Q1 2020 Earnings Call
Today we will.
Discuss non-gaap basis information it reconciliation from non-gaap basis information to gaap basis results is included in the press release and supplemental disclosure. We issued this month additionally much of the information. We will discuss today including the answers. We give in response to your questions may include forward-looking statements regarding our beliefs and current expectations with respect to various matters. These forward-looking statements are intended to fall within the safe harbor provisions of the Securities laws are actual results, May differ materially from those in the forward-looking statements as a result of various factors contained in our Securities and Exchange Commission filings, including the form 10-K. Thank you and 8-k reports with that. Please allow me to turn this call over to our chairman and CEO George zoley, George. Thank you Pablo and good morning to everyone this morning. We reported our first quarter results.
Updated our guidance for the full year and issued guidance for the second quarter.
As our country in the world face in the unprecedented health and economic crisis employees and Facilities throughout the United States and internationally have also been impacted by the spread of covid-19 virus some of our employees live in communities that have been derd significant hardship and a few of our facilities have experienced cases of took 19 in both our staff and individuals entrusted to our care.
From the outset of This Global pandemic our corporate Regional and field staff have been implemented comprehensive steps to address and mitigate the risk of covid-19 to all those in our gear and our employees ensuring the health and safety of all those in our facilities and our employees has always been our number one priority.
As a long-standing provider of the central government services, we have the experience with the implementation of best practices for the prevention assessment and the management of it's just deleted all of our facilities operate safely and without overcrowded conditions, all of our facilities have access to a regular hand-washing wage in water and soap as well as ample hygiene and sanitation products all of our secure facilities provide 24/7 access to Healthcare in the case of our ice processing centers. The number of healthcare staff is typically double the number of healthcare staff at State Correctional Facilities. Most of our facilities are equipped with air borne infection isolation rooms specifically designed to manage infectious diseases.
During this call, David Donahue.
And we'll discuss the steps we've taken at our Geo secure services and Geo care facilities to implement best practices consistent with the guidance wage by the Center for Disease Control and prevention, even though we have continued our operations as an essential government service provider. The spread of covid-19 has also really impacted our projected revenues and cash flows for the year.
Our ice and US Marshals facilities have experienced lower overall occupancy as a result of declines and crossing and apprehensions along the Southwest border off as well as a decrease in court and sentencing activity at the federal level.
Additionally, the federal government recently issued covid-19 operational guidance recommending a reduction to 75% capacity at ice processing centers. Where is possible to promote social distancing practices?
It's important to note that most of our Geo secure facilities contracts contain fixed price our minimum guaranteed payment Provisions intended to ensure adequate Staffing levels and consistent Service delivery. Currently our ice processing centers in u.s. Marshals facilities are operating at around the capacity level tied to the fixed-price or minimum wage payment provisions.
Although it is possible that we may experience an improvement in occupancy levels that ice and US Marshals facilities later this year our updated Financial guidance assuage the continuation of the currently lower levels for the entire year.
With respect to off-site medical expenses at our ice processing centers in u.s. Marshals facilities the federal government typically Bears the cost for offside Medical Care off.
R. G o t r segment has also experienced a decline in Revenue primarily related to lower occupancy across our Geo reentry centers and day reporting programs.
While we hope the trends will improve later this year are updated guidance assumes lower occupancy levels for the entire year.
During the first quarter We Begin the intake process at the government-owned 512 bed El Centro Detention Facility in California under a New Jersey monthly price contract with US Marshals service.
We also completed the intake process in Chief normalize operations that are company-owned 1800 North Lake Correctional Facility in Michigan.
And in Texas, we completed the intake process and Achieve normalized operations at the county-owned 1800 bedrooms County Detention Center one and two and one and the 1376 bed Reeves County Detention Center 3.
these
Facilities were activated under new ten-year contracts with the Federal Bureau of Prisons providing for fixed monthly payments.
Before I turn the call over to Brian Evans to review the results Outlook and liquidity position. I would like to say a few words about our front-line employees.
