<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 7, 1996
BRAZIL FAST FOOD CORP.
(Exact name of Registrant as specified in charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 0-23278 13-3688737
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
</TABLE>
Praia do Flamengo
200-22o. Andar
CEP 22210-30, Rio de Janeiro, Brazil N/A
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 55 21 285 2424
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of BigBurger Ltda. and affiliates (collectively,
"BigBurger").
(i) Report of Bendoraytes, Aizenman & Cia., Independent
Public Accountants;
(ii) Combined Balance Sheets of BigBurger Ltda as of June
30, 1996 (unaudited) and as of December 31, 1995 and
1994;
(iii) Combined Statements of Operations of BigBurger Ltda for
the six months ended June 30, 1996 (unaudited) and June
30, 1995 (unaudited) and for the years ended December
31, 1995 and 1994;
(iv) Combined Statements of Stockholders' Equity of
BigBurger Ltda for the six months ended June 30, 1996
(unaudited) and for the years ended December 31, 1995
and 1994;
(v) Combined Statements of Cash Flows of BigBurger Ltda for
the six months ended June 30, 1996 (unaudited) and June
30, 1995 (unaudited) and for the years ended December
31, 1995 and 1994; and
(vi) Notes to Combined Financial Statements.
(b) Pro Forma Financial Information.
(i) Unaudited Pro Forma Balance Sheet as of June
30, 1996;
(ii) Unaudited Pro Forma Statement of Operations
for the six months ended June 30, 1996;
(iii) Unaudited Pro Forma Statement of Operations
for the Year Ended December 30, 1995; and
(iv) Notes to Unaudited Pro Forma Financial Information.
(c) Exhibits.
(i) Exchange Agreement dated July 24, 1996 among
Registrant, BigBurger Ltda., BigBurger Niteroi
Lanchonetes Ltda.,
2
<PAGE>
BigBurger Fortaleza Lanchonetes Ltda., BigBurger
Aracaju Lanchonetes Ltda., BigBurger Porto Alegre
Lanchonetes Ltda., and BigBurger Recife Lanchonetes
Ltda.*
- ----------------
* Heretofore filed.
3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Directors and Shareholders of
BIGBURGER
Rio de Janeiro - Brazil
We have audited the accompanying combined balance sheets of BIGBURGER LTDA. (as
defined in Note 1) as of December 31, 1995 and 1994, and the related combined
statements of operations, cash flows and changes in shareholders' equity for the
years then ended, expressed in thousands of constant Brazilian Reais of March
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BIGBURGER LTDA. as of December
31, 1995 and 1994, expressed in thousands of constant Brazilian Reais of March
31, 1997 and the results of their operations and their cash flows for the years
then ended, expressed in thousands of constant Brazilian Reais of March 31, 1997
in conformity with generally accepted accounting principles in the United States
of America.
As described in Note 3, the accompanying financial statements expressed in
Brazilian Reais have been fully indexed using appropriate indices to recognize
the effects of changes in purchasing power of the Brazilian currency which
conforms with generally accepted accounting principles in the United States of
America.
We have also previously audited combined balance sheets of BIGBURGER LTDA. (as
defined in Note 1) as of December 31, 1995 and 1994, expressed in thousands of
constant Brazilian Reais of June 30, 1996, and the related combined statements
of operations, cash flows and changes in shareholders' equity for the years then
ended and in our report dated October 2, 1996, we expressed an unqualified
opinion on those combined financial statements.
BENDORAYTES, AIZENMAN & CIA
Auditores Independentes
Jose Bendoraytes Filho
Contador - CRC RJ 40.693-4
Rio de Janeiro, Brazil
July 7, 1997
<PAGE>
BIGBURGER LTDA.
