Target Hospitality Delivers Exceptional Third Quarter 2021 Results Driven by Significant Cash Flows and Strengthening Customer Demand Led by Government Contracts
Target Hospitality Corp. (NASDAQ: TH) reported third-quarter 2021 revenue of $89.2 million, up 85% year-over-year, with net income reaching $6.7 million. Adjusted EBITDA increased by 121% to $37.5 million. The company raised its full-year 2021 revenue outlook by 7% and adjusted EBITDA outlook by 9%. Approximately 73% of 2021 revenue is under committed contracts, with strong government service demand accounting for about 52% of third-quarter revenue. Target’s net leverage ratio improved by 52% to 3.1 times, with significant liquidity of over $155 million.
- Revenue increased by 85% year-over-year to $89.2 million.
- Net income rose to $6.7 million from a loss of $7.6 million in Q3 2020.
- Adjusted EBITDA reached $37.5 million, up 121% year-over-year.
- Full-year 2021 revenue outlook raised by 7% and adjusted EBITDA by 9%.
- Approximately 73% of anticipated 2021 revenue under committed revenue contracts.
- Strong liquidity with over $155 million available and zero borrowings under credit facility.
- Average daily rate (ADR) decreased by $4.50 to $76.78 due to lower occupancy.
- Government services segment ADR was materially lower due to pandemic-related occupancy issues.
THE WOODLANDS, Texas, Nov. 12, 2021 /PRNewswire/ -- Target Hospitality Corp. ("Target Hospitality", "Target" or the "Company") (NASDAQ: TH), North America's largest provider of vertically-integrated modular accommodations and value-added hospitality services, today reported results for the three months ended September 30, 2021.
Financial and Operational Highlights for the Third Quarter 2021
- Revenue increased to
$89.2 million for the three months ended September 30, 2021, an increase of85% year-over-year - Net income increased to
$6.7 million for the three months ended September 30, 2021, an increase of$14.3 million year-over-year - Basic and diluted earnings per share of
$0.07 for the three months ended September 30, 2021 - Adjusted EBITDA(1) of
$37.5 million , up121% year-over-year - Strong cash generation with net cash provided by operating activities of
$40.0 million and Discretionary Cash Flow ("DCF") (1) of$34.7 million for the three months ended September 30, 2021, representing39% DCF yield(1) to revenue - Improved net leverage ratio by
52% since the beginning of 2021, marking significant progress towards year-end 2021 target net leverage ratio of below 3.0 times - Raised full year 2021 financial outlook by
7% for revenue and9% for Adjusted EBITDA(1), representing a25% and42% increase, respectively, from full year 2020 - Executing on premier customer diversification with approximately
52% of third quarter 2021 revenue related to committed revenue contracts backed by the United States Government - Continued strengthening customer demand for Target's premier modular hospitality solutions, with third quarter utilization of
75% - Approximately
73% of 2021 revenue under committed revenue contracts, with approximately53% of anticipated 2021 revenue related to government services - Meaningful financial flexibility with over
$155 million in total available liquidity, with zero outstanding borrowings under the Company's$125 million credit facility
Executive Commentary
"Our impressive third quarter results demonstrate Target's commitment to executing on its strategic objectives. Target continues to benefit from its unique position as North America's leader in modular accommodation solutions and the scale of its world-class network, which has created a unique and efficient operating platform. This platform, along with broadening customer demand, has allowed Target to capture margin expansion and generate significant cash flow through 2021," stated Brad Archer, President and Chief Executive Officer.
"We have utilized this positive momentum to meaningfully enhance Target's balance sheet, through the significant reduction of outstanding debt, which has resulted in a
Financial Results
Third Quarter Summary Highlights
Refer to exhibits to this earnings release for definitions and reconciliations of Non-GAAP financial measures to GAAP financial measures
For the Three Months Ended ($ in '000s, except ADR and per share | September 30, 2021 | September 30, 2020 | |||||
(Restated) | |||||||
Revenue | $ | 89,169 | $ | 48,263 | |||
Net income (loss) | $ | 6,675 | $ | (7,603) | |||
Income (loss) per share – basic and diluted | $ | 0.07 | $ | (0.08) | |||
Adjusted EBITDA | $ | 37,534 | $ | 17,010 | |||
Average daily rate (ADR) | $ | 76.78 | $ | 81.28 | |||
Average utilized beds | 11,087 | 4,823 | |||||
Utilization | 75 | % | 36 | % | |||
Revenue for the three months ended September 30, 2021, was
Adjusted EBITDA was
ADR decreased by
Average utilized beds increased by 6,264 to 11,087 for the three months ended September 30, 2021, an increase of
Capital Management
The Company had approximately
As of September 30, 2021, the Company had
As a result, the Company has accelerated its year end 2021 total net leverage ratio target to below 3.0 times.
