$BABB
BAB, INC.

2016 Q1 Form 10-Q Financial Statement

#000143774916029382 Filed on April 12, 2016

View on sec.gov

Income Statement

Concept 2016 Q1 2015 Q1
Revenue $580.9K $492.4K
YoY Change 17.97% -8.29%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $430.0K $450.0K
YoY Change -4.44% 2.27%
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $4.849K $4.235K
YoY Change 14.5% -7.15%
% of Gross Profit
Operating Expenses $491.5K $737.9K
YoY Change -33.39% 46.23%
Operating Profit $89.34K -$245.6K
YoY Change -136.38% -862.0%
Interest Expense $397.00 $776.00
YoY Change -48.84% -31.75%
% of Operating Profit 0.44%
Other Income/Expense, Net
YoY Change
Pretax Income $89.13K -$250.0K
YoY Change -135.65% -933.33%
Income Tax
% Of Pretax Income
Net Earnings $89.13K -$245.6K
YoY Change -136.29% -886.29%
Net Earnings / Revenue 15.34% -49.88%
Basic Earnings Per Share $0.01 -$0.03
Diluted Earnings Per Share $12.40K -$0.03
COMMON SHARES
Basic Shares Outstanding 7.264M 7.264M
Diluted Shares Outstanding 7.264M 7.264M

Balance Sheet

Concept 2016 Q1 2015 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $720.0K $610.0K
YoY Change 18.03% 29.79%
Cash & Equivalents $725.0K $605.4K
Short-Term Investments
Other Short-Term Assets $560.0K $540.0K
YoY Change 3.7% -12.9%
Inventory $30.00K $30.00K
Prepaid Expenses
Receivables $73.57K $179.3K
Other Receivables $30.00K $30.00K
Total Short-Term Assets $1.410M $1.384M
YoY Change 1.86% 8.13%
LONG-TERM ASSETS
Property, Plant & Equipment $2.866K $5.205K
YoY Change -44.94% -47.95%
Goodwill $1.494M $1.494M
YoY Change 0.0%
Intangibles $455.2K $455.2K
YoY Change 0.0%
Long-Term Investments
YoY Change
Other Assets $250.0K $250.0K
YoY Change 0.0% 0.0%
Total Long-Term Assets $2.223M $2.234M
YoY Change -0.5% -0.72%
TOTAL ASSETS
Total Short-Term Assets $1.410M $1.384M
Total Long-Term Assets $2.223M $2.234M
Total Assets $3.632M $3.618M
YoY Change 0.4% 2.49%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $8.855K $40.51K
YoY Change -78.14% 305.1%
Accrued Expenses $310.0K $570.0K
YoY Change -45.61% 96.55%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $33.41K $31.90K
YoY Change 4.75% 6.33%
Total Short-Term Liabilities $1.010M $971.8K
YoY Change 3.97% 34.97%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $33.41K
YoY Change -100.0% -52.27%
Other Long-Term Liabilities
YoY Change
Total Long-Term Liabilities $0.00 $33.41K
YoY Change -100.0% -52.27%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.010M $971.8K
Total Long-Term Liabilities $0.00 $33.41K
Total Liabilities $1.010M $1.005M
YoY Change 0.48% 27.24%
SHAREHOLDERS EQUITY
Retained Earnings -$11.65M -$11.66M
YoY Change -0.08%
Common Stock $13.51M $13.51M
YoY Change 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $222.8K $222.8K
YoY Change 0.0%
Treasury Stock Shares
Shareholders Equity $2.622M $2.613M
YoY Change
Total Liabilities & Shareholders Equity $3.632M $3.618M
YoY Change 0.4% 2.49%

Cashflow Statement

Concept 2016 Q1 2015 Q1
OPERATING ACTIVITIES
Net Income $89.13K -$245.6K
YoY Change -136.29% -886.29%
Depreciation, Depletion And Amortization $4.849K $4.235K
YoY Change 14.5% -7.15%
Cash From Operating Activities $109.5K $41.83K
YoY Change 161.82% 2092.45%
INVESTING ACTIVITIES
Capital Expenditures
YoY Change
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00
YoY Change
Cash From Investing Activities -$4.022K -$703.00
YoY Change 472.12%
FINANCING ACTIVITIES
Cash Dividend Paid $217.9K $145.3K
YoY Change 50.0% -33.33%
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -217.9K -145.3K
YoY Change 50.0% -33.33%
NET CHANGE
Cash From Operating Activities 109.5K 41.83K
Cash From Investing Activities -4.022K -703.0
Cash From Financing Activities -217.9K -145.3K
Net Change In Cash -112.4K -104.1K
YoY Change 7.93% -51.79%
FREE CASH FLOW
Cash From Operating Activities $109.5K $41.83K
Capital Expenditures
Free Cash Flow
YoY Change