COMBINED BALANCE SHEETS
(expressed in thousands of constant Brazilian Reais - R$, of March 31, 1997)
<TABLE>
<CAPTION>
As of
June 30,1996 As of As of
(Unaudited) December 31, 1995 December 31, 1994
---------------- -------------------- --------------------
<S> <C> <C> <C>
ASSETS
CURRENT
. Cash and cash equivalents 274 165 84
. Customer accounts receivable, net 671 418 196
. Inventories 549 445 186
. Other accounts receivable 325 280 123
----------- ----------- -----------
Total current assets 1,819 1,308 589
----------- ----------- -----------
FIXED ASSETS, net 1,631 1,576 1,159
----------- ----------- -----------
DEFERRED CHARGES, net 142 142 188
----------- ----------- -----------
3,592 3,026 1,936
=========== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
. Accounts payable 282 311 151
. Accrued liabilities 139 118 64
. Payroll and related accruals 85 43 26
. Income taxes payable 1,014 797 413
. Taxes other than income taxes 116 135 93
. Other liabilities 40 48 36
----------- ----------- -----------
Total current liabilities 1,676 1,452 783
----------- ----------- -----------
LOANS AND FINANCING 265 208 133
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES (NOTES 9 AND 10)
STOCKHOLDERS' EQUITY
. Monetarily corrected share capital 182 163 123
. Retained earnings 1,469 1,203 897
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,651 1,366 1,020
----------- ----------- -----------
3,592 3,026 1,936
=========== =========== ===========
</TABLE>
<PAGE>
BIGBURGER LTDA
Combined Statements of Operations
(expressed in thousands of constant Brazilian Reais - R$, of March 31, 1997)
<TABLE>
<CAPTION>
Six months ended Six months ended
June 30, 1996 June 30, 1995 Year ended Year ended
(Unaudited) (Unaudited) December 31, 1995 December 31, 1994
---------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES:
. Restaurant sales 5,268 5,485 10,034 10,279
COSTS AND EXPENSES:
. Cost of restaurant sales (2,027) (2,114) (3,866) (3,950)
. Restaurant payroll and other employee
benefits (1,035) (1,102) (1,994) (2,074)
. Restaurant occupancy and other expenses (626) (688) (1,155) (1,281)
. Depreciation and amoritization (173) (260) (377) (251)
. Other operating expenses (439) (472) (860) (856)
. Selling expenses (175) (183) (332) (342)
. General and administrative expenses (310) (324) (760) (606)
---------------- ---------------- --------------- ---------------
Total costs and expenses (4,785) (5,143) (9,344) (9,360)
---------------- ---------------- --------------- ---------------
Income from operations 483 342 690 919
Provision for income taxes (217) (154) (384) (413)
---------------- ---------------- --------------- ---------------
NET INCOME 266 188 306 506
================ ================ =============== ===============
</TABLE>
<PAGE>
BIGBURGER LTDA
Combined Statement of Changes in Stockholders' Equity
(expressed in thousands of constant Brazilian Reais - R$, of March 31, 1997)
MONETARILY
CORRECTED RETAINED
SHARE CAPITAL EARNINGS TOTAL
============= ========== ==========
BALANCES AT DECEMBER 31, 1993 90 391 481
Capital contributions 33 - 33
Net income for the year - 506 506
---------- ---------- ----------
BALANCES AT DECEMBER 31, 1994 123 897 1,020
Capital contributions 40 - 40
Net income for the year - 306 306
---------- ---------- ----------
BALANCES AT DECEMBER 31, 1995 163 1,203 1,366
Capital contributions (unaudited) 19 - 19
Net income for the period (unaudited) - 266 266
---------- ---------- ----------
BALANCES AT JUNE 30, 1996 (unaudited) 182 1,469 1,651
========== ========== ==========
<PAGE>
BIGBURGER LTDA.
