Net income increases to $4.9 million in fiscal 2008 compared to
$3.9 million in fiscal 2007 NEW YORK and BEIJING, Oct. 3
/PRNewswire-FirstCall/ -- China Advanced Construction Materials
Group, Inc. ("China ACM") (OTC:CADC) (BULLETIN BOARD: CADC) today
announced financial results for the twelve months ended June 30,
2008. Mr. Xianfu Han, Chairman and Chief Executive Officer, stated,
"We are pleased with our strong financial performance for fiscal
2008, as illustrated by a 31% increase in revenue and 44% increase
in gross profit. We attribute this performance to the growing
interest in our technically advanced concrete products, which
translated into new contract awards and acceleration of existing
projects. New contract awards in fiscal 2008 included the JinYuChi
Office & Hotel project, the HeXie Garden residential project
and the XiaoHongMen New Village. China ACM's market share currently
represents less than 7% of the open tendered ready-mix concrete
market in Beijing, and we seek to capture additional market share
through the innovation of new materials, expanding our geographic
footprint and building long-term relationships with top
construction companies, general contractors, engineers and the
Chinese government." Mr. Han continued, "During fiscal 2008, we
increased our concrete production to nearly 700,000 cubic meters of
ready-mix concrete to support our growing portfolio of landmark
projects. In June 2008, we completed a $7 million private placement
to help facilitate our further growth through the construction of
new plants. We recently completed our portable plant to support our
involvement in the Beijing to Shanghai High Speed Railway project,
which will add an additional 400,000 cubic meters of annual
production capacity. We have also entered into technical consulting
and joint venture agreements with several independently-owned
mixture stations. We expect to expand upon this higher margin
business in the months ahead and to continue the vertical
integration of our operations." Mr. Han concluded, "Overall, our
proven ability to provide a superior product accounts for our
increasing number of repeat customers and high recurring revenue.
We have recently been awarded contracts that are expected to
account for nearly one million cubic meters of ready-mix concrete
through December 2009. In addition to our involvement with the
Beijing to Shanghai high-speed railroad, other projects recently
undertaken include the East Datong to Gudian railway project and
the Beijing to Shi Jiazhuang high-speed railroad. As a result of
these and other opportunities underway, we are confident in our
ability to achieve net income of at least $9 million for the fiscal
year ending June 30, 2009, after adjusting for certain
transaction-related charges and expenses." Revenue for the twelve
months ended June 30, 2008 increased 30.7% to $27.6 million,
compared to $21.1 million for fiscal 2007. Net income for the
twelve months ended June 30, 2008 increased 26.9% to $4.9 million
compared to net income of $3.9 million for the same period in
fiscal 2007. Net income for fiscal 2008 included cash and non-cash
expenses associated with the reverse merger of BVI-ACM and the
preferred stock offering, totaling $420,159. Excluding these
transaction related expenses, the company achieved net income of
$5.4 million for the fiscal year ended June 30, 2008. Additionally,
the company became subject to a 25% income tax starting January 1,
2008, which the company did not incur in fiscal 2007. As of
September 29, 2008, China ACM had 10,525,000 shares of common stock
issued and outstanding. About China ACM China ACM, founded in 2002
and based in Beijing, China, is a leading producer of advanced
construction materials for large scale commercial, residential, and
infrastructure developments. The company is primarily focused on
producing and supplying a wide range of advanced ready-mix concrete
materials for highly technical, large scale, and environmental
construction projects. The company also aims to develop and produce
new and innovative environmentally conscious construction
materials. China ACM provides materials and services through its
seven ready-mix concrete plant network covering Beijing
metropolitan area. China ACM owns one plant, leases two plants and
has technical services and preferred procurement agreements with
four other independently-owned plants. China ACM is ISO 9001
(product quality), ISO 14001 (environmental safety), and ISO 18001
(employment environment safety) certified. Additional information
about the company is available at http://www.china-acm.com/. This
press release contains "forward-looking statements" within the
meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results
expressed or implied by such statements, including changes from
anticipated levels of sales, future national or regional economic
and competitive and regulatory conditions, changes in relationships
with customers, access to capital, difficulties in developing and
marketing new products, marketing existing products, customer
acceptance of existing and new products, and other factors.