Every day more than 20,000 employees report to work at over two hundred facilities and Program locations these front-line employees make daily sacrifices to care for all of those in our facilities and programs. They are security officers social workers case managers teachers maintenance staff doctors nurses wage, but more importantly they are members of the diverse communities whose families have also been impacted like everyone else. I'd like to express our deepest gratitude and appreciation to all of our front-line GM employees for their daily dedication and sacrifice, which is truly an inspiration for us all despite. This quarter's many challenges our revenues and cash flows remain resilient continue to support our dividend events. I'll now turn the call over to Brian ethics. Thank you George. Good morning everyone today. We reported first quarter revenues of approximately
605 million dollars and net income attributable to Gio of Twenty One cents per diluted share
Our first quarter results reflect approximately $0.03 per share and higher employment tax expense which are front-loaded in the first quarter of each year. Additionally. Our first quarter results reflect a $400,000 gain on real estate assets a 1.6 million dollar gain on the extinguishment of debt two million dollars in start-up expenses, 1.9 million dollars and close out expenses and $900,000 in covid-19 related expenses all pre-tax associated with additional personal protective equipment diagnostic tests and medical expenses.
Excluding these items. We reported first-quarter adjusted net income of $0.24 per diluted share. We also reported first-quarter 2020 of 55,000 diluted share as George discussed. The spread of covid-19 has resulted in lower occupancy and a number of our facilities and programs beginning in late March and is therefore expecting a result lower full-year revenues primarily for our ice and US Marshals facilities and our Geo reentry Services business.
Currently are icing US Marshals facilities are operating at or around the capacity level tied to the fixed-price or minimum occupancy payment provisions and our contract wife is possible that we may experience an increase in occupancy levels at these facilities later. This year are updated full-year guidance assumes a continuation of the currently lower levels through the end of the year resulting in an estimated Revenue decline of approximately 8% for the full year are Geo reentry Services business has also seen an occupancy declined beginning of March in both our residential centers and non-residential day reporting centres do to lower levels of referrals by federal state and local agencies.
again
Wallet, is it possible that referral levels may increase later this year are updated full-year guidance assumes lower occupancy levels for a re-entry segment through the end of the year resulting in an estimated Revenue decline of approximately 4% for the full year. We have also increased our spending on personal protective equipment diagnostic testing and medical expenses incurred as a result of covid-19 and expect to incur several million dollars and non-recurring costs during 2020.
Our updated guidance continues to assume no contribution from our Central Valley Desert View and Golden State facilities in California, even though we are hopeful these facilities will be activated as ice processing center and taxes during the second half of this year despite several challenges. We believe that our cash flows and revenues remain resilient. We expect full, tributable to Gio to be in a range of 92 cents to a dollar and $0.04 per diluted share. We expect full-year adjusted. Net income to be in a range of a dollar to a dollar and $12 a month per diluted share. We expect full-year to be in a range of $2.25 to $2.35 per diluted share.
For the second quarter, we expect net income attributable to go to be in a range of twenty two twenty four cents per diluted share and adjusted. Net income to be in a range of 23 to $0.27 per diluted share long. We expect second quarter to be between $54.58 per diluted share.
As a reminder compared to our first quarter results are subsequent quarters historically reflect lower employment tax expenses, which are front-loaded in the first quarter of each year.
Moving to our capital structure at the end of the first quarter. We had approximately $32 in cash on hand and approximately 350 million dollars in available capacity under our revolving credit facility in addition to an accordion feature a $450 million dollars under our credit facility with respect to our Capital expenditures. We expect total capex in 2020 to be about $85 million dollars including twenty $19 for maintenance capex below our previous estimate at this time. I will turn the call over to Dave Donohue for a review of Geo secure Services segment. Thanks, Brian and good morning everyone. I'd like to provide you with an update on our Geo secure Services business unit and specifically on the stuff we've taken at our secure service facilities to address and mitigate the risk associated with covid-19.
