LiveWire (LVWR) - 2024 Q4 - Annual Results

Executive Summary & Business Highlights Introduction & CEO Statement LiveWire Group reported 2024 financial results and outlined strategic initiatives to reduce cash burn and lead the EV space - LiveWire Group, Inc reported fourth quarter and full year 2024 results[1] - CEO Karim Donnez stated the company expects to reduce cash burn by 40% or more in 2025 compared to 2024[2] - The company plans to continue establishing its leadership in the EV space[2] 2024 Highlights and Fourth Quarter Summary of Results The fourth quarter featured key operational achievements, business consolidation, and significant expense reductions - S2 Del Mar won MCN's Best Electric Bike of 2024[5] - Production of two new models, Mulholland and Alpinista, off the S2 platform[5] - Announced collaboration with KYMCO on an electric maxi-scooter project leveraging the S2 platform[5] - Completed consolidation of business operations in Milwaukee, Wisconsin[5] - Reduced consolidated selling, administrative and engineering expense by $12.6 million[5] - Consolidated operating loss decreased by $5.6 million, or 5%, from 2023[5] - Unit sales of 236, a 138% increase over third quarter 2024[5] - Aligned go-to-market strategy with Europe moving to a wholesale model and entered Spain and Italy markets[5] Financial Performance Analysis Consolidated Financial Results (Q4 and Full Year 2024) The company's full-year 2024 net loss improved, driven by reduced expenses and non-operating income gains Consolidated Results (Q4 and Full Year) | $ in millions* | 4th quarter 2024 | 4th quarter 2023 | Change (Q4) | Full Year 2024 | Full Year 2023 | Change (FY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Motorcycle Units | 236 | 514 | (54%) | 612 | 660 | (7%) | | Electric Balance Bike Units | 8,350 | 8,354 | 0% | 18,549 | 32,113 | (42%) | | Consolidated Revenue | $10.8 | $15.1 | (29%) | $26.6 | $38.0 | (30%) | | Electric Motorcycles Revenue | $3.5 | $8.0 | (56%) | $8.4 | $11.5 | (27%) | | STACYC Revenue | $7.3 | $7.1 | 2% | $18.3 | $26.5 | (31%) | | Consolidated Operating Income (Loss) | ($25.2) | ($33.8) | 25% | ($110.4) | ($116.0) | 5% | | Electric Motorcycles Operating Income (Loss) | ($24.7) | ($34.2) | 28% | ($105.5) | ($116.6) | 10% | | STACYC Operating Income (Loss) | ($0.6) | $0.4 | (225%) | ($4.9) | $0.6 | (881%) | | Net Loss | ($22.8) | ($33.1) | 31% | ($93.9) | ($109.6) | 14% | - Full year 2024 consolidated net loss decreased by $15.7 million to $93.9 million, driven by a $12.6 million decrease in selling, administrative and engineering expense and a $14.8 million increase in non-operating income from the decrease in fair value of outstanding warrants, offset by a $4.8 million decrease in interest income[6][8] Segment Performance The Electric Motorcycles segment reduced its operating loss while the STACYC segment saw increased product development expenses Electric Motorcycles Segment This segment experienced lower revenue from decreased sales but improved its operating loss through significant expense reductions - Electric Motorcycles revenue decreased in Q4 2024 due to lower unit sales and product mix[7] - Operating loss decreased by $9.5 million in Q4 2024, driven by a $9.2 million reduction in selling, administrative and engineering expense from decreased product development and cost reduction activities[7] STACYC Segment The STACYC segment maintained sales volumes but incurred higher costs related to product development and marketing initiatives - STACYC volumes were flat in Q4 2024 compared to 2023[8] - STACYC revenue increased by $138 thousand in Q4 2024 due to increased dealer and online sales, offset by decreased sales to a third-party distributor[8] - Selling, general and administrative expenses for STACYC increased by $554 thousand, primarily due to planned product development costs and increased marketing initiatives[8] Strategic Outlook & Corporate Information 2025 Financial Outlook LiveWire projects Electric Motorcycle sales between 1,000-1,500 units and a consolidated operating loss of $70-$80 million for 2025 2025 Financial Outlook | Metric | 2025 Outlook | | :--- | :--- | | Electric Motorcycle sales | 1,000 to 1,500 revenue units | | LiveWire Group operating loss | $70 to $80 million | About LiveWire LiveWire is an electric motorcycle company, majority-owned by Harley-Davidson, focused on leading the industry's transformation - LiveWire has a dedicated focus on the electric motorcycle sector[10] - Harley-Davidson, Inc is LiveWire's majority shareholder, and LiveWire capitalizes on Harley-Davidson's decade of EV learnings[10] - LiveWire plans to develop future technology and invest in capabilities to lead the transformation of motorcycling[10] Cautionary Note Regarding Forward-Looking Statements This section outlines forward-looking statements and associated risks, including operating