Total Shareholders' Equity More Than Doubles - Net Income Increases 35 Percent
Brazil Fast Food (OTC BB: BOBS.OB), a 580-outlet fast-food Bob´s chain and the second largest hamburger fast-food chain operator in Brazil, today announced financial results for its fourth quarter and year ended Dec. 31, 2007.
System-wide sales for the Company's 'Bob's' chain were R$143.3 million for the fourth quarter of 2007, up 15 percent from R$124.4 million for the last three months of 2006. Net restaurant sales for Brazil Fast Food Corp.'s company-owned retail outlets were R$21.8 million for the fourth quarter of 2007 compared with R$21.5 million for the fourth quarter of 2006. Net franchise revenue was R$5.8 million for the three-month period ended Dec. 31, 2007 - up 23 percent from 2006's fourth-quarter net franchise revenue of R$4.7 million. The Company's operating income was R$2.8 million for the fourth quarter of 2007 compared with R$2.9 million for the same period of 2006. Net income climbed 18 percent for the fourth quarter of 2007 to R$6.9 million, or R$0.83 per share, basic and diluted, from R$5.8 million, or R$0.70 per share, basic and diluted, for the fourth quarter of 2006. Earnings before interest, taxes, depreciation and amortization (EBITDA) were R$3.6 million, or R$0.44 per share, basic and diluted, for both the fourth quarter of 2007 and the fourth quarter of 2006.
For the twelve-moth period ended Dec. 31, 2007, Brazil Fast Food reported system-wide sales of R$488.2 million, up 15 percent from R$426.3 million for 2006. Net restaurant sales increased six percent to R$85.9 million for 2007 from R$80.9 million for 2006. Net franchise revenue rose 15 percent to R$18.8 million for 2007 from R$16.4 million for 2006. The Company's operating income was R$9.9 million for the year of 2007, up 11 percent from R$8.9 million for 2006. Net income increased 35 percent on a year-over-year basis - R$13.5 million, or R$1.65 per share, basic and diluted, compared with R$9.9 million, or R$1.22 per share, basic and diluted, for 2007 and 2006, respectively. EBITDA for 2007 was R$13.1 million, or R$1.60 per share, basic and diluted, compared with R$11.8 million, or R$1.45 per share, basic and diluted, for 2006.
Ricardo Figueiredo Bomeny, Chief Executive Officer of Brazil Fast Food Corp., commented, 'Our company reached a new level in its growth during 2007. We began the year with a corporate restructuring to consolidate our businesses. In addition to many other significant benefits, the restructuring has better positioned our Company to more effectively manage the three major aspects of our business - fast-food restaurants, franchises and real estate - and to seize new business opportunities.
'Leveraging our branding and operational expertise in Brazil's fast food market, we were able to reach a mutual agreement- through our then newly formed holding company, BFFC do Brasil Participações Ltda. (formerly 22N Participações Ltda.) - to franchise, operate and expand the KFC brand in Brazil. In April of 2007, we added four KFC stores to our fold of own-operated restaurants. We anticipate that KFC will provide an increasingly significant stream of additional revenue as we further enhance its brand power and presence in Brazil.
'Our top-line results continued to improve progressively in 2007, fueled primarily by the 63-outlet (net) expansion of our chain, our participation in such special events as the Pan American Games and by our strategic, multimedia marketing efforts. But, our bottom-line results were especially strong. Discipline and vigilance about cost control and efficiency yielded a 35 percent increase in net income for 2007. The response from investors has been enthusiastically positive: Total Shareholders' Equity more than doubled in 2007. Having previously repurchased 226,490 shares of Brazil Fast Food stock, our Company can fully appreciate this increase.
'Simply stated, our primary goal for 2008 is to continue to increase our top- and bottom-line results. By the end of 2008, we plan on having expanded our chain to 660 outlets and increased the presence of KFC, specifically in Rio de Janeiro. We are also boosting sales and increasing efficiency at our existing stores by installing refurbishing them, purchasing new restaurant equipment, and upgrading the technology system and computer bases at all of our Company-owned restaurants. Incorporating a more scientific approach to the layout of our restaurants, we are aiming to maximize our sales per square meter. To motivate our employees to differentiate Bob's from other fast-food competitors by providing the best service, we recently launched the 'Formula' campaign and the complementary 'AGIR' program. Our strategies may be numerous, but the goal is singular: To achieve a level of esteem in the minds of Brazilian consumers that is unapproachable for our competitors,' Mr. Bomeny concluded.
Brazil Fast Food 2007 highlights:
• Consolidation of our businesses through corporate restructuring
• Mutual agreement with Yum! Brands, one of the world's largest restaurant operators, to operate and expand the KFC chain in Brazil
• For the tenth year in a row, Bob's received the Quality Seal of the Brazilian Franchise Association
• Boost in revenue and brand recognition by participating as the exclusive fast-food vendor at the Pan American Games and the Para Pan American Games in Rio de Janeiro.
• Significant growth of our top and bottom line, including a 35 percent increase in net income for 2007, to R$13.5 million, or R$1.65 per share, basic and diluted, from R$9.9 million, or R$1.22 per share, basic and diluted, for 2006
• Total Shareholders' Equity more than doubled to R$23.5 million for 2007 from R$10.3 million for 2006.
• Over the course of 2007, Brazil Fast Food repurchased a total of 24,555 shares of its own common stock.
• Expansion of our Bob's chain by 63 outlets, net, to end the year with a total of 580 points of sale.
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