Target Hospitality (TH) Misses Q4 EPS by 1c, Revenues Beat

Target Hospitality (NASDAQ: TH) reported Q4 EPS of $0.07, $0.01 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $76.11 million versus the consensus estimate of $75.18 million.

Financial and Operational Highlights for the Year Ended 2019

• Revenues increased to $321.1 million, up 33% year-over-year, led by 44% growth in average available beds
• Net income of $6.2 million, and Adjusted net income(2) of $46.3 million, up 41% year-over-year
• Basic and diluted earnings per share of $0.07, and Adjusted basic and diluted earnings per share(2) of $0.49
• Adjusted EBITDA of $159.2 million, up 36% year-over-year with Adjusted EBITDA margin(2) of 50%
• Increase in average utilized beds to 9,923, up 42% year-over-year, driven by a combination of acquisitions and organic bed additions
• Significant cash generation, with net cash provided by operating activities of $60.5 million for the year ended December 31, 2019
• Completed the integration of communities acquired from Superior Lodging and ProPetro, adding over 750 news beds to the network and converting all four communities into full turnkey facilities
• Two new communities in Carlsbad, New Mexico and Orla, Texas became operational for a total of 600 beds; expansion activities for an additional 200 beds completed as planned

Executive Commentary

“Our 2019 results demonstrate Target’s resiliency through challenging business cycles. While the second half of 2019 produced headwinds we did not anticipate, our business performed well considering the challenges our energy end market customers faced,” stated Brad Archer, President and Chief Executive Officer.

“Despite these headwinds, we generated record cash flow from operations. As we indicated in our 2020 outlook, we will continue to generate meaningful discretionary cash flow as we move through 2020. This will provide the opportunity for Target to continue creating shareholder value by strengthening the financial posture of the Company through debt reduction or other accretive shareholder initiatives,” concluded Mr. Archer.

For earnings history and earnings-related data on Target Hospitality (TH) click here.

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