Asia Carbon Industries, Inc. Reports Second Quarter Financial Results Sales Up 131%, Net Income Increases 424% Compared to Prior Year

NEW YORK, Aug. 16, 2011 /PRNewswire-Asia/ -- Asia Carbon Industries, Inc. ("Asia Carbon", or the "Company") (OTC BB: ACRB) today announced its earnings for the quarter ended June 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 August 12, 2011.

Highlights of Second Quarter 2011 Financials

  • Revenues for the second quarter of 2011 increased 131% to $13.5 million in 2011 from $5.86 million for the same period in 2010.
  • Gross profit increased 272% to $2.95 million in the second quarter of 2011 from $0.79 million for the same period in 2010.
  • Net income for the quarter ended June 30, 2011 increased 424% to $1.98 million in 2011 from $0.37 million for the same period in 2010.
  • Earnings per share were at $0.04 for the three months ended June 30, 2011, compared to $0.01 for the same period in 2010.
  • EPS of $0.04 for third consecutive quarter.
  • Weighted average basic shares outstanding for the second quarter in 2011 were 50,608,077, a 3% increase, as compared to 49,056,223 for the same period in 2010.

Sales for the three months ended June 30, 2011 totaled $13,500,872, an increase of $7,645,793 or 131%, compared to $5,855,079 for the three months ended June 30, 2010.  The increase in sales was primarily attributed to sales of two products; N220-W, the Company's wet process product and naphthalene oil, a byproduct of the manufacturing process. Together, these products accounted for approximately 72% of total increase in sales in the three months ended June 30, 2011.

During the three months ended June 30, 2011, the Company sold 5,700 metric tons of N220-W, generating revenue of $6,295,254, and 510 metric tons naphthalene oil generating $459,171 in revenue for the three months ended June 30, 2011.

The remaining 28% increase in sales was attributable to the increased unit sales price for its carbon black products. The average unit sales price for Asia Carbon's carbon black products was $1,027 per metric ton during the second quarter of 2011, an increase of $204 per ton, or 25%, from $823 per ton during the second quarter of 2010.

Gross profits for the three months ended June 30, 2011 were $2,948,578, an increase of $2,155,531, or 272%, compared to $793,047 in the comparable period of 2010. The gross profit margin was 22% of revenues for the quarter, as compared to 14% for the second quarter of 2010. The increase is attributable mainly to the superior margins of the wet production line and naphthalene byproduct.

The Company's net income was $1,981,440 for the three months ended June 30, 2011, an increase of $1,603,512, or 424%, compared to $377,928 in the comparable period of 2010.

Yao Guoyun, Asia Carbon's Chairman of the Board and Chief Executive Officer, commented, "Asia Carbon sees continued growth in demand for our products, particularly N220-W, our wet-process product. We anticipate this trend will continue for the foreseeable future, and are working diligently to keep up with this demand."

Ms. Guoyun went on to say, "The opportunities for Asia Carbon are substantial. China now represents the largest automotive market in the world and we expect the domestic tire market will follow suit. The chemical properties of our N220-W product are very attractive to tire manufacturers, our primary customers. We are evaluating a small number of opportunities to increase our capacity in the near term so that we can capitalize on this strength."

Comparison of Sales for the Six Months Ended June 30, 2011 and 2010


2011


2010

Product

Sales


Quantity 
(Metric Ton)


Sales


Quantity 
(Metric Ton)

N220-D

$

4,667,531



4,552


$

3,850,771



4,635

N330


4,431,196



4,554



3,651,782



4,667

N660


4,395,598



4,569



3,647,399



4,670

N220-W


12,540,816



11,163



-



-

Naphthalene oil          


907,247



1,010



-



-

Total Sales

$

26,942,388



25,848


$

11,149,952



13,982



ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)














Three Months Ended June 30,


Six Months Ended June 30,


2011


2010


2011


2010









Net Sales

$

13,500,872


$

5,855,079


$

26,942,388


$

11,149,952

Cost of Sales


10,552,294



5,062,032



20,812,378



9,566,244

Gross Profit


2,948,578



793,047



6,130,010



1,583,708













 Operating Expenses:












Depreciation


57,586



16,186



114,505



32,372

Bad debts


(2,158)



17,815



1,124



14,194

Selling


72,411



33,714



143,487



69,636

Professional fees


48,781



90,006



157,678



277,328

Other


58,842



34,774



109,472



68,987

  Total


235,462



192,495



526,266



462,517

Income From Operations


2,713,116



600,552



5,603,744



1,121,191

Other Income and (Expense)












Interest income


8,948



-



8,948



-

Interest expense


(30,882)



(35,055)



(58,060)



(70,699)

  Total Other Income and (Expense)


(21,934)



(35,055)



(49,112)



(70,699)

Income Before Provision for Tax


2,691,182



565,497



5,554,632



1,050,492

Provision for tax


709,742



187,569



1,467,719



355,296

Net Income


1,981,440



377,928



4,086,913



695,196













Other comprehensive income


294,776



105,508



454,818



104,917

Comprehensive Income

$

2,276,216


$

483,436


$

4,541,731


$

800,113













Net Income Per Share - Basic

$

0.04


$

0.01


$

0.08


$

0.01

Net Income Per Share - Diluted

$

0.04


$

0.01


$

0.08


$

0.01

Weighted Average Shares Outstanding - Basic


50,608,077



49,056,223



50,608,077



46,382,104

Weighted Average Shares Outstanding - Diluted


50,608,077



49,056,223



50,608,077



46,382,104



ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS








June 30,


December 31,


2011


2010


(Unaudited)



ASSETS




 Current Assets:




Cash and equivalents

$

7,594,147


$

5,717,142

Accounts receivable, net


5,579,119



6,034,573

Inventories


1,540,012



1,476,061

Prepaid expenses


6,189



6,061

Total Current Assets


14,719,467



13,233,837







 Property and Equipment, Net


13,947,825



11,031,788







 Other Assets:






Idle assets, net


898,554



959,967

Land use rights, net


213,837



211,770

Total Other Assets


1,112,391



1,171,737







 TOTAL ASSETS

$

29,779,683


$

25,437,362







LIABILITIES AND STOCKHOLDERS' EQUITY






 Current Liabilities:






Short term debt

$

1,339,875


$

1,312,163

Accounts payable


3,801,668



3,913,207

Accrued liabilities


168,590



163,518

Taxes payable


714,322



896,351

Investor deposit payable


60,955



-

Due to shareholder


20,274



19,855

Total Current Liabilities


6,105,684



6,305,094







Commitments and Contingencies












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, 50,608,077






  issued and outstanding at June 30, 2011 and December 31, 2010


50,608



50,608

Additional paid-in capital


5,533,737



5,533,737

Statutory reserves


1,224,559



1,224,559

Retained earnings


14,714,923



10,628,010

Accumulated other comprehensive income


2,150,172



1,695,354

Total Stockholders' Equity


23,673,999



19,132,268

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

29,779,683


$

25,437,362



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 established 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.

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.

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



SOURCE Asia Carbon Industries, Inc.




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