BAB, Inc. Reports Profit for 3rd Quarter FY 2012

DEERFIELD, Ill. - October 3, 2012 - (BUSINESS WIRE) - BAB, Inc. (OTCBB: BABB) announced its financial results for its third quarter ended August 31, 2012.

For the quarter ended August 31, 2012, BAB had revenues of $587,000 and net income of $63,000, or $0.01 per share, versus revenues of $670,000 and net income of $70,000, or $0.01 per share, for the same quarter last year. The Company had no company-owned stores or related revenue for the quarter ended August 31, 2012 but had one store and $102,000 of company store revenues for quarter ended August 31, 2011.

For the nine months ended August 31, 2012, BAB had revenues of $1,980,000 and net income of $340,000, or $0.05 per share, versus revenues of $2,182,000 and net income of $249,000 or $0.03 per share for the same period in 2011. The Company had $178,000 of settlement revenue in the nine months ended August 31, 2012, of which $171,000 was from a single settlement in the second quarter. The Company only had $29,000 of settlement revenue in the nine months ended August 31, 2011. In addition, the Company had no company-owned stores or related revenue for the nine months ended August 31, 2012 but had one store and $302,000 of company store revenues for same period in 2011.

Total operating expenses for the quarter ended August 31, 2012, were $523,000 versus $593,000 in 2011. There were no company-owned store expenses in the quarter ended August 31, 2012 versus $88,000 for the quarter ended August 31, 2012. For the nine months ended August 31, 2012, total operating expenses were $1,622,000 versus $1,925,000 in 2011. There were no company-owned store expenses for the nine months ended August 31, 2012 versus $290,000 for the nine months ended August 31, 2011.

About BAB, Inc.

BAB, Inc. operates, franchises, and licenses Big Apple Bagels®, My Favorite Muffin®, SweetDuet Frozen Yogurt & Gourmet Muffins™, 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       Nine Months Ended
    08/31/12       08/31/11   % Change       08/31/12       08/31/11   % Change
                                     
REVENUES                                    
                                     
Royalty fees from franchised stores   463,113         445,287          4.0 %       1,395,115         1,307,931          6.7 %
Franchise and area development fee revenue       5,000             5,000          0.0 %            47,500            149,300       -68.2 %
Licensing fees and other income   118,826         117,830          0.8 %          537,602            423,572        26.9 %
Net sales by company-owned stores              0         101,889     -100.0 %                     0            301,584     -100.0 %
    586,939         670,006     -  12.4 %       1,980,217         2,182,387         -9.3 %
                                     
OPERATING COSTS AND EXPENSES                                    
Food, beverage and paper costs              0           33,683     -100.0 %                     0            102,836     -100.0 %
Store payroll and other operating expenses              0           54,645     -100.0 %                     0            186,867     -100.0 %
Selling, general and administrative   517,961         499,268          3.7 %       1,607,508         1,614,770         -0.4 %
Depreciation and amortization       4,713             5,756       -18.1 %            14,279              20,142       -29.1 %
    522,674         593,352       -11.9 %       1,621,787         1,924,615       -15.7 %
                                     
Income before interest, other and taxes     64,265           76,654       -16.2 %          358,430            257,772        39.0 %
                                     
Interest expense   (  1,812 )       (    2,126 )     -14.8 %       (     5,436 )       (     6,380 )     -14.8 %
Interest/other income         770                 857       -10.2 %             2,144                2,905       -26.2 %
                                     
Current tax expense             0         (   5,000 )   N/M         (   15,000 )       (     5,000 )     N/M  
                                     
NET INCOME     63,223           70,385       -10.2 %         340,138           249,297       36.4 %
                                     
Earnings per share - basic            0.01                  0.01     N/M                  0.05                  0.03     N/M  
Average number of shares outstanding   7,263,508         7,263,508             7,263,508         7,263,508      
                                     
Earnings per share - diluted            0.01                  0.01     N/M                  0.05                  0.03     N/M  
Average number of shares outstanding   7,265,510         7,267,148             7,265,707         7,264,965      

Contacts

BAB, Inc.
Michael K. Murtaugh
(847) 948-7520
Fax: (847) 405-8140
www.babcorp.com

###

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