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.
Contact Information: |
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Corporate Contact: |
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Ms. Helen Wang, Corporate Secretary |
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Deer Consumer Products, Inc. |
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Tel: 011-86-755-86028285 |
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Email: [email protected] |
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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
============ ===========
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 (expense) 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
===== =====
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
== ==========
SOURCE Deer Consumer Products, Inc.
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