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
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.
Third Quarter 2020 Financial Results
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited and in thousands
except for per share data)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Revenue
$
—
$
—
$
832
$
238
$
3,252
Cost of revenue
—
—
406
173
1,690
Gross profit
—
—
426
65
1,562
Selling, general, and administrative
expenses
30,936
26,047
17,814
83,738
44,719
Research and development expenses
46,243
37,150
34,528
117,675
96,119
Operating loss
(77,179
)
(63,197
)
(51,916
)
(201,348
)
(139,276
)
Interest income
322
506
387
2,005
1,137
Interest expense
(9
)
(8
)
—
(26
)
(2
)
Other income (expense)
(44
)
221
91
5
128
Loss before income taxes
(76,910
)
(62,478
)
(51,438
)
(199,364
)
(138,013
)
Income tax (benefit) expense
40
40
37
34
123
Net loss
(76,950
)
(62,518
)
(51,475
)
(199,398
)
(138,136
)
Other comprehensive loss:
Foreign currency translation
adjustment
48
—
(58
)
(6
)
(79
)
Total comprehensive loss
$
(76,902
)
$
(62,518
)
$
(51,533
)
$
(199,404
)
$
(138,215
)
Net loss per share:
Basic and diluted
$
(0.34
)
$
(0.30
)
$
(0.27
)
$
(0.94
)
$
(0.71
)
Weighted-average shares outstanding:
Basic and diluted
225,253,536
211,784,541
193,663,150
213,193,386
193,663,150
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated Balance
Sheets
(In thousands, except share
data)
September 30, 2020
December 31, 2019
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
741,575
$
480,443
Restricted cash
13,268
12,278
Inventories
25,147
26,817
Prepaid expenses and other current
assets
9,871
17,133
Total current assets
789,861
536,671
Property, plant, and equipment, net
57,255
49,333
Other non-current assets
18,930
19,542
Total assets
$
866,046
$
605,546
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
8,490
$
7,038
Accrued expenses
22,056
22,277
Customer deposits
83,190
83,362
Other current liabilities
2,300
3,168
Total current liabilities
116,036
115,845
Other long-term liabilities
23,763
22,141
Total liabilities
$
139,799
$
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; 234,021,503 and 196,001,038 shares
issued and outstanding as of September 30, 2020 and December 31,
2019, respectively
23
20
Additional paid-in capital
1,047,246
589,158
Accumulated deficit
(321,075
)
(121,677
)
Accumulated other comprehensive income
53
59
Total stockholders' equity
726,247
467,560
Total liabilities and stockholders'
equity
$
866,046
$
605,546
VIRGIN GALACTIC HOLDINGS,
INC.
Condensed Consolidated
Statements of Cash Flows
(Unaudited and in thousands)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Cash flows from operating activities
Net loss
$
(76,950
)
$
(62,518
)
$
(51,475
)
$
(199,398
)
$
(138,136
)
Stock-based compensation
8,625
5,525
—
18,575
—
Depreciation and amortization
2,677
2,615
1,714
7,397
4,920
Other operating activities, net
8
66
(129
)
75
(375
)
Change in assets and liabilities
Inventories
3,457
192
1,918
1,669
(2,310
)
Other current and non-current assets
2,891
1,119
(7,592
)
6,152
(5,928
)
Accounts payable and accrued expenses
1,633
2,064
5,361
719
2,560
Customer deposits
1,456
(1,530
)
1,125
(172
)
1,319
Other current and non-current
liabilities
1,502
892
9,664
2,394
9,664
Net cash used in operating activities
(54,701
)
(51,575
)
(39,414
)
(162,589
)
(128,286
)
Cash flows from investing activity
Capital expenditures
(3,996
)
(6,103
)
(5,380
)
(14,135
)
(13,680
)
Cash used in investing activity
(3,996
)
(6,103
)
(5,380
)
(14,135
)
(13,680
)
Cash flows from financing activities
Payments of finance lease obligations
(40
)
(26
)
(8
)
(89
)
(55
)
Net transfer from Parent Company
—
—
4,944
—
106,119
Proceeds from Parent Company
—
—
40,000
—
40,000
Proceeds from issuance of common
stocks
460,200
—
—
460,200
—
Transaction costs
(19,399
)
(770
)
—
(20,866
)
—
Withholding taxes paid on behalf of
employee on net settled stock-based awards
(399
)
—
—
(399
)
—
Net cash provided by (used in) by
financing activities
440,362
(796
)
44,936
438,846
146,064
Net increase (decrease) in cash and cash
equivalents
381,665
(58,474
)
142
262,122
4,098
Cash, cash equivalents and restricted cash
at beginning of period
373,178
431,652
85,324
492,721
81,368
Cash, cash equivalents and restricted cash
at end of period
$
754,843
$
373,178
$
85,466
$
754,843
$
85,466
Cash and cash equivalents
$
741,575
$
359,912
$
74,438
$
741,575
$
74,438
Restricted cash
13,268
13,266
11,028
13,268
11,028
Cash, cash equivalents and restricted
cash
$
754,843
$
373,178
$
85,466
$
754,843
$
85,466
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 September 30, 2020, June 30, 2020, September 30, 2019 and
nine months ended September 30, 2020 and 2019, respectively, are
set forth below:
Amounts in thousands ($)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Net Loss
(76,950
)
(62,518
)
(51,475
)
(199,398
)
(138,136
)
Income tax (benefit) expense
40
40
37
34
123
Interest expense
9
8
—
26
2
Depreciation & amortization
2,677
2,615
1,715
7,397
4,921
EBITDA
(74,224
)
(59,855
)
(49,723
)
(191,941
)
(133,090
)
Non-capitalized transaction costs*
—
—
—
697
—
Stock-based compensation
8,625
5,525
—
18,575
—
Adjusted EBITDA
(65,599
)
(54,330
)
(49,723
)
(172,669
)
(133,090
)
A reconciliation of selling, general, and administrative
expenses to non-GAAP selling, general, and administrative expenses
for the three months ended September 30, 2020, June 30, 2020,
September 30, 2019 and nine months ended September 30, 2020 and
2019, respectively, are set forth below:
Amounts in thousands ($)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Selling, general, and administrative
expenses
30,936
26,047
17,814
83,738
44,719
Stock-based compensation
5,056
3,546
—
11,472
—
Non-capitalized transaction costs*
—
—
—
697
—
Non-GAAP selling, general, administration
expenses
$
25,880
$
22,501
$
17,814
$
71,569
$
44,719
A reconciliation of research and development expenses to
non-GAAP research and development expenses for the three months
ended September 30, 2020, June 30, 2020, September 30, 2019 and
nine months ended September 30, 2020 and 2019, respectively, are
set forth below:
Amounts in thousands ($)
Three Months Ended
Nine Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Research and development expenses
46,243
37,150
34,528
117,675
96,119
Stock-based compensation
3,570
1,979
—
7,103
—
Non-GAAP Research and development
expenses
$
42,673
$
35,171
$
34,528
$
110,572
$
96,119
*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/20201105006028/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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