Company Overview - Target Hospitality is North America's largest provider of comprehensive hospitality solutions[4,6] - The company has over 16,000 network beds across 28 communities[6,9] and +8,000 available beds to expand with limited investment[9,33] - Target Hospitality has an average customer relationship length of +6.5 years[9] Financial Performance and Outlook - The company anticipates total revenue between $265 million and $285 million in 2025[6] - Adjusted EBITDA is projected to be between $47 million and $57 million in 2025[6] - Since 2021, the company has generated +$160 million of average annual Discretionary Cash Flow (DCF)[9] - As of December 31, 2024, Target Hospitality reported $191 million in cash and cash equivalents[42] Growth and Strategy - The company is pursuing a multi-year workforce hub contract supporting critical mineral development, expected to generate approximately $140 million in revenue through 2027[23,25] - Target Hospitality is strategically diversifying and regionally expanding its reach[22] - The company redeemed all outstanding 10.75% Senior Secured Notes on March 25, 2025, resulting in over $19 million of annual interest expense savings[46]

Core Points - Theratechnologies Inc. held its annual meeting of shareholders in a virtual-only format and reported the voting results [1] - Shareholders elected candidates to the Board of Directors, appointed KPMG LLP as auditors, and approved a long-term incentive plan [2] Voting Results - Joseph Arena received 20,473,944 votes (84.03% for) with 3,890,222 abstentions (15.97%) [3] - Frank Holler received 19,089,786 votes (78.35% for) with 5,274,380 abstentions (21.65%) [3] - Paul Lévesque received 19,027,772 votes (78.10% for) with 5,336,394 abstentions (21.90%) [3] - Andrew Molson received 19,066,145 votes (78.25% for) with 5,298,021 abstentions (21.75%) [3] - Dawn Svoronos received 18,998,230 votes (77.98% for) with 5,365,936 abstentions (22.02%) [3] - Elina Tea received 19,163,502 votes (78.65% for) with 5,200,664 abstentions (21.35%) [3] - Dale Weil received 19,005,768 votes (78.01% for) with 5,358,398 abstentions (21.99%) [3] - Jordan Zwick received 19,618,725 votes (80.52% for) with 4,745,441 abstentions (19.48%) [3] Company Overview - Theratechnologies is a biopharmaceutical company focused on innovative therapies that aim to redefine standards of care [4]

Core Points - Target Hospitality Corp has been awarded a multi-year contract valued at $4.0 billion for Emergency Detention and Related Services, supporting U.S. government immigration initiatives [1][2][3] - The contract period extends through May 16, 2027, and is aimed at enhancing the Department of Homeland Security and U.S. Immigration and Customs Enforcement's emergency detention capabilities [2][3] - This award positions Target to pursue additional growth opportunities beyond its existing asset portfolio, aligning with government initiatives [3][4] Company Overview - Target Hospitality is one of North America's largest providers of vertically integrated modular accommodations and hospitality services, offering a range of value-added solutions [5] - The company builds, owns, and operates a network of communities tailored for various end users, including services like food management, logistics, and security [5]

Revenue Performance - The termination of the PCC Contract resulted in a revenue decrease of approximately $168 million annually, with total revenue of $24.1 million for Q1 2025 compared to $53.6 million for Q1 2024 [136]. - Total revenue decreased by $36.8 million, or 34%, in Q1 2025 compared to the same period in 2024, primarily due to lower revenue from the Government segment [142]. - Total revenue for the three months ended March 31, 2025, was $69.9 million, a decrease of 34% from $106.7 million in the same period of 2024 [170]. - Services income decreased by 31% to $50.1 million, down from $72.4 million, primarily due to lower revenue in the Government segment following contract terminations [170][171]. - Specialty rental income fell by 56% to $15.0 million from $34.3 million, attributed to the same contract terminations in the Government segment [170][172]. - Government segment revenue decreased by 62% to $25.7 million from $67.6 