CoreCivic(CXW) - 2025 Q1 - Quarterly Results

Financial and Operational Highlights CoreCivic's first quarter of 2025 demonstrated strong financial performance and strategic operational advancements First Quarter 2025 Highlights CoreCivic reported strong financial results for the first quarter of 2025, with total revenue of $488.6 million and net income of $25.1 million, alongside active share repurchases Q1 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Total Revenue | $488.6 million | | Net Income | $25.1 million | | Diluted EPS | $0.23 | | FFO per Diluted Share | $0.45 | | EBITDA | $81.0 million | | Shares Repurchased | 1.9 million | | Cost of Repurchases | $37.9 million | Management Commentary Management highlighted a strong start to 2025, driven by increased facility occupancy and strategic re-activation of idle facilities, leading to increased annual financial guidance and accelerated share repurchases - Facility occupancy increased to 77.0% in Q1 2025 from 75.2% in Q1 2024, primarily due to higher utilization by U.S. Immigration and Customs Enforcement (ICE)[3] - The company is re-activating three previously idle facilities under agreements with ICE: the Dilley Immigration Processing Center, the Midwest Regional Reception Center, and the California City Immigration Processing Center[3][4] - CoreCivic is increasing its capital investment in idle facilities, having spent $12 million of an initial $40-$45 million authorization and approving an additional $25 million to prepare more locations for potential contracts[4] - The company's leverage, measured as net debt to trailing twelve-month Adjusted EBITDA, was 2.5x at the end of the quarter[6] Financial Performance Analysis A detailed analysis of CoreCivic's Q1 2025 financial results compared to Q1 2024, highlighting key drivers of revenue, EBITDA, and FFO changes Q1 2025 vs. Q1 2024 Results GAAP Net Income significantly increased in Q1 2025 due to the absence of prior-year debt refinancing expenses, despite a slight decrease in Adjusted Diluted EPS influenced by contract expirations Q1 Financial Comparison (2025 vs. 2024) ($M) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $25.1 | $9.5 | | Diluted EPS | $0.23 | $0.08 | | Adjusted Net Income | $25.1 | $27.9 | | Adjusted Diluted EPS | $0.23 | $0.25 | - The expiration of the CDCR lease at California City and the ICE contract at Dilley collectively accounted for a $0.16 per share reduction compared to Q1 2024[7] Revenue and EBITDA Analysis Revenue from ICE decreased due to contract termination, while state customer revenue grew, leading to a decrease in Adjusted EBITDA primarily from contract expirations - Revenue from ICE decreased by $20.6 million YoY, reflecting the termination of the Dilley facility contract, which accounted for a $33.6 million revenue reduction[8] - Revenue from state customers increased by 5.2% compared to the prior year's quarter[8] EBITDA Comparison (Q1 2025 vs. Q1 2024) ($M) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | EBITDA | $81.0 | $62.8 | | Adjusted EBITDA | $81.0 | $89.5 | Funds From Operations (FFO) Analysis Q1 2025 FFO was $49.7 million, or $0.45 per share, with Normalized FFO slightly decreasing year-over-year due to factors affecting Adjusted EBITDA, offset by lower interest expense and share count FFO Comparison (Q1 2025 vs. Q1 2024) ($M) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | FFO | $49.7 | $33.9 | | Normalized FFO | $49.7 | $52.6 | | FFO per Share | $0.45 | $0.30 | | Normalized FFO per Share | $0.45 | $0.46 | Corporate Strategy and Updates CoreCivic's corporate strategy focuses on capital allocation through share repurchases and securing new contracts with key partners like ICE Capital Strategy The company continued its share repurchase program, buying back 1.9 million shares for $37.9 million in Q1 2025, with $131.0 million remaining available under the current authorization - In Q1 2025, the company repurchased 1.9 million shares of common stock at an aggregate cost of $37.9 million[12] - Since May 2022, a total of 16.5 million shares have been repurchased for $219.0 million, with $131.0 million of authorization remaining as of March 31, 2025[12][13] Contract Updates CoreCivic secured several key agreements with ICE, including modifying existing contracts, resuming operations at the Dilley facility, and initiating activation of the Midwest and California City facilities - Amended an IGSA to resume operations at the 2,400-bed Dilley Immigration Processing Center; the new agreement expires in March 2030[15] - Entered into a letter agreement with ICE for initial funding up to $22.6 million to activate the 1,033-bed Midwest Regional Reception Center[16] - Entered