The GEO (US:GEO)2024-05-08 20:37Financial Performance - Consolidated revenues for the three months ended March 31, 2024, were $605.7 million, a slight decrease from $608.2 million in the same period of 2023[168]. - Total revenues decreased slightly by $2.5 million to $605.7 million in Q1 2024, a 0.4% decline from Q1 2023[176]. - Net income for the three months ended March 31, 2024, was $22,659,000, a decrease of 18.3% compared to $27,994,000 for the same period in 2023[230]. - Income from operations fell to $72.3 million in Q1 2024, down 15.6% from $85.6 million in Q1 2023[217]. - Net operating revenues for Q1 2024 were $552.4 million, a decrease of 1.4% from $559.8 million in Q1 2023[217]. - EBITDA for Q1 2024 was $111,083,000, down 11.6% from $125,684,000 in Q1 2023, while Adjusted EBITDA decreased to $117,643,000 from $131,016,000, reflecting a decline of 10.2%[230]. Revenue Segmentation - Revenues for U.S. Secure Services increased by $35.0 million to $400.9 million in Q1 2024, representing a 9.6% increase compared to Q1 2023[177]. - Electronic Monitoring and Supervision Services revenues fell by $45.9 million to $86.8 million, a 34.6% decrease compared to Q1 2023[179]. - Reentry Services revenues increased by $3.6 million to $67.8 million, a 5.6% increase from Q1 2023[180]. - International Services revenues grew by $4.7 million to $50.1 million, a 10.4% increase year-over-year[181]. Operational Metrics - The average company-wide facility occupancy rate was approximately 87.6% for Q1 2024, compared to 87.2% for Q1 2023, with 69,834 active beds in 2024 and 69,376 in 2023[168]. - The company manages and/or owns approximately 81,000 beds across 100 secure services and community-based facilities as of March 31, 2024[167]. - Operating expenses for U.S. Secure Services rose by $18.9 million to $301.1 million, accounting for 75.1% of segment revenues in Q1 2024[182]. - Operating expenses represented approximately 73% of consolidated revenues in Q1 2024, compared to 71% in Q1 2023, with labor and related costs accounting for about 68% of operating expenses in Q1 2024[239]. Cash Flow and Financing - Cash, cash equivalents, and restricted cash increased to $195.3 million as of March 31, 2024, up from $176.3 million a year earlier[220]. - Net cash provided by operating activities was $85.8 million in Q1 2024, down from $94.7 million in Q1 2023, reflecting a decrease of 9.4%[221]. - Net cash used in financing activities decreased to approximately $30.1 million in Q1 2024 from $45.9 million in Q1 2023, a reduction of 34.3%[224]. - The company completed a private offering of $1.275 billion in senior notes, including $650 million of 8.625% senior secured notes due 2029 and $625 million of 10.25% senior notes due 2031[204]. Risks and Challenges - The company is exposed to risks related to government appropriations, which may be affected by budgetary constraints at various government levels[163]. - The company faces challenges in maintaining occupancy rates and managing costs related to ongoing litigation and rising medical costs[162]. - The company is dependent on a limited number of governmental customers, which account for a significant portion of its revenues, posing a risk to financial stability[163]. Strategic Initiatives - The company plans to actively bid on new projects that fit its target profile for profitability and operational risk, despite potential adverse impacts from government budgetary constraints[232]. - The company has been awarded a ten-year contract renewal for secure transportation under the GEOAmey joint venture in the UK and a contract for primary health services in Victoria, Australia, starting July 1, 2023[237]. - The company is focused on delivering high-quality services and developing innovative technology solutions, including the launch of a new GPS tracking device, VeriWatch[238]. Idle Facilities and Capital Expenditures - The company is currently marketing 11,421 vacant beds at ten idle facilities, with a carrying value of $286.6 million as of March 31, 2024[172]. - The annual net carrying cost of idle facilities in 2024 is estimated to be $29.2 million, including $14.0 million in depreciation expense, with a combined net book value of $286.6 million for these facilities[241]. - Capital expenditures for Q1 2024 amounted to $14.8 million, compared to $13.8 million in Q1 2023, indicating an increase of 7.2%[223]. Tax and Interest - The provision for income taxes decreased by $4.3 million to $8.1 million, with an effective tax rate of 31.3% in Q1 2024[198]. - Interest income rose by $1.3 million to $2.5 million, a 111.8% increase compared to Q1 2023[194]. - A 1% increase in the average interest rate applicable to the Exchange Credit Facility would increase total annual interest expense by approximately $9 million, based on borrowings of $906.7 million as of March 31, 2024[242]. - A 10% change in foreign currency exchange rates would have approximately an $8.2 million effect on the financial position and a $0.2 million impact on results of operations for Q1 2024[244].