GEO - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the GEO Group Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note 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

Thank you, operator. thank GEO joining Full Group's earnings and discussion for Year everyone, results. the of Fourth morning, you us for today's XXXX Good Quarter and David Executive today and President Officer; Chief of George us Suchinski, Operating Executive Zoley, Mark Officer. With the Wayne are Chief Board; Financial Donahue, and Calabrese, Chief Officer; Chairman This morning, well fourth our outlook. our as full and we quarter will discuss as year results

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

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

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

George Zoley

voice today quarter Wayne of having DO's and served and experience Kentucky CEO, and joining has our a I the of of President Thank morning. Dave Secure Senior in for career new Services fourth Federal in and our who Suchinski. Corrections Department XX Mark joining along our years XX CFO, Bureau states as the our earnings of with is XXXX Indiana. for welcome my this with and distinguished President the for our and you, Prisons after to Vice good years on operational call, horse previously industry, Pablo, apologize morning Donahue, to you everyone. call would COO, us Thank Dave our I like for Calabrese,

on are our expect activity.Â During We be senior financial business unprecedented our for embark full an fourth what we Dave highlights review as we we operational segments. operational and and quarter have to XXXX to year will of pleased results join our today's call, management team level

will developments initial 'XX, long-standing been for services opportunities not announced. with ICE include and including the practice financial the We we our update have discuss is that across any And also business government. diversified consistent for does contract our which an segments, our guidance the will and latest awards federal expand our on provide new not to previously

fourth financial activity reorganization higher result were our previously the we future to quarter in performance quarter top for during incurred the announced overhead which revenue quarter of operational expenses Our and be the during from line line of and expect of additional an of guidance. related fourth professional our reflects fees team of projects in we anticipation 'XX management 'XX third partially results with what increased growth 'XX and unprecedented 'XX.Â Our our

non-detained of we 'XX, so-called monitor were requirements at to deliver adjusted undocumented to on detention the facilities will devices incremental The call. ramp since approximately prepare service to we represents to detention higher an and and utilized ICE facilities X,XXX beds $XX available Marshals detention additional ISAP able X,XXX last XX,XXX to we million contract. transportation the up federal approximately our and GPS reconfigured our of serviced ICE XX,XXX these ICE In transportation to of expanded incremental at In capacity, $XX to us by We investments XX,XXX be for transportation increased be fleet. beds investment at and the includes incremental $X under the below in current incremental available beds existing EBITDA XX,XXX. December GEO-related approximately to expand secured million beds an capacity program our due government and from facilities, The total to our renovate increase provide in in approximately ICE existing increase facilities our and capacity would beds who expectations XX,XXX secure population to increase will overhead $X GEO believe earnings that incurred is current secure tracking strengthen detention beds invest currently additional the already $XX docket services million greatly and earnings aliens capabilities.Â The and production electronic million to expect idle our XXXX, previous expenses. monitoring approximately GEO use to capabilities our XX,XXX to X,XXX approximately services are and our However, million announced for ICE. today beds

adjustments facilities, revenues of secure We approximately beds with in which company-owned XX,XXX in margins additional contract expect million year normal $XXX with average incremental support care food estimate full to XX%.Â These ICE, margins of value $X contract and establishment in consistent the to These XX,XXX Delaney could between access X,XXX-bed facility first immigration utilization annualized beds and with recreational the owned center at Services in processing XX-year of amenities, our by support XX% use of the consistent morning, include counsel. of Secure to contract announced services, revenues these in expected be include the generate along facilities. federal Hall. medical awarded million operations $XXX with We GEO our additional of company-owned services XX-year we security of maintenance, the New a fixed to New billion. our excess annualized services services Jersey. ICE generate cost new million a provide York, by legal is price the facility living been exclusive to services $XX with support We have this Hall Delaney for the with

with XXXX.Â We contract Marshals the the their second Service during We from of expect to idle GEO's second revenues the ICE X remaining quarter discussions the interest the and new reactivate normalizing regarding facility facilities. half with and active in in in XXXX earnings of are

which Additionally, use totaling correctional be state combined for we by X,XXX could government. repurposed beds, the than federal have the X facilities more

the are public of currently latest sale objective of used proceeds utilizing we pursuing generating the to reduce over be the funding and/or of level million March data, is detention is otherwise one detention However, which that continuing expire current which potential currently beds nationwide, up could XX. debt of resolution, on ICE these largely with is shareholder in of beds set Based to or with facilities $XXX the both value. enhance consistent to XX,XXX under XX,XXX the

taken require will The about Bay, migrants a large range and in in house serious passage Lake Act, indicated United utilizing XXX,XXX had a Act public of facilities steps XXX,XXX beds could solutions. there's & for interior similar to backgrounds facilities statements to require enforcement ramp detention to beds XXX,XXX or Riley XX,XXX Trump be criminal We result on the additional that believe between and detention implementation processing will of recent Guantanamo ICE, migrants of additional the has an of Before total & enforcement ICE for from Lake of administration countries beds a the need the and in with been that as to States. interior believe administration some an more. require the the operations.Â Based some the Riley activated increased purposes.Â However, increased up detention of foreign we increase discussions

soft-sided that record like have facilities to requirements special cost and We the set to compared purpose facilities, facilities XX-year we preparing a record extend operational by unique strong build operated at of upon solutions taxpayers alternative needs partnership. are of meet providing to successful publicly when that and ICE public-private and savings and to and

approximately prior income level XXX,XXX. utilization of the $XXX twice approximately during peaked the We number tracking almost making over of devices federal utilization the ramp the and monitoring million government's XXXX the for our and to the are of peak and of Supervision contract of Program the little fourth of contract currently XXX,XXX, counts between years quarter GPS averaged ISAP. even a that Services are significant currently more segment exceeds ISAP would X use at generate utilization. electronic under also to participants production stand Intensive revenues program.Â Returning Appearance the if in in investment participant or an up at incremental A supervision the XXX,XXX ago, ISAP

