2013 was not without its struggles. The first six months of the year involved the termination of a key wholesaler relationship (specifically, HHSE's use of Phase 4 Films to provide DVDs and Blu-Rays into Walmart); subsequently, the Company lost some new release sales momentum and additionally had to write-down a substantial amount of sales due to collection and bad-debt issues.
However, by late-summer, a new wholesale distribution venture for Walmart was in place, and sales began a fast recovery and growth trend. Overall, the company had a nicely profitable year - despite the lost sales and write-downs from Phase 4 - and is well positioned for 2014 and beyond. Based on the Price-Earnings averages for companies in Hannover's market space, the HHSE stock is trading at about 25% of value at this time. However, Management believes that the true value of HHSE stock is far higher than a backwards-looking analysis of last year's activities.
As we move into 2014 and 2015, we can anticipate significant revenues from ventures already in place, including the VODwiz pay-per-transaction launch, and the monetization of major features, including "MOTHER GOOSE: JOURNEY TO UTOPIA" and "THE LEGEND OF BELLE STARR." It is not unrealistic to look at the Mother Goose project has having international sales & licensing values of $12-million, and domestic values of $10-million, for instance.
Watch for more news and specific information on new titles that will be presented at this year's Cannes Film Festival by Hannover House under our new international financing and distribution partnership. Meanwhile, HHSE stock is a crazy bargain at the present time, so get to it!
HHSE 2013 SALES & MARGINS SNAPSHOT
| Period | Gross Sales | HH Margin | |
| Q1 | $ 539,336.71 | $ 432,783.04 | Actual |
| Q2 | $ 223,801.78 | $ 200,830.22 | Actual |
| Q3 | $ 1,205,392.68 | $ 428,669.51 | Actual |
| Q4 | $ 1,134,425.54 | $ 313,343.50 | ProForma |
| $ 3,102,956.71 | $ 1,375,626.27 | ||
| Earnings Per Share: | 0.00238824 | ||
| Industy P/E Ratio: | 22-X | ||
| PPS Value: | $ 0.0525 |
