BEIJING, Nov. 17, 2015 (GLOBE NEWSWIRE) -- China Advanced Construction Materials Group, Inc. CADC ("China ACM" or the "Company"), a provider of ready-mix concrete and related technical services in China, on November 17, 2015, reported financial results for the quarter ended September 30, 2015, i.e., the first quarter of the fiscal year 2016.
First Quarter Fiscal Year 2016 Financial Highlights
- Revenue decreased by 36% year over year to $13.5 million;
- Gross profit of $1.6 million, decreased by $0.3 million further year over year;
- Net loss of $1.1 million or basic LPS $(0.5);
- $26.7 million in working capital as of September 30, 2015.
First Quarter Fiscal Year 2016 Results
Revenue. For the three months ended September 30, 2015, we generated total revenue of approximately $13.5 million compared to approximately $21.2 million during the three months ended September 30, 2014, a decrease of approximately $7.7 million or 36%. The decrease in revenue was principally due to the decreased sales volume resulted from an approximately three weeks of government-mandated suspension of industrial activities in the city of Beijing where multiple international events were hosted during the period.
Cost of Revenue. For the three months ended September 30, 2015, total cost of revenue was approximately $11.9 million compared to approximately $19.3 million for the three months ended September 30, 2014, a decrease of approximately $7.5 million, or 39%. The decrease in cost of revenue was primarily associated to the decrease in production from our concrete plants during the three months ended September 30, 2015 compared to the three months ended September 30, 2014.
Gross Profit. Total gross profit was approximately $1.6 million for the three months ended September 30, 2015, as compared to gross profit of approximately $1.9 million for the three months ended September 30, 2014, a decrease of approximately $0.3 million, which was primarily due to the decrease of production volume.
(Provision for) Recovery of Doubtful Accounts. We incurred provision for doubtful accounts of approximately $0.9 million for the three months ended September 30, 2015; while for the three months ended September 30, 2014, we had a recovery of doubtful accounts of approximately $1.0 million.
Selling, General and Administrative Expenses. We incurred selling, general and administrative expenses of approximately $1.5 million for the three months ended September 30, 2015, a decrease of approximately $1.2 million, or 42%, as compared to approximately $2.7 million for the three months ended September 30, 2014. We incurred approximately $0.3 million of stock-based compensation for the three months ended September 30, 2015, which was primarily offset by the decreases of $0.3 million in consulting expense, $0.2 million in rent and $0.3 million in salary as compared to the three months ended September 30, 2014.
Research and Development Expenses. Research and development expenses for the three months ended September 30, 2015 was $0.1 million, a decrease of approximately $0.4 million, or 74%, as compared to approximately $0.5 million for the three months ended September 30, 2014. The Company's research and development expenditure was maintained at a similar percentage year over year as to the revenue and was adjusted based on economic outlook, plus discretionary spending on projects that were deemed to help improve our competitive advantage.
Net Loss (Income). We incurred net loss of approximately $1.1 million for the three months ended September 30, 2015, as compared to net income of approximately $0.1 million for the three months ended September 30, 2014. Such change of approximately $1.2 million from net income to net loss was the result of the combination of the changes as discussed above.
Balance Sheet Overview
China ACM had working capital of $26.7 million at September 30, 2015, including $1.3 million in cash and equivalents, $7.3 million in restricted cash, $5.2 million in short term investment, $38.4 million in accounts and notes receivable, $43.6 million in prepayments and advances, $1.1 million in other receivables and $73.3 million in current liabilities. Shareholders' equity was $37.0 million compared with $39.7 million at June 30, 2015. The total number of shares outstanding as of September 30, 2015 was approximately 2.2 million.
Second Quarter and Full Year Guidance of Fiscal Year 2016
For the second quarter ending December 31, 2015, management expects to earn revenue of between $12.0 and $14.0 million, and incur a net loss of between $0.5 million and $1.5 million, resulting in a loss per share of between $ 0.23 and $0.68 based on fully diluted shares of 2.2 million as of November 11, 2015.
