Geo Group, Earnings Call Insights: U.K. Electronic Monitoring Bid, Michigan

On Monday, Geo Group, Inc. (NYSE:GEO) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.

U.K. Electronic Monitoring Bid

Manav Patnaik – Barclays Capital: Two questions. The first one is, on electronic monitoring bid in the U.K., I just wanted to get some more color if possible on – if you guys are teaming up with somebody else, is there any subcontractor? I am just curious on how positioned we are, because BI is predominantly U.S., so how leveragable is that internationally?

George C. Zoley – Chairman, CEO and Founder: The prime bidder in U.K. procurement for electronic monitoring will be GEO U.K., and it is joined with the subcontractor GEO (indiscernible) which has the core transfer contract which is called PAX, and which covers 80% of the country, so I think we are well positioned to compete very effectively.

Manav Patnaik – Barclays Capital: So from a monitoring angle though, don’t you need a monitoring base station as they already a part of what that transportation contract is?

George C. Zoley – Chairman, CEO and Founder: We have monitory contracts in our GEOAmey prisoner transport contract, but this opportunity would require the establishment of a new monitoring station. The procurement really is a complete reengineering of the current services, which are provided by two vendors in four different contract geographical areas. The new opportunity would be to consolidate everything into one call center with the all of England and Wales as the geographic area, so everybody has to kind of start from scratch and work with a clean page to provide…

Manav Patnaik – Barclays Capital: Sorry about that, I am at the airport. The other question I had was, in terms of the dividend announcement. I’m just going to let you go on to another question. I’ll call over later.


Todd Van Fleet – First Analysis: Congratulations on yet another MCF deal hammered out. That should provide some additional flexibility for you. I want to ask about Michigan. Can you tell us what the latest is there with respect to that bill or bills moving through the legislative body?

George C. Zoley – Chairman, CEO and Founder: Well, there’s a bill in the Senate and I think that there still are attempts being made in the house to have a companion bill for authorization to issue an RFP to effectively privatize 1,750 bed, but it still has not yet occurred.

Todd Van Fleet – First Analysis: So any – do you expect that whole situation get cleaned up with the budget process this year so maybe (during the year) we would have some revolution on that?

George C. Zoley – Chairman, CEO and Founder: We hopefully would be resolving conference committee.

Todd Van Fleet – First Analysis: Conference committee, so that’s leading up to the end of the month and I guess. So, it’ll be the end of this month or next month?

George C. Zoley – Chairman, CEO and Founder: I think it’s the end of this month.

Todd Van Fleet – First Analysis: Then I wanted to get your sense, George, on California. When do you think we’ll have better visibility on the intent of the state could use those 2,200 plus committee corrections beds that you have vacant in California? Will we really only get the visibility on that situation come November when they vote on the tax proposal that (Brown) has there?

George C. Zoley – Chairman, CEO and Founder: It’s probably a fall timing. It’s certainly after the budgets been past, which is always late and then the vote on whether there’ll be more income generated for the various state programs that (Brown) has put in effect and I think that’s a fair reading of the timing.

Todd Van Fleet – First Analysis: Then one more before I jump. So you got me with the MCF announcement this morning, you got me thinking about the different properties that are included – Moshannon Valley is one of those facilities that’s included in that, is it not?

George C. Zoley – Chairman, CEO and Founder: No, it’s not.