Combined Statements of Cash Flows
(expressed in thousands of constant Brazilian Reais - R$, of March 31, 1997)
<TABLE>
<CAPTION>
Six months Six months
ended ended
June 30, 1996 June 30, 1995 Year ended Year ended
(Unaudited) (Unaudited) December 31, 1995 December 31, 1994
------------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Cash provided by operations:
Net income 266 188 306 506
Adjustments to reconcile net
income to cash provided by
operating activities:
Depreciation and amortization 173 260 377 251
Increase in customers
accounts receivable, net (253) (286) (221) (102)
Increase in inventories (104) (330) (259) (90)
Increase in other
accounts receivable (44) (68) (158) (121)
Increase in deferred charges (24) (7) (63) -
Increase/decrease in accounts
payable (29) 294 160 (15)
Increase/decrease in accrued
liabilities 20 132 54 (6)
Increase in payroll and related
accruals 41 99 17 19
Increase in income taxes
payable 217 154 384 93
Increase/decrease in taxes other
than income taxes (19) 24 42 (82)
Increase/decrease in other
liabilities (7) 36 12 -
-------- ------- --------- --------
Cash flows provided by operating
activities 237 496 651 453
-------- ------- --------- --------
Cash flows from investing activities:
Additions and disposals of fixed
assets (204) (461) (685) (575)
-------- ------- --------- --------
Cash flows used in investing activities (204) (461) (685) (575)
-------- ------- --------- --------
Cash flows from financing activities:
Increase in bank loans 57 71 75 133
Capital contributions 19 - 40 33
-------- ------- --------- --------
Cash flows provided by financing
activities 76 71 115 166
-------- ------- --------- --------
Increase in cash and cash equivalents 109 106 81 44
Cash and cash equivalents at beginning
of period 165 84 84 40
-------- ------- --------- --------
Cash and cash equivalents at end of
period 274 190 165 84
======== ======= ========= ========
</TABLE>
<PAGE>
BIGBURGER LTDA.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1996, (Unaudited) and June 30, 1995
(unaudited) and Years Ended December 31, 1995 and December 31, 1994 (In
thousands of constant Brazilian Reais-R$, of March 31, 1997)
1. OPERATIONS
Bigburger Ltda. as it is identified for the purposes of this reporting process
is the result of the combination of operations of 22 restaurants doing business
in the hamburger fast food segment in the Brazilian cities of Porto Alegre,
Joinvile, Sao Paulo, Santos, Guaruja, Rio de Janeiro, Niteroi, Vilar dos Teles,
Salvador, Aracaju, Petrolina and Fortaleza in the following company names:
. Bigburger Ltda
. Bigburger Porto Alegre Ltda
. Bigburger RJ Lanchonetes Ltda
. Norte Center Lanches Ltda
. Bigburger Niteroi Lanchonetes Ltda
. Bigburger Salvador Lanchonetes Ltda
. Bigburger Aracaju Lanchonetes Ltda
. Bigburger Recife Lanchonetes Ltda
. Bigburger Fortaleza Lanchonetes Ltda
2. FINANCIAL STATEMENT PRESENTATION
In order that a meaningful presentation of financial information is made for the
purposes hereof, the financial statements of the companies listed above, which
are under common control, have been combined to be presented as one company that
is denominated Bigburger Ltda. The procedures adopted for this purpose can be
summarized as follows:
a. Operating income and related costs and expenses generated by operations
other than hamburger fast food restaurants, are segregated and are not
considered in this presentation;
b. Assets and liabilities directly identified with operations other than
hamburger fast food restaurants are eliminated for the purposes of
reporting;
c. Intercompany assets, liabilities and results of operations have been
eliminated.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Generally Accepted Accounting Principles ("GAAP")
These combined financial statements have been prepared in accordance with GAAP
in the United States of America. Such accounting principles differ in certain
respects from Brazilian GAAP, which is applied by Bigburger Ltda. for annual
financial statement preparation. In addition, certain reclassifications and
changes in terminology have been made to financial statements previously issued
in order that the present combined financial statements conform with reporting
practices prevailing in the United States of America. All amounts in Brazilian
currency, that existed prior to the adoption of the real, have been restated in
constant Brazilian reais of March 31, 1997 purchasing power.
b. Constant currency restatement
The accompanying combined financial statements have been indexed and expressed
in currency of constant purchasing power of March 31, 1997 by using the monthly
average values of the fiscal reference unit, Unidade Fiscal de Referencia
("UFIR"), through December 31, 1995 and the IGP-M index for the period January
1, 1996 through March 31, 1997, depending on the nature of the account.
