<PAGE>
Page 1 of 14
Washington, D.C. 20549
Form 10-Q
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-23278
Brazil Fast Food Corp.
(Exact name of registrant as specified in its charter)
Delaware 13-3688737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Praia do Flamengo, 200-22c. Andar, CEP 22210-030, Rio de Janeiro, Brazil
(Address of principal executive offices)
011-55-21-285-2424
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. /X/ Yes / / No
Applicable Only to Issuers Involved in Bankruptcy
Proceeding During the Preceding Five Years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act 1934 subsequent to the distribution of securities under a plan
confirmed by a court. / / Yes / / No
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
12,304,484 shares of Common Stock at September 18, 1997
<PAGE>
Page 2 of 14
Part I - Financial Information
Item 1. Financial Statements
The condensed financial statements included herein have been prepared by
Brazil Fast Food Corp. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. While certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, the Company believes that the disclosures made herein are
adequate to make the information presented not misleading.
<PAGE>
Page 3 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1997 DECEMBER 31, 1996
- --------------------------------------------------------------------------- ------------------ -----------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.................................................. R$ 1,530,000 R$ 1,556,000
Accounts receivable, net................................................... 2,867,000 1,567,000
Inventories................................................................ 552,000 870,000
Prepaid and other assets................................................... 993,000 1,267,000
------------------ -----------------
TOTAL CURRENT ASSETS....................................................... 5,942,000 5,260,000
PROPERTY AND EQUIPMENT, NET................................................ 23,447,000 24,612,000
DEFERRED CHARGES, NET...................................................... 13,802,000 14,294,000
GOODWILL, NET.............................................................. 5,438,000 6,427,000
OTHER...................................................................... 188,000 20,000
------------------ -----------------
TOTAL ASSETS............................................................... R$ 48,817,000 R$ 50,613,000
------------------ -----------------
------------------ -----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable.............................................................. R$ 3,023,000 R$ 1,995,000
Accounts payable and accrued expenses...................................... 3,678,000 4,896,000
Payroll and related accruals............................................... 2,741,000 2,460,000
Taxes, other than income taxes............................................. 641,000 917,000
Deferred income............................................................ 990,000 657,000
Other...................................................................... 817,000 462,000
------------------ -----------------
TOTAL CURRENT LIABILITIES.................................................. 11,890,000 11,387,000
------------------ -----------------
NOTES PAYABLE, less current portion........................................ 716,000 2,729,000
DEFERRED INCOME, less current portion...................................... 3,149,000 2,997,000
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 5,000 shares authorized; no shares
issued................................................................... -- --
Common stock, $.0001 par value, 20,000,000 shares authorized; 12,304,484
and 10,404,484 shares issued and outstanding at September 30, 1997 and
December 31, 1996, respectively.......................................... 1,000 1,000
Additional paid-in capital................................................. 44,698,000 38,530,000
Accumulated deficit........................................................ (11,441,000) (5,038,000)
Cumulative translation adjustment.......................................... (196,000) 7,000
------------------ -----------------
TOTAL SHAREHOLDERS' EQUITY................................................. 33,062,000 33,500,000
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................. R$ 48,817,000 R$ 50,613,000
------------------ -----------------
------------------ -----------------
</TABLE>
<PAGE>
Page 4 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE VENBO
MONTHS ENDED JANUARY 1, 1996
SEPTEMBER 30, THROUGH
-------------------------------- MARCH 18,1996
1997 1996 (PREDECESSOR)
--------------- --------------- ---------------
<S> <C> <C> <C>
NET OPERATING REVENUES:
Restaurant sales............................................... R$ 53,343,000 R$ 33,975,000 R$ 16,427,000
Franchise income............................................... 1,033,000 362,000 176,000
Other income................................................... 1,214,000 662,000 124,000
--------------- --------------- ---------------
TOTAL NET OPERATING REVENUES................................... 55,590,000 34,999,000 16,727,000
--------------- --------------- ---------------
COSTS AND EXPENSES:
Cost of restaurant sales....................................... 18,839,000 12,643,000 7,041,000
Restaurant payroll and other employee benefits................. 13,170,000 7,787,000 3,538,000
Restaurant occupancy and other expenses........................ 5,430,000 2,812,000 1,188,000
Depreciation and amortization.................................. 3,142,000 2,297,000 739,000
Other operating expenses....................................... 8,201,000 5,640,000 3,407,000
