MONTREAL, Aug. 13, 2021 /PRNewswire/ - The Lion Electric
Company (NYSE: LEV) (TSX: LEV) ("Lion" or the "Company"), a leading
manufacturer of all-electric medium and heavy-duty urban vehicles,
today announced its financial and operating results for the second
quarter of fiscal year 2021, which ended on June 30, 2021. Lion reports in U.S. dollars and
in accordance with IFRS.
Q2 2021 HIGHLIGHTS
- Delivery of 61 vehicles, a significant increase, as compared to
the 22 delivered in the same period last year.
- Revenue of $16.7 million, up
$10.6 million, as compared to
$6.1 million in Q2 2020.
- Gross profit of $0.9 million,
down $0.1 million, as compared to
$1.0 million in Q2 2020.
- Administrative expenses of $50.0
million, up $48.9 million as
compared to $1.1 million in Q2 2020,
primarily as a result of significant increase in non-cash
share-based compensation of $44.5
million, an increase in expenses reflecting Lion's
transition to being a public company, and the expansion of Lion's
head office capabilities in anticipation of an expected increase in
business.
- Selling expenses of $13.3
million, up $12.5 million, as
compared to $0.9 million in Q2 2020,
primarily as a result of significant increase in non-cash
share-based compensation of $10.0
million, the expansion of Lion's salesforce, as well as an
increase in expenses associated with Lion's Experience
Centers.
- Net Loss of $178.5 million in Q2
2021 as compared to a net loss of $1.3
million in Q2 2020. The net loss for Q2 2021 includes
$167.7 million related to non-cash
share-based compensation, non-cash increase in the fair value of
share warrant obligations, and transaction costs.
- Adjusted EBITDA1 of negative $5.5 million, as compared to negative
$0.1 million in Q2 2020, after
adjusting for certain non-cash and non-recurring items such as
change in fair value of share warrant obligations, share-based
compensation, transaction costs and other non-recurring
expenses.
- Acquisition of intangible assets, which mainly consist of
R&D activities, amounted to $10.7
million, up $8.2 million, as
compared to $2.5 million in Q2
2020.
- At June 30, 2021, Lion had
$364.3 million in cash, with an
additional borrowing capacity of up to $100
million added on August 11,
2021.
_____________________________
1
|
See "Non-IFRS
Measures and Other Performance Metrics" section of this press
release
|
BUSINESS UPDATES
- 400+ vehicles on the road, with approximately 8 million miles
driven.
- Vehicle order book1 of 965 all-electric medium- and
heavy-duty urban vehicles as of August
12th, 2021, consisting of 262 trucks and 703
buses, representing a combined total order value of over
$280 million.
- LionEnergy order book1 of 73 charging stations as of
August 12th, 2021,
representing a combined total order value of approximately
$1.0 million.
- Initial truck orders from notable new clients such as: Green
Mountain Power, Day & Ross, Zūm, and Casella Waste
Systems.
- The order book also includes a new order from Amazon for 15
Lion8 Tractor trucks, a new order from Zūm Services Inc. for 30
LionA school buses, and a repeat purchase order for 35 LionC buses
from the Prince Edward Island
provincial government.
- Significant progress in recruitment, with total company
headcount of approximately 900 employees as of the date hereof,
along with key strategic hires.
- 4 new Experience Centers expected to be in operation during the
second half of the year.
- Approximately 80% completion in the construction of the shell
building of the 900,000 square-foot Joliet, Illinois manufacturing facility, with
vehicle production expected to begin in the second half of 2022;
Colliers International retained as construction project manager and
Merkur retained as advisors to assist with global project planning
as well as for the selection and commissioning of production
equipment.
- Formal announcement of the YMX International Aerocity of
Mirabel, Quebec as the site
selected for the construction of the Company's battery plant and
innovation center; initiation of the preliminary work (geotechnical
and environmental analysis, as well as permitting) and JR
Automation, a Hitachi company, retained for battery manufacturing
automation and equipment selection. We have also retained
Pomerleau, a flagship corporation in the Canadian construction
industry, as project manager and general contractor for the
construction of the battery plant and innovation center.
