LION ELECTRIC ANNOUNCES SECOND QUARTER 2024 RESULTS
Lion Electric Company (NYSE: LEV, TSX: LEV) announced Q2 2024 financial results. Revenue fell by $27.7M to $30.3M as 101 vehicles were delivered, down from 199 in Q2 2023. Gross loss was $15.2M, up from a gross profit of $0.4M in Q2 2023, due to higher manufacturing costs and lower sales volume. Net loss increased to $19.3M from $11.8M. Adjusted EBITDA was negative $20.6M, down from negative $9.7M in Q2 2023. The workforce will be reduced by 30% to save $25M annually. Lion’s vehicle order book stands at 1,994 vehicles worth $475M, and its LionEnergy order book includes 394 charging stations worth $9M. Despite financial challenges, the company launched the Lion8 Tractor truck and completed battery pack certifications. Lion received a NYSE non-compliance notice due to its stock price being below $1 for 30 days. The company aims to regain compliance within six months.
La Lion Electric Company (NYSE: LEV, TSX: LEV) ha annunciato i risultati finanziari del secondo trimestre 2024. I ricavi sono diminuiti di 27,7 milioni di dollari, scendendo a 30,3 milioni di dollari, con 101 veicoli consegnati, rispetto ai 199 del Q2 2023. La perdita lorda è salita a 15,2 milioni di dollari, rispetto a un utile lordo di 0,4 milioni di dollari nel Q2 2023, a causa di costi di produzione più elevati e un volume di vendite ridotto. La perdita netta è aumentata a 19,3 milioni di dollari, rispetto agli 11,8 milioni di dollari precedenti. L'EBITDA rettificato è stato negativo per 20,6 milioni di dollari, in calo rispetto a negativo 9,7 milioni di dollari nel Q2 2023. Il personale verrà ridotto del 30% per risparmiare 25 milioni di dollari all'anno. Il portafoglio ordini di veicoli di Lion comprende 1.994 veicoli per un valore di 475 milioni di dollari, mentre il portafoglio ordini LionEnergy include 394 stazioni di ricarica per un valore di 9 milioni di dollari. Nonostante le sfide finanziarie, l'azienda ha lanciato il camion Lion8 Tractor e completato le certificazioni dei pacchi batteria. Lion ha ricevuto un avviso di non conformità dalla NYSE a causa del prezzo delle sue azioni, che è stato inferiore a 1 dollaro per 30 giorni. L'azienda mira a ristabilire la conformità entro sei mesi.
Lion Electric Company (NYSE: LEV, TSX: LEV) anunció los resultados financieros del segundo trimestre de 2024. Los ingresos cayeron en $27.7M, alcanzando $30.3M, con 101 vehículos entregados, en comparación con 199 en el segundo trimestre de 2023. La pérdida bruta fue de $15.2M, aumentando desde una ganancia bruta de $0.4M en el segundo trimestre de 2023, debido a costos de fabricación más altos y un menor volumen de ventas. La pérdida neta se incrementó a $19.3M, desde $11.8M. El EBITDA ajustado fue negativo en $20.6M, en comparación con un negativo de $9.7M en el segundo trimestre de 2023. La fuerza laboral se reducirá en un 30% para ahorrar $25M anualmente. La cartera de pedidos de vehículos de Lion se encuentra en 1,994 vehículos valorados en $475M, y su cartera de pedidos de LionEnergy incluye 394 estaciones de carga por un valor de $9M. A pesar de los desafíos financieros, la compañía lanzó el camión Lion8 Tractor y completó las certificaciones de los paquetes de baterías. Lion recibió un aviso de incumplimiento de la NYSE debido a que su precio de acción estuvo por debajo de $1 durante 30 días. La empresa busca recuperar la conformidad dentro de seis meses.
라이온 전기 회사 (NYSE: LEV, TSX: LEV)가 2024년 2분기 재무 결과를 발표했습니다. 수익은 $27.7M 감소하여 $30.3M에 도달하였으며, 101대의 차량이 인도되어 2023년 2분기의 199대에서 감소했습니다. 총손실은 $15.2M으로 증가했으며, 이는 2023년 2분기 $0.4M의 총 이익에서 증가한 것입니다. 이는 더 높은 제조 비용과 낮은 판매량으로 인한 것입니다. 순손실은 $19.3M으로 증가하였으며, 이전의 $11.8M에서 증가했습니다. 조정된 EBITDA는 $20.6M의 적자로, 2023년 2분기의 적자 $9.7M에서 감소했습니다. 인력은 30% 줄여 연간 $25M를 절감할 계획입니다. 라이온의 차량 주문은 1,994대이며, 이는 $475M의 가치가 있으며, LionEnergy의 주문서에는 394개의 충전소가 포함되어 있으며, 이는 $9M의 가치가 있습니다. 재정적인 문제에도 불구하고, 회사는 Lion8 트랙터 트럭을 출시하고 배터리 팩 인증을 완료했습니다. 라이온은 주가가 30일 이상 $1 이하일 때 NYSE에서 비준수 통지를 받았습니다. 회사는 6개월 이내에 준수를 복원하는 것을 목표로 하고 있습니다.
