Q3 2022 Virgin Galactic Holdings Inc Earnings Call
Inefficiently improve the durability and reliability of both shifts, enabling a higher frequency flight rate for commercial service.
As you can see in the photo from Spaceport America on slide five one of the final steps and Unities enhancement program was the design and application of the ships new livery.
With the installation of <unk> enhancements now complete we anticipate reduced maintenance needs for the spaceship and the ability to support our monthly flight cadence.
On <unk>, the new launch pylon has been completed new horizontal stabilizers have been installed and upgrades to avionics and mechanical systems are wrapping up we are now in the process of completing final flight preparation desk.
Subject to successful completion of these task we expect the first test flight for <unk> to occur in early January if not before with the ship returning to its home base in new Mexico. Shortly thereafter.
After the verification test flights of Eve, we will move to a glide flight of VSS unity, and then to a spaceflight with Virgin Galactic mission specialist onboard.
The crew will assess various elements of the <unk> experience and make final refinements to our training program for our first commercial passengers.
As always our approach to test flights is methodical and iterative and following the sequence of test flights commercial service is expected to commence with the Italian Air Force Research mission, followed by private astronaut space flights.
In the coming weeks, we will begin communicating with our founder astronauts regarding their flight assignments for their life changing trip space.
I've spoken in the past about the value of our unique customer journey, both as a key product differentiator and as a customer retention and lead generation engine.
Key to that is our membership community and future astronauts in the exclusive events and programming that it offers.
In late September we held the inaugural space for the curious summit in Wyoming.
This is our Mark key membership event for future astronauts.
The images on slide six provide a glimpse of the dynamic programming designed to enrich our customers' anticipation and readiness for their space journey.
Many of our future astronauts brought friends and family members, who are able to interact with our team and other members of the community.
We continually hear feedback that this community access and interaction is a key differentiator for Virgin Galactic and it is something foremost in our customers' minds when they decide to fly with us.
Our future astronauts are incredibly excited for us to bring them the space, which is why the launch of commercial service in Q2 of 'twenty three is so important.
Also critical to our success is the ability to grow our fleet, so, let's turn to slide seven and our future fleet development.
As we've shared with you before our production model spaceships. The Delta class are intended to materially increase our flight frequency.
These ships will be the key driver of revenue growth and profitability for the company.
We are leveraging the existing aerospace ecosystem to enable greater speed to market and with a fully vertical operation.
Last quarter, we announced our agreement with Boeing subsidiary Aurora Flight Sciences to build our next generation mother ships and we shared that we had issued request for proposals for major sub assemblies of our Delta class ships.
As announced yesterday, we have selected two very experienced companies in aviation and aerospace Bell Textron and carbon aerospace as our primary suppliers for the Delta ships.
As illustrated on slide eight Bell Textron will supply our unique feathering system and flight control surfaces.
Among many strong attributes bell textron expertise and tilt rotor technology is complementary to the other technology used on our spaceships.
Carbon aerospace known for its expertise in constructing large complex composite parts for aerospace and aviation.
We will produce the fuselage and wing of our spaceships.
Along with Aurora These important relationships propel our production strategy and we're excited to be joining forces with aerospace companies of this caliber.
Work will begin immediately with bell and carbon and initial production, including tooling efforts is targeted to begin in 2023.
The Virgin Galactic team will retain responsibility for the overall system architecture and design authority for all components.
I know assembly and integration of the new ships will be done in our facility in Phoenix, Arizona flight.
Flight test and acceptance testing of the new ships will take place at Spaceport America in New Mexico.
Regarding our next generation Motherships, our collaboration with Aurora Flight Sciences is also progressing well.
We will soon be moving into the tooling phase and the next generation Mothership program remains on track to begin flight testing ahead of the first Delta ship coming off the line in Phoenix in 2025.
With this schedule in mind, we are dedicating significant engineering resources to the work that precedes production of the future fleet.
Simultaneously, we are focused on the launch and flight consistency of unity need to begin, bringing our customers to space and to demonstrate the value of our product.
