WeTheMarket
2 months ago
LION ELECTRIC ANNOUNCES FOURTH QUARTER AND FISCAL 2023 RESULTS
29/02/2024
Link to Press Release https://ir.thelionelectric.com/English/news/news-details/2024/LION-ELECTRIC-ANNOUNCES-FOURTH-QUARTER-AND-FISCAL-2023-RESULTS/default.aspx
Link to Webcast https://events.q4inc.com/attendee/506172225
Link to Investor Presentation https://s27.q4cdn.com/902820926/files/doc_financials/2023/q4/270224-Q4-and-F-2023-Earnings-Presentation-FINAL.pdf
Link to Prior (3Q 2023) Results https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173170525
MONTREAL, Feb. 29, 2024 /PRNewswire/ - The Lion Electric Company (NYSE: LEV) (TSX: LEV) ("Lion" or the "Company"), a leading manufacturer of all-electric medium and heavy-duty urban vehicles, today announced its financial and operating results for the fourth quarter and fiscal year ended on December 31, 2023. Lion reports its results in US dollars and in accordance with International Financial Reporting Standards ("IFRS").
Q4 2023 FINANCIAL HIGHLIGHTS
- Revenue of $60.4 million, up $13.7 million, as compared to $46.8 million in Q4 2022.
- Delivery of 188 vehicles, an increase of 14 vehicles, as compared to the 174 delivered in Q4 2022.
- Gross loss of $9.1 million as compared to a gross loss of $4.8 million in Q4 2022.
- Adjusted gross profit1 of $0.8 million as compared to adjusted gross loss of $4.8 million in Q4 2022.
- Net loss of $56.5 million in Q4 2023, as compared to net loss of $4.6 million in Q4 2022.
- Adjusted EBITDA2 of negative $6.3 million, as compared to negative $13.9 million in Q4 2022.
- Additions to property, plant and equipment related to the Joliet Facility and the Lion Campus, amounted to $13.7 million, down $25.4 million, as compared to $39.1 million in Q4 2022. See section 8.0 of the Company's MD&A for the three and twelve months ended December 31, 2023 entitled "Operational Highlights" for more information related to the Joliet Facility and the Lion Campus.
- Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to $17.8 million, down $3.5 million as compared to $21.3 million in Q4 2022.
- Impairment of intangible assets and property, plant and equipment of $36.0 million and write-down of inventory of $9.8 million related to the LionA and LionM minibuses for which the Company made the decision to indefinitely delay the start of commercial production, as announced on November 7, 2023.
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1 Adjusted gross profit (loss) is a non-IFRS financial measure. See "Non-IFRS Measures and Other Performance Metrics" section of this press release.
2 Adjusted EBITDA is a non-IFRS financial measure. See "Non-IFRS Measures and Other Performance Metrics" section of this press release.
FY 2023 FINANCIAL HIGHLIGHTS
- Delivery of 852 vehicles, an increase of 333 vehicles, as compared to the 519 delivered in fiscal 2022.
- Revenue of $253.5 million, up $113.6 million, as compared to $139.9 million in fiscal 2022.
- Gross loss of $5.5 million, as compared to gross loss of $12.9 million in fiscal 2022.
- Adjusted gross profit of $4.3 million as compared to adjusted gross loss of $12.9 million in fiscal 2022.
- Net loss of $103.8 million, as compared to net earnings of $17.8 million in fiscal 2022.
- Adjusted EBITDA of negative $34.3 million, as compared to negative $54.8 million in fiscal 2022.
- Additions to property, plant and equipment related to the Joliet Facility and the Lion Campus, amounted to $72.2 million, down $75.8 million, as compared to $148.0 million in fiscal 2022. See section 8.0 of the Company's MD&A for the three and twelve months ended December 31, 2023 entitled "Operational Highlights" for more information related to the Joliet Facility and the Lion Campus.
- Additions to intangible assets, which mainly consist of vehicle and battery development activities, amounted to $67.2 million, down $11.9 million, as compared to $79.1 million in fiscal 2022.
- Impairment of intangible assets and property, plant and equipment of $36.0 million and write-down of inventory of $9.8 million related to the LionA and LionM minibuses for which the Company made the decision to indefinitely delay of the start of commercial production, as announced on November 7, 2023.
BUSINESS UPDATES
- More than 1,850 vehicles on the road, with over 22 million miles driven (over 36 million kilometers).
- Vehicle order book3 of 2,076 all-electric medium- and heavy-duty urban vehicles as of February 28, 2024, consisting of 285 trucks and 1,791 buses, representing a combined total order value of approximately $500 million based on management's estimates.
- LionEnergy order book of 132 charging stations and related services as of February 28, 2024, representing a combined total order value of approximately $4 million.
- 12 experience centers in operation in the United States and Canada.
- Initiated commercial production of LionD units which led to the completion of first deliveries to customers in January 2024.
- Successfully completed the final certification for medium duty Lion battery packs, paving the way for initial deliveries of Lion5 trucks.
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3 See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book 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 programs, subsidies or incentives have been made by the applicable clients and the Company. The order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of February 28, 2024 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2026, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025. In addition, substantially all of the vehicle orders included in the order book are subject to the granting of governmental subsidies and incentives, including programs in respect of which applications relating to vehicles of Lion have not yet been fully processed to date. The processing times of governmental programs, subsidies and incentives are also subject to important variations. There has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Also, there has been in the past and the Company expects there will continue to be variances in the eligibility criteria of the various programs, subsidies and incentives introduced by governmental authorities, including in their interpretation and application. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part. The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
The Company decided to proceed with the temporarily lay off of approximately 100 employees, mostly impacting the nightshift production workforce at its Saint-Jerome manufacturing facility. The measure aims at further rationalizing the Company's cost structure in the context of prolonged challenges experienced by the Company, including delays and challenges associated with the processing and granting of various governmental subsidies and incentives, notably the ZETF program, which continue to negatively impact the Company's scheduled deliveries and sales efforts, and at further aligning its production workforce with current production requirements. The Company will reassess its production needs in the context of any future developments, including any developments relating to the foregoing challenges.