Lion Electric Company (NYSE: LEV, TSX: LEV) a annoncé les résultats financiers du deuxième trimestre 2024. Les revenus ont baissé de 27,7 millions de dollars, atteignant 30,3 millions de dollars, avec 101 véhicules livrés, contre 199 au T2 2023. La perte brute s’élevait à 15,2 millions de dollars, contre un bénéfice brut de 0,4 million de dollars au T2 2023, en raison de coûts de fabrication plus élevés et d’un volume de ventes plus faible. La perte nette a augmenté à 19,3 millions de dollars, contre 11,8 millions de dollars. L'EBITDA ajusté était négatif à 20,6 millions de dollars, contre un négatif de 9,7 millions de dollars au T2 2023. La main-d'œuvre sera réduite de 30% pour économiser 25 millions de dollars par an. Le carnet de commandes de véhicules de Lion se chiffre à 1.994 véhicules d'une valeur de 475 millions de dollars, et son carnet de commandes LionEnergy comprend 394 stations de recharge d'une valeur de 9 millions de dollars. Malgré les défis financiers, l'entreprise a lancé le camion Lion8 Tractor et a terminé les certifications des packs de batteries. Lion a reçu un avis de non-conformité de la part de la NYSE en raison du prix de ses actions étant resté en dessous de 1 dollar pendant 30 jours. L'entreprise vise à retrouver la conformité dans un délai de six mois.
Lion Electric Company (NYSE: LEV, TSX: LEV) hat die finanziellen Ergebnisse des zweiten Quartals 2024 bekannt gegeben. Die Umsätze sind um 27,7 Millionen Dollar gesunken und belaufen sich auf 30,3 Millionen Dollar, während 101 Fahrzeuge geliefert wurden, im Vergleich zu 199 im zweiten Quartal 2023. Der Bruttoverlust betrug 15,2 Millionen Dollar, im Vergleich zu einem Bruttogewinn von 0,4 Millionen Dollar im zweiten Quartal 2023, was auf höhere Produktionskosten und ein geringeres Verkaufsvolumen zurückzuführen ist. Der Nettoverlust stieg auf 19,3 Millionen Dollar, gegenüber 11,8 Millionen Dollar zuvor. Das bereinigte EBITDA war negativ mit 20,6 Millionen Dollar, nach einem negativen Betrag von 9,7 Millionen Dollar im zweiten Quartal 2023. Die Belegschaft wird um 30% reduziert, um jährlich 25 Millionen Dollar zu sparen. Der Auftragsbestand an Fahrzeugen von Lion umfasst 1.994 Fahrzeuge im Wert von 475 Millionen Dollar, und der Auftragsbestand an LionEnergy umfasst 394 Ladestationen im Wert von 9 Millionen Dollar. Trotz finanzieller Herausforderungen hat das Unternehmen den Lion8 Tractor Truck eingeführt und die Zertifizierungen für die Batteriepacks abgeschlossen. Lion erhielt eine Mitteilung über die Nichteinhaltung von der NYSE, da der Aktienkurs 30 Tage unter 1 Dollar lag. Das Unternehmen strebt an, innerhalb von sechs Monaten wieder compliant zu werden.
- Lion’s vehicle order book includes 1,994 electric vehicles worth $475M.
- LionEnergy order book includes 394 charging stations worth $9M.
- Annualized cost savings of up to $25M expected from a 30% workforce reduction.
- Revenue decreased by $27.7M to $30.3M.
- Gross loss of $15.2M, compared to a gross profit of $0.4M in Q2 2023.
- Net loss increased to $19.3M from $11.8M.
- Adjusted EBITDA negative $20.6M, down from negative $9.7M in Q2 2023.
- Delivered 101 vehicles, down from 199 in Q2 2023.
- Received NYSE non-compliance notice for stock price below $1.
Insights
Lion Electric's Q2 2024 results reveal significant challenges for the electric vehicle manufacturer. The company reported
Key points to consider:
- Vehicle deliveries dropped to 101 units from 199 in Q2 2023, impacted by EPA timing and subsidy delays.
- The net loss widened to
$19.3 million from$11.8 million year-over-year. - The company announced a significant restructuring plan, including a
30% workforce reduction, potentially saving up to$25 million annually. - Lion's vehicle order book stands at 1,994 units, valued at approximately
$475 million .
The restructuring plan indicates management's recognition of the need to align costs with current demand. However, the substantial decrease in revenue and widening losses raise concerns about the company's near-term financial health. The continued delays in subsidy programs and slower-than-expected market adoption of electric vehicles pose significant challenges for Lion Electric's growth trajectory.
Investors should closely monitor the company's ability to execute its restructuring plan and improve its financial position. The potential for selling battery packs to third parties could open new revenue streams, but it's important to see how quickly this can be implemented and its impact on the bottom line.
Lion Electric's Q2 results highlight the broader challenges facing the electric vehicle industry, particularly in the commercial and heavy-duty segments. The significant decrease in vehicle deliveries, from 199 in Q2 2023 to 101 in Q2 2024, underscores the impact of regulatory and funding uncertainties on market adoption.
Key market insights:
- The timing of EPA rounds and delays in the ZETF program are creating bottlenecks in the sales process, indicating the industry's heavy reliance on government incentives.
- Lion's order book of 1,994 vehicles suggests there's still substantial interest in electrification, but conversion to sales is slower than anticipated.
- The company's pivot to selling battery packs to third parties indicates a potential new market opportunity in the EV supply chain.
- The restructuring plan, including workforce reduction and optimizing facility usage, reflects a broader trend of EV manufacturers adjusting to market realities.
The slower-than-expected transition to electric vehicles in the commercial sector suggests that the market may be overestimating the pace of adoption. Factors such as infrastructure development, total cost of ownership and operational readiness are likely playing a role in delaying widespread adoption.
For investors and industry observers, Lion's challenges highlight the need for a more tempered outlook on the short-term growth of the electric commercial vehicle market. However, the long-term potential remains significant as regulatory pressures and improving technology continue to drive the transition to electric transportation.
