• Commercial Service Remains on Track for Q4 2022
  • Current Fleet Enhancement Program On Schedule to be Completed in Q3 2022
  • Opened Ticket Sales to the General Public

TUSTIN, Calif.–(BUSINESS WIRE)–Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the “Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2021 and provided a business update.

“We remain on track and on schedule to complete our enhancement program and launch commercial service later this year,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “We achieved many important milestones in 2021 that laid an essential foundation towards becoming a scaled, commercial operation. In recent weeks, we opened sales to the general public and launched our new global consumer brand. Demand for our one-of-a-kind experience remains strong, and we are currently building our operations to accommodate our growing customer base.”

Fourth Quarter and Full Year 2021 Business Highlights:

  • Opened sales at new price point of USD $450,000 for private astronauts in Q3 2022.
  • Opened a new Engineering, Design and Corporate headquarters, which will serve as the primary hub for R&D and the development of both the Delta class spaceship and the next generation motherships.
  • In July 2021, successfully completed first fully crewed spaceflight, Unity 22, which fulfilled test objectives including evaluating the cabin and customer experience.
  • In June 2021, received approval from the Federal Aviation Administration for full commercial launch license, marking the first time that the agency licensed a company to fly customers to space.
  • In May 2021, successfully completed first spaceflight from Spaceport America, New Mexico, Unity 21, which fulfilled various test objectives and carried revenue-generating scientific research experiments.
  • Rolled out Spaceship III, VSS Imagine, the second spaceship in the current fleet.

Fourth Quarter 2021 Financial Highlights:

  • Cash position remains strong, with cash, cash equivalents, and marketable securities of approximately $931 million as of December 31, 2021. This does not reflect our recent fundraise.
  • GAAP selling, general, and administrative expenses of $40 million, compared to $33 million in the fourth quarter of 2020. Non‐GAAP selling, general and administrative expenses of $29 million in the fourth quarter of 2021, compared to $21 million in the fourth quarter of 2020.
  • GAAP research and development expenses of $42 million, compared to $41 million in the fourth quarter of 2020. Non‐GAAP research and development expenses of $36 million in the fourth quarter of 2021, compared to $38 million in the fourth quarter of 2020.
  • Adjusted EBITDA totaled $(65) million, compared to $(60) million in the fourth quarter of 2020.
  • Net loss of $81 million, compared to a $104 million net loss in the fourth quarter of 2020.

Recent Updates:

  • Expected launch of private astronaut commercial service remains on track for Q4 2022.
  • Fleet enhancement program for mothership Eve and spaceship Unity remains on track to be completed in Q3 2022. This enhancement program is designed to improve the vehicles’ durability, reliability, and flight rate frequency leading into commercial service.
  • On February 15, 2022, announced the opening of tickets sales to the general public and launched new consumer brand.
  • On February 8, 2022, announced the appointment of Blair Rich as President and Chief Business Officer, Commercial and Consumer Operations.
  • Progressed plans for the design and location of new final assembly manufacturing facility for the Delta class spaceships.
  • In final stages of negotiations with preferred suppliers to manufacture the next generation of our motherships.
  • In January 2022, we consummated a convertible debt offering that resulted in $425 million in gross proceeds to us. The proceeds of the offering are expected to be used to fund working capital, general and administrative matters and capital expenditures to accelerate the development of the Delta class spaceship fleet and next generation motherships.

Financial Guidance:

The following forward-looking statements reflect our expectations for the first quarter of 2022 as of February 22, 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 first quarter of 2022 is expected to be in the range of $(75) to $(85) 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 022958. 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 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 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 presentation 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-capitalized transaction costs, 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.

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands except for per share data)

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

 

(Unaudited)

 

 

 

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

Revenue

 

$

141

 

 

$

 

 

$

3,292

 

 

$

238

 

Cost of revenue

 

 

2

 

 

 

 

 

 

272

 

 

 

173

 

Gross profit

 

 

139

 

 

 

 

 

 

3,020

 

 

 

65

 

Selling, general, and administrative expenses

 

 

39,902

 

 

 

32,854

 

 

 

173,178

 

 

 

116,592

 

Research and development expenses

 

 

41,518

 

 

 

41,481

 

 

 

149,377

 

 

 

158,757

 

Operating loss

 

 

(81,281

)

 

 

(74,335

)

 

 

(319,535

)

 

 

(275,284

)

Change in fair value of warrants

 

 

 

 

 

(30,080

)

 

 

(34,650

)

 

 

(371,852

)

Interest income, net

 

 

417

 

 

 

262

 

 

 

1,183

 

 

 

2,241

 

Other income (expense)

 

 

72

 

 

 

9

 

 

 

182

 

 

 

14

 

Loss before income taxes

 

 

(80,792

)

 

