SOURCE: Asia Carbon Industries, Inc.

Asia Carbon Industries, Inc.

April 07, 2011 15:18 ET

Asia Carbon Industries, Inc. Reports 2010 Financial Results

Sales Increased 44%, Confirming Figures in Preliminary Earnings Release

NEW YORK, NY--(Marketwire - April 7, 2011) - Asia Carbon Industries, Inc. (OTCBB: ACRB) ("Asia Carbon") today announced its earnings for the year ended December 31, 2010. The Company, whose shares trade in the U.S. under the stock symbol "ACRB," filed its annual report on Form 10-K with the Securities and Exchange Commission on March 30, 2011.

Overview of 2010 Financials

--  Revenues increased 44% to $29.69 million in 2010 from $20.65 million
    in 2009.
--  Gross profit increased 28.7% to $5.69 million in 2010 from $4.42
    million in 2009.
--  Net income increased 9.6% to $3.27 million in 2010 from $2.98 million
    in 2009.
--  Earnings per share were unchanged at $0.07 earnings per share for both
    2009 and 2010.
--  Weighted average basic shares outstanding in 2010 were 48,512,458, a
    17% increase as compared to 41,300,303 in 2009.

Sales for the year ended December 31, 2010 were $29,686,876, an increase of $9,038,190, or 44% compared to $20,648,686 in sales reported for the year ended December 31, in 2009, confirming the figures announced in the Company's preliminary earnings release. The increase in sales was largely attributed to sales of the Company's first product manufactured on its wet production line; N220-W, which commenced production on October 26, 2010. Sales of N220-W were $4,297,037 for the quarter.

The increase in revenue was also impacted by an increase in the Company's carbon black unit selling price. In 2009 Asia Carbon lowered product unit prices in response to the global financial crisis and related decrease in demand. However, recent market corrections and resulting return in product demand, in addition to an increase in raw material costs, prompted management to increase its pricing. This action has been accepted by customers, as evidenced by the increase in product sales. The Company sold 32,156 tons of carbon black in 2010, an increase of 3,598 tons, compared to 28,558 tons in 2009.

The final factor in the Company's increase in revenue was the sale of naphthalene oil, a by-product of its production process. Introduced at the end of the third quarter 2010, Asia Carbon sold 1,049 tons of naphthalene in 2010, generating revenue of $869,040 for the year.

Net income for the year ended December 31, 2010 totaled $3,273,857, an increase of $288,009, or 10% compared to the net income of $2,985,848 in 2009.

Yao Guoyun, Asia Carbon's Chairman of the Board and Chief Executive Officer, commented, "We are pleased to report our 2010 results. The year saw the turnaround from the earlier global financial crisis, we were able to complete the conversion of one of our dry-method production lines to the more profitable, more efficient wet process production, and we launched our Naphthalene Oil product."

Ms. Guoyun went on to say, "We anticipate these growth trends to endure as automobile demand continues to grow in China. Since Asia Carbon's primary customers are domestic tire manufacturers, we expect demand for our products to continue to grow. As we continue our plans for conversion of our dry process facilities to wet-processing, we will be able to provide the market with higher quality, and in turn higher priced carbon black."

Ms. Guoyun also commented on the Company's transition from a private to a public company, saying, "Asia Carbon became a public company through a registration statement on Form S-1 which was reviewed by the SEC and declared effective in October of last year. We hope to maintain a mutually beneficial relationship with our investors as we execute our plans for expansion."

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.



                ASIA CARBON INDUSTRIES INC AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

                         YEARS ENDED DECEMBER 31,

                                                      2010         2009
                                                  ------------ ------------
Net Sales                                         $ 29,686,876 $ 20,648,686
Cost of Sales                                       23,989,951   16,223,823
                                                  ------------ ------------
Gross Profit                                         5,696,925    4,424,863
                                                  ------------ ------------

Operating Expenses:
    Depreciation                                       221,296       58,917
    Bad debts                                           58,052      (10,213
    Selling                                            172,322      124,687
    Professional fees                                  380,088            -
    Other                                              161,485      122,286
                                                  ------------ ------------
    Total                                              993,243      295,677
                                                  ------------ ------------
Income From Operations                               4,703,682    4,129,186
                                                  ------------ ------------
Other Income and (Expense)
Interest income                                          9,805            -
Interest expense                                      (137,921     (146,738
                                                  ------------ ------------
    Total Other Income and (Expenses)                 (128,116     (146,738
                                                  ------------ ------------
Income Before Provision for Income Tax               4,575,566    3,982,448
Provision for income tax                             1,301,709      996,600
                                                  ------------ ------------
Net Income                                           3,273,857    2,985,848

Other comprehensive income (loss)                      598,353       24,353
                                                  ------------ ------------
Comprehensive Income                              $  3,872,210 $  3,010,201
                                                  ============ ============

Net Income Per Share - Basic and Diluted          $       0.07 $       0.07
                                                  ============ ============
Weighted Average Shares Outstanding - Basic and
 Diluted                                            48,512,458   41,300,303
                                                  ============ ============




                        CONSOLIDATED BALANCE SHEETS
                               DECEMBER 31,
                                                      2010         2009
                                                  ------------ ------------
ASSETS
  Current Assets:
    Cash and equivalents                          $  5,717,142 $  2,172,641
Accounts receivable, net of allowance of $97,640
 and $36,840, as of 2010 and 2009, respectively      6,034,573    2,930,329
    Inventories                                      1,476,061    1,272,127
    Prepaid expenses                                     6,061       30,860
                                                  ------------ ------------
    Total Current Assets                            13,233,837    6,405,957
                                                  ------------ ------------

Property and Equipment, Net                         11,031,788    9,985,427
                                                  ------------ ------------

Other Assets:
  Idle assets                                          959,967            -
  Xigu loan receivable                                       -      146,500
  Land use rights, net of amortization                 211,770       73,062
                                                  ------------ ------------
  Total Other Assets                                   211,770      219,562
                                                  ------------ ------------

TOTAL ASSETS                                      $ 25,437,362 $ 16,610,946
                                                  ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities:
    Short term debt                               $  1,312,163 $  1,294,190
    Accounts payable and accrued liabilities         4,076,725    1,904,561
    Taxes payable                                      896,351      421,157
    Due to shareholder                                  19,855            -
                                                  ------------ ------------
    Total Current Liabilities                        5,388,888    3,198,751
                                                  ------------ ------------

TOTAL LIABILITIES                                    6,305,094    3,619,908
                                                  ------------ ------------

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 and 36,239,494 issued
   and outstanding at 2010 and 2009, respectively
  Additional paid-in capital                         5,533,737    3,229,086
  Stock to be issued                                         -       50,000
  Statutory reserves                                 1,224,559      834,046
  Retained earnings                                 10,628,010    7,744,666
  Accumulated other comprehensive income             1,695,354    1,097,001
                                                  ------------ ------------
  Total Stockholders' Equity                        19,132,268   12,991,038
                                                  ------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 25,437,362 $ 16,610,946
                                                  ============ ============

Contact Information

  • Company contact:
    Mark Lubchenco
    Asia Carbon Industries, Inc.
    Phone +1-646-328-1502