EXHIBIT 99.1
[BACKYARD BURGERS LETTERHEAD]
Contact: Michael G. Webb
Chief Financial Officer
(901) 367-0888 Ext. 1226
BACK YARD BURGERS ANNOUNCES SECOND QUARTER
AND YEAR-TO-DATE 2004 RESULTS
MEMPHIS, TENNESSEE (JULY 27, 2004) -- Back Yard Burgers, Inc. (Nasdaq
SmallCap:BYBI) today announced results for the second quarter of 2004.
- - Total revenues for the 13-week period ended July 3, 2004, were $10,659,000,
a record second quarter for the company and an increase of 4.6% over total
revenues for the 13 weeks ended June 28, 2003. The increase primarily is
the result of a 2.4% increase in same-store sales at company-operated
restaurants versus the comparable period in 2003. Royalty fees also rose
over the year-earlier period due to a net increase of 12 franchised
restaurants since June 28, 2003.
- - Net income for the 13-week period ended July 3, 2004, was $502,000, or
$0.10 per diluted share, an increase of 15.4% from net income for the
second quarter of 2003 of $435,000, or $0.09 per diluted share. The
increase in net income was primarily due to the higher total revenues
described above.
During the second quarter of 2004, the company incurred an increase of
approximately 16% in the cost of beef as well as other food cost increases
driven primarily by higher fuel and transportation costs. To date, the
company has been able to mitigate the negative impact of these cost
increases on profitability with two menu price increases of approximately
2% that became effective in October 2003 and in June 2004. During the first
and second quarters of 2003, the company also offered certain sandwich
items at discounted prices in efforts to increase guest traffic and sales
at company-operated restaurants. The company has not pursued this
discounting strategy during 2004, which has helped lower the company's cost
of restaurant sales as a percentage of restaurant sales compared with the
year-earlier period.
The company incurred restaurant pre-opening costs of $58,000 during the
13-week period ended July 3, 2004, compared with zero costs during the
year-earlier period. The company opened one company-operated restaurant on
June 16, 2004, and another company-operated restaurant on July 9, 2004.
- - For the second quarter of 2004, same-store sales for company-operated
restaurants increased 2.4% from the comparable period in 2003 while
same-store sales for franchised restaurants declined 1.2% for the same
period. Year-to-date same-store sales for 2004 increased 5.5% from the
comparable period in 2003 for company-operated restaurants and decreased
1.7% for franchised restaurants.
1657 North Shelby Oaks Drive, Suite 105 | Memphis, TN 38134 | Phone 901 367 0888
| Fax 901 367 0999 | www.backyardburgers.com | Nasdaq Symbol BYBI
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BYBI Reports Second Quarter Results
Page 2
July 27, 2004
- - Total revenues for the 26-week period ended July 3, 2004, totaled
$20,142,000, compared with $18,762,000 in the prior-year period. Net
income for the 26-week period ended July 3, 2004, was $794,000, or
$0.15 per diluted share, compared with $685,000, or $0.14 per diluted
share in the prior-year period.
- - Unit activity for the quarter included one company operated store
opening, seven franchised store openings and one franchised store
closing. During the second quarter, the company also entered into two
agreements for the development of a combined total of ten additional
stores to be opened in the Kansas City and Columbia, Missouri, areas
over the next six years.
As of July 3, 2004, the company's restaurant system comprised 141 units,
including 43 company-operated stores and 98 franchised stores (of which nine
were co-branded restaurants under the agreement with Yum! Brands, Inc.).
Expansion plans for the remainder of 2004 include the opening of two
company-operated stores, one of which opened on July 9, 2004, and 19 franchised
stores.
Back Yard Burgers operates and franchises quick-service restaurants in 17
states, primarily in markets throughout the Southeast region of the United
States. The restaurants specialize in charbroiled, freshly prepared,
great-tasting food. As its name implies, Back Yard Burgers strives to offer the
same high-quality ingredients and special care typified by outdoor grilling in
the backyard. Its menu features made-to-order gourmet Black Angus hamburgers and
chicken sandwiches - charbroiled over an open flame, fresh salads, chili and
other specialty items, including hand-dipped milkshakes, fresh-made lemonade and
fresh-baked cobblers.
This press release contains forward-looking statements within the meaning of the
federal securities laws, including statements regarding the number of
company-operated and franchised restaurants the company anticipates opening
during fiscal year 2004. Forward-looking statements are based upon estimates,
projections, beliefs and assumptions of management at the time of such
statements and should not be viewed as guarantees of future performance. Such
forward-looking information involves important risks and uncertainties that
could significantly impact anticipated results in the future and, accordingly,
such results may differ materially from those expressed in any forward-looking
statements by or on behalf of the company. The factors that could cause our
actual results to differ materially, many of which are beyond our control,
include, but are not limited to, the following: delays in opening new stores or
outlets because of weather, local permitting, and the availability and cost of
land and construction; increases in competition and competitive discounting;
increases in minimum wage and other operating costs; shortages in raw food
products; volatility of commodity prices; consumer preferences, spending
patterns and demographic trends; the possibility of unforeseen events affecting
the industry generally, and other risks described from time to time in our
periodic reports filed with the Securities and Exchange Commission. Back Yard
Burgers, Inc. disclaims any obligation to update or revise any forward-looking
statement based on the occurrence of future events, the receipt of new
information, or otherwise.
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BYBI Reports Second Quarter Results
Page 3
July 27, 2004
BACK YARD BURGERS, INC
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
------------------------- -------------------------
07/03/04 06/28/03 07/03/04 06/28/03
---------- ---------- ---------- ----------
Revenues:
Restaurant sales ...................... $ 9,323 $ 8,870 $ 17,757 $ 16,447
Franchise and area development fees ... 121 75 209 165
Royalty fees .......................... 793 668 1,452 1,250
Advertising fees ...................... 205 167 370 312
Other ................................. 217 408 354 588
---------- ---------- ---------- ----------
Total revenues ..................... 10,659 10,188 20,142 18,762
---------- ---------- ---------- ----------
Expenses:
Cost of restaurant sales .............. 2,932 2,939 5,566 5,357
Restaurant operating expenses ......... 4,343 4,190 8,426 7,831
General and administrative ............ 1,307 1,188 2,506 2,283
Advertising ........................... 720 599 1,234 1,076
Depreciation and amortization ......... 489 465 977 885
---------- ---------- ---------- ----------
Total expenses ..................... 9,791 9,381 18,709 17,432
---------- ---------- ---------- ----------
Operating income ...................... 868 807 1,433 1,330
Interest income ............................ 2 1 3 4
Interest expense ........................... (109) (126) (223) (252)
Other, net ................................. (24) (13) (46) (28)
---------- ---------- ---------- ----------
Income before income taxes ............ 737 669 1,167 1,054
Income tax provision ....................... 235 234 373 369
---------- ---------- ---------- ----------
Net income ................................. $ 502 $ 435 $ 794 $ 685
========== ========== ========== ==========
Income per share:
Basic ................................. $ 0.10 $ 0.09 $ 0.17 $ 0.14
========== ========== ========== ==========
Diluted ............................... $ 0.10 $ 0.09 $ 0.15 $ 0.14
========== ========== ========== ==========
Weighted average number of common shares and
common equivalent shares outstanding:
Basic ................................. 4,775 4,728 4,770 4,725
========== ========== ========== ==========
Diluted ............................... 5,142 5,061 5,151 5,020
========== ========== ========== ==========
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