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Asia Carbon Industries, Inc. Reports Record Third Quarter Financial Results Sales Up 62%, Net Income Increased 87% Compared to Same Period 2010

NEW YORK, Nov. 15, 2011 /PRNewswire-Asia/ -- Asia Carbon Industries, Inc. ("Asia Carbon", or the "Company") (OTC BB: ACRB) today announced its earnings for the quarter ended September 30, 2011. The Company, whose shares trade in the U.S. under the stock symbol "ACRB", filed its quarterly report on Form 10-Q with the Securities and Exchange Commission on November 15, 2011.

Highlights of Third Quarter 2011 Financials

  • Revenues for the third quarter of 2011 increased 62% to $10,997,216 million in 2011 from $6,788,372 million for the same period in 2010.
  • Gross profit doubled to $2.6 million in the third quarter of 2011 from $1.3 million for the same period in 2010.
  • Net income for the quarter ended September 30, 2011 increased 87% to $1,527,662 in 2011 from $816,145 for the same period in 2010.
  • Earnings per share were at $0.03 for the three months ended September 30, 2011, compared to $0.02 for the same period in 2010.

Sales for the three months ended September 30, 2011 totaled $10,997,216, an increase of $4,208,844 or 62%, compared to $6,788,372 for the three months ended September 30, 2010. The increase was primarily attributed to the increase in product sales.

The Company sold 11,498 metric tons of carbon black and naphthalene oil, an increase of 3,792 metric tons, or 49%, compared to 7,706 metric tons in the comparable period of 2010. The Company also implemented a price increase of $75, to $956 per metric ton from $881 per ton during the third quarter of 2010.

Gross profit increased 100% to $2.6 million in the third quarter of 2011 from $1.3 million for the same period in 2010. The gross margin increased from 19% of sales in the third quarter of 2010 to 24% of sales in the third quarter of 2011.

Net income was $1,527,662 for the three months ended September 30, 2011, an increase of $711,517, or 87%, compared to $816,145 for the same period in 2010. Increase in net income resulted from new production capacity and improved gross margin rate.

The Company's total carbon black production capacity was 61,000 and 35,000 tons per annum as of September 30, 2011 and 2010, respectively. The prorated production/total capacity utilization rate was 72% and 82% during the three months ended September 30, 2011 and 2010, respectively.

Yao Guoyun, Asia Carbon's Chairman of the Board and Chief Executive Officer, commented, "Our continued improvement in performance is attributed to a strong, high-quality product line and dedication to satisfying our customers. We continue to benefit from the increased capacity provided by the launch of our production line in the fourth quarter of 2010. China's economy continues to demonstrate growth, particularly in the automotive sector, and we anticipate that demand for our products will follow this trend."

Ms. Guoyun went on to say, "With this in mind the Company has created an expansion strategy that will enable us to continue increasing our revenue and improve our productivity. The next step in our expansion strategy will be the construction of an on-site power plant. We anticipate breaking ground on this self-funded project within the next 60 days."

This release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

About Asia Carbon Industries, Inc.

Asia Carbon Industries Inc. is an emerging, China-based producer of a series of high quality carbon black products under the brand name "Great Double Star." The Company was stablished in 2003 in Shanxi, China's highest coal producing province. Asia Carbon is one of the top ten carbon black producers in the province and has established relationships with a high-profile customer base. The Company went public in 2010 through a registration statement on Form S-1 which was declared effective by the SEC on October 26, 2010, and is currently in the process of expanding its manufacturing capacity to meet the anticipated demand.

Forward-looking statements:

The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances, and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based.

Company contact:

Mark Lubchenco
Asia Carbon Industries, Inc.
Phone  +1-646-328-1502

ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AT











September 30,


December 31,




2011


2010




(Unaudited)



ASSETS





Current Assets:






Cash and equivalents


$   7,379,825


$     5,717,142


Accounts receivable, net


4,643,860


6,034,573


Inventories


2,344,754


1,476,061


Prepaid expenses


6,272


6,061


Total Current Assets    


14,374,711


13,233,837







Property and Equipment, Net


16,276,509


11,031,788







Other Assets:






Idle assets, net


869,241


959,967


Land use rights, net


215,494


211,770


Total Other Assets


1,084,735


1,171,737







TOTAL ASSETS


$ 31,735,955


$   25,437,362







LIABILITIES AND STOCKHOLDERS' EQUITY





Current Liabilities:






Short term debt


$   1,357,888


$   1,312,163


Accounts payable


3,532,650


3,913,207


Accrued liabilities


164,754


163,518


Taxes payable


774,870


896,351


Investor deposit payable


71,440


-


Due to shareholder


26,139


19,855


Total Current Liabilities


5,927,741


6,305,094







Stockholders' Equity:






Series A Convertible Preferred Stock, $0.001 par value, 5,000,000  authorized, none issued and outstanding


-


-


Blank Check Preferred Stock, $0.001 par value, 5,000,000  authorized, none issued and outstanding


-


-


Common stock, $0.001 par value, 100,000,000 authorized, 50,784,987 and 50,608,077 issued and outstanding at Sept 30, 2011 and Dec 31, 2010, respectively


50,785


50,608


Additional paid-in capital


5,808,753


5,533,737


Statutory reserves


1,224,559


1,224,559


Retained earnings


16,242,585


10,628,010


Accumulated other comprehensive income


2,481,532


1,695,354


Total Stockholders' Equity


25,808,214


19,132,268

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$ 31,735,955


$   25,437,362









ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)



Three Months Ended

September 30,

Nine Months Ended

September 30,



2011

2010

2011

2010







Net Sales

$ 10,997,216

$  6,788,372

$ 37,939,604

$ 17,938,324

Cost of Sales

8,364,288

5,482,802

29,176,666

15,049,046

Gross Profit

2,632,928

1,305,570

8,762,938

2,889,278







Operating Expenses:






Depreciation

58,342

16,325

172,847

48,697


Bad debts

-

7,060

1,124

31,254


Selling

79,419

34,953

222,906

104,589


Professional fees

207,621

56,881

365,299

334,209


Other

109,745

39,910

219,217

108,897


 Total Operating Expenses

455,127

165,129

981,393

627,646

Income From Operations

2,177,801

1,140,441

7,781,545

2,261,632

Other Income and (Expense)






Interest income

9,855

-

18,803

-


Interest expense

(45,690)

(33,215)

(103,750)

(103,914)


Total Other Income and (Expense)

(35,835)

(33,215)

(84,947)

(103,914)

Income Before Provision for Tax

2,141,966

1,107,226

7,696,598

2,157,718

Provision for tax

614,304

291,081

2,082,023

646,377

Net Income

1,527,662

816,145

5,614,575

1,511,341







Other comprehensive income

331,360

223,686

786,178

328,603

Comprehensive Income

$  1,859,022

$  1,039,831

$  6,400,753

$  1,839,944







Net Income Per Share - Basic

$  0.03

$  0.02

$  0.11

$  0.03

Net Income Per Share - Diluted

$  0.03

$  0.02

$  0.11

$  0.03

Weighted Average Shares Outstanding – Basic

50,642,690

50,608,077

50,619,741

47,806,241

Weighted Average Shares Outstanding - Diluted

50,642,690

50,608,077

50,619,741

47,806,241




SOURCE Asia Carbon Industries, Inc.




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