- Earnings call transcript Q3 2022

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Operator

Good day and welcome to the GEO Group Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Pablo Paez, Executive Vice President of Corporate Relations. Please go ahead.

Pablo Paez

operator. you, Thank and discussion everyone earnings for us joining Good the thank GEO today's of XXXX Group's for morning, you third results. quarter the Schlarb, Executive today Executive President Financial of us George Services; Board; GEO Black, of Jose and Care. Secure Ann With Officer; James Gordo, of Brian Officer; are Chief GEO Evans, President Chief Chairman Zoley, quarter This morning, outlook. our we will results discuss and our third

website This non-GAAP live A conclude will the Investor investors.geogroup.com. We press on the disclosure call webcast results also being reconciliation to release a will session. call we supplemental the basis is we conference question-and-answer information. our included discuss basis at Today, basis this in issued is and GAAP with non-GAAP information from morning.

will give Safe within answers we These may various laws. including Additionally, forward-looking and your our questions, to are the discuss in fall of forward-looking to expectations intended much we the statements regarding the current matters. securities Harbor statements include provisions beliefs information the response respect today, with of to

and please results materially turn our filings, a in reports. call from as the statements, factors forward-looking various Chairman, XX-K, of Executive that, to Zoley. over result Securities differ actual Form XX-Q the George and With Exchange our may including allow those Commission me in Our to X-K this contained George?

George Zoley

maturities our in debt the completion of all almost to the of balance joining Thank morning third pleased for everyone. recent stagger today our joined successful repayment business the on XXXX us remaining trends our our for financial the for quarter our of you, to guidance results our third segments, review good XXXX. due call. senior you year, quarter, our the our for and am be Pablo Thank management comprehensive by earnings and I previously to and including transaction debt to of the

units quarter. performance financial business during strong deliver continued diversified the third Our to operating and

revenues GAAP with quarterly to history, grew the approximately to along one million. of which year pleased income achieved have in We XX% quarterly our from net of highest million, are ago $XXX $XX one company's approximately

believe and new gains of net million, XX% by one-time our is high executed a performance diversified investment million, and business result support underpinned thoughtful more adjusted reached which of and all quarter, strong reported is nature year-over-year. adjusted Excluding We services, over we our the $XXX and time during with our our than EBITDA multiple of growing Board. of strategy from business years unit income the losses quarterly $XX the

exceeded year, a income the full to full attributable $XXX be we net expect $XXX million GEO which to has in year $XXX full of adjusted million. adjusted of million mark EBITDA balance be the $XXX expect we time approximately the million. And would XXXX year range to year at to in fiscal EBITDA Looking range of and of a our million, first $XXX

Prisons been associated policy strong impacted and achieve impacted have continued of growth entire contracts. COVID of segments through to this changes despite able the have which our Federal with We the some business federal primarily pandemic, that Bureau our year challenges

Enforcement. Marshals Leased Looking the agencies, of three historically Bureau current Owned Services each Customs comprise Prisons, at Federal been and segments, for of of with federal under and U.S. segment trends the Secure contract our in facilities our primarily U.S. the Immigrations has Service

rates experienced segment third points facilities compensated During increase X% quarter, to XX% the a active of of occupancy year-over-year our in capacity. in this

Correctional X,XXX at end previously Bureau contract Michigan we disclosed, of North September for Prisons the expired Lake in the Facility XXXX. bed our of As have with the

to facilities. Federal Prisons the As for have the end no we correctional of of secured quarter, longer third contracts the Bureau any

bed typically space U.S. alternatives where federal available. Service, facilities continued our Marshals and are stable. have needed courthouses for detention services areas, near federal We Turning Marshals to U.S. occupancy be suitable and to detention, across in pre-trial, not located believe the Marshals rates are U.S. facilities defendants our generally provide

Turning occupancy to during our ICE facilities, rates quarter. increased the modestly third

population Population orders court related facilities of operational outstanding remain at these ICE levels. below levels However, COVID full detaining impacted which by continue historical certain remain facilities. capacity to nationwide pandemic, the to federal the restrict

restrictions which In be under at addition, COVID-related March were place Title Southwest continued in first enacted XXXX border. today in to XX, of the

across continues XXXX utilization for ICE modest rates guidance Our only our in assume improvements facilities. to

supervision the Department of continued While to latest has detaining appearance called historical ISAP below XXX,XXX. of than participants. is Based the remain enroll data, individuals available ICE Intensive on in publicly and or enrolled number program Homeland populations the grown ISAP more to levels, Security's otherwise new has

