THE WOODLANDS, Texas,
May 24, 2021 /PRNewswire/ -- Target
Hospitality Corp. ("Target Hospitality", "Target" or the "Company")
(NASDAQ: TH), the largest provider of vertically-integrated
specialty hospitality accommodations with premium food management
and value-added hospitality services in the U.S., today reported
results for the three months ended March 31,
2021.
Financial and Operational Highlights for the First Quarter
2021
- Revenue of $45.5 million for the
three months ended March 31, 2021 as
compared to $71.7 million for the
same period in 2020
- Net loss of $13.1 million for the
three months ended March 31, 2021,
compared to net income of $5.5
million for first quarter 2020
- Basic and diluted loss per share of $0.14 for the three months ended March 31, 2021
- Adjusted EBITDA(1) of $16.0
million for the three months ended March 31, 2021, compared to $32.4 million for the same period in 2020
- Continued strengthening customer demand with sequential
quarterly utilization increasing 800 basis points in the first
quarter of 2021
- Executed a $118 million minimum
revenue contract that provides a suite of comprehensive service
offerings assisting humanitarian aid efforts in support of the
United States Government
- Approximately 72% of 2021 revenue under committed revenue
contracts, with approximately 54% of 2021 revenue related to
Government Services
- As of May 24, 2021, reduced
year-to-date 2021 outstanding borrowings on the Company's ABL by
$21 million
- Increasing midpoint of 2021 Adjusted EBITDA outlook range 11%
to $97 - $107
million from $88 -
$95 million
Executive Commentary
"Target's first quarter performance exemplifies the benefits of
our strong operating position that allows us to serve our customers
varying needs, while also expanding the end-markets we serve.
As we continue to see post-pandemic re-openings, Target experienced
a consistent increase in demand for its premium service offerings,
which was reflected in margin expansion and improving operational
metrics during the quarter," stated Brad
Archer, President and Chief Executive Officer.
"The continued momentum in customer activity and demand provides
confidence in the cadence for the rest of 2021 and into 2022.
Additionally, the new partnership within our Government Services
segment is off to a strong start and demonstrates Target's rapid
operational flexibility and scale. As the economic outlook
continues to improve, we anticipate this momentum to continue,
which will provide the backdrop for meaningful near-term debt
reduction and further strengthening of Target's financial position
through the balance of 2021 and into next year," concluded Mr.
Archer.
Financial Results
First Quarter Summary Highlights
Refer to exhibits to this earnings release for definitions
and reconciliations of Non-GAAP financial measures to GAAP
financial measures
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s, except ADR and per share
amounts)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
|
|
|
|
|
|
(Restated)
|
|
Revenue
|
|
$
|
45,492
|
|
$
|
71,655
|
|
Net income
(loss)
|
|
$
|
(13,138)
|
|
$
|
5,454
|
|
Earnings (loss)
per share – basic and diluted
|
|
$
|
(0.14)
|
|
$
|
0.06
|
|
Adjusted
EBITDA
|
|
$
|
15,961
|
|
$
|
32,352
|
|
Average daily rate
(ADR)
|
|
$
|
70.01
|
|
$
|
77.82
|
|
Average utilized
beds
|
|
|
6,861
|
|
|
9,798
|
|
Utilization
|
|
|
51
|
%
|
|
76
|
%
|
Revenue for the three months ended March
31, 2021 was $45.5 million
compared to $71.7 million for the
same period in 2020. The decrease in revenue was primarily driven
by a reduction in customer activity as a result of the COVID-19
pandemic and subsequent meaningful reduction in customer headcount
demand within our operating areas. These decreases were
offset by the execution of a new government services contract,
which began on March 18, 2021, and
contributed approximately $4.5
million in first quarter 2021 revenue. Net loss for the
three months ended March 31, 2021 was
$13.1 million compared to net income
of $5.5 million for the same period
in 2020.
Adjusted EBITDA was $16.0 million
for the three months ended March 31,
2021 compared to $32.4 million
for the same period in 2020.
ADR decreased by $7.81 to
$70.01 for the three months ended
March 31, 2021 compared to the same
period in 2020. The decrease in ADR was primarily driven by
lower average ADR in the Permian and Government segments.