million, primarily due to the termination of the PCC and STFRC contracts, which accounted for approximately $30 million and $12 million of the revenue decrease, respectively [187][188]. Profitability Metrics - The company reported a net loss of approximately $(6.5) million for Q1 2025, compared to net income of approximately $20.4 million for Q1 2024 [142]. - Consolidated Adjusted EBITDA for Q1 2025 was $21.6 million, a decrease of $32.1 million or 60% compared to the same period in 2024 [144]. - Adjusted gross profit was significantly impacted, resulting in a gross profit of $17.9 million, a 63% decrease from $49.1 million in the prior year [170]. - For the three months ended March 31, 2025, the company reported a gross profit of $17.964 million, down from $49.068 million in the same period of 2024, resulting in an adjusted gross profit of $31.636 million compared to $63.849 million [232]. - The net income (loss) for the three months ended March 31, 2025, was $(6.459) million, a significant decrease from a net income of $20.383 million in the same period of 2024 [234]. - EBITDA for the three months ended March 31, 2025, was $16.569 million, compared to $49.779 million for the same period in 2024, while adjusted EBITDA was $21.571 million, down from $53.688 million [234]. Cash Flow and Liquidity - Cash flows from operations for Q1 2025 were approximately $3.9 million, a decrease of $46.7 million or 92% compared to $50.6 million in Q1 2024 [141]. - Net cash provided by operating activities was $3.9 million for the three months ended March 31, 2025, a significant decline from $50.6 million in the same period of 2024 [197]. - Net cash used in investing activities increased to $17.2 million from $8.9 million, primarily due to $15.5 million in growth capital expenditures related to the WHS operating segment [199]. - Net cash used in financing activities surged to $142.9 million from $21.3 million, driven by the full redemption of the 2025 Senior Secured Notes totaling $181.4 million [200]. - As of March 31, 2025, the ABL Facility had an unused available borrowing capacity of $134.1 million, providing sufficient liquidity for the next 12 months [192][204]. Contracts and Future Revenue - The Workforce Housing Contract with Lithium Nevada is expected to generate approximately $140 million in revenue over its initial term, with about $76 million of committed minimum revenue, and $68 million anticipated in 2025 [135]. - The DIPC Contract is expected to provide over $246 million in revenue over its five-year term, with a ramp-up period affecting initial revenue amounts [139]. - The DIPC Contract is expected to generate over $246 million in revenue over its five-year term, starting March 5, 2025 [166]. - The Workforce Housing Contract is projected to generate approximately $140 million in revenue, with $76 million in committed minimum revenue expected in 2025 [167]. Expenses and Cost Management - Selling, general and administrative expenses remained relatively stable at $14.8 million, with a slight decrease from $14.9 million in the previous year [177]. - The company incurred approximately $21.2 million in capital expenditures during the three months ended March 31, 2025, with $15.5 million allocated to the new WHS operating segment [195]. - The company incurred transaction expenses of $2.830 million during the three months ended March 31, 2025, compared to $240,000 in the same period of 2024 [234]. - Stock-based compensation expenses for the three months ended March 31, 2025, were $1.716 million, down from $2.748 million in the same period of 2024 [234]. Risk Factors - Major customers accounted for 34% and 11% of revenues for the three months ended March 31, 2025, indicating a concentration risk in revenue sources [208]. - The company did not hedge its exposure to commodity prices, which could affect profitability and cash flows due to volatility [238]. - As of March 31, 2025, the company had $40.9 million of outstanding floating-rate obligations, exposing it to increased interest expense if short-term interest rates rise [236]. - If floating interest rates increased by 100 basis points, the company's consolidated interest expense would rise by approximately $0.4 million annually [236].

