China ACM Reports Second Quarter Fiscal Year 2014 Results, Provides Quarterly Guidance for the Third Quarter of Fiscal Year

China ACM Reports Second Quarter Fiscal Year 2014 Results, Provides Quarterly
Guidance for the Third Quarter of Fiscal Year 2014, and Updates the Full Year
Guidance for Fiscal Year 2014

NEW YORK, Feb. 12, 2014 (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 February 12,
2013, has announced its financial results for the second quarter ended
December 31, 2013.

Second Quarter Fiscal Year 2014 Financial Highlights

  oRevenue decreased 45% year over year to $11.8 million
  oGross margin at 12.7%
  oNet loss available to common shareholders of $5.7 million orloss per
    shareof $3.83
  o$29.4 million in working capital at December 31, 2013

Second Quarter Fiscal Year 2014 Results

Revenue. For the three months ended December 31, 2013, we generated total
revenue of approximately $11.8 million compared to approximately $21.6 million
during the three months ended December 31, 2012, a decrease of approximately
$9.7 million or 45%. Such decrease is due to a reduction in sales generated
from the concrete division for the three months ended December 31, 2013. Our
concrete sales revenue was approximately $11.4 million for the three months
ended December 31, 2013, a decrease of approximately $7.7 million, or 40%
compared to the three months ended December 31, 2012. The decrease in revenues
attributable to concrete sales was principally due to the decreased sales in
the areas in which we operate. Operations at one of our concrete producing
plants were suspended until late 2013 due to the China International Garden
Expo and a temporary suspension order imposed by the Beijing government for
industrial activities in the area. In addition, China's central government
continues to impose restrictions on the purchase of residential apartments in
order to regulate housing prices in China, and China's economic growth has
been decelerating since 2012, which has caused an adverse impact on the
construction industry in China.

During the three months ended December 31, 2013, we continued to supply
concrete products to three railway projects in China through our portable
plants, specifically our projects located in Anhui Province. These three
projects contributed approximately $0.4 million to our total revenue for the
three months ended December 31, 2013, a decrease of approximately $2.1
million, or 82%, compared to the three months ended December 31, 2012. The
decrease in revenues attributable to our manufacturing services segment was
principally due to the suspension of operations of a number of our portable
plants during the three months ended December 31, 2013.

Cost of Revenue. For the three months ended December 31, 2013, we generated
total cost of revenue of approximately $10.3 million compared to approximately
$18.4 million for the three months ended December 31, 2012, a decrease of
approximately $8.1 million, or 44%. The decrease in cost of revenue was
primarily due to the overall decrease in production from our fixed concrete
plants in the Beijing area and decreased production from manufacturing
services compared to the three months ended December 31, 2012.

The cost of revenue on concrete decreased by approximately $6.8 million, or
41%, for the three months ended December 31, 2013, as compared to the three
months ended December 31, 2012. Such decrease was due to a decrease in our
concrete production volume.

Cost of revenue with respect to our manufacturing services was primarily due
to our manufacturing services, which decreased by approximately $1.3 million,
or 77%, during the three months ended December 31, 2013, as compared to the
same period last year.

Gross Profit. Total gross profit was approximately $1.5 million for the three
months ended December 31, 2013, as compared to approximately $3.2 million for
the three months ended December 31, 2012. Our gross profit for sale of
concrete was approximately $1.4 million, or 13% of revenue, for the three
months ended December 31, 2013, compared to approximately $2.3 million, or 12%
of revenue for the three months ended December 31, 2012, a decrease of
approximately $0.9 million. The decrease in gross profit for concrete sales
for the three months ended December 31, 2013, compared with the three months
ended December 31, 2012, reflects lower production volume.

Our gross profit with respect to our manufacturing services was approximately
$0.08 million, or 17% for the three months ended December 31, 2013, a decrease
of $0.8 million from $0.9 million during the three months ended December 31,
2012, while the gross profit margin decreased from 34% for the three months
ended December 31, 2012 to 17% for the three months ended December 31, 2013.
Such decrease was principally due to the decrease in revenue form
manufacturing services for three months ended December 31, 2013, as a result
of the decrease in the number of portable plants and lower production rates at
our plant.

Provision for doubtful accounts. We incurred provision for doubtful accounts
of $5.1 million for the three months ended December 31, 2013, an increase of
approximately $4.6 million, as compared to $0.5 million for the three months
ended December 31, 2012. 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 the allowance for doubtful
accounts is adequate. The provision is 15% for accounts receivable past due
more than 180 days but less than one year, 60% for accounts receivable past
due from one to two years and 75% for accounts receivable past due beyond two
years. The allowance for doubtful accounts increased to approximately $40.5
million at December 31, 2013, as compared to approximately $36.5 million at
June 30, 2013, as a result of tightening monetary policy by the Chinese
government causing a shortage in cash and declining business of certain of our
customers.

Selling, General and Administrative Expenses. We incurred selling, general and
administrative expenses of approximately $2.7 million for the three months
ended December 31, 2013, an increase of approximately $0.2 million, or 11%, as
compared to approximately $2.5 million for the three months ended December 31,
2012. The increase was principally due to a $0.1 million increase in meals and
entertainment expenses and a $0.1 million increase in office expenses.

Research and development expenses. Research and development expenses for the
three months ended December 31, 2013 was $0.2 million, a decrease of
approximately $0.1 million, or 13%, as compared to approximately $0.3 million
for the three months ended December 31, 2012. The Company's research and
development expenditure was maintained at a certain percentage of revenue. The
$0.1 million decrease was mainly due to lower research and development
expenditures resulting from decreased revenue.

(Income) Loss realized from disposal of property, plant and equipment. For the
three months ended December 31, 2013, we incurred an approximately$4000 loss
realized from the disposal of property, plant and equipment. During the three
months ended December 31, 2012, we incurred a $0.2 million loss realized from
the disposal of property, plant and equipment.

Net loss available to Common shareholders. We recognized a net loss of
approximately $5.7 million for the three months ended December 31, 2013, as
compared to net loss of approximately $3.5 million for the three months ended
December 31, 2012, an increase of $2.2 million. Such increase in net loss was
primarily due to the decrease in gross profits of our concrete sales and
manufacturing services, and the increase in provision of doubtful accounts,
offset by the decrease in loss from termination of lease.

Balance Sheet Overview

China ACM had working capital of $29.4 million at December 31, 2013, including
$2.4 million in cash and equivalents, $11.9 million in restricted cash, $24.9
million in short term investment, $47.8 million in accounts and notes
receivable, $29.5 million in prepayments and advances, $5.7 million in other
receivables and $100.2 million in current liabilities. Shareholders' equity
was $45.9 million compared with $56.7 million at June 30, 2013. The total
number of shares outstanding as of February 6, 2014 was approximately 1.5
million.

Third Quarter Fiscal Year 2014 and Updated Fiscal Year 2014 Guidance

For the third quarter ending March 31, 2014, management expects net sales of
$7.5 to $8.5 million, net loss of $2 to $3 million, and EPS of $(1.35) to
$(2.02) based on 1,486,871 weighted average shares.

For the fiscal year ended June 30, 2014, due to the uncertainties in some
projects and the collection of accounts receivables, management expects net
sales of $49 million to $51 million, net loss of $9 million to $15 million,
and an EPS of $(6.05) to $(10.09) based on 1,486,871 weighted average shares.

Conference call

The Company will host a conference call with a live webcast and a full Q&A
session on February 13, 2014, at 8:00 a.m., Eastern Time, to discuss financial
results for the second quarter of Fiscal Year 2014.

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 13576033.

A replay of the call will remain available until: March 13, 2014 at 11:59 PM.
To access the replay, please dial either of the following numbers:

USA: 877-660-6853

International: +1 201-612-7415

About China ACM

China ACM is a producer of advanced, certified eco-friendly ready-mix concrete
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 the Company is available at
http://www.ir-site.com/cadc/index.asp.

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,
2013. 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)
                                                             
                                             December 31,   June 30,
ASSETS                                        2013            2013
                                                           
CURRENT ASSETS:                                             
Cash                                          $2,359,234   $3,949,939
Restricted cash                               11,879,607      6,491,175
Accounts and notes receivable, net of
allowance for doubtful accounts of $40,539,962 47,752,209      59,696,331
and $36,469,156, respectively
Inventories                                   1,127,090       1,122,380
Short term investment                         24,938,336      5,168,000
Other receivables                             5,745,487       6,298,088
Other receivable from termination of lease,    2,316,536       8,932,029
net
Prepayments and advances                      29,476,275      27,827,638
Deferred tax assets                           4,042,060       3,987,738
Total current assets                          129,636,834     123,473,318
                                                           
PROPERTY PLANT AND EQUIPMENT, net             15,191,109      14,357,349
                                                           
OTHER ASSETS:                                               
Other receivable from termination of lease,    --             3,710,455
net
Advances on equipment purchases, net          3,473,509       4,015,294
Deferred tax assets                           220,342         217,380
Total other assets                            3,693,851       7,943,129
                                                           
Total assets                                  $148,521,794 $145,773,796
                                                           
LIABILITIES AND SHAREHOLDERS' EQUITY                        
                                                           
CURRENT LIABILITIES:                                        
Short term loans, banks and bank guarantees   $47,767,660  $43,766,500
Short term loans - shareholders               2,946,600       --
Short term loans - other                      327,400         --
Notes payable                                 8,185,000       --
Accounts payable                              29,691,678      33,730,871
Customer deposits                             1,261,040       1,732,662
Other payables                                3,508,437       1,989,023
Other payables - shareholders                 844,064         757,328
Accrued liabilities                           1,123,920       988,598
Capital lease obligations - current           4,517,735       2,448,883
Taxes payable                                 26,713          107,013
Total current liabilities                     100,200,247     85,520,878
                                                           
OTHER LIABILITIES                                           
Capital lease obligations - non current       2,453,057       3,560,819
Total liabilities                             102,653,304     89,081,697
                                                           
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, 1,486,871 shares issued and 1,487           1,487
outstanding as of December 31, 2013 and June
30, 2013
Additional paid-in-capital                    35,233,305      35,233,305
(Accumulated deficit) Retained earnings       (6,121,786)     5,412,387
Statutory reserves                            6,248,357       6,248,357
Accumulated other comprehensive income        10,507,127      9,796,563
Total shareholders' equity                    45,868,490      56,692,099
Total liabilities and shareholders' equity    $ 148,521,794 $ 145,773,796


CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
                                                             
                  For the three months ended   For the six months ended
                  December 31,                 December 31,
                  2013           2012           2013           2012
REVENUE                                                   
Sales of concrete  $ 11,374,306 $ 19,060,488 $ 21,095,423   $
                                                                 47,937,396
Manufacturing       454,026        2,516,859      896,329        4,450,580
services
Total revenue      11,828,332     21,577,347     21,991,752     52,387,976
                                                         
COST OF REVENUE                                           
Concrete           9,946,088      16,722,221     18,560,843     38,583,375
Manufacturing       374,612        1,659,550      785,755        3,276,077
services
Total cost of       10,320,700     18,381,771     19,346,598     41,859,452
revenue
                                                         
GROSS PROFIT       1,507,632      3,195,576      2,645,154      10,528,524
                                                         
PROVISION FOR       (5,055,600)    (467,597)      (8,105,021)    (9,809,192)
DOUBTFUL ACCOUNTS
SELLING, GENERAL
AND ADMINISTRATIVE  (2,735,275)    (2,457,328)    (5,645,900)    (5,646,942)
EXPENSES
RESEARCH AND
DEVELOPMENT         (247,563)      (284,912)      (451,562)      (573,792)
EXPENSES
(LOSS) GAIN
REALIZED FROM
DISPOSAL OF         (4,222)        173,589        (1,373,683)    (170,836)
PROPERTY, PLANT AND
EQUIPMENT
LOSS FROM
TERMINATION OF      --            (4,096,984)    --            (4,096,984)
LEASE
                                                         
LOSS FROM           (6,535,028)    (3,937,656)    (12,931,012)   (9,769,222)
OPERATIONS
                                                         
OTHER (EXPENSE)                                            
INCOME, NET
Subsidy income     709,700        1,315,753      1,319,505      3,143,279
Non-operating
(expense) income,   (59,312)       (238,726)      72,934         (470,036)
net
Change in fair
value of warrant    --            (21,446)       --            101,651
liability
Interest income    837,828        30,627         1,184,081      58,061
Interest expense   (651,977)      (680,435)      (1,179,681)    (1,181,272)
TOTAL OTHER INCOME, 836,239        405,773        1,396,839      1,651,683
NET
                                                         
