GEO - Earnings call 4 2023 | The GEO Group, Inc.

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Operator

Good day, and welcome to the GEO Group Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]. Please note, today's 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, Full for us joining XXXX Good the thank GEO today's of results. and Group's for earnings morning, you Fourth Year Quarter Board; Zoley, With Services. are Chief GEO and Operating Acting Wayne Executive James Brian March, and Evans, Shayn Financial Chairman Calabrese, us President Chief George Secure of Chief today Officer; Black, Officer; Executive of the Officer; President will outlook. year we morning, results discuss our well as quarter full This our and as fourth

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

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

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

George Zoley

March, on joining team, today Black. Acting Secure Wayne President you, Chief fourth to by Operating President of James new Thank for management GEO reorganized Calabrese, Thank our XXXX us Evans, along Brian new our newly our senior including Officer, our morning earnings new Pablo, Chief and with I'm CEO, our Financial good quarter Officer, Shayn you our Services call. and joined and everyone.

long are their to the been each with Wayne they company Shayn Brian, positions have time. and a While new

deleverage our a each operational call, our XXXX we business fourth our review in includes annual financial for discuss to ongoing discussions results budget range efforts the and an for to guidance related our balance update financial assumptions Congress. today's primarily of federal milestones of segments, debt recap sheet of continued for our and During the which initial XXXX, provide will quarter reduce

fourth diversified to strong million $XXX GAAP operational our business morning, quarter income 'XX million. approximately of This the of financial net reported During performance. XXXX, continued fourth $XX deliver of units and we approximately revenues quarter and

We approximately the of also sequential reported quarter which increase from $XXX represents EBITDA of X% XXXX. of fourth quarter 'XX a adjusted million, third

Facility, X our California, Marshall U.S. owned secure associated business company contracts ICE our quarter, at renewed fourth provision the level. Processing Center Colorado, In a Aurora In with our renewed we X,XXX-bed the Services ICE contract X-year Security department. important unit support which term. contract the the state Mexico federal the of facility of renewed secure for support During with for for with County for for Mexico agreement and is term. at services we renewal the detention lease provision XXX-bed a government-owned X-year of Correctional state the by Guadalupe the company-owned New services a level, our X-year of Centro XXX-bed received we our the New Corrections managed El At

during renewed the residential contracts federal XXXX. reentry Reentry and state quarter X division GEO our center levels of Additionally, Services at fourth the

in across third new activated public health Australia, Victoria ICE, due state operation the the provide quarter in for segment XXXX. activated which new quarter our care Transportation XXXX. Secured Looking air the increase in was of trends, international a third contract in in our in our XXXX transportation also The deliver results our fourth primarily was driven contract revenues. at services in our which and quarterly Internationally, prisons was key of in increase support revenues the increase to to revenues quarter reflect to by secure segment was year-over-year our our of

increased year, during over remained Processing short-term a estimate supplemental stable Moving our resolution census on across quarter appropriations ICE approximately our twice bill, XXX,XXX been populations approximately XX,XXX group by under facilities which expire set the stable the to Intensive and nationwide, counts ongoing XXXX end currently populations to across we Last and XX% has proposed the ICE of ISAP The week, uncertain. of Senators to just is continues outcome the is approximately budget a or XX,XXX. funded current daily individuals. of October Security extended the of and budgetary Since federal relatively a With additional that to have and respect in the XXXX. facilities remain beds. government's at in believe U.S. pressures continuing the timing fourth X. all Homeland I Average have ICE. March ICE centers which released remains relatively X, discussions Currently, of ICE that Department Supervision face participant federal XXX,XXX Since participant quarter and count Program, Appearance funding the range in We during it's ISAP, fourth security. for of to border a approximately $XXX,XXX. included Congress of

ICE funding However, full an increase from XX,XXX bill beds level for XX,XXX down was current the for detention the beds. The voted beds, that which have bill provided of Senate. by XX,XXX funding represents

programs or continuing have current is agreement Congress under increased an to alternatives the continue package approximately to unable government would federal of prospect March the X, government to prior million. of shutdown. the from level annual be funding bill detention If appropriations on resolution funding face funded reach billion for a could $X.X $XXX to the the to Additionally,

assumptions initial with detail. and more for Given which Brian discuss uncertainty, will guidance in XXXX, our Shayn a provided have range we this of

are a decisions As government. we to of the have expressed provider funding to GEO's the control levels federal federal as past, outside in you policies related service and related to

