Company Announcements

Virgin Galactic Announces Second Quarter 2021 Financial Results

Quarter of Strong Operational Progress Including:

  • Successful Completion of Third Spaceflight; First Spaceflight from Spaceport America, New Mexico; Unity 21 in May
  • Approval from FAA for Full Commercial Launch License in June
  • Successful Completion of Fourth Spaceflight; First With a Full Crew; Unity 22 in July

Reopening Sales, with Prices Beginning at $450,000 Per Seat

Next Rocket-Powered Spaceflight, Unity 23, Targeted for Late-September

LAS CRUCES, N.M.--(BUSINESS WIRE)--Aug. 5, 2021-- 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, 2021.

“In the second quarter, we made meaningful progress towards commencing commercial service in 2022. We successfully completed two spaceflights from New Mexico — the latest carrying a full crew of mission specialists in the cabin and garnering an extraordinary global media and consumer response. In addition, we received FAA approval to expand our existing launch license, marking the first time the FAA has licensed a Spaceline to fly customers to space,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “Leveraging the surge in consumer interest following the Unity 22 flight, we are excited to announce the reopening of sales effective today, beginning with our Spacefarer community. As we endeavor to bring the wonder of space to a broad global population, we are delighted to open the door to an entirely new industry and consumer experience.”

Business Highlights:

  • On July 11, 2021, successfully completed first fully crewed spaceflight. This spaceflight marked VSS Unity’s 22nd flight and its fourth spaceflight. The flight fulfilled test objectives including evaluating the cabin and customer experience.
  • On May 22, 2021, successfully completed first spaceflight from Spaceport America, New Mexico. This spaceflight marked VSS Unity’s 21st flight and its third spaceflight. The flight fulfilled test objectives including confirming the technical readiness of the spaceship’s upgraded flight controls and horizontal stabilizers. The flight also carried revenue-generating scientific research experiments.
  • In June, the Federal Aviation Administration (“FAA”) updated the Company's existing commercial space transportation operator license to allow the spaceline to fly customers to space. The adjustment marked the first time the FAA has licensed a spaceline to fly customers.
  • In June, we announced a new contract for a human-tended research spaceflight. The company will fly Kellie Gerardi, a researcher for the International Institute for Astronautical Sciences (IIAS), on a dedicated research flight, during which Kellie will conduct experiments and test new healthcare technologies while she is in space.
  • Total retention of existing Future Astronaut reservations remained steady at approximately 600, as of June 30, 2021.
  • Announced plans to reopen sales effective today. For the private astronaut market, the Company will have three consumer offerings: i) a single seat; ii) a multi-seat couples / friends / family package; and iii) full-flight buy out. Pricing for these offers will begin at $450,000 per seat. Sales will initially open to the Company's significant list of early hand-raisers, prioritizing the Spacefarer Community, who, as promised, will be given first opportunity to reserve their place in space. A follow-on priority list will be opened to customers interested in reserving future spaceflights.
  • Announced that the next rocket-powered spaceflight, Unity 23, is targeted to occur in late-September from Spaceport America in New Mexico. This flight will be a revenue-generating flight with the Italian Air Force.

Second Quarter 2021 Financial Highlights:

  • Cash position remains strong, with cash and cash equivalents of $552 million as of June 30, 2021.
  • In July, the Company completed an “at-the-market” equity offering program (the “ATM Offering”). In connection with the ATM Offering, the Company filed a prospectus supplement with the U.S. Securities and Exchange Commission to offer and sell up to $500 million of shares of the Company’s common stock from time to time. The Company ultimately generated $500 million in gross proceeds through the sale of approximately 13.7 million shares of common stock. The Company intends to use the net proceeds generated from the ATM Offering for general corporate purposes, with a priority on expansion of its spaceship fleet.
  • GAAP selling, general, and administrative expenses of $39 million, compared to $26 million in the second quarter of 2020. Non-GAAP selling, general and administrative expenses of $26 million in the second quarter of 2021, compared to $21 million in the second quarter of 2020.
  • GAAP research and development expenses of $36 million, compared to $37 million in the second quarter of 2020. Non-GAAP research and development expenses of $31 million in the second quarter of 2020, compared to $34 million in the second quarter of 2020.
  • Adjusted EBITDA totaled $(56) million, compared to $(54) million in the second quarter of 2020.
  • Net loss of $94 million, compared to a $72 million net loss in the second quarter of 2020.
  • Cash paid for capital expenditures totaled $1 million, compared to $6 million in the second quarter of 2020.