- Entered into a new credit agreement with a syndicate of lenders
providing for a committed revolving credit facility in the maximum
principal amount of $100 million, to
be used for working capital, capital expenditure requirements and
general corporate purposes.
"We are pleased with our Q2 2021 performance, as we continue to
execute on our growth strategy in a timely manner. We have very
strong momentum in client dialogue and focus our efforts on
generating purchase orders and delivering our purpose-built
vehicles that meet the needs of our growing customer base. Various
levels of governments across North
America are sending strong signals to support transport
electrification, resulting in an increased unprecedented interest
from both our public and private clients. This bodes well for our
long-term growth," commented Marc
Bedard, CEO – Founder of Lion. "On the operational front, we
are advancing the development and commercialization of new
platforms and are on track to launch 8 new vehicles by the end of
2022, for a total of 15 models. In parallel, we have made
significant progress on our two plant projects and are on-track for
the first vehicles to be produced from our Joliet, Illinois manufacturing plant in the
second half of 2022, and for the initial battery production at our
battery plant in the same timeframe," concluded Marc Bedard.
CHANGES TO THE BOARD OF DIRECTORS AND MANAGEMENT TEAM AND
UPDATE ON COMPANY HEADCOUNT
Board of Directors
Mr. Lorenzo Roccia, Chairman of
Transatlantic Holdings, an international financial holding company,
has been appointed to the Board of Directors of Lion as an
independent Director. Mr. Roccia is a Founder & Chairman of
Transatlantic Power Holdings and Non-Executive Director of Skyline
Renewables, one of the leading independent renewable energy
companies in the US with over 1GW+ of wind and solar assets.
Management Team
The Company announced the appointment of Nathalie Giroux as Vice President, Chief People
Officer. In her role, Ms. Giroux will help oversee the development
and promotion of best practices in human resources management,
operations, organizational development, talent management and
talent acquisition.
Company Headcount
As of August 12, 2021, Lion had
approximately 900 employees, of which approximately 270 were in its
Engineering and R&D departments.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS
Revenues
For the three months ended June 30,
2021, revenues amounted to $16.7
million, an increase of $10.6
million, or 175%, compared to the corresponding period in
the prior year. The increase in revenue was primarily due to an
increase in vehicle sales volume of 39 units, from 22 units for the
three months ended June 30, 2020 to
61 units (48 school buses and 13 trucks; 41 vehicles in
Canada and 20 vehicles in the
U.S.) for the three months ended June 30,
2021.
For the six months ended June 30,
2021, revenues amounted to $22.9
million, an increase of $15.6
million or 214% compared to the corresponding period in the
prior year. The increase in revenue was primarily due to an
increase in vehicle sales volume of 61 units, from 24 units for the
six months ended June 30, 2020, to 85
units (66 school buses and 19 trucks; 63 vehicles in Canada and 22 vehicles in the U.S.) for the
six months ended June 30, 2021.
Cost of Sales
For the three and six months ended June
30, 2021, cost of sales amounted to $15.8 million and $23.8
million, respectively. They increased by $10.8 million and $16.5
million, respectively, compared to the corresponding periods
in the prior year. The increase was primarily due to increased
sales volumes and higher production levels, increased fixed
manufacturing costs related to the ramp-up of production capacity
for future quarters, and the impact of the increase in the cost of
raw materials in components used to manufacture Lion's
products.
Gross Profit
For the three months ended June 30,
2021, gross profit decreased by $0.1
million, from $1.0 million
(17.3% of revenues) for the three months ended June 30, 2020, to $0.9
million (5.4% of revenues) for the three months ended
June 30, 2021. For the six months
ended June 30, 2021, gross profit
decreased by $0.9 million (to
negative $0.9 million) compared to
the corresponding period in the prior year. The decrease for both
periods is primarily due to the impact of increased fixed
manufacturing costs related to the ramp-up of production capacity
for future quarters and the impact of the increase in the cost of
raw materials in components used to manufacture Lion's products,
partially offset by the positive gross profit impact of increased
sales volumes.
