CoreCivic Receives Termination Notice From U.S. Immigration and Customs Enforcement At South Texas Family Residential Center
June 10 2024 - 7:12PM
CoreCivic, Inc. (NYSE: CXW) ("CoreCivic") received
notification today from U.S. Immigration and Customs Enforcement
("ICE") that the agency intends to terminate an inter-governmental
service agreement (“IGSA”) between CoreCivic and ICE for services
at the South Texas Family Residential Center in Dilley, TX (the
“Facility”) effective in 60 days, or on or about August 9, 2024.
For the year ended December 31, 2023, and for the
quarter ended March 31, 2024, total revenues at the Facility were
$156.6 million and $39.3 million, respectively. Given that the
notice of termination was received today and based on cost
uncertainties associated with the closure, CoreCivic is suspending
its financial guidance for 2024. However, we estimate the
annualized financial impact to be a reduction to earnings per share
of approximately $0.38 to $0.41.
South Texas Family Residential Center was initially
opened during the Obama-Biden administration to improve conditions
for a high volume of families then arriving at the border. The
facility features such amenities as turf soccer fields and onsite
medical care. During 2021, the facility's mission shifted to
detention of single adults. The population at the Facility stood at
1,561 as of June 9, 2024.
CoreCivic leases the Facility and the site upon
which it was constructed from a third-party lessor. CoreCivic's
lease agreement with the lessor is over a base period concurrent
with the IGSA, which was amended in September 2020 to extend the
term of the agreement through September 2026. ICE's termination
rights, which permit ICE to terminate the agreement for convenience
or non-appropriation of funds, without penalty, by providing
CoreCivic with at least a 60-day notice, were unchanged under the
extension. Concurrent with the extension of the amended IGSA, the
lease with the third-party lessor for the site was also extended
through September 2026, and permits CoreCivic to terminate the
lease agreement with a notification period of at least 60 days.
CoreCivic has provided such notice of lease termination to the
lessor.
About CoreCivicCoreCivic is a diversified,
government-solutions company with the scale and experience needed
to solve tough government challenges in flexible, cost-effective
ways. We provide a broad range of solutions to government partners
that serve the public good through high-quality corrections and
detention management, a network of residential and non-residential
alternatives to incarceration to help address America’s recidivism
crisis, and government real estate solutions. We are the nation’s
largest owner of partnership correctional, detention and
residential reentry facilities, and believe we are the largest
private owner of real estate used by government agencies in the
United States. We have been a flexible and dependable partner for
government for more than 40 years. Our employees are driven by a
deep sense of service, high standards of professionalism and a
responsibility to help government better the public good. Learn
more at www.corecivic.com.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes forward-looking statements
concerning the termination of the IGSA, the anticipated financial
impact, and the termination of CoreCivic’s lease agreement for the
Facility. These forward-looking statements may include words such
as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,”
“believe,” “may,” “will,” “should,” “can have,” “likely,” and other
words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events. Such forward-looking statements may be
affected by risks and uncertainties in CoreCivic’s business and
market conditions. These forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially from the statements made. Important factors that could
cause actual results to differ are described in the filings made
from time to time by CoreCivic with the Securities and Exchange
Commission (“SEC”) and include the risk factors described in
CoreCivic’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the SEC on February 20, 2024. Except
as required by applicable law, CoreCivic undertakes no obligation
to update forward-looking statements made by it to reflect events
or circumstances occurring after the date hereof or the occurrence
of unanticipated events.
Contact: |
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Investors: Michael Grant -
Managing Director, Investor Relations - (615) 263-6957Media: Steve
Owen – Vice President, Communications - (615) 263-3107 |
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