Back Yard Burgers Reports Record Quarterly Revenues and Profits for Second Quarter.

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--July 23, 2002

Back Yard Burgers, Inc. (Nasdaq SmallCap:BYBI) today announced results for the second quarter of 2002.

-- Total revenues for the 13-week period ended June 29, 2002, were $9,196,000, a record second quarter for the company and an increase of 10.2% over total revenues for the thirteen weeks ended June 30, 2001. The increase is the result of improvements in same-store sales over the 13 weeks ended June 30, 2001, as well as revenues from the net opening of three new company-operated restaurants since June 30, 2001.

-- The company also reported record second quarter net income for the 13-week period ended June 29, 2002. Net income for the second quarter of 2002 was $537,000, or $0.11 per diluted share, an increase of 47.1% over net income for the second quarter of 2001 of $365,000, or $0.08 per diluted share. The increase is primarily due to the revenue growth described above as well as improved margins at company-operated restaurants. The company has reported increases of 40.0% or more in net income over the same quarter in the prior year for ten consecutive quarters.

-- Same-store sales for the second quarter of 2002 increased 0.9% over the comparable period in 2001 for company-operated restaurants and 0.4% for franchised restaurants. Year-to-date same-store sales for 2002 increased 2.6% over the comparable period in 2001 for company-operated restaurants and 0.8% for franchised restaurants. The company has reported year-over-year same-store sales growth for six consecutive quarters for company-operated restaurants and for three consecutive quarters for franchised restaurants.

-- Total revenues for the 26-week period ended June 29, 2002, totaled $17,375,000, compared with $15,477,000 in the prior-year period and net income for the 26-week period ended June 29, 2002, was $764,000, or $0.15 per diluted share, compared with $521,000, or $0.11 per diluted share in the prior-year period.

-- Unit activity for the quarter included three franchised store openings and two franchised store closings. During the quarter, the company also acquired a franchised location in Kansas City, Missouri, and closed one company-operated store in Memphis, Tennessee. The three franchised openings were co-branded restaurants under the Multi-Brand Development Agreement the company entered into with Yum! Brands, Inc. on January 2, 2002. One of the stores is located in Shelbyville, Kentucky, and was an existing Taco Bell converted into a Taco Bell-Back Yard Burgers co-branded restaurant. The other two stores were existing Pizza Huts located in Fayetteville and Portland, Tennessee. Under the terms of the Development Agreement, Back Yard Burgers granted Yum! Brands the right to use the Back Yard Burgers trademarks in the United States in connection with the establishment and operation of up to ten Back Yard Burgers outlets as part of multi-brand units with Taco Bell, Pizza Hut and/or KFC operations. It is anticipated that the first ten co-branded restaurants will be constructed and opened by the end of 2003. The Development Agreement also grants to Yum! Brands an option to co-brand up to 500 additional restaurants within certain geographic areas if the development schedule for the initial ten outlets is being met.

As of June 29, 2002, the company's restaurant system comprised 106 units, including 39 company-operated stores and 67 franchised stores (of which four were co-branded restaurants under the agreement with Yum! Brands, Inc.). Expansion plans for the remainder of 2002 include three company-operated stores and nine franchised stores (including two co-branded restaurants under the agreement with Yum! Brands, Inc.).

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville, and other markets across 17 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 special entrees, as well as hand-dipped milkshakes, fresh-made lemonade and fresh-baked cobblers.

                        BACK YARD BURGERS, INC.
                    Unaudited Financial Highlights

                    Thirteen Weeks Ended      Twenty-six Weeks Ended
                   -----------------------   -------------------------
                     June 29,    June 30,      June 29,     June 30,
                      2002         2001          2002         2001
                   ----------   ----------   -----------   -----------
Restaurant sales   $8,279,000   $7,387,000   $15,590,000   $13,718,000
Total revenues      9,196,000    8,343,000    17,375,000    15,477,000
Income before
  income taxes        853,000      619,000     1,213,000       867,000
Income taxes          316,000      254,000       449,000       346,000
Net income         $  537,000   $  365,000   $   764,000   $   521,000

Income per share:
  Basic            $     0.11   $     0.08   $      0.16   $      0.11
  Diluted          $     0.11   $     0.08   $      0.15   $      0.11

Weighted average
 shares outstanding:
    Basic           4,713,000    4,630,000     4,702,000     4,631,000
    Diluted         5,097,000    4,753,000     5,078,000     4,730,000

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 and co-branded outlets the company anticipates opening during fiscal years 2002 and 2003. There are certain important factors that could cause actual results to differ materially from those anticipated by the statements made herein. Among the factors that could cause actual results to differ from predicted or expected results are: delays in opening new stores or outlets because of weather, local permitting or other reasons; increased competition; cost increases or shortages in raw food products; and the possibility of unforeseen events affecting the industry generally. The forward-looking statements reflect management's current expectations. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

                        BACK YARD BURGERS, INC
            Unaudited Consolidated Statements of Operations
               (in thousands, except per share amounts)

                        Thirteen Weeks Ended   Twenty-Six Weeks Ended
                        --------------------   ----------------------
Revenues:               06/29/02    06/30/01    06/29/02    06/30/01
                        --------    --------    --------    --------
 Restaurant sales       $  8,279    $  7,387    $ 15,590    $ 13,718
 Franchise and area
  development fees            17          42          44         141
 Royalty fees                566         525       1,082         964
 Advertising fees            135         135         265         248
 Other                       199         254         394         406
                        --------    --------    --------    --------
   Total revenues          9,196       8,343      17,375      15,477
                        --------    --------    --------    --------
Expenses:
 Cost of restaurant
  sales                    2,588       2,371       4,879       4,388
 Restaurant operating
  expenses                 3,746       3,396       7,216       6,502
 General and
  administrative           1,040         978       2,106       1,794
 Advertising                 525         503         985         958
 Depreciation and
  amortization               345         336         670         667
                        --------    --------    --------    --------
  Total expenses           8,244       7,584      15,856      14,309
                        --------    --------    --------    --------
  Operating income           952         759       1,519       1,168
Interest income                4           4           8          11
Interest expense            (117)       (127)       (249)       (274)
Other, net                    14         (17)        (65)        (38)
                        --------    --------    --------    --------
  Income before
   income taxes              853         619       1,213         867
Income tax provision         316         254         449         346
                        --------    --------    --------    --------
Net income              $    537    $    365    $    764    $    521
                        ========    ========    ========    ========
Income per share:
 Primary                $   0.11    $   0.08    $   0.16    $   0.11
                        ========    ========    ========    ========
 Diluted                $   0.11    $   0.08    $   0.15    $   0.11
                        ========    ========    ========    ========
Weighted average number
 of common shares and
 common equivalent shares
 outstanding:
  Primary                  4,713       4,630       4,702       4,631
                        ========    ========    ========    ========
  Diluted                  5,097       4,753       5,078       4,730
                        ========    ========    ========    ========