BAB, Inc. Reports Profit for 2nd Quarter FY 2009

DEERFIELD, Ill.--(BUSINESS WIRE)--BAB, Inc. (OTCBB: BABB), announced its financial results for its second quarter ended May 31, 2009, reporting net income of $111,000, or $0.02 per share, versus net income of $177,000, or $0.02 per share, for the same quarter last year.

For the quarter ended May 31, 2009, BAB had revenues of $797,000 and net income of $111,000, or $0.02 per share, versus revenues of $945,000 and net income of $177,000, or $0.02 per share, for the same quarter last year.

For the six months ended May 31, 2009, BAB had revenues of $1,575,000 and a net loss of $2,283,000, or ($0.31) per share, versus revenues of $1,917,000 and net income of $320,000, or $0.04 per share for the same period in 2008. Excluding the first quarter 2009 noncash impairment charge for goodwill and other intangibles of $2,399,000, the six months ended May 31, 2009 net income would have been $116,000. There was no impairment charge in 2008.

Total operating expenses for the quarter ended May 31, 2009, were $687,000 versus $772,000 in 2008. YTD May 31, 2009, total operating expenses, excluding the $2,399,000 impairment charge, were $1,462,000 versus $1,610,000 in 2008.

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
05/31/09 05/31/08 % Change 05/31/09 05/31/08 % Change
REVENUES
Royalty fees from
franchised stores $484,037 $558,487 -13.3% $926,672 $1,072,703 -13.6%
Franchise and area
development fee revenue 5,000 35,000 -85.7% 50,000 140,000 -64.3%
Net sales by
company-owned stores 118,103 137,655 -14.2% 226,532 253,841 -10.8%
Licensing fees and
other income 190,055 213,951 -11.2% 371,861 449,997 -17.4%
797,195 945,093 -15.6% 1,575,065 1,916,541 -17.8%

OPERATING COSTS AND EXPENSES
Food, beverage and
paper costs 35,872 45,110 -20.5% 69,252 84,791 -18.3%
Store payroll and
other operating
expenses 109,958 107,528 2.3% 224,923 226,152 -0.5%
Selling, general
and administrative 532,089 609,841 -12.7% 3,547,628 1,280,659 177.0%
Depreciation and
amortization 9,556 9,937 -3.8% 18,828 18,584 1.3%
687,475 772,416 -11.0% 3,860,631 1,610,186 139.8%

Income from operations 109,720 172,677 N/M (2,285,566) 306,355 N/M

Interest expense (2,714) (2,987) -9.1% (5,427) (5,975) -9.2%
Interest/other income 4,446 7,425 -40.1% 7,748 19,915 -61.1%

NET INCOME $111,452 $177,115 N/M ($2,283,245) $320,295 N/M

Earnings per share -
basic $0.02 $0.02 N/M ($0.31) $0.04 N/M
Average number of
shares outstanding 7,263,508 7,263,508 7,263,508 7,263,508

Earnings per share
- diluted $0.02 $0.02 N/M ($0.31) $0.04 N/M
Average number of
shares outstanding 7,263,508 7,273,305 7,263,508 7,273,579

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