Generates Net Income of $2.3 Million or $0.16 per Diluted Share for
the Fiscal Third Quarter of 2009 NEW YORK and BEIJING, May 15
/PRNewswire-FirstCall/ -- China Advanced Construction Materials
Group, Inc. ("China ACM") (OTC:CADC) (BULLETIN BOARD: CADC) , a
leading provider of ready-mix concrete in China, today announced
financial results for the three months ended March 31, 2009. Mr.
Xianfu Han, Chairman and Chief Executive Officer, stated, "China
ACM has continued to experience year-over-year growth in revenue
and net income as well as rapid margin expansion. In our fiscal
third quarter, revenue increased to $9.3 million from $6.8 million
during the comparable period last year, with higher margin
manufacturing services and technical services contributing to our
growth. As a result, gross margins for our fiscal third quarter
increased to 41.9% from 26.5%, and our operating margin increased
to 33.2% from 20.6% for the same period last year. Net income for
the fiscal third quarter was $2.3 million versus $1.3 million
during the fiscal third quarter of 2008. We remain on track to
achieve net income of at least $9 million for fiscal 2009." Mr. Han
continued, "The Chinese government announced its $586 billion
stimulus package in November of 2008, with much of the money
allocated toward infrastructure projects, a key focus of China ACM.
Among the many infrastructure projects on the Chinese government's
agenda is the building of high speed railways through the year 2020
intended to better service the large population of Chinese citizens
located outside major cities. This initiative is expected to
consume 120 million tons of cement, as the network of track is set
to increase by 41,000 kilometers over the next 11 years at a cost
of approximately $730 billion. The Chinese government and many of
the large general contractors are long-standing customers of China
ACM. As a result, our company is now involved in over six such
railway projects, with associated revenue of $19.7 million, in and
around the Beijing area, the most recent additions being the
Guizhou-Guangzhou Railway and the Jin-Qin High Speed Railway. Our
investment in portable concrete facilities, combined with our solid
reputation, quality products and services and competitive pricing,
have placed us in a strong position to win railway projects and
also fits our strategic plan of expanding outside the Beijing area.
We continue to bid on projects of this type and have already begun
benefiting from the Chinese government's stimulus package." Revenue
for the three months ended March 31, 2009 was $9.3 million, as
compared to $6.8 million for the three months ended March 31, 2008.
Gross profit was $3.9 million for the three months ended March 31,
2009, as compared to $1.8 million for the three months ended March
31, 2008, representing gross margin of approximately 41.9% and
26.5%, respectively. Net income for the three months ended March
31, 2009 increased to $2.3 million, or $0.16 per diluted share,
compared to net income of $1.3 million, or $0.15 per diluted share,
for the same quarter last year. As of March 31, 2009, the company
had cash of $870,140, restricted cash of $666,954, working capital
of $8.0 million, and no long-term debt. Conference Call China ACM
will also host a conference call at 8:00 a.m. Eastern Time on
Friday, May 15, 2009. During the call, Mr. Xianfu Han, Chairman and
Chief Executive Officer, Mr. Weili He, Vice Chairman and Chief
Operating Officer, and Gene Hsiao, Chief Financial Officer, will
discuss the Company's quarterly performance and financial results.
The telephone number for the conference call is (201) 689-8035. A
live webcast of the call will also be available on the company's
website, http://www.china-acm.com/ or the new China ACM IR Hub at:
http://www.agoracom.com/IR/chinaacm. To listen to the live call
online, please visit the site at least 10 minutes early to
register, download and install any necessary audio software. The
webcast will be archived on the site as well as the China ACM IR
Hub, and investors will be able to access an encore recording of
the conference call for seven days by calling (201) 612-7415 and
entering account #286, ID #323153. The encore recording will be
available two hours after the conference call has concluded. About
China ACM China ACM, founded in 2002 and based in Beijing, China,
is a leading producer of advanced construction materials for large
scale commercial, residential, and infrastructure developments. The
company is primarily focused on producing and supplying a wide
range of advanced ready-mix concrete materials for highly
technical, large scale, and environmental construction projects.
