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CoreCivic Reports First Quarter 2020 Financial Results
First Quarter 2020 Highlights
- Activated our
Emergency Operations Center and implemented our crisis response plan to address the potential impact of COVID-19 on staff and residents entrusted to our care
Balance Sheet Highlights as of
- Cash and cash equivalents of
$335.5 million - Availability under revolving credit facility of
$146.7 million - No material capital commitments
- No debt maturities until
October 2022
Statement of Operations – First Quarter 2020
- Total revenue of
$491.1 million , an increase of 1.5%- CoreCivic Safety revenue of
$437.8 million CoreCivic Community revenue of$30.6 million CoreCivic Properties revenue of$22.7 million
- CoreCivic Safety revenue of
- Net income attributable to common stockholders of
$32.1 million - Diluted EPS of
$0.27 - Adjusted diluted EPS of
$0.30 - Normalized FFO per diluted share of
$0.54 - Adjusted EBITDA of
$100.4 million
“As essential public safety infrastructure, our work has continued uninterrupted throughout the pandemic. We have proactively implemented action plans customized for each facility and government partner, revised policies and procedures to conform with guidance from our government partners and public health officials, including the
COVID-19 Business Update
In
As a result of the declaration, the federal government decided to deny entry at the southern border to asylum-seekers and anyone crossing the southern border without proper documentation or authority in an effort to contain the spread of COVID-19. This action has resulted in the reduction in the number of people being apprehended and detained by
None of our management contracts have been materially renegotiated or adjusted as a result of COVID-19 and the impact on our operations.
In
"Like other essential critical infrastructure employees,
We also offered our idle bed capacity at no cost to communities where we operate for their use to help them combat COVID-19. For more information on our COVID-19 response, we have provided additional resources on our website at https://www.corecivic.com/covid-19-response.
First Quarter 2020 Financial Results
Net income attributable to common stockholders generated in the first quarter of 2020 totaled
Funds From Operations (FFO) was
Per share results in the first quarter of 2020, compared with the first quarter of 2019, decreased primarily because of lower utilization of our existing contracts with ICE and the expected decline in inmate populations from the state of California. All California populations had been transferred back to the State as of
EBITDA was
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, 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 net income, the most directly comparable GAAP measure.
As of
In
Business Development Update
Update on New and Expanded Management Contract with the
Update on New Lease Agreement with the
Financial Guidance
On
Management revenue in our Safety segment, which we expect to be impacted the most by COVID-19, declined 3% in
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the first quarter of 2020. Interested parties may access this information through our website at http://ir.corecivic.com/ under “Financial Information” of the Investors section. We do not undertake any obligation, and disclaim any duties to update any of the information disclosed in this report.
Management may meet with investors from time to time during the second quarter of 2020. Written materials used in the investor presentations will also be available on our website beginning on or about
Conference Call, 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 flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through corrections and detention management, a growing network of residential reentry centers to help address America’s recidivism crisis, and government real estate solutions. We are a publicly traded real estate investment trust (REIT) and the nation’s largest owner of partnership correctional, detention and residential reentry facilities. We also believe we are the largest private owner of real estate used by
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) the duration of the federal government's denial of entry at
The Company takes no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| ASSETS | 2020 |
2019 |
||||||
| Cash and cash equivalents | $ | 335,491 | $ | 92,120 | ||||
| Restricted cash | 16,850 | 26,973 | ||||||
| Accounts receivable, net of credit loss reserve of |
272,598 | 280,785 | ||||||
| Prepaid expenses and other current assets | 34,962 | 35,507 | ||||||
| Total current assets | 659,901 | 435,385 | ||||||
| Real estate and related assets: | ||||||||
| Property and equipment, net of accumulated depreciation of |
2,758,682 | 2,700,107 | ||||||
| Other real estate assets | 235,691 | 238,637 | ||||||
| 50,537 | 50,537 | |||||||
| Non-current deferred tax assets | 13,663 | 16,058 | ||||||
| Other assets | 360,325 | 350,907 | ||||||
| Total assets | $ | 4,078,799 | $ | 3,791,631 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable and accrued expenses | $ | 318,365 | $ | 337,462 | ||||
| Current portion of long-term debt, net | 34,891 | 31,349 | ||||||
| Total current liabilities | 353,256 | 368,811 | ||||||
| Long-term debt, net | 2,236,427 | 1,928,023 | ||||||
| Deferred revenue | 9,061 | 12,469 | ||||||
| Other liabilities | 101,379 | 105,579 | ||||||
| Total liabilities | 2,700,123 | 2,414,882 | ||||||
| Commitments and contingencies | ||||||||
| Preferred stock ― |
- | - | ||||||
| Common stock ― |
1,196 | 1,191 | ||||||
| Additional paid-in capital | 1,822,855 | 1,821,810 | ||||||
| Accumulated deficit | (468,646 | ) | (446,252 | ) | ||||
| Total stockholders’ equity | 1,355,405 | 1,376,749 | ||||||
| Non-controlling interest – operating partnership | 23,271 | - | ||||||
| Total equity | 1,378,676 | 1,376,749 | ||||||
