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Jun 30, 2020
Target Hospitality Q2 2020 Earnings Report
Target Hospitality's second quarter performance was impacted by the global pandemic and reduced demand, but the company took aggressive actions to align with demand and delivered strong financial results with approximately $15 million of discretionary cash flow.
Key Takeaways
Target Hospitality's second quarter revenue was $53.6 million, a decrease from $81.4 million in the same period last year. The company reported a net loss of $14.2 million, compared to a net income of $10.6 million in the second quarter of 2019. Despite the challenges, Target Hospitality generated $14.7 million in Discretionary Cash Flow and maintained a strong balance sheet.
Revenues of $53.6 million for the three months ended June 30, 2020 as compared to $81.4 million for the same period in 2019
Net loss of $(14.2) million for the three months ended June 30, 2020, compared to a net income of $10.6 million for the second quarter of 2019
Basic and diluted loss per share of $(0.15) for the three months ended June 30, 2020
Adjusted EBITDA of $13.4 million, compared to $41.2 million for the second quarter of 2019
Target Hospitality
Target Hospitality
Target Hospitality Revenue by Segment
Revenue by Segment
Government Revenue
CapyFin.comAll Other Revenue
CapyFin.com Forward Guidance
The path for global economic demand remains uncertain for the foreseeable future. However, as we exited the second quarter, we began to see positive trends in several of Target’s operating metrics, including occupancy and utilization. Albeit modest, we do anticipate continued marginal improvements in customer activity and demand through the second half of the year and into 2021.
Positive Outlook
- Positive trends in operating metrics, including occupancy and utilization, were observed as the second quarter exited.
- Anticipation of continued marginal improvements in customer activity and demand through the second half of the year and into 2021.
- Customer base and contract structure, including exclusivity provisions, will allow the Company to take advantage of a more balanced market.
- Secured and extended additional minimum revenue contract commitments, including exclusivity, from 2021 into 2025, significantly reducing near-term contract renewal risk and adding approximately $60 million in committed revenue.
- Continued marginal improvements in customer activity and demand through the second half of the year and into 2021.
Challenges Ahead
- The path for global economic demand remains uncertain for the foreseeable future.
- The second quarter was challenging due to the combined impacts of a global pandemic and deteriorating demand for a substantial portion of the global economy.
- The acceleration of the global pandemic significantly reduced economic activity and the corresponding demand for crude oil.
- The Supreme Court ruling in July 2020, the Company anticipates minimal activity associated with the TCPL project for the remainder of 2020.
- Significant volatility in commodity prices leading to a sharp reduction in customer activity.