MONTREAL, Nov. 10, 2021 /CNW Telbec/ - 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 third
quarter of fiscal year 2021, which ended on September 30,
2021. Lion reports its results in U.S. dollars and in accordance
with International Financial Reporting Standards ("IFRS").
Q3 2021 FINANCIAL HIGHLIGHTS
- Delivery of 40 vehicles, an increase of 30 vehicles, as
compared to the 10 delivered in the same period last year.
- Revenue of $11.9 million, up
$9.3 million, as compared to
$2.6 million in Q3 2020.
- Gross profit of negative $1.2
million, down $0.7 million, as
compared to negative $0.5 million in
Q3 2020.
- Administrative expenses of $10.0
million, which include $4.5
million of non-cash share-based compensation expense, were
down $16.7 million as compared to
$26.7 million in Q3 2020.
- Selling expenses of $5.2 million,
which include $1.5 million of
non-cash share-based compensation expense, were down $3.9 million, as compared to $9.1 million in Q3 2020.
- Net earnings of $123.0 million in
Q3 2021 as compared to a net loss of $38.6
million in Q3 2020. The net earnings for Q3 2021 includes a
$138.4 million gain related to
non-cash decrease in the fair value of share warrant obligations
and $6.0 million related to non-cash
share-based compensation.
- Adjusted EBITDA1 of negative $8.8 million, as compared to negative
$2.8 million in Q3 2020, after
adjusting for certain non-cash and non-recurring items such as
change in fair value of share warrant obligations, share-based
compensation, and other non-recurring expenses.
- Acquisition of intangible assets, which mainly consist of
R&D activities, amounted to $9.5
million, up $5.1 million, as
compared to $4.4 million in Q3
2020.
- As of September 30, 2021, Lion
had $317.8 million in cash, and
access to a committed revolving credit facility in the maximum
principal amount of $100 million, as
well as support by the Canadian federal and Quebec governments of up to approximately
C$100 million (amounting to
approximately C$50 million each) in
connection with its battery manufacturing plant and innovation
center projects.
BUSINESS UPDATES
- More than 450 vehicles on the road, with over 8 million miles
driven.
- Vehicle order book1 of 2,024 all-electric medium-
and heavy-duty urban vehicles as of November
10, 2021, consisting of 261 trucks and 1,763 buses,
representing a combined total order value of approximately
$500 million. This includes 1,000
school buses related to the conditional purchase order from Student
Transportation of Canada, a
subsidiary of Student Transportation of America, for which a
funding application has been submitted under Infrastructure
Canada's Zero Emission Transit Fund program.
- LionEnergy order book1 of 187 charging stations and
related services as of November 10,
2021, representing a combined total order value of
approximately $2.5 million.
- 7 Experience Centers in operation in the United States and Canada, and 7 additional ones expected to be
open by the end of the year.
- Approximately 90% completion in the construction of the shell
building of the 900,000 square-foot Joliet, Illinois manufacturing facility, with
Lion expected to take possession by the end of the year.
- Construction advancing as planned at the Mirabel battery plant/innovation center.
- As of November 10, 2021, Lion had
approximately 950 employees, of which approximately 270 were in its
Engineering and R&D departments.
___________________________
|
1
|
See "Non-IFRS
Measures and Other Performance Metrics" section of this press
release
|
"Although global supply chain challenges have impacted our
ability to manufacture and deliver complete vehicles in Q3, we
continued to see strong momentum in the shift to electrification of
medium and heavy-duty transports, as evidenced by dialogue with
potential customers translating into tangible engagement on
multi-year, large scale fleet electrification," commented
Marc Bedard, CEO – Founder of Lion.
"While we expect global supply chain headwinds affecting many
sectors to persist in 2022, we are taking tangible actions to
mitigate the impact this will have on our production and
performance. These tangible actions include increasing supplier
redundancy, selectively sourcing raw materials on behalf of our
component suppliers, increasing in-house fabrication of certain
parts, and re-designing certain sub-assemblies. Looking forward, we
remain focused on maintaining our first mover advantage and
continuing to advance our flagship projects that are the
foundations of our long-term growth. That is the best way for
us to deliver long-term value for our customers and our
shareholders," concluded Marc
Bedard.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS
Revenue
For the three months ended September 30,
2021, revenues amounted to $11.9
million, an increase of $9.3
million, compared to the corresponding period in the prior
year. The increase in revenue was primarily due to an increase in
vehicle sales volume of 30 units, from 10 units (all school buses;
7 vehicles in Canada and 3
vehicles in the U.S.) for the three months ended September 30, 2020 to 40 units (28 school buses
and 12 trucks; 28 vehicles in Canada and 12 vehicles in the U.S.) for the
three months ended September 30,
2021. Revenues for the three months ended September 30, 2021 were impacted by continuing
global supply chain challenges, which required the Company to delay
the final assembly of certain vehicles and resulted in increased
inventory levels.