the the Our funded at funding passed individuals federal continuing provides year's under year. previous BI subsidiary fiscal services with U.S. process. for resolution the through ensure With December ICE included of for to in to the funding government, resolution, ISAP is technology monitoring compliance suite funding continuing budget, late levels, consistent Congress and levels XX,XXX undergoing a respect of beds. immigration Under the contract which of the detention the September, a review middle full this

of primarily correctional facilities, Moving rates to of our our state managed-only occupancy in level relatively remain business the third comprised at which during managed-only capacity XXXX. is XX% quarter unchanged facilities

to correctional we and for address work for that, labor Correctional contract factors Services contracts with government a facility year was our term. the We mitigating of But five and contract and In contributed bed pleased South challenges. facilities. Secure beds been legislative have our West quarter, managed-only our state which Facility partners challenges focused two wage the for other agency correctional we term. state the remain segment. the successfully rehabilitation Bay we on to we difficult During inflation the across XXX and Florida, our for market in In are Phoenix COVID renewed pandemic, able a to Arizona, renewed Rehabilitation year renewed leaders a among has staffing our two X,XXX

several we additional have for frontline obtained efforts, funding states. to of employees increases wage result As these provide a across our

reentry business. Turning to services our

during agencies impacted day home were as pandemic, furloughs, governmental centers programs. and residential for COVID the alternatives, opted non-residential including Our reporting confinement

trends. we levels, rates encouraged While remain recent the are by historical our below occupancy

the third increase and occupancy capacity. centers sequential During points rates the five reentry XX% of we across experienced in quarter percentage of as ended our at the residential quarter,

reentry three five also We the Prisons. contracts renewed are contracts Federal with residential including successfully Bureau of

our interest senior in remaining we closing approximately debt debt for flow transactions, the loans and $XXX Additionally, the our XXXX strong non-residential throughout to quarter, during strengthened pre-tax the during a The the repaid segment day third of revenue our on of the mandates majority approximately million the performance the allow our transactions, grow to the our we transactions maturities by of our reduction. growth longer we maturities we third Electronic Centre million government-owned redeemed and sale million successfully of of And third consistent to robust Australia ability which $XX debt remaining period the address a reporting in equity will with the series towards year-over-year. which Correctional time throughout programs delivered stagger completed in of the increasing continue quarter. us proceeds. And to quarter. performance compensated Monitoring by The After use business notes. comprehensive our our our diversified $XXX Ravenhall in XXXX Supervision term year substantial also over year, excess cash allocate our XX% continue completed through investment

$X debt of important have result maturities position been billion outstanding from to financial of under below our to EBITDA billion approximately materially that X.X progress As leverage of approximately prior all goal stronger a end billion efforts. times, and the recourse $X.X net from we ago. reduced We less XXXX. believe reducing our $XX XXXX our of result below that our the made adjusted now substantial to a EBITDA to by we XXXX times to to as of We We've than able these $X three reduce X down years steps, just is million. debt adjusted believe GEO net these have total end by toward

and we to unlock of value. to have remain focused recourse our annually. the our efforts of that to flow leverage remain our achieve these shareholders. $XXX Once explore most of capital towards by We reducing on expect lose million cash debt additional we free equity options potential allocating to reduction stated forward, goals, net we optimistic debt return our meeting all goal further Going

care. lives those training diversity of of ESG human Before to related our programs, environmental report disclosures improving entrusted board month with to this we the Brian, governments publication over the report. call highlights to important another sustainability. oversight I respecting to I'd our annual includes rights achieved and turn and matters, milestone employee like our human and milestone This fourth our human to enhanced and The rights governance of the corporate highlight social continued commitment important environmental rights, the and

objectives, committed support dedicated, structure Our matters. to continue rehabilitation effort also providing our new to cybersecurity to recently our commitment through dedicated rehabilitation two another winning our to fourth criminal ESG an of advance GEO award In adding to board committed our oversee enhanced environmental report post-release committees. annual quarter enhanced and oversee care continue committees One, human ESG and by reinforces program. and sustainability rights; was justice and

our a this forward process, committed look we diverse continued our will detail. has a and with stakeholders incorporated Brian human and this external as remain report. in of to due future. rights additional I over call undertook interviews The process time, We group our result which and with other to assessment in advancing At diligence and diligence to due address initiatives organization ESG of engagement our our and risk from and throughout the more the we We stakeholders. feedback in also to guidance goals shareholders pursue Evans internal results financial been included ESG turn

