TH - Earnings call transcript Q4 2021 | Target Hospitality Corp.

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Operator

Good morning and welcome to the Target Hospitality's Fourth Quarter and Full Year 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Mark Schuck, Senior Vice President of Investor Relations. Please go ahead.

Mark Schuck

you. Thank and earnings Hospitality's call. everyone full quarter to XXXX year welcome morning, fourth Target and Good be Investor The outlining and can our release fourth in press we quarter full issued year website. of our Section this morning found the results

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

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

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

Brad Archer

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

XXXX results, have smooth was last to transition. XXXX time and briefly important And to to and role. about transition. initiatives as progressing leadership will the I announcement the continuity transition forward to It our business this into advisory lead touch into Target's a ensuring continue week. ample transition us excited and then ensure we to the balance and opportunity look I through there set made we its want said, strategic a of on XXXX get was we in Before for strategic company orderly through I'm

simultaneously to operational objectives XXXX diversify strategic took would strength structure, with defined results Target XX% experienced our an impressive customers at best-in-class to end markets, many and with of I Target's significantly We accomplished and and a sheet company in its Now, company's position and XXXX deliberate Target's demand like XXXX while which enjoyed positioning to these rate, over entered actions an labor of operating the segment. look across HFS over accomplishments. sport customer Target's to offerings. have We goal years. illustrate significant we renewal allocating These premier attributes efficient find the back to the commitment to flexibility. service for continue our we while Target's improving operating XX% balance customer strengthening world-class XXXX, create our an year-end the has Since initiatives. to demand take illustrates fundamentals. advantage This increase the value network

supporting created the network robust this we ideal structure. optimization and benefit and utilization scale customer within utilized scenario activity capital bed, an generation. matched Target's cash operating and the minimal contribution creates As from from efficiencies This each increases, our and margins have significant maximizes to demand with and continue additional have margin incremental we

on a strategic in broadening is unmatched missions. its offering the growth flexibility, expanding comprehensive our pursuing Target's permanent structure. the flow in minimum provider will while fundamentals flow Target's from by one government and This have premiere the represented and are the and expand a high-grading XXXX accomplishments diversify allowed by U.S. scale XXXX. supported of illustration these reach growth the itself exposure premier North aid sheet domestic counterparty resulted $XXX diversifying critical positive of Additionally, committed capabilities U.S. focused its our long-term These will support XXX% markets, for strengthened These materially States securing mix generated simultaneously intentionally initiatives This backed Government is business to XX% largest service opportunities. Target's of America. cash service remaining a while United contract These Target's cash operational initiatives Target our Target Target's of capabilities operating cash hospitality while U.S. history. accelerated viewed superior XXXX Target's the million, while be strategic to has Government simultaneously foundation XX% establishing of balance Target $XX ratio in discretionary commitment and by the leverage end progress pursue growth significantly operational enhance markets, continue significant and initiatives. operational of a increase fully generation providing were to company's in in long-term Government's unmatched and segment revenue, new Government. to end contract the as net to humanitarian million. objectives. Government. on on Target and established materially business favorably our catalyst award, our solutions clear revenue solutions and expanding and simultaneously a reduction hospitality its focused contracts

to have continuation contract. in to in greater recently service ultimate contract award multi-year Government Government's critical its public opportunities notice a the source for has a current intent As marks of have contract. of current contract, posted than These and final This the options began offering. our progressed procedures. and considerably extension steps the The the notice include recently -- of meaningfully last the one service it and sole contract in award relates evolved expansion of in terms of for regarding the discussions which year, to discussions Government March expansion this

momentum contract our the our in of benefits XXXX. vertically these premiere the North encouraged experience throughout provider competent illustrated United to of discussions the hospitality highly solutions. America's results States outcome positioning were integrated continuation of the We humanitarian and strategic as And are sustained Government. critical our to the support by successful We

I'll and focused now strategic quarter to sustaining discuss in more diversified we positioned we on have mix our initiatives are We long-term is for Target to and we initiatives business our intentionally the strategically growth focus our and results our the growth over fourth this progress which on expanding value greatest turn to detail. in creates ongoing call momentum impressive, XXXX. our executing shareholders. believe Eric on The have made financial opportunities,

