Deer Consumer Products (DEER) 8-K Deer Consumer Products, Inc. Announces 3rd Quarter Financial Results - Net Income Up 168% to $4.12 Million, Affirms 2009 Earnings Guidance

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

- Revenues of $26.54 million, an increase of 130% from Q3 in 2008

- Net income of $4.12 million, an increase of 168% from Q3 in 2008, fully diluted EPS $0.18

- Affirms 2009 revenue guidance of $81 million and net income of $10.5 million

NEW YORK, November 5, 2009 /PRNewswire-FirstCall/ -- Deer Consumer Products, Inc. (Nasdaq Global Market: 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.

SafeHarbor 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

Source: Deer Consumer Products, Inc.

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 oustanding 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 September 30,						Nine Month Ended 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