Selling expenses............................................... 3,473,000 1,907,000 964,000
General and administrative expenses............................ 8,484,000 6,372,000 3,952,000
--------------- --------------- ---------------
TOTAL COSTS AND EXPENSES....................................... 60,739,000 39,458,000 20,829,000
--------------- --------------- ---------------
(LOSS) FROM OPERATIONS......................................... (5,149,000) (4,459,000) (4,102,000)
INTEREST (EXPENSE) INCOME...................................... (1,242,000) (6,000) 1,322,000
OTHER (EXPENSE) INCOME......................................... (12,000) (33,000) 299,000
--------------- --------------- ---------------
(LOSS) BEFORE RECOVERY OF INCOME TAXES......................... (6,403,000) (4,498,000) (2,481,000)
RECOVERY OF INCOME TAXES....................................... -- 54,000 --
--------------- --------------- ---------------
NET (LOSS)..................................................... R$ (6,403,000) R$ (4,444,000) R$ (2,481,000)
--------------- --------------- ---------------
--------------- --------------- ---------------
NET (LOSS) PER COMMON SHARE.................................... R$ (.59) R$ (.65)
--------------- ---------------
--------------- ---------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING..................... 10,781,151 6,793,312
--------------- ---------------
--------------- ---------------
</TABLE>
<PAGE>
Page 5 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED SEPTEMBER 30,
--------------------------------
<S> <C> <C>
1997 1996
--------------- ---------------
NET OPERATING REVENUES:
Restaurant sales................................................................ R$ 17,707,000 R$ 17,442,000
Franchise income................................................................ 320,000 201,000
Other income.................................................................... 386,000 320,000
--------------- ---------------
TOTAL NET OPERATING REVENUES.................................................... 18,413,000 17,963,000
--------------- ---------------
COSTS AND EXPENSES:
Cost of restaurant sales........................................................ 6,268,000 6,201,000
Restaurant payroll and other employee benefits.................................. 4,338,000 3,894,000
Restaurant occupancy and other expenses......................................... 1,893,000 1,451,000
Depreciation and amortization................................................... 1,104,000 1,167,000
Other operating expenses........................................................ 2,548,000 2,428,000
Selling expenses................................................................ 1,288,000 1,131,000
General and administrative expenses............................................. 2,691,000 3,558,000
--------------- ---------------
TOTAL COSTS AND EXPENSES........................................................ 20,130,000 19,830,000
--------------- ---------------
(LOSS) FROM OPERATIONS.......................................................... (1,717,000) (1,867,000)
INTEREST (EXPENSE) INCOME....................................................... (348,000) (248,000)
--------------- ---------------
(LOSS) BEFORE RECOVERY OF INCOME TAXES.......................................... (2,065,000) (2,115,000)
RECOVERY OF INCOME TAXES........................................................ -- 67,000
--------------- ---------------
NET (LOSS)...................................................................... R$ (2,065,000) R$ (2,048,000)
--------------- ---------------
--------------- ---------------
NET (LOSS) PER COMMON SHARE..................................................... R$ (.19) R$ (.22)
--------------- ---------------
--------------- ---------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING...................................... 11,071,151 9,170,817
--------------- ---------------
--------------- ---------------
</TABLE>
<PAGE>
Page 6 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL CUMULATIVE
----------------------- PAID-IN ACCUMULATED TRANSLATION
SHARES PAR VALUE CAPITAL DEFICIT ADJUSTMENT TOTALS
------------ --------- --------------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997.......... 10,404,484 R$ 1,000 R$ 38,530,000 R$(5,038,000) R$ 7,000 R$33,500,000
Issuance of shares for private
placements...................... 1,900,000 -- 6,168,000 -- -- 6,168,000
Net loss for the period........... -- -- -- (6,403,000) -- (6,403,000)
Cumulative translation
adjustment...................... -- -- -- -- (203,000) (203,000)
------------ --------- --------------- ------------- ------------- ------------
Balance, September 30, 1997....... 12,304,484 R$ 1,000 R$ 44,698,000 (R$11,441,000) R$ (196,000) R$33,062,000
------------ --------- --------------- ------------- ------------- ------------
------------ --------- --------------- ------------- ------------- ------------
</TABLE>
<PAGE>
Page 7 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
VENBO
------------
FOR THE NINE JANUARY 1,
MONTHS ENDED 1996
SEPTEMBER 30, THROUGH
-------------------------------- MARCH 18,1996
1997 1996 (PREDECESSOR)
--------------- --------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)................................................... R$ (6,403,000) R$ (4,444,000) R$(2,481,000)
Adjustments to reconcile net (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization............................ 3,142,000 2,297,000 544,000
Changes in operating assets and liabilities, net of effects
from acquisition of businesses:
(Increase) decrease in:
Accounts receivable, net................................. (1,300,000) 320,000 605,000
