Target Hospitality Reports 30% Rise in Adjusted EBITDA

By Tamara Parker • Wednesday, March 13 10:21 • Permanent Link

Target Hospitality Corp. has reported its financial and operational results for the fourth quarter and year ended December 31, 2023. As of December 31, 2023, the company had approximately $104 million of cash and cash equivalents with approximately $279 million of total available liquidity, no outstanding borrowings on the company’s $175 million credit facility, and a net leverage ratio of 0.2 times. The company executed approximately $17.8 million of stock repurchases through March 8, 2024, focusing on allocating capital to high return initiatives.

Here are the key metrics forthe fiscal year:

Revenue for the year ended December 31, 2023, was $563.6 million, showing a 12% increase from the prior year's $501.9 million.
Net income for the year ended December 31, 2023, reached $173.7 million, a significant rise from the $73.9 million reported for the same period in 2022.
Basic and diluted income per share for the year ended December 31, 2023, were $1.71 and $1.56, respectively.
Adjusted EBITDA for the year ended December 31, 2023, was $344.2 million, indicating a 30% increase compared to the same period in 2022.
The company achieved strong cash generation with approximately $157 million of net cash provided by operating activities and $143 million of discretionary cash flow for the year ended December 31, 2023.
Target Hospitality had approximately $279 million of total available liquidity and a net leverage ratio of 0.2x as of December 31, 2023.

For the fourth quarter of 2023:

Revenue was $126.2 million, down from $152.4 million for the same period in 2022, primarily driven by lower non-cash, nonrecurring, infrastructure enhancement revenue associated with the company’s Pecos Children’s Center (PCC) community.
Net income for the quarter was $37.8 million, compared to $31.6 million for the same period in 2022.
Adjusted EBITDA for the quarter was $67.7 million, down from $90.8 million for the same period in 2022, primarily due to the same lower non-cash, nonrecurring, infrastructure enhancement revenue associated with the PCC community.

The company had approximately $65.6 million of capital expenditures for the year ended December 31, 2023, including approximately $31.4 million of select asset acquisitions and associated asset enhancements.

In addition, the company announced a new PCC contract solidifying PCC as a critical element of the U.S. government’s ongoing humanitarian aid mission, centered around $178 million minimum annual revenue commitments, with a foundation for continued operations through 2028.

The company is reiterating its preliminary 2024 outlook, excluding acquisitions, with total revenue between $410 and $425 million, adjusted EBITDA between $195 and $210 million, and total capital spending between $25 and $30 million, excluding acquisitions.

As a result of these announcements, the company's shares have moved 6.6% on the market, and are now trading at a price of $9.11. Check out the company's full 8-K submission here.

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