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CoreCivic Reports First Quarter 2017 Financial Results
First Quarter 2017 Highlights
- Diluted EPS of
$0.42 , up 7.7% from$0.39 - Adjusted Diluted EPS of
$0.43 , up 7.5% from$0.40 - Normalized FFO per diluted share of
$0.63 , up 5.0% from$0.60 - Adjusted EBITDA of
$99.9 million , up 5.5% from$94.7 million
"Our continued focus on providing dependable, professional service to address the needs of our government partners is key to the long-term success of
First Quarter 2017 Results
Total revenue for the first quarter of 2017 was
Net income generated in the first quarter of 2017 totaled
Funds From Operations, or FFO, was
EBITDA was
Adjusted net income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and their corresponding per share amounts, are measures calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP). Please refer to the Supplemental Financial Information and related note following the financial statements herein for further discussion and reconciliations of these measures to GAAP measures.
Business Development Update
Contract Award from the
Contract Extension with ICE at the Houston Processing Center. On
Expiration of Contract with BOP at the
Closure of
2017 Financial Guidance
Based on current business conditions we have provided the following updated financial guidance for the second quarter of 2017 and the full year 2017:
| Second Quarter 2017 | Full Year 2017 | ||
| Prior Guidance | Current Guidance | ||
| • Diluted EPS | $0.34 to $0.36 | $1.46 to $1.54 | $1.48 to $1.54 |
| • Adjusted Diluted EPS | $0.35 to $0.36 | $1.46 to $1.54 | $1.50 to $1.56 |
| • FFO per diluted share | $0.53 to $0.55 | $2.22 to $2.30 | $2.25 to $2.32 |
| • Normalized FFO per diluted share | $0.54 to $0.55 | $2.22 to $2.30 | $2.27 to $2.33 |
During 2017, we expect to invest approximately
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the first quarter 2017. We do not undertake any obligation, and disclaim any duty to update any of the information disclosed in this report. Interested parties may access this information through our website at www.corecivic.com/investors under “Financial Reports” of the Investors section.
Management may meet with investors from time to time during the second quarter of 2017. Written materials used in the investor presentations will also be available on our website beginning on or about
Webcast and Replay Information
We will host a webcast conference call at
About
The Company is a diversified government solutions company with the scale and experience needed to solve tough government challenges in cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, innovative and cost-saving government real estate solutions, and a growing network of residential reentry centers to help address America’s recidivism crisis. We are a publicly traded real estate investment trust (REIT) and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. The Company has been a flexible and dependable partner for government for more than 30 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at http://www.corecivic.com/.
Forward-Looking Statements
This press release contains statements as to our beliefs and expectations of the outcome of future events that are "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) general economic and market conditions, including the impact governmental budgets can have on our per diem rates, occupancy, and overall utilization; (ii) fluctuations in our operating results because of, among other things, changes in occupancy levels, competition, increases in cost of operations, fluctuations in interest rates and risks of operations; (iii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance and as a result of inmate disturbances; (iv) changes in the privatization of the corrections and detention industry, the public acceptance of our services, the timing of the opening of and demand for new prison, detention, and residential reentry facilities and the commencement of new management contracts, as well as our ability to utilize current available beds and new capacity as new development and expansion projects are completed; (v) changes in government policy regarding the utilization of the private sector for corrections and detention capacity and our services; (vi) changes in government policy and in legislation and regulation of corrections and detention contractors that affect our business, including but not limited to,
| CORECIVIC, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||||||
| ASSETS | March 31, 2017 |
December 31, 2016 |
||||||
| Cash and cash equivalents | $ | 43,164 | $ | 37,711 | ||||