Business Update
Demand fundamentals have strengthened throughout 2021 and have supported the broadening of customer activity and consistent increases in demand for Target's premium modular hospitality service offerings. Since year-end 2020, Target has experienced an over
The sustained momentum has allowed Target to execute on its diversification and growth strategy, focused on utilizing existing core competencies to pursue a balanced portfolio of service offerings. Target has meaningfully advanced its diversification strategy with approximately
This positive business momentum has resulted in approximately
Full Year 2021 Financial Outlook
- Total revenue between
$280 and$285 million - Adjusted EBITDA(1) between
$110 and$113 million - Interest expense(2) between
$33 and$35 million - Discretionary Cash Flow(1) between
$75 and$80 million - Total capital spending between
$25 and$30 million , excluding acquisitions - Targeting a total net leverage(3) ratio below 3.0x 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
Strategic Focus
Target has strategically positioned itself as North America's market leader in premier vertically integrated hospitality solutions by systematically identifying and transitioning its business mix to expand its growth pipeline. Target has accomplished this strategic growth by intentionally focusing on markets and customers that offer greater long-term growth potential, while optimizing its existing asset fleet and unique capabilities to maximize economic returns.
The scale of Target's modular network and expansive core competencies has created an efficient operating structure, providing substantial revenue visibility from highly contracted revenue with high renewal rates. These attributes result in a high return on growth capital and significant Discretionary Cash Flow. Target has experienced a
This highly attractive financial profile generates best-in-class margins and impressive cash flow conversion, which has allowed Target to systematically execute on its strategic objectives and meaningfully enhance Target's operational flexibility. This enhanced profile provides the opportunity to reinvest cash flows into complementary growth markets, intended to expand Target's long-term growth pipeline.
Target remains committed to enhancing value through a balanced portfolio of service offerings, focused on a range of adjacent end-markets, while continuing to expand its reach providing critical support to the United States Government. Target's financial strength, and robust core offerings, creates a platform to continue pursuing these highly economic growth initiatives, which it believes is the greatest opportunity to accelerate value creation.
Segment Results – Third Quarter 2021
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) | September 30, 2021 | September 30, 2020 | |||||
Revenue | $ | 46,428 | $ | 16,264 | |||
Adjusted gross profit | $ | 25,823 | $ | 13,213 | |||
Adjusted gross profit margin | 56 | % | 81 | % | |||
Average daily rate (ADR) | $ | 78.10 | $ | 72.27 | |||
Average utilized beds | 6,400 | 2,400 | |||||
Utilization | 100 | % | 100 | % | |||
Revenue for the three months ended September 30, 2021, was
On March 18, 2021, Target executed a
Hospitality & Facilities Services - South
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) | September 30, 2021 | September 30, 2020 | |||||
Revenue | $ | 31,066 | $ | 18,968 | |||
Adjusted gross profit | $ | 13,945 | $ | 8,606 | |||
Adjusted gross profit margin | 45 | % | 45 | % | |||
Average daily rate (ADR) | $ | 75.39 | $ | 89.56 | |||
Average utilized beds | 4,428 | 2,277 | |||||
Utilization | 64 | % | 24 | % | |||
Revenue for the three months ended September 30, 2021, was
ADR decreased by
Utilization was
Hospitality & Facilities Services - Midwest
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) | September 30, 2021 | September 30, 2020 | |||||
Revenue | $ | 1,266 | $ | 1,154 | |||
Adjusted gross profit | $ | (56) | $ | 87 | |||
Adjusted gross profit margin | (4) | % | 8 | % | |||
Average daily rate (ADR) | $ | 68.43 | $ | 98.11 | |||
Average utilized beds | 195 | 127 | |||||
Utilization | 18 | % | 12 | % | |||
Revenue for the three months ended September 30, 2021, was
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) | September 30, 2021 | September 30, 2020 | |||||
Revenue | $ | 9,880 | $ | 11,598 | |||
Adjusted gross profit | $ | 8,329 | $ | 2,027 | |||
Adjusted gross profit margin | 84 | % | 17 | % | |||
This segment's operations consist primarily of revenue from the construction phase of the TC Energy Keystone XL Pipeline ("TCPL") project. Revenue for the three months ended September 30, 2021, was
On July 23, 2021, the Company entered into a termination and settlement agreement with TC Energy, which terminated, the Company's contract with TC Energy that was originated in 2013. The agreement released the Company from any outstanding work performance obligations under the 2013 contract (including all change orders, limited notices to proceed, and amendments) and provided for payment of a termination fee of approximately
No further revenue will be generated from the 2013 contract with TC Energy and as of September 30, 2021, there are no unrecognized deferred revenue amounts or costs related to this contract.
