BAB, Inc. Reports Profit for 3rd Quarter FY 2009

For the quarter ended August 31, 2009, BAB had revenues of $824,000 and net income of $115,000, or $0.02 per share, versus revenues of $932,000 and net income of $162,000, or $0.02 per share, for the same quarter last year.

For the nine months ended August 31, 2009, BAB had revenues of $2,399,000 and a net loss of $2,168,000, or $0.30 per share, versus revenues of $2,849,000 and net income of $483,000, or $0.07 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 nine months ended August 31, 2009 net income would have been $231,000. There was no impairment charge in 2008.

Total operating expenses for the quarter ended August 31, 2009, were $709,000 versus $773,000 in 2008. For the nine months ended August 31, 2009, total operating expenses, excluding the $2,399,000 impairment charge, were $2,171,000 versus $2,383,000 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                     Nine Months Ended
                                            08/31/09   08/31/08   % Change    08/31/09         08/31/08   % Change
REVENUES
Net sales by company-owned stores           121,014    136,056    -11.1 %     347,546          389,896    -10.9  %
Royalty fees from franchised stores         460,889    531,908    -13.4 %     1,387,561        1,604,611  -13.5  %
Franchise and area development fee revenue  25,000     20,000     25.0  %     75,000           160,000    -53.1  %
Licensing fees and other income             216,880    244,421    -11.3 %     588,742          694,418    -15.2  %
                                            823,783    932,385    -11.6 %     2,398,849        2,848,925  -15.8  %
OPERATING COSTS AND EXPENSES
Food, beverage and paper costs              35,954     44,046     -18.4 %     105,205          128,836    -18.3  %
Store payroll and other operating expenses  115,865    123,711    -6.3  %     340,788          349,863    -2.6   %
Selling, general and administrative         551,279    595,699    -7.5  %     4,098,908        1,876,358  118.5  %
Depreciation and amortization               6,265      9,209      -32.0 %     25,093           27,793     -9.7   %
                                            709,363    772,665    -8.2  %     4,569,994        2,382,850  91.8   %
Income before interest, other and taxes     114,420    159,720    -28.4 %     (2,171,145 )     466,075    -565.8 %
Interest expense                            2,714      2,987      -9.1  %     8,141            8,962      -9.2   %
Interest/other income                       3,116      5,607      -44.4 %     10,863           25,522     -57.4  %
NET INCOME                                  114,822    162,340    -29.3 %     (2,168,423 )     482,635    -549.3 %
Earnings per share - basic                  0.02       0.02       N/M         (0.30      )     0.07       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         (0.30      )     0.07       N/M
Average number of shares outstanding        7,263,508  7,271,548              7,263,508        7,272,847

SOURCE: BAB, Inc.

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