3SOF

Getting it's first positive day since debut.


http://stockcharts.com/h-sc/ui?s=FUQI&p=D&b=5&g=0&id=p64893791912

Watch  FUQI tommorrow. 


- Revenues Increased 90% to $36.2 Million in 3Q07 -
- 3Q07 Net Income Increased 200% to $2.7 Million, or $0.21 per Diluted Share -
- Company Provides Financial Outlook for 4Q07 -


SHENZHEN, China, Nov. 14 /Xinhua-PRNewswire/ -- FUQI International, Inc. (Nasdaq: FUQI - News) today announced financial results for the third quarter of 2007.
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Revenues for the third quarter of 2007 increased 90% to $36.2 million from $19.1 million in the third quarter of 2006, due to several factors. The economy in China continues to grow, and consumers are purchasing more luxury goods than ever. The Company has begun introducing a broader product line to meet demand for more designs. Importantly, FUQI's stronger cash and inventory position allowed the Company to promptly meet the customers' demand. A stable pricing environment in the precious metal market during the third quarter of 2007 also allowed the Company to better manage the revenue growth.

Gross profit in the third quarter increased 221% to $4.5 million compared to $1.4 million in the prior year. Gross profit margin for the third quarter increased to 490 basis points to 12.4% compared to 7.5%. This increase in gross margin was primarily due to higher selling prices for new jewelry designs as well as a more favorable pricing environment in the precious metal market, which resulted in increased processing fees on jewelry items delivered during the third quarter.

Operating expenses in the third quarter increased to $807,000 compared to $189,000 in the prior year period. This increase was a result of higher advertising costs and expenses incurred as a result of being a publicly traded company. Operating income for the third quarter increased to $3.7 million from $1.3 million in the third quarter of 2006. Operating margin increased 370 basis points to 10.1%, up from 6.5% in the prior year period as revenue growth outpaced increased expenses.

Net Income for the third quarter of 2007 increased 200% to $2.7 million, or $0.21 per diluted share, compared to $0.9 million, or $0.08 per diluted share in the prior year period.

The Company's cash balance at the end of the third quarter of 2007 was $16 million. Subsequently, the Company issued eight million shares at $9 per share in a secondary offering, including a one million share over-allotment, generating approximately $67 million in net proceeds.

Mr. Yu Kwai Chong, Chairman of FUQI International commented, "We are pleased with our overall results for the third quarter and believe our strategy of continuing to build our wholesale business while penetrating the retail market is sound. Our strong balance sheet positions us to meet the growing demand for luxury jewelry products in China. We are excited by the increasing purchasing power of the Chinese consumers, and will deploy our capital strategically in order to continue to build FUQI as the leading wholesale and retail company in our market."

Mr. Chong continued, "We are on track with our retail strategy plans to penetrate 20 store counters and 2 retail stores by the end of this year, and open another 60-80 new counters and 8-10 new stores in 2008. At the same time, we have successfully positioned our wholesale business, and plan to leverage our strong sales and distribution network to continue to tap the wholesale market for luxury goods."

Financial Expectations

For the fourth quarter of 2007, the Company anticipates total revenue of approximately US$43 million, which represents a year-over-year increase of approximately 72%. Fourth quarter is a seasonally strong quarter, as the October Chinese holiday season drives sales, and Western influence on gift- giving in the Christmas season and the Chinese new year also helps to increase demand for purchase of luxury goods. Based on raw material pricing trends thus far in the quarter, the Company expects gross margins between 11.5%-12% for the fourth quarter. Diluted earnings per share for the fourth quarter are expected to be in the range of $0.14 to $0.18, based on a weighted average diluted count of 19 million shares.

Mr. Chong stated, "We are excited about the projected operating results for the remainder of 2007, and believe that our strong cash position provides us with opportunities for us to expand our presence in retail market, as well as the higher margin platinum and gemstone business going forward. We will continue to differentiate ourselves with unique and complex designs that we believe will also strengthen our margins going forward. Our solid sales and distribution network will help to build awareness of the FUQI brand name among wholesale customers and consumers, contributing to our goal of becoming the leading provider of luxury jewelry products in China."

Financial Results for the Nine Months ending September 30, 2007

For the nine-month period ending September 30, 2007, total sales increased 33.9% to $90.5 million compared to $67.6 million in the nine months of last year.

Gross profit increased to $10.7 million compared to $5.9 million in the prior year period. Gross margin increased 310 basis points to 11.8% from 8.7% in the same period of prior year.

Selling, general and administrative expenses in the for the first nine months of 2007 were $2.3 million, or 2.6% of sales, compared to $973,000, or 1.4% of sales, in the same period of prior year.

