Q2 2024 CoreCivic Inc Earnings Call Transcript
Key Points
- CoreCivic Inc (CXW) reported a 6% increase in revenue for the second quarter of 2024, reaching $490.1 million, driven by growth across federal, state, and local government partnerships.
- Normalized funds from operations (FFO) increased by 27% per share compared to the previous year, attributed to higher occupancy rates and effective cost management.
- The company successfully reduced its leverage to 2.5 times net debt to adjusted EBITDA, aligning with its target range, and repurchased 1.3 million shares of common stock during the quarter.
- CoreCivic Inc (CXW) experienced a 49% increase in local revenue due to new contracts with Hinds County, Mississippi, and Harris County, Texas.
- The company reported improved labor market conditions, allowing for a reduction in temporary staffing incentives and associated costs, contributing to better operational efficiency.
- The expiration of a lease with the State of California at the California City Correctional Center led to decreased lease revenue in the property segment.
- The termination of the South Texas Family Residential Center contract with ICE is expected to negatively impact operating margins by 150 to 200 basis points.
- Despite revenue growth, CoreCivic Inc (CXW) faced slightly higher general and administrative expenses during the quarter.
- The company's community segment saw a slight decline in occupancy from 62.8% to 62.3% year-over-year.
- CoreCivic Inc (CXW) anticipates a potential increase in leverage due to the termination of the South Texas contract, which may impact future stock repurchases.
Good day, and thank you for standing by. Welcome to the 2024 second-quarter CoreCivic, Inc earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Mike Grant, Managing Director of Investor Relations. Please go ahead.
Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today. Participating on today's call are Damon Hininger, CoreCivic's President and Chief Executive Officer; and David Garfinkle, our Chief Financial Officer. We're also joined here in the room by our Vice President of Finance, Brian Hammonds.
On this call, we will discuss financial results for the second quarter of 2024 as well as financial guidance for the 2024 year. We will also discuss developments with our government partners and provide you with other general business updates during today's call. Our remarks, including our answers to your
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