One year ago, the owner and operator of the Northwest Detention Center, Correctional Services Corporation, reported that earnings for the previous quarter had plunged from $722,000 to $77,000. -- This year, earnings plunged further, with the for-profit prison firm reporting a quarterly loss of $578,000.[1] -- The corporation's press release describes the private immigration prison on the Tacoma Tideflats as "a new 890 bed regional detention and processing center for the ICE located in Tacoma, Washington," though the comparable report one year ago called it "our new 500 bed facility for the Department of Homeland Security-Bureau of Immigration and Customs Enforcement ("ICE") in Tacoma, WA." -- Those who have followed the controversy surrounding the Northwest Detention Center may recall that the size of the facility has been a point of contention. -- In 2002, the News Tribune (Tacoma, WA) called it "a 500-bed detention facility." -- In 2003 and 2004, AP and the Seattle Times said the facility would have 700 beds. -- Later, it was sometimes reported that the facility would be able to "expand" to hold 800 prisoners. -- But today's figure of 890 sets a record and calls for an explanation, particularly since the report below states: "[James F.] Slattery[, President & CEO] further stated: 'We are very pleased with the operations and financial performance of our new Department of Homeland Security, Bureau of Immigration & Customs Enforcement ('ICE') Detention Center in Tacoma, Washington. ICE is currently utilizing 99% of the beds it contracted for at this facility. Our ICE contract to build and operate a similar 1020 bed detention facility in South Texas is proceeding towards its scheduled opening date in June, and we fully expect it will match the success of our Tacoma facility." -- CSC receives income from the federal government for every prisoner held, which leads one to wonder: Is CSC jamming prisoners into the NWDC in an effort to boost revenues? ...
1.
CORRECTIONAL SERVICES CORP. POSTS Q4 LOSS
By Dan Burrows
CBS MarketWatch
March 29, 2005
http://www.investors.com/breakingnews.asp?journalid=26694477&brk=1 (subscribers only)
NEW YORK -- Correctional Services Corp. (CSCQ) said Tuesday it swung to a fourth-quarter net loss of $578,000, or 6 cents a share, from net income of $77 million, or 1 cent a share, in the same period a year ago. The Sarasota, Fla. correction center operator's loss from continuing operations was $463 million, or 5 cents a share, versus a loss of $610 million, or 6 cents a share, last year. Thomson First Call doesn't publish an average earnings estimate for the company. Revenue for the three months ended Dec. 31 rose to $34.1 million from $29.9 million a year ago. Shares closed unchanged Monday at $2.38.
2.
Press Release
CORRECTIONAL SERVICES CORPORATION ANNOUNCES FINANCIAL RESULTS FOR FOURTH QUARTER 2004
Source: Correctional Services Corporation
March 29, 2005 -- 8:05 a.m. ET
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050329005485&newsLang=en
SARASOTA, Fla. -- Correctional Services Corporation today announced financial results for the fourth quarter and year-end 2004. Revenues for the fourth quarter were $34.1 million versus $29.9 million in the comparative period in 2003. For the 2004 quarter, the Company reported contribution from operations of $4.8 million and a net loss of $578,000 or $0.06 per diluted share. For the fourth quarter of 2003, the Company reported contribution from operations of $1.9 million and net income of $77,000 or $0.01 per diluted share. Diluted shares were 10,167,000 and 10,236,000 in the fourth quarter 2004 and 2003, respectively.
Included in the reported amounts for the fourth quarter 2004 and 2003 were the following pre-tax items: (in thousands)
2004 2003
-- Startup expenses associated
with the opening of new facilities
$52 $360
-- Impaired asset charge
1,496 -
-- Loss (income) from discontinued operations
$189 $(1,127)
The above pre-tax charges for the fourth quarter 2004 totaled $1.7 million. The total for the 2003 pre-tax items was income of $767,000. The after tax charges for 2004 was $1.1 million or $0.10 per diluted share and the after tax income for 2003 was $468,000 or $0.04 per diluted share. The $1.5 million asset impairment charge is related to the Eagle Lake juvenile facility.
Revenues for the year ended December 31, 2004 were $133.7 million versus $126.5 million for the year ended December 31, 2003. For the year ended December 31, 2004, the company reported contribution from operations of $15.5 million and a net loss of $3.2 million or $0.32 per diluted share. For 2003, the company reported contribution from operations of $13.8 million and net income of $1.3 million or $0.13 per diluted share. Diluted shares were 10,165,000 and 10,237,000 in 2004 and 2003, respectively.
Included in the reported amounts for the years ended December 31, 2004 and 2003 were the following pre-tax items: (in thousands)
2004 2003
-- Startup expenses associated with the opening of new facilities
$3,276 $378
-- Impaired asset charge
1,496 -
-- Loss on disposal of assets
$618 -
-- Loss (income) from discontinued
operations
$5,167 $(210)
The above pre-tax items total $10.6 million and $168,000 for the year ended December 31, 2004 and 2003, respectively. After taxes, these amounts for 2004 and 2003 are $6.4 million or $0.63 per diluted share and $103,000 or $0.01 per diluted share, respectively. The loss from discontinued operations for 2004 includes the operating results and a total of $2.9 million in asset impairment charges for the Tarkio, Missouri and the Canadian, Texas juvenile facilities that were closed during 2004 in addition to the results of other facilities previously classified as discontinued operations.