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) | September 30, 2021 | September 30, 2020 | |||||
Revenue | $ | 529 | $ | 279 | |||
Adjusted gross profit | $ | (139) | $ | (220) | |||
Adjusted gross profit margin | (26) | % | (79) | % | |||
This segment's operations consist of hospitality services revenue not included in other segments. Revenue for the three months ended September 30, 2021, was
Conference Call
The Company has scheduled a conference call for November 12, 2021, at 8:00 a.m. Central Time (9:00 am Eastern Time) to discuss the third 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: | 3424376 |
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 North America's largest provider of vertically integrated modular accommodations and value-added hospitality services in the United States. Target builds, owns and operates a customized and growing network of communities for a range of end users through a full suite of value-added solutions including premium food service management, concierge, laundry, logistics, security and recreational facilities services.
Cautionary Statement Regarding Forward Looking Statements
Certain statements made in this press release (including the financial outlook contained herein) 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 to global economic demand; 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, vaccine mandates, 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 in policy under 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, Discretionary Cash Flow, Discretionary Cash Flow Yield 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.
Target Hospitality defines Discretionary Cash Flow yield to revenue as Discretionary Cash Flow divided by total consolidated revenue.
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, Discretionary Cash Flow, Discretionary Cash Flow Yield 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, Discretionary Cash Flow, Discretionary Cash FlowYield 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, | |||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Revenue: | (Restated) | (Restated) | ||||||||||
Services income | $ | 57,221 | $ | 24,331 | $ | 143,806 | $ | 103,526 | ||||
Specialty rental income | 22,099 | 12,827 | 54,547 | 42,379 | ||||||||
Construction fee income | 9,849 | 11,105 | 11,294 | 27,634 | ||||||||
Total revenue | 89,169 | 48,263 | 209,647 | 173,539 | ||||||||
Costs: | ||||||||||||
Services | 37,064 | 21,990 | 85,835 | 82,456 | ||||||||
Specialty rental | 4,203 | 2,560 | 11,032 | 6,864 | ||||||||
Depreciation of specialty rental assets | 14,294 | 11,995 | 40,642 | 37,158 | ||||||||
Gross profit | 33,608 | 11,718 | 72,138 | 47,061 | ||||||||
Selling, general and administrative | 12,827 | 8,508 | 35,835 | 28,599 | ||||||||
Other depreciation and amortization | 4,008 | 4,341 | 12,100 | 12,555 | ||||||||
Other expense (income), net | 91 | (183) | 781 | (752) | ||||||||
Operating income (loss) | 16,682 | (948) | 23,422 | 6,659 | ||||||||
Interest expense, net | 9,465 | 9,913 | 29,058 | 30,113 | ||||||||
Change in fair value of warrant liabilities | (1,120) | (267) | 1,600 | (2,453) | ||||||||
Income (loss) before income tax | 8,337 | (10,594) | (7,236) | (21,001) | ||||||||
Income tax expense (benefit) | 1,662 | (2,991) | 139 | (5,187) | ||||||||
Net income (loss) | 6,675 | (7,603) | (7,375) | (15,814) | ||||||||
Other comprehensive income (loss) | ||||||||||||
