Target Hospitality Corp.

Good morning and welcome to the Target Hospitality second quarter 2022 earnings conference 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 touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference to Mark Shook, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Target Hospitality's second quarter 2022 earnings call. The press release we issued this morning outlining our second 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 this press release. The 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, August 9, 2022. 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 tables in our earnings release posted in the investor section of our website 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'll 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. Target's record-setting second quarter results illustrate the benefit of Target's strategically located network and superior operating capabilities, which have supported Target's ability to efficiently meet our customers' varying needs. Target has intentionally aligned itself with premier customers, including the United States government, who find increased value in the flexibility and premium service offering Target provides. We continue to experience consistent increases in customer demand across our HFS segments, supported by strong demand fundamentals. Target HFS customers continue to benefit from the size and scale of our network, which provides premium hospitality solutions and logistical flexibility for their dynamic labor allocation requirements. The intrinsic value of Target's network has supported an over 90% customer renewal rate for more than six years. and an 18% increase in customer labor allocation from the second quarter of 2021. We anticipate consistent increases in customer activity throughout 2022 and are well-positioned to benefit from this positive momentum across our network and HFS segments. Target's operating capabilities and network flexibility provided the foundation to expand our critical service offering to the United States government through the expanded humanitarian contract. which we announced last month. As a reminder, this contract represents a 60% increase from the initial contract we announced in 2021 and includes significantly enhanced amenities and support services for a population of approximately 6,400 individuals. These critical humanitarian services are centered around minimum revenue contracts backed by the United States government, which provide enhanced long-term revenue and cash flow visibility Our intentional focus to expand the critical hospitality service offerings we provide the United States government has materially strengthened Target's financial profile. Target's government segment represented over 68% of second quarter 2022 revenue and is expected to represent approximately 73% of full year 2022 revenue. This is a clear illustration of our commitment to diversify and expand Target's end markets. while simultaneously high-grading counterparty exposure and contract structure. These accomplishments have materially strengthened Target's financial position and established the foundation to continue pursuing strategic growth initiatives. These elements, along with Target's unmatched operating capabilities and distinct core competencies, create the optimal scenario to pursue a balanced portfolio of value-enhancing growth initiatives. These opportunities span targets' existing in-market portfolio, as well as naturally adjacent business and industry applications, which we believe creates the greatest opportunity to accelerate value creation. We are encouraged by the sustained momentum experienced in the first half of 2022 and believe we are well-positioned to continue benefiting from our strategic position as North America's leading provider of comprehensive hospitality solutions and value-added services. I'll now turn the call over to Eric to discuss our second quarter financial results and ongoing growth initiatives in more detail.