DHS behalf and of While will on our appropriations process, our monitor to all high-quality of we ICE continue providing on clients. remains services congressional the focus

continues debt remain net with we to $X.X ended in also debt, XXXX, for our billion We reducing a priority reduction strategic our debt. options capital and In I the than towards return balance deleverage net turn shareholders over and sheet approximately by debt our our company. explore total new the less our will position net focused to represents now to to progress be Brian on reduced future. the call which our The objective GEO $XXX in substantial year to Evans. CEO, to

Brian Evans

everyone. George. Thank you, Good morning,

join for prior execute continue of George our it the pleasure CEO to CFO team our as together As is strategic priorities. the and new to XX and my company's management senior we work to years, capacity

by diversified our Our platform. services continued of and the steady financial performance underpinned strength is

our to of and have team opportunities disciplined diversification and has strength strategy us a has the XX to growth and Over allowed and And We believe years, through and of as company Board steady strategic acquisitions this financial GEO a strategy positioned that leading the investment industry. our results management challenging our through this assets. businesses our operational organically services past diversified grow both in deliver implemented provider diversified pursue periods.

several in able our and the increases with transportation able segments, offset residential the to with monitoring were reentry Over XXXX contract our our revenues growth and and we loss monitoring from were course services our our of international XXXX, revenues. secure of including in in in COVID pandemic, revenues in secure of program. the segment offset XXXX, Similarly, of nonresidential services supervision community-based electronic declines electronic to increases we and And our in with and Bureau diversified Prisons declines our we businesses. offset

the our approach we to As the we are initial taking federal financial ongoing a in XXXX, we look timing prudent discussions that the of Congress. surrounding uncertainty and budget believe forward guidance given to outcome

specifically, services. While is and contract and solutions, technologies under federal, positioned provider to bipartisan to continue bed provided ICE. spectrum the funding law electronic and a U.S. and of additional decisions successfully largest program. BI support and management agencies which related support achieving going give ICE services and services policies forward. to respect of GEO to are solutions as out enforcement Marshall management compliance of with high provider federal control, case years, over with services, electronic monitoring we monitoring ICE company transportation, is for sole support platform services of capacity, the to we the time related BI monitoring are has advantage to state the the competitive built unparalleled XX a this local electronic has believe of will With including GEO ICF Over a solutions case frame, and to what anticipate we technology levels BI ISAP of an secure

utilization of to ISAP all our potentially or to provider of electronic to BI ICE contract, agency under generate beds guidance. a assist detention count the should of has SAP. significant the increase necessary in sole Future monitoring ISAP further increases the the utilization participant the in current ICE As resources decide could increases our services upside

which management approximately remains our and our X,XXX new our also our in Additionally, focus managed-only cash last objectives our annualized the care any of Operationally, beds, service total primary on secure ICE winning support any contracts contract reactivated. reactivation new daily and year. all our additional and from similar new operations facilities, fully We remaining upside flows activated to across could operational provide for could subcontract transportation excellence achieving health Australia, Air revenues to potential secure meaningful see also if upside of idle services we lines. which

our who frontline the our of enhance and employees team facility of focused fulfill value help every and capital From to this our long-term We leadership company is year. for standpoint, disciplined are a proud our dedication the objective corporate on of management our strategic allocation shareholders. regional

deleveraging For have and the focused progress and on reducing made significant we years, sheet objective. debt, this towards past our balance X have our we

sale Historically, residential uses. more that usually these centers sale urban in rationale can than been based in of repurposed alternative complemented reentry areas assets. and million This the reentry have are $XXX resulted typically on in focused that be the have fact residential assets located We of proceeds. have select has the with for we on efforts

result a these buyers. a pool As larger factors, interested potential often of see of we

create federal more under to a traditional important therefore, of underutilized company sold. a With facilities, assets Going reactivated. secure focused by to local to either idle long-term we idle that be reactivation, as our our explore value these and or either being create can value more we company our for have secure may, reentry that can believe contract sales previously facilities additional state services if marketing respect We for arrangement. are for services are lease forward, they on expect agencies facilities stated, we or these and

sale However, some larger reflects of that we if assets may their the believe that, adequately price value. also consider we sale of these

solutions sector potential developed have could across to we address As we a sector areas our with we used existing to agencies. of spectrum to clients provide also be growth. the private government our or new We execute government explore expertise government broad that with to services priorities, strategic expect continue of public either challenges believe new

and which that is goal positioning cash cash review shareholders, predictable continue and to nature attractive our earnings more predictable consistently At diversified We return our strengthen in allocate create debt proposition will we services overarching over this call value sustainably as and capital to detail. to strong March, our to platform, time, results toward already the and and to to the Our acting reducing of investors. for company will flows. our delivers capital flows believe financial our turn guidance an I Shayn CFO,

