HHSE Q2 Revenues, Profits Show Substantial Growth

Q2 Revenues Show Positive Results from Enhanced Theatrical and Video Release Activities for Hannover House

(Springdale, AR)  Hannover House, Inc. (OTC: HHSE), a leading U.S.A. producer and distributor of independent films, books and entertainment products, released Q2 revenue results today, several weeks ahead of the OTC Markets filing schedule. Revenues for the three-month period ending June 30, 2015 were $1,281,011 with pre-tax profits of $566,756.  These results compare to revenues generated by the company during the same quarter in 2014 of $891,190 and pre-tax profits of $241,647.  The revenue results for Q2, 2015 represent an increase of approximately 44% over 2014, and the pre-tax profits represent an increase of approximately   134% over the same quarterly period in 2014.  Key revenue items during the current quarter included subscription video-on-demand agreements for “The Algerian” and “Bonobos: Back to the Wild” as well as DVD product shipments for a slate of titles including “Lazarus Papers”, “Love Beat the Hell Outta Me”, “Asalto Al Cine”, “Grand Champion”, “American Justice” and “Antonio Aguilar Colecion.”  The company also generated theatrical marketing, booking and distribution fees on four releases.

The company plans to release the full Q2 Financials and Disclosures on Monday, August 3.

“Dark Awakening” launched to a single screen, theatrical premiere on June 26 but did not post revenues during the reporting quarter.  The horror-thriller from director Dean C. Jones has expanded to 25 locations during July, and is expected to reach 65 or more markets during August, prior to the October 6 home video release.  Hannover House is handling theatrical and home video rights for “Dark Awakening” with Alchemy picking up video-on-demand chores.

“Bonobos: Back to the Wild” launches Friday, July 31, and “The Algerian” launches on Friday, August 7.  Both films are expected to reach the top 20 markets during their limited theatrical engagements with Hannover House.  Home video for both titles is set for November 10, with the Netflix subscription video-on-demand windows opening January 11, 2016.

During 2015, Hannover House and the supplier studios organized under the Medallion Releasing, Inc. distribution consortium are collectively expected to release about 90-titles to the DVD and BluRay markets.  This volume of new releases represents a substantial increase in title activities for Hannover House when compared to the eight (or less) releases handled by the company during each of the full years of 2013 and 2014.

“Our sales revenues and profit margins are growing significantly and measurably each quarter,” said Eric Parkinson, C.E.O.  “When our receivables cash-flow collections catch up with our rate of new product manufacturing and sales, the financial dynamic for Hannover House is going to dramatically change – and we should grow exponentially from that point forward,” he concluded. 

Key retail accounts for Hannover House include Walmart Stores, Inc., Redbox, Netflix, Barnes & Noble and thousands of independent video retailers, schools, libraries and booksellers.  The company also sells entertainment products to a wide range of internet sites, and services most major video-on-demand portals. The company has been profitable for each of the past five years, and feels that the 2015 new activities will significantly increase both revenues and bottom line results.  Hannover House stock is traded on the OTC Markets under ticker symbol: HHSE.

SAFE HARBOR STATEMENT

This press release may contain certain forward-looking statements within the meaning of Sections 27A & 21E of the amended Securities and Exchange Acts of 1933-34, which are intended to be covered by the safe harbors created thereby. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, there can be no assurance that these statements included in this press release will prove accurate.

For more information contact:

Eric Parkinson, Hannover House, 818-481-5277 / Eric@HannoverHouse.com

HHSE Blog Update - Monday, July 27

Greetings HHSE Friends & Shareholders - As a follow-up to our blog last Monday (which many complained as reading rather glum) - we are releasing today a significant spread of news and developments which more clearly define the current activities of the company.  There's so much positive activity in motion that it's been difficult to stop the process long enough to write-up informative blogs.  Accordingly, today's summary will be in bullet point format for brevity.

Watch this space!

