Unassociated Document

Deer Consumer Products, Inc. Announces Record 2008 Financial Results –

NEW YORK, March 31/PRNewswire-Asia/

-	Revenues of $43.8 million, EPS of $.017, Anticipates Significant Earnings Growth in 2009 from Expanding Sales in the Chinese Domestic Markets

-	Revenue increased 31% to $43.8 million, strong sales growth in core products

-	Net income of $3.4 million

-	Anticipates significant earnings growth from domestic sales in 2009

Deer Consumer Products, Inc. (OTCBB: DCPI) (website: http://www.deerinc.com), a market leader in the design, manufacture and sale of home and kitchen electronic appliances targeting both international and Chinese domestic markets today announced audited 2008 financial results for the fiscal year ended December 31, 2008.

2008 Revenue:

·	Revenue of $43.8 million, an increase of 30.8% compared to 2007

·	Sales of company’s proprietary “Deer” branded products reached record levels due to the company’s marketing efforts in its domestic market

·	Overall sales growth was attributed to strong sales in core products, introduction of new products, and market share growth of its brand name products in the Chinese domestic markets

2008 Earnings:

·	Net income of $3.4 million

·	Earnings per Share of $0.17 on a fully diluted basis

Management Comments on 2008 Financial Performance and 2009 Outlook:

In 2008, Deer achieved a 30.8% growth in revenues due to increased international and domestic orders. Increased sales attest to the high quality of our products, our marketing strength and highly cooperative relationships that we have maintained with our new and returning customers. In addition to expanding our international sales under various global brands as a key supplier to global chain stores, we have started marketing household kitchen appliances domestically under our own registered “Deer” brand. Sales growth from our own brand has been promising.

James Chiu, Deer's Chief Operating Officer commented: “We are pleased with Deer’s 2008 financial performance. In 2008, in addition to expanding international sales, we continued to execute on our strategy of broadening distribution channels targeting the Chinese domestic consumer markets. In 2009, we anticipate significant growth from domestic product sales. The Chinese consumers’ appetite towards home appliances has been increasing steadily despite the challenging global economy.”

Bill He, Deer’s CEO commented: “On the capital market front, Deer plans to apply for listing on the NASDAQ stock market in the near future as we believe an Exchange listing would broaden our investor base and better reflect our position as a global market leader in the manufacturing and marketing of home and kitchen electronics.”

About Deer Consumer Products, Inc.

Deer Consumer Products, Inc. is a U.S. public company headquartered in China. Supported by more than 103 patents, Deer is a market leader in the design, manufacture and sale of home and kitchen electric appliances targeting 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 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. Deer's actual results may differ from its projections. Further, preliminary results are subject to normal year-end adjustments. 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:

James Chiu

Chief Operating Officer

Deer Consumer Products, Inc.

Tel: +86-755-8602-8285

Email: James.chiu@deerinc.com

DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND 2007

	2008		2007
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	2,782,026	$	1,511,545
Restricted cash		200,099		450,385
Accounts receivable, net		8,560,465		3,491,235
Advances to suppliers		5,015,479		2,817,333
Other receivables		489,286		395,180
Short-term investments		29,340		136,647
Due from shareholder		-		1,383,124
Due from related party		331,267		-
Inventories		7,680,851		4,153,304
Other current assets		13,342		628,718

Total current assets		25,102,155		14,967,471

PROPERTY AND EQUIPMENT, net		11,291,202		8,576,102
CONSTRUCTION IN PROGRESS		892,897		302,160
INTANGIBLE ASSETS, net		404,125		387,541
OTHER ASSETS		39,689		42,008

TOTAL ASSETS		37,730,068		24,275,282

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable		8,968,088		2,479,056
Other payables		760,632		564,820
Unearned revenue		3,305,966		69,591
Accrued payroll		168,282		134,301
Short-term loans		3,552,841		1,691,431
Due to shareholder		-		756,458
Advances to shareholder		-		509,139
Advances to related party		274,805		-
Notes payable		3,155,348		3,160,059
Tax and welfare payable		1,533,013		896,605

