CoreCivic(US:CXW)2025-05-08 16:36Part I – Financial Information Financial Statements This section presents the unaudited consolidated financial statements for CoreCivic, Inc. for the quarter ended March 31, 2025, including Balance Sheets, Statements of Operations, Cash Flows, and Stockholders' Equity, with notes on key financial activities Consolidated Balance Sheets As of March 31, 2025, total assets increased to $3.00 billion from $2.93 billion at year-end 2024, primarily driven by a new right-of-use asset for the Dilley Facility, while cash decreased to $74.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $3,002,446 | $2,931,891 | | Cash and cash equivalents | $74,498 | $107,487 | | Property and equipment, net | $2,057,518 | $2,060,024 | | Total Liabilities | $1,527,200 | $1,438,540 | | Long-term debt, net | $969,885 | $973,073 | | Total Stockholders' Equity | $1,475,246 | $1,493,351 | Consolidated Statements of Operations For Q1 2025, CoreCivic reported net income of $25.1 million, a significant increase from $9.5 million in Q1 2024, primarily due to the absence of $27.2 million in prior-year debt refinancing expenses, despite a slight revenue decrease to $488.6 million Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $488,627 | $500,686 | | Operating Expenses | $374,737 | $378,103 | | Expenses associated with debt repayments | $0 | $27,242 | | Income Before Income Taxes | $32,090 | $9,043 | | Net Income | $25,113 | $9,543 | | Diluted EPS | $0.23 | $0.08 | Consolidated Statements of Cash Flows Net cash provided by operating activities was $44.5 million for Q1 2025, down from $70.4 million in Q1 2024, with increased cash used in investing activities and $53.7 million used in financing, primarily for common stock repurchases Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,484 | $70,354 | | Net cash used in investing activities | ($24,982) | ($3,753) | | Net cash used in financing activities | ($53,688) | ($76,180) | | Net Decrease in Cash | ($34,186) | ($9,579) | - The company spent $50.6 million on the purchase and retirement of common stock in Q1 2025, compared to $49.0 million in Q1 202416 Notes to Consolidated Financial Statements The notes detail the company's structure, accounting policies, and key financial events, including the resumption of operations at the Dilley Facility, activation efforts at other idle facilities, ongoing debt management, a significant share repurchase program, and updates on legal proceedings - As of March 31, 2025, the company operated 43 correctional facilities (CoreCivic Safety), 21 residential reentry centers (CoreCivic Community), and owned 6 properties leased to government agencies (CoreCivic Properties)24 - The company resumed operations at the 2,400-bed Dilley Immigration Processing Center in March 2025 under an amended agreement with ICE, establishing a new right-of-use asset and liability of $116.9 million40 - The company is activating its Midwest Regional Reception Center and California City Immigration Processing Center under letter agreements with ICE while negotiating long-term contracts36 - The company repurchased 1.9 million shares for $37.9 million in Q1 2025, leaving $131.0 million available under its $350.0 million share repurchase authorization50 - A jury returned a verdict of $27.8 million against the company in an inmate litigation matter, which the company intends to appeal and believes is substantially covered by insurance64 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2025 financial results, highlighting the impact of executive and legislative actions on federal demand, particularly from ICE, and the company's strategy of activating idle facilities, managing debt, and executing its share repurchase program Overview The company anticipates significant growth opportunities from new executive actions and legislation, such as the Laken Riley Act, which are expected to increase demand for detention capacity from federal partners like ICE, leading CoreCivic to resume operations at the Dilley Facility and activate other idle facilities - Executive actions by President Trump on January 20, 2025, are intended to secure borders and increase detention of removable aliens, directing the DHS to expand facility capacity81 - The Laken Riley Act, signed into law on January 29, 2025, mandates detention for certain non-U.S. nationals, which ICE estimates could require 60,000 to 110,000 additional detention beds84 - The company is responding to increased ICE demand by resuming operations at the Dilley Facility and entering into letter