good boyz corporate report

good boyz dawgie treatz 2011 corporate report

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Table of Contents

The President’s Letter........................6The History.............10The Time Line.........14The Charities...........16The Figures............20

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good boyz dawgie treatz 2011 annual report 5

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Dear Friends of Good Boyz Dawgie Treatz,Three years ago, when Marshall, my Aussie mix was just a puppy, I wanted to do something

special for his first birthday. I have had him since he was only eight weeks old. I raised him from “scratch,” so why not make him something from...well, scratch. I made a batch of peanut butter flavored treats. The rest is really history. The past two years have been extremely suc-cessful for the GBDT family. Our first year went bet-ter than expected, especially in this market where luxury items such as home made gourmet quality dog treats have been cut from budgets. This year our sales were on the increase, and our product line has ex-panded.

Letter from the President


New to GBDT was our seasonal line including two new seasonal flavors in holiday packaging. Available mid-September through November is our new pumpkin flavor. Pumpkin has proven to be a new dog favorite as our orders have been more than we predicted Nevertheless, we never expected such success as our Mint Oral Care flavor, which is only available the day after Thanksgiving until Christmas Day. Due to its limited availability, we almost could not keep up with demands! We are looking forward to so many ideas in the upcoming years. Despite our successful growth, we have remained humble. The more money we earned, the more money,

time, and resources we could put into our

sponsorships, donations, and volunteering. After all, what kind of company would we be if we did not give back to reason we are here! I am also pleased to announce we are trying to get together the funds to add a no-kill shelter to every state and at least one additional shelter in every major metropolitan area. In addition, we will be providing several scholarships to veterinary students, to provide them an opportunity to obtain the education required to take care of our furry best friends. At GBDT, our future looks bright and we welcome the opportunity to grow. We believe in the best quality for our pups and we know you feel the same. We thank you for choosing Good Boyz Dawgie Treatz and helping us reach our success. We wish you and your pets all the best.

In health & happiness,

Danielle LukeGood Boyz Dawgie Treatz President

Danielle with Marshall at 8 weeks old.

Danielle LukeGood Boyz Dawgie TreatzPresident since 2010

Original FlavorDawgie Treatz

Introduced March 2009

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Our company formed over three years ago in a small, Southwest suburb of Chicago. It all began when Danielle Luke and

Andrew Soukup wanted to surprise their Australian Shepherd-Heeler mix with a delicious - but healthy - dog treat for his first birthday. As a DIY person her whole life, Danielle decided the only way she could get what she wanted was to make it herself. Made with all healthy and organic ingredients, Danielle knew that the treats she was making was actually good for her pup. And Marshall loved the treats too; he could not get enough!The first batch made, Danielle made what is now our Original flavor. It is actually granola, but we call it Original,

since after all, that is what it is. The second batch she made, she thought by putting in some scoops of organic peanut butter, it would give the treats a new flavor that Marshall was sure to love. And she was right! Marshall could not get enough of the peanut butter flavored bones.

This of course was never intended to become a company. This was

just Danielle baking treats her dog loved, that she loved to make, and for cheaper than buying a box at the store. Not to mention, healthier too. That is until Danielle brought Marshall to her parent’s house one day.See Danielle’s family loves dogs. She herself has always had at least one

The History of


dog at a time her entire life. Her parents, at the time, had Buddy, an old Old-English Sheepdog. We often joked about how you could ride Buddy; he was so tall. Well Danielle forgot how poor of manners old Buddy had. Unlike Marshall, Buddy takes food off of the counter. And...he took Marsh’s bones! Danielle’s mom was curious about these treats, and she was surprised how much Buddy enjoyed them. “You should sell these!” she said. However, Danielle could not. She said she did not have the time,

and she just did it for Marshall. Everyday Danielle’s mother would call her and give her ideas about selling the bones. And everyday Danielle told her she wasn’t interested in selling them and brushed her off. Well when her boyfriend, Andrew, lost his job as a mail carrier, they did what they needed to do to make money. Danielle, despite being a student working on her second Bachelor’s degree, picked up all the extra overtime she could at her job. They sold things they did not

BuddyOld-English SheepdogAdopted 2004

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need on eBay; they had garage sales. Danielle even participated in taste tests for extra money. The day Danielle sold her white gold High School class ring, she realized she was out of things to sell, things to cut back on, and out of options. She decided to take her mom’s advice. She was going to make and sell dog treats.