| Total liabilities and equity | $ | 4,078,799 | $ | 3,791,631 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| For the Three Months Ended |
||||||||
| 2020 |
2019 |
|||||||
| REVENUES: | ||||||||
| Safety | 437,765 | 434,318 | ||||||
| Community | 30,599 | 30,566 | ||||||
| Properties | 22,679 | 19,112 | ||||||
| Other | 58 | 68 | ||||||
| 491,101 | 484,064 | |||||||
| EXPENSES: | ||||||||
| Operating | ||||||||
| Safety | 330,737 | 316,595 | ||||||
| Community | 24,449 | 23,496 | ||||||
| Properties | 6,954 | 5,652 | ||||||
| Other | 175 | 89 | ||||||
| Total operating expenses | 362,315 | 345,832 | ||||||
| General and administrative | 31,279 | 29,445 | ||||||
| Depreciation and amortization | 37,952 | 35,523 | ||||||
| Asset impairments | 536 | - | ||||||
| 432,082 | 410,800 | |||||||
| OPERATING INCOME | 59,019 | 73,264 | ||||||
| OTHER (INCOME) EXPENSE: | ||||||||
| Interest expense, net | 22,538 | 21,436 | ||||||
| Other (income) expense | (533 | ) | 4 | |||||
| 22,005 | 21,440 | |||||||
| INCOME BEFORE INCOME TAXES | 37,014 | 51,824 | ||||||
| Income tax expense | (3,776 | ) | (2,484 | ) | ||||
| NET INCOME |
33,238 |
49,340 |
||||||
| Net income attributable to non-controlling interest | (1,181 | ) | - | |||||
| NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | 32,057 | $ | 49,340 | ||||
| BASIC EARNINGS PER SHARE | $ | 0.27 | $ | 0.42 | ||||
| DILUTED EARNINGS PER SHARE | $ | 0.27 | $ | 0.41 | ||||
| DIVIDENDS DECLARED PER SHARE | $ | 0.44 | $ | 0.44 | ||||
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 |
|||||
| 2020 | 2019 | ||||
| Net income attributable to common stockholders | $ | 32,057 | $ | 49,340 | |
| Non-controlling interest | 1,181 | - | |||
| Diluted net income attributable to common stockholders | $ | 33,238 | $ | 49,340 | |
| Special items: | |||||
| Expenses associated with mergers and acquisitions | 338 | 436 | |||
| Deferred tax expense on |
3,085 | - | |||
| Asset impairments | 536 | - | |||
| Adjusted net income | $ | 37,197 | $ | 49,776 | |
| Weighted average common shares outstanding – basic | 119,336 | 118,359 | |||
| Effect of dilutive securities: | |||||
| Stock options | - | 36 | |||
| Restricted stock-based awards | 47 | 46 | |||
| Non-controlling interest – operating partnership units | 1,342 | - | |||
| Weighted average shares and assumed conversions - diluted | 120,725 | 118,918 | |||
| Adjusted Diluted Earnings Per Share | $ | 0.30 | $ | 0.32 | |
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CALCULATION OF FUNDS FROM OPERATIONS AND NORMALIZED FUNDS FROM OPERATIONS
| For the Three Months Ended |
|||||
| 2020 | 2019 | ||||
| Net income | $ | 33,238 | $ | 49,340 | |
| Depreciation and amortization of real estate assets | 28,106 | 26,599 | |||
| Impairment of real estate assets | 405 | - | |||
| Funds From Operations | $ | 61,749 | $ | 75,939 | |
| Expenses associated with mergers and acquisitions | 338 | 436 | |||
| Deferred tax expense on |
3,085 | - | |||
| 131 | - | ||||
| Normalized Funds From Operations | $ | 65,303 | $ | 76,375 | |
| Funds From Operations Per Diluted Share | $ | 0.51 | $ | 0.64 | |
| Normalized Funds From Operations Per Diluted Share | $ | 0.54 | $ | 0.64 | |
SUPPLEMENTAL FINANCIAL INFORMATION
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
CALCULATION OF EBITDA AND ADJUSTED EBITDA
| For the Three Months Ended |
|||||
| 2020 | 2019 | ||||
| Net income | $ | 33,238 | $ | 49,340 | |
| Interest expense | 24,555 | 21,910 | |||
| Depreciation and amortization | 37,952 | 35,523 | |||
| Income tax expense | 3,776 | 2,484 | |||
| EBITDA | $ | 99,521 | $ | 109,257 | |
| Expenses associated with mergers and acquisitions | 338 | 436 | |||
| Asset impairments | 536 | - | |||
| Adjusted EBITDA | $ | 100,395 | $ | 109,693 | |
NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures. The Company believes that these measures are important operating measures that supplement discussion and analysis of the Company's results of operations and are used to review and assess operating performance of the Company and its properties and their management teams. The Company believes that it is useful to provide investors, lenders and security analysts disclosures of its results of operations on the same basis that is used by management. FFO, in particular, is a widely accepted non-GAAP supplemental measure of REIT performance, grounded in the standards for FFO established by the
NAREIT defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis. EBITDA, Adjusted EBITDA, and Normalized FFO are useful as supplemental measures of performance of the Company's properties because such measures do not 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. The Company may make adjustments to FFO from time to time for certain other income and expenses that it considers non-recurring, infrequent or unusual, even though such items may require cash settlement, because such items do not reflect a necessary or ordinary component of the ongoing operations of the Company. Start-up expenses represent the incremental operating losses incurred during the period we activate idle correctional facilities. Normalized FFO excludes the effects of such items. The Company calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt refinancing, M&A activity, start-up expenses, and certain impairments and other charges that the Company believes are unusual or non-recurring to provide an alternative measure of comparing operating performance for the periods presented. Even though expenses associated with mergers and acquisitions may be recurring, the magnitude and timing fluctuate based on the timing and scope of M&A activity, and therefore, such expenses, which are not a necessary component of the ongoing operations of the Company, may not be comparable from period to period.
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, where appropriate, 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
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Source: CoreCivic, Inc.