Brazil Fast Food Announces Second Quarter 2009 Results

Brazil Fast Food Corp. (OTC Bulletin Board: BOBS.OB) the second largest fast-food restaurant chain with 678 points of sale, operating under the Bob's, KFC and Pizza Hut brands in Brazil, reported today financial results for the second quarter ended on June 30, 2009.

Second Quarter 2009 Highlights

• System-wide sales reached R$ 150.7 million, up 33.5% from the second quarter of 2008

• Total revenue reached R$42.0 million, up 64.2% from the second quarter of 2008

• Operating income totaled R$1.7 million

• Net income was R$350 thousand, or R$0.04 per basic and diluted share

'We are pleased with our results for the quarter which reflect in part the recovery of the Brazilian economy from the recent global economic slowdown, but more importantly, the successful execution of our multi-brand strategy as we fully integrated the Pizza Hut acquisition, increased our scale, broadened our addressable market, and improved our leverage with our suppliers,' said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. 'We are also pleased to announce that subsequent to the end of the quarter we have opened our first Doggis store in Brazil, as well as the first Bob's store in Santiago, Chile. We expect to open this year the second store of both brands in each country.'

Second Quarter 2009 Results

System-wide sales grew 33.5% in the second quarter to R$ 150.7 million, driven first by the Pizza Hut sales that were not part of BFFC sales in 2008 and by the increase in the number of Bob's franchised points of sales.

Total net revenue for the second quarter 2009 increased 64.2% to R$42.0 million driven by the increase in the number of Bob's and KFC own stores from 61 to 71, the expansion of the franchisee network from 542 to 591 stores, and the consolidation of the 14 Pizza Hut restaurants acquired in the second half of 2008.

Net revenue for company-owned and operated stores was up 79.9% to R$33.4 million year-over-year driven by the increase in the number of stores the Company owns and operates as well as the Pizza Hut acquisition. Same store sales for KFC restaurants were up 2.4% over the same period in 2008.

Net revenue from franchisees was down 4.2% year-over-year to R$4.9 million driven by lower number of new franchise contracts signed in the quarter, resulting in lower initial fees. The Company believes the reduction in new franchise activity is a reflection of the on-going global economic crisis on franchisee investments.

Other revenue and other income amounted to R$ 2.1 million and R$ 1.5 million, up 54.4% and 217.9% over the comparable period of 2008, respectively.

Operating expenses were up 57.6% to R$40.3 million driven principally by the addition of the Pizza Hut stores and also by the overall increase in the number of the other brands' stores and the expansion of the franchisee network.

Operating income for the second quarter of 2009 was R$1.7 million, compared to an operating loss of R$10 thousand during second quarter of 2008. Operating margins expanded to 4.0% from a loss in the comparable period in 2008, as the Company implemented an aggressive program to improve the efficiency of its operations by reducing its labor force and renegotiating contracts with suppliers in response to the economic crisis. Bob's own stores improved the operating margin to 5.5 % compared to 2.4 % in the first half of 2008. In addition the Company benefited from synergies as well as from higher gross margins associated with the Pizza Hut acquisition.

Net income for the second quarter of 2009 was R$350 thousand, or R$0.04 per basic and diluted share. The company also highlights the fact that EBITDA for the second quarter 2009 was R$ 2.4 million compared to R$ 0.7 million in the second quarter 2008, demonstrating that the company is firmly coming out of the world crisis.

Six Months 2009 Results

For the six months ended June 30, 2009, net revenue was R$86.1 million, up 56.7% from R$55.0 million in the comparable period of 2008. Operating income for the six months ended June 30, 2009 was R$3.5 million, up 54.4% from R$2.3 million in the comparable period in 2008. Operating margin was 4.1% for the six months ended June 30, 2009 unchanged from the comparable period in 2008. Net income for the six months ended June 30, 2009 was $1.5 million, a decrease of 28.8% from $2.1 million in the comparable period in 2008. Basic and diluted earnings per share were R$0.18 for the six months ended in June of 2009 compared to R$0.25 for six months ended in June of 2008.

'Our strong top-line growth in the first half of 2009 was driven by the consolidation of Pizza Hut results, while the reduction in net income was due to higher interest expense related to the use of debt to finance the Pizza Hut acquisition,' said Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food.

Financial Condition

As of the balance sheet date on June 30, 2009 the Company had R$14.5 million in cash and Shareholder's equity stood at R$ 19.7 million. Cash flows from operations for the six months ended June 30, 2009 totaled R$7.1 million, compared to R$8.7 million during the six months ended June 30, 2008. Capital expenditures totaled R$5.5 million for the six months ended June 30, 2009.

Business Outlook

The Brazilian economy has shown signs of recovery, with GDP growing 0.7% in the second quarter of 2009, based on preliminary FGV estimates. Looking over the next several quarters, the outlook remains positive. Yet, the regression in industrial production will certainly keep GDP for 2009 negative at -1 to -1.5 %. There is an expectation that the economy will return to the 2-3% growth range by 2010. With an improving economic environment as the backdrop, Brazil Fast Food is well positioned to continue to grow its top and bottom lines as it leverages its industry leading brands to grow its footprint of restaurants.

The Company plans to invest R$ 10 million on its expansion program in 2009, with the goal of opening one Pizza Hut, three KFC, one Doggis and 20 Bob's restaurants in the next months of 2009, to end the year with 92 own-stores. The Company also expects to grow its franchised points of sale to 611 by the end of 2009. In addition, in 2010 the Company expects to begin the development of its KFC franchisee network.

'After a difficult period that started in the fourth quarter of 2008, we are seeing signs of recovery, with a pick up in sales growth that started in May and has continued into July,' commented Mr. Ricardo Bomeny, President and CEO of Brazil Fast Food. 'We have taken advantage of the challenging economic environment to renegotiate our contracts and to implement efficiency measures to reduce our costs and expand our margins. As we look to the future we are confident that our portfolio of brands, our improved cost structure, and a positive economic environment positions us well to deliver profitable growth to our shareholders in the quarters ahead.'

ABOUT BRAZIL FAST FOOD CORP.

Brazil Fast Food Corp. owns and operates, both directly or 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'), also a 60% subsidiary of Brazil Fast Food holding company, BFFC do Brasil Participações Ltda. As of Jun. 30, 2009, the Company had 678 points of sale, which includes traditional restaurants, kiosks and re-locatable trailers.

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