Good Boyz Dawgie Treatz was born.The name was inspired by the command their dog knew. As they were training Marshall, Danielle and Andrew would tell him “Good boy!” and hand him a dog treat. “That’s my good boy!” Another treat. Not to be confused with a different European company, Good Boyz Dawgie Treatz (or GBDT for short) had to take on a different, more ghetto-fied spelling. This also fit for the couple and Marshall since they joked and called the dog a “goon” all the time anyway. In addition, Marshall has been known to enjoy listening to rap music. Lil Wayne is his favorite.At first, Danielle and Andrew sold to family and friends. Little money started to come in. The profits would pay the

electric bill or a cable bill or something small like that. It was nice, but it was almost not worth it.Danielle knew in order to make more money, she needed to expand her market. Without having to spend any additional money, Andrew and Danielle each posted on Facebook with no response. Danielle brought in some samples to work, and that gained a few more customers.It was really just a friend, told a friend, told a friend kind of thing that started to build a client base for the couple. In about three months, Andrew returned to work. With the couple both working, they now had the opportunity to invest money into improving and expanding the GBDT company.Previously available were two flavors: Original and Peanut Butter, and they were available in one size: Large. One improvement Danielle made was to create different sizes to appeal to smaller and bigger dogs. She had realized this was a problem while giving samples at work. A lot of people had told her they would’ve bought some, but the bones were too big for their little dogs.


The other improvement Danielle made was to add more flavors. It was an experiment really. And through research, Danielle was able to develop three more flavors: Veggie, Beef, and a new dog favorite - Pumpkin.With the addition in sizes and flavors, Danielle set out to local groomers and small business that specialized in gourmet treats and items to pamper their pooch. Danielle then remembered that her Aunt had recently opened up a small shop north of Chicago for dog grooming. Danielle partnered with her

Aunt Clara in selling the treats.That’s when the business took off.Through the client base they gained through social media sites, their regular day jobs, friends, family, and Aunt Clara’s shop, Good Boyz Dawgie Treatz was able to grow into what it is now, just three years after it all began. Now GBDT carries bones in four different sizes and in ten different flavors. And with many new ideas, Good Boyz Dawgie Treatz looks forward to future expansion and growth into a nationwide company.

Our MissionOur mission is to be our best friend’s best tasting treat. We are decided to making quality, nutritious dog bones that our dogs are sure to love. Always made fresh, our bones are made with quality ingredients that we guarantee and guarantee your dog to love

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Time Line

March 22, 2008Marshall is born.

June 22,

2008Marshall is

adopted.

December 2009Good Boyz Dawgie

Treatz started being sold to

family, friends, & co-workers.

March 22, 2009Marshall’s 1st

Birthday.First batch of

treats ever made.


April 2010Good Boyz Dawgie Treatz debuted in Clara’s Grooming

Salon for dogs.Orders skyrocket.

December 2010

Sales exceed $43

thousand.

October 2011Pumpkin and Mint

flavors debut.The Future...

We look forward to so much to come!

December 2011Sales exceed $51

thousand.

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The Charities We Support

In 2011, Good Boyz Dawgie Treatz was proud to say that they gladly supported and gave back to three awesome charities they really believed in, who promoted adoption, treatment, and cared for our furry best friends.

the Animal Welfare LeagueEstablished in 1935, the Animal Welfare League saves animals’ lives and works to improve the way they are treated and regarded by society. The Animal Welfare League strives to: prevent cruelty to animals, provide quality homes for animals through

Pee WeeChihuahuaAdopted 2010


their adoption programs, promote respect and compassion for all creatures through education, through their low cost spay/neuter clinic, provide veterinary care for low income pet owners, and relieve the suffering of all animals. They work to improve municipal, city and state laws and regulations regarding the treatment of animals, and operate the state’s largest non-profit animal shelter program.

the Anti-Cruelty SocietyThe Anti-Cruelty Society (also known as the SPCA of Illinois), founded in 1899, is a private, open-admission, unlimited stay humane society, committed to helping both animals and people. SPCA’s programs and services include: Cat and dog adoptions - over 5,000 annually; Low or no cost spay/neuter surgeries open to the general public - over 11,000 annually; Cruelty investigations and rescue services - over 2,600 annually; Humane education and community outreach programs - over 25,000 participants annually. Other services include a charity veterinary clinic, dog training classes; a free behavior hot

line; and short-term accommodations for emergencies program, providing temporary housing for pets whose owners have been involved in crisis situations, e.g. domestic violence, fire, flood, illness, or foreclosure.

PAWS of ChicagoPAWS of Chicago is the city’s largest no kill humane organization, focused on implementing solutions to end the killing of homeless pets. Since PAWS of Chicago’s founding in 1997, the number of homeless dogs and cats kill annually has dropped more that 50%: from more than 42,000 homeless pets killed in 1997 to under 20,000 killed in 2006. PAWS Chicago is working to build a no kill Chicago - a city where pets are no longer destroyed just because they are homeless. PAWS Chicago will find new homes for more than 3,000 homeless pets this year with the brand new state-of-the-art Lincoln Park Adoption & Humane Center. The PAWS Chicago Lurie Spay/Neuter Clinic, the largest free spay/neuter clinic in Chicago and the nation, will sterilize more than 14,000 pets of low-income families this year alone.