Operating profit for the first nine months of 2007 increased 71% to $8.3 million compared to $4.9 million in the same period of prior year. Nine month operating margin increased 200 basis points to 9.2% compared to 7.2% in the same period of prior year.

Net income for the first nine months of 2007 was $6.1 million, or $0.42 per diluted share, compared to $3.7 million, or $0.33 per diluted share in the same period of prior year.

Conference Call

The Company will conduct a conference call to discuss the third quarter 2007 results today, Wednesday, November 14, 2007 after the market close at 4:30 pm ET. Listeners may access the call by dialing # 913-312-6673. To listen to the live webcast of the event, please go to http://www.viavid.net. A replay of the call will be available from November 14, 2007 to November 21, 2007. Listeners may access the replay by dialing # 719-457-0820; Passcode: 8097241.

About FUQI International, Inc.

Based in Shenzhen, China, FUQI International, Inc. is a leading designer of high quality precious metal jewelry in China, developing, promoting, and selling a broad range of products in the large and rapidly expanding Chinese luxury goods market.




                           Fuqi International, Inc.
                    Condensed Consolidated Balance Sheets

                                              September 30,       December 31,
                                                      2007               2006
                                                (Unaudited)
    Assets

    Current assets:
    Cash                                       $16,097,286        $13,354,981
    Restricted cash                                399,425                 --
    Accounts receivable, net of allowance
     for doubtful accounts of $363,000 as
     of September 30, 2007 and $195,000
     as of December 31, 2006                    13,955,656          9,363,397
    Refundable value added taxes                   808,978                 --
    Inventories                                 15,267,360          6,066,213
    Prepaid expenses                               142,355             89,362
    Deposits                                        66,821                 --
    Deposits related to borrowings on
     notes payable                                      --            736,358
    Deferred taxes                                  54,521             29,198
    Total current assets                        46,792,402         29,639,509

    Property, equipment, and
     improvements, net                           1,187,212          1,354,313

    Deposits                                        95,023             91,398

    Deferred offering costs                        218,042                 --

    Other assets                                    38,520             40,122

                                               $48,331,199        $31,125,342

    Liabilities and Stockholders' Equity

    Current liabilities:
    Notes payable                              $15,311,285        $14,086,852
    Line of credit                               1,331,416                 --
    Accounts payable and accrued
     liabilities                                 1,708,108            215,092
    Accrued business tax                         1,501,111          1,084,078
    Accrued estimated penalties                  1,163,592          1,119,201
    Accrued value added taxes                           --            133,010
    Customer deposits                            3,776,088          1,234,424
    Due to stockholder                                  --            422,909
    Income tax payable                           3,157,477          1,884,837
    Total current liabilities                  $27,949,077        $20,180,403

    Stockholders' equity:
    Preferred stock, $0.001 par value,
     5,000,000 shares authorized, none
     issued and outstanding                             --                 --
    Common stock, $0.001 par value,
     100,000,000 shares authorized as of
     September 30, 2007 and 75,000,000
     shares authorized as of December 31,
     2006; shares issued and outstanding
     - 12,835,955 shares as of September
     30, 2007 and 12,257,624 shares as of
     December 31, 2006                             $12,836            $12,258

    Additional paid in capital                   9,967,031          7,212,130
    Accumulated foreign currency
     translation adjustments                     1,011,342            432,125
    Retained earnings                            9,390,913          3,288,426

    Total stockholders' equity                 $20,382,122        $10,944,939
                                               $48,331,199        $31,125,342



                           Fuqi International, Inc.
     Condensed Consolidated Statements of Income and Comprehensive Income
                                 (Unaudited)

                             Three Months Ended           Nine Months Ended
                                 September 30,               September 30,
                             2007           2006          2007          2006

    Net sales         $36,247,811    $19,082,910   $90,488,776   $67,606,850

    Cost of sales      31,771,214     17,657,069    79,794,797    61,750,693

    Gross profit        4,476,597      1,425,841    10,693,979     5,856,157

    Operating
     expenses:
    Selling and
     marketing            268,334        112,108       648,907       327,968
    General and
     administrative       539,153         76,713     1,700,751       644,910

    Total operating
     expenses             807,487        188,821     2,349,658       972,878

    Income from
     operations         3,669,110      1,237,020     8,344,321     4,883,279

    Other income
     (expenses):
    Interest expense     (384,406)      (176,635)     (914,182)     (576,869)
    Interest Income         2,850             --         5,859            --
    Change of fair
     value on
     inventory loan
     payable                2,683             --       (45,692)            -
    Miscellaneous              88             49         5,702        12,502