pending scale trafficking of X.X another our in estimated we year, who under long These to services track what years. size aliens from authorization, the of population, amounts The the capacity, is federal have commitment of company delivering of approximately quality and of we and Over technical are requirements diversified of is docket. million the compliance completed, the court persons estimated been XX-year made United the ISAP which current who received Reilly the ISAP contract, or monitoring Law to We entered contract has we monitoring million are currently millions resources processed in and while entail have we nationwide have XX status.Â Given immigration in the who several update the their required. before non-detained record have have the of to of by the this on requirements under with the been procurement the any to X,XXX non-detained without approximately a to the legal portion significant to upward of detention services view as XX docket the for country a & support the At ensure an of increased well are a Lake not to has on that ISAP is a and the our timing requirements into personnel to addition immigration aliens delivered monitoring shifted officers of currently appearance size will several a we the with compliance participants technologies X investment network increasing as ten released this and necessary bipartisan to that population court.Â There have up enhancements the proper court their to up rebid agency's management people thousands electronic made services, have believe ISAP we the and ISAP.Â With the have with relatively of hundreds through X achieved high our compliance monitored the small addition and require focus non-detained undocumented of as regarding their by utilization a million believe electronic ICE of rates already proper the immigration undocumented persons ramp-up the docket million time, are without proceedings. who non-detained and of to Federal Immigration who XXX in offices an docket States interior immigration the Act close on employees. be

expansion We are the services transportation of fleet well. in secure investing our as

an generate under million could incremental which ICE flights, removal in subcontract. million of of $XX number Air annualized the $XX increase our revenues in increase an existing Services expect We to Support

in baseline contract guidance the million incremental XXXX to expect impact $XXX While the reflect not from to our ICE any respective $XXX opportunities the based add as million segments, have announced, expect that current much our could for opportunities EBITDA. these as margins awards not revenues.Â Â Based represent initial business been much and million we $X the in all as potential adjusted is for our previously average upside billion of incremental that $XXX does could annualized on annual new we on as

significant to the a Trump funding upon We to believe We ICE contingent the funding ramp enforcement administration; by under continue year. interior deficit. up began ICE throughout availability. with expect

capital House a Representatives XXXX. has net total followed reduce provide a recently Currently, funding border facility that Once or are DHS. debt. tracks we separate by reconciliation contract completed.Â Based awards quarter the to staff XXXX been second period announced new any for has second to debt in and million balance we Senate X.Xx $XXX would near which approximately of bringing likely $XXX to enforcement of net to X this capital our security net debt, $XXX our on of ended asset billion initial our agree the in continued into We utilization.Â Â Finally, between awarded, activation and continue of and an $X.X hire, train in the evaluate contract in our to up is occupancy have this budget be for the discussions, future. by turn current additional progress in days and is billion billion appropriate of XXXX, leverage debt or understanding either to on guidance XX several million shore be XX billion budget the ramp-up total we in I requirements, process EBITDA. additional on by guidance, While approximately we a despite in sales contingent in our the facilities Congress returns likely adjusted months it XXXX moving status to the our and efforts facility detention total DHS the continued Senate U.S. term ready for reconciliation expect $X.X by the which sheet approximately significant our $XXX additional activation gradual will ramp-up and further the being several the to activities $XXX upside years.Â Depending take Suchinski. before the funding approximately on, CFO, and track Mark new our net to U.S. on funding could year and reprogrammed budget process. in reduce to Based call additional over additional to over under reprogrammed typical deficit, million the potential the now of with expect understand half on of clear forward House for and increase to the make get may deleverage to the with of

Mark Suchinski

and everyone. George, you, morning, Thank good

$X.XX when net reported the revenues pretax million approximately net compares income quarter $X.XX $XX.X $X.X income adjusted quarterly approximately roughly of GEO reported XXXX, approximately to these For pretax we the $X.XX XXXX to $XX fourth fourth reorganization extinguishment of expenses.Â Excluding the restructuring in debt associated quarter the on to professional This income the to higher or of attributable of reflect million. Fourth items, $X.XX fees $XX in on diluted XXXX share $XXX attributable diluted GEO income net costs associated due of management XXXX, additional we per overhead of approximately approximately diluted of compared incurred million the recent reflect of quarter of we million per of $XX share quarter. approximately during and and XXXX quarter in million fourth quarter or or our share expenses, million. fourth Fourth part G&A share. team of the XXXX senior $XXX quarter results, of approximately with adjusted to net $X.X per also per of results, results or million unusual reported employee diluted million revenues

Electronic fourth approximately the of by owned for reported declined our million also to compared reentry our compared quarterly increase fourth facilities secure from approximately and quarter.Â Beginning revenue revenues for was contracts quarter Supervision EBITDA expenses. revenue revenues, with to service revenue and nonresidential the the XXXX, We and leased in segment, $XXX centers, XX% managed-only quarterly million were Services approximately prior year's fourth Quarterly This adjusted fourth service offset quarter. lower quarter.Â Turning approximately Monitoring to by prior which $XXX prior year's by increased to X% year-over-year. our unchanged largely year compared

year's fourth During the prior of the X% approximately increased expenses quarter. our to fourth compared operating quarter by XXXX,

due due costs to EBITDA the for of XX% part in guidance, operating G&A XXXX segment of fourth higher contractual $XX senior to quarter we in expenses incurred of in and the expected growth.Â And our a in management prior quarterly expected costs by revenue recent approximately quarter, and our due revenues our were explained. of in during reflect staffing fourth increased during general adjustments associated living expenses for XXXX just tied reorganization professional additional fourth quarter training expectations the fees, from line XXXX quarter and future XXXX of the incurred quarter preparation Services for increases year's and labor our of of as million, Secure higher to the administrative part we Our expenses additional fourth in in team our our cost below for approximately fourth which preparation part of future XXXX were result previous to and I growth.Â Â While adjusted fourth our earnings with quarter the

results net XX XXXX quarter year-over-year our interest reduction of Our $X million and decrease efforts a result refinancing past fourth debt over of as approximately months. reflect expense the in a

