Target Hospitality Corp.

Good morning, ladies and gentlemen, and welcome to the Target Hospitality First Quarter 2024 Earnings Call Conference Call. At this time, all lines are in 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, May 8, 2024. I would like to turn the conference over to Mark Schuch. Please go ahead.

Thank you. Good morning, everyone, and welcome to Target Hospitality's first quarter 2024 earnings call. The press release we issued this morning outlining our first 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, May 8, 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 gap measures. Finally, as previously announced on March 25, 2024, Arrow Holdings, an affiliate of TDR Capital, proposed to acquire all outstanding shares of common stock of Target Hospitality it or affiliates do not already own. The Board of Directors of Target Hospitality has established a special committee of independent directors to evaluate this proposal. The special committee has retained their own independent outside financial and legal advisors, and collectively, they have commenced their review and evaluation of the proposal. At this time, the special committee has made no decision with respect to the proposal. As a result, management will be unable to comment on the proposal or the evaluation process during today's call. 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 impressive first quarter performance reflects the benefits of our network capabilities. which allow us to maximize operational efficiencies while simultaneously providing world-class solutions to our customers. The scale and flexibility of our efficient operating structure continues to support seamless alignment with changes in customer demand, allowing us to preserve strong operating margins through cycles. These attributes have significantly enhanced our financial position and materially strengthened our balance sheet, supporting a highly durable and flexible operating model. In the government segment, these elements have supported the longevity of our PCC community, which has entered its fourth year of operations and is the longest operating influx care facility in the United States. Since its inception in 2021, this community has served approximately 2 million meals to unaccompanied children, illustrating its importance as a cornerstone to the government's influx care facility network. This established presence supports targets continued engagement with the US government and other strategic partners to jointly pursue the creation of a third ICS site, not currently in the government's portfolio. We remain actively engaged and are pleased with continued dialogue regarding this opportunity. As we have previously stated, we anticipate additional details regarding the third ICS site in the back half of 2024. In addition, our South Texas Family Residential Center is entering its 10th year of operations, a testament to the operational success of that community. This community has evolved through multiple contract renewals across three different federal administrations, exemplifying its importance as a critical humanitarian solution for the U.S. government. Regarding our HFS segment, we continue to benefit from strong customer demand, which has supported positive momentum over the past year. This demand illustrates the value of our world-class customers find in the network flexibility and premium hospitality solutions we provide. We have taken deliberate steps to enhance operational efficiencies across this segment and will continue to evaluate opportunities to optimize margin contribution through enhanced network optimization. Our ability to utilize the scale of our network to seamlessly align with changes in customer demand has consistently supported strong financial results. This focus has materially strengthened our financial position and established a robust balance sheet with significant liquidity. These elements continue to support impressive operating income and industry-leading cash conversion, which establishes the ideal position to continue evaluating a pipeline of growth initiatives. We believe these naturally adjacent opportunities will complement our existing service offers. while establishing multiple avenues to expand targets long-term growth opportunity set. In addition to the third ICS, we remain engaged with multiple federal agencies on a variety of solutions they are seeking to implement pertaining to increased activity along the U.S. southern border. Further, we continue to actively pursue a robust pipeline of non-government growth initiatives. As we have previously discussed, These opportunities include large industrial projects throughout the US, including technology infrastructure, energy transition, and the increase in domestic rare development. As a reminder, these growth opportunities tend to have longer sales cycles. While we are pleased with the active dialogue and progress of discussions, the timing and final outcomes are uncertain and can be difficult to predict. As we evaluate these initiatives, We remain committed to achieving defined objectives of our growth strategy. Our primary objective is focused 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 have established an enhanced financial position centered on the strength of our balance sheet and an efficient operating structure. These elements support our ability to provide a premier service offering to our customers while simultaneously delivering strong financial results and pursuing attractive growth opportunities. I'll now turn the call over to Jason to discuss our first quarter financial results in more detail.