HOUSTON, Jan. 12, 2010 (GLOBE NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) announced today that it has received a contract award from the Federal Bureau of Prisons ("BOP") to house up to 2,507 low-security adult male inmates in Cornell's D. Ray James Correctional Facility ("D. Ray James") located in Folkston, Georgia pursuant to the Criminal Alien Requirement X ("CAR-10") procurement.
In 2008, the BOP issued the CAR-10 procurement for the housing of approximately 3,814 low security adult male inmates currently housed at two correctional facilities and anticipated that the requirement would be fulfilled through multiple awards.
The contract has an anticipated effective date of October 1, 2010 and has an initial four-year term with three two-year options. While the base contract population is 2,180 inmates, the contract allows for a population up to the 2,507 maximum capacity. Prior to the effective date of the contract, the Company expects to spend between $5.0 million and $10.0 million to prepare D. Ray James for the BOP inmates. The Company estimates that it could earn revenues of approximately $205 million during the initial four-year term of the contract.
The Company intends to provide earnings guidance for the first quarter and full-year 2010 on its fourth quarter 2009 investor call, expected to be held in late February, 2010. At that time the Company expects to be able to discuss the impact on 2010 earnings from the ramp down of the Georgia Department of Corrections' inmates currently housed at D. Ray James and other one-time transition costs. The Company expects that the U.S. Marshals Service will continue to house detainees at this location as the CAR-10 contract does not affect the approximately 300-bed unit located adjacent to the main facility.
James E. Hyman, Cornell's chairman, president and chief executive officer, said, "Our company has served the Federal Bureau of Prisons for 28 years. We are honored that they have selected our D. Ray James facility in Georgia to house up to twenty-five hundred of their inmates over the coming decade. This will be our third facility meeting the BOP's criminal alien requirements, and we look forward to demonstrating our commitment to safety, security and service with a total of approximately 7,500 federal inmates."
Forward-Looking Statements
Statements regarding the expected contract with the Federal Bureau of Prisons, anticipated population and operating revenues at D. Ray James, completion of preparations for the BOP inmates at D. Ray James, anticipated financial impacts, as well as any other statements that are not historical facts, are forward-looking statements within the meaning of applicable securities laws that involve certain risks, uncertainties and assumptions. These include but are not limited to risks and uncertainties associated with general economic and market conditions, including the impact governmental budgets can have on our per diem rates and occupancy, Cornell's ability to perform according to its current expectations, changes in supply and demand, actions by government agencies and other third parties, access to capital and other risks and uncertainties detailed in the Company's most recent Form 10-K and other filings made by us from time to time with the Securities and Exchange Commission, which are available free of charge on the SEC's Web site at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from the statements made. All information set forth in this release is current as of the date of this release. Cornell undertakes no duty to update any statement in light of new information or future events.
About Cornell Companies
Cornell Companies, Inc. (http://www.cornellcompanies.com) is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education in an environment of dignity and respect, emphasizing community safety and rehabilitation in support of public policy. At December 31, 2009, the Company had 68 facilities in 15 states and the District of Columbia and a total service capacity of 21,392.
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