Hannover House Inc (HHSE)

[choppers]

I believe the floor on DVD profits is $2 per DVD. IMHO, there is no way HHSE would make less than $2 per DVD but that is all in my opinion. I can't see their books. I do know that HHSE did bring a lot of their costs in house to make better margins. I also can see that they made a 32% overall profit on 2011 sales, even with sunk costs for the theatre underperformance of Twelve and Turtle. That to me tells me the DVD margins are very good and they have realized better margins by bringing some costs in house. With DVD orders that large, they also benefit from the economies of scale. They have more sales to cover their fixed costs, so the profit margins increase exponentially once they are break even on the fixed costs. It's all good

$2/DVD profit is still not too shabby IMHO. That's $400,000 in profits on only 1 Preorder DVD. That's awesome. Especially considering that they made $1.4 Million in profits for 2011.