LiveWire Group Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
LVWR$0.55+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001898795-24-000263
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001898795-24-000307
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 114 current paragraphs.
71 unchanged; 35 reworded; 8 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Under this plan, the Company recorded $1,225 thousand and $3,769 thousand of expense in the three and nine months ended September 30, 2024, respectively, related to employee termination benefits and other costs, of which $1,617 thousand and $2,171 thousand was paid in cash during the three and nine months ended September 30, 2024, respectively.
Current report
In September 2024, continuing its focus on the Company’s path to profitability and furthering its strategy, the Company executed a reorganization of its Sales and Marketing function and Product Development and Design function, including consolidating each of these functions under singular leadership and other headcount reductions. In conjunction with this reorganization, the Company recorded $900 thousand of employee termination benefits, primarily severance, during the three and nine months ended September 30, 2024, of which none was paid as of September 30, 2024.
Current report
The Company also recognized a noncash reduction in stock compensation expense of $730 thousand and $3,024 thousand during the three and nine months ended September 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second and third quarters of 2024 as a result of the above actions. The Company also recorded $401 thousand and $863 thousand of accelerated depreciation related to LiveWire Labs leasehold improvements resulting from the move from Mountain View, California to Milwaukee, Wisconsin during the three and nine months ended September 30, 2024.
Current report
Effective November 5, 2024, the Company’s go-to-market strategy in Europe changed from selling direct to customers through international partners to selling at wholesale to independent dealers. Management believes this change will allow the Company to leverage the business practices and expertise of the dealer network in each region to further grow the business and increase unit sales in Europe. This change also aligns the business model in Europe to the business model in the United States. As of September 30, 2024, the Company had 48 international partners. Through the current date, seven of the Company’s prior international partners in Europe have committed to continuing to be a retail partner of LiveWire and being part of the LiveWire wholesale dealer network going forward. Additionally, three new international partners have committed to being part of the LiveWire wholesale dealer network.
Current report
On November 5, 2024, the Company announced a non-binding Memorandum of Understanding with Kwang Yang Motor Co., KTD. and its relevant subsidiaries (“KYMCO”) to collaborate on a new Electric Vehicle maxi-scooter project.
Current report
The following table presents consolidated results of operations for the nine months ended September 30, 2024 and September 30, 2023 (in thousands):
Current report
Under this plan, the Company recorded $1,225 thousand and $3,769 thousand of expense in the three and nine months ended September 30, 2024, respectively, related to employee termination benefits and other costs, of which $1,617 thousand and $2,171 thousand was paid in cash during the three and nine months ended September 30, 2024, respectively.
Current report
In September 2024, continuing its focus on the Company’s path to profitability and furthering its strategy, the Company executed a reorganization of its Sales and Marketing function and Product Development and Design function, including consolidating each of these functions under singular leadership and other headcount reductions. In conjunction with this reorganization, the Company recorded $900 thousand of employee termination benefits, primarily severance, during the three and nine months ended September 30, 2024, of which none was paid as of September 30, 2024.
Removed paragraphs (5)
Previous report
Under this plan, the Company recorded $2,544 thousand of expense in the three months ended June 30, 2024 related to employee termination benefits and other costs, of which $554 thousand was paid in cash during the three months ended June 30, 2024 and the remainder is expected to be paid out over the next twelve months. The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three and six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Previous report
*nm - not meaningful
Previous report
The following table presents consolidated results of operations for the six months ended June 30, 2024 and June 30, 2023 (in thousands):
Previous report
*nm - not meaningful
Previous report
Under this plan, the Company recorded $2,544 thousand of expense in the three and six months ended June 30, 2024 related to employee termination benefits and other costs, of which $554 thousand was paid in cash during the three and six months ended June 30, 2024 and the remainder is expected to be paid out over the next twelve months. The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three and six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Reworded paragraphs (35)
Previous wording
For the three months ended June 30, 2024, the Company’s net loss was $24,805 thousand compared to $40,732 thousand for the three months ended June 30, 2023, and was $48,449 thousand for the six months ended June 30, 2024 compared to $61,879 thousand for the six months ended June 30, 2023. The Company’s net losses reflect the early-stage nature of the Company’s business. The decrease in net losses of $15,927 thousand and $13,430 thousand for three and six months ended June 30, 2024, respectively, reflect the segment results discussed below and a decrease of $1,158 thousand and $1,834 thousand in interest income were offset by an increase of $13,230 thousand and $16,920 thousand of non-operating income related to the decrease in fair value of the outstanding warrants for three and six months ended June 30, 2024, respectively, as compared to prior year.
