MONTREAL, Feb. 24, 2022 /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 fourth
quarter and fiscal year 2021, which ended on December 31,
2021. Lion reports its results in US dollars and in accordance with
International Financial Reporting Standards ("IFRS").
Q4 2021 FINANCIAL HIGHLIGHTS
- Delivery of 71 vehicles, an increase of 25 vehicles, as
compared to the 46 delivered in the same period last year.
- Revenue of $22.9 million, up
$9.4 million, as compared to
$13.5 million in Q4 2020.
- Gross profit of $2.2 million,
down $0.5 million, as compared to
$2.5 million in Q4 2020.
- Net earnings of $28.3 million in
Q4 2021, as compared to a net loss of $53.0
million in Q4 2020. Net earnings for Q4 2021 include a
$46.6 million gain related to
non-cash decrease in the fair value of share warrant obligations
and a $5 million charge related to
non-cash share-based compensation, compared to a $31.9 million charge related to non-cash
share-based compensation in Q4 2020.
- Adjusted EBITDA[1] of negative $7.5
million, as compared to nil in Q4 2020, after mainly
adjusting for certain non-cash items such as change in fair value
of share warrant obligations and share-based compensation.
- Capital expenditures, which included expenditures related to
the Joliet Facility and the Lion Campus, amounted to $19.2 million, up $18.3
million, as compared to $0.9
million in Q4 2020.
- Acquisition of intangible assets, which mainly consist of
R&D activities, amounted to $9.7
million, up $2.9 million, as
compared to $6.8 million in Q4
2020.
- As of December 31, 2021, Lion had
$241.7 million in cash, and access to
a committed revolving credit facility in the maximum principal
amount of $100 million (which maximum
principal amount was increased to $200
million on January 25, 2022),
as well as available support from the Canadian federal and
Quebec governments of up to
approximately C$100 million
(amounting to approximately C$50
million each) in connection with the Lion Campus.
__________________________
|
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 550 vehicles on the road, with over 9 million miles
driven.
- Vehicle order book[2] of 2,325 all-electric medium- and
heavy-duty urban vehicles as of February 24,
2022, consisting of 300 trucks and 2,025 buses, representing
a combined total order value of approximately $575 million based on management's
estimates.
- LionEnergy order book2 of 278 charging stations and
related services as of February 24,
2022, representing a combined total order value of
approximately $3.0 million.
- 11 Experience Centers in operation in the United States and Canada
- Took possession of new leased 900,000 sq-ft U.S. manufacturing
facility in Joliet, Illinois (the
"Joliet Facility") and continuing with tenant improvement work as
well as the installation of critical production and other
equipment. Vehicle production is expected to begin in the second
half of 2022.
- Construction advancing at the battery manufacturing plant and
innovation center in Mirabel
Quebec, (the "Lion Campus") and the purchase of critical
equipment for the battery plant has begun. Production of battery
packs and modules expected to begin in the second half of
2022.
- Launched LionCapital Solutions, a new division dedicated to
providing customers with flexible financing solutions specifically
tailored to the medium and heavy-duty electric vehicle market.
- As of February 24, 2022, Lion had
approximately 1,000 employees, of which approximately 300 were in
its Engineering and R&D departments.
"We are proud of the progress we have made during the last year,
which marked, among other things, our transition to a public
company. In addition to delivering vehicles across North America, we solidified our commanding
leadership in all-electric school buses, continued to strengthen
our order book2 in both buses and trucks, and advanced
the development of additional vehicle platforms. We also started
building our 900,000 square foot, state-of-the-art manufacturing
facility in Joliet, Illinois,
which will eventually have the capacity to annually produce up to
20,000 Lion vehicles per year for the U.S. market. Additionally, we
began the construction of the Lion Campus, which will house our 5
GhW battery plant and innovation centre," commented Marc Bedard, CEO – Founder of Lion. "As we look
forward to 2022, I would like to thank all employees for their
continued dedication, as well as for their flexibility, agility and
innovation, which are essential as we strengthen our position as a
leader in the electric vehicle sector. I am confident that
the initiatives we have taken on will accelerate growth, while
making a concrete, long-term impact on the society we live in,"
concluded Marc Bedard.