| Accounts receivable, net of allowance of $1,619 and $1,580, respectively | 213,027 | 229,885 | ||||||
| Prepaid expenses and other current assets | 25,391 | 31,228 | ||||||
| Total current assets | 281,582 | 298,824 | ||||||
| Property and equipment, net of accumulated depreciation of $1,378,224 and $1,352,323, respectively | 2,822,805 | 2,837,657 | ||||||
| Goodwill | 38,127 | 38,386 | ||||||
| Non-current deferred tax assets | 11,868 | 13,735 | ||||||
| Other assets | 86,236 | 83,002 | ||||||
| Total assets | $ | 3,240,618 | $ | 3,271,604 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable and accrued expenses | $ | 240,586 | $ | 260,107 | ||||
| Income taxes payable | 2,601 | 2,086 | ||||||
| Current portion of long-term debt | 10,000 | 10,000 | ||||||
| Total current liabilities | 253,187 | 272,193 | ||||||
| Long-term debt, net | 1,421,182 | 1,435,169 | ||||||
| Deferred revenue | 50,006 | 53,437 | ||||||
| Other liabilities | 53,082 | 51,842 | ||||||
| Total liabilities | 1,777,457 | 1,812,641 | ||||||
| Commitments and contingencies | ||||||||
| Preferred stock ― $0.01 par value; 50,000 shares authorized; none issued and outstanding at March 31, 2017 and December 31, 2016, respectively | - | - | ||||||
| Common stock ― $0.01 par value; 300,000 shares authorized; 118,140 and 117,554 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 1,181 | 1,176 | ||||||
| Additional paid-in capital | 1,784,532 | 1,780,350 | ||||||
| Accumulated deficit | (322,552 | ) | (322,563 | ) | ||||
| Total stockholders’ equity | 1,463,161 | 1,458,963 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,240,618 | $ | 3,271,604 | ||||
| CORECIVIC, INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||
| For the Three Months Ended March 31, |
|||||||||
| 2017 | 2016 | ||||||||
| REVENUES | $ | 445,684 | $ | 447,385 | |||||
| EXPENSES: | |||||||||
| Operating | 315,303 | 313,918 | |||||||
| General and administrative | 24,826 | 26,480 | |||||||
| Depreciation and amortization | 36,257 | 42,059 | |||||||
| Asset impairments | 259 | - | |||||||
| 376,645 | 382,457 | ||||||||
| OPERATING INCOME | 69,039 | 64,928 | |||||||
| OTHER (INCOME) EXPENSE: | |||||||||
| Interest expense, net | 16,490 | 17,544 | |||||||
| Other (income) expense | 17 | (83 | ) | ||||||
| 16,507 | 17,461 | ||||||||
| INCOME BEFORE INCOME TAXES | 52,532 | 47,467 | |||||||
| Income tax expense | (2,485 | ) | (1,160 | ) | |||||
| NET INCOME | $ | 50,047 | $ | 46,307 | |||||
| BASIC EARNINGS PER SHARE | $ | 0.42 | $ | 0.39 | |||||
| DILUTED EARNINGS PER SHARE | $ | 0.42 | $ | 0.39 | |||||
| DIVIDENDS DECLARED PER SHARE | $ | 0.42 | $ | 0.54 | |||||
| CORECIVIC, INC. AND SUBSIDIARIES | |||||
| SUPPLEMENTAL FINANCIAL INFORMATION | |||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||
| CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EPS | |||||
| For the Three Months | |||||
| Ended March 31, | |||||
| 2017 | 2016 | ||||
| Net income | $ | 50,047 | $ | 46,307 | |
| Special items: | |||||
| Expenses associated with mergers and acquisitions | 130 | 1,143 | |||
| Asset impairments | 259 | - | |||
| Adjusted net income | $ | 50,436 | $ | 47,450 | |
| Weighted average common shares outstanding – basic | 117,782 | 117,235 | |||
| Effect of dilutive securities: | |||||
| Stock options | 420 | 432 | |||
| Restricted stock-based compensation | 57 | 102 | |||
| Weighted average shares and assumed conversions - diluted | 118,259 | 117,769 | |||
| Adjusted Diluted Earnings Per Share | $ | 0.43 | $ | 0.40 | |
| CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS | |||||
| For the Three Months | |||||
| Ended March 31, | |||||
| 2017 | 2016 | ||||
| Net income | $ | 50,047 | $ | 46,307 | |
| Depreciation of real estate assets | 23,699 | 23,337 | |||
| Funds From Operations | $ | 73,746 | $ | 69,644 | |
| Expenses associated with mergers and acquisitions | 130 | 1,143 | |||
| Goodwill and other impairments | 259 | - | |||
| Normalized Funds From Operations | $ | 74,135 | $ | 70,787 | |
| Funds From Operations Per Diluted Share | $ | 0.62 | $ | 0.59 | |
| Normalized Funds From Operations Per Diluted Share | $ | 0.63 | $ | 0.60 | |
| CORECIVIC, INC. AND SUBSIDIARIES | |||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | |||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||
| CALCULATION OF EBITDA AND ADJUSTED EBITDA | |||||||
| For the Three Months Ended March 31, |
|||||||
| 2017 | 2016 | ||||||
| Net income | $ | 50,047 | $ | 46,307 | |||
| Interest expense, net | 16,490 | 17,544 | |||||
| Depreciation and amortization | 36,257 | 42,059 | |||||
| Income tax expense | 2,485 | 1,160 | |||||
| EBITDA | $ | 105,279 | $ | 107,070 | |||
| Expenses associated with mergers and acquisitions | 130 | 1,143 | |||||
