NF Energy Saving Corporation of America Reports Third Quarter 2008 Results

• Press Release
• Source: NF Energy Saving Corporation of America
• On 9:00 am EST, Monday November 17, 2008

SHENYANG, China, Nov. 17, 2008 (GLOBE NEWSWIRE) -- NF Energy Saving Corporation of America (OTC BB:NFES.OB - News) (``NFES'' or ``the Company''), a manufacturer of energy-saving equipment and a provider of integrated energy conservation solutions in Liaoning province, People's Republic of China (``PRC''), reported financial results for its third quarter ended September 30th, 2008.

Third Quarter 2008 Highlights

 * Revenue increased to $4,601,826 and $11,763,310 for the periods of
   three and nine months ended September 30, 2008 respectively.
 * Gross profit increased to $1,236,242, up 32% from $2,454,486 for the
   same period in last year.
 * Net income was $1,065,096, or $0.03 per fully diluted share, up 75%
   from $0.04 for the same period in last year.

Third Quarter Fiscal Year 2008 Results

Total revenues were $4,601,826 and $11,763,310 for the three and nine months ended September 30, 2008, respectively, as compared to $2,031,016 and $7,062,399 for the corresponding periods in 2007. Total revenues increased by $2,570,810 and $4,700,911, a 127% and 67% increase, for the three and nine months ended September 30, 2008, as compared to total revenues for the three and nine months ended September 30, 2007.

The overall gross profit for the Company was $1,236,242 and $3,244,421, or 26.86% and 27.58%, for the three and nine months ended September 30, 2008 respectively. Profit margin increased by $510,688 to $1,236,242, but the gross margin ratio decreased 8.86% to 26.86%, for the three months ended September 30, 2008 and increased by $789,935 to $3,244,421, but the gross margin ratio decreased 7.17% to 27.58%, for the nine months ended September 30, 2008 as compared to the corresponding three and nine month periods in 2007.

``It is pleasant to announce that we have lots of increasing in revenue and net income in such a vile economic environment,'' said Mr Gang Li, President & CEO of NF Energy Saving Corporation of America. ``Our strong growth certified our substantial increase in energy-saving area since last year. We are confident to maintain such a growth trend in next year with the growth of our energy-saving re-engineering projects and EMC projects.''

Nine Month Results

For the nine months ended September 30th, 2008, total operating revenues were $11,763,310, up 100% from $7,062,399 from the same period last year. Gross profit was $3,244,421, up 27.58% from the same period 2007. Gross margin was increased by $789,935 to $3,244,421, but the gross margin ratio decreased 7.17% to 27.58% for the nine months ended September 30, 2008. Net income increased by $1,341,341 (100.49%) to $2,676,207 for the nine months ended September 30, 2008, as compared to the corresponding three and nine month periods in 2007.

Financial Condition

For the nine months ended September 30, 2008, net cash provided by financing activities was $2,000,000 attributable to the issuance of common stock to two investors from a convertible note.

For the nine months ended September 30, 2008, the Company had $2,904,609 in cash and cash equivalents.

About NF Energy Saving Corporation of America

NF Energy Saving Corp of America (OTC BB:NFES.OB - News) is a China-based provider of integrated energy conservation solutions utilizing energy-saving equipment, technical services and energy management re-engineering project operations to provide energy saving services to clients. Headquartered in Shenyang city of China, the Company currently has 220 employees and several proprietary energy saving technologies and patents. The management team of the Company has over 10 years of EMC project experience and has completed over 300 successful energy-saving projects. For more information on the Company, please visit: http://www.nfenergy.com

Safe Harbor Statement

This press release contains certain statements that may include 'forward-looking statements' as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the use of forward-looking terminology such as ``believes, expects, anticipate, optimistic, intend, will'' or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

               NF ENERGY SAVING CORPORATION OF AMERICA
                CONDENSED CONSOLIDATED BALANCE SHEETS
            AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
        (Currency expressed in United States Dollars ("US$"),
                     except for number of shares)
                             (Unaudited)

                                          September 30,   December 31,
                                              2008           2007
                                           -----------    -----------
                                           (Unaudited)     (Audited)
 ASSETS
 Current assets:
   Cash and cash equivalents               $ 2,904,609    $ 2,240,901
   Accounts receivable, trade                8,264,829      4,061,352
   Inventories                               2,175,182      1,448,386
   Prepayments and other receivables           953,803        605,989
                                           -----------    -----------