From the onset of the pandemic we issued guidance to all of our facilities consistent with the guidance issued for Correctional and detention facilities by the Centers for Disease Control and prevention month. We immediately updated our policies and procedures to include best practices for the prevention assessment and management of covid-19. Again, relying on the guidance issued by the CDC page best practices include the implementation of quarantine and cohorting procedures to isolate confirmed and presumptive cases of covid-19, including medical isolation and the name of Airborne infection isolation rooms at our facilities.
We also provided.
Educational guidance to our employees and individuals in our Care on the best preventive measures to avoid the spread of covid-19 such as frequent and careful hand-washing avoiding touching areas of the faith including facial hair avoiding individuals exhibiting flu-like symptoms proper cough and sneeze etiquette social distancing requirements and adjustments to laundry and meal schedule. We have increased the distribution of personal hygiene products, including soap shampoo and body wash and tissue paper to at least twice per week and all of our facilities and more frequently if needed. Additionally bars of soap or soap dispensers are placed at each sink daily for hand washing.
We have also deployed specialized sanitation teams to sterilize. Hi contact areas of our facilities and have developed intensive schedules and procedures for the cleaning and disinfecting facility spaces above and beyond normal cleaning activities.
We have procured additional cleaning equipment and sanitation products that are proven Healthcare grade disinfectants. We advised our employees to remain home if they exhibit flu-like symptoms month and we've exercised flexible paid leave and paid time off policies to allow for employees to remain home if they exhibit flu-like symptoms or to care for a family member.
We engaged with our government Partners to promptly suspend non-essential visitation at all of our facilities, and we have employed additional measures during the intake process and all of our facilities to include screenings specific to covid-19.
These additional screening procedures include temperature checks for all staff and any legally required visits before entering our facilities as well verbal medical screening questionnaires are always available.
We ordered and received swab kits for covid-19 from a national supplier. And we enacted quarantine and testing policies for any employees who may have come into contact with any individual who has tested positive for covid-19.
At every one of our facilities we have worked closely with our government agency partners and local Health officials to develop covid-19 emergency plans and testing policies for the issue in our care.
In March of this year, we started procuring additional personal protective equipment and began issuing that clinically needed at facilities impacted by covid-19 and over the course of April. We coordinated with our government Partners to distribute personal protective equipment including face Mass to all staff inmates and detainees as a precautionary measure at all of our security services facilities a few of our facilities primarily in our Eastern region of the country have experienced multiple cases of covid-19 in both our staff and individuals and trusted in our faith.
A small percentage of these cases have required Hospital.
And a very small number of tragically resulted in fatalities, which is left all of us with very heavy hearts. However, our facilities have thankfully not experienced a disproportionate impact from the pandemic and most of our facilities have had very few or no cases of covid-19.
We are incredibly grateful for our front-line employees who make daily sacrifices to report to work and provide high-quality and Compassionate Care to all of those in our facilities. We believed are their dedication and commitment that have allowed g g o to effectively manage the spread of covid-19 and mitigate its wrist before I turn the call over to an office like to briefly discuss a few other operational highlights in the quarter during the first quarter. We began the intake process under a new managed only contract with the US Marshals service at the government-owned 512 bed. El Centro Detention Facility in California.
This new contract has a term of approximately 9 years and is expected to generate approximately $29 in annualized Revenue.
Additionally we completed the intake process that achieved normalized operations at our company-owned 1800 bed North Lake Correctional Facility in Michigan under a new 10-year contract with the Federal Bureau of Prisons. This ten year contract is expected to generate approximately $37 in annualized revenues and in Texas under two new ten-year contracts with Iraq prisons, we work with Reeves County to complete the intake process and have achieved normalized operations at the county-owned 1800 bed Reeves County Detention Center one thousand and the 1376 bed Reeves County Detention Center 3.