____________________________
|
2 See
"Non-IFRS Measures and Other Performance Metrics" section of this
press release
|
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE FOURTH
QUARTER AND FISCAL YEAR 2021
Revenue
For the three months ended December 31,
2021, revenue amounted to $22.9
million, an increase of $9.4
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 25 units, from 46 units (all school buses;
28 vehicles in Canada and 18
vehicles in the U.S.) for the three months ended December 31, 2020 to 71 units (57 school buses
and 14 trucks; 43 vehicles in Canada and 28 vehicles in the U.S.) for the
three months ended December 31, 2021.
Revenues for the three months ended December
31, 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.
Although deliveries for the three months ended December 31, 2021 were sequentially higher than
previous quarter deliveries within fiscal 2021, we still expect
manufacturing and deliveries for the first quarter of fiscal 2022
to be impacted by supply chain challenges, however we expect these
issues to be reduced as we move forward in the year.
For the year ended December 31,
2021, revenue amounted to $57.7
million, an increase of $34.3
million, compared to the year ended December 31, 2020. The increase in revenue was
primarily due to an increase in vehicle sales volume of 116 units,
from 80 units (all school buses; 47 vehicles in Canada and 33 vehicles in the U.S.) for the
year ended December 31, 2020, to 196
units (151 school buses and 45 trucks; 134 vehicles in Canada and 62 vehicles in the U.S.) for the
year ended December 31, 2021.
Revenues for the year ended December 31,
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.
Cost of Sales
For the three months ended December 31,
2021, cost of sales amounted to $20.7
million, representing an increase of $9.7 million compared to $11.0 million in the corresponding period in the
prior year. The increase compared to the corresponding prior period
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.
For the year ended December 31,
2021, cost of sales amounted to $57.7
million, representing an increase of $37.4 million, compared to the year ended
December 31, 2020. 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
continuing global supply chain challenges.
Gross Profit
For the three months ended December 31,
2021, gross profit decreased by $0.3 million, from $2.5 million for the corresponding period in
the prior year, to $2.2 million for
the three months ended December 31,
2021. The decrease was 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.
For the year ended December 31,
2021, gross profit decreased by $3.1
million to nil, compared to $3.1
million for the year ended December
31, 2020. The decrease was 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 December 31,
2021, administrative expenses (which include $4.3 million of non-cash share-based
compensation) decreased by $19.2
million, from $31.3 million
for the three months ended December 31,
2020, to $12.2 million for the
three months ended December 31, 2021.
The decrease was primarily due to a decrease in non-cash
share-based compensation of $25.1
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 activities. Administrative expenses
for the three months ended December 31,
2021, also includes an expense of $0.9 million relating to the procurement of
Director and Officer ("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.
For the year ended December 31,
2021, administrative expenses (which included $56.7 million of non-cash share-based
compensation) increased by $18.5
million, from $59.9 million
for the year ended December 31, 2020,
to $78.4 million. The increase was
mainly due to 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
activities, as well as non-cash share-based compensation.
Administrative expenses for the year ended December 31, 2021, also includes an expense of
$2.5 million relating to the
procurement of director and officer ("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.
Selling Expenses
For the three months ended December 31,
2021, selling expenses (which include $0.6 million of non-cash share-based
compensation) increased by $0.6
million, from $4.2 million for
the three months ended December 31,
2020, to $4.8 million for the
three months ended December 31, 2021.
The increase was primarily due to the impact of Lion expanding its
sales force, and to an increase in expenses associated with
Experience Centers, partially offset by a decrease in non-cash
share-based compensation of $1.9
million.
For the year ended December 31,
2021, selling expenses (which included $14.4 million of non-cash share-based
compensation) increased by $12.0
million, from $15.7 million
for the year ended December 31, 2020,
to $27.7 million. The increase was
primarily due to an increase in non-cash share-based compensation
of $4.2 million as well as to Lion
expanding its sales force in anticipation of the ramp-up of
production capacity, and an increase in expenses associated with
Experience Centers as a result of the opening and operations of new
Experience Centers.
Transaction Costs
Transaction costs of $13.7 million
for the year ended December 31, 2021
were incurred in the second quarter of 2021 and related to the
completion of the Company's business combination and plan of
reorganization on May 6, 2021
pursuant to which Lion became a public company (the "Business
Combination") and were mainly composed of legal, banking, and other
professional fees.
Finance Costs
For the three months ended December 31,
2021, finance costs decreased by $1.9
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 year ended December 31,
2021 finance costs decreased by $0.3
million, from $8.7 million for
the year ended December 31, 2020, to
$8.3 million. The decrease was driven
primarily by lower accretion expense on retractable common shares,
(which were outstanding prior to the Business Combination),
partially offset 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 (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),
as well as and an increase in interest costs related to lease
liabilities from new Experience Center openings.
