BAB, Inc. Reports Profit for 2nd Quarter FY 2008

DEERFIELD, Ill.--(BUSINESS WIRE)--BAB, Inc. (OTCBB: BABB), announced its financial results for its second quarter ended May 31, 2008.

For the quarter ended May 31, 2008, BAB had revenues of $945,000 and net income of $177,000, or $0.02 per share, versus revenues of $1,037,000 and net income of $240,000, or $0.03 per share, for the same quarter last year.

For the six months ended May 31, 2008, BAB had revenues of $1,917,000 and net income of $320,000, or $0.04 per share, versus revenues of $1,988,000 and net income of $361,000, or $0.05 per share for the same period in 2007.

Total operating expenses for the quarter ended May 31, 2008, were $772,000 versus $810,000 in 2007. YTD May 31, 2008, total operating expenses were $1,610,000 versus $1,653,000 in 2007.

BAB, Inc. operates, franchises, and licenses Big Apple Bagels ®, My Favorite Muffin ® Jacobs Bros. Bagels ® and Brewster's ® Coffee. The Company's stock is traded on the OTCBB under the symbol BABB and its web site can be visited at www.babcorp.com.

Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "estimate," "project," "intend," "expect," "should," "would," "believe" and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the company's actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the company's SEC filings.


(TABLE FOLLOWS)

BAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

Quarter Ended Six Months Ended
05/31/08 05/31/07 %Change 05/31/08 05/31/07 %Change

REVENUES

Royalty fees
from franchised stores $558,487 $571,419 -2.3% $1,072,703 $1,098,895 -2.4%
Franchise and area
development fee revenue 35,000 47,500 -26.3% 140,000 125,000 12.0%
Net sales by
company-owned stores 137,655 118,088 16.6% 253,841 233,362 8.8%
Licensing fees
and other income 213,951 300,291 -28.8% 449,997 531,219 -15.3%
945,093 1,037,298 -8.9% 1,916,541 1,988,476 -3.6%

OPERATING COSTS AND EXPENSES
Food, beverage
and paper costs 45,110 38,141 18.3% 84,791 71,948 17.9%

Store payroll and
other operating expenses 107,528 108,704 -1.1% 226,152 224,044 0.9%
Selling, general
and administrative 609,841 651,301 -6.4% 1,280,659 1,330,351 -3.7%
Depreciation
and amortization 9,937 11,641 -14.6% 18,584 26,795 -30.6%
772,416 809,787 -4.6% 1,610,186 1,653,138 -2.6%

Income from operations 172,677 227,511 N/M 306,355 335,338 N/M

Interest expense (2,987) (4,150) -28.0% (5,975) (9,174) -34.9%
Interest/other income 7,425 16,942 -56.2% 19,915 34,719 -42.6%

NET INCOME $177,115 $240,303 N/M $320,295 $360,883 N/M

Earnings
per share - basic $0.02 $0.03 N/M $0.04 $0.05 N/M
Average number
of shares outstanding 7,263,508 7,263,099 7,263,508 7,260,011

Earnings
per share - diluted $0.02 $0.03 N/M $0.04 $0.05 N/M
Average number
of shares outstanding 7,273,305 7,278,712 7,273,579 7,276,332

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