Lion Electric's Q2 2024 report raises several legal and regulatory considerations that investors should be aware of:
- The company's reliance on government subsidies and incentives, particularly the ZETF program, exposes it to regulatory risks. Delays or changes in these programs can significantly impact Lion's financial performance.
- The restructuring plan, especially the
30% workforce reduction, must be carefully executed to comply with labor laws in both Canada and the United States. Temporary layoffs, if not handled properly, could lead to potential legal challenges. - Lion's receipt of a non-compliance notice from the NYSE regarding the
$1.00 minimum share price requirement puts additional pressure on the company. Failure to regain compliance within the six-month cure period could result in delisting, which would have significant legal and financial implications. - The company's plan to sell battery packs to third parties may require additional regulatory compliance, particularly regarding safety standards and liability considerations.
- As Lion explores options to regain NYSE compliance, any actions requiring shareholder approval must be conducted in accordance with securities regulations and corporate governance best practices.
From a legal standpoint, Lion Electric must navigate these challenges while ensuring full compliance with financial reporting requirements, securities laws and regulatory standards in both the U.S. and Canada. The company's ability to manage these legal and regulatory risks will be important for its long-term viability and investor confidence.
Q2 2024 FINANCIAL HIGHLIGHTS
- Revenue of
$30.3 million $27.7 million $58.0 million - Delivery of 101 vehicles, a decrease of 98 vehicles, as compared to the 199 delivered in Q2 2023. Less vehicles were delivered due to the impact of the timing of EPA rounds and the continued delays and challenges associated with the granting of subsidies related to the ZETF program. Deliveries were also impacted by a slowdown in the Company's production cadence due to the integration of its Lion MD batteries onto its vehicles and the continued ramp-up of production of the Lion5 and LionD platforms.
- Gross loss of
$15.2 million $0.4 million - Net loss of
$19.3 million $11.8 million - Adjusted EBITDA1 of negative
$20.6 million $9.7 million - Additions to property, plant and equipment of
$1.3 million $17.8 million $19.1 million - Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to
$10.6 million $9.4 million $7.3 million $17.9 million
________________________________ |
1 Adjusted EBITDA is a non-IFRS financial measure. See "Non-IFRS Measures and Other Performance Metrics" section of this press release. |
BUSINESS UPDATES
- More than 2,100 vehicles on the road, with over 28 million miles driven (over 46 million kilometers).
- Vehicle order book2 of 1,994 all-electric medium- and heavy-duty urban vehicles as of July 30, 2024, consisting of 190 trucks and 1,804 buses, representing a combined total order value of approximately
$475 million - LionEnergy order book of 394 charging stations and related services as of July 30, 2024, representing a combined total order value of approximately
$9 million - 12 experience centers in operation in
the United States andCanada . - Commercial launch of our Lion8 Tractor truck at the ACT conference in May
- Successfully completed the final certification for heavy duty Lion battery packs, which will be integrated into our Lion8 Tractor trucks
On July 31, 2024, the Company announced an action plan (the "Action Plan") intended to streamline its operations, further align its cost structure with current demand and improve its liquidity position and ability to reach its profitability goals. The Action Plan includes the following actions and initiatives:
- a reduction of the Company's workforce by
30% (representing approximately 300 employees) acrossCanada andthe United States and impacting all areas of the organization, which is expected to be implemented over the upcoming days and will result in mostly temporary lay offs (such initiative being expected to result in annualized costs savings for the Company of up to approximately$25 million - adjusting the Company's truck manufacturing operations in light of a lower market demand than initially anticipated for all-electric trucks, including by introducing a batch-size manufacturing approach for trucks directly aligned with the Company's order book;
- the creation of a new product line through which the Company will sell its battery packs to third parties;
- a process to optimize usage of the Company's facilities, including the potential sublease of a significant portion of its Joliet Facility and certain experience centers throughout
Canada andthe United States ; and - the implementation of an overall efficiency improvement plan to further reduce other operational expenses, such as third-party logistics costs, consultant costs, and other selling and administrative expenditures.
________________________________ |
2 See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of July 30, 2024 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2028, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025, which corresponds to the latest date by which claims are required to be made according to the current eligibility criteria of the ZETF, unless otherwise agreed by Infrastructure Canada. In addition, substantially all of the vehicle orders included in the order book are subject to the granting of governmental subsidies and incentives, including programs in respect of which applications relating to vehicles of Lion have not yet been fully processed to date. The processing times of governmental programs, subsidies and incentives are also subject to important variations. There has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Also, there has been in the past and the Company expects there will continue to be variances in the eligibility criteria of the various programs, subsidies and incentives introduced by governmental authorities, including in their interpretation and application. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part. The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales. |
On July 30, 2024, the Company and the lenders under the Revolving Credit Agreement agreed to certain accommodations relating to the temporary inclusion of additional assets in the borrowing base until August 16, 2024.
