TH - Earnings call transcript Q1 2020 | Target Hospitality Corp.

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Operator

Greetings, and welcome to the Target Hospitality First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Schuck, Senior Vice President, Investor Relations. sir. you, Thank

begin. You may

Mark Schuck

in everyone. XXXX And this Hospitality's morning, be to outlining Web of site. welcome call. The quarter found can earnings results issued first First investor press section our our Good quarter Target the release morning we

replay made as call press looking forward which statements addition, applies applicable today's site or in reflect archived the law. after Web circumstances that This disclaims This contain forward-looking any as by will statements this on the accurate today's well same expressly call the regarding XX, a time events or In date, update to limited cautionary time. language be conference in call. sensitive our statements, to amend as May release. language of call for on arise today, required obligation Please of Hospitality this note the will contained may information only as Target except XXXX. contained are conference information,

list complete uncertainties Hospitality's future please the of and a For affect SEC. Target filings with refer periodic that performance, to may risks

Brad I'll President Executive Commercial now we'll questions. President We our over will Chief in followed will be Archer, today's release Kalamaras, Chief measures the Brad Troy discuss Eric a Officer. find Vice Executive by Investor our Schrenk, Please Chief today be today's non-GAAP site call open and the measures Officer, reconciliations call and Officer, call the corresponding Web of After and Chief to Officer, earnings section our posted Leading to prepared joined Executive their call Archer. table the the of Financial non-GAAP refer turn to in measures. T. and their call. for financial financial in on remarks, referenced by GAAP

Brad Archer

morning, everyone for joining Good you and on the today. call thank Thanks, us Mark.

current quarter steps response market we COVID-XX pandemic will on have performance, the discussing In also the and to as priorities remainder well first I our touch in XXXX. taken addition through to condition, our as the cumulative of

continues we of imagined operating dual two of momentum The expectations. vastly results with oil markets quarter our into an effect the these of months being oversupply. Target economy. quarter below At today, commodity As building only COVID-XX any months we up on slightly coupled utilized a erosion of world could resulting we the Amidst The has environments have here the the first of had around and than headwinds, delivered same is different unprecedented quarter sit from Average pandemic impact the XXXX, of are first were felt solid time, a quarter just through slightly the are for the a in XXXX and ago. witnessed the XXXX. demand being late the dealt first global beds couple shock us global March.

Additionally, generation for cash million. we continue to with flow $XX discretionary of quarter the have approximately strong cash first

also Keystone with received quarter announced project. the of late the when proceed Energy positive will it pipeline first TC the XL We in news construction

for the in the remainder anticipate services increased amount and scale of and revenue scope of the XXXX. services prior XXXX. is the of logistics time, start of to the of We're planning into to to finalizing related begun project Target As anticipated duration has full project. process lap catering full project the limited a over this a project, provide will Target reminder, providing this and hospitality which At

focus our to environment. Turning challenging this in

ensure of across customers. response began well ended plan quickly States. to the the the and health face implemented of our these the accelerate COVID-XX and operational a we pandemic first the effects of being quarter, Target As unprecedented to United In the events, employees comprehensive

business. any result, COVID-XX not have a cases of our impact we had As

is shaping be what steps decisive taken a also XXXX. challenging have We up appropriately business to for to our position

lower activity components align Many reduce been into and to response customer's our with XXXX As we cost and taken services cash needs. costs demand have managing declined, our in containment network All organization rapidly us dynamically operating of utilization. to costs which to our leverage have flow are across are capacity levels over maintain initiatives the to variable, to our and lead will visibility long the term. across continued beyond, allowing

a success. We gain have potential positioned additional Target there is market as return evolve, pace a share activity. market we of to for to And long more term normalized as dynamics

into Although, the significantly business, those global we had in pandemic prices rapid expectations. improving our XXXX across came altered commodity expectation and with decline

of events including world, is the core on the company success cognizant this principle it strong of One macro businesses are relationships. these tremendous the have our customers. the put customer global stress We around underpinning

focused beneficial Target We these position a of in to strength mutually place activity are partnerships preserving as on to normalize. begins

