Industry News | February 26, 2001

Back Yard Burgers Reports 4Q, Year-end Results

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Back Yard Burgers, Inc. (Nasdaq SmallCap:BYBI) today announced results for the fourth quarter and fiscal year ended December 30, 2000.

Total revenues for the thirteen weeks ended December 30, 2000, rose 2.0% to $7,146,000 compared with $7,006,000 last year. The improvement resulted from increased sales of company-operated restaurants, as well as increased royalties due to net unit growth of seven franchised stores over the prior year. EBITDA for the thirteen weeks ended December 30, 2000, was $594,000 compared with negative $774,000 in the year-earlier period. For the thirteen weeks ended December 30, 2000, net income totaled $35,000, or $0.01 per diluted share, compared with a loss of $790,000, or $0.17 per diluted share in the year-earlier period. Prior year amounts include a $1,362,000 impairment charge taken in the fourth quarter of fiscal year 1999.

Total revenues for the year ended December 30, 2000, decreased 0.1% to $29,260,000 from $29,295,000 last year. EBITDA was $2,706,000 for the year ended December 30, 2000, compared with $991,000 for the year ended January 2, 1999. Net income totaled $466,000, or $0.10 per diluted share, compared with a loss of $558,000, or $0.12 per diluted share in fiscal year 1999. Prior year amounts include a $1,362,000 impairment charge taken in the fourth quarter of fiscal year 1999.

Same-store sales at company-operated restaurants decreased 1.1% for the fourth quarter and 5.6% for the year, while same-store sales at franchised restaurants decreased 5.1% in the fourth quarter and 4.5% in the year-to-date period. System-wide same-store sales decreased 3.4% for the fourth quarter and 5.0% in the year-to-date period.

Commenting on the results, Lattimore M. Michael, Chairman and Chief Executive Officer, said, "The infrastructure of the company has changed dramatically over the past two years with the hiring of a new Chief Operating Officer, Michael Myers, as well as a new Chief Financial Officer, Michael Webb. We have faced some difficult decisions and addressed them head on. I believe the strategic change of positioning the company as a premium fast-food chain and removing ourselves from the discount wars was the proper direction for the company to take. Although we sacrificed a portion of our customer base and sales as a result, I think we have made significant strides in improving profitability.''

Also commenting, Michael Myers, Chief Operating Officer, said, "We are focused on improving the economic model of our restaurants, which in turn should improve the growth rate of the company. It's simple: the more profitable our products, the faster the company can build stores and the easier it becomes to sell more franchises. During the last half of 2000, we introduced our new ''100% Black Angus Beef Burgers" in all company-operated stores and have been pleased with the results thus far. All franchised and company-operated stores will be serving this product by March 1, 2001. Black Angus Beef, which many consider the gold standard of beef, has helped further position the company as a premium fast-food chain as well as improve the overall profitability of the company. Our plans are to continue to improve product quality and customer satisfaction by enhancing existing products and service as well as introducing new products in the future.''

During the fourth quarter, the company sold one company-operated store in Benton, Arkansas, which will continue to be operated as a franchised restaurant. Franchise activity for the quarter included the opening of franchised restaurants in Louisville, Kentucky, and Broken Arrow, Oklahoma.

As of December 30, 2000, the company's restaurant system comprised 93 units, including 35 company-operated stores and 58 franchised stores.