By MATT BLOIS
The private prison operator CoreCivic reported a big increase in profits during the second quarter of 2019 compared to the year before.
CoreCivic, which moved into its Maryland Farms offices in Brentwood in July, is a for-profit company that owns and operates prisons for government agencies.
The company earned about $490 million in revenue during the second quarter of 2019, a 9 percent increase over the previous year. It also reported profits of about $49 million, up 24 percent from the same quarter in 2018.
For the second consecutive quarter, the company increased its predicted earnings for 2019.
The increase in profits comes despite several special expenses during the second quarter. The company reported $4.7 million in impaired assets and $2.7 million for start-up expenses at two idled facilities.
The company’s revenues have been increasing over the last several quarters because the U.S Marshals Service and U.S. Immigration and Customs Enforcements have been using CoreCivic facilities more. In addition, the company has several new contracts.
That new business offsets the company’s previous contracts with California. In 2010, 13 percent of the company’s revenue came from housing inmates from California’s overcrowded prison system in CoreCivic facilities outside the state.
Now, the company doesn’t house California prisoners outside the state. During that same time period contracts with USMS and ICE increased from 24 percent of revenue to 44 percent of revenue.
Recently, SunTrust, Bank of America, JP Morgan and Wells Fargo, decided to stop lending to the private prison industry. According to SEC documents, several of those banks have agreements to continue funding CoreCivic through 2023.
On a conference call Tuesday morning, CFO David Garfinkle said he expects the banks to follow through on those obligations, but added that the moves are making financing more expensive.
“Although the price of our debt and equity have been affected, primarily by recent headlines from some of the industry’s banking partners, we will continue to monitor capital markets and may alternatively issue debt securities or obtain other forms of capital to refinance these notes,” he said.
Garfinkle and CEO Damon Hininger criticized the banks’ decision not to work with CoreCivc, calling it politically motivated.
The strong financial numbers for the Brentwood company come a few weeks after a former detainee sued CoreCivic, claiming the company caused the death of her 1-year-old child.
Yamin Juárez Coyoy, who said she was fleeing violence in Guatemala, filed the lawsuit at the end of July in a Texas court. According to her complaint, she and her young daughter spent three weeks at a CoreCivic facility in Dilley, Texas, in March 2018.
A spokesperson for CoreCivic released a statement expressing sympathy for the family, stating the company cares about every person entrusted to CoreCivic.
The complaint claims that Juárez Coyoy’s daughter didn’t receive proper treatment for an infection during her time at the detention center, which led to her death shortly after leaving then facility.
CoreCivic manages the facility in Texas, but ICE is responsible for medical and mental health services there. CoreCivic employees don’t make medical treatment determinations.