LithiumBank Resources

LiveWire Group Reports 2023 Fourth Quarter and Full Year Financial Results

08 February 2024

MILWAUKEE / Feb 08, 2024 / Business Wire / LiveWire Group, Inc. (“LiveWire” or the “Company”) (NYSE: LVWR) today reported fourth quarter and full year 2023 results.

“LiveWire concluded 2023 with a strong Q4 performance, delivering on units and operating loss guidance for the full year with the successful delivery to market of S2 Del Mar®, the first model built on our S2 platform that continues to generate a positive response from the media, our retailers, and our riders. We expect 2024 to be a year highlighted by product innovation, market expansion, and continued cost improvements,” said Karim Donnez, CEO, LiveWire.

2023 Highlights and Financial Results

  • Launched Del Mar, the first model built with an all-new in-house developed battery pack, power electronics, motor, telematics, and associated software
  • Unit sales of 660 electric motorcycles, up double digits versus prior year
  • Consolidated operating loss in line with our expectations driven by product development costs relating to S2 platform, delivery of Del Mar, a provision for an obligation for excess inventory components, and additional costs to stand up the organization as a stand-alone public company
  • Ended the year with 126 retail partners globally

Fourth Quarter 2023 Summary of Results

  • Unit sales of 514 electric motorcycles, with an increase in consolidated revenue of 64% versus prior year
  • Consolidated operating loss increase over prior year of $4.9 million resulting primarily from costs related to increased volume and a provision for an obligation for excess inventory components
  • Continued investment in developing models on the S2 platform

LiveWire Group, Inc. – Consolidated Results

 

$ in millions*

4th quarter

Full Year

2023

2022

Change

2023

2022

Change

Revenue

$15.1

 

$9.2

 

64

%

$38.0

 

$46.8

 

(19

%)

Operating (Loss)

($33.8

)

($28.9

)

17

%

($116.0

)

($85.0

)

36

%

Net Loss

($33.1

)

($22.4

)

48

%

($109.6

)

($78.9

)

39

%

LiveWire Group, Inc. – Segment Results

 

$ in millions*, except units

4th quarter

Full Year

2023

2022

Change

2023

2022

Change

Electric Motorcycles

 

LiveWire (units)

514

 

69

 

645

%

660

 

547

 

21

%

Harley-Davidson LiveWire (units)

 

 

0

%

 

50

 

(100

%)

Electric Motorcycle Shipments (units)

514

 

69

 

645

%

660

 

597

 

11

%

 

 

 

 

 

 

 

Revenue

$8.0

 

$1.6

 

400

%

$11.5

 

$14.0

 

(18

%)

Operating (Loss)

($34.2

)

($29.7

)

15

%

($116.6

)

($89.1

)

31

%

 

$ in millions*

4th quarter

Full Year

2023

2022

Change

2023

2022

Change

STACYC Segment

 

Revenue

$7.1

 

$7.6

 

(7

%)

$26.5

 

$32.8

 

(19

%)

Operating Income

$0.4

 

$0.8

 

(50

%)

$0.6

 

$4.2

 

(86

%)

*Amounts may not add up due to rounding

The Company’s consolidated net loss was $109.6 million for the year ended 2023 compared to $78.9 million for the year ended 2022. The increase of $30.7 million was in line with our expectations driven by a provision for an obligation for excess inventory components, increased selling, administrative and engineering expense for product development costs relating to the S2 platform, delivery of Del Mar and additional costs to stand up the organization as a stand-alone public company. The Company also had an increase of $9.1 million of non-operating mark-to-market expense resulting from the increase in the fair value of warrant liabilities year-over-year which was offset by an increase of $9.3 million in interest income.

The Company’s consolidated net loss was $33.1 million for the fourth quarter 2023 as compared to $22.4 million in the same period prior year driven by the segment results noted below, an increase of $6.7 million of non-operating mark-to-market expense related to the increase in fair value of the outstanding warrants as of December 31, 2023 as compared to December 31, 2022, offset by an increase of $1.2 million in interest income.

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 Motorcycle revenue increased in fourth quarter 2023 compared to the same quarter in the prior year due to sales of Del Mar units. Increased operating losses compared to the fourth quarter of 2022 were primarily related to increased costs as a result of increased volumes and a provision for an obligation for excess inventory components.

STACYC

STACYC volumes were up in the fourth quarter of 2023 compared to 2022, while revenue and operating income were down due to product mix and pricing.

2024 Financial Outlook

For the full year 2024, the Company expects:

  • Electric Motorcycle sales of 1,000 to 1,500 revenue units
  • Operating Loss of $115 million to $125 million

Webcast

The public is invited to attend an audio webcast from 8-9 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,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “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; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; our ability to attract and retain a large number of customers; our future capital requirements and sources and uses of cash; our ability to obtain funding for our operations and manage costs; 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; 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; 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,
2023

 

December 31,
2022

 

December 31,
2023

 

December 31,
2022

Revenue, net

$

15,091

 

 

$

9,218

 

 

$

38,023

 

 

$

46,833

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of goods sold

 

20,279

 

 

 

6,942

 

 

 

43,795

 

 

 

43,929

 

Selling, administrative and engineering expense

 

28,567

 

 

 

31,153

 

 

 

110,217

 

 

 

87,859

 

Total operating costs and expenses

 

48,846

 

 

 

38,095

 

 

 

154,012

 

 

 

131,788

 

Operating loss

 

(33,755

)

 

 

(28,877

)

 

 

(115,989

)

 

 

(84,955

)

Other income, net

 

 

 

 

 

 

 

 

 

 

235

 

Interest expense related party

 

