Telos Corp (TLS) 2022 Q4 法說會逐字稿

Good day and thank you for standing by. Welcome to the Telos Corporation Fourth Quarter and Full Year 2021 Financial Results Conference Call. (Operator Instructions) Please be advised today's conference is being recorded.

美好的一天，謝謝你的支持。歡迎參加 Telos Corporation 第四季度和 2021 年全年財務業績電話會議。 （操作員說明）請注意今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, [Allison Philip.] Please go ahead.

我現在想把會議交給今天的發言人，[Allison Philip。]請繼續。

Good morning. Thank you for joining us to discuss Telos Corporation's Fourth Quarter and Full Year 2022 financial results. With me today is John Wood, Chairman and CEO of Telos, and Mark Bendza, Executive Vice President and CFO of Telos. Let me quickly review the format of today's presentation. John will begin with brief remarks on our 2022 year-end results and recent additions to our senior leadership team. Then Mark will cover the financials and guidance for 2023 before turning it back to John for an overview of our growth strategy and priorities. Then we'll open the line for Q&A or Mark Griffin, Executive Vice President of Security Solutions will also join us.

早上好。感謝您加入我們討論 Telos Corporation 的第四季度和 2022 年全年財務業績。今天和我一起的有 Telos 董事長兼首席執行官 John Wood 和 Telos 執行副總裁兼首席財務官 Mark Bendza。讓我快速回顧一下今天演講的形式。約翰首先將簡要介紹我們 2022 年的年終業績以及我們高級領導團隊的最新成員。然後 Mark 將介紹 2023 年的財務和指導，然後將其轉回給 John 以概述我們的增長戰略和優先事項。然後我們將打開問答熱線，否則安全解決方案執行副總裁 Mark Griffin 也將加入我們的行列。

The earnings press release was issued earlier today and is posted on the Telos Investor Relations website, where this call is being simultaneously webcast. Additionally, we have provided presentation slides on our Investor Relations website.

收益新聞稿於今天早些時候發布，並發佈在 Telos 投資者關係網站上，該電話會議正在該網站上同步進行網絡直播。此外，我們還在投資者關係網站上提供了演示幻燈片。

Before we begin, we want to emphasize that some of our statements on this call are forward-looking statements and are made under the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ for various reasons, including the factors described in today's press release, in the comments made during this conference call and in our SEC filings. We do not undertake any duty to update any forward-looking statements.

在我們開始之前，我們要強調的是，我們在本次電話會議上的一些聲明是前瞻性聲明，是根據聯邦證券法的安全港條款作出的。這些陳述基於受風險和不確定因素影響的當前預期和假設。實際結果可能因各種原因而存在重大差異，包括今天的新聞稿、本次電話會議期間發表的評論以及我們向美國證券交易委員會提交的文件中描述的因素。我們不承擔更新任何前瞻性陳述的義務。

In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental and clarifying measures to help investors understand Telos' financial performance. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and on the Investor Relations portion of the website.

此外，在今天的電話會議中，我們將討論非 GAAP 財務指標，我們認為這些指標有助於作為補充和澄清措施，幫助投資者了解 Telos 的財務業績。這些非 GAAP 財務指標應作為 GAAP 結果的補充，而不是替代或孤立於 GAAP 結果。您可以在我們的收益新聞稿和網站的投資者關係部分找到有關這些非 GAAP 措施的額外披露，包括與可比較的 GAAP 結果的對賬。

Please also note that financial comparisons are year-over-year unless otherwise specified. The webcast replay of this will be available for the next year on our company website under the Investor Relations link.

另請注意，除非另有說明，否則財務比較均為同比。明年將在我們公司網站的“投資者關係”鏈接下提供網絡直播重播。

With that, I'll turn the call over to John.

有了這個，我會把電話轉給約翰。

Thank you, [Allison,] and good morning, everyone. Let's begin today on Slide 3. Before I comment on the fourth quarter, it's important to acknowledge upfront that I'm disappointed with the ongoing poor execution of our long-term growth strategy since our IPO. And as CEO of Telos, I take full responsibility for that.

謝謝，[Allison]，大家早上好。讓我們從今天的幻燈片 3 開始。在我評論第四季度之前，重要的是要預先承認，我對自首次公開募股以來長期增長戰略的持續執行不力感到失望。作為 Telos 的首席執行官，我對此負全部責任。

During today's earnings call, we will provide an update on our expected revenue contraction in 2023 and the actions I'm taking to rebuild and grow our revenue base. Mark will discuss the details of our financial performance later in the call, but at a high level, we delivered $47.3 million of revenue in the fourth quarter and $216.9 million for the year.

在今天的財報電話會議上，我們將提供 2023 年預期收入收縮的最新情況，以及我為重建和擴大收入基礎而採取的行動。馬克將在電話會議稍後討論我們財務業績的細節，但在高層次上，我們在第四季度實現了 4730 萬美元的收入，全年實現了 2.169 億美元的收入。

Our GAAP gross margin expanded 95 basis points to 38.6% in the fourth quarter and expanded 96 basis points to 36.4% for the year. We delivered $5.4 million of adjusted EBITDA and 11.4% adjusted EBITDA margin in the fourth quarter and $19.5 million and a 9% margin for the year. Lastly, we delivered $0.05 of adjusted EPS in the fourth quarter and $0.19 for the year.

