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Target Hospitality (TH) Q1 Earnings: Taking a Look at Key Metrics Versus Estimates
ZACKS· 2025-05-19 17:31
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]
Target Hospitality (TH) Reports Q1 Loss, Tops Revenue Estimates
ZACKS· 2025-05-19 17:11
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]
Target Hospitality(TH) - 2025 Q1 - Earnings Call Transcript
2025-05-19 14:02
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]
Target Hospitality(TH) - 2025 Q1 - Earnings Call Transcript
2025-05-19 14:00
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]
Target Hospitality(TH) - 2025 Q1 - Quarterly Results
2025-05-19 11:49
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]
Target Hospitality Reports First Quarter 2025 Results with Continued Focus on Pursuing Strong Strategic Growth Pipeline
Prnewswire· 2025-05-19 10:45
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].
Here's What to Know Ahead of Target Hospitality's Q1 Earnings
ZACKS· 2025-05-15 16:31
Core Viewpoint - Target Hospitality Corp. is expected to report a loss in Q1 2025, with significant declines in both earnings and revenues compared to the previous year, reflecting ongoing challenges in its business segments [1][2][3]. Financial Performance - The adjusted earnings for Q1 2025 are estimated to be a loss of $0.02 per share, a deterioration of 110% from the EPS of $0.20 reported in the same quarter last year [2]. - Revenue estimates for Q1 2025 are pegged at $65.4 million, indicating a decline of 38.7% from $106.7 million in the prior-year quarter [3]. Segment Performance - The Government segment's revenues are expected to be $23.7 million, down from $67.6 million in the prior-year quarter [4]. - Revenues from the Hospitality & Facilities Services – South segment are estimated at $35.8 million, a slight decrease from $36.9 million reported in the previous year [4]. Cost and Operational Challenges - The company's bottom line is anticipated to be negatively impacted by increased selling, general, and administrative expenses, alongside a declining top line [5]. - The adjusted gross profit for the Government and Hospitality & Facilities Services – South segments is projected to be $16.2 million and $11.5 million, respectively, both showing year-over-year declines [6]. Earnings Prediction Model - The current model does not predict an earnings beat for Target Hospitality, as the Earnings ESP stands at 0.00% and the company holds a Zacks Rank of 2 (Buy) [7][8].
Target Hospitality Announces First Quarter 2025 Earnings Release and Conference Call Schedule
Prnewswire· 2025-05-09 10:45
Core Points - Target Hospitality Corp. will release its first quarter 2025 financial results on May 19, 2025, before the market opens [1] - A conference call to discuss the results is scheduled for the same day at 9:00 AM Eastern Time [1][3] - The conference call will be accessible via live webcast on the company's website [2] Company Overview - Target Hospitality is one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services [5] - The company builds, owns, and operates a customized network of communities, offering a full suite of services including food service management, concierge, laundry, logistics, security, and recreational facilities [5]
Target Hospitality (TH) FY Conference Transcript
2025-05-07 20:00
Summary of Target Hospitality (TH) FY Conference Call - May 07, 2025 Company Overview - **Company**: Target Hospitality - **Industry**: Hospitality and Facility Services, Government Contracts - **Key Segments**: Hospitality and Facility Services (HFS), Government, Workforce Hospitality Solutions [4][5][8] Core Business Insights - **Service Offerings**: Target Hospitality provides full-service turnkey construction and hospitality services, primarily in remote locations. The company utilizes mobile modular units, allowing for flexibility in asset relocation to meet customer demand [4][5]. - **Customer Base**: The HFS segment serves energy end-market customers, with many relationships lasting over a decade, providing stability and visibility into cash flows [5][12]. - **Government Contracts**: The company has been involved in government contracts since 2014, with a notable facility in Dilly, Texas, which was recently reactivated after a temporary termination [6][7][18]. Contract Structures and Revenue Visibility - **HFS Segment**: Contracts are primarily master service agreements based on utilization and contracted rates, with a renewal rate exceeding 90% since 2015 [12][13]. - **Government Segment**: Historically based on fixed minimum revenue amounts, providing high visibility into cash flows and revenues [14]. - **New Segment**: The Workforce Hospitality Solutions segment, driven by a $140 million contract with Lithium Americas, includes both construction and operational components, with expected revenues significantly above minimum commitments [15][27][31]. Recent Developments and Future Opportunities - **Government Segment Dynamics**: The government segment has seen fluctuations, with a focus on reactivating previously utilized assets to meet current immigration policy needs [22][25]. - **Workforce Housing Opportunities**: Target is exploring workforce housing for technology and data center build-outs, with potential contracts ranging from a few hundred to a thousand beds [34][36]. - **Lithium Americas Contract**: Expected to generate $140 million through 2027, with significant construction-related revenue anticipated in 2025 [27][31]. Financial Performance and Outlook - **CapEx and Free Cash Flow**: The company expects to remain free cash flow positive, with CapEx projected to be slightly below the previous year, focusing on growth and maintenance [50][52]. - **Balance Sheet Strength**: Target has paid off its senior notes, resulting in a virtually debt-free status, with an ABL facility of $175 million for working capital needs [53]. Margin Profiles - **HFS Segment**: Average gross margin around 30%, with stable operational activity expected [40][60]. - **Government Segment**: Higher margin profile, generally exceeding 40%, influenced by occupancy levels [60]. - **New Contracts**: The operational component of the Lithium Americas contract is expected to have margins similar to the HFS segment, around 30% [31][60]. Strategic Focus - **Growth Strategy**: Target is focused on organic growth, diversifying its customer base, and exploring inorganic growth opportunities through M&A [44][46][59]. - **Leadership Stability**: The leadership team is committed to growth through 2027, with a focus on reactivating assets and expanding into new sectors [45][46]. Conclusion Target Hospitality is positioned for growth with a strong focus on government contracts and new opportunities in workforce housing. The company maintains a solid financial position and is strategically diversifying its offerings while leveraging its unique asset base to respond to market demands.
Target Hospitality to Participate in Oppenheimer 20th Annual Industrial Growth Conference
Prnewswire· 2025-05-06 10:45
Core Insights - Target Hospitality Corp. is one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services [3] - The company will present at the Oppenheimer 20th Annual Industrial Growth Conference on May 7, 2025 [1][2] Company Overview - Target Hospitality builds, owns, and operates a customized network of communities for various end users, offering a full suite of value-added solutions including premium food service management, concierge, laundry, logistics, security, and recreational facilities services [3]