As a reminder go provides management consulting and support services threes County in relation to this facility while the county holds the contract with the Bureau of Prisons for the operation of the facility. Finally We are continuing to undertake expansion projects at our ravenhall Junie and Fulham facilities in Australia, which are expected to add close to 1,000 beds during 2028 at this time. I'll turn the call over to an for review of giocare and thank you Dave. Good morning everyone. I'd like to provide you an update on the steps. We have taken to address the risk and mitigating a spread of covid-19 across our giocare business unit consistent with the efforts undertaken by our Geo secure Services facilities, all of our residential facilities in Geo reentry Services had the issue covid-19 guidance consistent with the guidance issued by the Centers for Disease Control and prevention. We have updated our policies and procedures to include best birth.
This is for the prevention assessment and management of covid-19, including the implementation of quarantine and cohorting procedures to isolate confirmed and presumptive cases of covid-19. We have provided educational guidance to our employees and all individuals in our Care on the best preventive measures to avoid the spread of covid-19 should have increased the distribution of personal hygiene products similar to our Geo secure Services facilities. We have deployed specialized sanitation teams to sterilize. Hi contact page of our facilities and have developed special schedules and procedures for the cleaning and disinfecting of facility spaces using sanitation products that are proven Healthcare grade disinfectant.
we have
Also advised our employees to remain home if they exhibit flu-like symptoms and have exercised flexible paid leave and paid time off policies to allow for employees to remain home as needed Thursday. We have implemented additional screening measures for entry into our facilities and we are providing face masks all staff and residents.
At all of our facilities we have worked closely with our government agency partners and local Health officials to develop covid-19 emergency plan and testing policies consistent with CDC guidance. We have also established rapid response teams to be deployed to assist facilities that have been impacted by covid-19.
The covid-19 demek has affected many communities where our employees live, especially in the Northeast.
Before I turn the call back to George. I would also like to thank all our giocare employees whose dedication and daily sacrifice make us all very proud. Our front-line employees report to walk every day to care for all our participants in both residential and non-residential programs and two found innovative ways to deliver Rehabilitation programming through virtual Technologies in ways. We have never seen before we are incredibly proud of all of our employees at this time. I'll turn the call back to George for his closing remarks. Thank you Ann.
At times of unprecedented uncertainty we often see the best in our people.
and their abilities
We are incredibly proud of all of our employees whose Daily Commitment and dedication is allowed our company to meet this crisis head-on. As you've heard today. We have taken comprehensive steps to address and mitigate the risk of covid-19 across all of our facilities and programs ensuring the health and safety of all of those in our care in our employees has always been our number one priority. We are committed to working closely with our government agency partners and local Health officials across the country as well as continue to fight the spread of the covid-19 despite the significant challenges associated with this Global pandemic our business.
Earnings and cash flows remain resilient we've taken what we believe is a prudent approach to our guidance for the full year and we believe we have adequate liquidity in access to Kathy. We remain focused on the effective allocation of capital and on the continued enhancement of long-term value for our shareholders, which included many of our employees. Finally. I want to thank David Donahue for his eleven years with Gio and bring in additional professionalism to our company.
David will be retiring on July 11th and will be followed by Blake Davis who is presently in the role of President of Geo secure services that completes our presentation. We should be glad to address any questions.
We will now begin the question-and-answer session to ask a question. You may press * then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the key. Do you withdraw your question, please press * then two again to ask you a question. That is * then 1 and at this time we will pause momentarily to assemble our roster. S she
And our first question comes from Joe Gomes of noble Capital, please go ahead.
Good morning, and thanks for taking my questions.
Can you hear me? Yes I can. Good morning. Okay. Thanks. Thank you. Just wanted to first kind of start in with if you give me a little review of how the court right now, you know, we had January February where you you know, close to or above, you know, you're expected plan and it went in March. Did you really start to see the the covid-19 impact?