the their had regarding customers provide have our utilize long These ADR and customers’ commitments terms, greater with modifications of We This XXXX. long with consistent us benefit solidifying commercial with contract, extensions maintain providing long select with which larger flows to cash modify to top contract and aligns into discussion approach, investment and revenue term multi-year existing cash flow. for on contract visibility taken tier proactive Target quality term contract our term contract contracts have value Target. steps and horizon balances

beneficial outcome target our the of mutually a customers. maintained for delivering these while integrity have and contracts, We

strong financial structure work the contract rate. eventual strong term We thrive XX% always in goal, with our long mutual which for our these to will customers critical to foundation believe ensure and recovery. preserving success modifications economic this the our renewal and position we Target We partnership, capital is of is accomplish maintain while a

likely quarter half as the improvement of challenging, move to year. second anticipate is we incremental we into back the be do While the

we market enough clarity As activity towards will is revised begins to normalizing, outlook progress XXXX when available. a the provide

sound We have changing the business adapt structurally a to rapidly environment. flexibility with to created a

of We Hospitality. operational financially and Target long have taken decisive steps the term ensure both to success

now remain over taken call financial to on to mitigate current and provide to on the we results focused and financial waters, uncharted in preserving environment. turn our these liquidity. the strong flexibility, Eric first navigate to the quarter discuss steps have the continue we detail we operational As our impact more I'll position

Eric Kalamaras

you, morning, steps will our taking Brad our and good with continued economic I conclude discussion a details of everyone. on program review mitigate the capital results, begin to Thank we're with and uncertainty. ongoing

quarter. impacted While moments we of the did quarter, positive the rapid and combination results in through COVID-XX most commodity experienced deterioration late markets our global first of in the modestly

However, we still and discretionary to continue meaningful results flow. importantly quarterly generate solid produced cash

total $XX revenue was XXXX was discretionary approximately cash adjusted was and EBITDA quarter million First approximately flow $XX approximately million. million, $XX

performance, quarter a million, first across X% activity decrease quarter. primarily the year, utilization, revenue of mainly prior the This due due year to activity lower Bakken, Turning reduced was versus to by Basin average delivered our low also to region. $XX ADRs driven of levels. segment In $X as decreased the utilization quarter Permian decline was first approximately the revenue million, a uncontracted moderated reflecting prior the from XX% decrease

approximately Our consistent million. quarterly revenue of governance remain $XX segment with

associated $X a period quarter Our project. primarily of of last this fee compared segment, revenue decreased year. all which as in result first approximately same revenue Pipeline for other from construction the consists activity Energy with million million XXXX the Project $X significantly to of less Revenue of TC has

construction mentioned, million. revenue project remainder and Keystone The were associated anticipated with by for TC of the we XL expenses the current are of over additional encouraged approximately Brad recent that with this announcement corporate the Energy As $X pipeline, the quarter XXXX. will proceed

economic As in we have outlined, uncertainties. response cash the to to we across the reduce continued steps organization decisive have corporate expenses

for positive activities. expect capital. we first result, of approximately all $XX course cash capacity our Even per year. in operating including flow, in quarter a challenging and $X As expenses providing we generating We to were quarter continue investments recurring million less be the maintenance first to previously million, new XXXX. this around $X to remainder million environment, the sufficient $X announced Capital million to the approximately million flow to business expenditures generated operations communities than discretionary of related cash the $X normal in fund of for $X for from expect million corporate quarter of

expenditures As the in of leverage the with long-term a and quarter deterioration $XX ended consolidated through total drawn commodity the reduced million the including Target of $XX levels. net result we be of million than anticipates debt, global We our credit on times. year. remainder million to markets, anticipated facility $XXX capital X.X in activity less revolving

or a immediate us long-term structure. facility, financial our liquidity debt million maturities due providing senior of no within As million notes secured reminder, capital consists in covenants, $XXX XXXX flexibility of term our near have and significant with which $XXX ABL and

in markets global uncertainties. the meaningful continued Now The significant and steps eroded turn volatility the global taking commodity have These to uncertainty to simultaneous COVID-XX and in across shocks have response environment, we're our markets, a crude demand year. to taken events to this we're challenging negatively resulted and economic pandemic created and be possibly energy dramatically planning and oversupply. the market have actions and mitigating is In business a cash scenarios for manage commodity flow immediate range and financial have our what in shaping of up affected customers. end to

utilization pronounced The reduction activity what first of customer be and in quarter results reflect portion levels. is anticipated to a small a

