Memphis, TN - Back Yard Burgers, Inc. announced results for the fourth quarter and fiscal year ended January 3, 1998. Because Back Yard Burgers' fiscal year ends on the Saturday closest to December 31, fiscal 1997 contains 53 weeks versus 52 weeks for the prior year. As a result, sales for fiscal 1997 are not directly comparable with those of the prior 52-week fiscal year. Likewise, the fourth quarter reporting period contains 14 weeks for fiscal 1997 versus 13 weeks in the year-earlier period.
Income for 1997, before impairment charges described below, totaled $539,000, or $0.12 per diluted share, compared with $357,000, or $0.08 per diluted share for 1996. Total revenues for the year ended January 3, 1998, rose 8.3% to $26,034,000 from $24,041,000 last year. The increase reflects revenues of $447,000 from an additional week of operations as noted above; an increase of 7.0% in same-store sales; the addition of one new Company- operated restaurant; and the conversion of five Company-operated double drive-thrus to dine- in restaurants at various times during the past year.
For the fourth quarter ended January 3, 1998, income before impairment charges was $116,000, or $0.03 per diluted share, versus a net loss of $56,000, or $0.01 per diluted share, in the year- earlier period. Total revenues rose 12.4% to $6,958,000 compared with $6,192,000 last year.
During the fourth quarter of 1997, the Company incurred a non- cash charge of $377,000, or $0.08 per diluted share, for the effect of impaired assets at two underperforming restaurants. Including this non-cash charge, the Company reported net income of $162,000, or $0.04 per diluted share, for the year ended January 3, 1998, and a net loss for the fourth quarter of 1997 of $261,000, or $0.06 per diluted share.
Same-store sales increased 8.9% for the fourth quarter and 7.0% for the year. On a system-wide basis, including franchised units, same-store sales increased 7.0% for the fourth quarter and 6.8% for the year.
Commenting on the results, Lattimore M. Michael, Chairman and Chief Executive Officer, said, "Our Company made clear progress during 1997. We continued with our plan to convert the Company from primarily a quick-service, double drive-thru concept to a primarily fast-casual, single drive-thru concept with dine-in facilities. Even in the face of deep discounts by our competitors, comparable same-store sales rose 7.0% for the year. I believe this to be a favorable indicator of the success of the Company's strategy and its ability to compete in a crowded marketplace. Our focus on repositioning our concept is beginning to deliver results. We have addressed our underperforming locations and believe that our system is stronger than ever."
During the fourth quarter, construction was completed on a dining room addition to a Company-operated restaurant on Center Pointe Place in Franklin, Tennessee. Projects currently underway include the construction of three new Company-operated units featuring dine-in facilities with a single drive-thru and the conversion of a double drive-thru to a single drive-thru with dine- in facilities. Also during the quarter, two franchised stores opened. One is a convenience store location in Picayune, Mississippi, and the other is in Hope Mills, North Carolina. The Company anticipates that a dining room will be added to one franchised double drive-thru and that two new franchised restaurants will open during the first quarter of 1998. Two franchised stores were closed during the quarter, one each in Bentonville and Rogers, Arkansas. Subsequent to January 3, 1998, franchise agreements with a franchisee in South Florida were terminated. This franchisee operated two restaurants which will no longer be included in the Back Yard Burgers' system.
As of January 3, 1998, the Company restaurant system comprised 77 units, including 32 Company-operated stores and 45 franchised stores.
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, high- quality condiments and name-brand beverages as well as hand-dipped milkshakes, fresh-made lemonade and fresh-baked cobblers.
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