Asia Carbon Industries, Inc. Reports Second Quarter Financial Results

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.