"2023 has been a year of significant progress, marked by record vehicle deliveries and revenue, which translated into positive adjusted gross margins, and also by several achievements, including the construction and operation of our two new factories and the start of commercial production of our Lion5 electric truck and our LionD electric school bus. However, this past year has not been without its challenges, particularly as it relates to a volatile incentive environment that slowed down the pace of orders and deliveries," commented Marc Bedard, CEO - Founder of Lion. "In 2024, with the growth capex investments now behind us, we will focus on driving growth in orders and deliveries, while diligently controlling costs and keeping a tight control of our liquidity, as we expect the volatile environment to persist for at least the next few months. Despite facing such uncertain environment, we remain committed to leveraging all investments made over the last 15 years, with the ultimate objective to reach profitability." concluded Marc Bedard.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED DECEMBER 31, 2023
Revenue
For the three months ended December 31, 2023, revenue amounted to $60.4 million, an increase of $13.7 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 14 units, from 174 units (139 school buses and 35 trucks; 160 vehicles in Canada and 14 vehicles in the U.S.) for the three months ended December 31, 2022, to 188 units (178 school buses and 10 trucks; 107 vehicles in Canada and 81 vehicles in the U.S.) for the three months ended December 31, 2023, including the impact of a higher proportion of U.S. vehicle sales than in the corresponding period in the prior year.
For the year ended December 31, 2023, revenue amounted to $253.5 million, an increase of $113.6 million, compared to the year ended December 31, 2022. The increase in revenue was primarily due to an increase in vehicle sales volume of 333 units, from 519 units (409 school buses and 110 trucks; 471 vehicles in Canada and 48 vehicles in the U.S.) for the year ended December 31, 2022, to 852 units (771 school buses and 81 trucks; 625 vehicles in Canada and 227 vehicles in the U.S.) for the year ended December 31, 2023. Revenues for the year ended December 31, 2023 were positively impacted by the impact of a higher proportion of U.S. vehicle sales as compared to fiscal 2022, however were negatively impacted by delays in the processing and granting of subsidies, which resulted in the postponement of deliveries of vehicles which were ready for delivery.
Cost of Sales
For the three months ended December 31, 2023, cost of sales amounted to $69.5 million, representing an increase of $17.9 million compared to $51.5 million in the corresponding period in the prior year. The increase was primarily due to the $9.8 million write-down of inventory to net realizable value as a result of the decision to indefinitely delay the start of commercial production of the LionA and LionM minibuses, increased sales volumes and higher production levels, increased fixed manufacturing and inventory management system costs related to the ramp-up of production capacity, higher raw material and commodity costs, and the impact of the inflationary environment.
For the year ended December 31, 2023, cost of sales amounted to $259.0 million, representing an increase of $106.2 million, compared to the year ended December 31, 2022. The increase was primarily due to increased sales volumes and higher production levels, increased fixed manufacturing and inventory management system costs related to the ramp-up of production capacity, higher raw material and commodity costs, and the impact of the inflationary environment. In addition, cost of sales were impacted by the $9.8 million write-down of inventory to net realizable value as a result of the decision to indefinitely delay the commercial production of the LionA and LionM minibuses.
Gross Loss
For the three months ended December 31, 2023, gross loss increased by $4.3 million, from a gross loss of $4.8 million for the corresponding period in the prior year, to a gross loss of $9.1 million for the three months ended December 31, 2023. The increase in gross loss was primarily due to the negative impact of the $9.8 million write-down of inventory to net realizable value as a result of the decision to indefinitely delay the start of commercial production of the LionA and LionM minibuses, increased fixed manufacturing costs and inventory management system costs related to the ramp-up of future production capacity, higher raw material and commodity costs, product mix, and the impact of continuing global supply chain challenges and inflationary environment, partially offset by the positive gross profit impact of increased sales volumes.
For the year ended December 31, 2023, gross loss improved by $7.4 million to negative $5.5 million, compared to negative $12.9 million for the year ended December 31, 2022. The improvement was primarily due to the positive impact of increased sales volumes, favorable product mix, and higher manufacturing throughput, partially offset by higher raw material and commodity costs, higher inventory management system costs related to the ramp-up of production capacity, and the impact of the inflationary environment. Gross loss for the year ending December 31, 2023 was also negatively impacted by the $9.8 million write-down of inventory to net realizable value as a result of the decision to indefinitely delay the commercial production of the LionA and LionM minibuses.
Administrative Expenses
For the three months ended December 31, 2023, administrative expenses increased by $3.0 million, from $10.0 million for the three months ended December 31, 2022, to $13.0 million for the three months ended December 31, 2023. Administrative expenses for the three months ended December 31, 2023 included $1.4 million of non-cash share-based compensation, compared to $2.1 million for the three months ended December 31, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $7.9 million for the three months ended December 31, 2022, to $11.6 million for the three months ended December 31, 2023. The increase was mainly due to an increase in expenses, including higher headcount, resulting from the expansion of Lion's head office and general corporate capabilities.
For the year ended December 31, 2023, administrative expenses increased by $6.6 million, from $44.8 million for the year ended December 31, 2022, to $51.5 million. Administrative expenses for the year ended December 31, 2023 included $58.0 million of non-cash share-based compensation, compared to $59.0 million for the year ended December 31, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $35.3 million for the year ended December 31, 2022 to $35.3 million for year ended December 31, 2023. The increase was mainly due to an increase in expenses and a higher headcount, both resulting from the expansion of Lion's head office and general corporate capabilities. As a percentage of sales, administrative expenses represented 20% of net sales for the year ended December 31, 2023, compared to 32% for the year ended December 31, 2022.
Selling Expenses
For the three months ended December 31, 2023, selling expenses decreased by $2.5 million, from $5.6 million for the three months ended December 31, 2022, to $3.1 million for the three months ended December 31, 2023. Selling expenses for the three months ended December 31, 2023 included a recovery of $1.0 million of non-cash share-based compensation, compared to a charge of $0.4 million for the three months ended December 31, 2022. Excluding the impact of non-cash share-based compensation, selling expenses decreased from $5.2 million for the three months ended December 31, 2022, to $4.1 million for the three months ended December 31, 2023. The decrease was primarily due to streamlined selling related expenses and lower marketing costs, partially offset by higher sales commissions related to higher revenue.
For the year ended December 31, 2023, selling expenses decreased by $3.3 million, from $23.0 million for the year ended December 31, 2022, to $19.7 million. Selling expenses for the year ended December 31, 2023 included $0.2 million of non-cash share-based compensation, compared to $2.9 million for the year ended December 31, 2022. Excluding the impact of non-cash share-based compensation, selling expenses decreased from $20.1 million for the year ended December 31, 2022, to $19.5 million for year ended December 31, 2023. The slight decrease was primarily due to streamlined selling related expenses, including lower headcount and marketing costs, partially offset by higher sales commissions related to higher revenue.
Restructuring Costs
Restructuring costs of $1.4 million for the three months ended December 31, 2023 and fiscal 2023 are comprised mainly of severance costs related to the workforce reduction announced on November 27, 2023.
Impairment of Intangible Assets and Property, Plant and Equipment
Impairment of intangible assets and property, plant and equipment of $36.0 million for the three months ended December 31, 2023 and fiscal 2023 relates to the write-down of previously capitalized vehicle development costs and property, plant and equipment which resulted from the Company's decision to indefinitely delay the start of commercial production of the LionA and LionM minibuses, as announced on November 7, 2023.
