NEW YORK, March 22, 2013 /PRNewswire/ -- Asia Carbon Industries, Inc. ("Asia Carbon", or the "Company") today announced its earnings for the year ended December 31, 2012. 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 19, 2013.
Highlights of 2012 Financials
Plant Improvement Progress
In the fourth quarter of 2012, the Company began converting its three dry production lines to special carbon black ("SCB") production lines. SCB has a broader range of use compared to the more traditional products including use as a pigmenting agent, UV stabilizer or conductive agent in a variety of products, such as plastics, toners and printing ink and coating, battery and electrical parts. Management believes SCB will generate more revenues as a result of higher sales prices. The conversion affected the Company's operating results of 2012 since the three dry production lines ceased operations during the fourth quarter. The cost of the project is estimated at $4 million and will be funded by the cash from the Company's operations. The project is expected to be completed by the end of second quarter of 2013.
In June 2012, the Company began construction on a 3000 KW power plant. Utilizing residual exhaust gas generated from the Company's carbon black manufacturing process, the plant's capacity is expected to satisfy the Company's electricity needs for its current production lines. The cost of the construction of the plant is $6.4 million, and will also be funded by cash from operation. The power plant is currently in its testing stage. Management estimates the plant will bring savings of $570,000 annually given the current production capacity.
Financial Discussion
Sales for 2012 totaled $45,937,814, a decrease of $3,184,230, or 7%, compared to $49,122,044 for 2011. This change is primarily attributable to the decrease in product unit sales price. The average sales price was $908 per metric ton during 2012, a decrease of $81, or 8%, from $989 during 2011.
During 2012, the Company sold 46,518 metric tons of carbon black, a decrease of 1,135 metric tons, or 2%, compared to 47,653 metric tons of carbon black in 2011. The decrease was attributable to SCB renovation project and the related production hiatus.
Comparison of Sales for the Years Ended December 31, 2012 and 2011
Product | 2012 | 2011 | ||
Sales ($) | Quantity (Metric Ton) | Sales ($) | Quantity (Metric Ton) | |
N220 | $26,164,315 | 27,156 | $31,773,444 | 30,668 |
N330 | 10,323,933 | 11,760 | 7,883,618 | 8,492 |
N660 | 6,368,588 | 7,602 | 7,728,838 | 8,493 |
Naphthalene oil | 3,080,978 | 4,100 | 1,736,144 | 2,030 |
Total Sales | $45,937,814 | 50,618 | $49,122,044 | 49,683 |
Net income was $6,453,248 for 2012, a decrease of $3,184,230, or 12%, compared to $7,311,281 in 2012. Net income per share was $0.12 in 2012, a decrease of $0.02, or 14%, compared to $0.14 in 2011. During the period there was also a 1.4 million share increase, or 3%, in the shares outstanding. The decrease in net income is primarily attributed to the temporary cessation of production during the transition of manufacturing from dry to wet process, in addition to a decreased unit sales price and increased stock incentive expenses.
Yao Guoyun, Asia Carbon's Chairwoman of the Board and Chief Executive Officer, commented, "The Company continues to demonstrate healthy growth, as reflected in our ability to fund several important projects from operations. Though our SCB conversion project put pressure on our 2012 operating results, it has positioned us for real growth going forward. Our ability to produce a superior quality product provides access to a much broader customer base as well as the potential for higher margins."
Ms. Yao went on to say, "In addition to implementing the SCB project, we recently completed construction of an on-site power plant, which is now in the testing phase. Once fully on-line, this plant will enable us to recycle the exhaust gas generated from the Company's carbon black manufacturing process, complementing our shift to natural gas last year. Not only environmentally friendly, these changes will result in a substantial savings in our energy expenses. I believe these investments will be reflected in shareholder's value in the near term."
ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, (audited)
| ||
2012 | 2011 | |
ASSETS | ||
Current Assets: | ||
Cash and equivalents | $ 6,664,444 | $8,092,411 |
Accounts receivable, net | 3,622,644 | 4,404,319 |
Inventories | 2,393,121 | 3,146,756 |
Prepaid expenses | 6,420 | 11,138 |
Total Current Assets | 12,686,629 | 15,654,624 |
Property, Plant and Equipment, Net | 26,906,929 | 18,431,407 |
Other Assets: | 214,356 | 217,145 |
Total Other Assets | 214,356 | 217,145 |
TOTAL ASSETS | $39,807,914 | $34,303,176 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current Liabilities: | ||
Short term debt | $ 1,364,014 | $ 1,376,074 |
Accounts payable | 1,962,695 | 4,009,531 |
Accrued liabilities | 169,302 | 153,735 |
Taxes payable | 714,413 | 694,219 |
Investor deposit payable | - | 49,985 |
Due to shareholder | 26,625 | 26,415 |
Total Current Liabilities | 4,237,049 | 6,309,959 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 100,000,000 authorized, | 52,857 | 50,979 |
Additional paid-in capital | 6,690,461 | 5,942,339 |
Statutory reserves | 2,757,200 | 2,025,737 |
Retained earnings | 22,859,898 | 17,138,113 |
Accumulated other comprehensive income | 3,210,449 | 2,836,049 |
Total Stockholders' Equity | 35,570,865 | 27,993,217 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 39,807,914 | $ 34,303,176 |
ASIA CARBON INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, (audited)
| |||
2012 | 2011 | ||
Net Sales | $45,937,814 | $49,122,044 | |
Cost of Sales | 35,307,446 | 37,820,109 | |
Gross Profit | 10,630,368 | 11,301,935 | |
Operating Expenses: | |||
Depreciation | 233,416 | 235,765 | |
Bad debts | 26,078 | (17,000) | |
Selling | 341,703 | 305,245 | |
Professional fees | 263,501 | 313,000 | |
Consulting fees | 3,000 | 117,800 | |
Other | 696,119 | 253,156 | |
Total | 1,563,817 | 1,207,966 | |
Income From Operations | 9,066,551 | 10,093,969 | |
Other Income and (Expense) | |||
Interest income | 30,018 | 35,609 | |
Interest expense | (196,021) | (156,580) | |
Total Other Income and (Expense) | (166,003) | (120,971) | |
Income Before Provision for Income Tax | 8,900,548 | 9,972,998 | |
Provision for Income Tax | 2,447,300 | 2,661,717 | |
Net Income | 6,453,248 | $7,311,281 | |
Other Comprehensive Income - foreign currency translation | 374,400 | 1,140,695 | |
Comprehensive Income | $6,827,648 | 8,451,976 | |
Earnings Per Share - Basic and Diluted | $0.12 | $0.14 | |
Weighted Average Shares Outstanding - Basic | 52,093,867 | 50,666,166 | |
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 filed with the Securities and Exchange Commission (SEC) 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 SEC. 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, except as required by applicable laws, regulations and rules.
Company contact:
Delong Zhou, Chief Financial Officer
Asia Carbon Industries, Inc.
Phone +1-917-825-2997
delongcpa@yahoo.com
