Ann: September 2015 Quarterly Report and Appendix 4C, page-30

This is a very interesting announcement - more in what is not said than was said. Y

OW have tried to tell us that sales are going up but not disclose what price and volume they are selling to Walmart. The graph on the front page refers to "retail sales", that is the value of the sales to the end customer and NOT the value of the sales from YOW to its clients and most notably Walmart. However, if the average retail price of the yowie is USD2.49 (ie the Walmart price) then over 1.2m yowies were sold to retail customers in September which equates to an annual sales rate of 14m plus. However, As the non-Walmart retailers sell at a higher price point then the number of yowies being sold must be less - but my guess is not substantially so.

If 1m yowies were sold through Walmart in September. And there are 3700 stores stocked with Yowies at the end of september (assume weighted average stocked stores is 3000) then the daily sales rate is 11.1 yowies per walmart store per day (1,000,000/3,000/30) or 78 per week. If you use 3700 stores stocked for whole month then the number is 9 per day or 63 per week. I am certain that my estimates of sales per Walmart store are not perfect but give an indication of the number being sold (ie not 10 per week and not 150 per week). You can also play with the sales volume up and down to get a matrix of outcomes but most fall, in a broad sense, in the 70 to 80 a week range.

It also seems they have broken their sales, marketing and distribution down into two categories - Walmart and the rest. With the main aim to make a success at Walmart, being the material account, and then let the others fall into place. Although a concern that Safeway, Walgrens and other tier 1s weren't mentioned.

I am also find it interesting that there is no reference to manufacturing in the report. So we can conclude.......[insert you own answer]?

Finally, the cash flows from operations is interesting. Receipts from customers is what it is and there will be a lag to sales [cashflows does not equal sales in the short term - particularly when a company is growing - sales is when invoice raised cash is when invoice is paid]. However, the other working capital number is interesting. I don't really understand how amounts can be paid above purchases for "raw materials and manufacturing" and be called "working capital". Maybe distribution?

Overall looks ok but still waiting on announcements of other nation wide roll outs, manufacturing capability and particularly the progress on the movie (joke).

As always, IMHO, NFA, DYOR, GLTAH

Regards,

BSP