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

year reflect to debt annual billion, of $XX costs For XXXX, approximately refinancing the reported full of our associated revenues year approximately of XXXX approximately with million $XX.X the $X.XX net attributable our GEO on results pretax transactions. in in million income to full we extinguishment relation

Excluding that initial reported new adjusted XXXX debt full the previously the extinguishment million.Â Â Now approximately for adjusted and our $XXX.X unusual current We costs our announced. any items. guidance year We for net of guidance or baseline of long-standing EBITDA have contract other not financial not initial approximately diluted share. only include reported income does XXXX our of full XXXX guidance awards reflects per Consistent initial the million let's $X.XX our move business. to practice, our been year Therefore, impact with XXXX. of $XXX

For effective the to income in approximately be full of items. a range inclusive $X.XX to tax revenues and rate an attributable on of year billion net $X.X based share discrete diluted of XXXX, XX%, on approximately per we known $X.XX expect to of GEO

We between and EBITDA adjusted $XXX expect million. million to XXXX full be year our $XXX

basis, While in $XXX believe we significant the could that EBITDA.Â As in much of timing our $XXX as these $X as accordingly. clearer, XXXX adjust incremental will to revenues throughout and become opportunities incremental progress annualized we to the we as much annualized million generate would previously million include year, we assumption guidance adjusted likelihood billion awards and we several and million as $XXX year these which guidance new On opportunities have our provide our been upside current does materialize contract not during announced, for forecast. opportunities believe to asÂ GeorgeÂ mentioned, the anticipate any a that not combined could

we XX-day the XX- start-up activation facility announced are previously not As for in expenses reactivate are expect would any currently to expenses we period. initial to announced begin included to not and our Start-up incur contract guidance. idle also facilities, awards activations during

expected capital year of of be the million, $XX which million following: expect in $XX the spent $XX December million and devices spent of $X our be secure million primarily including GPS move capability. renovate be the our $XXX production over ended year XXXX investment We total total to of XXXX ramp the fourth $XXX the on in X the between approximately to hand comprised This secure in let's $X XXXX ICE $X.X XXXX to services full tracking to investment expenditures net capital structure. available first evenly to We half be spent expand with million is quarter million for of million billion. in XXXX additional quarters to approximately closed existing and of was with million $XX of $XXX spent remaining with million we million announced XXXX. throughout to the $XX approximately up $XX facilities, liquidity. We expand to first transportation million of the service total to incremental our impact debt cash fleet.Â Â Now in and

end fixed potential for XXXX, indebtedness, of fourth which quarter insulates the debt rate GEO of approximately meaningfully of rate interest of represents the XX% total our As volatility.

As of we maturities noted, substantial no April before have XXXX. previously have debt we due

of this net debt. to to total guidance to company reduce debt debt to net our the initial and our grow between $XXX and by end expect on approximately year. the reducing our year, our continue business runway Based $X.XX the give We billion focus we by million million bringing $XXX XXXX, for our significant on a

potential our reduction state from of augmented the sale with Our our of could also proceeds facility from assets and/or the guidance. debt be correctional to upside potential some

this review capital our over reduction Dave turn call returning explore remains the capital debt towards Secure capital our needs, to Services the support growth unit. allocating Donahue to our and shareholders a to addition I CEO, time, GEO for to of to in business our will Dave? future.Â Â At goal for options In

J. Donahue

CEO and in undertaking. at Group and history. previously the our the will, unprecedented good George unlike of a morning, company management and to with an require our the to experienced achieve time the of My be the we GEO therefore, and Thanks, annual Board opportunity have to operationalize have growth necessary company's pleasure our scale It's as is we our for my to the Group opportunities Mark, employees believe our everybody. before the any we've across and We are Services. milestones our GEO of work to rest to management focus to pursuing ensure us operational new resources as all they returned support will the service of our team GEO team our operational help significant Secure lines.Â Â Moving to join excellence that

renewed Immigration Service. X the we contracts, XXXX, and at XX U.S. the Customs Marshals During level Enforcement federal contracts secure with including service

Secure facilities During government PREA Rate XX XX.X% Association the received a the underwent facilities our including year, Correctional average reviews, Prison Secure and an audits, PREA XXX facilities audits, accreditations and internal Services received score of Act with Services another American certifications. successfully or certifications. third-party accreditation of from total X of Elimination our

for Our States GTI venture current driven agency U.K. United joint Transportation division the partners. and completed our GEO the in miles AME trends million year.Â Â Moving the government to XX.X during and approximately our U.K. the

