Target Hospitality Corp.

Good morning, ladies and gentlemen, and welcome to the Target Hospitality year-end 2023 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, March 13, 2024. I would now like to turn the conference over to Mr. Mark Shuck. Please go ahead.

Thank you. Good morning everyone and welcome to Target Hospitality's fourth quarter and full year 2023 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 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, March 13, 2024. 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 Jason Vlasic, Chief Financial Officer and Chief Accounting Officer. After their prepared remarks, we'll 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. Our strong 2023 results continue to illustrate the benefits of our strategic accomplishments over the last several years. These accomplishments have supported an enhanced operating platform, which allows us to efficiently align network capabilities with changes in customer demand while consistently achieving our financial goals. This efficient operating structure and network scale allows us to provide our world-class customers with the premium service offerings they demand. while simultaneously continuing to pursue strategic growth opportunities. This scale and flexibility enabled Target to quickly respond to a strategic growth initiative, which ultimately resulted in a materially expanded presence, providing critical humanitarian solutions to the U.S. government. We continue to benefit from this expanded presence, with 72% of 2023 revenue being derived from committed contracts backed by the U.S. government. This benefit is illustrated in the success of our PCC community, which is entering its fourth year of operations as an established component of the U.S. government's domestic humanitarian aid mission. It is important to remember that since 2021, this facility has evolved through multiple contract renewals and community expansions to be the longest serving influx care facility in the United States. Additionally, as the government sought to ensure the longevity of this critical solution, they initiated a comprehensive and competitive bidding process, which took nearly a year to complete. This process was conducted under an indefinite delivery, indefinite quantity, or IDIQ contracting vehicle. The IDIQ allows the government to appropriately establish a required funding vehicle to support long-term contracts and ensure continuity of essential multi-year service offerings. As we announced in December of last year, Target and our nonprofit partner were successfully awarded this multi-year IDIQ contract. The successful outcome of this competitive process coupled with Target's longstanding reputation as a proven provider of these critical humanitarian solutions to the U.S. government supports our belief that the PCC community is well positioned to remain a critical component of the government's influx care facility solutions through 2028 and beyond. Further, Target remains actively engaged and continues to build strategic partnerships to jointly pursue the creation of new ICF sites not currently in the government's portfolio. In addition, our South Texas Family Residential Center is entering its 10th year of operations, a testament to the operational success of that community. The longevity of these established communities and critical solutions they provide will continue to support a high degree of revenue visibility and strong cash generation for years to come. Regarding our HFS segment, we continue to benefit from strong customer demand, which supported select asset acquisitions in 2023. This demand illustrates the value our world-class customers find in the premium hospitality solutions we provide. Coupled with continued operational efficiency gains, we anticipate positive momentum across this segment over the coming quarters. These elements continue to support impressive operating income and industry-leading cash conversion, which has allowed us to achieve several strategic balance sheet objectives last year and established a highly flexible capital structure. We believe this is the ideal position to continue evaluating a robust pipeline of value-enhancing growth initiatives. As we continue to pursue unique, organic, and inorganic opportunities, these initiatives remain centered on elements of our existing core competencies. We believe these naturally adjacent opportunities will complement our existing service offerings while establishing multiple avenues to expand Target's long-term growth opportunity set. As we evaluate these initiatives, we remain committed to achieving defined objectives of our growth strategy. Our primary objective is to focus on diversifying our customer base and contract portfolio, which we believe is essential in broadening our long-term growth pipeline. By accomplishing this, we will establish a foundation to identify and consistently execute repeatable growth opportunities while remaining focused on generating strong operating income and industry-leading cash conversion. In summary, we remain focused on sustaining the momentum we have created over the past several years. We have established a strong financial and operating platform to continue supporting our world-class customers while simultaneously pursuing the most robust growth pipeline we have seen in many years. I'll now turn the call over to Jason to discuss our fourth quarter financial results, recent balance sheet initiatives, and expanding capital allocation and growth opportunities in more detail.