我們的 GAAP 毛利率在第四季度擴大了 95 個基點至 38.6%，全年擴大了 96 個基點至 36.4%。我們在第四季度實現了 540 萬美元的調整後 EBITDA 和 11.4% 的調整後 EBITDA 利潤率，全年實現了 1950 萬美元和 9% 的利潤率。最後，我們在第四季度交付了 0.05 美元的調整後每股收益，全年交付了 0.19 美元。

Our fourth quarter results exceeded quarterly expectations for our fifth consecutive quarter. However, our longer-term trajectory continues to underperform my aspirations for Telos. As we previewed on our third quarter earnings call, several factors will weigh heavily on revenues in 2023. Mark will discuss our guidance in detail later on the call, but these factors include the successful completion of large programs, insufficient new business wins in the second half of 2022 to drive revenues in 2023 and significant revenue reductions on some ongoing programs.

我們的第四季度業績連續第五個季度超出季度預期。然而，我們的長期發展軌跡繼續低於我對 Telos 的期望。正如我們在第三季度財報電話會議上預測的那樣，有幾個因素將對 2023 年的收入產生重大影響。馬克稍後將在電話會議上詳細討論我們的指導意見，但這些因素包括大型項目的成功完成、第二季度贏得的新業務不足2022 年的一半，以推動 2023 年的收入，並大幅減少一些正在進行的項目的收入。

2023 will be a transition year for Telos. The Board and I are fully aligned on our immediate priorities, including streamlining our operations and rebuilding and growing our revenue base.

2023 年將是 Telos 的過渡年。董事會和我完全同意我們的當務之急，包括精簡我們的運營以及重建和擴大我們的收入基礎。

Now let's turn to Slide 4. A first step to rebuilding and growing our revenue base is the addition of 2 senior leaders. I'm pleased to announce Josh Salmanson as Senior Vice President of Technology Solutions; and Lee Canterbury as Vice President of Corporate Growth.

現在讓我們轉到幻燈片 4。重建和擴大我們的收入基礎的第一步是增加 2 位高級領導。我很高興地宣布 Josh Salmanson 擔任技術解決方案高級副總裁； Lee Canterbury 擔任企業發展副總裁。

Josh leads our newly established technology solutions organization. In this newly created role, Josh will leverage our existing technology portfolio, to develop innovative solutions that meet our customers' critical and ever-evolving cybersecurity demands. Josh has over 30 years of experience and brings a successful track record of leading technology and solutions development for companies serving commercial and government customers.

Josh 領導我們新成立的技術解決方案組織。在這個新設立的職位上，Josh 將利用我們現有的技術組合開發創新解決方案，以滿足我們客戶不斷變化的關鍵網絡安全需求。 Josh 擁有超過 30 年的經驗，在為商業和政府客戶服務的公司的領先技術和解決方案開發方面有著成功的記錄。

Also new to the team, Lee Canterbury leads the newly consolidated and centralized corporate growth organization. He will oversee all aspects of new business and revenue generation across the company, serving all our business lines within both, security solutions and secure networks. Lee will optimize and continuously improve our business development function to accelerate new business wins and rebuild and grow our revenue base for the future.

Lee Canterbury 也是團隊的新成員，負責領導新整合和集中的企業發展組織。他將監督整個公司新業務和創收的各個方面，為我們在安全解決方案和安全網絡中的所有業務線提供服務。 Lee 將優化並不斷改進我們的業務發展職能，以加速贏得新業務並重建和擴大我們未來的收入基礎。

Lee has over 35 years of experience, successfully managing business development operations for companies serving commercial and government customers. Together, Lee and Josh will leverage the company's portfolio to rebuild and grow our revenue base and put Telos back on the path to sustained growth.

Lee 擁有超過 35 年的經驗，成功地為商業和政府客戶服務的公司管理業務開發運營。 Lee 和 Josh 將共同利用公司的投資組合重建和擴大我們的收入基礎，並使 Telos 重新走上持續增長的道路。

I'll now turn the call over to Mark, who will discuss the fourth quarter and full year 2022 financial results and guidance for the first quarter and full year 2023. Mark?

我現在將電話轉給馬克，他將討論 2022 年第四季度和全年的財務業績以及 2023 年第一季度和全年的指導。馬克？

Thank you, John, and thank you, everyone, for joining us today. Let's turn to Slide 5. As I walk through the details on the fourth quarter, I will underscore the important dynamics that impact 2023 guidance. Some of these dynamics started taking shape in the fourth quarter of 2022 and further solidified in the first quarter of 2023. We previewed some of these themes on the third quarter earnings call in the context of our preliminary 2023 revenue outlook, namely 6 of the largest programs across the portfolio which combined generated nearly $115 million of revenue in 2022 will face significant revenue headwinds in 2023.

