05 November 2020

Virgin Galactic Announces Third Quarter 2020 Financial Results

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  • First Spaceflight from Spaceport America Expected to Occur Between November 19-23

     

  • Rollout of Second Spaceship Scheduled to Take Place in the First Quarter of 2021

     

  • Reopening Ticket Sales in 2021 Following Sir Richard Branson’s Spaceflight

 

LAS CRUCES, N.M. – November 5, 2020 – Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the “Company”), a vertically integrated aerospace and space travel company, today announced its financial results for the third quarter ended September 30, 2020.

“During the quarter we made good progress completing the final steps to prepare for VSS Unity’s first rocket powered test flight from Spaceport America this November.  This will be the first-ever human spaceflight conducted from New Mexico,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic.  “We also made meaningful progress on our second SpaceShipTwo vehicle, which we plan to unveil in the first quarter of 2021.  During my first three months at the Company, I have been continually impressed with the team and the tremendous work that has gone into making the dream of commercial spaceflight a reality.  As we continue to prepare for commercial launch, we will reopen ticket sales following Richard Branson’s flight in 2021.  I am excited and confident in our ability to execute our vision and provide transformative experiences to people around the world.”

 

Third Quarter 2020 Business Highlights:

 

  • Completed the application of the thermal protection system on the Wing and Fuselage, progressed on systems installation, and successfully completed the initial Pilot Simulator evaluations of the second SpaceShipTwo vehicle, in preparation for its expected rollout in the first quarter of 2021.

  • Completed work on Spaceport America’s third floor astronaut training lounge and customer center.

  • Installed reclining seats, cabin cameras and download link hardware on VSS Unity for future live stream capability.

  • Implemented upgraded flight control system and upgraded horizontal stabilizers on VSS Unity to increase performance during the boost phase of the flight profile.

  • Unveiled the design of the SpaceShipTwo cabin interior via an exclusive virtual event, streamed live on YouTube.

  • Revealed initial design concept for high speed vehicle and announced non-binding memorandum of understanding with Rolls-Royce to collaborate in designing and developing engine propulsion technology for vehicle.

 

Third Quarter 2020 Financial Highlights:

 

  • Cash position remains strong, with cash and cash equivalents of $742 million as of September 30, 2020.

  • Net loss of $77 million, compared to a $63 million net loss in the second quarter of 2020.

  • GAAP selling, general, and administrative expenses of $31 million, compared to $26 million in the second quarter of 2020. Non-GAAP selling, general and administrative expenses of $26 million in the third quarter of 2020, compared to $23 million in the second quarter of 2020.

  • GAAP research and development expenses of $46 million, compared to $37 million in the second quarter of 2020. Non-GAAP research and development expenses of $43 million in the third quarter of 2020, compared to $35 million in the second quarter of 2020.

  • Adjusted EBITDA totaled $(66) million, compared to $(54) million in the second quarter of 2020.

  • Cash paid for capital expenditures totaled $4 million, compared to $6 million in the second quarter of 2020.

  • Completed underwritten public offering of 23.6 million shares of common stock at a public offering price of $19.50 per share, resulting in net proceeds of over $440 million to be used for general corporate purposes and capital expenditures.

 

Recent Updates:

 

  • Expect first spaceflight from Spaceport America to occur between November 19-23, 2020. This flight will include revenue-generating payloads as part of the NASA flight opportunities program.

  • Entered into agreement with NASA and the Southwest Research Institute to fly planetary scientist Dr. Alan Stern on SpaceShipTwo vehicle from Spaceport America to conduct experiments in space.

  • Total Future Astronauts remained at approximately 600, as of October 31, 2020.

  • Reopening ticket sales in 2021 after Sir Richard Branson’s flight.

  • Retiring “One Small Step” program on December 31, 2020. The pool of participants has now reached close to 900 participants, as of October 31, 2020.

 

COVID-19 Impact

 

Along with its third quarter 2020 financial results, Virgin Galactic also provided an update regarding the impact of COVID-19.  The Company is continuing to experience ongoing delays to its business and operations due to COVID-19, which has led to accumulated impacts to both schedule and cost efficiency.  This is expected to continue through the fourth quarter and in 2021, though the Company has continued to stay on track for its planned upcoming flights.  The Company has implemented strict protocols to ensure employee safety, including enforcing staggered shifts to lower on-site density and re-working communications processes with engineers who are primarily working from home.

