The Lion Electric pany(US:LEV)2024-11-07 03:40Financial Data and Key Metrics Changes - The company recorded quarterly revenue of $30.6 million, driven by lower unit sales due to various factors [15] - Gross margins were negative $16 million, compared to negative $19.5 million in the previous quarter [15] - Available liquidity as of September 30 was approximately $27 million [16] Business Line Data and Key Metrics Changes - During Q3, the company delivered 89 vehicles, comprising 71 buses and 18 trucks, with a decline in deliveries primarily due to delays with the ZETF program [10] - The vehicle order book stood at 1,590 vehicles, consisting of 1,455 buses and 135 trucks, representing a combined total order value of approximately $420 million [11] - The company removed 515 bus orders related to the ZETF program due to uncertainty in the application process [11] Market Data and Key Metrics Changes - The company obtained $30 million in Expense Reimbursement payments under the grant ramp [6] - The latest three rounds of the EPA Clean School Bus program are expected to result in over 10,000 new electric school buses being deployed by the end of 2027 [13] Company Strategy and Development Direction - The company is focused on improving liquidity and has implemented cost reduction initiatives expected to result in annual savings of approximately $65 million [4] - Plans to start selling battery packs to third parties in 2025 are underway [5] - The company aims to maintain its leadership position in the electric school bus segment while addressing the challenges in the current operating environment [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 is a challenging year but emphasized efforts to position the company for future success [8] - Positive movements in the ZETF and EPA programs were noted, indicating potential improvements in cash flow and revenue [5][6] - The company is actively seeking additional financing to strengthen its financial position [5][16] Other Important Information - The company has seen a $15 million reduction in inventory during Q3 and a $35 million reduction year-to-date [7] - The commercial production of a new vehicle line has been pushed to 2025 due to headcount reductions [7] Q&A Session Summary Question: Impact of new U.S. administration on electric vehicle programs - Management stated it is too early to determine the exact impact but noted that the EPA Clean School Bus program is functioning well and funding is being allocated [20] Question: Status of removed bus orders related to the ZETF program - Management clarified that the removal of 515 units was not a cancellation by customers but a proactive adjustment based on the timeline of the ZETF program [22] Question: Comments on pricing strategy - Management indicated that subsidies from the EPA program are adequate and that pricing will be adjusted based on market dynamics and total cost of ownership [24] Question: Delivery expectations for Q4 - Management emphasized ongoing discussions with lenders regarding liquidity and the timing of subsidies, but could not provide specific details on future deliveries [26] Question: Potential for vehicle deployment under EPA programs - Management confirmed that over 10,000 vehicles are expected to be deployed under various EPA programs by 2027 [28] Question: Competition and market share - Management acknowledged the competitive environment but stated that the company aims to increase its market share in the electric school bus segment [29] Question: Production capacity and ramp-up potential - Management confirmed that the company has the manufacturing capacity to ramp up production when needed [30] Question: Options for improving liquidity - Management reiterated that they are exploring various financing options but could not provide specific details at this stage [31]