Back Yard Burgers Reports Record Second Quarter Results.

MEMPHIS, Tenn.--(BUSINESS WIRE)--July 23, 1998--Back Yard Burgers, Inc. (Nasdaq Small Cap:BYBI) today announced results for the second quarter and first half of 1998.

Total revenues for the thirteen weeks ended July 4, 1998, rose 9.1% to $7,133,000 from $6,547,000 in the year-earlier period, reflecting primarily an increase in same-store sales, an increase in royalty fees from seven new franchised stores, and the addition of one new Company-operated store in the past year. Management of the Company believes the increase in same-store sales is the result of (1) improved customer service; (2) the retrofit of five double drive-thrus to dine-in facilities with single drive-thrus; and (3) menu price increases during the last half of 1997. The Company reported net income for the quarter increased 20.0% to a record $366,000, or $.08 per diluted share, compared with $305,000, or $.07 per diluted share, in the same period last year.

For the twenty-six weeks ended July 4, 1998, net income increased 142.5% to $531,000, or $.11 per diluted share, from $219,000, or $.05 per diluted share, in the first half of 1997. Total revenues for the first half of 1998 rose 8.6% to a record $13,500,000 from $12,426,000 in the prior year.

Same-store sales at Company-operated restaurants rose 10.7% for the second quarter and 11.0% for the year-to-date period, while same-store sales at franchised restaurants rose 4.1% for the second quarter and 7.3% for the year to date.

Commenting on the results, Lattimore M. Michael, Chairman and Chief Executive Officer, stated, "We are very pleased with the second quarter results. Same-store sales increased despite heavy discounting by our major competitors and extremely hot temperatures in June. We are committed to a focused plan to continue our growth and development.

"Equally important is our continuing development of new products. We are currently testing a number of new menu items and are pleased with the initial results," Michael said. "Finally, we are committed to delivering outstanding customer service and serving great-tasting products. In the coming months, we will be redoubling our efforts in these areas as we continue to strengthen our brand."

During the second quarter of 1998, a dining room addition was completed at the Company-operated store in North Little Rock, Arkansas. One Company-operated restaurant opened in Murfreesboro, Tennessee. In other action, one franchised restaurant closed in Cleveland, Mississippi. Subsequent to the end of the quarter, one new Company-operated restaurant opened in Cordova, Tennessee, and one new franchised restaurant opened in Wichita, Kansas, the first in that city. The Company expects to add dining rooms to approximately three Company-operated and one franchised double drive-thru restaurants during the remainder of 1998. In addition, three Company-operated and four franchised restaurants are expected to open during the second half of 1998.

As of July 4, 1998, the Company's restaurant system comprised 75 units, including 31 Company-operated stores and 44 franchised stores.

Back Yard Burgers operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets across 15 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 back yard. Its menu features made-to-order gourmet hamburgers and chicken sandwiches, fresh salads, chili and other special entrees as well as hand-dipped milkshakes, fresh-made lemonade and fresh-baked cobblers. -0-

                        BACK YARD BURGERS, INC.
                    Unaudited Financial Highlights

                        13 Weeks Ended           26 Weeks Ended
                 ------------------------  ---------------------------
                      7/4/98     6/28/97      7/4/98         6/28/97
                      ------     -------      ------         -------

Restaurant sales $  6,598,000 $ 6,030,000  $12,406,000    $11,491,000
Total revenues      7,133,000   6,537,000   13,500,000     12,426,000
 Income before
  income taxes        366,000     305,000      531,000        219,000
Income tax provision       --          --           --             --
Net income       $    366,000 $   305,000  $   531,000        219,000
Earnings per share:
   Basic         $        .08 $       .07  $       .12    $       .05
   Diluted       $        .08 $       .07  $       .11    $       .05
Weighted average
 shares outstanding:
   Basic            4,580,000   4,253,000    4,475,000      4,249,000
   Diluted          4,695,000   4,561,000    4,668,000      4,563,000


    CONTACT:  Back Yard Burgers, Memphis
               Stephen J. King, 901/367-0888, Ext. 1226