Shayn March

Today, we Good and quarter income $XXX $XX GAAP Brian. revenues XXXX approximately of fourth everyone. million net morning, you, quarterly approximately million. of Thank reported

million. XXXX adjusted quarter EBITDA of fourth reported $XXX approximately also We

ICE each at segments from X segments, subcontract increased secured ago, primarily fourth result nonresidential reentry segment were GEO fourth of revenue and was transportation approximately in care increased XXXX managed-only from by XX% XXXX year fourth was related participation population services Victoria, support X to our revenue increased year-over-year approximately health at a our increases driven Reentry in for and XX% our compared year higher quarter ISAP by international our as from quarter contract centers by leased new for secure offset lower facilities Australia, Fourth driven our to These fourth X% This the for our new increased our supervision revenues by with air respectively. XXXX increase programs of owned provide services Looking residential increase, our and ago. of of quarter revenues in the XX% Services segment from revenues revenues by contract of respectively. experiencing the reentry during under in revenues our an Further, XXXX. also and electronic a monitoring lower our increase ICE quarter quarter counts the and [indiscernible] quarter XXXX which income.

the to XXXX. a reflect year-over-year XXXX expense of year repayment as to interest also quarter higher net income as Our to decrease interest fourth results fourth in compared well debt quarter due the throughout due

Our effective was approximately of XXXX rate fourth quarter XX%. for tax the

guidance our Moving to for XXXX.

the and forced reported in to which under will does result million timing to of if As that detention additional news immigration of uncertain. it contract and scale discussed, and remains in a reported the be number operations budget of in Brian we receive budgetary that have $XXX Recent continues a a ICE The alternative-to-detention being and George under monitored face not beds back could federal agency's deficit outcome pressures reduction Congress budget funding. noncitizens programs, the ICE facing budget believe discussions includes ISAP. reduction ongoing deficit that is articles

to long-term order funding budget address addressed Although agency's deficit will we will its Congress, be motor needs remain avoided a deal hopeful to we the be the have obligations. whether no in that shortfall with by way to reported predict

guidance range of result, incorporates XXXX assumptions. a As a our financial for

year range million of be $XXX revenues approximately on the expect XX% GAAP discrete million exclusive to effective approximately any $X.X in $XXX income of of an annual of we full net XXXX, tax For rate items. billion to and the

assumes EBITDA XXXX under and to respect and stable centers full guidance between ISAP to assumptions, our the ICE million. our Processing stable our year midpoint of expect $XXX adjusted With in the million across accounts participant We populations contract. $XXX be our

decreased the On monitoring and ongoing discussions of be of some the throughout our center under our continue services low and assumes ICE beds end pressures both year that the result contract. the Processing budget and ISAP electronic delayed moderate budgetary to range, guidance utilization

contract assumes high end our ICE guidance additional of be funding the moderate year. ISAP range, should the and On utilization beds for Center some the electronic monitoring increase only of under during in appropriated this Processing services ICE fiscal the

revenues range quarter to For the a $XXX expect range income XXXX, of in we $XX be net $XX million million GAAP to million in the quarterly first million. of to and $XXX

the the impact quarter million fourth having range to to quarter EBITDA adjusted million. in to fewer in be quarter. first We first reflects XXXX day the our Compared XXXX, expect $XXX guidance of $XXX quarter of XXXX X

taxes, the is we quarter the to previously as of of first our addressed, each payroll which costs by year. related in front have higher impacted Additionally, beginning are year loaded

