<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission File Number: 001-13581
-----------
NOBLE INTERNATIONAL, LTD.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Michigan 38-3139487
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
33 Bloomfield Hills Parkway, Suite 155, Bloomfield Hills, Michigan 48304
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(248) 433-3093
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares of the registrant's common stock, no par value,
outstanding as of September 30, 1998 was 7,156,825.
<PAGE> 2
NOBLE INTERNATIONAL, LTD.
FORM 10-Q INDEX
This report contains "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933 and is subject to the safe harbor created by
that section. Statements regarding future operating performance, new programs
expected to be launched and other future prospects and developments are based
upon current expectations and involve certain risks and uncertainties that could
cause actual results and developments to differ materially. Potential risks and
uncertainties include such factors as demand for the company's products,
pricing, the company's growth strategy, including its ability to consummate and
successfully integrate future acquisitions, industry cyclicality and
seasonality, the company's ability to continuously improve production
technologies, activities of competitors and other risks detailed in the
company's Annual Report on Form 10-K for the year ended December 31, 1997 and
other filings with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION........................................................... 3
Item 1. Financial Statements.......................................................... 3
Consolidated Balance Sheets as of September 30, 1998
(unaudited) and December 31, 1997............................................. 3
Consolidated Statements of Earnings (unaudited) for the
Three and Nine Month Periods Ended September 30, 1998 and 1997................ 4
Consolidated Statements of Cash Flows (unaudited) for the
Nine Month Periods Ended September 30, 1998 and 1997.......................... 5
Consolidated Statements of Comprehensive Income (unaudited)
for the Three and Nine Month Periods Ended September 30, 1998 and 1997........ 6
Notes to Consolidated Interim Financial Statements............................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.................... 11
PART II - OTHER INFORMATION.............................................................. 12
Item 1. Legal Proceedings............................................................. 12
Item 2. Changes in Securities and Use of Proceeds..................................... 12
Item 3. Defaults Upon Senior Securities............................................... 12
Item 4. Submission of Matters to a Vote of Security Holders........................... 12
Item 5. Other Information............................................................. 12
Item 6. Exhibits and Reports on Form 8-K.............................................. 12
</TABLE>
2
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOBLE INTERNATIONAL, LTD.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
ASSETS 1997 1998
------------- -------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 2,352,814 $ 3,517,019
Accounts receivable, trade 11,507,622 16,765,281
Inventories 5,276,420 12,153,816
Prepaid expenses and other assets 290,832 1,546,250
Deferred income taxes 158,000 230,000
------------- -------------
Total Current Assets 19,585,688 34,212,366
PROPERTY, PLANT AND EQUIPMENT, NET 20,891,089 41,469,408
OTHER ASSETS
Goodwill 24,822,746 39,537,406
Covenants not to compete 1,383,333 1,233,277
Sundry 418,305 7,071,685
------------- -------------
26,624,384 47,842,368
------------- -------------
$ 67,101,161 $ 123,524,142
============= =============
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 717,285 $ 511,647
Current maturities of notes payable-
related parties 2,386,792 2,538,948
Current maturities of capital lease obligations 74,891 239,013
Accounts payable 7,055,130 10,887,425
Accrued liabilities 3,495,552 6,419,751
Income taxes payable 291,848 37,539
------------- -------------
Total Current Liabilities 14,021,498 20,634,323
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES 13,766,144 43,038,110
NOTES PAYABLE - RELATED PARTIES,
EXCLUDING CURRENT MATURITIES 10,286,281 8,275,668
CAPITAL LEASE OBLIGATIONS,
EXCLUDING CURRENT MATURITIES 183,150 920,567
CONVERTIBLE SUBORDINATED DEBENTURES -- 20,769,309
DEFERRED INCOME TAXES 384,000 727,769
PREFERRED STOCK OF SUBSIDIARY 850,000 737,500
SHAREHOLDERS' EQUITY
Preferred stock, $100 par value, 10% cumulative
authorized 150,000 shares -- --
Common stock, no par value, authorized
20,000,000 shares, issued and outstanding
7,160,168 and 7,156,825 shares at December
31, 1997 and September 30, 1998,
respectively 27,344,242 27,337,798
Retained earnings 265,846 2,380,911
Equity adjustment from foreign currency translation -- (1,297,813)
------------- -------------
27,610,088 28,420,896
------------- -------------
$ 67,101,161 $ 123,524,142
============= =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