Administrative Expenses
For the three months ended June 30,
2021, administrative expenses increased by $48.9 million, from $1.1
million for the three months ended June 30, 2020, to $50.0
million for the three months ended June 30, 2021. The increase was primarily due a
significant increase in non-cash share-based compensation of
$44.5 million, as well as an increase
in expenses reflecting Lion's transition to being a public company
and the expansion of Lion's head office capabilities in
anticipation of an expected increase in business.
For the six months ended June 30,
2021, administrative expenses increased by $54.4 million, from $1.9
million for the six months ended June
30, 2020, to $56.3 million for
the six months ended June 30, 2021.
The increase was primarily due a significant increase in non-cash
share-based compensation of $47.4
million, as well as an increase in expenses reflecting
Lion's transition to being a public company and the expansion of
Lion's head office capabilities in anticipation of an expected
increase in business.
Selling Expenses
For the three months ended June 30,
2021, selling expenses increased by $12.5 million, from $0.9
million for the three months ended June 30, 2020, to $13.3
million for the three months ended June 30, 2021. The increase was primarily due a
significant increase in non-cash share-based compensation of
$10.0 million, as well as to Lion
expanding its sales force, and to an increase in expenses
associated with Experience Centers.
For the six months ended June 30,
2021, selling expenses increased by $15.3 million, from $2.5
million for the six months ended June
30, 2020, to $17.7 million for
the six months ended June 30, 2021.
The increase was primarily due a significant increase in non-cash
share-based compensation of $12.1
million as well as to Lion expanding its sales force, and an
increase in expenses associated with Experience Centers.
Transaction costs
Transaction costs of $13.7 million
for the three and six months ended June 30,
2021, were related to the completion of Lion's business
combination with Northern Genesis Acquisition Corp (the "Business
Combination") and were mainly composed of legal, banking, and other
professional fees.
Finance Costs
For the three and six months ended June
30, 2021, finance costs increased by $1.1 million and $3.1
million, respectively, compared to the corresponding periods
in the prior year. The increase was driven primarily by an increase
in borrowing costs due to an increase in the amount of average debt
outstanding and an increase in interest expense on convertible debt
instruments, partially offset by lower accretion expense on
retractable common shares. These costs were incurred up until the
respective repayments or reclassification to common shares of these
related debts, which occurred on May 6,
2021, as part of the closing of the Business Combination.
The increase was also driven by an increase in interest accretion
related to lease liabilities from new Lion Experience Center
openings.
Foreign Exchange Loss (Gain)
Foreign exchange losses and gains for all periods presented
relate primarily to the revaluation of net monetary assets
denominated in foreign currencies. Foreign exchange loss
(gain) for the three and six months ended June 30, 2021, decreased by $1.6 million and $1.1
million respectively, compared to the corresponding periods
in the prior year, largely as a result of a strengthening of the
Canadian dollar relative to the U.S. dollar during such periods of
2021, as compared to the comparative periods of 2020.
Change in Fair Value of Share Warrant
Obligations
Change in fair value of share warrant obligations increased from
nil for the three and six months ended June
31, 2020 (as no warrants had been issued), to losses of
$99.3 million and $99.2 million, respectively, for the three and
six months ended June 30, 2021. The
losses for the three and six months ended June 30, 2021, were related to the warrants
issued to a customer in July 2020 and
the public and private warrants issued as part of the closing of
the Business Combination on May 6,
2021, and resulted mainly from the increased fair value of
Lion equity as compared to the previous valuations.
Net Loss
The net loss incurred for the three and six months ended
June 30, 2021, was largely due to
higher administrative and selling expenses (including share-based
compensation), increase in the fair value of share warrant
obligations, and transaction costs.
CONFERENCE CALL
A conference call and webcast will be held on August 13, 2021, at 8:30
a.m. (Eastern Time) to discuss the results.