The value of the UFIR in Brazilian reais at December 31 of each of the years
1994 and 1995 and the periodic inflation as measured by the UFIR were as
follows:
Value of 1.0 Inflation for
UFIR units the period
Period/year of one real %
- ----------- ------------ -------------
1994 0.6767000 904.3
1995 0.8287000 22.4
<PAGE>
BIGBURGER LTDA.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1996, (Unaudited) and June 30, 1995
(unaudited) and Years Ended December 31, 1995 and December 31, 1994
(In thousands of constant Brazilian Reais-R$, of March 31, 1997)
For the years 1994 and 1995, the UFIR has been the officially prescribed index
required to be used under Brazilian GAAP and Bigburger Ltda. believes it is an
appropriate index of general price level inflation to be used under US
GAAP.
For the year 1996, the IGP-M index has been adopted as the proper index to
measure inflation. The inflation as measured by the IGP-M for 1996 is 9.2% and
for the three months ended March 31, 1997 was 3.4%
Items in the combined statements of operations are adjusted to the balance sheet
date by: . Allocating inflationary holding gains or losses on interest bearing
monetary assets and liabilities to their corresponding income and expense
captions;
. Allocating inflationary holding gains and losses from other monetary items to
their corresponding income and expense captions.
c. INVENTORIES
Inventories, consisting mainly of food, beverages and supplies, are stated at
the lower of indexed cost or replacement value. Cost of inventories is
determined principally on the average cost basis.
d. FIXED ASSETS
Are stated at price-level adjusted cost, less price-level adjusted accumulated
depreciation. Depreciation is provided using the straight-line method on the
estimated useful lives of the related assets.
Annual depreciation rates are as follows:
Leasehold improvements Term of the related rent contract, or
estimated useful lives, whichever is shorter
Machinery and equipment 10%
Furniture and fixtures 10%
Contract terms for the rented buildings, in general, range between 5 to 10
years.
Repairs and maintenance are charged to operations as incurred. When assets are
sold, retired, or otherwise disposed of, the applicable costs and accumulated
depreciation are removed from the accounts and the resulting gain or loss is
recognized.
e. DEFERRED CHARGES
Deferred charges, which relate to leasehold premiums paid in advance for rented
outlet premises are stated at price-level adjusted cost, less price-level
adjusted accumulated amortization.
The amortization period is the term of the related rental contract, which, in
general, ranges between 5 and 10 years.
f. REVENUE RECOGNITION
Revenues, whether these consist of sales to final consumers or other income, are
recognized when earned.
g. SEGMENT INFORMATION
Bigburger Ltda operates primarily in the sale of hamburger fast food to final
consumers. All of Bigburger's sales are made within Brazil.
h. RECENTLY ISSUED ACCOUNTING STANDARDS
During March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting
for the Impairment of Long Lived Assets and for Long Lived Assets to Be Disposed
Of." This statement establishes financial accounting and reporting standards for
the impairment of long lived assets, certain identifiable intangibles and
goodwill related to those assets to be held and used, and for long lived assets
and certain identifiable intangibles to be disposed of. This statement is
effective for financial statements for fiscal years beginning after December 15,
1995, although earlier application is encouraged. The Company does not expect
that the adoption of SFAS 121 will have a material effect on its financial
statements.
