Overview of Q1 2024 Performance This section summarizes The GEO Group's financial results and management's strategic commentary for the first quarter of 2024 First Quarter 2024 Highlights The GEO Group reported a slight year-over-year decrease in Q1 2024 revenues and net income, with total revenues at $605.7 million Q1 2024 vs Q1 2023 Financial Results | Metric | Q1 2024 (USD) | Q1 2023 (USD) | | :--- | :--- | :--- | | Total Revenues | $605.7 million | $608.2 million | | Net Income | $22.7 million | $28.0 million | | Adjusted EBITDA | $117.6 million | $130.9 million | Management Commentary Executive Chairman George C. Zoley highlighted strong Q1 2024 performance and successful debt refinancing, enhancing capital allocation flexibility - The company's multiyear strategy to deleverage its balance sheet successfully positioned GEO to refinance substantially all of its debt4 - The recent refinancing has lowered the average cost of debt and provides greater flexibility to evaluate options for returning capital to shareholders4 Financial Guidance and Outlook This section provides the company's financial projections for the full year and second quarter of 2024, including expected revenues and net income Full Year 2024 Guidance GEO updated its full-year 2024 guidance, projecting net income between $55 million and $75 million on approximately $2.4 billion in revenues Full Year 2024 Financial Guidance | Metric | Guidance Range (USD) | | :--- | :--- | | Net Income | $55 million - $75 million | | Annual Revenues | ~$2.4 billion | | Adjusted EBITDA | $485 million - $515 million | | Loss on Extinguishment of Debt (pre-tax) | $86 million | Second Quarter 2024 Guidance The company anticipates a Q2 2024 net loss of $27 million to $30 million, primarily due to a significant pre-tax loss on debt extinguishment Second Quarter 2024 Financial Guidance | Metric | Guidance Range (USD) | | :--- | :--- | | Net Loss | $27 million - $30 million | | Revenues | $600 million - $610 million | | Adjusted EBITDA | $119 million - $125 million | Business and Operational Updates This section details recent contract awards and the comprehensive debt refinancing initiatives undertaken by The GEO Group Recent Developments GEO's subsidiary, GTI, secured a five-year contract with ICE for air operations support, expected to generate $25 million in annualized revenues - GEO Transport, Inc. (GTI) secured a five-year contract for air operations support services on behalf of U.S. Immigration and Customs Enforcement (ICE)8 - The new contract is expected to generate approximately $25 million in annualized revenues for GEO8 Debt Refinancing In April and May 2024, GEO completed a major debt refinancing, issuing $1.275 billion in senior notes and a new $450 million Term Loan B - Closed a private offering of $1.275 billion in senior notes and a new five-year $450 million Term Loan B9 - Net proceeds of approximately $1.67 billion were used to refinance approximately $1.5 billion of existing indebtedness and pay related fees10 - On May 6, 2024, the company retired $177.1 million principal amount of its 6.50% exchangeable senior notes due 202610 Financial Statements and Reconciliations This section presents the unaudited condensed consolidated financial statements and reconciliations of GAAP to non-GAAP financial measures Condensed Consolidated Financial Statements This section provides the unaudited condensed consolidated balance sheets and statements of operations for Q1 2024 and prior periods Balance Sheet The condensed consolidated balance sheet highlights total assets, liabilities, and shareholders' equity as of March 31, 2024, and December 31, 2023 Condensed Consolidated Balance Sheet Highlights (in '000s) | Account | March 31, 2024 (in '000s USD) | December 31, 2023 (in '000s USD) | | :--- | :--- | :--- | | Total current assets | $531,490 | $528,505 | | Total Assets | $3,684,510 | $3,696,406 | | Total current liabilities | $420,929 | $437,464 | | Long-Term Debt | $1,717,048 | $1,725,502 | | Total Shareholders' Equity | $1,308,621 | $1,290,314 | Statement of Operations The condensed consolidated statement of operations details revenues, operating income, net income, and diluted EPS for Q1 2024 and Q1 2023 Condensed Consolidated Statement of Operations Highlights (in '000s, except per share data) | Account | Q1 2024 (in '000s USD) | Q1 2023 (in '000s USD) | | :--- | :--- | :--- | | Revenues | $605,672 | $608,209 | | Operating income | $79,562 | $92,660 | | Net income | $22,659 | $27,994 | | Diluted EPS | $0.14 | $0.19 | Non-GAAP Financial Measures and Reconciliations This section reconciles GAAP net income to non-GAAP measures like EBITDA and Adjusted EBITDA, and provides the 2024 outlook for key metrics Reconciliation of Net Income to EBITDA and Adjusted EBITDA This reconciliation details the adjustments from net income to EBITDA and Adjusted EBITDA for the first quarters of 2024 and 2023 Q1 Reconciliation Highlights (in '000s) | Metric | Q1 2024 (in '000s USD) | Q1 2023 (in '000s USD) | | :--- | :--- | :--- | | Net Income | $22,659 | $27,994 | | EBITDA | $111,083 | $125,684 | | Adjusted EBITDA | $117,643 | $130,916 | | Adjusted Net Income | $23,628 | $28,105 | 2024 Outlook and Key Metrics This section provides the full-year 2024 outlook for capital expenditures, total net debt, and total net leverage FY 2024 Outlook for Key Metrics (in '000s) | Metric | Low Range (in '000s USD) | High Range (in '000s USD) | | :--- | :--- | :--- | | Capital Expenditures | $75,000 | $85,000 | | Total Debt, Net | $1,625,000 | $1,675,000 | | Total Leverage, Net | 3.2x | 3.4x | Important Disclosures This section includes information about The GEO Group, explanations of non-GAAP financial measures, and a safe-harbor statement for forward-looking information About The GEO Group The GEO Group is a leading diversified government service provider specializing in secure facilities and community reentry centers globally - GEO is a diversified government service provider for secure facilities, processing centers, and community reentry centers13 - Operations span the United States, Australia, South Africa, and the United Kingdom, covering 100 facilities and approximately 81,000 beds13 Note on Non-GAAP Financial Measures The company uses non-GAAP financial measures like Adjusted Net Income and EBITDA to provide investors with insights into operational performance - EBITDA is defined as net income adjusted for income tax, interest expense, and depreciation/amortization. Adjusted EBITDA further adjusts for items like stock-based compensation and other specified expenses19 - The company believes these non-GAAP measures provide investors with performance metrics that reflect operational trends in occupancy rates, per diem rates, and operating costs21 Safe-Harbor Statement This statement warns that forward-looking projections are subject to significant risks and uncertainties, which could cause actual results to differ materially - The press release contains forward-looking statements regarding financial guidance and strategic objectives like deleveraging26 - Identified risks include changes in federal and state government policy, changes in federal immigration policy, public and political opposition, and fluctuations in operating results26
The GEO (GEO) - 2024 Q1 - Quarterly Results