XX% activity costs Our by ability We to appropriately to manage expenses with in the utilization environment. cost offset remainder further these business steps we cash company portion and this reduce will over the structure anticipate the XXXX. of the Along a to restructure match variable which provide services, this to have margins remainder year, reduce reduced provide variable of meaningful of the does additional taken and costs challenging the costs, services of organization over appropriate. where variable approximately component of across

reduced spending our discretionary eliminated and travel. all We significantly have reduced non-essential workforce,

along financial taken expenses XXXX. continued and preserving over like for cumulative their taken protecting retaining resilient balance We position our been stronger our sheet We on provide that, for more the our prevail reduce focus the entirety to remainder company. and that more with opportunity stewardship closing reduction. flexibility. and balance will sheet the focus over liquidity strength have will These turn measures Brad steps I'd capital senior by have in a and to directors, the cash liquidity, to of management, of With addition, all board on cash remarks. voluntarily In the believe with call Target salary anticipate than of these executives XX%

Brad Archer

today. a Thanks, world different Eric. vastly in living We're

being the gradual difficult see a is signs current the to duration of encouraging or of scope progress market is to it return it predict made some While normalcy, uncertainties. and of

employees preserving focused sheet continue liquidity. can protecting customers, this navigate balance our remain our heightened we the we unprecedented we that to the of health things on while and focus and As Ensuring situation, safety and on a maintaining control.

Operator, believe We and variety adjust operational your you market ensure cycles conditions. positioned financial in the the our on the taken have position in these decisive to And strong to Target call will environment everyone again of may for open We joining actions of actions appreciate proactively have Target a to interest take line remains Target for navigate in business Hospitality. changing and you advantage business eventual questions. recovery. to thank I now the a today. current market

Operator

Thank you.

question We be now [Operator will a and Instructions]. answer session conducting

comes proceed question Stifel. with first your Stephen question. the Please with from Our line of Gengaro

Stephen Gengaro

difficult, couple completion sense very April far you from mean us March XX% looks things versus February, Permian looks A the for in in to we're occupancy like activity. here as reduction is hearing mean expectations. companies any concerned? quarter with service as I and what second XX% the Can give I

Eric Kalamaras

question. the Stephen. Hi, for Sure. Thanks It's question. a morning. good Good

utilization points, your to you've a quite the seen bit obviously metrics. we, think of down and is lot a I

think we're environment I macro second have or whether terms quarter, thinking in total you terms in we're April, think for whether of about about the the you reflects reduced, I crews thinking about think think being May frame general. April and that look whether being to you or out, think whether about at stacked. of about rigs you would terms in just time capital think you that being in assume of Look, in utilization I

lot of on about just specific data that different So tell than heard not I think will to number getting and a the But have thought you would other avoid it's I macro it. want that you a points I we about. think drastically

Stephen Gengaro

be we or outcome So should another than to there down think going would variables any better the way we on make side thought about, to Is about, which XX%. drilling think activity that? worse and if your completion was

Eric Kalamaras

a better probably Well, this it that We but wouldn't I it environment, what I you're probably utilization, I to think today. think disagree describing, it have profile, I when with on based mirrors that. in certainly comes contractual think

Brad Archer

set I I think differences, and for But the up of the to our still through contractors some of differences of think little going guarantees. bit we’re of be some we're with multiple this. kind moving services

you better some don't look of where one for should a of be those when our think one we some at because So that contracts. it's of I on

Stephen Gengaro

effectively I should activity, line about, of hurts impact And and I about which we quarter in then get going we and think that which first sense. Did talked back the if absence will just one at spot follow adjusting and quarter up here. we look or know first ADR But we thought see that forward. the of full a the makes that in about you

