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Previous: CORRECTIONS CORPORATION OF AMERICA, 8-K/A, 1995-07-10 |
Next: VAN KAMPEN MERRITT U S GOVERNMENT TRUST /IL/, 497, 1995-07-10 |
<PAGE> 1
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] AMENDMENT TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSACTION PERIOD FROM TO .
---------- ----------
COMMISSION FILE NUMBER: 1-13560
-------
CORRECTIONS CORPORATION OF AMERICA
----------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 62-1156308
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
102 WOODMONT BLVD., SUITE 800
NASHVILLE, TENNESSEE 37205
------------------------------- -------------------------------
(Address of principal (Zip Code)
executive offices)
(615) 292-3100
----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
----------------------------------------------------------------------------
(Former name, address and fiscal year if changed since last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
14,707,965
----------------------------------------------------------------------------
(Outstanding shares of the issuer's common stock as of May 1, 1995.)
THERE IS NO EXHIBIT INDEX
Total number of sequentially numbered pages is 10.
<PAGE> 2
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1995, as set forth in the pages attached
hereto:
Part I. Financial Information - Items 1 and 2 are amended by
substituting in lieu thereof the attached Items 1 and 2.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on behalf of the
undersigned, thereunto duly authorized.
CORRECTIONS CORPORATION OF AMERICA
Date: July 10, 1995 By /s/ Darrell K. Massengale
---------------------------------------
Darrell K. Massengale
Vice President, Finance;
Secretary/Treasurer
<PAGE> 3
CORRECTIONS CORPORATION OF AMERICA
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION: Number
------
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1995 (Unaudited) and December 31, 1994 3
Consolidated Statements of Operations
Three months ended March 31, 1995 and 1994
(Unaudited) 4
Consolidated Statements of Cash Flows
Three months ended March 31, 1995 and 1994
(Unaudited) 5-6
Notes to Consolidated Financial Statements
(Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Default Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
</TABLE>
2
<PAGE> 4
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
--------- ------------
ASSETS (Unaudited)
- ------
<S> <C> <C>
Current assets:
Cash, cash equivalents and restricted cash $ 7,355 $ 4,361
Accounts receivable, less allowance for doubtful accounts of
$61 in 1995 and $181 in 1994 28,203 26,231
Prepaid expenses 1,319 1,298
Deferred taxes 2,792 3,285
Other 982 933
-------- --------
Total current assets 40,651 36,108
Restricted investments 69 69
Other assets 10,919 10,292
Property and equipment, net 83,793 82,758
Investment in direct financing lease 10,033 10,118
-------- --------
$145,465 $139,345
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 7,737 $ 8,396
Accrued salaries and wages 2,298 2,688
Accrued property taxes 771 1,462
Other accrued expenses 5,595 5,166
Current portion of long-term debt 7,057 5,159
-------- --------
Total current liabilities 23,458 22,871
Long-term debt, net of current portion 44,944 47,386
Deferred taxes 3,682 3,629
Other long-term liabilities 2,823 3,758
-------- --------
Total liabilities 74,907 77,644
-------- --------
Stockholders' equity:
Common stock 14,658 14,162
Additional paid-in capital 50,850 44,034
Retained earnings 5,716 3,813
Treasury stock, at cost (666) (308)
-------- --------
Total stockholders' equity 70,558 61,701
-------- --------
$145,465 $139,345
======== ========
</TABLE>
3
<PAGE> 5
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31
--------------------------------
1995 1994
------- -------
<S> <C> <C>
Revenues $41,655 $32,472
Expenses:
Operating 32,103 25,516
Depreciation and amortization 1,194 1,088
------- -------
33,297 26,604
------- -------
Contribution from operations 8,358 5,868
Other expenses:
General and administrative 3,301 2,536
Interest, net 863 930
------- -------
4,164 3,466
------- -------
Income before income taxes 4,194 2,402
Income taxes 1,652 491
------- -------
Net income 2,542 1,911
Preferred stock dividends - 106
------- -------
Net income allocable to common stockholders $ 2,542 $ 1,805
======= =======
Net income per share:
Primary $ 0.15 $ 0.13
======= =======
Fully diluted $ 0.15 $ 0.13
======= =======
Weighted average shares outstanding:
Primary 16,980 13,610
======= =======
Fully diluted 17,478 13,897
======= =======
</TABLE>
4
<PAGE> 6
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
--------------------------------
1995 1994
------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 2,542 $ 1,911
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 1,455 1,338
Deferred income taxes 856 (29)
Loss (gain) on disposal of property and equipment (16) 6
Changes in assets and liabilities:
Accounts receivable (1,966) (274)
Prepaid expenses 137 389
Other current assets (207) (78)
Accounts payable (857) 152
Accrued expenses (283) 518
------- -------
Net cash provided by operating activities 1,661 3,933
------- -------
Cash Flows from Investing Activities:
Increase in restricted and escrow cash (118) (123)
Increase in other assets (1,379) (573)
Acquisition of property and equipment (1,992) (1,542)
Proceeds from disposals of property and equipment 21 -
Payments received on direct financing leases 77 69
------- -------
Net cash used in investing activities (3,391) (2,169)
------- -------
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt 7,780 350
Payments on long-term debt (1,619) (1,569)
Payments of short-term obligations refinanced by long-term
debt (700) -
Payment of international placement fees (248) -
Payments of dividends on preferred stock - (106)
Proceeds from exercise of stock options 24 51
Repurchase of stock warrants (630) -
------- -------
Net cash provided by (used in) financing activities 4,607 (1,274)
------- -------
Net increase in cash 2,877 490
CASH AND CASH EQUIVALENTS, beginining of period 4,036 7,075
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 6,913 $ 7,565
======= =======
</TABLE>
5
<PAGE> 7
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three months ended
March 31
--------------------------------
1995 1994
------- -------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 534 $ 747
======= =======
Income taxes $ 657 $ 334
======= =======
Supplemental Schedule of Noncash Investing and Financing
Activities:
The Company acuired treasury stock and issued common
stock through the exercise of stock options:
Common stock $ (49) $ (20)
Additional paid-in capital (310) (75)
Retained earnings (deficit) - 9
Treasury stock, at cost 359 86
------- -------
$ - $ -
======= =======
Long term debt was converted into common stock:
Other assets $ (86) $ -
Long-term debt 6,700 -
Common Stock (444) -
Additional paid-in capital (6,170) -
------- -------
$ - $ -
======= =======
</TABLE>
6
<PAGE> 8
CORRECTIONS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of March 31, 1995, and the
consolidated statements of operations and cash flows for the three
month periods ended March 31, 1995 and 1994, have been prepared by the
Company in accordance with the accounting policies described in its
1994 Annual Report and should be read in conjunction with the notes
thereto.
