Brazil Fast Food Reports Third Quarter/Nine Months Results; Company Realizes Significant Top-Line and Bottom-Line Improvements as It Continues to Expand Bob's Chain throughout Brazil.RIO DE JANEIRO Rio de Janeiro, city, Brazil Rio de Janeiro (rē`ō də zhänā`rō, Port. rē`  thĭ zhənĕē`r , Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. -- Brazil Fast Food (OTC OTCSee: Over-the-counter. OTC See over-the-counter market (OTC). BB: BOBS.OB), a 426-outlet fast-food fast food n. Inexpensive food, such as hamburgers and fried chicken, prepared and served quickly. fast chain and the second largest fast-food chain operator in Brazil, today announced financial results for its third quarter ended Sept. 30, 2005. Net restaurant sales for Brazil Fast Food's company-owned retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → increased 20.8 percent during the third quarter of 2005 to R$18.2 million from R$15.1 million for the third quarter of 2004. Net franchise royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. fees were R$2.3 million for the three-month period ended Sept. 30, 2005 - up 22 percent from 2004's third-quarter net franchise royalty fees of R$1.9 million. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter of 2005 was R$721,000, versus operating income of R$557,000 for the same period of 2004. The Company reported a dramatic increase in net income for the third quarter of 2005 to R$484,000, or R$.06 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 net income of R$64,000 million, or R$.01 per share, basic and diluted, for the third quarter of 2004. For the nine-month period ended Sept. 30, 2005, Brazil Fast Food reported net restaurant sales of R$53.1 million - a 13.1 percent increase from net restaurant sales of R$46.9 million for the first nine months of 2004. Net franchise royalty fees rose 26 percent to R$7.0 million for the first three quarters of 2005 from R$5.5 million for the same period of 2004. Operating income grew by 30 percent to R$3.6 million for the first nine months of 2005 from R$2.8 million for the first three quarters of 2004. As of Sept. 30, 2005, net income has risen year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. to R$1.8 million, or R$.22 per share, basic and diluted - nearly three times the net income reported for the same period of 2004, which was R$657,000, or R$.08 per share, basic and diluted. Ricardo Ri·car·do , David 1772-1823. British economist whose major work, Principles of Political Economy and Taxation (1817), supported the laws of supply and demand in a free market. Noun 1. Figueiredo Figueiredo is a common Portuguese surname, and also the name of many parishes in Portugal. It can also mean:
n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment in Brazil, where increases in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. have favored consumer durables Consumer durables Consumer products that are expected to last three years or more, such as an automobile or a home appliance. consumer durables See durable goods. . "Our progress is the result of a multi-pronged strategy, which is delivering meaningful top- top- pref. Variant of topo-. and bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. results on a number of fronts. We've we've Contraction of we have. we've have continued to strategically expand the Bob's chain, both in terms of the number of retail outlets - 38 new outlets (net), many of which are higher-margin kiosks, have been added to the chain so far this year - and in terms of our geographic reach in Brazil. We have increased revenue from our company-owned stores by remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure. bone remodeling some of our most strategic locations, and we have also improved the profitability of our growing franchise network. A warmer-than-usual winter (July July: see month. , August and September September: see month. in Brazil) in conjunction with an intensive marketing campaign for our popular 'Ovomaltine' milkshake helped to considerably boost sales of our cold drinks and ice cream products during this period. In addition, we have enhanced our revenue by increasing our product prices by seven percent on average during 2005." Continuing, Mr. Bomeny stated, "I would like to take this opportunity to more thoroughly explain our Company's continuing classification as a 'going concern,' especially in light of our significant financial and operational progress. First, there is a possibility that our Company will be deemed financial liability for debts incurred by Bob's Comercio e Industria Industria can refer to:
Payment made to someone for out-of-pocket expenses has incurred. from Vendex in this event, such legal processes are often lengthy and expensive, which could create serious financial and cash flow problems for us. Second, there is a discrepancy DISCREPANCY. A difference between one thing and another, between one writing and another; a variance. (q.v.) 2. Discrepancies are material and immaterial. between the amount of financial debt we have registered in our books and the amount the Fiscal Authority claims we owe. We are involved in legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. to settle this issue as well as some claims from labor and suppliers for past-due payments. Until these matters are settled and our financial liability is firmly established, our external auditors The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. cannot be certain of our Company's ability to continue as a going concern." Mr. Bomeny concluded, "Looking forward, we strongly believe that Brazil Fast Food will complete 2005 and enter 2006 with increasing positive operational momentum and greater financial strength. In fact, we estimate that 2005 will be our second income-positive year since 1996, when we purchased the Bob's chain. Having reduced our short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. to about 45 percent of our total assets, we hope to soon have those debts paid off entirely. In addition, we will continue to benefit from lower interest costs as we pay down our long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. with payments that are easily supported by our normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of . Further savings will result from a recently signed five-year contract with a new logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. supplier, which will reduce our related expenses chain-wide and expand our margins. Together, these accomplishments demonstrate our focus on and dedication to securing a successful future for our Company, and we believe that, over time, they will prove to be only the beginning of our 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 September 30, 2005, the Company had 426 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 December: see month. 31, 2004, filed with the Securities and Exchange Commission on April 15, 2005.