Current wording
For the three months ended September 30, 2024, the Company’s net loss was $22,694 thousand compared to $14,578 thousand for the three months ended September 30, 2023, and was $71,143 thousand for the nine months ended September 30, 2024 compared to $76,457 thousand for the nine months ended September 30, 2023. The Company’s net losses reflect the early-stage nature of the Company’s business. The increase in net loss of $8,116 thousand and the decrease in net loss of $5,314 thousand for three and nine months ended September 30, 2024, respectively, reflect the segment results and changes in interest income and the fair value of warrants discussed below.
Previous wording
For the three months ended June 30, 2024, the Electric Motorcycles segment operating loss was $26,796 thousand, compared to an operating loss of $31,898 thousand for the three months ended June 30, 2023, and was an operating loss of $55,803 thousand for the six months ended June 30, 2024 compared to an operating loss of $56,667 thousand for the six months ended June 30, 2023. Refer to the Electric Motorcycles segment analysis below for further discussion on the decrease in operating loss of $5,102 thousand and $864 thousand for three and six months ended June 30, 2024, respectively.
Current wording
For the three months ended September 30, 2024, the Electric Motorcycles segment operating loss was $25,015 thousand, compared to an operating loss of $25,741 thousand for the three months ended September 30, 2023, and was an operating loss of $80,818 thousand for the nine months ended September 30, 2024 compared to an operating loss of $82,408 thousand for the nine months ended September 30, 2023. Refer to the Electric Motorcycles segment analysis below for further discussion on the decrease in operating loss of $726 thousand and $1,590 thousand for three and nine months ended September 30, 2024, respectively.
Previous wording
For the three months ended June 30, 2024, the STACYC segment operating loss was $1,369 thousand, as compared to an operating loss of $86 thousand for the three months ended June 30, 2023, and was an operating loss of $2,784 thousand for the six months ended June 30, 2024 compared to operating loss of $224 thousand for the six months ended June 30, 2023. Refer to the STACYC segment analysis below for further discussion on the increase in operating loss of $1,283 thousand and $2,560 thousand for three and six months ended June 30, 2024, respectively.
Current wording
For the three months ended September 30, 2024, the STACYC segment operating loss was $1,510 thousand, as compared to operating income of $398 thousand for the three months ended September 30, 2023, and was an operating loss of $4,294 thousand for the nine months ended September 30, 2024 compared to operating income of $174 thousand for the nine months ended September 30, 2023. Refer to the STACYC segment analysis below for further discussion on the increase in operating loss of $1,908 thousand and $4,468 thousand for three and nine months ended September 30, 2024, respectively.
Previous wording
For 2024, LiveWire's focus continues to be on cost improvements, future additional models on the S2 platform and product innovation and development. LiveWire plans to continue to expand globally in 2024 with the focus on our priority markets in Europe.
Current wording
For the remainder of 2024, LiveWire's focus continues to be on cost improvements, future additional models on the S2 platform, product innovation and development, and aligning its go-to-market strategy globally.