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 to the functional currencies of
the related Lion entities. For three months ended December 31, 2021, foreign exchange loss was
$2.3 million, compared a gain of
$0.4 million in the corresponding
period in the prior year, largely as a result of a strengthening of
the Canadian dollar relative to the US dollar during the three
months ended December 31, 2021.
Foreign exchange loss for the year ended December 31, 2021, was $1.0 million compared to a gain of $0.7 million year ended December 31, 2020, largely as a result of a
strengthening of the Canadian dollar relative to the US dollar
during 2021, as compared to 2020.
Change in Fair Value of Share Warrant
Obligations
Change in fair value of share warrant obligations moved from a
loss of $17.3 million for the three
months ended December 31, 2020, to a
gain of $46.6 million, for the three
months ended December 31, 2021. The
gain for the three months ended December 31,
2021, was 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.
Change in fair value of share warrant obligations resulted in a
gain of $85.8 million for the year
ended December 31, 2021, compared to
a loss of $16.8 million for the year
ended December 31, 2020, 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. The gain for the year ended
December 31, 2021 results 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 December 31, 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).
For the year ended December 31,
2021, net loss decreased by $54.0
million, from $97.4 million
for the year ended December 31, 2020,
to $43.3 million. The lower net loss
for the year ended December 31, 2021
as compared to the year ended December 31,
2020 was largely due to the gain related to the fair value
of share warrant obligations, partially offset by higher
administrative and selling expenses (including share-based
compensation) and transaction costs.
BOARD OF DIRECTORS UPDATE
On November 11, 2021, Mr.
Ian Robertson resigned from the
Board of Directors. On February 24,
2022, Mr. Christopher Jarratt
also resigned from the Board of Directors. Messrs. Robertson and
Jarratt were both representatives of Northern Genesis Acquisition
Corp. and had served as members of the Board since May 2021. As a result, the Board of Directors is
now composed of Pierre Larochelle,
Marc Bedard, Sheila Colleen Bair, Pierre-Olivier Perras, Michel Ringuet, Lorenzo
Roccia and Pierre Wilkie.
Sheila Colleen Bair was appointed as
chair of the Nominating and Corporate Governance Committee and
Pierre Wilkie was appointed as chair
of the Human Resources and Compensation Committee.
CONFERENCE CALL
A conference call and webcast will be held on February 25, 2022, 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 the audited annual
audited consolidated financial statements of the Company and the
related notes for the years ended December
31, 2021, 2020 and 2019, and the related annual MD&A for
the fiscal year 2021, 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 SEDAR as well as on our website at
www.thelionelectric.com.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at
December 31, 2021 and December 31,
2020
(Audited, in US dollars)
|
Dec 31,
2021
|
|
Dec 31,
2020
|
|
$
|
|
$
|
ASSETS
|
|
|
|
Current
|
|
|
|
Cash
|
241,702,030
|
|
—
|
Accounts
receivable
|
37,899,085
|
|
18,505,072
|
Inventories
|
115,978,979
|
|
38,073,303
|
Prepaid
expenses
|
5,440,461
|
|
1,078,148
|
Current
assets
|
401,020,555
|
|
57,656,523
|
Non-current
|
|
|
|
Property, plant and
equipment
|
32,668,158
|
|
5,446,807
|
Right-of-use
assets
|
60,902,362
|
|
7,498,724
|
Intangible
assets
|
81,899,830
|
|
42,090,843
|
Contract
asset
|
14,113,415
|
|
14,327,709
|
Non-current
assets
|
189,583,765
|
|
69,364,083
|
Total
assets
|
590,604,320
|
|
127,020,606
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
|
|
|
|
Bank
indebtedness
|
—
|
|
91,076
|
