Good afternoon, everyone. I'm Scott Schneeberger, the Senior Business and Industrial Services Analyst at Oppenheimer. Thank you all for joining us today. It's my pleasure to have with us from Target Hospitality, CFO Jason Vlacich, and from Investor Relations, not on screen but in the background, Mark Schuck, to speak on the company's investment story today. We'll be using a fireside chat format. I'll ask management some high-level questions up front, get us an overview of the business. Later in the session, I'll pivot to questions asked by you from the audience, so feel free to send those in to me. I'll ask them on your behalf. Without any further ado, let's get started. Thanks for being here, Jason. I guess on question number one, could you please just provide us an overview of Target Hospitality's service offerings and the company's business segments? Thanks. Yeah, absolutely. Thanks, Scott, and thanks, everyone, for listening and your interest in Target Hospitality. As Scott said, I'm Jason Vlacich. I'm the CFO and CAO. I joined the company in October of 2018, helped take it public in March of 2019. The company primarily provides full-service turnkey construction and hospitality services for customers in remote locations. The unique aspect of our business is we not only provide the full turnkey solution, including construction and hospitality services, but we can also move our assets, which is relatively unique in the hospitality industry. Obviously, you can't move a traditional hospitality building, but all of our modular units, which is the primary composition of our assets, are mobile. We have a history of relocating them pretty seamlessly to respond to changing customer demand. We've done that over the years, quite significantly more recently, to grow our government segment. It brings me to kind of our primary two reportable segments include hospitality and facility services, and government. The hospitality and facility services, otherwise known as HFS, is primarily comprised of energy and market customers. That's a relatively mature business line. A lot of those customers have been with us for more than a decade. It's a pretty stable business. I would say the contract structure on that business is primarily, as outlined in our filings, master service agreements that are driven based on utilization and contracted rates. Because of the stability of the contract base, we have a great amount of visibility into that business in terms of its cash flows and revenue generation. On the government side, that's gone through a lot of ebbs and flows recently, but we've had our footprint in the government segment since 2014 with our Dilley facility, which was under contract from 2014 to 2024. In August, when it was terminated, it was recently reactivated in March of this year as well. That's our longest-running government segment facility servicing the needs of the government's immigration objectives. Currently, we're partnered up with CoreCivic on that. They're actually the original customer that we built the facility for back in 2014. That's really servicing the needs of the ICE Agency under their current administration's immigration policy objectives. That's kind of an overview of our business and our two main reportable segments. We recently created a new operating segment that we plan on growing with the Lithium Americas contract that we announced earlier this year. That new segment is called Workforce Hospitality Solutions. The locations of our assets, just to go back to the HFS segment for a moment, are primarily in West Texas and New Mexico. We also have a presence in North Dakota as well as Canada. More recently, with the LAC contract that was announced earlier this year, we're establishing a presence in Winnemucca, Nevada, to be part of the Lithium Mining project there. That is an overview of the business and the two reportable segments and a little bit of the history behind that. We can go anywhere you want to go from there, Scott. Thank you. Appreciate it. Great overview. Next, let's go to Target typically contracts with customers for multi-year periods, often with guaranteed payment provisions. Please discuss the company's contract structures and the revenue visibility across the two or two and a half segments now, three segments. Sure, right. Our contract structures are slightly different depending on the segment that you want to talk about. We'll start with HFS. As I mentioned, those contract structures are primarily comprised of master service agreements at this point in time that are driven based on contractual rates and utilization. Utilization there has been trending positively and is held pretty steady. We have, as I said earlier, long-standing relationships with our customers, some of which we've serviced the needs of for more than a decade. That gives us a lot of good visibility into the revenue streams and the cash flows associated with that business. Also, the contract renewal rates on those customers have been more than 90% since 2015, and they're multi-year contracts. A lot of them do have exclusivity provisions as well. Some, although a minor part, do have fixed minimum revenue amounts and commitments as well. That is a more minor part of the HFS business in terms of its contract