HOUSTON, Oct. 30, 2007 (PRIME NEWSWIRE) -- Cornell Companies, Inc. (NYSE:CRN), today confirmed earnings guidance for the third quarter 2007 and provided guidance impact for the fourth quarter 2007 for two primary changes. The Company stated that, as previously announced, it still expects third quarter 2007 earnings to range from $0.14 to $0.17 per diluted share. For the fourth quarter, however, Cornell announced that it now anticipates a reduction from its previous estimate of $0.36-0.39 per diluted share resulting primarily from two factors; a slower ramp in the intake of new inmates at its Great Plains Correctional Facility ("Great Plains") in Hinton, Oklahoma and higher staffing costs at its Regional Correctional Center ("RCC") in Albuquerque, New Mexico.
James E. Hyman, Cornell's Chairman & CEO said, "Although the inmate ramp at Great Plains proceeds without incident, it started later in September and ramped more slowly in its initial weeks than we originally forecast. This will cause a decline in expected earnings for the fourth quarter of approximately $0.04 cents per diluted share. However, we expect the ramp to be complete by mid-December when the facility reaches the initial contract population of 916. As a result, we do not expect any carryover effect to 2008 at Great Plains.
Mr. Hyman also said, "We also anticipate higher staffing costs than previously forecast in the fourth quarter at the RCC, principally due to our decision to maintain higher staffing levels than is required for just the U.S. Marshals' detainee population that we house today. We decided to staff at higher levels to enable a faster ramp should the Bureau of Immigration and Customs Enforcement (ICE) decide to return detainees to the facility. This will cause a decline in expected earnings for the fourth quarter of approximately $0.02 cents per diluted share. We anticipate that our revenue for the first quarter of 2008 will increase based on the approximately 500-bed guaranteed minimum contract that we have with the Marshals and ICE."
The Company stated that it would be in a position to provide more specific guidance for the fourth quarter 2007 at its upcoming earnings call to be held November 6, 2007.
Statements regarding the Company's earnings, results of operations, inmate ramp at Great Plains, costs and guaranteed minimum contract at RCC, business outlook and future growth, 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 perform according to its current expectations, changes in supply and demand, actions by governmental agencies and other 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.
About Cornell Companies
Cornell Companies, Inc. (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. The Company has 75 facilities in 15 states and the District of Columbia with a total service capacity of 17,602.
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