into a letter agreement with ICE for initial funding up to $31.2 million to activate the 2,560-bed California City Immigration Processing Center[16] 2025 Financial Guidance CoreCivic significantly raised its full-year 2025 financial guidance, reflecting strong Q1 results and the Dilley facility reactivation, while outlining capital expenditure plans for facility activations Updated Full Year 2025 Guidance ($M) | Metric | Revised Guidance | Prior Guidance | | :--- | :--- | :--- | | Net income | $91.3 - $101.3 | $53.5 - $67.5 | | Diluted EPS | $0.83 - $0.92 | $0.48 - $0.61 | | FFO per diluted share | $1.72 - $1.82 | $1.37 - $1.50 | | EBITDA | $331.0 - $339.0 | $281.0 - $293.0 | - The revised guidance does not include the impact of potential new long-term contracts at the Midwest Regional Reception Center and California City Immigration Processing Center[18] - The company expects to invest approximately $65.0 million to $70.0 million in capital expenditures for activating previously idled facilities and preparing for potential new opportunities[20] Financial Statements A summary of CoreCivic's consolidated balance sheets and statements of operations, providing a snapshot of the company's financial position and performance Consolidated Balance Sheets As of March 31, 2025, CoreCivic reported increased total assets and liabilities, with a slight decrease in total stockholders' equity compared to year-end 2024 Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $413,452 | $449,818 | | Total assets | $3,002,446 | $2,931,891 | | Total current liabilities | $266,633 | $285,797 | | Long-term debt, net | $969,885 | $973,073 | | Total liabilities | $1,527,200 | $1,438,540 | | Total stockholders' equity | $1,475,246 | $1,493,351 | Consolidated Statements of Operations For Q1 2025, total revenue slightly decreased, but net income significantly rose due to lower operating and interest expenses and the absence of prior-year debt repayment costs Statement of Operations Summary (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $488,627 | $500,686 | | Total operating expenses | $374,737 | $378,103 | | Income before income taxes | $32,090 | $9,043 | | Net Income | $25,113 | $9,543 | | Diluted EPS | $0.23 | $0.08 | Supplemental Financial Information (Non-GAAP) This section provides reconciliations of GAAP Net Income to key non-GAAP financial measures, including Adjusted Net Income, FFO, and EBITDA, along with guidance reconciliations Reconciliation of Adjusted Net Income and Adjusted Diluted EPS This section reconciles GAAP Net Income to Adjusted Net Income, showing that for Q1 2025, they were equal, while Q1 2024 included adjustments for debt repayment expenses Adjusted Net Income Reconciliation (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $25,113 | $9,543 | | Special items adjustments | $0 | $26,674 | | Income tax benefit for special items | $0 | ($8,358) | | Adjusted net income | $25,113 | $27,859 | Reconciliation of Funds From Operations (FFO) This table reconciles Net Income to FFO and Normalized FFO, indicating that for Q1 2025, both FFO and Normalized FFO were $49.7 million, while Q1 2024's FFO adjusted to $52.6 million Normalized FFO FFO Reconciliation (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $25,113 | $9,543 | | Depreciation and amortization of real estate | $24,598 | $24,784 | | Funds From Operations (FFO) | $49,711 | $33,937 | | Special items adjustments | $0 | $18,706 | | Normalized FFO | $49,711 | $52,643 | Reconciliation of EBITDA and Adjusted EBITDA This table reconciles Net Income to EBITDA and Adjusted EBITDA, showing that for Q1 2025, both were $81.0 million, while Q1 2024's EBITDA adjusted to $89.5 million Adjusted EBITDA EBITDA Reconciliation (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $25,113 | $9,543 | | Interest expense | $18,381 | $22,058 | | Depreciation and amortization | $30,518 | $31,730 | | Income tax expense (benefit) | $6,977 | ($500) | | EBITDA | $80,989 | $62,831 | | Special items adjustments | $0 | $26,674 | | Adjusted EBITDA | $80,989 | $89,505 | Guidance Reconciliation This section provides the calculations to reconcile the company's full-year 2025 guidance for Net Income to the non-GAAP metrics of FFO and EBITDA Full Year 2025 Guidance Reconciliation (in thousands) | Metric | Low End | High End | | :--- | :--- | :--- | | Net income | $91,250 | $101,250 | | Depreciation and amortization of real estate | $98,250 | $99,250 | | Funds From Operations | $189,500 | $200,500 | | Net income | $91,250 | $101,250 | | Interest expense | $73,750 | $72,750 | | Depreciation and amortization | $128,750 | $128,750 | | Income tax expense | $37,250 | $36,250 | | EBITDA | $331,000 | $339,000 |