Moving structure. to our capital

XXXX, total than net total towards our debt reduced our of which the net debt billion, approximately million. balance sheet. of represents goal less year During reducing with deleveraging debt by we $XXX progress our net $X.X We ended and substantial stated

total million Going approximately objective continue forward, XXXX. the is year, debt approximately of which our to by reducing bring $X.X our by $XXX million debt to per our to billion would net end $XXX

the debt. would and decrease, interest be levels to rates reduce is floating Approximately further annual could X/X our that ability rates enhance expect months, interest based reduce stabilize, free our on we to XX used would debt. of which our our of net Over further overall increase bolster flow to potentially rates cash next debt our

take to our portions of debt. additional expect steps we XXXX, in some refinance Finally, to

notes deck that refinanced X banking of remaining the in $XXX into interest which were revolving our The of will of in revolver and facility, which week, clearing from of remaining step, the we tranches refinancing dates maturity million a our to $XX we new had of relationships different March past credit mature October a with we combined strong senior debt banks. maturities is partners our Earlier successful announced XXXX, our revolver, redemption first significant of also As million December, XXXX. the received this due indicative this now XXXX. prior the the any

and believe potentially our our first of addressing that loans, these time. up flexibility At over notes. this Secure and that to in shareholders now GEO the our cost remain return debt for future. the which hope covenants debt under freeing for value will expensive review will call Services capital, XXXX interest Black debt, well refinancing reduce more our our enhance focus to capital allow We James our our to flow annual for over a reducing to convertible capital to will as savings the free term the achieve efforts within Our turn most us XXXX lien sheet focus options explore cash will time, on as agreements shift of overall gain shareholders segment. balance our the return We to delevering our I of potential cost

James Black

Thank It you, is milestones review Shayn. Secure Services. for morning, everyone. my to GEO Good pleasure the annual

with contracts, federal secure the Marshall. services XXXX, renewed the U.S. During level at and contracts XX we XX ICE including

During the reviews, Act received Wells services internal an the also of Prison XX.X%, including Elimination received Correctional and accreditation XX secure accreditations or facilities of from of audits, precertification. successfully American score total government facilities year, underwent facility Secure another and our Rape with average a audits, XXX our third-party Services precertifications. is Association

Amey approximately Our United driven division during States miles U.K. GTI year. and Transportation and joint completed our venture GEO XX the million the in U.K. the

Moving to our current stable facilities at remained Marshall our throughout government for detention agency XXXX. partners. populations the U.S. level, federal At trends

Our residential a U.S. there its services Central Marshall detention U.S. with we the country our courthouses, Marshall needed quarter, support believe custodial Marshall for generally of renewed alternative detainees contract government-owned facing the that mission suitable services capacity. agency In in support facilities pretrial the around term. a carries providing where the to facility our fourth space XXX-bed federal is X-year detention their U.S. criminal the provide facilities lack federal it for secure [indiscernible] proceeding. bed out of for as provide We

our in XXXX. ICE during most steady populations of fourth experienced increase XX% to Moving And ICE an recently, saw the we throughout a Processing Centers. increase XXXX. We quarter

the contract secure provision residential in ICE our renewed bed with fourth services Aurora of Processing for support Center the related we Colorado. ICE also During X,XXX and quarter, the

task includes funding Processing a that representing orders court ICE injunction we quarter, from motions intake allowing litigation the over positive the to for of these XXXX, XXX COVID-related that December of the in to we we review I Adelanto what awards. ICE prevent facility Adelanto be previously contract resumption in XX, this the and a filed to these of at June launched effect the Additionally, following disclosed Subsequent only intervene XXXX, and through unions past the our time facility. received X injunction XXXX, motions, February GEO use extended the employees January XX, additional a order Center XXXX, vacate facility. contract this of In as as COVID-related through outdated ICE will at of of outcome full hope funding

federal process. ICE through the funded Moving beds, levels a March ICE X. ICE XX,XXX. for present to the to currently under continuing appropriations and funding at of estimate beds The is that resolution census XX,XXX current be ICE approximately detention provides short-term runs we active detention

As federal funded if Congress previously is package no resolution prior could on to a the or the face government March government noted, an agreement shutdown. continuing reached again of prospect X, in appropriations be under a

As have those and timing over congressional service federal no a or in the decisions, play the of provider appropriations we establishment decisions no or policies. immigration long-standing role to government, of the control federal implementation

quality additional ICE stand remains support ready with we needs. any focus Our highest providing and on services, the to

needed GEO-contracted we has suited a Centers. services resources access long-standing support at services. professional delivering of GEO-contracted total ICE's a quality ICE and a ICE that centers needs. support ICE the X,XXX health mission. to agency's meet behalf record Processing offer the have well at around-the-clock And to Processing ancillary facilities have GEO care additional to of We track to provide of the services we beds believe are number expertise on

