NEW YORK, May 14, 2015 (GLOBE NEWSWIRE) -- China Advanced Construction Materials Group, Inc. (Nasdaq:CADC) ("China ACM" or the "Company"), a provider of ready-mix concrete and related technical services in China, on May 14, 2015, reported financial results for the quarter ended March 31, 2015, i.e., the third quarter of the fiscal year 2015.

Third Quarter Fiscal Year 2015 Financial Highlights:

  • Revenue decreased by 27% year over year to $5.1 million;
  • Gross loss of $0.2 million, decreased by $1 million further year over year;
  • Net income of $1.0 million or basic EPS $0.5;
  • $28.9 million in working capital as of March 31, 2015.

Third Quarter Fiscal Year 2015 Results

Revenue. For the three months ended March 31, 2015, we generated total revenue of approximately $5.1 million compared to approximately $7.0 million during the three months ended March 31, 2014, a decrease of approximately $1.9 million or 27%. Such decrease is due to the production volume decrease in the current quarter caused by the delays in some of our customers' production activities. Such unexpected delays were caused by prolonged bureaucratic procedures for our customers to obtain construction permits as the Beijing government strengthened regulations in the construction industry as part of the environmental protection efforts to improve air quality in the urban area.

Cost of Revenue. For the three months ended March 31, 2015, total cost of revenue was approximately $5.3 million compared to approximately $7.1 million for the three months ended March 31, 2014, a decrease of approximately $1.8 million, or 25%. The decrease in cost of revenue was primarily due to the decrease in production from our concrete plants in the Beijing area compared to the three months ended March 31, 2014.

Gross Loss. Total gross loss was approximately $0.2 million for the three months ended March 31, 2015, as compared to gross loss of approximately $0.1 million for the three months ended March 31, 2014. The decrease in gross profit for the three months ended March 31, 2015, compared with the three months ended March 31, 2014, was primarily caused by the decreased production volume while we were subject to relatively similar level of fixed costs.

Recovery of (Provision for) doubtful accounts. We had recovery of doubtful accounts of approximately $4.7 million for the three months ended March 31, 2015; while for the three months ended March 31, 2014, we incurred $0.3 million of provision for doubtful accounts. As compared to the balances of December 31, 2014, through the improved collection efforts and agreements to offset customer receivables with vendor payables, we effectively reduced balances aged from one to two years by approximately $2.0 million, balances aged from two years to three years by approximately $2.1 million and balances aged beyond three years by approximately $2.2 million.

Selling, General and Administrative Expenses. We incurred selling, general and administrative expenses of approximately $2.7 million for the three months ended March 31, 2015, a decrease of approximately $0.3 million, or 10%, as compared to approximately $3.1 million for the three months ended March 31, 2014. The decrease was principally due to decreases of approximately $0.1 million in business development expenses, $0.1 million in consulting expense, $0.1 million in board expense and $0.1 million in conference expense, offset by an increase of approximately $0.2 million in stock-based compensation.

Research and Development Expenses. Research and development expenses for the three months ended March 31, 2015 was $0.2 million, a decrease of approximately $0.2 million, or 58%, as compared to approximately $0.4 million for the three months ended March 31, 2014. The Company's research and development expenditure was maintained at a certain percentage of revenue and adjusted by outside consultants on certain projects based on economic outlook, plus discretionary spending on projects that helped to improve our competitive advantage.

Net Income (Loss) We recognized net income of approximately $1.0 million for the three months ended March 31, 2015, as compared to net loss of approximately $5.0 million for the three months ended March 31, 2014. Such change of approximately $6.0 million from net loss to net income was the result of the combination of the changes as discussed above.

Balance Sheet Overview

China ACM had working capital of $28.9 million at March 31, 2015, including $7.4 million in cash and equivalents, $11.2 million in restricted cash, $5.7 million in short term investment, $40.8 million in accounts receivable, $49.6 million in prepayments and advances, $1.5 million in other receivables and $91.0 million in current liabilities. Shareholders' equity was $41.6 million compared with $40.4 million at June 30, 2014. The total number of shares outstanding as of May 10, 2015 was approximately 2.1 million.

Fourth Quarter and Full Year Guidance of Fiscal Year 2015

For the fourth quarter ended on June 30, 2015, we expect to earn revenue of between $10 million and $15 million, net loss of between $2 million and $3 million, and EPS of between $(0.95) and $(1.43) based on fully diluted shares of 2.1 million as of May 13, 2015.

For the full fiscal year ended on June 30, 2015, we expect to earn revenue of between $54 million and $59 million, net loss of between $3.5 million and $4.5 million, and EPS of between $(1.67) and $(2.14) based on fully diluted shares of 2.1 million as of May 13, 2015.

Conference call

The company will host a conference call with a live webcast and a full Q&A session on Thursday May 14, 2015, at 8:00 a.m., Eastern Time, to discuss financial results for the third quarter of the 2015 Fiscal Year.

