EX-99.1 2 v176002_ex99-1.htm Unassociated Document
 
Exhibit 99.1

Deer Consumer Products, Inc. Announces Record 2009 Financial Results, Anticipates Record Earnings Growth to Continue in 2010

- Revenue of $81.3 million, an increase of 86% from $43.8 million in 2008
- Net income of $12.4 million, an increase of 268% from $3.4 million in 2008
- Earnings Per Share (EPS) of $.53, an increase of 170% from EPS $0.20 in 2008 on a fully diluted basis
- Record revenue and net income significantly exceeded 2009 guidance
- Strong balance sheet, approximately $80 million in cash without long term debts
- Sufficient cash on hand to fund continued record growth in 2010
- Anticipates no bank or other credit borrowing needs
- Affirms 2010 revenue guidance of approximately $155 million and net income guidance of approximately $24 million from organic growth
- Anticipates favorable market environment for both global and China domestic markets to continue in 2010
- Non-deal road show scheduled through William Blair & Company, BMO Capital Markets and Lazard Capital Markets beginning on March 3

NEW YORK, March 2 /PRNewswire-FirstCall/ -- Deer Consumer Products, Inc. ("Deer") (Nasdaq: DEER) (website: http://www.deerinc.com/), one of the world's largest designers and OEM/ODM manufacturers of home and kitchen electronics marketing to both global and China domestic consumers, announced record 2009 financial results. Deer management will host an investor conference call today at 8:30 am EST.

Record 2009 Revenue:
2009 revenue was $81.3 million, an increase of approximately 86% compared to $43.8 million in 2008. Significant revenue increase was attributed to strong organic sales growth in core products, introduction of new products, and market share growth both globally and in the China domestic markets. Sales of company's proprietary "Deer" branded products reached record levels due to the company's marketing efforts in the China domestic markets. Strong consumer demand for high quality, "better lifestyle" products in our blenders and juicers product categories continued in 2009. China domestic sales in 2009 reached approximately 18% of total revenues, higher than the Company's previous estimate of 12% of China domestic market sales in 2009.

Record 2009 Earnings:
2009 net income was approximately $12.4 million and EPS was $.53 on a fully diluted basis, significantly higher than in 2008. Net income growth was largely attributed to increased organic sales growth and higher profit margins.

Affirms Record 2010 Revenue and Net Income Guidance:
Deer affirms 2010 revenue guidance of approximately $155 million, an estimated increase of approximately 91% from 2009. Deer also affirms 2010 net income guidance of approximately $24 million, an estimated growth of 100% from 2009. Deer anticipates significant sales expansion in the China domestic markets for "Deer" branded products in 2010 through broader market presence and distribution channels.

Strategic Position with Direct Access to the Vast Chinese Consumer Markets:
Despite the fact that China has the world's fastest growing small household appliance market, not a single global brand in this industry has any meaningful sales presence in China. Deer's fully integrated model of aligning strong cash position, product design, internal manufacturing and quality control, supply chain management and direct access to customers has helped establish Deer as an effective distribution platform for expanded product offerings in China's fast growing small household appliance industry.
 
 
Management Comments on 2009 Financial Performance:
Bill He, Deer's Chairman & CEO commented: "Deer management executed our 2009 growth strategies well and exceeded our stated revenue and net income guidance for 2009. Management's relentless focus on execution and sales expansion in 2009 provided a solid platform for our continued record growth in 2010. We are pleased with Deer's 2009 financial performance and the delivery of our financial targets promised to our shareholders."

Management Comments on 2010 Outlook:
Mr. He continued: "In 2010, Deer anticipates significant growth from domestic product sales. The Chinese consumers' appetite towards small household appliances has been increasing steadily despite the challenging global economy. Deer continues to believe positive consumer sentiment towards consumption and China's economic growth to remain high in 2010. We look forward to another year of record sales and earnings growth for Deer in 2010."

Non-Deal Road Show Schedule:
Beginning in New York on March 3, 2010, Deer's senior management team, led by Chairman & CEO Mr. Bill He, will conduct a 10 day, non-deal road show visiting with institutional investors in multiple cities throughout the U.S. The non-deal road show is arranged through the institutional sales desks at William Blair & Company, BMO Capital Markets and Lazard Capital Markets.

