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

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 (R), My Favorite Muffin (R) Jacobs Bros. Bagels (R) and Brewster's (R) 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

SOURCE: BAB, Inc.

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