Individuals interested in participating in the conference call may do so by dialing 877-407-8031 from the United States, or +1 201-689-8031 from outside the United States and referencing conference ID number 13609429.

To pre-check system compatibility prior to the call, visit http://www.investorcalendar.com/aboutus/HelpDesk.asp

A webcast replay will be available until June 14, 2015 at 11:59 PM.
Replay Number (Toll Free): 1-877-660-6853
Replay Number (International): 1-201-612-7415

About China ACM

China ACM is a producer of advanced, certified eco-friendly ready-mix concrete (RMC) and provider of related technical services for large scale, and other complex infrastructure projects. Leveraging its proprietary technology and value-add engineering services model, the Company has won work on many high profile projects including the 30,000 km China HSR expansion, the Olympic Stadium Bird's Nest, Beijing South Railway Station, Beijing International Airport, National Centre for Performing Arts, CCTV Headquarters, Beijing Yintai Building and U.S. and French embassies in China. More information about the Company is available at www.china-acm.com, the Company routinely updates information in its website.

Forward-Looking Statements

This press release contains statements that are forward-looking in nature, including statements regarding the Company's competitive position and product and service offerings. These statements are based on current expectations on the date of this press release and involve a number of risks and uncertainties, which may cause actual results to differ significantly from such estimates. The risks include, but are not limited to, the degree of market adoption of the Company's product and service offerings; market competition; dependence on strategic partners; and the Company's ability to manage its business effectively in a rapidly evolving market. Certain of these and other risks are set forth in more detail in "Item 1A. Risk Factors" in China ACM's Annual Report on Form 10-K for the fiscal year ended June 30, 2014. China ACM does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise.

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
  March 31, June 30,
ASSETS 2015 2014
     
CURRENT ASSETS:    
Cash and cash equivalents  $ 7,423,170  $ 15,431,110
Restricted cash 11,193,053 13,413,264
Accounts and notes receivable, net of allowance for doubtful accounts of $27,171,569 and $31,667,803, as of March 31, 2015 and June 30, 2014, respectively 40,760,363 49,367,452
Inventories 1,617,108 1,562,309
Short term investment 5,675,916 14,716,023
Other receivables 1,471,532 4,121,550
Prepayments and advances 49,598,596 35,699,065
Deferred tax assets 2,202,163 2,585,902
Total current assets 119,941,901 136,896,675
     
PROPERTY PLANT AND EQUIPMENT, net 10,660,717 12,878,263
     
ADVANCES ON EQUIPMENT PURCHASES, net 1,978,672 2,855,937
     
Total assets  $ 132,581,290  $ 152,630,875
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES:    
Short term loans, banks and bank guarantees  $ 33,497,000  $ 54,396,713
Short term loans - other 6,536,000 3,250,000
Notes payable 21,977,300 9,750,000
Accounts payable 19,172,268 32,501,363
Customer deposits 1,262,342 1,072,998
Other payables 2,055,564 2,059,739
Other payables - shareholders 83,678 925,385
Accrued liabilities 1,860,996 2,241,208
Capital lease obligations - current 4,543,337 4,659,756
Taxes payable 16,010 192,205
Total current liabilities 91,004,495 111,049,367
     
OTHER LIABILITIES    
Capital lease obligations - non current -- 1,177,586
Total liabilities 91,004,495 112,226,953
     
COMMITMENTS AND CONTINGENCIES    
     
SHAREHOLDERS' EQUITY:    
     
Preferred stock $0.001 par value, 1,000,000 shares authorized, no shares issued or outstanding -- --
Common stock, $0.001 par value, 74,000,000 shares authorized, 2,080,799 and 1,486,871 shares issued and outstanding as of March 31, 2015 and June 30, 2014, respectively 2,081 1,487
Additional paid-in-capital 37,993,684 35,233,305
Accumulated deficit (13,075,020) (11,234,705)
Statutory reserves 6,248,357 6,248,357
Accumulated other comprehensive income 10,407,693 10,155,478
Total shareholders' equity 41,576,795 40,403,922
Total liabilities and shareholders' equity  $ 132,581,290  $ 152,630,875
 
CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
         
  For the three months ended For the nine months ended
  March 31, March 31,
  2015 2014 2015 2014
REVENUE        
Sales of concrete 5,136,819 6,925,301 43,675,925 28,020,724
Manufacturing services 193 103,005 313,835 999,334
Total revenue 5,137,012 7,028,306 43,989,760 29,020,058
         
COST OF REVENUE        
Concrete 5,300,176 6,861,157 40,395,403 25,422,000
Manufacturing services 176 245,692 285,270 1,031,447
Total cost of revenue 5,300,352 7,106,849 40,680,673 26,453,447
         