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Peanut ButterDawgie TreatzIntroduced March 2009


MarshallAustrailian Shepherd-Heeler Mix

Good Boyz Dawgie Treatz Mascot

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The Figures. A Monitary Breakdown

Our business is focused on providing health, quality and value to improve the lives of our best friends, our

pet dogs. We believe this will lead to exceeding sales, profits and value creation, allowing employees and the communities in which we operate to prosper for years to come.Good Boyz Dawgie Treatz markets over 8 healthy flavors of dog treats in more than 10 cities throughout the Chicagoland area. Our products are sold primarily through small, local pet shops; pet boutiques who specialize in

speciality pet gifts and gourmet dog biscuits, local pet groomers, and certain local drug stores.The following charts provide the percentage of net sales and net earnings for the fiscal year ending December 31, 2011 and divided by flavor. We have broken down the figures to reflect sales by flavor as this year was the first year carrying a few new flavors.These exclude information for corporate, since it is not meaningful. For more information, please refer to the section on corporate results.


2011 Net Sales by Flavor

2011 Net Earnings by Flavor

Strategic FocusWe are focused on strategies that we believe are right for the long-term health and that will increase the returns of the Company. Our long term financial targets include:• Sales growth of 4% to 6%. On

average, we expect approximately 2% of our growth to come from

market growth; 1% to 3% of our growth to come from the combination of market share growth, expansion to new locations and new business creation; and the remaining 1% to come from our smaller, tactile acquisitions to access markets or round out our current business portfolios.

• Free cash flow productivity greater than 90% (defined as the ratio of operating cash flow less capital expenditures divided by net earnings).

In order to achieve these targets, we have focused GBDT’s core strengths of branding, innovation, go-to-market capability and scale against the following growth areas:• Drive our core businesses into

stronger, global leadership positions• Grow our leading flavors in our

biggest markets and with our largest customers.

• Invest in faster-growing businesses with higher gross margins that are less asset-intensive.

• Build an opportunity in select developing markets and with lower-income consumers.

27%

33%

20%

13%7%

pumpkinoriginalpeanut butter

veggie

beef

32%

35%

14%

14%

5%pumpkinoriginalpeanut butter

veggiebeef

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SustainabilityTo sustain consistent and reliable sales and earnings growth in line with long-term financial targets, we have identified two key enablers:• Building a diversified portfolio

consisting of new and exciting products. GBDT provides a base for steady growth, strong operating cash flows and an excellent training ground for our future leaders. We are focused on expanding these categories through innovative products, offering our brand in more parts of the U.S. and tailoring our products to meet the needs of more consumers (including lower income consumers). To complement the steady growth of our foundation business. We are also focused on expanding our portfolio of brands and products to businesses with higher than expected growth rates. Over the past year we have increased the size of our business and expect it to continue to provide a disproportionate percentage of growth for the company.

• Investing in innovation and capability to reach more of the U.S.’s

consumers with quality, affordable dog treats. This not only includes a strong pipeline of initiatives on the base businesses, but also expansion of our brands to more geographies where we currently have demands, but have not yet discussed shipping measurements and requirements.

Sales reached a record level of $51 thousand in 2011, an increase of 19%. Organic sales increased 8%, well above our long-term target. Net sales increased behind volume growth. Product mix reduced sales growth by 1%, reflecting higher growth in developing markets, the West Suburbs, which generally have an average unit sales price lower than the company average. Pricing adjustments reduced sales growth by 1% as we sharpened pricing to remain competitive on shelf. We also took pricing actions to improve consumer value and stimulate growth in selected flavors.

Net SalesNet sales in 2010 were $43 thousand, exceeding 2009 by $41 thousand or by 104%. Volume growth of 104% was broad-based.


Net SalesCost of Products SoldSelling, General & Administrative ExpensesOperating Income

Interest ExpenseOther Non-Operational Income NetEarnings Before Taxes

Income TaxesNet Earnings

Contact Good Boyz Dawgie Treatz - 24 hours a day• Visit our website at

www.goodboyztreatz.com• E-mail us at [email protected]• Call for financial information at

1-800-555-7483 Or Write Us at GBDTFinancial Services DepartmentP.O. Box 6Tinley Park, IL 60477-8303

Consolidated Statement of Earnings2009 2010 2011 2012

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$51,407 25,076 16,504 9,827

629152

9,350

2,8696,481

$43,277 22,141 13,383 7,853

561238

7,530

2,3445,186

2011 2010

Net Sales in Thousands

The End.

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good boyz corporate report