EXHIBIT 99.1
(BACK YARD BURGERS, INC. LOGO)
Contact: Michael G. Webb
Chief Financial Officer
(901) 367-0888 Ext. 1226
BACK YARD BURGERS REPORTS FIRST QUARTER FINANCIAL RESULTS
MEMPHIS, TENNESSEE (MAY 6, 2005) -- Back Yard Burgers, Inc. (Nasdaq
SmallCap:BYBI) today announced results for the first quarter of 2005.
- - Total revenues for the 13-week period ended April 2, 2005, were
$9,677,000, a record first quarter for the Company and an increase of
2.0% over total revenues for the 13-week period ended April 3, 2004.
The higher revenues resulted primarily from a $272,000 increase in
royalty fees and a $79,000 increase in advertising fees over the
year-earlier period due to a net increase of 20 franchised restaurants
since April 3, 2004. Eight franchised restaurants opened during the
13-week period ended April 2, 2005, compared with five in the
year-earlier period. This resulted in a $77,000 increase in franchise
and area development fees over the year-earlier period. These higher
revenues were partially offset by a 2.7% decline in same-store sales at
Company-operated restaurants during the first quarter of 2005 compared
with the first quarter of 2004.
- - The Company reported a net loss of $163,000, or $0.03 per diluted
share, for the first quarter of 2005 compared with net income of
$267,000, or $0.05 per diluted share, for the first quarter of 2004.
The net loss for the first quarter of 2005 includes a non-cash charge
of approximately $358,000 (net of a tax benefit of $153,000) relating
to the extension of the exercise date of certain stock options upon the
resignation of an officer/director on January 7, 2005.
Under the original stock option agreements, all of which were
originally granted with an exercise price equal to the market value of
the stock at the date of grant, the vested options were required to be
exercised within 90 days after his resignation. The Company modified
the terms for only those options to extend the period in which the
former officer/director could exercise these stock options. The
modification was to extend the exercise date until the earliest to
occur of: (i) the last day of the term of the option as specified in
the applicable option grant agreement, and (ii) one year from January
7, 2005. This modification required a re-measurement of the intrinsic
value of the stock options as of January 7, 2005, and resulted in a
non-cash charge in the form of compensation expense recorded as a
general and administrative expense for the Company during the 13-week
period ended April 2, 2005. The former officer/director had been with
the Company for approximately 18 years and resigned as an officer and
director of the Company to become a franchisee. The Company and the
former officer/director entered into agreements for the development of
10 franchised locations in the Austin, Texas, area over the next seven
years.
The change in financial results from the first quarter of 2004 is also
due to the decline in same-store sales at Company-operated restaurants,
as well as increases in general and administrative expenses during the
13-week period ended April 2, 2005. For the first quarter of 2005,
same-store sales for Company-operated restaurants decreased 2.7% from
the comparable period in 2004 and same-store sales for franchised
restaurants decreased 0.3% for the same period. Same-store sales for
both Company-operated and franchised restaurants were negatively
affected by approximately 0.4% due to the fact that Easter Sunday
occurred during the first quarter of 2005 and during the second
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1657 North Shelby Oaks Drive, Suite 105 | Memphis, TN 38134 | Phone 901 367 0888
| Fax 901 367 0999 | www.backyardburgers.com | Nasdaq Symbol BYBI
BYBI Reports First Quarter Results
Page 2
May 6, 2005
quarter of 2004. The increases in general and administrative expenses,
in addition to the non-cash stock compensation described above, were
primarily for corporate personnel, professional fees and consulting
fees, including fees associated with the documentation of internal
controls over financial reporting related to compliance with Section
404 of the Sarbanes-Oxley Act of 2002. The Company is required to
comply with Section 404 no later than fiscal year 2006.
- - Unit activity for the quarter included eight franchised store openings.
Nine franchised stores closed during the quarter, all of which were
co-branded restaurants with Taco Bell. The Company does not expect the
closing of these co-branded restaurants to have a material impact on
its financial condition or its results of operations for fiscal year
2005.
As of April 2, 2005, the Company's restaurant system comprised 155 units,
including 42 Company-operated stores and 113 franchised stores. Expansion plans
for the remainder of 2005 include the opening of four Company-operated stores
and 27 franchised stores.
Back Yard Burgers operates and franchises quick-service restaurants in 19
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 2005. 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 First Quarter Results
Page 3
May 6, 2005
BACK YARD BURGERS, INC
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
THIRTEEN WEEKS ENDED
---------------------
04/02/05 04/03/04
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(restated)(1)
Revenues:
Restaurant sales $ 8,208 $ 8,434
Franchise and area development fees 165 88
Royalty fees 931 659
Advertising fees 244 165
Other 129 137
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Total revenues 9,677 9,483
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Expenses:
Cost of restaurant sales 2,639 2,634
Restaurant operating expenses 3,995 4,076
General and administrative 2,054 1,199
Advertising 554 514
Depreciation and amortization 563 524
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Total expenses 9,805 8,947
------- -------
Operating income (128) 536
Interest income 6 1
Interest expense (108) (126)
Other, net (21) (22)
------- -------
Income before income taxes (251) 389
Income tax expense (88) 122
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Net income $ (163) $ 267
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Income per share:
Basic $ (0.03) $ 0.06
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Diluted $ (0.03) $ 0.05
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Weighted average number of common shares and common equivalent shares
outstanding:
Basic 4,791 4,762
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Diluted 5,135 5,157
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(1) Restated from previously reported financial statements to reflect certain
adjustments for lease accounting as discussed in Note 3 to the
Consolidated Financial Statements included in the Company's 2004 Form
10-K.
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