Finance Costs (Income)
For the three months ended December 31, 2023, finance costs increased by $7.6 million compared to the corresponding period in the prior year. Finance costs for the three months ended December 31, 2023 were net of $1.8 million of capitalized borrowing costs, compared to $5.1 million for the three months ended December 31, 2022. Excluding the impact of capitalized borrowing costs, finance costs increased by $4.3 million compared to the three months ended December 31, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher average debt outstanding during the quarter relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, the Finalta-CDPQ Loan Agreement, and the Supplier Credit Facility, interest and accretion expense as well as financing costs related to the Convertible Debentures and Non-Convertible Debentures issued in July 2023, and an increase in interest costs related to lease liabilities, including for the Battery Plant.
For the year ended December 31, 2023, finance costs increased by $16.9 million, from $1.0 million for the year ended December 31, 2022, to $17.9 million for the year ended December 31, 2023. Finance costs for the year ended December 31, 2023 were net of $6.5 million of capitalized borrowing costs, compared to $5.1 million for the year ended December 31, 2022. Excluding the impact of capitalized borrowing costs, finance costs increased by $18.3 million compared to the year ended December 31, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher average debt outstanding during the year relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, the Finalta-CDPQ Loan Agreement, and the Supplier Credit Facility (as such terms are defined below), interest and accretion expense as well as financing costs related to the Convertible Debentures and Non-Convertible Debentures issued in July 2023, and an increase in interest costs related to lease liabilities, including for the Battery Plant. In addition, finance costs for the year ended December 31, 2022 included a gain of $2.1 million on the derecognition of the financial liability occurred as a result of the termination of an agreement maturing on May 7, 2022 granting a private company with dealership rights in certain regions in the United States.
Foreign Exchange Loss (Gain)
Foreign exchange gains (loss) for both periods relate primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the three months ended December 31, 2023, foreign exchange gain was $2.2 million, compared a loss of $0.6 million in the corresponding period in the prior year, related primarily to the impact of changes in the Canadian dollar relative to the U.S. dollar.
Foreign exchange loss (gain) relates primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the year ended December 31, 2023, foreign exchange gain was $2.3 million, compared to a loss of $2.0 million in the prior year, related primarily to the impact of changes in foreign currency rates, related primarily to the impact of changes in the Canadian dollar relative to the U.S. dollar.
Change in Fair Value of Conversion Options on Convertible Debt Instruments
For the three months ended December 31, 2023, change in fair value of conversion options on convertible debt instruments was a gain of $1.6 million, and was related to the revaluation of the conversion options on the Convertible Debentures issued in July 2023.
For the year ended December 31, 2023, change in fair value of conversion options on convertible debt instruments was a gain of $5.0 million, and was related to the revaluation of the conversion options on the Convertible Debentures issued in July 2023.
Change in Fair Value of Share Warrant Obligations
Change in fair value of share warrant obligations moved from a gain of $15.4 million for the three months ended December 31, 2022, to a gain of $9.1 million, for the three months ended December 31, 2023. The gain for the three months ended December 31, 2023, was related to the Specific Customer Warrants, the public and private Business Combination Warrants, the 2022 Warrants, and the July 2023 Warrants, 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 moved from a gain of $101.5 million for the year ended December 31, 2022, to a gain of $21.0 million, for the year ended December 31, 2023. The gain for the year ended December 31, 2023 was related to the Specific Customer Warrants, the public and private Business Combination Warrants, the 2022 Warrants, and the July 2023 Warrants, and resulted mainly from the decrease in the market price of Lion equity as compared to the previous valuations.
Net Earnings (Loss)
The net loss for the three months ended December 31, 2023 as compared to the net loss for the corresponding prior period is higher as it includes the impacts of the inventory write-down and the impairment charge related to the delay of start of commercial production of the LionA and LionM minibuses, and it reflects higher administrative and selling expenses and finance costs, and lower gains related to non-cash decrease in the fair value of share warrant obligations, as compared to the comparative period in the prior year.
The net loss of $103.8 million for the year ended December 31, 2023 as compared to the net loss of $17.8 million for the prior year was largely due to an improvement in gross loss, inclusive of the impact of the inventory write-down related to the delay of the start of commercial production of the LionA and LionM minibuses, more than offset by higher administrative and selling expenses, the impairment charge related to the delay of the start of commercial production of the LionA and LionM minibuses, higher finance costs, and lower gains related to non-cash decrease in the fair value of share warrant obligations.
CONFERENCE CALL
A conference call and webcast will be held on February 29, 2024, at 8:30 a.m. (Eastern Time) to discuss the results. To participate in the conference call, please dial (404) 975-4839 or (833) 470-1428 (toll free) using the Access Code 863541. 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 annual audited consolidated financial statements of the Company and the related notes for the years ended December 31, 2023 and 2022, and the related management discussion and analysis ("MD&A") for the three and twelve months ended December 31, 2023, 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. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the MD&A.
WeTheMarket
4 months ago
Canada’s First Bidirectional EV Charging Hub Launches in British Columbia
December 15, 2023
https://www.globenewswire.com/news-release/2023/12/15/2797252/0/en/Canada-s-First-Bidirectional-EV-Charging-Hub-Launches-in-British-Columbia.html
Coast to Coast Experiences Leads Collaboration to Bring Vehicle-to-Grid Technology to their Fleet of Electric Buses and to BC Hydro
Pilot Project with BC Hydro, Lion Electric, BorgWarner, Powertech Labs and Fermata Energy demonstrates Technical Feasibility as a Proof of Concept to Make Vehicle-to-Grid a Reality in British Columbia and Globally
VANCOUVER, British Columbia, Dec. 15, 2023 (GLOBE NEWSWIRE) -- Coast to Coast Experiences (CTCE), determined to electrify its fleet in North America, introduced Canada’s first Vehicle-to-Grid (V2G) pilot project for medium- and heavy-duty vehicles, demonstrating the very first bidirectional electric vehicle (EV) charging hub in British Columbia.
Working with BC Hydro, The Lion Electric Company (NYSE: LEV) (TSX: LEV), BorgWarner, Powertech Labs and Fermata Energy, CTCE is creating the first rapid, deployable, end-to-end V2G mobile power infrastructure in Canada, enabling stored energy from CTCE’s electric bus fleet to support power grids, such as BC Hydro peaking and demand response initiatives. The pilot is designed to test the technical feasibility of bidirectional charging and mobile grid infrastructure, opening up the opportunity to monetize electric fleets. In collaboration with the pilot program partners, Fermata Energy’s bidirectional charging platform enables the parked electric buses to be utilized as mobile batteries with stored energy discharged to mitigate peak energy demand, send power back to the grid, lower the vehicles’ total cost of ownership and create value for electric fleet operators.
