Business
Target Hospitality Provides Revised 2024 Outlook and Business Update Supported by Strength of Financial Position
THE WOODLANDS, Texas, June 27, 2024 /PRNewswire/ -- Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ: TH), one of North
About this update from Target Hospitality Corp.
[{"type":"text","content":"THE WOODLANDS, Texas, June 27, 2024 /PRNewswire/ -- Target Hospitality Corp. (\"Target Hospitality\", \"Target\" or the \"Company\") (NASDAQ: TH), one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services, today provided the following revised 2024 outlook and business update. \n\nAs previously announced, on June 10, 2024, the Company received notice that the U.S. government intends to terminate the South Texas Family Residential Center contract (\"STFRC Contract\"), effective in 60 days, or on or about August 9, 2024 (\"Effective Date\"). The STFRC Contract was based on a fixed minimum lease revenue commitment and for the year ended December 31, 2023, contributed approximately $55.9 million in total consolidated revenue. \nRegarding Target's Pecos Children's Center (\"PCC\") community, since 2021, the PCC community has served as a cornerstone to the U.S. government's domestic humanitarian aid mission and the Company anticipates a normal course renewal of this contract in November of 2024. However, given the dynamic fluctuations in community population, Target believes it prudent to exclude from the revised 2024 outlook any incremental PCC variable revenue.\nTarget's robust operating platform, network flexibility and commitment to maximize operational efficiencies has established an enhanced financial position. These attributes support a highly durable and flexible operating model centered on an optimized balance sheet and robust liquidity profile. \nAs of May 31, 2024, the Company had approximately $147 million of cash and cash equivalents with approximately $322 million of total available liquidity, no outstanding borrowings on the Company's $175 million credit facility and a net leverage ratio of 0.1 times. Target anticipates achieving zero net debt by year end 2024, with over $350 million of total available liquidity.\nTarget's contract portfolio provides a high degree of revenue visibility, coupled with an efficient operating structure, these elements support strong cash generation and an optimized balance sheet. After giving effect to the recent STFRC Contract termination, PCC variable revenue contribution and continued positive operational momentum, the Company is providing a revised 2024 outlook, of:\nTotal revenue between $375 and $385 millionAdjusted EB...