 

 

 

 

 

 

 

 

 

(475

)

Interest income

 

2,365

 

 

 

1,214

 

 

 

10,537

 

 

 

1,191

 

Change in fair value of warrant liabilities

 

(1,688

)

 

 

5,033

 

 

 

(4,020

)

 

 

5,033

 

Loss before income taxes

 

(33,078

)

 

 

(22,630

)

 

 

(109,472

)

 

 

(78,971

)

Income tax (benefit) provision

 

15

 

 

 

(192

)

 

 

78

 

 

 

(33

)

Net loss

$

(33,093

)

 

$

(22,438

)

 

$

(109,550

)

 

$

(78,938

)

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.16

)

 

$

(0.11

)

 

$

(0.54

)

 

$

(0.46

)

 

 

 

 

 

 

 

 

Weighted-average shares, basic and diluted

 

202,672

 

 

 

202,404

 

 

 

202,504

 

 

 

172,003

 

    

LiveWire Group, Inc.

Consolidated Balance Sheets

(In thousands)

    

 

(Unaudited)

 

 

 

December 31,
2023

 

December 31,
2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

167,904

 

 

$

265,240

 

Accounts receivable, net

 

4,295

 

 

 

2,325

 

Accounts receivable from related party

 

3,402

 

 

 

525

 

Inventories, net

 

32,122

 

 

 

29,215

 

Other current assets

 

3,004

 

 

 

4,625

 

Total current assets

 

210,727

 

 

 

301,930

 

Property, plant and equipment, net

 

38,483

 

 

 

31,567

 

Goodwill

 

8,327

 

 

 

8,327

 

Deferred tax assets

 

4

 

 

 

 

Lease assets

 

1,868

 

 

 

3,128

 

Intangible assets, net

 

1,347

 

 

 

1,809

 

Other long-term assets

 

6,192

 

 

 

5,044

 

Total assets

$

266,948

 

 

$

351,805

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

3,554

 

 

$

7,055

 

Accounts payable to related party

 

20,371

 

 

 

5,733

 

Accrued liabilities

 

21,990

 

 

 

20,343

 

Current portion of lease liabilities

 

1,152

 

 

 

1,312

 

Total current liabilities

 

47,067

 

 

 

34,443

 

Long-term portion of lease liabilities

 

792

 

 

 

1,913

 

Deferred tax liabilities

 

93

 

 

 

15

 

Warrant liabilities

 

12,319

 

 

 

8,388

 

Other long-term liabilities

 

814

 

 

 

246

 

Total liabilities

 

61,085

 

 

 

45,005

 

Shareholders' equity:

 

 

 

Preferred Stock

 

 

 

 

 

Common Stock

 

20

 

 

 

20

 

Treasury Stock

 

(1,969

)

 

 

 

Additional paid-in-capital

 

339,783

 

 

 

329,218

 

Accumulated deficit

 

(131,988

)

 

 

(22,438

)

Accumulated other comprehensive income

 

17

 

 

 

 

Total shareholders' equity

 

205,863

 

 

 

306,800

 

Total liabilities and shareholders' equity

$

266,948

 

 

$

351,805

 

    

LiveWire Group, Inc.

Consolidated Statements of Cash Flows

(In thousands)

    

 

(Unaudited)

 

 

 

Twelve months ended

 

December 31,
2023

 

December 31,
2022

Cash flows from operating activities:

 

 

 

Net loss

$

(109,550

)

 

$

(78,938

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

Depreciation and amortization

 

4,993

 

 

 

4,401

 

Payment of contingent consideration in excess of acquisition date fair value

 

 

 

 

(413

)

Change in fair value of warrant liabilities

 

4,020

 

 

 

(5,033

)

Stock compensation expense

 

8,926

 

 

 

394

 

Provision for doubtful accounts

 

53

 

 

 

145

 

Deferred income taxes

 

74

 

 

 

(125

)

Inventory write-down

 

2,719

 

 

 

1,074

 

Cloud computing arrangements development costs

 

(473

)

 

 

(4,894

)

Other, net

 

(117

)

 

 

(144

)

Changes in current assets and liabilities:

 

 

 

Accounts receivable, net

 

(2,023

)

 

 

4,156

 

Accounts receivable from related party

 

(2,877

)

 

 

(593

)

Inventories

 

(5,626

)

 

 

(21,068

)

Other current assets

 

1,621

 

 

 

(1,283

)

Accounts payable and accrued liabilities

 

160

 

 

 

6,371

 

Accounts payable to related party

 

14,638

 

 

 

6,269

 

Net cash used by operating activities

 

(83,462

)

 

 

(89,681

)

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(13,462

)

 

 

(14,081

)

Net cash used by investing activities

 

(13,462

)

 

 

(14,081

)

Cash flows from financing activities:

 

 

 

Repurchase of common stock

 

(1,969

)

 

 

 

Proceeds received from sale of warrants

 

1,557

 

 

 

 

Borrowings on notes payable to related party

 

 

 

 

15,333

 

Net proceeds from the Business Combination

 

 

 

 

293,717

 

Payment of contingent consideration up to acquisition date fair value

 

 

 

 

(1,767

)

Transfers from Parent

 

 

 

 

59,051

 

Net cash provided (used) by financing activities

 

(412

)

 

 

366,334

 

 

 

 

 

Cash and cash equivalents:

 

 

 

Cash and cash equivalents—beginning of period

$

265,240

 

 

$

2,668

 

Net increase (decrease) in cash and cash equivalents

 

(97,336

)

 

 

262,572

 

Cash and cash equivalents—end of period

$

167,904

 

 

$

265,240

 

 

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