謝謝約翰，也謝謝大家今天加入我們。讓我們轉到幻燈片 5。在介紹第四季度的詳細信息時，我將強調影響 2023 年指導的重要動態。其中一些動態在 2022 年第四季度開始形成，並在 2023 年第一季度進一步鞏固。我們在 2023 年初步收入展望的背景下，在第三季度財報電話會議上預覽了其中一些主題，即最大的 6 個主題整個投資組合中的項目在 2022 年合計產生了近 1.15 億美元的收入，但到 2023 年將面臨巨大的收入逆風。

Now let's get into the details, starting with revenues. Fourth quarter revenues declined 26% to $47.3 million. Revenues for our Security Solutions business declined 11% to $30.3 million, primarily due to the final ramp down of the U.S. Census program in the fourth quarter of 2021 and a more than 50% reduction in revenues on the second largest program in Security Solutions due to a lower volume of customer activity on that program, partially offset by higher revenues in information assurance.

現在讓我們進入細節，從收入開始。第四季度收入下降 26% 至 4730 萬美元。我們的安全解決方案業務收入下降 11% 至 3,030 萬美元，這主要是由於 2021 年第四季度美國人口普查計劃的最終下滑以及安全解決方案中第二大計劃的收入減少了 50% 以上，原因是該計劃的客戶活動量減少，部分被信息保障收入增加所抵消。

The 50% reduction in revenues on the second largest program in security solutions reflects the ebbs and flows of customer mission requirements on that program and will persist into 2023 on an annualized basis, creating a large year-over-year headwind. In addition, the largest program in Security Solutions has descoped by approximately 80% since the end of the year, and the third largest program in security solutions has terminated entirely. Neither of these 2 programs had an adverse revenue impact on the fourth quarter, but will create significant revenue headwinds in 2023.

第二大安全解決方案項目的收入減少了 50%，反映了客戶對該項目的任務要求的起伏，並將持續到 2023 年，按年計算，這將造成同比大幅逆風。此外，安全解決方案中最大的項目自年底以來縮減了約 80%，安全解決方案中的第三大項目已完全終止。這兩個項目都沒有對第四季度的收入產生不利影響，但將在 2023 年造成重大的收入阻力。

In total, the 3 largest programs in Security Solutions generated approximately $70 million in revenues in each of 2021 and 2022, and each of them will experience revenue declines of approximately 50% to 100% in 2023. On the third quarter earnings call, we described these programs as large programs that will potentially slow down and/or turn off sometime around the end of 2022 or the first quarter of 2023.

總的來說，安全解決方案中最大的 3 個項目在 2021 年和 2022 年分別產生了大約 7000 萬美元的收入，到 2023 年每個項目的收入都將下降大約 50% 到 100%。在第三季度的財報電話會議上，我們描述了這些程序作為大型程序，可能會在 2022 年底或 2023 年第一季度前後的某個時候放慢速度和/或關閉。

Turning to Secure Networks. Fourth quarter revenues declined 43% to $17.1 million. The decline was driven by 3 of the largest programs in secure networks, all of which are winding down and coming to successful completion. Combined, these 3 programs generated $69 million in revenue in 2021 and $44 million in 2022. We expect these 3 programs to generate single-digit revenues in 2023.

轉向安全網絡。第四季度收入下降 43% 至 1710 萬美元。這一下降是由安全網絡中 3 個最大的項目推動的，所有這些項目都在逐漸結束並即將成功完成。這 3 個項目在 2021 年和 2022 年共創造了 6900 萬美元的收入，在 2022 年創造了 4400 萬美元的收入。我們預計這 3 個項目在 2023 年將產生個位數的收入。

We started highlighting the wind down of these large programs on our fourth quarter earnings call a year ago, and they are wrapping up as expected.

我們在一年前的第四季度財報電話會議上開始強調這些大型項目的結束，它們正在按預期結束。

Now let's discuss profitability. Fourth quarter gross profit declined 24% to $18.3 million due to the decline in revenue partially offset by higher gross margin. Fourth quarter gross margin increased 95 basis points to 38.6%. Gross margin expanded primarily due to a more favorable revenue mix between Security Solutions and Secure Networks. Security Solutions revenues comprised 53% and of total company revenues in 2021 and 64% in 2022.

現在讓我們討論盈利能力。第四季度毛利潤下降 24% 至 1830 萬美元，原因是收入下降部分被較高的毛利率所抵消。第四季度毛利率增長 95 個基點至 38.6%。毛利率的增長主要是由於安全解決方案和安全網絡之間更有利的收入組合。 2021 年和 2022 年，安全解決方案收入分別占公司總收入的 53% 和 64%。

Security Solutions gross margin contracted approximately 650 basis points due to the previously mentioned 50% revenue decline in a large high-margin program. Secure Networks gross margin expanded approximately 250 basis points due to the previously mentioned revenue decline in large lower-margin programs.

由於前面提到的大型高利潤計劃收入下降 50%，安全解決方案的毛利率下降了約 650 個基點。由於前面提到的大型低利潤計劃的收入下降，Secure Networks 的毛利率增長了約 250 個基點。

We delivered $5.4 million of adjusted EBITDA and an 11.4% adjusted EBITDA margin. Adjusted EBITDA excludes the impact of a $2.8 million restructuring charge, resulting from severance and other related benefit costs associated with a reduction in force. In anticipation of lower revenues in 2023, we reduced our employee base by approximately 20% through a series of actions starting in the fourth quarter, including a reduction in force and managed attrition.