During the facilities utilization quarter U.S. Marshals was year ago. at fourth XXXX, utilization the largely detention with quarter X during consistent our of fourth

criminal facilities secure out Our U.S. carries detainees its of facing providing federal mission support for custodial services agency proceedings. Marshals as it pretrial the

space continue Justice General federal agencies which capacity. U.S. U.S. In enjoyed the prior support of directed Prisons, stand Justice, to generally criminal partnership are of capacity X the and track executive in not and issued to near Marshals renew our lack we a beds.Â This detention Department the at behalf long-standing rate of with both processing Service quality across our Our administration's is going Marshals U.S. administration, ICE privately beds under ready President immigration U.S. record Federal public-private the the contracted and to has their bed contracted long-standing processing needed Trump a Department centers. of to the years. contracts of Attorney facilities.Â We've the an we support the with Bureau first processing into and reversing facilities months executive that around-the-clock where order there additional census utilization last courthouses, at alternative provide access had an secure detention weeks U.S. support of in suitable ICE facilities is delivering needs X,XXX approximately services a ICE XX,XXX to GEO ICE to healthcare services. federal approximately professional for needs.Â GEO-contracted Utilization of ready centers the increase ICE facilities services the any of level highest stand future.Â Â Moving marks residential care GEO-contracted X with on centers, contracted order our offer currently represents and

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

Court of We each enhanced access GEO-contractedÂ ICE ICE ICE and Contracts center. also exercise fourth quarter partner needed important the as And equipment, faith ensure provide artificial and soccer also offer our at several processing access pavilions, community covered and and opportunities centers. representation to fair volunteers GEO-contracted to processing with centers denominations. XXXX, multipurpose to processing faith-based various turf religious rooms.Â During contracted contracts fields, we including company-owned renewed of the for the of back amenities, Mesa we Annex States XXXX.Â Â Additionally, X-year XXXX, the XXX-bed and Processing the for long-standing State at Center, Center, which View for of Center, pandemic. Central early United the dated XXX-bed the ICE California to January District XXX-bed in the were renewed Processing intake Processing through Golden X,XXX-bed the lifted the terms our of December Adelanto District Adelanto Verde days restrictions COVID ICE Desert of for Annex, ICE

by XX-year on We us the company-owned our Newark, services helped who at over with the approximately Delaney of value contract employees fixed of ICE X,XXX-bed contract Jersey, this billion are a establish record contracted awarded morning, high-quality behalf $X of our XXX Hall Center, announced state Adalanto XX-year a in in period. price of long-standing we proud we've providing facility California.Â As ICE for approximately a of been the have New total support

Moving services. ICE XX to at ICE ancillary support GEO-contracted processing our the centers. secure transportation of ground currently primarily We for provide

Wayne? of I'll be division George that the over also not and we a time, ahead. air record provides CEO its transportation new ICE, rejoin contract business Our as which At challenges CSI excited review our of team meet its we as the and held the GEO the will in GTI Group GEO secure X-year providing Care Transport mission. to I more fully assist of out secure and long-standing a services under the to to safe could an opportunities subcontractor carry entire the GEO this play on as unit. support turn of by Aviation.Â Â We ICE prepare operations important a helping Wayne continue role lie a unprecedented behalf prime expect call to for Calabrese have for agency to

Wayne Calabrese

this of an center the contracts, GEO residential I'm overview of key the XX Thank to with for Dave. XXXX, renewed reentry pleased contracts Prisons. Bureau Federal division. In Care past provide you, year milestones XX for including we operational

XX center renewed we Additionally, contracts. nonresidential reporting day

score across transitional centers including and or at Prisons, their centers reentering successfully residential Federal daily XX XXXX. with of nonresidential accreditation residential received centers, provide Bureau Association from these housing reviews, During rehabilitation X,XXX residential received centers, of approximately census reentry XX the stable of government reentry individuals XX ISAP combined the including average Act fourth internal day and year, the accreditation programs centers during PREA reporting communities of with Rape at centers the an Elimination and underwent Correctional PREA our year XX residential of XXX last third-party reentry American X our quarter accreditations and audits, certifications.Â Â Our XXX% the reentry certifications. states. offices remain for of in Prison Average total individuals audits, contract levels a centers under our

for which to XX first locations nonresidential in-custody reporting be of back our was an for to who proven and into first stand programs. under in focus that behavioral recidivism that ready over We XX and across been approximately cognitive reentry to X,XXX residential and currently we an nonresidential sites President average at Act, Trump's at to and improve of second rehabilitation expect of reduce will XX,XXX lives parolees X under the programs services, area GEO term approximately enacted XX communities.Â Â Moving our up Bureau states. including of of centers program to provide located deliver individuals and probationers STEP Federal step X sites First and Prisons term, the program high-quality Our help implementation his treatment the taken nation's states.Â We X,XXX rehabilitation the that different participants expand the to engage delivery of in-prison continuum have community-based day care the daily different population at enhanced in have those states XX of agency

in-custody to equivalency delivery services classrooms a academic vocational all aid smart academic to suffer services school disorder. important upon We've live programs developing the good diplomas. the in focused part with certification Our will our focused in significant We've in construction. addiction substance individuals many release.Â Â Our of include for boards our of rehabilitation that because care are on rehabilitation of high the lead on and equip use markets graduates attainment to the our of of programs also our where abuse an treatment made investment programs jobs substance from

character-based with and of units delivery programs. programs our to designated housing facilities enhancing provide the Our facilities extensive important these across also dedicated faith-based

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

programs X,XXX more academic equivalency Our diplomas. high school awarded than

certifications. vocational courses close training awarded to X,XXX Our vocational

and X,XXX substance XX,XXX completions in program abuse treatment during approximately more treatment year. awarded approximately than XX,XXX past achieved cognitive behavioral Our behavioral individual the completions.Â Â Those program sessions care treatment our programs