3
<PAGE> 4
NOBLE INTERNATIONAL, LTD.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- -------------------------------
1997 1998 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 4,527,868 $ 22,711,001 $ 14,261,655 $ 56,455,177
Cost of goods sold 3,152,666 17,262,288 9,597,964 41,805,017
------------ ------------ ------------ ------------
Gross profit 1,375,202 5,448,713 4,663,691 14,650,160
Selling, general and
administrative expenses 1,308,528 3,454,820 3,540,753 9,572,477
------------ ------------ ------------ ------------
Operating profit 66,674 1,993,893 1,122,938 5,077,683
Other income (expense)
Equity in loss of unconsolidated subsidiary (34,346) -- (99,046) --
Interest expense (214,817) (905,897) (653,651) (1,593,871)
Sundry, net 115,416 16,435 119,437 43,629
------------ ------------ ------------ ------------
(133,747) (889,462) (633,260) (1,550,242)
Earnings/(loss) before income taxes
and minority interest (67,073) 1,104,431 489,678 3,527,441
Minority interest -- 19,641 -- 39,675
------------ ------------ ------------ ------------
Earnings/(loss) before income taxes (67,073) 1,084,790 489,678 3,487,766
Income tax expense (5,171) 468,701 207,040 1,372,701
------------ ------------ ------------ ------------
Net earnings/(loss) (61,902) 616,089 282,638 2,115,065
Preferred stock dividends -- -- 63,506 --
------------ ------------ ------------ ------------
Net earnings/(loss) on common shares $ (61,902) $ 616,089 $ 219,132 $ 2,115,065
============ ============ ============ ============
Basic earnings (loss) per common share $ (0.02) $ 0.09 $ 0.06 $ 0.30
============ ============ ============ ============
Weighted average shares outstanding 3,903,393 7,161,877 3,874,569 7,161,827
============ ============ ============ ============
Earnings (loss) per common share - assuming
dilution $ (0.02) $ 0.08 $ 0.06 $ 0.29
============ ============ ============ ============
Weighted average shares outstanding
and common stock equivalents 3,903,393 7,345,771 3,874,569 7,271,782
============ ============ ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
4
<PAGE> 5
NOBLE INTERNATIONAL, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
1997 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 282,638 $ 2,115,065
Adjustments to reconcile net earnings to
net cash provided by operations
Depreciation of property, plant and equipment 321,242 2,131,485
Amortization of goodwill 202,695 1,224,182
Deferred income taxes (15,900) (276,525)
Equity in loss of unconsolidated subsidiary 99,046 --
Changes in operating assets and liabilities, net of business
acquisition
Increase in accounts receivable (1,749,208) (520,837)
Increase in inventories (636,885) (886,310)
Increase in prepaid expenses (143,412) (1,084,864)
Increase in other assets (469,773) (5,699,645)
Increase in accounts payable 315,674 782,140
Increase in income taxes payable 179,840 (254,309)
Increase in accrued liabilities 316,403 231,124
------------ ------------
Net cash (used in) operating activities (1,297,640) (2,238,494)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (622,929) (13,767,761)
Acquisitions of businesses, net of cash acquired -- (30,508,680)
------------ ------------
Net cash (used in) investing activities (622,929) (44,276,441)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related parties 49,094 22,858
Repayments of notes payable - related parties (5,000) (1,881,315)
Capital lease payments -- (128,365)
Proceeds from issuance of common stock 353,400 --
Proceeds from issuance of preferred stock 3,446,600 --
Proceeds from issuance of convertible subordinated debentures -- 20,769,309
Redemption of preferred stock of subsidiary -- (112,500)
Payments on long-term debt (795,772) (852,135)
Sale/purchase of company stock -- (6,444)
Net proceeds from note payable to bank (1,302,708) 29,918,463
------------ ------------
Net cash provided by financing activities 1,745,614 47,729,871
Effect of exchange rate changes on cash -- (50,731)
------------ ------------
Net increase (decrease) in cash (174,955) 1,164,205
Cash at beginning of period 471,412 2,352,814
------------ ------------
Cash at end of period $ 296,457 $ 3,517,019
============ ============
SUPPLEMENTAL CASH FLOW DISCLOSURE
Cash paid for:
Interest $ 709,907 $ 1,181,637
============ ============
Taxes $ 20,000 $ 1,295,603
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
5
<PAGE> 6
NOBLE INTERNATIONAL, LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- ----------------------------
1997 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net earnings $ (61,902) $ 616,089 $ 219,132 $ 2,115,065
Other comprehensive income,
equity adjustment from
foreign translation, net of tax -- (19,200) -- (139,800)
----------- ----------- ----------- -----------
Comprehensive income $ (61,902) $ 596,889 $ 219,132 $ 1,975,265
=========== =========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
6
<PAGE> 7
NOBLE INTERNATIONAL, LTD.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
have been included and all adjustments considered necessary for a fair
presentation have been included and such adjustments are of a normal recurring
nature.