Average utilized beds and utilization were 6,861 and 51%,
respectively, for the three months ended March 31, 2021.
Capital Management
The Company had approximately $3.2
million of capital expenditures for the three months ended
March 31, 2021. Capital
expenditures included approximately $1.5
million in maintenance capital, of which approximately
$0.6 million related to the severe
winter weather that impacted a significant portion of the Company's
Permian Basin segment, and $1.1
million associated with the recently executed government
services contract.
As of March 31, 2021, the Company
had $6.4 million of cash and cash
equivalents and $400 million in gross
amount of total debt. As of May 24,
2021, the Company has reduced 2021 year-to-date borrowings
by $21 million and had outstanding
borrowings of $39 million under the
Company's $125 million revolving
credit facility. The Company anticipates additional near-term
debt reduction and is achieving significant progress towards its
previously stated leverage target. As a result of this
improvement, the Company is advancing its year end 2021 total net
leverage ratio target to below 3.5 times from the previously stated
target below 4.0 times.
Business Update
The pace and momentum of the economic outlook continues to
improve, with encouraging signs of post-pandemic economic
re-openings promoting improvement in commercial activity, which
supported Target's strong first quarter results. The Company
continues to benefit from its first-class customer base, premium
service offerings and contract structure, including exclusivity,
which have contributed to increased customer labor allocation as
activity continues to build. Further, Target has increased
its effective market share as customers find added value in
Target's expansive network, which provides greater flexibility than
existing competitors. These attributes contributed to
sequential improvements in operating metrics, strengthening the
Company's view on further increases in customer demand as activity
builds throughout the balance of the year.
Target's new nonprofit partnership diversifies its end-market
customers, while securing a high-quality contract, and validating
the reach of its premier hospitality service offerings and
solutions. The Company continues to evaluate a range of
organic and strategic growth opportunities, both within its core
business segments and adjacent end-markets. Target's suite of
core competencies and unique capabilities strategically position
Target to continue pursuing value enhancing opportunities that will
further diversify Target's end-markets and strengthen its financial
posture.
The Company expects consistent improvements within its legacy
markets and the addition of a fully committed $118 million minimum revenue contract increases
the 2021 revenue outlook, which provides the foundation to
materially enhance operational flexibility through meaningful cash
flow generation. Approximately 94% of the Company's
anticipated 2021 revenue is under contract with approximately 72%
of contracted revenue having committed payment provisions. As
a result, the Company is raising its 2021 financial outlook to:
- Total revenue between $260 and
$270 million
- Adjusted EBITDA(1) between $97 and $107
million
- Interest expense(2) between $33 and $35
million
- Discretionary Cash Flow(1) between $65 and $70
million
- Total capital spending between $15 and $20
million, excluding acquisitions
- Targeting a total net leverage(3) ratio below 3.5x
by year end 2021
(2) Interest expense excludes amortization of
deferred financing cost and original issue discount
(3) Total net leverage ratio is defined in the
credit facility as consolidated total debt to consolidated EBITDA
for the preceding four fiscal quarters
As previously disclosed, on May 6,
2021, based upon the April 12,
2021 SEC guidance change regarding the technical accounting
for warrants issued by Special Purpose Acquisition Company's
("SPACs"), Target will be restating the financial statements
contained in its previously issued Annual Report on Form 10-K for
the year ended December 31, 2020 to
account for this recent directive. The Company expects the
restatement to be non-cash in nature and does not anticipate any
impact to its previously communicated GAAP metrics such as
revenues, operating income (loss), cash and cash equivalents,
assets or debt, or previously communicated non-GAAP operating
metrics including adjusted Gross Profit, Adjusted EBITDA or
Discretionary Cash Flow.
