HOUSTON, May 7, 2009 (GLOBE NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) today reported results for the three months ended March 31, 2009, and provided guidance for the second quarter and the full year.
James E. Hyman, Cornell's chairman, president and chief executive officer, said, "We are pleased by our first quarter results that demonstrate strong attention by our facilities to the daily blocking and tackling required to serve customers and perform financially. We believe this positions us well to deliver solid growth this year."
First-Quarter Summary (in thousands, except per share data)
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Three Months Ended
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As Reported 3/31/2009 3/31/2008
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Revenue from operations $ 99,710 $ 95,392
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Income from operations 15,788 14,490
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Net income 5,734 4,634
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Income available to shareholders 5,257 4,634
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EPS - diluted $ 0.36 $ 0.32
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Diluted shares outstanding used in per share
computation 14,629 14,558
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Higher Net Income on Increased Revenues
Revenues grew 4.5 percent to $99.7 million for the first quarter of 2009 from $95.4 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. In addition, the expansion activation and subsequent ramp during the 2008 first quarter at D. Ray James Prison further contributed to the revenue increase. 2008 first quarter revenues included $1.5 million in revenues associated with the contract-based true-up calculation at the Regional Correctional Center (RCC) for the contract period ended March 2008. Average contract occupancy levels were 93.2 percent for our residential facilities compared with 95.5 percent in the first quarter of 2008. The increase in capacity from expanding Great Plains and Walnut Grove in the third quarter of 2008, along with spare capacity at the Cornell Abraxas 1 juvenile facility, primarily accounted for this decrease in overall occupancy.
Income from operations of $15.8 million for the first quarter of 2009 improved from income of $14.5 million in the fourth quarter of 2008. This 9.0 percent increase related in part to the higher revenues mentioned above. For the first quarter of 2009 the Company reported an increase in net income of 23.7 percent to $5.7 million, from net income of $4.6 million, in last year's first quarter.
For the first quarter of 2009 the Company reported an increase in income available to shareholders of 13.4 percent to $5.3 million, or $0.36 per diluted share, from net income available to shareholders of $4.6 million, or $0.32 per diluted share, in last year's first quarter.
The Company capitalized interest of $0.7 million (or $0.03 per diluted share, after taxes) in the first quarter of 2009. 2008 first quarter results included pre-tax capitalized interest of $0.5 million (or $0.02 per diluted share, after taxes), and revenues of approximately $1.5 million from the true-up calculation resulting from the guaranteed population contract at RCC for the contract period ended March 2008.
Earnings Outlook for Second Quarter, Full Year
For the second quarter of 2009, management expects earnings to range from $0.42 to $0.46 per share. For the full year, management has raised its earlier guidance range by $0.06 per share to $1.70 to $1.78 earnings per share to account for the performance in the first quarter and a change in the activation assumption at the Company's new Hudson, Colorado facility. The Company now expects operations to commence in the middle of the first quarter of 2010 due to construction delays with off-site infrastructure. As a result, pre-opening expense at the facility of approximately $0.04 per share previously included in the fourth quarter of 2009 will shift to 2010.
Other changes to assumptions relevant for 2009 guidance are:
* At the Company's D. Ray James Prison, the approximate 700 bed expansion will begin to ramp at the beginning of the third quarter of 2009. As noted previously, if this expansion were to remain empty for all of 2009, earnings for the full year would be reduced. Management now estimates this potential reduction as up to approximately $0.08 per share, compared to up to $0.11 per share in its prior guidance. * At the Company's two small male facilities in California serving the California Department of Corrections and Rehabilitation, the Company now forecasts low occupancy levels through year-end. The Company expects that stronger performance across the rest of the Company's operations will offset the decline in contribution from these two facilities.
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 Company's Web site, or can be heard by dialing (800) 406-7325 or (303) 590-3030 and providing confirmation code 4060577. The replay will be available through Thursday, May 14, 2009 by phone and through Thursday, June 11, 2009 on the Web site. This earnings release also can be found on Cornell's Web site 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. (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 March 31, 2009, the Company has 70 facilities in 15 states and the District of Columbia and a total service capacity of 20,192.
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)
(unaudited)
Three Months Ended
March 31,
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2009 2008
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Revenues $ 99,710 $ 95,392
Operating expenses, excluding depreciation 72,891 70,209
Depreciation and amortization 4,893 4,157
General and administrative expenses 6,138 6,536
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Income from operations 15,788 14,490
Interest expense, net 5,953 6,295
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Income before provision for income taxes and
non-controlling interest 9,835 8,195
Provision for income taxes 4,101 3,561
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Net income 5,734 4,634
Non-controlling interest 477 --
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Income available to shareholders $ 5,257 $ 4,634
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Earnings per share:
- Basic $ .36 $ .32
- Diluted $ .36 $ .32
Number of shares used in per share computation:
- Basic 14,572 14,435
- Diluted 14,629 14,558
Total service capacity 20,192 19,009
Contracted beds in operation (end of period) 16,780 14,618
Average contract occupancy(A) 93.2% 95.5%
(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.
Additionally, 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:
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(in thousands) March 31, December 31,
2009 2008
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Cash and cash equivalents $ 10,271 $ 14,613
Working capital 57,444 49,385
Property and equipment, net 450,620 450,354
Total assets 635,601 636,921
Long-term debt 309,113 308,070
Total debt 321,525 320,482
Stockholders' equity 234,593 228,167
Cornell Companies, Inc.
Operating Statistics from Continuing Operations
For the Three Months Ended March 31, 2009 and 2008
Three Months Ended March 31,
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2009 2008
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% %
---------- ---- ---------- ----
Contracted beds in operation(A):
--------------------------------
Adult Secure Services 12,793 76% 10,376 71%
Adult Community-based Services 2,625 16% 2,805 19%
Abraxas Youth & Family Services 1,362 8% 1,437 10%
---------- ---- ---------- ----
Total 16,780 100% 14,618 100%
========== ==== ========== ====
Number of billed mandays:
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Adult Secure Services 1,057,823 66% 898,127 62%
Adult Community-based Services:
Residential 246,866 16% 256,755 17%
Non-residential(B) 61,860 4% 59,963 4%
Abraxas Youth & Family Services:
Residential 102,096 6% 111,868 8%
Non-residential(B) 122,647 8% 136,531 9%
---------- ---- ---------- ----
Total 1,591,292 100% 1,463,244 100%
========== ==== ========== ====
Revenues (in 000's):
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Adult Secure Services $ 56,858 57% $ 49,899 52%
Adult Community-based Services:
Residential 16,602 17% 16,935 18%
Non-residential 561 1% 786 1%
Abraxas Youth & Family Services:
Residential 20,165 20% 20,913 22%
Non-residential 5,524 5% 6,859 7%
---------- ---- ---------- ----
Total $ 99,710 100% $ 95,392 100%
========== ==== ========== ====
Average per diem rates:
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Adult Secure Services $ 53.75 $ 55.56
Adult Community-based Services:
Residential $ 67.25 $ 65.96
Non-residential(B) $ 9.07 $ 13.11
Abraxas Youth & Family Services:
Residential $ 197.51 $ 186.94
Non-residential(B) $ 45.04 $ 50.24
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Total $ 62.66 $ 65.19
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(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.