This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The GEO Group Reports Second Quarter 2012 Results; Increases Quarterly Dividend To $0.20 Per Share

Stock quotes in this article: GEO

GEO has made available a Supplemental Disclosure which contains reconciliation tables of pro forma income from continuing operations to income from continuing operations, Adjusted EBITDA to income from continuing operations, Adjusted Funds from Operations to income from continuing operations along with supplemental financial and operational information on GEO’s business segments. GEO’s Reconciliation Tables can be found herein and in GEO’s Supplemental Disclosure which is available on GEO’s Investor Relations webpage at www.geogroup.com.

Safe-Harbor Statement

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 financial guidance for third quarter 2012, fourth quarter 2012, and full year 2012, our expectation to declare quarterly cash dividends and the timing and amount of such dividends, and our expectations regarding the acquisition of MCF, including the amendment of our senior credit facility, the redemption of the MCF bonds, the impact of the transaction, and our estimates regarding the timing of when the acquisition of 100% of the partnership interests in MCF will be accretive. 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 meet its financial guidance for 2012 given the various risks to which its business is exposed; (2) GEO’s ability to declare future quarterly cash dividends; (3) GEO’s ability to successfully pursue further growth and continue to create shareholder value; (4) GEO’s ability to consummate the acquisition of 100% of the partnership interests in MCF within the anticipated timeframe; (5) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (6) 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; (7) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (8) GEO’s ability to obtain future financing on acceptable terms; (9) GEO’s ability to sustain company-wide occupancy rates at its facilities; (10) any difficulties encountered in maintaining relationships with customers, employees or suppliers as a result of the transactions with Cornell and BI; (11) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; and (12) other factors contained in GEO’s Securities and Exchange Commission filings, including the Form 10-K, 10-Q and 8-K reports.

Second quarter and first six months 2012 financial tables to follow:

   

THE GEO GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THIRTEEN AND TWENTY-SIX WEEKS ENDED

JULY 1, 2012 AND JULY 3, 2011

(In thousands, except per share data)

(Unaudited)

 
Thirteen Weeks Ended Twenty-six Weeks Ended
July 1, 2012   July 3, 2011 July 1, 2012   July 3, 2011
Revenues $ 412,348 $ 396,804 $ 813,605 $ 777,148
Operating expenses 305,035 299,236 613,295 588,257
Depreciation and amortization 23,807 20,945 46,882 39,646
General and administrative expenses 27,043   27,710   54,484   60,498  
Operating income 56,463 48,913 98,944 88,747
Interest income 1,761 1,629 3,568 3,198
Interest expense (20,617 ) (19,412 ) (41,424 ) (36,373 )
Income before income taxes, equity in earnings of affiliates and discontinued operations 37,607 31,130 61,088 55,572
Provision for income taxes 14,991 12,302 24,208 21,674
Equity in earnings of affiliates, net of income tax provision of $303, $563, $624 and $1,587, respectively 430   1,418   1,178   2,080  
Income from continuing operations 23,046 20,246 38,058 35,978
Income (loss) from discontinued operations, net of tax provision (benefit) of $(359), $577, $(330) and $985, respectively (570 ) 917   (523 ) 1,565  
Net income 22,476 21,163 37,535 37,543
Net (income) loss attributable to noncontrolling interests 25   415   (9 ) 825  
Net income attributable to The GEO Group, Inc. $ 22,501   $ 21,578   $ 37,526   $ 38,368  
Weighted-average common shares outstanding:
Basic 60,839 64,455 60,803 64,373
Diluted 61,066 64,858 60,984 64,787
Income per Common Share Attributable to The GEO Group, Inc.(1):
Basic:
Income from continuing operations $ 0.38 $ 0.32 $ 0.63 $ 0.57
Income (loss) from discontinued operations (0.01 ) 0.01   (0.01 ) 0.02  
Income per common share attributable to The GEO Group, Inc. - basic $ 0.37   $ 0.33   $ 0.62   $ 0.60  
Diluted:
Income from continuing operations $ 0.38 $ 0.32 $ 0.62 $ 0.57
Income (loss) from discontinued operations (0.01 ) 0.01   (0.01 ) 0.02  
Income per common share attributable to The GEO Group, Inc. - diluted $ 0.37   $ 0.33   $ 0.62   $ 0.59  
 

(1) Note that earnings per share tables may contain slight summation differences due to rounding.

 
   

CONSOLIDATED BALANCE SHEETS

JULY 1, 2012 AND JANUARY 1, 2012

(In thousands, except share data)

 
July 1, 2012 January 1, 2012

 