For the nine months ended September 30,
2021, revenues amounted to $34.8
million, an increase of $24.9
million, compared to the corresponding period in the prior
year. The increase in revenue was primarily due to an increase in
vehicle sales volume of 91 units, from 34 units (all school buses;
19 vehicles in Canada and 15
vehicles in the U.S.) for the nine months ended September 30, 2020, to 125 units (94 school buses
and 31 trucks; 91 vehicles in Canada and 34 vehicles in the U.S.) for the
nine months ended September 30,
2021.
Cost of Sales
For the three and nine months ended September 30, 2021, cost of sales amounted to
$13.2 million and $37.0 million, respectively. This represents an
increase of $10.0 million and
$26.5 million, respectively, compared
to the corresponding periods in the prior year. The increase
compared to the corresponding prior periods 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 continuing global
supply chain challenges.
Gross Profit
For the three months ended September 30,
2021, gross profit decreased by $0.7
million, from negative $0.5
million for the three months ended September 30, 2020, to negative $1.2 million for the three months ended
September 30, 2021. For the nine
months ended September 30, 2021,
gross profit decreased by $1.6
million (to negative $2.1
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
continuing global supply chain challenges, partially offset by the
positive gross profit impact of increased sales volumes.
Administrative Expenses
For the three months ended September 30,
2021, administrative expenses decreased by $16.7 million, from $26.7
million for the three months ended September 30, 2020, to $10.0 million for the three months ended
September 30, 2021. The decrease was
primarily due a significant decrease in non-cash share-based
compensation of $20.8 million,
partially offset by 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 nine months ended September 30,
2021, administrative expenses increased by $37.6 million, from $28.6
million for the nine months ended September 30, 2020, to $66.2 million for the nine months ended
September 30, 2021. The increase was
primarily due a significant increase in non-cash share-based
compensation of $26.6 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 September 30,
2021, selling expenses decreased by $3.9 million, from $9.1
million for the three months ended September 30, 2020, to $5.2 million for the three months ended
September 30, 2021. The decrease was
primarily due a decrease in non-cash share-based compensation of
$6.0 million, partially offset by the
impact of Lion expanding its sales force, and to an increase in
expenses associated with Experience Centers.
For the nine months ended September 30,
2021, selling expenses increased by $11.4 million, from $11.6
million for the three months ended September 30, 2020, to $22.9 million for the nine months ended
September 30, 2021. The increase was
primarily due a significant increase in non-cash share-based
compensation of $6.0 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
nine months ended September 30, 2021
were related to the completion of the Company's business
combination and plan of reorganization with Northern Genesis
Acquisition Corp. (the "Business Combination") and were mainly
composed of legal, banking, and other professional fees.
Finance Costs
For the three months ended September 30,
2021, finance costs decreased by $1.6
million compared to the corresponding period in the prior
year as a result of a significantly lower amount of average debt
outstanding during the period as a result of certain debt
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.
For the nine months ended September 30,
2021 finance costs increased by $1.5
million, compared to the corresponding period 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.
Foreign Exchange (Gain) Loss
Foreign exchange gains and losses for all periods presented
relate primarily to the revaluation of net monetary assets
denominated in foreign currencies. Foreign exchange gains for the
three and nine months ended September 30,
2021, increased by $2.1
million and $1.0 million
respectively, compared to the corresponding periods in the prior
year, largely as a result of a weakening 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
Gains on change in fair value of share warrant obligations
increased from $0.4 million for the
three months ended September 30,
2020, to gains of $138.4
million and $39.2 million,
respectively, for the three and nine months ended September 30, 2021. The significant gains for the
three and nine months ended September 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 decrease in the market price of Lion equity as compared to
the previous valuations.
Net Earnings (Loss)
The net earnings for the three months ended September 30, 2021 as compared to the net loss
for the corresponding prior period were largely due to the decrease
in the fair value of share warrant obligations, and lower
share-based compensation (included in administrative and selling
expenses).
The higher net loss for the nine months ended September 30, 2021 as compared to the
corresponding prior period was largely due to higher administrative
and selling expenses (including share-based compensation) and
transaction costs, partially offset by the decrease in the fair
value of share warrant obligations.
