HHSE Hannover House Inc (PK)

Hannover House, Inc. (Pinksheets: HHSE), a leading independent distributor of films, books and entertainment products, reported that net income for the first quarter of 2012 increased by more than 11% over the same period last year.  Gross revenues for the three months ending March 31, 2012 were $603,535, with pre-tax net income of $394,410.

Net income for last year's first quarter (2011) was $353,516, on higher gross revenues of $1,412,832,  primarily from home video and V.O.D. sales generated by 20th Century Fox Home Entertainment's release of the Hannover House title, "Twelve."  While gross revenues for Hannover House during this year's first quarter were lower, the net income to sales percentage increased by an impressive 40%, due to lowered costs of sales and marketing from a release slate more dominated by direct-to-video or limited release theatrical titles. 

The company has found value in targeted, limited release theatrical exposure for films, as can be measured in added value to home video, television and video-on-demand.  However, films with a broader theatrical release to date, such as "Twelve" have not resulted in improved bottom line results, due to the significantly higher costs to support nationwide theatrical distribution.  Accordingly, the company has placed a greater emphasis for 2012 on direct-to-video titles and limited-theatrical releases, as a strategy to increase both revenues and net income. 

At the present time, the company's broadest theatrical release slated for 2012 is "Toys in the Attic" which is expected to reach more than 100 theatres starting this August.

Hannover House posted its ninth consecutive quarter of profitable activities with these Q1 results.  After reserving for potential returns and bad debts, home video and video-on-demand revenues still comprised approximately 92% of all revenues for the company during Q1.  Three titles released during the quarter collectively represented about 80% of all revenues (specifically: "All's Faire In Love" at 55%, "Boggy Creek" at 18% and "Turtle: The Incredible Journey" at 7.5%).  For the full year of 2011, Hannover House generated gross revenues of approximately $4.3-million with pretax net income of $1.4-million.  Based on the current release slate and enhanced activities, the company is expecting an overall increase over about 100% in both revenues and net income for the current year (2012) over the 2011 results.. 

To review the full financials, go to:  www.OTCMarkets.com

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.

CONTACT: D. Frederick Shefte, Hannover House, 479-751-4500 / Fred@HannoverHouse.com