Prioritizing our resources against these important efforts will likely impact the pace of work on our second spaceship VSS imagine and we are reassessing its schedule for entering commercial service.
I'll now turn the call over to Doug for an update on our financials.
Thanks, Michael and good afternoon, everyone turning to slide 10, and our financial results for the third quarter.
We generated revenue of $767000 in the third quarter, driven by future astronaut membership in event fees and revenue recognized for research activities.
Operating expenses were $146 million compared.
Compared to $86 million in the prior year period the.
The increase is primarily attributable to higher R&D costs tied to our fleet enhancement activity and the development work for our future fleet.
We reported a GAAP net loss of $146 million.
Compared to $48 million in the prior year period, driven by higher R&D costs.
The favorable change in the fair value of warrants in the prior year.
Adjusted EBITDA was negative $129 million in the third quarter compared to negative $68 million in the prior year period, primarily driven by higher R&D costs.
Moving to slide 11.
Free cash flow was negative $107 million in the quarter slightly less than the low end of our guidance compared to negative $53 million in the same period last year.
The increased spending is largely due to higher R&D costs.
Our balance sheet remains strong with $1 $1 billion in cash cash equivalents and marketable securities we intend to maintain that strength, while prudently investing in the business.
During the quarter, we raised $100 million in gross proceeds through the issuance of $15 6 million shares of common stock as part of the aftermarket offering announced on August 4th 2022.
At the end of the third quarter, our issued and outstanding share Count was approximately $274 5 million shares while the weighted average diluted share count for the third quarter was approximately $263 9 million shares.
For the fourth quarter, we forecast free cash flow to be in the range of negative $120 million to $130 million.
With that I will hand, the call back to Michael for some closing comments.
Thanks, Doug as we approach our launch of commercial service in Q2 2023, we recognized a significant milestone this will be for the team one that advances our mission to become an astronaut driven consumer pacings baseline.
We continue to invest in our team and infrastructure to prepare us for that transition.
We have the right structure and leadership in place to support commercial service and fleet expansion.
Across the business I am confident in our approach and the progress that we're making.
In summary.
With the enhancement work on VSS unity, now complete and Vms Eve nearing completion.
We will begin verification flights in the coming months and we remain on track to start commercial service in the second quarter of 2023.
Our future fleet is progressing well and with agreements in place with Bell Textron and carbon aerospace we continue to expect to rollout. The first delta shifts for flight testing in 2025 with private astronaut service on the Delta is planned for 2026.
I want to take this opportunity to thank the Virgin Galactic team for all the hard work that they've done throughout the enhancement and modification period.
It has been an important time and thanks to this critical and complex work. Our ships will now have improved durability and reliability. We are all excited to get back space.
And with that I will turn to questions. Operator, we're ready to begin the Q&A portion of the call.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad. As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question.
The first question today comes from the line of Oliver Chen from Cowen. Please go ahead. Your line is now open.
Hi, Michael and Doug Congrats on the announcements of the partnerships. So as we look to 2023.
As you began initial production on the Delta cloud space ships, what are the key catalysts or moments in 'twenty three that we should look forward to with respect to that and more generally as you proceed the flexible and agile approach to working with suppliers or are there other partnerships that you need in terms of scaling or that you have.
In mind.
Second question is previously you mentioned disruptions acquiring materials.
Is that still happening.
If you could talk a little bit about.
How the supply chain looks given we're in such a dynamic environment. Thank you.
Thanks, Oliver Michael responding I'll, just take that last one.
I would say supply chain for us and for everywhere.
Still carries across the world.
Degrees of disruption, we've managed that disruption really really well. So we don't have anything that is.
Constraining us at the moment from a supply chain standpoint, it's still a disruptive market, we still look and manage proactively against it. So don't want to say that any company is out of the woods for that but we don't see issues in that.
The area right now so.
So that's good.
As to the Delta ships, what Youll see we're very excited to have.
Bell Textron and carbon aerospace onboard and I think those companies and the teams are also very excited to be partnering with us on this.
It is a program where as we said we're going to take the lead on the upfront design and overall design authority and what that means is we're going to have our engineers, especially some of our most experienced engineers with our ships really working through the upfront design too.
