BAB, Inc. Reports Profit for 1st Quarter FY 2006.

DEERFIELD, Ill. -- BAB, Inc. (OTCBB:BABB), the Deerfield based operator and franchisor of Big Apple Bagels, My Favorite Muffin and Brewster's Coffee, today announced its financial results for the first quarter ended February 28, 2006, reporting net income of $116,000, or $0.02 per share, versus $103,000, $0.01 per share, for the same quarter last year.

For the quarter ended February 28, 2006, BAB had revenues of $976,000 and net income of $116,000, or $0.02 per share, versus revenues of $1,204,000 and net income of $103,000, or $0.01 per share for the quarter-ended February 28, 2005.

Total operating expenses were $853,000, down $238,000, or 22%, from $1,091.000 for the same period in 2005. Total operating expenses as a percent of revenues were 87% for the 2006 quarter versus 91% in 2005.

The Company also continues to improve its balance sheet as it reduced its total debt by $256,000, or 28% since the quarter-ended February 28, 2005.

BAB, Inc. operates, franchises, and licenses Big Apple Bagels (R), My Favorite Muffin (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.

BAB, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

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                                              Quarter Ended
                                     02/28/06     02/28/05   % Change
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REVENUES

Net sales by company-owned stores     143,113      345,338      -58.6%
Royalty fees from franchised stores   533,773      540,896       -1.3%
Franchise and area development fee
 revenue                              100,000       30,000      233.3%
Licensing fees and other income       199,289      287,330      -30.6%
                                    ----------------------------------
                                      976,175    1,203,564      -18.9%

OPERATING COSTS AND EXPENSES

Food, beverage and paper costs         50,193      117,416      -57.3%
Store payroll and other operating
 expenses                             145,358      286,100      -49.2%
Selling, general and administrative   639,633      666,237       -4.0%
Depreciation and amortization          17,692       21,199      -16.5%
                                    ----------------------------------
                                      852,876    1,090,952      -21.8%

Income before interest, other and
 taxes                                123,299      112,612        9.5%

Interest expense                       (8,684)     (12,149)     -28.5%
Interest income                           649        2,520      -74.2%
Other income                              400            0        N/M

                                    ----------------------------------
Net Income                            115,664      102,983       12.3%
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Earnings per share - basic               0.02         0.01        N/M
Average number of shares
 outstanding                        7,221,838    7,150,603        N/M

Earnings per share - diluted             0.02         0.01        N/M
Average number of shares
 outstanding                        7,265,124    7,308,929        N/M