"Despite the important challenges the electric vehicle market is currently facing, Lion has been able to realize major headway in the recent rounds of the EPA program, which should bring significant positive momentum to our company, and also made important progress in the last quarter, such as the commercial launch of our Lion8 Tractor and the certification of our LionBattery HD pack" stated Marc Bedard, CEO-Founder of Lion. "Transition to electric is taking longer than initially expected, but transportation electrification is here to stay. It is with that mindset that we have put together an action plan to adjust our cost structure to enable us to continue to support the increasing electric school bus demand and maintain our leadership position, while allowing us to keep supporting the truck operators in their electric transition and focus on our profitability objectives," he added.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE SECOND QUARTER OF FISCAL YEAR 2024
Revenue
For the three months ended June 30, 2024, revenue amounted to
For the six months ended June 30, 2024, revenue amounted to
Cost of Sales
For the three months ended June 30, 2024, cost of sales amounted to
For the six months ended June 30, 2024, cost of sales amounted to
Gross Profit (Loss)
For the three months ended June 30, 2024, gross loss increased by
For the six months ended June 30, 2024, gross loss increased by
Administrative Expenses
For the three months ended June 30, 2024, administrative expenses decreased by
For the six months ended June 30, 2024, administrative expenses decreased by
Selling Expenses
For the three months ended June 30, 2024, selling expenses decreased by
For the six months ended June 30, 2024, selling expenses decreased by
Restructuring Costs
Restructuring costs of
Finance Costs
For the three months ended June 30, 2024, finance costs increased by
For the six months ended June 30, 2024, finance costs increased by
Foreign Exchange Loss (Gain)
Foreign exchange loss (gain) relates primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the three and six months ended June 30, 2024, foreign exchange loss was
Change in Fair Value of Conversion Options on Convertible Debt Instruments
For the three and six months ended June 30, 2024, change in fair value of conversion options on convertible debt instruments resulted in a gain of
Change in Fair Value of Share Warrant Obligations
Change in fair value of share warrant obligations moved from a gain of
Change in fair value of share warrant obligations moved from a gain of
Net Loss
The net loss of
The net loss of
Continued Listing Standard Notice from the New York Stock Exchange
The Company also announced that on July 17, 2024, it received notice (the "Notice") from the New York Stock Exchange (the "NYSE") that, as of July 16, 2024, it was not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company's common stock was less than
In accordance with applicable NYSE rules, the Company notified the NYSE of its intent to regain compliance with Rule 802.01C and return to compliance with the applicable NYSE continued listing standards.
The Company can regain compliance at any time within a six-month cure period following its receipt of the Notice if, on the last trading day of any calendar month during such cure period, the Company has both: (i) a closing share price of at least
The Company is considering all available options to regain compliance with the NYSE's continued listing standards, including, but not limited to, taking actions that are subject to shareholder approval no later than at the Company's next annual meeting of shareholders.
The Notice has no immediate impact on the listing of the Company's common stock, which will continue to be listed and traded on the NYSE during such cure period, subject to the Company's compliance with other NYSE continued listing standards. The Common Stock will continue to trade under the symbol "LEV," but will have an added designation of ".BC" to indicate that the Company currently is not in compliance with the NYSE's continued listing requirements. If the Company is unable to regain compliance during the cure period, the NYSE may initiate procedures to suspend and delist the Common Stock
Furthermore, the Notice is not anticipated to impact the ongoing business operations of the Company or its reporting requirements with the
CONFERENCE CALL
A conference call and webcast will be held on July 31, 2024, at 8:30 a.m. (Eastern Time) to discuss the results. To participate in the conference call, please dial (404) 975-4839 or (833) 470-1428 (toll free) using the Access Code 940640. An investor presentation and a live webcast of the conference call will also be available at www.thelionelectric.com under the "Events and Presentations" page of the "Investors" section. An archive of the event will be available for a period of time shortly after the conference call.
FINANCIAL REPORT
This release should be read together with the 2024 second quarter financial report, including the unaudited condensed interim consolidated financial statements of the Company and the related notes as at June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, and the related management discussion and analysis ("MD&A"), which will be filed by the Company with applicable Canadian securities regulatory authorities and with the
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at June 30, 2024 and December 31, 2023
(in US dollars)
(Unaudited) | |||
Jun 30, 2024 | Dec 31, 2023 | ||
$ | $ | ||
ASSETS | |||
Current | |||
Cash | 2,002,741 | 29,892,966 | |
Accounts receivable | 58,542,074 | 75,641,780 | |
Inventories | 230,018,902 | 249,606,756 | |
Prepaid expenses and other current assets | 1,860,117 | 1,553,276 | |
Current assets | 292,423,834 | 356,694,778 | |
Non-current | |||
Other non-current assets | 7,646,954 | 6,994,815 | |
Property, plant and equipment | 190,020,538 | 198,536,683 | |
Right-of-use assets | 85,697,681 | 89,663,139 | |
Intangible assets | 183,052,914 | 175,703,257 | |
Contract asset | 13,072,979 | 13,528,646 | |
Non-current assets | 479,491,066 | 484,426,540 | |
Total assets | 771,914,900 | 841,121,318 | |
LIABILITIES | |||
Current | |||
Trade and other payables | 66,758,623 | 92,424,961 | |
Deferred revenue and other deferred liabilities | 10,473,496 | 18,267,139 | |
Current portion of long-term debt and other debts | 31,886,443 | 27,056,476 | |
Current portion of lease liabilities | 8,236,230 | 7,984,563 | |
Current liabilities | 117,354,792 | 145,733,139 | |
Non-current | |||
Long-term debt and other debts | 247,688,441 | 197,885,889 | |
