Target Hospitality Corp. received notice that the U.S. government intends to terminate the existing Pecos Children's Center (PCC) services agreement with its nonprofit partner. The termination is effective immediately, or on or about February 21, 2025. This contract previously involved Target providing facility and hospitality solutions for up to 6,000 individuals.
The PCC Contract, which was a significant revenue source, could be terminated for convenience by the nonprofit partner. Following this notice, Target Hospitality announced it is withdrawing its previously issued preliminary 2025 financial outlook. This creates immediate uncertainty regarding the company's financial projections for the upcoming year.
Target Hospitality will retain ownership of the modular assets and real property associated with the PCC. The company is actively engaged in re-marketing these assets, along with other existing modular solutions, to support customer demand across its operating segments and other potential growth opportunities, including those related to U.S. government immigration policies.
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