Embraer Releases Second Quarter 2008 Results in U.S. GAAP

SAO JOSE DOS CAMPOS, Brazil, July 31 /PRNewswire-FirstCall/ --
The Company's operating and financial information is presented, except
where otherwise stated, on a consolidated basis in United States dollars (US$)
in accordance with US GAAP. The financial data presented in this document for
the quarters ended June 30, 2007, March 31, 2008 and June 30, 2008, are
derived from the unaudited financial statements. In order to better understand
the Company's operating performance, additional information is also presented
at the end of this release, in accordance with accounting practices adopted in
Brazil ("Brazilian GAAP").
Embraer (BOVESPA: EMBR3; NYSE: ERJ), the world's leading manufacturer of
commercial jets with up to 120 seats, recorded second quarter 2008 (2Q08) net
sales of US$ 1,635.0 million and net income of US$ 134.4 million, equivalent
to diluted earnings per ADS of US$ 0.7427.
Embraer added new customers to its firm order backlog in the second
quarter of 2008 such as ETA Star Group, from Dubai and TRIP Linhas Aereas, one
more Brazilian airline that will fly Embraer jets. Embraer's firm order
backlog on June 30, 2008, reached a record high of US$ 20.7 billion, including
sales to the Executive Aviation market, whose backlog is currently around
US$ 6.0 billion. The EMBRAER 170/190 jet family backlog accumulated a total of
847 firm orders and 827 options.
Embraer delivered 52 aircraft during 2Q08, an increase of 44.4% compared
to 36 deliveries in the second quarter of 2007 (2Q07), closing out the
semester with record 97 jets delivered. This result represents a 59% increase
over the 61 airplanes delivered during the first semester of 2007. Embraer
reaffirms its estimate of delivering 195 to 200 jets in 2008, tending toward
the higher figure, as well as ten to 15 Phenom 100 jets.
Net revenues for 2Q08 totaled US$ 1,635.0 million, a 47.3% increase over
the US$ 1,110.0 million in net revenues for 2Q07, basically due to the
increase in deliveries.
The gross margin for 2Q08 totaled 21.9%, representing an increase over the
21.5% gross margin for 2Q07, despite the impact of the 16.4% decrease in the
exchange rate (R$/US$) on the portion of the Company's cost stated in 'reais'.
This increase in the gross margin is due to the higher number of deliveries in
2Q08, compared to 2Q07, and productivity gains achieved since the improvement
of the Company's industrial processes started in mid-2007. The increase in
gross margin, from 20.4% for 1Q08 to 21.9% in 2Q08, is attributed to the same
reasons as above and the reduction of overtime work on the production lines.
Income from operations reached US$ 113.2 million in 2Q08, a significant
increase over the US$ 31.2 million recorded for the same period last year. The
operating margin was 6.9% in 2Q08, representing an increase over the 2.8% for
2Q07 and also an increase over the operating margin of 3.6% for 1Q08.
The increased operating income resulted in growth in net income, which
totaled US$ 134.4 million in 2Q08, compared to US$ 67.3 million in 2Q07. The
net margin increased to 8.2% in 2Q08, compared to 6.1% in 2Q07.
For the quarter ended June 30, 2008, the Company maintained its high level
of liquidity, and its net cash position was US$ 524.2 million.
SECOND QUARTER 2008 IN PERSPECTIVE
EMBRAER ANNOUNCES EMBRAER MSJ & EMBRAER MLJ EXECUTIVE JETS
Embraer formally introduced its new Embraer midsize and Embraer midlight
executive jet programs, which were recently approved by the Company's Board of
Directors. The Embraer midsize and Embraer midlight jets have been named the
Legacy 500 and the Legacy 450, respectively, forming the Legacy family, along
side the successful Legacy 600, already in operation. An estimated US$ 750
million will be invested in research and development for the new models, which
will enter service in the second semester of 2012 and 2013, respectively.
EMBRAER ROLLS OUT THE PHENOM 300 EXECUTIVE JET
Embraer finished assembling the first Phenom 300 jet at its Gaviao Peixoto
plant in Sao Paulo, Brazil. The rollout preceded a series of ground tests to
be conducted in preparation for the jet's first flight. Two weeks after the
event, the Embraer Phenom 300 successfully took to the air on its maiden
flight, starting its flight test campaign. It is expected to enter service in
the second semester of 2009.
EMBRAER PLANS TO EXPAND ITS OPERATIONS IN THE U.S.
Embraer announced that it plans to invest an estimated US$ 50 million for
the establishment of a new facility in the United States dedicated to its
executive jet business. The new 150,000-square-foot state-of-the-art facility
will house a final assembly line, the first for Embraer in the U.S. It will be
capable of producing both the Phenom 100 and Phenom 300 executive jet models,
and will have a paint shop and a delivery and customer design center.
EMBRAER'S ERJ 145 FAMILY OBTAINS FINAL RUSSIAN CERTIFICATION
Embraer received final approval from Russia's Interstate Aviation
Committee (IAC) for the 37 to 50-seat ERJ 145 regional jet family, comprised
of the 37-seat ERJ 135, the 44-seat ERJ 140, and the 50-seat ERJ 145. These
regional jets now have the way open to operate in all of the CIS, which,
besides Russia, includes Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan,
Kyrgyzstan, Moldova, Tajikistan, Ukraine, and Uzbekistan.
EMBRAER 190 AND EMBRAER 195 JETS RECEIVE CERTIFICATION IN CHINA
Embraer received certification from the Civil Aviation Administration of
China (CAAC) for operating the EMBRAER 190 and EMBRAER 195 jets in mainland
China.
EMBRAER SIGNS CONTRACT WITH BRAZIL'S TRIP LINHAS AEREAS
Embraer signed a contract with TRIP Linhas Aereas for the sale of five
EMBRAER 175 jets. The deal also includes options for ten more, plus purchase
rights for another 15.
EMBRAER PROVIDES EMBRAER 190 JETS TO BRAZILIAN GOVERNMENT
Embraer signed a contract for the sale of two EMBRAER 190 jets to the
Brazilian Government for transporting official personnel. The aircraft will be
configured specifically for this purpose and will be operated by the Special
Transportation Group (Grupo de Transporte Especial - GTE) of the Brazilian Air
Force (Forca Aerea Brasileira - FAB), which serves the President of the
Republic, Ministries, Presidential Departments, and officials from the
Legislative and Judiciary Branches.
EMBRAER JOINS UNITED NATIONS GLOBAL COMPACT
Embraer has formally joined the Global Compact program developed by the
United Nations (UN) for the purpose of mobilizing the international business
community to adopt basic values for its business practices in the areas of
human rights, labor relations, environmental protection, and anti-corruption.
SOURCE Embraer

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