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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