Eric Kalamaras

and XXXX, has and the results, adjusted a quarter, experienced fundamentals, In which XXX% Thank and and everyone. $XXX revenue supported increase throughout morning, $XXX demand for Since we XXXX Target demand strong hospitality high-end quarter the was Brad customer EBITDA you, strengthening exceeded good XXXX. million. Target accommodations experienced fourth full solutions. XXXX fourth financial continuation financial year demand year-end sustained in total million of year the a our of our XXXX premium benefited which was approximately and impressive This outlook. Full modular

continue resiliency we our discretionary DCF $XX within yield, had we XX% to through enhancing as year, million, XXXX. flow illustrates operating allows impressive an us the cash the our which of flexibility representing business move and flow cash For

U.S. Our $XX March, significant A to $XX period contract additional same Government million last increase the fourth in $XX year. from the segment revenue award which quarter. million contributed produced quarterly compared an executed revenue is approximately of XXXX, of Government million approximately in in

the backed is revenue by a contracts, As U.S. Government are which by reminder supported fully Target's contract terms. respective Government minimum over their segment

Target's to compared demand. segment service same commercial supported the delivered $XX by for period driven and million HFS momentum Our fourth customer revenue offerings, strengthening million in activity year. increase $XX by demand This of last quarter sustained economic was premium in

cost While to pressure. Target its components grown diligent allows year, an our to has flexibility, organization. and have adjusted primary pricing costs our service us take benefit the We adjust appropriately revenue active and mitigate cost input across approach EBITDA which managing the we remained offering from significantly in over and components past managing

expected have such, materially and ranges within have impacted not input margin. As costs our our remained

compensate We inflationary to extent and they evaluate the monitor our look to of pressure will negative impacts services to occur. for continue signs to of pricing cost

practice, Target ability corporate expenses Recurring of the flexibility, provides costs to significant has quarter managing organization. this illustrate operating minimal throughout Target's grow the while to to disciplined a preserve incremental our allowed the margins $X matter approximately environments. a of and As approach for across costs. which And maintained business were incurring variety a million significantly

award. to Government we anticipate $XX new were XXXX. model, directly for business corporate $X expenses million segment enhancement the contractor supporting around to our scalable recurring quarter within through the million $X of approximately towards the quarter per Services expenditures Total million remain capital directed result predominantly a As

of achieved experienced level level with the Because we with high our invested of XXXX, million helped million leverage result, our of X.X achieving million, of year-over-year the times. We approximately spending, business ended a industry-leading ratio liquidity of As plan. are have XX% net on ahead in Government capital. revenue generation, available well return cash and segment quarterly of improvement total we during of net generation, cash our of XXX% year $XXX ratio leverage $XXX minimal growth. high a a we Because debt, cash providing capital $XX

XXXX cash We level high continue. expect these and about of are to enthusiastic generation

fourth our quarter XXXX. service associated offerings. the full and year of by provide in excited in results, and strong These are elements confidence We strengthening the for Target's demand customer commercial cadence and supported activity demand

result, XX% revenue to of we As XXXX from XX% anticipate HFS XXXX and a between increase levels.

as expansion quantity XXXX influx contract of services facility, with services The known for permanent our humanitarian the proposed is the made is as of are contract prime an indefinite and through site. all a humanitarian at award pleased from has continuation the sole the U.S. a contract, Hospitality an indefinite in source, a influx U.S. the and regarding we currently progress the our with to shifts our This well award aid of otherwise Government partner the provides. site an contractor delivery, This as contract facility as a Additionally, Target who Government the of extension contract discussions serves emergency nature IDIQ. Government. supporting care

committed for reminder, government the various to contract our a many nonprofit the agreement, prime the IDIQ are national contract U.S. provide and process fully comprehensive across organization and Government to partner provides agencies. The our the the the solutions Target subcontractor requires award. backed government services contract same looking award leading this streamline to is contract procedural procurement is that to customer complex procure to direct by process steps counterparty this a nonprofit As to Government. hospitality to a prior agencies This to other allows and is

type, the to contract steps to is of outline the final for or details. critical notice and prior Target to that statutory late finalizing award of contract relevant duration to nearing intent its the February, of services One in post Once the completion Government This step other the for of with customer. our in scope response is anticipates occurred the formal partner, terms the subcontract period. the XX-day awarded publicly contract our notice

Target's enter providing. to month contract, subcontract being a ensuring will is intend the or new be of humanitarian no influx we existing facility to finalized, one care there Target While the is the extension services interruption