I I think it was mid March so it was late in the quarter and and you know, we made our quarter results. But you know, our revised game is indication that that the occupancy is did receive in late March and have stayed there and we've taken I think the prudent approach of forecasting the continuation on till you know, the situation changes and if I could just add to it off George mentioned, you know Norm our normal expectation in Q3 would have been for q1 would have been that the numbers would have started to our occupancy levels would have started to age proved towards the end of the first quarter, you know cyclically, the first quarter is usually lower occupancy levels, but instead of that Improvement starting which is why you suck.
The step up in our original guidance from q1 to Q2 through the rest of the year and instead we've essentially held the numbers kind of where we are today offset by some improvement from payroll tax expense not being as high in the second third and fourth quarter, so that that's kind of the the way things trended against what we would normally expect to occur. Okay, and kind of follow up on that one. So if if you look at a sponge average daily populations, you know at the end of the year for the month of December there are 42,000. You know last thing was last week or two weeks ago. They were you know at 30,000 as an average daily population for the week or you're roughly 26% decline, you know from birth.
the beginning of the year
And you guys are talking about, you know, an eight percent decline in your revenue from from Ice year-over-year and just wondering if you could give a little color to that affect how you squared it with such a sharp drop in the ice population since the beginning of the year.
Sure. So first of all, as we mentioned in the call, the 8% was a combination of ice and US Marshals, but as we've mentioned in I think we mentioned in the call, you know, the majority of our contracts with by have a fixed price component a significant fixed price component to cover the high level of fixed costs that it takes them a facility. So even though the occupancy levels are lower. It's not a proportionate impact to our revenues from the lower occupancy life. So that's why those um, those minimum occupancies are fixed price components of our contracts are so important and most is is George mentioned. Most of our ice contracts have that not quite as many of the u.s. Marshals. There's a little more variability and then most of our state and our contracts also have those fixed price arrangements. So that's why you see the impact.
I sighed just due to the volatility in those contracts and the US Marshals.
Okay, great. Thanks for the color on that. And then lastly if you could just talk a little bit, you know, you're experiencing previous economic downturns home overall prison populations as we know they the prison overall prison populations have been declining over time here. You know, what what has you guys seen in the past when we've seen an economic downturn on the impact either positively or negatively on Prison populations?
Well, usually the question is about economic situations. Our company seems to do just as well in difficult economic situations. As far as state populations are our state occupancy is fairly static. Our facilities are medium security and off so, we're not losing prisoners, you know, the the ones that are being released wage at the federal level or not. Our prisoners there in other types of facilities in the state facilities as well. They're they're usually reliable from Lowe's security institutions.
Okay, great. I'll jump back in line. Thank you very much.
Our next question comes from Mitre from Global sidoti, please. Go ahead. Yes. I am. Good morning. Thanks for taking the questions. I was just curious in terms of how you see the environment playing out assuming, you know, we get back to hopefully normal before the end of the year and I'm referring to I think you mentioned the ice processing stage is the operational guidance of 75% capacity to promote social distance and practices and in this curious if you see that becoming the norm or you probably go back to how things were pretty
We would think that the guidance that that was issued about the covid-19 at 75% occupancy or or below is a temporary measure that will you know be lifted once the the health situations in their respective communities and perhaps, you know, our facilities are primarily in the Sunbelt states where there has been less activity of the the virus and not we're hopeful that in the states that are reopening now is you hear them reported on the news, you know, the things will give back to normal in the next month, you know one to three months, but you know as as a publicly traded company, I think we have to be fairly prudent and conservative in our forecast, you know dead.
To you know account for all kinds of scenarios that may occur. So the basis of our forecast is is Brian mentioned is a continuation of the existing situation which we will hope will end in the near future. But you know, we we provided guidance as we feel appropriate. Okay, and then just woke up on that I guess obviously you you've taken a number of steps to improve the safety Etc and the sanitation. I think you mentioned things like daily soap being available at cetera, but those things also just temporary or is that going to be sort of the norm going forward?