To participate in the conference call, dial (236) 714-3941 or
(833) 329-1697 (toll free). A live webcast of the conference call
will also be available at www.thelionelectric.com under the "Events
and Presentation" 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 incorporates by reference our 2021 second quarter
financial report, including the unaudited interim consolidated
financial statements of the Company as at and for the quarter ended
June 30, 2021, and related MD&A,
which will be filed by the Company with applicable Canadian
securities regulatory authorities and with the U.S. Securities and
Exchange Commission and which will be available on our website at
www.thelionelectric.com.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
For the three and six months ended June 30, 2021 and 2020
(Unaudited, in
US dollars)
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June 30,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Revenue
|
|
16,688,939
|
|
6,077,475
|
|
22,914,417
|
|
7,305,914
|
|
Cost of
sales
|
|
15,789,144
|
|
5,028,540
|
|
23,821,445
|
|
7,313,216
|
|
Gross
profit
|
|
899,795
|
|
1,048,935
|
|
(907,028)
|
|
(7,302)
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
50,002,162
|
|
1,145,563
|
|
56,272,131
|
|
1,906,316
|
|
Selling
expenses
|
|
13,338,268
|
|
858,987
|
|
17,721,847
|
|
2,465,850
|
|
Transaction
costs
|
|
13,654,851
|
|
–
|
|
13,654,851
|
|
–
|
|
Operating
loss
|
|
(76,095,486)
|
|
(955,615)
|
|
(88,555,857)
|
|
(4,379,468)
|
|
|
|
|
|
|
|
|
|
|
|
Finance
costs
|
|
3,001,634
|
|
1,885,023
|
|
6,909,024
|
|
3,764,523
|
|
Foreign exchange loss
(gain)
|
|
102,562
|
|
(1,517,003)
|
|
(76,091)
|
|
(1,151,077)
|
|
Change in fair value
of share
warrant obligations
|
|
99,290,459
|
|
–
|
|
99,215,214
|
|
–
|
|
Net loss for the
period
|
|
(178,490,141)
|
|
(1,323,635)
|
|
(194,604,004)
|
|
(6,992,914)
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
Item that will be
subsequently
reclassified to net loss
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(3,144,116)
|
|
(40,899)
|
|
(4,446,583)
|
|
(153,139)
|
|
Comprehensive loss
for the
period
|
|
(181,634,257)
|
|
(1,364,534)
|
|
(199,050,587)
|
|
(7,146,053)
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
|
(1.13)
|
|
(0.01)
|
|
(1.45)
|
|
(0.06)
|
|
Diluted loss per
share
|
|
(1.13)
|
|
(0.01)
|
|
(1.45)
|
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at June 30, 2021 and
December 31,
2020
(Unaudited, in US dollars)
|
|
June 30,
2021
|
|
December
31, 2020
|
|
|
|
$
|
|
$
|
|
ASSETS
|
|
|
|
|
|
Current
|
|
|
|
|
|
Cash
|
|
364,304,209
|
|
–
|
|
Inventories
|
|
59,516,565
|
|
38,073,303
|
|
Accounts
receivable
|
|
26,220,690
|
|
18,505,072
|
|
Prepaid
expenses
|
|
6,044,395
|
|
1,078,148
|
|
Current
assets
|
|
456,085,859
|
|
57,656,523
|
|
Non-current
|
|
|
|
|
|
Property, plant and
equipment
|
|
9,338,550
|
|
5,446,807
|
|
Right-of-use
assets
|
|
10,730,563
|
|
7,498,724
|
|
Intangible
assets
|
|
60,982,970
|
|
42,090,843
|
|
Contract
asset
|
|
14,436,062
|
|
14,327,709
|
|
Non-current
assets
|
|
95,488,145
|
|
69,364,083
|
|
Total
assets
|
|
551,574,004
|
|
127,020,606
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
|
|
|
|
|
|
Bank indebtedness and
