LiveWire Group, Inc. Reports 2024 Fourth Quarter and Full Year Financial Results

MILWAUKEE--(BUSINESS WIRE)--LiveWire Group, Inc. (“LiveWire” or the “Company”) (NYSE: LVWR) today reported fourth quarter and full year 2024 results. “In 2024, we undertook several initiatives to navigate the market dynamics and turned challenges into opportunities to reposition the business for 2025. We now expect to reduce our cash burn by 40% or more in 2025 compared to 2024. The Company plans to continue establishing its leadership in the EV space. With our world-class products, first-class team, and best-in-the-industry retail partners, we will continue to relentlessly improve the fundamentals of the business and position ourselves for long-term success,” said Karim Donnez, CEO, LiveWire. 2024 Highlights and Financial Results S2 continues to lead the way with: S2 Del Mar® winning MCN’s Best Electric Bike of 2024 Production of two new models, Mulholland and Alpinista, off the S2 platform Announced collaboration with KYMCO on an electric maxi-scooter project leveraging the S2 platform Completed consolidation of business operations in Milwaukee, Wisconsin Reduced consolidated selling, administrative and engineering expense by $12.6 million from the completion of the development work on the S2 platform in the prior year, and initiatives taken during the year around streamlining of headcount Consolidated operating loss decreased by $5.6 million, or 5%, from 2023 driven by a decrease in Electric Motorcycle segment operating loss of $11.1 million offset by an increase in STACYC segment operating loss of $5.5 million Fourth Quarter 2024 Summary of Results Unit sales of 236, a 138% increase over third quarter 2024 Consolidated operating loss decreased by $8.5 million from 2023 driven by a decrease in consolidated selling, administrative and engineering expense Aligned the Company’s go-to-market strategy with Europe moving to a wholesale model and entered Spain and Italy markets LiveWire Group, Inc. – Consolidated Results $ in millions* 4th quarter Full Year 2024 2023 Change 2024 2023 Change 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 $3.5 $8.0 (56%) $8.4 $11.5 (27%) STACYC $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 ($24.7) ($34.2) 28% ($105.5) ($116.6) 10% STACYC ($0.6) $0.4 (225%) ($4.9) $0.6 (881%) Net Loss ($22.8) ($33.1) 31% ($93.9) ($109.6) 14% * Amounts may not add up or recalculate due to rounding The Company’s consolidated net loss was $93.9 million for the year ended 2024 compared to $109.6 million for the year ended 2023. The decrease of $15.7 million was driven by: a decrease in selling, administrative and engineering expense of $12.6 million resulting from the completion of development work on the S2 platform in the prior year, and initiatives taken during the year around streamlining of headcount, offset by a decrease in revenue, and an increase in non-operating income of $14.8 million related to the decrease in fair value of the outstanding warrants as of December 31, 2024, offset by a decrease of $4.8 million in interest income as compared to prior year. The Company’s consolidated net loss was $22.8 million for the fourth quarter 2024 as compared to $33.1 million in the same period prior year driven by the segment results noted below, an increase of $3.3 million of non-operating income related to the decrease in fair value of the outstanding warrants as of December 31, 2024, offset by a decrease of $1.5 million in interest income as compared to prior year. LiveWire Group, Inc. is comprised of two business segments: Electric Motorcycles – focused on the sale of electric motorcycles and related products STACYC – focused on the sale of electric balance bikes for kids and related products Electric Motorcycles Electric Motorcycles revenue decreased in the fourth quarter of 2024 compared to the same quarter in the prior year due to lower unit sales and product mix. Operating loss decreased by $9.5 million driven by a $9.2 million reduction in selling, administrative and engineering expense from decreased product development expense compared to prior year and other cost reduction activities. STACYC STACYC volumes were flat in the fourth quarter of 2024 compared to 2023 while revenue increased by $138 thousand from increased dealer and online sales offset by decreased sales to the Company’s third party branded distributor. Selling, general and administrative expenses increased by $554 thousand primarily driven by planned product development costs and increased marketing initiatives. 2025 Financial Outlook For the full year 2025, the Company expects: Electric Motorcycle sales of 1,000 to 1,500 revenue units LiveWire Group operating loss of $70 to $80 million Webcast The public is invited to attend an audio webcast from 8:00-9:00 a.m. CST. LiveWire leadership will be joining the Harley-Davidson, Inc. audio webcast to discuss our results, developments in the business, and updates to the Company’s outlook. The webcast login can be accessed at https://investor.livewire.com/news-events-1/events/default.aspx. The audio replay will be available by approximately 10:00 a.m. CST. About LiveWire LiveWire has a dedicated focus on the electric motorcycle sector. LiveWire’s majority shareholder is Harley-Davidson, Inc. LiveWire comes from the lineage of Harley-Davidson and is capitalizing on a decade of its learnings in the EV sector. With a dedicated focus on EV, LiveWire plans to develop the technology of the future and to invest in the capabilities needed to lead the transformation of motorcycling. www.livewire.com Cautionary Note Regarding Forward-Looking Statements The Company intends that certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “is on track,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “remain committed,” “should,” “target,” “will” and “would,” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the risks, uncertainties and assumptions described in prior public filings titled “Risk Factors.” These forward-looking statements are subject to numerous risks, including, without limitation, the following: our history of losses and expectation to incur significant expenses and continuing losses for the foreseeable future; our limited operating history, the rollout of our business and the timing of expected business milestones, including our ability to develop and manufacture electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale; our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder; our ability to obtain funding for our operations and manage costs; our future capital requirements and sources and uses of cash; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans, including our ability to effectively execute the Company’s relocation and streamlined headcount plan within expected costs and time and our ability to realize the expected savings in 2024 and on an ongoing annual basis; retail partners being unwilling to participate in our go-to-market business model or their inability to establish or maintain relationships with customers for our electric vehicles; our ability to attract and retain a large number of customers; challenges we face as a pioneer into the highly-competitive and rapidly evolving electric vehicle industry; our operational and financial risks if we fail to effectively and appropriately separate the LiveWire business from the H-D business; H-D making decisions for its overall benefit that could negatively impact our overall business; our relationship with H-D and its impact on our other business relationships; our ability to leverage contract manufacturers, including H-D and Kwang Yang Motor Co., Ltd., a Taiwanese company (“KYMCO”), to contract manufacture our electric vehicles; potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of our electric vehicles; building out our supply chain, including our dependency on our existing suppliers and our ability to source suppliers, in each case many of which are single-sourced or limited-source suppliers, for our critical components such as batteries and semiconductor chips; our ability to rely on third-party and public charging networks; our ability to attract and retain key personnel; our business, expansion plans and opportunities, including our ability to scale our operations and manage our future growth effectively; the effects on our future business of competition, the pace and depth of electric vehicle adoption generally and our ability to achieve planned competitive advantages with respect to our electric vehicles and products, including with respect to reliability, safety and efficiency; our business and H-D’s business overlapping and being perceived as competitors; our inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between us and H-D; our dependency on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it may require significant investment for us to build our own safety and testing facilities, or we may be required to obtain such services from another third-party at increased costs; any decision by us to electrify H-D products, or the products of any other company; our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; potential harm caused by misappropriation of our data and compromises in cybersecurity; changes in laws, regulatory requirements, governmental incentives and fuel and energy prices; the impact of health epidemics, including the COVID-19 pandemic, on our business, the other risks we face and the actions we may take in response thereto; litigation, regulatory proceedings, complaints, product liability claims and/or adverse publicity; and the possibility that we may be adversely affected by other economic, business and/or competitive factors. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. Some of these risks and uncertainties may in the future be amplified by new risk factors and uncertainties that may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this press release will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this earnings release completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. LiveWire Group, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) (Unaudited) (Unaudited) Three months ended Twelve months ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Revenue, net $ 10,761 $ 15,091 $ 26,633 $ 38,023 Costs and expenses: 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 LiveWire Group, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) December 31, 2024 December 31, 2023 ASSETS Current 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 Current liabilities: 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 LiveWire Group, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Twelve months ended December 31, 2024 December 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 Provision for doubtful accounts 230 53 Deferred income taxes 22 74 Inventory write-down 5,750 2,719 Cloud computing arrangements development costs (45 ) (1,312 ) Other, net (244 ) (117 ) Changes in current assets and liabilities: Accounts receivable, net 192 (2,023 ) Accounts receivable from related party 3,003 (2,877 ) Inventories (569 ) (5,626 ) Other current assets 540 1,621 Accounts payable and accrued liabilities (2,101 ) 160 Accounts payable to related party (10,609 ) 14,638 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: Cash and cash equivalents—beginning of period $ 167,904 $ 265,240 Net decrease in cash and cash equivalents (103,467 ) (97,336 ) Cash and cash equivalents—end of period $ 64,437 $ 167,904

LiveWire Group, Inc. Reports 2024 Fourth Quarter and Full Year Financial Results

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