Rollout of Second Spaceship Scheduled to Take Place on March 30

Announced Expected Timing of Revenue-Generating Flight with the Italian Air Force

Next Rocket-Powered Spaceflight Targeted to Occur in May

LAS CRUCES, N.M.--(BUSINESS WIRE)-- 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 fourth quarter and full year ended December 31, 2020.

“We accomplished several significant milestones during 2020 despite the ongoing challenges posed by the COVID-19 pandemic,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “Looking ahead, we’re focused on completing our test flight program, expanding our fleet of spaceships and motherships, and developing our unique and transformative customer experience. I am excited about the talent we’re bringing on to our leadership team and the investments we’re making in the business, both of which will position us well to scale for future growth.”

Fourth Quarter 2020 Business Highlights:

• Completed significant build milestones on second spaceship, in preparation for its scheduled rollout on March 30, 2021.
• Conducted safe test flight on December 12, 2020 during which the onboard computer lost connection and halted ignition of the rocket motor.
• Appointed two new pilots into Virgin Galactic Pilot Corps, bringing the total number of pilots to eight as of October 27, 2020.
• Successfully closed the “One Small Step” program on December 31, 2020, with approximately 1,000 participants enrolled.
• Total Future Astronauts remained at approximately 600, as of December 31, 2020.
• Appointed Alistair Burns as Chief Information Officer on November 9, 2020.

Fourth Quarter 2020 Financial Highlights:

• Cash position remains strong, with cash and cash equivalents of $666 million as of December 31, 2020.
• Net loss of $74 million, compared to a $77 million net loss in the third quarter of 2020.
• GAAP selling, general, and administrative expenses of $33 million, compared to $31 million in the third quarter of 2020. Non-GAAP selling, general and administrative expenses of $23 million in the fourth quarter of 2020, compared to $26 million in the third quarter of 2020.
• GAAP research and development expenses of $41 million, compared to $46 million in the third quarter of 2020. Non-GAAP research and development expenses of $40 million in the fourth quarter of 2020, compared to $43 million in the third quarter of 2020.
• Adjusted EBITDA totaled $(60) million, compared to $(66) million in the third quarter of 2020.
• Cash paid for capital expenditures totaled $3.5 million, compared to $3.7 million in the third quarter of 2020.

Recent Updates:

• Continue to prepare for next rocket-powered spaceflight from Spaceport America, targeted for May 2021. Completing modifications and conducting technical checks ahead of flight, which will include revenue-generating payloads as part of the NASA Flight Opportunities Program.
• Re-confirmed second and third spaceflights from Spaceport America, including Sir Richard Branson’s flight, and announced timing for revenue-generating spaceflight with the Italian Air Force.
• Accelerating multi-month enhancement program to mothership vehicle, VMS Eve, and preparing for second generation mothership build program.
• Continue to build senior management team:
  • Appointed Swami Iyer as President of Aerospace Systems, effective end of March 2021.
  • Appointed Stephen Justice as Vice President of Engineering on March 1, 2021.
  • Appointed Doug Ahrens as Chief Financial Officer, effective March 1, 2021.
  • Appointed Seth Zaslow as Vice President of Investor Relations on February 8, 2021.

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 (778) 560-2846 and enter the conference ID number 4979998. The live audio webcast along with accompanying presentation materials 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, as well as a manufacturer of advanced air and space vehicles. It is developing a spaceflight system designed to offer customers a unique and 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 expected spaceship rollout and 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 presentation, including but not limited to the factors, risks and uncertainties included in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including, once filed, its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which are or will be 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.

Fourth Quarter 2020 Financial Results

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, 2020, September 30, 2020, December 31, 2019 and years ended December 31, 2020 and 2019, respectively, are set forth below:

A reconciliation of selling, general, and administrative expenses to non-GAAP selling, general, and administrative expenses for the three months ended December 31, 2020, September 30, 2020, December 31, 2019 and years ended December 31, 2020 and 2019, respectively, are set forth below:

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended December 31, 2020, September 30, 2020, December 31, 2019 and years ended December 31, 2020 and 2019, respectively, are set forth below:

Reclassification Adjustments Impacting Prior Periods

During the year ended December 31, 2020, we reclassified a portion of our property, plant and equipment in machinery and equipment to inventory, as part of our standardization of accounting policies across entities, for inventory and property, plant and equipment. These reclassifications impacted our consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows, as set forth below:

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For media inquiries:

Aleanna Crane – Vice President, Communications

[email protected]

For investor relations inquiries:

Seth Zaslow – Vice President, Investor Relations

[email protected]

Source: Virgin Galactic Holdings, Inc.