Target Hospitality Announces Third Quarter 2020 Results
Target Hospitality Corp. (NASDAQ: TH) reported Q3 2020 revenues of $48.3 million, down from $81.6 million in Q3 2019. The company experienced a net loss of $(7.9) million versus a net income of $9.6 million last year. Adjusted EBITDA was $17.0 million, down from $40.6 million. However, strong cash flow generation continued with $28.6 million from operations. Target secured a $265 million revenue contract extension with CoreCivic, contributing to a revised annual financial outlook of $207-$212 million in revenue.
- Secured a five-year contract extension with CoreCivic, adding approximately $265 million in committed revenue.
- Strong cash generation with $28.6 million net cash from operating activities.
- Premium accommodation demand is stabilizing, indicating potential for improved utilization and margins.
- Q3 2020 revenue dropped to $48.3 million, a decrease of $33.3 million year-over-year.
- Net loss of $7.9 million compared to a net income of $9.6 million in Q3 2019.
- Utilization rate decreased to 36%, down from 83% in the prior year.
THE WOODLANDS, Texas, Nov. 9, 2020 /PRNewswire/ -- Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ: TH), the largest provider of vertically-integrated specialty hospitality accommodations with premium catering and value-added hospitality services in the U.S., today reported results for the three months ended September 30, 2020.
Financial and Operational Highlights for the Third Quarter 2020
- Revenues of
$48.3 million for the three months ended September 30, 2020 as compared to$81.6 million for the same period in 2019 - Net income (loss) of
$(7.9) million for the three months ended September 30, 2020, compared to a net income of$9.6 million for the third quarter of 2019 - Basic and diluted (loss) per share of
$(0.08) for the three months ended September 30, 2020 - Adjusted EBITDA(1) of
$17.0 million , compared to$40.6 million for the third quarter of 2019 - Strong cash generation in a challenging environment, with net cash provided by operating activities of
$28.6 million and Discretionary Cash Flow ("DCF") (1) of$27.8 million for the nine months ended September 30, 2020 - Strong balance sheet with liquidity of
$64.1 million and net leverage of 4.1 times as of September 30, 2020 - Maintaining focus on utilizing
$15 million of third quarter discretionary cash flow to reduce borrowings on the Company's revolving credit facility - Meaningful project activity from TC Energy Corporation's Keystone XL pipeline project, contributing approximately
$11.6 million in revenue - Renewed and extended lease and services agreement with CoreCivic, Inc. ("CoreCivic") servicing the South Texas Family Residential Center ("STFRC") for five years, expiring September 2026, securing approximately
$265 million in previously uncontracted revenue
Executive Commentary
"As we continue to navigate through a challenging operating environment, Target produced solid third quarter results across our business. We continued to experience positive trends in customer activity levels, providing steady improvement in Target's operating metrics, from lows experienced during the second quarter, including occupancy and utilization. These trends, along with the Company's contract structure, including exclusivity, allowed us to benefit from improving customer demand for our premium accommodations across our network. Further, Target is benefiting from the cost reduction initiatives it outlined early in the second quarter, which have created a leaner and more efficient operating structure. This has allowed Target to meet the increase in accommodation demand with little incremental cost, resulting in margin expansion during the quarter. As these trends materialized, we maintained our heightened focus on preserving our financial strength, evidenced by our strong cash generation and disciplined capital allocation, providing the ability to reduce our outstanding borrowings by
"While we remain encouraged by the increase in demand for our services offerings and continued stabilization in customer activity levels, we are cognizant that the economic recovery remains fragile. The pace of the global demand recovery remains volatile and could be slowed, or paused, if the persistent global pandemic results in heightened restrictions being reimplemented on resurging economic activity. Amidst these market uncertainties, we remain focused on maintaining our strong financial position with an emphasis on preserving our liquidity position. Targets premium accommodation network has achieved substantial scale within our operating areas, allowing us to reduce capital spending and continue generating meaningful cash flow from operations over the long term," concluded Mr. Archer.