structure. On the government side, historically, those contracts have been based heavily on fixed minimum revenue amounts. Essentially, we have an exclusive number of beds dedicated under those contract structures. With that comes that fixed minimum revenue commitment over the contract term. That gives us even greater visibility into cash flows and to revenues, et cetera, and puts a bit of stability around our forecasting objectives there. On the newly created segment, which is primarily driven by the new contract with Lithium Americas, that also has a fixed minimum revenue component to it as well. It is a $140 million contract value through 2027. About $65 million of that is driven off of construction services that we expect to complete this year. There is an operational component that has a small minimum fixed component to that. However, because of the manning curves associated with their plans and the project, we fully expect the operational aspect of that to go well above the minimum committed amounts. That is an overview of our contract structure, sort of broken down between HFS South, government, and the newly created segment, Workforce Hospitality Solutions. Now, over the past four years, Target's government segment has been quite dynamic. Could you please provide us with a historical timeline of the ebbs and flows across the company's primary assets serving government contracts in South Texas and West Texas, ending with the current status of these assets? As the beginning of the year had a flurry of announcements, may I follow up on this, but let's give an overview there, please, Jason. Thanks. Yeah, sure. As I said earlier, we began servicing or established the government segment back in 2014 with the Dilley community. That is a 2,400-bed facility with our customer, CoreCivic, who is also our current customer. That facility was designed and built by us and operated uninterrupted for about 10 years, starting in 2014. That contract was terminated for convenience in August of 2024. We kept the assets warm, as we call it, because we were confident it was going to be reactivated under the new administration, and it was back in March of this year, as we announced, with the same customer, with CoreCivic. They have been a great partner for us. In between that facility starting in 2014 and it being reactivated, we expanded pretty significantly in the government segment beginning in 2021 with the construction of the PCC community, or otherwise known as the Pecos Children's Center, which was an influx care facility. The Dilley facility was under the, or was and is under the ICE Agency. The Pecos Children's Facility, under the PCC contract that originated in 2021, was under HHS. We partnered up with a nonprofit partner at that time, and the government had a huge need to deal with inflows of immigrants, particularly undocumented migrant children or unaccompanied migrant children. We originated that contract in 2021. It expanded significantly in 2022. We built out hundreds of additional beds, ultimately moving from an original bed count of 4,000 or so up to 6,000 at the end of 2022. We expanded that segment pretty significantly right up until the contract was terminated earlier this year. That was the longest-running influx care facility up to its termination. It had about 41,000 undocumented or unaccompanied minors go through it during its operation. The way we were able to expand that, just to illustrate the flexibility of our asset base, is we utilized our existing assets, which were not being used for our energy and market customers at the time. We repurposed them to build out that PCC community to service the needs of that PCC contract at the time, which was a pretty cost-effective way for us to service those needs, required minimal capital investment. That is the more recent example of us being able to kind of use the flexibility of our asset base to respond to that changing demand, in this case, in the government segment. Right now, we're really focused on reactivating those assets. There were 6,000 beds under that PCC contract that we announced was terminated in February. Based on all of our conversations with the administration, they're highly interested in those assets. We believe it's a matter of funding and administrative process before we get them reactivated. Based on all of the conversations to date, which have been trending positively, there's a high degree of interest in reactivating those assets for a different need, obviously, for the current administration's policy objectives around immigration, which is detention and deportation. That's great. Yeah, a couple of follow-ups. I'll kind of ask them together here. Obviously, the West Texas facility, very large, certainly could serve a lot of possibilities. You mentioned some active discussions with the government there. What are some attributes of that location that you think may be attractive for the current administration's needs, and possibly, if there are any detractors, with regard to that? Also, could you speak to, I think, with regard to cross-border activity? It was obviously one direction under the prior administration, a different direction under this one. Some discussion on other assets that you have available besides West Texas