Conceptual Design for High Speed Aircraft
Unveiled
Design of SpaceShipTwo Cabin Interior Revealed
Through Live Virtual Event
Total Participants in ‘One Small Step’ Program
Increased to Over 700
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
second quarter ended June 30, 2020.
“During the second quarter we continued to advance our test
flight program, including conducting two successful glide flights
from Spaceport America,” said George Whitesides, Chief Space
Officer of Virgin Galactic. “We saw continued growth in customer
demand, with increases in paid enrollments for our ‘One Small Step’
program, and entered into deposit agreements for orbital
spaceflights with twelve customers. During the period, our
operations were impacted by the COVID-19 pandemic, despite our
efforts to minimize disruption. However, our preparations for
commercial service are well underway under the leadership of our
new CEO, Michael Colglazier. Going forward, I am excited to focus
my efforts and expertise on important future business areas,
including high speed travel, in my new role as Chief Space Officer.
We believe that these new technologies represent the future of
aviation and we look forward to working with respected parties like
NASA, Boeing and Rolls Royce to explore how we can revolutionize
the way we travel.”
Michael Colglazier, Chief Executive Officer, added: “I am
thrilled to be leading Virgin Galactic at this exciting time. We
are making substantial progress across many areas of the company as
we continue to focus on our path to commercial launch and the steps
we are taking to get there, including conducting our first powered
spaceflight from Spaceport America this fall.”
Second Quarter 2020 Business Highlights:
- Completed first glide flight of VSS Unity from Spaceport
America, New Mexico.
- Completed second glide flight of VSS Unity from Spaceport
America, New Mexico, achieving a glide speed of Mach 0.85.
- Cleared three new FAA Verification and Validation elements,
bringing the total number of elements cleared to date to 27 out of
29.
- Completed numerous structural and mechanical installations on
second SpaceShipTwo vehicle.
- Completed over 75% of parts fabrication for third SpaceShipTwo
vehicle.
- Entered into Space Act Agreement with NASA to facilitate the
development of high speed technologies.
- Entered into Space Act Agreement with NASA’s Johnson Space
Center to facilitate commercial participation in human orbital
spaceflight to the International Space Station.
Second Quarter 2020 Financial Highlights:
- Cash position remains strong, with cash and cash equivalents of
$360 million as of June 30, 2020.
- Net loss of $63 million, compared to a $60 million net loss in
first quarter of 2020.
- GAAP selling, general, and administrative expenses of $26
million, compared to $27 million in first quarter of 2020. Non-GAAP
selling, general and administrative expenses of $23 million in the
second quarter of 2020, compared to $23 million in the first
quarter of 2020.
- GAAP research and development expenses of $37 million, compared
to $34 million in first quarter of 2020. Non-GAAP research and
development expenses of $35 million in second quarter of 2020,
compared to $33 million in the first quarter of 2020.
- Adjusted EBITDA totalled $(54) million, compared to $(53)
million in first quarter of 2020.
- Cash paid for capital expenditures totalled $6 million,
compared to $4 million in first quarter of 2020.
Recent Updates:
- Named Michael Colglazier as new Chief Executive Officer in
preparation for commercial service.
- Continued to demonstrate strong pre-sales demand in the ‘One
Small Step’ initiative, with over 700 deposit payments received as
of July 30, 2020.
- Minimal customer refunds, with total Future Astronauts holding
at approximately 600 as of July 30, 2020.
- Entered into deposit agreements for orbital spaceflights with
twelve customers.
- Unveiled initial design concept for a high speed vehicle.
- Revealed interior cabin design for SpaceShipTwo, accompanied by
Augmented Reality mobile app, providing customer experience
simulation of Virgin Galactic spaceflight and cabin interior.
- Completed construction of the third floor of Spaceport America,
where astronaut training and flight preparation activities will
take place.
Flight Program Update
Along with its second quarter 2020 financial results, Virgin
Galactic also provided an update regarding the ongoing impact of
COVID-19 on its business and operations. The Company has
implemented rigorous health and safety procedures and testing
protocols for its employees, following guidelines from the CDC and
state and local officials.
The protocols and procedures implemented by the Company in
response to the pandemic have limited the number of employees who
are able to work on-site in the Company’s facility in Mojave,
California, and at Spaceport America, New Mexico, which has slowed
the Company’s pace.