I say modify our our existing ships design same outer mono line as we've discussed the modify them in a way such that bell and carbon can take those designs and then put them through their own shops that are own areas and manufacture them in a very efficient way in a very.
Both time and cost efficient fashion, so things that we will be doing we have to get the design piece done and there are milestones.
Milestones that we could work against internally for that Youll see US then we will be ordering materials and materials will first be used to build the tooling.
These partners will be using in the manufacturing process and as we get the material order then we will get the tooling built and then Youll see.
Parts actually getting built using those tooling and thats, mostly what's going to be happening in the 'twenty three time frame, Doug anything you would add to that that was complete.
Thank you Michael you have a really experienced experiential team in terms of membership and marketing driving a bigger consumer experience any updates there.
Plans and strategies in terms of what Youre doing.
And also related on the demand side with the encouraging campus and training building announcements what have you been seeing in terms of a demand regarding ticket. Thank you.
So I'd say, we're generally following the path we've laid out Oliver So our design process on the astronaut campus continues again, we think that campus will be coming online.
In parallel with the Delta ships coming on in line. So that's still got a ways to 'twenty three is still primarily a design phase for that effort, that's coming along quite well I've spent time with some of our future astronauts both in Europe .
The U K as well as in the U S.
They are just very pleased and excited about the part of the company, but also looking forward to doing this space. So we mentioned on this call we had our first major event.
Internally, we call it the space of the curious event.
And I participated in that with <unk>.
60% to 80, or so of our future astronauts in guest and the main takeaway. There is how important the journey is and I think for all the people who attended that as well as the dialog I have been having kind of across the board with our future astronauts. It continues to come back and focus on this isn't an up and down.
Alright. This is a journey and the development of the milestones on that journey are incredibly important along the way and what we really focused on in that space. Just curious piece is helping people recognize how theyre going to prepare so that the moments that are fairly fleeting in space will be so anchored in their memory when they come back.
Thats, what youre going to carry forward for the rest of their lives. So it was very reinforcing to attend that event and to talk with these folks. So we feel like we are definitely on the right track there now on demand.
As we shared in the last quarter's earnings calls.
We had 800 or so people that had come in we took 100 seats out of our first 10000 block.
And repurposed and dedicated those to the research market and that has been.
A good move on our part you may recall the research groups.
<unk> plan for something that's four years out they need the ability to make decisions for funding and for using their experiments on shorter timetables. So by able to reserve that 100 seats and basically be able to feather those.
And along the way, it's opened up our opportunity to talk to a lot more people you may have noticed we announced a partnership on research with axiom space that came out this morning, and they're going to use us to help train astronauts that they will be taking up to the space station on deeper exploration missions. So we've found.
Good momentum from countries universities axiom in the case of today's example, so thats a good market and then we have.
The bulk of the remaining of those first.
<unk>.
Off with virtuoso.
And I would imagine those tickets will get momentum through their.
A large network of travel advisors as we start flying so that's where I think we will see the push there and then.
As I said, we carried a few housekeeping so we've effectively.
With that.
Allocation to virtuoso and research and closed our efforts on sales at that $450000 price point, we think that was a.
Right piece to have for this moment, we're very successful with that and then as we're back to space and flying again will reopen for the next tranche of sales.
Very helpful Best regards.
Thanks Oliver.
Of the new suppliers for the Delta class, So you're seeing that trend I've I've talked about before how these layers will will combine next year. What you see is some ramp down on the.
The initial fleet because we will have finished the enhancement period, we've moved into flight test and we're finishing it up going into commercial service and then the ramp up of the the future fleet. So the net effect of that is some growth.
From where we are guiding for the fourth quarter, but we do see ourselves getting closer to our peak level of spend so.
As these layers are coming in.
Kind of how it stacks up so getting closer to that peak.
Okay.
Alright, Thanks, if I can get one more.
I just like to know how many passengers are still in the backlog now it can still roughly 800 ish not sure if any might have to drop out.