i. UTILIZATION OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
4. PROPERTY AND EQUIPMENT, NET
<TABLE>
<CAPTION>
June 30, December 31, December 31,
1996 1995 1994
(unaudited)
<S> <C> <C> <C>
Leasehold improvements 909 826 684
Machinery and equipment 562 599 377
Furniture and fixtures 373 458 474
Other 382 318 202
------ ------ ------
2,226 2,201 1,737
Less accumulated depreciation
and amortization ( 595) ( 625) ( 578)
------- ------- -------
1,631 1,576 1,159
------ ------ ------
</TABLE>
<PAGE>
BIGBURGER LTDA.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1996, (Unaudited) and June 30, 1995
(unaudited) and Years Ended December 31, 1995 and December 31, 1994
(In thousand of constant Brazilian Reais-R$, of March 31, 1997)
5. DEFERRED CHARGES, NET
<TABLE>
<CAPTION>
June 30, December 31, December 31,
1996 1995 1994
<S> <C> <C> <C>
Leasehold premiums 365 340 277
Less accumulated amortization (223) (198) ( 89)
------- ------- ------
142 142 188
------- ------- ------
</TABLE>
6. TAXATION
The Company has provided for income taxes in the accompanying financial
statements based on the results of operations as combined herein. Income taxes
are accounted for in accordance with Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes". The effect of deferred income taxes is
not material. The provision for income taxes is primarily comprised of income
taxes payable to the Brazilian federal government.
7. LOANS AND FINANCING
Loans and financing consists of a balance of a financing contract with Banco
Sudameris Brasil S.A. correspondent to foreign currency (US$) subject to
exchange variation and interest of 27% a year, due every six months, and
maturing June 1998. The contract is guaranteed by the real estate of a related
company.
8. SHAREHOLDERS' EQUITY
The share capital of Bigburger Ltda. at June 30, 1996 (unaudited)
consists of 121,454 quotas of R$1.00 each issued and fully paid.
The share capital of other companies is broken down as follows:
Number of
quotas
---------
. Bigburger Porto Alegre Ltda. 10,000
. Bigburger RJ Lanchonetes Ltda. 10,000,000
. Norte Center Lanches Ltda. 5,000
. Bigburger Niterol Lanchonetes Ltda. 7,000,000
. Bigburger Salvador Lanchonetes Ltda. 440,000
. Bigburger Aracaju Lanchonetes Ltda. 3,000,000
. Bigburger Recife Lanchonetes Ltda. 64,000
. Bigburger Fortaleze Lanchonetes Ltda. 5,000,000
9. LEASES
As at June 30, 1996 Bigburger's operations combined here comprise 22 hamburger
fast food outlets leased under operating leases. In addition to fixed lease
obligations, Bigburger pays a percentage of sales for various hamburger fast
food outlets that vary from 3 to 8% of gross sales.
Future minimum lease commitments of the Company are as follows:
1996 (remaining six months) 282
1997 505
1998 493
1999 391
2000 260
2001 and thereafter 348
Total rent expense for the six months ended June 30, 1996, (unaudited) and for
the years ended December 31, 1995 and 1994 was thousands of reais R$626, 1,155
and 1,281, respectively.
10. CONTINGENCIES
In the normal course of business, Bigburger Ltda. is involved in legal
procedures and claims with both private and governmentalparties. Bigburger is
contesting the assessment of certain value-added taxes (ICMS), pending the
resolution of judicial proceedings.
The income tax declarations of Bigburger Ltda. are open to examination and
possible reassessment by the fiscal authorities during a prescriptive period of
five years. Other taxes and contributions are subject to examination for varying
prescriptive periods.
<PAGE>
BIGBURGER LTDA.
NOTES TO THE COMBINED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1996 (Unaudited) and June 30, 1995 (unaudited)
and Years Ended December 31, 1995 and December 31, 1994
(In thousands of constant Brazilian Reais-R$, of MARCH 31,1997)
12. SUBSEQUENT EVENT
As at July 24, 1996 Bigburger Ltda has entered into an agreement to sell 100% of
its hamburger fast food restaurant business to Brazil Fast Food Corporation,
that consists of outlet assets (goodwill and equipment) and transfer of related
lease contracts.
13. UNAUDITED INTERIM
FINANCIAL INFORMATION
The financial statements as of June 30, 1996, and for the six months ended June
30, 1996 and 1995 are unaudited. In the opinion of management, all adjustments
necessary for a fair presentation of the financial statements, which are of a
normal recurring nature, for these interim periods have been included. The
results for the interim periods are not necessarily indicative of the results
for the full fiscal year.
