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China Advanced Constructn Mtrls Grp Inc (NASDAQ:CADC) announced financial results for the three-months ended March 31, 2015. The revenue declined 27% YOY to $5.1 million. The decline in revenue was due to the drop in production volume in the quarter resulting out of the delays in some of company’s clients’ production activities. The cost of sales declined 25% to $5.3 million in 3Q2015.

The unexpected delays were caused by the long and complex bureaucratic procedures for clients to get construction permits. The Beijing government made the regulations in the construction industry more stringent. The efforts were undertaken as a part of the environmental protection measures to enhance air quality in the urban area.

The financials

China Advanced reported that gross loss in the quarter came at $0.2 million compared to gross loss of almost $0.1 million for the quarter ended March 31, 2014. The decline in gross profit was primarily due to the lower production volume while the company was subject to comparatively similar level of fixed costs.

The net income came at almost $1.0 million in 3Q2015 against net loss of nearly $5 million for the quarter ended March 31, 2014. The drastic change of $6 million was the result of combination of the factors as highlighted above. China Advanced reported working capital of $28.9 million at the end of 3Q2015.

The guidance

For the three months ended on June 30, China Advanced Constructn Mtrls Grp Inc (NASDAQ:CADC) expects the revenue to come in between $10 million and $15 million. The net loss is projected to come in a range of $2 million to $3 million, while EPS is anticipated between $(0.95) and $(1.43).

For FY2015, the revenue is expected to come in a range of $54 million to $59 million. The net loss for the year can fall in between $3.5 million and $4.5 million while EPS is expected in a range of $(1.67) to $(2.14).

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