BACK YARD BURGERS REPORTS YEAR-END RESULTS.

MEMPHIS, Tenn.--(BUSINESS WIRE)--Feb. 15, 1996--Back Yard Burgers, Inc. (Nasdaq Small Cap:BYBI; CHX:BYB) today announced results for the fourth quarter and year ended December 30, 1995.

For 1995, fourth quarter results include a previously announced non-cash charge of $2,564,000 or $.57 per share for impaired assets (related to the adoption of a new accounting standard), as well as a charge of $100,000 related to a note receivable from American Modular Industries, Inc., a former modular building supplier which recently declared bankruptcy. Excluding the above charges, the Company reported a net loss of $302,000 or $.07 per share for the thirteen weeks ended December 30, 1995. The Company reported a loss of $2,966,000 or $.65 per share for the thirteen weeks ended December 30, 1995, compared with net income of $67,000 or $.02 per share for the year-earlier period.

Revenues for the thirteen weeks ended December 30, 1995, totaled $5,655,000 compared with $4,973,000 in the year-earlier period. For the full year, revenues were $22,743,000 during 1995 compared with $17,244,000 in 1994. The Company posted a net loss of $2,953,000 or $.65 per share for 1995 versus income of $683,000 or $.20 per share for the year ended December 31, 1994. Excluding the charges detailed above, the loss for 1995 was $289,000 or $.06 per share.

Commenting on the report, Lattimore M. Michael, Chairman and Chief Executive Officer, explained that the loss reflected lower- than-expected sales. Same-store sales declined 11.4% in the fourth quarter and 10.9% for the full year. On a system-wide basis, which includes franchised units, same-store sales declined 8.0% and 6.4%, respectively, for the fourth quarter and year-to- date periods. "Sales have continued to be affected by pressure from competitors' promotional activities and price discounting. The effect on margins has been compounded by an increase in our store promotional and advertising activities and increased direct labor costs. We are clearly disappointed with the 1995 results. During the coming year, we will curtail the opening of Company- operated units; however, we will use capital to convert certain double drive-thru units to single drive-thru units with dine-in facilities," Michael said.

"We are re-engineering our concept to meet our customers' demands. We will focus on service and customer satisfaction," Michael added. "In order to propel our efforts toward improvement, we retained The RMP Group, a management firm focused on the development and management of emerging and underperforming foodservice and retail companies. RMP has been assisting us in repositioning the concept, developing a strategic direction, creating a tactical marketing plan, enhancing customer satisfaction, and identifying strategies of change. We believe this assistance will have an impact during 1996."

As of December 30, 1995, the Company's restaurant system comprised 68 units, including 32 Company-operated stores and 36 franchised stores. An additional ten restaurants (one Company- operated and nine franchised) are currently under development.

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets across 15 states. The Company features gourmet hamburgers and chicken sandwiches, name-brand condiments and beverages as well as hand-dipped milkshakes, fresh-squeezed lemonade and fresh-baked cobblers. -0-

                          BACK YARD BURGERS, INC.
                    Unaudited Financial Highlights

                        13 Weeks Ended            52 Weeks Ended
                    12/30/95     12/31/94     12/30/95     12/31/94
Restaurant sales  $ 5,294,000  $ 4,508,000  $21,196,000  $15,606,000
Total revenues      5,655,000    4,973,000   22,743,000   17,244,000
Income (loss) before
 income taxes      (3,101,000)     108,000   (3,060,000)     876,000
Income tax provision
 (benefit)           (135,000)      41,000     (107,000)     193,000
Net income (loss) $(2,966,000) $    67,000  $(2,953,000) $   683,000
Earnings (loss) per share:
   Primary               (.65)         .02         (.65)         .20
   Fully diluted         (.65)         .01         (.65)         .15
Weighted average
 shares outstanding:
  Primary           4,534,000    3,333,000    4,533,000    3,333,000
  Fully diluted     4,534,000    4,533,000    4,533,000    4,533,000

CONTACT: Back Yard Burgers, Inc., Memphis

Stephen J. King, 901/367-0888