2Q21 Results. CoreCivic reported solid second quarter results after the market closed yesterday. Revenue came in at $464.6 million, just below the $472.6 million in the same period last year, which was before populations were significantly reduced due to COVID. The Company reported net income of $15.6 million, or $0.13 per share, compared to $22.2 million, or $0.18 per share last year. Adjusted EPS was $0.25 compared to $0.33 last year. On a proforma basis to reflect the adoption of a C-corp structure EPS was $0.25 versus $0.23 last year. We had projected revenue of $445 million and EPS of $0.07.Noise, Again. There was significant noise in the quarter. For example, special items included a charge of $52.2 million in expenses associated with debt repayments and refinancing transactions, $2.9 million in asset impairments, $2.6 million in shareholder litigation expense, $0.8 million in expenses associated with COVID-19, and a $38.8 million gain on the sale of non-core real estate assets, net of $4.2 million of income tax benefits for such items.Populations A Tailwind? We have pointed out in previous reports how populations, especially at ICE, have been rebounding off their COVID lows. ICE ADP continues to increase and there seems to be no end to border encounters. USMS populations are returning to normalized levels following the re-opening of the U.S. Court system. And, unless BOP populations decline significantly, there does not appear to be room to re-capture all inmates held in private facilities. All of these trends are positive for CoreCivic, in our view.Continued Debt Reduction. During the quarter, debt fell to $1.51 billion from $1.75 billion at the end of the first quarter. Using TTM as of the end of June, CoreCivic's total leverage ratio was 3.3x, compared to 3.9x in the year ago period. CoreCivic is rapidly approaching its target leverage ratio of 2.25-2.75x, at which point share repurchases could come into play, in our view.Call. Management will host an investor call this morning at 11am ET to discuss the quarter's results. Dial-in is 800-353-6461, passcode 7244786. We will provide additional commentary and update our models following the call. Read More >>