 Total current assets                       14,298,423      8,356,628
                                           -----------    -----------

 Plant and equipment, net                    3,150,192      2,514,795
                                           -----------    -----------

 TOTAL ASSETS                              $17,448,615    $10,871,423
                                           ===========    ===========

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
   Accounts payable, trade                 $ 2,221,138    $ 1,259,081
   Customer deposits                           379,229         22,719
   Value added tax payable                      76,293         70,604
   Other payables and accrued liabilities      166,487        355,390
                                           -----------    -----------

 Total current liabilities                   2,843,147      1,707,794
                                           -----------    -----------

 Stockholders' equity:
 Common stock, $0.001 par value;
  50,000,000 shares authorized;
  39,872,704 and 33,227,328 shares issued
  and outstanding as of September 30, 2008
  and December 31, 2007                         39,872         33,227
 Additional paid-in capital                  7,706,587      5,713,232
 Statutory reserve                             517,774        517,774
 Accumulated other comprehensive income      1,323,135        557,503
 Retained earnings                           5,018,100      2,341,893
                                           -----------    -----------

 Total stockholders' equity                 14,605,468      9,163,629
                                           -----------    -----------

 TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY                                   $17,448,615    $10,871,423
                                           ===========    ===========



               NF ENERGY SAVING CORPORATION OF AMERICA
                 CONDENSED CONSOLIDATED STATEMENTS OF
                 OPERATIONS AND COMPREHENSIVE INCOME
   FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
        (Currency expressed in United States Dollars ("US$"),
                     except for number of shares)


                     Three months ended         Nine months ended
                        September 30,             September 30,
                   ------------------------  ------------------------
                      2008         2007         2008         2007
                   -----------  -----------  -----------  -----------

 REVENUE, NET
   Product         $ 3,557,112  $ 1,383,252  $ 8,836,478  $ 5,328,588
   Services            939,406      211,915    2,108,342    1,297,962
   Projects            105,308      435,849      818,490      435,849
                   -----------  -----------  -----------  -----------
 Total operation
  revenues           4,601,826    2,031,016   11,763,310    7,062,399
                   -----------  -----------  -----------  -----------

 COST OF REVENUES:
   Cost of products  2,639,688      881,432    6,391,906    3,889,149
   Cost of services    711,781       93,152    1,517,172      387,886
   Cost of projects     14,115      330,878      609,811      330,878
                   -----------  -----------  -----------  -----------
 Total cost of
  revenues           3,365,584    1,305,462    8,518,889    4,607,913
                   -----------  -----------  -----------  -----------

 GROSS PROFIT        1,236,242      725,554    3,244,421    2,454,486
                   -----------  -----------  -----------  -----------

 OPERATING EXPENSES:
   Sales and
    marketing           16,318        9,568       78,598       24,277
   Research and
    development         10,377       14,014       95,963      343,920
   Stock-based
    compensation            --           --           --      510,000
   General and
    administrative     153,262      125,478      411,091      254,707
                   -----------  -----------  -----------  -----------
 Total operating
  expenses             179,957      149,060      585,652    1,132,904
                   -----------  -----------  -----------  -----------

 INCOME FROM
  OPERATIONS         1,056,285      576,494    2,658,769    1,321,582
                   -----------  -----------  -----------  -----------

 Other income:
   Interest income       8,902        4,085       17,716        4,427
   Other income             76       (2,662)         194        8,857
                   -----------  -----------  -----------  -----------
 Total other income      8,978        1,423       17,910       13,284
                   -----------  -----------  -----------  -----------

 INCOME BEFORE
  INCOME TAXES       1,065,263      577,917    2,676,679    1,334,866

 Income tax expense       (167)          --         (472)          --
                   -----------  -----------  -----------  -----------

 NET INCOME        $ 1,065,096  $   577,917  $ 2,676,207  $ 1,334,866
                   ===========  ===========  ===========  ===========

 Other
  comprehensive
  income:
 - Foreign currency
  translation gain      77,186      206,182      765,632      278,034
                   -----------  -----------  -----------  -----------

 COMPREHENSIVE
  INCOME           $ 1,142,282  $   784,099  $ 3,411,839  $ 1,612,900
                   ===========  ===========  ===========  ===========

