Asia Carbon Industries, Inc. Announces First Quarter Financial Results

NEW YORK, May 15, 2013 /PRNewswire/ -- Asia Carbon Industries, Inc. ("Asia Carbon", or the "Company") today announced its earnings for the quarter ended March 31, 2013. The Company, whose shares trade in the U.S. on the OTCQB Tier of the OTC Markets under the stock symbol "ACRB", filed its quarterly report on Form 10-Q with the Securities and Exchange Commission on May 15, 2013.

Commenting on the results, Yao Guoyun, Asia Carbon's Chairwoman of the Board and Chief Executive Officer, stated, "Asia Carbon has dedicated the past six months to complete conversion of our manufacturing facilities from commodity grade to specialty carbon black production. Although this has impacted our operating results during this period, we expect to see returns on this investment as soon as the new production goes online in the third quarter, as specialty carbon black commands prices ranging upwards of $2,400 per ton while traditional carbon black is typically sold for less than $1,000 per ton."

Ms. Yao went on to say "We undertook this project to better serve our primary customer, tire manufacturers, particularly those that produce higher quality tires. China is not only the world's largest producer of tires, it is also the largest consumer, and we believe our ability to offer our customers a higher grade product positions Asia Carbon to fully participate in this thriving market."

Highlights of First Quarter 2013 Financials

• All operating results for the quarter were negatively impacted by the suspension of the Company's three dry production facilities for conversion to specialty carbon black production.
• Net sales for the quarter ended March 31, 2013 were $5,963,945, 53% lower from $12,581,692 for the same period in 2012.
• Net income for the quarter ended March 31, 2013 was $389,953, a decrease of 78% from $1,807,081 for the same period in 2012.
• Tonnage sales of carbon black were 7,268 in the quarter ended March 31, 2013, a 47% decline as compared to the first quarter of 2012.

Financial Discussion

Asia Carbon's total sales decreased $6,617,747 or 53% during the three months ended March 31, 2013 compared to the same period of 2012. The decline in total sales is primarily attributed to the suspension of operation on three of the Company's four production lines during the quarter. 

Sales were also negatively impacted by the decline in the average selling prices of the Company's products during the first quarter which was $821 per metric ton, a decrease of $103, or 11%, from $924 in the same period of 2012. The Company sold 7,268 metric tons of carbon black and naphthalene oil during the quarter, a decrease of 6,355 metric tons or 47%, compared to 13,623 metric tons in the same period of 2012.

Net income for the three months ended March 31, 2013 was $389,953, a decrease of $1,417,128 or 78%, compared to $1,807,081 in the same period of 2012. The decrease in net income reflects a lower gross profit due to the decline in selling prices and the higher operating expenses, which were partly offset by lower income taxes.  The higher operating expenses as a percentage of sales in the first quarter of 2013 were mainly due to an increase in stock-based compensation to members of senior management and needed building repairs.

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" 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:  Elaine Zhao
Asia Carbon Industries, Inc.
Phone +1-626-386-8062

SOURCE Asia Carbon Industries, Inc.