other indebtedness
|
|
10,890,591
|
|
28,733,983
|
|
Trade and other
payables
|
|
27,337,222
|
|
12,404,614
|
|
Current portion of
share-based compensation liability
|
|
–
|
|
35,573,558
|
|
Current portion of
long-term debt
|
|
2,825,984
|
|
26,699,276
|
|
Current portion of
lease liabilities
|
|
2,436,053
|
|
1,814,635
|
|
Current
liabilities
|
|
43,489,850
|
|
105,226,066
|
|
Non-current
|
|
|
|
|
|
Share-based
compensation liability
|
|
–
|
|
35,126,025
|
|
Long-term
debt
|
|
79,001
|
|
118,539
|
|
Convertible debt
instruments
|
|
–
|
|
18,866,890
|
|
Lease
liabilities
|
|
8,459,429
|
|
5,904,473
|
|
Share warrant
obligations
|
|
297,439,350
|
|
31,549,033
|
|
Common shares,
retractable
|
|
–
|
|
25,855,509
|
|
Non-current
liabilities
|
|
305,977,780
|
|
117,420,469
|
|
Total
liabilities
|
|
349,467,630
|
|
222,646,535
|
|
SHAREHOLDERS'
EQUITY (DEFICIENCY)
|
|
|
|
|
|
Share
capital
|
|
397,559,231
|
|
32,562,541
|
|
Conversion options on
convertible debt instruments,
net of tax
|
|
–
|
|
1,472,520
|
|
Contributed
surplus
|
|
133,258,720
|
|
–
|
|
Deficit
|
|
(321,034,410)
|
|
(126,430,406)
|
|
Cumulative
translation adjustment
|
|
(7,677,167)
|
|
(3,230,584)
|
|
Total equity
(deficiency)
|
|
202,106,374
|
|
(95,625,929)
|
|
Total equity
(deficiency) and liabilities
|
|
551,574,004
|
|
127,020,606
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended June 30, 2021 and 2020
(Unaudited, in US Dollars)
|
Three months
ended
|
|
Six months
ended
|
|
June 30,
2021
|
|
June 30,
2020
|
|
June 30,
2021
|
|
June 30,
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net loss for the
period
|
(178,490,141)
|
|
(1,323,635)
|
|
(194,604,004)
|
|
(6,992,914)
|
Non-cash
items:
|
|
|
|
|
|
|
|
Amortization –
property, plant and equipment
|
382,875
|
|
143,565
|
|
674,267
|
|
253,682
|
Amortization –
right-of-use assets
|
631,532
|
|
349,338
|
|
1,089,101
|
|
689,809
|
Amortization –
intangible assets
|
249,540
|
|
60,022
|
|
484,389
|
|
94,975
|
Amortization –
contract asset
|
284,625
|
|
–
|
|
284,625
|
|
–
|
Stock-based
compensation
|
54,799,496
|
|
285,041
|
|
60,004,848
|
|
536,084
|
Accretion expense on
common shares, retractable
|
415,850
|
|
1,182,254
|
|
2,031,863
|
|
2,378,675
|
Accretion expense on
balance of purchase
price payable related to the acquisition of
the dealership rights
|
133,724
|
|
200,979
|
|
286,844
|
|
409,697
|
Accretion expense on
convertible debt instruments
|
1,705,883
|
|
76,893
|
|
2,503,097
|
|
101,781
|
Change in fair value
of share warrant obligation
|
99,290,459
|
|
–
|
|
99,215,214
|
|
–
|
Unrealized foreign
exchange loss (gain)
|
(398,443)
|
|
(144,703)
|
|
(434,369)
|
|
182,986
|
Net change in
non-cash working capital items
|
(19,658,089)
|
|
(3,739,952)
|
|
(22,252,943)
|
|
(6,055,590)
|
Cash flows used in
operating activities
|
(40,652,689)
|
|
(2,910,198)
|
|
(50,717,068)
|
|
(8,400,815)
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
(3,284,824)
|
|
(428,793)
|
|
(4,396,723)
|
|
(1,297,581)
|
Acquisition of
intangible assets
|
(10,716,772)
|
|
(2,497,201)
|
|
(17,166,957)
|
|
(5,277,815)
|
Government assistance
related to intangible assets
|
1,321,125
|
|
–
|
|
1,777,315
|
|
1,222,987
|
Cash flows used in
investing activities
|
(12,680,471)