Lease liabilities | 81,167,262 | 83,972,023 | |
Share warrant obligations | 8,579,583 | 29,582,203 | |
Conversion options on convertible debt instruments | 6,026,498 | 25,034,073 | |
Non-current liabilities | 343,461,784 | 336,474,188 | |
Total liabilities | 460,816,576 | 482,207,327 | |
SHAREHOLDERS' EQUITY | |||
Share capital | 489,454,628 | 489,362,920 | |
Contributed surplus | 140,757,712 | 139,569,185 | |
Deficit | (296,708,772) | (255,746,097) | |
Cumulative translation adjustment | (22,405,244) | (14,272,017) | |
Total shareholders' equity | 311,098,324 | 358,913,991 | |
Total shareholders' equity and liabilities | 771,914,900 | 841,121,318 |
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE EARNINGS
For the three and six months ended June 30, 2024 and 2023
(in US dollars)
(Unaudited) | (Unaudited) | ||||||
Three months ended | Six months ended | ||||||
Jun 30, | Jun 30, | Jun 30, | Jun 30, | ||||
$ | $ | $ | $ | ||||
Revenue | 30,276,027 | 58,015,843 | 85,756,916 | 112,719,248 | |||
Cost of sales | 45,489,617 | 57,596,937 | 112,114,193 | 114,557,630 | |||
Gross profit (loss) | (15,213,590) | 418,906 | (26,357,277) | (1,838,382) | |||
Administrative expenses | 10,944,160 | 12,478,787 | 22,061,493 | 25,481,472 | |||
Selling expenses | 4,274,676 | 5,466,706 | 8,035,670 | 11,326,366 | |||
Restructuring costs | 1,383,009 | — | 1,383,009 | — | |||
Operating loss | (31,815,435) | (17,526,587) | (57,837,449) | (38,646,220) | |||
Finance costs | 12,292,088 | 2,001,084 | 22,909,829 | 3,421,438 | |||
Foreign exchange loss (gain) | 971,342 | (1,753,661) | 3,524,106 | (2,965,306) | |||
Change in fair value of conversion options on convertible debt instruments | (12,471,759) | — | (23,217,793) | — | |||
Change in fair value of share warrant obligations | (13,341,671) | (5,986,425) | (20,090,916) | (11,731,321) | |||
Net loss | (19,265,435) | (11,787,585) | (40,962,675) | (27,371,031) | |||
Other comprehensive loss | |||||||
Item that will be subsequently reclassified to net earning (loss) | |||||||
Foreign currency translation adjustment | (2,276,235) | 6,898,743 | (8,133,227) | 7,362,420 | |||
Comprehensive loss for the period | (21,541,670) | (4,888,842) | (49,095,902) | (20,008,611) | |||
Loss per share | |||||||
Basic loss per share | (0.09) | (0.05) | (0.18) | (0.12) | |||
Diluted loss per share | (0.09) | (0.05) | (0.18) | (0.12) | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended June 30, 2024 and 2023
(in US Dollars)
(Unaudited) | (Unaudited) | ||||||
Three months ended | Six months ended | ||||||
Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2024 | Jun 30, 2023 | ||||
$ | $ | $ | $ | ||||
OPERATING ACTIVITIES | |||||||
Net loss | (19,265,435) | (11,787,585) | (40,962,675) | (27,371,031) | |||
Non-cash items: | |||||||
Depreciation and amortization | 9,108,162 | 5,561,359 | 17,195,476 | 10,475,016 | |||
Share-based compensation | 466,448 | 2,056,710 | 867,084 | 3,470,553 | |||
Accretion expense | 3,047,934 | — | 6,074,007 | — | |||
Interest paid in kind on convertible debt instruments | 2,477,108 | — | 4,950,035 | — | |||
Change in fair value of share warrant obligations | (13,341,671) | (5,986,425) | (20,090,916) | (11,731,321) | |||
Change in fair value of conversion options on convertible debt | (12,471,759) | — | (23,217,793) | — | |||
Unrealized foreign exchange gain (loss) | 1,280,968 | (1,847,822) | 3,917,505 | (1,231,348) | |||
Net change in non-cash working capital items | 19,691,656 | 7,054,722 | (1,439,318) | (16,161,663) | |||
Cash flows used in operating activities | (9,006,589) | (4,949,041) | (52,706,595) | (42,549,794) | |||
INVESTING ACTIVITIES | |||||||
Acquisition of property, plant and equipment | (1,564,403) | (17,812,004) | (5,388,348) | (45,396,451) | |||
Addition to intangible assets | (11,321,352) | (18,747,189) | (22,435,659) | (40,456,259) | |||
Proceeds from | — | — | — | 20,506,589 | |||
Government assistance related to property, plant and equipment and | 1,270,299 | 5,751,268 | 4,399,095 | 5,751,268 | |||
Cash flows used in investing activities | (11,615,456) | (30,807,925) | (23,424,912) | (59,594,853) | |||
FINANCING ACTIVITIES | |||||||
Increase in long-term debt and other debts | 19,807,525 | 43,058,254 | 56,602,075 | 69,224,720 | |||
Repayment of long-term debt and other debts | (3,698) | (6,199) | (4,370,947) | (22,495,971) | |||
Payment of lease liabilities | (2,021,130) | (1,354,189) | (4,013,671) | (2,715,536) | |||
Proceeds from issuance of shares through "at-the-market" equity | — | 1,613,804 | — | 6,239,038 | |||
Proceeds from the issuance of units through the December 2022 | — | — | — | 2,907,226 | |||
Proceeds from the issuance of units through the December 2022 | — | — | — | 4,175,836 | |||
Cash flows from financing activities | 17,782,697 | 43,311,670 | 48,217,457 | 57,335,313 | |||
Effect of exchange rate changes on cash held in foreign currency | 41,829 | 625,793 | 23,825 | 695,328 | |||
Net decrease in cash | (2,797,519) | 8,180,497 | (27,890,225) | (44,114,006) | |||
Cash, beginning of year | 4,800,260 | 35,972,482 | 29,892,966 | 88,266,985 | |||
Cash, end of period | 2,002,741 | 44,152,979 | 2,002,741 | 44,152,979 | |||
Other information on cash flows related to operating activities: | |||||||
Interest paid | 5,181,170 | 2,116,335 | 9,620,379 | 3,857,674 | |||
Interest paid under lease liabilities | 1,252,263 | 1,128,148 | 2,510,465 | 2,127,051 | |||
NON-IFRS MEASURES AND OTHER PERFORMANCE METRICS
This press release makes reference to Adjusted EBITDA, which is a non-IFRS financial measure, as well as other performance metrics, including the Company's order book, which are defined below. These measures are neither required nor recognized measures under IFRS, and, as a result, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. Lion compensates for these limitations by relying primarily on Lion's IFRS results and using Adjusted EBITDA and order book on a supplemental basis. Readers should not rely on any single financial measure to evaluate Lion's business. Adjusted gross profit (loss) and adjusted gross margin (loss), as defined in section 4.0 entitled "Non-IFRS Measures and Other Performance Metric" of the Company's MD&A for the years ended 2023 and 2022, are not presented in this press release as the inventory write-down recorded by the Company in connection with its decision to indefinitely delay the start of commercial production of the LionA and LionM minibuses did not have an impact on the Company's results for the three and six months ended June 30, 2024 and 2023.