Virgin Galactic expects to advance to the next phase of its test
flight program with its first powered spaceflight from Spaceport
America this fall, with two test pilots in the cockpit. Virgin
Galactic then expects to conduct a second powered space flight from
Spaceport America, with a crew of two test pilots in the cockpit
and four mission specialists in the cabin. Assuming both flights
demonstrate the expected results, Virgin Galactic anticipates Sir
Richard Branson’s flight to occur in the first quarter of 2021.
As always, safety remains the central focus, and the test flight
program will progress with a step-by-step, diligent approach.
Expected dates may adjust as the Company processes data from each
of its test flights.
Support in the Community
Virgin Galactic continues to assist with COVID-19 relief efforts
in its communities, including partnering with experts from the NASA
Armstrong Flight Research Center, Antelope Valley College and the
City of Lancaster, California on the COVID-19 task force to help
hospitals in the region. In addition, the Company donated medical
oxygen hoods to the Gallup Indian Health Care Center in New Mexico
and made monetary donations to support the purchase of essential
equipment and PPE for its local medical centers in Las Cruces.
The Company also announced a new scholarship, mentoring and
fellowship program for Black scholars pursuing STEM education with
a focus on aerospace, with an initial commitment of $100,000, which
will be augmented by additional donations and support. In addition,
Virgin Galactic continued to award STEM scholarships to students
pursuing degrees in aerospace.
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 9097602. 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 regarding the Company's business
described in the documents filed by the Company from time to time
with the Securities and Exchange Commission (the "SEC"). 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.
Second Quarter 2020 Financial Results
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(In thousands except for per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Revenue
$
—
$
238
$
638
$
238
$
2,420
Cost of revenue
—
173
278
173
1,284
Gross profit
—
65
360
65
1,136
Selling, general, and administrative
expenses
26,047
26,755
14,610
52,802
26,905
Research and development expenses
37,150
34,282
30,167
71,432
61,591
Operating loss
(63,197
)
(60,972
)
(44,417
)
(124,169
)
(87,360
)
Interest income
506
1,177
397
1,683
750
Interest expense
(8
)
(9
)
(1
)
(17
)
(2
)
Other income (expense)
221
(172
)
14
49
37
Loss before income taxes
(62,478
)
(59,976
)
(44,007
)
(122,454
)
(86,575
)
Income tax (benefit) expense
40
(46
)
61
(6
)
86
Net loss
(62,518
)
(59,930
)
(44,068
)
(122,448
)
(86,661
)
Other comprehensive loss:
Foreign currency translation
adjustment
—
(54
)
(31
)
(54
)
(21
)
Total comprehensive loss
$
(62,518
)
$
(59,984
)
$
(44,099
)
$
(122,502
)
$
(86,682
)
Net loss per share:
Basic and diluted
$
(0.30
)
$
(0.30
)
$
(0.23
)
$
(0.59
)
$
(0.45
)
Weighted-average shares outstanding:
Basic and diluted
211,784,540
202,409,552
193,663,150
207,097,047
193,663,150
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(In thousands, except share
data)
June 30, 2020
December 31, 2019
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
359,912
$
480,443
Restricted cash
13,266
12,278
Inventories
28,605
26,817
Prepaid expenses and other current
assets
13,859
17,133
Total current assets
415,642
536,671
Property, plant, and equipment, net
56,027
49,333
Other non-current assets
19,307
19,542
Total assets
$
490,976
$
605,546
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
8,228
$
7,038
Accrued expenses
20,810
22,277
Customer deposits
81,734
83,362
Other current liabilities
2,926
3,168
Total current liabilities
113,698
115,845
Other long-term liabilities
23,040
22,141
Total liabilities
$
136,738
$
137,986
Stockholders' Equity
Preferred stock, $0.0001 par value;
10,000,000 authorized; none issued and outstanding
$
—
$
—
Common stock, $0.0001 par value;
700,000,000 shares authorized; 210,403,856 and 196,001,038 shares
issued and outstanding as of June 30, 2020 and December 31, 2019,
respectively
21
20
Additional paid-in capital
598,337
