HEADLINE: Wackenhut Corporation Reports 2nd QTR Revenues up 11 Percent; * All Three Business Units --Security, Corrections, and Staffing --Drive Revenue Increase * Operations in International Security Services Have Negative Effect on Net Income
DATELINE: PALM BEACH GARDENS, Fla., Aug. 3
BODY: The Wackenhut Corporation (NYSE: WAK WAKB) today reported a revenue increase of 11 percent in the second quarter, 2001 to $686 million, compared to $617.3 million in the second quarter of 2000. Revenue for the six months increased 11 percent to $1.3 billion from $1.2 billion in the 2000 period. Net income for the second quarter was $1.0 million or six cents per share on a fully diluted basis, compared to $5.1 million or 34 cents per share in the second quarter of last year. For the first six months of the year, net loss was $0.5 million or four cents per share on a fully diluted basis compared to a net income of $8.8 million or 58 cents per share in the first six months of 2000, prior to the cumulative effect of change in accounting principle related to SAB 101 of $0.8 million or five cents per share. Net income for the three months ended July 1, 2001, and the six months ended July 1, 2001, respectively, declined compared with the same period in 2000, principally due to charges of $8.6 million and $18.0 million, pretax, respectively, connected with the Company's efforts to reposition and stabilize its affiliated operations in Chile while taking action to refocus its international strategies. Of those charges, pretax $5.4 million and $14.7 million, respectively, are connected with the Company's affiliate in Chile. Richard R. Wackenhut, vice chairman, president and chief executive officer of The Wackenhut Corporation, said, "Our revenue increase on a year-to-year basis indicates the success we have had in the further development of our customer base, and the confidence that Fortune 1000 corporations and government agencies have in contracting for our services. "Currently, a principal undertaking of our corporate management is the repositioning of our international operations and strategy. It has involved operational repositioning and changes in several key management positions in the past several months. In the case of Chile, the core physical security service remains the market leader in the country and we plan to build on that strength going forward. As we continue the repositioning and realignment of our international operations, we may encounter further costs and charges. While the losses are a deep personal disappointment, I am pleased by management's focus and progress to date." Mr. Wackenhut added, "With the exception of international security, all of our businesses showed solid growth in the quarter. North American security operations had double-digit percentage growth in both revenues and income. Our corrections subsidiary continued its growth pattern with new facility openings, facility expansions and contract awards during the quarter; and our flexible staffing subsidiary experienced a healthy expansion in the quarter despite the cyclical difficulties being experienced in the staffing industry."