Asia Carbon Industries, Inc. Announces Second Quarter Financial Results and Completion of Renovation of Production Facilities

 Asia Carbon Industries, Inc. Announces Second Quarter Financial Results and
              Completion of Renovation of Production Facilities

PR Newswire

NEW YORK, Aug. 14, 2013

NEW YORK, Aug. 14, 2013 /PRNewswire/ -- Asia Carbon Industries, Inc. ("Asia
Carbon", or the "Company") today announced its earnings for the quarter ended
June 30, 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 August 14, 2013.

The Company also reported the completion of the conversion of its three
remaining dry production lines to special carbon black ("SCB") production
lines. Initiated in October 2012, the project was implemented as part of the
Company's strategy to broaden its product line and increase revenues. SCB is
typically used in products which require higher quality carbon black, and is
generally priced at a substantial premium to traditional carbon black. The
transition required the suspension of much of the Company's production, which
in turn negatively impacted the Company's operating results for the first half
of 2013.

Yao Guoyun, Asia Carbon's Chairwoman of the Board and Chief Executive Officer,
commented, "We appreciate our shareholders' and customers' support throughout
the renovation of our manufacturing facility. While the transition did require
an interruption of much of our production for the first half of 2013, we were
able to remain profitable throughout the process. In fact, the gross profit
margin in our second quarter of 2013 is higher than that in the same period of
2012, which is 24% versus 22%"

Ms. Yao went on to say "This was a critical step in Asia Carbon's expansion
strategy. Our ability to produce and sell specialty carbon black not only
enables us to better serve market demand, but also provides the opportunity
for significant improvements to revenues and margins going forward."

Overview of Second Quarter 2013 Financials

Net Sales for the three months ended June 30, 2013 were $5,487,310, a
$7,707,224 or 58% decline as compared to $13,194,534 for the same period in
the prior year. The decrease in sales was primarily due to the suspension of
production for the conversion to SCB, and a decrease in unit sales prices
reflective of lower coal tar oil prices, the primary raw material for carbon
black production.

The average selling prices for the Company's products during the three months
ended June 30, 2013 was $796 per metric ton, a decrease of 14% from $929 in
the same period of 2012. The Company sold 6,890 metric tons of carbon black
and naphthalene oil in the second quarter of 2013, a decrease of 7,318 metric
tons or 52% compared to 14,208 metric tons in the same period of 2012.

Gross profit was $1,299,793 for the three months ended June 30, 2013, a
decrease of $1,636,880, or 56%, compared to $2,936,673 in the same period of
2012, consistent with the decline in sales. The gross profit margin was 24%
and 22% for the three months ended June 30, 2013 and 2012, respectively.

Net income for the three months ended June 30, 2013, was $622,522, a decrease
of $1,248,955, or 67%, compared to $1,871,477 in the same period of 2012. The
decrease in net income reflects the decline in gross profit and higher
operating expenses, which were partly offset by lower income taxes.



ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
                                                  June 30,       December 31,
                                                  2013           2012
                                                  (Unaudited)
ASSETS
Current Assets:
Cash and equivalents                              $ 5,317,693    $ 6,664,444
Accounts receivable, net                            2,479,290      3,622,644
Inventories                                         1,710,831      2,393,121
Prepaid expenses and other receivable               6,480          6,420
Total Current Assets                                9,514,294      12,686,629
Property, Plant and Equipment, net                 30,896,251     26,906,929
Other Assets:
Land use rights, net                                213,815        214,356
TOTAL ASSETS                                     $ 40,624,360   $ 39,807,914
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short term debt                                   $ 1,376,596    $ 1,364,014
Accounts payable                                    1,401,725      1,962,695
Accrued liabilities                                 146,969        169,302
Taxes payable                                       235,047        714,413
Due to shareholder                                  26,820         26,625
Total Current Liabilities                         $ 3,187,157      4,237,049
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, 56,056,858 and