<PAGE>
BRAZIL FAST FOOD CORP. AND BIGBURGER LTDA
UNAUDITED PRO FORMA FINANCIAL STATEMENTS
INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
On July 24, 1996, Brazil Fast Food Corp. ("BFFC") consummated the Acquisition of
each of BigBurger Ltda. and five of its affiliates (collectively, "BigBurger").
The accompanying unaudited pro forma balance sheet as of June 30, 1996 presents
the consolidated financial position of BFFC and BigBurger, assuming the
Acquisition had been completed at June 30, 1996. The unaudited pro forma
statements of operations for the year ended December 31, 1995 and for the six
months ended June 30, 1996 have been presented as if the acquisitions of
BigBurger and Venbo had been consummated at the beginning of the periods
presented.
In the Acquisition, BFFC acquired the Assets, as defined in the Exchange
Agreement, of BigBurger in exchange for 1,520,000 shares of BFFC common stock
valued at R$6,641,000 based on the fair value of the Company's common stock at
the date of acquisition. Of the shares issued to BigBurger, 228,000 shares have
been pledged in favor of BFFC as collateral security for the transfer of the
operating leases to be released and an additional 228,000 shares have been
pledged in favor of BFFC as collateral security for the truth and accuracy of
the several representations and warranties made by BigBurger in the acquisition
agreement. The Acquisition has been accounted for as a purchase by BFFC.
The pro forma financial information does not purport to be indicative of the
results which would have actually been obtained had such transactions been
completed as of the assumed dates and for the periods presented or which may be
obtained in the future.
The acquisition was accounted for using the purchase method of accounting. The
purchase price was allocated to the assets acquired based on appraisals of such
assets. The Company has recorded R$2,446,000 of excess purchase price over net
assets acquired. Management has determined a 20-year amortization period to be
appropriate for intangible assets identified (including goodwill) based on the
historical results of operations of BigBurger and the anticipated demand for its
products. Periodically, but no less than quarterly, management will evaluate the
relative fair market value of the intangible assets identified (including
goodwill) in the Acquisition of BigBurger by estimating the future cash flow
streams of the related business lines and comparing the present value of the
result of that estimation to the carrying value of the related assets.
Impairments, if any, measured as the difference between the estimated future
cash flows and the carrying value of the assets, will be charged to operations
when identified, in accordance with Statement on Financial Accounting Standards
No. 121.
<PAGE>
Brazil Fast Food Corp. and BigBurger Ltda.
Pro Forma Balance Sheet
As of June 30, 1996
(Unaudited)
(000's of $R)
<TABLE>
<CAPTION>
ASSETS Brazil Fast Pro Forma
Food Corp. BigBurger Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents 1,336 274 1,610
Customer accounts receivable, net 777 671 1,448
Inventories 542 549 1,091
Other current assets 1,600 325 1,925
------------ ------------ ------------
Total current assets 4,255 1,819 6,074
------------ ------------ ------------
PROPERTY AND EQUIPMENT, net 9,553 1,631 1,027 12,211
------------ ------------ ------------
OTHER ASSETS:
Deferred charges, net 1,253 142 1,395
Purchase price in excess of net assets acquired 23,410 - 2,446 25,856
------------ ------------ ------------
38,471 3,592 45,536
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 2,054 421 2,475
Notes payable 1,400 - 1,400
Payroll and related accruals 2,326 85 2,411
Income taxes payable - 1,014 (1,014) -
Taxes other than income taxes 420 116 536
Other current liabilities 1,809 40 1,849
Deferred income 661 - 661
------------ ------------ ------------
Total current liabilities 8,670 1,676 9,332
------------ ------------ ------------
LOANS AND FINANCING 2,923 265 (265) 2,923
------------ ------------ ------------
DEFERRED INCOME 3,345 - 3,345
------------ ------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock - -
Monetarily corrected share capital - 182 (182) -
Common stock 1 - 1
Additional paid-in capital 25,782 - 6,403 32,185
Retained earnings (accumulated deficit) (2,250) 1,469 (1,469) (2,250)
------------ ------------ ------------
Total shareholders' equity 23,533 1,651 29,936
------------ ------------ ------------
