Virgin Galactic Holdings, Inc.

Good afternoon. My name is Jacqueline and I will be your conference operator today. At this time, I would like to welcome you to Virgin Galactic's fourth quarter and full year 2020 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask your question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Hosting today's conference will be Seth Zaslow, Vice President, Head of Investor Relations at Virgin Galactic. As a reminder, today's call is being recorded. I would now like to turn the conference over to Mr. Zaslow. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to Virgin Galactic's fourth quarter and full year 2020 earnings conference call. On the call with me today are Michael Colglazer, Chief Executive Officer, Mike Moses, President of Space Missions and Safety, and John Campagna, Chief Financial Officer. Following prepared remarks from Michael, Mike, and John, we will open the call for questions. Our press release was issued about 45 minutes ago and is available on our Investor Relations website, as is the slide presentation that will accompany today's remarks. Let me refer you to slide two of the presentation, which contains our safe harbor disclaimer. During today's call, we will make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual events to differ materially from the forward-looking statements made on this call. For more information about these risks and uncertainties, please refer to the Risk Factors section of Virgin Galactic's annual report on Form 10-K filed with the Securities and Exchange Commission and other documents filed by Virgin Galactic from time to time. Readers are cautioned not to put undue reliance on forward-looking statements, and the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. Please also note that we will refer to certain non-GAAP financial information on today's call. You can find reconciliations of these non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. With that, I'd now like to turn the call over to Michael.

Thanks, Seth, and good afternoon, everyone. I hope you and your loved ones are keeping healthy and safe. First off, I'd like to welcome Seth Zaslow to Virgin Galactic. As you may have seen, Seth joined us a few weeks ago to lead our investor relations function and serve as our primary liaison with the investment community. Seth is awesome, and we're very pleased to have him on board, and I'm confident you will all enjoy working with him. Second, I'm sure many of you saw that our CFO, John Campagna, will be stepping down from his role to pursue his next adventure. I'd like to thank John on behalf of the entire Virgin Galactic team. John has been our CFO during our transition from private to public company and helped build excellent relationships within the investment community. He beat us with a strong balance sheet at a time when the company is well positioned for future growth. I will share more about our incoming CFO, Doug Ahrens, later in the call. Moving on to the agenda, I'm going to start today's call with a brief recap of our 2020 accomplishments and an overview of our flight schedule. I'll then ask Mike Moses to provide some detail on our December 2020 flight as well as an update on our upcoming flight, which I know many of you are eager to hear about. I'll then talk about the progress we're making on expanding our fleet, followed by some thoughts on commercial plans and how we are positioning the organization for scale and success. After that, John will provide detail on our financial results. So with that, let's get started. As I reflect back on 2020 and look ahead to 2021 and beyond, I can't help but be excited. It's an incredibly dynamic time for both our company and for the space industry as a whole, as there is a high degree of interest and advancement that is bringing our society closer to the frontier space than ever before. And we are just getting started on what we believe is going to be a long period of growth and expansion. Turning to slide four, 2020 was an active and productive year for Virgin Galactic, despite the challenges we faced as a result of the COVID-19 pandemic. At the start of the year, we completed a captive carry flight of our spaceship, VSS Unity, from Mojave, California, to its new home at Spaceport America. This flight completed the transition of all Virgin Galactic spaceflight operations to our new commercial base in New Mexico. Shortly after this flight, COVID began to have an impact on our operations. As we shared in the past, building and flying spaceships during a pandemic is materially less efficient than normal. But despite scheduling and cost inefficiencies related to the pandemic, our team was able to make significant progress during the year, and I'd like to thank all of them for their extraordinary level of commitment and dedication to our mission. In the second quarter, we completed two successful glide flights that provided us with valuable data on the ship and training for our team of pilots. Following these glide flights, we were able to complete seven FAA verification and validation reports. putting us in a strong position where we've now cleared 27 of the 29 reports that will address the proviso in our currently active FAA operator's license. We saw great success with our One Small Step program, which demonstrated the strong consumer demand for spaceflight. Closing the program with approximately 1,000 people signed up, and we are pleased that our total number of future astronauts remained at approximately 600 as of the end of the year, 2020. In August, we took advantage of favorable market conditions to further strengthen our balance sheet, and John will cover this topic in more detail in his remarks. We followed up our successful glide flights with a further test flight on December 12th, which Mike, Moses, and I will talk more about shortly. During the year, we also made progress on the build of our second and third spaceships. And in December, we realigned the company structure from a business unit focus to a functional structure as groundwork for our plans to shift from a prototype and an R&D focus to an organization that can design and manufacture at scale. In this process, we retired the Spaceship Company brand and have aligned everyone in the organization under the Virgin Galactic brand. Turning to slides five through seven. These three slides summarize the plan we discussed on last quarter's call for the next three flights in our test flight program. While the specific timing of each flight is shifted, we're still working towards completing these three flights. The first of these was originally set for November 2020. Due to COVID restrictions in New Mexico, we deferred the flight to December. While the December flight did not reach space as planned, it did provide valuable learnings. In particular, it demonstrated the effectiveness of our safety systems in a live scenario, which reinforced the importance of our space flight system architecture and our robust testing and training programs. Subsequent to the flight, we have performed and completed our root cause analysis, which has put us in a position to move forward with our program. I'd like to ask Mike Moses to share details about the December flight and the status of our upcoming flight.