In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial positions, results of operations and changes in cash flows
at March 31, 1995 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The results of
operations for the period ended March 31, 1995, are not necessarily
indicative of the operating results for the full year.
2. LONG-TERM DEBT
In March 1995, the Company converted $6,700,000 of convertible
subordinated notes into 443,692 shares of common stock. The notes had
been outstanding since 1989 and had earned 8.5% interest. The
conversion prices ranged from $14.33 to $16.74 and included a
provision which permitted the Company to require conversion after the
stock had a market value of 150% of the conversion price for a
specified period.
3. BUSINESS COMBINATION
In April, 1995, the Company acquired Concept, Inc. in a business
combination accounted for in a pooling-of-interest. The consolidated
balance sheet as of March 31, 1995, and the consolidated statements of
operations and cash flows for the three month periods ended March 31,
1995 and 1994 have been restated accordingly to reflect the
combination.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
REVENUES AND EXPENSES FROM FACILITY OPERATION
Revenues for the first quarter of 1995 increased 28% over the
comparable period of 1994. Management revenues increased $8,835,000
and transportation revenues increased $347,000 in the first three
months of 1995 as compared to the same period in 1994. The increase
in management revenues was due to compensated mandays increasing by
28% along with average occupancy increasing by 1%. The Company opened
the Eloy Detention Center in Eloy, Arizona, in the third quarter of
1994 and the Central Arizona Detention Facility in Florence, Arizona,
in the fourth quarter of 1994, representing a total of 1,500 new beds,
and also realized the full period effect of 1994 expansions to
existing facilities. The 19% increase in transportation revenues was
due to a marketing effort resulting in an expanded customer base and
therefore increased compensated mileage.
Operating expenses for the first quarter of 1995 increased 26% over
the comparable quarter in 1994. This increase was due to the
increased compensated mandays and compensated mileage that the Company
realized in 1995 as previously mentioned.
7
<PAGE> 9
Depreciation and amortization increased 10% in the first quarter of
1995 as compared to the first quarter of 1994. While increasing in
dollar amount depreciation and amortization actually decreased as a
percentage of revenue. This is a result of the trend in new contracts
moving towards the government financing and owning the fixed assets
while contracting out the operations with the private sector.
OTHER EXPENSES
General and administrative expenses increased 30% for the first
quarter of 1995 as compared to the comparable quarter of 1994. The
increased expenses were incurred in order to manage the new beds being
brought on line in 1995 and 1996. The Company is in the process of
bringing 7,710 beds on line over the next eighteen months. As these
facilities open general and administrative cost will again
decrease as a percentage of revenues.
Interest expense, net, decreased 7% from the first quarter of 1994 to
the first quarter of 1995. This is due to the Company making
regularly scheduled debt payments, the reduction of $9,800,000 of debt
in June 1994, with proceeds from an equity issuance and the conversion
of $6,700,000 convertible subordinated notes in March 1995.
Income taxes increased from $491,000 in the first quarter of 1994 to
$1,652,000 in the first quarter of 1995. This increase is due to the
Company's complete utilization of net operating loss carryforwards and
therefore being subject to the full statutory tax rates.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's business is capital intensive. The Company's efforts to
obtain contracts, construct additional facilities, and maintain its
day-to-day operations have required the continued acquisition of funds
through borrowings and equity offerings. Thus far the Company has
financed these activities through the sale of capital stock,
subordinated convertible notes and senior secured debt, through the
issuance of taxable and tax-exempt bonds, by bank borrowings, and by
assisting governmental agencies in the issuance of municipal bonds.
The Company has a working capital revolving credit facility with a
bank which provides for borrowings of up to $15,000,000. The facility
requires interest payments to be made monthly and bears interest, at
the election of the Company, of either the Bank's prime rate or LIBOR
plus 2%, 9.0% and 8.13%, respectively at March 31, 1995. The facility
consists of a working capital line, which includes letters of credit.
As of March 31, 1995, There were no amounts borrowed against the
facility but $7,361,000 of letters of credit had been issued leaving
the unused commitment at $7,639,000.
Concept, Inc. also has a credit facility with a bank. The credit
facility provides for borrowings of up to $1,500,000, requires monthly
interest payments and bears interest at the bank's prime rate, 9.0% at
March 31, 1995. As of March 31, 1995, there were $1,046,000 of
outstanding borrowings leaving $454,000 of unused commitment.
Future expansion and the acquisition and construction of additional
facilities may require further financing, the form of which will vary
depending upon prevailing market and other conditions. The trend in
growth opportunities has been a movement towards the government
financing and owning the fixed assets while contracting out the
operations with the private sector.
Management believes that cash flow from operations, borrowing capacity
and access to alternative financing techniques are adequate to meet
its future financial requirements.
8
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