Core Insights - Target Hospitality reported a revenue of $69.9 million for the quarter ended March 2025, which is a decrease of 34.5% compared to the same period last year [1] - The earnings per share (EPS) for the quarter was -$0.05, down from $0.20 in the year-ago quarter, indicating a significant decline [1] - Despite the revenue drop, the reported revenue exceeded the Zacks Consensus Estimate of $65.37 million by 6.93% [1] - The EPS surprise was -150.00% compared to the consensus estimate of -$0.02 [1] Financial Performance Metrics - Revenue from Hospitality & Facilities Services - South was $36.07 million, surpassing the two-analyst average estimate of $35.79 million [4] - Revenue from All Other segments was $8.11 million, significantly higher than the estimated $1.64 million [4] - Government revenue reached $25.72 million, exceeding the average estimate of $23.71 million [4] - Adjusted Gross Profit for Hospitality & Facilities Services - South was $11.03 million, slightly below the estimated $11.52 million [4] - Adjusted Gross Profit for Government was $19.18 million, outperforming the average estimate of $16.15 million [4] Stock Performance - Shares of Target Hospitality have returned +6.9% over the past month, while the Zacks S&P 500 composite increased by +13.1% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Group 1: Earnings Performance - Target Hospitality reported a quarterly loss of $0.05 per share, missing the Zacks Consensus Estimate of a loss of $0.02, compared to earnings of $0.20 per share a year ago, representing an earnings surprise of -150% [1] - The company posted revenues of $69.9 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.93%, but down from year-ago revenues of $106.67 million [2] - Over the last four quarters, Target Hospitality has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Target Hospitality shares have lost about 26.5% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at -$0.10 on $59.43 million in revenues for the coming quarter and -$0.25 on $273.03 million in revenues for the current fiscal year [7] - The estimate revisions trend for Target Hospitality is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3: Industry Context - The Leisure and Recreation Services industry, to which Target Hospitality belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a positive outlook for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - First quarter total revenue was approximately $70 million with adjusted EBITDA of approximately $22 million [15] - The company ended the quarter with $35 million in cash and $169 million in total liquidity, with a net leverage ratio of 0.1 times [19] - The financial outlook for 2025 consists of total revenue between $265 million and $285 million and adjusted EBITDA between $47 million and $57 million [19] Business Line Data and Key Metrics Changes - The Government segment produced quarterly revenue of approximately $26 million, a decrease primarily due to the termination of the PCC contract and the South Texas Family Residential Center contract [15] - The HFS and All Other segments delivered quarterly revenue of approximately $44 million, benefiting from consistent customer demand [16] - The Workforce Hospitality Solutions segment generated approximately $5 million of revenue in the first quarter, with the majority of construction revenue expected in the second and third quarters of 2025 [17] Market Data and Key Metrics Changes - The company is experiencing strong demand for hospitality solutions to support significant workforce requirements associated with large capital investments in domestic infrastructure [9] - The government segment is transitioning amidst evolving policy initiatives, with a focus on supporting critical U.S. government initiatives [10] Company Strategy and Development Direction - The company announced two multi-year contracts expected to generate over $380 million in revenue over the coming years, illustrating its ability to support critical domestic initiatives [5] - The company is focused on pursuing strategic growth initiatives aimed at expanding and diversifying its contract portfolio across end markets [13][21] - The company is evaluating a robust growth pipeline, particularly in large domestic infrastructure projects, including mining, power, and data centers [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the existing customer base and network capabilities, supporting a resilient business model [13] - The company is encouraged by the pace of active conversations regarding growth opportunities, particularly in the government sector [10] - Management highlighted the importance of maintaining financial flexibility to react to value-enhancing growth opportunities as they arise [20] Other Important Information - The company redeemed all outstanding senior notes due in June 2025, resulting in expected annual interest savings of over $19 million [18] - The reactivation of the Dilley, Texas facility is progressing ahead of schedule, with expectations for full activation by