The Lion Electric Company (NYSE:LEV) Q3 2024 Earnings Conference Call November 6, 2024 5:30 PM ET
Company Participants
Dominique Perron - Chief Legal Officer & Corporate Secretary
Marc Bedard - CEO & Founder
Nicolas Brunet - President
Richard Coulombe - CFO
Conference Call Participants
Kevin Chiang - CIBC
Mike Shlisky - D. A. Davidson
Rupert Merer - National Bank
Operator
Welcome to The Lion Electric Third Quarter 2024 Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Dominique Perron, Chief Legal Officer and Corporate Secretary. Please go ahead, Ms. Perron.
Dominique Perron
Good afternoon everyone. Welcome to Lions' third quarter 2024 results conference. Today, I am here with Marc Bedard, our CEO and Founder, Nicolas Brunet, our President, and Richard Coulombe, our CFO. Please note that her discussion may include estimates and other forward looking information, and that our actual results could differ materially from those employed in any such statement. We invite you to review the cautionary language in this afternoon's press release in our MD&A which contains 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.
Marc Bedard
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 and initiated other cost reduction initiatives expected to result in annual life cost savings of approximately $65 million. 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 [indiscernible] 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 ZETF program, the timing of the rounds in the U.S. 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 ZETF and EPA programs that we will be addressing in a few minutes. As you may have seen, our interim financial statements and MD&A signaled the existence of uncertainty about the company's ability to continue as a growing concern over the next 12 months, if no additional funding is raised, the 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 experience of the COVID-19 relief period and the final test, CDPQ, debt maturity,