NEW YORK and BEIJING, Sept 24 /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 and fiscal year ended June 30, 2009. Mr. Xianfu Han,
Chairman and Chief Executive Officer, stated, "We are pleased to
report that careful strategic planning and aggressive bidding for
new projects has resulted in another quarter of substantial growth
and increased profitability for China ACM. In our fiscal fourth
quarter, revenue increased to $14.5 million from $7.7 million in
the comparable quarter of last year. The substantial increase in
revenue was the result of a number of contract wins for China's
national rail network, a major focus of China ACM, given the
government's goal to add 41,000 kilometers of track through the
year 2020 requiring approximately 120 million tons of cement. Gross
profit increased by 89.5% to $4.7 million in the fourth quarter as
we continued to expand both our manufacturing and technical
services. At the same time, we resumed growth in our traditional
concrete sales in the Beijing area. Net income in the fourth
quarter was $5.7 million, up 311% from $1.4 million in the fourth
quarter of 2008." Mr. Han continued, "For the fiscal year ended
June 30, 2009, revenue was $39.7 million, up from $27.6 million in
fiscal 2008, while gross profit increased by 124.6% to $15.2
million. Operating income increased to $13.5 million, a 179.7%
increase, while net income totaled $12.1 million, exceeding our
guidance of $9 million for fiscal 2009. A number of factors
contributed to the substantial improvement in our bottom line.
First, we continued to alter our revenue mix so that a greater
percentage of our revenue is now derived from manufacturing and
technical services which provide higher profit margins than the
production of concrete. As of June 30, 2009, approximately 22.6% of
our revenue was derived from these services compared to 0% at
fiscal year-end 2008." "A second contributor to our higher net
income was a reduction in the corporate tax rate for China ACM from
25% to 15% which will be in effect for three years. The reduction,
which was applied retroactive to January 1, 2009, was the result of
a special certification awarded to China ACM by certain government
entities and was based on the company's involvement in producing
high-tech products, its research and development, as well as its
technical services. We also obtained a 2-year extension on our 6%
value added tax credit due to the fact that China ACM uses at least
30% recycled materials for the production of our concrete, thereby
achieving the Chinese government's threshold for receiving tax
incentives for environmentally-friendly initiatives." "In support
of our long-term strategy to participate in building out China's
railway system, we invested in five portable concrete plants
subsequent to our fiscal fourth quarter, bringing the total number
of portable plants to nine. Our continued investment in these
plants has proven to be a successful strategy and places us in a
strong competitive position to win new business going forward. With
the addition of four new contracts totaling $8 million since our
fiscal year end, and a strong pipeline of upcoming projects, we are
encouraged by the near and long-term outlook for the business.
Additionally, we have strengthened our balance sheet and now have
over $3 million in cash, more than $5 million of working capital,
and no long-term debt." Revenue for the three months ended June 30,
2009 was $14.5 million, as compared to $7.7 million for the three
months ended June 30, 2008. Gross profit was $4.7 million for the
three months ended June 30, 2009, as compared to $2.5 million for
the three months ended June 30, 2008, representing gross margins of
approximately 32% for both periods. Gross margin for the quarter
reflects an increase in higher margin services, offset by higher
concrete production at China ACM's fixed plants. Net income for the
three months ended June 30, 2009 increased to $5.7 million, or
$0.40 per diluted share, compared to net income of $1.4 million, or
$0.12 per diluted share, for the same quarter last year. Revenue
for the twelve months ended June 30, 2009 was $39.7 million, as
compared to $27.6 million for the twelve months ended June 30,