我們交付了 540 萬美元的調整後 EBITDA 和 11.4% 的調整後 EBITDA 利潤率。調整後的 EBITDA 不包括 280 萬美元的重組費用的影響，重組費用由遣散費和與裁員相關的其他相關福利成本產生。由於預計 2023 年收入會下降，我們從第四季度開始採取了一系列行動，包括裁員和管理人員流失，將員工人數減少了約 20%。

Personnel counts is lower company-wide including direct staff and indirect staff across all departments as well as among all levels of seniority, including a smaller executive team. We continue to review our cost base and investments and may take additional actions that could result in various forms of restructuring charges as the year progresses.

全公司範圍內的人員數量較低，包括所有部門的直接員工和間接員工以及各級資歷，包括較小的執行團隊。我們將繼續審查我們的成本基礎和投資，並可能採取額外行動，隨著時間的推移可能導致各種形式的重組費用。

Now let's turn to free cash flow and liquidity. Free cash flow for the full year increased from a $5.9 million net outflow in 2021 to an $11.2 million net inflow during 2022 due to strong collections driving lower receivables. We deployed the entirety of our free cash flow to repurchase 1.6 million shares during the year.

現在讓我們轉向自由現金流和流動性。全年的自由現金流量從 2021 年的 590 萬美元淨流出增加到 2022 年的 1120 萬美元淨流入，原因是收款強勁導致應收賬款減少。年內，我們將全部自由現金流用於回購 160 萬股股票。

We ended 2022 with over $119 million of cash on our balance sheet. During the fourth quarter, we also closed on a $30 million senior secured revolving credit facility with an additional $30 million expansion feature. The credit facility remains undrawn, and we currently have no debt. Our balance sheet is well positioned to support the company through a wide range of operating conditions.

到 2022 年底，我們的資產負債表上有超過 1.19 億美元的現金。在第四季度，我們還完成了一項 3000 萬美元的優先擔保循環信貸安排，以及額外的 3000 萬美元擴展功能。信貸額度仍未提取，我們目前沒有債務。我們的資產負債表處於有利地位，可以在各種運營條件下為公司提供支持。

Let's turn to Slide 6 to discuss the revenue bridge from 2022 actual results to our 2023 guidance and the evolution of our outlook since we first provided a preliminary view on our last earnings call 4 months ago. The revenue bridge is primarily comprised of 5 components, including large programs that are coming to successful completion, lower revenues on existing programs and the program loss, partially offset by new programs under contract and potential new business wins.

讓我們轉到幻燈片 6，討論從 2022 年實際結果到我們 2023 年指導的收入橋樑，以及自我們 4 個月前在上一次財報電話會議上首次提供初步觀點以來我們展望的演變。收入橋樑主要由 5 個組成部分組成，包括即將成功完成的大型項目、現有項目的較低收入和項目損失，部分被合同中的新項目和潛在的新業務勝利所抵消。

Let's take each in turn, starting with the successful completion of large programs. We expect approximately a $45 million headwind, primarily from the 3 large programs and secure networks that are coming to successful completion. This assumption has not changed since our third quarter earnings call.

讓我們依次從大型項目的成功完成開始。我們預計會有大約 4500 萬美元的逆風，主要來自即將成功完成的 3 個大型項目和安全網絡。自我們第三季度財報電話會議以來，這一假設沒有改變。

Turning to lower revenues on existing programs. We expect approximately a $45 million headwind on 2 of the largest programs in Security Solutions and 1 of the largest programs in Secure Networks. This assumption is also unchanged since our third quarter earnings call.

轉向降低現有項目的收入。我們預計安全解決方案領域的 2 個最大項目和安全網絡領域最大的項目之一將面臨大約 4500 萬美元的逆風。自我們第三季度財報電話會議以來，這一假設也沒有改變。

Turning to Program Losses. We expect a $10 million revenue headwind from a single program in Security Solutions that terminated at the end of the year. This assumption is consistent with our preliminary outlook.

轉向計劃損失。我們預計在年底終止的安全解決方案中的單個程序將帶來 1000 萬美元的收入逆風。這一假設與我們的初步展望一致。

Next, we expect approximately a $13 million tailwind on new programs that are starting in 2023. This assumption is $10 million lower than previously expected, primarily due to TSA PreCheck. The soft launch of our TSA PreCheck program is well underway, but our nationwide launch has not yet begun. So we have adjusted our revenue assumptions accordingly.

接下來，我們預計 2023 年開始的新項目將獲得大約 1300 萬美元的順風。這一假設比之前的預期低 1000 萬美元，這主要是由於 TSA PreCheck。我們的 TSA PreCheck 計劃的軟啟動正在順利進行，但我們的全國啟動尚未開始。因此，我們相應地調整了我們的收入假設。

Lastly, we're assuming a very modest $2 million tailwind from new business wins. We're only including in our guidance, new programs that we have already won have signed contracts in place and are executing. Our preliminary revenue outlook in November reflected our broader portfolio of pipeline opportunities. But for purposes of setting guidance, we're assuming new business wins in 2023 will primarily occur late in the year with revenue recognition beginning in 2024.

最後，我們假設新業務的勝利帶來非常適度的 200 萬美元的順風。我們只在我們的指導中包括，我們已經贏得的新項目已經簽署了合同並正在執行。我們 11 月份的初步收入展望反映了我們更廣泛的管道機會組合。但出於設定指導的目的，我們假設 2023 年的新業務獲勝將主要發生在今年晚些時候，收入確認從 2024 年開始。

There is potential upside to this assumption, but we feel this is an appropriate assumption to start the year. We can pull additional new business wins into our guidance from our funnel of pipeline opportunities as they occur.

