China Advanced Construction Mat (NASDAQ:CADC)

BEIJING, Jan. 16, 2019 /PRNewswire/ -- China Advanced Construction Materials Group, Inc. (Nasdaq CM: CADC) (the "Company" or "China ACM"), a construction company engaging in the production of advanced construction materials for large scale infrastructure, commercial and residential developments, is pleased to announce that it has regained compliance with Nasdaq's periodic filing requirement and annual meeting requirement.

On January 11, 2019, the Company received a written notification from the NASDAQ Stock Market Listing Qualifications Staff (the "Nasdaq Staff") indicating that the Company has regained compliance with the periodic filing requirement for continued listing on the NASDAQ Capital Market pursuant to NASDAQ Listing Rule 5250(c)(1) (the "Periodic Filing Requirement")  based on the December 10, 2018 filing of the Company's Form 10-K for the fiscal year ended June 30, 2018 and the January 4, 2019 filing of the Company's Form 10-Q for the period ended September 30, 2018.

Additionally, Nasdaq Staff indicated that the Company has regained compliance with the annual meeting requirement for The NASDAQ Capital Market pursuant to Listing Rule 5620 (the "Annual Meeting Requirement") based on the December 27, 2018 filing of the Company's Form 8-K disclosing the Company's annual meeting of shareholders held earlier that day.

BEIJING, Nov. 19, 2018 /PRNewswire/ -- China Advanced Construction Materials Group, Inc. (NASDAQ CM: CADC) (the "Company" or "China AMC"), a construction company engaging in the production of advanced construction materials for large scale infrastructure, commercial and residential developments, today said it has received a notice ("Notice") from the NASDAQ Stock Market notifying the Company that, because its Form 10-Q for the period ended September 30, 2018 was not filed with the Securities and Exchange Commission by the required due date of November14, 2018, and the Company remains delinquent in filing its Form 10-K for the year ended June 30, 2018 (the "2018 10-K"), the Company is therefore not in compliance with the periodic filing requirements for continued listing set forth in NASDAQ Listing Rule 5250(c)(1).

This Notice received has no immediate effect on the listing or trading of the Company's shares.

As previously announced, in accordance with NASDAQ's notice dated October 15, 2018, the Company had until November 14, 2018 to submit a plan to regain compliance with respect to these delinquent 2018 10-K. Following the Company's request, NASDAQ has extended that due date until November 16, 2018. The Company submitted its plan to regain compliance to NASDAQ on November 16, 2018.

This announcement is made in compliance with Nasdaq Listing Rule 5810(b), which requires prompt disclosure of receipt of a deficiency notification.

Item 4.01.  Changes in Registrant’s Certifying Accountant. 

On June 29, 2016, China Advanced Construction Materials Group, Inc., a Nevada corporation (the “Company”) dismissed Kabani & Company, Inc. (“Kabani”) as the Company’s independent registered public accounting firm. The decision to dismiss Kabani was approved by the Company’s audit committee.

Kabani was appointed as the Company’s auditors since October 27, 2015, less than a fiscal year ago. As a result, Kabani has not issued any accountant’s report on the financial statements of the Company.

During the period Kabani served as the Company’s auditors through June 29, 2016 (the “Applicable Period”), there were no disagreements with Kabani on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s) if not resolved to Kabani’s satisfaction would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report. During the Applicable Period, there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.

The Company provided Kabani with a copy of the foregoing disclosure and requested Kabani to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made therein. A letter to be furnished by Kabani will be filed as Exhibit 16.1 to an Amendment to this Form 8-K once the Company receives such letter.

On June 29, 2016, the Company’s audit committee approved the engagement of Friedman LLP (“Friedman”) as the Company’s independent registered public accounting firm. Friedman had served as the Company’s auditors from December 27, 2010 to October 27, 2015.

During the Applicable Period, neither the Company nor anyone on its behalf consulted with Friedman regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided that Friedman concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and its related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

First Quarter 2016 Financial Results

• Revenue decreased by 36% year over year to $13.5 million;
• Net loss of $1.1 million or basic LPS $(0.5);

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.

Item 4.01.  Changes in Registrant’s Certifying Accountant. 

On October 27, 2015, China Advanced Construction Materials Group, Inc., a Nevada corporation (the “Company”) dismissed Friedman LLP (“Friedman”) as the Company’s independent registered public accounting firm. The decision to dismiss Friedman was approved by the Company’s audit committee.

The principal accountant’s reports of Friedman on the financial statements of the Company as of and for the fiscal years ended June 30, 2014 and 2013 did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company’s two most recent fiscal years and the subsequent interim period through October 27, 2015, there were no disagreements with Friedman on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s) if not resolved to Friedman’s satisfaction would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report. During the Company’s two most recent fiscal years and the subsequent interim period through October 27, 2015, there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.

The Company provided Friedman with a copy of the foregoing disclosure and requested Friedman to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made therein. A copy of such letter, dated October 30, 2015, furnished by Friedman is filed as Exhibit 16.1 to this Form 8-K.

On October 27, 2015, the Company’s audit committee approved the engagement of Kabani & Company, Inc. (“Kabani”) as the Company’s new independent registered public accounting firm.

NEW YORK, Sept. 28, 2015 (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 September 25, 2015, announced its financial results for the fiscal year ended June 30, 2015.

Fiscal Year 2015 Financial Highlights

• Revenue increased 14% year over year to $55.5 million
• Gross margin was 9%
• Net loss available to common shareholders of $4.2 million or EPS of - $2.15
• $27.9 million in working capital at June 30, 2015

Fiscal Year 2015 Results

Revenue. For the year ended June 30, 2015, we generated total revenue of approximately $55.5 million compared to approximately $48.7 million during the year ended June 30, 2014, an increase of approximately $6.8 million or 14%. The increase in revenue was principally due to increased sales volume resulted from the commencement of operation of our manufacturing plant in the eastern suburban area of Beijing in early 2014.

Cost of Revenue. For the year ended June 30, 2015, we generated total cost of revenue of approximately $50.8 million compared to approximately $44.1 million during the year ended June 30, 2014, an increase of approximately $6.7 million or 15%. The increase in cost of revenue was primarily associated to the increase in production from our concrete plants during the year ended June 30, 2015 compared to the year ended June 30, 2014.

Gross Profit. Total gross profit was approximately $4.7 million for the year ended June 30, 2015, as compared to approximately $4.6 million for the year ended June 30, 2014, an increase of approximately $0.1 million. Percentage of gross profit over revenue for each of the years ended June 30, 2015 and 2014 was approximately 9%.

Recovery of (Provision for) Doubtful Accounts. We had recovery of doubtful accounts of $2.8 million for the year ended June 30, 2015, we incurred $7.7 million of provision for doubtful accounts for the year ended June 30, 2014. As compared to the balances of June 30, 2014, through improved collection efforts and certain agreements to offset customer receivables with vendor payables, we effectively reduced balances aged from one to two years by approximately $10.5 million and balances aged beyond two years by approximately $2.8 million.

