HOUSTON, March 7, 2008 (PRIME NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) announced today that the Company has been informed that the federal agency which currently holds the contract in effect for use of the Regional Correctional Center (RCC) in Albuquerque, New Mexico intends to unilaterally reduce use of the facility. The modification is intended to continue use of RCC by the U.S. Marshals Service but eliminate any future use by the Immigration and Customs Enforcement (ICE) division.
Cornell, which leases RCC from Bernalillo County, believes that the attempted unilateral reduction of guaranteed bed-days does not comply with the terms of the contract and will be exploring the legal and financial implications with that in mind in the coming days. Bernalillo County owns RCC and holds the contract directly with the Office of Federal Detention Trustee (OFDT). The unilateral notice indicated an intention to reduce the total guaranteed bed-days annually from 182,500 to 66,300 effective February 26, 2008.
James E. Hyman, Cornell's Chairman, President and CEO said, "We are disappointed that ICE has decided not to use the RCC, as we have made an enormous effort over the past year to address all concerns that they, other customers, and other constituencies, brought to our attention. Should ICE decide in the future that their needs have changed, we would welcome them back. We remain committed to serving the needs of the U.S. Marshals Service and to providing space to other potential customers as they arise. We also are reviewing Cornell's and the county's legal rights under the contract."
OFDT has stated that the Marshals Service will continue to use the facility at generally the current level, which since the third quarter of 2007 has fluctuated between 170 and 200 detainees. Cornell also continues to actively market the facility to other customers.
As previously announced, the Company will host a conference call and audio webcast on March 13, 2008 at 11 a.m. Eastern Time at which time the Company will review fourth quarter 2007 financial results, discuss 2008 guidance and answer questions about this and other items.
Forward-Looking Statements
Statements in this news release regarding the contract and population at RCC, the guaranteed bed-days, the attempted unilateral amendment and the use of RCC by clients, 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 Cornell's ability to perform according to its current expectations, changes in supply and demand, changes in capital markets, actions by governmental agencies and other third parties, and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission, which are available free of charge on the SEC's Web site at http://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 those indicated.
About Cornell Companies
Cornell Companies, Inc. (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. The company has 74 facilities in 15 states and the District of Columbia and a total service capacity of 18,887.
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