Previous wording
The Electric Motorcycles independent retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles. As of June 30, 2024 and December 31, 2023, this total includes 1 and 4 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
Current wording
The Electric Motorcycles independent retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles. As of September 30, 2024 and December 31, 2023, this total includes 2 and 4 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
Previous wording
The Company reported an operating loss of $28,165 thousand for the three months ended June 30, 2024 compared to an operating loss of $31,984 thousand for the three months ended June 30, 2023. The Electric Motorcycles segment reported an operating loss of $26,796 thousand for the three months ended June 30, 2024, as compared to an operating loss of $31,898 thousand for the three months ended June 30, 2023. The STACYC segment reported operating loss of $1,369 thousand for the three months ended June 30, 2024, compared to operating loss of $86 thousand for the three months ended June 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Current wording
The Company reported an operating loss of $26,525 thousand for the three months ended September 30, 2024 compared to an operating loss of $25,343 thousand for the three months ended September 30, 2023. The Electric Motorcycles segment reported an operating loss of $25,015 thousand for the three months ended September 30, 2024, as compared to an operating loss of $25,741 thousand for the three months ended September 30, 2023. The STACYC segment reported operating loss of $1,510 thousand for the three months ended September 30, 2024, compared to operating income of $398 thousand for the three months ended September 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Previous wording
Interest income for the three months ended June 30, 2024 was $1,596 thousand, as compared to interest income of $2,754 thousand for the three months ended June 30, 2023. The decrease was primarily driven by the decrease in the balance ofmoney market funds at June 30, 2024 as compared to the prior year. The Company had investments of $105,000 thousand and $213,000 thousand in money market funds as of June 30, 2024 and June 30, 2023, respectively.
Current wording
Interest income for the three months ended September 30, 2024 was $1,252 thousand, as compared to interest income of $2,726 thousand for the three months ended September 30, 2023. The decrease was primarily driven by the decrease in the balance ofmoney market funds at September 30, 2024 as compared to the prior year. The Company had investments of $80,000 thousand and $197,000 thousand in money market funds as of September 30, 2024 and September 30, 2023, respectively.
Previous wording
Change in fair value of warrant liabilities for the three months ended June 30, 2024 was income of $1,792 thousand, as compared to expense of $11,438 thousand for the three months ended June 30, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the three months ended June 30, 2024 and the expense recognized for the three months ended June 30, 2023 was due to the increase in estimated fair value due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Current wording
Change in fair value of warrant liabilities for the three months ended September 30, 2024 was income of $2,581 thousand, as compared to income of $8,038 thousand for the three months ended September 30, 2023. The income recognized was due to the decrease in the estimated fair value due to fluctuations in the market price of the warrants during the three months ended September 30, 2024 and 2023. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Previous wording
The income tax provision for the three months ended June 30, 2024 was $28 thousand, as compared to $64 thousand for the three months ended June 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss in the U.S. to be benefited in future periods.
Current wording
The income tax provision for the three months ended September 30, 2024 was $2 thousand, as compared to a benefit of $1 thousand for the three months ended September 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss in the U.S. to be benefited in future periods.
Previous wording
Revenue for the three months ended June 30, 2024 increased by $1,668 thousand, or 218.9%, to $2,430 thousand from $762 thousand for the three months ended June 30, 2023. Unit sales increased by 378.8% from 33 units in 2023 to 158 units in 2024 driven by more products in the market, including the new S2 Mulholland model launched in the first quarter of 2024. The Company has three bikes in market at June 30, 2024 as compared to one bike in market at June 30, 2023. The impact on revenue of the increased unit sales in the three months ended June 30, 2024 was offset by a reduction in revenue of $729 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $276 thousand resulting from the impact of new incentives associated with a revised strategy with our retail partners implemented in the second quarter of 2024 and other incentives, including additional incentives announced in the second quarter of 2024.
Current wording
Revenue for the three months ended September 30, 2024 decreased by $129 thousand, or 9.6%, to $1,209 thousand from $1,338 thousand for the three months ended September 30, 2023. Unit sales increased by 98.0% from 50 units in 2023 to 99 units in 2024 driven by more products in the market. The Company has three bike models in the market as of September 30, 2024 as compared to two bike models in market at September 30, 2023. The impact on revenue of the increased unit sales in the three months ended September 30, 2024 was offset by a reduction in revenue of $725 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $513 thousand related to the reserve for estimated future returns.
Previous wording
Cost of goods sold for the three months ended June 30, 2024 decreased by $336 thousand, or 5.5%, to $5,756 thousand from $6,092 thousand for the three months ended June 30, 2023. Cost of sales for the three months ended June 30, 2024 decreased over the three months ended June 30, 2023 due to the non-recurrence of a $3,717 thousand provision for a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement recorded in the three months ended June 30, 2023. This decrease was offset by increases resulting from increased sales units as discussed above, net realizable value adjustments of$435 thousand, and increased depreciation expense of $415 thousand.