Additional Information regarding risks can be found in the
Company's Annual Report on Form 10K and in the Company's recent
report on Form 8K filed with the SEC. Accordingly, although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. The
Company has no obligation to update the forward-looking information
contained in this press release. Contact: Crescendo Communications,
LLC David Waldman or Klea Theoharis Tel: (212) 671-1020 Email: Web:
http://www.china-acm.com/ (tables follow) CONSOLIDATED BALANCE
SHEETS AS OF JUNE 30, 2008 AND 2007 2008 2007 ASSETS CURRENT
ASSETS: Cash $ 1,910,495 $ 1,424,883 Restricted cash 913,092 -
Investments 61,767 69,209 Accounts receivable, net of allowance for
doubtful accounts of $224,924 and $53,038, respectively 9,365,486
12,388,484 Inventories 237,836 416,420 Other receivables 505,968
1,227,622 Prepayment 3,240,394 512,874 Total current assets
16,235,038 16,039,492 PLANT AND EQUIPMENT, net 16730220 7894876
OTHER ASSETS: Financing cost 586,818 - Accounts receivable
(non-current), net of allowance for doubtful accounts of $411,061
and $96,929, respectively 4,753,006 2,243,566 Total other assets
5,339,824 2,243,566 Total assets $ 38,305,082 $ 26,177,934
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts
payable $ 6,293,553 $ 8,453,884 Customer deposits 165,434 - Short
term loans 4,271,222 5,876,735 Other payables 254,259 142,330 Other
payables - shareholder 880,302 - Accrued liabilities 145,207
208,093 Taxes payable 1,073,237 661 Current portion of contribution
payable - 750,000 Total current liabilities 13,083,214 15,431,703
Contribution payable - 4,250,000 Redeemable preferred stock ($0.001
par value, 875,000 and 0 shares issued) 5,831,452 - net of discount
of $1,168,548 and $0 at June 30, 2008 and 2007, respectively Total
liabilities 18,914,666 19,681,703 COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY: Preferred stock $0.001 par value, 1,000,000
shares authorized, 875,000 redeemable preferred shares issued and
outstanding in 2008, and reported in liabilities Above - - Common
Stock, $0.001 par value, 74,000,000 shares authorized, 10,525,000
and 8,809,583 shares issued and outstanding, respectively 10,525
8,810 Paid-in-capital 13,494,105 12,091,290 Contribution receivable
(1,210,000) (13,470,100) Deferred Compensation (27,708) - Retained
earnings 3,072,249 6,309,675 Statutory reserves 1,452,779 896,634
Accumulated other comprehensive income 2,598,466 659,922 Total
shareholders' equity 19,390,416 6,496,231 Total liabilities and
shareholders' equity $ 38,305,082 $ 26,177,934 CONSOLIDATED
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE YEARS
ENDED JUNE 30, 2008 AND 2007 2008 2007 REVENUE $ 27,565,044 $
21,082,534 COST OF SALES 20,799,398 16,393,134 GROSS PROFIT
6,765,646 4,689,400 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
1,946,541 1,273,415 INCOME FROM OPERATIONS 4,819,105 3,415,985
OTHER INCOME, NET Other subsidy income 1,586,192 1,264,952
Non-operating (expense) income, net (79,312) 14,494 Interest
expense, net (367,833) (797,378) TOTAL OTHER INCOME, NET 1,139,047
482,068 INCOME BEFORE PROVISION FOR INCOME TAXES 5,958,152
3,898,053 PROVISION FOR INCOME TAXES 1,012,382 - NET INCOME
4,945,770 3,898,053 OTHER COMPREHENSIVE INCOME: Unrealized (loss)
gain from marketable securities (12,482) 8,523 Foreign currency
translation adjustment 1,951,026 461,570 COMPREHENSIVE INCOME $
6,884,314 $ 4,368,146 EARNING PER SHARE Basic Weighted average
number of shares 9,064,359 8,809,583 Earning per share $ 0.55 $
0.44 Diluted Weighted average number of shares 9,255,616 8,809,583
Earning per share $ 0.35 $ 0.44 CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE YEARS ENDED JUNE 30, 2008 AND 2007 2008 2007 CASH
FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,945,770 $ 3,898,053
Adjustments to reconcile net income to cash provided by operating
activities: Depreciation 1,178,745 1,091,740 Amortization of
discount on capital lease - 121,834 Amortization of financing cost
15,682 - Amortization of discount on convertible preferred stock
33,387 Loss on disposal of equipment - 7,638 Bad debt expense, net
of recovery 443,171 - Warrants issued for services 169,345 -
Amortization of deferred compensation expense 5,542 - Changes in
operating assets and liabilities Accounts receivable (4,831,494)
(11,539,141) Inventories 211,569 (141,789) Other receivables
1,109,454 345,625 Other receivables - shareholders - 96,068
Prepayment (2,523,568) (498,652) Accounts payable 3,157,464
10,056,683 Customer deposits 156,125 - Other payables 108,430
(474,761) Accrued liabilities (80,851) (130,365) Taxes payable
1,012,153 643 Net cash provided by operating activities 5,110,924
2,833,576 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of
property, plant, and equipment (8,701,026) (241,004) Net cash used
in investing activities (8,701,026) (241,004) CASH FLOWS FROM
FINANCING ACTIVITIES: Borrowings under short term loans 3,925,075
481,763 Principal payments under short term loans (5,906,096) -
Restricted cash (913,092) - Proceeds from issuance of redeemable
preferred stock 6,397,500 - Proceeds from capital contribution 100
- Proceeds from advances by shareholder 873,020 - Payments on
capital lease obligations - (2,090,368) Net cash provided by (used
in) financing activities 4,376,507 (1,608,605) EFFECTS OF EXCHANGE
RATE CHANGE IN CASH (300,793) 37,094 INCREASE IN CASH 485,612
1,021,061 CASH, beginning of year 1,424,883 403,822 CASH, end of
year $ 1,910,495 $ 1,424,883 DATASOURCE: China Advanced
Construction Materials Group, Inc. CONTACT: David Waldman or Klea
Theoharis, both of Crescendo Communications, LLC for China Advanced
Construction Materials Group, Inc., +1-212-671-1020, Web Site:
http://www.china-acm.com/
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