September 2025 [15] Q&A Session Summary Question: Opportunities on idle assets in the government side - Management indicated strong interest in West Texas assets and ongoing high-level conversations with the government, emphasizing the facility's readiness for immediate occupancy [29] Question: Contract details on the lithium front - The majority of revenue generated this year will come from construction activities, with an estimated $65 million of revenue expected [32] Question: M&A or new asset considerations - Management noted strong bid activity in large domestic infrastructure projects and emphasized a focus on organic growth in the immediate term [39][44] Question: Trends in ADR and demand - Management indicated that utilization is slightly up from the prior year, while ADR is down due to a competitive market [47] Question: Financial cadence for the WorkhorseHub contract - The majority of construction activity is expected in Q3, with Q4 likely being the best quarter from a run rate standpoint [52] Question: Opportunities to assist the government on immigration policy - Management plans to utilize existing assets first before considering open market purchases or building new facilities [56]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $70 million, with adjusted EBITDA of approximately $22 million [14] - The company ended the quarter with $35 million in cash and $169 million in total liquidity, with a net leverage ratio of 0.1 times [19] - The financial outlook for 2025 consists of total revenue between $265 million and $285 million and adjusted EBITDA between $47 million and $57 million [19] Business Segment Data and Key Metrics Changes - The Government segment produced quarterly revenue of approximately $26 million, a decrease primarily due to the termination of the PCC contract and the South Texas Family Residential Center contract [14] - The HFS and All Other segments delivered quarterly revenue of approximately $44 million, benefiting from consistent customer demand [15] - The Workforce Hospitality Solutions segment generated approximately $5 million of revenue in Q1, with the majority of construction revenue expected in Q2 and Q3 [17] Market Data and Key Metrics Changes - The company is experiencing strong demand for hospitality solutions to support significant workforce requirements associated with large industrial projects across the U.S. [8] - The government segment is actively pursuing growth opportunities related to immigration initiatives, with a focus on reactivating facilities and supporting policy objectives [9][10] Company Strategy and Development Direction - The company announced two multi-year contracts expected to generate over $380 million in revenue, illustrating its ability to support critical domestic initiatives [5] - The strategic growth initiatives are focused on expanding and diversifying the contract portfolio across end markets, including both commercial and government sectors [12] - The company is evaluating a robust growth pipeline, particularly in large capital investments aimed at modernizing domestic infrastructure [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the existing customer base and operational flexibility, supporting a resilient business model [12] - The company is optimistic about the growth opportunities stemming from significant domestic capital investments and national security initiatives [20] - Management emphasized the importance of maintaining financial flexibility to react to value-enhancing opportunities as they arise [20] Other Important Information - The company redeemed all outstanding senior notes due in June 2025, resulting in expected annual interest savings of over $19 million [18] - The reactivation of the Dilley, Texas facility is progressing ahead of schedule, with expectations for full activation by September 2025 [14] Q&A Session Summary Question: Opportunities on idle assets in the government side - Management indicated strong interest in West Texas assets and ongoing conversations with the government, emphasizing the facility's readiness for immediate occupancy once funding is secured [28] Question: Contract details on the lithium front - The majority of revenue from the workforce subcontract will come from construction activities, expected to contribute about $65 million this year, with service revenue kicking in through 2027 [30][31] Question: M&A or new asset considerations - Management noted strong bid activity in large domestic infrastructure projects and indicated that immediate government opportunities may not require significant capital investment [38][42] Question: Trends in ADR and demand - Management stated that while utilization is slightly up, ADR is down due to a competitive market, with expectations for the remaining quarters to resemble Q1 [46] Question: Financial cadence for the WorkhorseHub contract - The majority of construction activity is expected in Q3, with Q4 being a minimal wrap-up period [50][52] Question: Opportunities to assist the government on immigration policy - Management plans to utilize existing assets first and then consider open market options or new builds if necessary [54]

