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Correctional Services (CSCQ) Message Board

  • mcprison mcprison Aug 23, 2000 10:57 AM Flag

    CSCQ loses two facilities

    Correctional Services Corporation Reports on
    Strategic Alternatives; Company Receives Notice of Exercise
    of Rights to Acquire Crowley and McLoud
    Contracts

    SARASOTA, Fla.--(BUSINESS WIRE)--Aug. 23,
    2000--Correctional Services Corporation (Nasdaq:CSCQ) announced
    today an update on its evaluation of strategic
    alternatives. After a thorough examination of possibilities and
    consultation with its advisors, the Company has determined
    that current capital market conditions are not
    conducive for a strategy that encompasses the sale of the
    Company. Consequently, the Company will focus its efforts
    on other business and financial strategies,
    including but not limited to share repurchase programs, the
    sale of non-operational real estate, acquisitions,
    business line extensions and other steps that will enhance
    shareholder's value.

    James F. Slattery, Chairman and
    CEO, stated, "we believe the Company is very well
    positioned in both the adult and juvenile industries and our
    prospects are bright. We are committed to continuing our
    efforts to enhance the value of our shares."

    In
    addition, CSC announced today that Dominion Management
    Group notified the Company of Dominions' decision to
    exercise its rights to acquire the contracts for the
    Crowley, Colorado and McLoud, Oklahoma facilities, as
    provided for under the terms of such contracts. In
    accordance with the notice of exercise, CSC expects to
    turnover the operations of the facilities to Dominion on
    or about December 20, 2000, at which time the
    contracts provide for the company to receive a lump sum
    payment of approximately $4 million.

    CSC noted
    that its operations at the two facilities have been
    widely praised, with both facilities receiving their
    American Correctional Association accreditation last week
    with very high scores. ACA officials in their
    evaluation of the facilities conveyed accolades to CSC's
    management of the facilities and the quality of the
    programs. CSC has managed the McLoud and Crowley facilities
    since their inception in August and October of 1998,
    respectively.

    In the latest quarter these facilities,
    collectively, provided less than $.01 per share in earnings to
    the Company and are currently running at a loss. This
    loss was expected to continue until there was a marked
    improvement in the population levels at the Crowley facility,
    which is currently running at a 55% occupancy
    rate.

    Mr. Slattery also stated "we are proud of our
    accomplishments at both the Crowley and McLoud facilities. CSC
    has built an outstanding reputation for quality
    operations and this reputation was enhanced as a result of
    the superior services we provided at these
    facilities. Dominion's decision will not impair the Company's
    prospects in any way."

    Through its Youth Services
    International subsidiary, Correctional Services Corporation is
    the nation's leading private provider of juvenile
    programs for adjudicated youths. In addition, the Company
    is a leading developer and operator of adult
    correctional facilities. On a combined basis, the company
    operates 49 facilities in 18 states and Puerto Rico which,
    including aftercare services, represents approximately
    9,450 beds.

    THE COMPANY WILL BE HAVING A
    CONFERENCE CALL TO DISCUSS

    THIS RELEASE AT 11:00
    A.M. (EST) TODAY THE NUMBER TO CALL IS


    1-800-247-9979