Additionally, critical prior will a humanitarian place the to continuation these services. in of contract existing finalized, seamless content new being economics remain ensuring

to of discussions. Strong As confidence as of desire highly without support the services and Government's well throughout and to facility business and States continued fundamentals performance, successful customer outcome renewal maintain a to sustained past cadence demand continued are of momentum the as XXXX have provide entering United year. existing confident the extension in customers Target this we result into interruption, and our contract the

our between XXXX announced million of consists which outlook, adjusted As we $XXX $XXX a million $XXX preliminary result, million. $XXX and EBITDA revenue and financial and between today million

strategically financial attractive North best-in-class and growth We to premier hospitality this returns. the as fleet unique intentionally $XX of have market providing flow in customers America's to solutions. has focusing million spending. that resisting a also margins principles leader anticipate optimizing potential, Target by our world-class long-term accomplished We $XX while maximize vertically on asset capital markets integrated million conversion. itself positioned offer revenue economic profile established capabilities cash These with substantial generates highly greatest and

comments. full significantly on expanding coupled strong sheet created. proposition. strategic shareholders. broadening to pursue leading characteristics by call will anticipate turning back existing end Additionally, the flow. capital flexibility. allocation, while while our We profile value Target's for capital, core creation strategy existing competencies requirements, service enhancing discretionary that, economic simultaneously the opportunity XXXX. strengthen flow in with is within position These to impressive This platform growth from accomplished, reach growth to the greatest to impressive in government create capabilities balanced over will a invested offerings, on financial as of impressive these revenue these year focused capital, network markets. and value broad increase while have our balance capital cash discretionary attributes enhancing our generation, strategy a XXX% illustrated flexibility we increase Target's With services strategic creating enhanced Brad meaningfully markets, long-term its end closing financial well flow focused we to while of cash reaching focus growth. on of our asset financial pursue Foundation select limited returns, foundation accelerate The cash portfolio creates and turn maintenance believe preserving cash our fleet Target's adjacent I significantly our as resulted its with requires return initiatives flow visibility Target's unique growth the expanding to market, growth builds the limited an this opportunities significant pursue commercial With opportunities. utilizing and focus for to and

Brad Archer

while Thanks will of our exceed initiatives. to XXXX. which on America's to momentum North customer's the significantly solutions, strategic Eric. needs, allowed as enhancing Target's position These strategic us exemplifying amount illustrate we meet a as These have leader in objectives. and progressing accommodation growth executing XXXX accomplishments unique created continue attributes while tremendous financial position our results to and modular in our enter our benefits commitment Target's we of XXXX, varying Target's utilize hospitality

financial interest on the operator Target have accelerate core aligning believe achieved. growth you for the the to I thank there. we focused for on Hospitality. remain strong again position I Target's optimal Q&A. in We we now to value call today competencies, As with have we'll and this stated, our joining scenario our strategic preserving your pass creates everyone existing the us will while shareholders creation appreciate call for back the

Operator

Instructions] We first [Operator ahead. The Stifel. from go question will Please now begin the comes session. Gengaro with question-and-answer Stephen

Stephen Gengaro

Thanks and good gentlemen. morning

Brad Archer

Stephen. morning, Good

Stephen Gengaro

on congrats your And transition. Brad

Brad Archer

Thank you.

Stephen Gengaro

seems the I right, the it on up about things to contract, looks first, your wanted I guidance, to to larger. current am two think of includes had like was an curious, government based what -- The you and existing include just ask I extension we that an could contract at government that guidance seen of Is the it size. on -- website, sort XX% be I your current extension

Eric Kalamaras

Eric. It's question. to a the morning. Good Stephen. Thanks Hi, question. It's good

said, nearly have on. we we when this the live as ago, entered So, continue to to year historically, a contract expected we

And yeah, sure. so,

have thing for that's live XXXX existing some not it's always now And We to time to economics. relates continues assumption it -- any that that, changing at on been as underwriting and assumed outlook. the

Stephen Gengaro

the probably -- unit know remain basis, economics or to envision, it's per envision Okay. that Thanks. hard similar? I on a but And is there do answer, do you and a you pretty

Eric Kalamaras

complex. the variety frankly I and take to Look, takes end think, financially. and similar flexed Look of we've that that operationally can on of There work the that, takes but economics. evaluate are There the that. customer a IDIQ. desires economics a But being ways, and -- that of of time time day. what for what continues to in say. depending is some specs purposes here's purposes, in for to number the ultimately the IDIQ considered, on assumed your are scope through all puts certainly move the I at our It'll number be the a would of Look, of that

Stephen Gengaro

Okay.