Yeah. So we are talking we have 800 <unk>.
<unk> that had signed up before we took the.
Remaining seats unallocated 100 off for research.
And then the bulk of the rest to virtuoso. So that's we're kind of holding it that collective number of congo's thousand at the 450000 price point that we put out and as we get back and start flying again will reopen up from there.
Okay. Thanks, so much.
Thanks, Sir.
Thank you.
The next question today comes from the line of Christine luck from Morgan Stanley . Please go ahead. Your line is no Ethan.
Hey, good afternoon, everyone.
Nice to hear from you Christine how are Ya.
Great. Let me be following up on your announcement with that that will provide <unk>. During this time, you've got flight control surfaces in carbon aerospace will be peace Lodge and when I mean, these are pretty important partnerships can you provide more color on the contact arrangements with these two suppliers.
Will these be cost plus contracts for you six fries are they rich sharing partners, what sort of investment and capital costs. You estimate this will be in 2023.
And also you know if you have a multiyear outlook that would be better than just 2023.
Sure.
I'll take a little bit of that and you can kind of pick up there. So.
Probably as you would expect the contra.
Contracts are going to be a combination of time and materials. When we're in periods, where definition is still very which are these early faces right now right. It's we're kind of clarifying that the design specificity with each other and then we will move them into from fixed price contracts as we locked down to design and.
The partners know what their job is with with more specific detail in them. So that's that's how those will work and just I think we'll move into the fixed price version of that when.
Design is appropriately lockdown and that allows for time and materials in a place where we can work easily with each other to find the the most efficient way forward and people aren't trying to hedge to kind of cover beds, because they don't know what's coming so that's why we set up first PNM and then go into firm fixed price.
Talk on either risk or other other officer sure.
So regarding the risk sharing it's similar to what we did with Aurora and yes. There is a risk sharing element to it where suppliers are incentivized to go faster.
And if things take longer or.
Performance challenges along the way.
There is some degradation in the price so.
It we're in it together as a partnership.
In terms of the cost.
We aren't disclosing the cost the run rates for $2000 three are cost per vehicle at this time because for the reasons Michael mentioned.
We're entering the design phase with them and we lock down the design and that.
From that that specifies the remainder of the like the recurring costs that will see with the vehicles. So because that's an ongoing process with the vendors, it's really not in our best interest to put that out there publicly what that is because that's an ongoing interaction between all of us together so.
So for that reason, we don't disclose it.
But hopefully that gives you enough color.
Yeah. Thank you very much that's really helpful color and it's great that you were able to line up the experienced manufacturers to help you.
Visa visa very sophisticated flying machines right aren't space machines.
In terms of the follow up on cash I mean, 432 22, you burned about 107 million <unk>, you're looking at the burn rate $120 million to $130 million is that the one wait we should expect leading up to.
Commercial service next year or have you done the bulk of the work and does that cheaper off leading into commercial service.
So we only give one chord guidance on that Christine. So we've got a mid point of 125 for Q4.
You'll you'll see directionally.
As we go forward is.
Probably still some growth.
Because of the fact that we're still finishing up the flight test phase getting ready for commercial service. While we're also ramping up the fleet expansion efforts the fleet development with the outside vendor. So you've got to kind of sum flaring on there, which directionally should draw.
Ive costs, a little higher.
But as we get to commercial service then you start to see some ramp down on the current fleet because we've finished that flight testing process and we're now in a sustainment relative maintenance mode and see that starts to come down but at the same time you got the the vendors wrapping up.
So that that's how the the different components should work together.
Great. Thank you very much.
Thanks, Christine good to hear from you and yes, we are really excited to have <unk>.
Both of these organizations on board with us they bring facilities, they bring expertise and they bring ideas on how to help us move quickly and cost effectively under the leadership and their teams are all also really excited to be part of it.
<unk> work.
Oh.
Thank you.
Next question today comes from the line of Greg Conradt from Jeffries. Please go ahead. Your line is now I think.
Good evening Greg.
Uhm, a Greg good evening maybe.
Hey, just to follow up on Bell and carbon I mean, those are obviously the the major structural components, but let me just think about the out.
