DALIAN, China, Nov. 13 /Xinhua-PRNewswire-FirstCall/ -- Fushi Copperweld, Inc. (Nasdaq: FSIN), the leading global manufacturer and innovator of copper-clad bimetallic wire used in a variety of telecommunication, utility, automotive and other electrical applications, today announced financial results for the third quarter ended September 30, 2008.

Revenues for the third quarter of 2008 increased 99.4% to $63.8 million, from revenue of $32.0 million in the prior year's quarter, primarily due to both an increase in sales volume from the Dalian facility and the contribution from the acquisition of Copperweld in October 2007.

Gross profit in the third quarter increased 60.4% year over year to $16.9 million. Gross margin decreased to 26.5%, primarily attributable to lower margins contributed by the Fayetteville and Telford facilities acquired from Copperweld, as well as a decline in gross margin in Dalian.

Operating expenses in the third quarter increased 183.5% to $4.6 million, compared with $1.6 million in the prior year's quarter. This increase was due to a larger sales force and general and administrative expenses in Dalian associated with the increase in sales at that location, as well as the acquisition of Copperweld. On a percentage basis, operating expenses decreased sequentially to 7.3% from 7.6% in the second quarter 2008.

Net income for the 2008 third quarter was $9.0 million, or $0.31 per diluted share. This compares with $8.2 million or $0.33 per diluted share in the third quarter of 2007.

Mr. Li Fu, Chairman and Chief Executive Officer of Fushi Copperweld, commented, "We are pleased with our results for the third quarter, which reflect an ongoing integration of Fushi and Copperweld, as well as our continued ramp in production. The third quarter also reflects our ability to continue to grow in an indisputably challenging environment. During the third quarter, our capacity was limited by the Chinese government's support of the Beijing Olympic Games, which required that businesses cap use of the electrical grid, thereby limiting production. Additionally, copper prices were still on the rise until late in the third quarter, which kept our margins under some pressure. And lastly, as the global economy began to slow we have seen some impact on demand. Still, our revenue growth was strong, and we have maintained a solid capital position that we believe will allow us to weather the current market conditions better than many of our competitors. We plan to continue to take the appropriate steps to ensure our position as a dominant player in the bimetallic industry through domestic and international sales, marketing and manufacturing expertise, branding and technological innovation, and we believe our strong balance sheet provides us with the opportunity to do that."

Mr. Fu continued, "While we are excited about the long term health of our industry, and about Fushi Copperweld specifically, we believe that the short term will bring about some additional challenges for our industry. First, the global economic situation has not yet stabilized, which could impact demand for the near term. And secondly, after the close of the quarter, we saw copper prices drop significantly. Lower copper prices can also have a negative impact on our top line, but we believe this is offset somewhat by our lower working capital needs, allowing us to maintain a strong financial position. Another ancillary outcome of the current environment is that companies in our industry with weaker balance sheets may have a difficult time surviving this environment, leaving a larger market share to those of us with strong balance sheets who are able to weather the storm. Our plan is to continue to stay in close contact with our customers and with the industry, and continue to identify new ways to increase revenues and improve our margins, especially during these challenging times."

Financial Expectations

For the full year 2008, the company now expects fully diluted earnings per share between $1.03 and $1.13 based on an estimated weighted average diluted share count of 28.8 million shares. This diluted EPS estimate excludes a charge of $2.35 million, or $0.08 per diluted share associated with a litigation accrual. This adjustment to guidance reflects falling copper prices, general market uncertainty, and macroeconomic trends. It also accounts for our new organic growth initiatives to diversify and increase sales and cost control measures in response to deteriorating macro conditions. Management continues to anticipate that 2008 will be a year of executing the integration of Fushi Copperweld, and looks to 2009 as the year in which the company can begin to realize the full range of benefits of the combined company, as a result of equipment relocation and additional product lines ramping up.

Going forward, the Company expects that overall it will continue to benefit from the infrastructure buildout in China and sales growth will continue to be increasingly broadly based as it supplies the growing demand in the Chinese industrial sector. Given the Company's facilities in Dalian, PRC; Fayetteville, TN, USA; and Telford, UK, it is geographically diversified and in a strong position to gain global market share. That said, it expects that the majority of net sales will continue to be generated in Asia.

Conference Call

The Company will conduct a conference call to discuss the third quarter 2008 results today, Thursday, November 13, 2008, at 8:30 am ET. Listeners may access the call by dialing 1-480-629-9039. A live webcast of the conference call will also be available at http://www.fushicopperweld.com , under the Calendar of Events link located on the Investor Relations section or at http://www.viavid.net . A replay of the call will be available from November 13, 2008 to December 14, 2008. Listeners may access the replay by dialing # 303-590-3030; passcode: 3942239.

