Mon, May 19, 6:29 PM (35 days ago)
**Target Hospitality Corp. (TH, NASDAQ) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $69.9M (Q1 2024: $106.7M), down 34% YoY. - **Net Loss:** $(6.5)M (Q1 2024: $20.4M net income), a swing of $(26.8)M. - **Adjusted EBITDA:** $21.6M (Q1 2024: $53.7M), down 60% YoY. - **Cash Flow from Operations:** $3.9M (Q1 2024: $50.6M), down 92% YoY. **Profit Margins:** - **Gross Profit Margin:** 25.7% (Q1 2024: 45.9%). - **Operating Margin:** (1.5%) (Q1 2024: 28.5%). **Cash Flow:** - **Operating Cash Flow:** $3.9M (Q1 2024: $50.6M). - **Investing Cash Flow:** $(17.2)M (Q1 2024: $(8.9)M). - **Financing Cash Flow:** $(142.9)M (Q1 2024: $(21.3)M). **Earnings Changes:** - **EPS:** $(0.07) (Q1 2024: $0.20). **Quarterly Performance Discussion:** - **Revenue Decline:** Driven by lower revenue in the Government segment due to contract terminations (PCC and STFRC) and lower ADR in HFS-South. - **Cost Management:** Decrease in service and specialty rental costs, but offset by increased construction fee income from the Workforce Housing Contract. - **Debt Redemption:** Early redemption of $181.4M in 2025 Senior Secured Notes, expected to save $19.5M annually in interest expense. **Trends & Uncertainties:** - **Government Segment:** Uncertainty due to contract terminations and potential cancellations. - **HFS-South:** Dependence on natural resource development activity. - **WHS Segment:** Growth potential from the Workforce Housing Contract, but subject to construction and operational risks. **Future Operations Impact:** - **Liquidity:** $40.9M drawn on ABL Facility, $134.1M unused capacity. - **Capital Expenditures:** $21.2M in Q1 2025, with $15.5M in the WHS segment. - **Debt Obligations:** Focus on managing debt service requirements and potential refinancing. **Segment Performance:** - **Government:** Revenue down 62%, adjusted gross profit down 63%. - **HFS-South:** Revenue down 2%, adjusted gross profit down 14%. - **All Other:** Revenue up 281%, driven by the WHS segment. **Market Risks:** - **Interest Rates:** Exposure to floating-rate debt under the ABL Facility. - **Commodity Prices:** Indirect impact on natural resource development activity. **Outlook:** - **Revenue Growth:** Dependent on contract renewals and new business. - **Cost Control:** Focus on operational efficiencies and cost management. - **Debt Management:** Strategic debt reduction and refinancing plans. **Conclusion:** Target Hospitality faces significant challenges in Q1 2025, with revenue and earnings declines driven by contract terminations and market conditions. However, the company is focusing on cost management, strategic investments, and debt reduction to navigate these uncertainties and position itself for future growth.