Cornell Companies to Operate Jos-Arz Therapeutic Public Charter School; Five-Year Management Agreement Could Yield $5 Million in Revenue Per Year.

Business Editors

HOUSTON--(BUSINESS WIRE)--Nov. 13, 2003

Cornell Companies (NYSE:CRN) announced today that it has signed a five-year management agreement with Jos-Arz Inc., a 501(c)(3) not-for-profit, to operate the Jos-Arz Therapeutic Public Charter School in Washington, D.C. A special committee of the District of Columbia School Board has reviewed and approved the agreement and will submit it to the full board for ratification later this month.

The 70-student school provides for the needs of children who have a diagnosed, level four or five, special educational requirement. At current rates, the program is expected to produce approximately $5 million in annualized revenues, when at full capacity in Q2, 2004.

In making the announcement, Tom Jenkins, president and chief operating officer, said, "The Therapeutic Public Charter School is a natural extension of Cornell's mission to build better futures for troubled children and it is an outstanding supplement to our recently announced Jos-Arz Residential Treatment Center.

"Several months ago, when we entered into a management agreement for the residential treatment center, we indicated that the program was a harbinger of more growth in the District of Columbia. We are delighted that this growth has come so quickly," he added.

The school will meet the educational needs of the children already placed in the residential treatment center. It has additional space to meet the needs of non-resident children as well. The school will occupy space already under lease by the treatment center. With the addition of more classroom space, the number of children that can be served will increase.

"We continue to grow our business by taking advantage of opportunities to provide solutions to our clients and contracting agencies," Jenkins stated. "This new program requires no additional capital or lease costs and only modest, incremental additions in staff."

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 (www.cornellcompanies.com) operates 72 facilities with a total service capacity of 16,528. Cornell's facilities are located in 14 states and the District of Columbia.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, (i) risks associated with acquisitions and the integration thereof (including the ability to achieve administrative and operating cost savings and anticipated synergies), (ii) the timing and costs of expansions of existing facilities, (iii) changes in governmental policy to eliminate or discourage the privatization of correctional, detention and pre-release services in the United States, (iv) availability of debt and equity financing on terms that are favorable to the Company, (v) fluctuations in operating results because of occupancy, competition (including competition from two competitors that are substantially larger than the Company), increases in cost of operations, fluctuations in interest rates and risks of operations and (vi) significant charges to expense of deferred costs associated with financing and other projects in development if management determines that one or more of such projects is unlikely to be successfully concluded.