Adjusted EBITDA
"Adjusted EBITDA" is defined as net earnings (loss) before finance costs, income tax expense or benefit, and depreciation and amortization, adjusted to exclude restructuring costs, share-based compensation, change in fair value of conversion options on convertible debt instruments, change in fair value of share warrant obligations, foreign exchange (gain) loss and transaction and other non-recurring expenses. Lion uses adjusted EBITDA to facilitate a comparison of the profitability of its business on a consistent basis from period-to-period and to provide a further understanding of factors and trends affecting its business. The Company also believes this measure is useful for investors to assess the Company's profitability, its cost structure and its ability to service debt and to meet other payment obligations. However, readers should be aware that when evaluating Adjusted EBITDA, Lion may incur future expenses similar to those excluded when calculating Adjusted EBITDA. In addition, Lion's presentation of these measures should not be construed as an inference that Lion's future results will be unaffected by unusual or non-recurring items. Readers should review the reconciliation of net earnings (loss), the most directly comparable IFRS financial measure, to Adjusted EBITDA presented by the Company under section 13.0 of the Company's MD&A for the three and six months ended June 30, 2024 entitled "Results of Operations - Reconciliation of Adjusted EBITDA."
Order Book
This press release also makes reference to the Company's "order book" with respect to vehicles (trucks and buses) as well as charging stations. The Company's vehicles and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients, or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book as further explained under "Pricing" in section 10.0 of the Company's MD&A for the three and six months ended June 30, 2024 entitled "Order Book". The vehicles included in the vehicle order book as of July 30, 2024 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2028, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025, which corresponds to the latest date by which claims are required to be made according to the current eligibility criteria of the ZETF, unless otherwise agreed by Infrastructure Canada. In addition, substantially all deliveries are subject to the granting of subsidies and incentives with processing times that are subject to important variations. There has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Also, there has been in the past and the Company expects there will continue to be variances in the eligibility criteria of the various programs, subsidies and incentives introduced by governmental authorities, including in their interpretation and application. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part.
The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales. See the section below for a full description of the methodology used by the Company in connection with the order book and certain important risks and uncertainties relating to such methodology and the presentation of the order book.
General Principle:
| The Company's vehicle and charging stations order book is determined by management based on purchase orders that have been signed, orders that have been formally confirmed by clients or products in respect of which formal joint applications for governmental programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book as further explained below under the section entitled "Pricing".
The vehicles included in the vehicle order book as of July 30, 2024 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2028, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025, which corresponds to the latest date by which claims are required to be made according to the current eligibility criteria of the ZETF, unless otherwise agreed by Infrastructure Canada. In addition, substantially all of the vehicle orders included in the order book are subject to the granting of governmental programs, subsidies, and incentives, including programs in respect of which applications relating to vehicles of Lion have not yet been fully processed to date. The processing times of governmental subsidies and incentives are also subject to important variations. As further described below under the sections entitled "Delivery Periods" and "Ongoing Evaluation; Risk Factors", there has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Also, there has been in the past and the Company expects there will continue to be variances in the eligibility criteria of the various programs, subsidies and incentives introduced by governmental authorities, including in their interpretation and application. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part.
The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
|
Delivery Periods:
| The Company's order book refers to products that have not yet been delivered but which are reasonably expected by management to be delivered within a time period that can be reasonably estimated and includes, in the case of charging stations, services that have not been completed but which are reasonably expected by management to be completed in connection with the delivery of the product.
Purchase orders and applications relating to vehicles of Lion generally provide for a time period during which the client expects delivery of the vehicles. Such period can vary from a specific date, a number or range of months after the issuance of the order or application, or a calendar year. The vehicles included in the vehicle order book as of July 30, 2024 provided for a delivery period, subject to the satisfaction of the conditions set forth in each order (which, in substantially all cases as further discussed herein, relate to the approval of governmental subsidies and grants), ranging from a few months to the end of the year ending December 31, 2028, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025, which corresponds to the latest date by which claims are required to be made according to the current eligibility criteria of the ZETF, unless otherwise agreed by Infrastructure Canada. Delivery periods are disclosed from time to time by the Company when available in respect of material orders. Delivery periods should not be construed as a representation or a guarantee by the Company that the actual delivery time will take place as scheduled. Given the nature of the business and the products of the Company, the implied lead time for the production and delivery of a vehicle (which may be impacted, among other things, by supply chain challenges or changes in specifications), the nature of certain customers of the Company (in many cases, fleet owners operating capital intensive operations which require financing and ongoing scheduling flexibility), and the fact that, as further described herein, substantially all of the vehicle orders included in the order book are subject to the granting of governmental subsidies and incentives, actual delivery times may be subject to important variations or delays. Please refer to the section entitled "Ongoing Evaluation; Risk Factors" below regarding the potential impact of variations or delays in deliveries.