38,471 3,592 45,536
============ ============ ============
</TABLE>
<PAGE>
Brazil Fast Food Corp. and BigBurger Ltda
Pro Forma Statement of Operations
For the Six Months Ended June 30, 1996
(Unaudited)
(000's of $R,
except per share data)
<TABLE>
<CAPTION>
Brazil Fast
Food Corp. Venbo from
(As Reported 1/1/96 - BFFC and Venbo BigBurger Pro Forma
in Form 10-Q) 3/19/96 Combined Adjustments Combined
------------- ----------- ------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Restaurant sales 16,432 14,759 31,191 5,268 36,459
Franchise related income 160 158 318 - 318
Other income 339 111 450 - 450
------------ ----------- ------------ ----------- ------------
16,931 15,028 31,959 5,268 37,227
------------ ----------- ------------ ----------- ------------
COSTS AND EXPENSES
Cost of restaurant sales 6,403 6,326 12,729 2,027 14,756
Restaurant payroll and other
employee benefits 3,870 3,179 7,049 1,035 8,084
Restaurant occupancy and other
expenses 1,352 1,067 2,419 626 3,045
Depreciation and amortization 1,123 664 1,787 173 61(f) 2,021
Other operating expenses 3,193 3,061 6,254 439 6,693
Selling expenses 772 866 1,638 175 1,813
General and administrative expenses 2,796 3,551 6,347 310 6,657
------------ ----------- ------------ ----------- ------------
19,509 18,714 38,223 4,785 43,069
------------ ----------- ------------ ----------- ------------
Income (loss) from operations (2,578) (3,686) (6,264) 483 (5,842)
INTEREST INCOME 390 2,161 2,551 - 2,551
INTEREST EXPENSE (150) (973) (1,123) - (1,123)
EXCHANGE GAIN/(LOSS) (33) 269 236 - 236
------------ ----------- ------------ ----------- ------------
Income (loss) before provision for
income taxes (2,371) (2,229) (4,600) 483 (4,178)
PROVISION FOR INCOME TAXES 14 - 14 217 231
------------ ----------- ------------ ----------- ------------
Net income (loss) (2,385) (2,229) (4,614) 266 (4,409)
============ =========== ============ =========== ============
NET (LOSS) PER SHARE (0.51)
===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 8,646(g)
===========
</TABLE>
<PAGE>
Brazil Fast Food Corp. and BigBurger Ltda
Pro Forma Statement of Operations
For the Year Ended December 31, 1995
(Unaudited)
(000's of $R, except
per share data)
<TABLE>
<CAPTION>
Trinty and
Pro Forma Venbo
Trinity Venbo Adjustments Combined BigBurger Adjustments Combined
------------ ----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Restaurant sales - 69,056 69,056 10,034 79,090
Franchise related income - 716 716 - 716
Other income - 458 694(b) 1,152 - 1,152
------------ ----------- ---------- ----------- -----------
- 70,230 70,924 10,034 80,958
------------ ----------- ---------- ----------- -----------
COSTS AND EXPENSES
Cost of restaurant sales - 26,169 26,169 3,866 30,035
Restaurant payroll and other
employee benefits - 13,506 13,506 1,994 15,500
Restaurant occupancy and other
expenses - 6,124 6,124 1,155 7,279
Depreciation and amortization - 3,067 1,108(f) 4,175 377 122(f) 4,674
Other operating expenses - 12,987 (2,935)(a) 10,052 860 10,912
Selling expenses - 3,573 3,573 332 3,905
General and administrative expenses 341 12,009 12,350 760 13,110
Restructuring expenses - 275 275 - 275
------------ ----------- ---------- ----------- -----------
341 77,710 76,224 9,344 85,690
------------ ----------- ---------- ----------- -----------
Income (loss) from operations (341) (7,480) (5,300) 690 (4,732)
INTEREST INCOME 672 1,710 (1,710)(d) 672 - 672
INTEREST EXPENSE - (5,280) 5,280(c) (256) - (256)
EXCHANGE GAIN/(LOSS) - 1,402 (256)(e) 1,402 - 1,402
------------ ----------- ---------- ----------- -----------
Income (loss) before provision
for income taxes 331 (9,648) (3,482) 690 (2,914)
PROVISION FOR INCOME TAXES 107 - 107 384 491
------------ ----------- ---------- ----------- -----------
Net income (loss) 224 (9,648) (3,589) 306 (3,405)
============ =========== ========== =========== ===========
NET (LOSS) PER SHARE (0.39)
===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 8,646(g)
===========
</TABLE>
<PAGE>
NOTES TO PRO FORMA FINANCIAL STATEMENTS
Basis of Presentation
- ---------------------
The accompanying unaudited pro forma balance sheet is presented as if the
Acquisition of BigBurger Ltda. by BFFC occurred at June 30, 1996. The unaudited
pro forma statements of operations for the year ended December 31, 1995 and for
the six months ended June 30, 1996 reflect the acquisitions of Venbo and
BigBurger as if they had been consummated at the beginning of the periods
presented.
