Brazil Fast Food Announces Second Quarter 2013 Results

Before you go, we thought you'd like these...
Before you go close icon

Brazil Fast Food Announces Second Quarter 2013 Results

RIO DE JANEIRO--(BUSINESS WIRE)-- Brazil Fast Food Corp. (OTC Markets: BOBS) ("Brazil Fast Food", or "the Company"), the second largest fast-food restaurant chain in Brazil with 1,057 points of sale, operating under (i) the Bob's brand, (ii) the Yoggi brand, (iii) KFC and Pizza Hut São Paulo as franchisee of Yum! Brands, and (iv) Doggis as master franchisee of Gastronomia & Negocios S.A. (former Grupo de Empresas Doggis S.A.), today announced financial results for the second quarter ended June 30, 2013.

Second Quarter 2013 Highlights

  • System-wide sales totaled R$286.0 million, up 13% from R$254.2 million in the second quarter 2012
  • Franchised points of sale totaled approximately 982, up from 963 at the end of the second quarter of 2012
  • Revenue totaled R$57.0 million, up 14% from R$49.9 million (reclassified) in the second quarter 2012
  • Operating income increased 25% to R$6.3 million, from R$5.0 million in the second quarter 2012
  • Net income was R$4.4 million, an increase of 21% from R$3.6 million in the second quarter 2012
  • Earnings per basic and fully diluted share was R$0.54, as compared to R$0.45 per basic and diluted share in the comparable year-ago quarter

"We are pleased that sales from both our Company-owned restaurants and our franchised restaurants have continued to grow, and that our ongoing strategy of opening more franchised stores is reflected in robust net income growth.", said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. "We have continued to invest in property and equipment to improve retail operations and believe our policy of retaining future earnings for their development will generate strong sustained growth."

Second Quarter 2013 Results

Higher sales from company owned stores, and an increase in the number of franchised points of sale, led to system-wide sales growth of 13% in the second quarter, up from R$254.2 million to R$286.0 million.

Total revenue for the second quarter 2013 increased by 14% to R$57.0 million, compared to R$49.9 million in the second quarter 2012.

Net restaurant sales for Company-owned retail outlets were up 14.6% to R$46.1 million for the three months ended June 30 2013, compared to R$40.2 million for the three months ended June 30 2012. This increase in sales is attributed to six recently opening of Pizza Hut-owned restaurants and to one Bob's-owned restaurant.

Net revenue from franchises increased 12.4% year over year to R$10.9 million, up from R$9.7 million, driven by higher same store sales and an increase in franchised retail outlets to 982 on June 30 2013, up from 893 in the same period a year ago.

Operating expenses grew 13% to R$50.7 million in the second quarter 2013 from R$44.9 million in the second quarter of 2012. As a percentage of revenue, operating costs declined to 89% of total revenue in the second quarter of 2013 compared to 90% of total revenue in the same period of 2012.

Operating income for the second quarter of 2013 increased by 25% to R$6.3 million, compared to R$5.0 million in the second quarter of 2012.

EBITDA in the second quarter of 2013 was R$8.0 million, compared to R$6.7 million in the second quarter of 2012. Please refer to Table 1 following the financial statements for a computation and description of EBITDA.

Interest expense remained at R$0.2 million in the second quarter of 2013, compared to interest expense of R$0.2 million in the second quarter of 2012.

Net income for the second quarter of 2013 rose to R$4.4 million, or R$ 0.54 per basic and diluted share, up 21% from net income of R$3.6 million, or R$0.45 per basic and diluted share in the same period of 2012.

Six Months 2013 Results

For the six months ended in June 30, 2013, total net revenue was R$115.3 million, up 11.4% from R$103.5 million in the comparable period of 2012. Operating income was R$16.5 million, up 57% from R$10.6 million in the comparable period in 2012. Net income for the six months ended June 30, 2013 was R$11.2 million, up from R$7.0 million in the comparable period in 2012, an increase of 58%. Basic and diluted earnings per share were R$1.37 for the six months ended June 30, 2013 compared to R$0.87 for the six months ended June 30, 2012.

