China ACM Reports Third Quarter Fiscal Year 2013 Results, Provides Quarterly Guidance for the Fourth Quarter of Fiscal Year

China ACM Reports Third Quarter Fiscal Year 2013 Results, Provides Quarterly 
Guidance for the Fourth Quarter of Fiscal Year 2013, and
Updates the Yearly Guidance for Fiscal Year 2013 
BEIJING  -- (Marketwired) -- 05/15/13 --  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, has announced its financial results for the third quarter of
fiscal year 2013 ended March 31, 2013. The Company will host a
conference call to discuss the results at 8:00 a.m., Eastern Time on
May 16, 2013. Further details are provided below. 
Third Quarter FY 2013 Financial Highlights  


 
--  Revenue reduced 61.7% from the prior year the same quarter to $7.2
    million 
--  Gross margin at 0.81% 
--  Net loss of $8.8 million or EPS of $(0.49) 

 
Third Quarter FY 2013 Results 
Revenue. Our revenue is primarily generated from sales of our
advanced ready-mix concrete products, manufacturing services. For the
three months ended March 31, 2013, we generated revenue of $7.2
million, compared to $18.9 million during the same period in 2012, a
decrease of $11.7 million, or 61.7%. The decrease in our revenue is
due primarily to decreased revenue from our manufacturing services
and concrete sales for the three months ended March 31, 2013. 
Our concrete sales revenue was approximately $7.2 million for the
three months ended March 31, 2013, a decrease of $10.8 million or 60%
from the three months ended March 31, 2012. The decrease in revenues
from concrete sales was principally due to the decreased demand of
concrete sales in line with slowing down of the housing market and
overall economic growth. Revenue from our manufacturing services
segment was $5,616 for the three months ended March 31, 2013, a
decrease of $0.85 million, or 99.3%, as compared to the three months
ended March 31, 2012. Such decrease in revenue was attributable
principally to the suspension of operations of certain of our
portable plants during the three months ended March 31, 2013.  
Gross Profit. Gross profit was $0.1 million for the three months
ended March 31, 2013, as compared to $2.1 million for the three
months ended March 31, 2012. Our gross profit for the sale of
concrete was $0.6 million, or 9
.0% of revenue, for the three months
ended March 31, 2013, as compared to $2.6 million, or 15% of revenue,
for the same period last year. The decreased gross profit margin
reflects lower demand and lower prices for our concrete products in
Beijing as compared to the same period last year.  
Our gross loss with respect to our manufacturing services segment was
$0.6 million for the three months ended March 31, 2013, flat with
$0.6 million gross loss for the same period last year.  
Provision for doubtful accounts. We incurred provision for doubtful
accounts of $1.3 million for the three months ended March 31, 2013, a
decrease of $2.3 million, as compared to $3.6 million for the three
months ended March 31, 2012. An estimate of doubtful accounts is
recorded when collection of the full amount is no longer probable.
Known bad debts are written off against allowance for doubtful
accounts when identified. The accrual ratio is 5% for accounts
receivable past due less than one year, 50% for accounts receivable
past due from one to two years and 100% for accounts receivable past
due beyond two years. In accordance with our allowance for doubtful
accounts policy, at the end of each quarter, we conduct an aging
analysis of each customer's arrears to determine whether allowance
for doubtful accounts is adequate. In establishing allowance for
doubtful accounts, we consider historical experience, economy, trends
in the construction industry, the expected collectability of amount
receivable that are past due, and the expected collectability of
overdue receivables.  
Selling, General and Administrative Expenses. Selling, general and
administrative expenses consist of sales commissions, advertising and
marketing costs, office rent and expenses, costs associated with
staff and support personnel who manage our business activities, and
professional and legal fees paid to third parties. We incurred
selling, general and administrative expenses of $3.8 million for the
three months ended March 31, 2013, an increase of $0.7 million, or
22%, as compared to $3.1 million for the three months ended March 31,
2012. The increase was principally due to an increase in salary and
employment benefit expense, and advertising expense.  
Net Loss. We recognized net loss of approximately $8.8 million for
the three months ended March 31, 2013, as compared to net loss of
approximately $4.2 million for the three months ended March 30, 2012,
an increase of $4.6 million. Such increase in net loss was primarily
due to the decrease in gross profits of concrete sales and
manufacturing service, the increase in selling, general, and
administrative expense, and an impairment charge for long-lived
assets. 
Balance Sheet Overview 
China ACM had working capital of $37.8 million at March 31, 2013,
including $2.3 million in cash and equivalents, $4.3 million in
restricted cash and $63.2 million in total liabilities. Shareholders'
equity was $61.8 million compared with $79 million at June 30, 2012.
The total number of shares outstanding as of May 10, 2013 was 17.8
million.  
Guidance Update  
During the third quarter ended June 30, 2013, the management expects
the Company to earn revenue of between $13 million and $15 million,
recognize net loss of between $8 million and $9 million, and EPS of
between $(0.45) and $(0.50) based on weighted average shares of 17.83
million.   
In addition, the Company updates its full year guidance for the
fiscal year ending June 30, 2013, and currently expects to earn
revenue of between $72 million and $75 million, recognize net loss of
$25 million to $ 27 million, and EPS of $(1.40) to $(1.51) based on
weighted average shares of 17.83 million. 
Conference Call  
The Company will host a conference call with a live webcast and a
full Q&A session on May 16, 2013, at 8:00 a.m., Eastern Time, to
discuss financial results for the third quarter of Fiscal Year 2013.  
Individuals interested in participating in the conference call may do
so by dialing 877-407-8035 from the United States, or +1 201-689-8035
from outside the United States, and referencing conference ID number
414699.  
A replay of the call will remain available until June 15, 2013, at
11:59 PM.  
To access the replay, please dial either of the following numbers:  
USA: 877-660-6853 International: +1 201-612-7415  
To pre-check system compatibility prior to the call, visit:
http://www.investorcalendar.com/aboutus/HelpDesk.asp 
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, high-speed rail (HSR) 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.  
More information about China ACM is available at www.china-acm.com.  
Safe Harbor Statement  
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 Form 10-K for the fiscal year ended June 30,
2012. 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     
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                 (UNAUDITED)                                
                                                                            