(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 68,538 $ 44,753
Restricted cash and investment (including VIEs 1 of $29,373 and $35,435, respectively) 40,071 42,535
Accounts receivable, less allowance for doubtful accounts of $2,779 and $2,453, respectively 284,431 285,810
Deferred income tax assets, net 28,726 28,726
Prepaid expenses and other current assets 23,383 50,346
Current assets of discontinued operations 6,713   7,159
Total current assets 451,862   459,329
Restricted Cash and Investments (including VIEs of $41,270 and $38,930, respectively) 60,070 57,912
Property and Equipment, Net (including VIEs of $160,284 and $162,665, respectively) 1,718,392 1,705,306
Assets Held for Sale 5,390 4,363
Direct Finance Lease Receivable 29,253 32,146
Deferred Income Tax Assets, Net 1,711 1,711
Goodwill 508,068 508,066
Intangible Assets, Net 190,743 200,342
Other Non-Current Assets 83,163 79,576
Non-Current Assets of Discontinued Operations 576   865
Total Assets $ 3,049,228   $ 3,049,616
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable $ 63,681 $ 69,632
Accrued payroll and related taxes 37,209 38,130
Accrued expenses 121,604 126,682
Current portion of capital lease obligations, long-term debt and non-recourse debt (including VIEs of $21,000 and $20,770, respectively) 59,758 53,666
Current liabilities of discontinued operations 702   708
Total current liabilities 282,954   288,818
Deferred Income Tax Liabilities 125,209 125,209
Other Non-Current Liabilities 58,938 56,381
Capital Lease Obligations 12,456 13,087
Long-Term Debt 1,298,030 1,319,068
Non-Recourse Debt (including VIEs of $101,730 and $108,335, respectively) 198,995   208,532
Total shareholders’ equity 1,072,646   1,038,521
Total Liabilities and Shareholders’ Equity $ 3,049,228   $ 3,049,616
 

1 Variable interest entities or “VIEs”

 

Reconciliation Tables for Second Quarter and First Six Months 2012

 
Reconciliation of Pro Forma Income from Continuing Operations to Income from Continuing Operations
(In thousands except per share data)
    13 Weeks   13 Weeks   26 Weeks   26 Weeks
Ended Ended Ended Ended
1-Jul-12 3-Jul-11 1-Jul-12 3-Jul-11
Income from continuing operations $ 23,046 $ 20,246 $ 38,058 $ 35,978
Start-up/transition expenses, net of tax 1,084 3,348 4,139 5,537
International bid and proposal expenses, net of tax 753 416 1,171 416
Net loss (income) attributable to non-controlling interests 25 415 (9 ) 825
M&A related expenses, net of tax   209   394   482     4,129
Pro forma income from continuing operations $ 25,117 $ 24,819 $ 43,841   $ 46,885
 
Diluted earnings per share from continuing operations (1) $ 0.38 $ 0.31 $ 0.62 $ 0.56
Start-up/transition expenses, net of tax 0.02 0.05 0.07 0.09
International bid and proposal expenses, net of tax 0.01 0.01 0.02 0.01
Net loss attributable to non-controlling interests - 0.01 - 0.01
M&A related expenses, net of tax   -   0.01   0.01     0.06
Diluted pro forma earnings per share from continuing operations $ 0.41 $ 0.38 $ 0.72   $ 0.72
 
Weighted average common shares outstanding-diluted 61,066 64,858 60,984 64,787
 
(1) Note that earnings per share tables may contain slight summation differences due to rounding
 
       
Reconciliation from Adjusted EBITDA to Income from Continuing Operations
(In thousands)
  13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
1-Jul-12 3-Jul-11 1-Jul-12 3-Jul-11
Income from continuing operations $ 23,046 $ 20,246 $ 38,058 $ 35,978
Interest expense, net 18,856 17,783 37,856 33,175
Income tax provision 14,991 12,302 24,208 21,674
Depreciation and amortization 23,807 20,945 46,882 39,646
Tax provision on equity in earnings of affiliate   303   563   624     1,587
EBITDA $ 81,003 $ 71,839 $ 147,628   $ 132,060
 
Adjustments
Net loss (income) attributable to non-controlling interests $ 25 $ 415 $ (9 ) $ 825
Stock based compensation expenses, pre-tax 1,988 1,537 3,494 3,598
Start-up/transition expenses, pre-tax 1,535 4,996 6,424 8,563
International bid and proposal expenses, pre-tax 1,050 645 1,615 645
M&A related expenses, pre-tax   351   651   804     6,308
Adjusted EBITDA $ 85,952 $ 80,083 $ 159,956   $ 151,999
 
   
Reconciliation of Adjusted Funds from Operations to Income from Continuing Operations
(In thousands)    
  13 Weeks 13 Weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
1-Jul-12 3-Jul-11 1-Jul-12 3-Jul-11
Income from continuing operations $ 23,046 $ 20,246 $ 38,058 $ 35,978
Net loss (income) attributable to non-controlling interests 25 415 (9 ) 825
Depreciation and Amortization 23,807 20,945 46,882 39,646
Income Tax Provision 14,991 12,302 24,208 21,674
Income Taxes (Paid) Refunded (4,934 ) (7,794 ) 4,397 (8,734 )
Stock Based Compensation Expenses 1,988 1,537 3,494 3,598
Maintenance Capital Expenditures (8,090 ) (6,875 ) (14,212 ) (15,194 )
Equity in Earnings of Affiliates, Net of Income Tax (430 ) (1,418 ) (1,178 ) (2,080 )
Tax provision on equity in earnings of affiliate 303 563 624 1,587
Amortization of Debt Costs and Other Non-Cash Interest 679 415 1,369 641
Start-up/transition expenses 1,535 4,996 6,424 8,563
M&A Related Expenses 351 651 804 6,308
International bid and proposal expenses   1,050     645     1,615     645  
Adjusted Funds from Operations $ 54,321   $ 46,628   $ 112,476   $ 93,457  
       
Adjusted Funds from Operations Per Share $ 0.89   $ 0.72   $ 1.84   $ 1.44  
 
Weighted average common shares outstanding-diluted 61,066 64,858 60,984 64,787
 




8 of 9

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs