Brazil Fast Food Announces First Quarter 2009 Results

Brazil Fast Food Corp. (OTC Bulletin Board: BOBS.OB) ('Brazil Fast Food', or the 'the Company') the second largest fast-food restaurant chain with 671 points of sale, operating under the Bob's and KFC brands in Brazil, reported today financial results for the first quarter ended on March 31, 2009.

First Quarter 2009 Highlights

- System-wide sales reached R$ 168.15 million, up 16.8% from the first quarter of 2008

- Total revenue reached R$44.2 million, up 50% from the first quarter of 2008

- Operating income totaled R$1.8 million, down from R$2.3 million in the first quarter of 2008

- Net income was R$1.1 million, or R$0.14 per diluted share in the first quarter 2009

'We are pleased with our strong profitable growth this quarter despite the difficult operating environment brought about by the international financial crisis,' said Mr. Ricardo Bomeny, Chairman and CEO of Brazil Fast Food. 'In the first quarter revenues were up 50% as we fully consolidated our Pizza Hut restaurants and added new points of sale under the Bob's and KFC brand, increasing system-wide store count to 671.'

First Quarter 2009 Results

System-wide sales grew 16.8% in the first quarter to R$ 168.15 million, driven by the increase in the number of franchised points of sales.

Total revenue for the first quarter 2009 increased 50% to R$44.2 million driven primarily by the consolidation of the Company's Pizza Hut business, but also by the expansion of Bob's and KFC points of sale as well as by solid own-store sales growth from the Company's own-operated restaurants.

Net revenue for company-owned and operated retail outlets was up 70% to R$35.0 million year-over-year as the Company consolidated 14 Pizza Hut stores, and added 1 store under the Bob's brand and 4 under the KFC brand. Same store sales, which measure the performance of stores open for more than a year, were up by 13.6% for Bob's and 11.9 for KFC.

Net revenue from franchisees increased 23% year-over-year to R$6.1 million, driven by an increase in number of franchised retail outlets to 582, up from 532 in the same period a year ago. Other revenue and other income totaled R$3.0 million.

Operating expenses were up 56.3% to R$42.3 million driven by higher costs associated with the increase in number of own stores, as well as integration expenses associated with the acquisition of IRB in 2008. In addition the company incurred higher franchise costs as it grow its franchisee network to 582 units.

Operating income for the first quarter of 2009 was R$1.8 million, compared to R$2.3 million during first quarter of 2008. Operating margin in the first quarter of 2009 was 4.1% down from 7.7% in the same period last year mainly because of the increase in food/beverage/packing costs due to local inflation and to the Brazilian currency devaluation against de dollar.

Net income for the first quarter of 2009 was R$1.1 million or R$0.14 per basic and diluted share, as compared to net income of R$2.0, or R$0.25 per basic and diluted share, during the first quarter of 2008.

Financial Condition

Cash and cash equivalents on March 31, 2009 totaled R$12.4 million, up from R$10.4 million on December 31, 2008. For the quarter ended March 31, 2009, the Company had net cash provided by operating activities of R$5.5 million compared to R$4.4 million in 2008, net cash used in investing activities of R$ 2.7 million compared to R$0.6 million in 2008, and net cash used by financing activities of R$0.9 million (R$1.4 million in 2008). Net cash used in investing activities was primarily the result of Company's investment in property and equipment to improve Company's retail operations, mainly setting up new own-operated KFC stores. Net cash used in financing activities was mainly the result of repayments to financial institutions which funded the IRB (Pizza Hut) acquisition.

Business Outlook

'The Company is particularly pleased with the trend of the operating results in the Bob's and Pizza Hut stores whilst KFC is still targeting operational scale. During the first quarter we focused a lot of our management's attention on integrating our multiple brands under a common organization structure that should allow us to increase our operating leverage and maximize the synergies from operating a multi-brand business model. We took steps to integrate G&A activities of the various brands, which will lead to optimizing these costs in the near future,' said Ricardo Bomeny, Chief Executive Officer of Brazil Fast Food. 'The economic environment remains difficult, but our business is tracking well, and we feel we are well positioned with industry leading restaurant concepts as well broad geographic exposure within Brazil to continue to show steady profitable growth in our business.'

Brazil Fast Food is on target to reach the mark of around 740 points of sale in 2009. In addition, the Company will continue to assess opportunities for expansion into other countries in Latin America. We intend opening the first two Bob's restaurants in Chile in 2009.

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