                                                  March 31,      June 30,   
                     ASSETS                         2013           2012     
                                               -------------- --------------
                                                                            
CURRENT ASSETS:                                                             
  Cash                                         $    2,252,496 $    2,409,914
  Restricted cash                                   4,324,090      6,536,082
  Accounts and notes receivable, net of                                     
   allowance for doubtful accounts of                                       
   $33,291,143 and $24,913,151, respectively       66,096,131    109,977,143
  Inventories                                         846,488      2,042,156
  Other receivables and advances, net               5,226,523      1,298,942
  Other receivable from termination of lease,                               
   net                                              6,167,396               
  Prepayments                                       9,055,149     11,694,758
  Deferred tax assets                               3,293,051      3,293,051
                                               -------------- --------------
   Total current assets                            97,261,324    137,252,046
                                               -------------- --------------
                                                                            
PROPERTY, PLANT AND EQUIPMENT, net                 16,448,846     20,622,505
                                               -------------- --------------
                                                                            
OTHER ASSETS:                                                               
  Other receivable from termination of lease,                               
   net                                              6,046,218              -
  Advances on equipment purchases                   4,646,510      4,617,360
  Prepayments                                               -      1,140,498
  Deferred tax assets                                 578,413        578,413
                                               -------------- --------------
Total other assets                                 11,271,141      6,336,271
                                               -------------- --------------
                                                                            
Total assets                                   $  124,981,311 $  164,210,822
                                               ============== ==============
                                                                            
     LIABILITIES AND SHAREHOLDERS' EQUITY                                   
                                                                            
CURRENT LIABILITIES:                                                        
  Short term loans, banks                      $   14,664,800 $   19,008,000
  Short term borrowing                                267,154              -
  Accounts payable                                 38,247,116     57,171,917
  Customer deposits                                 1,219,481        798,096
  Other payables                                    1,147,510      4,514,828
  Other payables - shareholders                       751,378        804,001
  Accrued liabilities                                 819,845      1,712,414
  Warrants liability                                        -        132,427
  Capital lease obligations-current                 1,813,477              -
  Taxes payable                                       548,930      1,064,953
                                               -------------- --------------
Total current liabilities                          59,479,691     85,206,636
                                                                            
OTHER LIABILITIES                                                           
  Capital lease obligations-non current             3,707,677              -
                                               -------------- --------------
Total liabilities                                  63,187,368     85,206,636
                                               -------------- --------------
                                                                            
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, 17,839,464 and                                        
   17,829,464 shares issued and outstanding as                              
   of March 31, 2013 and June 30, 2012,                                     
   respectively                                        17,839         17,829
  Additional paid-in capital                       35,209,004     35,154,257
  Retained earnings                                11,327,801     29,010,766
  Statutory reserves                                6,248,357      6,248,357
  Accumulated other comprehensive income            8,990,942      8,572,977
                                               -------------- --------------
Total shareholders' equity                         61,793,943     79,004,186
                                               -------------- --------------
Total liabilities and shareholders' equity     $  124,981,311 $  164,210,822
                                               ============== ==============
                                                                            
                
                                                            
 

 
                                                                            
     CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC AND SUBSIDIARIES      
  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME  
                                   (LOSS)                                   
                                (UNAUDITED)                                 
                                                                            
                    For the three months ended   For the nine months ended  
                             March 31,                   March 31,          
                        2013          2012           2013          2012     
                    ------------  ------------  -------------  ------------ 
REVENUE                                                                     
  Sales of concrete $  7,221,971  $ 18,055,172  $  55,159,367  $ 98,121,928 
  Manufacturing                                                             
   services                5,616       859,326      4,456,196     7,937,472 
                    ------------  ------------  -------------  ------------ 
    Total revenue      7,227,587    18,914,498     59,615,563   106,059,400 
                    ------------  ------------  -------------  ------------ 
                                                                            
COST OF REVENUE                                                             
  Concrete             6,595,355    15,406,059     45,178,730    78,219,193 
  Manufacturing                                                             
   services              573,922     1,434,725      3,849,999     7,478,478 
                    ------------  ------------  -------------  ------------ 
    Total cost of                                                           
     revenue           7,169,277    16,840,784     49,028,729    85,697,671 
                    ------------  ------------  -------------  ------------ 
                                                                            
GROSS PROFIT              58,310     2,073,714     10,586,834    20,361,729 
                                                                            
PROVISION FOR                                                               
 DOUBTFUL ACCOUNTS     1,292,052     3,559,143     11,101,244    13,920,185 
SELLING, GENERAL                                                            
 AND ADMINISTRATIVE                                                         
 EXPENSES              3,761,220     3,076,851      9,408,162     9,007,506 
RESEARCH AND                                                                
 DEVELOPMENT                                                                
 EXPENSES                205,343       684,523        779,135     2,739,978 
LOSS FROM                                                                   
 TERMINATION OF                                                             
 LEASE                         -             -      4,096,984             - 
IMPAIRMENT LOSS OF                                                          
 LONG-LIVED ASSETS       250,746             -        250,746             - 
                    ------------  ------------  -------------  ------------ 
LOSS FROM                                                                   
 OPERATIONS           (5,451,051)   (5,246,803)   (15,049,437)   (5,305,940)
                    ------------  ------------  -------------  ------------ 
                                                                            
OTHER INCOME                                                                
 (EXPENSE), NET                                                             
  Other subsidy                                                             
   income                433,656     1,134,916      3,576,935     6,373,939 
  Non-operating                                                             
   income                                                                   
   (expense), net     (3,643,362)      (76,464)    (4,284,234)     (115,373)
  Change in fair                                                            
   value of                                                                 
   warrants                                                                 
   liability              30,776        47,418        132,427      (154,080)
  Interest income        280,342        89,578        338,403       425,029 
  Interest expense      (404,424)     (543,219)    (1,585,696)   (1,242,434)
                    ------------  ------------  -------------  ------------ 
TOTAL OTHER INCOME                                                          
 (EXPENSE), NET       (3,303,012)      652,229     (1,822,165)    5,287,081 
                    ------------  ------------  -------------  ------------ 
                                                                            
LOSS BEFORE                                                                 
 PROVISION FOR                                                              
 INCOME TAXES         (8,754,063)   (4,594,574)   (16,871,602)      (18,859)
                                                                            
PROVISION (BENEFIT)                                                         
 FOR INCOME TAXES         36,027      (389,168)       811,363       649,837 
                    ------------  ------------  -------------  ------------ 
NET LOSS AVAILABLE                                                          
 TO COMMON                                                                  
 SHAREHOLDERS       $ (8,790,090) $ (4,205,406) $ (17,682,965) $   (668,696)
                    ============  ============  =============  ============ 
                                                                            
COMPREHENSIVE                                                               
 INCOME (LOSS):                                                             
  Net Loss            (8,790,090)   (4,205,406)   (17,682,965)     (668,696)
  Foreign currency                                                          
   translation                                                              
   adjustment            378,779       515,684        417,965     1,954,252 
                    ------------  ------------  -------------  ------------ 
                                                                            
                                                                            
COMPREHENSIVE                                                               
 INCOME (LOSS)      $ (8,411,311) $ (3,689,722) $ (17,265,000) $  1,285,556 
                    ============  ============  =============  ============ 
                                                                            
LOSS PER COMMON                                                             
 SHARE ALLOCATED TO                                                         
 COMMON                                                                     
 SHAREHOLDERS                                                               
  Weighted average                                                          
   number of                                                                
   shares:                                                                  
    Basic and                                                               
     diluted          17,839,464    17,822,623     17,837,530    17,814,837 
                    ============  ============  =============  ============ 
                                                                            
  Loss per share:                                                           
    Basic and                                                               
     diluted        $      (0.49) $      (0.24) $       (0.99) $      (0.04)
    
                ============  ============  =============  ============ 
                                                                            
                                                                            
 

 
                                                                            
     CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES     
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS               
                                (UNAUDITED)                                 
                                                                            
                                                 For the nine months ended  
                                                         March 31,          
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM OPERATING ACTIVITIES:                                       
  Net loss                                     $ (17,682,965) $    (668,696)
  Adjustments to reconcile net loss to cash                                 
   provided by (used in) operating activities:                              
    Depreciation                                   2,732,964      3,299,211 
    Stock-based compensation expense                  54,757        112,680 
    Deferred tax benefit                                   -     (2,366,431)
    Provision for doubtful accounts               11,101,244     13,920,185 
    Change in fair value of warrants liability      (132,427)       154,080 
    Loss realized from disposal of property,                                
     plant, and equipment                          3,766,895         49,363 
    Loss from termination of lease                 4,096,984              - 
    Impairment loss of long-lived assets             250,746              - 
  Changes in operating assets and liabilities                               
    Accounts and notes receivable                 (1,386,175)   (27,445,560)
    Inventories                                    1,114,636       (487,577)
    Other receivables                               (479,144)       123,334 
    Prepayments                                    2,528,160     (6,702,172)
    Long term prepayments                                  -      1,265,447 
    Other receivable from termination of lease     2,409,825              - 
    Accounts payables                             (2,688,926)     8,206,872 
    Customer deposits                                414,518        364,332 
    Other payables                                (2,995,764)       299,866 
    Accrued liabilities                             (897,456)      (700,732)
    Taxes payable                                   (492,554)     1,354,597 
                                               -------------  ------------- 
  Net cash provided 
by (used in) operating                                  
   activities                                      1,715,318     (9,221,201)
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
    Proceeds from disposal of property, plant,                              
     and equipment                                   673,315          6,288 
    Purchases of property, plant and equipment      (267,744)      (251,062)
    Purchase of capital lease equipment             (287,707)             - 
    Proceeds from investments, net of payments                              
     for investments                                       -     12,418,800 
                                               -------------  ------------- 
  Net cash provided by investing activities          117,864     12,174,026 
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
    Proceeds from short term loan                 23,375,600     25,314,820 
    Payments for short term loan                 (27,798,500)   (18,163,410)
    Proceeds from short term borrowing             3,773,251              - 
    Payments for short term borrowing             (3,507,270)             - 
    Rent payable to shareholder                      (52,723)        11,891 
    Restricted cash                                2,243,361     (8,244,543)
                                               -------------  ------------- 
  Net cash used in financing activities           (1,966,281)    (1,081,242)
                                               -------------  ------------- 
                                                                            
EFFECT OF EXCHANGE RATE CHANGE ON CASH               (24,319)       (21,936)
                                               -------------  ------------- 
                                                                            
NET INCREASE (DECREASE) IN CASH                     (157,418)     1,849,647 
                                                                            
CASH, beginning of period                          2,409,914      1,610,699 
                                               -------------  ------------- 
                                                                            
CASH, end of period                            $   2,252,496  $   3,460,346 
                                               =============  ============= 

  
Contact: 
China ACM Investor Relations
Phone: +86-10-82525361
E-mail: IR@china-acm.com