Trade and other
payables
|
40,409,565
|
|
12,404,614
|
Current portion of
share-based compensation liability
|
—
|
|
35,573,558
|
Current portion of
long-term debt and other debts
|
13,015,584
|
|
55,342,183
|
Current portion of
lease liabilities
|
7,728,923
|
|
1,814,635
|
Current
liabilities
|
61,154,072
|
|
105,226,066
|
Non-current
|
|
|
|
Share-based
compensation liability
|
—
|
|
35,126,025
|
Long-term debt and
other debts
|
62,086
|
|
118,539
|
Convertible debt
instruments
|
—
|
|
18,866,890
|
Lease
liabilities
|
54,480,394
|
|
5,904,473
|
Share warrant
obligations
|
106,225,934
|
|
31,549,033
|
Common shares,
retractable
|
—
|
|
25,855,509
|
Non-current
liabilities
|
160,768,414
|
|
117,420,469
|
Total
liabilities
|
221,922,486
|
|
222,646,535
|
SHAREHOLDERS'
EQUITY (DEFICIENCY)
|
|
|
|
Share
capital
|
418,709,160
|
|
32,562,541
|
Conversion options on
convertible debt instruments,
net of tax
|
—
|
|
1,472,520
|
Contributed
surplus
|
122,637,796
|
|
—
|
Deficit
|
(169,755,726)
|
|
(126,430,406)
|
Cumulative
translation adjustment
|
(2,909,396)
|
|
(3,230,584)
|
Total
shareholders' equity (deficiency)
|
368,681,834
|
|
(95,625,929)
|
Total
shareholders' equity (deficiency) and liabilities
|
590,604,320
|
|
127,020,606
|
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND COMPREHENSIVE
EARNINGS (LOSS)
For the three months and years ended
December 31, 2021 and
2020
(in US dollars)
|
(Unaudited)
|
|
(Audited)
|
|
Three months
ended
|
|
Year
ended
|
|
Dec
31, 2021
|
|
Dec 31,
2020
|
|
Dec
31, 2021
|
|
Dec 31,
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
22,870,406
|
|
13,504,187
|
|
57,710,204
|
|
23,422,623
|
Cost of sales
(1)
|
20,690,602
|
|
11,030,245
|
(1)
|
57,664,749
|
|
20,277,309
|
Gross
profit
|
2,179,804
|
|
2,473,942
|
|
45,455
|
|
3,145,314
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
12,181,342
|
|
31,346,004
|
|
78,422,622
|
|
59,941,972
|
Selling
expenses
|
4,789,563
|
|
4,151,931
|
|
27,719,888
|
|
15,721,328
|
Transaction
costs
|
—
|
|
—
|
|
13,654,851
|
|
—
|
Operating
loss
|
(14,791,101)
|
|
(33,023,993)
|
|
(119,751,906)
|
|
(72,517,986)
|
|
|
|
|
|
|
|
|
Finance
costs
|
1,193,959
|
|
3,064,288
|
|
8,332,477
|
|
8,667,405
|
Foreign exchange loss
(gain)
|
2,336,548
|
|
(398,133)
|
|
1,036,840
|
|
(681,194)
|
Change in fair value
of share warrant obligations
|
(46,587,319)
|
|
17,291,531
|
|
(85,795,903)
|
|
16,847,470
|
Net income
(loss)
|
28,265,711
|
|
(52,981,679)
|
|
(43,325,320)
|
|
(97,351,667)
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
Item that will be
subsequently reclassified to net earnings (loss)
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
3,734,078
|
|
(3,875,896)
|
|
321,188
|
|
(4,630,873)
|
Comprehensive
earnings (loss) for the period
|
31,999,789
|
|
(56,857,575)
|
|
(43,004,132)
|
|
(101,982,540)
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
0.15
|
|
(0.48)
|
|
(0.27)
|
|
(0.88)
|
Diluted earnings
(loss) per share
|
0.14
|
|
(0.48)
|
|
(0.27)
|
|
(0.88)
|
|
(1) Cost
of sales for the three months ended December 31, 2020 has been
adjusted to exclude an amount of approximately $1.2 million
relating to manufacturing and transport costs incurred and
accounted for in the nine months ended September 30, 2020 and which
were capitalized to inventories during the three months ended
December 31, 2020 as part of the Company's year-end audit
procedures. Including the impact of these aforementioned items,
cost of sales for the three months ended December 31, 2020 was
approximately $9.8 million.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three
months and years ended December 31,
2021 and 2020
(in US Dollars)
|
(Unaudited)
|
|
(Audited)
|
|
Three months
ended
|
|
Year
ended
|
|
Dec 31,
2021
|
|
Dec 31,
2020
|
|
Dec 31,
2021
|
|
Dec 31,
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net earnings (loss)
for the period
|
28,265,711
|
|
(52,981,679)
|
|
(43,325,320)