Eric Kalamaras

and when say started say of was level, seeing ahead think be quarter from actually we certainly expectations. the a our shaping about -- that up So we at to in just ADR I'll first a we modifications first quarter, nice high saw really quarter

pulled from see think going forward, from activity March going have started to partially of we largely As the that you're today. full see you we ADR. that the really know When that the some shifts in fairly transient enter March, meaningful period would through of downward, of that that we to effects end onward about half second to

you So portion of saw I just that. a think

Operator

Thank you.

Our Please with Markets. Capital proceed question comes with Jeff question. Northland next Grampp from your

Jeff Grampp

contract can some the simplistically Brad for I Troy, and/or some bit gives we that hoping, I exchanging touch if maybe of maybe contracts, takes? dig utilization talk maybe on think maybe Can on and for the modified guys you in likely guess on mean, guys more. was a that I ADR longer you terms. or little

with And those thoughts. customers if XX types conversations taking of track What maybe to see or we're I at, top So percent on I those if don't want know look we those your first just guess so. place? of have

Eric Kalamaras

a focused So things. when we on contracts, we look at few

ADR the ADR all cases, have the you to who to we trying know, of balance term. have we're period. contract trying some balance mechanisms. nearly the as So I handful we through were we What those kept you would with was wanted to that were what customers tell discussions, in flat

the be look came to in going number contract, the years the think a contract additional that term to is, revenue as we out And is point that's biggest commitments well. for going of Target on to I think long also And in significant better addition I in established bear as term. mind extend to with that, a we structure we out positive.

bear things to in have mind. we think I So those

with, the customers discussions when top we're we I think that the were you know we look talking at were five, of about discussions were engaging which kind in really meaningful being had.

think looking But ended a forward. we is going I it different customers. we've absolutely I contract good XXXX XX I of expected the up. is about coming see with maybe top And XX, the what of be we difficult going you pool which we revenue into had think, look you XXXX discussions to the know year. look we know probably biggest, five. forward than I the think the Certainly think where a share into when going But XXXX, don't know, kind as you we lion see XX, profile, feel we positive biggest

Brad Archer

this is Jeff Brad.

with XXXX, Let our say held bit forever day. contracts little back North that little we some really favorable pandemic. in look color. good would in not to went me a contracts. we’ve when live our for here the contracts of What we've Target the and that XXXX blow have customers I renewal contracts these negotiated as rest is said company, also been we to up it's could down helped to a for ground this have said, one and these the our if sat issue had on a that got in and come outcome what the do But us by in work, on through With Dakota factoring the and add would the XXXX,

help. are us was to And of and these know to and some in them them, of here to customer get we front go let to out the this reaching talk ahead

So as that start agreements this won't win we up many get really matter up back look, Target XXXX, and Hospitality demand But the to up back on no customer, success. see year for the and But they're to frank get contract but what no modifications does the future through outer these picks we're of doubt negotiation. to normal coming until of a demand roll were hopefully be in so. that even years that in years set better contracts more on us some coming next up win just were for for

relief they pandemic what And that. the this to actually it some next come probably solved in gave year hate things we to some wanted, customer see we While in that hit, up were going XXXX.

of the the further a being positive as out XXXX wish at and this I of as end So we the move years. day, into

Jeff Grampp

follow reconfigure if and don't for to as up, guys you maybe consolidate degradation in and the obviously communities, position. And want be Permian their right my network certain about areas? any the the you and just about think just know, but size demand thinking that Might consolidating kind areas there for of we thinking core seeing are the certain about, guys I not your of or of operators know to considerations you or you utilization shutdown you to footprint today, type know dynamics are in know any you business acreage

Brad Archer

variable good utilization. of on were some or always, bad, And our We've to in we of this a lower that costs facilities we have lot date, consolidated business.

