Cornell Companies Inc. Q3 2008 Earnings Call Transcript

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2008-11-24 11:38:12.0

Tags: Ramp, Call Transcript, Earnings, Question, Cornell Companies Inc., Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) And our first question comes from the line of Todd Van Fleet from First Analysis. Please go ahead.

Todd Van Fleet - First Analysis

Good afternoon, guys. Bear with me, please. I hope you can understand me, but just a couple of quick questions, if I could. The first being with respect to the startup expenses of about $900,000 in the quarter, I think is what you identified. Should we feel those as potentially non-recurring in Q4?

James Hyman

Well, I mean talking of standpoint that as we now begin to ramp up, we'll have a higher costs overall. There is certainly, probably a portion of those that were one-off and not repetitive. But that number is really driven also on a quarter-by-quarter or the incremental increase in cost for that facility or those facilities rather as they ramped up.

So I guess to answer your questions, shortly there is a portion of those costs that certainly built in the ongoing basis as the population ramps, so they grow some scale. But there is a segment, if that number is third to half, that's probably non-repetitive, its probably somewhere in that range per se.

Todd Van Fleet - First Analysis

Okay. Thanks, sorry. And John, could you tell me again the guidance that you've -- sorry I am struggling through this bare with me. John on the Q4 numbers I think you had said, you'd given some indications as to what was built into the guidance for Q4. Could you just run over that again really quickly G&A and depreciation I think I got the interest expense but just those two elements?

John Nieser

Sure, Todd. G&A we're estimated at about $6.2 million for the fourth quarter and D&A would be roughly $5.2 million that of course increasing over the third quarter because of the full period inclusion of the ramp at or the activation at Great Plains.

Todd Van Fleet - First Analysis

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Kevin Campbell with Avondale Partners. Please go ahead.

Kevin Campbell - Avondale Partners

Thanks. Could you talk a little about the D Ray James expansion, the beds that you said are coming online towards the end of the first quarter? Who's the customer, what might you expect in terms of the potential ramp there things of that nature?

James Hyman

 

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