Selling, General and Administrative Expenses. We incurred selling, general and administrative expenses of approximately $10.1 million for the year ended June 30, 2015, a decrease of approximately $0.5 million, or 5%, as compared to approximately $10.7 million for the year ended June 30, 2014. We incurred approximately $0.5 million of stock-based compensation for the year ended June 30, 2015, which was offset by decreases of $0.4 million in consulting expense, $0.1 million in office expenses, $0.2 million in business development expenses, and $0.2 million in conference expense as compared to the year ended June 30, 2014.

Research and development expenses. Research and development expenses for the year ended June 30, 2015 were $1.1 million, a decrease of approximately $0.3 million, or 23%, as compared to approximately $1.5 million for the year ended June 30, 2014. The Company's R&D expenditure was maintained relative to the level of revenue and was adjusted based on economic outlook, plus discretionary spending on projects that were deemed to help improve our competitive advantage.

Loss realized from disposal of property, plant and equipment. For the year ended June 30, 2015, we incurred approximately $0.1 million of loss realized from disposal of property, plant and equipment, as compared to approximately $1.7 million for the year ended June 30, 2014.The change was caused by our disposal of certain vehicles at loss during the year ended June 30, 2014.

Net Loss. We incurred net loss of approximately $4.2 million for the year ended June 30, 2015, as compared to net loss of approximately $16.6 million for the year ended June 30, 2014, a decrease of $12.5 million. Such decrease in net loss was the result of the combination of the changes as discussed above.

Balance Sheet Overview

China ACM had working capital of $27.9 million at June 30, 2015, including $2.7 million in cash and equivalents, $11.1 million in restricted cash, $5.4 million in short term investment, $40.4 million in net accounts receivable, $52.5 million in prepayments, $1.1 million in other receivables and $88.5 million in total liabilities. Shareholders' equity was $39.7 million compared to $40.4 million at June 30, 2014. The total number of shares outstanding as of September 18, 2015 was approximately 2.1 million.

First Quarter and Full Year Guidance of Fiscal Year 2016

For the first quarter ending September 30, 2015, management expects to earn revenue of between $12 and $14 million, and incur a net loss of between $0 million and $1 million, resulting in a loss per share of between $ 0 and $0.53 based on fully diluted shares of 1.9 million as of Sep 28, 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 $1.05 and $2.11 based on fully diluted shares of 1.9 million as of Sep 28, 2015.

Third Quarter 2015  Financial Results

• Generated total revenue of approximately $5.1 million compared to approximately $7.0 million during the three months ended March 31, 2014, a decrease of approximately $1.9 million or 27%.
• Income (loss) per share: Diluted $0.47 vs. last years loss of $(3.39)

Fourth Quarter and Full Year Guidance of Fiscal Year 2015

For the fourth quarter ended on June 30, 2015, we expect to earn revenue of between $10 million and $15 million, net loss of between $2 million and $3 million, and EPS of between $(0.95) and $(1.43) based on fully diluted shares of 2.1 million as of May 13, 2015.

For the full fiscal year ended on June 30, 2015, we expect to earn revenue of between $54 million and $59 million, net loss of between $3.5 million and $4.5 million, and EPS of between $(1.67) and $(2.14) based on fully diluted shares of 2.1 million as of May 13, 2015.

NEW YORK, March 3, 2015 (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 March 3rd, 2015, reported that the Company's solution for eco-friendly parking facilities had received recognition from the conference organizers of APEC China 2014 Summit (the"APEC Summit", or the"Summit") in Beijing.

The APEC Summit was the 26th annual gathering for the leaders of Asian-Pacific Economic Cooperation countries. The Summit's conference organizer, the central government of China and the municipal government of Beijing, had held the Summit in Yanqi Lake, 50 miles north of Beijing from November 10^th to 12^th, 2014.

To prepare for the Summit, the conference organizer had taken various preventive measures to minimize the Summit's impact to natural resource and environment. The prevention measures include attempts to reduce smog occurrence by limiting traffic emission and industrial production in Beijing. The conference organizer also advocated to use clean technologies and recyclable materials to build the Summit's conference facilities.

The Company had been engaged by the conference organizer to build eco-friendly parking facilities for the Summit around the Yanqi Lake, where the Summit took place. The parking facilities in the project were totaled near 200 thousand square feet. The conference organizer also required that the parking facilities should be restored back to its original natural landscape after the Summit.

In order to build parking facilities restorable to greenfield condition, the Company used alternative material to replace conventional concrete and asphalt in paving the parking facilities. Essentially, the new alternative materials were green pavement products and were made from local soil, construction wastes and building debris. When the Summit was over, the pavement was subsequently removed and recycled back to soil and reusable construction material. With that, the parking facilities were able to get restored back to greenfield conveniently. The conference organizer was satisfied and recognized the Company's achievement and work quality in delivering such eco-friendly parking facilities and restoring them back to greenfield.

"We are glad that we had quickly built eco-friendly parking facilities for the APEC Summit," said Mr. Xianfu Han, Chairman and CEO of the Company, "and thanks for our technologies in developing green pavement products from construction waste, we are proud that the parking facilities can easily get restored back to greenfield."

Mr. Han further commented, "We had demonstrated the usefulness of our recyclable products and their potential at the APEC Summit in Beijing. We will continue focusing on inventing new technologies in recycling construction wastes. We will lead in recycling building debris and work hard to turn the construction waste back to clean concrete products for blue sky, fresh air, healthy environment, and happy people."

NEW YORK, March 2, 2015 (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 March 2, 2015, announced a recent publication of technical standards for recycling concrete products and the production of such products from construction waste and building debris in Beijing.

The Alliance of Construction Waste Recycling Technologies of China, (the "Alliance"), which is chaired by the Company, published the foregoing technical standards for its members recently. The Standards provide an industry guidance to standardize the production of concrete products from construction wastes. The Standards is the first of its kind in construction wastes recycling in China.

The Alliance is the first and currently the largest autonomous cooperative association of construction waste recycling in China. The Alliance consists of member companies and participants who are voluntarily contributing, and collaborating to develop new technologies in construction waste recycling. In 2009, the Ministry of Science and Technology of China (the "Ministry", the "Government"), issued an executive order (2009, #648) to advocate the foundation of technologies cooperatives to promote technologies innovation among industries. In the executive order, the Ministry announced a series of policies on how the Government would support the Ministry-approved cooperatives for technology development strategically and financially. Together with other key members, the Company founded the Alliance, and the Ministry approved the Alliance's charter in 2013. The Company has chaired the Alliance since then.

The Standards include chapters of detailed technical specifications on how the recycling concrete products shall be, the compliance requirements that recycling productions shall met, and other related measures that environmental protections and quality assurance shall address. With these chapters, the Standards had provided a norm to the construction waste recycling systems. Its codes intend to establish the uniformed engineering criteria in the recycling production processes. Since the publication, the Standards had received large consensus from technical experts and been largely appraised by members and non-member entities in the industry. The standards had become effective in the Alliance from the beginning of 2015.

"As the chair of the Alliance, we contributed most to the draft of the Standards. We are very happy for the Standards to become effective," said Mr. Xianfu Han, chairman and CEO of the Company, "we are committed to adopt the entire Standards in our business. Under the Standards, we will advance our recycling technologies with big strides."