Current wording
Cost of goods sold for the three months ended September 30, 2024 increased by $784 thousand, or 26.9%, to $3,701 thousand from $2,917 thousand for the three months ended September 30, 2023. Cost of sales for the three months ended September 30, 2024 increased over the three months ended September 30, 2023 due to increased sales units as discussed above, highernet realizable value adjustments of$468 thousand, and increased depreciation expense of $341 thousand.
Previous wording
Selling, administrative and engineering expense for the three months ended June 30, 2024 decreased by $3,098 thousand, or 11.7%, to $23,470 thousand from $26,568 thousand for the three months ended June 30, 2023. The decrease was due to a reduction in product development expenses of $2,836 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024 resulting in decreases of approximately $988 thousand from reductions in software licensing fees, personnel costs, insurance premiums, legal fees and travel expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. These decreases were offset by an increase in depreciation expense of $1,391 thousand, including $386 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the planned move of LiveWire Labs as well as the Company’s plan to streamline headcount, the Company recorded $2,544 thousand of expense in the three months ended June 30, 2024 related to employee termination benefits and other costs, The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the three months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current wording
Selling, administrative and engineering expense for the three months ended September 30, 2024 decreased by $1,639 thousand, or 6.8%, to $22,523 thousand from $24,162 thousand for the three months ended September 30, 2023. The decrease was due to a reduction in product development expenses of $1,587 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024, including decreases of $1,577 thousand in personnel costs in the third quarter of 2024 compared to the third quarter of 2023 primarily from headcount reductions in 2024, and $344 thousand from reductions in insurance premiums. These decreases were offset by an increase in depreciation expense of $706 thousand, including $401 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the move of LiveWire Labs as well as the Company’s plan to streamline headcount announced in the second quarter of 2024, and additional headcount reductions initiated in the third quarter of 2024, the Company recorded $2,125 thousand of expense in the three months ended September 30, 2024 related to employee termination benefits and other costs. The Company also recognized a noncash reduction in stock compensation expense of $730 thousand during the three months ended September 30, 2024 resulting from forfeitures of awards related to employees who terminated during the third quarter 2024.
Previous wording
Revenue for the six months ended June 30, 2024 decreased by $4,791 thousand, or 38.2%, to $7,753 thousand from $12,544 thousand for the six months ended June 30, 2023. The decrease in revenue of $4,791 thousand was driven by a $4,827 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $417 thousand reduction due to pricing in the six months ended June 30, 2024. This decrease was offset by a $453 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the six months ended June 30, 2024.
Current wording
Revenue for the three months ended September 30, 2024 decreased by $3,570 thousand, or 52.5%, to $3,236 thousand from $6,806 thousand for the three months ended September 30, 2023. The decrease in revenue of $3,570 thousand was driven by a $3,043 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors, a decrease of $231 thousand in parts, accessories and apparel revenue, and a $296 thousand reduction due to pricing in the three months ended September 30, 2024.
Previous wording
Cost of goods sold for the three months ended June 30, 2024 decreased by $1,399 thousand, or 36.1%, to $2,475 thousand from $3,874 thousand for the three months ended June 30, 2023. The decrease was primarily due to lower volumes in alignment with the decreased revenue described above.
Current wording
Cost of goods sold for the three months ended September 30, 2024 decreased by $1,871 thousand, or 45.2%, to $2,264 thousand from $4,135 thousand for the three months ended September 30, 2023. The decrease was primarily due to lower volumes in alignment with the decreased revenue described above.
Previous wording
Selling, administrative and engineering expense for the three months ended June 30, 2024 increased by $437 thousand, or 17.6%, to $2,913 thousand from $2,476 thousand for the three months ended June 30, 2023. The increase was primarily due to increased research and development costs relating to new product development of $255 thousand, increased personnel costs of $187 thousand, offset by decreased marketing expense of $128 thousand in the three months ended June 30, 2024.
