TDGI: Very happy with today's news, shows me Eric and I are on the same page here. This story is about growth and profitability. Numbers from t0days news match up with everything in the projections down below.
Due to corporate restructuring, Hannover House only released one title to DVD and Blu-Ray for the entire year of 2009, specifically "Hounddog," which was originally listed at $19.95 for DVD and $24.95 for Blu-Ray units. Despite the absence of other releases or catalog sales efforts, Hannover House still posted a respectable bottom-line profit for 2009 of $485,000. For the calendar year 2010, the company is pursuing a greatly enhanced release slate, led by six, major theatrical releases, five new release books, and thirty new release DVD / Blu-Ray titles. Additionally, Hannover is implementing a variety of catalog promotions and pricing strategies, including a Blu-Ray product line with $14.95 list pricing.
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Last year, the company had one release to DVD and Blu-Ray, a drama called "Hounddog" starring Dakota Fanning. Hannover House also released "War Eagle, Arkansas" to 11 theaters in Arkansas and later expanded the release to eight additional theaters in out-of-state markets.
In 2010, the company plans to release six films to theaters, 30 films to DVD and Blu-Ray as well as six books. "That's a tremendous increase in volume and cash flow," Parkinson said.
Last Years Numbers only included one Feature Film with a limited release to 19 theaters and one new release to DVD/Blue-Ray. They still had revenue of just under $1 million and were profitable. Compare that to the 2010 Release slate with 40+ releases and you can see what a massive growth story TDGI is becoming.
TDGI/Hannover Financial Numbers from their recent filings
Total Assets of $26,675,321
Assets valuation per share .058
Current 301,870,610 shares O/S and
159,336,082 restricted shares being issued to Hanover for merger.
301,870,610 shares O/S before Hanover shares.
461,206,692 shares O/S after Hanover shares.
Earnings of $485,719
Revenue $935,382
EPS for 2009 .0016 current shares O/S
EPS for 2009 .0011 with Hanover shares
EPS of 15-20X last years numbers
No new Dilution to raise money.
"ITEM “C” – Limitation on Future Stock Issuances – The Board held a discussion and unanimously agreed to not pursue new financing for the company that would require an issuance of additional common or preferred shares."
2010 TDGI Hannover plans 30 new releases to DVD/Blue-Ray, 4-6 National Theatrical Film Releases and 6 new Book Titles. They are projecting Revenue of $22-$39 million with earnings of $3.75-$8.55 million dollars.
VI-a). Base Business Forecasts for 2010 – Based upon the Company’s current release slate of 30 video releases, 4 theatrical titles and 5 books in 2010 (as well as revenues to be derived from the Company’s existing library plus the Elite Entertainment and FOCUSFilm libraries),
Management forecasts $17-million as “Base Business” gross revenues for 2010, with pre-tax margins of approximately $3.75-million.
VI-b). Key Title Anticipated Forecasts for 2010 – Subject to the Company’s successful closing of the financing venture for the P&A Fund (or any other comparable financing venture), and subject to the acquisition of at least two of the key titles now being pursued for national theatrical release,
Target-Hannover believes that an additional $22-million in gross revenues (generating an additional $4.8-million in pre-tax margins) is realistically obtainable to be added to the Company’s base Business Forecasts for 2010.
They already landed one of those two key titles for national theatrical release with the deal they announced for the movie "Twelve". So we just need one more deal.
$39 million revenue, $8.55 million pre-tax margins. EPS of just under .02 per share. PE of 25X gets me a TDGI share price of .50
General Operations, Administration and Overhead – The executives and managers of Target-Hannover House believe that the Company’s Overhead and G&A costs are extremely conservative and significantly lower than the entertainment industry average. This lowered expense for basic overhead should enable Target-Hannover to realize greater profit margins than its competitors, and in doing so, deliver a greater value to the Company’s shareholders.
On December 15, 2009, the board of directors of Target accepted and approved the employment agreements that were already in place at Hannover House for the services of Eric Parkinson and D. Frederick Shefte. The Company also approved the hiring of middle management positions including a Director of Marketing, a Director of Sales and an Accountant-Controller, along with administrative support staff as needed. Notwithstanding the costs of these anticipated new hires, the estimated Overhead / Base G&A costs for Target-Hannover in 2010 (inclusive of salaries to key executives) are forecast at a total of $690,000. This 2010 overhead total has been included within the Base Business Forecasts listed above on line item V-a.
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