 

(104,144

)

 

 

(352,820

)

 

 

(644,881

)

Income tax (benefit) expense

 

 

5

 

 

 

(28

)

 

 

79

 

 

 

6

 

Net loss

 

 

(80,797

)

 

 

(104,116

)

 

 

(352,899

)

 

 

(644,887

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

118

 

 

 

(48

)

 

 

129

 

 

 

(54

)

Unrealized loss on marketable securities

 

 

(1,566

)

 

 

 

 

 

(2,003

)

 

 

 

Total comprehensive loss

 

$

(82,245

)

 

$

(104,164

)

 

$

(354,773

)

 

$

(644,941

)

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.31

)

 

$

(0.44

)

 

$

(1.43

)

 

$

(2.94

)

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

Basic and diluted

 

 

257,887,722

 

 

 

236,722,884

 

 

 

247,618,557

 

 

 

219,107,905

 

VIRGIN GALACTIC HOLDINGS, INC.

Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

 

 

 

 

 

December 31, 2021

 

December 31, 2020

 

 

 

 

 

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

524,481

 

 

$

665,924

 

Restricted cash

 

 

25,549

 

 

 

13,031

 

Marketable securities, short-term

 

 

79,418

 

 

 

 

Inventories

 

 

29,668

 

 

 

30,483

 

Prepaid expenses and other current assets

 

 

19,476

 

 

 

18,489

 

Total current assets

 

 

678,592

 

 

 

727,927

 

Marketable securities, long-term

 

 

301,463

 

 

 

 

Property, plant, and equipment, net

 

 

47,498

 

 

 

53,148

 

Other non-current assets

 

 

41,281

 

 

 

22,915

 

Total assets

 

$

1,068,834

 

 

$

803,990

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

 

9,237

 

 

 

5,998

 

Accrued liabilities

 

 

28,787

 

 

 

22,982

 

Customer deposits

 

 

90,863

 

 

 

83,211

 

Other current liabilities

 

 

2,636

 

 

 

2,830

 

Total current liabilities

 

 

131,523

 

 

 

115,021

 

Non-current liabilities

 

 

 

 

Warrant liability

 

 

 

 

 

135,440

 

Other long-term liabilities

 

 

43,047

 

 

 

26,451

 

Total liabilities

 

$

174,570

 

 

$

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; 258,166,417 and 236,123,659 shares issued and outstanding as of December 31, 2021 and 2020, respectively

 

 

26

 

 

 

23

 

Additional paid-in capital

 

 

2,019,750

 

 

 

1,297,794

 

Accumulated deficit

 

 

(1,123,643

)

 

 

(770,744

)

Accumulated other comprehensive income

 

 

(1,869

)

 

 

5

 

Total stockholders’ equity

 

 

894,264

 

 

 

527,078

 

Total liabilities and stockholders’ equity

 

$

1,068,834

 

 

$

803,990

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

 

(Unaudited)

 

 

 

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(80,797

)

 

$

(104,116

)

 

$

(352,899

)

 

$

(644,887

)

Stock-based compensation

 

 

13,101

 

 

 

11,749

 

 

 

61,805

 

 

 

30,324

 

Depreciation and amortization

 

 

2,883

 

 

 

2,783

 

 

 

11,518

 

 

 

9,781

 

Change in fair value of warrant liability

 

 

 

 

 

30,080

 

 

 

34,650

 

 

 

371,852

 

Other operating activities, net

 

 

53

 

 

 

21

 

 

 

11

 

 

 

96

 

Change in assets and liabilities

 

 

 

 

 

 

 

 

Inventories

 

 

(363

)

 

 

176

 

 

 

815

 

 

 

1,371

 

Other current and non-current assets

 

 

(9,807

)

 

 

(8,569

)

 

 

(3,465

)

 

 

(2,417

)

Accounts payable and accrued liabilities

 

 

6,111

 

 

 

(1,729

)

 

 

7,935

 

 

 

(1,010

)

Customer deposits

 

 

5,504

 

 

 

21

 

 

 

7,652

 

 

 

(151

)

Other current and non-current liabilities

 

 

(1,811

)

 

 

(512

)

 

 

1,215

 

 

 

1,882

 

Net cash used in operating activities

 

 

(65,126

)

 

 

(70,096

)

 

 

(230,763

)

 

 

(233,159

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(2,183

)

 

 

(3,540

)

 

 

(4,635

)

 

 

(17,201

)

Purchases of marketable securities

 

 

(96,752

)

 

 

 

 

 

(382,884

)

 

 

 

Net cash used in investing activities

 

 

(98,935

)

 

 

(3,540

)

 

 

(387,519

)

 

 

(17,201

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Payments of finance lease obligations

 

 

(35

)

 

 

(34

)

 

 

(140

)