INVESTOR CONFERENCE CALL INSTRUCTIONS:
Date and time:  8:30 am U.S. Eastern Standard Time, March 2, 2010
U.S. toll free number:  1-866-543-6408
International direct dial-in:  617-213-8899
Conference passcode:  43992613


About Deer Consumer Products, Inc.
Deer Consumer Products, Inc. (http://www.deerinc.com/) is a NASDAQ Global Market listed U.S. registered public company headquartered in China. Deer has a 15-year operating business as well as a strong balance sheet. Supported by more than 103 patents, trademarks, copyrights and approximately 2,000 company-trained seasonal and full-time staff, Deer is a leading designer, ODM/OEM manufacturer and global marketer of quality small home and kitchen electric appliances. Deer's product lines include blenders, juicers, soy milk makers and a large variety of other home appliances designed to make today's lifestyles simpler and healthier. With more than 100 global clients/branded products such as Black & Decker, Ariete, Disney, Toastmaster, Magic Bullet, Back to Basics and Wal-Mart, and rapidly expanding China domestic market footprint, Deer has enjoyed rapid sales and earnings growth in recent years.

Safe Harbor Statement
All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect Deer's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in Deer's filings with the Securities and Exchange Commission.
 

Corporate Contact:
Ms. Helen Wang, Corporate Secretary
Deer Consumer Products, Inc.
Tel: 011-86-755-86028285
Email: investors@deerinc.com
 
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DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
 
   
2009
    
2008
  
ASSETS
  
CURRENT ASSETS:
            
Cash and cash equivalents
   $ 79,333,729     $ 2,782,026  
Restricted cash
     35,701       200,099  
Accounts receivable, net
     17,070,781       8,560,465  
Advances to suppliers
     3,299,107       5,015,479  
Other receivables
     213,487       489,286  
Short term investments
     -       29,340  
Due from related party
     -       331,267  
Inventories
     18,061,282       7,680,851  
Other current assets
     12,500       13,342  
                 
Total current assets
     118,026,587       25,102,155  
                 
PROPERTY AND EQUIPMENT, net
     11,325,999       11,291,202  
CONSTRUCTION IN PROGRESS
     3,724,337       892,897  
INTANGIBLE ASSETS, net
     394,684       404,125  
OTHER ASSETS
     20,073       39,689  
                 
TOTAL ASSETS
   $ 133,491,680     $ 37,730,068  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
  
CURRENT LIABILITIES:
                
Accounts payable
   $ 13,055,110     $ 8,968,088  
Other payables
     1,061,460       760,632  
Unearned revenue
     1,719,761       3,305,966  
Accrued payroll
     1,148,663       168,282  
Short term loans
     -       3,552,841  
Advances from related party
     -       274,805  
Notes payable
     6,212,911       3,155,348  
Tax and welfare payable
     862,332       1,533,013  
                 
Total current liabilities
     24,060,237       21,718,975  
                 
LONG-TERM LOAN
     -       733,500  
                 
TOTAL LIABILITIES
     24,060,237       22,452,475  
                 
STOCKHOLDERS' EQUITY:
                
Common Stock, $0.001 par value; 75,000,000 shares authorized; 32,631,748 and 19,652,226 shares issued and outstanding as of December 31, 2009 and December 31, 2008, respectively
     32,632       19,652  
Additional paid-in capital
     91,111,661       9,329,371  
Development funds
     1,185,859       542,701  
Statutory reserve
     2,371,718       1,085,403  
Other comprehensive income
     2,335,216       2,345,698  
Retained earnings
     12,394,357       1,954,768  
                 
Total stockholders' equity
     109,431,443       15,277,593  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
   $ 133,491,680     $ 37,730,068  


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DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
 
   
2009
    
2008
  
             
Revenue
   $ 81,342,680     $ 43,784,935  
                 
Cost of Revenue
     61,176,610       34,125,019  
                 
Gross profit
     20,166,070       9,659,916  
                 
Operating expenses
                
Selling expenses
     3,555,547       2,854,946  
General and administrative expenses
     2,380,861       2,566,634  
                 
