Target Hospitality Corp.

Good morning, and welcome to the Target Hospitality's third quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I'd like to turn the conference over to Mark Schuch, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Target Hospitality's third quarter 2021 earnings call. The press release we issued this morning outlining our third quarter results can be found in the investor section of our website. In addition, a replay of this call will be archived on our website for a limited time. Please note the cautionary language regarding forward-looking statements contained in the press release. This same language applies to statements made on today's conference call. This call will contain time-sensitive information as well as forward-looking statements, which are only accurate as of today, November 12th, 2021. Target Hospitality expressly disclaims any obligation to update or amend the information contained in this conference call to reflect events or circumstances that may arise after today's date, except as required by applicable law. For a complete list of risks and uncertainties that may affect future performance, please refer to Target Hospitality's periodic filings with the SEC. We will discuss non-GAAP financial measures on today's call. Please refer to the table in our earnings release posted in the investor section of to find a reconciliation of non-GAAP financial measures referenced in today's call and their corresponding GAAP measures. Leading the call today will be Brad Archer, President and Chief Executive Officer, followed by Eric T. Calamares, Executive Vice President and Chief Financial Officer. After their prepared remarks, we will be joined by Troy Schrenk, Chief Commercial Officer, and open the call for questions. I will now turn the call over to our Chief Executive Officer, Brad Archer.

Thanks, Mark. Good morning, everyone, and thank you for joining us on the call today. Demand fundamentals have strengthened throughout 2021 and have supported consistent increases in demand for Target's premium hospitality service offerings. Since year-end 2020, Target has experienced an over 40% increase in customer demand across its hospitality and facility services segments. This robust demand has resulted in expansion of operating margins and utilization throughout 2021. and has supported the continued execution of our strategic objectives. Target's exceptional third quarter results are a direct reflection of the intentional action we have taken to appropriately position Target to take advantage of building customer demand. Target's top 10 HFS customers have increased their labor allocation by over 95% since mid-2020. This demonstrates the value of our best-in-class customers find in allocating labor to Target's world-class network and premier holistic service offerings. These attributes continue to support an over 90% customer renewal rate, which we have enjoyed for many years. As Target's utilization increases, we are approaching an ideal level of network optimization and are beginning to benefit from the scale and efficiencies we have created within our operating structure. This network optimization creates an ideal operating environment and maximizes the margin contribution from each utilized bed with negligible capital requirements. This efficient operating structure has resulted in meaningful cash flow generation, which has been directed towards significant debt reduction and accelerated the strengthening of Target's financial position. This intentional focus has resulted in a 52% reduction in Target's net leverage ratio in 2021. These accomplishments have allowed Target to materially enhance its operational flexibility, while simultaneously diversifying its business mix and establishing a robust growth pipeline. Additionally, Target has advanced its diversification focus, with its government segment now representing over 50% of third quarter and anticipated four-year revenue. As we continue to focus on network optimization, we recently relocated a number of assets from our HFS Midwest segment to be utilized in servicing our existing contract within our government segment. This illustrates the flexibility of our network and our ability to optimize assets to generate the highest returns. We have illustrated our ability to appropriately position the company to systematically execute on its strategic objectives. By doing so, we have established the trajectory in which to continue pursuing our growth strategy. focused on enhancing value through a diversified portfolio of service offerings. Target's unique capabilities translate across a range of end markets and provide the opportunity to pursue a variety of value-enhancing growth initiatives. Target will pursue these opportunities while simultaneously remaining focused on expanding its reach, providing critical support to the United States government. Our established platform creates avenues to utilize our existing core competencies, to support critical services, including humanitarian aid efforts across a variety of federal agencies. Additionally, Target's holistic service offerings create a broad suite of commercial opportunities across a range of end markets. These services extend beyond our legacy accommodation offerings and include facilities management, building operation, asset maintenance, and other critical support services. Target has identified and is currently evaluating a robust pipeline of expansion and diversification initiatives within the government and commercial services markets. These multiple growth levers are underpinned by the existing strength in Target's core offerings and include both inorganic-focused initiatives and broadening our existing commercial portfolio. As it relates to our government services opportunity set, we continue to have active and productive conversations. with various government agencies regarding their continued need for permanent humanitarian solutions. Target's premier and comprehensive service offering is viewed favorably by the U.S. government, providing multiple avenues to expand Target's offering in support of these critical humanitarian solutions. While we can never be sure of a successful contract outcome, we are very encouraged by the frequency and scope of our ongoing dialogue with the U.S. government. we have strategically positioned Target as North America's leader in premier vertically integrated hospitality solutions. We have accomplished this by intentionally identifying and transitioning Target's business mix to capture the greatest value creation and expand its long-term growth pipeline. Target has intentionally enhanced its operational and leadership capabilities to effectively identify and evaluate these growth opportunities, which it believes provides the greatest opportunity to accelerate value creation. We have been encouraged by the sustained momentum experienced throughout 2021, and as our results have illustrated, the benefits of our strategic positioning as North America's premier provider of vertically integrated hospitality solutions. The progress we have made in executing our strategic initiatives is impressive and has exceeded our expectations. This positive momentum is illustrated in our recently raised 2021 financial outlook, which represents the second increase to our financial outlook this year. We anticipate this progress to continue as we progress through 2021 and into 2022, while staying focused on our strategic priorities and creating value for our shareholders. I'll now turn the call over to Eric to discuss our third quarter financial results and ongoing growth initiatives in more detail. Thank you, Brad, and good morning, everyone.