CONFERENCE CALL
A conference call and webcast will be held on November 11, 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). 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 our 2021 third quarter
financial report, including the unaudited interim consolidated
financial statements of the Company as at and for the quarter ended
September 30, 2021 and related management's discussion and
analysis ("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 EARNINGS (LOSS) AND COMPREHENSIVE
EARNINGS (LOSS)
For the three and nine months ended
September 30, 2021 and
2020
(Unaudited, in US dollars)
|
Three months
ended
|
|
Nine months
ended
|
|
September
30,
2021
|
|
September 30,
2020
|
|
September
30,
2021
|
|
September 30,
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
11,925,381
|
|
2,612,522
|
|
34,839,798
|
|
9,918,436
|
Cost of
sales
|
13,152,702
|
|
3,144,848
|
|
36,974,147
|
|
10,458,064
|
Gross
profit
|
(1,227,321)
|
|
(532,326)
|
|
(2,134,349)
|
|
(539,628)
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
9,969,149
|
|
26,689,652
|
|
66,241,280
|
|
28,595,968
|
Selling
expenses
|
5,208,478
|
|
9,103,547
|
|
22,930,325
|
|
11,569,397
|
Transaction
costs
|
—
|
|
—
|
|
13,654,851
|
|
—
|
Operating
loss
|
(16,404,948)
|
|
(36,325,525)
|
|
(104,960,805)
|
|
(40,704,993)
|
|
|
|
|
|
|
|
|
Finance
costs
|
229,494
|
|
1,838,594
|
|
7,138,518
|
|
5,603,117
|
Foreign exchange
(gain) loss
|
(1,223,617)
|
|
868,016
|
|
(1,299,708)
|
|
(283,061)
|
Change in fair value
of share warrant obligations
|
(138,423,798)
|
|
(444,061)
|
|
(39,208,584)
|
|
(444,061)
|
Net earnings
(loss) for the period
|
123,012,973
|
|
(38,588,074)
|
|
(71,591,031)
|
|
(45,580,988)
|
Other comprehensive
earnings (loss)
|
|
|
|
|
|
|
|
Item that will be
subsequently
reclassified to net earnings (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
1,033,693
|
|
(601,838)
|
|
(3,412,890)
|
|
(754,977)
|
Comprehensive
earnings (loss) for the period
|
124,046,666
|
|
(39,189,912)
|
|
(75,003,921)
|
|
(46,335,965)
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
0.65
|
|
(0.35)
|
|
(0.47)
|
|
(0.41)
|
Diluted earnings
(loss) per share
|
0.60
|
|
(0.35)
|
|
(0.47)
|
|
(0.41)
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
September 30, 2021 and December 31,
2020
(Unaudited, in US dollars)
|
September 30,
2021
|
|
December 31,
2020
|
|
$
|
|
$
|
ASSETS
|
|
|
|
Current
|
|
|
|
Cash
|
317,846,724
|
|
—
|
Inventories
|
89,801,661
|
|
38,073,303
|
Accounts
receivable
|
29,797,304
|
|
18,505,072
|
Prepaid
expenses
|
6,415,737
|
|
1,078,148
|
Current
assets
|
443,861,426
|
|
57,656,523
|
Non-current
|
|
|
|
Property, plant and
equipment
|
13,594,841
|
|
5,446,807
|
Right-of-use
assets
|
10,480,072
|
|
7,498,724
|
Intangible
assets
|
68,985,267
|
|
42,090,843
|
Contract
asset
|
14,043,628
|
|
14,327,709
|
Non-current
assets
|
107,103,808
|
|
69,364,083
|
Total
assets
|
550,965,234
|
|
127,020,606
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
|
|
|
|
Bank indebtedness and
other indebtedness
|
10,512,351
|
|
28,733,983
|
Trade and other
payables
|
41,547,007
|
|
12,404,614
|
Current portion of
share-based compensation liability
|
—
|
|
35,573,558
|
Current portion of
long-term debt
|
2,699,301
|
|
26,699,276
|
Current portion of
lease liabilities
|
2,372,034
|
|
1,814,635
|
Current
liabilities
|
57,130,693
|
|
105,226,066
|
Non-current
|
|
|
|
Share-based
compensation liability
|
—
|
|
35,126,025
|
Long-term
debt
|
67,441
|
|
118,539
|
Convertible debt
instruments
|
—
|
|
18,866,890
|
Lease
liabilities
|
8,485,890
|
|
5,904,473
|
Share warrant
obligations
|
152,461,774
|
|
31,549,033
|
Common shares,
retractable
|
—
|
|
25,855,509
|
Non-current
liabilities
|
161,015,105
|
|
117,420,469
|
Total
liabilities
|
218,145,798
|
|
222,646,535
|
SHAREHOLDERS'
EQUITY (DEFICIENCY)
|
|
|
|
Share
capital
|
411,691,748
|
|
32,562,541
|
Conversion options on
convertible debt instruments,
net of tax
|
—
|
|
1,472,520
|
Contributed
surplus
|
125,792,599
|
|
—
|
Deficit
|
(198,021,437)
|
|
(126,430,406)
|
Cumulative
