HOUSTON, May 4, 2007 (PRIME NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN) announced today that it has been awarded a contract by the Arizona Department of Corrections to house 2,000 medium-security inmates at the company's Great Plains Correctional Facility in Hinton, Oklahoma.
The contract, which has a base term of one year with four one-year renewable options, calls for an initial population of 916 beds at the existing facility. During the initial phase, Cornell estimates annualized run-rate revenue of approximately $19 million.
To accommodate the total contracted population of 2,000 inmates, Cornell will commence expansion of the facility in 2007, with an anticipated completion by the fourth quarter of 2008. Once construction is complete, the contract will transition to the full 2,000-bed capacity, for which estimated annualized run-rate revenues at full occupancy are approximately $40 million.
James E. Hyman, Cornell's chairman and chief executive officer, stated, "We are excited to enter into a relationship with a new customer -- the Arizona Department of Corrections -- whereby our recently vacated Great Plains Correctional Facility can be exclusively dedicated to serve their needs. We look forward to providing Arizona with the same quality of care we pride ourselves in delivering throughout the organization."
The official start date of the contract is expected to occur in the third quarter of 2007, although it remains a subject of further discussion at this time. Financial impacts on 2007 will not be estimable until such terms are finalized. Management intends to provide additional comments regarding the contract during the first quarter 2007 earnings conference call scheduled for Tuesday, May 8, 2007 at 11:00 a.m. Eastern time.
About Cornell Companies
Cornell Companies, Inc. 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. The Company (www.cornellcompanies.com) has 80 facilities in 16 states and the District of Columbia with a total service capacity of 18,747.
Statements regarding the receipt of a contract from the Arizona Department of Corrections, its term, its expected impact on future revenues or earnings, timing of expansion-related construction 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 Cornell's ability to finalize contract terms and operate the facility accordingly, actions by third parties, and other factors detailed in the company's most recent Form 10-K and other filings with the Securities and Exchange Commission, which are available free of charge on the SEC's website at http://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 those indicated.