Current wording
Selling, administrative and engineering expense for the three months ended September 30, 2024 increased by $209 thousand, or 9.2%, to $2,482 thousand from $2,273 thousand for the three months ended September 30, 2023. The increase was primarily due to increased research and development costs relating to new product development of $312 thousand offset by decreased sales commissions and depreciation and amortization in thethree months ended September 30, 2024.
Previous wording
The Company reported an operating loss of $58,587 thousand for the six months ended June 30, 2024 compared to an operating loss of $56,891 thousand for the six months ended June 30, 2023. The Electric Motorcycles segment reported an operating loss of $55,803 thousand for the six months ended June 30, 2024, as compared to an operating loss of $56,667 thousand for the six months ended June 30, 2023. The STACYC segment reported an operating loss of $2,784 thousand for the six months ended June 30, 2024, compared to an operating loss of $224 thousand for the six months ended June 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Current wording
The Company reported an operating loss of $85,112 thousand for the nine months ended September 30, 2024 compared to an operating loss of $82,234 thousand for the nine months ended September 30, 2023. The Electric Motorcycles segment reported an operating loss of $80,818 thousand for the nine months ended September 30, 2024, as compared to an operating loss of $82,408 thousand for the nine months ended September 30, 2023. The STACYC segment reported an operating loss of $4,294 thousand for the nine months ended September 30, 2024, compared to operating income of $174 thousand for the nine months ended September 30, 2023. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Previous wording
Interest income for the six months ended June 30, 2024 was $3,612 thousand compared to interest income of $5,446 thousand for the six months ended June 30, 2023. The change was primarily driven by interest income earned on money market fund investments entered into using funds from the Business Combination. The Company had an investment of $105,000 thousand in money market funds as of June 30, 2024 and $213,000 thousand as of June 30, 2023.
Current wording
Interest income for the nine months ended September 30, 2024 was $4,864 thousand compared to interest income of $8,172 thousand for the nine months ended September 30, 2023. The change was primarily driven by interest income earned on money market fund investments entered into using funds from the Business Combination. The Company had an investment of $80,000 thousand in money market funds as of September 30, 2024 and $197,000 thousand as of September 30, 2023.
Previous wording
Change in fair value of warrant liabilities for the six months ended June 30, 2024 was income of $6,550 thousand, as compared to an expense of $10,370 thousand for the six months ended June 30, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the six months ended June 30, 2024 and the expense recognized for the six months ended June 30, 2023 was due to the increase in estimated fair value due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Current wording
Change in fair value of warrant liabilities for the nine months ended September 30, 2024 was income of $9,131 thousand, as compared to an expense of $2,332 thousand for the nine months ended September 30, 2023. The income recognized was due to the decrease in the estimated fair value of the warrants during the nine months ended September 30, 2024 and the expense recognized for the nine months ended September 30, 2023 was due to the increase in estimated fair value due to fluctuations in the market price of the warrants. See Note 7, Warrant Liabilities, in the consolidated financial statements for further discussion.
Previous wording
The income tax provision for the six months ended June 30, 2024 was $24 thousand, as compared to $64 thousand for the six months ended June 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss to be benefited in future periods.
Current wording
The income tax provision for the nine months ended September 30, 2024 was $26 thousand, as compared to $63 thousand for the nine months ended September 30, 2023. The Company believes there is not sufficient positive evidence for the tax benefit generated by the current period operating loss in the U.S. to be benefited in future periods.
Previous wording
The following table presents consolidated results of operations for the Electric Motorcycles segment for the six months ended June 30, 2024 and six months ended June 30, 2023 (in thousands):
Current wording
The following table presents consolidated results of operations for the Electric Motorcycles segment for the nine months ended September 30, 2024 and nine months ended September 30, 2023 (in thousands):
Previous wording
Revenue for the six months ended June 30, 2024 increased by $1,430 thousand, or 63.7%, to $3,674 thousand from $2,244 thousand for the six months ended June 30, 2023. Unit sales increased by 186.5% from 96 units in 2023 to 275 units in 2024 driven by more products in the market, including the new S2 Mulholland model launched in the first quarter of 2024. The Company has three bikes in the market at June 30, 2024 as compared to one bike in the market at June 30, 2023. The impact on revenue of the increased unit sales for the six months ended June 30, 2024 was offset by a reduction in revenue of $1,523 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $854 thousand resulting from the impact of new incentives associated with the revised strategy with our retail partners implemented in 2024 and other incentives, including additional incentives announced in the second quarter of 2024.