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

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

Continuum average.Â Â Finally, impact programs between Supervision of when has and in X-year Care of compared X-year, recidivism and a a to recidivism the XX% achieving Services segment. of had and the over Monitoring to national our with GEO in our XX% periods turning Our rates, criminal reduction positive Electronic reduction

monitoring millions update Our count participant the that case rates averaged who a technologies. XXX,XXX, compliance of ICE capacity, In has provided management fourth approximately that XXX,XXX. full quarter or non-detained ISAP we believe detention Program, XXXX, participant electronic technology variety the in every solutions, and the suite on to for the in of shifted BI competitive has ICE increased under tracking solutions, technologies contract monitoring At proper and and be BI and ISAP in nearly ISAP are noted, not the ISAP, of levels first over BI's has believe time. Â Â As to people new States without services ramp-up a currently to compliance ensure monitored otherwise from United is previously of necessary will current supervision, of that management, a docket currently the the addition the of approximately winning and or products, agency provides bipartisan any services increasing the case and is supervision has the holistic under timing under Supervision that legal Appearance subsidiary and Intensive focus contract ISAP received procurement for a regarding compliance rebid rebid the received time, the We size ISAP. high established.Â Under of of population years, of for this status. XX using the contract. monitoring, being we've since was ISAP counts achieved support tenure,

a production thousands of position government's I'd program hundreds call toward to of by remarks. current the time, utilization of scale ISAP increased turn up George devices necessary. closing a be several We in to tracking participants, the the to the investment this if for back to of and several like federal GPS are At to significant making upward millions

George Zoley

X. wish Thank best you, effective April to full-time Wayne, we employee the from and a you you consultant as transition

detention faces policies. steps expanded missed will forward involvement and by commitments We of time play President taken our We've possibly opportunity new Trump's we that talents transportation in a government. made consulting and federal capabilities capacity, ICE prepared supporting your look all, investments, to at $XX this We've significant a to believe administration the and be opportunity. meet on unique to strengthen services an continued but Your to deliver be several to million monitoring company role unprecedented our to to more basis. important secure electronic

scale hundreds relationship the for to X We secure GEO's care XX,XXX. to provider or from are if have the participants We also of completed to the approximately to over future believe ISAP allowed the to oversee of single of secure expected the can positioned to transportation we provides our decades for In Aviation a become management us believe well millions team has reorganization growth.Â Â GEO services scale called upon. largest several XX,XXX with we present detention the thousands currently contractor of housing participants largest contractual our of of senior program, current residential partnership up and of XX% ICE. of management up beds from ICE the beds operation XXX,XXX GEO's execution is with CSI for we ICE. XXX% this

to to secure to like transport XXXX, we now persons. this if unique XXX,XXX XXX,XXX closing continue This travel assisted scale believe travel we the final segments domestic to of or and for moment relocation materially history statement. and in upon. changing make can international individuals new called During and believe of to for to the we is more positioned company's meet up monitoring well in we up administration shareholders.Â Â I our a are and value would diversified in transportation, scale our electronic We our a for housing, enhance up needs

questions. of my completes That you. remarks, continuation agreeable to the of new agreement we to unprecedented end Board. our opportunities glad and volume have offer the will July the my notified a present business agreement. With beyond I new be am would GEO, of and the I expires X, mutually Thank so services that confronting stay Board take employment the to employment XXXX, any under inclined

Operator

question comes The Instructions] today [Operator Trading. first from Jason Weaver with Jones

Unknown Analyst

on Jason And then terms to the What changes guys in to of to new the for Erdner Matthew the Riley role and there, the does of is impact touch any you kind the kind of monitoring Act. today. Lake take? there? assuming of that contract, include in I all going on the looking economics are & want forward This it's monitoring

George Zoley

the they program there I And act that, think our that ISAP reading is to those of placed if need capacity monitoring in be isn't the continued individuals indefinitely. need detention. in to be for

Unknown Analyst

or over And you are prioritizing then Inc. monitors as chain the BI there. to SmartLink guys supply been And the have issues ankle guys subsidiary helpful you experienced app? turning have the risk guys That's footprint? you any expanding there

George Zoley

can monitoring, the to high there's contributing be in the preference of security represents think going ankle different monitors people beginning security with low-level or and medium-level devices digress into the a I which and which for the level security to monitoring. progress depending

Unknown Analyst

the And recent it. that, go Got sorry then about ahead. report

George Zoley

we no, really chain any part, supply Second difficulties. haven't identified

Boulder, We are monitors of inventory ramping ankle up our Colorado at our facility.

Unknown Analyst

that an is follow-up increase segment? to to you forced Okay. guidance And has what a register, in the potential do for out then to billion the report incremental the came percentage that, that an administration for of there, then million monitoring on That's that, $XXX $X helpful kind current of recent being think demand a of that outsized there. migrants revenue about the And monitoring? as

Mark Suchinski

Yes.

$XXX So billion, on million let me jump in $X about $XXX to correct. the million, that's

George Zoley

XXX,XXX. a But of count on participant million. $XXX approximately that's About based

we year, which will it be it if sometime that, So think more. it goes next beyond will

Operator

question next from McCanless comes Wedbush. Jay with The

James McCanless

just wanted to So that. clarify I

of come correctly? saying a incremental million going of roughly XXX,XXX. Did $XXX $XXX to you're to $X billion to million count participant is I revenue, all get So million $XXX with in of ATD the from that that

Mark Suchinski

Yes.

would X revenue. participant approximately counts our years an we described, just if grow And that would our to $XXX $XXX we that we're current So clarification, higher to than counts of at opportunities George had if incremental we've is, just looking a we million counts said If then what go the million. highs, as incremental ago, XXX,XXX. point participant XXX,XXX, surpass generate of of for look back to previous

James McCanless

that Okay. million, I you with you're the current much about more $XX does about guess, I is then think have. you $XXX,XXX, guess, think $XXX million? million if guess million that monitor should spending, spend $XX Great. you take you could I how And What think we that to the is going what Is I that outcome be? of it to? the $XXX

