- Achieved Income from Continuing Operations of $4.7 Million -
$0.46 EPS BOCA RATON, Fla., May 4 /PRNewswire-FirstCall/ -- The GEO
Group, Inc. (NYSE:GGI) ("GEO") today reported first quarter 2006
GAAP earnings of $4.6 million, or $0.45 per share, based on 10.0
million diluted weighted average shares outstanding, including an
after-tax loss of $0.1 million, or $0.01 per share, from
discontinued operations, compared with $2.9 million, or $0.29 per
share, based on 10.0 million diluted weighted average shares
outstanding, including an after-tax gain of $0.5 million, or $0.05
per share, from discontinued operations, in the first quarter of
2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/20031201/FLM015LOGO ) Excluding
after-tax start-up expenses of $0.2 million, or $0.02 per share,
related to the activation of GEO's new contract in the State of
Indiana for the management of the 2,416-bed New Castle Correctional
Facility, first quarter 2006 pro forma income from continuing
operations was $4.9 million, or $0.48 per share, compared with
income from continuing operations of $2.4 million, or $0.24 per
share for the first quarter of 2005. Reconciliation of Pro Forma
Income from Continuing Operations to GAAP Income from Continuing
Operations (In thousands except per share data) 13 Weeks 13 Weeks
Ended Ended 2-Apr-06 3-Apr-05 Income from Continuing Operations
$4,674 $2,391 Start-Up Expenses 211 - Pro Forma Income from
Continuing Operations $4,885 $2,391 Diluted Earnings Per Share
Income from Continuing Operations $0.46 $0.24 Start-Up Expenses
0.02 - Diluted Pro Forma Earnings Per Share $0.48 $0.24 Revenue GEO
reported first quarter 2006 revenue of $185.9 million compared with
$148.3 million in the first quarter of 2006. George C. Zoley,
Chairman and Chief Executive Officer of GEO, said: "We are very
pleased with our strong operational and financial performance in
the first quarter of the year. The successful integration of our
acquisition of Correctional Services Corporation along with higher
occupancy levels at our existing facilities has positioned us to
achieve further growth in 2006. In addition, we believe that we
have the strongest organic growth pipeline in our industry with
seven projects totaling more than 4,500 beds under development
which are expected to add more than $84 million in operating
revenues between mid-2006 and late-2007. We also remain optimistic
of our new business development prospects in our three business
units of U.S. Corrections, International Corrections, and GEO
Care's residential treatment services." Financial Guidance GEO is
raising its previously-issued revenue guidance for 2006 to a range
of $760 million to $775 million and its previously issued earnings
guidance for 2006 to a pro forma range of $2.10 to $2.20 per share
with the following quarterly detail. 2006 Revenue Guidance (In
Millions) 1Q 2006 2Q 2006 3Q 2006 4Q 2006 FY 2006 Previously Issued
Guidance (March 31, 2006) $184-$188 $181-$185 $181-$185 $185-$189
$731-$747 Revised Guidance (May 4, 2006) $185.9A $185-$190
$194-$199 $195-$200 $760-$775 2006 Earnings Per Share 1Q 2006 2Q
2006 3Q 2006 4Q 2006 FY 2006 Previously Issued Guidance (March 31,
2006) $0.39-$0.41 $0.43-$0.45 $0.53-$0.55 $0.50-$0.54 $1.85-$1.95
Revised GAAP Projection $0.45A $0.41-$0.43 $0.56-$0.60 $0.53-$0.57
$1.95-$2.05 Projected After-Tax Start-Up Expenses/ Discontinued
Operations $0.03A $0.03 $0.04 $0.05 $0.15 Revised Pro Forma
Guidance (May 4, 2006) $0.48A $0.44-$0.46 $0.60-$0.64 $0.58-$0.62
$2.10-$2.20 GEO's second quarter pro forma earnings guidance
excludes $0.03 per share in projected after-tax start-up expenses
related primarily to the activation of GEO's new contract in the
United Kingdom for the management of the 198-bed Campsfield House
Immigration Centre and secondarily to the acceleration of start-up
costs for the 600-bed expansion of GEO's 1,918-bed Lawton
Correctional Facility in Oklahoma, both of which were not included
in GEO's previously issued guidance for the second quarter. GEO's
third and fourth quarter pro forma earnings guidance excludes $0.04
per share and $0.05 per share respectively in projected after-tax
start-up expenses related to the acceleration of start-up costs
associated with the construction of GEO's 1,000-bed Sex Offender
Facility in Florence, Arizona, which GEO had previously projected
for early 2007. GEO is raising its previously issued Adjusted
EBITDA and EBITDAR guidance for 2006. GEO estimates year-end 2006
Adjusted EBITDA to be in the range of $78 million to $82 million
and year-end 2006 EBITDAR to be in the range of $102 million to
$106 million. GEO is raising its previously issued Adjusted Free
Cash Flow guidance for 2006 to a range of $48 million to $52
million. Pro Forma Income from Continuing Operations, Adjusted
EBITDA, EBITDAR, and Adjusted Free Cash Flow are non-GAAP financial
measures. Pro Forma Income from Continuing Operations is defined as
Income from Continuing Operations excluding Start-Up Expenses.