For the full fiscal year ended June 30, 2016, management expects to earn revenue of between $40 million and $60 million, net loss of between $2 and $4 million, and a loss per share of between $0.91 and $1.82 based on fully diluted shares of 2.2 million as of November 11, 2015.
Conference call
The company will host a conference call with a live webcast and a full Q&A session on Tuesday November 17, 2015, at 7:00 a.m., Eastern Time, to discuss financial results for the first quarter of the 2016 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 participate in the conference call, please refer to the following dial-in information:
| Phone number: +86-10-65652889 |
| Conference number: 53610 |
| Password: 22225361 |
To pre-check system compatibility prior to the call, visit http://www.investorcalendar.com/aboutus/HelpDesk.asp
A webcast replay will be available until December 17, 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) | ||
| September 30, | June 30, | |
| ASSETS | 2015 | 2015 |
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 1,330,537 | $ 2,691,915 |
| Restricted cash | 7,304,744 | 11,062,358 |
| Accounts and notes receivable, net of allowance for doubtful accounts of $27,443,778 and $28,209,249, as of September 30, 2015 and June 30, 2015, respectively | 38,389,227 | 40,357,169 |
| Inventories | 1,348,522 | 1,416,664 |
| Short term investments | 5,187,023 | 5,401,499 |
| Other receivables | 1,051,306 | 1,080,187 |
| Prepayments and advances | 43,635,237 | 52,478,097 |
| Deferred tax assets | 1,763,825 | 1,836,757 |
| Total current assets | 100,010,421 | 116,324,646 |
| PROPERTY PLANT AND EQUIPMENT, net | 9,477,949 | 10,155,848 |
| ADVANCES ON EQUIPMENT PURCHASES, net of allowance of $3,723,184 and $3,578,891 as of September 30, 2015 and June 30, 2015, respectively | 859,196 | 1,684,064 |
| Total assets | $ 110,347,566 | $ 128,164,558 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Short term loans, banks and bank guarantees | $ 16,506,000 | $ 26,355,700 |
| Notes payable | 26,173,800 | 30,530,050 |
| Accounts payable | 25,787,644 | 23,399,883 |
| Customer deposits | 728,388 | 1,284,579 |
| Other payables | 1,220,749 | 2,704,233 |
| Other payables - shareholders | 142,143 | 83,678 |
| Accrued liabilities | 1,921,408 | 2,603,662 |
| Capital lease obligations - current | 684,215 | 1,489,384 |
| Taxes payable | 157,947 | 12,859 |
| Total current liabilities | 73,322,294 | 88,464,028 |
| 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, 2,180,799 shares issued and outstanding as of September 30 and June 30, 2015 | 2,181 | 2,181 |
| Additional paid-in-capital | 38,373,584 | 38,373,584 |
| Accumulated deficit | (16,490,968) | (15,398,817) |
| Statutory reserves | 6,248,357 | 6,248,357 |
| Accumulated other comprehensive income | 8,892,118 | 10,475,225 |
| Total shareholders' equity | 37,025,272 | 39,700,530 |
| Total liabilities and shareholders' equity | $ 110,347,566 | $ 128,164,558 |
| CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
| (Unaudited) | ||
| For the three months ended | ||
| September 30, | ||
| 2015 | 2014 | |
| REVENUE | ||
| Sales of concrete | $ 13,472,831 | $ 20,900,690 |
| Manufacturing services | -- | 313,063 |
| Total revenue | 13,472,831 | 21,213,753 |
| COST OF REVENUE | ||
| Concrete | 11,855,331 | 19,045,388 |
| Manufacturing services | -- | 283,452 |
| Total cost of revenue | 11,855,331 | 19,328,840 |
| GROSS PROFIT | 1,617,500 | 1,884,913 |
| RECOVERY OF (PROVISION FOR) DOUBTFUL ACCOUNTS | (894,784) | 1,027,973 |