Financial Performance - Revenue for Q1 2025 was $69.9 million, a decrease of 34.5% compared to $106.7 million in Q1 2024[6] - Net loss for Q1 2025 was $6.5 million, compared to a net income of $20.4 million in Q1 2024[7] - Adjusted EBITDA for Q1 2025 was $21.6 million, down from $53.7 million in Q1 2024[7] - Operating income for Q1 2025 was a loss of $1.1 million, compared to an operating income of $30.4 million in Q1 2024[42] - Specialty rental income for Q1 2025 was $15.0 million, down 56.3% from $34.3 million in Q1 2024[42] - Adjusted EBITDA for Q1 2025 was $21.6 million, down 59.9% from $53.7 million in Q1 2024[49] - The company reported a loss on extinguishment of debt amounting to $2.4 million in Q1 2025[42] Liquidity and Capital Structure - Total available liquidity as of March 31, 2025, was approximately $169 million, with a net leverage ratio of 0.1x[11] - Cash and cash equivalents decreased to $34.5 million as of March 31, 2025, from $190.7 million at the end of 2024, a decline of 81.9%[44] - Total liabilities decreased to $147.3 million as of March 31, 2025, from $304.7 million at the end of 2024, a reduction of 51.7%[44] - The company redeemed all $181.4 million of Senior Secured Notes, expecting annual interest expense savings of approximately $19.5 million[10] Contracts and Future Projections - The multi-year Workforce Hub Contract is expected to generate approximately $140 million in revenue through 2027[6] - A 5-year $246 million Dilley Contract was awarded, effective March 5, 2025, reactivating assets in South Texas[6] - The company projects total revenue for 2025 to be between $265 million and $285 million, with Adjusted EBITDA between $47 million and $57 million[24] Operational Metrics - Average utilized beds decreased to 9,898 in Q1 2025 from 14,049 in Q1 2024, resulting in a utilization rate of 60% compared to 87%[5] - Capital expenditures for Q1 2025 were approximately $21.2 million, including $15.5 million in growth capital[9] - The company incurred transaction expenses of $2.8 million related to acquisition activities during Q1 2025[35] - Depreciation of specialty rental assets was $13.7 million in Q1 2025, slightly down from $14.8 million in Q1 2024[49]

Core Insights - Target Hospitality Corp reported a significant decline in revenue and net income for the first quarter of 2025 compared to the same period in 2024, indicating challenges in the business environment [5][6][7]. Financial and Operational Highlights - Revenue for the three months ended March 31, 2025, was $69.9 million, down from $106.7 million in the same period in 2024, representing a decrease of approximately 34.5% [5][6]. - Net loss for the same period was $6.5 million, compared to a net income of $20.4 million in the prior year [6][7]. - Adjusted EBITDA was $21.6 million, down from $53.7 million year-over-year, reflecting a decline of about 59.8% [6][7]. - Average utilized beds decreased to 9,898 from 14,049, resulting in a utilization rate of 60%, down from 87% [5][6]. Executive Commentary - The CEO emphasized the company's strong fundamentals and ongoing momentum in executing recent contract wins, particularly highlighting the Workforce Hub Contract and the reactivation of assets in Dilley, Texas [3][4]. - The company aims to diversify its contract portfolio and business mix to ensure consistent results across various business cycles [4]. Strategic Developments - The company redeemed all outstanding 10.75% Senior Secured Notes due 2025, maintaining financial flexibility and expecting annual interest expense savings of approximately $19.5 million [7][10]. - Target Hospitality has approximately $169 million in total available liquidity and a net leverage ratio of 0.1x as of March 31, 2025 [11]. Contract Awards and Growth Initiatives - The company secured a multi-year Workforce Hub Contract expected to generate approximately $140 million in revenue through 2027, supporting a critical mineral supply chain in North America [7][14]. - A 5-year $246 million contract was awarded for the Dilley Contract, effective March 5, 2025, aimed at supporting U.S. government initiatives [7][15]. Segment Performance - The government segment experienced revenue declines primarily due to the termination of the Pecos Children's Center Contract and the South Texas Family Residential Center Contract, although these were partially offset by the Dilley Contract [8][20]. - The Hospitality & Facilities Services - South segment reported revenue of $36.1 million, slightly down from $36.9 million in the previous year, with an increase in average utilized beds [21][22]. - The "All Other" segment, which includes the Workforce Hospitality Solutions, saw revenue increase to $8.1 million from $2.1 million, driven by the Workforce Hub Contract [23][24]. Outlook - The company reiterated its 2025 outlook, projecting total revenue between $265 million and $285 million and Adjusted EBITDA between $47 million and $57 million [18][17].