The following is a summary of the CoreCivic, Inc. (CXW) Q3 2024 Earnings Call Transcript:
Financial Performance:
CoreCivic reported Q3 2024 revenue of $491.6 million, a 2% increase from the previous year, driven by higher occupancy and revenue from new state contracts with Wyoming and Montana.
Normalized FFO for Q3 2024 was $47.6 million, or $0.43 per share, a 23% increase per share year-over-year, attributed to higher revenues and lower interest expenses.
Adjusted EBITDA increased to $83.3 million, up from $75.2 million in the prior year quarter.
Business Progress:
Notable revenue growth excluded the South Texas Family Residential Center due to its closure.
New management contracts with Hinds County, Mississippi, and Harris County, Texas contributed to a 39% increase in local revenue in the Safety and Community segments.
CoreCivic continues to focus on labor attraction and retention, improving operational and financial metrics post-COVID-19 staffing challenges.
Achieved a leverage target of 2.2x trailing 12-month adjusted EBITDA, reflecting disciplined cost management and sound financial strategies.
Opportunities:
CoreCivic has positioned itself to respond to potentially increased demand from ICE following recent policy changes and signaled intentions for expanding detention capacities, anticipating RFPs in early 2025 based on engagement through RFIs.
Continued strong relationship and new contract awards with the state of Montana as well as active discussions with several state and federal partners indicate potential growth and facility activations.
Risks:
The recent termination of contracts like the South Texas Family Residential Center and the California City Correctional Center could impact future revenue streams and operational scaling.
Uncertainties during the election year may delay procurements, affecting planned expansions and financial projections.
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