Page 1

Telos Telos Corporation Announces Third Quarter Results : Delivers 48 % Reported Sales Growth , 80 % Adjusted Sales Growth , Record Gross Profit and $ 12.5 Million of Cash Flow November 15 , 2021 • Delivers Revenues of $ 70.1 Million ; Up 48 % Reported ; Up 80 % Excluding Contract with U.S. Census Bureau ; Driven by Xacta Solutions , Telos ID and Secure Networks • Increases Gross Profit 57 % to a Record $ 26.1 Million ; Expands Gross Margin 229 Basis Points to 37 % , Driven by Every Line of Business • Generates $ 12.5 Million of Cash Flow from Operations and $ 9.4 Million of Free Cash Flow ● Updates Guidance with Sales of $ 240 Million - $ 245 Million and Adjusted EBITDA of $ 18 Million - $ 19 Million ASHBURN , Va . , Nov. 15 , 2021 ( GLOBE NEWSWIRE ) -- Telos® Corporation ( NASDAQ : TLS ) , a leading provider of cyber , cloud and enterprise security solutions for the world's most security - conscious organizations , today announced financial results for the third quarter 2021 . " We saw strong third - quarter results , as we delivered 48 % reported sales growth , 80 % adjusted sales growth , and increased gross profit 57 % to a record $ 26.1 million , " said John B. Wood , CEO and chairman , Telos . " Additionally , we expanded gross margin 229 basis points to 37 % , generated $ 12.5 million of positive cash flow from operations and continued to win and retain meaningful contracts . I am pleased with our performance this quarter . " Third Quarter 2021 Financial Highlights ( in millions , except per share data ) Revenue 1 Gross Profit Gross Margin GAAP Net Income ( Loss ) Adjusted Net Income ( Loss ) 2 , 3 Enterprise EBITDA² Adjusted EBITDA² , 3 GAAP Net Loss per Share Attributable to Telos Corporation , Diluted Adjusted EPS 2,3 Weighted - average Shares of Common Stock Outstanding , Diluted Cash Flow from Operations Free Cash Flow 2 1 3Q 2021 $ 70.1 $ 26.1 37.2 % $ ( 5.4 ) $ 6.8 $ ( 3.8 ) $ 8.4 $ ( 0.08 ) $ 0.10 66.8 $ 12.5 $ 9.4 3Q 2020 $ 47.4 $ 16.6 34.9 % $ 2.5 $ ( 0.2 ) $ 5.8 $ 5.8 $ ( 0.01 ) $ ( 0.01 ) 39.0 $ 11.1 $ 8.5 Includes $ 1.6 million of revenue from the contract with the U.S. Census Bureau in Q3 2021 and $ 9.4 million in Q3 2020. Excluding this contract , year - over - year growth is 80 % . 2 Adjusted EBITDA , Enterprise EBITDA , Adjusted Net Income ( Loss ) , Adjusted EPS and Free Cash Flow are non - GAAP financial measures . Refer to " Non - GAAP Financial Measures " below . 3 After adjustment for stock compensation expense of $ 12.2 million in the third quarter 2021 and de minimis in the third quarter 2020 . Selected Third Quarter and Recent 2021 Business Highlights : New Business Activities • Telos continued to bring on new airlines within the Designated Aviation Channeling business , adding three additional airlines in the third quarter and receiving option - year extensions from current airport customers . The most notable expansion within the practice is the United Parcel Service ( UPS ) announcing its full use of Telos services for cargo security - threat assessments and criminal history record checks later this year . • The Federal government requested expanded services from Telos ' Security Solutions and Secure Networks groups in support of a confidential healthcare program . • A customer since 1995 , the Defense Manpower Data Center ( DMDC ) , awarded Telos option - year three through mid - September 2022. The IDTrust360® solution supports the U.S. Department of Defense ( DoD ) within its security and common access card programs ; as part of the DMDC award , Telos received over $ 22 million in orders in the third quarter . • A special customer utilizing Telos Ghost® for an intelligence support solution executed an option year .