Results for interim periods should not be considered indicative of results for a
full year. The year-end consolidated balance sheet was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1997.
NOTE B--INVENTORIES
Inventories at December 31, 1997 and September 30, 1998 consisted of the
following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
------------ -------------
<S> <C> <C>
Raw materials and purchased parts $1,116,708 $ 3,217,251
Work in process 383,069 1,781,204
Finished goods 2,765,339 4,333,419
Unbilled customer tooling 1,011,304 2,821,942
---------- -----------
$5,276,420 $12,153,816
========== ===========
</TABLE>
NOTE C--OTHER ASSETS
Other assets at September 30, 1998 include $5,498,000 advanced by the Company
toward the acquisition of Tiercon Coaters, Inc. (formerly Centrifugal Coaters,
Inc.). This acquisition by the Company was successfully completed on October 1,
1998.
NOTE D--LINE OF CREDIT AND LONG TERM DEBT
In December 1997, the Company established a $35 million secured revolving Line
of Credit with Comerica, which was increased to $55 million in July 1998, and
which expires in December 2000. The Line of Credit may be utilized for general
corporate purposes, including working capital and acquisition financing, and
provides the Company with borrowing options for advances under the facility of
either a "Eurocurrency Rate" (Comerica's Eurodollar rate as adjusted for
reserves and other regulatory requirements) or a "Base Rate" (1% less than
Comerica's prime rate), plus an applicable margin (ranging from 0% to 2.25%)
based upon the Company's ratio of funded debt to EBITDA. Advances under the
facility during the quarter ended September 30, 1998 bore interest at the rate
of 7.25% per annum. The Line of Credit is subject to customary financial and
other covenants including, but not limited to, limitations on payment of
dividends, limitations on consolidations, mergers and sales of assets, and bank
approval on acquisitions over $20 million.
7
<PAGE> 8
NOTE E--CONVERTIBLE SUBORDINATED DEBENTURES
On July 31, 1998 and concluding August 10, 1998 the Company closed a private
offering of 6% Convertible Subordinated Debentures (the "Debentures") for gross
proceeds of $20.76 million. The proceeds were used to reduce the Line of
Credit. The Debentures have not been registered under the Securities Act of 1933
and were sold only outside the United States to non-U.S. persons as part of a
private offering pursuant to Regulation S of a minimum of $15 million and a
maximum of $40 million in principle amount of Debentures. The Debentures mature
on July 31, 2005 and interest is payable on January 31 and July 31 of each year;
provided, however, that for the first three years, in lieu of cash interest,
additional Debentures will be issued. The Debentures are unsecured obligations
of the Company which may be redeemed by the Company during the six months
beginning January 31, 2000 at 110%, and at 107.5%, 104.5%, 102.5%, 101% and
100.5% during each 12 month period following. Commencing November 30, 1998, the
Debentures are convertible into Common Stock at $14.3125 per share (subject to
adjustment). Beginning January 31, 2004 and on each July 31 and January 31
thereafter, the Company is required to redeem for cash 25% of the outstanding
principal amount of the Debentures through the maturity date. Offering costs of
$1.392 million are being amortized over seven years.
