Virgin Galactic Holdings Inc
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Industrials : Aerospace & Defense | Small Cap Growth
Company profile

Virgin Galactic Holdings, Inc. is an aerospace and space travel company. The Company and its wholly owned subsidiaries are focused on the development, manufacture and operations of spaceships and related technologies for the purpose of conducting commercial human spaceflight and flying commercial research and development payloads into space. The Company is offering access to space for private individuals, researchers, and government agencies. Its operations include the design and development, manufacturing, ground and flight testing, and post-flight maintenance of its spaceflight system vehicles. Its spaceflight system is developed using its technology and processes and is focused on providing space experiences for private astronauts, researcher flights and professional astronaut training. Its operations also include spaceflight opportunities for research and technology development. The development and manufacturing activities are located in Tustin, California, and Mojave, California.

Closing Price
$4.88
Day's Change
0.01 (0.21%)
Bid
--
Ask
--
B/A Size
--
Day's High
5.18
Day's Low
4.82
Volume
(Light)
Volume:
5,361,820

10-day average volume:
7,233,787
5,361,820

Virgin Galactic Announces Second Quarter 2022 Financial Results And Provides Business Update

4:05 pm ET August 4, 2022 (BusinessWire) Print

Virgin Galactic Holdings, Inc. (NYSE: SPCE) ("Virgin Galactic" or the "Company") today announced its financial results for the second quarter ended June 30, 2022 and provided a business update.

Michael Colglazier, Chief Executive Officer of Virgin Galactic said "As we prepare to return to the skies, we have put in place many powerful initiatives to drive our long-term success. Our agreement with Aurora to develop new motherships, selection of Phoenix as the location for our new Spaceship factory in Phoenix, and acquisition of an incredible land parcel in New Mexico for our Future Astronaut Campus are cornerstone elements of how we will build and operate our global Spaceline. While our short-term plans now call for commercial service to launch in the second quarter of 2023, progress on our future fleet continues and many of the key elements of our roadmap are now in place to scale the business in a meaningful way."

Second Quarter 2022 Financial Highlights:

Cash position remains strong, with cash and cash equivalents and marketable securities of $1.1 billion as of June 30, 2022. Net loss of $111 million compared to a $94 million net loss in the second quarter of 2021. GAAP selling, general, and administrative expenses of $45 million, compared to $37 million in the second quarter of 2021. Non-GAAP selling, general and administrative expenses of $36 million in the second quarter of 2022, compared to $26 million in the second quarter of 2021. GAAP research and development expenses of $62 million, compared to $35 million in the second quarter of 2021. Non-GAAP research and development expenses of $59 million in the second quarter of 2022, compared to $31 million in the second quarter of 2021. Adjusted EBITDA totaled $(93) million, compared to $(56) million in the second quarter of 2021. Net cash used in operating activities totaled $(87) million, compared to $(65) million in the second quarter of 2021. Free cash flow totaled $(91) million, compared to $(66) million in the second quarter of 2021. Cash paid for capital expenditures totaled $5 million, compared to $1 million in the second quarter of 2021.

Business Highlights and Recent Updates:

On July 6, 2022, announced selection of Boeing subsidiary, Aurora Flight Sciences, to build two new motherships, each designed to fly up to 200 launches per year. The first new mothership is planned to enter service in 2025. On July 14, 2022, announced new Delta class manufacturing facility in Mesa, Arizona. This site is expected to have the capacity to produce up to six spaceships per year and is expected to be fully operational in late 2023, bringing hundreds of new highly skilled jobs to the Greater Phoenix area. On July 21, 2022, announced partnership with Virtuoso to make a limited number of reservations within Virgin Galactic's first 1,000 seats available to their exclusive global portfolio offering. On August 2, 2022, announced expanded presence in New Mexico to support scaled operations. Commercial service expected to launch in Q2 2023 due to extended completion dates within the mothership enhancement program.

Financial Guidance:

The following forward-looking statements reflect our expectations for the third quarter of 2022 as of August 04, 2022 and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in "Forward-Looking Statements."

Forecasted free cash flow for the third quarter of 2022 is expected to be in the range of $(110) million to $(120) million.

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 +1 844 200 6205 or +1 646 904 5544 and enter the conference ID number 643846. The live audio webcast along with supplemental information will be accessible on the Company's Investor Relations website at https://investors.virgingalactic.com/events-and-presentations/. A recording of the webcast will also be available following the conference call.

About Virgin Galactic Holdings

Virgin Galactic is an 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 love, 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, expected flight schedule, timing of commercial launch, completion of new motherships and launch capacity, expected timing of completion and benefits from the Mesa manufacturing facility and the Company's financial forecast. 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," "can," "continue," 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, 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.

USE OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA, non-GAAP selling, general, and administrative expense, non-GAAP research and development expense and free cash flow. 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-GAAP research and development expenses as research and development expenses other than stock-based compensation. It defines free cash flow as net cash used by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other 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.

