Healthy Fast Food Announces Third Quarter 2010 Results
Nine Month Revenues Increase 134% and Net Loss Drops 80% on Year-Over-Year Basis; U-SWIRL Frozen Yogurt Cafe Operating Profits Climb 160%
HENDERSON, Nev., Nov. 12, 2010 // PRNewswire-FirstCall // -- Healthy Fast Food, Inc. (OTC Bulletin Board: HFFI), parent to U-SWIRL International, Inc., the owner and franchisor of U-SWIRL Frozen Yogurt® cafes, today announced its third quarter financial results for the three and nine months ended September 30, 2010.
Financial Highlights For Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009:
- Total revenues rose 134% to $2,163,134 from $925,603.
- As of September 30, 2010, there were a total of six Company-owned cafes 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, 2010.
- In addition, the Company had two franchised cafes in operation as of September 30, 2010 – one located in Henderson, Nevada which does not pay royalties; and one in Reno, Nevada which pays a royalty fee equal to 3% of weekly sales.
- Cafe operating profits, excluding pre-opening expenses attributable to training, supplies and various grand-opening promotional activities, increased 160% to $680,871 from $262,161
- After factoring $352,630 in non-cash expenses related to share-based compensation, depreciation and amortization offset by a $74,481 gain from on discontinued operations compared to $123,539 in similar non-cash expenses and a $1,155,053 loss on discontinued operations, the net loss declined 80% to $359,416, or $0.12 per basic and fully diluted share, from a net loss of $1,786,228, or $0.71 per basic and diluted share.
Financial Highlights for Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009:
- Total revenues increased 43% to $760,403, up from $530,332.
- Excluding pre-opening expenses attributable to training, supplies and various grand-opening promotional activities, cafe operating profits totaled $241,600, rising 72% from $140,438.
- Net loss declined 95% to $57,705, or $0.02 per basic and fully diluted share, from $1,233,612, or $0.49 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 on November 12, 2010.
- U-SWIRL's Facebook fan base has recently surpassed 10,000, growing more than 30% from 7845 fans reported as of the end of the prior quarter.
- In July, the Company signed an area development agreement with Regents Management, LLC, providing for the expansion of the U-SWIRL self-serve concept into Boise Idaho, with the first cafe scheduled to open in that metropolitan market before the end of this year.
- In August 2010, the Company announced that River Jordan, Inc. signed a new franchise agreement with plans to open a U-SWIRL self-serve frozen yogurt cafe in Marietta, Georgia, one of metro Atlanta's largest suburbs.
- Subsequent to the end of the third quarter, the Company signed a second area development agreement with Regents for a minimum of five stores in Salt Lake City, Utah; Galena Frozen Yogurt hosted the grand opening of its second U-SWIRL cafe serving Reno, Nevada; and in late October, Healthy Fast Food completed a secondary offering, raising total gross proceeds of $690,000, which will be used to develop the seventh Company-owned U-SWIRL cafe.
Commenting on the results, Hank Cartwright, Chairman and CEO of Healthy Fast Food, stated, "Our Company continued to make solid progress on many fronts in the third quarter, increasing revenues, expanding our U-SWIRL national franchise network and completing our capital raise. With a number of new franchise locations currently in construction or undergoing development, we expect to finish 2010 on very strong footing and, in the year ahead, look forward to perpetuating and accelerating the growth momentum we are now enjoying."