|
|
(2,925,994)
|
|
(19,786,365)
|
|
(5,352,409)
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Net change in credit
facilities
|
(21,239,925)
|
|
(347,431)
|
|
(16,262,610)
|
|
5,123,848
|
Repayment of loans on
research and development tax
credits and subsidies
receivable
|
–
|
|
–
|
|
(2,745,712)
|
|
–
|
Increase in long-term
debt
|
–
|
|
7,185,361
|
|
15,775,473
|
|
7,185,361
|
Repayment of
long-term debt
|
(41,035,572)
|
|
(652,719)
|
|
(41,405,598)
|
|
(1,338,707)
|
Repayment of
convertible debt instruments
|
(23,903,068)
|
|
–
|
|
(23,903,068)
|
|
–
|
Payment of lease
liabilities
|
(582,250)
|
|
(308,851)
|
|
(1,029,975)
|
|
(524,484)
|
Proceeds from
issuance of convertible debt instruments,
net of issuance
costs
|
–
|
|
–
|
|
–
|
|
3,671,299
|
Proceeds from
issuance of shares through private
placement, net of
issuance costs
|
197,651,681
|
|
–
|
|
197,651,681
|
|
–
|
Proceeds from the
issuance of shares through exercise of stock
options
|
54,394
|
|
–
|
|
54,394
|
|
–
|
Proceeds from
issuance of shares through business combination
transaction
|
308,232,870
|
|
–
|
|
308,232,870
|
|
–
|
Cash flows from
financing activities
|
419,178,130
|
|
5,876,360
|
|
436,367,455
|
|
14,117,317
|
Effect of exchange rate changes on cash held in foreign
currency
|
(1,406,691)
|
|
(178,942)
|
|
(1,468,737)
|
|
(200,643)
|
Net increase (decrease) in cash
|
364,438,279
|
|
(138,774)
|
|
364,395,285
|
|
163,450
|
Cash (bank
overdraft), beginning of period
|
(134,070)
|
|
134,116
|
|
(91,076)
|
|
(168,108)
|
Cash (bank
overdraft), end of period
|
364,304,209
|
|
(4,658)
|
|
364,304,209
|
|
(4,658)
|
Other information on
cash flows related to operating activities:
|
|
|
|
|
|
|
|
Income taxes
paid
|
–
|
|
–
|
|
–
|
|
–
|
Interest
paid
|
2,950,374
|
|
400,907
|
|
4,000,843
|
|
790,948
|
Interest paid under
lease liabilities
|
107,732
|
|
64,928
|
|
189,605
|
|
130,952
|
NON-IFRS MEASURES AND OTHER PERFORMANCE METRICS
This press release makes reference to certain non-IFRS measures,
including Adjusted EBITDA and other performance metrics, including
the Company's order book, which are defined below. These measures
are not recognized measures under IFRS, 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.
"Adjusted EBITDA" is defined as net earnings (loss) before
finance costs, income tax expense or benefit, and depreciation and
amortization, adjusted for share-based compensation, changes in
fair value of share warrant obligations, foreign exchange loss
(gain) and transaction and other non-recurring expenses. Adjusted
EBITDA is intended as a supplemental measure of performance that is
neither required by, nor presented in accordance with, IFRS. Lion
believes that the use of Adjusted EBITDA provides an additional
tool for investors to use in evaluating ongoing operating results
and trends and in comparing Lion's financial measures with those of
comparable companies, which may present similar non-IFRS financial
measures to investors. 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. Lion's computation of Adjusted EBITDA may
not be comparable to other similarly entitled measures computed by
other companies, because all companies may not calculate Adjusted
EBITDA in the same fashion.