The company also aims to develop and produce new and innovative
environmentally conscious construction materials. China ACM
provides materials and services through its seven ready-mix
concrete plant network covering Beijing metropolitan area. China
ACM owns one plant, leases two plants and has technical services
and preferred procurement agreements with four other
independently-owned plants. China ACM is ISO 9001 (product
quality), ISO 14001 (environmental safety), and ISO 18001
(employment environment safety) certified. Additional information
about the company is available at http://www.china-acm.com/. This
press release contains "forward-looking statements" within the
meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from
anticipated levels of sales, future national or regional economic
and competitive and regulatory conditions, changes in relationships
with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer
acceptance of existing and new products, and other factors.
Additional Information regarding risks can be found in the
Company's Annual Report on Form 10K and in the Company's recent
report on Form 8K filed with the SEC. Accordingly, although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The
Company has no obligation to update the forward-looking information
contained in this press release. Contact: Crescendo Communications,
LLC David Waldman or Klea Theoharis Tel: (212) 671-1020 Email: Web:
http://www.china-acm.com/ (tables follow) CONSOLIDATED BALANCE
SHEETS AS OF MARCH 31, 2009 AND JUNE 30, 2008 ASSETS March 31, 2009
June 30, 2008 (Unaudited) RESTATED CURRENT ASSETS: Cash $870,140
$1,910,495 Restricted cash 666,954 913,092 Marketable securities
58,451 61,767 Accounts receivable, net of allowance for doubtful
accounts of $357,810 and $224,924 as of March 31, 2009 and June 30,
2008, respectively 14,856,208 9,365,486 Inventories 777,548 237,836
Short term loan receivable 1,465,000 - Other receivables 1,008,368
505,968 Prepayment 3,940,771 3,240,394 Total current assets
23,643,440 16,235,038 PLANT AND EQUIPMENT, net 15,237,656
16,730,220 OTHER ASSETS: Accounts receivable (non-current), net of
allowance for doubtful accounts of $664,503 and $411,061 as of
March 31, 2009 and June 30, 2008, respectively 7,529,760 4,753,006
Total assets 46,410,856 37,718,264 LIABILITIES AND SHAREHOLDERS'
EQUITY CURRENT LIABILITIES: Short term loans $4,723,893 $4,271,222
Accounts payable 5,875,554 6,293,553 Customer deposits 10,751
165,434 Other payables 280,182 254,259 Other payables - shareholder
763,634 880,302 Accrued liabilities 411,168 145,207 Taxes payable
3,468,297 1,073,237 Interest payable 155,200 - Total current
liabilities 15,688,679 13,083,214 COMMITMENTS, CONTINGENCIES, AND
SUBSEQUENT EVENT REDEEMABLE PREFERRED STOCK ($0.001 par value,
873,000 and 875,000 shares issued and outstanding) net of discount
of $717,822 and $1,168,548 at March 31, 2009 and June 30, 2008,
respectively, liquidation preference of $8.00 per share and accrued
dividends 6,266,178 5,831,452 SHAREHOLDERS' EQUITY: Preferred stock
$0.001 par value, 1,000,000 shares authorized, 873,000 and 875,000
redeemable preferred shares issued and outstanding, and classified
above outside shareholders' equity above, liquidation preference of
$8.00 per share and accrued dividends as of March 31, 2009 and June
30, 2008 - - Common Stock, $0.001 par value, 74,000,000 shares
authorized, 10,508,000 and 10,525,000 shares issued and
outstanding, as of March 31, 2009 and June 30, 2008, respectively
10,508 10,525 Paid-in-capital 12,777,188 12,722,260 Contribution
receivable (1,210,000) (1,210,000) Retained earnings 8,011,906
3,257,276 Statutory reserves 2,172,408 1,452,779 Accumulated other
comprehensive income 2,693,989 2,598,466 Deferred compensation -
(27,708) Total shareholders' equity 24,455,999 18,803,598 Total
liabilities, redeemable preferred stock, and shareholders' equity $
