Target Hospitality Corp. has provided a revised 2024 outlook and business update, following the termination of the South Texas Family Residential Center contract, which contributed approximately $55.9 million in total consolidated revenue for the year ended December 31, 2023.
As of May 31, 2024, the company had approximately $147 million of cash and cash equivalents, with total available liquidity of around $322 million, and no outstanding borrowings on its $175 million credit facility. The net leverage ratio stands at 0.1 times, and the company anticipates achieving zero net debt by the end of 2024, with over $350 million of total available liquidity.
Following the termination of the STFRC contract and the exclusion of incremental Pecos Children's Center (PCC) variable revenue from the revised 2024 outlook, the company now anticipates total revenue between $375 and $385 million, and adjusted EBITDA between $184 and $190 million for the year 2024.
Additionally, the company expects total capital spending between $25 and $30 million, excluding acquisitions. The year-end 2024 total available liquidity is projected to exceed $350 million.
In March 2024, the Board of Directors received an unsolicited non-binding proposal from Arrow Holdings S.àr.l., an affiliate of TDR Capital LLP, to acquire all outstanding shares of common stock of Target Hospitality for cash consideration of $10.80 per share. A special committee of independent directors is currently in the process of reviewing and evaluating the proposal, with no decision made at this time.
Target Hospitality is one of North America’s largest providers of vertically integrated modular accommodations and value-added hospitality services, with a suite of solutions including premium food service management, concierge, laundry, logistics, security, and recreational facilities services. The market has reacted to these announcements by moving the company's shares 10.4% to a price of $8.18. For more information, read the company's full 8-K submission here.
