The Lion Electric Company Common Shares

Good afternoon, ladies and gentlemen. Welcome to the Lion Electric's third quarter 2024 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 Dominique Perron, Chief Legal Officer and Corporate Secretary. Please go ahead, Ms. Perron.

Good afternoon, everyone. Welcome to Lions' third quarter 2024 results conference call. Bienvenue à la conférence téléphonique sur les résultats financiers du troisième trimestre 2024 de Lyon. Today, I am here with Marc Bédard, our CEO Founder, Nicolas Brunet, our President, and Richard Coulombe, 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 cautionary language in this afternoon's press release and in our MD&E, which contain important information regarding various factors, assumptions, and risks that could impact our actual results. With that, let me turn it over to Marc to begin.

Thank you, Dominique. Good afternoon, everyone. Thank you for joining us today. Since the last quarter, the team at Lion continued to deploy significant efforts in our relentless march towards improving our liquidity position and build sustainable foundations for both the short-term and long-term success of Lion. As previously announced, we have implemented multiple initiatives to streamline our operations, and we have seen the impact of these on our cash outflows. We have implemented headcount reductions initiated other cost reduction initiatives expected to result in annual life cost savings of approximately 65 million dollars we have implemented a batch size manufacturing approach to our truck business tying production directly to purchase orders in order to minimize expenditures and cash burn while maintaining our leadership in the electric truck market finally We have launched a formal process to sublease a substantial portion of our Joliet production facility, aiming to reduce expenditures while maintaining current production capacity at the plant. In parallel, we are exploring various alternatives to reduce our facilities related expenditures across our entire footprint. And we continue to execute on our plan to start selling our battery packs to third parties starting in 2025. Despite these initiatives, the challenges that we had signal in the first half of the year continued in the third quarter to put significant pressure on the company from a cash flow and liquidity standpoint. The continued delays associated with the Canadian Federal ZET ETF program, the timing of the rounds in the US EPA program, and our liquidity position impacting our production cadence have negatively impacted our revenues. That being said, We have recently seen positive movements in both the ZET ETF and EPA programs that we will be addressing in a few minutes. As you may have seen, our interim financial statements and MD&A signal the existence of uncertainty about the company's ability to continue as a going concern over the next 12 months if no additional funding is raised. Inclusion of a going concern note is a reflection of the challenges we are currently facing. but it does not mean that we are out of options. We continue to actively review and consider different opportunities to secure additional financing and straighten our financial position while working with our debt holders to identify the best path to ensure the long-term sustainability of our business in light of the upcoming expiry of the covenant relief period and the final CDPQ debt maturity. Turning our attention to some of the third quarter highlights. We are seeing positive momentum with the EPA program. Nick will provide more details shortly. And we also obtain expense reimbursement payments totaling 30 million under the grant fund and continue to actively work with customers to obtain formal purchase orders and fulfill other requirements to receive payments from the rebate fund. We are continuing to work closely with the Canadian government and the operators to improve the timing of the processing of applications under the ZET ETF program. And we are happy to note that the recent dialogue has been constructive in this regard, as we have been informed by several operators that their applications are being processed. We also continue to execute on our inventory reduction plan, with a $15 million reduction in Q3 alone and a $35 million year-to-date inventory reduction as of September 30th. the vast majority of which relates to raw materials. We are therefore very well aligned to realize a $50 million inventory reduction in 2024. With respect to vehicle development, we continue to ramp up the production of our Alliance fiscal buses with the Lion proprietary battery packs and have received positive feedback from our customers on this new platform. Separately, commercial production of the Lion AT has been pushed to 2025 as a result of headcount reductions performed and our focus on preserving liquidity and thus allocate resources to producing and delivering existing platforms. Looking forward, it is clear that 2024 is a very challenging year and we will continue to work towards positioning ourselves for the future. With capex span behind us and a significant reduction in development costs as a result of our vehicle platforms being substantially completed, Our focus remains on preserving liquidity and straightening our financial position, as mentioned earlier. With all the efforts and initiatives taken to adjust our cost structure, we will continue to work tirelessly to position the company to support increasing electric school bus demand and allow us to maintain our leadership position in this segment. I will now turn it to Nicholas.