Item 1. FINANCIAL INFORMATION
BAB, Inc.
Condensed
Consolidated Balance Sheet (Unaudited)
As
of February 29, 2008
|
ASSETS
|
||||
|
Current
Assets
|
||||
|
Cash
|
$ | 1,294,702 | ||
|
Restricted
cash
|
270,323 | |||
|
Receivables
|
||||
|
Trade
accounts receivable (net of allowance for doubtful accounts of
$5,142)
|
98,146 | |||
|
Marketing
fund contributions receivable from franchisees and stores
|
13,180 | |||
|
Notes
receivable (net of allowance for doubtful accounts of
$8,206)
|
2,910 | |||
|
Inventories
|
45,138 | |||
|
Prepaid
expenses and other current assets
|
113,641 | |||
|
Total
Current Assets
|
1,838,040 | |||
|
Property,
plant and equipment (net of accumulated depreciation of
$533,294)
|
73,174 | |||
|
Notes
receivable (net of allowance of $2,174)
|
3,296 | |||
|
Trademarks
|
763,667 | |||
|
Goodwill
|
3,542,772 | |||
|
Definite
lived intangible assets (net of accumulated amortization of
$308,240)
|
46,610 | |||
|
Deferred
tax asset
|
500,000 | |||
|
Total
Noncurrent Assets
|
4,929,519 | |||
|
Total
Assets
|
$ | 6,767,559 | ||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||
|
Current
Liabilities
|
||||
|
Current
portion of long-term debt
|
$ | 23,051 | ||
|
Accounts
payable
|
45,172 | |||
|
Accrued
expenses and other current liabilities
|
372,508 | |||
|
Unexpended
marketing fund contributions
|
220,762 | |||
|
Deferred
franchise fee revenue
|
135,000 | |||
|
Deferred
licensing revenue
|
59,218 | |||
|
Total
Current Liabilities
|
855,711 | |||
|
Long-term
debt (net of current portion)
|
228,516 | |||
|
Deferred
revenue (net of current portion)
|
(3,911 | ) | ||
|
Total
Noncurrent Liabilities
|
224,605 | |||
|
Total
Liabilities
|
1,080,316 | |||
|
Stockholders'
Equity
|
||||
|
Common
stock ($.001 par value; 15,000,000 shares authorized;8,466,953 shares
issued, and 7,263,508 shares outstanding)
|
13,508,257 | |||
|
Additional
paid-in capital
|
940,056 | |||
|
Treasury
stock
|
(222,781 | ) | ||
|
Accumulated
deficit
|
(8,538,289 | ) | ||
|
Total
Stockholders' Equity
|
5,687,243 | |||
|
Total
Liabilities and Stockholders' Equity
|
$ | 6,767,559 | ||
SEE
ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
BAB,
Inc.
Condensed
Consolidated Statements of Operations
For
the Quarters Ended February 29, 2008 and February 28, 2007
(Unaudited)
|
February
29, 2008
|
February
28, 2007
|
|||||||
|
REVENUES
|
||||||||
|
Royalty
fees from franchised stores
|
$ | 514,216 | $ | 527,477 | ||||
|
Net
sales by Company-owned stores
|
116,186 | 115,273 | ||||||
|
Franchise
fees
|
105,000 | 77,500 | ||||||
|
Licensing
fees and other income
|
236,045 | 230,928 | ||||||
|
Total
Revenues
|
971,447 | 951,178 | ||||||
|
OPERATING
EXPENSES
|
||||||||
|
Store
food, beverage and paper costs
|
39,681 | 33,807 | ||||||
|
Store
payroll and other operating expenses
|
118,623 | 115,340 | ||||||
|
Selling,
general and administrative expenses:
|
||||||||
|
Payroll
and payroll-related expenses
|
391,327 | 392,865 | ||||||
|
Occupancy
|
35,422 | 34,419 | ||||||
|
Advertising
and promotion
|
29,908 | 24,875 | ||||||
|
Professional
service fees
|
84,681 | 86,174 | ||||||
|
Depreciation
and amortization
|
8,647 | 15,155 | ||||||
|
Other
|
129,481 | 140,717 | ||||||
|
Total
Operating Expenses
|
837,770 | 843,352 | ||||||
|
Income
from operations
|
133,677 | 107,826 | ||||||
|
Interest
income
|
12,490 | 17,778 | ||||||
|
Interest
expense
|
(2,987 | ) | (5,024 | ) | ||||
|
Income
before provision for income taxes
|
143,180 | 120,580 | ||||||
|
Provision
(benefit) for income taxes
|
||||||||
|
Current
tax (benefit)
|
- | - | ||||||
|
Deferred
tax (benefit)
|
- | - | ||||||
| - | - | |||||||
|
Net
Income
|
$ | 143,180 | $ | 120,580 | ||||
|
Net
Income per share - Basic
|
$ | 0.02 | $ | 0.02 | ||||
|
Net
Income per share - Diluted
|
$ | 0.02 | $ | 0.02 | ||||
|
Weighted
average shares outstanding - Basic
|
7,263,508 | 7,256,855 | ||||||
|
Weighted
average shares outstanding - Diluted
|
7,273,781 | 7,273,812 | ||||||
|
Cash
dividends paid per share
|
$ | 0.04 | $ | 0.04 | ||||
SEE
ACCOMPANYING NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
BAB,
Inc.
Condensed
Consolidated Statements of Cash Flows
For
the Quarters Ended February 29, 2008 and February 28, 2007
(Unaudited)
|
February
29, 2008
|
February
28, 2007
|
|||||||
|
Operating
activities
|
||||||||
|
Net
income
|
$ | 143,180 | $ | 120,580 | ||||
|
Depreciation
and amortization
|
8,647 | 15,155 | ||||||
|
Loss
on sale of equipment
|
- | - | ||||||
|
Provision
for uncollectible accounts, net of recoveries
|
(3,928 | ) | (6,360 | ) | ||||
|
Share-based
compensation
|
8,018 | 8,630 | ||||||
|
Changes
in:
|
||||||||
|
Trade
accounts receivable
|
7,876 | 2,211 | ||||||
|
Restricted
cash
|
1,647 | 4,492 | ||||||
|
Marketing
fund contributions receivable
|
23,576 | 9,583 | ||||||
|
Notes
receivable
|
1,981 | 3,805 | ||||||
|
Inventories
|
(1,192 | ) | (625 | ) | ||||