Commenting on the company's performance, James F. Slattery, President & CEO stated: "We have made substantial progress throughout 2004 in positioning our juvenile division for the future by reducing expenses and eliminating underperforming facilities, while at the same time bringing on new business that we believe will contribute significantly to our operating margins throughout 2005. In 2004, we closed 4 juvenile facilities and are planning for an additional 2 facility closures in 2005. While the juvenile environment remains difficult, we believe our remaining juvenile facilities will provide the company with stable operating contributions."
Slattery further stated: "We are very pleased with the operations and financial performance of our new Department of Homeland Security, Bureau of Immigration & Customs Enforcement ("ICE") Detention Center in Tacoma, Washington. ICE is currently utilizing 99% of the beds it contracted for at this facility. Our ICE contract to build and operate a similar 1020 bed detention facility in South Texas is proceeding towards its scheduled opening date in June, and we fully expect it will match the success of our Tacoma facility."
Regarding 2005, Slattery further stated: "We saw some occupancy reductions in certain adult facilities in the State of Texas at the end of the fourth quarter, which have continued in the first quarter of 2005. This trend has begun to reverse and we expect to attain prior population levels. The nature of the Company's adult operations in Texas causes short-term volatility in population levels; however, the Company has demonstrated the ability to successfully manage this volatility over the long term. Our reputation as a quality adult provider is at the highest point in the Company's history and we believe we are very well positioned for continued growth in this sector of our business."
2004 Highlights
Opening of the Northwest Regional Detention Center
During 2004, the Company completed the construction and began operations of a new 890 bed regional detention and processing center for the ICE located in Tacoma, Washington.
South Texas Detention Complex
On January 26, 2004, ICE awarded the Company a contract for a new 1,020 bed regional detention and processing center to be located in Frio County, Texas.
The facility, which was financed with "AAA" rated, non-recourse revenue bonds, is in the final stages of construction. The Company anticipates completing construction and accepting detainees in June 2005.
New Management Contracts
* Bill Clayton Detention Center, a former juvenile facility located in Littlefield, Texas, re-opened with an adult bed capacity of 214-beds. The facility currently houses medium security adult offenders from the Wyoming Department of Corrections and is being expanded to 310 beds.
* Crisp County Youth Development Center, a 64-bed residential facility for juveniles located in Cordele, Georgia, which the Company manages for the Georgia Department of Juvenile Justice.
* Marion Youth Development Center, a 96-bed residential facility for male juveniles located in Ocala, Florida, which the Company manages for the Florida Department of Juvenile Justice.
* Sawmill Academy for Girls, a 27-bed residential facility for female juveniles located in Tallahassee, Florida, which the Company manages for the Florida Department of Juvenile Justice.
* Thompson Juvenile Residential Facility, a 112-bed residential facility for male juveniles, located in Pembroke Pines, Florida, which the Company manages for the Florida Department of Juvenile Justice.
* Tri-County Jail and Detention Jail Facility, a 226-bed facility for adult offenders located in Ullin, Illinois, which the Company manages for Pulaski County, Illinois, is currently utilized by the United States Marshals' Services, ICE and surrounding counties. A 50-bed expansion is planned for this facility.
THE COMPANY WILL BE HAVING A CONFERENCE CALL TO DISCUSS THIS RELEASE ON TUESDAY, MARCH 29, 2005 AT 11:00 a.m. EST. THE NUMBER TO CALL IS (888) 858-4066 (U.S. only) or (973) 935-2403 (International). A REPLAY WILL BE AVAILABLE BY CALLING (877) 519-4471 AND USING THE PIN 5869867.
Through its Youth Services International subsidiary, the Company is the nation's leading private provider of juvenile programs for adjudicated youths with 17 facilities and 1,300 juveniles in its care. In addition, the Company is a leading developer and operator of adult correctional facilities, operating 14 facilities with approximately 5,500 beds. On a combined basis, the Company provides services in 12 states, representing approximately 6,800 beds including aftercare services.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained in this press release are not historical but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements regarding the expectations, beliefs, intentions or strategies regarding the future. The Company intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's views as of the date they are made with respect to future events and financial performance, but are subject to many uncertainties and risks which could cause the actual results of the Company to differ materially from any future results expressed or implied by such forward-looking statements. Examples of such uncertainties and risks include, but are not limited to: fluctuations in occupancy levels and labor costs; the ability to secure both new contracts and the renewal of existing contracts; the possibility of unforeseen costs relating to facility closings, the ability to achieve profitability and public resistance to privatization; ability to obtain construction financing; and ability to complete new construction projects within budgeted amounts. Additional risk factors include those discussed in reports filed by the Company from time to time on Forms 10-K, 10-Q and 8-K. The Company does not undertake any obligation to update any forward-looking statements
. . . . . . [See link for detailed financial statement]
Correctional Services Corporation, Sarasota
Bernard A. "Skip" Wagner, 941-953-9199
Source: Correctional Services Corporation
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