Segment Results – First Quarter 2021
Permian Basin
Refer to exhibits to this earnings release for definitions
and reconciliations of Non-GAAP financial measures to GAAP
financial measures
|
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s, except ADR)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
|
Revenue
|
|
$
|
25,093
|
|
$
|
49,131
|
|
|
Adjusted gross
profit
|
|
$
|
10,658
|
|
$
|
26,784
|
|
|
Adjusted gross
profit margin
|
|
|
42
|
%
|
|
55
|
%
|
|
Average daily rate
(ADR)
|
|
$
|
74.13
|
|
$
|
79.32
|
|
|
Average utilized
beds
|
|
|
3,712
|
|
|
6,721
|
|
|
Utilization
|
|
|
41
|
%
|
|
73
|
%
|
|
Revenue for the three months ended March
31, 2021 was $25.1 million
compared to $49.1 million for the
same period in 2020. Revenue decreased primarily due to lower
utilization as a result of the COVID-19 pandemic, which created a
meaningful reduction in customer headcount demand. ADR
decreased by $5.19, to $74.13 compared to the same period in 2020.
The reduction in ADR was primarily driven by a reduction in the
uncontracted portion of the business and moderate pricing
pressure.
Adjusted gross profit margin was 42% for the three months ended
March 31, 2021, compared to 55% for
the same period in 2020.
Utilization was 41% for the three months ended March 31, 2021, compared to 73% for the same
period in 2020. As a result of the new government services
contract, executed on March 18, 2021,
the Company reallocated approximately 2,400 beds from the Permian
segment to the Government segment.
Bakken Basin
Refer to exhibits to this earnings release for definitions
and reconciliations of Non-GAAP financial measures to GAAP
financial measures
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s, except ADR)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
Revenue
|
|
$
|
597
|
|
$
|
4,185
|
|
Adjusted gross
profit
|
|
$
|
(549)
|
|
$
|
1,404
|
|
Adjusted gross
profit margin
|
|
|
(92)
|
%
|
|
34
|
%
|
Average daily rate
(ADR)
|
|
$
|
64.14
|
|
$
|
77.65
|
|
Average utilized
beds
|
|
|
101
|
|
|
573
|
|
Utilization
|
|
|
9
|
%
|
|
56
|
%
|
Revenue for the three months ended March
31, 2021 was $0.6 million
compared to $4.2 million for the same
period in 2020. The decrease was attributable to select communities
remaining closed in the Bakken since May
2020, as a result of the COVID-19 pandemic, which created a
meaningful reduction in customer headcount demand.
Government
Refer to exhibits to this earnings
release for definitions and reconciliations of Non-GAAP financial
measures to GAAP financial measures
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s, except ADR)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
Revenue
|
|
$
|
18,039
|
|
$
|
16,592
|
|
Adjusted gross
profit
|
|
$
|
13,802
|
|
$
|
11,580
|
|
Adjusted gross
profit margin
|
|
|
77
|
%
|
|
70
|
%
|
Average daily rate
(ADR)
|
|
$
|
65.02
|
|
$
|
74.91
|
|
Average utilized
beds
|
|
|
3,022
|
|
|
2,400
|
|
Utilization
|
|
|
100
|
%
|
|
100
|
%
|
Revenue for the three months ended March
31, 2021 was $18.0 million
compared to $16.6 million for the
same period in 2020. Average available beds of 3,022 were
fully utilized for the three months ended March 31, 2021, with an ADR of $65.02. On March 18,
2021, Target executed a $118
million minimum revenue contract, which is fully committed
over its initial one-year term. The contract adds 4,000
available beds, which will be fully utilized over the contract
term.
TCPL Keystone
Refer to exhibits to this earnings
release for definitions and reconciliations of Non-GAAP financial
measures to GAAP financial measures
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
Revenue
|
|
$
|
1,471
|
|
$
|
1,134
|
|
Adjusted gross
profit
|
|
$
|
208
|
|
$
|
338
|
|
Adjusted gross
profit margin
|
|
|
14
|
%
|
|
30
|
%
|
This segment's operations consist primarily of revenue from the
construction phase of the TCPL project. Revenue for the three
months ended March 31, 2021 was
$1.5 million compared to $1.1 million for the same period in 2020. As a
result of the January 20, 2021
Executive Order, revoking the Keystone XL Presidential Permit, the
Company anticipates substantially lower 2021 revenue associated
with the TCPL project.
