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

DEERFIELD, Ill.--(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.

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

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

Source: BAB, Inc.