Percentage are you through and kind of walking down the supply chain and I know, you're not disclosing cost, but through these discussions any indication of how the price of the vehicles tracking with maybe internal plans.
Well, let's see I think as far as the supply chain goes while there will be.
Obviously bell and carbon on their own will have further supply chain that they pulled in on their side from our standpoint. These are by far the large bulk for the Delta ship as Aurora as.
Large large bulk poor the mother ships.
I can <unk> case here will be bringing in <unk>.
Engines from Pratt and.
Some smaller elements.
For the spaceships the Delta class.
Outside of what bell and carbon will be doing.
Examples of what we'll be doing in addition to the final assembly or what's involved final assembly I will probably do the interiors will bring the gear and install the gear things like that so the.
The waiting of this is heavily to Berlin carpet.
And there will not be we're not expecting any other major.
A supplier or relationship that we need for the Delta spaceships. So that's that's great news.
Also regarding costs relative to ordering cause I'd say relative to our expectations first I'd say as Doug mentioned.
We start these relationships and a time and materials basis. So that we can kind of work through the design specificity with each other together and then we moved to firm fixed price. So we have to get through that process to really kind of locked that down I'd say through the RFP process that we did and as part of our selection criteria.
With both bell and carbon.
The pricing that they were looking for which is wrong pricing is RFP level is consistent in the area that we had projected internally so.
That was your questions I'd say, we're still tracking in a consistent fashion there.
And Greg I can add.
That we had our own parametric studies that we had done and so we had our projections of what these things would be and yes, it's consistent materially consistent with what we thought it would be.
And then I might've missed that I think you you may be mentioned it briefly how are you thinking about the schedule for imagine.
As of today it seems like the first part of the schedule hasn't slipped, but how're you kind of thinking about that coming into the flight plan.
Yes, so we put the emphasis on.
Number one I would say, ensuring the eve and unity not only are fine, but have the engineering resources to fly on a consistent basis as we said and just make sure. We have the ability to have the staff ready if there's anything we need to settle out in the early flight at.
At the same time.
The economic.
Momentum other companies around the Delta ships and we are the first domino to fall internally of needing to get the engineering done upfront to.
To help get the definition, so that bill on carbon can get going so those two things that really priority, what's consistent amongst both those too as they require not just engineers. They require the engineers that have the most history with our existing ships and that is a limited resource we have a large engineering pool, but.
We need to make sure we focus those deeply experienced engineers on those two things now it happens a lot of those engineers are also the ones that will be in some of the flight testing phase four imagine so we're doing doing some resource prioritization, there and as we start to learn how quickly we will be able to pull folks back from even unity and I'll <unk>.
Quickly we will move through.
Some of these early design paces on Delta that will influence how how many people we get back on to imagine so what we said in the prepared remarks was we're reassessing imagine schedule I can say that we will not be in twenty-three for commercial flight with imagine. So I think we've kind of passed that mark but.
Where it falls.
Depend on how quickly we are able to pull people back from even unity Delta.
Thank you.
Thanks Cranky.
The next question today comes from the line of miles Wilson Frugal Research. Please go ahead you on line is nowhere.
Thanksgiving miles.
Hey, I was wondering on the schedule for return to commercial service <unk>.
<unk> getting back into your in early January and then I heard a unity glide flight and then a unity space flight and then the Italian was the plan all week to just have the one powered flight and has the schedule of compressed at all I realize that the the start of commercial services remained steady but has a schedule a compressed at all.
Schedule has not compressed, but what you are seeing is.
The flight back following unity 22 that we did with kind of Richard and our internal team we had planned to flights following that.
One was going to be an internal flight one was going to be the Italian Air Force research flight that we announced and at that time. We are going to then go into this kind of modification enhancement period. What we've done is as we pulled the modification enhancement period went into that first so we're bringing back those same two flights that we plan before.
Additional is we're adding a glide flight of unity and that's primarily a verification fly because unity had some upgrades to it and.
Ive had some upgrades so we want the whole space flight system.
To be able to go through.