All Other
Refer to exhibits to this earnings
release for definitions and reconciliations of Non-GAAP financial
measures to GAAP financial measures
|
|
|
|
|
|
|
|
For the Three
Months Ended ($ in '000s)
|
|
March 31, 2021
|
|
March 31, 2020
|
|
Revenue
|
|
$
|
292
|
|
$
|
613
|
|
Adjusted gross
profit
|
|
$
|
(218)
|
|
$
|
(62)
|
|
Adjusted gross
profit margin
|
|
|
(76)
|
%
|
|
(10)
|
%
|
This segment's operations consist of hospitality services
revenue not included in other segments. Revenue for the three
months ended March 31, 2021 was
$0.3 million compared to $0.6 million for the same period in 2020.
Conference Call
The Company has scheduled a conference call for May 24, 2021 at 8:00 a.m.
Central Time (9:00 am Eastern
Time) to discuss the first quarter 2021 results.
The conference call will be available by live webcast through
the Investors section of Target Hospitality's website at
www.TargetHospitality.com or by dialing in as follows:
|
|
Domestic:
|
1-888-317-6003
|
International:
|
1-412-317-6061
|
Passcode:
|
6447877
|
Please register for the webcast or dial into the conference call
approximately 15 minutes prior to the scheduled start time.
About Target Hospitality
Target Hospitality is the largest provider of vertically
integrated specialty rental accommodations and value-added
hospitality services in the United
States. Target Hospitality builds, owns and operates
customized housing communities for a range of end users, and offers
a full suite of cost-effective hospitality solutions including
culinary, catering, concierge, laundry and security services as
well as recreational facilities. Target Hospitality primarily
serves the energy and government sectors and its growing network of
communities is designed to maximize workforce productivity and
satisfaction.
Cautionary Statement Regarding Forward Looking
Statements
Certain statements made in this press release are "forward
looking statements" within the meaning of the "safe harbor"
provisions of the United States Private Securities Litigation
Reform Act of 1995. When used in this press release, the words
"estimates," "projected," "expects," "anticipates," "forecasts,"
"plans," "intends," "believes," "seeks," "may," "will," "should,"
"future," "propose" and variations of these words or similar
expressions (or the negative versions of such words or expressions)
are intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside our control, that could cause
actual results or outcomes to differ materially from those
discussed in the forward-looking statements. Important factors,
among others, that may affect actual results or outcomes include:
the severity and duration of the COVID-19 pandemic, related
economic repercussions and the resulting negative impact on demand
for oil and natural gas; operational challenges relating to the
COVID-19 pandemic and efforts to mitigate the spread of the virus,
including logistical challenges, protecting the health and
well-being of our employees and customers, remote work arrangements
and return to work arrangements, contract and supply chain
disruptions; operational, economic, political and regulatory risks;
federal government budgeting and appropriations; our ability to
effectively compete in the specialty rental accommodations and
hospitality services industry; effective management of our
communities; natural disasters, including pandemics and other
business disruptions; the effect of changes in state building codes
on marketing our buildings; changes in demand within a number of
key industry end-markets and geographic regions; our reliance on
third party manufacturers and suppliers; failure to retain key
personnel; increases in raw material and labor costs; the effect of
impairment charges on our operating results; our inability to
recognize deferred tax assets and tax loss carry forwards; our
future operating results fluctuating, failing to match performance
or to meet expectations; our exposure to various possible claims
and the potential inadequacy of our insurance; unanticipated
changes in our tax obligations; our obligations under various laws
and regulations; the effect of litigation, judgments, orders,
regulatory or customer bankruptcy proceedings on our business; our
ability to successfully acquire and integrate new operations;
global or local economic and political movements, including any
changes from the Biden administration; our ability to effectively
manage our credit risk and collect on our accounts receivable; our
ability to fulfill Target Hospitality's public company obligations;
any failure of our management information systems and our ability
to remediate any material weakness; fluctuations in the fair value
of warrant liabilities; our ability to meet our debt service
requirements and obligations; and risks related to Arrow Bidco's
obligations under the senior notes. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
(1) Non-GAAP Financial Measures
This press release contains historical non-GAAP financial
measures including Adjusted gross profit, Adjusted gross profit
margin, DCF and Adjusted EBITDA, which are measurements not
calculated in accordance with US GAAP, in the discussion of our
financial results because they are key metrics used by management
to assess financial performance. Our business is capital-intensive,
and these additional metrics allow management to further evaluate
our operating performance. Reconciliations of these measures
to the most directly comparable GAAP financial measures are
contained herein. To the extent required, statements disclosing the
definitions, utility and purposes of these measures are also set
forth herein.