589,158
Accumulated deficit
(244,125
)
(121,677
)
Accumulated other comprehensive income
5
59
Total stockholders' equity
354,238
467,560
Total liabilities and stockholders'
equity
$
490,976
$
605,546
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Cash flows from operating activities
Net loss
$
(62,518
)
$
(59,930
)
$
(44,068
)
$
(122,448
)
$
(86,661
)
Stock-based compensation
5,525
4,425
—
9,950
—
Depreciation and amortization
2,615
2,105
1,596
4,720
3,206
Other operating activities, net
66
1
(129
)
67
(246
)
Change in assets and liabilities
Inventories
192
(1,980
)
(4,193
)
(1,788
)
(4,228
)
Other current and non-current assets
1,119
2,142
2,499
3,261
1,664
Accounts payable and accrued expenses
2,064
(2,978
)
(2,670
)
(914
)
(2,801
)
Customer deposits
(1,530
)
(98
)
964
(1,628
)
194
Other current and non-current
liabilities
892
—
—
892
—
Net cash used in operating activities
(51,575
)
(56,313
)
(46,001
)
(107,888
)
(88,872
)
Cash flows from investing activity
Capital expenditures
(6,103
)
(4,036
)
(5,232
)
(10,139
)
(8,300
)
Cash used in investing activity
(6,103
)
(4,036
)
(5,232
)
(10,139
)
(8,300
)
Cash flows from financing activities
Payments of finance lease obligations
(26
)
(23
)
(24
)
(49
)
(47
)
Net transfer from Parent Company
—
—
53,730
—
101,175
Transaction costs
(770
)
(697
)
—
(1,467
)
—
Net cash (used in) provided by financing
activities
(796
)
(720
)
53,706
(1,516
)
101,128
Net (decrease) increase in cash and cash
equivalents
(58,474
)
(61,069
)
2,473
(119,543
)
3,956
Cash, cash equivalents and restricted cash
at beginning of period
431,652
492,721
82,851
492,721
81,368
Cash, cash equivalents and restricted cash
at end of period
$
373,178
$
431,652
$
85,324
$
373,178
$
85,324
Cash and cash equivalents
$
359,912
$
419,374
$
76,897
$
359,912
$
76,897
Restricted cash
13,266
12,278
8,427
13,266
8,427
Cash, cash equivalents and restricted
cash
$
373,178
$
431,652
$
85,324
$
373,178
$
85,324
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.
A reconciliation of adjusted EBITDA to net loss for the three
months June 30, 2020, March 31, 2020, June 30, 2019 and six months
ended June 30, 2020 and 2019, respectively, are set forth
below:
Amounts in thousands ($)
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Net Loss
$
(62,518
)
$
(59,930
)
$
(44,068
)
$
(122,448
)
$
(86,661
)
Income tax (benefit) expense
40
(46
)
61
(6
)
86
Interest expense
8
9
1
17
2
Depreciation & amortization
2,615
2,105
1,596
4,720
3,206
EBITDA
(59,855
)
(57,862
)
(42,410
)
(117,717
)
(83,367
)
Non-capitalized transaction costs*
—
697
—
697
—
Stock-based compensation
5,525
4,425
—
9,950
—
Adjusted EBITDA
(54,330
)
(52,740
)
(42,410
)
(107,070
)
(83,367
)
A reconciliation of selling, general, and administrative
expenses to non-GAAP selling, general, and administrative expenses
for the three months ended June 30, 2020, March 31, 2020, June 30,
2019 and six months ended June 30, 2020 and 2019, respectively, are
set forth below:
Amounts in thousands ($)
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Selling, general, and administrative
expenses
$
26,047
$
26,755
$
14,610
$
52,802
$
26,905
Stock-based compensation
3,546
2,871
—
6,417
—
Non-capitalized transaction costs*
—
697
—
697
—
Non-GAAP selling, general, administration
expenses
$
22,501
$
23,187
$
14,610
$
45,688
$
26,905
A reconciliation of research and development expenses to
non-GAAP research and development expenses for the three months
ended June 30, 2020, March 31, 2020, June 30, 2019 and six months
ended June 30, 2020 and 2019, respectively, are set forth
below:
Amounts in thousands ($)
Three Months Ended
Six Months Ended
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Research and development expenses
$
37,150
$
34,282
$
30,167
$
71,432
$
61,591
Stock-based compensation
1,979
1,554
—
3,533
—
Non-GAAP Research and development
expenses
$
35,171
$
32,728
$
30,167
$
67,899
$
61,591
* Non-capitalized transaction costs
include non-recurring expenses related to preparation and filing of
an S-1 registration statement in the first quarter.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200803005738/en/
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
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