The GEO (US:GEO)2020-08-06 21:47Financial Data and Key Metrics Changes - The company reported second quarter revenues of approximately $588 million and net income attributable to GEO of $0.31 per diluted share [22] - Adjusted net income for the second quarter was reported at $0.36 per diluted share, with an AFFO of $0.66 per diluted share [23][24] - The updated guidance for full-year net income attributable to GEO is expected to be in the range of $0.95 to $0.99 per diluted share [31] Business Line Data and Key Metrics Changes - The GEO Secure Services segment has experienced lower occupancy levels due to COVID-19, particularly in ICE and U.S. Marshals facilities [11][12] - The GEO Care segment also reported lower occupancy levels in reentry centers and day reporting programs [15] - The D. Ray James Facility contract is set to expire on September 30, which generated annualized revenues of approximately $60 million [26] Market Data and Key Metrics Changes - The company anticipates a revenue decline of approximately 9% for the full year due to lower occupancy levels at ICE and U.S. Marshals facilities [25] - The Federal Bureau of Prisons has seen a decline in overall populations, impacting the company's contracts [14] - State-level government partners are expecting budget shortfalls due to the economic slowdown from the pandemic [27] Company Strategy and Development Direction - The company plans to reduce quarterly dividend payments to preserve capital and focus on debt repayment, with a new target of $0.34 per share [19][36] - The management team is looking for cost savings opportunities and potential sales of company-owned facilities [21][38] - The company aims to remain structured as a REIT while balancing shareholder value and debt repayment [20][62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the COVID-19 pandemic but expressed confidence in the strength of the business, earnings, and cash flows [16][61] - The current political climate and mischaracterization of the company's role have negatively impacted its valuation and access to capital [17][61] - Management believes that clarity in immigration policy post-election could lead to a rebound in occupancy levels and overall business performance [120][126] Other Important Information - The company has approximately $76 million in cash on hand and $350 million in borrowing capacity under its revolving credit facility [34] - Total capital expenditures for 2020 are expected to be approximately $93 million [35] - The company has implemented extensive COVID-19 safety measures across its facilities [10][41] Q&A Session Summary Question: Guidance for the full-year and thought process behind it - Management explained that the guidance was tightened due to better-than-expected cost performance and the impact of the D. Ray James contract expiration [68][69] Question: ICE facilities and potential additions - Management expressed hope for the activation of California ICE facilities, citing a need for beds in the state [71] Question: Dividend reduction and future cuts - Management confirmed that there is still room to reduce dividends further if necessary, but the current level balances shareholder returns and debt repayment [72] Question: Cost savings opportunities and potential facility sales - Management indicated that they are exploring idle assets for sale and expect to find cost savings during the budgeting process [73][75] Question: Bid pipeline and new business opportunities - Management noted that the most active area for new business is in the international sector, particularly in Australia and the UK [76] Question: Concerns regarding future access to capital - Management reassured that they have significant liquidity and a debt reduction strategy in place to address upcoming maturities [132]