Target Hospitality Corp.

Good morning and welcome to the Target Hospitality fourth quarter and full year 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. 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 would now 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 fourth quarter and full year 2022 earnings call. The press release we issued this morning outlining our fourth quarter and full year 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. 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, March 10, 2023. 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'll 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 2022 results are a direct reflection of our commitment to further solidify our strong financial standing while positioning the business to quickly respond to strategic growth opportunities. Throughout 2022, Target meaningfully increased its minimum revenue commitments, diversified its in-market customers, and increased discretionary cash flow by 215%. We achieved these accomplishments while serving a diverse customer base across 29 communities. We have remained focused on providing premium, full-service hospitality solutions to our world-class HFS clients, many of whom have been customers for over a decade. As a result, Target had consecutive quarterly HFS demand increases, resulting in a 17% year-over-year increase in utilization with consistent customer renewal rates of over 90%, which we have enjoyed for over seven years. Target's reputation and our commitment to these customers supported numerous HFS contract renewals and extensions over the past year. We anticipate these contracts will add over $200 million of cumulative revenue through 2028, We are pleased with our current HFS utilization and its ability to meet our strong customer demand. However, we will thoughtfully evaluate select opportunities to add capacity in response to customer demand where appropriate, while also adequately expanding our significant market share. During 2022, we demonstrated Target's superior operational flexibility that allowed us to match increasing HFS demand while simultaneously utilizing existing assets to expand our government segment by 60%. The end result was a more fully optimized network and more valuable contracts. Regarding the government segment, we have completed the enhancements to our expanded humanitarian community announced in July of 2022. With its completion, we have solidified this community as the only purpose-built campus with the sole mission of providing critical hospitality solutions in support of the government's humanitarian aid efforts. We can say this one-of-a-kind, all-inclusive community has exceeded the expectations of our partner and the US government. Since its inception in 2021, it has been our belief this world-class facility would be the premier community providing critical hospitality solutions to the government's humanitarian aid missions. This belief has recently been affirmed with the U.S. government publicly announcing their intention to consolidate the remaining active influx care facilities. Additionally, we are pleased to announce that our nonprofit partner has recently been awarded an indefinite delivery indefinite quantity contract related to the extension of our humanitarian community in Pecos. This award consisting of a base five-year term with an additional five-year option establishes the contracting vehicle required by the U.S. government to appropriately fund multi-year contract awards. The IDIQ award to our nonprofit partner is one of the final steps in the government's contract award process prior to working through definitive agreements. We are highly pleased with the progress as the contracting vehicle has come sooner than expected, and we anticipate working through additional contract specifications over the coming months. We look forward to solidifying the longevity of this community and the critical humanitarian mission it was purpose-built to provide. As a reminder, last year we entered into an exclusive 11-year partnership with our national nonprofit partner. The long-term agreement solidified our joint commitment to continue providing critical humanitarian services to the United States government at this highly customized campus. In summary, We have achieved our strategic objectives to materially strengthen Target's financial position while simultaneously diversifying our customer base and continuing to accelerate value creation for our shareholders. I'll now turn the call over to Eric to discuss our fourth quarter financial results, 2023 financial outlook, and capital allocation initiatives in more detail.