 

The Company continues to follow rigorous health and safety procedures and testing protocols for its employees, following guidelines from the CDC and state and local officials.  Only those employees whose work requires them to be in Virgin Galactic’s facilities are working on-site in Mojave and New Mexico.

 

Conference Call Information

 

Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today.  To access the conference call, parties should dial (778) 560-2846 and enter the conference ID number 1946019.  The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at investors.virgingalactic.com.  A recording of the webcast will also be available following the conference call.

 

About Virgin Galactic Holdings

 

Virgin Galactic Holdings, Inc. is a vertically integrated aerospace and space travel company, pioneering human spaceflight for private individuals and researchers, as well as a manufacturer of advanced air and space vehicles.  Using its proprietary and reusable technologies and supported by a distinctive, Virgin-branded customer experience, it is developing a spaceflight system designed to offer customers a unique, multi-day, transformative experience.  This culminates in a spaceflight that includes views of Earth from space and several minutes of weightlessness that will launch from Spaceport America, New Mexico.  Virgin Galactic and The Spaceship Company believe that one of the most exciting and significant opportunities of our time lies in the commercial exploration of space and the development of technology that will change the way we travel across the globe in the future.  Together we are opening access to space to change the world for good.`

 

Forward-Looking Statements

 

 

This press release contains certain forward-looking statements within the meaning of federal securities laws with respect to Virgin Galactic Holdings, Inc. (the "Company"), including statements regarding the Company’s spaceflight systems, markets and expected performance. These forward-looking statements generally are identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this presentation, including but not limited to the factors, risks and uncertainties included in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com. These filings identify and address other important risks and uncertainties that could cause the Company’s actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Use of Non-GAAP Financial Measures (Unaudited)

 

This press release references certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP selling, general, and administrative expense and non-GAAP research and development expense. The Company defines adjusted EBITDA as earnings before interest expense, taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. It defines non-GAAP selling, general, and administrative expenses as selling, general, and administrative expenses other than stock-based compensation and non-capitalized transaction costs, and non-GAAP research and development expenses as research and development expenses other than stock-based compensation. None of these non-GAAP financial measures is a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles in the United States (GAAP) and should not be considered as an alternative to any other performance measures derived in accordance with GAAP.

 

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

 

For media inquiries:

 

VirginGalacticPress@virgingalactic.com

 

UK, Middle East, Asia, Africa – Ollie Bailey-Pratt, FTI Consulting

US, Canada, South America, Australia – Antonia Gray, FTI Consulting

VirginGalacticFin@fticonsulting.com

 

For investor relations inquiries:

 

VirginGalactic-SVC@sardverb.com

GEORGE WHITESIDES

GEORGE WHITESIDES

SPACE ADVISORY BOARD CHAIR

George T. Whitesides is the Chair of the Space Advisory Board, where he is responsible for bringing together aerospace leaders to advise the Virgin Galactic senior management team on the journey towards regular commercial spaceflight, developing the next generation vehicles and exploring new opportunities. Previously, George served as the Chief Space Officer of Virgin Galactic, spearheading the development of future technologies, including high speed, point-to-point travel and orbital flight, after stepping down as CEO in 2020.

George joined Virgin Galactic in 2010 as Chief Executive Officer. During George’s 10 years with the Company, he built the company from 30 people to a workforce of over 900, successfully guiding Virgin Galactic through its human space flight R&D and flight test program, culminating in two space flights. These historic flights saw the first humans launched into space from US soil since the retirement of the Space Shuttle, as well as the first woman to fly on a commercial space vehicle. George led the transition of operations from Mojave, California to Spaceport America, New Mexico, and oversaw the company’s successful public listing making it a multi-billion dollar company and creating the world’s first publicly traded human spaceflight venture.

Prior to Virgin Galactic, George served as Chief of Staff for NASA. Upon departure from the American space agency, he received the Distinguished Service Medal, the highest award the agency confers.

George’s volunteer service includes Caltech’s Space Innovation Council, Princeton University’s Advisory Council for Mechanical and Aerospace Engineering, and the Antelope Valley Economic Development & Growth Enterprise. He is a fellow of the UK Royal Aeronautical Society and an associate fellow of the American Institute of Aeronautics and Astronautics.

