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Virgin Galactic Announces Second Quarter 2021 Financial Results

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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

 

Virgin Galactic Holdings, Inc.

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