that investors should consider. Thanks. Yeah, sure. In terms of the, I guess, the purpose fit of these beds for the administration's policy objectives, based on some tours that we've done, some conversations that we've had, there seems to be a need to keep it the way it is, with minimal capital investment required to adjust anything from a CapEx standpoint. Based on the population set, we understand that the way the facility is currently built and positioned would still fit the government's needs with minimal capital requirements to adjust anything. On your second question, the government and other folks have publicly announced their need for an excessive amount of beds for their policy objectives. In some cases, that's over 100,000 beds. Right now, we have about 8,000 beds available. That includes the 6,000 that are associated with the West Texas assets. We are fully focused on reactivating those and remarketing those, not only for the government, but for other purposes as well, certainly focused on and very well aware of the government's need for additional beds. We also have other means to procure additional beds if needed, if that is what is required to take advantage of these opportunities. Thanks. Appreciate all that follow on color. In addition to government contracts, Target's announced a workforce hub contract with Lithium Americas Corp, you referenced it a few times. It's expected to generate $140 million of revenue through 2027 and estimated, I think, $68 million in 2025. That's predominantly construction- related. If you could outline the attributes of the contract, and what I'm getting at here is more of the future potential of it, maybe a rehash of what the current structure is, but what the opportunity is here for the long term. Thanks. Yep. The current structure is, as you said, $140 million with an initial contract term through 2027. $65 million of that is related to construction, which we expect to complete this year. The margin on the construction, we expect to be somewhere in the area of, we'll call it 25%-30%. There is an operational component where we will operate the facility once completed and provide our traditional suite of hospitality services, which include catering and food services, as well as facilities management and the basic amenities that are at our other facilities, in managing that. The margin on that profile will be somewhat similar to our HFS South segment, right around 30% or so. This project, again, that's an initial term through 2027 for what they call phase I. This Thacker Pass project can go all the way through 2040. We are well- positioned in that area to service the needs of those workers through that time period. We think that is a great opportunity for us. We also did spend some CapEx earlier this year to expand our capacity there, about $15-$20 million in Q1, as announced earlier this year. That is already being utilized as well by current construction workers. Our strategy there was to build out some excess capacity during the construction phase, as well as post-construction phase for others that want to go into that area and participate in the project. Excellent. Thanks. Let's talk now about some opportunities outside. We've discussed a lot of the cross-border- related opportunities. Of course, just covered Nevada. What are some other opportunities and potential magnitude and timing? I know you have an active and sizable pipeline. I know you can't say everything about it, but just if you can give us a sense about some things that are out there and the nature of what you look at, just with a bit of anonymity. Yep. Workforce housing for things like technology and data center buildouts are things that we are focused in on. We see those as potentially some immediate-term opportunities that we're working towards. I will say that a lot of these opportunities do have long lead times, right? It's not something that we just started looking into. It's something that we've been focused on for quite a while. To give you an idea of the lead times, the LAC announcement there was probably three or four years in the making, or so. We've been looking at these things for quite a while. We see these things do pick up a lot of steam recently. We're really focused on, I would say, more imminently kind of data centers and technology buildouts, and providing workforce housing for the construction of those facilities. In terms of the magnitude of those opportunities, what they could look like, we're seeing opportunities anywhere from a few hundred beds to 1,000. In terms of the terms on those, we're seeing terms anywhere between three and four years and a ramp-up period. It may start out at a few hundred beds and then expand from there over time. Those are some of the other opportunities we are focused in on, I would say, in parallel to the government opportunities. Obviously, leaning into the government opportunities pretty heavily because we see a lot. We've never seen this much government activity for us in quite some time. That is not the only thing we're focused in on. Thanks. Target was originally best known for its remote accommodations for oil workers, particularly in the Permian Basin in West Texas. If you could provide an update on this business and how you anticipate