agreements to activate the Midwest Regional Reception Center and the California City Facility85 Results of Operations Q1 2025 revenue fell 2.4% to $488.6 million, primarily due to a 64.6% drop in lease revenue and lower federal management revenue, while net income surged to $25.1 million from $9.5 million in Q1 2024 due to the absence of prior-year debt refinancing charges Revenue by Source (in millions) | Revenue Source | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Federal | $241.3 | $262.4 | $(21.1) | (8.0%) | | State | $198.6 | $188.8 | $9.8 | 5.2% | | Lease revenue | $4.6 | $13.0 | $(8.4) | (64.6%) | | Total revenue | $488.6 | $500.7 | $(12.1) | (2.4%) | - The decrease in federal revenue was primarily due to the termination of funding for the Dilley Facility in August 2024, which resumed operations on March 5, 202596 - The decrease in lease revenue was driven by the termination of the lease for the California City Facility, effective March 31, 202499 - Operating expenses decreased by $3.4 million YoY, mainly due to the temporary closure of the Dilley Facility, partially offset by wage increases across the portfolio100101 Liquidity and Capital Resources The company's capital strategy focuses on debt management and returning capital to shareholders, with $37.9 million in common stock repurchases in Q1 2025, $131.0 million remaining under authorization, and no debt maturities until 2027 - The company's Board of Directors increased the share repurchase program authorization to $350.0 million. As of March 31, 2025, a total of $219.0 million has been used, with $131.0 million remaining133 - The company has internally approved $65.0 million to $70.0 million in capital expenditures for activating previously idled facilities to meet anticipated demand134 Contractual Cash Obligations as of March 31, 2025 (in thousands) | Obligation | Total | | :--- | :--- | | Long-term debt | $994,429 | | Interest on senior and mortgage notes | $272,994 | | Dilley Facility Lease | $245,336 | | Other Leases & Commitments | $32,088 | | Total | $1,544,847 | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk exposure is to interest rate changes on its variable-rate Bank Credit Facility, where a 100 basis point change would impact net interest expense by approximately $0.3 million for Q1 2025, though most debt is fixed-rate - The company is exposed to interest rate risk on its Bank Credit Facility. A 100 basis point increase or decrease in rates would have changed interest expense by $0.3 million in Q1 2025155 - As of March 31, 2025, a significant portion of debt is fixed-rate, including $238.5 million of 4.75% Senior Notes, $500.0 million of 8.25% Senior Notes, and $138.8 million of 4.43% Kansas Notes, which are not materially impacted by market interest rate fluctuations156 Controls and Procedures Based on senior management's evaluation, the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures are effective as of the end of the reporting period158 - No material changes in internal control over financial reporting occurred during the quarter158 Part II – Other Information Legal Proceedings The company is involved in various legal proceedings, including a class-action lawsuit, a lawsuit from the City of Leavenworth, and an appeal of a $27.8 million jury verdict in an inmate litigation case, which is believed to be substantially covered by insurance, while also cooperating with a DOJ investigation - This section incorporates by reference the information from Note 7 of the financial statements, which details ongoing litigation161 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in risk factors were reported for the quarter162 Issuer Purchases of Equity Securities During Q1 2025, the company repurchased approximately 1.94 million shares of its common stock for $37.9 million, with $131.0 million remaining under its $350.0 million share repurchase authorization Q1 2025 Share Repurchases | Period | Total Shares Purchased (Shares) | Average Price Paid per Share ($) | | :--- | :--- | :--- | | January 2025 | 515,206 | $21.35 | | February 2025 | 801,160 | $18.72 | | March 2025 | 619,916 | $19.17 | | Total Q1 2025 | 1,936,282 | $19.56 | - The company has a total share repurchase authorization of $350.0 million, with $131.0 million remaining as of March 31, 2025163 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications as required by the Sarbanes-Oxley Act and Inline XBRL data files - Exhibits filed include a list of guarantor subsidiaries, CEO/CFO certifications (Sections 302 and 906), and XBRL data files167