Brian Evans

everyone. George, Thank good and you, morning,

GAAP reported attributable $XX third quarter XXXX, the to of approximately For million. income of we net GEO

quarter, our quarter debt, our share on investment completed our EBITDA as company. had to approximately history. debt million, for to $XXX Center interest of the related by also net is third reported XXXX onetime a gain in $X.XX a for in third the revenues And onetime on represents highest Adjusting these all the recently extinguishment adjusted items sale XX% had approximately for of third the and adjusted revenues equity During non-recurring our an $XXX our quarter of offsetting loss as per which increased high income which Ravenhall diluted And quarterly Australia. company's the we XXXX, the on expenses one we time of transactions. for EBITDA of quarterly the in million we of adjusted well

XXXX half results reminder, quarter debt a interest result completed our higher expense restructuring. a one of third and a As also our reflect of as months

Monitoring segment business, reentry non-residential facility. active increases in and Our to improvements by Electronic continues and overall occupancy strong growth in our in be driven our and in in mandates performance rates financial Supervision leased our owned compensated secure

comprehensively reducing to longer of closed ability the our of strengthened debt substantial maturities transactions, year we staggered of the which address throughout than completed growth through transactions our $XXX period maturities debt The time, closing. a significantly August. over series debt majority a to consistent maturities less near-term at Our our our successfully million in

$XX repay pretax Australia proceeds on loans. the in the of approximately transactions, million XXXX using equity Subsequent use our Following to investment we senior cash remaining and cash hand term we interest those the the outstanding sale we that, our million the Ravenhall $XXX closing redeemed $XXX with outstanding for in to of along our proceeds XXXX of remaining hand. of Center the available on notes completed gross available in million

$X maturing since of And reduction approximately net we reduced which As from $XX to all billion, these the prior our reduced XXXX. a outstanding of debt recourse we million, to to of $XXX million. XXXX $X approximately overall, result have our have beginning a debt billion steps, represents just

last a efforts our the focused for been that GEO believe our materially reducing stronger position. on and placed We three in have financial debt we years have

efforts, be be with end reduce performance to we the rate our XXXX annually. over current further explore return to After also our assets XXXX. options last we by debt million to $XXX below reduction, EBITDA and and two goal stated our additional of exploring value. have X.Xx by EBITDA to would end sell years. times to able of the our Assuming complement to our hope leverage rate, Xx To at equity adjusted to is financial our been decrease by shareholders and run to targets, the below debt remains At adjusted reduction to this of be expect consistent achieving able opportunities company-owned leverage debt unlock businesses our to capital

million interest the in of have in the and goal With Center, we totaling Ravenhall exceeding million proceeds. $XXX approximately completed between our sale $XXX our now equity in of $XXX sales previously investment articulated proceeds, million

year. the quarter of XXXX. balance full the morning, for for the guidance This guidance fourth we our the to Moving year updated our and

increased million quarterly of and to our $XXX $XX GEO $XXX to XXXX net quarter range $XXX a fourth $XXX on have million. million between million $XX quarter attributable income million and to to guidance be EBITDA adjusted of and our expect fourth We revenues we XXXX million

of interest Our our fourth XXXX beds of debt transactions. Facility X,XXX expense previously as announced quarter effective our BOP September XXXX guidance contract in for with non-renewal and higher reflects the completed Michigan XX, North the result a Lake

of million million. increased to diluted income our We full to range expect year of adjusted be we attributable $X.XX year or guidance approximately $XXX we a $XXX full items, have EBITDA range be full unusual million in million a adjusted between approximately XXXX $X.XX to expect year And income annual for net $X.XX revenues $XXX XXXX per GEO and non-occurring net to share. to on $XXX to billion. Adjusting of XXXX

the tax turn for approximately exclusive James any expect over effective year segment. At Secure for Services our call I'll We items. Black review XX%, discrete to of this Geo be time, to our the rate of a

James Black

Thank GEO on Services. update morning, Secure to everyone. provide It is Good you, my an Brian. pleasure

During facilities employees our milestones. the achieved important third several quarter XXXX, and of

perfect underwent achieved under the Secure Eight successfully Services Correctional XXX%. reviewed, an including Act. audits our received from government American audits, Prison Elimination and of during facilities average with accreditation two third-party those certifications and of Rape XX.X% XX score internal of facilities the Our facilities Association quarter score third a accreditations accreditation of the

facilities of several Justice Act, Department Rape received Elimination all areas. exceeding under facilities Services of these U.S. certification of our Prison Secure four the standards Additionally, with in