Financial Results
Third Quarter Summary Highlights
Refer to exhibits to this earnings release for reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s, except ADR and per share amounts) | September 30, 2020 | September 30, 2019 | |||||
Revenue | $ | 48,263 | $ | 81,643 | |||
Net income (loss) | $ | (7,870) | $ | 9,569 | |||
Earnings (loss) per share – basic and diluted | $ | (0.08) | $ | 0.10 | |||
Adjusted EBITDA | $ | 17,010 | $ | 40,610 | |||
Average daily rate (ADR) | $ | 81.28 | $ | 80.80 | |||
Average utilized beds | 4,823 | 10,340 | |||||
Utilization | 36 | % | 83 | % |
Revenue for the three months ended September 30, 2020 was
Adjusted EBITDA was
ADR increased by
Capital Management
The Company had less than
As of September 30, 2020, the Company had
Business Update
Target continued to see steady improvements in its operating metrics during the third quarter, as customer activity levels stabilized and demand for its Permian Basin accommodations increased. Target anticipates these trends will continue, at a moderated pace, through the rest of the year and into 2021 providing persistent stabilizing fundamentals. However, as market uncertainty remains Target will also be focused on maintaining financial strength through balance sheet flexibility and ongoing debt reduction.
Target has executed a five-year renewal and extension of its government services contract with CoreCivic, servicing the STFRC. The five-year extension will expire September 30, 2026 and adds approximately
Targets core business remains strong, and its customer base and contract structure, including exclusivity, have allowed the Company to take advantage of stabilizing market trends that reflect an increased demand for its premium hospitality and accommodation services. These trends support the Company's revised 2020 financial outlook. As a result, the Company is reiterating its previously issued revised 2020 financial outlook of:
- Total revenue between
$207 and$212 million - Adjusted EBITDA(1) between
$67 and$72 million - Total capital spending between
$8 and$12 million , excluding acquisitions - Discretionary Cash Flow between
$27 and$32 million
Target anticipates limited activity related to the TCPL project for the remainder of 2020, as a result the revised 2020 revenue outlook excludes additional revenue related to this project for the remainder of 2020.
Recent Developments
On November 5, 2020 Target announced that the Board of Directors of Target Hospitality ("the Board") has received an unsolicited non-binding proposal from Arrow Holdings S.à r.l. ("Arrow"), an affiliate of TDR Capital LLP ("TDR"), to acquire all of the outstanding shares of common stock of Target Hospitality that are not owned by any of Arrow, any investment fund managed by TDR or their respective affiliates, for cash consideration of
The Board intends to establish a special committee of independent directors with its own independent advisors to review the Proposal (the "Special Committee").
The Board has just received the Proposal and neither the Board nor the Special Committee has had an opportunity to carefully review and evaluate the Proposal or make any decision with respect to the Company's response to the Proposal. There can be no assurance that any agreement with respect to the proposed transaction will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Segment Results – Third Quarter 2020
Permian Basin
Refer to exhibits to this earnings release for reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s, except ADR) | September 30, 2020 | September 30, 2019 | |||||
Revenue | $ | 18,968 | $ | 56,524 | |||
Adjusted gross profit(1) | $ | 8,606 | $ | 33,285 | |||
Adjusted gross profit margin(1) | 45 | % | 59 | % | |||
Average daily rate (ADR) | $ | 89.56 | $ | 84.20 | |||
Average utilized beds | 2,277 | 6,994 | |||||
Utilization | 24 | % | 81 | % | |||
Revenue for the three months ended September 30, 2020 was
Adjusted gross profit margin was
Bakken Basin
Refer to exhibits to this earnings release for reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s, except ADR) | September 30, 2020 | September 30, 2019 | |||||
Revenue | $ | 1,154 | $ | 6,019 | |||
Adjusted gross profit(1) | $ | 87 | $ | 2,895 | |||
Adjusted gross profit margin(1) | 8 | % | 48 | % | |||
Average daily rate (ADR) | $ | 98.11 | $ | 77.40 | |||
Average utilized beds | 127 | 771 | |||||
Utilization | 12 | % | 76 | % | |||
Revenue for the three months ended September 30, 2020 was
Government
Refer to exhibits to this earnings release for reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s, except ADR) | September 30, 2020 | September 30, 2019 | |||||
Revenue | $ | 16,264 | $ | 16,830 | |||
Adjusted gross profit(1) | $ | 13,213 | $ | 12,817 | |||
Adjusted gross profit margin(1) | 81 | % | 76 | % | |||
Average daily rate (ADR) | $ | 72.27 | $ | 74.50 | |||
Average utilized beds | 2,400 | 2,400 | |||||
Utilization | 100 | % | 100 | % | |||
Revenue for the three months ended September 30, 2020 was
All Other
Refer to exhibits to this earnings release for reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s) | September 30, 2020 | September 30, 2019 | |||||
Revenue | $ | 11,877 | $ | 2,270 | |||
Adjusted gross profit | $ | 1,807 | $ | 781 | |||
Adjusted gross profit margin | 15 | % | 34 | % | |||
This segment's operations consist primarily of revenue from the construction phase of the TCPL project as well as vertically integrated specialty rental and hospitality services revenue not included in our other segments. Revenue for the three months ended September 30, 2020 was
As a result of the continued uncertainty of the scope and timing of the TCPL project, the Company anticipates minimal activity associated with this project in the fourth quarter of 2020.
