CoreCivic(US:CXW)2019-05-10 06:53Financial Data and Key Metrics Changes - Total revenue for Q1 2019 was $484 million, an increase of nearly 10% compared to Q1 2018 [7] - Normalized FFO per share was $0.64, up 21% year-over-year [7] - Adjusted EBITDA for the quarter was $109.7 million, representing a 19% increase from the prior year [7] - Facility net operating income increased across all three business segments by $16.3 million or 13.4% [32] Business Segment Data and Key Metrics Changes - CoreCivic Safety segment revenue grew by 7% [7] - CoreCivic Community segment revenue increased by 23% [7] - CoreCivic Properties segment revenue saw substantial growth of 65% [7] - Occupancy in the Safety segment increased from 79.5% to 83% [32] - Net operating income in the Community segment increased despite a decline in occupancy from 81.4% to 78.4% [34] Market Data and Key Metrics Changes - Federal populations in the U.S. Marshals Service grew from approximately 52,000 to roughly 61,000 [13] - The Bureau of Prisons' populations have declined by roughly 39,000 inmates since their peak in 2013 [11] - ICE has experienced a consistent increase in average daily detainee populations since early 2018 [15] Company Strategy and Development Direction - CoreCivic is focusing on diversifying its portfolio to grow and stabilize cash flows, particularly in the Community and Property segments [8] - The company is pursuing M&A opportunities to expand its real estate assets and enhance service offerings [23] - CoreCivic is engaged in the procurement process with various states to address aging criminal justice infrastructure [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's pricing discipline and ability to meet government partners' needs despite challenges in the federal contracting environment [12] - The company anticipates continued demand for its services, particularly from federal partners, and expects to activate idle facilities if necessary [40][56] - Management provided an updated financial outlook, increasing the forecast for normalized FFO per share to a range of $2.47 to $2.53 for 2019 [24] Other Important Information - CoreCivic plans to release its first Environmental, Social, and Governance (ESG) report, highlighting its commitment to ethical operations and community engagement [44][45] - The company has made investments in workforce management to address labor market challenges [52] Q&A Session Summary Question: What are the highest probability new business opportunities that you may be able to close in 2019? - Management indicated potential new contracts with the U.S. Marshals and ICE, as well as opportunities in Alaska, Kansas, and Idaho [47] Question: Is the expense control and higher margins sustainable? - Management believes the current level of profitability is sustainable, citing investments in staff and operational efficiencies [51][52] Question: What are the assumptions for the California business and ICE detainee population levels for the balance of '19? - Management expects California's remaining inmates to exit by June 30, with federal populations potentially backfilling those vacancies faster than anticipated [55]