BOP the at end by the XXXX. to Every X,XXX excellence. federal September Lake the not division to divisions Correctional prior achieving at quarter important was our and several X.X transportation trends employees GTI underpinned North bed consistent Our which of in million expectations. level, milestones, United operational third in respect contract safely partners, miles commitment professionalism and with the completed Services during and impacting Michigan our our the dedication their With facilities the approximately quarter are government agency driven renewed for of overseas achieved of our Secure States the Facility our and XXXX

overcrowding a the enjoyed needed with high long the and have provided at have the agency support prison capacity We federal quality when to facilities partnership BOP services our address decade times across system.

years, was pandemic. and last trend COVID accelerated the during However, XX declined, over the BOP populations have this

with activation of Facility, the Correctional have our Secure under Services beds North XX,XXX we now that With idle were Lake BOP. six contract facilities, totaling approximately the previously

facilities We marketing important leased hope sell are assets government other we be state to the level. and to future. agencies on And these federal or reactivate, focused these to at able the in

criminal responsibility remained Marshal Services the federal U.S. U.S. Marshals our to facing stable several proceedings. years. over last facilities contract, at have have populations The Marshals custody Turning U.S. pretrial detention detainees for

a XX, contract XXXX. we recently received U.S. As the Service facility through quarter, our extension for noted beds last Diego San Marshal XXX September

resulting in other and current two that We pandemic. bed from space important detention utilization With provided courthouses, orders option and there's U.S. face XXXX the run several which With with Immigrations continued the the Service Enforcement, the respectively. to to federal through of Texas. regarding a ICE suitable operational optimistic continued related and have near direct needed generally lack Customs September believe facilities, services Marshal the to and Georgia we where contracts XXXX, February restrictions respect these facilities alternative U.S. of court COVID remain periods We capacity.

XXXX first implemented limits, mandated this to March XX, place court in Southwest of under at Title COVID-related border. in remain addition In the restrictions

modest the year's to respect federal detention populations With at rates for of government below levels continuing the agency, ICE continuing the funding provided this continue beds. well our of levels. December Under for current resolution end levels the of increase funding a facilities, the a experienced prior September, passed includes the at historical at in the detainee XX,XXX some recently year. in which be fiscal same funds ICE have which we Congress middle resolution, funded budget, through of the the to occupancy While U.S.

the to the to support quality processing fields, equipment, provide exercise providing The congressional to we counsel, will we focused centers covered services services appropriations care, leisure offer quality process and legal XX/X amenities monitor and access prepared culturally opportunities facilities to elections. our access government agency support We to And soccer registered on legal rooms, health at continue high respond faith needs. multipurpose ICE meals approved turf partner remain based our by after being including sensitive and access artificial where midterm enhanced to religious libraries. pavilions, dieticians, and

help centers available. amenities often in purpose fulfill key geographical country where special the with facilities, not important ICE are services processing areas an and alternatives of Our mission, built suitable

vacated over allows contracts our en government's detention Department cannot U.S. banc important the of We Security. California exert services the the are XX operations. State the U.S. the Circuit the for relief, and Civil detention Circuit private Ninth decision ruling federal en panel Law, therefore Ninth by States pleased to the in State favorable banc the has detention Court injunctive United relation banc and the of denied non-BOP the rule The made violation by centers. would a Constitution prohibited which ruling XX detention ICE the Law Court panel District a operation panel give had and contractors. in the facilities of GEO Appeals decisions of en California The XX California that AB by XX that by of in Clause, declaratory AB application have would Homeland support with decision recent power barring such State Court the AB request prior of of that processing California to of of the federal by Supremacy immigration for of California control This by over review virtual continuation

to continue state beds and entered our bed, government five on Arizona, Bay Moving contract renewed and partners, addressing for services GEO Phoenix state we only term. are religious South including agency of Care. Correctional rehabilitation behalf support XXX contract into contract year for all and to the our facility release for term. labor renewals a services rehabilitation Facility for result in on our facilities West facilities. government And to the we for high X,XXX partners, recently Both was Florida, was Rehabilitation correctional In a a manage two correctional a rehabilitation difficult Continuum of facing our our programs under market. Across state facilities, our enhanced deliver of we post focus renewed as year quality challenges the of agency and

executive We to and support staffing have wage across able address inflation. worked under partners, funding our our agency our to states. receive state government shortages contracts increases for to wage state we legislative branch closely have additional with leaders been and and several And employees

shortages. several and our to of at We and long-term management the continuing facilities the will we under contractor equity partners the state Ravenhall center, government initiatives, continue of presented by our sale Center level or operate investment the This interest are to in involve the not could challenges state which correctional Internationally, monitor cell older our prison agency does officer our of address recently completed we owned Australia. existing affect opportunities use are state of infrastructure in considering which contract. to purchase