This press release also contains forward-looking non-GAAP
financial measures Adjusted EBITDA and Discretionary Cash Flow.
Reconciliations of these forward-looking measures to their most
directly comparable GAAP financial measures are unavailable to
Target Hospitality without unreasonable effort. We cannot provide
reconciliations of forward-looking Adjusted EBITDA and
Discretionary Cash Flow to GAAP financial measures because certain
items required for such reconciliations are outside of our control
and/or cannot be reasonably predicted, such as the provision for
income taxes. Preparation of such reconciliations would require a
forward-looking balance sheet, statement of income and statement of
cash flow, prepared in accordance with GAAP, and such
forward-looking financial statements are unavailable to us without
unreasonable effort. Although we provide a range of Adjusted EBITDA
and Discretionary Cash Flow that we believe will be achieved, we
cannot accurately predict all the components of the Adjusted EBITDA
and Discretionary Cash Flow calculations. Target Hospitality
provides an Adjusted EBITDA and Discretionary Cash Flow outlook
because we believe that these measures, when viewed with our
results under GAAP, provide useful information for the reasons
noted below.
Definitions:
Target Hospitality defines Adjusted gross profit, as Gross
profit plus depreciation of specialty rental assets and loss on
impairment. Target Hospitality defines Adjusted gross profit margin
as Adjusted gross profit divided by total revenue for the same
period.
Target Hospitality defines EBITDA as net income (loss) before
interest expense and loss on extinguishment of debt, income tax
expense (benefit), depreciation of specialty rental assets, and
other depreciation and amortization. Adjusted EBITDA reflects the
following further adjustments to EBITDA to exclude certain non-cash
items and the effect of what management considers transactions or
events not related to its core business operations:
- Other expense (income), net: Other expense (income), net
includes consulting expenses related to certain projects, financing
costs not classified as interest expense, gains and losses on
disposals of property, plant, and equipment, involuntary asset
conversions, COVID-19 related expenses, and other immaterial
non-cash charges.
- Transaction expenses: Target Hospitality incurred certain
transaction costs, including legal and professional fees,
associated with the previously announced non-binding proposal made
by Arrow Holdings S.à r.l. ("Arrow"), an affiliate of TDR Capital
LLP ("TDR"), to acquire all of the outstanding shares of common
stock of Target Hospitality not owned by Arrow or its affiliates
for cash consideration of $1.50 per
share in the current period. The prior period primarily included
residual tax advisory filing related expenses associated with the
Business Combination.
- Stock-based compensation: Non-cash charges associated with
stock-based compensation expense, which has been, and will continue
to be for the foreseeable future, a significant recurring expense
in our business and an important part of our compensation
strategy.
- Change in fair value of warrant liabilities: Non-cash change in
estimated fair value of warrant liabilities.
- Other adjustments: System implementation costs, including
primarily non-cash amortization of capitalized system
implementation costs, claim settlement, business development,
accounting standard implementation costs and certain severance
costs.
Target Hospitality defines Discretionary cash flow as cash flow
from operations less maintenance capital spending for specialty
rental assets.
Utility and Purposes:
EBITDA reflects net income (loss) excluding the impact of
interest expense and loss on extinguishment of debt, provision for
income taxes, depreciation, and amortization. We believe that
EBITDA is a meaningful indicator of operating performance because
we use it to measure our ability to service debt, fund capital
expenditures, and expand our business. We also use EBITDA, as do
analysts, lenders, investors, and others, to evaluate companies
because it excludes certain items that can vary widely across
different industries or among companies within the same industry.
