Geo Group gets modified ICE contract

Company will house undocumented immigrants

“There’s a growing trend this year compared to last year, where ICE is actively seeking out additional capacity because of the illegal crossings, and we expect that trend to continue.” George Zoley,

Geo Chairman and CEO

The Geo Group, a global prison and detention center operator based in Boca Raton, on Thursday said it has received a modified contract to house additional undocumented immigrants and is bidding for other detention business that could be awarded by year’s end.

The announcement came during a conference call with Wall Street analysts to address second-quarter earnings.

In June, the Department of Homeland Security and U.S. Immigration and Customs Enforcement asked suppliers for information to fill a potential need for about 15,000 beds in different locations.

“There’s a growing trend this year compared to last year, where ICE is actively seeking out additional capacity because of the illegal crossings, and we expect that trend to continue,” Geo Chairman and CEO George Zoley said on Thursday.

During the call, Zoley said he wanted to make clear that “our company does not manage any facilities that house unaccompanied minors.”

Geo operates the Karnes Family Residential Center in Karnes City, Texas, which holds mothers and children and was established in 2014 by the Obama administration.

Under the Trump administration’s order not to separate undocumented families who cross the border, analysts expect that Geo and competitor CoreCivic could potentially capture millions of dollars in business.

During the second quarter, ICE modified Geo’s contract for its Folkston, Ga., ICE processing center in July, increasing the number of beds from 738 to 1,118, and began taking new detainees two weeks ago, according to J. David Donahue, who oversees U.S. corrections and detention for Geo.

Geo said it is awaiting an award decision from ICE for management of a governmentowned, 700-bed processing center in Florence, Ariz.

Geo also said it expects to complete in September its new

1,000-bed contract for a detention center in Conroe, Texas, awarded by ICE in 2017. The detention center will cost $120 million but generate $144 million in revenues, Donahue said.

The company is bidding on other opportunities in federal and state prisons as well as with ICE, executives said.

On Thursday, the company also announced new state contracts for prison operation in Idaho, Oklahoma and California, and said it expects more states’ business as aging prisons, now 30 to 60 years old in some states, are replaced.

Geo has about 7,000 “idle” beds in existing correctional facilities that the company has said it hopes will be filled through new ICE, U.S. Marshals Service and U.S. Bureau of Prisons contracts.

The Geo Group beat Wall Street analysts’ earnings forecast for its second quarter with $37.4 million, or 31 cents a share, compared with $31 million, or 25 cents a share during the second quarter last year. Quarterly revenues were $583.5 million, up from $577.1 million, the company said Thursday.

Geo’s stock was $25.18 a share, down 47 cents or 1.83 percent, in midday trading Thursday on the New York Stock Exchange.