Conference Call
The Company has scheduled a conference call for November 9, 2020 at 8:00 a.m. Central Time (9:00 am Eastern Time) to discuss the third quarter 2020 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: | 1529022 |
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, contract and supply chain disruptions; operational, economic, political and regulatory risks; 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; 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; our ability to meet our debt service requirements and obligations; and risks related to 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 including Adjusted EBITDA and DCF. 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 or DCF 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 DCF that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA and DCF calculation. Target Hospitality provides Adjusted EBITDA and DCF guidance because we believe that these measures, when viewed with our results under GAAP, provides 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.
- Currency (gains) losses, net: Foreign currency transaction gains and losses.
- Restructuring costs: Target Parent incurred certain costs associated with restructuring plans designed to streamline operations and reduce costs.
- Transaction expenses: Target Hospitality incurred certain transaction costs, including legal and professional fees, associated with the Business Combination. Such amounts were funded by proceeds from the Business Combination. The current period primarily included residual tax advisory filing related expenses associated with the Business Combination.
- Acquisition-related expenses: Target Hospitality incurred certain transaction costs associated with the acquisition of Superior.
- Officer loan expense: Non-cash charge associated with loans to certain executive officers of the Company that were forgiven and recognized as selling, general, and administrative expense upon consummation of the Business Combination. Such amounts are not expected to recur in the future.
- Target Parent selling, general and administrative costs: Target Parent incurred certain costs in the form of legal and professional fees as well as transaction bonus amounts, primarily associated with a restructuring transaction that originated in 2017.
- 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.
- 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 | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Revenue | ||||||||||||
Services income | $ | 24,331 | $ | 64,189 | $ | 103,526 | $ | 185,094 | ||||
Specialty rental income | 12,827 | 14,230 | 42,379 | 43,103 | ||||||||
Construction fee income | 11,105 | 3,224 | 27,634 | 16,786 | ||||||||
Total revenue | 48,263 | 81,643 | 173,539 | 244,983 | ||||||||
Costs | ||||||||||||
Services | 21,990 | 29,470 | 82,456 | 91,215 | ||||||||
Specialty rental | 2,560 | 2,395 | 6,864 | 7,203 | ||||||||
Depreciation of specialty rental assets | 11,995 | 11,222 | 37,158 | 31,083 | ||||||||
Gross profit | 11,718 | 38,556 | 47,061 | 115,482 | ||||||||
Selling, general and administrative | 8,508 | 11,141 | 28,599 | 66,817 | ||||||||
Other depreciation and amortization | 4,341 | 4,021 | 12,555 | 11,600 | ||||||||
Restructuring costs | — | — | — | 168 | ||||||||
Currency gains, net | — | (77) | — | (77) | ||||||||
Other expense (income), net | (183) | 440 | (752) | 279 | ||||||||
Operating income (loss) | (948) | 23,031 | 6,659 | 36,695 | ||||||||
Loss on extinguishment of debt | — | — | — | 907 | ||||||||
Interest expense, net | 9,913 | 10,172 | 30,113 | 24,056 | ||||||||
Income (loss) before income tax | (10,861) | 12,859 | (23,454) | 11,732 | ||||||||
Income tax expense (benefit) | (2,991) | 3,290 | (5,187) | 5,562 | ||||||||