這個假設有潛在的好處，但我們認為這是一個合適的假設來開始今年。我們可以在管道機會漏斗中將更多的新業務贏取到我們的指導中。

Let's turn to Slide 7 for the overall guidance picture. For 2023, we forecast sales in the range of $115 million to $140 million and an adjusted EBITDA loss of $17 million to $27 million. We forecast Security Solutions revenue to decline low 30% to high 40% due to the previously mentioned headwinds on the segment's 3 largest programs partially offset by the initial ramp of TSA PreCheck.

讓我們轉到幻燈片 7 了解總體指導圖片。對於 2023 年，我們預測銷售額在 1.15 億美元至 1.4 億美元之間，調整後的 EBITDA 虧損為 1700 萬至 2700 萬美元。我們預測安全解決方案收入將下降 30% 至 40%，這是由於前面提到的該部門 3 個最大項目的不利因素被 TSA PreCheck 的初始增長部分抵消。

We forecast Secured Networks revenue to decline low to high 40% primarily due to the previously mentioned wind down of large programs as expected. Gross margins are likely to be lower as a result of revenue pressure on higher-margin programs partially offset by slightly better mix of revenues between Security Solutions and Secure Networks at the top end of the guidance range.

我們預測安全網絡收入將下降 40%，這主要是由於前面提到的大型項目如期結束。由於較高利潤計劃的收入壓力部分被處於指導範圍頂端的安全解決方案和安全網絡之間略微更好的收入組合所抵消，因此毛利率可能會降低。

Turning to expenses. Share-based compensation is expected to be lower by approximately $25 million to $30 million, primarily as a result of the final vesting and amortization of substantially all IPO-related grants through the end of 2022. Cash below-the-line expenses, excluding stock-based compensation, restructuring costs and D&A are forecasted to be approximately $4.5 million lower primarily due to $6.5 million of lower labor costs, partially offset by $2 million of higher miscellaneous other costs. This excludes any impact from potential future restructuring costs associated with the ongoing review of our spending and investments as well as our management reserves.

談到開支。基於股份的薪酬預計將減少約 2500 萬至 3000 萬美元，這主要是由於到 2022 年底幾乎所有與 IPO 相關的贈款最終歸屬和攤銷。線下現金支出，不包括股票基於薪酬、重組成本和 D&A 預計將減少約 450 萬美元，這主要是由於 650 萬美元的勞動力成本降低，部分被 200 萬美元的其他雜項成本增加所抵消。這不包括與持續審查我們的支出和投資以及我們的管理儲備相關的潛在未來重組成本的任何影響。

For the purposes of setting guidance, we've included an unallocated management reserve in our below-the-line expenses in the event we have opportunities to make further investments in support of the growth initiatives that John will discuss next. The management reserve ranges from $2 million at the low end of guidance to $7 million at the high end of guidance. Including the management reserve, cash below the line expenses range from $2.5 million lower to $2.5 million higher year-over-year.

出於製定指導的目的，如果我們有機會進行進一步投資以支持約翰接下來將討論的增長計劃，我們會在我們的線下支出中加入未分配的管理儲備。管理儲備從指導低端的 200 萬美元到指導高端的 700 萬美元不等。包括管理準備金在內，線下現金支出同比減少 250 萬美元至增加 250 萬美元不等。

Layering in the impact of depreciation and amortization, net of capitalization of R&D, would add another $1 million to below-the-line expenses. Potential upside opportunities to our overall guidance includes new business wins that could occur earlier than expected and contribute to 2023 revenue potential additional cost actions over the course of the year and nonutilization of the previously mentioned management reserve.

將折舊和攤銷的影響疊加起來，扣除研發資本化後，線下支出將再增加 100 萬美元。我們總體指導的潛在上行機會包括可能比預期更早發生的新業務勝利，並有助於 2023 年收入的潛在額外成本行動，以及不使用前面提到的管理儲備。

Let's turn to Slide 8 to discuss our guidance for the first quarter. For the first quarter, we forecast sales in a range of $30 million to $33 million and an adjusted EBITDA loss of $4.5 million to $6.5 million. We forecast Security Solutions revenues to decline mid-20% to mid-30% and Secured Networks revenues to decline mid-40% to high 40%, both due to the same large program dynamics described for the full year.

讓我們轉到幻燈片 8 來討論我們對第一季度的指導。對於第一季度，我們預測銷售額在 3000 萬至 3300 萬美元之間，調整後的 EBITDA 虧損為 450 萬至 650 萬美元。我們預測安全解決方案收入將下降 20% 到 30% 中期，安全網絡收入將下降 40% 到 40% 高，兩者都是由於全年描述的大型計劃動態相同。

Gross margin is expected to contract by approximately 300 to 400 basis points, primarily due to revenue pressure on high-margin programs partially offset by a more favorable revenue mix between Security Solutions and Secure Networks.