and libraries are to daily appropriate centers diet have centers resources, ICE generally access provide and centers health health GEO-contracted that ICE full sensitive, is meetings facility. registered in the and legal legal care at counsel. X correctional ICE double residents meals and culturally each Processing offer contracted a we where of GEO provide state health and more with staffing special typical accommodate dietitians. dedicated space care by counsel approved center to than ICE to staff legal care we Our Processing number resident Processing

contracted provide with we religious volunteers access partner also access of also as opportunities to ICE GEO ensure incentives faith ICE needed Processing faith-based activities. And Processing, representation GEO-contracted denominations. and fair to cetera. at and quality et offer recreational We to each community various

and amenities We have investment covered in soccer these artificial fields, exercise a enhanced room. multipurpose centers, the made turf at significant pavilions, equipment including

air have Processing the XX operation primarily of provided ICE our ICE for centers transportation well. Transportation in and ICE, historically We GEO for GTI began services division also secure XXXX, secure at as support contracted providing

our to government partners. Moving agency state

During Commonwealth New operated Mexico by Virginia our correction Correctional department. County with the received quarter, transition renewal fourth state-owned our agreement Correctional company-owned which managed Center XXX-bed notified In of management August we Guadalupe of will is Mexico bed the Corrections state the we New for by were lease the a the of the and for X-year Department that XXXX. Lawrenceville December, to of Virginia X,XXX in of the Facility,

We and partnership have we successful Virginia of to working smooth agency ensure closely with a transition. to committed Department are Corrections with had a the the

to our residential health care services across activated XXXX respect as new state deliver Australia July markets, we previously of the in prisons. of with contract to XX secure in Victoria Finally, a care public health with noted, international

this will GEO Australia, a pursue to important Care We market. time, continue I long-standing in Calabrese division. At in presence of to Wayne future growth expect turn opportunities we have review call to over this a and for the

Wayne Calabrese

XX Thank annual unit. reentry contracts renewed for you, of the overview the Bureau to XXXX, milestones XX center pleased James. contracts, an residential operational In provide business we Care of including I'm Federal Prisons. GEO with our

renewed XX contracts. day nonresidential reporting center Additionally, we

and precertifications. of During XXXX, underwent accreditation and of average including with accreditation reentry reentry and residential reporting reviews, offices reentry Association third-party received American the the residential Correctional of received X ISAP residential nonresidential centers XX a our centers our year, audits, XXX day centers XX.X% of successfully from our combined internal score government an total precertifications. accreditations audits, centers, in

XX housing transitional for states. and reentering their rehabilitation reentry Our communities provide XX across residential programs centers individuals

community-based X,XXX services, All including to cognitive throughout improvement treatment states. probationers across approximately XX XX rate centers up attesting for lowering high-quality different provide and our in for showed at key and nonresidential parole metrics to evidence-based day practices reentry approximately locations year, track our recidivism. a record outcome of Our and the programs reporting behavioral the

In population X,XXX GEO our Continuum X daily at of Care in-prison in-prison in approximately and services in-custody sites Care XXXX, post-release states. an of at delivered in programs Continuum average to X and we XX individuals to enhanced to XX XX,XXX Moving rehabilitation program approximately individuals sites of division. states

we During across X renewed country. the treatment the in-prison contracts year,

Our in-custody rehabilitation services the include all our of made to equip academic programs facilities. focused on school classrooms helping smart those investment all in diplomas. in equivalency aid to of our our significant with care attain at We've high academic boards delivery instruction a

lead focused We only developing market on completed, job to when not programs but are based have on vocational needs. certification also placement also that

programs important rehabilitation the many suffer of from services individuals abuse addiction. piece of an our are Our in our substance care treatment because

our Our enhance facilities character-based units facilities also dorms these designated provide have extensive of programs. delivery and programs. character-based across to housing or the faith-based and faith-based we And

of rehabilitation During enhanced hours XXXX, we approximately completed X.X programming. in-custody million

Our awarded training more diplomas academic is close vocational programs course vocational X,XXX than certifications. high to school awarded our equivalency and X,XXX

abuse and and more approximately treatment treatment cognitive sessions. XX,XXX program achieved substance XX,XXX individual program behavioral awarded than programs Our completions, completions we behavioral X,XXX treatment over

from During their X,XXX services. more $X.X million supported allocated communities. toward as This released to year, they individuals return the approximately also facilities than we funding GEO post-release

We provides people criminal our on support post-release Continuum model program States United community that critical in-custody released better treatment services served GEO changing justice the Care in a proven individuals. of award-winning the including needs Our can how of be integrates address X-plus behavioral believe rehabilitation, million with in system lives. cognitive their enhanced

solutions, segment, electronic suite supervision of a BI provides services and our monitoring across full state on to behalf technologies the agencies and of federal, and supervision and monitoring local turning subsidiary Finally, our products country.