history, funding, and supply chain dependencies - Statements in the press release are 'forward-looking statements' subject to risks and uncertainties[10] - Key risks include a history of losses, limited operating history, ability to obtain funding, supply chain dependencies (single-sourced components), competition in the EV industry, and reliance on Harley-Davidson for services and manufacturing[10][11] - The company does not plan to publicly update or revise any forward-looking statements unless required by applicable law[11] Consolidated Financial Statements Consolidated Statements of Operations The statement details revenues, costs, and expenses, showing the components of the company's net loss for 2024 and 2023 Consolidated Statements of Operations (In thousands, except per share amounts) | | Three months ended Dec 31, 2024 | Three months ended Dec 31, 2023 | Twelve months ended Dec 31, 2024 | Twelve months ended Dec 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $10,761 | $15,091 | $26,633 | $38,023 | | Cost of goods sold | 16,115 | 20,279 | 39,416 | 43,795 | | Selling, administrative and engineering expense | 19,890 | 28,567 | 97,573 | 110,217 | | Total operating costs and expenses | 36,005 | 48,846 | 136,989 | 154,012 | | Operating loss | (25,244) | (33,755) | (110,356) | (115,989) | | Interest income | 840 | 2,365 | 5,704 | 10,537 | | Change in fair value of warrant liabilities | 1,639 | (1,688) | 10,770 | (4,020) | | Loss before income taxes | (22,765) | (33,078) | (93,882) | (109,472) | | Income tax provision | 17 | 15 | 43 | 78 | | Net loss | $(22,782) | $(33,093) | $(93,925) | $(109,550) | | Net loss per share, basic and diluted | $(0.11) | $(0.16) | $(0.46) | $(0.54) | | Weighted-average shares, basic and diluted | 203,301 | 202,672 | 203,206 | 202,504 | Consolidated Balance Sheets The balance sheet presents the company's financial position, detailing assets, liabilities, and equity as of year-end 2024 and 2023 Consolidated Balance Sheets (In thousands) | | December 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $64,437 | $167,904 | | Accounts receivable, net | 3,874 | 4,295 | | Accounts receivable from related party | 399 | 3,402 | | Inventories, net | 26,942 | 32,122 | | Other current assets | 2,709 | 3,004 | | Total current assets | 98,361 | 210,727 | | Property, plant and equipment, net | 34,012 | 37,682 | | Goodwill | 8,327 | 8,327 | | Deferred tax assets | 7 | 4 | | Lease assets | 765 | 1,868 | | Intangible assets, net | 1,058 | 1,347 | | Other long-term assets | 5,430 | 6,192 | | Total assets | $147,960 | $266,147 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Accounts payable | $1,738 | $3,554 | | Accounts payable to related party | 9,762 | 20,371 | | Accrued liabilities | 17,960 | 21,189 | | Current portion of lease liabilities | 394 | 1,152 | | Total current liabilities | 29,854 | 46,266 | | Long-term portion of lease liabilities | 405 | 792 | | Deferred tax liabilities | 118 | 93 | | Warrant liabilities | 1,549 | 12,319 | | Other long-term liabilities | 919 | 814 | | Total liabilities | $32,845 | $60,284 | | Shareholders' equity: | | | | Preferred Stock | — | — | | Common Stock | 20 | 20 | | Treasury Stock | (3,413) | (1,969) | | Additional paid-in-capital | 344,409 | 339,783 | | Accumulated deficit | (225,913) | (131,988) | | Accumulated other comprehensive income | 12 | 17 | | Total shareholders' equity | 115,115 | 205,863 | | Total liabilities and shareholders' equity | $147,960 | $266,147 | Consolidated Statements of Cash Flows This statement details cash flows from operating, investing, and financing activities, highlighting a net decrease in cash for 2024 Consolidated Statements of Cash Flows (In thousands) | | Twelve months ended Dec 31, 2024 | Twelve months ended Dec 31, 2023 | | :--- | :--- | :--- | | Cash flows from operating activities: | | | | Net loss | $(93,925) | $(109,550) | | Adjustments to reconcile net loss to net cash used in operating activities | | | | Depreciation and amortization | 10,041 | 5,832 | | Change in fair value of warrant liabilities | (10,770) | 4,020 | | Stock compensation expense | 4,626 | 8,926 | | Inventory write-down | 5,750 | 2,719 | | Net cash used by operating activities | (93,859) | (83,462) | | Cash flows from investing activities: | | | | Capital expenditures | (8,068) | (13,462) | | Net cash used by investing activities | (8,068) | (13,462) | | Cash flows from financing activities: | | | | Repurchase of common stock | (1,444) | (1,969) | | Proceeds received from exercise of warrants | — | 1,557 | | Net cash used by financing activities | (1,444) | (412) | | Effect of exchange rate changes on cash and cash equivalents | (96) | — | | Net decrease in cash and cash equivalents | $(103,467) | $(97,336) | | Cash and cash equivalents—beginning of period | $167,904 | $265,240 | | Cash and cash equivalents—end of period | $64,437 | $167,904 |