Total current liabilities		21,718,975		10,261,460

LONG-TERM LOAN		733,500		-

TOTAL LIABILITIES		22,452,475		10,261,460

STOCKHOLDERS' EQUITY:
Common Stock, $0.001 par value;
75,000,000 shares authorized; 22,600,000 and
18,050,000 shares issued and outstanding
as of December 31, 2008 and 2007, respectively		22,600		18,050
Additional paid-in capital		9,326,423		9,330,973
Development funds		542,701		343,232
Statutory reserve		1,085,403		686,464
Other comprehensive income		2,345,698		1,303,732
Retained earnings		1,954,768		2,331,371
Total stockholders' equity		15,277,593		14,013,822

TOTAL LIABILITIES AND STOCKHOLDERS'		37,730,068		24,275,282
EQUITY

DEER CONSUMER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	2008			2007


Net Revenue	$	43,784,935		$	33,476,259

Cost of Revenue		34,125,019			26,249,009

Gross profit		9,659,916			7,227,250

Operating expenses
Selling expenses		2,854,946			1,518,482
General and administrative expenses		2,566,634			1,788,025
Total operating expenses		5,421,580			3,306,507

Income from operations		4,238,336			3,920,743

Non-operating income (expense):
Financing costs		(247,901	)		(194	)
Interest income		13,870			18,524
Interest expense		(310,762	)		(114,361	)
Other income (expense)		40,216			64,698
Realized loss on trading securities		(34,873	)		-
Unrealized gain on trading securities		-			57,043
Foreign exchange gain		959,943			90,707

Total non-operating income (expense)		420,493			116,417

Income before income tax		4,658,829			4,037,160

Income tax		1,302,045			615,568

Net income		3,356,784			3,421,592

Other comprehensive income

Foreign currency translation gain		1,041,966			822,146

Comprehensive Income	$	4,398,750		$	4,243,738

Weighted average shares outstanding :
Basic		19,533,425			18,050,000
Diluted		19,533,425			18,050,000

Earnings per share:
Basic	$	0.17		$	0.19
Diluted	$	0.17		$	0.19

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,356,784		$	3,421,592
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation		1,199,578			795,531
Amortization		18,723			18,509
Loss on disposal of fixed assets		351,257			-
Realized loss on short-term investments		34,873			-
Unrealized loss on short-term investments		-			(57,043	)
(Increase) / decrease in assets:
Accounts receivable		(7,821,066	)		(2,423,876	)
Other receivable		210,696			435,100
Inventories		(3,180,080	)		(549,092	)
Due from shareholder		1,454,375			(1,328,793	)
Due from related party		(325,509	)		-
Advances to suppliers		(1,965,833	)		(251,437	)
Tax rebate receivable		158,989			51,484
Other assets		215,234			(40,357	)
Increase / (decrease) in current liabilities:
Accounts payable		6,205,438			(556,796	)
Unearned revenue		3,175,324			(849,077	)
Other payables		156,499			499,020
Due to related party		(795,427	)		726,744
Accrued payroll		24,138			61,536
Tax and welfare payable		563,573			479,845

Net cash provided by operating activities		3,037,566			432,890

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment		(3,627,873	)		(2,191,640	)
Acquisition of intangible assets		(8,319	)		(162,263	)
Construction in process		(559,651	)		111,835
Changes in restricted cash		276,966			(307,229	)
Purchases of short-term investments		-			(131,280	)
Proceeds from short-term investments		79,984			-

Net cash used in investing activities		(3,838,893	)		(2,680,577	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable		2,969,781			1,795,227
Proceeds from issuance of short-term loans		4,176,723			885,108
Payment on notes payable		(3,192,128	)		-
Payment on notes short term loans		(2,464,203	)		-
Change in advance to shareholder, net		(535,367	)		424,397
Change in advance to related party, net		270,028			-
Proceeds from issuance of long-term note		720,750			-

Net cash provided by financing activities		1,945,584			3,104,732

Effect of exchange rate changes on cash and cash equivalents		126,224			75,476

NET INCREASE IN CASH & CASH EQUIVALENTS		1,270,481			932,521

CASH & CASH EQUIVALENTS, BEGINNING BALANCE		1,511,545			579,024

CASH & CASH EQUIVALENTS, ENDING BALANCE	$	2,782,026		$	1,511,545

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	310,762		$	113,356
Income taxes paid	$	725,125		$	112,743
Settlement of receivable as a deemed dividend	$	3,314,979			-