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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2008

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to
.

Commission File No.: 001-13581





NOBLE INTERNATIONAL, LTD.

(Exact name of registrant as specified in its
charter)







|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Delaware                                       |  | 38-3139487                          
|(State of incorporation)                       |  | (I.R.S. Employer Identification No.)
|                                               | 
|840 W. Long Lake Rd., Suite 601 Troy, Michigan |  | 48098                               
|(Address of principal executive offices)       |  | (Zip Code)                          

Registrants telephone number, including area code: (248) 519-0700





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   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | x
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

The number of shares of the registrants common stock outstanding as of July 31, 2008 was 23,671,760.









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NOBLE INTERNATIONAL, LTD.

TABLE OF CONTENTS



|                               |  |                                                                                       |  |   
|------------------------------ |  | ------------------------------------------------------------------------------------- |  | --
|                               |  | Page                                                                                 
|Part I  Financial Information |  |                                                                                      
|Item 1.                        |  | Financial Statements                                                                  |  | 3 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 27
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 32
|Item 4.                        |  | Controls and Procedures                                                               |  | 33
|                               | 
|Part II  Other Information    |  |                                                                                      
|Item 1.                        |  | Legal Proceedings                                                                     |  | 34
|Item 1A.                       |  | Risk Factors                                                                          |  | 34
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 34
|Item 3.                        |  | Defaults Upon Senior Securities                                                       |  | 34
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |  | 34
|Item 5.                        |  | Other Information                                                                     |  | 34
|Item 6.                        |  | Exhibits                                                                              |  | 34

***

The matters discussed in this Quarterly Report (Report) on Form 10-Q contain certain forward-looking statements of Noble International, Ltd. (the Company). For this purpose, any statements
contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as may, expect, believe, anticipate,
estimate, or continue, the negative or other variations thereof, or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties,
and actual results may differ materially depending on a variety of factors, including continued market demand for the types of products and services produced and sold by the Company, change in worldwide economic and political conditions and
associated impact on interest and foreign exchange rates, the level of sales by original equipment manufacturers of vehicles for which the Company supplies parts, the successful integration of companies acquired by the Company, and changes in
consumer debt levels.



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Part I  Financial Information



|Item 1. | Financial Statements
|------- | --------------------

NOBLE INTERNATIONAL, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share amounts)



|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                              |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                              |  | 2008                       |         |   | 2007                     |   |         | 2008 |  |   | 2007    |  
|Net sales                                                     |  | $                          | 314,949 |   |                          | $ | 182,657 |      |  | $ | 629,047 |   |  | $ | 342,728 |  
|Cost of sales                                                 |  |                            | 283,773 |   |                          |   | 168,650 |      |  |   | 573,976 |   |  |   | 315,129 |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Gross margin                                                  |  |                            | 31,176  |   |                          |   | 14,007  |      |  |   | 55,071  |   |  |   | 27,599  |  
|Selling, general and administrative expenses                  |  |                            | 19,247  |   |                          |   | 7,743   |      |  |   | 40,117  |   |  |   | 15,256  |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Operating profit                                              |  |                            | 11,929  |   |                          |   | 6,264   |      |  |   | 14,954  |   |  |   | 12,343  |  
|Interest income                                               |  |                            | 175     |   |                          |   | 72      |      |  |   | 260     |   |  |   | 159     |  
|Interest expense                                              |  |                            | (5,772  | ) |                          |   | (3,200  | )    |  |   | (11,782 | ) |  |   | (6,147  | )
|Loss on extinguishment of debt                                |  |                            | (929    | ) |                          |   |        |      |  |   | (929    | ) |  |   | (3,285  | )
|Net loss on derivative instruments                            |  |                            |        |   |                          |   | (1,751  | )    |  |   |        |   |  |   | (1,751  | )
|Other income, net                                             |  |                            | 2,527   |   |                          |   | 1,559   |      |  |   | 3,047   |   |  |   | 1,227   |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes, minority interest and equity loss |  |                            | 7,930   |   |                          |   | 2,944   |      |  |   | 5,550   |   |  |   | 2,546   |  
|Income tax (benefit) expense                                  |  |                            | (1,274  | ) |                          |   | 736     |      |  |   | (1,990  | ) |  |   | 129     |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Income before minority interest and equity loss               |  |                            | 9,204   |   |                          |   | 2,208   |      |  |   | 7,540   |   |  |   | 2,417   |  
|Minority interest, net of tax                                 |  |                            | (235    | ) |                          |   | (289    | )    |  |   | (527    | ) |  |   | (464    | )
|Equity loss, net of tax                                       |  |                            | (6      | ) |                          |   | (71     | )    |  |   | (34     | ) |  |   | (291    | )
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                    |  | $                          | 8,963   |   |                          | $ | 1,848   |      |  |   | 6,979   |   |  |   | 1,662   |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                              |  |                            |         |  
|Basic earnings per common share                               |  | $                          | 0.38    |   |                          | $ | 0.13    |      |  | $ | 0.30    |   |  | $ | 0.12    |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted earnings per common share                             |  | $                          | 0.35    |   |                          | $ | 0.13    |      |  | $ | 0.30    |   |  | $ | 0.12    |  
|                                                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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NOBLE INTERNATIONAL, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands)