GROSS (LOSS) PROFIT (163,340) (78,543) 3,309,087 2,566,611
         
RECOVERY OF (PROVISION FOR) DOUBTFUL ACCOUNTS 4,729,017 (311,911) 4,329,048 (8,416,932)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,737,190) (3,057,335) (8,303,995) (8,703,235)
RESEARCH AND DEVELOPMENT EXPENSES (159,475) (375,330) (1,008,523) (826,892)
LOSS REALIZED FROM DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT (9,067) (291,727) (90,383) (1,665,410)
         
INCOME (LOSS) FROM OPERATIONS 1,659,945 (4,114,846) (1,764,766) (17,045,858)
         
OTHER (EXPENSE) INCOME, NET        
Subsidy income 154,116 401,971 1,329,108 1,721,476
Non-operating (expense) income, net (220,996) (16,179) (517,783) 56,755
Interest income 124,978 900,871 1,026,764 2,084,952
Interest expense (360,546) (844,635) (1,187,254) (2,024,316)
TOTAL OTHER (EXPENSE) INCOME, NET (302,448) 442,028 650,835 1,838,867
         
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES 1,357,497 (3,672,818) (1,113,931) (15,206,991)
         
PROVISION FOR INCOME TAXES (380,071) (1,372,068) (726,384) (1,372,068)
         
NET INCOME (LOSS)  $ 977,426 $ (5,044,886) $ (1,840,315) $ (16,579,059)
         
COMPREHENSIVE INCOME (LOSS):        
Net income (loss) 977,426 (5,044,886) (1,840,315) (16,579,059)
Foreign currency translation adjustment 95,801 (357,665) 252,215 352,899
         
COMPREHENSIVE INCOME (LOSS)  $ 1,073,227 $ (5,402,551) $ (1,588,100) $ (16,226,160)
         
EARNING (LOSS) PER COMMON SHARE        
Weighted average number of shares:        
Basic 2,080,799 1,486,871 1,888,332 1,486,871
Diluted 2,080,799 1,486,871 1,888,332 1,486,871
         
Income (loss) per share:        
Basic  $ 0.47 $ (3.39) $ (0.97) $ (11.15)
Diluted  $ 0.47 $ (3.39) $ (0.97) $ (11.15)
 
CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
     
  For the nine months ended
  March 31,
  2015 2014
     
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,840,315) $ (16,579,059)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:    
Depreciation 1,605,580 1,420,242
Stock-based compensation expense 355,793 --
Deferred tax provision 396,355 1,372,068
(Recovery of) provision for doubtful accounts (4,329,048) 8,416,932
Loss realized from disposal of property, plant and equipment 90,383 1,665,410
Imputed interest on other receivable from termination of leases -- (708,996)
Changes in operating assets and liabilities    
Accounts and notes receivable 8,349,571 13,057,519
Inventories (45,950) (274,435)
Other receivables 2,784,803 1,925,723
Other receivable from termination of lease -- 13,083,021
Prepayments and advances (13,423,906) (2,500,580)
Accounts payable (7,239,429) (7,315,865)
Customer deposits 182,616 (664,646)
Other payables (15,149) 114,003
Accrued liabilities (388,322) 402,738
Taxes payable (176,500) (46,790)
Net cash (used in) provided by operating activities (13,693,518) 13,367,285
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Redemption (acquisition) of short-term investments, net 9,082,534 (21,082,697)
Proceeds from disposal of property, plant and equipment 56,945 400,336
Purchase of property, plant and equipment (40,651) (325,006)
Net cash provided by (used in) investing activities 9,098,828 (21,007,367)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from short term loans and bank guarantees 39,698,800 61,858,500
Payments of short term loans and bank guarantees (60,808,962) (63,407,000)
Proceeds from short term loans - shareholders -- 2,934,000
Payments of short term loan - shareholders -- (2,934,000)
Proceeds from short term loans - other 16,514,050 11,410,000
Payments of short term loan - other (13,260,050) (3,912,000)
Proceeds from notes payable 39,048,000 13,040,000
Payments of notes payable (26,926,850) (3,260,000)
Payable to shareholder 118,302 100,699
Principal payments on capital lease obligations (1,320,654) (1,794,045)
Restricted cash 2,284,670 (4,244,004)
Proceeds from issuance of common stock 1,167,552 --
Net cash (used in) provided by financing activities (3,485,142) 9,792,150
     
EFFECTS OF EXCHANGE RATE CHANGE IN CASH 71,892 6,436
     
NET CHANGE IN CASH AND CASH EQUIVALENTS (8,007,940) 2,158,504
     
CASH AND CASH EQUIVALENTS, beginning of period 15,431,110 3,949,939
     
CASH AND CASH EQUIVALENTS, end of period  $ 7,423,170  $ 6,108,443
CONTACT: China ACM Investor Relations
         Phone: +86-10-82525361
         E-mail: IR@china-acm.com