Brad Archer

we potential finalizing about The The scopes, middle feel of terms forward, today, We're a it it's the of confident sits highly -- IDIQ that. I the it extension as I the expansion, IDIQ, in about feel needs good the just today, doing in the the to Yeah. good we're moving we're but contract mean, mentioned a that in we're expansion final move to right? little there's while the that's that listed an think forward. very possible spread. I as variety well. piece still continuing mean, in bit in comes for there, when

Stephen Gengaro

then like. understand. more kind One cost about one And there. what it and margins. when helps takes -- the offset the some we are didn't and Thanks. And the two the side operational -- oil I what honestly impact the about the the but guess, cost the side just that scale puts as and what has of the others. takes run get old just in divide was, what versus on curious think just how question. seeing When oil the but but looks I about -- margin -- we you on think in curious the project in imagine puts and I the government, you're up, profile you're just numbers I of busier, I'm I that on thinking didn't and

Brad Archer

Yeah.

me bit been level. labor, but staff market a guess been tighter, very we've labor maintain able about look that. higher the When to at we touch to on we've Definitely a good Let just little adequate is maintaining ratio.

were you, accounted the for us allows in but -- -- So, able good at in inflationary when that. purchases, scale mitigate And a different have to well. and of really pressures not tell seen at in on the some, we I'm we pressures we've XXXX we affect -- it menu Those we're we and volume, things us inflationary there. very flexibility going to operational didn't food, our our we've level, XXXX, that are look

puts as let to in I more -- and able you, that. continue on tell would XXXX. far And as do accounted touch that we'll think Eric for to I they're be I'll

Eric Kalamaras

Sure.

one the labor. the components think about -- we will pool, of of service three be component largest cost when So, three

one so We're don't food of think And food the moment. other providers servicing right? the one have a food top hit and I food one one on other substantial marketplace XX and massive for -- last me the in we will that, Brad So, will servicing utilities. of be other of terms Look, on on purchasers, -- necessarily be The it's scale. in touched -- -- the the let country servicing labor appreciates purchasing. but scale

a servicing, per increasing per pace increase. we when right, we occupancy, function of continue of we relatively to on some we inflationary cost XXXX, basis partially about on expect have think it just at a think to heading cost expect a unit about a that as So, come to unit basis down, expect than and into movement. We do higher

However, we're able ameliorate portion of to that. the substantial

of frankly as seeing to, drastically talking not the past. than would whether single seen So, different in we've opposed PPI, the it you're digits, or numbers, what be which and CPI we're XX%, headline low be

continue to we'll at don't it, think to anything point. So, that degradation impacts that monitor should but we margin look I

at that level Now, look consolidated when to TCPL line right, you did we mind, just for in mentioning the bear think at have things Target, it's I in included last at XXXX. worth a top year, this

that XXXX. we forward have so, won't carrying And into

level, aggregate year. movement having see now last you'll costless the of an a function it's at So, margin. little a Largely, bit of on revenue

mind. So, that just bear in

that, just think you reminding I know but you.

Stephen Gengaro

that. understand I Yes.

Thank back stop there. I'll Okay. line. I'll in get you.

Operator

Schneeberger Please go next with The from comes ahead. question Oppenheimer. Scott

Scott Schneeberger

on is of importantly, ago, the process like question. -- a Thank notice the on few how discuss contract kind two-part timeline leading there forward? everyone. is the to weeks and evening. looks a It now, you the of Good the part the envision do back tomorrow I like more speed much. this from Could very going of expiration of you extension you sort up I'd government of to some guess, morning, kind start posted and question

this think it we keep about you. customer in to you? should to that Just and your how to mind. Thank So, as

Brad Archer

Yeah. Scott, this morning. Brad. Good is

the to For similar the at residential occurred family relevance purpose, South this that our with is very transition services government center. Texas contract

slow, is not and to we're -- work. while not it's So, these new things us cumbersome process of and atypical the how to kind

issue. thing biggest the of kind point source I is the was think sole the I to gating that would everyone IDIQ

exact to You I date XX-day it first. needed Mark notice remember -- coming that period -- I should don't the up. maybe but does, happen is can't that

happens, not and been So, contracts. we're negotiating once that still, talking sitting we've already

the could here extension. is that it hope us think a It what ultimate be awarded. be contract. goal would what's highly So, to we'll out confident extension in extended everybody, look, IDIQ, just finalizing long-term that's happen to to for XX-day and would with But XX-day a the based that is get for again. not, function then will I that come of The finalize XX-day on of period that the the of allow is done contract, we're here If all being contracts. receive we