MEANWHILE - it would not hurt the film's momentum if HHSE shareholders were to go to Fandango and pre-buy a ticket for this weekend's opening of "BONOBOS: BACK TO THE WILD" at the Regal Majestic 20 in Washington, DC (Silver Spring, MD).  We're looking to have a strong, single-screen box office result at that one location this weekend... so that our "standby" locations in second and third-tier size markets become "confirmed."  In mid-summer, no theatre owner wants to book a room to empty seats... so they often look at the results of single screen exclusives before allocating screens.  Just an idea...  We'd like to SELL OUT the morning show (11:00-am), since our evening shows already have support from The American Humane Society, Discovery Networks, The Smithsonian Institute, and the Downtown Silver Spring Visitor's Bureau.  If you buy tickets, but cannot attend yourself, please email the ticket link (or print them out, scan and then email the scan to):  Andrea@HannoverHouse.com  (Andrea Bernath), 479-751-4500.  Andrea will be getting these pre-paid tickets to the Discovery Center and to the Downtown Silver Spring office for distribution to families and visitors:

http://www.downtownsilverspring.com/events


HERE'S WHERE TO GO TO BUY TICKETS:

http://www.fandango.com/regalmajesticstadium2026imax_aaron/theaterpage?date=7/31/2015

* * * * *

FIRST UPDATE:  12:30 pm Central Time

HHSE's "DARK AWAKENING" Theatrical Expands to 6 more markets this weekend - and Fandango Ticket Links will be posted shortly.  New theatrical markets will be added every weekend through AUGUST, with the HHSE Home Video Release to Walmart, Redbox, Best Buy, Target and others occuring on OCTOBER 6th - same street date for Alchemy (sub-distribution deal) for VIDEO-ON-DEMAND;  HHSE Showtime Placement window opens January 5, 2016.  Based on pre-orders from the key big-box retailers, "DARK AWAKENING" will be the company's largest, single-title home video shipment since 2010.

Speaking of Alchemy - HHSE is pleased to be working with Alchemy on selected video-on-demand placements and accounts.  They have established vendor status at some accounts that have previously been unavailable to HHSE for placement.  With respect to "DARK AWAKENING," the licensor to HHSE (The Little Film Company), withheld V.O.D. rights from the offset of the deal - in lieu of requireing HHSE to pay a royalty advance.  However, this item will be added to VODWIZ, and will also be available in 4k format as the V.O.D. opportunities for that new media format emerge.


SECOND UPDATE:  7:33 pm Central Time

Crazy Monday - lots on our plates...

Anyway, for next Friday's opening of THE ALGERIAN in Washington, DC (and for the opening the following weekend in NYC), we are pleased to announce the appearance and "meet-in-person" support of our principal cast members.  HARRY LENNIX from the hit NBC Show, "The Blacklist" and TARA HOLT ("Californication") will be joined by the film's lead BEN YOUCEF and producer-director GIOVANNI ZELKO.  Should create a happening event!

Quick Update - Various HHSE Matters

Good Morning HHSE Friends - There's so much activity underway, that no time has been open for blog updates; apologies for being temporarily absent from this update site!

In respect of time - here's a quick summary of key items of interest or as requested by shareholders:

1).  NY MEDIA DAY - response and attendance was superb, especially for the upcoming "BONOBOS" release.  There were only a few reviewers present for "Dark Awakening" (and response was mixed to negative - but hey, horror films RARELY get good critical acclaim!); critical feedback on "THE ALGERIAN" was almost unanimously positive, and critical feedback on "BONOBOS" was unanimous and enthusiastic.  Feature stories and reviews on "ALGERIAN" and "BONOBOS" will begin appearing in publications and websites during the intial weeks of release.  As for broadcast / television at NY Media Day, four major (national) shows were represented, which should generate a lot of free airtime to support "ALGERIAN" and "BONOBOS."

