The GEO Group, Inc. (NYSE:GEO) Q4 2022 Earnings Call Transcript

Brian Evans: Yeah, I think $175 million to $200 million.

Kirk Ludtke: Got it, great. Thank you very much, guys.

Operator: Our next question will come from Jordan Sherman with Ranger Global. You may now go ahead.

Jordan Sherman: Great. Thank you. Okay, so I apologize. I want to return to ISAP for one more minute. Two questions on that. But first, I just want to understand the ISAP budget is, it was consistent from 2022 to 2023. But in 2023, you were able to — they had some flexibility in the budget and they were able to get money that were budgeted for elsewhere to increase the number of people in ISAP, is that correct? And then this year, they’ve pulled back to budget levels?

George Zoley : No, I didn’t say that.

Jordan Sherman: Okay.

George Zoley : This year we see the allocated amount is approximately the same as last year, it remains to be seen as to whether they’re approved for additional funding as they have been in prior years.

Jordan Sherman: Got it. Okay. So that’s not a definite at the moment. It’s just a — to be determined.

George Zoley : Correct. And so we had to take that in consideration in creating our guidance and providing some flexibility.

Jordan Sherman: Yes. Understood. You mentioned part of the reason for — so that’s one reason, part of the reason you mentioned is budgetary pressures. The other one was changes in immigration policy. And I’m wondering if that’s what that was, a; and b, is that the reason, I’d look at the Southwest border crossings numbers, which were in December 252,000, but dropped 156,000 in January? And I’m wondering if those two are related, or if those are — what’s driving those? What were the changes? And is that the reason why had some so few — so many fewer border encounters?

George Zoley : Well, January is historically the lowest count day because of temperature, and there’s also holidays in Mexico during that time that impact the border crossings. So for four decades, January’s been the lowest crossing count month.

Jordan Sherman: No, I appreciate that. But we were running 40% above last year levels, and then in Jan — in October, to November, December, and then in January, we’re just about last year’s level.

George Zoley : Well, I think that was part of the anticipation of the end of Title 42 and the potential surge, and that didn’t happen.

Jordan Sherman: So how does that decrease the number of border encounters?

George Zoley : Well, Title 42 is still in effect, a. B, it’s a lot colder. And

Jordan Sherman: Okay. And it just seems a pretty dramatic drop year-over-year, month-over-month and you had didn’t see that, is that

George Zoley : I think well, historically, December is not as large. I mean, you shouldn’t be looking at a December as being nominally, not January. January is always the lowest month. Why was December so high? And I think they were anticipating that Title 42 would go away and people were lined up at the border.

Jordan Sherman: Oh, I see. Got it. Got it. Okay, I understand. I understand. So with Title 42 do not people got discouraged and went away.

George Zoley : Yes. Yes.

Jordan Sherman: Got it. Okay. Okay. Understood. And I appreciate that. In the ISAP program, well, what were the changes in immigration policy? You mentioned that impacted ISAP?

George Zoley : Well, there’s been the establishment of the parole program for certain countries, and which is now being legally challenged in the courts, but some action has been taken to remove some ISAP participants align with those countries.

Jordan Sherman: Got it. Okay. And then just finally, if you had on average 100 and I mean, 290,000 across the year versus 300,000. What would be on €“ I know this varies depending on what services you’re providing for the individual persons. But on average, how much revenue difference would that 10,000 across the year be and how much EBITDA difference?

Brian Evans: I don’t know, if we’ve given out that kind of information in the past.

Jordan Sherman: Would you liked it

Jose Gordo: Yes, no, I think

Brian Evans: It is, right, we’ve taken into account all the factors you described to provide a reasonable, low end of the range, we’re certainly hopeful it does materialize. But we want to make sure we take into account the most recent current events, and then I think we’ve been prudent. As wee talked about last year, was growing every month, there’s always been some starts and stops in the program. But the general direction is in trend to the program has always been upward. But we’ve seen this recent trend in some of the issues that George described, and felt that it was prudent to give a guidance range that reflected a reasonable lower estimate. And so that’s what we’ve done.

Jordan Sherman: Yeah. I appreciate that. Could you elaborate on any potential opportunities for reactivation facilities? I’m sure I got that word wrong.

Jose Gordo: No, I can’t.

Jordan Sherman: Okay. Are they €“ how about this one. Are they state or federal? Say

Jose Gordo: Yeah, we talked to all our clients.

Brian Evans: They are both.

Jordan Sherman: Okay. Any of them out for formal RFP yet?