The initiative lays the groundwork for future deployable V2G charging hubs in Canada and North America. CTCE’s partnership with other critical industry leaders in advancing V2G technology will also highlight the essential role an electric bus fleet can have in offsetting the peak capacity of utilities, such as BC Hydro, during peak periods.
CTCE electric buses, which stand idle many hours each day, can become valuable mobile power plants, allowing utilities, such as BC Hydro, to leverage power from the bidirectionally-enabled electric vehicle during peak periods to offset the grid. This will be especially crucial during inclement weather and natural disasters when extreme pressure on the grid creates the potential for outages.
“Ultimately, we are creating grid infrastructure solutions for an electrified transportation ecosystem that will provide for an end-to-end V2G mobile power infrastructure,” said Rob Safrata, CEO of Coast to Coast Experiences and Novex Delivery Solutions. “This enables commercial electric vehicle fleet operators, when their vehicles are sitting idle, to create a high-power, mobile, bidirectional power plant capable of supporting grid resilience, peak shaving, and powering buildings.”
“This project implements an exciting milestone for Fermata Energy and the V2G industry as we successfully demonstrate bidirectional charging on the Combined Charging Standard (CCS1), which has been widely adopted in the North American market. Our integration with Lion Electric and BorgWarner allows us to leverage our AI-driven cloud-based V2X software platform to determine where power is needed most as we support CTCE in maximizing the value of their electric fleet,” says Tony Posawatz, CEO of Fermata Energy. “In collaboration with Powertech Labs and BC Hydro, this pilot is a great opportunity to capitalize on existing resources to build a stronger grid, create additional sources, and ultimately provide grid stability and economic value to ratepayers.”
“Lion all-electric buses serve as mobile batteries capable of enhancing power grid resiliency. Our vehicles are equipped with V2G technology, a smart, bidirectional charging technology that redirects unused power from the electric vehicle back to the power grid,” said Nicolas Brunet, President of Lion Electric. “The pilot project aims to demonstrate the possibilities and impact of this innovative technology, which can support various power needs and generate revenue for the operator. Our electric buses are capable of providing V2G solutions today, marking another milestone in demonstrating benefits of electric transportation and enhancing the feasibility of electrification,” Brunet emphasized.
“With the growing adoption of electric vehicles, bi-directional charging represents a unique opportunity to use stationary vehicles as back-up batteries to charge electronic devices, homes and businesses and even send power back to the grid when demand is high,” says Chris O’Riley, President and CEO of BC Hydro. “This trial marks the first of its kind for large vehicles in Canada, and we are excited to work with Coast-to-Coast Experiences and Powertech on this innovative technology that has the potential to benefit all British Columbians.”
“Environmental responsibility is the cornerstone of our business,” says Rob Safrata, CEO and owner of CTCE Experiences and Novex Delivery Solutions. “Together, with our industry partners, we are transforming the health of our communities by merging innovation and technology as we electrify the bus industry across North America,” Safrata continues. “Additionally, we will prove our ability to generate additional revenue streams by monetizing our electric buses from the sale of power back to the grid to offset peaking capacity during key periods of the year.”
“I am very proud we have finally come to this moment and want to thank our partners as collaboration is key when mounting new infrastructure,” continues Safrata. “This pilot sets the groundwork for CTCE to partner with utilities in all the markets we operate in around North America. Our company hopes to inspire others to make different choices for the benefit of our health, our homes, and our planet.”
The V2G pilot project is fully commissioned and operational over the next 2 weeks, participating in a variety of grid programs while creating a V2G road map for BC Hydro and laying the foundation for distributed V2G charging hubs throughout North America.
About Coast-to-Coast Experiences
CTCE was founded in 2009 and currently operates in three of the most recognized tourism destinations in the world—Vancouver, Seattle and New York. These key tourism markets have provided CTCE with a platform for solidifying their expertise in clean transportation and electrification as we continue to lead the way to a regenerative future. Find Coast to Coast Experiences at www.ctcexperiences.com.
About Fermata Energy
Park it. Plug it. Profit. ™ Fermata Energy is a leading software platform services provider of data science data science-driven Vehicle-to-Everything (V2X) bidirectional charging technology, including Vehicle-to-Grid (V2G), Vehicle-to-Home (V2H), and Vehicle-to-Building (V2B) solutions. The company was founded in 2010 to accelerate the adoption of electric vehicles (EVs) and the transition to renewable energy. Fermata Energy’s proprietary technology enables its customers to manage EVs as distributed energy resources by selling excess energy stored in EV batteries to offset costly peak demand charges. To learn more about Fermata Energy, please visit https://fermataenergy.com/ and follow the company on LinkedIn.
About BorgWarner Chargers
For more than 130 years, BorgWarner has been a transformative global product leader bringing successful mobility innovation to market. Today, we’re accelerating the world’s transition to eMobility — to help build a cleaner, healthier, safer future for all.
About Powertech Labs
As a subsidiary of BC Hydro, a provincial Crown corporation, Powertech Labs plays an instrumental role in supporting BC Hydro and the Government of British Columbia in their hydrogen strategy, and more broadly in B.C.’s CleanBC plan to lower climate-changing emissions by 40 percent by 2030.
About BC Hydro
BC Hydro is a provincial Crown corporation, owned by the government and people of British Columbia, Canada. It generates and delivers electricity to 95% of the population of B.C. and serves over five million people.
Media Contacts:
CTCE - Joey Gill, joey @lmastro-556-0675
Fermata Energy - Daniel Cherrin, dcherrin @seaspray
Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/a5147144-486a-4c77-a09d-307426d2c2cd
https://www.globenewswire.com/NewsRoom/AttachmentNg/e3f6b9ae-ae7c-4d12-bca0-89f5e71636d2
WeTheMarket
5 months ago
LION ELECTRIC POSTS RECORD REVENUE AND GROSS PROFIT FOR THE THIRD QUARTER OF 2023
November 07 2023
https://ih.advfn.com/stock-market/NYSE/lion-electric-LEV/stock-news/92483977/lion-electric-posts-record-revenue-and-gross-profi
MONTREAL, Nov. 7, 2023 /PRNewswire/ - The Lion Electric Company (NYSE: LEV) (TSX: LEV) ("Lion" or the "Company"), a leading manufacturer of all-electric medium and heavy-duty urban vehicles, today announced its financial and operating results for the third quarter of fiscal year 2023, which ended on September 30, 2023. Lion reports its results in US dollars and in accordance with International Financial Reporting Standards ("IFRS").
Q3 2023 FINANCIAL HIGHLIGHTS
- Record revenue of $80.3 million, up $39.4 million, as compared to $41.0 million in Q3 2022.