|                                             |  |              |         |                  |   |        
|-------------------------------------------- |  | ------------ | ------- | ---------------- | - | -------
|                                             |  | June 30,2008 |         | December 31,2007
|ASSETS                                       |  |              |         |                  |   |        
|Current Assets:                              |  |              |         |                  |   |        
|Cash and cash equivalents                    |  | $            | 14,897  |                  | $ | 3,332  
|Accounts receivable, trade, net              |  |              | 181,690 |                  |   | 160,664
|Inventories, net                             |  |              | 64,409  |                  |   | 81,500 
|Unbilled customer tooling, net               |  |              | 6,909   |                  |   | 8,825  
|Prepaid expenses                             |  |              | 3,932   |                  |   | 3,804  
|Income taxes receivable                      |  |              | 4,705   |                  |   | 5,842  
|Value added tax receivable                   |  |              | 8,575   |                  |   | 11,117 
|Deferred income taxes                        |  |              | 3,544   |                  |   | 3,781  
|Assets held for sale                         |  |              | 2,248   |                  |   |       
|Other current assets                         |  |              | 11,127  |                  |   | 12,625 
|                                             |  |              |         |                  |   |        
|Total Current Assets                         |  |              | 302,036 |                  |   | 291,490
|                                             |  |             
|Property, Plant and Equipment, net           |  |              | 264,762 |                  |   | 264,163
|                                             |  |             
|Other Assets:                                |  |              |         |                  |   |        
|Goodwill                                     |  |              | 152,312 |                  |   | 155,100
|Other intangible assets, net                 |  |              | 79,696  |                  |   | 78,330 
|Other assets, net                            |  |              | 15,935  |                  |   | 14,608 
|                                             |  |              |         |                  |   |        
|Total Other Assets                           |  |              | 247,943 |                  |   | 248,038
|                                             |  |              |         |                  |   |        
|Total Assets                                 |  | $            | 814,741 |                  | $ | 803,691
|                                             |  |              |         |                  |   |        
|                                             |  |             
|LIABILITIES AND STOCKHOLDERS EQUITY         |  |              |         |                  |   |        
|Current Liabilities:                         |  |              |         |                  |   |        
|Accounts payable                             |  | $            | 164,566 |                  | $ | 152,868
|Accrued liabilities                          |  |              | 32,386  |                  |   | 35,125 
|Valued added tax payable                     |  |              | 6,774   |                  |   | 3,831  
|Current maturities of long-term debt         |  |              | 37,413  |                  |   | 49,795 
|Contingent consideration                     |  |              | 15,705  |                  |   | 14,746 
|Income taxes payable                         |  |              | 1,074   |                  |   | 1,021  
|                                             |  |              |         |                  |   |        
|Total Current Liabilities                    |  |              | 257,918 |                  |   | 257,386
|                                             |  |             
|Long-Term Liabilities:                       |  |              |         |                  |   |        
|Long-term debt, excluding current maturities |  |              | 146,522 |                  |   | 205,690
|Convertible subordinated notes               |  |              | 86,216  |                  |   | 36,216 
|Deferred income taxes                        |  |              | 35,545  |                  |   | 35,605 
|Other liabilities                            |  |              | 10,180  |                  |   | 10,018 
|                                             |  |              |         |                  |   |        
|Total Long-Term Liabilities                  |  |              | 278,463 |                  |   | 287,529
|                                             |  |             
|Minority Interest                            |  |              | 6,168   |                  |   | 5,641  
|                                             |  |             
|Commitments and Contingencies (Note 16)      |  |              |         |                  |   |        
|                                             |  |             
|Stockholders Equity                         |  |              |         |                  |   |        
|Common stock                                 |  |              | 16      |                  |   | 16     
|Additional paid-in capital                   |  |              | 223,177 |                  |   | 222,057
|Retained earnings                            |  |              | 19,300  |                  |   | 16,109 
|Accumulated other comprehensive income, net  |  |              | 29,699  |                  |   | 14,953 
|                                             |  |              |         |                  |   |        
|Total Stockholders Equity                   |  |              | 272,192 |                  |   | 253,135
|                                             |  |              |         |                  |   |        
|Total Liabilities and Stockholders Equity   |  | $            | 814,741 |                  | $ | 803,691
|                                             |  |              |         |                  |   |        

