GEO Group FFO Increases; Closes Acquisition Of LCS Assets

(RTTNews) - GEO Group, Inc. (GEO) Wednesday announced a fourth quarter net income of $38.05 million, up from $27.611 million last year. Earnings per share increased to $0.52 from $0.38 a year ago. NAREIT defined FFO also increased to $51.57 million from $40.92 million last year. Normalized FFO per share was $0.70 compared to $0.59 last year. Adjusted FFO increased to $0.81 from $0.72 in the prior year.

Revenue for the quarter climbed to $427.74 million from $383.55 million in previous year.

In a separate announcement, GEO said it closed the acquisition of eight correctional and detention facilities totaling more than 6,500 beds from LCS Corrections Services, Inc. The $307 million deal cash is immediately accretive transaction.

On an annualized basis, the acquisition is expected to immediately increase Geo's revenues by approximately $75-80 million and be initially $0.10-$0.12 accretive to Adjusted Funds from Operations per share, excluding one-time transaction-related expenses. Additionally, GEO expects to achieve substantial improvements in the utilization of the LCS Facilities which is expected to create additional accretion to AFFO per share over the next 12-24 months.

GEO financed the acquisition of the LCS Facilities with borrowings under its $700 million Revolving Credit Facility.

LCS will use the proceeds to repay approximately $298 million in outstanding net debt.