Deer Consumer Products, Inc. Reports Record First Quarter 2010 Results: 248% Revenue Growth, 515% Net Income Growth, 16.9% Net Income Margin, EPS $0.12, Strong Earnings Growth Momentum Continues in 2010.
NEW YORK, May 10 /PRNewswire-FirstCall/ —
| | · | Revenues of $23.9 million, an increase of 248% from Q1/09 |
| | · | Net income of $4.04 million, an increase of 515% from Q1/09 |
| | · | Fully diluted EPS (Earnings per Share) of $0.12, an increase of 300% from EPS $0.03 in Q1/09 |
| | · | Strong balance sheet: $75.3 million in cash (approximately $2.31 per common share in cash) without any long term debts or bank borrowing |
| | · | High margin China domestic sales increased 1305% to 27% of revenue in Q1/2010 |
| | · | Expanded gross profit margin to 28.8%, compared to 24.2% in Q1/09 |
| | · | Expanded operating margin to 20%, compared to 16% in Q1/09 |
| | · | Expanded net income margin to 16.9%, compared to 9.6% in Q1/09 |
| | · | Anticipates the high margin China domestic sales to exceed 40% of revenues in 2010, compared to 17.6% in 2009 |
| | · | Sees record earnings growth momentum to continue in 2010 |
| | · | Sees positive impact to earnings from China’s current macro economic environment |
Deer Consumer Products, Inc. (Nasdaq: DEER; website: www.deerinc.com), one of the world’s largest vertically integrated designers and ODM/OEM manufacturers of home and kitchen electronics marketing to both global and China domestic consumers, announced today record financial results for the quarter ended March 31, 2010. Deer’s senior management will host an investor conference call today at 8:30 am Eastern Daylight Time to discuss first quarter results.
Financial Summary for Q1/2010 versus Q1/2009:
| | | | Q1 2010 | | | | Q1 2009 | | | YoY% Change | |
| Revenue | | $ | 23,902,457 | | | $ | 6,872,216 | | | | 248 | % |
| China Sales | | $ | 6,394,880 | | | $ | 455,211 | | | | 1,305 | % |
| China sales % of revenue | | | 26.8 | % | | | 6.6 | % | | | — | |
| International Sales | | $ | 17,507,577 | | | $ | 6,417,005 | | | | 173 | % |
| International sales % of revenue | | | 73.3 | % | | | 93.4 | % | | | — | |
| Gross Profit | | $ | 6,877,848 | | | $ | 1,659,512 | | | | 314 | % |
| Gross Margin | | | 28.8 | % | | | 24.2 | % | | | — | |
| Income from Operations | | $ | 4,774,818 | | | $ | 1,104,589 | | | | 332 | % |
| Operating Margin | | | 20.0 | % | | | 16.1 | % | | | — | |
| Income Tax Rate | | | 15.7 | % | | | 28.5 | % | | | — | |
| Net Income | | $ | 4,037,023 | | | $ | 656,874 | | | | 515 | % |
| Net Margin | | | 16.9 | % | | | 9.6 | % | | | — | |
| Diluted EPS | | $ | 0.12 | | | $ | 0.03 | | | | 300 | % |
Record First Quarter Revenues
Revenues for the first quarter of 2010 were $23.9 million, an increase of approximately 248% from $6.87 million in first quarter 2009. Deer attributes the significant revenue increase to stronger than expected revenue growth in the high margin China domestic market which grew 1,305% year over year. Deer continues to experience strong organic growth rate in all its global markets.
Record First Quarter Net Income
Net income for the first quarter of 2010 was approximately $4.04 million, an increase of approximately 515% from first quarter 2009. Fully diluted EPS was $0.12 compared to $0.03 in 2009.
Anticipates Rapid Earnings Growth Momentum to Continue in 2010
Deer is currently experiencing robust product sales across all product lines in the current second quarter. The Company anticipates continued China domestic and global market expansion for the rest of 2010. Deer previously provided 2010 revenue guidance of $155 million, an increase of 91% from 2009, as well as net income guidance of $24 million, an increase of 94% from 2009. Deer is confident in its abilities to achieve and exceed these previous sales and earnings targets.
Strategically Well Positioned as a Direct Access to the Vast Chinese Consumer Markets
China has the world’s fastest growing small household appliance market, however, not a single global brand in the industry has any meaningful sales presence in China. Deer’s fully integrated model of aligning a strong cash position, product design, internal low cost manufacturing and quality control, supply chain management and direct access to end user customers has positioned Deer as a strategic platform for accessing the Chinese consumers.
Management Comments on First Quarter 2010 Financial Results
Bill He, Deer’s Chairman and Chief Executive Officer, commented: “Deer management continued its relentless focus on execution and sales expansion in the first quarter. We are pleased with our significant organic revenue and margin expansion. Deer has a strong cash position and has no exposure to the credit markets. Our integrated “production to market” model has made Deer one of the most profitable companies in terms of net income margins in the small household appliance industry in the world.”
Management Comments on Positive 2010 Outlook
Mr. He continued: “For the rest of 2010, Deer anticipates significant growth from domestic product sales as well as global sales expansion. Chinese consumers’ demand for modern lifestyle products, including convenient small household appliances, has been growing in double digits as a result of China’s economic expansion. We see our market presence continuing to expand and our rapid earnings growth to continue in 2010. We look forward to delivering strong results in the coming quarters in 2010.”
Investor Conference Call Instructions
Deer management will host an earnings conference call today to discuss its financial results for the quarter ended March 31, 2010.
Date and time: 8:30 am U.S. Eastern Daylight Time, May 10, 2010
U.S. toll free number: 1-800-688-0796
International direct dial-in: +1 617-614-4070
Conference passcode: 64286251
About Deer Consumer Products, Inc.
Deer Consumer Products, Inc. (Nasdaq: DEER; website: www.deerinc.com) is a NASDAQ Global Select 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.
| Contact Information: | |
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| Corporate Contact: | |
| Mrs. Yongmei Wang | |
| Deer Consumer Products, Inc. | |
| Tel: 011-86-755-86028285 | |
Email: investors@deerinc.com | |
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| Source: Deer Consumer Products, Inc. | |
DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