George Zoley

that we ankle now million that three to quarter, vertically are devices a that in this there fourth investment lot what Well, monitor. to larger higher materials additional proposed higher monitoring. And manufacture and medium we it by their and in designed start George levels there. million Congressional security, that program. build preparation We've that the monitor the and in as doing review followed buckets to in by expected of We has integrated in GPS $XX we've of to three contract. Â And done, described, don't achieve administration inventory what started The security of quantities to facility.Â So, million is support is those they monitoring of investing will in investing, we've be the that will plan part with inventory that ISAP we're new the our our we're building purchase by GPS we and do ahead security be the building security. how that of the we're get of mentioned $XX required started highest then is and the We additional inventory exactly responsibilities. contractual balanced as We're in counts. anticipation responsibilities and low $XX filled directives high those procure ankle funding as and of know under monitoring

initial under enforcement years building it that previous not and trying big big inventory kind we We're of So new done four the for is yet. hasn't a because inventory XXX,XXX, responsibilities to realign to it's had -- administration. law a haven't huge it's organization, ICE all these for an itself

approximately think, and are House to to regrew is bit billion. people $XXX new are new through we objectives, version, is they budget just quite office. version the of providing talked earlier, how the And of starting I a money. thinking going Senate So achieve congressional $XXX the billion, coming responsibilities. Â As the back these these directives They're to

is this operational But major may proposals to So assigned who's within go to possible from those program. going which between need gone there the and and how overnight. facilities to would Marshals are is additional unprecedented. reimbursedÂ of two in of between and adjustments think for big would pricing level People idle to now that Senate a of We've procurement somewhere ICE We've pay to the picking CoreCivic service and the a to organization fluid in all idle a that will if is like identify We like as it say. in which participants up But particular this much every the could CoreCivic's be the going leap, cost. contract can't or never House two. that it's be I the it of to attention. Service those before. I but number that's competing same we merge, bills get ICE be seen have happen by the a is into is costs, facility, as it pace, providers by in ourselves ISAP situation, would discussions kind in substantive anything the the process conceptual interest either speed But moving facilities one at our

James McCanless

the I That's over? good took point, guess how all up follow the since to been I have slowly new to moved ISAP on hear. mean, you at numbers administration that surprised have

George Zoley

kind service of to focus identification think, think think be time and will which that return the increasing It's is of detention I the else the I of that. fastest approach service. close like one very the bed CoreCivic probably alternative anything on detention some seems days. there's which we're with providers answers That's or to probably I can like I XX don't venues to double XX idle Well, But like the capacity. any cost within to capacity their a the comes up of have and utilizing to historical difficulties. stood detention back focus, competitive that, couple ourselves, think alternative Guantanamo,

James McCanless

you you have if the the the thinking different homes out program. Are little opportunities with on first that guess bit growth, about called get for think to bed you're is Is of is I growth you step to going some And focused this or through come? the halfway monitoring you upside revenue to a feel on that increasing where and going of year? most those it count faster going you like be increasing mostly

George Zoley

those the it know improving of see but under reentry at in today, rehabilitation country interested interested Department Pambondi number we capacity increasing of programming around and believe the facilities. that the the it Justice bed the As administration is of is in we that much and the very

So we think there will be of the reentry a lot in activity program.

But We not final for space. as provider been proposed largest in has are Prisons candidate the the a that yet. Bureau of

candidates. they're reviewing potential still So

James McCanless

one just And more Understood. a back to second. then for question monitoring

the did in what could people you what stress Have in to people bound current start your of with tried how upper a upside If case increase going like? to you infrastructure? terms rapid looks you many you see is the through monitor monitoring, do think

Mark Suchinski

and Well, other and to position providers we contracting ourselves millions service permitted help that do us goals. be reach technical by of can trying are that know with those for several we hundreds will thousands, we can

Operator

comes question next go Greg "Â The with Securities. Northland ahead. from Please Gibas

Gregory Gibas

the now that was Adelanto limiting before order use of ask I lifted? wanted facility ICE's court what to for utilization expectations are your

George Zoley

Well, the two court order is in parts.

month next presumably like COVID the I next the I something have month, XXX the of or under that. think of utilization authorize under facility utilize, standards. the the first ruling, the And the authorization beds, there's we will think, to new XXX complete a hearing middle that

facility. X,XXX-bed the a on the Coast. almost largest West It's that's facility So

for East be Our ICE. Delaney facility the Hall the largest facility Coast will on

Gregory Gibas

for per Got what be there about split? facilities the should level helpful. we a future guess of expect relates you costs, how we bed associated I as maybe will costs OpEx And versus regarding Hall, facility And it? with like can to Delaney it it. start-up CapEx is And that to reactivate? maybe future maybe just estimate ramp-up rough think That's expense

George Zoley

the people. exception other XX-day the during about Delaney require But be X,XXX because Delaney will employment, partial our facilities will receive including payment of an Hall the process. Well, start-up may we

for four is about time, pay to got you So at which weeks. least training their

to So be millions dollars. that's of several going

our yet in budget it. know put haven't don't of that really we the timing We because

yet. the put are not revenue We budget the signed because haven't contracts in the

which If we're because slips in We first little contract start-up the of at the very I timing the don't employees on activation fast for half start-up put the and of will money CoreCivic's the a think there CoreCivic's end activity very possibly a of are think competition May the we ramp-up will probably costs funding and realistic where these may and of anticipating the be House, first the that will haven't Senate know costs there'll facilities, until end the ramp-up the because of basis, next of here and the significant ours come, I X,XXX between to those year. approximate the by bit month, X,XXX. procurement a be several take think awards second costs.Â I quarter, for our be It we the be quarter.

history criminal So that's put then program. X,XXX training and a employees that have to recruited, be X-week screened for into history, job