Facts In Submission

Frame Concept Type Concept / XBRL Key Value Unit
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CY2016Q1 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><div style="display: inline; font-weight: bold;">7. Recent Accounting Pronouncements </div></div></div> <div style=" MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Revenue from Contracts with Customers, ASU 2014-09 establishes a comprehensive revenue recognition standard for virtually all industries in U.S. GAAP, including those that previously followed industry-specific guidance such as the real estate, construction and software industries. The revenue standard&#x2019;s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. The standard requires five basic steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, (v) recognize revenue when (or as) the entity satisfies a performance obligation. Entities will generally be required to make more estimates and use more judgment than under current guidance, which will be highlighted for users through increased disclosure requirements. The ASU is effective for years beginning after December 15, 2017. The Company will adopt ASU 2014-09 for fiscal year ending November 30, 2019 and the Company is evaluating the impact that adoption of this guidance might have on the Company&#x2019;s consolidated financial position, cash flows&nbsp;and results&nbsp;of operations. </div></div> <div style=" MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On February 25, 2016, the FASB issued ASU 2016-02, a leasing standard for both lessees and lessors. Under its core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. The amendments are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company intends to adopt ASU 2016-02 for fiscal year ending November 30, 2020 and the Company is evaluating the impact that adoption of this guidance might have on the Company&#x2019;s consolidated financial position, cash flows&nbsp;and results&nbsp;of operations. </div></div> <div style=" TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Management does not believe that there are any other recently issued and effective or not yet effective pronouncements as of February 29, 2016 that would have or are expected to have any significant effect on the Company&#x2019;s financial position, cash flows or results of operations</div><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">. </div></div></div>
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CY2016Q1 us-gaap Loss Contingency Disclosures
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><div style="display: inline; font-weight: bold;">9. Contingencies</div></div></div> <div style=" TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><div style="display: inline; font-weight: bold;">&nbsp;</div></div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">We are subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of such proceedings or claims cannot be predicted with certainty, management does not believe that the outcome of any such proceedings or claims will have a material effect on our financial position. Except as stated below, we know of no pending or threatened proceeding or claim to which we are or will be a party.</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On July 8, 2013, a judgment was entered in the Circuit Court of Cook County against BAB Operations, Inc. (&#x201c;Operations&#x201d;), a wholly owned subsidiary of BAB, Inc., and in favor of a former landlord of Operations, Alecta Real Estate USA, LLC. In September 2013 the Company filed an appeal. On March 23, 2015 the Appellate Court found in favor of the plaintiff and against Operations, affirming the trial court&#x2019;s judgment. The legal settlement of $243,000 was recorded in the first quarter of 2015 and payment was made in the second quarter of 2015 and included the judgment, attorney&#x2019;s fees and interest. </div></div></div>
CY2016Q1 us-gaap Marketing And Advertising Expense
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CY2015Q1 us-gaap Marketing And Advertising Expense
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CY2016Q1 us-gaap Nature Of Operations
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><div style="display: inline; font-weight: bold;">Note 1. Nature of Operations </div></div></div> <div style=" MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">BAB, Inc (&#x201c;the Company&#x201d;) has three wholly owned subsidiaries: BAB Systems, Inc. (&#x201c;Systems&#x201d;), BAB Operations, Inc. (&#x201c;Operations&#x201d;) and BAB Investments, Inc. (&#x201c;Investments&#x201d;). Systems was incorporated on December 2, 1992, and was primarily established to franchise Big Apple Bagels&reg; (&#x201c;BAB&#x201d;) specialty bagel retail stores. My Favorite Muffin (&#x201c;MFM&#x201d;) was acquired in 1997 and is included as a part of Systems. Brewster&#x2019;s (&#x201c;Brewster&#x2019;s&#x201d;) was established in 1996 and the coffee is sold in BAB and MFM locations. SweetDuet&reg; (&#x201c;SD&#x201d;) frozen yogurt can be added as an additional brand in a BAB or MFM location. Operations was formed in 1995, primarily to operate Company-owned stores of which there are currently none. The assets of Jacobs Bros. Bagels (&#x201c;Jacobs Bros.&#x201d;) were acquired in 1999, and any branded wholesale business uses this trademark. Investments was incorporated in 2009 to be used for the purpose of acquisitions. To date there have been no acquisitions.</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company was incorporated under the laws of the State of Delaware on July 12, 2000.&nbsp; The Company currently franchises and licenses bagel and muffin retail units under the BAB and MFM trade names. At February 29, 2016,</div> <div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">the Company had 84 franchise units and 3 licensed units in operation in 24 states and one international location. There are 7 units under development. The Company additionally derives income from the sale of its trademark bagels, muffins and coffee through nontraditional channels of distribution including under licensing agreements with Kohr Bros. Frozen Custard and Green Beans Coffee. Also, included in licensing fees and other income is Operations Sign Shop results. For franchise consistency and convenience, the Sign Shop provides the majority of signage to franchisees, including but not limited to, menu panels, build charts, interior and exterior signage and point of purchase materials.</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The BAB franchised brand consists of units operating as &#x201c;Big Apple Bagels&reg;,&#x201d; featuring daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches and other related products. Licensed BAB units serve the Company's frozen bagel and related products baked daily.&nbsp; BAB units are primarily concentrated in the Midwest and Western United States. The MFM brand consists of units operating as &quot;My Favorite Muffin&reg;,&quot; featuring a large variety of freshly baked muffins, coffees and related products, and units operating as &quot;My Favorite Muffin and Bagel Cafe,&quot; featuring these products as well as a variety of specialty bagel sandwiches and related products.&nbsp; The SweetDuet&reg; brand is a fusion concept, pairing self-serve frozen yogurt with MFM&#x2019;s exclusive line of My Favorite Muffin gourmet muffins. SD frozen yogurt can be added as an additional brand in a BAB or MFM location. Although the Company doesn't actively market Brewster's stand-alone franchises, Brewster's coffee products are sold in most franchised units.</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company is leveraging on the natural synergy of distributing muffin products in existing BAB units and, alternatively, bagel products and Brewster's Coffee in existing MFM units. The Company expects to continue to realize efficiencies in servicing the combined base of BAB and MFM franchisees.</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</div></div> <div style=" TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><div style="display: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The accompanying condensed consolidated financial statements are unaudited. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading.&nbsp; These financial statements and the notes hereto should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended November 30, 2015 which was filed February 24, 2016.&nbsp; In the opinion of the Company's management, the condensed consolidated financial statements for the unaudited interim period presented include all adjustments, including normal recurring adjustments, necessary to fairly present the results of such interim period and the financial position as of the end of said period. The results of operations for the interim period are not necessarily indicative of the results for the full year. </div></div></div>
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