RIO DE JANEIRO -- (Business Wire)

Brazil Fast Food Corp. (OTC Bulletin Board: BOBS) (“Brazil Fast Food”, or the “the Company”), the second largest fast-food restaurant chain in Brazil with 891 points of sale, operating under (i) the Bob’s brand, (ii) KFC and Pizza Hut São Paulo as franchisee of Yum! Brands, and (iii) Doggis as franchisee of Gastronomía & Negocios S.A. (formerly Grupo de Empresas Doggis S.A. (“GED”)), today announced financial results for the first quarter 2012 ended March 31, 2012.

First Quarter 2012 Highlights

• System-wide sales totaled R$254.2 million, up 15.0% from the first quarter 2011
• Revenue totaled R$60.5 million, up 10.2% from the first quarter 2011
• Points of sale totaled 891 at March 31, 2012, up from 781 at the end of first quarter 2011
• EBITDA was R$7.1 million, up 7.3% from the first quarter 2011
• Operating income increased 13.8% year-over-year to R$5.5 million
• Net income was R$3.4 million, or R$0.42 per basic and diluted share

“We began fiscal 2012 on a positive note as our revenue increased over 10% year-over-year and we continued to expand our market presence to a record 891 points of sale. Additionally, the decline in the number of Bob’s, KFC and Doggis’s point of sales reflects our strategy to limit direct operations to our most profitable outlets and to focus on growing our franchise network,” said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.

First Quarter 2012 Results

System-wide sales grew 15.0% in the first quarter to R$254.2 million, driven by an increase in the number of franchised points of sale as well as higher sales from company-owned stores.

Total revenue for the first quarter 2012 increased by 10.2% to R$60.5 million compared to R$54.9 million in the first quarter 2011. Revenue growth was primarily driven by the continued expansion of Brazil Fast Food’s franchisee network and higher sales from the Company’s franchisee business.

Net revenue for company-owned and operated outlets was up 8.6% year-over-year to R$43.6 million in the first quarter 2012, reflecting an increase in net revenues across the Company’s Bob’s, KFC and Pizza Hut brands, offset somewhat by a decrease in net revenues for the Company’s Doggis brand. At March 31, 2012, the Company had no own operated Doggis’ stores.

Net revenue from franchisees increased 31.6% year-over-year to R$10.0 million, driven primarily by an increase in number of franchised retail outlets to 826, up from 709 in the same period a year ago. Other revenue and income totaled R$0.3 million in the first quarter 2012.

Operating expenses grew 9.8% to R$55.0 million in the first quarter 2012, primarily due to increase in depreciation of headquarters’ fixed assets, accruals for contingencies and other expenses. As a percentage of revenue, operating costs slightly declined from 91.1% of total revenue in the first quarter of 2011 to 90.8% of total revenue in the first quarter 2012.

Operating income for the first quarter of 2012 was R$5.5 million, compared to R$4.9 million in the first quarter of 2011. Operating margin in the first quarter of 2012 was 9.2% compared to 8.9% in the same period of 2011.

EBITDA in the first quarter of 2012 was R$7.1 million, compared to R$6.6 million in the first quarter of 2011. EBITDA margin was 11.8% compared to 12.1% in the comparable period of 2011. Please refer Table No. 4 in this press release for a reconciliation of EBITDA to its nearest GAAP equivalent.

Net income for the first quarter of 2012 was R$3.4 million or R$0.42 per basic and diluted share, compared to net income of R$4.2 million or R$0.52 per basic and diluted share in the same period of 2011.

Financial Condition

As of March 31, 2012 the Company had R$24.1 million in cash and cash equivalents, up from R$21.4 million as of December 31, 2011. Working capital was R$17.6 million, as compared to R$16.9 million as of the end of 2011. Total shareholders' equity was R$49.3 million at the end of the first quarter of 2012, compared to R$45.5 million at the end of 2011.

Subsequent Events

On May 3, 2012, Brazil Fast Food and Yum! Restaurants International ("YRI") announced the satisfactory completion of the first phase of their efforts to expand the KFC brand in Brazil, pursuant to which the Company was engaged to provide franchise support services to KFC franchisees and to develop the KFC brand, upon its reentry into Brazil. Brazil Fast Food and YRI will remain close partners as the Company will continue to contribute to the development of YRI’s brands as a KFC franchisee focused in Rio de Janeiro and São Paulo and as a Pizza Hut franchisee with operations in the São Paulo metropolitan area.

Business Outlook

Brazil Fast Food completed the acquisition of Yoggi, a frozen yogurt brand in Brazil on May 17, 2012, to expand its product portfolio in the food service industry. Yoggi was founded in 2008 and now has a total of 60 points of sale in Brazil operated by franchisees across the country. Brazil Fast Food expects to increase the total number of points of sale to 150 over the next five years.

“With the acquisition of Yoggi, we have now expanded our product offerings and improved our ability to cater to our customers taste and preferences. We are seeing an increasing level of consumer interest in frozen yogurt and expect this trend to continue. In 2012, we are focusing our efforts on enhancing our customer service and increasing guest counts and sales at our KFC stores by promoting KFC’s Buckets at dinner party and weekends. We also plan to enhance our own-operated Pizza Hut stores results, consolidate 'Pizza Hut Express with PHD platform' and expand our Pizza Hut stores. At the end of 2012, we expect Bobs’ brand to reach a total of 1000 points of sale, a 20.5% increase from 2011,” concluded Mr. Bomeny.

About Brazil Fast Food Corp.

Brazil Fast Food Corp. owns and operates, both directly and through franchisees, the second largest fast-food restaurant chain in Brazil. The Bob’s trade name is used by Venbo Comércio de Alimentos Ltda., a subsidiary of Brazil Fast Food holding company, BFFC do Brasil Participações Ltda (formerly 22N Participações Ltda.). The “KFC” trade name is used by CFK Comércio de Alimentos Ltda. (formerly Clematis Indústria e Comércio de alimentos e Participações Ltda.), also a holding company subsidiary. The “Pizza Hut” trade name is used by Internacional Restaurantes do Brasil (“IRB”), a subsidiary of Brazil Fast Food holding company, BFFC do Brasil Participações Ltda, which is a 60% owner of IRB. In 2008, the Company entered into an agreement with GED, now Gastronomía & Negocios S.A. to cross-franchise the Bob’s and Doggis brands in Chile and Brazil, respectively. Brazil Fast Food will control the Doggis’ master franchise in Brazil and Gastronomía & Negocios S.A. will control the Bob’s master franchise in Chile.

Safe Harbor Statement

This press release contains forward-looking statements 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, and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission.

EBITDA represents earnings before net interest expense, income tax provision, depreciation and amortization. Our management believes EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in evaluating companies in our industry. In addition, our management believes that EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending, which items may vary for different companies for reasons unrelated to overall operating performance. As a result, our management uses EBITDA as a measure to evaluate the performance of our business. However, EBITDA is not a recognized measurement under generally accepted accounting principles, or GAAP, and when analyzing our operating performance, investors should use EBITDA in addition to, and not as an alternative for, income from operations and net income, each as determined in accordance with GAAP. Not all companies use identical calculations, and our presentation of EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as a tax and debt service payments.

Contacts:

Brazil Fast Food Corp.
Ricardo Figueiredo Bomeny, CEO
Phone: +1-55-21-2536-7501 (Brazil)
Email: ir@bffc.com.br
URL: www.bffc.com.br
or
CCG Investor Relations Inc.
Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
URL: www.ccgir.com

Source: Brazil Fast Food Corp.