- Record gross profit of $5.4 million as compared to a gross loss of $3.8 million in Q3 2022.
- Delivery of 245 vehicles, an increase of 89 vehicles, as compared to the 156 delivered in the same period last year.
- Net loss of $19.9 million in Q3 2023, as compared to net loss of $17.2 million in Q3 2022. Net loss for Q3 2023 includes a $3.4 million gain related to a non-cash decrease in the fair value of conversion options on convertible debt instruments, a $0.2 million gain related to non-cash decrease in the fair value of share warrant obligations and a $1.3 million charge related to non-cash share-based compensation, whereas net loss for Q3 2022 included a $7.6 million gain related to non-cash decrease in the fair value of share warrant obligations and a $2.7 million charge related to non-cash share-based compensation.
- Adjusted EBITDA(1) of negative $3.9 million, as compared to negative $15.1 million in Q3 2022.
- Capital expenditures, which included expenditures related to the Joliet Facility and the Lion Campus, amounted to $16.2 million, down $13.2 million, as compared to $29.4 million in Q3 2022. See section 8.0 of the MD&A entitled "Operational Highlights" for more information related to the Joliet Facility and the Lion Campus.
- Additions to intangible assets, which mainly consist of R&D activities, amounted to $15.0 million, down $3.2 million, as compared to $18.2 million in Q3 2022.
- The Company closed on July 19, 2023 concurrent financing transactions for aggregate gross proceeds to the Company of approximately $142 million, extended the maturity of its senior credit facilities by one year to August 11, 2025, and terminated its at-the-market equity program which was set to expire in July 2024 and will therefore no longer make any sales thereunder.
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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 1,600 vehicles on the road, with over 19 million miles driven (over 30 million kilometers).
- Vehicle order book(2) of 2,232 all-electric medium- and heavy-duty urban vehicles as of November 6, 2023, consisting of 268 trucks and 1,964 buses, representing a combined total order value of approximately $525 million based on management's estimates.
- LionEnergy order book(2) of 129 charging stations and related services as of November 6, 2023, representing a combined total order value of approximately $4 million.
- 12 experience centers in operation in the United States and Canada.
- Began to manufacture initial LionD units in Joliet, Illinois and Lion5 units in Montreal.
- Commercial production of the LionA and LionM is being delayed
- As of November 6, 2023, Lion had approximately 1,500 employees.
"We are pleased with our performance in the third quarter of 2023, as we posted record revenue and gross margins, and our revenue year-to-date has more than doubled compared to last year," commented Marc Bedard, CEO - Founder of Lion. "As we approach the end of the year, we continue to relentlessly focus on all the elements that will enable us to reach our profitability objectives," concluded Marc Bedard.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE THIRD QUARTER OF FISCAL YEAR 2023
Revenue
For the three months ended September 30, 2023, revenue amounted to $80.3 million, an increase of $39.4 million compared to the corresponding period in the prior year. The increase in revenue was due to an increase in vehicle sales volume of 89 units, from 156 units (108 school buses and 48 trucks; 140 vehicles in Canada and 16 vehicles in the U.S.) for the three months ended September 30, 2022 to 245 units (220 school buses and 25 trucks; 132 vehicles in Canada and 113 vehicles in the U.S.) for the three months ended September 30, 2023.
For the nine months ended September 30, 2023, revenue amounted to $193.1 million, an increase of $99.9 million compared to the corresponding period in the prior year. The increase in revenue was due to an increase in vehicle sales volume of 319 units, from 345 units (270 school buses and 75 trucks; 311 vehicles in Canada and 34 vehicles in the U.S.) for the nine months ended September 30, 2022 to 664 units (593 school buses and 71 trucks; 518 vehicles in Canada and 146 vehicles in the U.S.) for the nine months ended September 30, 2023.
Revenues for the nine months ended September 30, 2023 were negatively impacted by delays in the processing and granting of subsidies, which resulted in the postponement of deliveries of vehicles which were ready for delivery. In addition, revenues were impacted by challenges associated with the production ramp-up and the development of certain models.
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2 See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book 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 order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of November 6, 2023 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2026, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025. In addition, substantially all deliveries are subject to the granting of subsidies and incentives with processing times that are subject to important variations. There has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Also, there has been in the past and the Company expects there will continue to be variances in the eligibility criteria of the various programs, subsidies and incentives introduced by governmental authorities, including in their interpretation and application. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part. The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
Cost of Sales
For the three months ended September 30, 2023, cost of sales amounted to $75.0 million, representing an increase of $30.2 million compared to $44.8 million in the corresponding period in the prior year. For the nine months ended September 30, 2023, cost of sales amounted to $189.5 million, representing an increase of $88.2 million compared to $101.3 million in the corresponding period in the prior year. The increase for both periods was primarily due to increased sales volumes and higher production levels, increased fixed manufacturing and inventory management system costs related to the ramp-up of future production capacity, higher raw material and commodity costs, and the impact of continuing inflationary environment.
Gross Profit (Loss)
For the three months ended September 30, 2023, gross profit was $5.4 million compared to a gross loss of $3.8 million for the corresponding period in the prior year. The improvement in gross profit was primarily due to the positive impact of increased sales volumes, favourable product mix, and higher manufacturing throughput, partially offset by higher raw material and commodity costs, higher inventory management system costs related to the ramp-up of future production capacity, and the impact of continuing inflationary environment.
For the nine months ended September 30, 2023, gross profit was $3.5 million compared to a gross loss of $8.2 million for the corresponding period in the prior year. The improvement in gross profit was primarily due to the positive impact of increased sales volumes, favourable product mix, and higher manufacturing throughput, partially offset by higher raw material and commodity costs, higher inventory management system costs related to the ramp-up of future production capacity, and the impact of continuing inflationary environment.
Administrative Expenses
For the three months ended September 30, 2023, administrative expenses increased by $0.8 million, from $12.2 million for the three months ended September 30, 2022, to $13.0 million for the three months ended September 30, 2023. Administrative expenses for the three months ended September 30, 2023 included $1.0 million of non-cash share-based compensation, compared to $2.0 million for the three months ended September 30, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $10.2 million for the three months ended September 30, 2022 to $12.0 million for the three months ended September 30, 2023. The increase was mainly due to an increase in expenses, including higher headcount, resulting from the expansion of Lion's head office and general corporate capabilities.
For the nine months ended September 30, 2023, administrative expenses increased by $3.6 million, from $34.8 million for the nine months ended September 30, 2022, to $38.5 million for the nine months ended September 30, 2023. Administrative expenses for the nine months ended September 30, 2023 included $3.6 million of non-cash share-based compensation, compared to $7.4 million for the nine months ended September 30, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $27.5 million for the nine months ended September 30, 2022 to $34.8 million for nine months ended September 30, 2023. The increase was mainly due to an increase in expenses, including higher headcount, resulting from the expansion of Lion's head office and general corporate capabilities.
