THE
WOODLANDS, Texas, March 6,
2025 /PRNewswire/ -- Target Hospitality Corp.
("Target Hospitality", "Target" or the "Company") (Nasdaq: TH), one
of North America's largest
providers of vertically integrated modular accommodations and
value-added hospitality services, today announced it has
entered into a five-year lease and services agreement with
CoreCivic, Inc. ("CoreCivic") to resume operations utilizing the
Company's existing assets located in Dilley, Texas ("Dilley Contract").
These assets operated from September
2014 to August 2024 as the
South Texas Family Residential Center ("Dilley Facility"), where Target provided
facility and hospitality solutions to CoreCivic through a lease and
services agreement. Upon reactivation the Dilley Facility will
retain a similar facility size and operational scope as the prior
operations.
The Dilley Facility will be capable of supporting up to 2,400
individuals and provide an open and safe environment to
appropriately care for the community population. The consistency of
the community layout will require no capital investment, allowing
for a seamless community reactivation.
Target will provide facility and hospitality solutions to
CoreCivic under the Dilley Contract, which has a similar economic
structure to the Company's previous agreement with CoreCivic,
including fixed minimum revenue regardless of occupancy. The Dilley
Contract is expected to provide over $246
million of revenue over its anticipated five-year term, to
March 2030. Target anticipates
approximately $30 million of revenue
will be realized in 2025.
The seamless reactivation of this community illustrates the
benefits of Target's flexible operating model and unique
capabilities. These elements consistently support the Company's
ability to appropriately respond to customer demand, while
providing unmatched customized solutions. Target believes these
distinct core competencies form a strong foundation as the Company
continues evaluating additional growth opportunities supporting the
U.S government's immigration policies, as well as a strong pipeline
of other diversifying growth initiatives.
"We are excited to continue our partnership with CoreCivic,
leveraging the unique strengths of both organizations to support
the U.S. government's policy initiatives. The reactivation of this
community illustrates the strategic importance of these assets and
Target's proven ability in providing these critical services and
hospitality solutions. We are well positioned, and encouraged, as
we continue pursuing other potential opportunities supporting the
U.S. government," stated Brad
Archer, President and Chief Executive Officer.
The Dilley Contract is supported by an amended intergovernmental
services agreement ("IGSA") between the city of Dilley, Texas and U.S. Immigration and Customs
Enforcement ("ICE"). As is customary for U.S. government contract
and subcontracts, the IGSA and the Dilley Contract are subject to
annual U.S. government appropriations and can be canceled for
convenience with 60-day's prior notice.
About Target Hospitality
Target Hospitality is one of North
America's largest providers of vertically integrated modular
accommodations and value-added hospitality services in the United States. Target builds, owns and
operates a customized and growing network of communities for a
range of end users through a full suite of value-added solutions
including premium food service management, concierge, laundry,
logistics, security and recreational facilities services.
Cautionary Statement Regarding Forward Looking
Statements
Certain statements made in this press release (including the
financial outlook contained herein) are "forward looking
statements" within the meaning of the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words "estimates,"
"projected," "expects," "anticipates," "forecasts," "plans,"
"intends," "believes," "seeks," "may," "will," "should," "future,"
"propose" and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or
results, and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside our control, that could cause actual results or
outcomes to differ materially from those discussed in the
forward-looking statements. Important factors, among others, that
may affect actual results or outcomes include: operational,
economic, including inflation, political and regulatory risks; our
ability to effectively compete in the specialty rental
accommodations and hospitality services industry, including growing
the HFS – South and Government segments; effective management of
our communities; natural disasters and other business disruptions,
including outbreaks of epidemic or pandemic disease; the duration
of any future public health crisis, related economic repercussions
and the resulting negative impact to global economic demand; the
effect of changes in state building codes on marketing our
buildings; changes in demand within a number of key industry
end-markets and geographic regions; changes in end-market demand
requirements that could lead to cancelation of contracts for
convenience in the Government segment; our reliance on third party
manufacturers and suppliers; failure to retain key personnel;
increases in raw material and labor costs; the effect of impairment
charges on our operating results; our future operating results
fluctuating, failing to match performance or to meet expectations;
our exposure to various possible claims and the potential
inadequacy of our insurance; unanticipated changes in our tax
obligations; our obligations under various laws and regulations;
the effect of litigation, judgments, orders, regulatory or customer
bankruptcy proceedings on our business; our ability to successfully
acquire and integrate new operations; global or local economic and
political movements, including any changes in policy under the
Trump administration or any future administration; federal
government budgeting and appropriations; our ability to effectively
manage our credit risk, liquidity and collect on our accounts
receivable; our ability to fulfill Target Hospitality's public
company obligations; any failure of our management information
systems; our ability to refinance debt on favorable terms and meet
our debt service requirements and obligations; and risks related to
our outstanding debt obligations. We undertake no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Investor Contact
Mark
Schuck
(832) 702 – 8009
ir@targethospitality.com
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SOURCE Target Hospitality