Net income (loss) | (7,870) | 9,569 | (18,267) | 6,170 | ||||||||
Other comprehensive income (loss) | ||||||||||||
Foreign currency translation | 89 | 80 | 23 | (64) | ||||||||
Comprehensive income (loss) | $ | (7,781) | $ | 9,649 | $ | (18,244) | $ | 6,106 | ||||
Weighted average number shares outstanding - basic and diluted | 96,138,459 | 100,102,641 | 95,997,647 | 93,378,332 | ||||||||
Net income (loss) per share - basic and diluted | $ | (0.08) | $ | 0.10 | $ | (0.19) | $ | 0.07 | ||||
Exhibit 2 | |||||||
Target Hospitality Corp. | |||||||
Condensed Consolidated Balance Sheet Data | |||||||
($ in thousands) | |||||||
(unaudited) | |||||||
September 30, | December 31, | ||||||
2020 | 2019 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 9,102 | $ | 6,787 | |||
Accounts receivable, less allowance for doubtful accounts | 33,546 | 48,483 | |||||
Other current assets | 5,830 | 5,525 | |||||
Total current assets | $ | 48,478 | 60,795 | ||||
Specialty rental assets, net | 323,109 | 353,695 | |||||
Goodwill and Other intangibles, net | 147,827 | 158,904 | |||||
Other non-current assets | 32,079 | 27,398 | |||||
Total assets | $ | 551,493 | $ | 600,792 | |||
Liabilities | |||||||
Accounts payable | $ | 8,191 | $ | 7,793 | |||
Deferred revenue and customer deposits | 6,895 | 16,809 | |||||
Other current liabilities | 18,027 | 36,319 | |||||
Total current liabilities | 33,113 | 60,921 | |||||
Long-term debt, net | 325,632 | 323,258 | |||||
Revolving credit facility | 70,000 | 80,000 | |||||
Other non-current liabilities | 14,988 | 13,211 | |||||
Total liabilities | 443,733 | 477,390 | |||||
Stockholders' equity | |||||||
Common stock and other stockholders' equity | 88,314 | 85,687 | |||||
Accumulated earnings | 19,446 | 37,715 | |||||
Total stockholders' equity | 107,760 | 123,402 | |||||
Total liabilities and stockholders' equity | $ | 551,493 | $ | 600,792 | |||
Exhibit 3 | ||||||||
Target Hospitality Corp. | ||||||||
Condensed Consolidated Cash Flow Data | ||||||||
($ in thousands) | ||||||||
(unaudited) | ||||||||
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2020 | 2019 | |||||||
Cash, cash equivalents and restricted cash - beginning of period | $ | 6,839 | $ | 12,451 | ||||
Cash flows from operating activities | ||||||||
Net (loss) income | (18,267) | 6,170 | ||||||
Adjustments: | ||||||||
Depreciation | 38,636 | 31,944 | ||||||
Amortization of intangible assets | 11,077 | 10,739 | ||||||
Other non-cash items | 2,472 | 11,061 | ||||||
Changes in operating assets and liabilities | (5,326) | (15,837) | ||||||
Net cash provided by operating activities | $ | 28,592 | $ | 44,077 | ||||
Cash flows from investing activities | ||||||||
Purchases of specialty rental assets | (11,601) | (74,002) | ||||||
Purchase of business | - | (30,000) | ||||||
Other investing activities | 1,313 | 870 | ||||||
Net cash used in investing activities | $ | (10,288) | $ | (103,132) | ||||
Cash flows from financing activities | ||||||||
Other financing activities | (16,027) | 50,327 | ||||||
Net cash (used in) provided by financing activities | $ | (16,027) | $ | 50,327 | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14) | (17) | ||||||
Change in cash, cash equivalents and restricted cash | 2,263 | (8,745) | ||||||
Cash, cash equivalents and restricted cash - end of period | $ | 9,102 | $ | 3,706 | ||||
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 | For the Nine Months | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Total Revenue | $ | 48,263 | $ | 81,643 | $ | 173,539 | $ | 244,983 | |||||||||||||
Gross Profit | $ | 11,718 | $ | 38,556 | $ | 47,061 | $ | 115,482 | |||||||||||||
Adjustments: | |||||||||||||||||||||
