MONTREAL — The Lion Electric Company (LEV.WS) (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 first quarter of fiscal year 2021, which ended on March 31, 2021. All amounts are in U.S. dollars except where otherwise indicated.
Q1 2021 HIGHLIGHTS
- Delivery of 24 vehicles, a significant increase as compared to the 2 delivered in the same period last year.
- Revenue of $6.2 million, up $5.0 million compared to $1.2 million in Q1 2020.
Negative gross profit of $1.8 million, down $0.8 million as compared to $1.1 million in Q1 2020.
- Administrative expenses of $6.3 million, up $5.5 million as compared to Q1 2020.
- Selling expenses of $4.4 million, up $2.8 million as compared to Q1 2020.
- Adjusted EBITDA1 of negative $5.9 million, compared to negative $3.0 million in 2020.
- Acquisition of intangible assets, which mainly consist of research & development activities, amounted to $6.5 million, up $3.7 million as compared to $2.8 million in Q1 2020.
- Vehicle order book1 of 817 all-electric medium- and heavy-duty urban vehicles as of May 14th, 2021, consisting of 209 trucks and 608 buses, representing a combined total order value of over $225 million.
- LionEnergy order book1 of 76 charging stations as of May 14th, 2021, representing a combined total order value of over $800,000.
- Secured an order of 260 school buses from First Student, a leading school bus operator on May 14, 2021, with deliveries expected to take place from the second half of 2021 to the first half of 2023.
- Obtained initial truck orders from sizable fleet owners, such as Pride Group, Ikea’s logistics partners (Second Closet and Metro Supply Chain Group), Sobeys, ConEdison and Heritage during and after the end of the quarter.
- Delivery of the first 10 Lion6 trucks to Amazon completed shortly after the end of the quarter.
- Significant progress in recruitment, with total company headcount exceeding 650 employees as of the date hereof, along with key strategic hires, as we look to accelerate and support long-term growth.
- Significant progress on long-term strategy, including formal announcement of the site selection for the U.S. manufacturing facility and launch of the battery plant and innovation center construction, including C$100 million funding support towards construction costs.
- Successful debut as a publicly traded company on both the NYSE and the TSX, with net transaction proceeds resulting from the related business combination transaction of approximately $490 million.
- While the COVID-19 pandemic continues to impact Lion’s operations, its suppliers and its customers’ ability to take vehicle deliveries, numerous signs point to an upcoming market recovery.
“The last few months were pivotal for Lion, as we made the transition from being a private to a publicly-listed company, which provides us with capital to support our long-term strategy. I would like to express my gratitude to everyone involved in our successful public listing and extend a warm welcome to all our new shareholders,” commented Marc Bedard, CEO and founder of Lion. “On the operational front, despite the continued impact of the COVID-19 pandemic, we were able to post a positive performance for Q1 2021 as compared to Q1 2020. In addition, our clients continue to show a high level of satisfaction with our products and services. Not only have we shown growth in revenues in Q1, but we have improved our order book. With 7 types of purpose-built electric vehicles available for purchase today and eight additional ones expected to be available by the end of 2022, our focus is to accelerate our growth and execute on our long-term strategy, including by advancing our U.S. manufacturing facility and our battery plant projects, continuing to build our order book, accelerating vehicle deliveries and further strengthening our team. All these elements are the foundation of our success.”
CHANGES TO THE BOARD OF DIRECTORS AND MANAGEMENT TEAM AND UPDATE ON COMPANY HEADCOUNT
Board of Directors
Ian Robertson and Chris Jarratt, both co-founders and directors of Norther Genesis Acquisition Corp. (NGAB) (“NGA”), joined Lion’s newly formed board of directors consisting of eight directors, including six former Lion board members.
During and shortly after the end of the quarter, Lion strengthened its management team, with the addition of Isabelle Adjahi as VP, Investor Relations and Sustainable Development (SDAC) and François Duquette as VP, Chief Legal Officer and Corporate Secretary.
