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Press Release

Facilities getting solid benefits from PCS’ financial strength

Published: 04/14/2008

LOS ANGELES, CALIF. - No long-term debt combined with consistent yearly incremental growth and profitability has positioned Public Communications Service, Inc. (PCS) as the leading inmate communications firm that serves many medium and large correctional facilities nationwide. Their financial stability and focus on inmate communications represents long-term staying power for PCS that ultimately benefits inmates and their family and friends.

PCS started out 20 years ago as a traditional phone company. Ten years ago, companies like Verizon, Qwest and AT&T drove the inmate telephone service industry. But those companies have long since left the industry. Expanding market share, guided by a long-term growth plan, PCS is now the third largest inmate phone company in the industry.

The only major debt-free company in the inmate telephone service business, PCS has built over the last 10 years a solid, long-term stability by focusing on key elements like:
  • No long-term debt

  • Consistent incremental growth and profit each year

  • No history of layoffs

  • Fewer large accounts rather than many small accounts

  • Long-term focus

  • Developing depth of core management and the PCS team by creating long-term compensation plans

  • Policy not to bid on accounts demanding high commissions
“If you look at the size of our company, we haven’t had a lot of major blips,” said CEO Paul Jennings. “Because we grow incrementally, it allows us to think about what resources we will need this year and the year after. Our core team has been here 10 years or more. Our best return on our equity comes from staying the course.”

With higher retention rates of employers and customers than their competitors, PCS has a 10-year track record of promoting from within and staying focused on lower rates for inmates and their families. Ultimately, it’s those two factors, Jennings said, that has allowed the company to stay debt-free.

“Our customer focus over the last five years has been to go after the more sophisticated accounts that require a higher demand of service and expectations. We are not necessarily in a lot of the small county jails, but our level of resources is best qualified in large states, counties and cites, compared to most companies that have hundreds and hundreds of small little jails,” Jennings explained.

Having an average account size of more than 2,500 beds ensures a higher level of customer service and responsiveness, he said.

“When a large state calls with lockdown needs we are able to respond quickly.”

One of the biggest elements in keeping costs low and profits consistent is the focus on facilities and states that do not require commissions from inmate calls. This is a cost that directly correlates to greater costs in the long run for PCS and for the facilities and state agencies.

“We very specifically go after customers that do not have commissions and we do not bid on customers that demand the highest commissions,” states Jennings. Studies have indicated that phone calls are an important part of the social fabric maintained between inmates, their families and the outside world. Jennings said the ability to manage inmates is better and more positive because they are able to maintain some semblance of a life. Equally important is that rehabilitation studies point to the fact that the more an inmate is connected to the outside world, until the day they are released, the less likely they are to end up back in jail.

“Eighty to ninety percent re-incarceration rates aren’t good for anybody,” said Jennings. “Being a long term player, the temptation to play the commission game is a short term strategy. It is a better business practice for us to follow long term strategies.”

As an example, AT&T raised rates at least 17 times from 1993 until 2004, so that each time they could raise commissions. They are no longer in the business.

“What we’ve found is that it’s just like cellular telephone usage,” Jennings observes. Today with cell phones being as inexpensive as they are, usage has gone up fifteen-fold over the last 15 years. Ours is the same, the lower the rates the more calls that are made. When you charge higher rates, your other costs go up.”

“So many companies sit around and talk about their exit strategy and the expectations of immediate riches,” observes Jennings. “We have not spent anytime talking about our exit strategy because we want PCS to be an operating business. We stick to the basics and don’t get into the latest management craze. I’m not interested in prematurely trying to exit the business. We’ll be here for the next 20 years and then some.”

Public Communication services, Inc. is a privately owned company incorporated in 1987, and one of the largest communications companies in the U.S. PCS provides services to over 120 inmate facilities with more than 100,000 inmates across the U.S. The company is based in Los Angeles, CA. www.pcstelcom.com
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