I think they're temporary of in in the magnitude that they're being applied at this time, you know, we're incurring costs for masks and gloves and you know, just in fact in a much higher level than we would expect in the future. But you know, there probably will be a continuation to a a lesser degree of some of these procedures off just as some predicted there could be a further outbreak and fall just like the flu season but you know, we have faced these situations on a lesser extent in previously, you know where you have outbreaks of mumps or measles and people have to be warranty on and then so off the in ice in particular we Face these situations we have the procedures we have the organizational Financial Resources to deal with with these dead.
Situation Beach for this is David to add to George's comment the the focus and support for personal hygiene has always been sustained and maintained at a very high level of organization. So the those protective equipment, uh that are now specific to covid-19. We would anticipate those to be lessened in the future as the pandemic is obviously MetLife understood and scientifically controlled, but our focus on personal hygiene is always been at the highest level. So thanks, I appreciate the clarification.
Just wanted to touch base.
Some capex. I know you pulled that in a little and a number of companies are obviously scaling back their capital investment spending given the low visibility and the uncertainty that's out there right now, but I just curious some of them. It's more about you know, cash constrained Etc. It seems like in your case is probably more just you know, reduced opportunities in the near-term given the environment supposed more liquidity issues. Is that fair?
That's correct. I think we looked at you know, we we changed the growth Graphics a little bit. But most of the reduction was on the maintenance side and I think that's just deferring and pushing some stuff out a little bit further. So, you know, no liquidity issues. Just trying to find some offsets to the reductions that we had to take on the revenue side. Thanks, and that just finally again on the growth initiatives. Obviously International something you've always been looking at in terms of expanding and just curious if you're seeing any major changes on that front and light of the global pandemic and also just on the acquisition front I'm assuming that some of your competitors are other players in the space or having would like to be also experiencing some tough conditions and might present some opportunities for you near medium-term and any thoughts on that.
Well on the international front we have expansions occurring in Australia is I think David mentioned so that's still looks quite good for us off as far as Acquisitions have you know, we really don't talk about that very much.
Okay. Thanks again for taking the questions.
Again, if you would like to ask a question, please press * then 1 and our next question will come from Matthew Larson of National Security, please go ahead.
Okay. Thanks for taking my call. I appreciate it.
I'm not really surprised that your guidance of the remaining of the year has been less. I mean the the the Virus issue has made business difficult across all Industries. And actually your reduction is, you know to be minimal. I'm if I'm looking at the numbers your revenues or down on a hundred million in your home town about ten or 12% or something like that. But you know the stocks down quite a bit more than that and in a world where yield is, you know at a premium and the yield that off, you know from your dividend is is really enormous which should be attractive to people. What what do you think you all could do to
You know get your stock price up. I mean the yield should be attracting people and I understand that there's you know certain groups of people who want to invest in a profit prisons and things like that. But since there's really only two firms yourself, of course Civic that are publicly traded in this area and there's plenty of private Equity money out there trillions. I understand that would you know love the sort of return your able to generate. Is there a game plan to hopefully you'll get this this price up, you know, since you don't have any coverage or sponsorship out there and you know other ways that normally you might be able to generate some interest in the stock once summer of these concerns fade away whether the the the political concerns and or or if the virus finally abates
Well, I think as the second quarter unfold shareholders will see a stark comparison between our service industry versus others. We're an essential government service providers you correctly stated that our profitability is maybe compressing by ten eleven percent, but that's far better than the typical companies in and throughout the country and I I think share folders investors will see a stark comparison as time moves forward this year and you know, we plan to reach out to the investment Community throughout the year different Road. Show me and talk about the company and remind them of the kind of business where in the the predictability of our cash flows and the generous in, New Jersey.
So, you know, we think the economic conditions are in our favor and you know in time it more and more people will see this in the Stockholm.
All right.
Okay. Thank you. I you know, that's kind of my thoughts as well. It's just a matter of time as long as you can execute. In the meantime, if you can maintain some semblance of your birth Vivid end that's going to continue to attract some attention. So thanks for your time this morning. Thank you.
