China Advanced Construction Materials Group, Inc (CADC) SEC Filing 10-Q Quarterly report for the period ending Sunday, December 31, 2017

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China ACM Reports First Quarter Fiscal Year 2016 Results, Provides Quarterly Guidance for the Second Quarter of Fiscal Year 2016, and Updates the Full Year Guidance for Fiscal Year 2016

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 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  
             

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


 


The following information was filed by China Advanced Construction Materials Group, Inc on Tuesday, November 17, 2015 as an 8K 2.02 statement, which is a press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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  • Form Type: Quarterly
  • Number of times amended: 0
  • Accession Number: 0001062993-18-000689
  • Submitted to the SEC: Tuesday, February 13, 2018
  • Accepted by the SEC: Tuesday, February 13, 2018
  • Period Ending: December 2017
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