 

 

(123

)

Repayment of notes payable

 

 

 

 

 

(310

)

 

 

(310

)

 

 

(310

)

Proceeds from issuance of common stock pursuant to stock options exercised

 

 

1,124

 

 

 

2,582

 

 

 

19,980

 

 

 

2,582

 

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

 

 

(7,622

)

 

 

(4,368

)

 

 

(23,401

)

 

 

(4,767

)

Proceeds from issuance of common stocks

 

 

 

 

 

 

 

 

500,000

 

 

 

460,200

 

Transaction costs

 

 

(19

)

 

 

(122

)

 

 

(6,772

)

 

 

(20,988

)

Net cash provided by (used in) by financing activities

 

 

(6,552

)

 

 

(2,252

)

 

 

489,357

 

 

 

436,594

 

Net increase (decrease) in cash and cash equivalents

 

 

(170,613

)

 

 

(75,888

)

 

 

(128,925

)

 

 

186,234

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

720,643

 

 

 

754,843

 

 

 

678,955

 

 

 

492,721

 

Cash, cash equivalents and restricted cash at end of period

 

$

550,030

 

 

$

678,955

 

 

$

550,030

 

 

$

678,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VIRGIN GALACTIC HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Three Months Ended

 

Years Ended

(Unaudited)

 

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

Cash and cash equivalents

 

$

524,481

 

$

665,924

 

$

524,481

 

$

665,924

Restricted cash

 

 

25,549

 

 

13,031

 

 

25,549

 

 

13,031

Cash, cash equivalents and restricted cash

 

$

550,030

 

$

678,955

 

$

550,030

 

$

678,955

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-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 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 December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

 

 

Three Months Ended

 

Years Ended

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

 

Net Loss

 

$

(80,797

)

 

$

(104,116

)

 

$

(352,899

)

 

$

(644,887

)

 

Income tax (benefit) expense

 

 

5

 

 

 

(28

)

 

 

79

 

 

 

6

 

 

Interest expense

 

 

6

 

 

 

10

 

 

 

25

 

 

 

36

 

 

Depreciation & amortization

 

 

2,883

 

 

 

2,783

 

 

 

11,518

 

 

 

9,781

 

 

EBITDA

 

 

(77,903

)

 

 

(101,351

)

 

 

(341,277

)

 

 

(635,064

)

 

Non-capitalized transaction costs*

 

 

 

 

 

 

 

 

 

 

 

697

 

 

Stock-based compensation

 

 

13,101

 

 

 

11,749

 

 

 

61,805

 

 

 

30,324

 

 

Change in fair value of warrants

 

 

 

 

 

30,080

 

 

 

34,650

 

 

 

371,852

 

 

Adjusted EBITDA

 

$

(64,802

)

 

$

(59,522

)

 

$

(244,822

)

 

$

(232,191

)

 

A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three months ended December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

 

 

Three Months Ended

 

Years Ended

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

 

Selling, general, and administrative expenses

 

$

39,902

 

$

32,854

 

$

173,178

 

$

116,592

 

Stock-based compensation

 

 

9,177

 

 

9,800

 

 

46,181

 

 

21,272

 

Depreciation and amortization

 

 

1,590

 

 

1,579

 

 

6,364

 

 

5,388

 

Non-capitalized transaction costs*

 

 

 

 

 

 

 

 

697

 

Non-GAAP selling, general, administration expenses

 

$

29,135

 

$

21,475

 

$

120,633

 

$

89,235

 

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended December 31, 2021 and 2020 and years ended December 31, 2021 and 2020, respectively, are set forth below (in thousands):

 

 

Three Months Ended

 

Years Ended

 

 

 

December 31, 2021

 

December 31, 2020

 

December 31, 2021

 

December 31, 2020

 

Research and development expenses

 

$

41,518

 

$

41,481

 

$

149,377

 

$

158,757

 

Stock-based compensation

 

 

3,924

 

 

1,949

 

 

15,624

 

 

9,052

 

Depreciation and amortization

 

 

1,293

 

 

1,204

 

 

5,155

 

 

4,393

 

Non-GAAP Research and development expenses

 

$

36,301

 

$

38,328

 

$

128,598

 

$

145,312

 

_______________

*

 

 

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.

The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the three months ended March 31, 2022 (in thousands):

 

 

Forecasted Range

 

Net cash used in operating activities

 

($ 74,000) – ($ 82,000)

 

Capital expenditures

 

($ 1,000) – ($ 3,000)

 

Free cash flow

 

($ 75,000) – ($ 85,000)

 

 

Contacts

For media inquiries:

Aleanna Crane – Vice President Communications

Virgingalacticpress@virgingalactic.com
575.800.4422

For investor inquiries:

vg-ir@virgingalactic.com

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