Arizona DOC Not Renewing Great Plains Correctional Facility Contract with Cornell Companies (CRN)
Cornell Companies, Inc. (NYSE: CRN) announced today that it has received notification from the Arizona Department of Corrections of its election not to renew its contract at Cornell's 2,048 bed Great Plains Correctional Facility in Hinton, Oklahoma, which is scheduled to expire on September 12, 2010. The Company will be working with Arizona in the coming days to determine the schedule for the transfer of inmates, which the Company expects to complete in 2010. As a result of this notification, Cornell intends to continue marketing the facility to other customers.
Cornell's previous 2010 guidance assumed that the Arizona DOC would maintain its use of the Great Plains facility at its present level through the end of the year. In May 2010, Cornell reported that the ultimate resolution of Arizona's usage of the facility would likely depend on the timing of Arizona's budget process and may not occur until the third quarter of 2010. In light of the contract termination, Cornell is withdrawing its prior annual financial guidance.
James E. Hyman, Cornell's Chairman, President, and Chief Executive Officer, said, "The loss of the Great Plains contract will have a negative impact on our near-term financial results. As a result, we are withdrawing our prior annual financial guidance. In light of our proposed merger with The GEO Group ("GEO"), we have decided not to issue updated financial guidance at this time. However, GEO has previously stated that it believes the merger will produce an accretive transaction in 2011, which included an assumption that Arizona would withdraw their inmates from Great Plains during 2010."
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Cornell's previous 2010 guidance assumed that the Arizona DOC would maintain its use of the Great Plains facility at its present level through the end of the year. In May 2010, Cornell reported that the ultimate resolution of Arizona's usage of the facility would likely depend on the timing of Arizona's budget process and may not occur until the third quarter of 2010. In light of the contract termination, Cornell is withdrawing its prior annual financial guidance.
James E. Hyman, Cornell's Chairman, President, and Chief Executive Officer, said, "The loss of the Great Plains contract will have a negative impact on our near-term financial results. As a result, we are withdrawing our prior annual financial guidance. In light of our proposed merger with The GEO Group ("GEO"), we have decided not to issue updated financial guidance at this time. However, GEO has previously stated that it believes the merger will produce an accretive transaction in 2011, which included an assumption that Arizona would withdraw their inmates from Great Plains during 2010."
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