Target Hospitality Corp. (NASDAQ:TH) Q4 2023 Earnings Call Transcript

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Greg Gibas: And curious, it seems like that kind of maybe potentially drove some of the upside in Q4, the variable piece. And curious if you could saw that kind of continue into early 2024? And maybe what you’re — I mean is it fair to kind of assume a midpoint of that guidance range, just given what we’re seeing on the variable side thus far?

Jason Vlacich: So in Q4, I think you’re referring maybe to the outperformance, which is primarily driven by cost efficiencies that we realized ahead of what we anticipated. So that was sort of a function of us switching over to the new contracts, some population fluctuations at the community, and we just realized our operational efficiencies ahead of schedule. And so we don’t necessarily expect that to continue into 2024. But again, in 2025 minimal variable revenue contribution considered there, and it’s more heavily weighted towards the fixed minimum revenue contracted component of the contract.

Mark Schuck: Yes. Greg, this is Mark. Just to add on to what Jason said. Like we did capture some of the very minimal variable revenue that is embedded in the 2024 outlook so far in 2024 to look certainly gets back to what Jason was describing as a very small amount to consider their as it relates to the full year outlook. Look, specifically to your question around kind of where to be with that range. Yes, look, the midpoint is fine there. But I think, importantly, just staying within that range is where we feel comfortable and certainly was the basis for us reiterating that today and then this morning in the release.

Greg Gibas: Great. Yes, I appreciate the color there. And really nice to hear that that pipeline is improving on the organic growth initiative side. And it seems like there’s kind of a range of opportunities. I wanted to get a sense of that timing there, right? I mean, it seems like the third ICF would be a huge opportunity that’s closer to the back half of 2024. But I’m guessing there are some smaller opportunities that you may have been evaluating for a while or — any sense on when those types of contracts could be announced?

Brad Archer: Yes. It’s just too hard to put a time frame on it at this point. There’s definitely some look, everything goes right, that could happen in 2024, but I don’t want to put a time frame on it at this point.

Operator: There are no further questions at this time. I’d now like to turn the call back over to Mr. Archer for final closing comments.

Brad Archer: Sure. I want to thank you all for joining the call today. Have a great day, and we look forward to speaking again in May when we deliver our numbers for the first quarter. Thank you.

Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.

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