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(in thousands of Brazilian Reais, except share amounts)
Nine Months Ended September 30,
2005 2004
STORE RESULTS
Net Restaurant Sales R$ 53,094 R$ 46,933
Store Costs and Expenses
Food, Beverage and Packaging (19,806) (17,063)
Payroll & Related Benefits (12,284) (10,689)
Restaurant Occupancy (6,524) (6,252)
Contracted Services (6,320) (6,310)
Depreciation and Amortization (1,625) (1,688)
Other Store Costs and Expenses (2,069) (1,600)
Total Store Costs and Expenses (48,628) (43,602)
STORE OPERATING INCOME 4,466 3,331
FRANCHISE RESULTS
Net Franchise Royalty Fees R$ 7,005 R$ 5,540
Franchise Costs and Expenses (1,528) (1,477)
FRANCHISE OPERATING INCOME 5.477 4.063
MARKETING, GENERAL AND
ADMINISTRATIVE (EXPENSES) INCOME
Marketing (Expenses) Income (2,278) (571)
General and Administrative Expenses (6,584) (5,726)
Other Operating Income (Expenses) 4,156 1,951
Depreciation and Amortization (912) (473)
Net result of assets sold and impairment
of assets (702) 208
Total Marketing, G & A (Expenses) Income (6,320) (4,611)
OPERATING INCOME 3,623 2,783
Interest Income (Expense) (832) (1,755)
Foreign Exchange and Monetary Restatement
Gain (Loss) (4) (214)
NET INCOME BEFORE INCOME TAX 2,787 814
Income taxes (965) (110)
NET INCOME BEFORE MINORITY INTEREST R$ 1,822 R$ 704
Minority Interest -- (47)
NET INCOME 1,822 657
NET INCOME PER COMMON SHARE
BASIC AND DILUTED R$ 0.22 R$ 0.08
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
BASIC AND DILUTED 8,102,177 7,936,540
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(in thousands of Brazilian Reais, except share amounts)
Three Months Ended September 30,
--------------------------------
2005 2004
--------------------------------
STORE RESULTS
Net Restaurant Sales R$ 18,221 R$ 15,082
Store Costs and Expenses - -
Food, Beverage and Packaging (6,734) (5,114)
Payroll & Related Benefits (3,958) (3,569)
Restaurant Occupancy (2,248) (2,045)
Contracted Services (2,000) (1,875)
Depreciation and Amortization (556) (552)
Other Store Costs and Expenses (673) (376)
Total Store Costs and Expenses (16,169) (13,531)
------------------------------
STORE OPERATING INCOME 2,052 1,551
------------------------------
FRANCHISE RESULTS
Net Franchise Royalty Fees R$ 2,343 R$ 1,917
Franchise Costs and Expenses (557) (477)
------------------------------
FRANCHISE OPERATING INCOME 1,786 1,440
------------------------------
MARKETING, GENERAL AND
ADMINISTRATIVE (EXPENSES) INCOME
Marketing (Expenses) Income (1,685) (557)
General and Administrative Expenses (2,310) (1,965)
Other Operating Income (Expenses) 1,314 106
Depreciation and Amortization (302) (177)
Net result of assets sold and
impairment of assets (134) 159
Total Marketing, G & A (Expenses) Income (3,117) (2,434)
------------------------------
OPERATING INCOME 721 557
------------------------------
Interest Income (Expense) (45) (358)
Foreign Exchange and Monetary
Restatement Gain (Loss) 21 (1)
------------------------------
NET INCOME BEFORE INCOME TAX 697 198
------------------------------
Income taxes (213) (87)
------------------------------
NET INCOME BEFORE MINORITY INTEREST R$ 484 R$ 111
==============================
Minority Interest - (47)
------------------------------
NET INCOME 484 64
------------------------------
NET INCOME PER COMMON SHARE
BASIC AND DILUTED R$ 0.06 R$ 0.01
==============================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
BASIC AND DILUTED 8,102,177 8,066,540
==============================
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(in thousands of Brazilian Reais, except share amounts)
September 30, December 31,
2005 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents R$ 972 R$ 1,717
Inventories 1,879 2,366
Accounts receivable --
Clients 1,676 1,820
Franchisees 4,580 5,690
Allowance for doubtful accounts (1,420) (1,420)
Prepaid expenses 756 874
Other current assets 1,093 1,166
TOTAL CURRENT ASSETS 9,536 12,213
PROPERTY AND EQUIPMENT, NET 16,600 16,142
DEFERRED CHARGES, NET 5,645 6,307
OTHER RECEIVABLES AND OTHER ASSETS 4,170 3,197
TOTAL ASSETS R$ 35,951 R$ 37,859
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Notes payable R$ 4,048 R$ 5,976
Accounts payable and accrued expenses 5,543 6,104
Payroll and related accruals 2,937 1,956
Income taxes accruals 68 343
Taxes, other than income taxes 635 768
Deferred income 866 784
Reassessed taxes 1,713 1,339
Other current liabilities 510 178
TOTAL CURRENT LIABILITIES 16,320 17,448
NOTES PAYABLE, less current portion 428 1,489
DEFERRED INCOME, less current portion 2,997 2,628
CONTINGENCIES AND REASSESSED TAXES, less
current portion (note 4) 18,696 20,457
OTHER LIABILITIES -- 29
TOTAL LIABILITIES 38,441 42,051
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 5,000
shares authorized; no shares issued -- --
Common stock, $.0001 par value, 12,500,000
shares authorized; 8,102,177 shares
issued and outstanding 1 1
Additional paid-in capital 59,865 59,865
Treasury Stock (100) --
Deficit (61,309) (63,131)
Accumulated comprehensive loss (947) (927)
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,490) (4,192)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT) R$ 35,951 R$ 37,859
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