China ACM Announces First Quarter's Results Met Guidance, Provides Second Quarter's Guidance, and Raises Full Year Guidance for Fiscal Year 2015

New York, New York--(Newsfile Corp. - November 17, 2014) - 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, 2014, reported financial results for the first quarter of the fiscal year ended June 30, 2015. 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.

First Quarter Fiscal Year 2015 Financial Highlights

• Quarterly revenue doubled from $10.2MM to $21.2MM by 109% year over year, met previously provided guidance of between $18MM and $22MM.
• Quarterly net income rose above break-even after three-year losses, met previously provided guidance of between $(0.5)MM and $2MM.
• Quarterly net income available to common shareholders amounted to $0.1MM from $(5.8)MM quarterly loss year over year.
• Doubtful accounts recovered $1.0MM during the quarter, improved by $4.1MM year over year, as compared to a provision of $3.0MM for the same quarter a year ago.
• Allowance for doubtful accounts decreased to $29.9MM by 5% from a quarter ago.

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.

First Quarter Fiscal Year 2015 Results

Revenue. For the three months ended September 30, 2014, we generated total revenue of approximately $21.2 million compared to approximately $10.2 million during the three months ended September 30, 2013, an increase of approximately $11.1 million or 109%. The majority of our sales revenue consists of the concrete sales. The increase in revenues was principally due to the commencement of operation of our manufacturing plant in the suburban area of Beijing in early 2014. In addition, 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 and regained capacity, which contributed to the increase in revenue.

Cost of Revenue. For the three months ended September 30, 2014, we incurred total cost of revenue of approximately $19.3 million compared to approximately $9.0 million for the three months ended September 30, 2013, an increase of approximately $10.3 million, or 114%. The increase of cost of revenue was primarily due to the increase in production from our fixed concrete plants in the Beijing area. The majority of our cost of revenue consists of the cost of concrete production. Such increase was due to the increase in our concrete production volume.

Gross Profit. Total gross profit was approximately $1.9 million for the three months ended September 30, 2014, as compared to approximately $1.1 million for the three months ended September 30, 2013. Our gross profit for sale of concrete was approximately $1.9 million, or 9% of revenue, for the three months ended September 30, 2014, compared to approximately $1.1 million, or 11% of revenue for the year ended three months 30, 2013, an increase of approximately $0.8 million. The increase in gross profit for concrete sales during the three months September 30, 2014, as compared with the three months ended September 30, 2013, was primarily due to the increased production volume.

Provision for Doubtful Accounts. The recovery of doubtful accounts was approximately $1.0 million for the three months ended September 30, 2014, a change of approximately $4.1 million, as compared to a provision of approximately $3.0 million for the three months ended September 30, 2013. The allowance for doubtful accounts decreased to approximately $29.9 million at September 30, 2014, as compared to approximately $31.7 million at June 30, 2014, mainly attributable to the recovery of certain doubtful accounts.

Selling, General and Administrative Expenses. We incurred selling, general and administrative expenses of approximately $2.7 million for the three months ended September 30, 2014, a decrease of approximately $0.2 million, or 8%, as compared to approximately $2.9 million for the three months ended September 30, 2013. The decrease was principally due to a $0.4 million decrease in consulting expense, offset by a $0.1 million increase in rental expense and a $44,000 increase in stock-based compensation.

Research and Development Expenses. Research and development expenses for the three months ended September 30, 2014 was $0.5 million, an increase of approximately $0.3 million, or 145%, as compared to approximately $0.2 million for the three months ended September 30, 2013, The Company's research and development expenditure was maintained at a certain percentage of revenue and adjusted by outside consultants on certain projects based on economic outlook, plus discretionary spending on projects that helped to improve our competitive advantage.

Loss Realized from Disposal of Property, Plant and Equipment. For the three months ended September 30, 2014 and 2013, we incurred $0.1 million and 1.4 million loss realized from disposal of property, plant and equipment.

Net Income (Loss). We recognized net income of approximately $0.1 million for the three months ended September 30, 2014, as compared to net loss of approximately $5.8 million for the three months ended September 30, 2013, a change of $5.9 million from net loss to net income. Such change was the result of the combination of the changes as discussed above. We stopped 11-quarter consecutive net losses during the three months ended September 30, 2014.

Balance Sheet Overview

China ACM had working capital of $28.8 million on September 30, 2014. The working capital includes $3.9 million in cash and equivalents, $9.3 million in restricted cash, $10.7 million in short term investment, $53.2 million in accounts receivable, $39.3 million in prepayments, $4.9 million in other receivables, and $97.3 million in total current liabilities. Shareholders' equity was $42.4 million compared with $40.4 million at June 30, 2014. The total number of shares outstanding as of November 15, 2014 was approximately 1.9 million.

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."

Conference call

The Company will host a conference call with a live webcast and a full Q&A session on Monday, November 17, 2014, at 8:00 a.m., Eastern Time, to discuss financial results for the first quarter of the 2015 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 13595553.

To pre-check system compatibility prior to the call, visit http://www.investorcalendar.com/aboutus/HelpDesk.asp

A webcast replay will be available until Dec 17, 2014 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 and provider of related technical services for large scale, high-speed rail (HSR) 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.

More information about the Company is available at http://www.ir-site.com/cadc/index.asp.

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)

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

CHINA ADVANCED CONSTRUCTION MATERIALS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

CONTACT: China ACM Investor Relations

Phone: +86-10-82525361
E-mail: IR@china-acm.com