Target Hospitality (TH) Oppenheimer 20th Annual Industrial Growth Conference summary

Business overview and segment structure

• Provides turnkey construction and hospitality services, specializing in mobile modular units for remote locations.

• Operates three segments: Hospitality and Facility Services (HFS), Government, and the new Workforce Hospitality Solutions.

• HFS serves energy and market customers, mainly in West Texas, New Mexico, North Dakota, and Canada.

• Government segment focuses on immigration-related contracts, with a history of long-term partnerships.

• Workforce Hospitality Solutions launched with a major contract for a lithium mining project in Nevada.

Contract structures and revenue visibility

• HFS contracts are multi-year master service agreements with high renewal rates and some exclusivity provisions.

• Government contracts feature fixed minimum revenue commitments, providing strong cash flow visibility.

• The new lithium contract is valued at $140 million through 2027, with a significant construction component.

• Operational revenues from the lithium project are expected to exceed minimum commitments.

Government segment dynamics and asset utilization

• Dilley facility (2,400 beds) operated from 2014–2024, reactivated in March 2024 for ICE needs.

• Pecos Children's Center expanded from 4,000 to 6,000 beds (2021–2022), serving unaccompanied minors until early 2024.

• Assets from terminated contracts are being actively marketed for reactivation, with high government interest.

• Currently, 8,000 beds are available for government or other uses, with flexibility to add more if needed.