Depreciation of specialty rental assets | 11,995 | 11,222 | 37,158 | 31,083 | |||||||||||||||||
Adjusted gross profit | $ | 23,713 | $ | 49,778 | $ | 84,219 | $ | 146,565 | |||||||||||||
Adjusted gross profit margin | |||||||||||||||||||||
Exhibit 5 | ||||||||||||||
Target Hospitality Corp. | ||||||||||||||
Reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA | ||||||||||||||
($ in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Total Revenue | $ | 48,263 | $ | 81,643 | $ | 173,539 | $ | 244,983 | ||||||
Net income (loss) | $ | (7,870) | $ | 9,569 | $ | (18,267) | $ | 6,170 | ||||||
Income tax expense (benefit) | (2,991) | 3,290 | (5,187) | 5,562 | ||||||||||
Interest expense, net | 9,913 | 10,172 | 30,113 | 24,056 | ||||||||||
Loss on extinguishment of debt | - | - | - | 907 | ||||||||||
Other depreciation and amortization | 4,341 | 4,021 | 12,555 | 11,600 | ||||||||||
Depreciation of specialty rental assets | 11,995 | 11,222 | 37,158 | 31,083 | ||||||||||
EBITDA | $ | 15,388 | $ | 38,274 | $ | 56,372 | $ | 79,378 | ||||||
Adjustments | ||||||||||||||
Other expense (income), net | 99 | 723 | 94 | 1,141 | ||||||||||
Restructuring costs | - | - | - | 168 | ||||||||||
Currency gains, net | - | (77) | - | (77) | ||||||||||
Transaction expenses | 26 | 35 | 382 | 38,028 | ||||||||||
Acquisition-related expenses | - | 67 | - | 370 | ||||||||||
Officer loan expense | - | - | - | 1,583 | ||||||||||
Target Parent selling, general, and administrative costs | - | - | - | 246 | ||||||||||
Stock-based compensation | 886 | 433 | 2,808 | 643 | ||||||||||
Other adjustments | 611 | 1,155 | 3,071 | 1,664 | ||||||||||
Adjusted EBITDA | $ | 17,010 | $ | 40,610 | $ | 62,727 | $ | 123,144 | ||||||
Exhibit 6 | ||||||
Target Hospitality Corp. | ||||||
Reconciliation of Net cash provided by operating activities to Discretionary cash flows | ||||||
($ in thousands) | ||||||
(unaudited) | ||||||
For the Nine Months Ended | ||||||
September 30, | ||||||
2020 | 2019 | |||||
Net cash provided by operating activities | $ | 28,592 | $ | 44,077 | ||
Less: Maintenance capital expenditures for specialty rental assets | (766) | (1,409) | ||||
Discretionary cash flows | $ | 27,826 | $ | 42,668 | ||
Purchase of specialty rental assets | (11,601) | (74,002) | ||||
Purchase of property, plant and equipment | (182) | (154) | ||||
Purchase of business, net of cash acquired | — | (30,000) | ||||
Repayments from affiliates | — | 638 | ||||
Receipt of insurance proceeds | 619 | 386 | ||||
Proceeds from sale of specialty rental assets and other property, plant and equipment | 876 | — | ||||
Net cash provided by (used in) investing activities | $ | (10,288) | $ | (103,132) | ||
Proceeds from borrowings on Senior Secured Notes, net of discount | — | 336,699 | ||||
Principal payments on finance and capital lease obligations | (10,654) | (1,970) | ||||
Proceeds from borrowings on finance and capital lease obligations | 10,151 | — | ||||
Principal payments on borrowings from ABL | (52,500) | (32,790) | ||||
Proceeds from borrowings on ABL | 42,500 | 82,240 | ||||
Repayment of affiliate note | — | (3,762) | ||||
Contributions from affiliate | — | 39,107 | ||||
Recapitalization | — | 218,752 | ||||
Recapitalization - cash paid to Algeco Seller | — | (563,134) | ||||
Payment of deferred financing costs | — | (19,799) | ||||
Restricted shares surrendered to pay tax liabilities | (206) | (57) | ||||
Purchase of treasury stock | (5,318) | (4,959) | ||||
Net cash provided by (used in) financing activities | $ | (16,027) | $ | 50,327 | ||
View original content:http://www.prnewswire.com/news-releases/target-hospitality-announces-third-quarter-2020-results-301168203.html
SOURCE Target Hospitality
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