California officials have renewed their contract with Corrections Corp. of America for three years, giving the Nashville-based company a nice win after some recent negative client news.
The California Department of Corrections and Rehabilitation's latest deal became effective July 1 and calls for CCA to make available 8,244 prison beds at three of the company's facilities in Arizona, Oklahoma and Mississippi. Those complexes now house 7,450 California inmates.
The contract extension also calls for CCA to work with CDCR officials to move more than 1,500 inmates out of another Arizona prison that is set to begin housing prisoners from that state in January.
"We appreciate the opportunity to continue our relationship with the state of California," said CCA President and CEO Damon Hininger. "This partnership exemplifies the flexibility that CCA is able to provide CDCR to safely and securely manage its populations."
Word of the new Golden State contract comes shortly after officials in Kentucky and Idaho said they would not extend CCA contracts when they expire. California contracts accounted for $215 million of CCA's top line in 2012, which amounted to 12 percent of total revenues. Investors reacted enthusiastically to today's renewal news, pushing up shares of the company (Ticker: CXW) by more than 2 percent on a flat day for the broader market. The stock is flat since going ex-dividend in mid-April.