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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NOBLE INTERNATIONAL, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)



|                                                                                       |  |                          |         |   |      |   |         |  
|-------------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                       |  | Six Months EndedJune 30, |        
|                                                                                       |  | 2008                     |         |   | 2007 |  
|Cash flows from operating activities:                                                  |  |                          |         |   |      |   |         |  
|Net income                                                                             |  | $                        | 6,979   |   |      | $ | 1,662   |  
|Adjustments to reconcile net loss to net cash provided by operating activities:        |  |                          |         |   |      |   |         |  
|Minority interest                                                                      |  |                          | 527     |   |      |   | 464     |  
|Equity loss                                                                            |  |                          | 34      |   |      |   | 291     |  
|Loss on extinguishment of debt                                                         |  |                          | 929     |   |      |   | 3,285   |  
|Net loss on derivative instruments                                                     |  |                          |        |   |      |   | 1,751   |  
|Amortization of financing fees included in interest expense                            |  |                          | 1,001   |   |      |   | 258     |  
|Depreciation and amortization                                                          |  |                          | 26,643  |   |      |   | 9,768   |  
|Deferred income taxes                                                                  |  |                          | (1,416  | ) |      |   | (156    | )
|Share-based compensation expense                                                       |  |                          | 230     |   |      |   | 392     |  
|Gain on sale of property, plant and equipment                                          |  |                          | 51      |   |      |   | (2      | )
|Changes in operating assets and liabilities, net of acquisitions and foreign exchange: |  |                          |         |   |      |   |         |  
|Accounts receivable                                                                    |  |                          | (14,762 | ) |      |   | (21,234 | )
|Inventories                                                                            |  |                          | 20,560  |   |      |   | (1,353  | )
|Prepaid and other assets                                                               |  |                          | 7,022   |   |      |   | 5,128   |  
|Accounts payable                                                                       |  |                          | 7,967   |   |      |   | 20,985  |  
|Income taxes payable or receivable                                                     |  |                          | 1,313   |   |      |   | 691     |  
|Accrued liabilities                                                                    |  |                          | 6,684   |   |      |   | 951     |  
|Excess tax benefit from share-based compensation arrangements                          |  |                          | 184     |   |      |   | (164    | )
|                                                                                       |  |                          |         |   |      |   |         |  
|Net cash provided by operating activities                                              |  |                          | 63,946  |   |      |   | 22,717  |  
|                                                                                       |  |                         
|Cash flows from investing activities:                                                  |  |                          |         |   |      |   |         |  
|Purchases of property, plant and equipment                                             |  |                          | (16,314 | ) |      |   | (13,890 | )
|Proceeds from sale of property, plant and equipment                                    |  |                          | 1,230   |   |      |   | 220     |  
|Investment in joint ventures                                                           |  |                          | (814    | ) |      |   | (187    | )
|Additional direct costs paid for Pullman acquisition                                   |  |                          |        |   |      |   | (37     | )
|                                                                                       |  |                          |         |   |      |   |         |  
|Net cash used in investing activities                                                  |  |                          | (15,898 | ) |      |   | (13,894 | )
|                                                                                       |  |                         
|Cash flows from financing activities:                                                  |  |                          |         |   |      |   |         |  