Selling Expenses
For the three months ended September 30, 2023, and the three months ended September 30, 2022, selling expenses were approximately the same at $5.2 million. Selling expenses for the three months ended September 30, 2023 included $0.3 million of non-cash share-based compensation, compared to $0.7 million for the three months ended September 30, 2022. Excluding the impact of non-cash share-based compensation, selling expenses increased from $4.6 million for the three months ended September 30, 2022 to $4.8 million for three months ended September 30, 2023. The slight increase was primarily due to higher sales commissions related to higher revenue, partially offset by lower marketing costs.
For the nine months ended September 30, 2023, selling expenses decreased by $0.8 million, from $17.3 million for the nine months ended September 30, 2022 to $16.5 million for the nine months ended September 30, 2023. Selling expenses for nine months ended September 30, 2023 included $1.2 million of non-cash share-based compensation, compared to $2.5 million for nine months ended September 30, 2022. Excluding the impact of non-cash share-based compensation, selling expenses slightly increased from $14.8 million for the nine months ended September 30, 2022 to $15.3 million for nine months ended September 30, 2023. The slight increase was primarily due to higher sales commissions related to higher revenue, partially offset by lower marketing costs.
Finance Costs
For the three months ended September 30, 2023, finance costs increased by $6.2 million, from $1.5 million for the corresponding period in the prior year, to $7.7 million for the three months ended September 30, 2023. Finance costs for the three months ended September 30, 2023 were net of $1.6 million of capitalized borrowing costs. Excluding the impact of capitalized borrowing costs, finance costs increased by $7.8 million compared to the three months ended September 30, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher average debt outstanding during the quarter relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, and the Finalta-CDPQ Loan Agreement, interest and accretion expense as well as financing costs related to the Convertible Debentures and Non-Convertible Debentures issued in July 2023, and an increase in interest costs related to lease liabilities, including for the Battery Plant.
For the nine months ended September 30, 2023, finance costs increased by $9.3 million, from $1.8 million for the corresponding period in the prior year, to $11.1 million for the nine months ended September 30, 2023. Finance costs for the nine months ended September 30, 2023 were net of $4.8 million of capitalized borrowing costs. Excluding the impact of capitalized borrowing costs, finance costs increased by $14.1 million compared to the nine months ended September 30, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher average debt outstanding during the nine months ended September 30, 2023 relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, and the Finalta-CDPQ Loan Agreement, interest and accretion expense as well as financing costs related to the Convertible Debentures and Non-Convertible Debentures issued in July 2023, an increase in financing costs related to the over-allotment option exercise of the 2022 Warrants, and an increase in interest costs related to lease liabilities, including for the Battery Plant. In addition, finance costs for the nine months ended September 30, 2022 included a gain of $2.1 million on derecognition of the financial liability occurred as a result of the agreement with a private company relating to the previous acquisition of dealership rights in certain territories in the United States maturing on May 7, 2022.
Foreign Exchange Loss (Gain)
Foreign exchange losses (gains) relate primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the three months ended September 30, 2023, foreign exchange loss was $2.9 million, compared to a loss of $2.1 million in the corresponding period in the prior year, related primarily to the impact of changes in foreign currency rates.
For the nine months ended September 30, 2023, foreign exchange gain was $0.1 million, compared to a loss of $1.4 million in the corresponding period in the prior year, and related primarily to the impact of changes in foreign currency rates.
Change in Value of Conversion Options on Convertible Debt Instruments
For the three and nine months ended September 30, 2023, change in value of conversion options on convertible debt instruments was a gain of $3.4 million, and was related to the revaluation of the conversion options on the Convertible Debentures issued in July 2023.
Change in Fair Value of Share Warrant Obligations
Change in fair value of share warrant obligations moved from a gain of $7.6 million for the three months ended September 30, 2022, to a gain of $0.2 million, for the three months ended September 30, 2023. The gain for the three months ended September 30, 2023 was related to the Specific Customer Warrants, the public and private Business Combination Warrants, the 2022 Warrants, and the July 2023 Warrants, 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 moved from a gain of $86.0 million for the nine months ended September 30, 2022, to a gain of $11.9 million, for the nine months ended September 30, 2023. The gain for the nine months ended September 30, 2023, was related to the Specific Customer Warrants, the public and private warrants Business Combination Warrants, the 2022 Warrants, and the July 2023 Warrants, and resulted mainly from the decrease in the market price of Lion equity as compared to the previous valuations.
Net Earnings (Loss)
The net loss of $19.9 million for the three months ended September 30, 2023 as compared to the net loss of $17.2 million for the corresponding prior period were largely due to the lower decrease in the fair value of share warrant obligations (resulting in a lower gain) discussed in "Change in fair value of share warrant obligations" above, the change in value of conversion options on convertible debt instruments, and higher finance costs, partially offset by higher gross profit.
The net loss for the nine months ended September 30, 2023 as compared to the net earnings for the corresponding prior period were largely due to the lower decrease in the fair value of share warrant obligations (resulting in a lower gain) discussed in "Change in fair value of share warrant obligations" above, the change in value of conversion options on convertible debt instruments, higher finance costs, higher administrative expenses (excluding share-based compensation), partially offset by higher gross profit, and lower non-cash share-based compensation.
CONFERENCE CALL
A conference call and webcast will be held on November 7, 2023, at 8:30 a.m. (Eastern Time) to discuss the results. To participate in the conference call, please dial (404) 975-4839 or (833) 470-1428 (toll free) using the Access Code 592776. 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 2023 third quarter financial report, including the unaudited condensed interim consolidated financial statements of the Company as at and for the quarter ended September 30, 2023, and the related management discussion and analysis ("MD&A"), which will be filed by the Company with applicable Canadian regulatory securities 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. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the MD&A.
WeTheMarket
9 months ago
LION ELECTRIC ANNOUNCES SECOND QUARTER 2023 RESULTS
August 03 2023
https://ih.advfn.com/stock-market/NYSE/lion-electric-LEV/stock-news/91724226/lion-electric-announces-second-quarter-2023-result
MONTREAL, Aug. 3, 2023 /CNW/ - The Lion Electric Company (NYSE: LEV) (TSX: LEV) ("Lion" or the "Company"), a leading manufacturer of all-electric medium and heavy-duty urban vehicles, today announced its financial and operating results for the second quarter of fiscal year 2023, which ended on June 30, 2023. Lion reports its results in US dollars and in accordance with International Financial Reporting Standards ("IFRS").