Inventories.............................................. 318,000 37,000 1,158,000
Other current assets..................................... 274,000 (634,000) 122,000
Other.................................................... (59,000) (314,000) --
Increase (decrease) in:
Accounts payable and accrued liabilities................. (1,218,000) 182,000 (2,376,000)
Payroll and related accruals............................. 281,000 661,000 207,000
Taxes, other than income taxes........................... (275,000) (132,000) (78,000)
Deferred income.......................................... 485,000 3,865,000 --
Other current liabilities................................ 355,000 (345,000) (1,143,000)
--------------- --------------- --------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.... (4,400,000) 1,493,000 (3,442,000)
--------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES :
Capital expenditures......................................... (605,000) (4,007,000) --
Increase in restricted cash and investments.................. -- (109,000) --
Release of restricted cash and investments................... -- 10,184,000 --
Acquisitions of businesses................................... -- (24,078,000) --
--------------- --------------- --------------
NET CASH (USED IN) INVESTING ACTIVITIES................ (605,000) (18,010,000) --
--------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in short-term borrowings.......................... (986,000) 3,409,000 --
Proceeds from private placements............................. 6,168,000 16,071,000 --
Increase in due to related parties........................... -- -- 2,162,000
--------------- --------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES.............. 5,182,000 19,480,000 2,162,000
--------------- --------------- --------------
EFFECT OF FOREIGN EXCHANGE RATES............................... (203,000) (437,000) --
--------------- --------------- --------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS........... (26,000) 2,526,000 (1,280,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD................. 1,556,000 28,000 1,280,000
--------------- --------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD....................... R$ 1,530,000 R$ 2,554,000 R$ --
--------------- --------------- --------------
--------------- --------------- --------------
</TABLE>
<PAGE>
Page 8 of 14
BRAZIL FAST FOOD CORP. AND SUBSIDIARIES
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared by Brazil Fast
Food Corp. (the "Company"), without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows
at September 30, 1997 and for all periods presented have been made. The
results of operations for the period ended September 30, 1997 are not
necessarily indicative of the operating results for a full year.
Certain information and footnote disclosures prepared in accordance with
general accepted accounting principles and normally included in the financial
statements have been condensed or omitted. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
The accompanying financial statements have been presented in Brazilian
Reais, in accordance with generally accepted accounting principles used in
the United States. Through June 30, 1997, the financial statements have been
indexed and expressed in currency of constant purchasing power by using a
monthly index derived from the Indice Geral de Precos-Mercado (IGP-M).
Effective July 1, 1997, management determined that Brazil ceased to be
considered a hyperinflationary economy, as defined in FASB 52, and no longer
indexed its financial statements for constant currency purchasing power.
NOTE 2--SHAREHOLDERS' EQUITY
During the nine months ended September 30, 1997, the Company sold
1,900,000 shares of its common stock from which the Company derived net
proceeds of R$6,168,000.
<PAGE>
Page 9 of 14
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
As the nature of the Company's operations subsequent to its acquisition (the
"Acquisition") of Venbo Comercio de Alimentos Ltda. ("Venbo") on March 19,
1996 are significantly different from its operations prior to the
Acquisition, the following unaudited comparative financial data of the
Company for the three months ended September 30, 1996 and for the three
months ended September 30, 1997 are included herein in an effort to
facilitate a meaningful presentation of the Company's post-Acquisition
operating results.
Since the implementation of the Real Plan in June 1994, the Brazilian Economy
has experienced declining levels of inflation rates. The cumulative inflation
rate for the three-year period July 1994 to June 1997, as measured by the
IGP-M (Indice Geral de Precos Mercado), was 54% whereas in the three year
period from June 1994 to May 1997 the rate was in excess of 100%. Considering
the above, and the fact that there is a clear historical trend of decreasing
inflation in Brazil, Management has made the determination that Brazil is no
longer a hyperinflationary economy as from July 1, 1997 on, as defined, pursuant
to FASB 52. No change in functional currency is being made. Brazil Fast Food
Corp. has been reporting its financial statements in Brazilian Reais since
its Acquisition on March 19, 1996.
Accordingly, operating results for the periods ended September 30, 1996
presented in the accompanying financial statements have been indexed and
expressed in currency of constant purchasing power at June 30, 1997 by using
a monthly index derived from Indice Geral de Precos - Mercado (IGP-M). The
Company believes that the IGP-M index is an appropriate general price level
inflation indication to be used under US GAAP. For the period comprised
between October 1, 1996 to June 30, 1997, the inflation as measured by the
IGP-M was 6.38%.