NEW YORK, Feb. 26, 2015 (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 26th, 2015, provided an update of the Company's ongoing key project, the China Zun Tower (also known as "CITIC Plaza" and "China Zun") in Beijing.

The China Zun Tower, (aka CITIC Plaza) is a supertall skyscraper under construction in the Central Business District of Beijing. The 108-story and 1,732-foot-tall building will become the tallest in Beijing once the construction completes, and its height will surpass that of the current tallest, China World Trade Center Tower III, by over 600 feet. The name of the building, China Zun, comes from "zun", an ancient Chinese wine vessel that inspired the building design, according to the developers and design firms, the CITIC Group and the Tower's design firms, Beijing Institute of Architecture and Design, Kohn Pedersen Fox Associates, and Arup Group. More information of China Zun project is available athttp://skyscrapercenter.com/building/zhongguo-zun/11116.

The Company has thoroughly participated in the development of China Zun from the beginning. Together with a few limited suppliers, the Company has been supplying various concrete materials and delivering related construction services at the project's ground breaking, foundation constructions, underground constructions, and aboveground developments.

To view an enhanced version of Photo 1: Construction Site of the China Zun Tower, please visit:http://orders.newsfilecorp.com/files/1471/14213_cacm.h3.jpg

The China Zun project constantly encounters formidable challenges during its development. For instance, its over-130-foot-deep foundation is among the deepest for modern skyscrapers in the world. In building this earthquake-resistant foundation, the Company once had delivered and pumped over half million cubic feet of concrete products in continuous batches with no pause.

To view an enhanced version of Photo 2: Construction Site of the China Zun Tower, please visit:http://orders.newsfilecorp.com/files/1471/14213_cacm.h4.jpg

Over the past couple of years, the Company had accumulatively supplied over 2 million cubic feet of concrete products for some major skyscraper projects in Beijing, and will continue to serve as one of the main suppliers for China Zun till the completion of the project in 2018. Once completed, The China Zun Tower will be home to the CITIC Group and the CITIC Bank's headquarter offices, several 6-star hotels, and feature certain high-end retail outlets. The total volume of concrete products supplied by the Company for the Central Business District of Beijing is expected to exceed 3 million cubic feet.

"Beijing is competing to become one of the cities with a new generation of skyscrapers in the world. Currently the three tallest skyscrapers are the 1110-foot-tall China World Trade Center Tower III, the 820-foot-tall Fortune Plaza and the 820-foot-tall Yintai Plaza. We have participated in the development of essentially all these landmark buildings," said Mr. Xianfu Han, Chairman and CEO of the Company, "and this will soon be lifted to a whole new level. As expected to become the new iconic landmark in the future Beijing, China Zun Tower will be the first skyscraper close to 2000 feet tall and subsequently lead to a wave of skyscraper constructions with similar heights within the area."

"We are honored and grateful to have the opportunity to serve China Zun," further commented by Mr. Han, "and we are committed to continuously contribute our environmentally-friendly concrete to China Zun and all the upcoming new skyscrapers in Beijing."

Second Quarter 2015 Financial Results

• Revenue increased 49% year over year to $17.6 million
• Net loss of $2.9 million or EPS of - $(1.48) vs. last years same quarter of $(3.83).

Mr. Xianfu Han, Chairman and Chief Executive Officer of China ACM, commented, "In the past quarter, the government of China hosted the APEC meeting in Beijing. To mitigate the adverse pollutions, the government ordered suspensions of industrial production in Beijing and vicinity area, larger, wider, and longer than expected. Such suspensions had adversely affected certain industries and companies. Our company got affected as well for the quarter. However, for the rest of the year, we will continue our efforts to increase our client base and improve the collection of account receivables. In the ongoing third quarter, we are committed to sweat to stop loss and bring our business back to the normal track. We target to turn around as soon as possible and are cautiously optimistic to break even for the whole fiscal year as we had planned."

Third Quarter and Full Year Guidance of Fiscal Year 2015

For the third quarter ended on March 31,2015, we expect to earn revenue of between $10 million and $11 million, net income of between $1 million and $1.5 million, and EPS of between $0.48 and $0.71 based on fully diluted shares of 2.1 million as of February 15, 2015.

For the full fiscal year ended on June 30, 2015, we expect to earn revenue of between $70 million and $75 million, net income of between $1 million and $2 million, and EPS of between $0.48 and $0.95 based on fully diluted shares of 2.1 million as of February 15, 2015.

Item 3.02  Unregistered Sales of Equity Securities. 

On December 2, 2014, the board of directors (the “Board”) of China Advanced Construction Materials Group, Inc., a Nevada corporation (the “Company”) authorized the Company to issue 92,897 and 81,968 shares of common stock of the Company (collectively, the “Shares”), to each of Mr. Xianfu Han, the Company’s Chief Executive Officer and Mr. Weili He, the Company’s Chief Operating Officer and interim Chief Financial Officer, at $5.49 per share, the closing bid price quoted by Nasdaq on December 1, 2014. The Shares offset the payables advanced by the two executives in the amount of approximately $510,000 and $450,000, respectively, to the Company. The issuance was approved by the Company’s audit committee of the Board.

First Quarter 2015 Financial Results

• Quarterly revenue doubled from $10.2MM to $21.2MM by 109% year over year, met previously provided guidance of between $18MM and $22MM.
• Net income was $0.1 million or $0.05 per diluted share, for the first quarter of fiscal year 2015, compared to net loss of $(5.8) million, or $(3.92) per diluted share, in the first quarter of fiscal year 2014.

Mr Xianfu Han, President and Chief Executive Officer of China ACM, stated "After consecutive losses for 11 quarters, I am thrilled to report that we once again managed to deliver results. We had come back from difficulty. While we began to bring the business to normal, we are making solid progress in the execution of our strategic plan.

Our core business, the sales of concrete products, is bouncing back. At our heart market in Beijing, the sales of concrete had recovered by more than 100% for the quarter from a year ago.

Another quarterly highlight is our ability to improve receivable management. The doubtful accounts had shown healthy recovery and the collection is at its highest peak in the past three years."

Mr. Han continued, "While the loss had been stopped, we are focused on revolutionizing our core business. We aim to deliver clean concrete using otherwise non-recycled materials such as building debris and construction wastes. Related recycling technologies of debris wastes are essential for the success of transforming our business. The technologies that we will use can bring us better margins, competence, and a prudent path to growth."

"We are pleased with the results of the first quarter. This is a good start, not only for fiscal 2015, but also for the new era of China-ACM. Workers know and use premium mortar to bind quality bricks, when building great buildings that last hundreds of years. We know and will use fiduciary discipline, shareholder awareness, and environmental responsibility, as mortar to bind our team, to rebuild our home for shareholder value, layer over layer. We will make a clean, and transparent company with stringent governance, effective control, and responsible management. We invite our shareholders, our clients to police us, to grow with us, from all over the world. The Company is still young. The vision of the Company may exceed our limits of imagination. Let's witness together." Mr. Han concluded.

Second Quarter and Full Year Guidance of Fiscal Year 2015

"We are bringing our business back to the normal track. With the continuous momentum of recovery, for the second quarter ended on December 31, 2014, we expect to earn revenue of between $20 million and $22 million, net income of between $0 million and $1 million, and EPS of between $0 and $0.53 based on fully diluted shares of 1.9 million as of Nov 15, 2014.

