The GEO Group (NYSE:GEO) (“GEO”) announced today that it has signed a contract with U.S. Immigration and Customs Enforcement (“ICE”) for the continued management of the company-owned 1,904-bed South Texas Detention Center (the “Center”) located in Pearsall, Texas.
The new contract will have a term of approximately five years effective through November 30, 2016, inclusive of renewal option periods. Under the terms of the agreement, the contracted capacity at the Center will be 1,800 beds with a 75 percent occupancy guarantee and the ability to surge to 1,900 beds. The new contract is expected to generate approximately $45.0 million in annualized revenues at the full occupancy level of 1,800 beds, inclusive of regular transportation responsibilities.
George C. Zoley, Chairman and Chief Executive Officer of GEO, said, “We appreciate the confidence placed in our company by U.S. Immigration and Customs Enforcement with this important contract award. Our South Texas Detention Center plays a key role in helping meet the need for federal detention bed space. We look forward to strengthening our long-standing public-private partnership with ICE and the community of Pearsall.”
The GEO Group is the world leader in the delivery of correctional, detention, residential treatment, and electronic monitoring services to federal, state, and local government agencies around the globe with 116 facilities and 80,000 beds, including projects under development. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, and the United Kingdom.This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results, including statements regarding estimated earnings, revenues and costs and our ability to maintain growth and strengthen contract relationships. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to successfully pursue further growth and continue to enhance shareholder value; (2) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; (3) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (4) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (5) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (6) GEO’s ability to obtain future financing on acceptable terms; (7) GEO’s ability to sustain company-wide occupancy rates at its facilities; and (8) other factors contained in GEO’s Securities and Exchange Commission filings, including the forms 10-K, 10-Q and 8-K reports.