Signed Pioneering NASA Space Act Agreement to
Enable the Development of High Speed Point-to-Point Technologies
Over 400 Participants Paid Deposits to Enroll in “One Small Step”
Program Successfully Completed First VSS Unity Glide Flight from
Spaceport America, New Mexico
Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic”
or “the Company”), a vertically integrated aerospace company, today
announced its financial results for the first quarter ended March
31, 2020.
“In the first quarter we made significant progress toward our
goal of opening access to space in a safe and responsible way,”
said George Whitesides, Chief Executive Officer of Virgin Galactic.
"We are encouraged by the response to our ‘One Small Step’
initiative, with over 400 refundable deposit payments received from
individuals from 44 countries, representing over $100 million of
potential future revenue upon full ticket payment. We believe this
response to our ‘One Small Step’ initiative demonstrates the
appetite for our product offering among new potential Future
Astronauts, complementing the strength and ongoing support of our
existing customer base of 600 Future Astronauts who already have
reservations on our spaceflights. The COVID-19 outbreak led to an
unprecedented situation for companies and individuals across the
world, but I am encouraged by the commitment displayed by our team
in helping to support relief efforts while making program progress.
We remain focused on our strategic goals and our path to commercial
launch.”
First Quarter 2020 Business Highlights:
- Launched “One Small Step” initiative, enabling prospective
customers to secure their place at the front of the line for future
ticket reservations when ticket sales re-open.
- Completed five VMS Eve carrier aircraft flights and a captive
carry flight to ferry VSS Unity from Mojave, CA to Spaceport
America, as well as significant preparations for the first glide
flight of VSS Unity from Spaceport America.
- Cleared four new FAA Verification and Validation provisos,
bringing the total number of provisos cleared to date to 24 out of
29.
- Achieved “Weight on Wheels” milestone, completed numerous
structural and mechanical installations, commenced assembly of
flight control systems and began preparing for Integrated Vehicle
Ground Testing on second spaceship.
- Relocated VSS Unity to Spaceport America in New Mexico.
- Completed the first and second floors at Spaceport America and
continued to build out the third floor, which will be used for
astronaut training and flight preparation activities.
- Appointed Enrico Palermo as Chief Operating Officer.
First Quarter 2020 Financial Highlights:
- Strong cash position, with cash and cash equivalents of $419
million as of March 31, 2020.
- Revenue of $238,000, generated by providing engineering
services.
- Net loss of $60 million, narrowed from a $73 million net loss
in fourth quarter of 2019.
- GAAP selling, general, and administrative expenses of $27
million, compared to $37 million in fourth quarter of 2019.
Non-GAAP selling, general and administrative expenses of $23
million in the first quarter of 2020.
- GAAP research and development expenses of $34 million, compared
to $37 million in fourth quarter of 2019. Non-GAAP research and
development expenses of $33 million in first quarter of 2020.
- Adjusted EBITDA totalled $(53) million, compared to $(55)
million in fourth quarter of 2019.
- Cash paid for capital expenditures totalled $4 million,
compared to $6 million in fourth quarter of 2019.
- Completed the redemption of all outstanding public warrants on
a cashless basis on April 13, 2020, in accordance with the Warrant
Agreement. All public warrants and units ceased trading at 5:00pm
Eastern Time on April 13, 2020.
Recent Business Highlights:
- Entered into Space Act Agreement with NASA to facilitate the
development of high speed technologies.
- Strong interest in the “One Small Step” initiative, with over
400 deposit payments received from individuals from 44 countries as
of April 29, 2020. If Virgin Galactic can convert all of these
customers, that would represent over $100 million of future
business, depending on ticket price.
- Registrations of interest in flight reservations increased by
approximately 1,200 as of April 29, 2020, a 15% increase since
February 23, 2020.
- Completed transition of all Virgin Galactic operations
personnel from Mojave, California to Spaceport America, bringing
current total number of staff in New Mexico to 178.
- Completed glide flight of VSS Unity from Spaceport America on
May 1, 2020, marking the spaceship’s first flight from a new home
base and in new airspace.
Impact of COVID-19 and Support in the Community
Along with its first quarter 2020 financial results, Virgin
Galactic also provided an update regarding the impact of COVID-19
on its business and operations. The full impact of the COVID-19
pandemic on the Company’s full year financial results and test
flight program will depend on future developments, such as the
ultimate duration and scope of the outbreak, the timing and impact
of future stay-at-home orders and other government mandates, and
the pace at which the Company can resume normal course operations.
Virgin Galactic continues to monitor the impact of COVID-19 and
will provide updates as appropriate.
Virgin Galactic has been assisting with COVID-19 relief efforts
in its communities and has partnered with NASA to develop
innovative solutions to the problems facing healthcare workers on
the frontlines, including developing negative pressure enclosures
and low-cost breathing hoods (PPB Hoods) that provide oxygen-rich
positive pressure to patients in need. In addition, the Company has
donated medical supplies from its stocks to communities in
California and New Mexico, including masks, suits and gloves, and
has donated Powered Air Purifying Respirators to local
hospitals.