毛利率預計將收縮約 300 至 400 個基點，這主要是由於高利潤計劃的收入壓力部分被安全解決方案和安全網絡之間更有利的收入組合所抵消。

Cash below the line expenses, excluding stock-based compensation, restructuring costs and D&A are forecasted to be approximately $1 million to $2 million lower primarily due to lower labor costs. Layering in the impact of depreciation and amortization, net of capitalization of R&D would deduct approximately $1 million from the cash numbers due to capitalization of R&D being higher than depreciation and amortization.

線下現金支出（不包括基於股票的薪酬、重組成本和 D&A）預計將減少約 100 萬至 200 萬美元，這主要是由於勞動力成本下降。在折舊和攤銷的影響中，由於研發的資本化高於折舊和攤銷，研發的資本化淨額將從現金數字中扣除約 100 萬美元。

With that, I'll pass it back to John, who will discuss 2023 business development priorities and wrap up the presentation. John?

有了這個，我會把它傳回給約翰，他將討論 2023 年的業務發展重點並結束演講。約翰？

Thanks, Mark. Let's move to Slide 9. Our 2023 priorities reflect our sharpened focus on rebuilding and growing our revenue base. We are looking closely at the growth function and implementing performance improvements. To achieve this, in the fourth quarter, we began an internal reorganization that created operations, growth and technology groups to improve our ability to react to the market, and opportunities effectively align our staff and resources for growth and maximize our return on investment across all our teams.

謝謝，馬克。讓我們轉到幻燈片 9。我們 2023 年的優先事項反映了我們更加註重重建和增長我們的收入基礎。我們正在密切關注增長函數並實施性能改進。為實現這一目標，我們在第四季度開始了內部重組，創建了運營、增長和技術團隊，以提高我們對市場和機會的反應能力，有效地調整我們的員工和資源以實現增長，並最大限度地提高我們的投資回報率我們的團隊。

Streamlining operations in this way makes the company more agile and able to focus on developing the right technologies for the right markets at the right time. As Mark previously noted, we have implemented a significant personnel reduction through a series of actions beginning in the fourth quarter to better align our staffing levels with our expected revenues.

以這種方式簡化運營使公司更加敏捷，並能夠專注於在正確的時間為正確的市場開發正確的技術。正如 Mark 先前指出的那樣，我們從第四季度開始通過一系列行動實施了大幅裁員，以更好地使我們的人員配置水平與我們的預期收入保持一致。

At the same time, we've been investing in skilled new talent with deep industry experience who will help us meet our growth targets to include Josh Salmanson and Lee Canterbury, as I previously mentioned. We will continue to invest in top talent to bring new technology [trials] and rigorous execution of our growth strategies.

與此同時，我們一直在投資具有深厚行業經驗的技能型新人才，他們將幫助我們實現增長目標，其中包括我之前提到的 Josh Salmanson 和 Lee Canterbury。我們將繼續投資於頂尖人才，以帶來新技術[試驗]並嚴格執行我們的增長戰略。

The next top priority for 2023 is to maximize our existing strategic partnerships such as IBM for commercial market expansion impact in ROI. We're also working to increase the overall market awareness and positioning of our solutions. And lastly, we are focused on increasing our opportunity portfolio and the quality of contract vehicles we hold.

2023 年的下一個首要任務是最大化我們現有的戰略合作夥伴關係，例如 IBM，以實現商業市場擴張對投資回報率的影響。我們還致力於提高我們解決方案的整體市場知名度和定位。最後，我們專注於增加我們的機會組合和我們持有的合同工具的質量。

My team and I are learning from in addressing short-term issues related to the downturn. We will have renewed discipline around the need for mature account plans and opportunities to drive performance and prioritize quick wins. All of these efforts will help to replenish the pipeline and rebuild and grow our revenue base.

我和我的團隊正在從解決與經濟低迷相關的短期問題中吸取教訓。我們將圍繞需要成熟的客戶計劃和機會來推動績效和優先考慮速贏的問題重新制定紀律。所有這些努力都將有助於補充渠道，重建和擴大我們的收入基礎。

Our mission has remained unchanged. Telos empowers and protects the world's most security-conscious enterprises. We entered 2023 committed to that mission with the recognition that to grow, we must rightsize, prioritize and reorganize in ways that enable us to deliver higher levels of new business wins and growth.

我們的使命沒有改變。 Telos 為世界上最具安全意識的企業提供支持和保護。進入 2023 年，我們認識到要實現增長，我們必須以能夠實現更高水平的新業務勝利和增長的方式調整規模、確定優先次序和重組。

Now let's turn to Slide 10. In summary, in 2022, we delivered $216.9 million of revenue. We expanded our gross margins by nearly 100 basis points, delivered a 9% adjusted EBITDA margin and generated $11.2 million of free cash flow, which we deployed to share repurchases. We ended 2022 with over $119 million of cash. We currently have no debt. Our balance sheet is well positioned to support the company through a wide range of operating conditions.

現在讓我們轉到幻燈片 10。總而言之，在 2022 年，我們實現了 2.169 億美元的收入。我們將毛利率提高了近 100 個基點，實現了 9% 的調整後 EBITDA 利潤率，並產生了 1120 萬美元的自由現金流，我們將其用於股票回購。到 2022 年底，我們擁有超過 1.19 億美元的現金。我們目前沒有債務。我們的資產負債表處於有利地位，可以在各種運營條件下為公司提供支持。

Our end markets remain strong. Our customer base is well funded, and our solutions address critical and growing customer needs. In 2023, we are focused on generating new business wins that will begin to rebuild and grow our revenue base. We have and are continuing to take immediate action to improve our performance.