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | (1,544,688) | (2,667,304) |
| RESEARCH AND DEVELOPMENT EXPENSES | (130,446) | (500,167) |
| LOSS REALIZED FROM DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT | -- | (80,732) |
| LOSS FROM OPERATIONS | (952,418) | (335,317) |
| OTHER (EXPENSE) INCOME, NET | ||
| Subsidy income | -- | 645,805 |
| Non-operating expense, net | (132,894) | (118,764) |
| Interest income | 171,836 | 703,509 |
| Interest expense | (178,675) | (473,659) |
| TOTAL OTHER (LOSS) INCOME, NET | (139,733) | 756,891 |
| (LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (1,092,151) | 421,574 |
| PROVISION FOR INCOME TAXES | -- | (336,664) |
| NET (LOSS) INCOME | $ (1,092,151) | $ 84,910 |
| COMPREHENSIVE LOSS: | ||
| Net (loss) Income | $ (1,092,151) | $ 84,910 |
| Foreign currency translation adjustment | (1,583,107) | 74,449 |
| COMPREHENSIVE (LOSS) INCOME | $ (2,675,258) | $ 159,359 |
| LOSS PER COMMON SHARE | ||
| Weighted average number of shares: | ||
| Basic | 2,180,799 | 1,591,188 |
| Diluted | 2,180,799 | 1,625,427 |
| (Loss) Earnings per share: | ||
| Basic | $ (0.50) | $ 0.05 |
| Diluted | $ (0.50) | $ 0.05 |
| CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (Unaudited) | ||
| For the three months ended | ||
| September 30, | ||
| 2015 | 2014 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net (loss) income | $ (1,092,151) | $ 84,910 |
| Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | ||
| Depreciation | 513,775 | 561,922 |
| Stock-based compensation expense | 311,719 | 43,900 |
| Deferred tax provision | -- | 99,275 |
| Provision (Recovery) for doubtful accounts | 894,784 | (1,027,973) |
| Loss realized from disposal of property, plant and equipment | -- | 80,732 |
| Changes in operating assets and liabilities | ||
| Accounts and notes receivable | (3,073) | (2,026,485) |
| Inventories | 12,072 | (142,011) |
| Other receivables | (258,194) | (453,437) |
| Prepayments and advances | 6,362,149 | (3,574,741) |
| Accounts payable | 3,367,535 | (669,926) |
| Customer deposits | (512,897) | 30,270 |
| Other payables | (1,620,638) | 136,481 |
| Accrued liabilities | (618,893) | 49,583 |
| Taxes payable | 147,821 | 73,452 |
| Net cash provided by (used in) operating activities | 7,504,009 | (6,734,048) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Redemptions of short-term investments, net | -- | 4,057,500 |
| Purchase of property, plant and equipment | -- | (29,344) |
| Net cash provided by investing activities | -- | 4,028,156 |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from short term loans and bank guarantees | 3,192,000 | 9,575,700 |
| Payments of short term loans and bank guarantees | (12,129,600) | (27,672,150) |
| Payments of short term loans - other | -- | (3,246,000) |
| Proceeds from notes payable | 14,922,600 | 17,122,650 |
| Payments of notes payable | (18,114,600) | (9,738,000) |
| Payable to shareholder | 58,466 | 38,745 |
| Principal payments on capital lease obligations | (74,831) | (167,857) |
| Restricted cash | 3,369,026 | 4,064,546 |
| Proceeds from issuance of common stock | -- | 1,167,552 |
| Net cash used in financing activities | (8,776,939) | (8,854,814) |
| EFFECTS OF EXCHANGE RATE CHANGE IN CASH | (88,448) | 58,555 |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,361,378) | (11,502,151) |
| CASH AND CASH EQUIVALENTS, beginning of period | 2,691,915 | 15,431,110 |
| CASH AND CASH EQUIVALENTS, end of period | $ 1,330,537 | $ 3,928,959 |
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