|
|
(97,351,667)
|
Non-cash
items:
|
|
|
|
|
|
|
|
Depreciation –
property, plant and equipment
|
630,129
|
|
319,743
|
|
1,717,977
|
|
764,068
|
Depreciation –
right-of-use assets
|
811,101
|
|
383,545
|
|
2,606,013
|
|
1,444,204
|
Amortization –
intangible assets
|
201,757
|
|
243,946
|
|
935,560
|
|
487,876
|
Amortization –
contract asset
|
—
|
|
—
|
|
284,625
|
|
—
|
Share-based
compensation
|
5,080,008
|
|
31,860,931
|
|
71,081,047
|
|
65,248,941
|
Accretion expense on
common shares, retractable
|
—
|
|
1,364,034
|
|
2,031,863
|
|
4,791,806
|
Accretion and
revaluation expense on balance of purchase price payable related to
the acquisition of the dealership rights
|
(102,831)
|
|
132,710
|
|
125,290
|
|
582,018
|
Accretion expense on
convertible debt instruments
|
—
|
|
683,330
|
|
2,503,097
|
|
1,034,927
|
Change in fair value
of share warrant obligations
|
(46,587,319)
|
|
17,291,531
|
|
(85,795,903)
|
|
16,847,470
|
Unrealized foreign
exchange loss (gain)
|
250,524
|
|
224,153
|
|
17,973
|
|
7,893
|
Net change in
non-cash working capital items
|
(47,189,473)
|
|
(19,704,636)
|
|
(83,150,851)
|
|
(20,915,636)
|
Cash flows used in
operating activities
|
(58,640,393)
|
|
(20,182,392)
|
|
(130,968,629)
|
|
(27,058,100)
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
Acquisition of
property, plant and equipment(1)
|
(10,436,899)
|
|
(912,267)
|
|
(19,825,006)
|
|
(2,897,237)
|
Acquisition of
intangible assets(1)
|
(9,174,252)
|
|
(6,845,430)
|
|
(44,956,423)
|
|
(16,539,159)
|
Government assistance
related to intangible assets
|
236,369
|
|
2,535,445
|
|
2,182,923
|
|
2,842,172
|
Contact asset, other
costs
|
—
|
|
(199,790)
|
|
—
|
|
(199,790)
|
Cash flows used in
investing activities
|
(19,374,782)
|
|
(5,422,042)
|
|
(62,598,506)
|
|
(16,794,014)
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
Net change in credit
facilities
|
—
|
|
11,807,226
|
|
(19,188,863)
|
|
7,272,073
|
Loans on research and
development tax credits receivable and subsidies
receivable
|
—
|
|
91,000
|
|
2,934,384
|
|
9,699,300
|
Repayment of loans on
research and development tax
credits and subsidies
receivable
|
(83,542)
|
|
(612,530)
|
|
(2,829,254)
|
|
(3,242,248)
|
Increase in long-term
debt
|
—
|
|
7,431,395
|
|
15,775,473
|
|
15,021,339
|
Repayment of
long-term debt
|
(131,024)
|
|
(669,615)
|
|
(41,611,760)
|
|
(1,659,855)
|
Proceeds from
issuance of convertible debt instruments,
net of issuance
costs
|
—
|
|
268,408
|
|
—
|
|
18,698,168
|
Repayment of
convertible debt instruments
|
—
|
|
—
|
|
(23,903,068)
|
|
—
|
Payment of lease
liabilities
|
(433,421)
|
|
(380,339)
|
|
(2,093,371)
|
|
(1,327,707)
|
Proceeds from
issuance of shares through private
placement, net of
issuance costs
|
—
|
|
—
|
|
196,255,491
|
|
—
|
Proceeds from the
issuance of shares through exercise of stock options
|
400,341
|
|
—
|
|
1,124,940
|
|
—
|
Proceeds from
issuance of shares through business combination
transaction
|
—
|
|
—
|
|
308,232,870
|
|
—
|
Cash flows from
financing activities
|
(247,646)
|
|
17,935,545
|
|
434,696,842
|
|
44,461,070
|
Effect of exchange
rate changes on cash held in foreign currency
|
2,118,127
|
|
(534,361)
|
|
663,399
|
|
(531,924)
|
Net increase in
cash
|
(76,144,694)
|
|
(8,203,250)
|
|
241,793,106
|
|
77,032
|
Cash (bank
overdraft), beginning of year
|
317,846,724
|
|
8,112,174
|
|
(91,076)
|
|
(168,108)
|
Cash (bank
overdraft), end of year
|
241,702,030
|
|
(91,076)
|
|
241,702,030
|
|
(91,076)
|
Other information on
cash flows related to operating activities:
|
|
|
—
|
|
|
|
—
|
Income taxes
paid
|
—
|
|
—
|
|
—
|
|
—
|
Interest
paid
|
1,479,447
|
|
1,224,080
|
|
5,722,466
|
|
3,249,129
|
Interest paid under
lease liabilities
|
139,517
|
|
91,899
|
|
443,740
|
|
277,375
|
|
|
(1)
|
Acquisitions of
property, plant and equipment of $8,797,575 and of intangible
assets of $554,310 were included in trade and other payables as at
December 31, 2021.