我們的終端市場依然強勁。我們的客戶群資金充足，我們的解決方案可滿足關鍵且不斷增長的客戶需求。 2023 年，我們專注於創造新的業務成果，這些業務將開始重建和擴大我們的收入基礎。我們已經並將繼續立即採取行動來提高我們的績效。

And with that, we're happy to take questions. Thank you.

有了這個，我們很樂意回答問題。謝謝。

Operator, please open the line for Q&A, and we ask the call participants to please be mindful of others in the queue by asking only 1 question. Thank you.

接線員，請打開問答線路，我們要求通話參與者註意隊列中的其他人，只問 1 個問題。謝謝。

(Operator Instructions) Our first question comes from Zach Cummins with B. Riley.

（操作員說明）我們的第一個問題來自 Zach Cummins 和 B. Riley。

I guess I'll just have a 2-part question here. I mean, Mark, I appreciate you giving some insight into the differences between the preliminary outlook and your current guidance. But can you dig a little bit deeper into kind of the final assumption around new business wins, kind of what's driving a lot of that conservatism and the difference between the preliminary outlook?

我想我這裡只有一個由兩部分組成的問題。我的意思是，馬克，我感謝你對初步展望和你目前的指導之間的差異給出了一些見解。但是，您能否更深入地了解圍繞新業務獲勝的最終假設，以及推動保守主義和初步前景之間差異的各種因素？

And the second part is, what gives you guys confidence that you'll be able to turn this business back to growth over the longer term, just given some of the challenges you're seeing with some of your core programs and Security Solutions?

第二部分是，是什麼讓你們相信你們能夠在長期內將這項業務恢復增長，只是考慮到你們在一些核心程序和安全解決方案中看到的一些挑戰？

Sure, Zach. Thanks. I'll take the first question, and then I'll have John respond to the second question. So first, on the $45 million of new business from the preliminary outlook, a couple of comments there. First, we haven't lost any of that business. As a matter of fact, we've won some of that business. We've won approximately $9 million of that business, given the lead times on that program and when we expect that program to start, we only have about $1 million to $2 million of that $9 million being recognized as revenue in 2023.

當然，扎克。謝謝。我將回答第一個問題，然後讓 John 回答第二個問題。所以首先，關於初步展望中的 4500 萬美元的新業務，有幾條評論。首先，我們沒有失去任何業務。事實上，我們已經贏得了部分業務。考慮到該項目的交貨時間以及我們預計該項目啟動時，我們已經贏得了該業務的大約 900 萬美元，而在 2023 年，這 900 萬美元中只有大約 100 萬至 200 萬美元被確認為收入。

With respect to the rest of it, that $45 million was actually significantly factored down. It was factored down by about 2/3 or more. But as we think about setting guidance, we want to be cautious about how much new business to put into the guidance for the year. A lot of these opportunities are large and chunky opportunities. And it's unclear exactly when in the year these opportunities could come to fruition.

至於其餘部分，這 4500 萬美元實際上被大大減少了。它被分解了大約 2/3 或更多。但在我們考慮制定指導方針時，我們希望對今年的指導方針中投入多少新業務持謹慎態度。很多這些機會都是大而笨重的機會。目前尚不清楚這些機會在一年中的確切時間會實現。

So I don't want to take a lot of risk on timing here. If an opportunity comes through at the end of December versus, say, in September, that can have a big difference on revenue. So we decided to just take a blanket assumption with respect to these large opportunities that will happen late in the year as is typical for the customer buying season and primarily contribute to revenues in 2024. So basically, just a blanket assumption there in the large opportunities.

所以我不想在這裡冒太多時間風險。如果一個機會在 12 月底出現，而不是在 9 月份出現，那麼收入可能會有很大差異。因此，我們決定對這些將在今年晚些時候發生的重大機會進行全面假設，這對於客戶購買季節來說是典型的，並且主要對 2024 年的收入做出貢獻。所以基本上，只是在重大機會中進行全面假設.

I'll turn it to John for the other piece.

我會把它交給 John 做另一篇文章。

Yes. Zach, thank you. The reason why we feel confident in these business development opportunities is number one, is our past performance, but we've got past performance calls that are very good with these opportunities. So number two, it's sort of around wheelhouse. It's right our wheelhouse. Most of these opportunities are government oriented. And then number three, a lot of it is also the knowledge of the customer and more importantly, the customers' knowledge of us. So that -- those are the 3 reasons why we feel confident in the business development expansion.

是的。扎克，謝謝你。我們對這些業務發展機會充滿信心的原因是第一，是我們過去的表現，但我們過去的表現電話對這些機會非常好。所以第二，它有點像駕駛室。這是我們的駕駛室。大多數這些機會都是面向政府的。然後是第三，其中很多也是客戶的知識，更重要的是，客戶對我們的了解。所以——這就是我們對業務發展擴張充滿信心的三個原因。

(Operator Instructions) Our next question comes from Nehal Chokshi with Northland Capital.

（操作員說明）我們的下一個問題來自 Northland Capital 的 Nehal Chokshi。

Yes. On the TSA PreCheck, the soft launch has been underway. And I think at the 3Q call, you had implied that you expected the national launch to start in calendar '22. So why hasn't it launched yet? And what have you learned from the soft launch so far?