For example, interest expense can be dependent on a company's
capital structure, debt levels, and credit ratings. Accordingly,
the impact of interest expense on earnings can vary significantly
among companies. The tax positions of companies can also vary
because of their differing abilities to take advantage of tax
benefits and because of the tax policies of the jurisdictions in
which they operate. As a result, effective tax rates and provision
for income taxes can vary considerably among companies. EBITDA also
excludes depreciation and amortization expense, because companies
utilize productive assets of different ages and use different
methods of both acquiring and depreciating productive assets. These
differences can result in considerable variability in the relative
costs of productive assets and the depreciation and amortization
expense among companies.
Target Hospitality also believes that Adjusted EBITDA is a
meaningful indicator of operating performance. Our Adjusted EBITDA
reflects adjustments to exclude the effects of additional items,
including certain items, that are not reflective of the ongoing
operating results of Target Hospitality. In addition, to
derive Adjusted EBITDA, we exclude gains or losses on the sale of
depreciable assets and impairment losses because including them in
EBITDA is inconsistent with reporting the ongoing performance of
our remaining assets. Additionally, the gain or loss on sale of
depreciable assets and impairment losses represents either
accelerated depreciation or excess depreciation in previous
periods, and depreciation is excluded from EBITDA.
Adjusted gross profit, Adjusted gross profit margin, DCF and
Adjusted EBITDA are not measurements of Target Hospitality's
financial performance under GAAP and should not be considered as
alternatives to Net income (loss), Gross profit, Earnings per
share, Net cash provided by operating activities, or other
performance measures derived in accordance with GAAP. In addition,
these non-GAAP measures may not be comparable to similarly titled
measures of other companies. Target Hospitality's management
believe that Adjusted gross profit, Adjusted gross profit margin,
DCF and Adjusted EBITDA provide useful information to investors
about Target Hospitality and its financial condition and results of
operations for the following reasons: (i) they are among the
measures used by Target Hospitality's management team to evaluate
its operating performance; (ii) they are among the measures used by
Target Hospitality's management team to make day-to-day operating
decisions, (iii) they are frequently used by securities analysts,
investors and other interested parties as a common performance
measure to compare results across companies in Target Hospitality's
industry.
Investor Contact:
Mark
Schuck
(832) 702 – 8009
ir@targethospitality.com
|
|
|
|
|
|
Exhibit 1
|
Target Hospitality
Corp.
Consolidated
Statements of Comprehensive Income (Loss)
($ in thousands,
except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2021
|
|
2020
|
Revenue:
|
|
|
|
|
|
(Restated)
|
Services
income
|
|
$
|
32,939
|
|
$
|
53,938
|
Specialty rental
income
|
|
|
11,620
|
|
|
16,583
|
Construction fee
income
|
|
|
934
|
|
|
1,134
|
Total
revenue
|
|
|
45,492
|
|
|
71,655
|
Costs:
|
|
|
|
|
|
|
Services
|
|
|
19,349
|
|
|
29,007
|
Specialty
rental
|
|
|
2,242
|
|
|
2,604
|
Depreciation of
specialty rental assets
|
|
|
12,440
|
|
|
12,897
|
Gross
profit
|
|
|
11,461
|
|
|
27,147
|
Selling, general and
administrative
|
|
|
11,332
|
|
|
9,990
|
Other depreciation
and amortization
|
|
|
3,996
|
|
|
4,116
|
Other expense
(income), net
|
|
|
246
|
|
|
(1,015)
|
Operating income
(loss)
|
|
|
(4,113)
|
|
|
14,056
|
Interest expense,
net
|
|
|
9,849
|
|
|
10,022
|
Change in fair value
of warrant liabilities
|
|
|
640
|
|
|
(1,653)
|
Income (loss) before
income tax
|
|
|
(14,602)
|
|
|
5,687
|
Income tax expense
(benefit)
|
|
|
(1,464)
|
|
|
233
|
Net income
(loss)
|
|
|
(13,138)
|
|
|
5,454
|
Other comprehensive
loss
|
|
|
|
|
|
|
Foreign currency
translation
|
|
|
(19)
|
|
|
(111)
|
Comprehensive income
(loss)
|
|
$
|
(13,157)
|
|
$
|
5,343
|
|
|
|
|
|
|
|
Weighted average
number shares outstanding - basic and diluted
|
|
|
96,168,425
|
|
|
95,849,854
|
|
|
|
|
|
|
|
Net income (loss)
per share - basic and diluted
|
|
$
|
(0.14)
|
|
$
|
0.06
|
|
|
|
|
|
|
|
Exhibit 2
|
Target Hospitality
Corp.