COVID of efforts like the pandemic. address the to impact I'd to ongoing our briefly Finally, mitigate

implementation relatively will Schlarb strategies, mitigation time, levels guidance call remain While Ann we consistent by and Care. to Disease which are I with cases, low the Prevention. of of over turn the are for review for COVID Control vigilant the the of in latest GEO our experiencing this issued At Center currently a we

Ann Schlarb

on services experienced I'm business of and pleased unit. James, Care provide with to points. five reentry increase meaningful centers everyone. residential you, an sequential GEO update segment, a occupancy Thank our in percentage our good our Starting rates morning,

residential and occupancy population at historical facilities, continued However, reentry our levels XX%. well active to be stands our below across

to confinement, we recent have throughout as rates. been government existing are the impacted we monitoring alternatives agencies have continued Our our and challenges, day pandemic, programs. the residential Despite COVID have renew home encouraged electronic including successfully trends furloughs, centers prioritized reentry by occupancy and these contracts in reporting non-residential

During renewed the Bureau third quarter, contracts, of residential including we contracts reentry five Prisons. the Federal three with

in decision Bo occupancy we quarter, some Robinson in of the our New also at rates resulted which During residential made to facility, consolidate populations the our facility. discontinuation our a Jersey, Harbor reentry but of our increased

evaluating optimize residential occupancy order our continually utilization to are in the reentry We of assets. trends

dedication an Additionally, Seven nine average centers XXX%. of of eight and recently accreditation XX.X% of all U.S. milestones daily very standards frontline with whom scores our of our from proud received perfect the that exceeding Prison very centers are in of reentry received our American important residential Rape facilities of Act under Department nine areas. These accreditation Justice of with these the residential the centers, grateful. received the we the Certification are of results we several employees reentry commitment Correctional for Association score Elimination are and

Looking growth and with at during programs continue experience reentry Compensated $XX by non-residential business mandates year-over-year services, increased XX% quarter. million. topping third quarterly to the strong now for our non-residential revenues our we

Monitoring also increasing during with Electronic approximately deliver to strong growth $XXX revenue quarterly million. to rate continued segment third revenue run Supervision the Our our quarter and

the or local behalf July and services At management, technology provider Our agencies BI service compliance Homeland Electronic Supervision the Appearance a solutions, full federal, country. XXXX. five through been the holistic and contract, Intensive services behalf ICE incumbent federal and monitoring of level, and BI across technologies since solutions, under ISAP on provides and subsidiary on Department these ISAP Supervision XXXX, effective Security. of delivering are and of state currently has comprehensive U.S. under Program the suite supervision, under we year Monitoring and of the BI products provides of case a

immigration has the enrolled participants number of Over publicly the on of Under process. Based XXX,XXX. available the exceeds individuals achieved the for ISAP going ISAP of growth tenure, program beginning high has review grown and compliance ISAP this XXXX, steadily, BI's the through data, has latest program years, in since the levels accelerated. the

and rate ISAP of XXXX, and case the of ISAP the participants between instance, to their of with XX.X% by success our all under immigration attended August the believe of May required hearings. We high meetings innovate. of ability For participants attended court required is continually specialists, BI's and program underpinned the ICE ISAP partnership XX.X% with that XXXX

solutions, the Our from program enhance was technologies partners team potential justice hosted our management services innovative issued contract working year, to edge for in Technology criminal Training is wrist and annual technology worn cutting at of different to case drive Earlier our hundreds ranging BI device. provider. solutions has showcase BI constantly for component where this immigration young customer respect delivery new agency case services. both on the monitoring recent to the awarded new at by government this additional new With to XX,XXX this a a and growth technology approximately for opportunities monitoring for service state-of-the-art BI forum, adults, management we and related with of ICE We believe the no space. procurement that

approximately Continuum in of employees rehabilitation, division, services GEO programming, an our to participants. to daily release and our enhanced support of to population reentry continued Turning custody deliver Care XX,XXX have average post

