Geo Group Inc (The) REIT

Good day and welcome to the GEO Group first quarter 2024 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star, then two. 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.

Thank you, operator. Good morning, everyone, and thank you for joining us for today's discussion of the GEO Group's first quarter 2024 earnings results. With us today are George Zoli, Executive Chairman of the Board, Brian Evans, Chief Executive Officer, Wayne Calabrese, President and Chief Operating Officer, Shane March, Acting Chief Financial Officer, and James Black, President of GeoSecure Services. This morning we will discuss our first quarter results as well as our outlook. We will conclude the call with a question and answer session. This conference call is also being webcast live on our investor website at investors.geogroup.com. Today, we will discuss non-GAAP basis information. A reconciliation from non-GAAP basis information to GAAP basis results is included in the press release and supplemental disclosure we issued this morning. Additionally, much of the information we will discuss today, including the answers we give in response to your questions, may include forward-looking statements. regarding our beliefs and current expectations with respect to various matters. These forward-looking statements are intended to fall within the safe harbor provisions of the securities laws. Our actual results may differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the Form 10-K, 10-Q, and 8-K reports. With that, please allow me to turn this call over to our Executive Chairman, George Olie. George?

Thank you, Pablo, and good morning to everyone. Thank you for joining us on our first quarter 2024 earnings call. I'm pleased to be joined today by our senior management team. During today's call, we will review the first quarter financial results and the operational milestones for each of our business segments. provide an update on our recent refinancing transactions and our continued efforts to enhance long-term value for our shareholders, and discuss our financial guidance and outlook for the balance of the year. During the first quarter, our diversified business units continued to deliver strong operational and financial performance. This morning, we reported first quarter revenues of approximately $606 million and a gap net income of approximately $23 million. We also reported first quarter adjusted EBITDA of approximately $118 million. Looking at our key quarterly trends, revenues for our owned and leased secure facilities increased by approximately 7% from a year ago. This increase was driven primarily by year-over-year population increases across our ice facilities. Utilization in our ice facilities averaged approximately 13,000 beds during the first quarter of 2024. We estimate that during the same time frame, the utilization across all ice facilities nationwide averaged approximately 38,500 beds. We estimate that the utilization across ICE facilities nationwide is currently at approximately 37,000 beds, and that the current utilization at GEO's ICE facilities remains at approximately 13,000 beds. With respect to federal funding, the Appropriations Bill for Fiscal Year 24, which recently was enacted by Congress, increased funding for ICE detention 41,500 beds from the previously funded level of 34,000 beds. Moving to our managed-only segment compared to one year ago, our quarterly revenues increased by approximately 14%. The year-over-year increase in managed-only revenues was driven by new contract activations in our secure transportation and international business. In the third quarter of 2023, our GTI Transportation Division activated a new contract to provide air operation support for ICE. This contract was first activated on an emergency basis, and more recently, we announced a new long-term five-year contract for GTI to continue to deliver these services as a subcontractor to CSI Aviation, which holds the prime contract with ICE. Internationally, our GEO Australia subsidiary activated a new contract in July of 23 to deliver primary health care services across 13 public prisons in the state of Victoria. Moving to our GEO Reentry Services Division, we renewed three residential reentry center contracts with the Federal Bureau of Prisons during the first quarter of 2024. And the quarterly revenues for our non-residential reentry services segment increased by approximately 19 percent from a year ago. With respect to the Federal Government's Intensive Supervision Appearance Program, or ISAP, participant counts averaged approximately 188,000 individuals during the first quarter of 2024. compared to an average ISAT participant count of approximately 192,000 during the fourth quarter of 2023. Since the end of the first quarter, the ISAT participant count has fluctuated between approximately 184,000 and 185,000 individuals. With respect to federal funding, Appropriation bills for fiscal year 24, which was recently enacted by Congress, increased funding for alternatives to detention programs to approximately $470 million, an increase of approximately 7% over the previously funded level of approximately $440 million. While we would expect utilization rates for detention beds and the alternative detention programs to potentially increase in the second half of the year, consistent with seasonal increases in border crossing activity, the timing and impact of such increases are difficult to estimate. Additionally, policy and budgetary decisions that can often impact the utilization of ICE detention beds and the alternatives to detention programs like ISAF are outside of GEO's control as a service provider to the federal government. For these reasons, we have decided to maintain our full year 2024 adjusted EBIDA guidance. We remain focused on providing high-quality services on behalf of DHS and ICE, and we stand ready to provide any needed services and resources to help the federal government and all of our government agency partners meet their needs. Finally, we are pleased to have recently completed the refinancing of substantially all of our debt. These important refinancing transactions have pushed our debt maturities, reduced our overall cost of debt, and have given us greater flexibility for potential capital returns under our debt covenant. I will now turn the call over to our CEO, Brian Evans.