2008. Gross profit was $15.2 million for the year ended June 30,
2009, as compared to $6.8 million for the year ended June 30, 2008,
representing gross margins of approximately 38% and 25%,
respectively. Net income for the year ended June 30, 2009 increased
to $12.1 million, or $0.86 per diluted share, compared to net
income of $5.2 million, or $0.56 per diluted share, for fiscal
2008. As of June 30, 2009, the company had cash of $3.6 million,
restricted cash of $453,192, working capital of $5.3 million, and
no long-term debt. The Company reduced its long-term receivables by
transferring approximately $5.7 million of its receivables as a
method of payment for equipment and other asset purchases. The
company also transferred another $6.4 million of receivables for
future lease payments and factored approximately $4.1 million of
additional receivables. China ACM also paid off a $4.4 million
short-term loan subsequent to the fiscal year end. Conference Call
China ACM will also host a conference call at 8:00 a.m. Eastern
Time on Thursday, September 24, 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 (877) 221-1081 (U.S. callers) or (706) 758-6511 (International
callers), conference ID #31107275. A live webcast of the call will
also be available on the company's website
http://www.china-acm.com/. 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 website and investors will be able to access an
encore recording of the conference call through midnight October 1,
2009 by calling (800) 642-1687 (U.S. callers) or (706) 645-9291
(International callers) and entering conference ID #31107275. 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
eight ready-mix concrete plant network covering Beijing
metropolitan area. China ACM owns one plant, leases three 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. (tables follow) CHINA ADVANCED
CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS AS OF JUNE 30, 2009 AND 2008 ASSETS 2009 2008 ----
---- CURRENT ASSETS: Cash $3,634,805 $1,910,495 Restricted cash
453,192 913,092 Marketable securities 71,880 61,767 Notes
receivable 10,799 - Accounts receivable, net of allowance for
doubtful accounts of $120,986 and $224,924, respectively 11,815,402
9,365,486 Inventories 1,216,014 237,836 Other receivables 3,845,186
505,968 Prepayments 4,255,326 3,240,394 --------- --------- Total
current assets 25,302,604 16,235,038 ---------- ---------- PLANT
AND EQUIPMENT, net 22,089,717 16,730,220 ---------- ----------
OTHER ASSETS: Accounts receivable (non-current), net of allowance
for doubtful accounts of $328,563 and $411,061 respectively
4,132,706 4,753,006 Long term prepayments 4,794,746 - --------- ---
Total other assets 8,927,452 4,753,006 --------- --------- Total
assets $56,319,773 $37,718,264 =========== =========== LIABILITIES
AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short term loans
$4,512,200 $4,271,222 Accounts payable 10,722,741 6,293,553
Customer deposits - 165,434 Other payables 352,880 254,259 Other
payables - shareholder 806,946 880,302 Accrued liabilities 593,057
145,207 Taxes payable 3,048,179 1,073,237 --------- --------- Total
current liabilities 20,036,003 13,083,214 Total liabilities
20,036,003 13,083,214 COMMITMENTS AND CONTINGENCIES REDEEMABLE
CONVERTIBLE PREFERRED STOCK ($0.001 par value, 851,125 shares
issued and outstanding as of June 30, 2009 and 875,000 shares
issued and outstanding as of June 30, 2008), net of discount for
the amount of $567,581 and $1,168,548 as of June 30, 2009 and 2008,
respectively 6,241,419 5,831,452 --------- --------- SHAREHOLDERS'
EQUITY: Preferred stock $0.001 par value, 1,000,000 shares
authorized, 851,125 issued and outstanding as of June 30, 2009, and
875,000 shared issued and outstanding as of June 30, 2008 and
classified outside shareholders' equity (see above), liquidation
preference of $8.00 per share and accrued dividends as of June 30,
2009 and June 30, 2008 - - Common stock, $0.001 par value,
74,000,000 shares authorized, 10,595,500 and 10,525,000 shares
issued and outstanding, as of June 30, 2009 and June 30, 2008,
respectively 10,596 10,525 Paid-in-capital 12,987,417 12,722,260
Contribution receivable (1,210,000) (1,210,000) Deferred
compensation - (27,708) Retained earnings 12,783,892 3,257,276