COVID-19 Impact

The Company is continuing to experience ongoing delays to its business and operations due to COVID-19. The Company continues to operate under strict protocols and follows rigorous health and safety procedures, in line with CDC, state and local guidelines, to ensure employee safety.

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 (844) 200-6205 and enter the conference ID number 997887. 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 with its advanced air and space vehicles. It is developing a spaceflight system designed to connect the world to the wonder and awe created by space travel and to offer customers a transformative experience. You can find more information at https://www.virgingalactic.com.

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 flight schedule. 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 press release, including but not limited to the factors, risks and uncertainties included in Amendment No. 2 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the "SEC"), 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.

Second Quarter 2021 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

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

 

 

 

 

(As restated)

 

 

 

(As restated)

Revenue

 

$

571

 

 

 

$

 

 

 

$

571

 

 

 

$

238

 

 

Cost of revenue

 

63

 

 

 

 

 

 

63

 

 

 

173

 

 

Gross profit

 

508

 

 

 

 

 

 

508

 

 

 

65

 

 

Selling, general, and administrative expenses

 

38,503

 

 

 

26,047

 

 

 

83,417

 

 

 

52,802

 

 

Research and development expenses

 

35,903

 

 

 

37,009

 

 

 

72,266

 

 

 

71,201

 

 

Operating loss

 

(73,898

)

 

 

(63,056

)

 

 

(155,175

)

 

 

(123,938

)

 

Change in fair value of warrants

 

(20,363

)

 

 

(9,596

)

 

 

(69,082

)

 

 

(326,492

)

 

Interest income, net

 

214

 

 

 

498

 

 

 

532

 

 

 

1,666

 

 

Other income, net

 

13

 

 

 

221

 

 

 

40

 

 

 

49

 

 

Loss before income taxes

 

(94,034

)

 

 

(71,933

)

 

 

(223,685

)

 

 

(448,715

)

 

Income tax (expense) benefit

 

(6

)

 

 

(40

)

 

 

(49

)

 

 

6

 

 

Net loss

 

(94,040

)

 

 

(71,973

)

 

 

(223,734

)

 

 

(448,709

)

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

(19

)

 

 

 

 

 

8

 

 

 

(54

)

 

Total comprehensive loss

 

$

(94,059

)

 

 

$

(71,973

)

 

 

$

(223,726

)

 

 

$

(448,763

)

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.39

)

 

 

$

(0.34

)

 

 

$

(0.94

)

 

 

$

(2.17

)

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

240,733,497

 

 

 

211,784,541

 

 

 

238,774,515

 

 

 

207,097,047

 

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

June 30,
2021

 

December 31,
2020

 

 

(Unaudited)

 

(As restated)

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

551,624

 

 

 

$

665,924

 

 

Restricted cash

 

13,031

 

 

 

13,031

 

 

Inventories

 

29,965

 

 

 

30,483

 

 

Prepaid expenses and other current assets

 

14,990

 

 

 

18,489

 

 

Total current assets

 

609,610

 

 

 

727,927

 

 

Property, plant, and equipment, net

 

48,870

 

 

 

53,148

 

 

Other non-current assets

 

25,536

 

 

 

22,915

 

 

Total assets

 

$

684,016

 

 

 

$

803,990

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

3,587

 

 

 

$

5,998

 

 

Accrued expenses

 

24,364

 

 

 

22,982

 

 

Customer deposits

 

81,960

 

 

 

83,211

 

 

Other current liabilities

 

2,627

 

 

 

2,830

 

 

Total current liabilities

 

112,538

 

 

 

115,021

 

 

Non-current liabilities

 

 

 

 

Warrant liability

 

100,347

 

 

 

135,440

 

 

Other long-term liabilities

 

25,908

 

 

 

26,451

 

 

Total liabilities

 

$

238,793

 

 

 

$

276,912

 

 

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; 240,937,540 and 236,123,659 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

 

23

 

 

 

23

 

 

Additional paid-in capital

 

1,439,667

 

 

 

1,297,794

 

 

Accumulated deficit

 

(994,478

)

 

 

(770,744

)

 

Accumulated other comprehensive income

 

11

 

 

 

5

 

 

Total stockholders' equity

 

445,223

 

 

 

527,078

 

 

Total liabilities and stockholders' equity

 

$

684,016

 

 

 

$

803,990

 

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited and in thousands)

 

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

 

 

 

(As restated)

Cash flows from operating activities

 

 

 

 

Net loss

 

$

(223,734

)

 

 

$

(448,709

)

 

Stock-based compensation

 

36,535

 

 

 

9,950

 

 

Depreciation and amortization

 

5,740

 

 

 

4,489

 

 

Change in fair value of warrant liability

 

69,082

 

 

 