是的。在 TSA PreCheck 上，軟啟動一直在進行中。我認為在 3Q 電話會議上，您曾暗示您預計全國發布將於 22 年日曆開始。那為什麼還沒有推出呢？到目前為止，您從軟啟動中學到了什麼？

Nehal, this is John. One of the things that's happened is I think it's both, TSA and Telos working out some of the details of the program, make sure the program will be very smooth for the customer experience. In terms of specific details, I'll turn it over to Mark Griffin, if you want to add anything.

尼哈爾，這是約翰。發生的一件事是，我認為 TSA 和 Telos 都在製定該計劃的一些細節，以確保該計劃對於客戶體驗而言非常流暢。具體的細節，我會交給Mark Griffin，如果你想補充的話。

Sure. Nehal, as mentioned, the soft launch is well underway and that involves testing both, at Telos and TSA sites. But just to put (inaudible) what this does mean though is that during this testing phase, we are enrolling and renewing staff members during this process, and that continues. So I think we're getting close, but we are still in soft watch mode, and we're very confident that we will be launching in 2023.

當然。 Nehal，如前所述，軟啟動正在進行中，涉及在 Telos 和 TSA 站點進行測試。但只是說（聽不清）這意味著在這個測試階段，我們正在這個過程中招收和續訂工作人員，而且這種情況還在繼續。所以我認為我們正在接近，但我們仍處於軟觀察模式，我們非常有信心我們將在 2023 年推出。

Our next question comes from (inaudible) with D.A. Davidson.

我們的下一個問題來自（聽不清）D.A.戴維森。

This is (inaudible) on for Rudy Kessinger. I was just curious about the CMS contract. Anything -- any update there would be great.

這是 Rudy Kessinger 的（聽不清）。我只是對 CMS 合同感到好奇。任何 - 那裡的任何更新都會很棒。

This is John. There's no update on the CMS contract that I'm aware of. Mark Griffin?

這是約翰。據我所知，CMS 合同沒有更新。馬克格里芬？

Yes. No, there's been no update at this point. We're still awaiting the future past order release to do the work that was previously described.

是的。不，目前沒有更新。我們仍在等待未來的過去訂單發布來完成之前描述的工作。

Our next question comes from Bradley Clark with BMO.

我們的下一個問題來自 BMO 的 Bradley Clark。

I just want to talk about some of the headcount and expense management move that you have made given the revenue headwinds. How did you -- you mentioned (inaudible) of the staff across all departments. What was the strategy in terms of shaping the workforce? Can you just sort of elaborate on how and why you decided to cut where you did and perhaps where you prioritize them, keeping those that stayed, what factors led to your decisions on what to keep?

我只想談談你在收入逆風的情況下所做的一些員工人數和費用管理舉措。你是怎麼說的——你提到了（聽不清）所有部門的員工。在塑造勞動力方面的戰略是什麼？你能否詳細說明一下你是如何以及為什麼決定削減你所做的，也許你優先考慮他們的地方，保留那些留下來的，是什麼因素導致你決定保留什麼？

Sure. So it was pretty clear given where the revenue forecast looked for 2023 that they were going to be a number of areas across the company that we're going to experience a lower operational volume between both, billable and nonbillable rules, a big chunk of the employee reduction was related to billable roles associated with the 6 programs that we talked about.

當然。因此，很明顯，考慮到 2023 年的收入預測，它們將成為公司的許多領域，我們將在可計費規則和不可計費規則之間經歷較低的運營量，其中很大一部分裁員與我們談到的 6 個項目相關的計費角色有關。

And then, of course, naturally, there is a knock-on effect to nonbillable indirect roles as those programs were ramping down or coming to completion or terminating that had a knock-on effect on the operational cadence and volume for all the support functions across the company. So that's really what drove it.

然後，當然，自然而然地，當這些程序逐漸減少或即將完成或終止時，會對不可計費的間接角色產生連鎖反應，這對跨所有支持功能的運營節奏和數量產生了連鎖反應公司。所以這真的是推動它的原因。

Thank you. This concludes today's question-and-answer session. I'd like to turn the call back over to John Wood for any closing remarks.

謝謝。今天的問答環節到此結束。我想將電話轉回給 John Wood 以聽取任何結束語。

Well, first of all, I just want to thank our shareholders for your ongoing support through these times. And we are in robust and recession-resistant end markets. We have well-funded customers. We have a decade-long track record of serving the world's most security-conscious organizations. So Telos does have a strong foundation for the future.

好吧，首先，我只想感謝我們的股東在這段時間裡一直以來的支持。我們正處於強勁且抗衰退的終端市場。我們有資金雄厚的客戶。我們在為世界上最具安全意識的組織提供服務方面擁有長達十年的記錄。所以 Telos 確實為未來打下了堅實的基礎。

I also want to make the point that the Board and I are fully committed to taking the necessary actions to capture the opportunity in front of us and we build and grow our revenue base for the future. Thank you.

我還想指出，董事會和我完全致力於採取必要的行動來抓住我們面前的機會，並為未來建立和發展我們的收入基礎。謝謝。

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

女士們，先生們，今天的演講到此結束。您現在可以斷開連接並度過美好的一天。