CoreCivic(US:CXW)2024-11-07 20:32Financial Data and Key Metrics Changes - In Q3 2024, CoreCivic generated revenue of $491.6 million, a 2% increase compared to the prior year quarter. Excluding the South Texas family residential center, underlying revenue growth would have been over 5% [10] - Normalized funds from operations (FFO) were $47.6 million, or $0.43 per share, compared to $40.5 million, or $0.35 per share in Q3 2023, representing a 23% per share increase [11] - GAAP net income was $0.19 per share compared to $0.12 per share in the prior year quarter, and adjusted EPS was $0.20 compared to $0.14 per share in the prior year quarter [51] Business Line Data and Key Metrics Changes - Revenue from federal partners was flat year-over-year, with ICE revenue declining 3.4%. However, excluding the South Texas facility, ICE revenue increased by 10.9% [13][14] - State revenue in the Safety and Community segments grew 3% year-over-year, driven by higher per diem rates and new state contracts [17] - Local revenue in the Safety and Community segments increased by 39%, reflecting new management contracts with Hinds County and Harris County [21] Market Data and Key Metrics Changes - CoreCivic's overall occupancy in the Safety and Community segments increased to 75.2% from 72% in the prior year period, with significant improvements in both Safety and Community segments [22][23] - ICE's detention population count remained relatively flat during Q3, with a slight increase in October [16] Company Strategy and Development Direction - CoreCivic aims to address the growing needs of federal, state, and local government partners, particularly in light of increasing prison populations and staffing challenges [35][36] - The company is preparing to activate idle facilities to meet potential demand from ICE and other partners, with proactive steps taken to ensure readiness [37][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term macro environment for their services, despite uncertainties during an election year [35] - The company anticipates increased demand for detention capacity, particularly with the new Republican leadership in Congress [94] Other Important Information - CoreCivic ended the quarter with leverage at 2.2x trailing 12-month adjusted EBITDA, slightly below their long-term target [33] - The company updated its 2024 financial guidance, expecting adjusted EPS of $0.69 to $0.75, up from previous guidance [69] Q&A Session Summary Question: Margin profile changes with increased occupancy - Management indicated that if occupancy increases to the low-80s, margins could reach around 25%, but this may be adjusted downwards due to the termination of the South Texas contract [122] Question: Impact of USMS contracting on private providers - Management confirmed that having multiple contracting tools would likely ease bottlenecks and make it easier for USMS to utilize private providers [124] Question: Timeline for RFIs and RFPs - Management noted that there may be more RFIs and potential expansions in scope, indicating a busy period for procurement activity [130]