X management, services Intensive During of due the a quarter solutions, ISAP, government's compliance BI of years. compliance tenure, we for using be under monitoring case number to in experienced technologies a the ISAP case first to variety XXXX, ISAP under time. Under decline revenues range XXX,XXX that holistic of XX a ISAP of and required levels number over stable participants XXX,XXX to of participants achieved participants. has Appearance during the Supervision fourth during the the monitored and steadily of a in compared XXXX or has provided remained decrease the After management declining monitoring to technology XXXX, XXXX. Program, electronic approximately under BI's relatively quarters contract in of high new services supervision, almost federal

We expect innovative to quality solutions partners to the BI we as to needs call explore current to remarks. continue and our and add the technology support for ICE back time, all like At pursue to growth to turn agency partners new and future government of new opportunities. this closing George I'd

George Zoley

for XXXX, prudent current the units throughout delivered our financial In approach Wayne. initial given our financial operational a diversified Thanks, taken discussions Congress. surrounding uncertainty and guidance business strong closing, is in performance federal XXXX. We've what budget to believe we

we we several However, as today, said upside. opportunities we have believe potential for

We company. pursue marketing growth our quality as we diversified facilities idle current services and are our actively our for opportunities

flexibility debt. future. aimed at we remain services also behalf interest our We gaining to Operational, our agency in our reducing operational partners. daily excellence on efforts refinancing capital annual achieving are of overall on steadfast shareholders in remain in of potential and portions the and commitment of the net delivery our our to costs government of our the of focused These debt reducing return

That our for remarks, have and dedication to allowed GEO today. to you we milestones grateful questions take has we'd completes the our are some professionalism for XX,XXX employees accomplish highlighted glad worldwide, and be We whose Operator?

Operator

[Operator with NOBLE Instructions]. And today's first from question Joe Capital. Gomes comes

Joseph Gomes

a trying was yesterday, that the in seen understand people where down call occurred remarks your ICE the release beds mass something And have to said, the from know your about this just speculation, reports general frame? happening. had as current, that your of yet, I they get underfunding just And thoughts. ICE. XX,XXX from And thoughts release in George, like mentioned, that you I on ICE has I'm you about going to article So $XX,XXX. came to time don't they're another just you guys today you COVID the sure more ever the it, it previously excluding funding about out

George Zoley

border-free being of But by House the unveil I the articles to Israel, Ukraine, are alternative ICE Tuesday. bill today the think was and reading of as the any there's news nature that an comparable in came day Taiwan don't to I'm discussed regarding White scope by been the And anything from are the that House now. as that lawmakers Republicans this planning encouraged Senate expected release passed to one package press the release populations.

is a our [indiscernible] take optimism funding will issues. border of critical compromise elements be comprehensive one that basis So tied both to the funding of for hope and that in security care in for can

Joseph Gomes

as or we you know, of levels. have still levels? at number just those do are guaranteed couple guaranteed I'm have a your facilities have wondering, that that now a below all are above levels? you at contracts those all facilities And Or those

George Zoley

of the is ICE most are at locations be those X,XXX have those X,XXX depending facilities existing between incremental capacity, where do you along above most think likely referenced. most border higher guarantees are of levels most prevalent. I the southern agency. funding levels. we where on The activity have And our could that result do additional provided We for previously, as and the the call beds to was mentioned them facilities

Joseph Gomes

any monitoring. for there's movement was just information the if past; on gears in change just any a about was shifting there monitoring? update the in on potential talked We request I here been that that wondering for And or And a second.

George Zoley

our request I request, response to information, haven't anything was think that. RFI, but more for we we about heard that submitted and that

certain ankle possibly program of to as that is of predicated the ideas heads the of And about well. ISAP We and use funding households. on additional are aware monitors extending

Joseph Gomes

level anything that point on and And state for the local can new the business? to you new

George Zoley

there that aging because think I facing facilities are are states problems of in particular.