Q2 2023 FINANCIAL HIGHLIGHTS
Record revenue for a quarter of $58.0 million, up $28.5 million, as compared to $29.5 million in Q2 2022.
Achieved positive gross profit of $0.4 million as compared to a gross loss of $3.5 million in Q2 2022.
Delivery of 199 vehicles, an increase of 94 vehicles, as compared to the 105 delivered in the same period last year. Deliveries were negatively impacted by delays in the final approval of a subsidy program which resulted in the deferral to subsequent quarters of the delivery of 50 school buses to one customer despite that such vehicles were ready for delivery and the client being ready to receive them.
Net loss of $11.8 million in Q2 2023, as compared to net earnings of $37.5 million in Q2 2022. Net loss for Q2 2023 includes a $6.0 million gain related to non-cash decrease in the fair value of share warrant obligations and a $2.1 million charge related to non-cash share-based compensation, whereas net earnings for Q2 2022 included a $56.9 million gain related to non-cash decrease in the fair value of share warrant obligations and a $3.4 million charge related to non-cash share-based compensation.
Adjusted EBITDA1 of negative $9.7 million, as compared to negative $14.4 million in Q2 2022, 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 $19.1 million, down $25.2 million, as compared to $44.3 million in Q2 2022. See section 8.0 of this MD&A entitled "Operational Highlights" for more information related to the Joliet Facility and the Lion Campus.
Additions to intangible assets, which mainly consist of R&D activities, amounted to $17.9 million, down $6.7 million, as compared to $24.6 million in Q2 2022.
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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 1,400 vehicles on the road, with over 14 million miles driven.
Vehicle order book2 of 2,559 all-electric medium- and heavy-duty urban vehicles as of August 2, 2023, consisting of 304 trucks and 2,255 buses, representing a combined total order value of approximately $625 million based on management's estimates.
LionEnergy order book2 of 275 charging stations and related services as of August 2, 2023, representing a combined total order value of approximately $5 million.
12 Experience Centers in operation in the United States and Canada.
Officially inaugurated the vehicle manufacturing facility in Joliet, Illinois.
Progressing on final certification of the first Lion battery packs.
On July 19, 2023, the Company closed concurrent financing transactions for aggregate gross proceeds to the Company of approximately $142 million, extended the maturity of its senior credit facilities by one year to August 11, 2025, and terminated its at-the-market equity program which was set to expire in July 2024 and will therefore no longer make any sales thereunder.
As of August 2, 2023, Lion had approximately 1,450 employees.
"We are pleased with our performance in the second quarter of 2023, as we continued to see gradual growth in revenue and in truck deliveries," commented Marc Bedard, CEO - Founder of Lion. "As we recently closed a $142 million financing that provides us with the flexibility to execute our growth plans, we will continue to focus our efforts on achieving profitability, which is moving in the right direction, as demonstrated by the positive gross margin we posted this quarter," concluded Marc Bedard.
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2 See "Non-IFRS Measures and Other Performance Metrics" section of this press release. The Company's vehicle and charging stations order book 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 order book is expressed as a number of units or a total dollar value, which dollar value is determined based on the pricing of each unit included in the order book. The vehicles included in the vehicle order book as of August 2, 2023 provided for a delivery period ranging from a few months to the end of the year ending December 31, 2026, with substantially all of such vehicles currently providing for deliveries before the end of the year ending December 31, 2025. In addition, substantially all deliveries are subject to the granting of subsidies and incentives with processing times that are subject to important variations. There has been in the past and the Company expects there will continue to be variances between the expected delivery periods of orders and the actual delivery times, and certain delays could be significant. Such variances or delays could result in the loss of a subsidy or incentive and/or in the cancellation of certain orders, in whole or in part. The Company's presentation of the order book should not be construed as a representation by the Company that the vehicles and charging stations included in its order book will translate into actual sales.
SELECT EXPLANATIONS ON RESULTS OF OPERATIONS FOR THE SECOND QUARTER OF FISCAL YEAR 2023
Revenue
For the three months ended June 30, 2023, revenue amounted to $58.0 million, an increase of $28.5 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 94 units, from 105 units (90 school buses and 15 trucks; 91 vehicles in Canada and 14 vehicles in the U.S.) for the three months ended June 30, 2022 to 199 units (166 school buses and 33 trucks; 171 vehicles in Canada and 28 vehicles in the U.S.) for the three months ended June 30, 2023.
For the six months ended June 30, 2023, revenue amounted to $112.7 million, an increase of $60.6 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 230 units, from 189 units (162 school buses and 27 trucks; 171 vehicles in Canada and 18 vehicles in the U.S.) for the six months ended June 30, 2022 to 419 units (373 school buses and 46 trucks; 386 vehicles in Canada and 33 vehicles in the U.S.) for the six months ended June 30, 2023.
Revenues for the three and six months ended June 30, 2023 were negatively impacted by delays in the final approval of a subsidy program which resulted in the deferral to subsequent quarters of the delivery of 50 school buses to one customer despite that such vehicles were ready for delivery and the client being ready to receive them. In addition, revenues 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, as well as challenges associated with the production ramp-up and the development of certain models.
Cost of Sales
For the three months ended June 30, 2023, cost of sales amounted to $57.6 million, representing an increase of $24.6 million compared to $33.0 million in the corresponding period in the prior year. For the six months ended June 30, 2023, cost of sales amounted to $114.6 million, representing an increase of $58.0 million compared to $56.5 million in the corresponding period in the prior year. The increase for both periods was primarily due to increased sales volumes and higher production levels, increased fixed manufacturing and inventory management system costs related to the ramp-up of future production capacity, higher raw material and commodity costs, and the impact of continuing global supply chain challenges and inflationary environment.
Gross Profit (Loss)
For the three months ended June 30, 2023, gross profit was $0.4 million compared to a gross loss of $3.5 million for the corresponding period in the prior year. The improvement in gross profit was primarily due to the positive impact of increased sales volumes, favourable product mix, and higher manufacturing throughput, partially offset by higher raw material and commodity costs, higher inventory management system costs related to the ramp-up of future production capacity, and the impact of continuing global supply chain challenges and inflationary environment.
For the six months ended June 30, 2023, gross loss was $1.8 million compared to a gross loss of $4.4 million for the corresponding period in the prior year. The decrease in the gross loss was primarily due to the positive impact of increased sales volumes, favourable product mix, and higher manufacturing throughput, partially offset by higher raw material and commodity costs, higher inventory management system costs related to the ramp-up of future production capacity, and the impact of continuing global supply chain challenges and inflationary environment.