Foreign currency translation | (15) | 89 | (27) | 23 | ||||||||
Comprehensive income (loss) | $ | 6,660 | $ | (7,514) | $ | (7,402) | $ | (15,791) | ||||
Weighted average number shares | 96,814,970 | 96,138,459 | 96,539,703 | 95,997,647 | ||||||||
Net income (loss) per share - basic and | $ | 0.07 | $ | (0.08) | $ | (0.08) | $ | (0.16) | ||||
Exhibit 2 | ||||||
Target Hospitality Corp. Condensed Consolidated Balance Sheet Data ($ in thousands) (unaudited) | ||||||
September 30, | December 31, | |||||
2021 | 2020 | |||||
Assets | (Restated) | |||||
Cash and cash equivalents | $ | 30,641 | $ | 6,979 | ||
Accounts receivable, less allowance for doubtful accounts | 33,373 | 28,183 | ||||
Other current assets | 5,765 | 8,400 | ||||
Total current assets | $ | 69,779 | $ | 43,562 | ||
Specialty rental assets, net | 294,372 | 311,487 | ||||
Goodwill and Other intangibles, net | 133,191 | 144,159 | ||||
Other non-current assets | 32,614 | 35,029 | ||||
Total assets | $ | 529,956 | $ | 534,237 | ||
Liabilities | ||||||
Accounts payable | $ | 12,321 | $ | 10,644 | ||
Deferred revenue and customer deposits | 60,986 | 6,619 | ||||
Other current liabilities | 21,363 | 28,270 | ||||
Total current liabilities | 94,670 | 45,533 | ||||
Long-term debt, net | 329,245 | 326,499 | ||||
Revolving credit facility | - | 48,000 | ||||
Warrant liabilities | 2,133 | 533 | ||||
Other non-current liabilities | 10,462 | 14,784 | ||||
Total liabilities | 436,510 | 435,349 | ||||
Stockholders' equity | ||||||
Common stock and other stockholders' equity | 82,501 | 80,568 | ||||
Accumulated earnings | 10,945 | 18,320 | ||||
Total stockholders' equity | 93,446 | 98,888 | ||||
Total liabilities and stockholders' equity | $ | 529,956 | $ | 534,237 | ||
Exhibit 3 | ||||||
Target Hospitality Corp. Condensed Consolidated Cash Flow Data ($ in thousands) (unaudited) | ||||||
For the Nine Months Ended | ||||||
September 30, | ||||||
2021 | 2020 | |||||
(Restated) | ||||||
Cash, cash equivalents and restricted cash - beginning of period | $ | 6,979 | $ | 6,839 | ||
Cash flows from operating activities | ||||||
Net loss | (7,375) | (15,814) | ||||
Adjustments: | ||||||
Depreciation | 41,774 | 38,636 | ||||
Amortization of intangible assets | 10,968 | 11,077 | ||||
Other non-cash items | 9,615 | 19 | ||||
Changes in operating assets and liabilities | 44,465 | (5,326) | ||||
Net cash provided by operating activities | $ | 99,447 | $ | 28,592 | ||
Cash flows from investing activities | ||||||
Purchases of specialty rental assets | (23,707) | (11,601) | ||||
Other investing activities | (301) | 1,313 | ||||
Net cash used in investing activities | $ | (24,008) | $ | (10,288) | ||
Cash flows from financing activities | ||||||
Purchase of treasury stock | - | (5,318) | ||||
Other financing activities | (51,792) | (10,709) | ||||
Net cash used in financing activities | $ | (51,792) | $ | (16,027) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 15 | (14) | ||||
Change in cash, cash equivalents and restricted cash | 23,662 | 2,263 | ||||
Cash, cash equivalents and restricted cash - end of period | $ | 30,641 | $ | 9,102 | ||
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 | For the Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Total Revenue | $ | 89,169 | $ | 48,263 | $ | 209,647 | $ | 173,539 | |||
Gross Profit | $ | 33,608 | $ | 11,718 | $ | 72,138 | $ | 47,061 | |||
Adjustments: | |||||||||||
