EXHIBIT 99.1
[BACKYARD BURGERS LOGO]
Contact: Michael G. Webb
Chief Financial Officer
(901) 367-0888 Ext. 1226
BACK YARD BURGERS ANNOUNCES SECOND QUARTER
AND YEAR-TO-DATE 2005 RESULTS
MEMPHIS, TENNESSEE (JULY 26, 2005) -- Back Yard Burgers, Inc. (Nasdaq
SmallCap:BYBI) today announced results for the second quarter of 2005.
o Total revenues for the 13-week period ended July 2, 2005, were
$10,737,000 compared with total revenues of $10,659,000 for the 13-week
period ended July 3, 2004. Royalty and advertising fees rose by
approximately 30% over the year-earlier period due to a net increase of
21 franchised restaurants since July 3, 2004. Franchise and area
development fees increased to $146,000 from $121,000 in the
year-earlier period due to the opening of seven franchised restaurants
during the 13-week period ended July 2, 2005, compared with six
franchised restaurant openings in the year-earlier period. These
increases were partially offset by a 1.7% decrease in same-store sales
for Company-operated restaurants from the comparable period in 2004.
o Net income for the 13-week period ended July 2, 2005, decreased 14.8%
to $404,000, or $0.08 per diluted share, from $474,000, or $0.09 per
diluted share, in the year-earlier period. The decrease was primarily
due to the decline in same-store sales at Company-operated restaurants
coupled with a 14% increase in the cost of beef during the 13-week
period ended July 2, 2005, as well as increased spending for general
and administrative expenses, including corporate personnel,
professional and consulting fees and travel relating to franchised
restaurant support.
o For the second quarter of 2005, same-store sales for Company-operated
restaurants decreased 1.7% from the comparable period in 2004, and
same-store sales for franchised restaurants declined 1.0% for the same
period. Same-store sales for the second quarter of 2005 for both
Company-operated and franchised restaurants were positively affected by
approximately 0.4% due to the fact that Easter Sunday occurred during
the first quarter of 2005 and during the second quarter of 2004.
Year-to-date same-store sales for 2005 decreased 2.2% for
Company-operated restaurants and decreased 0.7% for franchised
restaurants versus the comparable period in 2004.
o Total revenues for the 26-week period ended July 2, 2005, totaled
$20,414,000 compared with $20,142,000 in the prior-year period. Net
income for the 26-week period ended July 2, 2005, was $241,000, or
$0.05 per diluted share, compared with $741,000, or $0.14 per diluted
share, in the prior-year period. Net income for the 26-week period
ended July 2, 2005, included 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.
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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 Second Quarter Results
Page 2
July 26, 2005
o Unit activity for the quarter included the opening of seven franchised
stores and the closing of one Company-operated store. As of July 2,
2005, the Company's restaurant system comprised 160 units, including 41
Company-operated stores and 119 franchised stores. Expansion plans for
the remainder of 2005 include the opening of three Company-operated
stores and 20 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 Second Quarter Results
Page 3
July 26, 2005
BACK YARD BURGERS, INC
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<Table>
<Caption>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
-------------------- ----------------------
Revenues: 07/02/05 07/03/04 07/02/05 07/03/04
-------- -------- --------- ---------
(restated) (1) (restated) (1)
Restaurant sales $ 9,072 $ 9,323 $ 17,280 $ 17,757
Franchise and area development fees 146 121 311 209
Royalty fees 1,038 793 1,969 1,452
Advertising fees 271 205 515 370
Other 210 217 339 354
-------- -------- --------- ---------
Total revenues 10,737 10,659 20,414 20,142
-------- -------- --------- ---------
Expenses:
Cost of restaurant sales 2,951 2,932 5,590 5,566
Restaurant operating expenses 4,275 4,342 8,270 8,418
General and administrative 1,579 1,307 3,633 2,506
Advertising 713 720 1,267 1,234
Depreciation and amortization 515 526 1,078 1,050
-------- -------- --------- ---------
Total expenses 10,033 9,827 19,838 18,774
-------- -------- --------- ---------
Operating income 704 832 576 1,368
Interest income 7 2 13 3
Interest expense (104) (120) (212) (246)
Other, net (23) (24) (44) (46)
-------- -------- --------- ---------
Income before income taxes 584 690 333 1,079
Income tax provision 180 216 92 338
-------- -------- --------- ---------
Net income $ 404 $ 474 $ 241 $ 741
======== ======== ========= =========
Income per share:
Basic $ 0.08 $ 0.10 $ 0.05 $ 0.16
======== ======== ========= =========
Diluted $ 0.08 $ 0.09 $ 0.05 $ 0.14
======== ======== ========= =========
Weighted average number of common shares and
common equivalent shares outstanding:
Basic 4,806 4,775 4,798 4,770
======== ======== ========= =========
Diluted 5,107 5,142 5,121 5,151
======== ======== ========= =========
</Table>
(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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