NOTE F--ADOPTION OF NEW ACCOUNTING STANDARDS
On January 1, 1998, the Corporation adopted Financial Accounting Standards Board
(the "FASB") issued Statement No. 130, "Reporting of Comprehensive Income"
("SFAS 130"), which establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of financial statements. This statement also requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES. Net sales for the three months ended September 30, 1998
increased 402% to $22.71 million from $4.53 million for the comparable quarter
of 1997. Net sales for the nine months ended September 30, 1998 increased 296%
to $56.46 million from $14.26 million for the comparable period of 1997. The
increase in sales is due primarily to the acquisitions of Noble Metal
Processing, Inc. ("Noble Processing," formerly Utilase, Inc.) and Noble Metal
Forming, Inc. ("Noble Forming," formerly Noble Metal Products, Inc. and DCT
Component Systems, Inc.) after the first two quarters of 1997, and Tiercon
Plastics, Inc. ("Tiercon Plastics," formerly Triam Automotive Canada, Inc.),
acquired in connection with the Company's acquisition of Tiercon Industries,
Inc. (formerly Tiercon Holdings, Inc.) in July 1998. Noble Processing
contributed sales of $6.69 million and $19.60 million, respectively, for the
three and nine month periods ended September 30, 1998. Noble Forming contributed
sales of $5.01 million and $16.94 million, respectively, for the three and nine
month periods ended September 30, 1998. Tiercon Plastics contributed sales of
$7.49 million for the three month period ending September 30, 1998. Net sales
from continuing operations decreased by approximately $1.01 million and $1.83
million, respectively for the three and nine month periods ended September 30,
1998 compared to prior year periods. The decline in the most recent quarter is
due to the impact of the General Motors strike. The decline for the nine month
period ended September 30, 1998 is due to a significant level of tooling sales
for new programs in sales in the prior year, the impact of the General Motors
strike, and the loss of a customer at the Company's Vassar Industries
subsidiary.
COST OF GOODS SOLD. Cost of goods sold increased 448% to $17.26 million
for the three months ended September 30, 1998 from $3.15 million for the
comparable quarter of 1997. Cost of goods sold increased 336% to $41.80 million
from $9.60 million for the nine months ended September 30, 1998. As a percent of
net sales, cost of goods sold increased to 76% from 70% and to 74% from 67%,
respectively, for the three and nine month periods ended September 30, 1998
compared to prior year periods. The increase in cost of goods sold as a
percentage of net sales in the current year is primarily due to the inclusion of
Noble Forming and Tiercon Plastics, which had significantly higher cost of goods
sold as a percentage of net sales than the Company's continuing operations, and
the reduced volume of sales due to the General Motors strike and loss of a
customer at Vassar Industries, without a corresponding reduction in fixed
manufacturing costs.
GROSS PROFIT. The Company's gross profit increased by 296% to $5.45
million for the three months ended September 30, 1998 from $1.37 million for the
comparable quarter of 1997. For the nine months ended September 30, 1998, the
Company's gross profit increased by 214% to $14.65 million from $4.66 million
for the comparable period of the prior year.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by 164% and 170%, respectively, for the three
and nine month periods ended September 30, 1998 as compared to the three and
nine month periods ended September 30, 1997 due to the acquisitions of Noble
Processing, Noble Forming and Tiercon Plastics, the addition of executive
personnel to support the Company's expanded operations and the costs of
maintaining the Company's public status following its November 1997 initial
public offering. Notwithstanding the increased level of expenses, selling,
general and administrative expenses actually decreased as a percentage of net
sales from 28.9% for the third quarter of 1997 to 15.2% for the third quarter of
1998, and from 24.8% for the nine months ended September 30, 1997 to 17.0% for
the nine months ended September 30, 1998. The decreases are primarily the result
of the increased volume of sales generated in the current year periods.
9
<PAGE> 10
OPERATING PROFIT. Operating profit increased to $1.99 million for the
three months ended September 30, 1998 from $0.07 million for the three months
ended September 30, 1997. For the nine months ended September 30, 1998,
operating profit was $5.08 million compared to $1.12 million in the prior year
period, an increase of 352%.
INTEREST EXPENSE. Interest expense increased 322% to $0.91 million for
the three months ended September 30, 1998 from $0.21 million for the comparable
quarter of the prior year, and by 144% to $1.59 million for the nine months
ended September 30, 1998 from $0.65 million for the comparable period of the
prior year. The increases in the current year periods were primarily due to the
financing obtained to support increased sales as well as the financing of the
Noble Processing, Noble Forming and Tiercon Plastics acquisitions.
NET EARNINGS. Net earnings increased by $0.68 million to $0.62 million
for the three months ended September 30, 1998 from a loss of $(0.06) million for
the three months ended September 30, 1997. Net earnings increased by $1.90
million to $2.12 million for the nine months ended September 30, 1998 from $0.22
million for the nine months ended September 30, 1997. The increase in net
earnings for the current year is primarily due to the Noble Processing and Noble
Forming acquisitions.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements have historically been satisfied through
a combination of cash flow from operations, equipment financing, bank financing
and loans from shareholders. The Company's working capital needs and capital
equipment requirements have increased as a result of the growth of the Company
and are expected to continue to increase as a result of anticipated growth. The
anticipated increase in required working capital and capital equipment
requirements, are expected to be met from the cash flow from operations,
equipment financing and revolving credit borrowings. As of September 30, 1998,
the Company had working capital of approximately $13.58 million.