|Net (payments) borrowings on revolving credit facilities                               |  |                          | (23,192 | ) |      |   | 5,390   |  
|Repayments of borrowings under term loans                                              |  |                          | (86,124 | ) |      |   | (7,070  | )
|Repayments under other debt agreements                                                 |  |                          | (3,829  | ) |      |   | (1,178  | )
|Proceeds from issuance of convertible subordinated debt                                |  |                          | 50,000  |   |      |   |        |  
|Proceeds from issuance of subordinated debt                                            |  |                          | 31,249  |   |      |   |        |  
|Proceeds from issuance of common stock                                                 |  |                          | 187     |   |      |   | 1,163   |  
|Dividends paid on common stock                                                         |  |                          | (3,788  | ) |      |   | (2,262  | )
|Financing fees                                                                         |  |                          | (937    | ) |      |   | (90     | )
|Excess tax benefit from share-based compensation arrangements                          |  |                          | 148     |   |      |   | 164     |  
|                                                                                       |  |                          |         |   |      |   |         |  
|Net cash used in financing activities                                                  |  |                          | (36,286 | ) |      |   | (3,883  | )
|                                                                                       |  |                         
|Effect of exchange rate changes on cash and cash equivalents                           |  |                          | (197    | ) |      |   | 28      |  
|                                                                                       |  |                         
|Net increase (decrease) in cash and cash equivalents                                   |  |                          | 11,565  |   |      |   | 4,968   |  
|Cash and cash equivalents at beginning of period                                       |  |                          | 3,332   |   |      |   | 6,587   |  
|                                                                                       |  |                          |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                             |  | $                        | 14,897  |   |      | $ | 11,555  |  
|                                                                                       |  |                          |         |   |      |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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NOBLE INTERNATIONAL, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in
thousands)



|                                                                     |  |                            |        |                          |   |       |  |      |        |  |   |      
|-------------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------ | - | ----- |  | ---- | ------ |  | - | -----
|                                                                     |  | Three Months EndedJune 30, |        | Six Months EndedJune 30,
|                                                                     |  | 2008                       |        | 2007                     |   | 2008  |  | 2007
|Net income                                                           |  | $                          | 8,963  |                          | $ | 1,848 |  | $    | 6,979  |  | $ | 1,662
|Other comprehensive income:                                          |  |                            |        |                          |   |       |  |      |        |  |   |      
|Foreign currency translation adjustments, net                        |  |                            | 307    |                          |   | 1,631 |  |      | 14,311 |  |   | 1,649
|Change in unrecognized loss on derivative instruments and other, net |  |                            | 1,186  |                          |   | 59    |  |      | 435    |  |   | 59   
|                                                                     |  |                            |        |                          |   |       |  |      |        |  |   |      
|Other comprehensive income                                           |  |                            | 1,493  |                          |   | 1,690 |  |      | 14,746 |  |   | 1,708
|                                                                     |  |                            |        |                          |   |       |  |      |        |  |   |      
|Comprehensive income                                                 |  | $                          | 10,456 |                          | $ | 3,538 |  | $    | 21,725 |  | $ | 3,370
|                                                                     |  |                            |        |                          |   |       |  |      |        |  |   |      

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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NOBLE INTERNATIONAL, LTD.