52,857,052 issued and outstanding at June 30,     56,057         52,857
2013 and December 31, 2012,

respectively
Additional paid-in capital                          7,195,501      6,690,461
Statutory reserves                                  2,757,200      2,757,200
Retained earnings                                   23,872,373     22,859,898
Accumulated other comprehensive income              3,556,072      3,210,449
Total Stockholders' Equity                          37,437,203     35,570,865
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 40,624,360   $ 39,807,914



ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)
                    Three Months Ended June 30,   Six Months Ended June 30,
                    2013           2012           2013           2012
Net Sales           $ 5,487,310    $ 13,194,534   $ 11,451,255   $ 25,776,226
Cost of Sales         4,187,517      10,257,861     8,762,206      19,913,601
Gross Profit          1,299,793      2,936,673      2,689,049      5,862,625
Operating
Expenses:
Selling               114,990        93,297         196,775        184,988
General and           266,669        247,402        885,377        557,790
administrative
Total Operating     381,659        340,699        1,082,152      742,778
Expenses
Income From           918,134        2,595,974      1,606,897      5,119,847
Operations
Other Income and
(Expense)
Interest income       -              7,044          -              18,104
Interest expense      (35,198)       (49,247)       (69,449)       (94,881)
Total Other
Income and            (35,198)       (42,203)       (69,449)       (76,777)
(Expense)
Income Before
Provision for         882,936        2,553,771      1,537,448      5,043,070
Income Tax
Provision for         260,414        682,294        524,973        1,364,512
income tax
Net Income            622,522        1,871,477      1,012,475      3,678,558
Other
comprehensive         551,412        (268,325)      345,623        (283,736)
income (loss)
Comprehensive       $ 1,173,934    $ 1,603,152    $ 1,358,098    $ 3,394,822
Income
Net Income Per      $ 0.01         $ 0.04         $ 0.02         $ 0.07
Share - Basic
Net Income Per      $ 0.01         $ 0.04         $ 0.02         $ 0.07
Share - Diluted
Weighted Average
Shares Outstanding    55,624,316     52,315,538     54,248,333     51,755,060
- Basic
Weighted Average
Shares Outstanding    55,624,316     52,315,538     54,248,333     51,755,060
- Diluted



ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)
                                                Six Months Ended June 30,
                                                2013            2012
Cash Flows from Operating Activities:
Net Income                                      $ 1,012,475     $ 3,678,558
Adjustments to Reconcile Net Income to

Net Cash Provided by Operating Activities:
Provision for doubtful accounts                  90,638          13,284
Depreciation and amortization                    938,554         892,165
Stock-Based Compensation                         358,240         225,000
Changes in operating assets and liabilities:
Accounts receivable                           1,069,778       (947,564)
Inventories                                   692,591         (248,528)
Prepaid expenses and other receivable         173             4,842
Accounts payable                              (610,076)       (865,476)
Accrued expenses                              12,831          31,646
Taxes payable                                 (476,717)       202,247
Net Cash Provided by Operating Activities         3,088,487       2,986,174
Cash Flows from Investing Activities:
Additions to construction in progress             (1,580,504)     (5,351,940)
Acquisitions of property, plant and equipment     (3,052,822)     (933,441)
Net Cash Used in Investing Activities             (4,633,326)     (6,285,381)
Cash Flows from Financing Activities:
Repayment of short term debt                      -               (1,370,012)
Proceeds from short term debt                     -               1,358,938
Proceeds from issuance of common stock            150,000         149,955
Net Cash Provided by Financing Activities         150,000         138,881
Effect of Exchange Rate Changes on Cash           48,088          (127,351)
Net Decrease in Cash and Equivalents              (1,346,751)     (3,287,677)
Cash and Equivalents - Beginning of the Period    6,664,444       8,092,411
Cash and Equivalents - End of the Period        $ 5,317,693     $ 4,804,734
Supplemental Cash Flow Information:
Interest Paid                                   $ 67,655        $ 95,032
Income taxes                                    $ 728,753       $ 1,266,291
Non-cash Investing and Financing Activities:
Issuance of stocks for stock-Based              $ 2,165         $ -
Compensation
Transfer from construction in progress to       $ 4,991,192     $ -
plant and equipment

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.
 
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