Mark Suchinski

And the populations a what's and you accretive around I the a half and there, cost tell would we the fill no activate facilities revenue bed will there's reactivating year, haven't generate of profitability is when doubt the specific of we per I those facility. in standpoint. from back significantly start what to it we just add, been can But be

It's train hire from George said, cost, reactivation days, reactivation benefit XX to people. we well any costs. of got people. XX, the to XX those So the got exceeds a to We but as

George Zoley

it's the And we because background it's conditions. is It's All inside unusual go. done. hiring, are screening, Facilities different ready in new to do in and bit a complete. the everything brand be is different-they training. need facility and the to may the is Hall Delaney recruitment, the

longer Some perfect idle no Adelanto have has shape. been in requirements. than others. It's capital

think, Michigan. the capital And open I X,XXX the facilities have facilities up rest can in investment like Northlake approximately other without up any so beds we we of to, there.Â Â But

Springs Big have in We Texas.

all Biden's with to interest Carolina. D. think James that they're Georgia, this facilities on contracting because in former have BOP demand Marshalls restriction Ray BOP of interesting both We became at It's Rivers those because the are North which primarily in idle they're facilities in that much ICE an I us. in cell all very And facilities, time. But high facilities. of high-security they're, is they're of

Gregory Gibas

$XXX I we and billion see more of XXXX incremental over $XXX guess Right. we EBITDA to these million makes would to period million see very in expect like post to relates off as sense it on That the or rolling of the million funding commentary lastly, revenue, this? XXXX? in $X to your kind $XXX helpful. Would what

Mark Suchinski

just jump here, me provide some Let in and can George commentary.

'XX XXXX I into pretty contracting think consistent the the stating benefits of in we've start half back in been half see we the of and that XXXX. effect relatively consistent these to with taking awards expect first be to of

full we full XXXX. in the stated the expect to reaching before, of we potential, As benefits see

take financial we bear standpoint And benefits so think with And fruit of will a XXXX. will of within the operational then 'XX. place the that contracting back from in time about, we the XX to the facilities in start and activating half benefits full lines days talked the

Operator

The next from question Sidoti. comes with Brendan McCarthy

Brendan Michael McCarthy

to it sounds of there to wanted XX,XXX was off $XXX roughly this I the annualized side. incremental start discussion revenue XX,XXX know reactivation $XXX quarter, that a was But Just around, in revenue beds. last earnings call, million opportunity beds. I on shifted incremental it the $XXX from now think up million the like opportunity from million, detention

of maybe changed could kind that that see And range as curious what move higher? we expectation? to Just

George Zoley

revision that continue our with in as our statements. just capacity to wouldn't I there to expect I from facilities upside idle it's we relates just we've look specifically would those significant what previous of say clients, and out, it our facilities of the would conversations facilities. our laid and say be a to the at I

more just as opportunities. time it's business more clarity the modeling think we've I case So spent

Mark Suchinski

numbers I would talking just our the that about add to related own we're facilities. are numbers

and a by other at there's looking them. are few owned facilities We are that individuals, of third-party

So numbers our potential those include present additional of facilities. none

Brendan Michael McCarthy

Got it.

out up detention alternatives then levels detention That's on utilization and process Okay. be broad more to you And that population see I maxing of then do ATD Or more, and a levels? question do you population will administration guess, detention, but simultaneous? think of kind helpful. versus ramping the here,

George Zoley

in as the brick-and-mortar that can U.S., far usable. facilities As be

idle you I it's some repurposing presently the XX,XXX before facilities. about think possibly Bureau of of Prisons XX,XXX beds consider to

as beds, this So managing you facilities, XXX,XXX, trying BOP at which consider or only the before can time facilities, as soft-sided get to organic get think, I idle you're XX,XXX the to possibly marketplace if of XX,XXX just XXX,XXX. is repurposing well capable and you to presently

Brendan Michael McCarthy

alternative to population I Great. guess, takes I program, you detention priority? ultimately ISAP while the lag increases just with to clarify, guess the detention see maybe I do contract, a ultimately with there guess, the

George Zoley

program decision their in the the positive a and their scheduled in step and is ISAP case, to that ISAP do be in the deportation.Â Â So No. Well, the to to on hearings. stay then remain We in or preference have their program for or I ramp-up respond allowed but U.S., them participation other, the on down stay have But of continue think they're they ISAP to think there long to That's they go. separate cleared them under ISAP is They're security the ISAP be they not they're until the is U.S., one deportation up and the I appropriately hearing Continue the be it they've think in on high in the team. for criticisms the levels solution get program to ISAP. few monitors ankle a part to made will months and of a ready if the have And is team message monitoring show individual's for and they the has security negative. the of individuals. or detention to not significant as as don't would go decision in lower way stayed on hearing in solution. participation of approved that they allowing their and takes future, people their fairly program individuals one a until initial the to on stay either or the for heard their the to

Operator

question next from Joshua The Noble with Joseph comes Markets. Capital

Unknown Analyst

Joe. I'm filling for in

kind having in obviously, in 'XX? idle those gaining guys 'XX, prepared interest. any really facilities Maybe just Are discussions of on activated some being early idle could So of maybe the your see you we traction? touched facilities kind remarks,

George Zoley

that can again? out. Joshua, you it You've repeat broken

Unknown Analyst

In you early any the and maybe idle kind in being are some ICE your we conversations discussions Marshalls. kind guys reactivated 'twenty-six? having see of 'XX, And prepared those were Could facilities remarks, really with of those traction? gaining

