Telos Corporation · NASDAQ:TLS
Telos — Investor Presentation (April 2021)
31 slides from Telos's investor presentation, Apr 7, 2021
Slide 1: Investor Presentation April 2021
Investor Presentation April 2021
Slide 2: Disclaimer and forward-looking statements
2 The information contained in this presentation does not constitute or form part of, and should not be construed as, any offer or sale or subscription of, or any invitation to offer, buy or subscribe for, any securities, nor shall there be any offer, solicitation or sale in any jurisdiction in whic
Slide 3: Senior Management Team
John Wood(President, CEO, and Chairman) Joined Telos as EVP and COO in 1992; named President and CEO in 1994 Formerly worked in finance for Dean Witter Reynolds, and UBS Securities Michele Nakazawa(EVP and CFO) Joined Company in 2004 as VP and Controller; named CFO in 2005Former experience includes
Slide 4: Update and Highlights 4Q 2020 and FY 2020 Earnings
4 Update and Highlights 4Q 2020 and FY 2020 Earnings4Q 2020 – Revenue of $44.9MM; AEBITDA (loss) of ($2.6MM)FY 2020 – Revenue of $179.9MM; AEBITDA of $11.4MM1FBI — $13.5MM contract for XactaPHL — Background check renewal for Telos IDSSA — Option renewal for XactaOmnilert — Telos GhostJohnson Control
Slide 5: Premier Provider of Software-based Solutions for Security Conscious Customers
1) Based on Telos management estimates 5 Based on Telos management estimates Premier Provider of Software-based Solutions for the World’s Most Security Conscious Customers Telos Security Solutions consistently deliver more efficient, more effective, and more secure operating environments Endorsed by
Slide 6: Telos Snapshot
Note: Reflects fiscal year ended December 31Based on Telos management estimatesApproximate recurring revenue for each of the last three years2021 Guidance represents midpoint of management range of $283-$295MM Revenue ($MM) $180 $289 350+ Customers Revenue Profile85% recurring250% sole source / limi
Slide 7: Unique Solution Set Addressing Urgent Customer Needs
7 81% of 2020 Gross Profit 19% of 2020 Gross Profit Unique Solution Set Addressing Urgent Customer Needs SecuritySolutions SecureNetworks AMHS Governance risk and compliance solution that facilitates cloud migrationMis-attribution obfuscation solution that protects user information and locationTrust
Slide 8: Telos is at the Forefront of Security Solution Development
8 Telos is at the Forefront of Security Solution Development 1994 Common Access Card (“CAC”) Largest biometric application in the government 2016 Xacta partnership with Amazon Web Services to provide cloud solution to the CIA 2018 Telos Ghost launched to shield communications, transactions, and netw
Slide 9: Customer and partner logos
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Slide 10: Land and Expand
Land and Expand The Sixteenth Air Force expanded their license from Top Secret to now include SecretThe U.S. Social Security Administration upgraded to an enterprise-wide license, and as we recently announced, they also exercised the first option year of this contractThe U.S. Department of Energy’s
Slide 11: Demand for Telos' Security Solutions Has Never Been Greater
11 4.1B Exposed records from data breaches in 1H19 $8.6MM Average cost of data breach in U.S. as of 2019 954K Average web attacks blocked per day 280 Average days to identify & contain a breach Sources: Comparitech, Symantec Internet Security Threat Report 2019, Cyber Risk Analytics 2019 MidYear Dat
Slide 12: Investing in Sales and Marketing
Investing in Sales and Marketing New Hires and Industry Leading Experience Foundations of the Channel 12 Security Solutions Security Solutions
Slide 13: Industry-Leading Cyber Risk & Compliance Management
13 Xacta accounts for common, shared, and customer specific controls On-premises Hybrid Cloud / Multi Cloud Operationalizes complex frameworks and required reporting Compliance Data Sharing Continuous Monitoring GRC Workflow Automates security compliance activities through inheritance & control mapp
Slide 14: Reduced Onboarding Time, Continuous Monitoring Drive Customer Adoption
14 Reduced Onboarding Time, Continuous Monitoring, and “Referenceability” Drive Customer Adoption Commercial SaaSCompanies U.S. Governmental Agencies C2S/CIA Secure Networks Security Solutions Security Solutions
Slide 15: AWS and Microsoft Azure Partnerships
15 Sources: Gartner, RightScale Worldwide Public Cloud Service Revenue$ in Billions Public Cloud Adoption% of All Respondents 14% CAGR Rick Trinidad, Worldwide Public Sector, AWS “With Xacta’s…inheritance and provider project features and capabilities, AWS expects a dramatic increase in efficiencies