| Depreciation expense associated with STFRC lease | (4,057 | ) | (10,590 | ) | |||
| Interest expense associated with STFRC lease | (1,674 | ) | (2,879 | ) | |||
| Asset impairments | 259 | - | |||||
| Adjusted EBITDA | $ | 99,937 | $ | 94,744 | |||
| CORECIVIC, INC. AND SUBSIDIARIES | |||||||||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION | |||||||||||||||
| (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||||||||
| CALCULATION OF ADJUSTED NET INCOME, NORMALIZED FUNDS FROM OPERATIONS & ADJUSTED EBITDA GUIDANCE | |||||||||||||||
| For the Quarter Ending June, 2017 |
For the Year Ending December 31, 2017 |
||||||||||||||
| Low End of Guidance |
High End of Guidance |
Low End of Guidance |
High End of Guidance |
||||||||||||
| Net income | $ | 40,700 | $ | 42,700 | $ | 175,700 | $ | 182,700 | |||||||
| Expenses associated with mergers and acquisitions | 400 | 400 | 1,500 | 1,500 | |||||||||||
| Asset impairments | - | - | 300 | 300 | |||||||||||
| Adjusted net income | $ | 41,100 | $ | 43,100 | $ | 177,500 | $ | 184,500 | |||||||
| Net income | $ | 40,700 | $ | 42,700 | $ | 175,700 | $ | 182,700 | |||||||
| Depreciation of real estate assets | 22,600 | 22,600 | 91,000 | 92,000 | |||||||||||
| Funds From Operations | $ | 63,300 | $ | 65,300 | $ | 266,700 | $ | 274,700 | |||||||
| Expenses associated with mergers and acquisitions | 400 | 400 | 1,500 | 1,500 | |||||||||||
| Asset impairments | - | - | 300 | 300 | |||||||||||
| Normalized Funds From Operations | $ | 63,700 | $ | 65,700 | $ | 268,500 | $ | 276,500 | |||||||
| Diluted EPS | $ | 0.34 | $ | 0.36 | $ | 1.48 | $ | 1.54 | |||||||
| Adjusted EPS per diluted share | $ | 0.35 | $ | 0.36 | $ | 1.50 | $ | 1.56 | |||||||
| FFO per diluted share | $ | 0.53 | $ | 0.55 | $ | 2.25 | $ | 2.32 | |||||||
| Normalized FFO per diluted share | $ | 0.54 | $ | 0.55 | $ | 2.27 | $ | 2.33 | |||||||
| Net income | $ | 40,700 | $ | 42,700 | $ | 175,700 | $ | 182,700 | |||||||
| Interest expense, net | 17,000 | 16,500 | 67,000 | 67,000 | |||||||||||
| Depreciation and amortization | 36,500 | 36,500 | 147,000 | 147,000 | |||||||||||
| Income tax expense | 3,100 | 2,600 | 11,000 | 10,500 | |||||||||||
| EBITDA | $ | 97,300 | $ | 98,300 | $ | 400,700 | $ | 407,200 | |||||||
| Expenses associated with mergers and acquisitions | 400 | 400 | 1,500 | 1,500 | |||||||||||
| Depreciation expense associated with STFRC lease | (4,100 | ) | (4,100 | ) | (16,600 | ) | (16,600 | ) | |||||||
| Interest expense associated with STFRC lease | (1,600 | ) | (1,600 | ) | (6,400 | ) | (6,400 | ) | |||||||
| Asset impairments | - | - | 300 | 300 | |||||||||||
| Adjusted EBITDA | $ | 92,000 | $ | 93,000 | $ | 379,500 | $ | 386,000 | |||||||
NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION
Adjusted Net Income, EBITDA, Adjusted EBITDA, Funds From Operations (FFO), and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures.
NAREIT defines FFO as net income computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate. EBITDA, Adjusted EBITDA, and Normalized FFO are useful as supplemental measures of performance of the Company's corrections facilities because they don't take into account depreciation and amortization, or with respect to EBITDA, the impact of the Company's tax provisions and financing strategies. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), this accounting presentation assumes that the value of real estate assets diminishes at a level rate over time. Because of the unique structure, design and use of the Company's properties, management believes that assessing performance of the Company's properties without the impact of depreciation or amortization is useful. However, a portion of the rental payments for the South Texas Family Residential Center (STFRC) is classified as depreciation and interest expense for financial reporting purposes. Adjusted EBITDA includes such depreciation and interest expense in order to more properly reflect the cash flows associated with this lease.
Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited. Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and their corresponding per share measures are not measures of performance under GAAP, and should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income as indicators of the Company's operating performance or any other measure of performance derived in accordance with GAAP. This data should be read in conjunction with the Company's consolidated financial statements and related notes included in its filings with the
Contact: Investors:Cameron Hopewell - Managing Director, Investor Relations - (615) 263-3024 Financial Media:David Gutierrez ,Dresner Corporate Services – (312) 780-7204