46,410,856 $37,718,264 CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME FOR THE NINE MONTHS AND THREE MONTHS ENDED
MARCH 31, 2009 AND 2008 (UNAUDITED) Nine months ended Three months
ended March 31, March 31, 2009 2008 2009 2008 REVENUE: Sales of
concrete $16,382,049 $19,841,164 $6,544,484 $6,790,646
Manufacturing services 5,301,154 - 1,304,615 - Technical services
1,471,583 - 431,456 - Mixer rental 1,992,520 - 995,939 - Marketing
cooperation 94,167 - 32 - Total revenue 25,241,473 19,841,164
9,276,526 6,790,646 COST OF REVENUE: Cost of concrete 12,147,067
15,538,513 4,592,863 4,988,211 Manufacturing Services 1,803,356 -
510,268 - Technical services 119,742 - 22,059 - Mixer rental
602,485 - 265,442 - Marketing cooperation 38,720 - 13 - Total cost
of revenue 14,711,370 15,538,513 5,390,645 4,988,211 GROSS PROFIT
10,530,103 4,302,651 3,885,881 1,802,435 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,079,257 1,033,958 809,777 404,692 INCOME
FROM OPERATIONS 8,450,846 3,268,693 3,076,104 1,397,743 OTHER
(EXPENSE) INCOME, NET Other subsidy income 1,300,992 1,190,159
470,971 407,434 Non-operating expense, net (201,531) (36,655)
(118,343) (9,264) Interest income 4,777 - 937 - Interest expense
(640,544) (215,532) (194,200) (67,963) Total other income, net
463,694 937,972 159,365 330,207 INCOME BEFORE PROVISION FOR INCOME
TAXES 8,914,540 4,206,665 3,235,469 1,727,950 PROVISION FOR INCOME
TAXES 2,516,707 422,521 941,477 422,521 NET INCOME 6,397,833
3,784,144 2,293,992 1,305,429 Dividends and accretion on redeemable
preferred stock 923,575 - 305,443 - Net income available to common
shareholders 5,474,258 3,784,144 1,988,549 1,305,429 RECONCILIATION
OF COMPREHENSIVE INCOME: Net income 6,397,833 3,784,144 2,293,992
1,305,429 Unrealized (loss) gain from marketable securities (3,316)
5,223 15,901 (18,220) Foreign currency translation adjustment
98,839 1,539,290 (39,340) 644,374 COMPREHENSIVE INCOME $6,493,356
$5,328,657 $2,270,553 $1,931,583 EARNING PER SHARE: Basic $0.52
$0.43 $0.19 $0.15 Diluted $0.46 $0.43 $0.16 $0.15 WEIGHTED AVERAGE
NUMBER OF SHARES: Basic 10,525,066 8,809,583 10,525,200 8,809,583
Diluted 14,024,081 8,809,583 14,021,832 8,809,583 CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2009
AND 2008 (UNAUDITED) 2009 2008 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $6,397,833 $3,784,144 Adjustments to
reconcile net income to net cash (used in) provided by operating
activities: Depreciation 1,611,255 815,689 Stock-based compensation
expense 66,619 - Bad debt expense 383,581 3,136 Changes in
operating assets and liabilities Accounts receivable (14,505,340)
7,298,441 Inventories (538,551) 32,838 Other receivables (998,078)
703,888 Other receivables - related parties - (218) Prepayment
(83,374) (328,836) Accounts payable 5,365,721 (9,139,259) Other
payables 25,142 363,910 Accrued liabilities 265,272 (94,066)
Customer deposits (155,310) - Taxes payable 2,389,830 385,422 Net
cash provided by operating activities 224,600 3,825,089 CASH FLOWS
FROM INVESTING ACTIVITIES: Disbursement on short term loan
(1,464,500) Purchase of equipment (50,423) (15,665) Net cash used
in investing activities (1,514,923) (15,665) CASH FLOWS FINANCING
ACTIVITIES: Principal payments of short term loan (6,961,984)
(5,679,400) Proceeds from short term loan 7,398,231 3,404,168 Other
payables - shareholders (117,160) - Preferred dividends paid
(317,649) - Restricted cash 246,138 751,000 Net cash provided by
(used in) financing activities 247,576 (1,524,232) EFFECTS OF
EXCHANGE RATE CHANGE IN CASH 2,392 125,468 DECREASE (INCREASE) IN
CASH (1,040,355) 2,410,660 CASH, beginning of period 1,910,495
1,424,883 CASH, end of period $870,140 $3,835,543 DATASOURCE: China
Advanced Construction Materials Group, Inc. CONTACT: David Waldman
or Klea Theoharis, Crescendo Communications, LLC, +1-212-671-1020,
, both for China Advanced Construction Materials Group, Inc. Web
Site: http://www.china-acm.com/
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