The increase in sales was driven by both higher sales from the company-owned restaurants and by growth in the franchise business.

Based on the criterion of same-store sales, which only includes stores that have been open for more than one year and is a metric that is not in accordance with IFRS accounting principles but is often used in retail industry analysis, the greatest growth from the Company-owned restaurants was seen in KFC, driven primarily by its restaurants in shopping centers, and were approximately 6.9% higher than they had been in the comparable period the year before. By the same store criterion, Pizza Hut's net restaurant sales increased 5.0% for the six-month period ended June 30, 2013 relative to the comparable year-ago period which is attributable to the launch of new products, the reformulation of the breakfast menu and the introduction of a take-out system at selected restaurants.

Net franchise revenues have increased 15.5% to R$22.7 million for the six months ended June 30, 2013 from R$19.7 million in comparable year-ago period, an increase of. This growth was driven by the growth of the franchise business to 982 as of June 30, 2013 from 893 outlets as of June 30 2012 with the Bob's brand accounting for most of the franchise activity.

Operating income for the first semester of 2013 was R$ 16.5 million, an increase of 56.5% from R$ 10.6 million in the year-ago semester. The Company also recorded R$ 3.0 million gain on the sale of assets.

Financial Condition

As of June 30, 2013, Brazil Fast Food had R$37.0 million in cash and cash equivalents, up from R$32.0 million in cash and cash equivalents as of December 31, 2012.

Net working capital was R$34.7 million as of June 30, 2013, as compared to R$24.2 million as of December 31, 2012. Total shareholders' equity as of June 30, 2013 was R$72.7 million, compared to R$61.5 million at the end of fiscal 2012.

Business Outlook

Brazil has been experiencing resilient higher inflation which could potentially impact on the company's business operations. However, the Company has been able to minimize its impact through successful negotiations with its suppliers, keeping the cost of inputs 5 basis points below inflation, and by passing the increase in the cost of inputs onto the products. Moreover, in June 2013, Brazil experienced popular uprisings against poor public services, political corruption, and the government's lack of responsiveness to popular demands. Although the impact of these uprisings has been visible on both the economy and the popularity of Brazil's politicians in recent months, the outcome in the years ahead is unpredictable. "Although the economic and political conditions in Brazil continue to be challenging, we believe that we are building a strong franchise and remain optimistic about our long-term future", said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.

About Brazil Fast Food Corp.

Brazil Fast Food Corp., through its holding company in Brazil, BFFC do Brasil Participações Ltda. ("BFFC do Brasil", formerly 22N Participações Ltda.), and its subsidiaries, manage one of the largest food service groups in Brazil and franchise units in Angola and Chile. Our subsidiaries are Venbo Comércio de Alimentos Ltda. ("Venbo"), LM Comércio de Alimentos Ltda. ("LM"), PCN Comércio de Alimentos Ltda. ("PCN"), CFK Comércio de Alimentos Ltda. ("CFK", former Clematis Indústria e Comércio de Alimentos e Participações Ltda.), CFK São Paulo Comércio de Alimentos Ltda. ("CFK SP"), MPSC Comércio de Alimentos Ltda. ("MPSC"), FCK Comércio de Alimentos Ltda. ("FCK", former Suprilog Logística Ltda.), DGS Comércio de Alimentos Ltda. ("DGS"), Yoggi do Brasil Ltda. ("Yoggi"), Schott Comércio de Alimentos Ltda. ("Schott"), Little Boss Comércio de Alimentos Ltda. ("Little Boss"), CLFL Comércio de Alimentos Ltda. ("CLFL") and Internacional Restaurantes do Brasil S.A. ("IRB"). IRB has 40% of its capital held by Mascali Participações Ltda., another Brazilian limited liability company, whose main partner is the CEO of IRB.

