Back Yard Burgers, Inc. (Nasdaq SmallCap:BYBI) announced on February 16, 2000 results for the fourth quarter and fiscal year ended January 1, 2000.
Total revenues for the thirteen weeks ended January 1, 2000, rose 3.6% to $7,006,000 compared with $6,766,000 last year, resulting from additional sales generated from a net increase of two company-operated stores since the prior year, as well as an increase in royalty fees from a net increase of three franchised restaurants. These increases were offset by a decline in system-wide same-store sales of 1.3% for the thirteen-week period ended January 1, 2000. EBITDA, before impairment charges described below, was $588,000 for both the current period and the year-earlier period. For the thirteen weeks ended January 1, 2000, pre-tax income before impairment charges totaled $67,000, or $.01 per diluted share, compared with $79,000 or $.02 per diluted share, in the year-earlier period.
Total revenues for the year ended January 1, 2000, rose 7.1% to $29,295,000 from $27,364,000 last year. EBITDA was $2,353,000 for the year ended January 1, 2000, compared with $2,576,000 for the year ended January 2, 1999. Pretax income before impairment charges described below, totaled $432,000, or $.09 per diluted share, compared with $820,000, or $.18 per diluted share for 1998.
During the fourth quarter of 1999, the company incurred a non-cash charge of $1,362,000, or $.29 per diluted share, for the effect of three company-operated restaurant closings and impaired assets at three underperforming company-operated restaurants. The resultant income tax benefit for the thirteen weeks ended January 1, 2000, was $505,000, or $.11 per diluted share. This tax benefit for fourth quarter results in an annual tax benefit of $372,000, or $.08 per diluted share. The company also had an income tax benefit in the fourth quarter of 1998 as noted in the unaudited financial highlights below.
Including the above referenced items, the company reported a net loss of $790,000, or $.17 per diluted share, for thirteen weeks ended January 1, 2000, and a net loss of $558,000, or $.12 per diluted share, for the year ended January 1, 2000.
Same-store sales at company-operated restaurants decreased 3.8% for the fourth quarter although the full year reflected an increase of 0.4%, while same-store sales at franchised restaurants rose 0.3% in the fourth quarter and 2.0% in the year-to-date period. System-wide same-store sales decreased 1.3% for the fourth quarter and increased 1.3% in the year-to-date period.
Lattimore M. Michael, Chairman and Chief Executive Officer, noted, “The decisions made during the fourth quarter to close three of our company-operated restaurants did not come easy, but we feel it was a necessary step to improve our overall operating margins and performance. These decisions were made in the best interest of our shareholders and were based on our belief that they will have a positive impact on profitability in the future. Although we had positive system-wide same-store sales for the year, we did experience declines in the company-operated same-store sales during the last three quarters of 1999. However, we will have targeted local store marketing plans in placeduring the latter part of the first quarter of 2000 for the stores that were largely responsible for this negative trend.”
During the fourth quarter, the company opened one store in the Olive Branch, Mississippi, and closed company-operated restaurants in Horn Lake, Mississippi, and in Columbia, Tennessee. The company has also planned the closing of an additional unit in the Memphis area during the first quarter of 2000. Also during the fourth quarter, the company sold one company-operated store in Collierville, Tennessee, which will continue to be operated as a franchised restaurant. The three underperforming company-operated restaurants for which a charge for the impairment of long-lived assets was taken are located in Memphis and Little Rock.
Franchise activity for the quarter included the opening of franchised restaurants in Akron, Ohio, and Shawnee, Kansas, as well as the closing of franchised restaurants in Greer, South Carolina, Austin, Texas, and Picayune, Mississippi. In addition, three new franchised restaurants are expected to open during the first quarter of 2000. As of January 1, 2000, the company’s restaurant system was composed of 86 units, including 35 company-operated stores and 51 franchised stores.