Back Yard Burgers Reports Record Revenues and Profits for Second Quarter 2006
August 01 2006 - 4:01PM
Business Wire
Back Yard Burgers, Inc. (NASDAQ:BYBI) today announced results for
the second quarter of 2006. -- Total revenues for the 13-week
period ended July 1, 2006, were $11,695,000, a record second
quarter for the company and an increase of 8.9% over total revenues
for the 13-week period ended July 2, 2005. Restaurant sales
increased by 6.8% to $9,686,000 from $9,072,000 in the year-earlier
period due primarily to the net addition of five company-operated
restaurants and the divestiture of four lower-volume
company-operated restaurants since July 2, 2005. Royalty and
advertising fees rose by approximately 19% over the year-earlier
period due to a net increase of 13 franchised restaurants since
July 2, 2005. Franchise and area development fees increased to
$204,000 from $146,000 in the year-earlier period. The company
opened five new franchised restaurants during the 13-week period
ended July 1, 2006, compared with seven in the year-earlier period.
The company cancelled three area development agreements during the
second quarter of 2006 due to lack of development and recognized
approximately $103,000 in area development fees as a result of
these cancellations. These area development agreements represented
commitments to develop 42 stores over the next six years, including
a 37-store development agreement with Black Angus Burgers, Inc. The
development agreement with Black Angus Burgers was originally
executed in May 2002 and was for 40 stores. -- The company also
reported record second quarter net income for the 13-week period
ended July 1, 2006. Net income for the 13-week period ended July 1,
2006, increased $172,000, or 42.6%, to $576,000, or $0.11 per
diluted share, from $404,000, or $0.08 per diluted share, in the
year-earlier period. The improvement in net income is primarily due
to increased royalty fees from the net growth of 13 franchised
locations since the July 2, 2005. The cancelled area development
fees described above also had a positive impact on net income of
approximately $67,000 (tax effected) for the 13-week period ended
July 1, 2006. -- For the second quarter of 2006, same-store sales
for company-operated restaurants increased 0.4% from the comparable
period in 2005, and same-store sales for franchised restaurants
increased 1.8% for the same period. Year-to-date same-store sales
for 2006 increased 1.6% for company-operated restaurants and
increased 2.0% for franchised restaurants versus the comparable
period in 2005. -- Total revenues for the 26-week period ended July
1, 2006, totaled $22,336,000 compared with $20,414,000 in the
prior-year period. Net income for the 26-week period ended July 1,
2006, was $793,000, or $0.15 per diluted share, compared with
$241,000, or $0.05 per diluted share, in the prior-year period. Net
income for the 26-week period ended July 2, 2005, included a
non-cash charge of approximately $358,000 (net of a tax benefit of
$153,000) relating to the extension of the exercise date of certain
stock options in January 2005. -- Unit activity for the quarter
included the opening of five franchised stores and the closing of
three franchised stores. As of July 1, 2006, the company's
restaurant system comprised 174 units, including 42
company-operated stores and 132 franchised stores. Expansion plans
for the remainder of 2006 include the opening of two
company-operated stores and 12 to 15 franchised stores. Back Yard
Burgers operates and franchises quick-service restaurants in 21
states, primarily in markets throughout the Southeast region of the
United 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 specialty items, including hand-dipped milkshakes,
fresh-made lemonade and fresh-baked cobblers. 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 the company
anticipates opening during fiscal year 2006. Forward-looking
statements are based upon estimates, projections, beliefs and
assumptions of management at the time of such statements and should
not be viewed as guarantees of future performance. Such
forward-looking information involves important risks and
uncertainties that could significantly impact anticipated results
in the future and, accordingly, such results may differ materially
from those expressed in any forward-looking statements by or on
behalf of the company. The factors that could cause our actual
results to differ materially, many of which are beyond our control,
include, but are not limited to, the following: delays in opening
new stores or outlets because of weather, local permitting, and the
availability and cost of land and construction; increases in
competition and competitive discounting; increases in minimum wage
and other operating costs; shortages in raw food products;
volatility of commodity prices; consumer preferences, spending
patterns and demographic trends; the possibility of unforeseen
events affecting the industry generally, and other risks described
from time to time in our periodic reports filed with the Securities
and Exchange Commission. Back Yard Burgers, Inc. disclaims any
obligation to update or revise any forward-looking statement based
on the occurrence of future events, the receipt of new information,
or otherwise. -0- *T BACK YARD BURGERS, INC Unaudited Consolidated
Statements of Operations (in thousands, except per share amounts)
Thirteen Weeks Ended Twenty-Six Weeks Ended --------------------
---------------------- Revenues: 07/01/06 07/02/05 07/01/06
07/02/05 -------- -------- -------- -------- Restaurant sales $
9,686 $ 9,072 $ 18,618 $ 17,280 Franchise and area development fees
204 146 290 311 Royalty fees 1,245 1,038 2,380 1,969 Advertising
fees 314 271 611 515 Other 246 210 437 339 -------- --------
-------- -------- Total revenues 11,695 10,737 22,336 20,414
-------- -------- -------- -------- Expenses: Cost of restaurant
sales 3,120 2,951 6,117 5,590 Restaurant operating expenses 4,646
4,275 8,936 8,270 General and administrative 1,634 1,579 3,382
3,633 Advertising 668 713 1,353 1,267 Depreciation and amortization
543 515 1,094 1,078 Gain on sale of assets -- -- (162) -- --------
-------- -------- -------- Total expenses 10,611 10,033 20,720
19,838 -------- -------- -------- -------- Operating income 1,084
704 1,616 576 Interest income 16 7 23 13 Interest expense (198)
(104) (387) (212) Other, net (24) (23) (47) (44) -------- --------
-------- -------- Income before income taxes 878 584 1,205 333
Income tax provision 302 180 412 92 -------- -------- --------
-------- Net income $ 576 $ 404 $ 793 $ 241 ======== ========
======== ======== Income per share: Basic $ 0.11 $ 0.08 $ 0.16 $
0.05 ======== ======== ======== ======== Diluted $ 0.11 $ 0.08 $
0.15 $ 0.05 ======== ======== ======== ======== Weighted average
number of common shares and common equivalent shares outstanding:
Basic 5,022 4,806 4,982 4,798 ======== ======== ======== ========
Diluted 5,151 5,107 5,128 5,121 ======== ======== ======== ========
*T
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