Brazil Fast Food Announces Third Quarter 2009 Results

Brazil Fast Food Corp. (OTC Bulletin Board: BOBS) the second largest restaurant chain with 684 points of sale, operating under the Bob's, Doggis, and KFC brands in Brazil as well as Pizza Hut in the State of São Paulo, Brazil , today reported financial results for the third quarter ended on September 31, 2009.

Third Quarter 2009 Highlights

• System-wide sales reached R$ 158.5 million, up 10.8% from the third quarter of 2008

• Total revenue reached R$46.5 million, up 56% from the third quarter of 2008

• EBITDA was R$4.6 million, up 63% from the third quarter of 2008

• Operating income totaled R$3.3 million, up from R$1.9 million in the third quarter of 2008

• Net income was R$2.1 million, or R$0.26 per diluted share

'We are pleased with the execution of our multi-brand strategy and with our financial results for the quarter,' said Mr. Ricardo Bomeny, Chairman and CEO of Brazil Fast Food. 'In the third quarter revenue was up an impressive 56% over the same period of last year, and EBITDA was up 63% to R$4.6 million. The acquisition of 14 Pizza Hut restaurants has been a key driver of our revenue growth and margin expansion in the quarter. This acquisition was a key component of our multi-brand strategy as it broadened our service offering into a higher margin segment of the restaurant business, increased our scale and improved our ability to compete in the market place. Our results for this quarter underlie the strength of our multi-brand business model and reaffirm our confidence in our strategic direction. With the backdrop of an improved economy and a portfolio of industry leading brands we remain well positioned to continue to deliver positive results in the quarters ahead.'

Third Quarter 2009 Results

System-wide sales grew 10.8% in the third quarter to R$ 158.8 million, driven by the increase in the number of franchised points of sales and the addition of 14 Pizza Hut restaurants acquired in December 2008.

Total revenue for the third quarter 2009 increased 56% to R$46.6 million driven primarily by the consolidation of the Company's Pizza Hut acquisition, but also by the expansion of Bob's, KFC and Doggis points of sale, as well as successful marketing campaigns promoting the company's best-selling 'Ovomaltine' milk-shakes and 'Big Bob' burger.

Net revenue for company-owned and operated retail outlets was up 70% to R$37.0 million year-over-year, as the Company consolidated its 14 Pizza Hut restaurants acquired in December of 2008, and added 2 new stores under the Bob's brand, 7 under the KFC brand and 1 store under the Doggis brand, compared to the same period of last year. Same store sales, which measure the performance of stores open for more than a year, were down by 2.3% for Bob's and 0.5% for KFC.

Net revenue from franchisees increased 7.4% year-over-year to R$6.1 million, driven by an increase in number of franchised retail outlets to 597, up from 558 in the same period a year ago. Other revenue and other income totaled R$3.4 million.

Operating expenses were up 54.9% to R$46.6 million mostly resulting from the consolidation of the Pizza Hut acquisition, and to a lesser extent due to higher costs associated with the increase in number of own stores, and higher prices of food and beverage due to local inflation. In addition the company incurred higher franchise costs as it grew its franchisee network to 597 units.

Operating income for the third quarter of 2009 was R$3.3 million, up 76% from R$1.9 million during third quarter of 2008. Operating margin in the third quarter of 2009 was 7.1% up from 6.3% in the same period last year mainly driven by gains from economies of scale as well as higher margin Pizza Hut restaurant sales.

Net income for the third quarter of 2009 was R$2.2 million or R$0.26 per basic and diluted share, as compared to net income of R$1.9, or R$0.24 per basic and diluted share, during the third quarter of 2008.

Financial Condition

Cash and cash equivalents on September 30, 2009 totaled R$10.7 million, up from R$10.4 million on December 31, 2008. For the quarter ended September 30, 2009, the Company had net cash provided by operating activities of R$7.7 million compared to R$1.8 million in 2008, net cash used in investing activities of R$ 8.8 million compared to R$7.0 million in 2008, and net cash from financing activities of R$1.4 million (R$8.0 million in 2008).

Business Outlook

'As we look to the future, we are encouraged by a more favorable economic outlook and by our improved competitive position and margin structure. During the quarter Rio de Janeiro was elected host to the 2016 Olympics, after having been selected as one of the cities to host the Soccer World Cup in 2014. We believe these events will attract significant investments that will contribute to economic growth in Brazil and more particularly in Rio de Janeiro for many quarters to come. With a portfolio of great restaurant brands, and a proven track record of execution we feel we expect to continue our progress as we pursue our vision of building a world-class multi-brand restaurant business in Latin America,' said Ricardo Bomeny, Chief Executive Officer of Brazil Fast Food.

Brazil Fast Food expects to end the fiscal year of 2009 with 753 outlets. For the current year, we are on target to add 70 Bob's points of sale, 6 KFC, 2 Doggis, and 1 additional Pizza Hut restaurant. In addition the Company will continue prospecting and evaluating additional brands and concepts to add to its mix of restaurants, and to assess opportunities for expansion in Latin America.

About Brazil Fast Food Corp.

Brazil Fast Food Corp. owns and operates, both directly or through franchisees, the second largest 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.

Logos, product and company names mentioned are the property of their respective owners.

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