The company also welcomed and announced the following appointments:
Brian S. Piern as chief commercial officer, effective June 7, 2021. In this newly created role, Mr. Piern will guide Lion to the next level of its growth by expanding to new markets, building on long-standing relationships with existing clients, while developing new accounts and expanding market share. He is an experienced executive leader with a demonstrated history of working in the financial services, logistics, fleet and electrification industries. Since January of 2019, Brian led the development of the commercial team at XL Fleet, offering significant support to the company’s growth, merger and NYSE listing in late 2020. Prior to this, he spent 13 years in the fleet industry, most recently with Element Fleet Management and GE Capital Fleet, where he served as senior vice president of sales.
Rocco Mezzatesta as Senior Vice-president – Product development and Vehicle engineering.
Mr. Mezzatesta, who is tasked with product development as well as the management of engineering projects, brings over 20 years of engineering experience, mostly in the transportation industry for companies such as Tesla, Ford, and Toyota.
Vince Spadafora as Vice President, Financial Reporting, effective May 17, 2021. In this newly created role, Mr. Spadafora will oversee all aspects of financial reporting and related compliance. Mr. Spadafora has over 15 years of experience with public company financial reporting. He recently served as Director, External Reporting & Accounting Policies at Gildan Activewear Inc., a leading manufacturer of everyday basic apparel listed on the NYSE and the TSX.
As of May 14, 2021, Lion had over 650 employees, of which over 200 were in its R&D department.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS
Revenues increased by $5.0 million, from $1.2 million for the three-month period ended March 31, 2020, to $6.2 million for the three-month period ended March 31, 2021. The increase in revenue was primarily due to an increase in vehicle sales volume of 22 units, from 2 units (2 school buses in the U.S.) for the three-month period ended March 31, 2020, to 24 units (18 school buses and 6 trucks; 22 vehicles in Canada and 2 vehicles in the U.S.) for the three-month period ended March 31, 2021.
Cost of Sales
Cost of sales increased by $5.7 million, from $2.3 million for the three-month period ended March 31, 2020, to $8.0 million for the three-month period ended March 31, 2021. The increase was primarily due to the addition of personnel and other resources to accommodate higher anticipated production volumes. Lion completed the manufacturing of 43 vehicles in the three-month period ending March 31, 2021.
Gross profit decreased by $0.8 million, from ($1.1) million (-86.0 percent of revenues) for the three-month period ended March 31, 2020, to ($1.8) million (-29.0 percent of revenues) for the three-month period ended March 31, 2021. The decrease is primarily due to the addition of personnel and other resources to accommodate higher anticipated production volumes.
Administrative expenses increased by $5.5 million, from $0.8 million for the three-month period ended March 31, 2020, to $6.3 million for the three-month period ended March 31, 2021. The increase was primarily due a significant increase in non-cash share-based compensation of $3.1 million for the three-month period ended March 31, 2021 ($0.2 million for the three-month period ended March 31, 2020), to Lion expanding its head office capabilities in preparation of an expected increase in business, and an increase in non-recurring professional fees.
Selling expenses increased by $2.8 million, from $1.6 million for the three-month period ended March 31, 2020, to $4.4 million for the three-month period ended March 31, 2021. The increase was primarily due a significant increase in non-cash share-based compensation of $2.1 million for the three-month period ended March 31, 2021 ($0.1 million for the three-month period ended March 31, 2020), to Lion expanding its sales force effectiveness, and an increase in expenses associated with Experience Centers.
The business combination transaction with NGA and the concurrent equity private placement closed on May 6, 2021, and resulted in proceeds of approximately $490 million to the Company, net of transaction fees. Approximately $90 million of such proceeds were used to repay outstanding credit facilities and debt instruments. Immediately after the closing of the transaction and the repayment of such indebtedness, the Company had a debt balance of approximately $12 million, consisting mainly of a loan against vehicle subsidies to be received in the future, in addition to approximately $400 million of cash on hand.
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.