it performs over the next few years, maybe drivers, what's intake of activity levels you expect there. Thanks. Yeah, absolutely. Great question. We view the HFS segment as a relatively mature business. As I said, we've had customers in that segment for more than a decade. It is underpinned by some multi-year contracts with such customers that are multinational that have been with us for a while. The operational activity on that has been pretty stable because it is a pretty mature business, and that is how we expect it to continue to trend. I would say utilization trends are slightly up from last year. They sort of have continued to increase incrementally since, I would say, the downturn that we experienced back in 2020, as many folks had experienced in that sector with the oil and gas price volatility and COVID-19. I would say it is a relatively mature, steady business that we continue to count on. It does have long-term contracts, pretty stable customer base. It's kind of easy to predict the cash flows on that because of those attributes. Next. Let's talk next about some new hires in the company and then maybe some objectives of Target's leadership team over the coming few years, including what we might see with the executive branch. Thanks. Yeah, sure. We're really focused on growing the business, obviously, organically and inorganically, and the objective there being not only just to grow it, but to diversify it and to broaden the customer base. We've had two major contract announcements this year, one of which does do that, which is the Lithium contract. We're going to continue to focus in on organic growth. The hires that we have hired and announced help facilitate that, particularly in the government segment. Inorganic growth is still in our line of sight. I would say it's not the immediate focus at this point in time, but we do continue to look at opportunities that could be very accretive to the company. We think it's a quick way to accelerate that objective of diversifying the business. We did hire up in the M&A area. I would say, in terms of the leadership team, including the CEO, all of our employment agreements go through 2027. We obviously announced special awards that go through 2028. We are really focused on growing the business primarily organically at the moment. We are leaning into getting those assets reactivated, as I mentioned earlier, with the West Texas assets and the other excess assets that we have available, and then focusing on those other sectors I mentioned, including technology and data centers to grow. We are also looking at inorganic opportunities as well. That continues to be part of the strategy to grow and diversify the business. The other thing is, as announced earlier, we obviously deleveraged our balance sheet pretty significantly. We think that positions us quite well to be as flexible as we can to take advantage of those growth opportunities. That's what the new hires are focused in on, both growing the government segment, looking at M&A, but the entire management team is on board to focus on growing and diversifying the business. Excellent. Thanks. Yeah, you touched on the balance sheet a little bit there, and that's where I'm going with my next question. Before I go there, just everyone in the audience, we do have a few questions in queue. I'm about to wrap up the formal fireside chat part. We'll go into your questions, but just a few minutes left in the session. If you have anything else to ask, please get it in the system now. Jason, last one from me. Target's free cash flow generation is really solid. Please provide perspective on the company's CapEx profile and outlook for free cash flow. Also, please discuss the condition of the balance sheet and your capital allocation priorities. Thanks. Yeah, absolutely. We continue to expect to be free cash flow positive. Our CapEx for 2025 is probably going to be slightly below last year. Last year, we spent about $32.5 million of CapEx. I would say $20-$30 million is a good gauge. As I mentioned earlier, we already spent $15-$20 million earlier this year to grow that new segment in Winnemucca, Nevada, and expand our workforce hub capabilities there. That is more growth CapEx. The rest of it is expected to be pretty minimal maintenance CapEx type stuff, which is historically pretty low to maintain our assets. I will say that if an opportunity does arise that we think is worth investing in, then we could end up spending more. Obviously, it's going to be for the right opportunity that's going to grow the company and add pretty accretively to our adjusted EBITDA number for the year. That's kind of how we see free cash flow staying positive. CapEx will be slightly below what we spent last year, I would say $20-$30 million. On the balance sheet side, we completely paid off our senior notes, which were originated when we went public in March of 2019, had an original balance of $340 million, completely paid those off at the end of March. We're virtually debt-free. We do have an ABL facility that has a capacity of $175 million. The termination date on that is February of 2028. We would anticipate a balance of between $40 million and $50 million or so just to deal with general working capital requirements this year, particularly