|
Pricing:
| When the Company's order book is expressed as an amount of sales, such amount has been determined by management based on the current specifications or requirements of the applicable order, assumes no changes to such specifications or requirements and, in cases where the pricing of a product or service may vary in the future, represents management's reasonable estimate of the prospective pricing as of the time such estimate is reported. A small number of vehicles included in the order book have a pricing that remains subject to confirmation based on specifications and other options to be agreed upon in the future between the applicable client and the Company. For purposes of the determination of the order book and the value allocated to such orders, management has estimated the pricing based on its current price lists and certain other assumptions relating to specifications and requirements deemed reasonable in the circumstances.
|
Performance Metric:
| The order book is intended as a supplemental measure of performance that is neither required by, nor presented in accordance with, IFRS, and is neither disclosed in nor derived from the financial statements of the Company. The Company believes that the disclosure of its order book provides an additional tool for investors to use in evaluating the Company's performance, market penetration for its products, and the cadence of capital expenditures and tooling.
The Company's computation of its order book is subject to the specific methodology described herein and may not be comparable to other similarly entitled measures computed by other companies, because all companies may not calculate their order book in the same fashion. Other companies also sometimes refer to or use "order backlog" or "order intake" as performance metrics, which are most likely not calculated on the same basis as the Company's order book. In addition, as explained above, the Company's presentation of the order book is calculated based on the orders and the applications made as of the time that the information is presented, and it is not based on the Company's assessment of future events and should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
|
Ongoing Evaluation; Risk Factors: | A portion of the vehicles or charging stations included in the Company's order book may be cancellable in certain circumstances (whether by reason of a delivery delay, unavailability of a program, subsidy or incentive or otherwise) within a certain period. Management reviews the composition of the order book every time it is reported in order to determine whether any orders should be removed from the order book. For purposes of such exercise, management identifies orders that have been or are reasonably likely to be cancelled and examines, among other things, whether conditions attaching to the order are reasonably likely to result in a cancellation of the order in future periods as well as any other available information deemed relevant, including ongoing dialogue with clients and governments. Such exercise may result from time to time in orders that have previously been included in the order book being removed even if they have not been formally canceled by the client. See the first paragraph of this section entitled "Order Book" for a presentation of the variance in the total number of units and the total dollar value of the vehicles and charging stations included in the Company's order book since May 7, 2024, being the last date on which such information was presented.
The Company cannot guarantee that its order book will be realized in full, in a timely manner, or at all, or that, even if realized, revenues generated will result in profits or cash generation as expected, and any shortfall may be significant. The Company's conversion of its order book into actual sales is dependent on various factors, including those described below and under section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended December 31, 2023 and 2022. For instance, a customer may voluntarily or involuntarily default on an order, may become subject to bankruptcy or insolvency or cease its business operations. In addition, substantially all of the vehicle orders included in the order book are subject to conditions relating to the granting of governmental subsidies or incentives or a specified timing for the delivery of the vehicle and, in a limited number of cases, the availability of certain specifications and options or the renewal of certain routes by governmental or school authorities. As a result, the Company's ability to convert its order book into actual sales is highly dependent on the granting and timing of governmental subsidies and incentives, most notably subsidies and incentives under the
Any termination, modification, delay or suspension of any governmental programs, subsidies and incentives, including, most importantly as of the date hereof, the ZETF, the Quebec Green Economy Plan or the EPA Program could result in delayed deliveries or the cancellation of all or any portion of orders, which, in turn, could have a material and adverse effect on the Company's business, results of operations or financial condition.
The Company's conversion of its order book into actual sales is also dependent on its ability to economically and timely manufacture its vehicles, at scale. The Company delivered 519 vehicles during the year ended December 31, 2022 and 852 vehicles during the year ended December 31, 2023. As of July 30, 2024, the Company's vehicle order book stood at 1,994 vehicles. The execution of the Company's growth strategy and the conversion of its order book, which currently provides for deliveries ranging from a few months to the end of the year ending December 31, 2028, will require that the Company increases its production cadence. While the |
RECONCILIATION OF ADJUSTED EBITDA
The following table reconciles net loss to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:
Unaudited - Three months ended June 30, | Unaudited - Six months ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in thousands) | (in thousands) | ||||||
Revenue | |||||||
Net loss | ( | ( | ( | ( | |||
Restructuring costs(1) | $— | $— | |||||
Finance costs | |||||||
Depreciation and amortization | |||||||
Share-based compensation(2) | |||||||
Change in fair value of conversion options on convertible debt instruments(3) | ( | $— | ( | $— | |||
Change in fair value of share warrant obligations(4) | ( | ( | ( | ( | |||
Foreign exchange loss (gain)(5) | ( | ( | |||||
Transaction and other non-recurring expenses(6) | |||||||
Adjusted EBITDA | ( | ( | ( | ( | |||
(1) | Represents the restructuring costs (mainly severance costs) recognized in connection with workforce reduction announced on April 18, 2024, as described in note 11 to the condensed interim consolidated financial statements as at June 30, 2024 and for the three and six months ended June 30, 2024, and 2023. See also "Workforce Reduction" in section 8.0 of the MD&A for the three and six months ended entitled June 30, 2024 "Operational Highlights." |
(2) | Represents non-cash expenses recognized in connection with the issuance of stock options, restricted share units, and deferred share units issued under Lion's omnibus incentive plan as described in Note 10 to the condensed interim consolidated financial statements as at June 30, 2024 and for the three and six months ended June 30, 2024, and 2023. |
(3) | Represents non-cash change in the fair value of the conversion options on convertible debt instruments as described in Note 8 to the condensed interim consolidated financial statements as at June 30, 2024 and for the three and six months ended June 30, 2024, and 2023. |
(4) | Represents non-cash change in the fair value of the share warrant obligations as described in Note 9 to the condensed interim consolidated financial statements as at June 30, 2024 and for the three and six months ended June 30, 2024, and 2023. |
(5) | Represents losses (gains) relating to foreign exchange translation. |
(6) | For the three and six months ended June 30, 2024, and 2023, represents non-recurring professional, legal and consulting fees. |
ABOUT LION ELECTRIC
Lion Electric is an innovative manufacturer of zero-emission vehicles. The company creates, designs and manufactures all-electric class 5 to class 8 commercial urban trucks and all-electric school buses. Lion is a North American leader in electric transportation and designs, builds and assembles many of its vehicles' components, including chassis, battery packs, truck cabins and bus bodies.