Condensed
Consolidated Balance Sheet Data
($ in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2021
|
|
2020
|
Assets
|
|
|
|
|
|
|
(Restated)
|
Cash and cash
equivalents
|
|
$
|
6,373
|
|
$
|
6,979
|
Accounts receivable,
less allowance for doubtful accounts
|
|
|
30,915
|
|
|
28,183
|
Other current
assets
|
|
|
6,518
|
|
|
8,400
|
Total current
assets
|
|
|
$
|
43,806
|
|
|
43,562
|
|
|
|
|
|
|
|
Specialty rental
assets, net
|
|
|
|
302,237
|
|
|
311,487
|
Goodwill and Other
intangibles, net
|
|
|
|
140,501
|
|
|
144,159
|
Other non-current
assets
|
|
|
|
35,723
|
|
|
35,029
|
Total
assets
|
|
|
$
|
522,267
|
|
$
|
534,237
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
9,167
|
|
$
|
10,644
|
Deferred revenue and
customer deposits
|
|
|
6,696
|
|
|
6,619
|
Other current
liabilities
|
|
|
17,436
|
|
|
28,270
|
Total current
liabilities
|
|
|
|
33,299
|
|
|
45,533
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
|
327,390
|
|
|
326,499
|
Revolving credit
facility
|
|
|
|
60,000
|
|
|
48,000
|
Warrant
liabilities
|
|
|
|
1,173
|
|
|
533
|
Other non-current
liabilities
|
|
|
|
13,964
|
|
|
14,784
|
Total
liabilities
|
|
|
|
435,826
|
|
|
435,349
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
Common stock and other
stockholders' equity
|
|
|
81,259
|
|
|
80,568
|
Accumulated
earnings
|
|
|
5,182
|
|
|
18,320
|
Total
stockholders' equity
|
|
|
|
86,441
|
|
|
98,888
|
Total liabilities
and stockholders' equity
|
|
|
$
|
522,267
|
|
$
|
534,237
|
|
|
|
|
|
|
Exhibit 3
|
Target Hospitality
Corp.
Condensed
Consolidated Cash Flow Data
($ in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March 31,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
(Restated)
|
Cash, cash
equivalents and restricted cash - beginning of
period
|
|
$
|
6,979
|
|
$
|
6,839
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
Net (loss)
income
|
|
|
(13,138)
|
|
|
5,454
|
Adjustments:
|
|
|
|
|
|
|
Depreciation
|
|
|
12,777
|
|
|
13,265
|
Amortization of
intangible assets
|
|
|
3,658
|
|
|
3,747
|
Other non-cash
items
|
|
|
1,139
|
|
|
177
|
Changes in operating
assets and liabilities
|
|
|
(12,435)
|
|
|
(12,092)
|
Net cash provided
by (used in) operating activities
|
|
$
|
(7,999)
|
|
$
|
10,551
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Purchases of specialty
rental assets
|
|
|
(3,173)
|
|
|
(10,751)
|
Other investing
activities
|
|
|
(29)
|
|
|
606
|
Net cash used in
investing activities
|
|
$
|
(3,202)
|
|
$
|
(10,145)
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Purchase of treasury
stock
|
|
|
-
|
|
|
(5,318)
|
Other financing
activities
|
|
|
10,588
|
|
|
5,647
|
Net cash provided
by financing activities
|
|
$
|
10,588
|
|
$
|
329
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
7
|
|
|
(18)
|
|
|
|
|
|
|
|
Change in cash, cash
equivalents and restricted cash
|
|
|
(606)
|
|
|
717
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash - end of period
|
|
$
|
6,373
|
|
$
|
7,556
|
|
|
|
|
|
Exhibit 4
|
Target Hospitality
Corp.
