Business Context and Reporting Period
This Form 6-K filing by Embraer S.A. is dated September 29, 2022, and addresses a material fact regarding the restatement of financial results for the quarter ended June 30, 2022. The filing concerns accounting adjustments related to warrants issued by the Company's subsidiary, Eve Holding, Inc., following a business combination with Zanite Acquisition Corp.
Key Financial Metrics and Adjustments
The filing details specific non-cash accounting adjustments rather than standard operational performance metrics for the period ending September 30, 2022. Key financial impacts identified include:
- Eve Holding Adjustments: An estimated increase in net loss of approximately US$87 million for the quarter ended June 30, 2022, due to a non-cash expense, with a corresponding increase in additional paid-in-capital.
- Embraer Consolidated Adjustments: An expected increase in non-cash expense of approximately US$82 million and an increase in non-current liabilities of the same amount for the quarter ended June 30, 2022.
- Additional SPAC Transaction Impact: A potential further increase in non-cash expense of approximately US$83 million with a contra-entry in shareholders' equity, subject to ongoing evaluation.
- Liquidity and Cash Flow: The adjustments are explicitly stated to have no cash effect and are not expected to impact liquidity, capital resources, or compliance with material agreements.
Material Changes Versus Prior Period
The filing indicates that the previously reported Second Quarter 2022 results for both Eve Holding and Embraer are unreliable and will be restated. The adjustments are not expected to impact financial statements for any periods prior to the quarter ended June 30, 2022. The filing does not provide comparative operational data (revenue, profit, margins) for the current period versus prior periods, as the focus is solely on the accounting restatement.
Guidance, Outlook, and Risks
Guidance: Embraer's published guidance for 2022 Adjusted EBIT and EBITDA margins remains unchanged. This is because the guidance does not incorporate Eve Holding's results, and therefore, the restatement is not expected to affect the outlook.
Risks and Contingencies:
- Internal Controls: The Company is assessing whether the restatement indicates a significant deficiency in internal controls.
- Accounting Interpretation: The Company notes that accounting matters pertaining to SPACs may have different interpretations and continues to analyze the impact with its independent auditor.
- Reporting Status: The previously issued Second Quarter Results and the limited review report are subject to modification and will be republished once the analysis is concluded.
Investor Verification Checklist
- Verify the final restated Second Quarter 2022 financial statements once published by Embraer and submitted to the CVM.
- Confirm the final determination regarding the potential "significant deficiency in internal controls."
- Review the specific accounting treatment of the SPAC transaction warrants to understand the full scope of the US$83 million potential additional expense.
- Monitor future filings for any updates on the impact of these adjustments on the Company's overall financial position beyond the non-cash expense.