He previously served as Vice Chair of the Commercial Spaceflight Federation, chair of the Reusable Launch Vehicle Working Group for the FAA’s Commercial Space Transportation Advisory Committee, a member of the Board of Directors of Virgin Galactic, a member of the Board of Trustees of Princeton University, co-chair of the World Economic Forum’s Global Future Council on Space Technologies, and the Board of Virgin Unite USA. George has testified on American space policy before the United States Senate, the United States House of Representatives, and the President’s Commission on Implementation of United States Space Exploration Policy. An honors graduate of Princeton University’s School of Public and International Affairs, George later earned a master’s degree in geographic information systems and remote sensing from the University of Cambridge, and a Fulbright Scholarship to Tunisia. George is a licensed private pilot and certified parabolic flight coach.

He resides in California with his wife Loretta and two children.

CHRIS HADFIELD

CHRIS HADFIELD

SPACE ADVISORY BOARD MEMBER

Colonel Chris Hadfield is a heavily decorated astronaut, engineer, and test pilot who has commanded the International Space Station. Formerly NASA’s Director of Operations in Russia and veteran of three spaceflights, Hadfield’s many awards include the Order of Canada, the Meritorious Service Cross and the NASA Exceptional Service Medal. Hadfield is a three-time NYT bestselling author, a renowned musician, an adjunct professor at the University of Waterloo, chair of the board of the Open Lunar Foundation, and host of several internationally acclaimed television series. In addition, Hadfield leads the space stream at the Creative Destruction Lab, one of the world’s top tech incubators.

DR SANDRA MAGNUS

DR SANDRA MAGNUS

SPACE ADVISORY BOARD MEMBER

Dr. Sandra H. “Sandy” Magnus is the Principal at AstroPlanetview, LLC. Most recently she served as the Deputy Director of Engineering in the Office of the Secretary of Defense for the Undersecretary of Research and Engineering. In that role she served as the “Chief Engineer” for the Department of Defense establishing engineering policy, propagating best practices and working to connect the engineering community across the department.

Dr. Magnus is the former Executive Director of the American Institute of Aeronautics and Astronautics (AIAA). Prior to leading AIAA, she was a member of the NASA Astronaut Corps for 16 years. During her time at NASA she flew in space on the STS-112 shuttle mission in 2002, and on the final shuttle flight, STS-135, in 2011. In addition, she flew to the International Space Station on STS-126 in November 2008, served as flight engineer and science officer on Expedition 18, and returned home on STS-119 after four and a half months on board.

Following her assignment on Station, she served at NASA Headquarters in the Exploration Systems Mission Directorate. Her last duty at NASA, after STS-135, was as the deputy chief of the Astronaut Office.

While at NASA, Dr. Magnus worked extensively with the international community, including the European Space Agency (ESA) and the Japan Aerospace Exploration Agency (JAXA), as well as with Brazil on facility-type payloads. She also spent time in Russia developing and integrating operational products and procedures for the International Space Station.

Before joining NASA, Dr. Magnus worked for McDonnell Douglas Aircraft Company as a stealth engineer. While at McDonnell Douglas, she worked on internal R&D and on the Navy’s A-12 Attack Aircraft program.

Dr. Magnus has received numerous awards, including the NASA Space Flight Medal, the NASA Distinguished Service Medal, the NASA Exceptional Service Medal, and the 40 at 40 Award (given to former collegiate women athletes to recognize the impact of Title IX).

DAVID A. WHELAN

DAVID A. WHELAN

SPACE ADVISORY BOARD MEMBER

Dr. David A. Whelan is the SVP Chief-Scientist of Cubic Corporation. Dr. Whelan retired from Boeing in 2017, as the Vice President, Engineering (BDS) and Board of Directors for HRL Laboratories. Whelan served as Director of the Tactical Technology Office of the Defense Advanced Research Projects Agency (DARPA) and began his career at Northrop as designer of the B-2 Stealth Bomber. Whelan is a member of the National Academy of Engineering, a fellow of the American Physical Society and IEEE. He earned his Ph.D. Physics from UCLA; He holds over 75 US patents.