Notes to Condensed Consolidated Financial Statements

Note 1  Basis of Presentation

Basis of Presentation

The
accompanying unaudited, condensed and consolidated financial statements of Noble International, Ltd. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America
(GAAP) for interim financial reporting, and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the financial statements for interim reporting do not include all of the information and notes or disclosures
required by GAAP for complete financial statements. In the opinion of management, 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 consolidated balance sheet for the year ended December 31, 2007 was derived from audited financial statements, but does not include all the disclosures required by GAAP. For
further information, refer to the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K, as amended by Form 10-K/A, for the period ended December 31, 2007, as filed with the Securities and
Exchange Commission (SEC).

The consolidated financial statements include the Company and the accounts of the Companys
subsidiaries in which it holds a controlling financial or management interest. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company applies the equity method of accounting for investments in voting stock which give it the ability to exercise significant influence over
operating and financial policies of the investee. Significant influence is generally defined as 20% to 50% ownership in the voting stock of an investee. However, each investment in voting stock is analyzed to determine if other factors are present,
such as representation on the investees board of directors, participation in policy making processes, material intercompany transactions, interchange of managerial personnel, or technological dependency, which may indicate the Companys
ability to exercise significant influence absent a voting stock ownership greater than 20%.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates.

Recent Accounting Pronouncements

In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurement (SFAS 157). SFAS 157 defines fair
value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. SFAS 157 is effective,
except as described below, for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position (FSP) No. FAS 157-1,
Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13, which amends
SFAS 157 to exclude FASB Statement No. 13, Accounting for Leases, (SFAS 13)



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NOBLE INTERNATIONAL, LTD.

Notes to Condensed Consolidated Financial Statements



and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS 13. In February 2008,
the FASB issued FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed
at fair value in the financial statements on a recurring basis (at least annually). On January 1, 2008, the Company adopted the provisions of SFAS 157 as it applies to financial assets and liabilities, and it did not have a material effect on
its consolidated financial statements.

On January 1, 2008, the Company adopted SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The
objective of SFAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently. The Company did not elect to re-measure
any of its existing financial assets or liabilities under the provisions of SFAS 159.

In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements  an amendment to ARB No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest (minority
interest) in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial
statements. SFAS 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. SFAS 160 also requires that changes in a parents ownership interest in a
subsidiary that do not result in deconsolidation to be accounted for as equity transactions if the parent retains its controlling financial interest in the subsidiary. Otherwise, transactions that result in deconsolidation of a subsidiary are
recognized as gains or losses. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company does not believe that the adoption of SFAS 160 will have a material
effect on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations (SFAS 141(R)), which retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called the purchase method) be used for all business combinations and for an
acquirer to be identified for each business combination. SFAS 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair
values as of that date, with limited exceptions. SFAS 141(R) retains the guidance in Statement 141 for identifying and recognizing intangible assets separately from goodwill and applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The Company is currently evaluating the requirements of SFAS 141(R) and has
not yet determined the impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging Activities (SFAS 161), which requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and
related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (SFAS 133) and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15,
2008, with early application encouraged. The Company does not believe that the adoption of SFAS 161 will have a material effect on its consolidated financial statements.



