Brazil Fast Food Reports Strong Net Profit Improvements in Second Quarter/Six Months Results; Company's Growth and Expansion Continues; Shareholders' Equity Increases Dramatically.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 (OTCBB OTCBBSee OTC Bulletin Board (OTCBB). : BOBS), a 479-outlet fast-food chain and the second largest fast-food chain operator in Brazil, today announced financial results for its second quarter ended June 30, 2006. System-wide sales for the Company's "Bob's" chain were R$91.4 million for the second quarter of 2006, up 20 percent from R$76.4 million for the second quarter 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 five percent for the second quarter of 2006 to R$17.6 million from R$16.8 million for the second quarter of 2005. Net franchise revenue was R$3.4 million for the three-month period ended June 30, 2006 - up 23 percent from 2005's second-quarter net franchise revenue of R$2.8 million. The Company nearly tripled its 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. for the second quarter of 2006 to R$224,000 from R$78,000 for the same period of 2005. The net loss for the second quarter of 2006 decreased dramatically to R$(26,000), or R$0.00 per share, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , from R$(680,000), or R$(0.08) per share, basic and diluted, for the second quarter of the prior year. For the six-moth period ended June 30, 2006, Brazil Fast Food reported system-wide sales of R$200.9 million - a 27 percent increase from net restaurant sales of R$158.8 million for the first six months of 2005. Net restaurant sales climbed by 18 percent to R$41.0 million for the first two quarters of 2006 from R$34.9 million for half of 2005. Net franchise revenue rose 40 percent to R$7.4 million for the first two quarters of 2006 from R$5.3 million for the same period of 2005. Net operating profit grew by 25 percent to R$3.6 million for the first six months of 2006 from R$2.9 million for the first two quarters of 2005. As of June 30, 2006, net income has risen year-to-date to R$2.4 million, or R$0.30 per share, basic and diluted - 82 percent higher than the net income reported for the same period of the prior year, which was R$1.3 million, or R$.17 per share, basic and diluted. Ricardo Figueiredo Bomeny, Chief Executive Officer of Brazil Fast Food Corp., commented, "Our long-term growth strategy, which includes the expansion of our chain, and investments in marketing, employee training, remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure. bone remodeling and equipment, has enabled our Company to make significant progress in Brazil's continuingly favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. economic climate. Our growth during the second quarter may seem more subdued sub·due tr.v. sub·dued, sub·du·ing, sub·dues 1. To conquer and subjugate; vanquish. See Synonyms at defeat. 2. To quiet or bring under control by physical force or persuasion; make tractable. 3. than during our first quarter. However, the positive momentum continues. During the first quarter, our Company participated in two special events - 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 concerts at Morumbi Soccer Stadium. We will, of course, continue to seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. such opportunities whenever possible, further leveraging the strength of the Bob's brand and our niche in Brazil's fast-food market." Mr. Bomeny continued, "We believe that our efforts to increase our Company's revenues, control costs and boost profitability are well-reflected in our financial results and our greatly appreciated Shareholders' Equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . And, although we still face obstacles, including some significant operating contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. (covered in detail in our 10K), we are just as dedicated to resolving those issues to ensure our Company's continued success." 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 June 30, 2006, the Company had 479 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 a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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$000 Six Months, ended
06/30/06 06/30/05
--------------- ---------------
System-wide sales R$ 200,852 R$ 158,764
Net Restaurant Sales 41,036 34,873
Net Franchise Revenue 7,432 5,307
Net Operating Profit 3,638 2,902
Net Income 2,432 1,338
Net Income
Per Common Share,
Basic and Diluted R$0.30 R$0.17
---------------------------------------------------------
R$000 Three Months, ended
06/30/06 06/30/05
--------------- ---------------
System-wide sales R$ 91,394 R$ 76,446
Net Restaurant Sales 17,610 16,774
Net Franchise Revenue 3,439 2,794
Net Operating Profit
(Loss) 224 78
Net Income (Loss) (26) (680)
Net Income (Loss)
Per Common Share,
Basic and Diluted R$(0.00) R$(0.08)
---------------------------------------------------------
BRAZIL FAST FOOD CORP.
CONSOLIDATED BALANCE SHEET
(in thousands of Brazilian Reais)
R$000 Period ended
06/30/06 12/31/05
--------------- ---------------
Current Assts R$ 11,451 R$ 11,800
Total Assets 37,817 38,070
Current Liabilities 13,985 16,171
Total Liabilities 34,816 38,036
Shareholders' Equity 3,001 34
Treasury Stock (516) (216)
Accumulated Deficit (56,225) (58,687)
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