About Fushi Copperweld

Fushi Copperweld, Inc. through its wholly owned subsidiaries, Fushi International (Dalian) Bimetallic Cable Co,, Ltd., and Copperweld Bimetallics, LLC,, is the leading manufacturer and innovator of copper cladded bi-metallic engineered conductor products used in the electrical, telecommunications, automotive, utilities and industrial industries. With extensive design and production capabilities and a long-standing dedication to customer service, Fushi-Copperweld, Inc. is the preferred choice bi-metallic products world-wide. For more information, visit: http://www.fushicopperweld.com .

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking terminology such as "will," "believes," "expects" or similar expressions. These forward-looking statements may also include statements about our proposed discussions related to our business or growth strategy,

which is subject to change. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect.

All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-Q, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at http://www.sec.gov .

                           (financial tables below)



                   FUSHI COPPERWELD, INC. AND SUBSIDIARIES

       CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
    FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007


                                Three months ended      Nine months ended
                                   September 30,           September 30,
                                 2008        2007        2008        2007
                              Unaudited   Unaudited   Unaudited   Unaudited
     REVENUES                $63,823,927 $32,014,592$180,369,083 $79,238,417

     COST OF GOODS SOLD       46,931,400  21,481,175 131,996,263  51,367,707

    GROSS PROFIT              16,892,527  10,533,417  48,372,820  27,870,710

    OPERATING EXPENSE
     Selling expenses          1,223,087     189,625   3,274,048     558,735
     General and
      administrative
      expenses                 3,418,704   1,447,530  11,335,948   4,588,010
       Total operating
        expense                4,641,791   1,637,155  14,609,996   5,146,745

    INCOME FROM OPERATIONS    12,250,736   8,896,262  33,762,824  22,723,965

    OTHER INCOME (EXPENSE)

     Interest income             176,830     565,383     529,651   1,074,837
     Interest expense         (1,800,738) (1,523,343) (7,386,274) (4,800,554)
     Gain on derivative
      instrument                 (32,482)    286,245     322,708   1,088,768
     Other income                (65,305)     14,077     (30,600)    188,693
     Other expense                (6,348)     (5,298)   (149,055)    (84,992)

       Total other expense,
        net                   (1,728,043)   (662,936) (6,713,571) (2,533,248)

    INCOME BEFORE INCOME
     TAXES                    10,522,693   8,233,326  27,049,253  20,190,717

     Deferred income tax
      benefit                   (106,390)          0  (1,295,285)          0
     Current income tax
      expense                  1,582,133           0   4,446,247           0

     Total income tax expense  1,475,743          --   3,150,961          --

    NET INCOME                 9,046,950   8,233,326  23,898,292  20,190,717

    OTHER COMPREHENSIVE INCOME
     Unrealized gain or
      (loss) on marketable
       securities                     --          --      22,301          --
     Foreign currency
      translation
      adjustment               1,899,163   2,250,423  14,062,515   5,266,973
     Change in fair value of
      derivative
      instrument               3,940,908  (3,738,571)  3,209,403  (4,610,090)

    COMPREHENSIVE INCOME     $14,887,021  $6,745,178 $41,192,511 $20,847,600

    EARNINGS PER SHARE:
    BASIC                          $0.33       $0.37       $0.88       $0.94
    DILUTED                        $0.31       $0.33       $0.83       $0.85

    WEIGHTED AVERAGE NUMBER
     OF SHARES:
    BASIC                     27,387,302  22,263,618  27,263,638  21,422,610
    DILUTED                   28,446,786  25,454,871  28,601,237  24,335,426




                   FUSHI COPPERWELD, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007

                                   A S S E T S

                                                 September 30,   December 31,
                                                         2008           2007
                                                    Unaudited
    CURRENT ASSETS:
     Cash                                       $  50,043,410  $  79,914,758
     Marketable Securities                                 --      2,977,699
     Restricted cash                                1,000,000      1,000,000
     Accounts receivable, trade, net of
      allowance of bad debt
      $498,205 and $135,418 as of September
      30,2008 and December 31, 2007                50,018,459     23,611,186
     Inventories                                   20,444,709     12,308,295
     Notes receivables                                370,149        816,905
     Other receivables and prepaid expenses           496,762        997,979
     Advances to suppliers                         25,046,960      2,341,839
     Cross currency hedge receivable                   55,322        706,170
     Deposit in derivative hedge                    1,000,000             --
      Total current assets                        148,475,771    124,674,831

     PLANT AND EQUIPMENT, net                     107,816,898     87,228,600

    OTHER ASSETS:
     Advances to suppliers, noncurrent             17,946,939     18,204,775
     Prepaid land use right                                --      4,559,760
     Intangible asset, net of accumulated
      amortization                                 12,617,273      5,832,721
     Deferred loan expense, net                     3,612,387      3,115,930
     Deferred tax assets                            4,147,286      2,852,000
      Total other assets                           38,323,885     34,565,186