Our next question comes from David nap of Capital Management, please. Go ahead.
My question is kind of on the line of the last one and actually last two what portion of your industry is under attack by a certain group of people in the country what portion of Prisons beyond the to public companies are private prison facilities.
I mean between ourselves and of course Civic we're about eighty percent of the privately managed facilities in the US maybe more maybe a little bit more knowledge of you know less than 20% or less.
And do you have any incentive other than just being good corporate citizens and just as a world for giocare do you get any?
Reward in some way for helping your patience and reducing recidivism.
Well, I I think our state clients in particular know the value of the the Continuum of Care program that we've established which we think is dead among the best offender rebuilt issue programs in the world because it's so comprehensive in nature with respect to its Rehabilitation components on site as well as the post-release services, which we provide once they leave the facility in providing them assistance for financial purposes Transportation employment housing. We have I think fifteen positions slotted just for that purpose post-release services, so I know in the state incarceration sector we think we we were bringing a a lot
to the table
As far as Rehabilitation more than any other organization, I'm aware of you know, we have 50 people in our corporate offices. That's what do they they're part of the rebuilt issue program. So I'm not aware of any other organization in the world Correctional public or private that has assembled the number of people that we have and contributes what portion of our profit is off 10% 10% of net profit is spent on supporting this offender program. I can't think of any other companies in the world that that
committed 10% of their profits to offender Rehabilitation or Criminal Justice Reform as we have
Okay. Well, I'm glad to hear that because you know, it's such a political issue what you do and as a believer in good capitalism. I think that happens all the time, but how long you get your under attack is so you're not doing it but my suspicions you're doing better than the state-run facilities and the federal facilities and I just like to ask you a question was how do you get the word out and get the people buy these are next annual report that describes the activities of the continuing ed program for 2019. That'll be out next month and we'll we'll send that to all of our shareholders and investors.
Okay, look forward to it. Cuz I'd like to have more good good feeling publicity rather than people just saying. Oh say, you know Private Industry should not profit from prisoners or so, you create prisoners off. You don't create prisoners, you know tells them we take care of them and it was really in our own initiative that we developed this program. We weren't page do it. We spent our own money developing it for many many years and we're proud that we have what we believe is possibly the finest offender rehabilitation program world.
Keep up the good work and get the word out. Thank you. Thank you.
Our next question comes from Harvey of popped LP, please go ahead.
Thank you very much. You've been very clear about the impact. I appreciate the clarity. You made one comment, though, very briefly, and I would want to just have you found it on you said something to the effect that your results are adequate to cover the dividend. Is that imply that the dividend is Thursday for now?
It's safe for I'm not sure what your question is is is are you asking whether it it's temporarily safe? Well, I am comments you'll have how far out is it. Do you see that? It's it's safe. Well, it certainly stay consistent with our our forecast our guidance office. Okay. Good the second question. That's that that's the clarification I was looking for. The second question is regarding the overhang on the stock which comes from the threat of a democratic sweep at the end of in November and would like to get your comments on what the downside of that might look like and how you're preparing for it.
Well, there might be less occupancy in our ice facilities, but I don't think it would be less than it is today. You know, we we operated very profitably under the eight years of the Obama Administration. In fact, we expanded considerably under the Obama Administration. And the reason why I ask is because under that Administration there was a a raising of the standards of quality for those that were severely detain and they were physical plant upgrades that were necessary Staffing upgrades Healthcare upgrades and a lot of the previous month service providers for ice in particular set now, we're not able to meet those requirements and the dead
Eyes turned to the private sector which did meet those standards. So we built new facilities and that meant those standards and we grew up under a democratic Administration and that you know, I would think if there is a Democratic president such as the the former vice president that he would have a continuation of of those policies.
Okay. Thank you very much.
This concludes our question-and-answer session. I would like to turn the conference back over to George for any closing remarks. Well, thanks to everyone for joining us today. We look forward to adjust menu on the second quarter earnings call. Thank you.
The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.