under we've our We that's think these footprint do as So our on as our will temporary. to remains continue as contract coverage were still open to kind at we them But together. We how we reduced and far and lodges the kind customers up. back the look same that. of service cost. able higher our our We also utilization, wanted scope put two of we'll

comes open within As get out can these we back demand to for structure. now, But them, back, up. is lodges, our we've do them built We and cost of a it some utilization variable the what cost consolidate of comes week. up had reduce

Operator

you. Thank

Our next Oppenheimer. question. from Schneeberger question proceed comes Please your Scott with with

Scott Schneeberger

the How pipeline but would juncture. end, we And our know, not it on perhaps Thanks. providing XXXX have you based guidance on at I of the progressive U.S. think in XXXX guys project. about to Would I you're be anticipate? build curious election? then to Hey what is this on in best the outcome just be revenue conservative guess

Eric Kalamaras

first So we’ll TC. take

I think I advance. through how project to change mean you that. working orders. in necessarily of don't in this at for of modelling color, that is little just we're a give those still us of we're terms moving a a bit But point come and months quarters series

working little month advance. those we're bit So two a in through a or

terms think we Hopefully, be bit progressing is. think a so that So I will the the really I little specifically. would you what here we do is we tell up there. from that's want you perspective of would right think this At I in it absolutely of time, at to modeling the is guarded kind point expect in can I see, do a future. the in point back incremental notional weighted But number what movement some assumption

that start revenue start our from and which ramping As some our base what think from frame, we XXXX XXXX, how we EBITDA in seeing are. perspective. we is time think we But means up you and if is we'll December about base see that right November, progression I the a assumption think assumption

be. So be it may not conservative, may that

perspective, But the get think cycle to fully make back long how about in you engaged from will on a be own think to you it. of personnel macro commodity long West day, think assumptions at XXXX last the take look still get, your ultimately Texas. the I end modeling have it think how you I at So and conservative

Scott Schneeberger

getting little In there Just some theme. this but in into on quarter, gross line. the it as the a is year-over-year follow first and on Bakken to up, pressure the was the details, revenue that flat speaks a the was broader a margins

level? few hear to the of margin to you're what couple maintain quarters. the might the kind to Just that there's of it over what obviously, over what curious And with extends But levels did whole kind there? of talk And action business about lot then do taken was segments going see into of next thoughts you on a next quarters? across to see we curious the what

Eric Kalamaras

So on outlook provided that's XXXX said I'll yet. because as pause haven't term, margin longer really the we we

of the is I you environment reasonable second So as a a that we a before or on think make of really done the of we assessment good more day, really to tough point pretty and and the this it dynamic such can lot -- really aggressive job at a go company the I time To it's to think that the need into dynamic can think quarter Bakken, imagine through management in good the comes that, end really has down that. I expense a environment. doing

we question quickly that we’re to adjusted was and specifically variable costs Bakken how is your really able as So into that. maintain

I have management think, the expense like when we it to and were is that. and able do do to this structure you the it's quick key environment

Operator

you. Thank

question of next your from Suisse. with Credit Our Please with Kevin the comes McVeigh question. line proceed

Kevin McVeigh

broader you last, sense come position just to at can much even out any, incremental like level, the higher the you’ve discussions the share. the like in market a higher level? what wondered this how clients of stronger modification, obviously a even to as higher given contract last because seems in one just looking just types last were opposed But I at retention cycle better concessions it were a these of the of and for opposed a as at us just give level,

Brad Archer

Well, the here first everything they thing. because to right, the is want pandemic be the unknown. always was when frank, hit is good it Look call

XX contracts these have in plus teeth. with some a cases, years to the because have We strong relationship

middle. to everything, that was somewhere down, and talk we weren't the but up do let give ended to going sat we we What we we down in calm So them. up

years. the For us back giving needed up some in things in XXXX, those we

XXXX. to demand Some for negotiate believe and time in now for again when contracts we renewal is those of years instead waiting and the the get out were now XXXX and extensions much to took of be going everything up these better. We coming

gave them and gave they turned It So for us asset what and off a was into positive I'll customer ended we little say be will XXXX. started up, bigger it again. as positive for believe a But most where a well. we we and of the a much it in nice with little

