The Lion Electric Company Common Shares

Good morning, everyone. Welcome to Line Electric's fourth quarter and fiscal 2023 results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the call over to Isabel Ajay, Vice President, Investor Relations and Sustainable Development. Please go ahead, Ms. Ajay.

Good morning, everyone. Welcome to Lions' fourth quarter and fiscal 2023 results conference, Coulomb. Today, I'm here with Marc Bédard, our CEO funder, Nicolas Brunet, our president, and Richard Coulomb, our chief financial officer. Please note that our discussion may include estimates and other forward-looking information, and that our actual results could differ materially from those implied in any such statement. We invite you to review the questionnaire language in this morning's press release and in our MDNA, which contains important information regarding various factors, assumptions, and risks that could impact our actual results. With that, Let me turn it over to Mark to begin.

Mark. Thank you, Isabelle. Good morning, everyone. We will be discussing our Q4 results in a moment, but I first want to address our 2023 performance and highlight some of our achievements. 2023 has without a doubt been a challenging year for the whole lead industry, including for Lion, but it has also been a year of significant progress for our company. 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. We also completed the construction of our vehicle production facility in Joliet and our battery plant in Mirabelle and started production at both facilities. We now have the infrastructure in place, including the production line and equipment, to achieve a production capacity of up to 5,000 vehicles per year. and battery production capacity of 1.7 gigawatt hour, enough to power 5,000 of our vehicles. With this significant manufacturing infrastructure in place, we do not plan to make any significant investments in gross capex for the foreseeable future. We also obtain certification for our MD battery pack, which powers our Lion 5 trucks today and will be integrated shortly on our Lion C-School buses. This represents a significant milestone in the execution of our vertical integration strategy. And last but not least, we started the commercial production of the Lion D school bus and the Lion 5 truck, and we are planning to start the commercial production of the Lion A tractor this summer. 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. Let me now comment on our Q4 results. During the quarter, we delivered 188 vehicles, leading to 29% revenue growth over Q4 2022. Despite maintaining a positive adjusted gross margin during the quarter, the 188 vehicles we delivered are below our expectations. This is mainly explained by two reasons. we incurred delays in the initial deliveries of the Lion B-School buses and the Lion 5 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. 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 ZDTF, since several Canadian school bus operators are still waiting for an official approval to start receiving our electric buses. The continued uncertainty and delays around the ZDTF program had a major impact on momentum of electric school bus deliveries in Canada. 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. As a result of these delays and its impact on our liquidity, we are taking immediate action by temporarily laying off approximately 100 employees, mostly impacting our night shift production workforce in Saint-Jerome. We will reassess our production needs on a regular basis in the upcoming months, mainly depending on the pace of the ZDTF project approval and deployment. 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. Our main objectives are an effective liquidity management and achieving profitability by remaining agile and actively focused on cost control. Further, we will continue to proactively improve the quality of our vehicles and increase our SEAL technician service coverage to maximize customer experience and uptime with our vehicles. Nicholas.