For the full fiscal year ended on June 30, 2015, we confirm to earn revenue of between $70 million and $90 million, and we raise our expectation to earn net income of between $1 million and $9 million, and EPS of between $0.53 and $4.72 based on fully diluted shares of 1.9 million as of Nov 15, 2014." said Mr. Weili He, Chief Operating Officer of the Company, "our guidance had incorporated the continuous improvement of receivable collection and the sustainable rebound of sales demand."

NEW YORK, Sept. 24, 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 September 23, 2014, announced its financial results for the fiscal year ended June 30, 2014.

The FY2014 sales decreased to $48.7 million, net loss reduced 30% to $16.6 million with loss per share of $11.2

The Company Provides Fiscal Year 2015 Guidance Range: Revenue, Net Income and EPS of between $70 million and $90 million, $0 million and $9 million, and $0 and $4.72 based on 1.9 million fully diluted shares, respectively.

Fiscal Year 2014 Financial Highlights and Fiscal Year 2015 Guidance

• Revenue decreased 34.6% year over year ("YOY") from $74.5 million to $48.7 million
• Net loss of $16.6 million, an increase of $7 million in positive net earnings YOY from a net loss of $23.6 million
• Loss per share of $11.2, an increase of $4.68 in positive net earnings, YOY from $15.88
• $25.8 million in working capital at June 30, 2014
• First Fiscal Quarter 2015 Guidance: Revenue of $18 million to $22 million; Net Income of -$0.5 million to $2 million; EPS of -$0.26 to $1.05 based on 1.9 million fully diluted shares.
• Fiscal Year 2015 Fully Year Guidance: Revenue of $70 million to $90 million; Net Income of $0 million to $9 million; EPS of $0 to $4.72 based on 1.9 million fully diluted shares.

Mr. Xianfu Han, Chairman and Chief Executive Officer of China ACM said, "the past couple of fiscal years had been hard for us. We had experienced the widest downturn of revenues and earnings in the Company's history. While the downturn in the real estate market and macro-economy affects every one in the concrete industry, we didn't give up. In the past couple of years, we had searched and worked very hard to find viable solution on not only how to rebuild our financial performance but also on how to better protect and sustain it in an adverse market.

For that purpose, we are transforming our core business, through which we produce and deliver concrete products to our clients, from a traditionally volume-based model to a technology-centered model. We are focusing on inventing and developing a set of new technologies that can enhance the industry's sustainability. We will use such technologies to produce new generation of concrete products that can bring better profit margins and are more eco-friendly from using recyclable construction wastes as the alternative source of raw material to reduce the expensive consumption of traditional raw materials."

Mr. Han continued, "With that, we will rebuild shareholder value through focusing on technology and product innovation, prudent revenue growth, establishing the long-term durability of our core business, sustained net profits and balance sheet discipline. Our performance in 2014 was noteworthy also due to the improved collection of account receivables and the subsequent reduction of losses."

"As we exit our recently concluded fiscal year, we look forward to a year with new technologies, new products, more clients, and new business. Again, we will focus on using efficient large-scale method to manufacture the next generation of eco-friendly, high quality concrete products from recyclable construction wastes at low cost. In addition to improve our product's profitability, the reuse of construction waste in our production will reduce the massive pollution from abandoned construction waste and contribute to lower the carbon dioxide emissions from the reduced consumption of traditional cement raw materials."

"As we had achieved early benchmarks in transforming our business model, in the brand new fiscal year, we are very confident that we are much better positioned than our competitors to take the leadership role of product and technological innovation in the global concrete industry," Mr. Han concluded.

Fiscal Year 2014 Results

Revenue. For the year ended June 30, 2014, we generated total revenue of approximately $48.7 million compared to approximately $74.5 million during the year ended June 30, 2013, a decrease of approximately $25.8 million or 34.6% . The majority of such decrease is related to the reduction of sales in the Company's business segment of concrete sales for the year ended June 30, 2014. Our concrete sales revenue was approximately $47.5 million for the year ended June 30, 2014, a decrease of approximately $21.8 million, or 31.5% compared to the year ended June 30, 2013. The decrease in revenues attributable to concrete sales was principally due to the decreased sales in the areas in which we operate. After the suspension due to the China International Garden Expo and a temporary suspension order imposed by the Beijing government for industrial activities in the area, operations at one of our concrete producing plants recommenced in the first calendar quarter of 2014, but had yet to achieve full capacity. Furthermore, China's central government imposed restrictions on residential property investments in order to regulate housing prices in China. The restriction had caused an adverse impact on the property development industry, amid the overall slowed economic growth in China.

During the year ended June 30, 2014, in the business segment of concrete manufacturing services, we continued to supply concrete products to three railway projects throughout China from our portable plants, specifically, for the railway projects in Anhui Province. These three projects contributed approximately $1.2 million to our total revenue for the year ended June 30, 2014, a decrease of approximately $4.0 million, or 76.4%, compared to the year ended June 30, 2013. The decrease in revenues attributable to our manufacturing services was principally due to the suspension of operations on a number of portable plants during the year ended June 30, 2014.

Cost of Revenue. For the year ended June 30, 2014 total cost of revenue was approximately $44.1 million compared to approximately $60.8 million during the year ended June 30, 2013, a decrease of approximately $16.7 million or 27.5% . 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 on manufacturing services compared to the year ended June 30, 2013.

The cost of revenue on concrete sales decreased by approximately $13.5 million, or 23.9%, for the year ended June 30, 2014, as compared to the year ended June 30, 2013. 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 $3.2 million, or 72.0%, during the year ended June 30, 2014, as compared to the same period last year.

Gross Profit (Loss). Total gross profit was approximately $4.6 million for the year ended June 30, 2014, as compared to approximately $13.7 million for the year ended June 30, 2013.

Our gross profit for sale of concrete was approximately $4.7 million, or 9.8% of revenue, for the year ended June 30, 2014, compared to approximately $13.0 million, or 18.8% of revenue for the year ended June 30, 2013, a decrease of approximately $8.4 million. The lower gross profit for concrete sales for the year ended June 30, 2014, compared with the year ended June 30, 2013, was primarily due to lowered production volume while we were subject to similar level of fixed costs.

Our gross loss with respect to our manufacturing services was approximately $0.04 million for the year ended June 30, 2014, a decrease of $0.66 million from $0.7 million during the year ended June 30, 2013. Such decrease was principally due to the decrease in revenue from manufacturing services for the year ended June 30, 2014, as a result of the decrease in the number of portable plants and lower production rates at our plants.

Provision for doubtful accounts. We incurred provision for doubtful accounts of $7.7 million for the year ended June 30, 2014, a decrease of $7.5 million, as compared to $15.2 million for the year ended June 30, 2013. The allowance for doubtful accounts decreased to approximately $31.7 million at June 30, 2014, as compared to approximately $36.5 million at June 30, 2013, mainly attributable to a $10.9 million write-off of bad debts against allowance balances, offset by additional provision in current year.