Administrative Expenses
For the three months ended June 30, 2023, administrative expenses increased by $0.8 million, from $11.7 million for the three months ended June 30, 2022, to $12.5 million for the three months ended June 30, 2023. Administrative expenses for the three months ended June 30, 2023 included $1.6 million of non-cash share-based compensation, compared to $2.5 million for the three months ended June 30, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $9.2 million for the three months ended June 30, 2022 to $10.9 million for the three months ended June 30, 2023. The increase was mainly due to an increase in expenses, including higher headcount, resulting from the expansion of Lion's head office and general corporate capabilities in anticipation of an expected increase in business activities.
For the six months ended June 30, 2023, administrative expenses increased by $2.8 million, from $22.7 million for the six months ended June 30, 2022, to $25.5 million for the six months ended June 30, 2023. Administrative expenses for the six months ended June 30, 2023 included $2.7 million of non-cash share-based compensation, compared to $5.3 million for the six months ended June 30, 2022. Excluding the impact of non-cash share-based compensation, administrative expenses increased from $17.3 million for the six months ended June 30, 2022 to $22.8 million for six months ended June 30, 2023. The increase was mainly due to an increase in expenses, including higher headcount, resulting from the expansion of Lion's head office and general corporate capabilities in anticipation of an expected increase in business activities.
Selling Expenses
For the three months ended June 30, 2023, selling expenses decreased by $1.3 million, from $6.7 million for the three months ended June 30, 2022, to $5.5 million for the three months ended June 30, 2023. Selling expenses for the three months ended June 30, 2023 included $0.4 million of non-cash share-based compensation, compared to $0.8 million for the three months ended June 30, 2022. Excluding the impact of non-cash share-based compensation, selling expenses decreased from $5.9 million for the three months ended June 30, 2022 to $5.0 million for three months ended June 30, 2023. The decrease was primarily due to streamlined selling related expenses and lower marketing costs.
For the six months ended June 30, 2023, selling expenses decreased by $0.8 million, from $12.1 million for the six months ended June 30, 2022, to $11.3 million for the six months ended June 30, 2023. Selling expenses for six months ended June 30, 2023 included $0.8 million of non-cash share-based compensation, compared to $1.8 million for six months ended June 30, 2022. Excluding the impact of non-cash share-based compensation, selling expenses slightly increased from $10.3 million for the six months ended June 30, 2022 to $10.5 million for six months ended June 30, 2023.
Finance Costs (Income)
For the three months ended June 30, 2023, finance costs (income) increased by $2.8 million, from an income of $0.8 million for the corresponding period in the prior year, to a cost $2.0 million for the three months ended June 30, 2023. Finance costs for the three months ended June 30, 2023 were net of $1.4 million of capitalized borrowing costs. Excluding the impact of capitalized borrowing costs, finance costs increased by $4.3 million compared to the three months ended June 30, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher debt outstanding during the quarter relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, and the Finalta-CDPQ Loan Agreement, an increase in interest costs related to lease liabilities, including for the Mirabel battery manufacturing facility. In addition, finance costs (income) for the three months ended June 30, 2022 included the gain on derecognition of the financial liability occurred as a result of the agreement with a private company relating to the previous acquisition of dealership rights in certain territories in the United States maturing on May 7, 2022.
For the six months ended June 30, 2023, finance costs increased by $3.1 million, from $0.3 million for the corresponding period in the prior year, to $3.4 million for the six months ended June 30, 2023. Finance costs for the six months ended June 30, 2023 were net of $3.1 million of capitalized borrowing costs. Excluding the impact of capitalized borrowing costs, finance costs increased by $6.2 million compared to the six months ended June 30, 2022. The increase was driven primarily by higher interest expense on long-term debt, due to higher debt outstanding during the first half of the year relating to borrowings made under the Revolving Credit Agreement, the IQ Loan, the SIF Loan, and the Finalta-CDPQ Loan Agreement, as well as an increase in financing costs related to the over-allotment option exercise of the 2022 Warrants, and an increase in interest costs related to lease liabilities, including for the Mirabel battery manufacturing facility. In addition, finance costs (income) for the six months ended June 30, 2022 included the gain on derecognition of the financial liability occurred as a result of the agreement with a private company relating to the previous acquisition of dealership rights in certain territories in the United States maturing on May 7, 2022.
Foreign Exchange Gain
Foreign exchange gains relate primarily to the revaluation of net monetary assets denominated in foreign currencies to the functional currencies of the related Lion entities. For the three months ended June 30, 2023, foreign exchange gain was $1.8 million, compared a gain of $1.6 million in the corresponding period in the prior year, related primarily to the impact of changes in foreign currency rates.
For six months ended June 30, 2023, foreign exchange gain was $3.0 million, compared a gain of $0.7 million in the corresponding period in the prior year, related primarily to the impact of changes in foreign currency rates.
Change in Fair Value of Share Warrant Obligations
Change in fair value of share warrant obligations moved from a gain of $56.9 million for the three months ended June 30, 2022, to a gain of $6.0 million, for the three months ended June 30, 2023. The gain for the three months ended June 30, 2023, was related to the warrants issued to a customer in July 2020, the public and private warrants issued as part of the closing of the Business Combination on May 6, 2021, and the 2022 Warrants issued under the December 2022 Offering, 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 moved from a gain of $78.4 million for the six months ended June 30, 2022, to a gain of $11.7 million, for the six months ended June 30, 2023. The gain for the six months ended June 30, 2023, was related to the warrants issued to a customer in July 2020, the public and private warrants issued as part of the closing of the Business Combination on May 6, 2021, and the 2022 Warrants issued under the December 2022 Offering, and resulted mainly from the decrease in the market price of Lion equity as compared to the previous valuations.
Net Earnings (Loss)
The net loss for the three months ended June 30, 2023 as compared to the net earnings for the corresponding prior period were largely due to the lower decrease in the fair value of share warrant obligations (resulting in a lower gain) discussed in "Change in fair value of share warrant obligations" above, higher administrative expenses (excluding share-based compensation), partially offset by higher gross profit and lower non-cash share-based compensation.
The net loss for the six months ended June 30, 2023 as compared to the net earnings for the corresponding prior period were largely due to the lower decrease in the fair value of share warrant obligations (resulting in a lower gain) discussed in "Change in fair value of share warrant obligations" above, higher administrative expenses (excluding share-based compensation), partially offset by lower gross loss, lower non-cash share-based compensation, and the impact of a higher foreign exchange gain compared to the corresponding prior period.
CONFERENCE CALL
A conference call and webcast will be held on August 3, 2023, at 8:30 a.m. (Eastern Time) to discuss the results. To participate in the conference call, please dial (226) 828-7575 or (833) 950-0062 (toll free) using the Access Code 242263. 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 2023 second quarter financial report, including the unaudited condensed interim consolidated financial statements of the Company as at and for the quarter ended June 30, 2023, and the related management 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 SEDAR+ as well as on our website at www.thelionelectric.com.
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