You Deserve A

Indulge 2013 Annual Report

Contents
Foreward.........................02 Company Summary.......05 To Our Shareholders...... 07 Financials....................... 08 Secret Recipe................. 10

Taking A Bite Out Of The Competition

It is with great pleasure that I present our annual report for the year of 2013, which displays all of the sugary success of Indulge Bakery. Indulge Bakery is a family owned bakery that stems from three generations of bakers. Our history of tradition, culture and know-how makes us a bite above the rest in the industry! Indulge takes pride in being your around the corner bakery. As a three generation strong company, we are pleased to inf orm our consumers that we are still growing and increasing income each year. 2013 was an exceptionally delicious year, with a huge spike in revenue in the final two quarters. Indulge is the home of fresh baking with emphasis on our customers as they always come first! Concluding, I would like to say a very big thank you, to all of you, the friends of Indulge Bakeries, who trust and believe in our quality of bakery goods and who make this dream come true! Thank you for trusting us!

- Chelsea Vena
President and Chief Executive Officer

2 | CEO Letter

A Year of Sweet Success

2013 has truly been one of great success. We have seen such growth in our bakeries, employees and in the company overall. Indulge has expanded on all of our recipes, bringing more delicious treats to consumers. Our primary market consists of the typical parents and other family oriented members. As of now, Indulege has two main bakeries; one in Syracuse, NY and one in Manhattan, NY. With our great success over the past year, we have begun to considering opening more bakeries within the Tri-State area. After another great year, Indulge has found itself in a great position for the coming year, anticipating growth and continued success. First Quarter: Our first quarter started a little bumpy, but picked up around the valentines day season. Overall sales started down from the previous quarter, however we anticipated this drop from the beginning. Second Quarter: Indulge gained momentum over the spring season. We reported net earnings of $50 million, up from the $25 million in the first quarter. Third Quarter: In the summer months, Indulge has always encountered an unusual spike in revenue. This year in particular, we found an enormous spike in August, increasing our sales by 17%. Fourth Quarter: Our services have been in such a large demand over the past year that Indulge decided to open our unique dessert catering line, which had not been projected to begin until 2014.

1 2 3 4

Company Summary |5

LIVE A LITTLE.

INDULGE.
-President and CEO, Chelsea Vena

IS

Sometimes
all you need to do
let yourself

To Our Favorite Desserts

2013 was a year of significant growth and success for Indulge Bakeries. As a three-generation strong bakery, we have a reputation to stick to, which we believe we have held together. Although several factors contributed to the years outstanding results, the most important factor was an unyielding drive among our people to simply make our company better regardless of the barriers they may face. This drive helped create a successful execution of essential marketing plans. As a result, we made substantial progress in realizing the full value of our brands in the marketplace even as we enhanced our operations and improved service to our customers. Along with a successful marketing strategy, we made progress in the plans for opening another bakery in Manhattan along with launching our newest division, dessert catering. With these expansions, Indulge hopes to continue growing and progressing with the same speed each year to follow. This year was one of hard work and wellearned success for Indulge Bakeries. Over the course of 2013, we raised our net worth, and began plans for expanding our bakery into the tri-state area. A special thanks to our employees for their hard work, our customers for their loyalty, and our shareholders for their constant support. We look forward to continued sweet success in 2014.

To The Shareholders|7

$546

$551

$706

$751

26% Employee Salary

Total Company Costs

49% Supplies 13% Other 11% Expansion

Total Revenue (in millions)

09 $50.6

10 $67.3

11 $80.2

12 $90.3

Quarterly Stats
Number of Product Sales Number of Special Orders Number of Catering Orders

Q1
330,150 250,003 N/A

Q2
400,043 349,493 N/A

Q3
504,503 569,403 N/A

Q4
503,493 578,394 405,504

Net Income (in millions)

Sales (in millions)

09

10

11

12

8 | Financial Summary

$97.5 13

$805 13

An Abundance of Cookies

Assets
Cash and Cash Equivalents Receivables Prepaid Expenses and Other Assets Investments Fixed Assets, net Intangables, net Total Assets: $ $ 278,277 926,353 1,298,281 21,229,932 1,345,323 2,394,392 27,481,558

Liabilities and Net Assets

Accured Expenses Short-Term Borrowing Deferred Income Deferred Rent Pension Liability $ $ 2,902,026 2,800,000 3,895,130 746,815 2,989,042 13,333,013

Net Assets
Unrestricted Total Liabilites and Net Assets Total and Net Assets: $ $ 4.067,537 4,067,537 17,400,550

Financial Summary |9

A Secret Recipe Just For You

Ingredients
1 cup butter, softened 1 cup white sugar 1 cup packed brown sugar 2 eggs 2 teaspoons vanilla extract Makes 4 Dozen 3 cups all-purpose flour 1 teaspoon baking soda 2 teaspoons hot water 1/2 teaspoon salt 2 cups semisweet chocolate chips 1 cup chopped walnuts (optional)

Directions
1. Preheat oven to 350 degrees F (175 degrees C). 2. Cream together the butter, white sugar, and brown sugar until smooth. Beat in the eggs one at a time, then stir in the vanilla. Dissolve baking soda in hot water. Add to batter along with salt. Stir in flour, chocolate chips, and nuts. Drop by large spoonfuls onto ungreased pans. 3. Bake for about 10 minutes in the preheated oven, or until edges are nicely browned.

10 | Secret Recipe

Our Sweet Staff

Alan R. Andrews
Vice President Corporate Controller

Gary H. Pilnick
Senior Vice President Security

Alicia F. Mack
Vice President Corporate Expansion

Carlos E. Mejia
Vice President Development

Brad J. Davidson
Vice President Corporate Development

Jay L. Goldman
In Store

Margaret R. Bath
Senior Vice President Quality and Technology

Brian S. Rice
Vice President Fincancial

Francine P. Colon
In Store

Paul T. Norman
Senior Vice President Research

Samantha A. Gold
Vice President Catering

Carly J. Sitzer
In Store

Mark R. Baynes
Senior Vice President Chief Marketing Officer

Julie P. Rosenbaum
Vice President In-Store Promotion

James K. Sholl
In Store

Todd A. Penegor
Vice President Advertising

Chelsea S. Dissinger
Vice President Recipe Innovation

Michael L. Libbing
In Store

336 Comstock Ave Syracuse, NY 13210 T: 516. 509. 6362 E: info@indulge.com @indulgebakery www.indulge.com