BOCA RATON, Fla., April 25 /PRNewswire-FirstCall/ -- The GEO Group, Inc. (“GEO”) announced today that its wholly owned subsidiary, Atlantic Shores Healthcare, Inc. (“ASH”), has been selected through a competitive procurement process by the State of Florida, Department of Children and Families (“DCF”), to negotiate contracts for the management and operation of the 200-bed South Florida Evaluation and Treatment Center (the “Center”) located in Miami, Florida, and for the construction of a new 200-bed replacement facility.
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Under the terms of the first agreement (the “transition agreement”), ASH would manage the Center for a six-month period from July 1, 2005 through December 31, 2005 with a small management team, while the Center remains staffed with State employees.
On January 1, 2006, ASH would assume full operation of the existing Center under a second agreement (the “operations agreement”), which is expected to generate approximately $24 million in annual revenues for each of the first two years. Under the terms of a third agreement (the “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, which would have an initial term of five years with three five-year renewals.
George C. Zoley, Chairman of the Board and Chief Executive Officer of GEO, said: “We feel honored to have been selected to negotiate for the management of the South Florida Treatment and Evaluation Center and the development of a new $35 million to $42 million state-of-the-art forensic hospital.
“This project would in many ways be similar to our successful partnership at the South Florida State Hospital, where we developed a new $37 million mental health hospital while managing the existing facility for the State of Florida. We believe that these successful public-private partnerships can be replicated throughout the country. With this new mental health contract, ASH revenues in 2006 would represent approximately 10 percent of total GEO revenues, and I expect that percentage to consistently increase,” 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/