Our including that address enhanced of release relief housing, and with support behavioral Continuum needs of employment custody individuals, assistance. integrates food, community Care GEO rehabilitation, clothing, transportation services cognitive post in including treatment,

grants total $XXX,XXX providing since support on spending from return began to allocated they communities. to our the than post release During with services it over support $X.X support as their can how we the GEO brings GEO XXXX community for expenses needs. their This the released U.S. XXXX, the post of justice facilities proven changing released to third the million, our better to Continuum of million and more funding and model individuals in is X.X system individuals release quarter lives. scope believe provides a in on assist We be criminal that people Program winning of served award unparalleled. them Care And their substance

care mitigation call GEO to guidance the CDC. return closing to steps time, our continue Jose are the issued the programs implementing I'll at this And focus that for facilities Finally, latest COVID remarks. and consistent by Gordo with on

Jose Gordo

our the a operational top units Our business and in achieve all strong us time continued one milestones robust quarterly revenues new adjusted diversified have EBITDA. deliver third and This of new important financial during allowed achieve to quarterly top-line performance quarter. high to a and results highest

efforts year, transactions throughout consistently our entire overall to Our sell strong complete a net successfully transactions to position with maturities. our performance able debt allowed management further of remaining our majority to comprehensive These have the to address us debt non-core approximately have to and our reduce the series debt this team assets into coupled be our future. of substantial maturities to recourse billion staggered $X out

our from Importantly, and $XX we now near-term have outstanding between significantly billion maturities reduced $X do approximately XXXX. debt in to remaining just million

believe now position. stronger As a a in result financial GEO of these materially efforts, we is

explore options return shareholders years, While to is be our to net hope to shareholders. to for our on unlock reducing we our continue capital to earliest value that all additional time. focus these our recourse the next two able equity possible at will debt We and net the leverage hope efforts over

segments. with the continued are pleased business We our growth across

with for additional industries. And and address However, funding working we across partners inflation proactively diverse we also the support wage difficult increases several government secure recognize a for states. closely to challenges posing have are across these our challenge wage our companies staffing to shortages employees agency

high facilities for employees our who and to programs. services compassionate grateful quality on of behalf are to provide partners, entrusted and agency of our all to sacrifices government the those and dedication care safe and We commitment deliver daily continued make frontline our

solutions. units sets industry. company-owned and to diversified assets that and GEO and by strong units, real these which our from supported business valuable be operational and are continued based government community believe will business diversified We That services, flows underpinned we financial remarks questions. take cash in completes performance, by our estate entailing is our apart glad ranging secure essential Our residential technology to care

Operator

Joe [Operator today with Instructions] The Gomes comes first Noble ahead. go from Capital. Please question

Joe Gomes

color start trying at detail Just get they're really with that renewed additional Again wanted an Partners. that off BI to even maybe more with BI a agreement Also as really could an growth the OMNIA growth. they to today. positive mean little saw business? strong possibly And recently just what for to numbers

Ann Schlarb

question. Thank This OMNIA now. your you for years Partners we've for contract several had and our is Ann with

stated, provide through renewal. platform And to contracting this that was use in justice as you So our technology market that platform. services BI a services customers the allows to individuals that as criminal

So, the can that with to the grow that that through through pricing we negotiated. platform set we continue contract

Joe Gomes

to gears ICE. Switching

talked You it. little about bit a

if roughly Now to end daily from the populations, at XX,XXX look ICE by XX,XXX I they've September grown of year. earlier the the about in

are on on of guys Just Any we finally thoughts Where minimums? reaching think of might and exceeding Title XX rescinded? that may hopefully we do you or be increase seeing? some when contract you that have wondering, much how the stand

Jose Gordo

We space. so the XX facilities insight to in our be unique Title during don't significant any rescinded, quarter. the border fourth during have the third but the those a have was we growth southern particularly ICE steady modest may occupancies, occupancy seen quarter, in seen we far. quarter fairly fourth in But in when more more have in increase as It

Joe Gomes

minimums? comment exceeding when Any of contract be might some you on your

Jose Gordo

at time. No. this Not

Joe Gomes

Okay.

that sale any from here Is of there impact Okay. interest statement be equity the on need to the aware we of? the Ravenhall financial

Brian Evans

million an modest The it's it's release, and in earnings. and earnings between the impact in the think income amount. $X revenue million the is then in going forward, think that's reported is gain-on-sale the statement. impact in $X -- pretax year line annual income I Well, there And net to a probably I the a the

Joe Gomes

you color. that for Thank Okay.

because -- the have idle had talked idle On BOP here, partly facilities, some the a non-renewals we of we've the side. beds on lot