The historical balance sheets used in the preparation of the pro forma financial
statements have been derived from unaudited interim financial statements as of
June 30, 1996 with respect to both BFFC (as included in the Company's Form 10-Q
for the period ended June 30, 1996) and BigBurger (as included herein). The
historical statement of operations presented for the year ended December 31,
1995 has been derived by first combining the statements of operations of Trinity
(the Registrant) and (Venbo the predecessor of Brazil Fast Food Corp) reflecting
appropriate pro forma adjustments for this combination, and then combining the
result with the statement of operations of BigBurger, as presented herein. The
historical statement of operations for the six months ended June 30, 1996 has
been derived by first combining the statements of operations of Brazil Fast Food
Corp as reported in its Form 10-Q for the period ended June 30, 1996, and Venbo
for the period from January 1, 1996 through March 18, 1996, the date of
acquisition, and then combining the result with the unaudited interim statement
of Operations of BigBurger.
Unaudited Pro Forma Adjustments
A description of the adjustments included in the unaudited pro forma financial
statements are as follows:
Balance Sheet Adjustments
- -------------------------
The adjustments included in the unaudited pro forma balance sheet reflect the
application of purchase accounting for the acquisition of BigBurger and the
issuance of 1,520,000 shares of common stock related to the acquisition at a
value of $4.00 per share (the market value of BFFC's common stock at the time of
the Acquisition). Incremental expenses related to this transaction were not
material.
Income Statements Adjustments
- -----------------------------
(a) Reflects the elimination of royalty payments made by Venbo to BIEC for the
rights to use certain trademarks and servicemarks and certain product
formulas and manufacturing processes, which will no longer be required as
such rights are included in the Acquisition.
(b) Reflects the recognition of income under the Coca-Cola distribution
agreement.
(c) Reflects the elimination of Venbo's interest expense as Venbo's debt is not
included in the liabilities assumed in the Acquisition.
(d) Reflects the elimination of Venbo's interest income as the related
investment is not included in the assets assumed in the Acquisition.
(e) Reflects interest expense relating to payables to BIEC resulting from the
Acquisition.
(f) Reflects the amortization of purchase price in excess of
net assets acquired, and the acquisition of trademarks, resulting from the
acquisitions. Such amortization has been computed on a straight-line basis
over an estimated useful life of 20 years.
(g) Reflects the total number of shares to be outstanding after giving effect
to the acquisitions of Venbo and BigBurger calculated as 8,646,000 shares
as follows: 2,965,000 shares outstanding prior to the acquisition of Venbo,
1,046,000 shares issued to Shampi Investments, A.E.C., 3,115,000 shares
issued in a private placement and 1,520,000 shares issued in the
acquisition of BigBurger. All common stock equivalents are considered to be
anti-dilutive as the pro forma results of operations reflect a net loss for
the periods presented.
<PAGE>
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.
Dated: August 1, 1997 BRAZIL FAST FOOD CORP.
(Registrant)
By: /s/Ira Roxland
Ira Roxland
Assistant Secretary