Selling, General and Administrative Expenses. We incurred selling, general and administrative expenses of approximately $10.7 million for the year ended June 30, 2014, a decrease of approximately $1.9 million, or 14.8%, as compared to approximately $12.5 million for the year ended June 30, 2013. The decrease was principally due to a $0.6 million decrease in advertising expense, a $0.4 million decrease in labor service expense, a $0.2 million decrease in automobile expenses and a $0.2 million decrease in meals and entertainment expense.

Research and development expenses. Research and development expenses for the year ended June 30, 2014 were $1.5 million, a decrease of approximately $0.7 million, or 31.9%, as compared to approximately $2.2 million for the year ended June 30, 2013. The Company's R&D expenditure was maintained at a certain percentage of revenue, plus any discretionary spending on projects that would help improve our competitive advantage.

Loss realized from disposal of property, plant and equipment. For the year ended June 30, 2014, we incurred $1.7 million loss realized from disposal of property, plant and equipment.

Impairment of long-lived assets. We incurred a $0.3 million impairment charge related to the carrying values of certain property, plant and equipment of our manufacturing service business segment that exceeded the estimated future cash flow from disposition of these assets.

Net loss. We recognized a net loss of approximately $16.6 million for the year ended June 30, 2014, as compared to net loss of approximately $23.6 million for the year ended June 30, 2013, a decrease of $7.0 million in net loss. Such a decrease in net loss was the result of the combination of the changes as discussed above.

Balance Sheet Overview

China ACM had working capital of $25.8 million at June 30, 2014, including $15.4 million in cash and equivalents, $13.4 million in restricted cash, $14.7 million in short term investment, $49.4 million in net accounts receivable, $35.7 million in prepayments and advances, $4.1 million in other receivables and $111.0 million in total current liabilities. Shareholders' equity was $40.4 million at June 30, 2014, compared with $56.7 million at June 30, 2013. The total number of shares outstanding as of June 30, 2014 was 1,486,871.

First Quarter and Full Year Guidance of Fiscal Year 2015

Amid the ongoing rapid changes in the construction material market, the Company was compelled to advance our competence in the concrete industry. While our traditional sales slowed in the last couple of years, we were striving to transform our core business, through which we produce and deliver concrete products to developers, from a traditionally volume-based model to a technology-centered model. In the new model, our core business will center at using efficient large-scale method to manufacture the next generation of eco-friendly, high quality concrete products from recyclable construction wastes at low cost. To build the new model, we are researching new product formulas, developing new manufacturing methods, designing new industry standards, chartering corporate-academia co-ops, and chairing industry-wide consortium with several dozens of companies and universities throughout the nation. This new model will use new eco-friendly, high quality concrete products to enhance the operational effectiveness of our existing businesses, earn new business, and thus improve our product's profitability. These works is an integral part of our mission to become the industry leader of inventing new concrete products and technological innovation and hence take leadership role in the sustainability of economy growth.

"As such, based on the management's outlook for the potential rebound of demand in the target market, for the first quarter ending September 30, 2014, management expects to earn revenue of between $18 and $22 million, and incur a net income (loss) of between $(0.5) million and $2 million, resulting in EPS of between $(0.26) and $1.05 based on fully diluted shares of 1.9 million as of Sep 23, 2014. For the full fiscal year ended June 30, 2015, management expects to earn revenue of between $70 million and $90 million, net income of between $0 and $9 million, and an EPS of between $0 and $4.72 based on fully diluted shares of 1.9 million as of Sep 23, 2014. Embedded in the forecast for the first quarter 2015 guidance and fiscal year 2015 guidance is an expectation for the continuous improvement in the account receivable collection and the potential rebound in the production demand," said Mr. Weili He, Chief Operating Officer of the Company.

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)

Management Discussion and Analysis

Revenue

Our revenue is primarily generated from sales of our advanced ready-mix concrete products and manufacturing services. For the three months ended March 31, 2014, we generated total revenue of approximately $7.0 million, as compared to approximately $7.2 million during the three months ended March 31, 2013, a decrease of approximately $0.2 million, or 3%. Such decrease was primarily due to our sales generated from the concrete division for the three months ended March 31, 2014, which was approximately $6.9 million, a decrease of approximately $0.3 million, or 4%, as compared to $7.2 million for the three months ended March 31, 2013. The decrease in revenue attributable to concrete sales was principally due to the decreased average sales price, which, compared to that of the three months ended March 31, 2013, decreased by 8% in the three months ended March 31, 2014. The decreased average sales price was mainly attributable to the increased competition in the area where we operate. The effect of decrease in unit price on revenue was partially offset by a 4% increase in sales volume, as operation of our manufacturing plant in the suburban area of Beijing commenced in the three months ended March 31, 2014.

During the three months ended March 31, 2014, we continued to supply concrete products to three railway projects in China through our portable plants, specifically our projects located in Anhui Province. Since the three months ended March 31, 2013, we suspended the operations of some of our portable plants due to inspections of high speed railroad projects by the government in China. The three railway projects contributed approximately $0.1 million to our total revenue for the three months ended March 31, 2014, an increase of approximately $0.1 million, or 1,734%, as compared approximately $6,000 for the three months ended March 31, 2013. The increase in revenues attributable to our manufacturing services was principally due to the operations of these three projects during the three months ended March 31, 2014 whereas we had minimal operation of our manufacturing service due to suspension of operations of our portable plants during the three months ended March 31, 2013.

Net Loss available to Common Shareholders

We recognized a net loss of approximately $5.0 million for the three months ended March 31, 2014, as compared to a net loss of approximately $8.8 million for the three months ended March 31, 2013, an decrease of $3.8 million in net loss. Such decrease in net loss was primarily due to the decrease in provision of doubtful accounts, selling, general and administration expenses and loss realized from disposal of property, plant and equipment, offset by the increase in provision for income taxes.

Second Quarter 2014 Financial Results

• Revenue for second quarter decreased 45% year over year to $11.8 million, as compared to $21.6 million for the second quarter last year.
• Net loss available to common shareholders of $5.7 million or loss per share of $3.83, compared to net loss of $2.36 for the second quarter last year.

Business Outlook

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.

First Quarter 2014 Financial Results

• Total revenue of approximately $10.2 million compared to approximately $30.8 million during the three months ended September 30, 2012, a decrease of approximately $20.6 million or 67.0%
• Loss per share:Basic and diluted (*) was the same as last years quarter of $(3.92)

(*) Retrospectively restated shares for a 1-for-12 reverse split

Second Quarter Fiscal Year 2014 and Fiscal Year 2014 Guidance

For the second quarter ending December 31, 2013, management expects to earn revenue of between $9 and $11 million, and incur a net income (loss) of between $1 million and $(1) million, resulting in EPS of between $0.67 and $(0.67) based on weighted average shares of 1,486,871 as of November 12, 2013.

For the fiscal year ended June 30, 2014, management expects to earn revenue of between $56 million and $58 million, net income of between $2 million and $3 million, and an EPS of between $1.35 and $ 2.02 based on weighted average shares of 1,486,871 as of November 12, 2013.