LOSS BEFORE
PROVISION FOR       (5,698,789)    (3,531,883)    (11,534,173)   (8,117,539)
INCOME TAXES
                                                         
(BENEFIT) PROVISION --            (23,831)       --            775,336
FOR INCOME TAXES
                                                         
NET LOSS AVAILABLE
TO COMMON           $(5,698,789)  $ (3,508,052)  $ (11,534,173) $ (8,892,875)
SHAREHOLDERS
                                                         
COMPREHENSIVE                                              
INCOME (LOSS):
Net loss           $(5,698,789)  $ (3,508,052)  $ (11,534,173) $ (8,892,875)
Foreign currency
translation         271,556        199,459        710,564        39,186
adjustment
                                                         
COMPREHENSIVE LOSS $ (5,427,233) $ (3,308,593)  $ (10,823,609) $ (8,853,689)
                                                         
LOSS PER COMMON
SHARE ALLOCATED TO                                         
COMMON
SHAREHOLDERS
Weighted average
number of shares                                           
(*):
Basic and diluted  1,486,871      1,486,622      1,486,871      1,486,382
                                                         
Loss per share:                                           
Basic and diluted   $ (3.83)       $ (2.36)       $ (7.76)       $ (5.98)
(*)
                                                             
(*) Retrospectively restated
shares for a 1-for-12 reverse                                  
split.


CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                For the six months ended
                                               December 31,
                                               2013            2012
                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                         
Net loss                                        $ (11,534,173) $(8,892,875)
Adjustments to reconcile net loss to cash                      
provided by operating activities:
Depreciation                                    964,188         1,796,843
Stock-based compensation expense                --             36,772
Provision for doubtful accounts                 8,105,021       9,809,192
Change in fair value of warrant liabilities     --             (101,651)
Loss realized from disposal of property, plant   1,373,683       170,836
and equipment
Imputed interest on other receivable from        (442,295)       --
termination of leases
Loss from termination of lease                  --             4,096,984
Interest expense on capital lease               257,945         --
Changes in operating assets and liabilities                   
Accounts and notes receivable                   5,720,891       (11,943,556)
Inventories                                     10,515          933,013
Other receivables                               20,136          1,508,410
Other receivable from termination of lease      11,063,600      --
Prepayments                                     (2,425,283)     (581,702)
Long term prepayments                           --             (174,804)
Accounts payable                                (4,471,203)     5,905,442
Customer deposits                               (492,200)       (209,270)
Other payables                                  1,484,105       1,629,753
Accrued liabilities                             122,478         (303,787)
Taxes payable                                   (81,259)        (68,013)
Net cash provided by operating activities       9,676,149       3,611,587
                                                             
CASH FLOWS FROM INVESTING ACTIVITIES:                         
Acquisition of short-term investments, net      (19,579,595)    --
Proceeds from disposal of property, plant and    399,600         672,466
equipment
Purchase of property, plant and equipment       (263,360)       (266,362)
Net cash (used in) provided by investing         (19,443,355)    406,104
activities
                                                             
CASH FLOWS FROM FINANCING ACTIVITIES:                         
Proceeds from short term loans and bank          38,559,900      20,267,250
guarantees
Payments of short term loans and bank            (35,175,740)    (25,016,750)
guarantees
Proceeds from short term loan - shareholders    2,928,600       --
Proceeds from short term loan - other           325,400         --
Proceeds from short term borrowing              --             3,768,496
Proceeds from notes payable                     8,135,000       --
Rent payable to shareholder                     86,736          (52,656)
Principal payments on capital lease obligations (1,455,843)     --
Restricted cash                                 (5,267,631)     1,123,864
Net cash provided by financing activities       8,136,422       90,204
                                                             
EFFECTS OF EXCHANGE RATE CHANGE IN CASH         40,079          (15,539)
                                                             
NET CHANGE IN CASH                              (1,590,705)     4,092,356
                                                             
CASH, beginning of period                       3,949,939       2,409,914
                                                             
CASH, end of period                             $ 2,359,234   $ 6,502,270

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