This press release also makes reference to the Company's order
book with respect to vehicles and charging stations. The Company's
order book, expressed as a number of units or the amount of sales
expected to be recognized in the future in respect of such number
of units, is determined 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 subsidies or economic incentives have been made by the
applicable clients and the Company. 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 established 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. 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. The order book is intended as a supplemental
measure of performance that is neither required by, nor presented
in accordance with, IFRS or any other applicable securities
legislation. Lion believes that the disclosure of its order book
provides an additional tool for investors to use in evaluating the
Company's performance and trends. Lion's computation of its order
book may not be comparable to other similarly entitled measures
computed by other companies, because all companies may not
calculate their order book, order backlog, or order intake in the
same fashion. In addition, Lion's presentation of such measure
should not be construed as a representation by Lion that all of the
vehicles and charging stations included in its order book will
translate into actual sales. A portion of the vehicles or charging
stations included in the Company's order book may be cancellable in
certain circumstances within a certain period. In addition, the
conversion of the Company's order book into actual deliveries and
sales is subject to a number of risks. For instance, a customer may
default on a purchase order that has become binding, and the
Company may not be able to convert orders included in its order
books into sales. The conversion of the Company's order book into
actual deliveries and sales may also be impacted by changes in
government subsidies and economic incentives. As a result, the
Company's realization of its order book could be affected by
variables beyond its control and may not be entirely realized. See
section 3.0 entitled "Caution Regarding Forward-Looking Statements"
and section 10.0 entitled "Order Book" of the Company's
MD&A.
Because of these limitations, Adjusted EBITDA and order book
should not be considered in isolation or as a substitute for
performance measures calculated in accordance with 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 review the reconciliation of net
earnings (loss) to Adjusted EBITDA presented by the Company under
the section entitled "Reconciliation of Adjusted EBITDA" of section
13.0 of the Company's MD&A, and not rely on any single
financial measure to evaluate Lion's business.
RECONCILIATION OF ADJUSTED EBITDA
The following table reconciles net loss to Adjusted EBITDA for
the three and six months ended
June 30, 2021, and 2020:
|
Unaudited - three
month
ended June 30,
|
Unaudited - six
month
ended June 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
(in
thousands)
|
(in
thousands)
|
|
|
|
|
|
Revenue
|
$16,689
|
$6,077
|
$22,914
|
$7,306
|
|
|
|
|
|
Net loss
|
($178,490)
|
($1,324)
|
($194,604)
|
($6,993)
|
Finance
costs
|
3,002
|
1,885
|
6,909
|
3,765
|
Depreciation and
amortization
|
1,265
|
553
|
2,249
|
1,042
|
Share-based
compensation(1)
|
54,799
|
285
|
60,004
|
531
|
Change in fair value
of share
warrant obligations(2)
|
99,290
|
-
|
99,215
|
-
|
Foreign exchange loss
(gain)(3)
|
103
|
(1,517)
|
(76)
|
(1,151)
|
Transaction and other non-
recurring expenses(4)
|
14,506
|
-
|
14,916
|
21
|
Income tax
expense
|
-
|
-
|
-
|
-
|
Adjusted
EBITDA
|
($5,525)
|
($118)
|
($11,387)
|
($2,785)
|
(1)
|
Represents non-cash
expenses recognized in connection with the issuance and revaluation
to fair value of stock options
issued to participants under Lion's stock option plan as described
in note 10 to the unaudited condensed interim consolidated
financial statements as at and for three and six months ended June
30, 2021, and 2020.
|
(2)
|
Represents non-cash
change in the fair value of the share warrant obligations as
described in note 9 to the unaudited
condensed interim consolidated financial statements as at and for
three and six months ended June 30, 2021, and 2020.
|
(3)
|
Represents non-cash
losses (gains) relating to foreign
exchange translation.