Slide 16: Inheritance Creates Channel Partnerships to Drive Incremental Revenue
Prospective & Pending Current Cloud customers and partners use Xacta to automatically inherit common compliance data Automated inheritance accelerates cloud adoption and creates incremental demand for Xacta solution Cloud infrastructure owners share control information with partners and customers vi
Slide 17: Reduce Attack Surface, Hide Digital Exhaust & Disguise Identity
Encrypted communications, storage and applications Private Network Access Private Web Access Cloaked Services Secure, private network in the cloud Anonymous worldwide internet access 17 Reduce Attack Surface, Hide Digital Exhaust & Disguise Identity You can’t attack what you can’t see Security Solut
Slide 18: Advancing Capabilities & Proven Validation Driving New Customer Wins
Based on Telos management estimates derived from customer / sponsor contract assumptions FBIFingerprint Capture SaaS biometric web capture Pre-employment screeningIdentity vetting TSA - AirportsEmployee Vetting Continuous monitoring of airport employees – Security Threat AssessmentFingerprint captur
Slide 19: IDTrust360
Affiliated Service Providers Fully integrated suite of Telos ID and commercial services for identity verification, enrollment, fingerprinting, insider threat management, biometric matching, and personnel security IDTrust360 has direct interfaces to: The FBI's criminal recordsDHS's terrorist watch li
Slide 20: Secure Mobility and Network Management / Defense
Productivity — Mobile / remote accessCoverage — Seamless roaming between Wi-Fi and cellular on any device, anywhereCost Savings — Single integrated enterprise mobility management solutionEfficiency — Simplify the process of updating devices with the most recent version of apps and contentSecurity —
Slide 21: Financial Highlights & Objectives
Financial Highlights & Objectives 21
Slide 22: Key New Contract Wins and Financial Results
TSA PreCheck – $1.7B+1 total 10-year contract potentialCMS – $2.0B2 total 10-year contract potentialU.S. Govt Ghost Customer – $39MM1 with significant upside with program of recordSecurity Solutions / Secure Networks – $34MM new one year contract Key New Contract Wins Note: Reflects fiscal year ende
Slide 23: Pro Forma Capitalization
Assets Current1 Pro Forma Cash $106.0 $128.9 Finance Lease Obligations 15.6 15.6 Total Debt $15.6 $15.6 Common Stock2 $2,138.4 $2,173.4 Total Debt and Equity $2,154.1 $2,189.0 ($in MM) 23 Pro Forma Capitalization As of 12/31/2020Reflects basic shares outstanding. Share price as of 3/24/2021.
Slide 24: Growth Strategies
Grow revenue & expand margins by building robust sales channels Target & replace inefficient legacy products withinorganizations Leverage diverse Security Solutions to expand commercial market presence Extend Security Solutions platform & ecosystem to capitalize on massive scalability Broaden existi
Slide 25: Long-Term Aspirational Goals
Revenue $1B Gross Margin 50% Adj. EBITDA Margin 30% Free Cash Flow $150MM 25 This is a forward-looking statement. Please refer to forward-looking statement disclaimer on page 2. Long-Term Aspirational Goals1
Slide 26: Investment Highlights
1) Based on Telos management estimates Telos Security Solutions consistently deliver more efficient, more effective, and more secure operating environments Endorsed by marquee intelligence community customers with growing commercial market penetration Large and fast growing total addressable market
Slide 27: Appendix
Appendix Telos
Slide 28: Historical Income Statement
28 Historical Income Statement ($ in thousands) FY 2019 FY 2020 Revenue $159,218 $179,917 Costs and Expenses Cost of Sales 106,874 117,497 Selling, General & Administrative Expenses 47,319 62,123 Operating Income $5,025 $297 Other Income (Expenses) Gain on redemption of public preferred stock – 14,0
Slide 29: Adjusted EBITDA Reconciliation
29 Adjusted EBITDA Reconciliation ($ in thousands) FY 2019 FY 2020 Net income (loss) attributable to Telos Corporation ($6,401) $1,687 Non-controlling interest 4,264 5,154 Non-operating income (201) (20) Interest Expense 7,467 7,259 (Benefit) provision for income taxes (104) (46) Depreciation and am
Slide 30: Customer Need / Pain Point and Telos Solution
Customer Need / Pain Point Telos Solution Solution Capabilities Time, cost, effort of cyber risk and compliance managementCompliance as an obstacle to cloud adoptionAudit fatigue – many standards Automated cyber risk management workflowInheritance and control mappingAutomated continuous monitoring M
Slide 31: Telos: Solutions that empower and protect the enterprise
«Telos Solutions that empower and protect the enterprise.” 31