So ended sides. a for being it up deal fairly good both

Troy Schrenk

think, in other I that the would biggest gave is them XXXX the time thing contract fulfillment. element one I add for of Kevin, thing is the we

So, that coupled with maintaining forward margins in addition to contract duration with extended commitments beyond that.

we get I the that together, XXXX all couple spot be where to think under when really that going you was happened to situation. the things any a challenging all under

company So think really XXXX, position and let's that's going how really XXXX at solid I them and we and shake it's for to looked said, think out. I the

Kevin McVeigh

areas I just kind ton as energy the of of revenue just help for kind balance given going term? diversifying but the obviously a a And of exposure it just then underscores of out to thoughts there's other kind guess strategic bit. longer just rationale to Have on, probably some little you

Brad Archer

We’ve the look are talked diversification is management, very we business catering things really lot that facility we those with business position spend, the about can even of are do really almost we don't capital little to do good. so for well a be of again this cards. zero. going pieces There's continue from to our on that to still a more back couple times, want at those diversification in today. this to think We We're of

day those look the day. what some continue other outside do of to at continue we as better. to on And after then economy businesses to adjacent we'll gets the go So we'll

XXXX fact we we definitely, big company a out piece the In business. the as diversifications think is of of gets

Kevin McVeigh

cases said your you that at to haven't want just I campuses. Is any of right? And COVID you any confirm, had

Brad Archer

it have been they actually We they any cases face We Target and pandemic. coming with temperature living isolated, It's since were campuses, towards they’re from. than did they to of employees that Hospitality feeding, face they the really knew outside were the where them. months, is coming They’re more cases but weeks, your to from beginning had they're these we've had control I employees at even somebody they’re we our checks. than more. folks, think It's which been cleaning, of easier own hit were had infected, two zero with were is removed,

ones really Chevrons, know bigger helping along some have that with helped as that good to We you that Halliburtons with from the the base that. customer well the us was to the

we had effect we operationally than things other the on on limited very changed. business So

but but we you fare other had hurt business that keep than no things the we operationally, know, did care to we revenue. down know that You the other is hotel, had we down are on the all taking customer. Everything fared shut types got the in and where shut prepare effect gyms. to rooms, go of But and the things. utilization of eat We to those where meals Those in continue they to cafeteria very restaurants well.

Operator

you. Thank

comes Bank. proceed with of question. Deutsche Sabadra Our next Ashish the your line from Please question with

Ashish Sabadra

we my in forward. as revenues of up gave contract XX% XXXX should How for wondering that 'XX your going some Can about questions, revenues extension. Brad, way was follow going do think we and just 'XX? a historically into Thanks you about extensions your concessions long mentioned taking in under contracts? on have contract you you the you think question helps under similar a I term these were XX% contract? of it

Brad Archer

at know to two the think look you it's you way have is, I it fold. really So

portion total volumes. portion committed contract then there's under there's So the that's the contract and

forma is going be, just that while so think provided too it's early. to we pro what we haven't And number

should I way the normalized you environment really a is about to think probably more this in think XXXX. and apply that would

contracts how we let had the handle that your assumptions way more that's mirror revenue really and roll you XXXX you purposes modeling assumption shake for going is the about think in that environment. I XXXX. would to the So how XXXX the entered want, in and kind year normalized forward into for total sort of into of out but I normal the you heading And think when

Ashish Sabadra

still you've a wondering comments was But done already consolidation I was there up some I side. there. in overall just follow question the that it again, on the any seen available on made wondering if the just you capacity. was Permian. wondering just can consolidation facility I capacity maybe some And capacity the more you've on you around in space? And seen Have rational comment was that's if Thanks.