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, % September 30, %
------------- -------------
1996 1997
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Net operating revenues
- Restaurant sales................... R$ 17,442 R$17,707
- Franchise income................... 201 320
- Other income....................... 320 386
------------- -------------
Total net operating revenues........... 17,963 100.0 18,413 100.0
------------- ----- ------------- -----
Costs and expenses:
- Cost of restaurant sales........... 6,201 34.5 6,268 34.0
- Restaurant payroll and other
employee benefits................ 3,894 21.7 4,338 23.6
- Restaurant occupancy costs and
other expenses................... 1,451 8.1 1,893 10.3
- Depreciation and amortization...... 1,167 6.5 1,104 6.0
- Other operating expenses........... 2,428 13.5 2,548 13.8
- Selling expenses................... 1,131 6.5 1,288 7.0
- General and administrative
expenses......................... 3,558 19.8 2,691 14.6
------------- ----- ------------- -----
Total costs and expenses............... 19,830 110.6 20,130 109.3
------------- ----- ------------- -----
Loss from operations................... (1,867) (10.6) (1,717) (9.3)
------------- ----- ------------- -----
Interest expense....................... (248) 1.9 (348) (1.9)
(Loss) before Income Taxes............. (2,115) (12.5) (2,065) (11.2)
------------- ----- ------------- -----
Recovery of Income Taxes............... 67 0 0 0
------------- ----- ------------- -----
Net (Loss)............................. (2,048) (12.5) R$ (2,065) (11.2)
</TABLE>
<PAGE>
Page 10 of 14
RESTAURANT SALES
Net restaurant sales for company-owned stores were R$ 17,442,000 and
R$ 17,707,000, respectively, for the third quarters of 1996 and 1997. The
increase from period to period is mainly due to an increase in the number of
company-owned stores from 74 at September 30, 1996 to 82 at September 30,
1997, partially offset by reduced traffic in stores and an average price
reduction of 3%, effective August 6, 1997.
FRANCHISE INCOME
Franchise income was R$ 201,000 and R$ 320,000, respectively, for the third
quarter of 1996 and 1997. The quarter to quarter increase is primarily due to
the expansion of the number of franchisee stores from 24 at September 30, 1996
to 50 at September 30, 1997.
COST OF RESTAURANT SALES
Cost of restaurant sales expressed as a percentage of net operating revenues
decreased from 34.5% for the quarter ended September 30, 1996 to 34.0% for
the quarter ended September 30, 1997. This reduction is due to the continuous
renegotiation of purchase terms and prices with suppliers and alternative
sourcing of products. Major products such as meat, french fries and ice cream
have had their costs reduced in excess of 15% over the last eighteen months.
RESTAURANT PAYROLL AND OTHER EMPLOYEE BENEFITS
Restaurant payroll and other employee benefits expressed as a percentage of
net operating revenues were approximately 21.7% and 23.6% for the quarters
ended September 30, 1996 and 1997, respectively. The increase is attributable
to increased salaries mandated by union agreements during the latter part of
1996 and from July 1997 (Sao Paulo stores), as well as increased medical
and transportation costs. These increased costs were partially offset by a
reduced headcount in 1997 and the adoption of a new recruitment program in
1997 allowing for a greater degree of flexibility in manpower usage and lower
costs of recruitment and replacement of staff.
RESTAURANT OCCUPANCY COSTS AND OTHER EXPENSES
Restaurant occupancy costs and other expenses expressed as a percentage of
net operating revenues were approximately 8.1% and 10.3% for the quarters
ended September 30, 1996 and 1997, respectively. The increase is primarily
related to the increased number of leased stores in 1997 as compared with
1996.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expressed as a percentage of net operating
revenues was approximately 6.5% and 6.0% for the quarters ended September 30,
1996 and 1997, respectively. Depreciation and amortization expenses in 1997
remained fairly consistent as compared with 1996.
OTHER OPERATING EXPENSES
Other operating expenses expressed as a percentage of net operating revenues
were approximately 13.5% and 13.8% for the third quarters of 1996 and 1997,
respectively. The results of renegotiated service contracts (legal,
accounting, human resources and others) were compensated by the increase in
utilities and certain store expenses due to the increased number of stores,
thus leading to fairly constant amounts in 1997 when compared with 1996.