2).  DARK AWAKENING BOX OFFICE - The opening weekend of "Dark Awakening" at the Red Cinema in Greensboro, NC (June 26 - 28) was reasonably successful at $3,800+ in ticket sales.  However, many of these were for locally-based cast and crew, and as such, this result (which was #3 overall out of 12 films in that multiplex), did not represent the broader national audience.  The addition of twelve (12) theatres last weekend, primarily in smaller markets, did not fare well, with only $1,000 per screen averages, and rankings generally in the middle of the pack to lower echelon in each multiplex (e.g., "Dark Awakening" was # 6 out of 12 films at most multiplexes).  This level of box office is generally not good enough for "hold-overs" - although four locations of these twelve did agree to a second week.  More crucially, these locations add to the overall requirement for the Showtime cable sale requirement - and with new locations on July 31 and August 7, that commitment will be fully satisfied.  While it's easy for HHSE management to say, "wow, it only grossed $1,000 per theatre," it's important to note that our local market spend averaged only $200 per location.  So mathematically, this is the first time in HHSE theatrical history that the opening weekend grosses exceeded the cost to achieve them.  We are still haunted by the spend of nearly $3-million in 2010 for "TWELVE" to gross only $183,000.  That was a revenue loss-ratio of 99-to-1.  So to spend $200 per location to gross $1,000 is still small dollars, at least it's positive dollars and indicates that focused targeting around theatre zones may be more efficient than national shotgun blasts.  And again, let's not lose focus that these limited release theatricals are designed first-and-foremost to satisfy lucrative presales for Showtime and Netflix.  Yes, it would be great to pop a million bucks at the box office on one of these... but the business model is not based on generating any box office results, other than the actual release of the films being what is required to satisfy the presales.

3).  FORM 10 AND NEW AUDITS - Yes, the company is working with a new auditing firm, as previously reported.  This process is moving ahead and could be finished very quickly - enabling a prompt refiling of the Form 10.  Yes, there was a meeting in NYC on this last week and HHSE received a full update.

4).  CASH FLOW AND TCA GLOBAL - The loan that HHSE received in May, 2013 from TCA Global Master Fund continues to haunt the company and impede our operations with legal and cash flow encumbrances.  Collections from Q1 sales have been sluggish, due in large part to the sale of wholesaler Anderson Merchandisers to Alchemy / MMS (with Anderson fulfilling Walmart orders for HHSE and Medallion titles, and thus representing the largest portion of packaged goods receivables).  In the meantime, TCA has been pushing for default conversions of due to HHSE's current inability to meet their monthly payment demands (which are at $50,000 per month - but when added to a cash flow cycle that requires significant monthly funding for for new release video manufacturing and fulfillment - the available resources to HHSE management have been crunched).  The Security Liens and Encumbrances imposed by the TCA deal are effectively like "handcuffs" onto HHSE management, making it nearly impossible to "juggle" and manage while one's hands are tied.

The TCA structure has been a horrible experience and one that we would not wish onto any reasonable persons.  In many respects, the deal structure appears to be designed to impede the borrower's ability to repay with cash, in favor of TCA's default bonus provisions and mandatory share conversions. Their U.C.C. lien creates a cloud over the company's ability to secure new lending, and their claim to be eligible to all receivables (as opposed to just those specific titles listed in the loan agreement), casts a shadow over each collected deposit.  Maybe someday, federal regulators will be stricter or prohibit such lending practices? One can only hope. Meanwhile, HHSE became trapped under this structure, and is still about $150,000 away from managerial freedom (we've paid over $300,000 already).  TCA is pushing hard right now for another $50,000 forced debt conversion transaction.  So on the eve of a positive story in the Wall Street Journal, HHSE is being held down in the muck to wrestle out a prompt ending to the TCA woes.  It's been exhausting.  But fortunately, we're near the end of that venture.

5).  VODWIZ - Many of the masters that HHSE delivered to Nanotech for uploading to the VODWIZ site hit technical approval or suitability issues.  Katherine Mills and Caitlin McKenzie are working with Nanotech and their outside service providers, to deliver suitable elements to get the next major round of titles published.  There will be a more detailed update on this early next week after a title count of "technically acceptable" films is determined.

A SHAREHOLDER EMAILED US THIS MORNING:  "WHY IS TODAY'S BLOG SO GLUM"?

