Healthy Fast Food Franchise Announces Second Quarter 2010 Results

For the Comparable Six Month Reporting Periods, U-SWIRL® Revenues Increased 255% to $1.4 Million and Café Operating Profits Rose 283% to $440,000

August 17, 2010 // Franchising.com // HENDERSON, Nev. − Healthy Fast Food, Inc. (OTCBB: HFFI), parent to U-SWIRL International, Inc., the owner and franchisor of U-SWIRL Frozen Yogurt® cafés, today announced its second quarter financial results for the three and six months ended June 30, 2010.

Financial Highlights For Six Months Ended June 30, 2010 Compared to Six Months Ended June 30, 2009:

  • Total revenues increased 255% to $1,402,731 from $395,271.
    • As of June 30, 2010, there were a total of six Company-owned cafés in operation - one opened in the first quarter ended March 31, 2009; one opened in the second quarter ended June 30, 2009; three opened in the third quarter ended September 30, 2009; and one opened mid-way through the first quarter ended March 31.
    • In addition, the Company had two franchised cafés in operation as of June 30, 2010 - one located in Henderson, Nevada and one in Reno, Nevada.

  • Café operating profits, excluding pre-opening expenses attributable to training, supplies and various grand-opening promotional activities, increased 283% to $439,271 from $114,711.
  • Despite factoring $245,616 in non-cash expenses related to share-based compensation, depreciation and amortization, which compared to $31,600 in similar non-cash expenses in the prior year, the net loss declined 45% to $301,711, or $0.11 per basic and fully diluted share, from a net loss of $552,616, $0.22 per basic and diluted share.

Financial Highlights for Three Months Ended June 30, 2010 Compared to Three Months EndedJune 30, 2009:

  • Total revenues climbed 123% to $846,230, up from $379,572.
  • After factoring in café operating costs, excluding pre-opening expenses of $904 and 8,026, respectively, the Company achieved an operating profit of $307,584 from Company café operations, compared to $125,147.
  • Net loss declined 81% to $39,043, or $0.01 per basic and fully diluted share, from $205,336, or $0.08 per basic and fully diluted share.

For more detailed information on the financial results, please refer to the financial charts reflected below and the Form 10Q filed with the U.S. Securities & Exchange Commission yesterday afternoon.

Operational Highlights:

  • In April 2010, franchisee Galena Frozen Yogurt Company began construction on its second café in Reno, Nevada; which is scheduled to be open on or before October 1, 2010. Subsequent to the end of the second quarter, Galena finalized lease negotiations for its third café in Reno, which it anticipates opening in January 2011.
  • In late April 2010, the Company signed an Area Development Agreement with AV, LLC to develop four franchise U-SWIRL cafes in Tucson, Arizona over the next 36 months. AV is currently engaged in finalizing lease terms for its first café.
  • As of the end of June 30, 2010, the Company had signed franchise or area development agreements with new franchise partners in Reno, Nevada; Phoenix, Arizona; Monmouth County, New Jersey; and Tucson, Arizona. In July 2010, Regent Management, LLC signed an area development agreement providing for the expansion of the U-SWIRL self-serve frozen yogurt concept into Boise, Idaho.
  • U-SWIRL's Facebook fan base grew over 57% to 7,845 people in the second quarter period.

Hank Cartwright, Chief Executive Officer of Healthy Fast Food, stated, "We are very pleased with the success we have achieved, thus far, in expanding the U-SWIRL franchise system out of Nevada and into several states across the country. With 30 new stores contracted for development over the next three to five years and a number of new franchising deals in the works, we have made notable progress since opening our very first company-owned café just 16 months ago. This is a clear testament to the underpinning value that we are building in the U-SWIRL brand and to the fact that consumers simply love the U-SWIRL concept and self-serve experience."

FINANCIAL CHARTS TO FOLLOW

HEALTHY FAST FOOD, INC. CONDENSED CONSOLIDATED BALANCE SHEET Q1-10 Balance Sheet

HEALTHY FAST FOOD, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Q1-10 Statement of Operations

ABOUT U-SWIRL INTERNATIONAL, INC.

U-SWIRL International is a wholly owned subsidiary of Healthy Fast Food, Inc., and is launching a national chain of self-serve frozen yogurt cafés called U-SWIRLFrozen Yogurt®. U-SWIRL allows guests the ultimate choice in frozen yogurt by providing up to 20 non-fat flavors, including tart, traditional, no sugar-added options, and up to 70 toppings, including seasonal fresh fruit, sauces, candy and granola. Guests serve themselves and pay by the ounce instead of by the cup size. A healthier alternative to a coffee shop hang out, locations are furnished with couches and tables, and patio seating. In addition to its development of Company-owned cafés, U-SWIRL International has also launched its franchise program to roll out the concept nationwide in those states in which the Company is qualified to offer franchises.

ABOUT HEALTHY FAST FOOD, INC.

Headquartered in Henderson, Nevada, Healthy Fast Food, Inc. is on a mission to deliver consumers a smarter alternative to America's favorite meals and snacks. In September 2008, the Company and its wholly-owned subsidiary, U-SWIRL International, Inc., acquired the worldwide rights to the U-SWIRL Frozen Yogurt system. Sole ownership of the system was transferred to U-SWIRL International, Inc., and it has been executing an aggressive strategy to build the brand into a globally recognized chain of highly experiential frozen yogurt cafés.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding the timing and financial impact of Healthy Fast Food, Inc.'s ability to implement its business plan, expected revenues and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgments with respect to future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time in Healthy Fast Food's periodic filings with the Securities and Exchange Commission, including without limitation, the Company's Annual Report for the year ended December 31, 2009. The forward looking-statements in this press release are based upon management's reasonable belief as of the date hereof. Healthy Fast Food undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

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