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 (833) 968-2325
and enter the conference ID number 8115418. 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 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.
First Quarter 2020 Financial Results
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(In thousands except for per
share data)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Revenue
$
238
$
1,782
Cost of revenue
173
1,006
Gross profit
65
776
Selling, general, and administrative
expenses
26,755
12,295
Research and development expenses
34,282
31,424
Operating loss
(60,972)
(42,943)
Interest income
1,177
353
Interest expense
(9)
(1)
Other income
3
23
Other expense
(175)
—
Loss before income taxes
(59,976)
(42,568)
Income tax (benefit) expense
(46)
25
Net loss
(59,930)
(42,593)
Other comprehensive loss:
Foreign currency translation
adjustment
(54)
10
Total comprehensive loss for the year
$
(59,984)
$
(42,583)
Net loss per share:
Basic and diluted
$
(0.30)
$
(0.22)
Weighted-average shares outstanding:
Basic and diluted
202,409,552
193,663,150
Condensed Consolidated Balance
Sheets
(In thousands, except share
data)
(Unaudited)
As of
March 31, 2020
December 31, 2019
Assets
Current assets
Cash and cash equivalents
$
419,374
$
480,443
Restricted cash
12,278
12,278
Inventories
28,797
26,817
Other current assets
14,879
17,133
Total current assets
475,328
536,671
Property, plant, and equipment, net
52,382
49,333
Other non-current assets
20,349
19,542
Total assets
$
548,059
$
605,546
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
8,410
$
7,038
Accrued expenses
18,511
22,277
Customer deposits
83,264
83,362
Other current liabilities
3,207
3,168
Total current liabilities
113,392
115,845
Other long-term liabilities
22,666
22,141
Total liabilities
$
136,058
$
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;
209,240,972 and 196,001,038 shares issued
and outstanding
as of March 31, 2020 and December 31,
2019, respectively
21
20
Additional paid-in capital
593,582
589,158
Accumulated deficit
(181,607)
(121,677)
Accumulated other comprehensive income
5
59
Total stockholders' equity
412,001
467,560
Total liabilities and stockholders'
equity
$
548,059
$
605,546
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March
31,
2020
2019
Cash flows from operating activities
Net loss
$
(59,930
)
$
(42,593
)
Stock-based compensation
4,425
—
Depreciation and amortization
2,105
1,610
Other operating activities, net
1
(117
)
Change in assets and liabilities
Inventories
(1,980
)
(35
)
Other current and non-current assets
2,142
(835
)
Accounts payable and accrued expenses
(2,978
)
(131
)
Customer deposits
(98
)
(770
)
Net cash used in operating activities
(56,313
)
(42,871
)
Cash flows from investing activity
Capital expenditures
(4,036
)
(3,068
)
Cash used in investing activity
(4,036
)
(3,068
)
Cash flows from financing activities
Payments of finance lease obligations
(23
)
(23
)
Net transfer from Parent Company
—
47,445
Transaction costs
(697
)
—
Net cash (used in) provided by financing
activities
(720
)
47,422
Net (decrease) increase in cash and cash
equivalents
(61,069
)
1,483
Cash, cash equivalents and restricted cash
at beginning of period
492,721
81,368
Cash, cash equivalents and restricted cash
at end of period
$
431,652
$
82,851
Cash and cash equivalents
$
419,374
$
74,973
Restricted cash
12,278
7,878
Cash, cash equivalents and restricted
cash
$
431,652
$
82,851
Use of Non-GAAP Financial Measures
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 ended March 31, 2020 and 2019, respectively, are set forth
below:
Amounts in thousands ($)
Three Months Ended March
31,
2020
2019
Net Loss
$
(59,930)
$
(42,593)
Income tax (benefit) expense
(46)
25
Interest expense
9
1
Depreciation & amortization
2,105
1,610
EBITDA
(57,862)
(40,957)
Non-capitalized transaction costs*
697
—
Stock-based compensation
4,425
—
Adjusted EBITDA
$
(52,740)
$
(40,957)
A reconciliation of selling, general, and administrative
expenses to non-GAAP selling, general, and administrative expenses
for the three months ended March 31, 2020 and 2019, respectively,
are set forth below:
Amounts in thousands ($)
Three Months Ended March
31,
2020
2019
Selling, general, and administrative
expenses
$
26,755
$
12,295
Stock-based compensation
2,871
—
Non-capitalized transaction costs*
697
—
Non-GAAP Selling, general and
administrative expenses
$
23,187
$
12,295
A reconciliation of research and development expenses to
non-GAAP research and development expenses for the three months
ended March 31, 2020 and 2019, respectively, are set forth
below:
Amounts in thousands ($)
Three Months Ended March
31,
2020
2019
Research and development expenses
$
34,282
$
31,424
Stock-based compensation
1,554
—
Non-GAAP Research and development
expenses
$
32,728
$
31,424
*
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/20200505006006/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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