SOURCE: China ACM

China ACM

May 05, 2011 16:01 ET

China ACM Announces Preliminary Q3 FY11 Results and Q3 Reporting Date

BEIJING--(Marketwire - May 5, 2011) - China Advanced Construction Materials Group, Inc. (NASDAQ: CADC) ("China ACM"), a leading provider of ready-mix concrete and related technical services in China, today announced preliminary results of its Fiscal Year 2011 third quarter ended March 31, 2011.

China ACM will release complete financial results for the quarter on Friday, May 13, 2011. The Company will host a conference call with a live webcast and a full Q&A session on Friday, May 13 at 10:00 a.m. Eastern time/7:00 a.m. Pacific time, to discuss those results. Details are provided below.

China ACM's third quarter results were impacted by slow holiday plant activity in its Concrete Sales Division during the Chinese New Year holidays, higher new plant start-up expenses, and delays in its Manufacturing Services Division. Based on these factors, the Company expects to report third quarter revenue of approximately $23 million and GAAP Net Income Available to Common Shareholders of between $3.3 million and $3.6 million, or $0.18 to $0.20 per share on a fully diluted basis. Included in these results is income from the change in fair value of warrants liability of approximately $1.4 million and a non-cash expense of approximately $300,000 for equity based compensation.

"The March quarter is always our seasonally weakest quarter, however, our 2011 third quarter was weaker than usual for a couple of reasons," said Jeremy Goodwin, China ACM President and Chief Financial Officer. "First, we faced increased margin pressure in our Manufacturing Services Division as we incurred higher ramp-up costs associated with delays in putting several new portable plants into service and higher ramp-down costs associated with delays in decommissioning plants nearing project service completion due to the leadership transition in China's Railway Ministry, which impacted many companies in the High Speed Rail sector during the quarter. Second, we experienced rising fuel and labor costs. We were able to offset some of these margin declines with margin improvements in our concrete sales segment, but not enough to compensate for the shortfall as the month of February generated only a fraction of our normal production levels throughout our entire production network due to the extensive Chinese New Year holiday season during the month of February."

Q3-FY11Report and Conference Call
Individuals interested in participating in the Q3-FY11 conference call and Q&A session may do so by dialing 877-941-8609 from the United States, or 480-629-9692 from outside the United States and referencing conference ID #4438159. Those interested in listening to the conference call live via the Internet may do so by visiting the Investor Relations section of the Company's Web site at www.china-acm.com. A telephone replay will be available through May 20, 2011, by dialing 800-406-7325 from the United States, or 303-590-3030: from outside the United States, and entering conference ID #4438159. A webcast replay will be available for 90 days.

About China ACM
China ACM is a leading producer of advanced, certified eco-friendly ready-mix concrete (RMC) and 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 numerous 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.

Founded in 2002, Beijing-based China ACM provides its materials and services through its network of fixed ready-mix concrete plants covering the Beijing metropolitan area. It also has technical consulting services and preferred procurement agreements with other independently-owned plants across China. Additionally, the Company owns numerous portable plants deployed in various provinces across China primarily to major high speed rail projects. More information about the Company is available at www.china-acm.com.

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, 2010. 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.

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