Current wording
Revenue for the nine months ended September 30, 2024 increased by $1,301 thousand, or 36.3%, to $4,883 thousand from $3,582 thousand for the nine months ended September 30, 2023. Unit sales increased by 156.2% from 146 units in 2023 to 374 units in 2024 driven by more products in the market. The Company has three bike models in the market as of September 30, 2024 as compared to two bikes in the market at September 30, 2023. The impact on revenue of the increased unit sales for the nine months ended September 30, 2024 was offset by a reduction in revenue of $2,249 thousand resulting from product mix due to the S2 Del Mar and Mulholland having lower selling prices than LiveWire ONE and $809 thousand resulting from the impact of new incentives associated with the revised strategy with our retail partners implemented in 2024 and other incentives, including additional incentives announced in the nine months ended September 30, 2024, and $642 thousand related to the impact of returns reserve recorded in the nine months ended September 30, 2024.
Previous wording
Cost of goods sold for the six months ended June 30, 2024 increased by $3,695 thousand, or 43.3%, to $12,227 thousand from $8,532 thousand for the six months ended June 30, 2023. The increase was primarily due to higher shipments of electric motorcycles, in alignment with the increased revenue described above, increased net realizable value adjustments of$2,138 thousand, and increased depreciation expense of$1,200 thousand. These increases were offset by the non-recurrence of a $3,717 thousand provision for a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement recorded in the three months ended June 30, 2023.
Current wording
Cost of goods sold for the nine months ended September 30, 2024 increased by $4,479 thousand, or 39.1%, to $15,928 thousand from $11,449 thousand for the nine months ended September 30, 2023. The increase was primarily due to higher shipments of electric motorcycles, in alignment with the increased revenue described above, higher net realizable value adjustments of$2,530 thousand, and increased depreciation expense of$1,540 thousand. These increases were offset by the non-recurrence of a $3,757 thousand provision for a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement recorded in the nine months ended September 30, 2023.
Previous wording
Selling, administrative and engineering expense for the six months ended June 30, 2024 decreased by $3,129 thousand, or 6.2%, to $47,250 thousand from $50,379 thousand for the six months ended June 30, 2023. The decrease was due to a decrease in product development expense of $4,968 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024 resulting in decreases of approximately $1,276 thousand from reductions in software licensing fees, insurance premiums, and legal fees. These decreases were offset by an increase in personnel costs in the first part of 2024 of $932 thousand and an increase in depreciation expense of $2,092 thousand, including $462 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the planned move of LiveWire Labs as well as the Company’s plan to streamline headcount, the Company recorded $2,544 thousand of expense in the six months ended June 30, 2024 related to employee termination benefits and other costs, The Company also recognized a noncash reduction in stock compensation expense of $2,294 thousand during the six months ended June 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second quarter of 2024.
Current wording
Selling, administrative and engineering expense for the nine months ended September 30, 2024 decreased by $4,768 thousand, or 6.4%, to $69,773 thousand from $74,541 thousand for the nine months ended September 30, 2023. The decrease was due to a decrease in product development expense of $6,221 thousand in the current year as 2023 included increased expenses related to the initial development of the S2 platform. Additionally, the Company continues to focus on cost reduction activities in 2024, including decreases of $1,938 thousand in personnel costs in the third quarter of 2023 primarily from headcount reductions in 2024, and $846 thousand from reductions in insurance premiums. These decreases were offset by an increase in depreciation expense of $2,786 thousand, including $863 thousand related to accelerated depreciation on leasehold improvements related to LiveWire Labs resulting from the planned move from Mountain View, California to Milwaukee, Wisconsin. As discussed above, related to the planned move of LiveWire Labs as well as the Company’s plan to streamline headcount, the Company recorded $4,669 thousand of expense in the nine months ended September 30, 2024 related to employee termination benefits and other costs. The Company also recognized a noncash reduction in stock compensation expense of $3,024 thousand during the nine months ended September 30, 2024 resulting from forfeitures of awards related to employees who terminated during the second and third quarters of 2024.