For those who aren't familiar on the call a glide flight is where we.
Bring.
The spaceship unity up to altitude and release, it but instead of power it into space with our propulsion system. The pilots take it through a series of maneuvers as they glide back to Spaceport America that has the additional.
Fight that we've put in the system. The other two are the same as we were at before.
Okay, good and and I think in the queue and talks about this relationship.
Virgin Galactic would continue to own the airworthiness certificate and awarded for the manufactured products, which makes sense, but can you just remind us the over the institute forget that goes along with the Delta class how different is that versus what you currently carry for unity.
Mm each vehicle will have kind of a.
What is a.
Spaceship that is functions as an air vehicle in the lower parts of the atmosphere. Each of these will have a reasonable launch vehicle license. So each vehicle has its own license.
The FAA license to carry commercial passengers to space as an operating license and while we will clearly kind of show the FAA. The work we've done on Delta.
Our dialogues with them so far.
We we feel each side feels these will all be part of that same license. So we do not expect having to create a new commercial license for the Delta shift.
Don't fall under the same operations license, but each vehicle will need it's own reasonable lunch.
Okay certification and then the last the last one was on.
You said that the cash flow from R&D running hot with enhancement cost as well as future fleet is there any way maybe Doug you could sort of breakdown how much is going to the future fleet today versus enhancement.
Today, I'll, just say, it's more an enhancement, but that's rapidly shifting.
Okay, So future fleet.
Okay, Alright, Thanks, you were looking at.
Q3, it was more of an enhancement shifting over okay.
Thanks miles.
Thank you.
The next question today comes from the line of Jessica from truly Securities. Please go ahead. Your line is no way.
Okay does online for my turmoil. This evening I was just curious and you guys mentioned kind of putting some engineering force behind your various initiatives and do it. The T V doesn't elaborate you looked into adding any additional labor or do you guys have any times of shortages or anything like that and then kind of on the same.
Note, you said, you're managing supply chain, alright, but have you guys had any issues with pricing pressures.
<unk>. Thank you.
Let me think the the supply chain, we have not seen alcott pricing pressures sometimes.
Ah miscellaneous part or something that's in demand and we may expedite from a shipping or expedite to kind of get ourselves to the front of the line.
I think more like day in and day out of the supply chain world, but nothing I'd call. It structurally that we've seen at this moment I'm looking at Doug case, I'm missing something there no other factors that the bulk of our costs are labor not materials. So.
Labor is more fixed in terms of pricing so even with the contractors and so on so yeah. It really doesn't show up as a as a material thing for us any any supply chain cost changes.
And then I'd say on the engineering side, we have great number of incredible engineers that are very smart the number of those engineers that have historical experience with our ships is more limited because that came over the time kind of earlier in the company's time, when our engineering Corps was smaller and more deeper.
<unk> experienced engineers that we have kind of a two.
Three three demands on their time one of them is is we put even unity in the service. Those are the people who are very familiar to the flight test program and we just want them kind of on the job.
Hopefully on site are ready to help us turn those ships. So that's one where we need that specific group and then the design phase upfront as you would expect you want to bring that deep expertise and once we get through some of the early design pieces you get more larger groups of an incredibly smart engineers, but who may not have as much historical <unk>.
<unk>, it's that core that also is important for the some of the early testing of imagine and so we want to make sure that we put focus on the first of those two of those even unity in Delta and that's what's given us a little bit of schedule of flexibility and what we're trying to think about with imagine.
So as I said that will push us out of 2023, but it's for that specific cadre of engineers.
Great and then if I could do.
Sneak in one more you guys I think mentioned that the production.
On the Delta class would begin in 2023 is there any way you could do any more detail and kind of when does that would be more back half or not.
I don't think we're kind of at the point, where we're putting specifics out on that.
However.
We will follow a fairly standard process that will go through from a design upfront.
Design is completing and we get certain parts of that are ahead, we were able to start tooling exercises ritzy design. The tools and then you can order the material for the tools and you can then.
And build the tools that truly exercise can happen as design is completing on some of the more detailed efforts.