Second Quarter 2022 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, 2022                                              June 30, 2021                                              June 30, 2022                                              June 30, 2021
                                                                  ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
                                                                                                                                                                       
Revenue                                                           $            357                        $            571                        $            676                        $            571  
                                                                                                                                                     
Operating expenses:                                                                                                                                                                                         
                                                            122                   63                  147                   63  
    Customer experience
                                                         44,700               36,916               81,707               80,235  
    Selling, general, and administrative
                                                         62,340               34,619              114,167               69,708  
    Research and development
                                                          2,915                2,871                5,767                5,740  
    Depreciation and amortization
                                                                  -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                        110,077               74,469              201,788              155,746  
        Total operating expenses
                                                                  ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                     
Operating loss                                         (109,720 )                               (73,898 )                              (201,112 )                              (155,175 )
                                                                                                                                                     
Interest income                                           1,985                  220                2,803                  545  
Interest expense                                         (3,157 )                                    (6 )                                (5,631 )                                   (13 )
Change in fair value of warrants                 --              (20,363 )                        --              (69,082 )
Other income, net                                           194                   13                  210                   40  
                                                                  -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                       (110,698 )                               (94,034 )                              (203,730 )                              (223,685 )
        Loss before income taxes
Income tax expense                                          (23 )                                    (6 )                                   (48 )                                   (49 )
                                                                  -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                       (110,721 )                               (94,040 )                              (203,778 )                              (223,734 )
        Net loss
Other comprehensive income (loss):                                                                                                                                      
                                                           (108 )                                   (19 )                                  (133 )                                     8  
    Foreign currency translation adjustment
                                                         (1,862 )                        --               (7,642 )                        --  
    Unrealized loss on marketable securities
                                                                  -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                  $       (112,691 )                                         $        (94,059 )                                         $       (211,553 )                                         $       (223,726 )
        Total comprehensive loss
                                                                  ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                     
Net loss per share:                                                                                                                                                     
                                                                  $          (0.43 )                                         $          (0.39 )                                         $          (0.79 )                                         $          (0.94 )
        Basic and diluted
                                                                  ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                     
Weighted-average shares outstanding:                                                                                                                                    
                                                                                                                                                        VIRGIN GALACTIC HOLDINGS, INC.
                                                                                                                                                     Condensed Consolidated Balance Sheets
                                                                                                                                                       (In thousands, except share data)
                                                                                                                                                                                                          
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ----------------------------------------------------------------------------- ---------------------------------------------------------
                                                                                                                                                                                       June 30, 2022                                            December 31, 2021
                                                                                                                                                                                                       ------------------------------------------------------                        ------------------------------------------------------
                                                                                                                                                                                        (Unaudited)                                            
Assets                                                                                                                                                                                                                       
Current assets                                                                                                                                                                                                               
                                                                                                                                                                                                       $        329,857                        $        524,481  
     Cash and cash equivalents
                                                                                                                                                                                              40,207               25,549  
     Restricted cash
                                                                                                                                                                                             587,716               79,418  
     Marketable securities, short-term
                                                                                                                                                                                              33,804               29,668  
     Inventories
                                                                                                                                                                                              18,576               19,476  
     Prepaid expenses and other current assets
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                           1,010,160              678,592  
         Total current assets
Marketable securities, long-term                                                                                                                                                             164,777              301,463  
Property, plant, and equipment, net                                                                                                                                                           49,183               47,498  
Other non-current assets                                                                                                                                                                      44,356               41,281  
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                       $      1,268,476                        $      1,068,834  
         Total assets
                                                                                                                                                                                                       ==================== ============== ====================                      ==================== ============== ====================
Liabilities and Stockholders' Equity                                                                                                                                                                                         
Current liabilities                                                                                                                                                                                                          
                                                                                                                                                                                                       $         12,768                        $          9,237  
     Accounts payable
                                                                                                                                                                                              36,707               28,787  
     Accrued liabilities
                                                                                                                                                                                             104,596               90,863  
     Customer deposits
                                                                                                                                                                                               2,803                2,636  
     Other current liabilities
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                             156,874              131,523  
         Total current liabilities
Non-current liabilities                                                                                                                                                                                                      
                                                                                                                                                                                             414,563       --  
     Convertible senior notes, net
                                                                                                                                                                                              46,464               43,047  
     Other long-term liabilities
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                             617,901              174,570  
         Total liabilities
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
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; 258,690,646 and 258,166,417 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively                 26                   26  
Additional paid-in capital                                                                                                                                                                 1,987,614            2,019,750  
Accumulated deficit                                                                                                                                                                       (1,327,421 )                            (1,123,643 )
Accumulated other comprehensive income                                                                                                                                                        (9,644 )                                (1,869 )
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                             650,575              894,264  
         Total stockholders' equity
                                                                                                                                                                                                       -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                         VIRGIN GALACTIC HOLDINGS, INC.
                                                                                                 Condensed Consolidated Statements of Cash Flows
                                                                                                          (Unaudited and in thousands)
                                                                                                                             