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 financial reports, including the risk factors contained in the Company's most recent annual report and quarterly reports available on its websitewww.bffc.com.br.

BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
Consolidated Balance Sheets - Assets
(in thousands of Brazilian Reais, except share amounts)
      
June, 30December 31,
20132012
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalentsR$37,065R$32,062
Inventories2,9773,228
Accounts receivable
Clients - food sales9,6138,748
Franchisees17,94117,226
Allowance for doubtful accounts(255)(220)
Prepaid expenses970892
Advances to suppliers1,9092,092
Other current assets 6,485 6,601
TOTAL CURRENT ASSETS 76,705 70,629
 
NON-CURRENT ASSETS:
 
Other receivables and other assets13,03213,667
Deferred tax asset, net8,4618,565
Goodwill1,1211,121
Property and equipment, net42,71739,414
Intangible assets, net 9,912 8,280
TOTAL NON-CURRENT ASSETS 75,243 71,047
    
TOTAL ASSETSR$151,948R$141,676
 
 
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
Consolidated Balance Sheets - Liabilities and Shareholders' Equity
(in thousands of Brazilian Reais, except share amounts)
     
June, 30December 31,
20132012
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Loans and financingR$11,558R$14,523
Accounts payable and accrued expenses12,48913,834
Payroll and related accruals7,4014,782
Taxes4,2397,848
Current portion of deferred income4,2963,398
Current portion of litigations and reassessed taxes 2,070 2,090
TOTAL CURRENT LIABILITIES 42,053 46,475
 
 
Deferred income, less current portion1701,608
Loans and financing, less current portion12,6336,397
Litigations and reassessed taxes, less
current portion17,29818,472
Other liabilities 2,654 3,093
TOTAL NON-CURRENT LIABILITIES 32,755 29,570
 
    
TOTAL LIABILITIES 74,808 76,045
 
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000 shares authorized; no
shares issued--
Common stock, $.0001 par value, 12,500,000 shares authorized;
8,472,927 shares issued for both 2013 and 2012; and 8,129,437
shares outstanding for both 2013 and 201211
Additional paid-in capital61,14861,148
Treasury Stock (343,490 shares)(2,060)(2,060)
Retained Earnings14,6863,527
Accumulated comprehensive loss (1,035) (1,115)
TOTAL SHAREHOLDERS' EQUITY 72,740 61,501
Non-Controlling Interest 4,400 4,130
TOTAL EQUITY 77,140 65,631
    
TOTAL LIABILITIES AND EQUITYR$151,948R$141,676
 
 
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
 
Consolidated Statements of Operations (Unaudited)
(in thousands of Brazilian Reais, except share amounts)
    
Six Months Ended June 30,
2013 2012
(unaudited)(reclassified)
REVENUES FROM RESTAURANTS AND FRANCHISEES
Net revenues from own-operated restaurantsR$92,522R$83,863
Net revenues from franchisees 22,739 19,688
TOTAL REVENUES FROM RESTAURANTS AND FRANCHISEES 115,261 103,551
 
Store Costs and Expenses(90,400)(79,286)
Franchise Costs and Expenses(7,308)(6,808)
Administrative Expenses(14,966)(16,243)
Income from supply agreements13,54910,738
Other income3741,302
Other Operating Expenses(2,588)(2,785)
Net result of assets sold and impairment of assets 2,596 83
OPERATING INCOME 16,518 10,552
Interest Expense (320) (373)
NET INCOME BEFORE INCOME TAX 16,198 10,179
Income taxes (4,769) (2,706)
NET INCOME BEFORE NON-CONTROLLING INTEREST 11,429 7,473
Net loss attributable to non-controlling interest (270) (426)

NET INCOME ATTRIBUTABLE TO BRAZIL FAST FOOD CORP.

R$11,159R$7,047
 
NET INCOME PER COMMON SHARE
BASIC AND DILUTED
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Sat, Dec 03
Set Your Location
City, State, or Zip