Back Yard Burgers Reports Second Quarter Results.

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--July 25, 2000

Back Yard Burgers, Inc. (Nasdaq SmallCap:BYBI) today announced results for the second quarter of 2000.

Total revenues for the thirteen weeks ended July 1, 2000 decreased 0.1% to $7,759,000 from $7,763,000 in the year-earlier period, due to a decrease in same-store sales offset by incremental sales from the acquisition of three franchised stores during May of 2000 and an increase in royalty fees from the year-earlier period. EBITDA increased 39.1% to $850,000 for the second quarter of 2000 from $611,000 in the year-earlier period. Net income increased 154.0% for the quarter to $221,000 or $.05 per diluted share, from $87,000 or $.02 per diluted share, during the second quarter of 1999. EBITDA and net income for the quarter were positively impacted by a $153,000 gain on the sale of a previously closed store.

Total revenues for the first half of 2000 decreased 1.9% to $14,333,000 from $14,614,000 in the prior year. EBITDA for the twenty-six weeks ended July 1, 2000, was $1,394,000 compared to $1,135,000 in the year-earlier period, and net income increased by 121.7% to $286,000 from $129,000 in 1999.

Same-store sales for the second quarter and the year-to date period decreased 8.2% for company-operated restaurants, and same-store sales at franchised restaurants decreased 4.0% for the second quarter and 3.5% for the year-to-date period.

Commenting on the results, Lattimore M. Michael, Chairman and Chief Executive Officer, stated, "We are committed to the decisions made during the latter half of 1999 to reduce our coupon and discount programs and focus on enhancing the quality of our existing products. We are still experiencing declines in same-store sales, but a large portion of these sales declines were related to the lower margin discounted sales. As a result, our company-wide operating margin and profitability has improved over the prior year even though same-store sales have declined."

During the second quarter of 2000, the company purchased the operating businesses, including personal property, of Back Yard Burgers franchised stores located in Jackson, Tennessee, Tupelo, Mississippi, and Jonesboro, Arkansas, from a franchisee, KEA Foods, effective May 7, 2000. Other store activity included one franchised store opened in each of Kansas City, Missouri, Wilmington, North Carolina and Hickory, North Carolina. The company anticipates one company-operated and at least six additional franchised restaurants to open during the last half of 2000.

As of July 1, 2000, the Company's restaurant system comprised 90 units, including 37 company-operated stores and 53 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.

                       BACK YARD BURGERS, INC.
                    Unaudited Financial Highlights

                      Thirteen Weeks Ended    Twenty-Six Weeks Ended
                     ----------------------  ------------------------
                        7/1/00     7/3/99       7/1/00      7/3/99
                     ----------  ----------  -----------  -----------
Restaurant sales     $6,975,000  $7,111,000  $12,852,000  $13,286,000
Total revenues        7,759,000   7,763,000   14,333,000   14,614,000
Income before
 income taxes           349,000     145,000      445,000      215,000
Income taxes            128,000      58,000      159,000       86,000
Net Income             $221,000     $87,000     $286,000     $129,000
Income per share:
  Basic                    $.05        $.02         $.06         $.03
  Diluted                  $.05        $.02         $.06         $.03
Weighted average shares
 outstanding:
  Basic               4,628,000   4,605,000    4,625,000    4,603,000
  Diluted             4,650,000   4,634,000    4,645,000    4,635,000

This press release contains forward-looking statements within the meaning of the federal securities laws. 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 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 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.