Scott Schneeberger

there embedded is a on up up CapEx following to CapEx the than contract update, segment, still for CapEx. was expect is last lower you. develop or that, should to the and regard with additional of the CapEx we the an And be this in may anticipating in, year. guidance March on not Government perhaps getting and this extension in that is Thank going. for Thanks. tied contract that Great. government year lot if required year favorably guide what year? Is that What it last Obviously, things

Eric Kalamaras

Sure. Sure. question. Good

of for extension can were not going be think So, opportunities, contract those termed the reason to that expansion the meaningful. be the but opportunities, we And and the the when about we negotiations that out on. purposely the guidance, only when we preliminary, put it because -- was

assuming XXXX, the when basis, a extension, has So, assumed, we lot a lift already on did of year. lot a in year. pretty standalone that forward It last We big of think capital in right? was the of been half moving that last a first just about

got So, we've of lot a that.

some of is business. that maintenance predominantly in you're the work the side HFS what So, seeing from

and those update we come we forward a that expansion be through that and there we'll opportunity, just back the meaningful capital accordingly, could is as to extent move move Now, discussions. that as

the relates spending. that have could permutations that As and of it implications capital I mentioned IDIQ above as to customer can number desire before, there the over so, different a and ultimately are

Scott Schneeberger

is that. the more the be demand more count. One side. price of were is regard cost count, over side, the year And labor this expected guidance embedded Great. rig for year, more South. in to on appreciate segment maybe in This what's company the me. on this it's to the asked rig going course overall Hospitality over the with The -- Thanks. in oil guidance, per I you the --

Just point, how are you this and here activity at prices thinking likely guidance this with be about obviously, going oil that forward? to shell volatile

Eric Kalamaras

Sure. Good question.

let So bit give me context. the a of you little --

Just so you have an understanding before I get in the meat of your question.

call think we about So, think it we about basing to plan, we it, were levels. terms something at about and -- about year, occupancy of And over the of and the $XX pricing together to when right? from lag were we thinking. looking increasing area. we We on. for we looking construct of scenarios related when type business that's pricing that the we we the and So, -- pricing, to typically because levels when in as as four-month is reason the see that and an part quarter our what put permit tend $XX exhibits at rates a you're occupancy think it as to the what evaluate linear And about think utilization think about trends budget it as outlook in overall commodity perhaps don't you're being

we peaked consistent $XXX Not barrel. positive That to partly see, a would in to a out That's of It -- still rationale XXXX, weighted, some the said that it was the of gains being was nice hangover, lot expecting behind later right? two year, front necessarily saw residual movement saw crude coming there. COVID but of Okay? that. we months prices entire throughout half

we'll to double-digit weighted see be that the to going see we to quarterly revenue all continue And the growth, expect of lot the going year. that's to that year-over-year, A first this in again, in what's that's half, solid through continued look, to be We but good year. and embedded numbers. expect

continued I companies their what you're They've is which seeing plans, producers and marketplace, what we'll do. see fine. wait current the now, with and to stick look, But ultimately think expect what development is faster current environment more not assuming. we we that are further may than this that's maybe right the -- see things to pushes the we but and helpful it, with

Brad Archer

in Yeah. just are going EMP add lot bunch the of bigger, to our customers thing right you tell bigger the that hearing adding -- I one ours the still Permian Eric's in and back not half a We're in capture to seat our already it it to built especially network, to companies. of time we're it the down those for doing really that, a What we trickle if takes that right. way you But business business. rigs. start little the us. A would And we're now, early, does, happens out from just year, setting of a basin, good to that folks. if with whole to

comes back and it, because that from actually that. some at today, out we're we're getting we'd year, with end lift of not I seeing if update start a do setting but -- it think, go But So, drilling. would the if that the the and that contracts up that already to of we comes,

Scott Schneeberger

Thanks. guys. perspective the Appreciate Great.

Operator

comes Greg with Please ahead. Securities. question from next Northland go The Gibas

Greg Gibas

of on missed and Hey, guess, the of taking I Eric. government first Brad quarter terms questions. energy. government kind good your between in XXXX Congrats this, morning, implied apologize the What's versus mentioned split represented are and for if -- XXXX of guidance -- thanks revenue. you in you the but for expecting I XX% what

Eric Kalamaras

didn't positive We've the to energy the continue would the lot a expect government, of movement the last look year, the When side, question. we be same. basis, would those to though offset is on right? exactly a think thanks we Yeah. to which another reality relative of for things Greg, impute we each just it The actually It you closed on quarter mix. that the tilt would government would It for contract a quarter of that. new So, structures other. continue assumed you have have -- at roll those while full

level. it that you'd expect XX%, be in to XX% so And

that shift mix, we Now, get obviously towards side. to the obviously the government the extent that will expansion

what However, to and that when like, that and see have if looks comes. we'll wait