|
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 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. 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
twelve months ended December 31, 2021
entitled "Results of Operations - Reconciliation of Adjusted
EBITDA."
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, and is neither disclosed in nor derived from the
financial statements of the Company. 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 ("STC"), a subsidiary of
Student Transportation of America ("STA"), 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 of the Company's MD&A for the three
and twelve months ended December 31,
2021 entitled "Caution Regarding Forward-Looking
Statements," section 10.0 of the Company's MD&A for the three
and twelve months ended December 31,
2021 entitled "Order Book," and section 23.0 of the
Company's MD&A for the three and twelve months ended
December 31, 2021 entitled "Risk
Factors."
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 not rely on any single financial
measure to evaluate Lion's business.
RECONCILIATION OF ADJUSTED EBITDA
The following table reconciles net earnings (loss) to Adjusted
EBITDA for the three months ended December
31, 2021, and 2020, and the years ended December 31, 2021 and 2020:
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
Revenue
|
$22,870
|
|
$13,504
|
|
$57,710
|
|
$23,423
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
$28,266
|
|
($52,982)
|
|
($43,325)
|
|
($97,352)
|
Finance
costs
|
1,194
|
|
3,064
|
|
8,332
|
|
8,667
|
Depreciation and
amortization
|
1,643
|
|
947
|
|
5,260
|
|
2,696
|
Share-based
compensation(1)
|
5,080
|
|
31,861
|
|
71,081
|
|
65,249
|
Change in fair value
of share warrant obligations(2)
|
(46,587)
|
|
17,292
|
|
(85,796)
|
|
16,847
|
Foreign exchange
(gain) loss(3)
|
2,337
|
|
(398)
|
|
1,037
|
|
(681)
|
Transaction and other
non-recurring expenses(4)
|
616
|
|
212
|
|
15,815
|
|
233
|
Income taxes
|
–
|
|
–
|
|
–
|
|
–
|
Adjusted
EBITDA
|
($7,453)
|
|
($4)
|
|
($27,596)
|
|
($4,340)
|
|
|
(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 15 to the annual audited
consolidated financial statements as at and for years ended
December 31, 2021, 2020 and 2019.
|
(2)
|
Represents non-cash
change in the fair value of the share warrant obligations as
described in note 13 to the annual audited consolidated financial
statements as at and for years ended December 31, 2021, 2020 and
2019.
|
(3)
|
Represents non-cash
losses (gains) relating to foreign exchange translation.
|
(4)
|
For the year ended
December 31, 2021, represents transaction costs related to the
Business Combination which was completed on May 6, 2021, as
described in note 4 to the annual audited consolidated financial
statements, professional fees related to financing transactions,
and other non-recurring professional fees. For the year ended
December 31, 2020, represents professional fees related to
financing transactions and other non-recurring professional
fees.
|
Adjusted EBITDA for the years ended December 31, 2021 includes an expense of
$2.5 million relating to the
procurement of D&O insurance on terms reflecting the public
company status of Lion, which is materially higher than the
corresponding 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; any ability to ramp-up the production of
Lion's products and meet project construction and other project
timelines; any inability to reduce total cost of ownership of
electric vehicles sold by Lion over time; 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 by
Lion to meet user expectations related to, or other difficulties in
providing, charging solutions to its customers; any inability to
maintain the Company's 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; 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; 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 section 23.0
entitled "Risk Factors" of the Company's annual MD&A for the
fiscal year 2021. Many of these risks are beyond Lion's
management's ability to control or predict. All forward-looking
statements included in this press release are expressly qualified
in their entirety by the cautionary statements contained herein and
the risk factors included in the Company's annual MD&A for the
fiscal year 2021 and in other documents filed with the applicable
Canadian regulatory securities authorities and the Securities and
Exchange Commission.
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