Asia Carbon Industries Inc. (OTCBB: ACRB), a China-based producer of a series of high-quality carbon black products, similar to companies like Cabot Corporation (NYSE: CBT) and Tokai Carbon Co., Ltd. (TYO: 5301), recently reported first quarter revenues that increased 154% and net income that jumped 564%.

Asia Carbon Industries, Inc. (OTC.BB:ACRB) (“Asia Carbon,” or the “Company”) today announced its earnings for the quarter ended March 31, 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 May 16, 2011.

Highlights of First Quarter 2011 Financials

• Revenues for the first quarter of 2011 increased 154% to $13.44 million in 2011, from $5.29 million for the same period in 2010.
• Gross profit increased 302% to $3.18 million in the first quarter of 2011 from $0.79 million for the same period in 2010.
• Net income for the first quarter of 2011 increased 564% to $2.1 million in 2011 from $0.32 million for the same period in 2010.
• Earnings per share were at $0.04 for the first quarter of 2011, compared to $0.01 for the same period in 2010.
• Weighted average basic shares outstanding for the first quarter in 2010 were 50,608,077, a 16% increase, as compared to 43,678,272 for the same period in 2010.

The Company’s sales for the three months ended March 31, 2011 totaled $13,441,516, an increase of $8,146,643, or 154%, compared to $5,294,873 for the three months ended March 31, 2010. The increase in sales was primarily attributed to the expansion in sales of the Company’s two newest products; N220-W, a wet-process carbon black, which launched in November of 2010, and naphthalene oil, which began selling in July 2010. Together, these two products accounted for 50% of revenue for the quarter and 82% of the increase in sales in the three months ended March 31, 2011.

During the three months ended March 31, 2011, the Company sold 5,463 metric tons of N220-W, generating revenue of $6,245,563 and naphthalene oil accounted for $448,075 in revenue from 500 metric tons of product sales for the quarter. Sales generated by the Company’s three dry process carbon black products, N330, N660 and N220-D accounted for $6,747,878 in sales.

The average sales price of all carbon products was $1,070 per metric ton during the first quarter of 2011, an increase of $299 per ton, or 42%, from $771 per ton during the first quarter of 2010.

Gross profit for the three months ended March 31, 2011 was $3,181,432, an increase of $2,390,771, or 302%, compared to $790,661 in the comparable period of 2010. The gross profit margin also increased, to 24% for the quarterly period ended March 31, 2011, from 15% for the same period in 2010, primarily as a result of the increased percent of sales from the higher margin wet process product and sale of naphthalene oil.

Net income was $2,105,473 for the three months ended March 31, 2011, an increase of $1,788,205, or 564%, compared to $317,268 for the same period in 2010. Again, the increase in net income is the result of the contribution of N220-W and naphthalene oil.

Yao Guoyun, Asia Carbon’s Chairman of the Board and Chief Executive Officer, commented, “We are very excited to report our first quarter results to our shareholders. The Company’s performance is a direct result of the successful implementation of the expansion plans we laid out at the time we brought Asia Carbon public; expanding our overall manufacturing capacity and transforming our existing production lines from dry-process to the higher quality wet-process production.”

Ms. Guoyun went on to say, “Demand for our products remains strong, particularly for N220-W, and we are hopeful that our continued growth will be well received by the public markets as we look to them for capital to facilitate the further expansion of our manufacturing and distribution capabilities.”

Ms. Guoyun commented further on the Company’s transition from a private to a public company, saying, “We became a public company through a registration statement on Form S-1 rather than a reverse merger, and while it was a somewhat slower process, our management team felt this was the appropriate approach for Asia Carbon and its shareholders. We have always, and will continue to adhere to the rules and regulations associated with being a public company in the United States.”

About Asia Carbon Industries, Inc.

Asia Carbon Industries Inc. is a 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.

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