Noble International Ltd. has retained financial advisers as it reviews strategic alternatives for the companys future, Noble said today.
In a press release, Noble said it was considering a wide range of strategic alternatives, including potential transactions, but offered no further detail.
The suburban Detroit supplier retained Houlihan Lokey Howard & Zukin Capital Inc., a Los Angeles-based investment banking firm specializing in mergers and acquisitions, financial advisory services and restructuring, to assist the company in the review.
We feel that its responsible on our part to engage Houlihan Lokey and look for ways to get through this and come out on the other end, CEO Tom Saeli said. We could have a great company and a lot of good things going for us; its just the volumes are down so low now that it just makes it a very difficult operating environment.
Saeli declined comment on whether a Chapter 11 bankruptcy filing was among the options being considered by the company.
In its third quarter financial report released Nov. 5, Noble warned that it would post a significant net loss for its fourth quarter ending Dec. 31, and a modest net loss or, at best, negligible net income for its full 2008 fiscal year.
The overall economic downturn, car and truck production volumes that have been crippled by vehicle sales at 25-year lows and automakers' cancellations of future vehicle platforms for which Noble had contracts pushed the company to withdraw its full-year financial guidance.
In the same Nov. 5 statement, the company warned that it may fall out of compliance with some of its bank covenants by Dec. 31, adding it would be increasingly unlikely to comply with some covenants as 2009 progressed without waivers or amendments from its lenders.
The company also said it would be increasingly difficult to have enough liquidity and cash flow to fund its operations without restructuring its debt or finding new financial support.
Houlihan Lokeys Web site said the firm was the ranked as the No. 1 firm for most U.S. M&A transactions worth less than $1.25 billion by Thompson Reuters in 2007, completing 125 deals.
Noble said in today's news release that it plans to keep developments about the review under wraps until its board of directors has approved a specific transaction.
Saeli declined to comment further beyond what was in the release.
Noble has seen its stock price fall from its 52-week high of $13.65 per share on Feb. 1to 35 cents per share in early afternoon trading today.
A Bloomberg survey of two analysts covering Noble expects the company to post revenue of $255.5 million for the fourth quarter, which would be a 29 percent drop from the same period a year ago. Noble is scheduled to release its fourth quarter and full-year 2008 earnings on Feb. 26.
Nobles primary product is laser-welded steel blanks used to make car and truck bodies.