 Net income per
  share - basic and
  diluted          $      0.03  $      0.02  $      0.07  $      0.04
                   ===========  ===========  ===========  ===========

 Weighted
  average shares
  outstanding -
  basic and diluted 33,227,328    2,320,661   36,377,728   31,699,180
                   ===========  ===========  ===========  ===========
                              (Unaudited)



               NF ENERGY SAVING CORPORATION OF AMERICA
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
        (Currency expressed in United States Dollars ("US$"))
                             (Unaudited)

                                               Nine months ended
                                                  September 30,
                                           --------------------------

                                              2008           2007
                                           -----------    -----------

 Cash flows from operating activities:
 Net income                                $ 2,676,207    $ 1,334,866
 Adjustments to reconcile net income to
  net cash provided by operating activities
   Depreciation                                238,702        190,161
   Gain on disposal of plant and equipment                     (7,640)
   Stock-based compensation                                   510,000
   Change in operating assets and
    liabilities:
     Accounts receivable                    (3,804,182)    (1,004,058)
     Inventories                              (609,412)       213,836
     Prepayments and other receivables        (306,187)    (1,878,371)
     Accounts payable                          849,318         16,063
     Customer deposits                         343,490         67,294
     Income tax payable                            167       (392,183)
     Value added tax payables                    8,618          5,123
     Other payables and accrued liabilities   (156,442)       (23,392)
                                           -----------    -----------
 Net cash provided by operating activities    (759,721)      (968,301)
                                           -----------    -----------

 Cash flows from investing activities:
   Purchase of plant and equipment            (738,043)      (166,605)
   Proceeds from disposal of plant and
    equipment                                       --         79,504
                                           -----------    -----------
 Net cash (used in) provided by investing
  activities                                  (738,043)       (87,101)
                                           -----------    -----------

 Cash flows from financing activities:
   Proceeds from private sale of common
    stock                                    2,000,000        870,000
                                           -----------    -----------
 Net cash provided by financing activities   2,000,000        870,000
                                           -----------    -----------

 Effect on exchange rate change on cash
  and cash equivalents                         161,472         38,262
                                           -----------    -----------

 NET CHANGE IN CASH AND CASH EQUIVALENTS       663,708       (147,140)

 CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                     2,240,901        796,944
                                           -----------    -----------

 CASH AND CASH EQUIVALENTS, END OF PERIOD  $ 2,904,609    $   649,804
                                           ===========    ===========

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
   Cash paid for income taxes              $       305    $   392,183
                                           ===========    ===========
   Cash paid for interest expenses         $        --    $        --
                                           ===========    ===========



               NF ENERGY SAVING CORPORATION OF AMERICA
       CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                FOR THE NINE MONTHS ENDED SEPTEMBER 30,
      2008 (Currency expressed in United States Dollars ("US$"),
                     except for number of shares)
                              (Unaudited)


                           Common stock
                     -----------------------
                                               Additional
                       No. of                   paid-in     Statutory
                       shares       Amount      capital      reserve
                     -----------   ---------   ----------   ----------
 Balance as of
  January 1, 2008    $33,227,328   $  33,227   $5,713,232   $  557,503

 Private sale of
   common stock        6,645,376       6,645    1,993,355           --

 Foreign currency
  translation
  adjustment                  --          --           --      765,632

 Net income for the
    period                    --          --           --           --
                     -----------   ---------   ----------   ----------
 Balance as of
    September 30,
    2008             $39,872,704   $  39,872   $7,706,587   $1,323,135
                     ===========   =========   ==========   ==========



                       Accumulated
                          other                          Total
                      comprehensive     Retained      stockholders'
                         income         earnings         equity
                       -----------     -----------     -----------

 Balance as of
  January 1, 2008     $   517,774     $ 2,341,893     $ 9,163,629

 Private sale of
   common stock                --              --       2,000,000

 Foreign currency
  translation
  adjustment                   --              --         765,632

 Net income for the
  period                       --       2,676,207       2,676,207
                      -----------     -----------     -----------
 Balance as of
  September 30,
  2008                $   517,774     $ 5,018,100     $14,605,468
                      ===========     ===========     ===========

          NF Energy Saving Corporation of America
          Ms. Hong LI
          (86) 24 8563 1159
          Fax: (86) 24 2560 9750
          info@nfenergy.com
          www.nfenergy.com