Reconciliation of
Gross profit to Adjusted gross profit and Adjusted gross profit
margin
($ in
thousands)
(unaudited)
|
|
|
|
For the Three
Months Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
|
|
|
|
Total
Revenue
|
$
|
45,492
|
|
$
|
71,655
|
|
|
|
|
|
|
Gross
Profit
|
$
|
11,461
|
|
$
|
27,147
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Depreciation of
specialty rental assets
|
|
12,440
|
|
|
12,897
|
Adjusted gross
profit
|
$
|
23,901
|
|
$
|
40,044
|
|
|
|
|
|
|
Adjusted gross profit
margin
|
|
53%
|
|
|
56%
|
|
|
|
|
|
Exhibit 5
|
Target Hospitality
Corp.
Reconciliation of
Net income (loss) to EBITDA and Adjusted EBITDA
($ in
thousands)
(unaudited)
|
|
|
|
For the Three
Months Ended
|
|
March 31,
|
|
2021
|
|
2020
|
|
|
|
|
|
(Restated)
|
Total
Revenue
|
$
|
45,492
|
|
$
|
71,655
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(13,138)
|
|
$
|
5,454
|
Income tax expense
(benefit)
|
|
(1,464)
|
|
|
233
|
Interest expense,
net
|
|
9,849
|
|
|
10,022
|
Other depreciation
and amortization
|
|
3,996
|
|
|
4,116
|
Depreciation of
specialty rental assets
|
|
12,440
|
|
|
12,897
|
EBITDA
|
$
|
11,683
|
|
$
|
32,722
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
Other expense
(income), net
|
|
245
|
|
|
(734)
|
Transaction
expenses
|
|
817
|
|
|
24
|
Stock-based
compensation
|
|
799
|
|
|
884
|
Change in fair value
of warrant liabilities
|
|
640
|
|
|
(1,653)
|
Other
adjustments
|
|
1,777
|
|
|
1,109
|
Adjusted
EBITDA
|
$
|
15,961
|
|
$
|
32,352
|
|
|
|
|
|
|
Exhibit 6
|
Target Hospitality
Corp.
Reconciliation of
Net cash provided by operating activities to Discretionary cash
flows
($ in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
|
March
31,
|
|
|
2021
|
|
2020
|
Net cash provided
by (used in) operating activities
|
|
$
|
(7,999)
|
|
$
|
10,551
|
Less: Maintenance
capital expenditures for specialty rental assets
|
|
|
(1,460)
|
|
|
(629)
|
Discretionary cash
flows
|
|
$
|
(9,459)
|
|
$
|
9,922
|
|
|
|
|
|
|
|
Purchase of specialty
rental assets
|
|
|
(3,173)
|
|
|
(10,751)
|
Purchase of property,
plant and equipment
|
|
|
(29)
|
|
|
(13)
|
Receipt of insurance
proceeds
|
|
|
—
|
|
|
619
|
Net cash used in
investing activities
|
|
$
|
(3,202)
|
|
$
|
(10,145)
|
|
|
|
|
|
|
|
Principal payments on
finance and capital lease obligations
|
|
|
(1,361)
|
|
|
(3)
|
Proceeds from
borrowings on finance and capital lease obligations
|
|
|
—
|
|
|
733
|
Principal payments on
borrowings from ABL
|
|
|
(6,000)
|
|
|
(22,500)
|
Proceeds from
borrowings on ABL
|
|
|
18,000
|
|
|
27,500
|
Restricted shares
surrendered to pay tax liabilities
|
|
|
(51)
|
|
|
(83)
|
Purchase of treasury
stock
|
|
|
—
|
|
|
(5,318)
|
Net cash provided
by financing activities
|
|
$
|
10,588
|
|
$
|
329
|
View original
content:http://www.prnewswire.com/news-releases/target-hospitality-announces-first-quarter-2021-results-and-raises-full-year-2021-financial-outlook-301297075.html
SOURCE Target Hospitality