MOJAVE, Calif. – May 5, 2020 – Virgin Galactic Holdings, Inc. (NYSE: SPCE), 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, California 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 CommunityAlong 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 InformationVirgin 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.