as we navigate through the construction phase of the Lithium Americas contract and have to meet certain milestones in order to get the reimbursements, etc. That is kind of how we view the balance sheet. It has never looked better, honestly, since we went public. Thanks. Let's go to the questions in the queue. I want to get to those with enough time. Sure. All right. First one's pretty straightforward and probably brief. There was an opportunity via the Keystone pipeline in the past. It didn't progress under the Biden administration. Is there an opportunity under the current administration? We're not completely ruling it out, but we're not seeing that at the moment. We're really focused on, under the current administration, we're focused on the immigration policy objectives that they have. Thanks. Is Target exploring any opportunities to establish facilities on military bases in support of immigration enforcement? If so, can you share anything about the economics or even just the size feasibility of the overall opportunity? Yeah, I would say we've got a lot of irons in the fire and many opportunities that service the administration's policy objectives, including those that are embedded in the question. There is a range of opportunities that we're looking at, and those are also part of that opportunity set. That's also part of our objective of reactivating those 8,000 beds. Is CoreCivic your most likely partner for future ICE opportunities? Yeah, I would say CoreCivic's been a great partner since 2014. They have a long-standing, I believe, 40-year relationship with ICE. They're definitely a strong partner for us on these opportunities. I would say not the only one. We're certainly flexible in that regard, where we're positioned as a subcontractor. Typically, we partner up with prime contractors, CoreCivic not being the only one, but certainly a great partner. Thanks. I'm going to go a little out of order because I have one. Similarly, you had another, not named names, but you had a nonprofit partner in West Texas. Is that someone that you're likely to partner with again, or was that more based on paraphrasing here on the prior opportunity, and not so much going forward? Yeah, I believe it's the latter. It was more attached to the prior opportunity and not so much the ones that we're looking at right now. Thanks. I do this one. We were discussing earlier, Jason, about opportunities in other areas. Would you be willing to do M&A to go into other areas beyond just doing organic activities? Yeah, absolutely. I mean, we continue to look at inorganic opportunities via M&A in the background. Our priority right now is organic, but we continue to look at that and certainly not rule that out. If the right opportunity comes along and it makes sense, we'll act on it. Thanks. All right. I think we're getting close on time. I just have one last one. Unless anything else enters the queue, Jason, this is going to be our last one. Please compare and contrast gross margin profiles or EBITDA profiles of your different segments, and how much fluctuation do you anticipate in them? Our two main reportable segments with respect to HFS South, our average gross margin there has been 30%. That is kind of how I would think about that going forward as well. On the government side, typically because of the contract structures and the fixed minimum amounts and the fact that we have to basically dedicate a handful of beds to that contract for that term, it generally has a higher margin profile. A lot of those are, I would say, in excess of 40%, some even higher than that over the years. It will depend on occupancy because those fixed minimum committed amounts, if you have a time where you have a low occupancy level, that is going to drive up the margin. That is why the government side tends to be a higher margin profile than the HFS side. On the new LAC contract, I think I talked a little bit about that, but the construction services piece, which is expected to be completed this year by Q4, I would say it has an estimated margin of between 25%-30%. The operational portion of that is more along the lines of HFS South, right around 30%. Thanks. One last question just snuck in. Let me just give it a look first. Okay. Yeah, one more, Jason. We have a couple of minutes left. I think we'll take this as our last one, everyone. If ICE takes the West Texas facility, will the economics be similar to the prior contract in that location? Yeah, I would say the best, there's a lot of variables there, but the best proxy we have to that is the Dilley contract. I would say if you're trying to model it out and what it might look like, I would say look at the Dilley contract. The Dilley contract, the new one we just reactivated under, which is a five-year lease and services agreement, has a revenue stream of around $50-$55 million on 2,400 beds and a profit margin of between 40%-50%. I would say that's the best proxy for the West Texas assets reactivation at this point in time. Thanks. Appreciate it. Good questions, audience. Thanks for your attention. Jason, great job. I think we all learned a little bit there. It was very helpful. Great overview, great answers. With that, we're going to wrap it up. Sounds great. Thanks, everybody. Appreciate it.