Statutory reserves 2,765,179 1,452,779 Accumulated other
comprehensive income 2,705,267 2,598,466 --------- --------- Total
shareholders' equity 30,042,351 18,803,598 ---------- ----------
Total liabilities, redeemable preferred stock and shareholders'
equity $56,319,773 $37,718,264 =========== =========== CHINA
ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED JUNE 30, 2009 AND 2008 2009 2008 ---- ----
REVENUE Sales of concrete $ 28,118,492 $ 27,565,044 Manufacturing
services 7,053,728 - Technical services 1,924,089 - Mixer rental
2,618,493 - --------- --- Total revenue 39,714,802 27,565,044
---------- ---------- COST OF SALES Concrete 20,657,312 20,799,398
Manufacturing services 2,768,255 - Technical services 147,418 -
Mixer rental 945,057 - ------- --- Total cost of revenue 24,518,042
20,799,398 ---------- ---------- GROSS PROFIT 15,196,760 6,765,646
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,717,794 1,946,541
--------- --------- INCOME FROM OPERATIONS 13,478,966 4,819,105
---------- --------- OTHER INCOME (EXPENSE), NET Other subsidy
income 2,109,290 1,586,192 Non-operating expense, net (602,020)
(79,312) Interest expense, net (802,650) (149,419) --------
-------- TOTAL OTHER INCOME, NET 704,620 1,357,461 -------
--------- INCOME BEFORE PROVISION FOR INCOME TAXES 14,183,586
6,176,566 PROVISION FOR INCOME TAXES 2,115,097 1,012,382 ---------
--------- NET INCOME 12,068,489 5,164,184 DIVIDENDS AND ACCRETION
ON REDEEMABLE PREFERRED STOCK 1,229,473 33,387 --------- ------ NET
INCOME AVAILABLE TO COMMON SHAREHOLDERS 10,839,016 5,130,797
---------- --------- RECONCILIATION OF COMPREHENSIVE INCOME: Net
Income 12,068,489 5,164,184 Unrealized gain (loss) from marketable
securities 20,605 (12,482) Foreign currency translation adjustment
86,196 1,951,026 ------ --------- COMPREHENSIVE INCOME $ 12,175,290
$ 7,102,728 ========== ========= EARNING PER COMMON SHARE ALLOCATED
TO COMMON SHAREHOLDERS Weighted average number of shares: Basic
10,526,719 9,064,359 ========== ========= Diluted 14,032,479
9,255,616 ========== ========= Earnings per share: Basic $ 1.03 $
0.57 ==== ==== Diluted $ 0.86 $ 0.56 ==== ==== CHINA ADVANCED
CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2009 AND 2008
2009 2008 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net
income $ 12,068,489 $ 5,164,184 Adjustments to reconcile net income
to cash provided by operating activities: Depreciation 2,184,462
1,178,745 Amortization of long term deferred expense 179,463 - Bad
debt expense, net of recovery (189,052) 443,171 Amortization of
deferred compensation expense 107,477 5,542 Changes in operating
assets and liabilities Accounts receivable (13,681,007) 1,561,399
Inventories (977,200) 211,569 Other receivables (3,347,936)
1,109,454 Prepayment 419,258 (2,825,219) Accounts payable 4,403,314
(2,933,778) Customer deposits (166,114) 156,125 Other payables
97,849 108,430 Accrued liabilities 291,597 (80,851) Taxes payable
1,970,528 1,012,153 --------- --------- Net cash provided by
operating activities 3,361,128 5,110,924 --------- --------- CASH
FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, and
equipment (1,771,915) (8,701,026) ---------- ---------- Net cash
used in investing activities (1,771,915) (8,701,026) ----------
---------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
short term loans 8,247,950 3,925,075 Payments for short term loans
(8,024,538) (5,906,096) Payments on other payables - Shareholders
(73,889) - Restricted cash 459,900 (913,092) Proceeds from issuance
of redeemable preferred stock - 6,397,500 Proceeds from capital
contribution - 100 Proceeds from advances by shareholder - 873,020
Preferred dividends paid (472,851) - -------- --- Net cash provided
by financing activities 136,572 4,376,507 ------- --------- EFFECTS
OF EXCHANGE RATE CHANGE IN CASH (1,475) (300,793) ------ --------
INCREASE IN CASH 1,724,310 485,612 CASH, beginning of year
1,910,495 1,424,883 --------- --------- CASH, end of year $
3,634,805 $ 1,910,495 ========= ========= DATASOURCE: China
Advanced Construction Materials Group, Inc. CONTACT: David Waldman
or Klea Theoharis, both of Crescendo Communications, LLC,
+1-212-671-1020, Web Site: http://www.china-acm.com/
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