Cornell Companies Wins Two Contract Extensions with Illinois DOC; Closure of Plankinton Facilities Permanent.

HOUSTON -- Cornell Companies Inc. (NYSE:CRN) announced today that it received extensions on two contracts with the Illinois Department of Corrections (DOC) that total more than $1.5 million in annualized revenue. Cornell also announced its closure of a 40-bed detention center in Plankinton, S.D., is permanent and that it will not open an 82-bed residential treatment center at the same location.

The Southwestern Illinois Correctional Center's (SWICC) Turning Point Program will operate for an additional two years under its current contract. It is expected to produce approximately $1.2 million in annualized revenue. A one-year extension was granted at the Dixon Correctional Center's Therapeutic Community Program, which will produce annual revenue of approximately $354,000.

Thomas R. Jenkins Jr., president and chief operating officer with Cornell, stated, "Our demonstrated ability to operate these programs efficiently and effectively for the Illinois DOC contributed to receiving the contract extensions. All aspects of these two contracts remained intact and we will operate the programs as we did during the preceding 12 months. While we continue to actively and aggressively seek out new business opportunities in accordance with our strategic growth plan, we are equally vigilant in pursuing contract extensions and re-bids."

The programs provide both mental health and substance abuse services to the participants. SWICC was the first prison dedicated to the treatment of offenders convicted of drug-related crimes in the state of Illinois. Cornell operates the Turning Point Program, which is the facility's therapeutic community where treatment occurs.

Cornell also operates the therapeutic community at the Dixon facility. Offenders who participate in the program are dually diagnosed with substance abuse and mental illness. They have at least six months remaining on their sentence and not more than five years left to serve.

The Plankinton Regional Detention Center, which opened in May and closed in August, will not be reopened. A residential treatment center, which was scheduled to open in August, will not be opened as the Company withdraws from the South Dakota market at this time. Both programs were located on the campus of the former Plankinton Training School.

Mark Thompson, regional vice president for Cornell, said, "After a very careful analysis, it became obvious that the per diem expected from the state of South Dakota and in our judgment necessary to provide the appropriate level of services to the clients, was not forthcoming. We regret that we will not be able to assist in returning those juveniles, currently in treatment out of state, to South Dakota for treatment."

Cornell Companies Inc. is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education in an environment of dignity and respect, emphasizing community safety and rehabilitation in support of public policy. Cornell (http://www.cornellcompanies.com) has 66 facilities in 16 states and the District of Columbia and 5 facilities under development or construction, including a facility in one additional state. Cornell has a total service capacity of 18,205, including capacity for 2,726 individuals that will be available upon completion of facilities under development or construction.