BEIJING, Aug. 23, 2013 (GLOBE NEWSWIRE) -- China Advanced Construction Materials Group, Inc. (Nasdaq:CADC) ("China ACM", the "Company"), a provider of ready-mix concrete and related technical services in China, today announced that it received a letter from The NASDAQ Stock Market LLC ("NASDAQ") on August 20, 2013 notifying the Company that it had regained compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market. During the period between and including August 2, 2013 and August 19, 2013, the Company's common stock closed at a price higher than $1.00 per share. Accordingly, NASDAQ informed the Company that it regained compliance with Listing Rule 5550(a)(2), the minimum bid price rule, and the matter is now closed.

Third Quarter 2013 Financial results

• 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) vs. last years loss of $(0.24)

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.

Fourth Quarter 2012 Results

• For the three months ended June 30, 2012, we generated revenue of $39.1 million, compared to $49.3 million during the same period in 2011, a decrease of $10.2 million.
• Net Income (loss) available to Common shareholders. We recognized net loss of approximately $5.6 million for the three months ended June 30, 2012, as compared to net income of approximately $7.0 million for the three months ended June 30, 2011, a decrease of $12.6 million.
• Loss per share for the three months ended June 30, 2012 was $0.31 vs earnings of $0.38 in prior year quarter.

Item 1.02 Termination of a Material Definitive Agreement.

On October 24, 2011, China Advanced Construction Materials Group, Inc., a Delaware corporation (the “Company”), Novel Gain Holdings Limited, a British Virgin Islands company (“Novel Gain”), CACMG Acquisition, Inc., a Delaware corporation and a wholly owned, direct subsidiary of Novel Gain (“Merger Sub”), Mr. Xianfu Han and Mr. Weili He entered into an Agreement and Plan of Merger, dated October 24, 2011 (the “Merger Agreement”), pursuant to which Merger Sub was to merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Novel Gain. The Company filed a Current Report on Form 8-K, dated October 24, 2011, reporting its entry into the Merger Agreement under Item 1.01 and providing a description of the material terms thereof and a copy of the Merger Agreement as an exhibit thereto.

On July 9, 2012, the Board of Directors of the Company, acting on the unanimous recommendation of the Special Committee of the Board of Directors, determined to terminate the merger agreement based on the determination by all parties that the conditions to consummate the Merger cannot be satisfied, and the Company and the other parties to the Merger Agreement entered into the Termination of Agreement and Merger Agreement to terminate the Merger Agreement pursuant to Section 8.1(a) thereto. The termination takes effect immediately, and no fees are payable by the Company or the other parties in connection therewith.

GeoTeam® Note: 2011 vs. 2010 Adjusted EPS of $0.00 vs. $0.10

Full Year:

Fourth Quarter:

Cost of revenue, which consists of direct labor, rentals, depreciation, other overhead and raw materials, including inbound freight charges, was approximately $35 million for the three months ended December 31, 2011, as compared to approximately $27.8 million for the three months ended December 31, 2010, an increase of approximately $7.2 million, or 26%. The increase of cost of revenue was due to the overall increase in production from our fixed concrete plants in the Beijing area compared to the three months ended December 31, 2010. The increase in cost of revenue was also due to the increase of inflation in China, as well as increases in labor and crude oil prices, which increased the costs of raw materials and transportation during this quarter compared to the prior fiscal year. We are uncertain whether crude oil prices or raw material prices will maintain at the current level in the near future. We intend to adjust our concrete prices to keep pace with changes in raw material pricing, particularly the price of cement.

NEW YORK, Jan. 19, 2012 (GLOBE NEWSWIRE) -- Mr. Ephraim Fields of Echo Lake Capital today announced he had issued the following letter to the Board of Directors of China Advanced Construction Materials Group, Inc. (Nasdaq:CADC).

• Believes $2.65 offer is grossly inadequate
• Encourages Board and shareholders to reject the buyout offer
• Doubts offer representing only 54% of book value is in best interests of shareholders
• Believes liquidation value significantly greater than current buyout offer
• Demands Board explain why shareholders would not be better served if company were liquidated

To the Board of Directors:

We are writing to (i) encourage all CADC shareholders to vote against the Chairman's proposed buyout of CADC at $2.65 per share (the "Offer") and (ii) encourage CADC's Board of Directors (the "Board") to reassess its actions and reject the Offer. Full letter.

First Quarter 2012 Results

• Revenue increased 44% year-over-year to $44.6 million
• Gross margin at 24.1%
• Non-GAAP adjusted net income available to common shareholders of $2.9 million
• Non-GAAP adjusted fully diluted EPS to common shareholders of $0.17 vs $0.19 in prior year
• GAAP net income available to common shareholders of $3.1 million or $0.17 EPS

Management Commentary

Mr. Xianfu Han, Chairman and Chief Executive Officer of China ACM, commented, "We experienced another quarter of revenue growth for China ACM. During the first quarter, volumes at our Beijing fixed plants increased as we expanded our customer base in our home market."

"However, in light of ongoing quality inspections at high-speed rail construction sites across the country, and the recent government suspension of new and ongoing high-speed rail projects, we experienced lower volumes at several of our manufacturing services division plants in the quarter. As a result, we continue to focus on managing our cost structure in anticipation of lower volumes from our portable plant network for the foreseeable future."

Fourth quarter and full year 2011 results

Fourth Quarter FY 2011 Financial Highlights

• Revenue increased 59% year over year to $49.3 million
• Gross margin at 21.9%
• Non-GAAP adjusted net income available to common shareholders of $5.3 million
• Non-GAAP adjusted fully diluted EPS to common shareholders of $0.30 vs $0.33 in 2010
• GAAP net income available to common shareholders of $7.0 million or $0.39 EPS

Fiscal Year 2011 Financial Highlights

• Revenue increased 48% year over year to $137.9 million
• Gross margin at 18.6%
• Non-GAAP adjusted net income available to common shareholders increased 2% YOY to $16.0 million
• Non-GAAP adjusted fully diluted EPS to common shareholders of $0.88 vs $0.95 in 2010
• Net income available to common shareholders rose 42% YOY to $17.1 million
• $47.2 million in working capital at June 30, 2011

Management Commentary

Mr. Xianfu Han, Chairman and Chief Executive Officer of China ACM, commented, "Fiscal Year 2011 was another year of growth and profitability for China ACM. During fiscal 2011, our volumes from our Beijing fixed plants increased as we expanded our customer base in that market. We also experienced increased volumes from our portable plant division that primarily services the build out of China's high-speed rail network."

"However, in light of the recent government suspension of new and ongoing high-speed rail projects, our near-term outlook for the manufacturing services division is uncertain. The government is conducting ongoing quality inspections at high-speed rail construction sites across the country, which has resulted in a slowdown in overall construction. As a result, we are focused on managing our cost structure in anticipation of lower volumes from our portable plant network for the foreseeable future."

BEIJING--(Marketwire -07/26/11)- China Advanced Construction Materials Group, Inc. (NASDAQ: CADC), a leading provider of ready-mix concrete and related technical services in China, today announced that its Board of Directors has received a preliminary, non-binding offer from its Chairman and Chief Executive Officer, Mr. Xianfu Han ("Mr. Han"), and Weili He, Vice Chairman and Chief Operating Officer, to acquire all of the outstanding shares of our common stock not currently owned by them in a going private transaction at a proposed price of $2.65 per share in cash. Messrs. Han and He currently beneficially own in the aggregate approximately 49.5% of our common stock.