        Total assets                            $ 294,616,554  $ 246,468,617

    L I A B I L I T I E S    A N D    S H A R E H O L D E R S'   E Q U I T Y

    CURRENT LIABILITIES:
     Accounts payable, trade                    $   5,685,839  $   3,028,823
     Revolver line                                  9,410,373      7,168,524
     Short term bank loans                         17,673,600      5,703,360
     Current portion of long term debts                    --     10,968,000
     Current portion of notes payable               5,000,000             --
     Other payables and accrued liabilities         3,118,409      5,791,597
     Customer deposits                                570,990             --
     Taxes payable                                  2,083,687      1,005,259
      Total current liabilities                    43,542,897     33,665,563

    LONG TERM  LIABILITIES:
     Notes payable, noncurrent                     40,000,000     60,000,000
     Fair value of derivative instrument            5,305,993      8,515,396

        Total liabilities                          88,848,890    102,180,959

    COMMITMENTS AND CONTINGENCIES                   7,197,794             --

    SHAREHOLDERS' EQUITY:
     Preferred stock,$0.001 par value, 5,000,000
      shares authorized, none issued
      or outstanding                                       --             --
     Common stock, $0.006 par value, 100,000,000
      shares authorized,
      September 30, 2008: 27,503,885 shares
      issued and 27,403,885 outstanding
      December 31, 2007: 25,311,304 shares
      issued and 25,211,304
      outstanding                                     164,424        151,268
     Restricted common stock in escrow                    600            600
     Additional paid in capital                    90,741,609     77,665,064
     Statutory reserves                             8,321,726      8,321,726
     Retained earnings                             78,031,362     54,133,070
     Accumulated other comprehensive income        21,310,149      4,015,930
      Total shareholders' equity                  198,569,869    144,287,658

        Total liabilities and shareholders'
         equity                                 $ 294,616,554  $ 246,468,617




                   FUSHI COPPERWELD, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007


                                                         2008           2007
                                                    Unaudited      Unaudited
    CASH FLOWS FROM OPERATING ACTIVITIES:
        Net income                                 23,898,292     20,190,717
     Adjustments to reconcile net income to cash           --
       provided by (used in) operating activities:         --
        Bad debt expenses                             355,293
        Reserve for obsolete inventory                401,646
        Depreciation                                4,728,235      2,029,646
        Amortization of intangibles                   256,722        174,627
        Amortization of loan commission             2,525,756        491,178
        Interest penalty                              710,544
        Amortization of stock option compensation   1,437,557        887,080
        Gain on derivative instrument                (322,708)    (1,088,768)
        Investment loss on marketable securities       16,158
     Change in operating assets and liabilities:           --

        Accounts receivable                       (24,965,036)    (5,426,757)
        Inventories                                (7,885,132)    (5,175,451)
        Other receivables and prepayments            (395,449)    (1,306,764)
        Notes receivables                             487,946       (104,512)

        Advance to suppliers                      (22,061,823)    (5,600,003)
        Deferred tax assets                        (1,295,286)
        Accounts payable                            2,521,359        (58,813)
        Other payables and accrued liabilities     (2,737,772)       570,231
        Customer deposits                             528,731       (198,848)
        Taxes payable                                 960,752       (177,576)

          Net cash (used in) provided by
           operating activities                   (20,834,215)     5,205,987

    CASH FLOWS FROM INVESTING ACTIVITIES:
        Marketable securities                       2,983,842
        Payment for Investment deposit                            (3,000,000)
        Proceeds from derivative instrument           973,556        802,523
        Purchase of land use right                 (1,687,468)
        Advance for purchase of land use right             --     (4,109,757)
        Purchase of property and equipment        (15,540,210)    (8,613,889)
        Advances for purchase of equipment         (3,148,802)   (25,724,917)
          Net cash used in investing activities   (16,419,082)   (40,646,040)


    CASH FLOWS FROM FINANCING ACTIVITIES:
        Repayments to shareholders                         --     (3,985,698)
        Net borrowings for Revolver line            2,279,289
        Proceeds from bank loans                   16,908,000     11,546,600

        Payments on bank loans                    (17,268,032)   (12,507,240)
        Net proceeds from convertible notes                --     56,400,000
        Proceeds from exercise of stock warrants      139,394      7,541,346
          Net cash provided by financing activities 2,058,651     58,995,008

        EFFECT OF EXCHANGE RATE ON CASH             5,323,298      1,984,326

    INCREASE IN CASH                              (29,871,348)    25,539,281

    CASH, beginning of period                      79,914,758     20,493,551

    CASH, end of period                            50,043,410  $  46,032,832



    For more information, please contact:

     Nathan Anderson
     Director IR & Corporate Development
     Tel:   +1-931-433-0482
     Email: ir@fushicopperweld.com

     Bill Zima & Ashley Ammon
     ICR, Inc.
     Tel:   +1-203-682-8200

SOURCE Fushi Copperweld, Inc.