Virgin Galactic Holdings, Inc. · NYSE:SPCE
Virgin Galactic — Q2 2020 Earnings Presentation
26 slides from Virgin Galactic's earnings presentation, Aug 3, 2020
Slide 1: Second Quarter 2020 Investor Update
Second Quarter 2020 Investor Update August 3, 2020
Slide 2: Disclosures
Disclosures Forward-Looking Statements This presentation 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 pe
Slide 3: Introducing Michael Colglazier
Introducing Michael Colglazier ▪ Michael Colglazier appointed CEO of Virgin Galactic effective July 20, 2020 ✓ Visionary commercial leader ✓ Most recently President and Managing Director, Disney Parks International ✓ Track record of delivering world-class experiences ✓ Over three decades of developi
Slide 4: Recent Milestones
Recent Milestones Spaceflight Operations Advanced Development Initiatives Flight Test Program FAA Approval Process Orbital Human Spaceflight Successful test flights from Progressed towards flying paying customers Signed Space Act with NASA for private orbital Spaceport America under existing Launch
Slide 5: Spaceport America Test Flights and Operational Readiness
Spaceport America Test Flights and Operational Readiness ▪ Completed eight flights in the second quarter: ✓ Six flights from Spaceport America for VMS Eve ✓ Two VSS Unity flights for glide flight testing ▪ Conducted several tests of ground infrastructure to support spaceflights: ✓ Full scale exercis
Slide 6: Second Spaceport America Glide Flight June 25, 2020
Second Spaceport America Glide Flight June 25, 2020 ▪ Flown at higher speed than first glide flight ✓ Enabled certain vehicle systems to operate close to the environment seen during phases of rocket boost on spaceflight ▪ Achieved glide speed of 0.85 Mach after being released from mothership VMS Eve
Slide 7: Update on FAA Approval Process
Update on FAA Approval Process ▪ FAA previously issued Launch License to allow Virgin Galactic to conduct spaceflight missions ▪ The path to flying paying customers is through a Verification and Validation program that contains 29 elements ✓ Cleared three new elements during Q2, related to cabin hum
Slide 8: Flight Program Update
Flight Program Update ▪ Completed data review from second glide flight ▪ Final installation of customer cabin and vehicle inspections currently underway ▪ Powered test flights expected to commence from Spaceport America this fall ✓ Next powered test flight will carry NASA payloads 8
Slide 9: Update on Build Program
Update on Build Program ▪ Continued to make progress on key fabrication metrics and preparing second vehicle for integrated vehicle systems testing ▪ Expect to rollout completed second spaceship and commence ground testing this year ▪ Achieved over 75% completion of parts fabrication for third vehic
Slide 10: SpaceShipTwo Cabin Reveal
SpaceShipTwo Cabin Reveal ▪ On July 28, 2020, unveiled SS2 cabin interior via virtual event streamed live on YouTube ▪ Launched immersive experience of spaceflight and cabin interior using Augmented Reality mobile app ▪ Life-changing and profound view from space ✓ 12 windows around cabin provide a 3
Slide 11: Spaceport America Milestones
Spaceport America Milestones ▪ Continued to make meaningful progress in build-out of Spaceport America ▪ Completed construction of third floor customer area – the future home of astronaut training, flight preparation activities and the Customer Spaceship Training Cabin and Astronaut Lounge ✓ Receive
Slide 12: Customer Demand
Customer Demand ▪ The “One Small Step” offering supports the direct sales Total Addressable Market process by creating a pool of qualified prospects ~2M HIGH NET WORTH INDIVIDUALS[1] ✓ “One Small Step” pool reached over 700 as of July 30, 2020 ✓ This community now substantially exceeds number of Fut
Slide 13: Future Growth Areas
Future Growth Areas . Note: Images of the high speed travel vehicle are computer renderings 13
Slide 14: Orbital Spaceflight Initiative Update
Orbital Spaceflight Initiative Update ▪ Continues relationship with NASA from Space Act Agreement for private orbital spaceflight to the International Space Station ▪ Private orbital spaceflight largely driven by demand from existing customers ✓ Entered into deposit agreements for orbital spacefligh
Slide 15: Completed High Speed Vehicle Mission Concept Review
Completed High Speed Vehicle Mission Concept Review ▪ On August 3, 2020, unveiled initial design concept for high speed vehicle effort ▪ Successfully completed Mission Concept Review, attended by NASA representatives ✓ Confirmed company’s design concept meets high level of requirements and objective
Slide 16: Virgin Galactic's High Speed Technology Roadmap
Virgin Galactic’s High Speed Technology Roadmap ▪ High speed technology could bring a paradigm shift to human air travel ▪ Experienced resources dedicated to conceptual development ▪ Leverages recently signed Space Act Agreement with NASA Long-Term Medium-Term ▪ FAA certification ▪ Detailed design N
Slide 17: Virgin Galactic's Advantages in High Speed Technology Development
Virgin Galactic’s Advantages in High Speed Technology Development First Mover Advantage In-House Engineering and Only company in the world to have flown a Manufacturing non-pilot crew member in a winged vehicle at Vertically integrated with 10+ years of Mach 3+ development and design experience Cust
Slide 18: Financials
Financials
Slide 19: Second Quarter 2020 Financials
Second Quarter 2020 Financials ▪ Strong cash position, with cash and cash equivalents of $360 million as of June 30, 2020 ▪ Net loss of $63 million, compared to $60 million net loss in Q1 2020 ▪ GAAP SG&A expenses of $26 million, compared to $27 million in Q1 2020. Non-GAAP SG&A expenses (1) of $23
Slide 20: Income Statement
Income Statement Amounts in thousands ($) Unaudited Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Revenue - $ 238 $ 638 $ 238 $ 2,420 Cost of revenue - 173 278 173 1,284 Gross profit - 65 360 65 1,136 Selling, general, and administrative e
Slide 21: Cash Flow Statement
Cash Flow Statement Amounts in thousands ($) Unaudited Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Cash flows from operating activities Net loss $ (62,518) $ (59,930) $ (44,068) $ (122,448) $ (86,661) Stock-based compensation 5,525 4,425
Slide 22: Looking Ahead
Looking Ahead 22
Slide 23: Appendix
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Slide 24: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Amounts in thousands ($) Unaudited Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Net Loss $ (62,518) $ (59,930) $ (44,068) $ (122,448) $ (86,661) Income tax (benefit) expense 40 (46) 61 (6) 86 Interest e
Slide 25: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Amounts in thousands ($) Unaudited Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Selling, general, and administrative expenses $ 26,047 $ 26,755 $ 14,610 $ 52,802 $ 26,905 Stock-based compensation 3,546
Slide 26: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Amounts in thousands ($) Unaudited Three Months Ended Six Months Ended June 30, 2020 March 31, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Research and development expenses $ 37,150 $ 34,282 $ 30,167 $ 71,432 $ 61,591 Stock-based compensation 1,979 1,554 - 3,53
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