Depreciation of specialty rental assets | 14,294 | 11,995 | 40,642 | 37,158 | |||||||
Adjusted gross profit | $ | 47,902 | $ | 23,713 | $ | 112,780 | $ | 84,219 | |||
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, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
(Restated) | (Restated) | ||||||||||
Total Revenue | $ | 89,169 | $ | 48,263 | $ | 209,647 | $ | 173,539 | |||
Net income (loss) | $ | 6,675 | $ | (7,603) | $ | (7,375) | $ | (15,814) | |||
Income tax expense (benefit) | 1,662 | (2,991) | 139 | (5,187) | |||||||
Interest expense, net | 9,465 | 9,913 | 29,058 | 30,113 | |||||||
Other depreciation and amortization | 4,008 | 4,341 | 12,100 | 12,555 | |||||||
Depreciation of specialty rental assets | 14,294 | 11,995 | 40,642 | 37,158 | |||||||
EBITDA | $ | 36,104 | $ | 15,655 | $ | 74,564 | $ | 58,825 | |||
Adjustments | |||||||||||
Other expense , net | 91 | 99 | 781 | 94 | |||||||
Transaction expenses | 49 | 26 | 1,198 | 382 | |||||||
Stock-based compensation | 1,362 | 886 | 3,598 | 2,808 | |||||||
Change in fair value of warrant liabilities | (1,120) | (267) | 1,600 | (2,453) | |||||||
Other adjustments | 1,048 | 611 | 3,697 | 3,071 | |||||||
Adjusted EBITDA | $ | 37,534 | $ | 17,010 | $ | 85,438 | $ | 62,727 | |||
Exhibit 6 | |||||||||||||||
Target Hospitality Corp. Reconciliation of Net cash provided by operating activities to Discretionary cash flows and Discretionary cash ($ in thousands) (unaudited) | |||||||||||||||
For the Three Months | For the Nine Months | For the Year | |||||||||||||
Ended | Ended | Ended | |||||||||||||
September 30, | September 30, | December 31, | |||||||||||||
2021 | 2020 | 2021 | 2020 | 2020 | |||||||||||
Total Revenues | $ | 89,169 | $ | 48,263 | $ | 209,647 | $ | 173,539 | $ | 225,148 | |||||
Net cash provided by operating activities | $ | 40,006 | $ | 3,233 | $ | 99,447 | $ | 28,592 | $ | 46,781 | |||||
Less: Maintenance capital expenditures for specialty rental | (5,341) | (71) | (8,407) | (766) | (888) | ||||||||||
Discretionary cash flows | $ | 34,665 | $ | 3,162 | $ | 91,040 | $ | 27,826 | $ | 45,893 | |||||
Purchase of specialty rental assets | (9,600) | 709 | (23,707) | (11,601) | (12,177) | ||||||||||
Purchase of property, plant and equipment | (197) | (112) | (301) | (182) | (381) | ||||||||||
Receipt of insurance proceeds | — | — | — | 619 | 619 | ||||||||||
Proceeds from sale of specialty rental assets and other | — | 876 | — | 876 | 990 | ||||||||||
Net cash provided by (used in) investing activities | $ | (9,797) | $ | 1,473 | $ | (24,008) | $ | (10,288) | $ | (10,949) | |||||
Principal payments on finance and capital lease obligations | (1,003) | (539) | (3,693) | (10,654) | (11,581) | ||||||||||
Proceeds from borrowings on finance and capital lease | — | — | — | 10,151 | 13,437 | ||||||||||
Principal payments on borrowings from ABL | (11,000) | (15,000) | (76,000) | (52,500) | (74,500) | ||||||||||
Proceeds from borrowings on ABL | 6,000 | — | 28,000 | 42,500 | 42,500 | ||||||||||
Restricted shares surrendered to pay tax liabilities | (14) | (47) | (99) | (206) | (221) | ||||||||||
Purchase of treasury stock | — | — | — | (5,318) | (5,318) | ||||||||||
Net cash used in financing activities | $ | (6,017) | $ | (15,586) | $ | (51,792) | $ | (16,027) | $ | (35,683) | |||||
Discretionary cash flows yield % of total revenue | |||||||||||||||
View original content:SOURCE Target Hospitality
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