BAB, Inc. Reports Profit for 3rd Quarter FY 2015

DEERFIELD, Ill. - October 06, 2015 - (BUSINESS WIRE) - BAB, Inc. (OTCQB: BABB), announced its financial results for the third quarter ended August 31, 2015.

For the quarter ended August 31, 2015, BAB had revenues of $609,000 and net income of $135,000, or $0.02 per share, versus revenues of $600,000 and net income of $168,000, or $0.02 per share, for the same quarter last year.

For the nine months ended August 31, 2015, BAB had revenues of $1,669,000 and a net income of $9,000, with $0.00 (zero) earnings per share, versus revenues of $1,906,000 and net income of $471,000, or $0.06 per share for the same period in 2014. The Company recognized revenue of $200,000 from an International Master Franchise Agreement in 2014 versus no such agreement in the same period in 2015. In addition, an expense of $243,000 was incurred in 2015 relating to the settlement of a lawsuit against BAB Operations, Inc., a wholly owned subsidiary of BAB, Inc., which involved the 2001 lease assignment of a Company-owned store that was subsequently franchised.

Total operating expenses for the quarter ended August 31, 2015, were $482,000, versus $439,000, in 2014. Total operating expenses for the nine months ended August 31, 2015 were $1,668,000 versus $1,425,000 for the nine months ended August 31, 2014. The operating expenses for the nine months in 2015 include the $243,000 legal settlement as explained in the previous paragraph.

BAB, Inc. franchises and licenses Big Apple Bagels®, My Favorite Muffin®, SweetDuet® frozen yogurt and Brewster’s® coffee. The Company’s stock is traded on the OTCQB 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   Nine Months Ended
    08/31/15   08/31/14   % Change   08/31/15   08/31/14   % Change
                         
REVENUES                        
                         
Royalty fees from franchised stores   440,960     458,656     -3.9 %   1,278,715     1,311,369     -2.5 %
Franchise and area development fee revenue   50,000     37,500     33.3 %   80,000     272,500     -70.6 %
Licensing fees and other income   118,351     104,060     13.7 %   310,746     322,559     -3.7 %
    609,311     600,216     1.5 %   1,669,461     1,906,428     -12.4 %
                         
OPERATING COSTS AND EXPENSES                      
Selling, general and administrative   477,890     434,018     10.1 %   1,655,585     1,411,277     17.3 %
Depreciation and amortization   4,176     4,522     -7.7 %   12,703     13,636     -6.8 %
    482,066     438,540     9.9 %   1,668,288     1,424,913     17.1 %
                         
Income before interest, other and taxes   127,245     161,676     -21.3 %   1,173     481,515     -99.8 %
                         
Interest expense   (776 )   (1,138 )   -31.8 %   (2,327 )   (3,412 )   -31.8 %
Interest/other income   306     87     251.7 %   1,478     353     318.7 %
                         
Current tax benefit/(expense)   8,500     7,583     N/M     8,500     (7,417 )   N/M  
                         
NET INCOME   135,275     168,208     -19.6 %   8,824     471,039     -98.1 %
                         
Earnings per share - basic   0.02     0.02     N/M     0.00     0.06     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     0.00     0.06     N/M  
Average number of shares outstanding   7,263,508     7,263,508         7,263,508     7,263,508      

SOURCE BAB, Inc.

Contact:

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

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