                                                                                                                          Six Months Ended June 30,
                                                                                                         --------------------------------------------------------------------------------------------------------------------------------
                                                                                             2022                                                       2021
                                                                                                         ------------------------------------------------------                        ------------------------------------------------------
Cash flows from operating activities                                                                                           
                                                                                                         $       (203,778 )                                         $       (223,734 )
    Net loss
                                                                                                22,978               36,535  
    Stock-based compensation
                                                                                                 5,767                5,740  
    Depreciation and amortization
                                                                                                   841       --  
    Amortization of debt issuance costs
                                                                                        --               69,082  
    Change in fair value of warrants
                                                                                                   241                  (17 )
    Other operating activities, net
                                                                                                                                                                   
    Change in assets and liabilities
                                                                                                (4,136 )                                   518  
         Inventories
                                                                                                 1,410                  319  
         Other current and non-current assets
                                                                                                10,109                 (751 )
         Accounts payable and accrued liabilities
                                                                                                13,733               (1,252 )
         Customer deposits
                                                                                                  (125 )                                    88  
         Other current and non-current liabilities
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                              (152,960 )                              (113,472 )
             Net cash used in operating activities
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from investing activity                                                                                                                                 
                                                                                                (6,293 )                                (1,647 )
    Capital expenditures
                                                                                              (379,254 )                        --  
    Purchases of marketable securities
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                              (385,547 )                                (1,647 )
             Cash used in investing activity
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash flows from financing activities                                                                                                                               
                                                                                                   (66 )                                   (69 )
    Payments of lease obligations
                                                                                               425,000       --  
    Proceeds from convertible senior notes
                                                                                               (11,278 )                        --  
    Debt issuance costs
                                                                                               (52,318 )                        --  
    Capped call premium
                                                                                                    49               12,965  
    Proceeds from issuance of common stock pursuant to stock options exercised
                                                                                        --                 (274 )
    Transaction costs
                                                                                                (2,846 )                               (11,803 )
    Withholding taxes paid on behalf of employees on net settled stock-based awards
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                               358,541                  819  
             Net cash provided by financing activities
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                              (179,966 )                              (114,300 )
             Net decrease in cash and cash equivalents
Cash, cash equivalents and restricted cash at beginning of year                                550,030              678,955  
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Cash, cash equivalents and restricted cash ending balances                                               $        370,064                        $        564,655  
                                                                                                         ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                
Cash and cash equivalents                                                                                $        329,857                        $        551,624  
Restricted cash                                                                                 40,207               13,031  
                                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------

Use of Non-GAAP Financial Measures (Unaudited)

This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), 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-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 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, 2022 and June 30, 2021 , respectively, are set forth below:

Amounts in thousands ($)                                                                     Three Months Ended                                                                                                                 Six Months Ended
                                                         -------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------
                                         June 30, 2022                                           June 30, 2021                                          June 30, 2022                                           June 30, 2021
                                                         ------------------------------------------------------                        -----------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------
Net Loss                                                 $       (110,721 )                                         $ (94,040 )                                         $       (203,778 )                                         $ (223,734 )
                                                    23             6                   48             49  
   Income tax expense
                                                 3,157             6                5,631             13  
   Interest expense
                                                 2,915         2,871                5,767          5,740  
   Depreciation & amortization
                                                12,083        14,423               22,978         36,535  
   Stock-based compensation
                                        --        20,363       --         69,082  
   Change in fair value of warrants
                                                         -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------

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, 2022 and June 30, 2021, respectively, are set forth below:

Amounts in thousands ($)                                            Three Months Ended                                                              Six Months Ended
                                                          ------------------------------------------------------------------------                          ------------------------------------------------------------------------
                            June 30, 2022                 June 30, 2021                 June 30, 2022                 June 30, 2021
                                                          --------------------------                       --------------------------                       --------------------------                       --------------------------
Selling, general, and administrative                      $ 44,700                      $ 36,916                      $ 81,707                      $ 80,235
Stock-based compensation                  8,650     10,426     15,942     28,465

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three and six months ended June 30, 2022 and June 30, 2021, respectively, are set forth below:

Amounts in thousands ($)                                Three Months Ended                                                               Six Months Ended
                                              ------------------------------------------------------------------------                          -------------------------------------------------------------------------
                June 30, 2022                 June 30, 2021                 June 30, 2022                  June 30, 2021
                                              --------------------------                       --------------------------                       ---------------------------                       --------------------------
Research and development                      $ 62,340                      $ 34,619                      $ 114,167                      $ 69,708
Stock-based compensation      3,433      3,997       7,037      8,070

The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the third quarter of 2022 (in thousands):

                          Forecasted Range
                                                           -------------------------
Net cash used in operating activities    ($ 107,000) - ($ 115,000)
Capital expenditures                       ($ 3,000) - ($ 5,000)
                                                           -------------------------

View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005994/en/

SOURCE: Virgin Galactic Holdings, Inc.

For media inquiries: 
Aleanna Crane - Vice President Communications
Virgingalacticpress@virgingalactic.com 
575.800.4422

For investor inquiries: 
Eric Cerny - Vice President Investor Relations
vg-ir@virgingalactic.com
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