Our Board of Directors is considering forming a special committee of independent directors (the "Special Committee") to consider any proposal that may be made by Messrs. Han and He and their affiliates, if any. If formed, the Special Committee will be authorized to retain independent legal and financial advisors to assist it. There can be no assurance that any proposal for a transaction will be made, that any agreement will be approved or executed or that any transaction will be consummated.

Third Quarter Results:

• Revenue increased 41% year over year to $23.1 million
• Gross margin at 17.5%
• Non-GAAP adjusted net income available to common shareholders of $2.4 million
• Non-GAAP adjusted fully diluted EPS to common shareholders of $0.13

"Despite having recently terminated one fixed Concrete plant lease, the third quarter 41 percent top line growth was solid and affirms that we have the right product in the right market," said Mr. Xianfu Han, Chairman and Chief Executive Officer of China ACM. "Both our revenue and our bottom line faced headwinds in the quarter with the leadership transition in China's Railway Ministry, slowing HSR business broadly. However, the same drivers of our long term growth remain intact, primarily our growing industry stature, strategic alliances, attrition of marginal concrete providers -- all fueled by China's generational urbanization and modernization.

Second Quarter FY 2011 Financial Highlights

• Revenue increased 32% year over year to $34.5 million
• Gross margin expanded to 19.4% sequentially vs.13.3% in Q1-11
• Non-GAAP adjusted net income available to common shareholders up 14.5%
  YOY to $4.9 million
• Non-GAAP adjusted fully diluted EPS to common shareholders of $0.27 vs. $0.29
• GAAP net income available to common shareholders of $3.2 million,
  decreased from $7.6 million YOY primarily on $4.8 million higher non-
  cash net expense for the change in fair value of warrants
• Quarter end backlog at record $66.7 million, up 15% sequentially from
  Q1-11
• Adjusted EBITDA of $7.1 million, up 21.4% YOY.

Commenting on the quarter's results and outlook for the balance of Fiscal Year 2011, China ACM President and Chief Financial Officer Jeremy Goodwin, stated, "While we produced solid growth in the second quarter, with the blended gross margin at 19.4 percent, we expect meaningful margin improvements in the current quarter and second half of the fiscal year as we move beyond the transition phase of a number of HSR projects underway. We have six new HSR plants coming on line. We are bidding and winning increasingly longer term HSR manufacturing contracts to minimize project transition time. I am confident we will expand HSR margins in the second half to our customary levels approaching the 40 percent range."

"Further, the third and subsequent quarters' margins will benefit by our mid-second quarter termination of one leased Concrete Sales fixed plant that had been underperforming. We plan to redeploy those resources into high-margin portable plants to support contracts in the Beijing area or for new HSR business in outlying provinces. Additionally, Concrete Sales margins will benefit from capturing the current, full quarter's 25 percent average price increase, announced midway through the second fiscal quarter, against costs that increased 20 percent at that time."

"Our diversified backlog has grown to a record $66.7 million while the new business pipeline is a healthy $28.4 million. With recently established strategic alliances with CSCEC, and others in process, our new business development is becoming more efficient, and leveraged, as we begin jointly bidding projects along with major SOE contractors, some of whom will fund capital expenditures for certain projects," Mr. Goodwin said. "Our balance sheet is strong with $3.2 million in cash, $36.0 million in working capital and no long term debt. Our accounts receivable is primarily composed of large, highly creditworthy state owned enterprises."

"Also in the second fiscal quarter, we launched our new corporate website featuring major upgrades to content to provide greater transparency for our shareholders and clients," he added. "At the end of December 2010, we engaged Friedman LLP as our independent auditor. They assisted in the preparation of this second quarter's unaudited report. In the months ahead, we target geographic expansion, joint ventures, strategic alliances and will evaluate acquisitions -- all of which increases our requirement for Friedman's world class financial management and reporting expertise."

Backlog

China ACM reported that its December 31, 2010 backlog, or bids in house, increased by 15% sequentially from September 30, 2010 to a record $66.7 million. 83% of the Dec. 31 backlog is contracted with Government State Owned Enterprise contractors and 17% is contracted with private sector developers. The backlog is comprised of $43.9 million in contracted unfilled orders for its Concrete Sales segment, and $22.8 million in contracted unfilled order for its Manufacturing Services segment. Based on its historical experience, the Company's estimated time to convert these contracted orders into recognized revenues averages between four and 12 months for Concrete Sales, and six to 24 months for Manufacturing Services, depending on the scope of the projects.

The Company's new business pipeline, or bids outstanding, which is a measure of the value of bids it has submitted for Concrete Sales and Manufacturing Services business, was $2.5 million and $25.9 million, respectively, or $28.4 million total.

Fiscal 2011 First Quarter Ended Septermber

Fully Diluted Non-GAAP EPS was  $0.19 vs. $0.23

Commenting on the quarter's results and outlook for Fiscal Year 2011, China ACM President and Chief Financial Officer Jeremy Goodwin, said, "Operationally, the first quarter of Fiscal Year 2011 was highlighted by rapidly increasing sales, higher capacity and growing new business opportunities. The start up of an unusually high number of new long term HSR contracts is quite positive, so despite a dip in first quarter margins from portable plant redeployment and start ups, the outlook for the 2011 fiscal year is robust and on track. We generated $4.93 million in EBITDA and finished the quarter with $28.8 million in working capital.

"The first quarter reflected a large number of new HSR portable plant start ups in ramp-up stage as well as an unusually high number of plants in redeployment transition whose downtime was lengthened due to a client SOE contractor's local permit issue. While start dates were delayed, those newly contracted projects will require the same number of cubic meters of the Company's premium RMC to be delivered by the originally scheduled project completion date, so that full revenue is expected to be realized subsequently.

"Concrete Sales in the quarter were impacted by higher commodity raw materials costs that increased our overall cost of goods by about two percent. As many of our Concrete Sales fixed-price contracts signed prior to the material cost increase have ended or will soon be ending, the price raise we announced today averaging 25 percent across the range of our concrete sales products is expected to boost margins back to normal levels in our second quarter. Our Manufacturing Services portable plants are unaffected by raw material costs as the client provides the raw materials.

"Additionally, two of our high margin consulting contracts in the Technical Services business expired. This Segment has been trending higher in recent years but has been highly variable, and the Company will be selectively pursuing more such contracts in our target markets around the country to replace and grow this business.

"Driven by modernization and urbanization, our addressable markets, infrastructure, continue to accelerate in growth -- unaffected by China's import/export markets. According to the Investment Research Institute of China's State Development and Reform Commission, during the 12th 5-year plan from 2011-2015 the Chinese Government will invest $450 billion in railway plus another $460 billion in rural infrastructure which plays to our strength in commercial and industrial real estate, utilities, airports rail and subway stations.

"Our diversified backlog and new business pipeline are strong, near record levels at $58 million and $31 million respectively. Given our increasing capacity, they support the outlook for a record year," Mr. Goodwin concluded.