HEALTHY FAST FOOD, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2010 December 31, 2009
Cash $ 89,626 $ 516,925
Accounts receivable 9,355 5,597
Due from U-Create Enterprises 1,364 1,481
Inventory 79,326 61,658
Prepaid expenses 73,898 77,680
Current assets from discontinued operations - 8,426
Total current assets 253,569 671,767
Leasehold improvements, property
and equipment, net 2,074,602 2,056,346
Deposits 47,872 56,762
Deferred offering costs 188,658 70,134
Other asset 53,898 58,475
Other assets from discontinued operations - 85,351
Total other assets 290,428 270,722
Total assets $ 2,618,599 $ 2,998,835
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 166,335 $ 203,665
Accounts payable and accrued liabilities from
discontinued operations 12,072 154,953
Current portion of long-term debt 5,319 4,808
Total current liabilities 183,726 363,426
Deferred rent 330,434 355,756
Deferred revenue 210,000 100,000
Long-term capital lease 6,087 10,142
Long-term liabilities from discontinued operations - 53,253
Total liabilities 730,247 882,577
Commitments and contingencies
Preferred stock; $0.001 par value; 25,000,000 shares
authorized, no shares issued and outstanding - -
Common stock; $0.001 par value; 100,000,000 shares
authorized, 2,947,836 and 2,761,336 shares issued and
outstanding at 09/30/10 and 12/31/09, respectively 2,948 2,761
Additional paid-in capital 7,285,443 7,154,117
Compensation payable in stock 16 19
Accumulated deficit (5,400,055) (5,040,639)
Total stockholders' equity 1,888,352 2,116,258
Total liabilities and stockholders' equity $ 2,618,599 $ 2,998,835
HEALTHY FAST FOOD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended For the nine months ended
September 30, 2010 September 30, 2009 September 30, 2010 September 30, 2009
net of discounts $ 751,153 $ 515,332 $ 2,140,074 $ 910,603
Franchise royalties and fees 9,250 15,000 23,060 15,000
Total revenues 760,403 530,332 2,163,134 925,603
Restaurant operating costs
Food, beverage and
packaging costs 208,151 152,574 623,990 267,523
Labor and related expenses 171,255 138,561 502,161 245,654
Occupancy and related expenses 130,147 83,759 333,052 135,265
Marketing and advertising 35,027 74,342 65,317 102,195
General and administrative 126,599 158,469 368,725 365,721
Officer compensation 123,359 50,726 389,243 294,775
Investor relations fees 24,800 - 81,800 -
Pre-opening costs - 34,225 9,648 69,241
Depreciation and amortization 75,654 44,673 221,620 82,039
Total costs and expenses 894,992 737,329 2,595,556 1,562,413
Loss from operations (134,589) (206,997) (432,422) (636,810)
Interest expense (419) (570) (1,509) (1,810)
Interest income - 1,422 34 7,445
Loss from continuing
income taxes (135,008) (206,145) (433,897) (631,175)
Provision for income taxes - - - -
Loss from continuing
operations (135,008) (206,145) (433,897) (631,175)
(Income) expense from operations of discontinued
Fresh and Fast
restaurant component (77,303) 1,027,467 (74,481) 1,155,053
Income tax benefit - - - -
Gain (loss) on
discontinued operations 77,303 (1,027,467) 74,481 (1,155,053)
Net loss $ (57,705) $ (1,233,612) $ (359,416) $ (1,786,228)
Earnings per share - basic
Loss from continuing
operations $ (0.05) $ (0.08) $ (0.15) $ (0.25)
Loss from discontinued
operations 0.03 (0.41) 0.03 (0.46)
Net loss per common share
- basic and fully diluted $ (0.02) $ (0.49) $ (0.12) $ (0.71)
Weighted average common shares outstanding -
basic and diluted 2,925,155 2,518,350 2,849,044 2,518,350
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 cafes called U-SWIRL Frozen 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 cafes, 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 cafes. For more information, please visit www.U-SWIRL.com. You can also follow the Company on Facebook (U-SWIRL Frozen Yogurt) and on Twitter (U_SWIRL).
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.
FOR MORE INFORMATION, PLEASE CONTACT
Elite Financial Communications Group, LLC
Dodi Handy, President and CEO (Twitter: @dodihandy) or
Kathy Addison, COO (Twitter: @kathyaddison)
407-585-1080 or via email at HFFI@efcg.net
SOURCE Healthy Fast Food, Inc.