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Deer Consumer Products, Inc. Announces 3rd Quarter Financial Results - Net Income Up 168% to $4.12 Million, Affirms 2009 Earnings Guidance

Posted on: Thursday, 5 November 2009, 05:55 CST

NEW YORK, Nov. 5 /PRNewswire-FirstCall/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (Website: www.deerinc.com), a leading manufacturer of home and kitchen electronics marketing to both global and Chinese domestic consumers, is pleased to announce financial results for the 3rd quarter ended September 30, 2009.

3rd Quarter Revenues

• Revenues of $26.54 million, up 130%, compared to $11.54 million in Q3 2008
• Revenue increase was due to expansion of sales in the U.S. market and putting significant efforts into increasing our sales to the Chinese and European markets
  

3rd Quarter Net Income

• Net income of $4.12 million, up 168%, compared to $1.54 million in Q3 2008
  

Affirms 2009 Sales and Earnings Guidance

DEER affirms 2009 financial guidance of approximately $81 million in revenues and approximately $10.5 million in net income for our fiscal year ending December 31, 2009. In 2008, DEER reported US GAAP audited revenues of $43.8 million, net income of $3.4 million.

Management Comments

Bill He, Deer's Chairman & CEO commented, "During the 3rd quarter, we experienced sales and earnings growth both in the Chinese domestic and international markets. Our global customer base, as well as Chinese domestic sales channels, responded positively to the improved global economic environment which continued to strengthen our market position. As a result, we are comfortable with our 2009 earnings guidance."

Mr. He continued: "In the most recently concluded Guang Dong Fair which is China's largest product show, we noticed significant global and domestic customer demand and interest towards our products. Deer is well positioned to further benefit from any global economic recovery."

About Deer Consumer Products, Inc.

Deer Consumer Products, Inc. (www.deerinc.com) is a NASDAQ Global Market listed U.S. public company headquartered in China. Supported by more than 103 patents and approximately 1,900 full time and part time employees, Deer is a market leader in the design, manufacture and sale of home and kitchen electric appliances marketing to the vast Chinese domestic consumer markets as well as customers in more than 40 countries worldwide. Deer's product lines include blenders, juicers, pressure cookers and other home appliances designed to improve home lifestyles in today's fast-paced society. With more than 100 global and domestic clients/branded products including Black & Decker, Ariete, Disney, Toastmaster, Magic Bullet, Back to Basics, and Wal-Mart, Deer has enjoyed rapid sales and earnings growth in the 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.

Contact Information: Corporate Contact: Helen Wang, Corporate Secretary Deer Consumer Products, Inc. Tel: 011-86-755-86028285

DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 2009 2008 ---- ---- (unaudited) ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $17,833,183 $2,782,026 Restricted cash - 200,099 Accounts receivable, net 11,757,169 8,560,465 Advances to suppliers 3,767,328 5,015,479 Other receivables 199,871 489,286 Short term investments - 29,340 Due from related party - 331,267 Inventories 12,334,960 7,680,851 Other current assets - 13,342 - ------ Total current assets 45,892,511 25,102,155 PROPERTY AND EQUIPMENT, net 11,705,817 11,291,202 CONSTRUCTION IN PROGRESS 2,213,427 892,897 INTANGIBLE ASSETS, net 397,044 404,125 OTHER ASSETS 24,977 39,689 ------ ------ TOTAL ASSETS $60,233,776 $37,730,068 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY --------------------------------------- CURRENT LIABILITIES: Accounts payable $9,687,669 $8,968,088 Other payables 1,676,026 760,632 Unearned revenue 3,258,033 3,305,966 Accrued payroll 1,028,714 168,282 Short term loans - 3,552,841 Advances from related party 80,070 274,805 Notes payable 4,881,576 3,155,348 Tax and welfare payable 1,635,005 1,533,013 --------- --------- Total current liabilities 22,247,093 21,718,975 LONG-TERM LOAN 733,500 733,500 ------- ------- TOTAL LIABILITIES 22,980,593 22,452,475 ---------- ---------- STOCKHOLDERS' EQUITY: Common Stock, $0.001 par value; 75,000,000 shares authorized; 25,576,094 and 19,652,226 shares issued and outstanding as of September 30, 2009 and December 31, 2008, respectively 25,576 19,652 Additional paid-in capital 24,809,942 9,329,371 Development funds 859,361 542,701 Statutory reserve 1,718,723 1,085,403 Other comprehensive income 2,340,270 2,345,698 Retained earnings 7,499,311 1,954,768 --------- --------- Total stockholders' equity 37,253,183 15,277,593 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $60,233,776 $37,730,068 =========== =========== DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME Three Months Ended Nine Month Ended September 30, September 30, ------------------ ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- (unaudited) (unaudited) (unaudited) (unaudited) Revenue $26,541,039 $11,542,215 $48,723,758 $32,045,142 Cost of Revenue 20,670,731 8,255,913 37,403,300 24,550,251 ---------- --------- ---------- ---------- Gross profit 5,870,308 3,286,302 11,320,458 7,494,891 Operating expenses Selling expenses 960,013 672,714 1,871,266 1,882,130 General and administrative expenses 429,656 943,467 1,607,560 2,182,969 ------- ------- --------- --------- Total operating expenses 1,389,669 1,616,181 3,478,826 4,065,099 --------- --------- --------- --------- Income from operations 4,480,639 1,670,121 7,841,632 3,429,792 Non- operating income (expense): Financing costs (35,882) (1,926) (156,543) (48,361) Interest income 63,698 1,693 66,354 8,548 Interest expense (14,292) (116,617) (118,984) (206,474) Other income (expense) 8,894 (1,698) 4,998 74,523 Realized loss on trading securities - (296) - (34,684) Foreign exchange gain 288,461 530,510 207,958 876,436 ------- ------- ----- ------- Total non- operating income (expense) 310,879 411,666 3,783 669,988 Income before income tax 4,791,518 2,081,787 7,845,415 4,099,780 Income tax 668,745 540,717 1,350,892 1,165,020 --------- --------- --------- --------- Net income 4,122,773 1,541,070 6,494,523 2,934,760 Other comprehensive income Foreign currency translation gain (loss) 57,012 1,367,814 (5,428) 2,305,404 ----- ---------- ----- ---------- Comprehensive Income $ 4,179,785 $2,908,884 $ 6,489,095 $5,240,164 ========= ========== ========= ========== Weighted average shares outstanding : Basic 22,730,722 16,856,898 21,462,056 16,087,045 ========== ========== ========== ========== Diluted 23,266,256 16,856,898 21,908,490 16,087,045 ========== ========== ========== ========== Earnings per share: Basic $0.18 $0.09 $0.30 $0.18 ===== ===== ===== ===== Diluted $0.18 $0.09 $0.30 $0.18 ===== ===== ===== ===== DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Month Ended September 30, ---------------- 2009 2008 ---- ---- (unaudited) (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $6,494,523 $2,934,760 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 1,072,586 857,170 Amortization 7,076 13,966 Loss on disposal of fixed assets - 36,996 Realized loss on short term investments - 34,684 (Increase) / decrease in assets: Accounts receivable (3,194,307) (4,015,909) Other receivables 294,584 147,815 Inventories (4,650,620) (6,234,027) Due from stockholder - 1,446,505 Due from related party 331,019 (3,799,263) Advances to suppliers 1,247,216 (228,506) Tax rebate receivable - - 347,731 Other assets 25,695 176,343 Increase / (decrease) in current liabilities: Accounts payable 719,113 4,946,373 Unearned revenue (47,897) 1,383,045 Other payables 901,444 (150,561) Due to related party (194,529) (791,123) Accrued payroll 859,787 113,427 Tax and welfare payable 101,915 392,629 --------- ---------- Net cash provided by (used in) operating activities 3,967,605 (2,387,945) --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment (1,486,891) (3,188,166) Acquisition (disposal) of intangible assets - 8,041 Construction in process (1,319,539) (617,887) Changes in restricted cash 199,948 (147,634) Sale of short-term investments 29,318 114,235 ---------- ---------- Net cash used in investing activities (2,577,164) (3,831,411) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of notes payable 1,724,933 2,969,781 Proceeds from issuance of short term loans - 4,176,723 Proceeds from sale of common stock 17,678,000 - Offering costs paid (2,213,892) - Proceeds from exercise of warrants 22,387 - Payment on notes short term loans (3,550,177) - Change in advance to shareholder, net - (532,470) Change in advance to related party, net - 114,695 ---------- --------- Net cash provided by financing activities 13,661,251 6,728,729 ---------- --------- Effect of exchange rate changes on cash and cash equivalents (535) 111,982 ---- ------- NET DECREASE IN CASH & CASH EQUIVALENTS 15,051,157 621,355 CASH & CASH EQUIVALENTS, BEGINNING BALANCE 2,782,026 1,511,545 --------- --------- CASH & CASH EQUIVALENTS, ENDING BALANCE $17,833,183 $2,132,900 =========== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $116,315 $113,356 ======== ======== Income taxes paid $565,418 $112,743 ======== ========

SOURCE Deer Consumer Products, Inc.

Source: PR Newswire

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