Brazil Fast Food Reports First Quarter Results.RIO DE JANEIRO Rio de Janeiro, city, Brazil Rio de Janeiro (rē`ō də zhänā`rō, Port. rē`  thĭ zhənĕē`r , Brazil -- Brazil Fast Food (OTC OTCSee: Over-the-counter. OTC See over-the-counter market (OTC). BB: BOBS.OB), a 460-outlet fast-food chain and the second largest fast-food chain operator in Brazil, today announced financial results for its first quarter ended Mar. 31, 2006. System-wide sales for the Company's "Bob's" chain were R$109.5 million for the first quarter of 2006, up 33 percent from R$82.3 million for the first three months of 2005. Net restaurant sales for Brazil Fast Food Corp.'s company-owned retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → increased 29 percent for the first quarter of 2006 to R$23.4 million from R$18.1 million for the first quarter of 2005. Net franchise revenue was R$4.0 million for the three-month period ended Mar. 31, 2006 - up 48 percent from 2005's first-quarter net franchise revenue of R$2.7 million. The Company's net operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. rose 21 percent to R$3.4 million for the first quarter of 2006 from R$2.8 million for the same period of 2005. Net income climbed 22 percent for the first quarter of 2006 to R$2.4 million, or R$.31 per share, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , from R$2.0 million, or R$0.25 per share, basic and diluted, for the first quarter of 2005. Ricardo Figueiredo Bomeny, Chief Executive Officer of Brazil Fast Food Corp., commented, "During the first quarter of 2006, we continued to reap the benefits of our multi-pronged growth strategy. As a result, the year-over-year first quarter improvements to our top-line results were generated by a number of factors. As the economic environment in Brazil continued to improve, we have increased both our physical and media presence in Brazil. In the first three months of 2006, we expanded our chain by nine net points of sale, we launched an intensive marketing campaign, and we set up outlets at such special events as Carnival carnival, communal celebration, especially the religious celebration in Catholic countries that takes place just before Lent. Since early times carnivals have been accompanied by parades, masquerades, pageants, and other forms of revelry that had their origins in in Rio de Janeiro and the U2 rock concert at the Morumbi Soccer Stadium in Sao Paulo. These efforts, in addition to the recent remodel re·mod·el tr.v. re·mod·eled also re·mod·elled, re·mod·el·ing also re·mod·el·ling, re·mod·els also re·mod·els To make over in structure or style; reconstruct. of some of our key stores, have yielded demonstrable de·mon·stra·ble adj. 1. Capable of being demonstrated or proved: demonstrable truths. 2. Obvious or apparent: demonstrable lies. results, increasing both traffic and sales among our targeted demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. and strengthening the power of our brand. "While we have been making considerable financial and operational progress - realizing meaningful top- and bottom-line growth, reducing debt, increasing our cash flow and expanding our margins - we continue to face challenges that are potentially threatening to our operation. We have been working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to resolve some longstanding issues over certain State and Federal Tax liabilities and Social Security payment obligations, and, pending the completion of a government review - which is being executed at our request - we await a final determination of the outstanding balance. In addition, during 2005, we were ordered to pay R$480,000 in response to a labor claim from a former employee. Although this amount is unusually high for such a claim, the Company cannot assure that it will not be required to pay similarly high amounts for labor claims received from other former employees. As of March 31, 2006 we had labor contingencies at the amount of R$1.2 million accounted for as liabilities in our balance sheet. We also accounted for another liability on our balance sheet in the amount of R$737,000 for an ICMS ICMS Imposto Sobre Circulação de Mercadorias e Serviços (Brazilian excise tax) ICMS International Centre for Mathematical Sciences ICMS International Committee for Museum Security ICMS Integrated Customer Management System tax contingency (Brazil's value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. state tax). This stems from our inability (for technical reasons) to meet a state requirement to file electronic forms for four years of monthly sales figures sales figures npl → cifras fpl de ventas for two of our stores, for which we were fined R$737,000. Although we are appealing the amount - and we do expect it to be reduced - we cannot guarantee that this issue will not have more far-reaching and serious consequences for our Company. It is for all of the above reasons, as well as other contingencies discussed in detail in our most recent quarterly and annual S.E.C. filings, that we cannot assure our Company's ability to continue as a going concern. "Despite this, however, we are continuing to work to secure a successful future for our Company. While we do not underestimate the potential for these contingencies to endanger en·dan·ger tr.v. en·dan·gered, en·dan·ger·ing, en·dan·gers 1. To expose to harm or danger; imperil. 2. To threaten with extinction. that future, we believe that it is important to entertain all of the possibilities, including the one toward which we are working: the possibility that these factors will work out in our favor. It is with such hope and optimism that we are continuing to stay our course, in the belief that those factors that are under our control will be managed for the best possible outcome." ABOUT BRAZIL FAST FOOD CORP. Brazil Fast Food Corp. owns and operates, both directly and through franchisees, the second largest chain of hamburger fast-food restaurants in Brazil, through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Venbo Comercio de Alimentos Ltda. Brazil Fast Food Corp. conducts business in Brazil under the trade name "Bob's." As of March 31, 2006, the Company had 460 points of sale, which includes traditional restaurants, kiosks and re-locatable trailers. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Such statements involve known or unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied by such forward-looking statements. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the disclosures in the Company's filings with the Securities and Exchange Commission, including the risk factors contained in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, filed with the Securities and Exchange Commission on March 31, 2006.
BRAZIL FAST FOOD CORP.
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(in thousands of Brazilian Reais, except per-share amounts)
R$000 Three Months, ended
03/31/06 03/31/05
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System-wide sales R$ 109,457 R$ 82,318
Net Restaurant Sales 23,426 18,099
Net Franchise Revenue 3,993 2,701
Net Operating Profit
(Loss) 3,414 2,824
Net Income (Loss) 2,458 2,018
Net Income (Loss)
Per Common Share,
Basic and Diluted R$0.31 R$0.25
BRAZIL FAST FOOD CORP.
CONSOLIDATED BALANCE SHEET
(in thousands of Brazilian Reais)
R$000 Year ended
03/31/06 12/31/05
----------------- ------------
Current Assts R$ 11,681 R$ 11,800
Total Assets 37,778 38,070
Current Liabilities 14,023 16,171
Total Liabilities 35,260 38,036
Shareholders' Equity 2,518 34
Treasury Stock (269) (216)
Accumulated Deficit (56,229) (58,687)
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