Total operating expenses
     5,936,408       5,421,580  
                 
Income from operations
     14,229,662       4,238,336  
                 
Non-operating income (expense):
                
Financing costs
     (223,607 )     (247,901 )
Interest income
     94,986       13,870  
Interest expense
     (122,299 )     (310,762 )
Other income (expense)
     364,418       40,216  
Realized loss on trading securities
     -       (34,873 )
Foreign exchange gain
     138,284       959,943  
                 
Total non-operating income
     251,782       420,493  
                 
Income before income tax
     14,481,444       4,658,829  
                 
Income tax
     2,112,382       1,302,045  
                 
Net income
     12,369,062       3,356,784  
                 
Other comprehensive income
                
Foreign currency translation gain (loss)
     (10,482 )     1,041,966  
Comprehensive Income
   $ 12,358,580     $ 4,398,750  
                 
Weighted average shares outstanding:
                
Basic
     22,782,200       16,985,460  
Diluted
     23,190,286       16,985,460  
                 
Earnings per share:
                
Basic
   $ 0.54     $ 0.20  
Diluted
   $ 0.53     $ 0.20  

 
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DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
 
   
2009
    
2008
  
             
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income
   $ 12,369,062     $ 3,356,784  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation
     1,439,751       1,199,578  
Amortization
     9,435       18,723  
Loss on disposal of fixed assets
     -       351,257  
Realized loss on short term investments
     -       34,873  
Stock based compensation
     333,387       -  
(Increase) / decrease in assets:
                
Accounts receivable
     (8,512,633 )     (7,821,066 )
Other receivables
     (5,019 )     210,696  
Inventories
     (10,374,062 )     (3,180,080 )
Due from stockholder
     -       1,454,375  
Due from related party
     331,064       (325,509 )
Advances to suppliers
     1,715,320       (1,965,833 )
Tax rebate receivable
     283,706       158,989  
Other assets
     18,100       215,234  
Increase / (decrease) in current liabilities:
                
Accounts payable
     4,084,515       6,205,438  
Unearned revenue
     (1,585,231 )     3,175,324  
Other payables
     241,952       156,499  
Due to related party
     (274,636 )     (795,427 )
Accrued payroll
     979,780       24,138  
Tax and welfare payable
     (670,270 )     563,573  
                 
Net cash provided by operating activities
     384,221       3,037,566  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
Acquisition of property and equipment
     (1,474,527 )     (3,627,873 )
Acquisition of intangible assets
 
   -       (8,319 )
Construction in process
     (2,829,702 )     (559,651 )
Changes in restricted cash
     164,297       276,966  
Sale of short-term investments
     29,322       79,984  
 
               
Net cash used in investing activities
     (4,110,610 )     (3,838,893 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
            
Proceeds from issuance of notes payable
     3,055,687       2,969,781  
Proceeds from issuance of short term loans
     -       4,176,723  
Proceeds from sale of common stock
     93,578,000       -  
Offering costs paid
     (12,407,007 )     -  
Proceeds from exercise of warrants
     290,890       -  
Payment on short term loans
     (3,550,661 )     (5,656,331 )
Payment on long term loans
     (733,050 )     -  
Change in advance to shareholder, net
     -       (535,367 )
Change in advance to related party, net
     -       270,028  
Proceeds from issuance of long-term note
     -       720,750  
                 
Net cash provided by financing activities
     80,233,859       1,945,584  
                 
Effect of exchange rate changes on cash and cash equivalents
     44,233       126,224  
                 
NET INCREASE IN CASH & CASH EQUIVALENTS
     76,551,703       1,270,481  
                 
CASH & CASH EQUIVALENTS, BEGINNING BALANCE
     2,782,026       1,511,545  
                 
CASH & CASH EQUIVALENTS, ENDING BALANCE
   $ 79,333,729     $ 2,782,026  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                
                 
Interest paid
   $ 119,996     $ 310,762  
                 
Income taxes paid
   $ 567,226     $ 725,125  
                 
Settlement of receivable as a deemed dividend
   $ -     $ 3,134,979  
 
CONTACT:  Corporate Contact: Ms. Helen Wang, Corporate Secretary, Deer Consumer Products, Inc., +86-755-86028285, investors@deerinc.com
 
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