XX,XXX. Your idle beds exceeding now are

But see color trying those to to difficult for going in as better trying top-line. it's to be again more some these and of little when are feel of of we terms actually those, a how interested back parties other might the get how are Just online in I how just facilities, in project. some to able contributing marketing get know facilities? in the parties, to a negotiations little other or

Jose Gordo

in than election, and an organizations less Well, quarter given fourth from new contract weeks projects. we deferring results year election of usually are two any federal the state

first the early decisions quarter. any until expect would possibly I So, year new next

Joe Gomes

And the legal anything dealing just may then out more I significant with the today? the in legal that a there that legal are you're -- else one on. if win -- pass I'll front in anything and side wondering, big Obviously, in there there on California, Okay. is is it

Jose Gordo

known I as by several the volunteer in that in a work Congress day. there's ICE is which in establishes to the program in litigation established $X contract, which regarding per think is facilities compensation, it's publicly Well, we're And the states. challenge

plaintiffs states And some are minimum that asking for challenging are the challenging state and some that wage.

on in that we're So litigation matter.

Joe Gomes

continue to guys the here Again, Thank the on in I'll cover the quarter, back knock very impressive. ball queue. congrats off And operationally, get you you.

Operator

comes The ahead. next Please Ramgopal Sidoti. question Mitra go from with

Mitra Ramgopal

nice obviously of First, also tight the market a this with. difficulty margin the have more wondering But specific I companies on to cost side you're operating margin on top improvement to help margins terms just I was labor A touch is line. especially thing it environment on and in the the really that quarter, having to just given the want help improvement? able do improve lot side, of

Jose Gordo

-- state. don't. haven't Department federal business usually a federal higher level, dividing periodically we by really adjusted At the the recruitment, with we and Well, compensation the and of problems level, Labor. had at in And federal is it's because our facilities between

compensation. the the our because to ask as the almost, are state from So, with recessions, for high the pretty we historically problems legislatures situation level, to vacancy we're their But along rates. labor funding, and insulated state same the at gone They requests. you in clients are know, regarding have additional with or

requests, similar made they've been we've and approved. So,

able both is still fairly clients we've our although, wages process, on and labor to state be because it but and may facilities continuous as facilities. tight, simultaneously encouraged progressively; at to faces, ours, this we've at the the their success staggered compensation step a been a as much increase step behalf market very of increase well our state state occurred by correctional we, the by on So, been that's because

Mitra Ramgopal

the not be able noticeable ability to the change to I And in increase any wages, turnover? seeing you're think

Jose Gordo

increase greater stability you the turnover reduces in labor the wages, Well, the as there's force.

Mitra Ramgopal

facilities, you still ICE terms impact the occupancy an having the of there. Regarding mentioned restrictions COVID in

restrictions lifted? ultimately hearing front you're these might as if anything curious, to get Just when that on

Jose Gordo

to in a restrictions several any be the for don't been there hasn't COVID balance change change now expect and There months we year. the the for of

happens So next year. we'll see what

Mitra Ramgopal

business related if technology? applications, come renewal, the and on increased the board adopt you in have back to accelerating on just given technology Do and of this tracking curious, terms willing omni the then you maybe the etc. now parties capabilities smartphone as think it you're that a even BI GPS I And has coming seeing chance more growth just believe the things like of

Ann Schlarb

technology. can I agencies use out straight them bid, think could it The the for they another to vehicle go using this things put procurement or vehicle. to allows to

managing access as do how looking that the services have products they're So the to looking it them expand suite I customer, at allows and we and for. their population. they're it avenue diversity, technology another of more them think gives our that to But to

Mitra Ramgopal

strong nice, highlighted And like as etc., then the and clearly, XXXX, revenue year a top restructuring made this to look you the extending EBITDA terms significant the the on adjusted we metrics has the out rate, of run themes maturity, but level, seeing of been etc. very of progress you've in we're even the really debt, some

do for unknown, as what look you an seems to still but to out you is because headwind Obviously, terms of you can As in control? the environment XXXX, just much maybe is sort the what political everything very you, like, here? see together it starting of like come biggest

Jose Gordo

idle improvement either I our facilities. organizations. see opportunities opportunities in our really federal I see next year, for and see facilities improvement I headwinds. in see for state continued big And our any our occupancy by levels federal or big state don't reengagement continued I wages. see of I actually.