<PAGE>
Page 11 of 14
SELLING EXPENSES
Selling expenses, expressed as a percentage of total net operating revenues,
were approximately 6.5% and 7.0% for the quarters ended September 30, 1996
and 1997, respectively. Selling expenses increased by R$ 157,000 or 14% period
to period, reflecting increased marketing efforts initiated in the second
half of fiscal 1996.
GENERAL AND ADMINISTRATIVE EXPENSIVE
General and administrative expenses expressed as a percentage of net
operating revenues were approximately 19.8% and 14.6%, respectively, for the
quarters ended September 30, 1996 and 1997. General and administrative
expenses decreased by R$ 867,000 or 32%. Approximately R$ 430,000 of this
decrease is due to lower pre-operating expenses related to new store openings
(11 stores and 3 stores in each of the quarters ended September 30, 1996 and
1997 respectively). The remainder of the decrease is attributable to:
(i) greater use of outsourcing for certain administrative functions previously
performed by headquarters personnel, (ii) restructuring of the middle
management level of the Company, eliminating certain positions, (iii) a
freeze on hiring of additional headquarters personnel in excess of 1995 staff
levels, and (iv) voluntary salary reductions by the Company's senior
management.
INTEREST INCOME AND EXPENSES
The increase in interest expense is attributable to an increase in borrowings
from revolving lines of credit as well as the imposition by the Brazilian
government of a tax charge at a flat rate of 0.2% on every bank account
payment issued, as from early 1997.
<PAGE>
Page 12 of 14
LIQUIDITY AND CAPITAL RESOURCES
Since its Acquisition on March 19, 1996, the Company has funded its
operating losses and made acquisitions of businesses and capital improvements
(including furniture, fixtures and equipment) by using cash remaining at the
closing of the Acquisition, cash flow generated by operations and by
borrowing funds from various sources. As of September 30, 1997, the Company
had cash on hand of R$ 1,530,000 and a working capital deficiency of
R$ 5,948,000.
The Company's capital requirements are primarily for expansion of its
retail operations. Currently, 73 of the Company's stores are in leased
facilities and 9 are owned by the Company. During fiscal 1996, the Company's
average cost to open a store approximated R$ 300,000 to R$ 400,000, including
leasehold improvements, equipment and beginning inventory, as well as all
expenses for store design, site selection, lease negotiation, construction
supervision and permitting. The Company currently estimates that the capital
expenditures through fiscal 1997 will approximate R$ 3,000,000.
In August 1997, the Company completed a private placement of 1,500,000
shares of its common stock to an institutional investor receiving net
proceeds of R$ 4,897,000.
The Company's continued operations are dependent in part upon its ability
to increase sales volume through enhancements of its stores, including but
not limited to new computerized systems, air conditioning and refurbishment
of interior designs. These activities, as well as sales promotional
activities, require a substantial amount of cash which the Company believes
will be generated from its current operations. The Company's working capital
deficit, as well as its need to improve its facilities, will be supported by
cash flow from operations, the proceeds of equity sales, and its borrowing
facilities.
The Company has also embarked on a plan to substantially reduce its
costs, specifically in the area of food purchases and general administrative
expenses. In the opinion of management, these actions, coupled with cash flow
from operations, vendor financing, available bank and equipment lines of
credit and sales of equity, will provide sufficient working capital for
it to continue through the end of 1997.
<PAGE>
Page 13 of 14
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) None
<PAGE>
Page 14 of 14
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report, as amended, to be signed on its
behalf by the undersigned thereunto duly authorized.
Brazil Fast Food Corp.
(registrant)
Dated: November 18, 1997
By: /s/ Peter van Voorst Vader
------------------------------------
Peter van Voorst Vader
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Marcos Bastos Rocha
------------------------------------
Marcos Bastos Rocha
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,530,000
<SECURITIES> 0
<RECEIVABLES> 3,054,000
<ALLOWANCES> (187,000)
<INVENTORY> 552,000
<CURRENT-ASSETS> 993,000
<PP&E> 27,499,000
<DEPRECIATION> (4,052,000)
<TOTAL-ASSETS> 48,817,000
<CURRENT-LIABILITIES> 11,890,000
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 33,061,000
<TOTAL-LIABILITY-AND-EQUITY> 48,817,000
<SALES> 53,343,000
<TOTAL-REVENUES> 55,590,000
<CGS> 18,839,000
<TOTAL-COSTS> 60,739,000
<OTHER-EXPENSES> 12,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,242,000
<INCOME-PRETAX> (6,403,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,403,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,403,000)
<EPS-PRIMARY> (.59)
<EPS-DILUTED> (.59)
</TABLE>
