---------------
% %
---------- --- ---------- ---
Contracted beds in
operation(1):
------------------
Adult Secure Services 13,493 77% 12,793 75%
Adult Community-based Services 2,625 15% 2,671 16%
Abraxas Youth & Family Services 1,362 8% 1,553 9%
---------- --- ---------- ---
Total 17,480 100% 17,017 100%
========== === ========== ===
Number of billed mandays:
-------------------------
Adult Secure Services 3,203,837 66% 2,808,967 63%
Adult Community-based Services:
Residential 787,940 16% 755,700 17%
Non-residential(2) 166,971 3% 178,943 4%
Abraxas Youth & Family Services:
Residential 322,329 7% 325,531 7%
Non-residential(2) 373,384 8% 390,932 9%
---------- --- ---------- ---
Total 4,854,461 100% 4,460,073 100%
========== === ========== ===
Revenues (in 000's):
--------------------
Adult Secure Services $ 173,819 56% $ 151,673 53%
Adult Community-based Services:
Residential 52,771 17% 50,207 17%
Non-residential 1,658 1% 2,454 1%
Abraxas Youth & Family Services:
Residential 63,139 20% 62,186 22%
Non-residential 16,936 6% 18,705 7%
---------- --- ---------- ----
Total $ 308,323 100% $ 285,225 100%
========== === ========== ===
Average revenue per diem:
-------------------------
Adult Secure Services $ 54.25 $ 54.00
Adult Community-based Services:
Residential $ 66.97 $ 66.44
Non-residential(2) $ 9.93 $ 13.71
Abraxas Youth & Family Services:
Residential $ 195.88 $ 191.03
Non-residential(2) $ 45.36 $ 47.85
---------- ----------
Total $ 63.51 $ 63.95
========== ==========
Income from Operations
(in 000's)(3):
-----------------------
Adult Secure Services $ 50,545 $ 44,782
Adult Community-based Services 17,099 14,090
Abraxas Youth & Family Services 6,216 5,831
(1) Residential contract capacity only.
(2) Non-residential "mandays" includes a mix of day units and
hourly units. Mental health facilities are reported in hours.
(3) Segment-level income from operations exclude general and
administrative expenses, amortization of intangibles and corporate
overhead charges that are included in consolidated income from
operations.