Previous wording
The following table presents consolidated results of operations for the STACYC segment for the six months ended June 30, 2024 and six months ended June 30, 2023 (in thousands):
Current wording
The following table presents consolidated results of operations for the STACYC segment for the nine months ended September 30, 2024 and nine months ended September 30, 2023 (in thousands):
Previous wording
Revenue for the three months ended June 30, 2024 decreased by $2,245 thousand, or 35.8%, to $4,019 thousand from $6,264 thousand for the three months ended June 30, 2023. The decrease in revenue of $2,245 thousand was driven by a $2,201 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $151 thousand reduction due to pricing in the three months ended June 30, 2024. This decrease was offset by a $107 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the three months ended June 30, 2024.
Current wording
Revenue for the nine months ended September 30, 2024 decreased by $8,361 thousand, or 43.2%, to $10,989 thousand from $19,350 thousand for the nine months ended September 30, 2023. The decrease in revenue of $8,361 thousand was driven by a $8,025 thousand reduction in electric balance bikes revenue due to lower shipment volumes primarily to our independent distributors and a $558 thousand reduction due to pricing in the nine months ended September 30, 2024. This decrease was offset by a $222 thousand increase in parts, accessories and apparel revenue due primarily to increased battery and replacement part sales in the nine months ended September 30, 2024.
Previous wording
Cost of goods sold for the six months ended June 30, 2024 decreased by $2,823 thousand, or 35.6%, to $5,109 thousand from $7,932 thousand for the six months ended June 30, 2023. The decrease was primarily due to lower shipment volumes, in alignment with the decreased revenue described above.
Current wording
Cost of goods sold for the nine months ended September 30, 2024 decreased by $4,694 thousand, or 38.9%, to $7,373 thousand from $12,067 thousand for the nine months ended September 30, 2023. The decrease was primarily due to lower shipment volumes, in alignment with the decreased revenue described above.
Previous wording
Selling, administrative and engineering expense for the six months ended June 30, 2024 increased by $592 thousand, or 12.2%, to $5,428 thousand from $4,836 thousand for the six months ended June 30, 2023. The increase was primarily due to increased research and development costs related to new product development of $411 thousand, increased personnel costs of $316 thousand, offset by decreased marketing expense of $259 thousand in the six months ended June 30, 2024.
Current wording
Selling, administrative and engineering expense for the nine months ended September 30, 2024 increased by $801 thousand, or 11.3%, to $7,910 thousand from $7,109 thousand for the nine months ended September 30, 2023. The increase was primarily due to increased research and development costs related to new product development of $723 thousand, increased personnel costs of $439 thousand, offset by decreased marketing expense of $281 thousand, and decreased depreciation and amortization of $122 thousand in the nine months ended September 30, 2024.
Previous wording
As of June 30, 2024 and December 31, 2023, LiveWire’s cash and cash equivalents were $113,011 thousand and $167,904 thousand, respectively.
Current wording
As of September 30, 2024 and December 31, 2023, LiveWire’s cash and cash equivalents were $88,442 thousand and $167,904 thousand, respectively.
Previous wording
In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $349.2 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a “cashless basis,” LiveWire will not receive any proceeds upon such exercise. LiveWire expects to use any proceeds it receives from Warrant exercises for general corporate and working capital purposes, which would increase its liquidity. LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of June 30, 2024, the reported sales price of Common Stock was $7.66 per share. If the trading price of Common Stock is less than the $11.50 exercise price per share of the Warrants, LiveWire expects that warrant holders will not exercise their Warrants. There is no guarantee the Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and LiveWire may receive no proceeds from the exercise of Warrants. As a result, LiveWire does not expect to rely on the cash exercise of Warrants to fund its operations and LiveWire does not believe that it needs such proceeds to support working capital and capital expenditure requirements for the next twelve months. LiveWire will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in its future liquidity projections. LiveWire instead currently expects to rely on the sources of funding described below, if available on reasonable terms or at all.