I larger done kind purpose most think that either new building facilities facilities of populations of New have are and means facing states combination clients problems. of consolidation And facilities Oklahoma Mexico. leasing actually or as with a are for those that in within we

those think kinds within there of for more that be states problems. progresses, to So idle facing facilities I time market will those us our are as opportunities

Joseph Gomes

me. expected unusual is the a than And that? anything quarter. just Was more bit we was had in one in that for G&A seasonality? there Or higher little

Brian Evans

That just fourth rate that specific. things don't expect and that in guidance a bit lower forward. run fees we in quarter, rate nothing on, This professional some is assume so occurred was that, other Brian. true-up little the We year-end run going going our

Operator

next our comes Brian And question today Violino Wedbush with Securities. from

Brian Violino

the of clarify that to increases. increase assumption? volume curious, it wanted I'm the funding it's numbers. midpoint I Just that end assuming know was assumptions In the incremental numbers midpoint. baking that funding And funding just near in into assume talk nowhere center out doesn't, throwing curious then incremental high the the end, just sounds the well? but low could as the given high-end the any guidance assuming the some you're I'm you're does about like you to your I'm of guidance.

Brian Evans

assumes some maybe This we few reprogramming is I slightly said, were -- the as is down ICE that now, or and really XXX,XXX moderate. in quarter, significant from end, the if to funding. ICE beds participant currently low XXX,XXX Remember, fourth in in just the incremental it and said we ISAP. same. there be high only level. right a It's they're It for the The It might maybe the is additional we counts, increases the And assumes count more XX reduction slightly think some uses assumes participant continued reduction Brian. slight don't ISAP plus supposedly. XX,XXX in at then end is funded then maybe participant some currently. modest

that, they George about was down maybe previously downside. what back to but closer or So about the the like either on like talking upside nothing or something XX,XXX go the

Brian Violino

the articles incremental detainees, move in terms it's about know there's think budget those in if recently there's I out opportunity from the you program, any possibility probably then of there reduction these tell savings an ATD do could coming into be to perspective? to detainees And hard some that

George Zoley

a possibility. That is

The monitoring has certainly, We in that expanding ISAP kind about place desire a assist people with program to the under are been talked so if if desired. to of and it up individuals. change. of groups detention program, policy staffed for ready ISAP scale other policy those we're And there's beds up to respect reduce to that that's and change,

Brian Violino

me. for one last And

nice your You in uptick your saw a NOI margins segments. all across pretty almost

operating the on your margins benefiting view was that of line XXXX. onetime anything we quarter? the get aware should you wanted or expense Just sustainability on to seasonal to those there of be Is that this

Brian Evans

No.

as our we the Marshall some first as holds sustain the our degree that, that quarter And lower the in payroll-related of be populations little to a as think especially for in previously. I our the seasonality should next I we that rebounded degree think facilities. facilities, to first impact going in bit as There's the nicely, talked able year, that. Except about, is well has Shayn facilities, mentioned taxes in also ICE the some reasons quarter. but to

a put will pressure. that bit of little downward So

Operator

And question comes McCarthy from with our next Sidoti. Brendan

Brendan Michael McCarthy

Just in thrown funded on a was of out number saw the that the count potentially guidance up of down bringing to I thousands range? the was believe follow low around release curious, just captured there, number the of the to detainees. potential beds I bed number ICE end I of there is XX,XXX.

Brian Evans

our No. earlier component the pandemic cash mentioning which revenue. have predictability And George most of as COVID except structure, a during contracts, ICE as our historically a and the the part, one, supported represents of reminder, for or our the was fixed that flow. And significant lower of populations protected just when facilities, enhanced significantly all for the were payment

impact it bed it went as some as per if seem be would on low, be they there while basis. might a would So not significant that

are it at incremental facilities, the some guarantees said, those may guarantees, above George those a diems per those As few of above but impact lower. we're where facilities already

So it if dollar for a will. would not be impact, you dollar

Brendan Michael McCarthy

it the happen assume is instance down safe -- only X to And government come that is or to the to -- may it shut March were is that assume? fair

Brian Evans

No, I that. And happen don't immediate think that would there's I sense desire to that an it don't do during time.

decisions week results the people take will of end the place I likelihood by await first that will final the that think all budget of the is of March.