The Company's operations used cash flow of $2.24 million for the nine
months ended September 30, 1998. Cash used by operating activities in the period
was primarily the result of cash provided by net earnings, depreciation and
amortization, offset by changes in working capital, together with $5.50 million
advanced toward the acquisition of Tiercon Coaters, Inc. (formerly Centrifugal
Coaters, Inc.) which was successfully completed on October 1, 1998. The Company
used cash in investing activities of $44.28 million for the nine months ended
September 30, 1998. Cash used in investing activities included $30.51 million
for the acquisition of Tiercon Plastics in July 1998, together with $13.77
million for the purchase of property, plant and equipment, primarily at Noble
Processing. The Company generated $47.73 million in cash flow from financing
activities for the nine months ended September 30, 1998. The financing
activities in the period were primarily borrowings on the Company's line of
credit together with $20.76 million of proceeds from a private offering of
Convertible Subordinated Debentures in July 1998 and concluding August 10, 1998.
The liquidity provided by the Company's existing credit facilities,
combined with cash flow from operations is expected to be sufficient to meet the
Company's currently anticipated working capital and capital expenditure needs
for at least 12 months. There can be no assurance, however, that such funds will
not be expended prior thereto due to changes in economic conditions or other
unforeseen circumstances, requiring the Company to obtain additional financing
prior to the end of such 12-month period. In addition, the Company intends to
pursue, as part of its business strategy, future growth through opportunistic
acquisitions may involve the expenditure of significant funds. Depending upon
the nature, size and timing of future acquisitions, the Company may be required
to obtain additional debt or equity financing in connection with such future
acquisitions. There can be no assurance, however, that additional financing will
be available to the Company, when and if needed, on acceptable terms or at all.
10
<PAGE> 11
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. These date code
fields will need to accept four digit entries to distinguish 21st century dates
from 20th century dates. As a result, in less than two years, computer systems
and software used by many companies will need to be upgraded to comply with such
"Year 2000" requirements. The Company has conducted an evaluation of the actions
necessary to ensure that its business critical computer systems will be able to
function without disruption with respect to the application of dating systems in
the year 2000. As a result of this evaluation, the Company is engaged in the
process of upgrading, replacing and testing certain of its information and other
computer systems so as to be able to operate without disruption due to Year 2000
issues. The Company is also evaluating the ability of its key suppliers to
operate without disruption due to Year 2000 issues. The Company's remedial
actions are scheduled to be completed no later than the second quarter of 1999
and based on information currently available, the Company does not anticipate
the costs of its remedial actions will be material to the Company's results of
operations and financial condition and are being expensed as incurred.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Inapplicable
NOTE A -- BASIS OF PRESENTATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Inapplicable..
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Inapplicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Inapplicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
ITEM 5. OTHER INFORMATION.
Inapplicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits and Index of Exhibits
27.1 -- Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on August 10, 1998.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NOBLE INTERNATIONAL, LTD.
Dated: November 16, 1998 By: /s/ DANIEL W. SAMPSON
--------------------------------
Daniel W. Sampson,
Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the interim
financial statements of the Company for the nine months ended September 30, 1998
and is qualified in its entirety by reference to such interim financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,517
<SECURITIES> 0
<RECEIVABLES> 16,765
<ALLOWANCES> 0
<INVENTORY> 12,154
<CURRENT-ASSETS> 34,212
<PP&E> 41,469
<DEPRECIATION> 0
<TOTAL-ASSETS> 123,524
<CURRENT-LIABILITIES> 20,634
<BONDS> 20,769
0
0
<COMMON> 28,421
<OTHER-SE> 738
<TOTAL-LIABILITY-AND-EQUITY> 123,524
<SALES> 56,455
<TOTAL-REVENUES> 56,455
<CGS> 41,805
<TOTAL-COSTS> 41,805
<OTHER-EXPENSES> 9,572
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,594
<INCOME-PRETAX> 3,527
<INCOME-TAX> 1,373
<INCOME-CONTINUING> 2,115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,115
<EPS-PRIMARY> .30
<EPS-DILUTED> .29
</TABLE>
