The GEO (US:GEO)2024-08-08 20:07Financial Performance - Consolidated revenues for the six months ended June 30, 2024, were $1,212.9 million, compared to $1,202.1 million for the same period in 2023, reflecting a growth of approximately 0.15%[142] - Total revenues for Q2 2024 were $607.2 million, a 2.2% increase from $593.9 million in Q2 2023[149] - Revenues for U.S. Secure Services increased by $64.5 million in the first half of 2024, primarily due to new transportation contracts and increased rates, with total revenues reaching $803.0 million[175] - Net operating revenues for the six months ended June 30, 2024, were $1,105,117 thousand, a slight increase from $1,104,959 thousand in the same period of 2023[209] - The company reported a net loss of $(22,884) thousand for the six months ended June 30, 2024, compared to a net income of $45,962 thousand in the prior year[209] Occupancy and Capacity - The average company-wide facility occupancy rate was approximately 87.8% for the six months ended June 30, 2024, compared to 85.0% for the same period in 2023, indicating an increase in occupancy[142] - The company manages and/or owns approximately 81,000 beds across 100 secure services and community-based facilities as of June 30, 2024[141] - The company has 69,834 active beds and 11,275 idle beds, which includes those being marketed to potential customers, as of June 30, 2024[142] - The company is currently marketing 11,275 vacant beds across ten idle facilities, with a carrying value of $283.5 million[147] - Activating remaining idle facilities could generate approximately $355 million in incremental annualized revenue and increase earnings per share by $0.36 to $0.40[229] Revenue Streams - U.S. Secure Services revenue increased by $29.6 million to $402.1 million, representing 66.2% of total revenue, with an average occupancy rate of 87.7%[150][151] - Electronic Monitoring and Supervision Services revenue decreased by $23.3 million to $84.7 million, primarily due to lower participant counts[152] - Reentry Services revenue increased by $1.4 million to $69.0 million, driven by new contracts and increased census levels[153] - International Services revenue rose by $5.7 million to $51.4 million, mainly due to increased populations in Australia[154] Expenses and Liabilities - Operating expenses totaled $443.5 million, a 3.6% increase from $428.1 million in Q2 2023, with U.S. Secure Services expenses rising by $15.3 million[155] - General and administrative expenses increased by $10.5 million to $52.2 million, primarily due to transaction fees and compensation adjustments[165] - Operating expenses represented approximately 73% of consolidated revenues for the six months ended June 30, 2024, compared to 72% for the same period in 2023[227] - General and administrative expenses accounted for approximately 9% of consolidated revenues for the six months ended June 30, 2024, up from 8% in 2023[228] - The company’s operations are exposed to various liabilities, including legal claims and proceedings, which could adversely affect its financial condition[136] Debt and Financing - The company completed a private offering of $1.275 billion in senior notes on April 18, 2024, including $650 million of 8.625% senior secured notes due 2029 and $625 million of 10.250% senior notes due 2031[201] - The net proceeds from the senior notes offering were used to refinance approximately $1.5 billion of existing indebtedness, extending debt maturities to 2029 and 2031[202] - The company has approximately $484.4 million in borrowings under its Credit Agreement, with a potential $5 million increase in annual interest expense for every 1% rise in interest rates[230] - Loss on extinguishment of debt was approximately $82.4 million in Six Months 2024, representing 6.8% of revenue, compared to a loss of $1.754 million (0.1% of revenue) in Six Months 2023, an increase of 4596.6%[192] Tax and Income - The effective tax rate for Q2 2024 was 37.9%, with a tax benefit of $20.4 million due to pre-tax losses, compared to a benefit of $11.2 million and an effective rate of 28.5% in Q2 2023[172] - The effective tax rate for Six Months 2024 was 53.4%, with a tax benefit of $12.308 million, compared to a tax provision of $23.515 million (29.9% effective rate) in Six Months 2023, a change of 152.3%[196] - Income from operations decreased to $142,249 thousand for the six months ended June 30, 2024, compared to $174,568 thousand for the same period in 2023[209] Future Outlook and Risks - The company is focused on developing new facilities based on contract awards, utilizing its project development expertise[140] - The company faces risks related to government appropriations and budgetary constraints that may impact its financial condition[136] - Future budgetary pressures may impact the company's operations and ability to pursue new business opportunities due to potential reductions in per diem rates and contract modifications[221] - The company is exploring opportunities for future business acquisitions or dispositions, which may require additional financing or refinancing of existing debt[207]