Fair question.  For the past few years, this Blog has concentrated only on the upbeat developments, and tended to provide little attention to some of the less-than-shiny parts of the company.  Yes, there is a tremendous amount of positive activity for HHSE and much to be excited about.  But we cannot also ignore that TCA has been like a ball-and-chain around management's necks... and we cannot pretend that our cash flow is superb when it's actually challenging due to TCA, corporate mergers and general market conditions that happen when a small supplier goes from 6-titles per year to 90-titles in the same amount of time.  Throughout the past few years, a barrage of positively-spun blogs has had no measurable impact to the stock volume or pricing.  In fact, the more positive our blogs have been worded, the more pressure that seemed to arrive against the PPS.  Almost like a challenge to the good news?  Who are we kidding?  It's DEFINITELY a challenge to the good news... the chat board trolls BRAG about pushing hard against HHSE whenever press releases come out.  So rather than focus on only the shiny bits, we felt that a more candid blog - with the less than exciting parts exposed - offered a new approach to corporate communications.  Maybe we're wrong?  Guess we'll find out.  But there's a logical conclusion if you think it through... there is "a method to the madness" to coin a phrase.

Another title placement at Walmart - another HHSE / Medallion / Green Apple Hit?

Dear HHSE Friends - we're pleased to announce that shipments to Walmart are underway now for the August 18 street date of "ON ANGEL'S WINGS" starring Robin Givens.

This is a quality, new release family film that has multiple markets of cross-over appeal:  Family, Christian, Urban and even Soccer / Sports!  Walmart's "Everyday Low Price" is at the affordable, near-impluse level of only $9.96 for the DVD - and this item will appear in the New Release Modular section of "A" and "B" volume Walmart Stores.

Complementary studio titles of a non-competitive nature are proving to add significant new revenues to HHSE and Medallion, without any compromise of revenues to the core releases under the Hannover House logo.  Go HHSE!

ONE MORE DAY: "Dark Awakening" Roll-Out To Theatres Begins!

Dear HHSE Friends - for those of you in the 5-mile zone surrounding each theatre playing "DARK AWAKENING" starting tomorrow - we apologize.  Our targeted ads are bombarding the specific markets and specific neighborhoods like a tidal wave onto those locals.

For those of you NOT residing in a market playing the film, you probably haven't seen many ads.

Why is this?  Well, as some of you know or will recall, Hannover House spent over $3-million on NATIONAL ADS for "TWELVE" back in 2010 - reaching audiences in markets that the film was NOT playing in, and NOT making much of an impression (due to spend-dilution) for the markets where the film WAS playing.  So a smarter plan, we've discovered, is to target the specific zones around each theatre playing a particular film.  This way, the ads are being seen ONLY by those people most likely to respond, and we're not wasting dollars on audiences that cannot act on our advertising message.

In the meantime, tomorrow will see 12-new locations added to Greensboro, and July 24 and July 31 will see the broader expansion to all major markets.

The Special Event / Red-Carpet premiere by Fangoria Magazine last night in Studio City (Los Angeles market) was a HUGE success (Standing Room Only!), and we will post media from this as the sites go live.  (GETTY IMAGES LINK IS BELOW).

Meanwhile, here's a list of tomorrow's locations and the upcoming roll-out theatres for DARK AWAKENING:

