Back Yard Burgers Completes Stock Option Review and Files Form 10-Q

  
    
  
  
    
      Back Yard Burgers, Inc. (NASDAQ:BYBI) announced today that it has filed 
      its Quarterly Report on Form 10-Q for the quarter ended September 30, 
      2006, which had been delayed since November 2006 pending completion of a 
      review by the Audit Committee of the Company’s 
      Board of Directors of the Company’s historical 
      stock option grant practices. In the course of its investigation, the 
      Audit Committee did not find any evidence of fraudulent conduct on the 
      part of members of the Company’s Board of 
      Directors, Compensation Committee or senior management team in the 
      granting of stock options. However, the Audit Committee concluded that 
      the measurement dates previously used by the Company with respect to 
      certain stock option grants made during the 13-year period under review 
      differed from the appropriate measurement dates that should have been 
      used with respect to such awards. As a result, revised measurement dates 
      were applied to the affected option grants, and the Company has recorded 
      a total of $311,000 (net of a tax benefit of $118,000) of cumulative 
      additional stock-based compensation expense relating to the years 
      covered by the Audit Committee’s review. As a 
      result of this review, the Company’s Audit 
      Committee has also adopted certain remedial actions considered necessary 
      to strengthen the Company’s internal controls. 
      A detailed explanation of the review conducted by the Audit Committee 
      and the findings of that review are contained in the Company’s 
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, 
      which the Company filed with the Securities and Exchange Commission on 
      March 30, 2007. The Company believes that by filing its Form 10-Q, it is 
      now in compliance with Nasdaq Marketplace Rules and that, as such, its 
      common stock is no longer subject to possible delisting from the Nasdaq 
      Stock Market.
    
    
      The Company also announced today that it has filed Form 12b-25 with the 
      Securities and Exchange Commission indicating that it would not be able 
      to complete and file its Annual Report on Form 10-K with the SEC by 
      March 30, 2007, due to the time required to complete the Company’s 
      stock option review, record the appropriate financial statement 
      adjustments and complete its third quarter Form 10-Q. The Company 
      expects to file its Form 10?K as soon as 
      practicable and, in any event, within the 15 calendar days provided by 
      Rule 12b-25 of the SEC’s Rules and 
      Regulations.
    
    
      Back Yard Burgers operates and franchises quick-service restaurants in 
      20 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.
    
    
      Forward-Looking Statements
    
    
      All statements in this press release other than statements of historical 
      fact are forward?looking statements that are 
      subject to risks and uncertainties that could cause such statements to 
      differ materially from actual future events or results. Such forward?looking 
      statements are generally, but not necessarily, accompanied by words such 
      as “plan,” “if,” 
      “estimate,” “expect,” 
      “believe,” “could,” 
      “would,” “anticipate,” 
      “may,” or other 
      words that convey uncertainty of future events or outcomes. Specific 
      examples of forward?looking statements in 
      this release include, but are not limited to, statements concerning the 
      status of the internal review, the timing of the filing of the Company’s 
      Annual Report on Form 10-K for the fiscal year ended December 30, 2006, 
      the effect of improvements on the Company’s 
      stock option granting practices and whether the filing of the Company’s 
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 
      will result in the Company coming into compliance with Nasdaq 
      Marketplace Rules. These forward?looking 
      statements and other statements made elsewhere in this release are made 
      in reliance, in part, on the Private Securities Litigation Reform Act of 
      1995. Factors which could cause actual results to differ from 
      anticipated results include, but are not limited to, the impact of 
      additional tax liabilities that have not yet been estimated, future rule?making, 
      pronouncements or guidance by the SEC, PCAOB, NASDAQ or other regulatory 
      agencies. Any one of these factors may cause the Company’s 
      actual financial results to differ materially from its projected 
      results. The forward?looking statements in 
      this release speak only as of the date they are made. We undertake no 
      obligation to revise or update publicly any forward?looking 
      statement for any reason. Readers are referred to our Annual Report on 
      Form 10?K, subsequent Quarterly Reports on 
      Form 10?Q, recent Current Reports on Form 8?K, 
      and other Securities and Exchange Commission filings which discuss the 
      foregoing factors as well as other important risk factors that could 
      affect our business, results of operations and financial condition.