Always actively seeking new and reliable technologies, Lion vehicles have unique features that are specifically adapted to its users and their everyday needs. Lion believes that transitioning to all-electric vehicles will lead to major improvements in our society, environment and overall quality of life. Lion shares are traded on the New York Stock Exchange and the Toronto Stock Exchange under the symbol LEV.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws and within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). Any statements contained in this press release that are not statements of historical fact, including statements about Lion's beliefs and expectations, are forward-looking statements and should be evaluated as such.
Forward-looking statements may be identified by the use of words such as "believe," "may," "will," "continue," "anticipate," "intend," "expect," "should," "would," "could," "plan," "project," "potential," "seem," "seek," "future," "target" or other similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements may contain such identifying words. These forward-looking statements include statements regarding the Company's liquidity and capital requirements and management's forecasts related thereto, the implementation by the Company of measures and initiatives aimed at reducing its cost structure, managing its liquidity and optimizing its balance sheet (including the July 2024 Action Plan (as defined below)) and the expected impact thereof, the end of the covenant relief period (as defined below) and the upcoming maturity of certain of the Company's debt instruments, the implementation by the Company of measures to reduce its vehicle and battery development costs and its inventory levels (including the Company's fiscal 2024 objectives related thereto), the Company's order book and the Company's ability to convert it into actual sales, the expected production capacity of the Company's manufacturing facilities in
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Lion believes that these risks and uncertainties include the following:
- any inability to generate sufficient cash flows and/or raise additional funds to meet its capital requirements (including as result of upcoming maturities of debt instruments such as the Finalta-CDPQ Loan Agreement (as defined below) or the expiration of the covenant relief period) and pursue its growth strategy, in each case, when and in the amounts needed;
- any inability to remain in compliance with the terms and conditions of its debt instruments (including during or after the covenant relief period);
- any adverse changes in
U.S. or Canadian general economic, business, market, financial, political or legal conditions, including as a consequence of the ongoing uncertainties relating to inflation and interest rates; - any unavailability, reduction, discriminatory application, delay in processing or elimination of governmental programs, subsidies or incentives due to policy changes, government regulations or decisions or otherwise;
- any inability to ramp-up the production of Lion's products and meet project construction and other project milestones and timelines;
- any inability to meet the expectations of the Company's customers in terms of products, specifications, and services;
- any inability to successfully and economically manufacture and distribute its vehicles at scale;
- any inability to execute the Company's growth strategy;
- any escalation, deterioration and adverse effects of current military conflicts, which may affect economic and global financial markets and exacerbate ongoing economic challenges;
- any unfavorable fluctuations and volatility in the availability or price of raw materials included in components used to manufacture the Company's products, including battery cells, modules and packs;
- the reliance on key suppliers and any inability to maintain an uninterrupted supply of raw materials;
- any inability to reduce total cost of ownership of electric vehicles sold by the Company over time;
- the reliance on key management and any inability to attract and/or retain key personnel;
- labor shortages (including as a result of employee departures, turnover, demands for higher wages and unionization of employees) which may force the Company to operate at reduced capacity, to lower its production and delivery rates or lower its growth plans, and could pose additional challenges related to employee compensation;
- any inability to maintain the Company's competitive position;
- any inability to reduce the Company's costs of supply over time;
- any inability to maintain and enhance the Company's reputation and brand;
- any significant product repair and/or replacement due to product warranty claims or product recalls;
- any failure of information technology systems or any cybersecurity and data privacy breaches or incidents;
- any inability to secure adequate insurance coverage or a potential increase in insurance costs;
- natural disasters, epidemic or pandemic outbreaks, boycotts and geo-political events such as civil unrest, acts of terrorism, the current ongoing military conflicts or similar disruptions;
- any event or circumstance, including the materialization of any of the foregoing risks and uncertainties, resulting in the Company's inability to convert its order book into actual sales; and
- the outcome of any legal proceedings in which the Company is or may be involved from time to time.
These and other risks and uncertainties related to the business of Lion are described in greater detail in section 23.0 entitled "Risk Factors" of the Company's MD&A for the years ended December 31, 2023 and 2022. Many of these risks are beyond Lion's management's ability to control or predict. All forward-looking statements attributable to Lion or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained and risk factors identified in this MD&A and in other documents filed with the applicable Canadian regulatory securities authorities and the
Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under applicable securities laws, Lion undertakes no obligation, and expressly disclaims any duty, to update, revise or review any forward-looking information, whether as a result of new information, future events or otherwise.
View original content:https://www.prnewswire.com/news-releases/lion-electric-announces-second-quarter-2024-results-302210785.html
SOURCE The Lion Electric Co.
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