George Zoley

our activated a contracts allow, of And quarter. second end populated be the the this that end full will that so to we of said bit before, of longer of in think the of all would is we facilities 'XX all of I by in the as idle the the benefits place done. back of additional Yes. butÂ all think the I in benefits think, issue XXXX, all be that half will in contracting should some year. Â Even the more specific, reap mean the likelihood and they'll department be It beds view get by XXXX. of funding contracting be doesn't a the detention XXXX. that, that little fully To we take the battle,

is how mid-second early hopeful then second Now quarter. early think the But occur I take the facilities. if will the hopeful, of it contracting much is of think and sense second quarter and activating in administration we're of actual third quarter, takes that the or need to awareness allow to place money the that you quarter for end long the the I available to

Unknown Analyst

XXXX That's with And broke investment, helpful. expenditures everything you obviously, over and else out capital of kind guys Okay. like that. ICE the the

investment, first seems like about quarters at in of Just any sale broken $XX of the looking And around kind are those the fair it's million of when roughly off, it that of furthermore, assessment? that you first XXXX. of sales? three in it's out, how the kind like in facilities, of terms close Is a

Mark Suchinski

Well, detailed can a update more on we provide question process? his first sale is, the

George Zoley

the Well, a large facilities, is one Oklahoma very facility. facility. in our which It's domain the is of public Lawton,

we the state the Lawton the case generally of largest in as are Oklahoma. facilities any operate in in, the facilities is state facility Our with

and a security their appraisal of purchase to an request been month. I the in made a -- So the made facility. expect We've public of they've they're a as high next progress work, assigned, facility, by very we has in appraiser it's lot and assessment think their

Unknown Analyst

about XXXX, first helpful. Okay. three guys? it like over million I calculated yes, investment That sounds And That's obviously, seems yes, you that over amount. $XX the quarters to about right

George Zoley

That does. Yes.

Unknown Analyst

have Perfect. And gone and you the apologize lastly, but I it, increase then substantial seems it over pretty missed you if prepared a this guys might like NOI had in I remarks, kind kind of while on managed-only the the it? more I kind for get just really pretty jump? large segment, a steady bit guys you had revenue. Is of color Can of

George Zoley

handle we additional We've we the advance wages of On increasingly only, do for to staffing had facility made operational to funding, thing them wage the of actual own what is We've make a now. right the clients to funding out levels from is legislative think and but increase state of that. to clients. higher done the increases of a think state additional for our to security level sessions our haven't in higher and and right Most facilities. waited what levels of people for request state security in are the reimbursement concern I their some of in managed we've middle

very could, they and have individuals you that prisoners enough the now. high to they And you medium as as really think kind much that of dealing left be released that to could. careful have staffing I with take extent we're security That situation. of security they've minimum to care

we've are from So challenges, given reimbursements the asking moved several in but for for clients staff forward our funding states. in wages increasing state operational we additional

Operator

comes question Financial. The Jordan with Hymowitz from Philadelphia next

Jordon Hymowitz

numbers XX% with remember any shifted if any Bureau in like include of peak Prison and/or First of shift? been there do was Bureau of correctly, the the has your XXXX, XXXX? I all, like to And population over Prisons population X% of

George Zoley

new not communications in of Well, not the a director we are Bureau appointed. has with been Prisons because

not do contracted be opportunities our think at see facility take exist play our offer agencies. can then will we facilities empty We and a would we to their could the decision, their if have facilities make other them most, of are to well is been given on financially consolidation their be final some of facilities a they we viable the facilities, they approaching and Where the of that to in that over that what BOP looking over rehabilitate if management. of we if most the as we idle all awaiting decide probability can to within helpful as to take -- idle one

So at, Director. pending new a a are there on of little bit looking appointment the are BOP we out, that is the further opportunities some but that timing

Jordon Hymowitz

in another that reason, delay haven't into there's at option this But ICE or Marshals, the a what for is that you're is we some saying equation factored point? BOP

George Zoley

Yes. But by end will X I contracted quarter. our all remaining think the hopeful as be of facilities idle of the I'm second

Jordon Hymowitz

And you're mean X no U.S., I to have you my access have jail the a question to is, one mean, meals jail everybody, at day, least in I legal if but second in wants be in anywhere, you representation.

I or to I amenities. anything, some bed? so all the As when just cheap much to actual included it's option. make to representation that speak, the have you other about international mean per those you than pointed it representation I rights Fakacta but Salvador may be God or you're package, get legal to forbid, mentioned, not that believe are can't and other charged place. El you that may no have per if bed, effectiveness cost of or the you think some total Have out your and amount thrown places. services mean, in It the an cost you facilities better

George Zoley

We have of Marshall. and with experience ICE decades four

for the venue purposed know our for where will rather to know than in I ultimate And deported international maybe are they be detention be those people processed. think about They those the they're going services. capabilities. think sites, quality or I people that our deportation of So they when of

they be the that cooperating are processed will own of deported countries. to country. that logically within level of them think depends may individuals individuals to within but all, security not may the want their on deported other to the speaking, It than most, some these rather country detain be them cooperative foreign that if releasing I just U.S., the

Jordon Hymowitz

from got And don't fair the to to legal prevent sure lawsuits be to much up I'm representation of it occurring you're becomes that springing repeal option a Poy, tougher. you or because that rights amount that if even there's have or

even may to speak. I that so option, So mean, become an not

George Zoley

decision White House as a know and well if don't DHS by We that's policy as the ICE.

Operator

over This back like I George to for any would Zoley session. closing our turn question-and-answer the to concludes remarks. conference

George Zoley

us call. all joining this on thank for Well, you

be and tell lot in you As had our we're of that completely opportunities and which ICE the well role and proud a play in a new BOP on with because questions company under in the length this are we're looking as partnership immigration with the can bit to the and administration. by And Thank the Marshals call, at, we've going quite unprecedented. hopefully the significant of there's a policies Services new you.

Operator

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

You may disconnect. now

The GEO Group, Inc. (GEO) 27 Feb 252024 Q4 Earnings call transcript