Adjusted EBITDA is defined as EBITDA excluding Start-Up Expenses.
EBITDAR is defined as Adjusted EBITDA including Lease Rental
Expense. Adjusted Free Cash Flow is defined as Income from
Continuing Operations after giving effect to the items set forth in
the Reconciliation Table in the Financial Tables Section of this
press release. A reconciliation of these non-GAAP measures to the
most directly comparable GAAP measurements of these items is
included in the Financial Tables section of this press release. GEO
believes that these financial measures are important operating
measures that supplement discussion and analysis of GEO's financial
results derived in accordance with GAAP. These non-GAAP financial
measures should be read in conjunction with GEO's consolidated
financial statements and related notes included in GEO's filings
with the Securities and Exchange Commission. Update on REIT
Relationship GEO will provide an update on the restructuring of its
relationship with CentraCore Properties Trust (NYSE:CPV) on GEO's
first quarter 2006 earnings conference call. Conference Call
Information GEO has scheduled a conference call and simultaneous
webcast at 11:00 AM (Eastern Time) on Friday, May 5, 2006 to
discuss GEO's first quarter 2006 financial results as well as its
progress and outlook. The call-in number for the U.S. is
1-800-561-2693 and the international call-in number is 1-617-614-
3523. The participant pass-code for the conference call is
16095234. In addition, a live audio webcast of the conference call
may be accessed on the Conference Calls/Webcasts section of GEO's
investor relations home page at http://www.thegeogroupinc.com/. A
replay of the audio webcast will be available on the website for
one year. A telephonic replay of the conference call will be
available until June 5, 2006 at 1-888-286-8010 (U.S.) and 1-617-
801-6888 (International). The pass-code for the telephonic replay
is 76215620. GEO will discuss Non-GAAP ("Pro Forma") basis
information on the conference call. A reconciliation from Non-GAAP
("Pro Forma") basis information to GAAP basis results may be found
on the Conference Calls/Webcasts section of GEO's investor
relations home page at http://www.thegeogroupinc.com/. About The
GEO Group, Inc. The GEO Group, Inc. ("GEO") is a world leader in
the delivery of correctional, detention, and residential treatment
services to federal, state, and local government agencies around
the globe. GEO offers a turnkey approach that includes design,
construction, financing, and operations. GEO represents government
clients in the United States, Australia, South Africa, Canada, and
the United Kingdom. GEO's worldwide operations include 61
correctional and residential treatment facilities with a total
design capacity of approximately 49,000 beds. 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 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 meet its financial guidance for 2006 given the various
risks to which its business is exposed; (2) GEO's ability to
successfully pursue further growth and continue to enhance
shareholder value; (3) GEO's ability to access the capital markets
in the future on satisfactory terms or at all; (4) risks associated
with GEO's ability to control operating costs associated with
contract start- ups; (5) 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; (6) GEO's ability to win management contracts for which it
has submitted proposals and to retain existing management
contracts; (7) GEO's ability to obtain future financing on
acceptable terms; (8) GEO's ability to sustain company-wide
occupancy rates at its facilities; and (9) other factors contained
in GEO's Securities and Exchange Commission filings, including the
forms 10-K, 10-Q and 8-K reports. The GEO Group, Inc. Consolidated
Statements of Operations For the thirteen weeks ended April 2, 2006
and the thirteen weeks ended April 3, 2005 (In thousands except per
share data) 13 Weeks 13 Weeks Ended Ended April 2, 2006 April 3,
2005 Revenues $185,881 $148,255 Operating Expenses 153,746 125,813
Depreciation and Amortization 5,664 3,668 General and
Administrative Expenses 14,009 11,401 Operating Income 12,462 7,373
Interest Income 2,216 2,330 Interest Expense (7,579) (5,454) Income
before income taxes, minority interest, equity in income of