Brad Archer

some a industry to in referring you're general? from and competitive perspective And

Ashish Sabadra

general. industry in Yes,

Troy Schrenk

Absolutely, has time competitors continue accommodation capacity whether when a offers or accommodation we hotels available total market and in the that at monitor it you type basis has look real or supply direct definitely on contracted. profile. a be similar the today supply of Clearly, or it’d the that contracted, to

our as think to things about in share, terms our we've plan think to of forward capture terms that the customers we're I we So, But of Permian normalize COVID-XX service and our, earlier consolidation so. in to got the as opportunity our do entire able start do a in of submarkets we'll and in mentioned basis. the to Basin continue each operating Brad we to a market throughout our to Permian, go that on ability were and prior

Operator

Thank you.

with line from your with is question. the of Stephen question Stifel. proceed Please next Gengaro Our

Stephen Gengaro

potential the patch a on. EBITDA look One there's you'll oil I know second is positive? Just hit that in it just third well. the I two in here you when this things quarters, at as the is a still in the obviously, be assumption follow visibility up, want and occupancy and levels fairly to Is reasonable tough being but

Eric Kalamaras

be not asked further any a don't an step -- EBITDA there's That's positive. even I got I going whether it discussion point. just the to not question any, you really we're hasn't or question. because even think

we And So not that, look flow have the scenario there's we not positive. than modeled a step the we are in scenario further modeled modeled under we any scenario and that pretty negative where envisioned application. that cash we've discretionary have ones, that even any not

Stephen Gengaro

I get And have then post-election the do you only I air the we the other as one government any still and was, up through have updates about I we guess contracts. renewal. the it's mean, in and think

XX was I to months think -- away XX it's about it now? right

Brad Archer

Yes, definitely.

we consistent. contract call. very It's to that And say right. exactly on just each continue along. It You're moves this

change. everything much facility. any part it’s because need. To it The change You to year, just the And There's don't there the a you the What is next know, has that can It well of so of on not until been as we still year, being much don't probably and else. tell question, we done. there just run it get thing getting an late in to negotiations first side. see more I your It's see see there's a numbers. always would ran that probably government is big much. doesn't election there time

Stephen Gengaro

conversations you've find cetera. In final know very a royalty one down cost I world you you have that that Does do to providing one. But that a in, detail easier in all? these cost I come it et your so on value. better just guys I a customers proposition you’re think help mean where at hotel conscious? understand is I are easier rates to your now, gave basis, we’re had. still about And When you an And is environment that cutting sell? some good talk value even

Brad Archer

you we tell so I of all that, ADR maintained we balanced contract. the the extended We cases. integrity the in term return, would

with in our is helps tell to negotiate the not that would willing and or set set So what own, you definitely environment we like this, have we��re just got we an with in been would it had how us, up hand. and I contracts they

better think in the North we earlier, market you moved we share. does stronger. out as know, is proof times gain that in it We mentioned And become this. up in was happening. pudding, like thing of easier it We the Dakota and same see and much became did Kevin we ended So this I

of companies, us larger in years. who should future contracted You larger the with I the demand we’re already Permian is the come know consolidation that our see starts companies what of saw help in to as consolidation on lodges, but back move own we we and

Troy Schrenk

is platform, far terms. I you mind, mean other Stephen, five that think as largest four by or to thing Target have in bear has I the well the by

think of here they're what is today. competitors now that is Target’s are you ago, the space long-term partners, So when for months six going to months the three not look and commercially we're right a from no contraction at I are here's seeing longer looking and seeing ago that's thing And or customers we're they is know be there. there who lot other happening

to So value partner that and going with platform. be lot we of I most offer who think the across your realizing has that a is as cost the well flexibility

Operator

you. Thank

We have reached and the session. answer end of question our

the would like floor turn any for additional to Archer I So back to over Brad comments. closing

Brad Archer

their this ensure customers Yes, families have of These Hospitality Target been care out first remain frontline for healthy. a weeks from time pandemic. members I at that taking safe want away our of to they the and on folks are thank all during to team the

truly thank next to for we team you. forward of call. in look our apart Thank frontline want to what are sets also industry. joining today, again our quarter’s speaking members us and call I Our all you

Operator

Ladies time. this disconnect your you does conclude teleconference. and and participation you your at today’s for this We gentlemen, may thank lines

Target Hospitality (TH) 28 May 202020 Q1 Earnings call transcript