TAIPEI, Taiwan (BRAIN) — Taiwanese manufacturer Merida Industry Co., which owns 35% of Specialized Bicycle Company, recorded a non-operating loss of over $100 million related to that investment in 2024, as the U.S. bike brand took a deferred tax loss and write-downs on its retail operations.
Merida’s board approved a dividend despite the annual loss, explaining that its core business was growing and profitable and the Specialized loss was a one-time occurrence. It also said Specialized’s inventory position and cash balance have returned to pre-pandemic levels.
At a news conference in Taiwan Thursday, Merida explained that the losses due to its investment in Specialized came from three sources: 8% of the loss was from operations, while the other 92% came from a deferred tax loss and write-down on the valuation of Specialized’s retail stores, in goodwill and a ROU (Right of Use) Asset Impairment. Merida did not specify what share of the total loss came from the deferred loss and what share was from the retail write downs.
“During the pandemic, numerous brands strategically acquired bike shops to gain market share. However, the market demands have shifted rapidly, leading to a decline in the valuation of these bike shops and resulted in the impairment,” Merida explained in a presentation made at the news conference.
Merida noted the deferred tax loss can be used to offset taxes on future profits.
Merida's non-operating loss was about NT$3.4 billion ($105 million), equating to a NT$11.51 loss per share, exceeding Merida’s operating profit of NT$9.17 per share and causing the company to record its first consolidated loss since 2002, of NT$766.2 million or a loss of NT$2.34 per share.
Merida’s revenue for the year was NT$29.63 billion, up 8.7% from the year before; operating profit was NT$3.03 billion.
In preliminary 2025 sales figures filed with the Taipei stock exchange, Merida said year-to-date revenues after the first two months were up 48%.
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Screenshot from Merida presentation on the one-time losses.