Current wording
In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $349.2 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. To the extent any of the Warrants are exercised on a “cashless basis,” LiveWire will not receive any proceeds upon such exercise. LiveWire expects to use any proceeds it receives from Warrant exercises for general corporate and working capital purposes, which would increase its liquidity. LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of September 30, 2024, the reported sales price of Common Stock was $6.10 per share. If the trading price of Common Stock is less than the $11.50 exercise price per share of the Warrants, LiveWire expects that warrant holders will not exercise their Warrants. There is no guarantee the Warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the Warrants may expire worthless and LiveWire may receive no proceeds from the exercise of Warrants. As a result, LiveWire does not expect to rely on the cash exercise of Warrants to fund its operations and LiveWire does not believe that it needs such proceeds to support working capital and capital expenditure requirements for the next twelve months. LiveWire will continue to evaluate the probability of Warrant exercises and the merit of including potential cash proceeds from the exercise of the Warrants in its future liquidity projections. LiveWire instead currently expects to rely on the sources of funding described below, if available on reasonable terms or at all.
Previous wording
The following table presents condensed highlights from the Company’s consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following table presents condensed highlights from the Company’s consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):
Previous wording
The overall decrease in cash during the six months ended June 30, 2024 was due primarily to cash used for operating activities, as described below.
Current wording
The overall decrease in cash during the nine months ended September 30, 2024 was due primarily to cash used for operating activities, as described below.
Previous wording
The Company had negative cash flow from operating activities during the six months ended June 30, 2024 and 2023. Net cash used by operating activities increased by $7,691 thousand to $48,886 thousand for the six months ended June 30, 2024 compared to $41,195 thousand for the six months ended June 30, 2023. The increase in negative cash flow from operating activities was primarily driven by unfavorable changes in Accounts payable to related party and Accounts payable and accrued liabilities offset by favorable changes in Accounts receivable, net and Account receivable from related party.
Current wording
The Company had negative cash flow from operating activities during the nine months ended September 30, 2024 and 2023. Net cash used by operating activities increased by $16,114 thousand to $71,990 thousand for the nine months ended September 30, 2024 compared to $55,876 thousand for the nine months ended September 30, 2023. The increase in negative cash flow from operating activities was primarily driven by unfavorable changes in Accounts payable to related party and Other current assets offset by favorable changes in Accounts receivable, net, Account receivable from related party, and Accounts payable and accrued liabilities.
Previous wording
Net cash used by investing activities decreased by $3,095 thousand to $5,080 thousand for the six months ended June 30, 2024 compared to $8,175 thousand for the six months ended June 30, 2023. The decrease was due to higher capital expenditures in 2023 related to investments to support future product development activities.
Current wording
Net cash used by investing activities decreased by $4,309 thousand to $6,661 thousand for the nine months ended September 30, 2024 compared to $10,970 thousand for the nine months ended September 30, 2023. The decrease was due to higher capital expenditures in 2023 related to investments to support future product development activities.
Previous wording
The Company expects to fund future cash flows used in investing activities with the financing raised through the Business Combination and available funds under the Convertible Term Loan. The Company estimates capital expenditures to be between $10 million and $20 million in 2024.
Current wording
The Company expects to fund future cash flows used in investing activities with its current cash on hand, including the financing raised through the Business Combination, and available funds under the Convertible Term Loan. The Company estimates capital expenditures to be between $8 million and $15 million in 2024.
Previous wording
Net cash used by financing activities was $927 thousand for the six months ended June 30, 2024 compared to an inflow of $2 thousand for the six months ended June 30, 2023. The $927 thousand cash outflow related to the repurchase of common stock to satisfy withholding taxes in connection with the vesting of restricted stock.
Current wording
Net cash used by financing activities decreased by $2,481 thousand to an outflow $927 thousand for the nine months ended September 30, 2024 compared to an inflow of $1,554 thousand for the nine months ended September 30, 2023. The $927 thousand cash outflow related to the repurchase of common stock to satisfy withholding taxes in connection with the vesting of restricted stock.