China Architectural Engineering, Inc. (CAEI)

[kuwlness]

10Q out, monstrous 400% backlog increase. Still getting sold down in pre-market ... time to back up the truck!!


As of June 30, 2009, the total value of backlog quadrupled sequentially to $550 million, from $136 million in the prior quarter. The backlog includes the previously announced Nine Dragons Resort project, which has a three year duration and represents $500 million of the backlog, in addition, to the Changsha Riverfront Cultural Park Museum and Changsha High Speed Train Station projects. CAE defines backlog as the total anticipated revenue from projects already begun and upcoming projects for which contracts have been signed or awarded and pending signing.

Revenues from contracts for the second quarter of 2009 were $30.6 million, versus $41.4 million in second quarter of 2008, as the Company proactively halted the large Singapore project mentioned above. Gross profit was $10.0 million, compared to $13.3 million for the same period last year. Despite of the decrease in gross profit, gross margin increased 50 basis points year-over-year to 32.7% from 32.2% in the prior year's period, and sequentially by 1,000 basis points, from 22.5% in the first quarter of 2009. The strong gross margin expansion reflects the Company's increased leverage from its advanced design capabilities and higher design revenue in the mix.