Brendan Michael McCarthy

And specifically? was nice a that then What I interest income. noticed in the drove in fourth there jump quarter,

Brian Evans

going we by That's predominantly interest rates the higher internationally. have end cash some plus year of the to be balances

Brendan Michael McCarthy

I've research, me. somehow you the this ICE program, but And like something evolve if ATD it from sounds and and try program been program whether insight you think reporting development that speculated one may can will potential into just some ATD the into provide on management reading rebrand release and question my that? into from wondering last that of

George Zoley

anything I whether ideas those have progressed. we to about doing think there as that, a heard was haven't but more discussion

Operator

[Operator Instructions].

from Capital. with Kirk Imperial Our next comes question Ludtke

Kirk Ludtke

on quarter. Congratulations the

couple follow-ups. a Just of

much would You in $X.X that your detention. down remarks how I to allocated for alternatives of it be bill was did mentioned funding the that ISAP? included into Senate of that curious; billion to break

George Zoley

passed, not the it funding. that not. was need just It's the the Senate And one No, was X original that did bill. which

Kirk Ludtke

who proposals. might curious up in just I'm show because future some knows if that of

a So year-over-year on I year-over-year, remarkably second maintain about was decline Changing you talk able How in but monitoring, meaningful such stable. cost margins revenues? business? curious. revenues that a topics were to you're here Can down structure for margins with were electronic the in

George Zoley

we and we're just and is it those product for of lot products some a think paid outright using, the products depreciated. own already of they're mostly I that and mix

Brian Evans

efficiency. found some cost we And

George Zoley

year, were the last and And 'XX early as that the benefited of end of that full impact helped at from during negotiated 'XX those the somewhat year we well. and

Kirk Ludtke

in you that with the happen it You respect in to to Can and ISAP that in is might you program impact margins the mentioned technology expect how evolving. CapEx? what and talk about technology

George Zoley

and replacements Well, those and develop to in monitors, products, new include to or monitoring think It's or replacements continue all those as phones and for the the technologies, called our to we've through continue mechanisms. which are watches developed. obligated presently of future we I ankle VeriWatch the that evolve items think, inclusion

Kirk Ludtke

that Northern How there might be ICE and play were DHS might the you and on from to away think year? road, moving be range in mentioned any beds this you that? county that way down call, jails States is in a put opportunity an Last many

George Zoley

to move additional going opportunities through the half additional funding. of us going getting year, year. pop fiscal depend And second are for obviously to probably the those the funding up It's on in assuming we as

Operator

Securities. And question Northland comes next our Greg Gibas from with

Gregory Gibas

know in to right the get to and had to is a half I the Congrats best little to now second assumption a populations as see really we necessarily await visibility whether if quarter. sense change visibility funding? I or on more stable we government XXXX because didn't wanted are expected I from be happen. of And going those expected a or participants that how wanted just of on you there's the rebound ISAP flat bit

George Zoley

the year week continuing believe, determined the deadline we existing hope until some of there, resolutions. really end We for will first anything the March which sort, fiscal That's balance March. the know I of government shutdown there's by, the a be won't the unless is of of And not.

Gregory Gibas

also ask, out? are to wanted cost structure steady is or that are XXXX your be going comparatively? variations worth relative changes to to Or expenses in XXXX, cost pretty with I the just respect any calling structure on to notable

George Zoley

during pretty should at $XX second expense think, guidance continue we our refinance looking the as reprice $XX be that it's year We're or steady year-over-year comparatively. say any assume to going term we from to not the would item about interest place our trying be at at the of The reduce million. lower, million, the the benefit take I biggest be I or will maybe half change line any does year discussed. debt, latest may the loan. refinancing to as in redo And

So that benefit additional or could some provide upside.

Gregory Gibas

last one. Just

last you've curious at -- I sales, been of you of anything range terms Regarding sale that the the quarters. several values there interest receive? Just of could larger the if that's potential changed or looked something know has assets, in levels

different anything terms larger assets. So potential if sales of there's of in the

George Zoley

No.

driven that or level before like and to done their larger to Our we've through a state leases, a a large ability and then be it's make Mexico. year from in issues was budget them their is their redeploy issues acquisition recently assets, and X what that. Partly Oklahoma by most able New funding

at sense. think I preferable to to makes So it's buy, than if probably we'll perspective it's more to their from continue likely look that both it lease but

Operator

the turn Zoley like our this conference over closing to any concludes session. back remarks. to gentlemen, I'd and for ladies question-and-answer George And

George Zoley

next joining for you call. call. you forward to We this addressing Thank us look the on on

Operator

This attending all you sir. thank concludes for you, presentation. conference Thank We call. today's today's

your have may and wonderful You day. lines, now disconnect a

The GEO Group, Inc. (GEO) 15 Feb 242023 Q4 Earnings call transcript