Yahoo Finance CoreCivic Inc (CXW) Reports First Quarter 2024 Financial Results
Revenue: $500.7M, up 9.3% year-over-year, exceeding estimates of $481.07M.
Net Income: Reported at $9.5M, falling short of estimates of $16.26M.
Earnings Per Share (EPS): Reported at $0.08, below the estimated $0.14.
Adjusted Net Income: Improved to $27.9M from $14.7M in Q1 2023, indicating strong operational performance after adjustments.
Normalized Funds From Operations (FFO) Per Share: Increased to $0.46, up 35% from $0.34 in Q1 2023, reflecting efficient capital management and reduced interest expenses.
Share Repurchase: Accelerated buyback with 2.7 million shares repurchased for $39.4M, demonstrating confidence in financial stability and shareholder value enhancement.
Debt Management: Issued $500M of new senior unsecured notes, effectively refinancing existing debt and maintaining leverage within target range, showcasing prudent financial strategy.
On May 8, 2024, CoreCivic Inc (NYSE:CXW), a leader in the ownership and management of private prisons and detention centers, disclosed its financial outcomes for the first quarter of 2024 through an 8-K filing. The company, known for operating across three segments: Safety, Community, and Properties, highlighted a quarter driven by increased occupancy rates and robust capital strategy maneuvers, including significant share buybacks and debt refinancing.
Financial Performance Overview
CoreCivic reported a net income of $9.5 million, or $0.08 per diluted share for the quarter, a decrease from $12.4 million, or $0.11 per diluted share in the first quarter of 2023. However, adjusted for special items, the adjusted net income rose to $27.9 million, or $0.25 per diluted share, from $14.7 million, or $0.13 per diluted share in the prior year's quarter. This improvement was primarily due to higher federal, state, and local populations, particularly at facilities serving U.S. Immigration & Customs Enforcement (ICE), coupled with a decrease in interest expenses and a reduction in shares outstanding.
Revenue for the quarter was $500.7 million, up 9% from $458.0 million in the first quarter of 2023, driven by a 75.2% occupancy rate, the highest since the first quarter of 2020. The Adjusted EBITDA also saw a significant increase to $89.5 million from $73.7 million in the previous year, reflecting higher occupancy and effective cost management strategies.
Strategic Capital Management
The quarter was notable for CoreCivic's active capital management. The company repurchased 2.7 million shares for $39.4 million and issued $500 million of new senior unsecured notes to refinance existing debt. This strategic refinancing extended the debt term by approximately three years at the same interest rate, demonstrating prudent financial stewardship amid lower interest rates established in 2021.
Operational Highlights and Challenges
CoreCivic successfully renewed eight contracts during the quarter and continued to see benefits from its labor retention strategies, which have reduced costs significantly. However, the company faces challenges from the non-renewal of the lease at the California City Correctional Center, which is expected to impact earnings per share in the coming quarters.
Looking Ahead
For the full year 2024, CoreCivic has updated its financial guidance, now expecting net income between $52.7 million and $63.7 million and adjusted net income between $74.0 million and $85.0 million. The company also anticipates investing between $70.0 million and $76.0 million in capital expenditures to further enhance its operational capabilities and infrastructure.
CoreCivic's first quarter results reflect a resilient operational model and a strategic approach to capital management, positioning the company to navigate the complexities of the corrections and detention management industry effectively. As the company moves forward, its focus on maintaining high occupancy rates and managing costs will be crucial in sustaining its financial health and operational efficiency.
For more detailed financial information and future updates, investors and interested parties are encouraged to visit CoreCivic's investor relations webpage.
Explore the complete 8-K earnings release (here) from CoreCivic Inc for further details.
This article first appeared on GuruFocus.