DARK AWAKENING
Branch	Theater Name	City	State
	JULY 17, 2015 - OPENINGS
Indie	Red Cinemas	Greensboro	NC
Malco	Malco Razorback Cinema	Fayetteville	AR
Malco	Malco Rogers Towne Cinema	Rogers	AR
Malco	Fort Smith Malco Cinema	Ft. Smith	AR
Malco	Malco Owensboro Cinema	Owensboro	KY
Malco	Malco Oxford Commons	Oxford	MS
Malco	Malco Cinema 10	Tupelo	MS
Malco	Malco Smyrna Cinema	Smyrna	TN
Malco	Malco Wolfchase Cinema	Memphis	TN
Malco	Malco Cordova Towne Cinema	Cordova	TN
Cinemark	Sam's Town Cinema	Las Vegas	NV
Cinemark	Century 18 Sam's Town	Las Vegas	NV
Harkins	HARKINS ARIZONA MILLS 25	Tempe	AZ
Harkins	HARKINS TUCSON SPECTRUM 18	Tucson	AZ
	JULY 24 and JULY 31
Cinemark	CINEMARK HOWARD HUGHES 18	Los Angeles	CA
AMC	Burbank 16	Burbank	CA
Regal	REGAL COMMERCE CENTER 14	Commerce	CA
Regal	CINEMARK CENTURY 25	Orange	CA
Regal	REGAL OCEANSIDE STADIUM 16	Oceanside	CA
Regal	Regal Laguna Village	Sacramento	CA
Carmike	Carmike Avenue 16	Melbourne	FL
Carmike	Muvico Parisian 20 & IMAX	West Palm Beach	FL
Carmike	Carmike Royal Palm 20	Bradenton	FL
Carmike	Muvico Starlight 20	Tampa	FL
Carmike	Carmike Sundial 20	St. Petersburg	FL
Regal	REGAL MALL OF GEORGIA BUFORD	Buford	GA
Regal	REGAL HOLLYWOOD CHAMBLEE 24	Chamblee	GA
Regal	REGAL ARBOR PLACE	Douglas	GA
Regal	REGAL TOWN CENTER KENNESAW	Kennesaw	GA
Regal	REGAL DOLE CANNERY STADIUM 18	Honolulu	HI
Regal	REGAL MAUI MALL MEGAPLEX 12	Kahului	HI
Regal	REGAL GALAXY 14	Bloomington	IL
Regal	REGAL WEBSTER PLACE	Chicago	IL
Carmike	Carmike 20	Fort Wayne	IN
Carmike	Carmike Metropolis 18	Plainfield	IN
Regal	REGAL BEDFORD 7	Bedford	IN
Regal	REGAL CIRCLE CENTER 9	Indianapolis	IN
Regal	COLDWATER CROSSING 14	Fort Wayne	IN
Regal	REGAL GREENWOOD STADIUM 14	Greenwood	IN
Regal	REGAL MADISON 6	Madison	IN
Regal	REGAL NOBLESVILLE 10	Noblesville	IN
Regal	REGAL SHILOH CROSSING 18	Avon	IN
Regal	REGAL VILLAGE PARK 17	Carmel	IN
Regal	REGAL SEYMOUR STADIUM 8	Seymour	IN
Regal	REGAL NEW ALBANY 16	New Albany	IN
Regal	REGAL RIVER FALLS 12	Clarksville	IN
Regal	REGAL HAMBURG PAVILLON 16	Lexington	KY
Regal	REGAL SHELBYVILLE STADIUM 8	Shelbyville	KY
Regal	REGAL WILDER STADIUM 14	Wilder	KY
AMC	AMC STAR FAIRLANE 21	Detroit	MI
Regal	REGAL LANSING 12 & RPX	Lansing	MI
Regal	REGAL BROOKLYN CENTER STADIUM	Minneapolis	MN
Carmike	Carmike Londonderry 10	Londonderry	NH
Regal	REGAL CINEMAS BURLINGTON 20	Burlington	NJ
Regal	REGAL CINEMAS COMMERCE CENTER 18	North Brunswick Township	NJ
Regal	REGAL HADLEY THEATRE 16	South Plainfield	NJ
Cinemark	Century Rio 24	Albuquerque	NM
Regal	REGAL E-WALK 13	New York	NY
Regal	REGAL HENRIETTA STADIUM 18	Rochester	NY
Regal	REGAL TRANSIT CENTER 18	Williamsville	NY
Regal	REGAL HUDSON VALLEY MALL 12	Kingston	NY
Regal	UA STATEN ISLAND 16	Staten Island	NY
Regal	REGAL DEERFIELD TOWN CENTER 16	Mason	OH
Regal	REGAL FAIRFIELD COMMONS 20	Beavercreek	OH
Regal	REGAL GEORGESVILLE SQUARE 16	Columbus	OH
Regal	REGAL INDIAN MOUND 11	Heath	OH
Regal	REGAL LLOYD CENTER 10	Portland	OR
Regal	REGAL CINEMAS OAKS STADIUM 24	Oaks	PA
Regal	REGAL CINEMAS PLYMOUTH MEETING 10	Conshohocken	PA
Regal	UA RIVERVIEW PLAZA STADIUM 17	Philadelphia	PA
Regal	REGAL WARRINGTON CROSSING	Warrington	PA
Regal	EDWARDS HOUSTON MAR'Q STAD. 24	Houston	TX
Regal	EDWARDS GREENWAY PALACE 24	Houston	TX
Regal	REGAL GATEWAY 16	Austin	TX
Regal	REGAL CIELO VISTA STADIUM 18	San Antonio	TX
Regal	REGAL CINEMAS MACARTHUR MKTPLC	Irving	TX
Regal	UA FOSSIL CREEK STADIUM 11	Fort Worth	TX
Regal	UA AMARILLO STAR 14	Amarillo	TX
Regal	REGAL MERIDIAN 16	Seattle	WA
Regal	REGAL GRAND CENTRAL MALL 12	Vienna	WV
Regal	REGAL NITRO STADIUM 12	Cross Lanes	WV