Greg Gibas

apologize I are remain Right. anticipating relating contract, month settled, government month also but are or a But this delay? end be helpful. missed And That's you expecting if or it'll this. the confident that I of pretty I you guess, you happen XX-day to by the to that

Brad Archer

the anticipating And we're is today. within contract it days, all definitely XX-day as that us finalized that working we've is Everything So, a been extension. rolls on. that of XX hope

Greg Gibas

to one is existing -- and for of I last how timing Thanks kind it. much a debt, guess, Got me, relating refinancing just your that general on for clarifying. of And your related. thoughts priority

Eric Kalamaras

We at not given Right that is number that. -- Great now, able we certainly the of macro within of a available some backdrops that I on now past to we'll are to we've on the the evaluate just the look market rate execute and we've to looked the continue the for our that Sure. strategic time. where And things is fits the cooperated, some to spot -- favorable at to the do high but over seen it is to be that extent to objectives. yield current weeks, us will notes. And we're extent in to that think question. market look to

with top mind balance certainly, of to strategic well. objective on our we us, so, do want that but entire for And as

will decision just that economic is it's strategically. decision, not only it an also so, a And -- so

Greg Gibas

much. very Thanks Great. Okay.

Operator

Please Stephen we a And ahead. with Gengaro follow-up from go Stifel. have

Stephen Gengaro

follow-up. the taking Thanks for

of balance strong quick understand So, but question, I back ones, flow looking this the between do the sort ratio, strong you work? the the How shareholders a leverage just follow-up. balance the cash the looks visibility generation. more very -- outlook, cash of sheet free returning and but to from to two debt what government CapEx lot the the to gets think given like and the reduction -- free cash about flow at When

Eric Kalamaras

here. than So, maximize part I'm genesis maxed Stephen, Look, asked remain prepayable for debt, you and to begin you surprised question. all and as that company, the -- Look, the really growth couple the over options competencies. and the to of years, terms are of actively better I that our the to stages all know, being on on Target positioned may. we really fit nicely we do others. our are not time, the obviously opportunities core table that some of variety out pursue though, there have that's the value suspected options a our evaluating so with question past able right? that end Look all to it you of of certainly we've the

want we continue capital look at to always path, return so, we'll so, to opportunities to right? And pursue that back. And

shareholder opportunities all the to come than better there strategic one our others. are opportunities more I long-term of some perhaps like return grow to things or don't shareholder I But opportunities reason develop at the remain another, some the table, think the that direct of to value other this extent said, but forefront for for viable point.

highest consider wouldn't I those so, be And priority to the right now.

Stephen Gengaro

then Thank one me. for you. And just follow-on

or said some -- patch, in about labor the are when constraints -- service or think and As how I'm right, tight -- But to frac of whether I And selling general. that kind But there. guys sort the facilities, the just trying ask a on you've for a Target views think operators they -- market that through you kind what's your sand of your I'm have in tight? companies take Is both it. truck point competitive and I the or of is to drivers to services? clearly the And it's thinking oil of but they're it's what's stay how believe the oil is does those business, better market into about things a you for it. in the worse curious for companies, position of -- sort how on their in E&P that we the curious when consideration? to labor when it sort when of impact how updated your labor growing of kind talk And impact demand you for past,

Unknown Company Representative

and for years of course it on gas they're past, for a Yeah. I fighting in are them if the And truck regular of the superior just in a market tighter not oil when driver us. or me. willing the We hiring part labor even Almost the becomes but is frac And package. tell employee, cheapest, more that business. it's it XX retain they're benefit to it's the market can business can folks a and better of the in any when field, a you the of for their tight it than We're it's offer their helps product. in it pay or labor

it's that a the not bad not but pain, So, this to thing for we is like business. for in them our be

Stephen Gengaro

the for color. Great. Thank you

Unknown Company Representative

Absolutely.

Operator

back like our for Brad session. turn remarks. question-and-answer Archer closing to over would conference to I any the This concludes

Brad Archer

today. look talking quarter. Thanks to all we call joining again for with And the Thanks. you next forward

Operator

you now presentation. has for Thank conference attending concluded. today's The

disconnect. I'll You

Target Hospitality (TH) 10 Mar 222021 Q4 Earnings call transcript