Operator

comes Wedbush. McCanless The go next question ahead. Jay Please with from

Jay McCanless

of around would into by couple federal be of the mostly the kind or questions growth a rapid Just states electronic any you've driven a as level of collection that Is insight appreciated? monitoring seen there. and growth that

Jose Gordo

level. the is attributed to it federal of Most

Jay McCanless

is see to you going have to step function going we'll you're expect forward And sign do in it of higher going the same of another this to contracts or see revenues? kind the kind set to of increase

James Black

had the guaranteed growth, of on accelerated and really, those has contracts there's there's contracts it or no any I recent the contract minimums caps the no mean, so maximums. Yes,

down So the as the sees fit. contracts can go customer expand or

contracts it have of been utilized the high have at Fortunately, recently, and and the has most customers and significantly. expanded most historically, them a level these customer federal continued to expand

that her the at think they out, believe create additional some device going for technology are Ann I forward. new borne technology rolling developing their and we the that introduced said risk forum opportunities is as also comments, in and we there will Company

Jose Gordo

But steady level. our forecast assumes

James Black

our Current additive to run rate right would now, any -- increase be forecast. significant

Jose Gordo

for that And in call for update Yes. next XXXX. the conference our we'll

Operator

Kirk The go next Capital. with comes Please from Ludtke ahead. question Imperial

Kirk Ludtke

the Hello, exchange Congratulations on quarter. everyone. the in

Just respect to XX,XXX is has the get occupancy? beds of funding just federal budget, for a this constraint follow ups. sense risks With couple ICE trying the better for funded mentioned I'm ICE at a you been through mid-December. a And surrounding to ever that funding. curious, I'm

Jose Gordo

I and December, reveal XX,XXX But line funds for funding beds, approximately funding the the through are the which Department prior detention that their In believe publicly from line occupancy that often past, items funding within for borrow Homeland present and that year current at is to their item XX,XXX. of Security, as is same the believe. ICE the available had levels the authorized they I of the is which exceeded have other level

Kirk Ludtke

you. Thank it. Got That's helpful.

Jose Gordo

funding, carry to have they their have to the able them year. those exceeded levels through to when obtain even additional been So, -- for carry they occupancy funding

Kirk Ludtke

sense. makes respect do that with there think reason That inversely population are it. there the versus is population, any to think to ICE is -- you these Got the And ISAP correlated?

Jose Gordo

No.

of nature in is program, That's detention, quarter totally both we they the program growth have in the a The actually. areas fourth this ISAP but growth steady are quarter, I of this think totally fourth obviously. seen separate. partial separate, program in of lieu

Kirk Ludtke

Got both. time we it. This the where maybe is first have seen

Jose Gordo

year, yes. this For

Kirk Ludtke

change, you. ICE population it. staffing with there say about to went pre Got And Thank COVID you levels? anything can would is how respect back the to staffing, if

Jose Gordo

change the if would that minimum staffing for facility. we the not much, essentially require majority, not because have It these guarantees the entire

Kirk Ludtke

the on show on then you maintenance covenants credits those And supplement. that couple of ones, financial the availability right? him revolving just and reflects two a That minor the agreements, the

Jose Gordo

fully available. that's Yes,

Kirk Ludtke

And then and lastly, not through to XXXX, a think feeling in what bit. us time? help government thinking means, debt out a raised Can is the you shutdown that the

Jose Gordo

service. and considered we it the Well, not in us past, we've had affected has government because government shutdowns essential are an

remain open. our So facilities

and a when from is receive remain services ongoing standpoint. budget reestablished eventually Our government we payment the

Kirk Ludtke

Right.

So, I'm it's that on. the part focused last

government payments delayed? delayed Your from payments federal the your be are -- would

Brian Evans

delays experienced they That's longer pretty mean, shuts long government They has once in to catch that we've the you're it's up if can on no as down. delay relatively be George how There'll some be. past. issue short, going the have I it's but main usually really the impact. a said, then to it's some day. quick payments, in depends If back

George Zoley

occurred. one would has payments to have the so arrears, never usually in are our month, which a than more be Because shutdown month

Kirk Ludtke

happened. never That’s

Okay, all that's need. I

Operator

This Zoley, for any George to GEO concludes our remarks. question answer Executive the closing over session. I Chairman back would like for to conference turn

George Zoley

very call. conference you. joining you look addressing call. We you to this us Thank next much in Thank for Okay. on our

Operator

Thank attending The presentation. for conference today's you is now concluded.

disconnect. now may You

The GEO Group, Inc. (GEO) 27 Oct 222022 Q3 Earnings call transcript