China ACM reported first quarter Fiscal Year 2011 non-GAAP adjusted net income available to common shareholders increased 35 percent, year over year, to $3.3 million on 59 percent higher revenue of $31.0 million. The non-GAAP adjusted net income available to common shareholders is before non-cash change in fair value of warrants, option and equity-based compensation.

First quarter Manufacturing Services revenue increased by 59 percent to a record $4.5 million year over year with a 28.1 percent gross margin. Technical Services revenue decreased by 7 percent to $1.2 million with a 91 percent gross margin. Concrete Sales revenue at our fixed plants in Beijing increased by 70 percent to $25.3 million with a gross margin of 7.2 percent.

The Company's first quarter blended gross margin was 13.3 percent, declining from 16.9 percent a year ago temporarily reflecting portable plant projects completion ramp down, relocation delays and new portable plant projects ramp up, higher seasonal concrete sales raw material costs as well as higher margin Technical Services contracts expiring.

Backlog

China ACM reported that, on September 30, its backlog, or bids in house, was $58 million, 82% of which is contracted with Government State Owned Enterprise contractors and 12% contracted with private sector developers. This is comprised of $33 million in contracted unfilled orders for its Concrete Sales segment, and $25 million in contracted unfilled order for its Manufacturing Services segment. Based on its historical experience, the Company's estimated time to convert these contracted orders into recognized revenues averages is between six and twelve months for Concrete Sales, and 12 to 30 months for Manufacturing Services depending on the scope of the project.

The Company's new business pipeline, or bids outstanding, which is a measure of the value of bids it has submitted for either Concrete Sales and Manufacturing Services business, was $16 million and $15 million, respectively, or $31 million total.

Market Opportunity

The China Ministry of Rail has announced its plans to invest $120.75 billion in 70 new projects upgrading rail infrastructure in calendar 2010 which together with future planned rail infrastructure investment will total $730 billion by 2020. China's State Development and Reform Commission recently announced plans to expand China's subway system to 6,100 KM investing $105 billion through 2020.

According to a recent article in The Journal of Commerce, infrastructure spending in Asia (not including Japan) could total roughly $1.4 trillion in the next two years, with China committing $585 billion or more. India is also projected to spend more than $500 billion by 2015. China is already at work on 12 major highway projects connecting rural areas to urban centers, which will give the country 53,000 miles of highways by 2020.

China is also in the midst of a $200 billion campaign to expand its railways and freight-handling facilities, and plans to build 97 new airports by 2020, including 10 with the capacity to handle more than 30 million passengers per year. All told, China is expected to account for more than 28 percent of global infrastructure spending totaling $70 trillion over the next two decades, reports CG/LA Infrastructure LLC, a Washington-based consulting firm for the construction industry.

Comparison of the years Ended June 30, 2010 and 2009

• Revenue of $93,040,847 compared to $39,714,802 during the same period of 2009, an increase of $53,326,045 or 134%.
  
• Cost of Sales  was $73,704,701 for the year ended June 30, 2010, as compared to $24,518,042 for the year ended June 30, 2009, an increase of $49,186,659, or 201%. The increase of cost of revenue was due to overall increase in production from our five fixed concrete plants in the Beijing area and increased production on manufacturing and technical services as well as other services compared to the same period in 2009. The increase in cost of sales was also due to the addition of seven new portable plants, the increases in crude oil prices which increased the costs of raw materials and transportation during this quarter compared to the same period last year. We are uncertain whether crude oil prices will maintain at the current level in the near future.
  
• GAAP net income of $13,006,395 for the year ended June 30, 2010, as compared to net income of $12,068,489 for the same period in 2009, an increase of $937,906.
  
• GAAP EPS of $0.79 vs. $0.86.
  
• Company provided non-GAAP EPS of $0.95 vs $0.82.

GeoTeam® Note: We adjusted EPS by adding back non-cash charges, subtracting subsidy income and applying a tax rate of 25.0%.  This yields EPS 0.65 vs. 0.76. The company did not subtract subsidy income in its non-GAAP EPS calculation.

Added to the GeoSpecial list on 9/23/2009 @ $4.75.

    Catalyst: Appeared that EPS was about to go into second gear; Direct beneficiary from China stimulus package

    Peak performance: Reached a high of $8.50 on 10/20/2009

    Current road block: Dilution will hinder EPS growth despite sharp rise in revenue.  2011 growth is forecast to be only 16%, with most quarters under 10%.

    Removed from the GeoSpecial list

GeoSpecial CADC reported 2010 second quarter results yesterday. on a GAAP basis it looked like a stellar quarter. But a closer look at GeoCalculated non-GAAP results, after adjusting for non-operating items, revealed less impressive results.

Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures. We also applied a 25% tax rate.

Our non-GAAP EPS number differs from the company’s non-GAAP number as, in addition to subtracting a warrant gain, we also subtracted "other subsidy income." Doing this portrays a much different picture and highlights that net income growth did not nearly keep up pace with revenue growth.

Comments in its 10Q explained that margins had suffered due to increased oil prices..

"The increase of cost of revenue was due to overall increase in production from our five fixed concrete plants in the Beijing area and increased production on manufacturing and technical services as well as other services compared to the same period in 2008. The increase in cost of sales was also due to increases in crude oil prices which increased the costs of raw materials and transportation during this quarter compared to the same quarter last year. The cost of sales on concrete increased $12,459,399 this fiscal quarter compared to the same quarter last year. Such increase was due to an increase in our concrete production as a result of additional plants we added during this fiscal quarter, as well as the increase in crude oil prices as indicated above as compared to the same period last year. Cost of sales with respect to our manufacturing services increased $1,267,766 during the fiscal quarter ended December 31, 2009, as compared to the same quarter last year. Such increase was due to the increase in total operational capacity and a decrease in the utilization rate for the two new portable plants we added to our operations, as well as an increase in transportation costs."

The company did comment that it has seen  improvements in its efficiencies:

"Our production and utilization rate started picking up during the quarter as the celebration of National Day of PRC came to an end in the beginning of October. However, we are uncertain whether the crude oil prices will maintain at the current level in the near future."

The GeoTeam is faced with a difficult decision, especially as we are generally attempting to be more selective in our stock selection process. As the global economy continues to accelerate, we fear that the rise in commodity prices may continue, leaving us to ponder how this will impact CADC's future bottom line.

Overall, the earnings conference call was bullish, so we will keep CADC coded as a GeoSpecial, mainly due to its low fully adjusted trailing P/E of 6.76.  But it will not be one of our top portfolio choices until we attain a better grip on how CADC financial results will be impacted by a rise commodity prices. Also, the company is facing challenging EPS comparisons for its third and fourth quarters of $0.19 and $0.20, respectively.

**The GeoTeam assumed that the above targets utilized the company's current tax rate of 16%. In 2008 the company earned net income of $5,130,797 and EPS of $0.57.

**The GeoTeam® is attempting to verify the outstanding share count.

Source: SEC Form S-1/A ( January 2, 2009)

As part of a private placement transaction, China ACM entered into a Make Good Escrow Agreement whereby the company must achieve certain net income milestones

Net Income Milestones: (adjusted for certain transaction related charges).


1). Fiscal year ended June 30, 2008 $5.2 million

2). Fiscal year ended June 30, 2009 $9.0 million

Source: PR Newswire (June 16, 2008)