translation adjustment
|
(6,643,474)
|
|
(3,230,584)
|
Total
shareholders' equity (deficiency)
|
332,819,436
|
|
(95,625,929)
|
Total
shareholders' equity (deficiency) and liabilities
|
550,965,234
|
|
127,020,606
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three
and nine months ended September 30,
2021 and 2020
(Unaudited, in US Dollars)
|
Three months
ended
|
|
Nine months
ended
|
|
September 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net earnings (loss)
for the period
|
123,012,973
|
|
(38,588,074)
|
|
(71,591,031)
|
|
(45,580,988)
|
Non-cash
items:
|
|
|
|
|
|
|
|
Amortization –
property, plant and equipment
|
413,580
|
|
190,643
|
|
1,087,848
|
|
444,325
|
Amortization –
right-of-use assets
|
705,811
|
|
370,850
|
|
1,794,912
|
|
1,060,659
|
Amortization –
intangible assets
|
249,414
|
|
148,955
|
|
733,803
|
|
243,930
|
Amortization –
contract asset
|
—
|
|
—
|
|
284,625
|
|
—
|
Stock-based
compensation
|
5,996,191
|
|
32,851,926
|
|
66,001,039
|
|
33,388,010
|
Accretion expense on
common shares, retractable
|
—
|
|
1,049,097
|
|
2,031,863
|
|
3,427,772
|
Accretion and
revaluation expense on balance of purchase price payable related to
the acquisition of the dealership rights
|
(58,723)
|
|
39,611
|
|
228,121
|
|
449,308
|
Accretion expense on
convertible debt instruments
|
—
|
|
249,816
|
|
2,503,097
|
|
351,597
|
Change in fair value
of share warrant obligations
|
(138,423,798)
|
|
(444,061)
|
|
(39,208,584)
|
|
(444,061)
|
Unrealized foreign
exchange loss (gain)
|
201,818
|
|
(399,246)
|
|
(232,551)
|
|
(216,260)
|
Net change in
non-cash working capital items
|
(22,842,689)
|
|
(2,359,868)
|
|
(45,095,632)
|
|
(8,415,458)
|
Cash flows used in
operating activities
|
(30,745,423)
|
|
(6,890,351)
|
|
(81,462,490)
|
|
(15,291,166)
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment
|
(4,991,385)
|
|
(687,389)
|
|
(9,388,107)
|
|
(1,984,970)
|
Acquisition of
intangible assets
|
(9,480,960)
|
|
(4,415,914)
|
|
(26,647,917)
|
|
(9,693,729)
|
Government assistance
related to intangible assets
|
169,239
|
|
(916,260)
|
|
1,946,554
|
|
306,727
|
Cash flows used in
investing activities
|
(14,303,106)
|
|
(6,019,563)
|
|
(34,089,470)
|
|
(11,371,972)
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Net change in credit
facilities
|
—
|
|
(9,659,001)
|
|
(16,262,610)
|
|
(4,535,153)
|
Loans on research and
development tax credits receivable and subsidies
receivable
|
—
|
|
9,608,300
|
|
—
|
|
9,608,300
|
Repayment of loans on
research and development tax
credits and subsidies
receivable
|
—
|
|
(2,629,718)
|
|
(2,745,712)
|
|
(2,629,718)
|
Increase in long-term
debt
|
—
|
|
753,050
|
|
15,775,473
|
|
7,589,944
|
Repayment of
long-term debt
|
(75,138)
|
|
—
|
|
(41,480,736)
|
|
(990,240)
|
Repayment of
convertible debt instruments
|
—
|
|
—
|
|
(23,903,068)
|
|
—
|
Payment of lease
liabilities
|
(629,978)
|
|
(422,884)
|
|
(1,659,950)
|
|
(947,368)
|
Proceeds from
issuance of convertible debt instruments,
net of issuance
costs
|
—
|
|
14,758,461
|
|
—
|
|
18,429,760
|
Proceeds from
issuance of shares through private
placement, net of
issuance costs
|
—
|
|
—
|
|
197,651,681
|
|
—
|
Proceeds from the
issuance of shares through exercise of stock options
|
670,205
|
|
—
|
|
724,599
|
|
—
|
Proceeds from
issuance of shares through business combination
transaction
|
—
|
|
—
|
|
308,232,870
|
|
—
|
Cash flows from (used
in) financing activities
|
(34,911)
|
|
12,408,208
|
|
436,332,547
|
|
26,525,525
|
Effect of exchange
rate changes on cash held in foreign currency
|
(1,374,045)
|
|
203,080
|
|
(2,842,787)
|
|
2,437
|
Net increase
(decrease) in cash
|
(46,457,485)
|
|
(298,626)
|
|
317,937,800
|
|
(135,176)
|
Cash (bank
overdraft), beginning of period
|
364,304,209
|
|
(4,658)
|
|
(91,076)
|
|
|
(168,108)
|
Cash (bank
overdraft), end of period
|
317,846,724
|
|
(303,284)
|
|
317,846,724
|
|
(303,284)
|
Other information on
cash flows related to operating activities:
|
|
|
|
|
|
|
|
Income taxes
paid
|
—
|
|
—
|
|
—
|
|
—
|
Interest
paid
|
242,176
|
|
1,234,101
|
|