   

EXAMPLE: LOCAL MARKET PRINT ADS (supplemented by Internet & Social):

http://www.gettyimages.com/detail/news-photo/actor-jason-cook-at-the-fangoria-screening-of-dark-news-photo/480883372

Tremendous Activity at Media Day - and there's more for tonight!

Greetings HHSE Friends - the early morning hours at the Hannover House Media Day saw a record level of media support for our upcoming release slate of theatrical titles.  Print and Internet pieces were covered for upcoming editions of HUFFINGTON POST, DAILY BEAST, THE HILL, THE NATION and SLATE.COM.  Broadcast (videotaped) interviews were conducted for many of the nation's top rated entertainment programs including ENTERTAINMENT TONIGHT, ACCESS HOLLYWOOD, E! TV and INSIDE EDITION.  Later still (today / tonight) we have HOLLYWOOD REPORTER, USA TODAY and WALL STREET JOURNAL.  Media Reviewers included New York Times, New York Post, New York Daily News, Variety and IBR.  The flood of visibility and coverage for HANNOVER HOUSE and our theatrical release slates will bring cleansing and refreshing vitality to the company and to our theatrical release titles.  Can't blog more because this is still happening!

 

 

Writer, Director, Producer and Star, GIOVANNI ZELKO speaks with journalist and columnist CLIFF SCHECTER during interviews supporting the release of "THE ALGERIAN."

 

 

 

 

Final Preparations for Media Day in NYC!

With less than 24 hours to go, the energy is building for tomorrow's 3-picture "MEDIA DAY" event in New York City.  Hannover House will present reviewer screenings of "DARK AWAKENING", "THE ALGERIAN" and the World Premiere of the enhance and English-language edition of "BONOBOS: BACK TO THE WILD."  Media RSVPs include (alphabetically):  Associated Press, Daily Beast, Hollywood Reporter, Huffington Post, New York Daily News, New York Post, New York Times, Slate, The Hill, The Nation, Time Out, Variety - and broadcast media coverage for: CNN/HLN Entertainment News,  E! TV, Entertainment Tonight and EPK.TV... more to come!

SWEET! 100% Re-Order within 2-Weeks!

Terrence Howard's smash-hit TV Series, EMPIRE, has elevated his star stature to levels exceeding even his IRON MAN fame.  As a result, the HHSE / Green Apple release of "LOVE BEAT THE HELL OUTTA ME" is being popularly received at Walmart and Best Buy.  To our welcomed surprise, we received re-orders today for Walmart equalling 100% of the initial placement quantities of the title... and that's less than 2-weeks after initial (June Modular) street date!  WOW!