CoreCivic Reports First Quarter 2021 Financial Results

BRENTWOOD, Tenn., May 05, 2021 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the first quarter of 2021.

Financial Highlights – First Quarter 2021

• Total revenue of $454.7 million
  • CoreCivic Safety revenue of $409.8 million
  • CoreCivic Community revenue of $23.7 million
  • CoreCivic Properties revenue of $21.3 million
• Special items include income tax expense of $114.2 million primarily associated with change in corporate tax structure and $51.7 million for a shareholder litigation settlement
• Net loss attributable to common stockholders of $125.6 million
• Diluted loss per share of $1.05
• Adjusted diluted EPS of $0.24
• Normalized FFO per diluted share of $0.44
• Adjusted EBITDA of $96.3 million

Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “While our GAAP financial results were impacted by certain non-recurring charges related to our conversion from a REIT to a taxable C-corporation and a shareholder litigation settlement, we are pleased with the strong underlying performance of the business despite the challenges of operating during the COVID-19 pandemic. We continue to generate strong cash flows and remain focused on repaying debt to improve our credit profile. Following the revocation of our REIT status, in April we were able to successfully access the credit markets to extend our debt maturities by issuing unsecured senior notes.”

We are dedicated to helping those in our care be successful in their next step in life. Every day, our chaplains, counselors and instructors help nearly 1,500 inmates learn the life and vocational skills they need to find and keep employment once released. Every year, our dedicated teachers help more than 1,500 inmates earn a GED, which research shows makes them 30% less likely to return to prison after they’re released. We help our government partners solve some of their toughest challenges by providing flexibility to manage constantly changing needs and populations and delivering on proven reentry programs that fight recidivism and change lives.

First Quarter 2021 Financial Results Compared With First Quarter 2020

Net loss attributable to common stockholders in the first quarter of 2021 totaled $125.6 million, or $1.05 per diluted share, and was driven by $154.8 million, or $1.29 per share, of special items, compared with net income attributable to common stockholders generated in the first quarter of 2020 of $32.1 million, or $0.27 per diluted share. Adjusted for special items, net income in the first quarter of 2021 was $29.3 million, or $0.24 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the first quarter of 2020 of $37.2 million, or $0.30 per diluted share. Special items in the first quarter of 2021 included a non-recurring charge of $114.2 million in income taxes primarily associated with change in corporate tax structure, $51.7 million in shareholder litigation expense, $1.6 million in expenses associated with COVID-19, $1.3 million in asset impairments, less $14.1 million of income tax benefits for the aforementioned special items. Special items in the first quarter of 2020 included $3.1 million of deferred tax expenses related to our Kansas lease structure, $0.5 million in asset impairments, and $0.3 million of expenses associated with mergers and acquisitions.

Funds From Operations (FFO) was a loss of $100.9 million, or $0.83 per diluted share, in the first quarter of 2021, compared to $61.7 million, or $0.51 per diluted share, in the first quarter of 2020. Normalized FFO, which excludes the special items described above, was $53.0 million, or $0.44 per diluted share, in the first quarter of 2021, compared with $65.3 million, or $0.54 per diluted share, in the first quarter of 2020.

EBITDA was $41.6 million in the first quarter of 2021, compared with $99.5 million in the first quarter of 2020. Adjusted EBITDA, which excludes the special items described above, was $96.3 million in the first quarter of 2021, compared with $100.4 million in the first quarter of 2020, including a decrease of $2.3 million resulting from the sale of 42 properties sold in the fourth quarter of 2020.   

Adjusted financial results in the first quarter of 2021, compared with the first quarter of 2020, declined primarily because 2021 financial results reflect an income tax provision under our new corporate tax structure, compared with the prior year when we were entitled to a deduction for dividends paid as a real estate investment trust (REIT). As a REIT, therefore, we incurred very little income tax expense. Financial results in 2021 also reflected lower utilization under contracts with Immigration and Customs Enforcement (ICE) and modest occupancy declines across many of our state-level contracts due to the ongoing impact of COVID-19.

Issuance of Senior Unsecured Notes

On April 14, 2021, we completed the offering of $450.0 million aggregate principal amount of 8.25% senior unsecured notes, due April 2026 (the new notes). The new notes priced at 99% of face value and as a result have an effective yield to maturity of 8.5%. We used net proceeds from the offering of the new notes of approximately $435.1 million, after deducting the original issuance, underwriting discounts, and estimated offering expenses, to redeem all $250.0 million principal amount of our outstanding 5.0% senior unsecured notes due 2022, which have been called for redemption on May 14, 2021 by a redemption notice issued on April 14, 2021, including the payment of the applicable make-whole amount and accrued interest. We used additional net proceeds from the offering to repay $149.0 million of the $350.0 million principal amount of our outstanding 4.625% senior unsecured notes due 2023 (the 2023 notes) at an aggregate purchase price of $151.2 million in privately negotiated transactions, reducing the outstanding balance of the 2023 notes to $201.0 million. The remaining net proceeds from the offering were used to pay-down a portion of the amounts outstanding under our revolving credit facility and for general corporate purposes.

Business Development Update

Update on Contracts with the United States Marshals Service.
Pursuant to President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO, the U.S. Marshals Service (“USMS”) has indicated that it has been advised by the Office of the Deputy Attorney General not to renew existing contracts, or enter into new contracts for private detention facilities. We currently have four contracts with the USMS that expire in 2021. The USMS has notified the Company that it will not be renewing its contract for our Northeast Ohio Correctional Center, which expires May 30, 2021. We continue to explore opportunities with various government agencies, including the state of Ohio, the primary user of the Northeast Ohio facility, to replace the capacity currently used by the USMS.   

In addition to the contract with the USMS for our Northeast Ohio Correctional Center, the USMS has full access to our 600-bed West Tennessee Detention Facility and our 1,033-bed Leavenworth Detention Center under direct contracts with the USMS that expire in September 2021 and December 2021, respectively. The USMS also utilizes less than 100 of the 664 beds at our Crossroads Correctional Center under a contract that was scheduled to expire in April 2021, but was extended through June 30, 2021, and is not expected to be renewed thereafter. We currently expect the USMS to relocate detainees at the Crossroads Correctional Center. The state of Montana, which utilizes the remaining capacity at the Crossroads facility, has expressed a desire to utilize the beds used by the USMS at the facility, and we currently expect to incorporate their utilization into a contract renewal that begins July 1, 2021, negating the financial impact of the USMS vacancy. We do not yet know if the USMS will relocate the detainees at our West Tennessee and Leavenworth facilities. We continue to work with the USMS to enable it to fulfill its mission, including at the Northeast Ohio, West Tennessee, and Leavenworth facilities. However, we can provide no assurance that we will be able to provide a solution that is acceptable to all parties that would be involved in such a solution.

Financial Guidance

At this time we are not providing 2021 financial guidance because of uncertainties associated with COVID-19, as well as uncertainties associated with the application of the administration’s various executive actions and policies related to immigration and criminal justice. We do not expect to provide…