    Total other
     expenses            (378,785)      (176,586)     (948,313)     (564,367)

    Income before
     provision for
     income taxes       3,290,325      1,060,434     7,396,008     4,318,912

    Provision for
     income taxes         560,026        155,056     1,293,521       624,959

    Net income          2,730,299        905,378     6,102,487     3,693,953

    Other
     comprehensive
     income - foreign
     currency
     translation
     adjustments          228,320         94,943       553,239       165,582

    Comprehensive
     income            $2,958,619     $1,000,321    $6,655,726    $3,859,535

    Earnings per
     share - basic          $0.21          $0.08         $0.49         $0.33

    Earnings per
     share - diluted        $0.21          $0.08         $0.42         $0.33

    Weighted average
     number of common
     shares - basic    12,835,955     11,175,543    12,497,006    11,175,543

    Weighted average
     number of common
     shares - diluted  12,835,955     11,175,543    14,531,517    11,175,543



                           Fuqi International, Inc.
         Condensed Consolidated Statements of Cash Flows (Unaudited)
                         Increase (Decrease) in Cash

                                                      Nine Months Ended
                                                         September 30,
                                                    2007              2006
    Cash flows provided by operating
     activities:
    Net income                                $6,102,487        $3,693,953

    Adjustments to reconcile net income
     to net cash used for operating
     activities:
    Depreciation and amortization                242,160           229,387
    Bad debt                                     158,129           (12,502)

    Changes in operating assets and
     liabilities:
    Accounts receivable                        (4,301,122)        (331,054)
    Refundable value added taxes                 (929,785)      (1,163,132)
    Inventories                                (8,795,197)      (9,560,912)
    Inventory loan receivable                          --          687,936
    Prepaid expenses                              (48,536)         (54,840)
    Deposits - short term                         684,617         (284,486)
    Deferred taxes                                (23,719)         (21,242)
    Other current assets                               --            2,189
    Deposits                                           --           18,966
    Deferred offering costs                      (217,674)
    Other assets                                    3,061          (23,283)
    Accounts payable, accrued expenses,
     accrued business tax and accrued
     penalties                                  1,830,231          235,018
    Customer deposits                           2,446,706       (1,055,564)
    Income tax payable                          1,175,777          501,463
    Net cash used for operating
     activities                                (1,672,865)      (7,138,103)

    Cash flows provided by (used for)
     investing activities:
    Purchase of property, equipment and
     improvements                                 (25,347)         (20,864)
    Disbursements on loans to stockholder              --      (47,988,056)
    Proceeds from collections on loans to
     stockholder                                       --       54,983,415
    Decrease (Increase) in restricted
     cash                                        (392,054)       1,011,506
    Net cash provided by (used for)
     investing activities                        (417,401)       7,986,001

    Cash flows provided by (used for)
     financing activities:
    Proceeds from short-term borrowing          1,960,272               --
    Loan from (repayment to) a non-
     related party                                     --         (991,326)
    Cash proceeds from exercise of
     warrants, net of financing cost            2,755,479               --
    Proceeds from loans borrowed from
     stockholder                                  203,506               --
    Repayments to loans payable to
     stockholder                                 (642,295)
    Net cash provided by (used for)
     financing activities                       4,276,962         (991,326)

    Effect of exchange rate changes on
     cash                                         555,609          201,619

    Net increase (decrease) in cash             2,742,305           58,191

    Cash, beginning of the period              13,354,981           71,479

    Cash, end of the period                   $16,097,286         $129,670

    Supplemental disclosure of cash flow
     information:
    Interest paid                                $904,194         $573,541
    Income taxes paid                            $141,463         $150,141

    Non-cash activities:
    Decrease in due from stockholder for
     dividend declared and paid                  $     --       $2,739,726



    For more information, please contact:

     FUQI International, Inc.
     Dexter Fong
     Executive VP of Corporate Development
     Phone: +1-408-786-5540

     ICR Inc.
     In the U.S:
     Bill Zima
     Phone: +1-203-682-8200 (Investor Relations)

     ICR Inc.
     In Asia:
     Xuyang Zhang
     Phone: +86-10-8523-3087 (Investor Relations)

Those numbers look super impressive.

Hope you got in Sully, I think this one should go wild tomorrow..

Bjc, I'm not in it yet, but considering it. Being the very recent IPO it is, gotta use extra caution.

been moving up nicely since ER.

heavy volume this morn.

upped guidance yesterday

I like this stock.  Just waiting for the technicals to say "buy".