href=”http://www.backyardburger.com”>Back Yard Burgers, Inc. (Nasdaq SmallCap: BYBI) today announced results for the third quarter and first nine months of 2000.

Total revenues for the thirteen weeks ended September 30, 2000, rose 1.4% to $7,781,000 from $7,675,000 in the year-earlier period, reflecting primarily an increase in royalty fees from four new franchised stores. EBITDA for the thirteen-week period was $718,000 compared with $630,000 in the year-earlier period. The company reported net income for the quarter of $145,000, or $.03 per diluted share, compared with $103,000, or $.02 per diluted share, in the same period last year.

For the thirty-nine-week period ended September 30, 2000, total revenues declined 0.8% to $22,114,000 from $22,289,000 in the prior year. EBITDA for the thirty-nine weeks ended September 30, 2000, was $2,112,000 compared with $1,765,000 in the year-earlier period, and net income was $431,000, or $.09 per diluted share, compared with $232,000, or $.05 per diluted share.

Same-store sales at company-operated restaurants decreased 5.0% in the third quarter and decreased 7.1% in the year-to-date period, while same-store sales at franchised restaurants decreased 5.7% in the third quarter and 4.4% in the year-to-date period. System-wide same-store sales decreased 5.4% in the third quarter and 5.5% in the year-to-date period.

“We have continued to make improvements in margins since the prior year,” says Lattimore Michael, chairman and CEO. Revenues were up 1.4% and net income was up 40.8%. These improvements are the result of decisions we’ve made over the past year to reduce the level of discounting programs, combined with cost savings initiatives that have been put in place by our operations team. We began testing our new 100% Black Angus beef burgers in the Memphis market on August 14, 2000, which also had a positive impact on profitability during the quarter.”

“At the end of last year, we made the decision to distance ourselves from discounting and focus on enhancing the quality of our core products,” said Michael Myers, C OO said. “This initiative has resulted in a slight decline in guest counts, but has had a positive impact on our operating margins at the store level. We learned that those customers motivated by the ”deal” were not loyal to our brand. The switch to Black Angus Beef in our Memphis market is helping to solidify our position as a premium fast food provider, and appeal to more people who discriminate on quality.

“We also changed our compensation format for our corporate operations personnel during the third quarter. The new compensation plan derives an employee’s compensation from the performance of the individual’s assigned business unit. Our employees are excited about the potential this new plan offers. Our employees’ compensation grows in concert with the success of the organization.”

During the third quarter of 2000, a franchised restaurant was opened in Hoover, Alabama, and Gulfport, Mississippi. One company-operated restaurant was closed in Little Rock, Arkansas. In addition, four new franchised restaurants are expected to open during the fourth quarter of 2000 or early in 2001.

As of October 2, 2000, the company’s restaurant system comprised 91 units, including 36 company-operated stores and 55 franchised stores.

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets across 16 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 hamburgers and chicken sandwiches – charbroiled over an open flame, fresh salads, chili and other special entrees as well as hand-dipped milkshakes, fresh-made lemonade and fresh-baked cobblers.

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