326,492

 

 

Other operating activities, net

 

(17

)

 

 

67

 

 

Change in assets and liabilities

 

 

 

 

Inventories

 

518

 

 

 

(1,987

)

 

Other current and non-current assets

 

319

 

 

 

3,261

 

 

Accounts payable and accrued expenses

 

(751

)

 

 

(914

)

 

Customer deposits

 

(1,252

)

 

 

(1,628

)

 

Other current and non-current liabilities

 

88

 

 

 

892

 

 

Net cash used in operating activities

 

(113,472

)

 

 

(108,087

)

 

Cash flows from investing activity

 

 

 

 

Capital expenditures

 

(1,647

)

 

 

(9,940

)

 

Cash used in investing activity

 

(1,647

)

 

 

(9,940

)

 

Cash flows from financing activities

 

 

 

 

Payments of finance lease obligations

 

(69

)

 

 

(49

)

 

Proceeds from issuance of common stock pursuant to stock options exercised

 

12,965

 

 

 

 

 

Transaction costs

 

(274

)

 

 

(1,467

)

 

Withholding taxes paid on behalf of employees on net settled stock-based awards

 

(11,803

)

 

 

 

 

Net cash provided by (used in) by financing activities

 

819

 

 

 

(1,516

)

 

Net decrease in cash and cash equivalents

 

(114,300

)

 

 

(119,543

)

 

Cash, cash equivalents and restricted cash at beginning of period

 

678,955

 

 

 

492,721

 

 

Cash, cash equivalents and restricted cash at end of period

 

$

564,655

 

 

 

$

373,178

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

551,624

 

 

 

$

359,912

 

 

Restricted cash

 

13,031

 

 

 

13,266

 

 

Cash, cash equivalents and restricted cash

 

$

564,655

 

 

 

$

373,178

 

 

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 and six months ended June 30, 2021 and June 30, 2020 , respectively, are set forth below:

Amounts in thousands ($)

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Net Loss

 

$

(94,040

)

 

$

(71,973

)

 

$

(223,734

)

 

$

(448,709

)

Income tax expense (benefit)

 

6

 

 

40

 

 

49

 

 

(6

)

Interest expense

 

6

 

 

8

 

 

13

 

 

17

 

Depreciation & amortization

 

2,871

 

 

2,474

 

 

5,740

 

 

4,489

 

Non-capitalized transaction costs*

 

 

 

 

 

 

 

697

 

Stock-based compensation

 

14,423

 

 

5,525

 

 

36,535

 

 

9,950

 

Change in fair value of warrants

 

20,363

 

 

9,596

 

 

69,082

 

 

326,492

 

Adjusted EBITDA

 

$

(56,371

)

 

$

(54,330

)

 

$

(112,315

)

 

$

(107,070

)

A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three and six months ended June 30, 2021 and June 30, 2020, respectively, are set forth below:

Amounts in thousands ($)

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Selling, general, and administrative expenses

 

$

38,503

 

 

$

26,047

 

 

$

83,417

 

 

$

52,802

 

Stock-based compensation

 

10,426

 

 

3,546

 

 

28,465

 

 

6,417

 

Non-capitalized transaction costs*

 

 

 

 

 

 

 

697

 

Depreciation & amortization

 

1,587

 

 

1,330

 

 

3,182

 

 

2,399

 

Non-GAAP selling, general, and administration expenses

 

$

26,490

 

 

$

21,171

 

 

$

51,770

 

 

$

43,289

 

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three and six months ended June 30, 2021 and June 30, 2020, respectively, are set forth below:

Amounts in thousands ($)

 

Three Months Ended

 

Six Months Ended

 

 

June 30, 2021

 

June 30, 2020

 

June 30, 2021

 

June 30, 2020

Research and development expenses

 

$

35,903

 

 

$

37,009

 

 

$

72,266

 

 

$

71,201

 

Stock-based compensation

 

3,997

 

 

1,978

 

 

8,070

 

 

3,533

 

Depreciation & amortization

 

1,284

 

 

1,144

 

 

2,558

 

 

2,090

 

Non-GAAP Research and development expenses

 

$

30,622

 

 

$

33,887

 

 

$

61,638

 

 

$

65,578

 

_____________

* Non-capitalized transaction costs include non-recurring expenses related to preparation and filing of an S-1 registration statement in the first quarter of 2020.

For investor relations inquiries:
Seth Zaslow – Vice President, Investor Relations
seth.zaslow@virgingalactic.com

For media inquiries:
Aleanna Crane – Vice President, Communications
aleanna.crane@virgingalactic.com

Source: Virgin Galactic Holdings, Inc.