4,243,019
|
|
2,025,049
|
Interest paid under
lease liabilities
|
114,618
|
|
54,524
|
|
304,223
|
|
185,476
|
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 (gain)
loss 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 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 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. For example, the
announced conditional purchase order from Student Transportation of
Canada, a subsidiary of STA (as
defined below), for 1,000 all-electric LionC school buses, which
would represent the Company's largest single purchase order to
date, is dependent upon the satisfactory grant of non-repayable
contributions to STC under Infrastructure Canada's Zero-Emission
Transit Fund ("ZETF"), in respect of which the formal application
filed by STC constitutes the first application made by a customer
of Lion under the ZETF program. 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 in the
table below and 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 nine months ended September
30, 2021, and 2020:
|
Unaudited - three
months ended September 30,
|
Unaudited - nine
months ended September 30,
|
|
2021
|
2020
|
2021
|
2020
|
|
(in
thousands)
|
(in
thousands)
|
|
|
|
|
|
Revenue
|
$11,925
|
$2,613
|
$34,840
|
$9,918
|
|
|
|
|
|
Net earnings
(loss)
|
$123,013
|
($38,588)
|
($71,591)
|
($45,581)
|
Finance
costs
|
229
|
1,839
|
7,139
|
5,603
|
Depreciation and
amortization
|
1,369
|
710
|
3,617
|
1,749
|
Share-based
compensation(1)
|
5,996
|
32,852
|
66,001
|
33,388
|
Change in fair value
of share warrant obligations(2)
|
(138,424)
|
(444)
|
(39,209)
|
(444)
|
Foreign exchange
(gain) loss(3)
|
(1,224)
|
868
|
(1,300)
|
(283)
|
Transaction and other
non-recurring expenses(4)
|
283
|
–
|
15,199
|
21
|
Income tax
expense
|
–
|
–
|
–
|
–
|
Adjusted
EBITDA
|
($8,757)
|
($2,763)
|
($20,144)
|
($5,547)
|
|
|
(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 nine months ended September 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 nine months ended
September 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 nine months ended September 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 nine months ended September 30, 2021.
|
Adjusted EBITDA for the three and nine months ended September 30, 2021 includes an expense of
$0.7 million and $1.6 million, respectively, 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 and the Company's
ability to convert it into actual sales, 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
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 further supply
chain challenges or 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, 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
additional funding through equity or debt financing on terms
acceptable to Lion when required in the future. 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 the following:
any adverse changes in U.S. or Canadian general economic, business,
market, financial, political or legal conditions, including as
consequences of the global COVID-19 pandemic and the emergence of
COVID-19 variants, as well as varying vaccination rates amongst
different countries; any inability to successfully and economically
manufacture and distribute its vehicles at scale and meet its
customers' business needs; the reliance on key management and any
inability to attract and/or retain key personnel; the inability to
execute the Company's growth strategy; any unfavorable fluctuations
and volatility in the price of raw materials included in key
components used to manufacture Lion's products; the reliance on key
suppliers and any inability to maintain an uninterrupted supply of
raw materials; any inability to maintain its competitive position;
any inability to reduce its 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 event or circumstance resulting
in the Company's inability to convert its order book into actual
sales, including 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 non-offering 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