affiliate, and discontinued operations 7,099 4,249 Provision for
Income Taxes 2,693 1,723 Minority interest (9) (184) Equity in
earnings of affiliate, net of income tax 277 49 Income from
Continuing Operations 4,674 2,391 Income (loss) from Discontinued
Operations, net of tax (118) 505 Net Income (loss) $4,556 $2,896
Basic EPS Income from Continuing Operations $0.48 $0.25 Income
(loss) from Discontinued Operations (0.01) 0.05 Earnings per share
- Basic $0.47 $0.30 Basic Weighted Average Shares Outstanding 9,700
9,525 Diluted EPS Income from Continuing Operations $0.46 $0.24
Income (loss) from Discontinued Operations (0.01) 0.05 Earnings per
share - Diluted $0.45 $0.29 Diluted Weighted Average Shares
Outstanding 10,034 10,002 The GEO Group, Inc. Operating Data 13
Weeks 13 Weeks Ended Ended April 2, 2006 April 3, 2005 *
Revenue-producing beds 44,553 34,813 * Compensated man-days
3,929,744 3,125,505 * Average occupancy (1) 100.5% 99.0% * Includes
South Africa (1) Does not include GEO's idle facilities. The GEO
Group, Inc. Consolidated Balance Sheets April 2, 2006 and January
1, 2006 (In thousands) April 2, 2006 January 1, 2006 (Unaudited)
ASSETS Current assets Cash and cash equivalents $56,169 $57,094
Restricted Cash 10,633 8,882 Accounts receivable, less allowance
for doubtful accounts of $224 and $224 137,468 127,612 Deferred
income tax asset 19,756 19,755 Other current assets 12,366 15,826
Current assets of discontinued operations 6 123 Total current
assets 236,398 229,292 Restricted cash 20,317 17,484 Property and
equipment, net 287,145 282,236 Assets held for sale 1,265 5,000
Direct finance lease receivable 37,394 38,492 Goodwill and other
intangible assets, net 56,780 52,127 Other non current assets
14,680 14,880 $653,979 $639,511 LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Accounts payable $39,761 $27,762
Accrued payroll and related taxes 30,204 26,985 Accrued expenses
64,028 70,177 Current portion of deferred revenue 1,810 1,894
Current portion of long-term debt and non-recourse debt 12,399
8,441 Current liabilities of discontinued operations 1,216 1,260
Total current liabilities 149,418 136,519 Deferred revenue 2,899
3,267 Deferred tax liability 2,121 2,085 Minority interest 1,325
1,840 Other non current liabilities 21,268 19,601 Capital Leases
17,262 17,072 Long-term debt 217,992 219,254 Non-recourse debt
126,245 131,279 Total shareholders' equity 115,449 108,594 $653,979
$639,511 Adjusted EBITDA and EBITDAR First quarter 2006 EBITDA
excluding Start-Up Expenses ("Adjusted EBITDA") was $18.7 million
compared with $10.9 million for the first quarter of 2005. Adjusted
EBITDA including Lease Rental Expense ("EBITDAR") for the first
quarter of 2006 was $24.8 million compared with $16.7 million for
the first quarter of 2005. Reconciliation from Adjusted EBITDA and
EBITDAR to GAAP Net Income (In thousands) 1Q 2006 1Q 2005 Net
Income $4,556 $2,896 Discontinued Operations 118 (505) Interest
Expense, Net 5,363 3,124 Income Tax Provision 2,693 1,723
Depreciation and Amortization 5,664 3,668 Adjustments, Pre-tax
Start-Up Expenses 340 - Adjusted EBITDA $18,734 $10,906 Lease
Rental Expense 6,048 5,832 EBITDAR $24,782 $16,738 Adjusted Free
Cash Flow Adjusted Free Cash Flow, defined as Income from
Continuing Operations after giving effect to the items set forth in
the table immediately below ("Adjusted Free Cash Flow"), for the
first quarter of 2006 was $13.0 million compared with $6.1 million
for the first quarter of 2005. Reconciliation of Adjusted Free Cash
Flow to GAAP Income from Continuing Operations (In thousands) 1Q
2006 1Q 2005 Income from Continuing Operations $4,674 $2,391
Depreciation and Amortization 5,664 3,668 Income Tax Provision
2,693 1,723 Income Taxes Paid (272) (90) Stock Based Compensation
Included in G&A 177 - Maintenance Capital Expenditures (1,723)
(1,841) Equity in Earnings of Affiliates, Net of Income Tax (277)
(49) Dividends from Equity Affiliates 1,812 - Minority Interest 9
184 Amortization of Debt Costs and Other Non-Cash Interest 281 79
Adjusted Free Cash Flow 13,038 6,065
http://www.newscom.com/cgi-bin/prnh/20031201/FLM015LOGODATASOURCE:
The GEO Group, Inc. CONTACT: Pablo E. Paez, Director, Corporate
Relations of The GEO Group, Inc., 1-866-301-4436 Web site:
http://www.thegeogroupinc.com/
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