BAB, Inc. Reports Profit for 2nd Quarter FY 2013

DEERFIELD, Ill. - July 1, 2013 - (BUSINESS WIRE) - BAB, Inc. (OTCBB: BABB), announced its financial results for the second quarter ended May 31, 2013.

For the quarter ended May 31, 2013, BAB had revenues of $658,000 and net income of $125,000, or $0.02 per share, versus revenues of $826,000 and net income of $267,000, or $0.04 per share, for the same quarter last year. For the quarter ended May 31, 2012, the Company received a $171,000 payment for the buyout of the Franchise Agreement from its Minot, ND franchisee so the franchisee could pursue its other business interests associated with the local energy boom. In that acceptance by the Company of the voluntary buyout is unique, no such transaction occurred nor was such income earned in the quarter ended May 31, 2013.

For the six months ended May 31, 2013, BAB had revenues of $1,193,000 and net income of $60,000, or $0.01 per share, versus revenues of $1,393,000 and net income of $277,000, or $0.04 per share for the same period in 2012. As noted above, the Company received a $171,000 buyout from its Minot, ND franchisee during the six months ended May 31, 2012 versus no such income in the same period in 2013.

Total operating expenses for the quarter ended May 31, 2013, were $531,000, versus $543,000, in 2012. The Company spent $31,000 on the SweetDuet® concept for the quarter ended May 31, 2013, versus $16,000 for the same quarter in 2012. Total operating expenses for the six months ended May 31, 2013 were $1,131,000 versus $1,099,000 for the six months ended May 31, 2012. The Company spent $68,000 on the SweetDuet concept for the six months ended May 31, 2013, versus $16,000 for the same period in 2012.

BAB, Inc. franchises and licenses Big Apple Bagels®, My Favorite Muffin®, SweetDuet Frozen Yogurt & Gourmet Muffins® 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.

(TABLE FOLLOWS)

BAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         
                         
    Quarter Ended   Six Months Ended
    05/31/13   05/31/12   % Change   05/31/13   05/31/12   % Change
                         
REVENUES                        
                         
Royalty fees from franchised stores   $467,525     $489,081     -4.4 %   $887,444     $932,002     -4.8 %
Franchise and area development fee revenue   10,000     37,500     -73.3 %   10,000     42,500     -76.5 %
Licensing fees and other income   180,632     299,205     -39.6 %   295,793     418,776     -29.4 %
Total Revenue   658,157     825,786     -20.3 %   1,193,237     1,393,278     -14.4 %
                         
OPERATING COSTS AND EXPENSES                        
                         
Selling, general and administrative   527,118     537,766     -2.0 %   1,122,034     1,089,547     3.0 %
Depreciation and amortization   4,367     4,782     -8.7 %   8,711     9,566     -8.9 %
Total Expense   531,485     542,548     -2.0 %   1,130,745     1,099,113     2.9 %
                         
Income from operations   126,672     283,238     -55.3 %   62,492     294,165     -78.8 %
                         
Interest expense   (1,482 )   (1,812 )   -18.2 %   (2,965 )   (3,624 )   -18.2 %
Interest/other income   248     668     -62.9 %   555     1,374     -59.6 %
Current tax   0     (15,000 )   N/M     0     (15,000 )   N/M  
                         
NET INCOME   $125,438     $267,094     -53.0 %   $60,082     $276,915     -78.3 %
                         
Earnings per share - basic   $0.02     $0.04     N/M     $0.01     $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     $0.04     N/M     $0.01     $0.04     N/M  
Average number of shares outstanding   7,267,558     7,265,510         7,266,718     7,265,707      
                                 

Contact:

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

###

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