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| Statement |
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| And so we will catch up, what we lost at the end of Q4 is going to take us two quarters to catch up, but we feel good about the quality of the product we’re bringing to market |
| With our vehicle lineup nearly completed and with significant production infrastructure in place, we are well positioned to capture market share in the medium and heavy-duty EV space |
| With the Lion5 and Lion6 in commercial production today, and with the start of commercial production of the Lion8 tractor truck scheduled for mid-2024, we believe we are very well positioned for our customers to benefit from such funding |
| We therefore anticipate that inventory reduction will positively contribute to liquidity in 2024, with a targeted inventory reduction of $50 million to $75 million |
| In summary, the grants environment, combined with customers’ strong appetite for electric vehicles, is very promising for the long-term, despite causing some volatility in the short-term, which we expect to persist for at least the next few months |
| This is what I’m getting and there are terms negotiations as we speak, but we’re very enthusiastic about the outcome of that |
| Before turning it over to Nicolas and Richard to provide more detailed insights into our commercial operations and financial performance, let me reiterate that with our 1,850 vehicles on the road that have driven 22 million miles in real operating conditions and considering everything we have achieved over the past 15 years, we believe we are in an exceptional position for continued success |
| We had a significant improvement in adjusted EBITDA, which was negative $6.3 million for the quarter, as compared to negative $13.9 million in Q4 2022, resulting from improved adjusted gross profits and decreasing costs |
| Further, we will continue to proactively improve the quality of our vehicles and increase our field technician service coverage to maximize customer experience and uptime with our vehicles |
| First, we saw a significant increase in deliveries, resulting in revenue growth of 81% for the year, in addition to achieving positive adjusted gross margins |
| So, we’re staying tuned, we’re a good partner and we feel that we’re well-listened as well |
| and we expect to -- we’re hoping to see continued improvements in the proportion of our wins under the EPA program |
| And so these subsidy programs, when you take a medium-term timeframe, they are very exciting |
| We achieved positive adjusted gross margins for the year, with adjusted gross profit of $4.3 million or 1.7% of revenue, as compared to an adjusted gross loss of $12.9 million or negative 9.3% of revenue in 2022 |
| You probably saw some feedback also on some of the customers that started to receive the LionD and it’s very, very positive |
| Before we open the line for questions, let me conclude by reiterating that while we expect the current environment to continue to result in volatile order flow and deliveries for at least the next few months, we remain very enthusiastic about our future and fully committed to leveraging all investments made over the last 15 years to reach our ultimate objective of becoming profitable and free cash deposits |
| Now that the applications for the EPA’s latest rebate round have closed, we are hopeful to see more momentum in a number of state-level programs, including in California, Colorado and New York, among others |
| During the quarter, we delivered 188 vehicles, leading to 29% revenue growth over Q4 2022 |
| We are also very encouraged by customer engagement towards applications for the most recent rebate round of the EPA program, which closed on February 14 |
| On the truck side, we are particularly excited by two trucking programs from the EPA |
| Very good |
| Very good |
| They will benefit, of course, from some of the subsidies, particularly here in Canada and we also have dialogue with much larger players that are looking to figure out the solution at scale |
| This represents a significant milestone in the execution of our vertical integration strategy |
| So, all in all, there’s certainly good movement there |
| I hope you saw the improvement year-over-year and that’s going to continue |
| Well, the $150 million, we’re already benefiting from this cap |
| Obviously, with the amount of inventory that we have, it could take a little while as well to start seeing the benefit of those cost savings, because we have $250 million of inventory and the real goal is obviously to use that inventory as soon as possible to get the benefit of the $50 million to $75 million inventory reduction that Richard was talking about |
| Our main objectives are an effective liquidity management and achieving profitability by remaining agile and actively focused on cost control |
| So I think it’s great |
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| Despite maintaining a positive adjusted gross margin during the quarter, the 188 vehicles we delivered are below our expectations |
| Furthermore, as previously explained, we experienced some delays in the first deliveries of the Lion5 trucks and the LionD school buses, which further impacted results |
| First, we incurred delays in the initial deliveries of the LionD school buses and the Lion5 trucks, as we wanted to ensure optimal quality of these vehicles, which were the first ones going to customers, and as a result, initial deliveries were pushed out to Q1 and Q2 of this year |
| As previously mentioned, the ramp-up of the LionV -- the Lion5 and the Lion batteries, as well as the upcoming launch of the LionA tractor, will put short-term pressure on our growth margin, particularly in the first half of the year |
| In addition to the challenging economic environment, the decline in the order book is in part attributable to the timing of certain subsidy programs, which are beneficial in the long-term but can cause some volatility on a quarter-to-quarter basis |
| Our school bus deliveries in Canada were impacted by the inability to deliver under the Canadian ZETF program, for which a number of our clients are in discussions with the government to obtain satisfactory approval under the program |
| Chris, I mean, obviously, we cannot provide the exact figure, but that was significant, right? Some of it is explaining the difference between what the street was looking at and the final number that we got at 188, which was clearly below our expectations |
| And second, our Q4 deliveries and the pacing of new orders were significantly impacted by the substantial delays incurred by the Canadian Government with its Zero Emission Transit Fund program, the ZETF, since several Canadian school bus operators are still waiting for an official approval to start receiving our electric buses |
| Without a doubt, we’re operating in a more challenging economic environment for the purchasers of trucks, for shippers, as you said |
| The continued uncertainty and delays around the ZETF program had a major impact on momentum of electric school bus deliveries in Canada, as the Canadian federal government and our clients currently work to evaluate and process sizable applications for school buses deployment that were filed several months ago |
| So our goal was really to start delivering them by the end of the year, but I mean, we’ve had a few challenges like in terms of software updates and those kind of things where we felt that since those will be the first deliveries, the customers deserve the best |
| Our Q4 results included an impairment of intangible assets and property, plant, and equipment of $36 million related to our decision to indefinitely delay the start of our commercial production of the LionA and LionM vehicles |
| Obviously, we feel, as I said earlier, our inventory in a very challenging supply chain environment, and right now, as I mentioned earlier, we don’t need to have or carry buffers that we’ve been carrying in the last couple of years |
| Adjusted EBITDA amounted to negative $34.3 million for the year, as compared to negative $54.8 million in 2022 |
| You have a significant amount of excess capacity |
| Despite lower than expected sales volume, we posted adjusted gross margin of 1.3%, which excludes the $9.8 million inventory write-down related to the Lion8 and LionM vehicles, as compared to an adjusted gross margin that was negative 10.2% for the corresponding quarter in 2022 |
| Last year, in parts of 2022, we did go through and are going through a freight recession |
| So there has been a lot of delays |
| I know it’s a volatile environment |
| As a result of these delays and its impact on our world liquidity, we are taking immediate action by temporarily laying off approximately 100 employees, mostly impacting our night shift production workforce in Saint-Jerome |
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