BOCA RATON, Fla., July 1 /PRNewswire-FirstCall/ -- The GEO Group, Inc. (“GEO”) announced today that its wholly owned subsidiary, Atlantic Shores Healthcare, Inc. (“ASH”), has assumed management of the 200-bed South Florida Evaluation and Treatment Center (the “Center”) located in Miami, Florida, under a transition agreement for a six-month period beginning July 1, 2005 and ending December 31, 2005. During this transition period, ASH will manage the Center with a small management team, while the Center remains staffed with State employees.
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On January 1, 2006, ASH expects to assume full operation of the existing Center under an operations agreement, which has an initial term of five years with three five-year renewals and is expected to generate approximately $24 million in annual revenues for each of the first two years. Under the terms of a separate development agreement, ASH would begin the design, construction and financing, through tax-exempt bonds, of a new 200-bed replacement facility that would be leased to and ultimately owned by the State of Florida. ASH would assume operation of the new facility upon its completion in January 2008 under the terms of the operations agreement.
George C. Zoley, Chairman of the Board and Chief Executive Officer of GEO, said: “We are pleased with the assumption of management functions at the South Florida Evaluation and Treatment Center, and we are looking forward to assuming full operation of the Center in early 2006 and to the development of a new state-of-the-art forensic hospital.
“With this new mental health contract, ASH revenues in 2006 would represent approximately 10 percent of total GEO revenues, and we expect that percentage to consistently increase given the robust pipeline of new business opportunities being pursued by ASH,” Zoley added.
The GEO Group, Inc. (“GEO”) is a world leader in the delivery of correctional and detention management, health and mental health, and other diversified services to federal, state, and local government agencies around the globe. GEO offers a turnkey approach that includes design, construction, financing, and operations. GEO represents government clients in the United States, Australia, South Africa, New Zealand, and Canada managing 41 facilities with a total design capacity of approximately 36,000 beds.
This press release contains forward-looking statements regarding future events and future performance of GEO that involve risks and uncertainties that could materially affect actual results, including statements regarding estimated earnings, revenues and costs and our ability to maintain growth and strengthen contract relationships. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) GEO’s ability to successfully manage and operate the 200-bed South Florida Evaluation and Treatment Center and to successfully design, finance and build a new 200-bed replacement facility; (2) GEO’s ability to successfully pursue further growth and continue to enhance shareholder value; (3) GEO’s ability to access the capital markets in the future on satisfactory terms or at all; (4) risks associated with GEO’s ability to control operating costs associated with contract start-ups; (5) GEO’s ability to timely open facilities as planned, profitably manage such facilities and successfully integrate such facilities into GEO’s operations without substantial costs; (6) GEO’s ability to win management contracts for which it has submitted proposals and to retain existing management contracts; (7) GEO’s ability to obtain future financing on acceptable terms; (8) GEO’s ability to sustain company-wide occupancy rates at its facilities; and (9) other factors contained in GEO’s Securities and Exchange Commission filings, including the forms 10-K, 10-Q and 8-K reports.
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CONTACT: Pablo E. Paez, Director, Corporate Relations, The GEO Group,Inc., +1-866-301-4436
Web site: http://www.thegeogroupinc.com/