LiveWire, the electric motorcycle brand and model line launched by Harley-Davidson back in 2019, has issued a dire warning about its potential to continue operating, pointing to a raft of financial headwinds the company’s management feels it is unlikely to weather.

LiveWire, which was spun out into its own company in 2022, published its third quarter financial results last Thursday, and despite increased revenue and increased unit sales, the company reported earnings of -$US14.7 million and a consolidated net loss of $US18.6 million.

Electric motorcycle sales rose 31 per cent year-on-year to 241 units, while revenue increased by $US1.7 million to $US2.7 million. Despite that growth, the division still recorded an operating loss of $US17 million, underscoring the scale of LiveWire’s financial challenges.

As if all this wasn’t bad enough, LiveWire said that its management had “determined that conditions and events raise substantial doubt about the company’s ability to continue as a going concern” within the next year.

LiveWire pointed to “recurring operating losses, negative cash flows from operations, limited liquidity resources, and anticipated future funding requirements” as the cause for this determination, though it continues “to evaluate and pursue comprehensive financing and other strategic alternatives” such as “significant capital raises, strategic partnerships or investments, sales, and other strategic transactions”.

However, as the company’s management warned, “there can be no assurance that such efforts will be successful or that any such transaction will be available on terms acceptable to the company, our lienholders or stockholders.”

LiveWire’s board of directors has subsequently formed a special restructuring committee to carry out a wholesale review of the company and its potential to continue moving forward.

Source link