|
(4)
|
Represents
non-recurring transaction costs related to the business combination
which was completed on May 6, 2021, as
described in note 5 to the unaudited condensed interim consolidated
financial statements as at and for three and six months
ended June 30, 2021 and 2020, and professional fees related to the
acquisition of dealership rights and other professional
fees, including as it relates to financing transactions, recruiting
of senior management and other non-recurring items included
in administrative expenses in the unaudited condensed interim
consolidated statement of loss for the three and six months
ended June 30, 2021, and 2020
|
Adjusted EBITDA for the three and six months ended June 30, 2021 also includes an expense of
$0.7 million relating to the
procurement of D&O insurance on terms reflecting the public
company status of Lion, which is materially higher than the expense
incurred in prior periods when the company was a private
company.
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 buses and minibuses for the school,
paratransit and mass transit segments. 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" (collectively, "forward-looking
statements") within the meaning of applicable securities laws. 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 contain such
identifying words. These forward-looking statements include
statements regarding the Company's order book, the Company's
long-term strategy and future growth, the Company's battery plant
and innovation center project in Quebec and its U.S. manufacturing facility,
and the expected launch of new models of electric vehicles. Such
forward-looking statements are based on a number of estimates and
assumptions that Lion believes are reasonable when made including,
but not limited to, that Lion will be able to retain and hire key
personnel and maintain relationships with customers, suppliers and
other business partners, that Lion will continue to operate its
business in the normal course, that Lion will be able to implement
its growth strategy, that Lion will be able to successfully and
timely complete the construction of its U.S. manufacturing facility
and its Quebec battery plant and
innovation center, that Lion will not suffer any material
disruption in the supply of raw materials on competitive terms,
that Lion will be able to maintain its competitive position, that
Lion will continue to improve its operational, financial and other
internal controls and systems to manage its growth and size and
that its results of operations and financial condition will not be
adversely affected, that Lion will be able to benefit, either
directly or indirectly (including through its clients), from
government subsidies and economic incentives in the future and that
Lion will be able to secure any required additional funding through
equity or debt financing on terms acceptable to Lion. Such
estimates and assumptions are made by Lion in light of the
experience of management and their perception of historical trends,
current conditions and expected future developments, as well as
other factors believed to be appropriate and reasonable in the
circumstances. However, there can be no assurance that such
estimates and assumptions will prove to be correct.
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, but are not
limited to, the following: any adverse changes in the U.S. and
Canadian general economic, business, market, financial, political
and legal conditions, including as consequences of the global
COVID-19 pandemic and the emergence of COVID-19 variants and
varying rates of vaccination amongst various countries; Lion's
inability to successfully and economically manufacture and
distribute its vehicles at scale and meet its customers' business
needs; Lion's reliance on key management and any inability to
attract and/or retain key personnel; Lion's inability to execute
its growth strategy; Any unfavorable fluctuations and volatility in
the price of raw materials included in key components used to
manufacture Lion's products; Lion's reliance on key suppliers and
any inability to maintain an uninterrupted supply of raw materials;
Lion's inability to maintain its competitive position; Lion's
inability to reduce its costs of supply over time; any inability to
maintain and enhance Lion'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; the
reduction, elimination or discriminatory application of government
subsidies and economic incentives or the reduced need for such
subsidies; natural disasters, epidemic or pandemic outbreaks,
boycotts and geo-political events; the outcome of any legal
proceedings that may be instituted against the Company from time to
time.
These and other risks and uncertainties related to the
businesses of Lion are described in greater detail in the section
entitled "Risk Factors" in the Company's final prospectus dated
May 5, 2021 (the "Canadian
Prospectus") filed with the Autorité des marchés financiers (the
"AMF") and the registration statement on Form F-1 (the
"Registration Statement") filed with the Securities and Exchange
Commission (the "SEC") and declared effective on June 14, 2021 and other documents publicly filed
with the AMF and the SEC. 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 the Canadian Prospectus,
the Registration Statement and other documents filed with the AMF
and the SEC.
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.
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SOURCE Lion Electric