And then you go into actually manufacturing process. There. So if you think about that sequence you can probably make some assessments on that but.
That's probably the right level of discussion at this stage.
<unk> thanks, guys.
Thank you thanks.
Remind you of you would like to ask a question. Please press staff on that by one on your telephone keypad.
The next question today comes from the line of <unk> from Goldman Sachs. Please go ahead. Your line is no way.
Hey, guys. This is Anthony off vanilla how are Ya.
Hi, Anthony welcome.
Thanks for taking my question I just wanted to go back to the reservation for a minute. It sounds like the reservations are closed at this point in time, but the sales process also like completely closed at a at a full stop halt or do you guys got people out there that are drumming up business for future customers.
Yeah. So just kind of those for you, but also for everybody's listening. So we have a backlog.
Of tickets that have been already sold there's greater than three years and so those are obviously the people that we want to be flying to space along the way.
And so as mentioned earlier, that's where we are building two 800. So we have and then the 100 research flights and then come to your question here. We've got a number of those remaining thousand that we've allocated with a luxury and adventure travel partner virtuoso.
Those folks.
I think we'll be putting their energy towards this as we go back to flight that will be from my old world that would probably be the most efficient way for them to go at that but these are again we've got.
Kind of pushing towards four years of backlog.
Along the way so it's from that standpoint, we've have oclock closed the 450000 dollar price point.
Virtuoso tickets that they will be selling will be at that 450000 piece. So at this point then if people are coming in we're obviously, taking taking those names we will add them to the interest list to come online as well as and make sure that we're ready to follow up when we do reopened things up.
And we also have kept some house seats, so when we get referrals from our existing and future astronaut Corps.
We have the ability to bring some of those folks in as well.
Sometimes that's with Hey, I'd like to bring a family member.
Or somebody else's things start to get real for them. So.
So we wanted to keep a few tickets available for that but then as we get back to flight and we are flying again, then will reopen up sales and so our effort for our sales team right now is primarily structured on what are the.
Tens of sales infrastructure mechanisms that we will use as we need to scale sales up at higher levels as we get closer to the Delta is coming online.
So this is a good time period for us to get that work done.
Okay. Yeah, that's really helpful and makes sense I'm curious in terms of just like the trend color and information on people that are coming to you with interests have you guys seem that swelling. There's been you know recessionary years.
Stock market decline business profits down things like that.
What we have even talk just to our existing core right.
Generally maintaining the existing base.
Everybody is impacted by world events companies and individuals.
For the most part the people who are coming at this kind of early phases have the economic capacity to do so.
But undoubtedly everybody pays attention when markets are going up and down and things like that so.
With kind of it's kind of near four year backlog, it's not really the concern for us at the moment.
We're more focused on what's the infrastructure going to be as we begin our flight.
Flights back to space and taken that momentum to really ramp the sales.
And we've got a little bit of time for that so hasn't been the economy in the world events have not I'd say b, a weighting factor on us, but we will look to kind of.
Get back focused on sale since we get back to flight.
Okay, Great last one for you here on supply chain, you guys touched on it but I'm curious if there's like any specific parts.
You guys are seeing that required longer lead times or anything like that.
Companies that we're hearing that are in AMD generally are really harping on the fact that satisfy change has taken a major hit here. So I'm just curious to get your thoughts.
A lot of what we've got going on right now is.
And we have that we had some issues.
We were concerned about with some of the thermal protection system materials, we use and that took some scrambling to pulse.
Pull shipments in from Australia, because that had been sole source added the Ukraine as an example.
I think things that are.
Very particular types of metal metallics that are used in aerospace can be tricky. So we had some work to do on a certain type of aluminum that we needed that was there.
It took us a while to get to and so those are some of the earlier things we faced.
At this point, we've kind of work through those and the things that we're working on in the near term have not been problematic for us at that point, Doug anything you've seen.
Nothing that I haven't mentioned and beyond that milk.
Okay.
Thank you.
Thanks to Anthony.
Thank you.
There are no further questions.
This concludes today's question and answer session and today's conference call. Thank you for your participation.