LiveWire (US:LVWR)2025-02-21 22:06Financial Performance - LiveWire's net loss for the year ended December 31, 2024, was $93,925 thousand, a decrease from a net loss of $109,550 thousand in 2023, reflecting a 14.3% improvement [349]. - Revenue for 2024 decreased to $26,633 thousand, down 30.5% from $38,023 thousand in 2023 [428]. - Operating loss for 2024 was $110,356 thousand, slightly improved from a loss of $115,989 thousand in 2023 [428]. - The overall decrease in cash and cash equivalents was $103,467 thousand for 2024, compared to a decrease of $97,336 thousand for 2023 [398]. - LiveWire's cash and cash equivalents decreased to $64,437 thousand as of December 31, 2024, down from $167,904 thousand in 2023 [387]. - Net cash used by operating activities increased by $10,397 thousand to $93,859 thousand for the year ended December 31, 2024, compared to $83,462 thousand for 2023 [399]. - Total assets decreased to $147,960 thousand in 2024, down 44.3% from $266,147 thousand in 2023 [431]. - Total liabilities reduced to $32,845 thousand in 2024, a decrease of 45.6% from $60,284 thousand in 2023 [431]. - Shareholders' equity fell to $115,115 thousand in 2024, down 44.1% from $205,863 thousand in 2023 [431]. Segment Performance - The Electric Motorcycles segment reported an operating loss of $105,500 thousand for 2024, compared to an operating loss of $116,611 thousand in 2023, representing a 9.5% reduction in losses [350]. - Revenue for the Electric Motorcycles segment decreased by $3,167 thousand, or 27.4%, to $8,381 thousand in 2024 from $11,548 thousand in 2023, with unit sales down 7% to 612 [379]. - The STACYC segment experienced an operating loss of $4,856 thousand in 2024, a significant decline from an operating income of $622 thousand in 2023, marking an 880.7% change [351]. - The STACYC segment's revenue decreased by $8,223 thousand, or 31.1%, to $18,252 thousand in 2024 from $26,475 thousand in 2023, primarily due to lower shipment volumes of electric balance bikes [383]. Sales and Market Strategy - Total Electric Balance Bike Unit Sales decreased to 18,549 units in 2024 from 32,113 units in 2023, reflecting a 42.4% decline [366]. - Wholesale Motorcycle Unit Sales totaled 511 units in 2024, down from 533 units in 2023, a decrease of 4.1% [365]. - Company Retail Motorcycle Unit Sales fell to 101 units in 2024 from 127 units in 2023, a decline of 20.5% [365]. - Total Retail Motorcycle Unit Sales increased to 492 units in 2024, up from 337 units in 2023, representing a 46.0% increase [365]. - Effective November 5, 2024, LiveWire changed its go-to-market strategy in Europe from direct sales to wholesale distribution through independent dealers, aiming to enhance growth and unit sales [356]. - LiveWire plans to expand its business internationally, which is expected to increase its exposure to currency rate risk [419]. Cost Management and Future Plans - LiveWire plans to relocate its product development facility from Mountain View, California, to Milwaukee, Wisconsin, to optimize efficiencies and reduce costs [352]. - LiveWire's focus for 2025 will be on cost improvements, product innovation, and market growth [362]. - LiveWire plans to utilize current cash and funds from the Convertible Term Loan for core operations, new product development, and enhancing manufacturing capabilities, with $8,468 thousand in purchase order commitments for fiscal year 2025 [394]. - LiveWire estimates capital expenditures to be between $8 million and $12 million in 2025 [400]. Cash Flow and Financing - LiveWire does not expect to generate positive cash flow from operations over the next twelve months, relying on existing cash and a $100 million Convertible Term Loan from H-D [388]. - Net cash used in investing activities decreased by $5,394 thousand to $8,068 thousand for the year ended December 31, 2024, compared to $13,462 thousand for 2023, due to lower capital expenditures [400]. - Net cash used by financing activities increased by $1,032 thousand to $1,444 thousand for the year ended December 31, 2024, compared to $412 thousand for 2023 [401]. Audit and Compliance - LiveWire's financial statements are based on significant accounting policies that require management to make critical estimates and assumptions [403]. - The company has been audited by Ernst & Young LLP since 2021, ensuring compliance with U.S. generally accepted accounting principles [427]. - The audit provides reasonable assurance that the financial statements are free of material misstatement [425]. - The company is required to maintain independence in accordance with U.S. federal securities laws and PCAOB regulations [424]. Inventory and Liabilities - As of December 31, 2024, LiveWire had a liability of $6,156 thousand for excess inventory components held by H-D under the Contract Manufacturing Agreement [396]. - The company's inventories, net, decreased to $26,942 thousand in 2024 from $32,122 thousand in 2023, with electric motorcycles and balance bikes accounting for $24,862 thousand [512]. - The balance of warranty and recall liabilities at the end of 2024 was $881,000, down from $1,011,000 at the end of 2023, indicating a decrease of approximately 12.9% [543]. Research and Development - The Company incurred research and development expenses of $41,742 thousand, $54,070 thousand, and $35,612 thousand for the years 2024, 2023, and 2022, respectively [469]. - The company has a strategic focus on developing new electric motorcycle models and related accessories to capture a larger market share [450].