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Notes to Condensed Consolidated Financial Statements



In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3), which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement
No. 142, Goodwill and Other Intangible Assets. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The guidance
contained in this FSP for determining the useful life of a recognized intangible asset shall be applied prospectively to intangible assets acquired after the effective date. However, the disclosure requirements of FSP 142-3 must be applied
prospectively to all intangible assets recognized in the Companys financial statements as of the effective date. The Company does not believe that the adoption of FSP 142-3 will have a material effect on its consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS
162), which identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted
accounting principles (GAAP) in the United States (the GAAP hierarchy). SFAS 162 is effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.The Company does not believe that the adoption of SFAS 162 will have a material effect on its consolidated financial statements.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities (FSP 03-6-1), which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing
earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of FASB Statement No. 128, Earnings per Share. FSP 03-6-1 indicates that unvested share-based payment awards that contain nonforfeitable
rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of EPS pursuant to the two-class method. FSP 03-6-1 is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those years. All prior-period EPS data presented shall be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data)
to conform with the provisions of this FSP. Early application is not permitted. The Company does not believe that the adoption of FSP 03-6-1 will have a material effect on its consolidated financial statements.

Note 2  Earnings Per Share

Basic earnings per
share are computed by dividing net income by the weighted-average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were
exercised and converted into common stock or resulted in the issuance of common stock that then shared in the net income of the Company.



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Notes to Condensed Consolidated Financial Statements



The following table reconciles the numerators and denominators of the basic and diluted per-share
computations.



|                               |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|------------------------------ |  | ---------------------------------------- | ----- | ------------------- | ------ | --------------- | - | ----- | --------------------- |  | ------------------- | ----- | --------------- | ------ |  | - | ----
|                               |  | Three Months Ended June 30,             
|                               |  | 2008                                     |       |                     | 2007  
|                               |  | Net Income(Numerator)                    |       | Shares(Denominator) |        | PerShareAmounts |   |       | Net Income(Numerator) |  | Shares(Denominator) |       | PerShareAmounts
|                               |  | (in thousands, except per share amounts)
|Basic earnings per share       |  | $                                        | 8,963 |                     | 23,661 |                 | $ | 0.38  |                       |  | $                   | 1,848 |                 | 14,138 |  | $ | 0.13
|Effect of dilutive securities: |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|Share-based compensation       |  |                                          |      |                     | 1      |                 |   |      |                       |  |                     |      |                 | 20     |  |   |    
|Convertible subordinated notes |  |                                          | 910   |                     | 4,840  |                 |   | (0.03 | )                     |  |                     |      |                 |       |  |   |    
|                               |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|Diluted earnings per share     |  | $                                        | 9,873 |                     | 28,502 |                 | $ | 0.35  |                       |  | $                   | 1,848 |                 | 14,158 |  | $ | 0.13
|                               |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|                               | 
|                               |  | Six Months Ended June 30,               
|                               |  | 2008                                     |       |                     | 2007  
|                               |  | Net Income(Numerator)                    |       | Shares(Denominator) |        | PerShareAmounts |   |       | Net Income(Numerator) |  | Shares(Denominator) |       | PerShareAmounts
|                               |  | (in thousands, except per share amounts)
|Basic earnings per share       |  | $                                        | 6,979 |                     | 23,634 |                 | $ | 0.30  |                       |  | $                   | 1,662 |                 | 14,133 |  | $ | 0.12
|Effect of dilutive securities: |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|Share-based compensation       |  |                                          |      |                     | 22     |                 |   |      |                       |  |                     |      |                 | 24     |  |   |    
|                               |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     
|Diluted earnings per share     |  | $                                        | 6,979 |                     | 23,656 |                 | $ | 0.30  |                       |  | $                   | 1,662 |                 | 14,157 |  | $ | 0.12
|                               |  |                                          |       |                     |        |                 |   |       |                       |  |                     |       |                 |        |  |   |     

The following securities would have had an anti-dilutive effect on earnings per share and are
therefore excluded from the computations above.



|                               |  |                            |  |                          |  |       |  |      
|------------------------------ |  | -------------------------- |  | ------------------------ |  | ----- |  | -----
|                               |  | Three Months EndedJune 30, |  | Six Months EndedJune 30,
|                               |  | 2008                       |  | 2007                     |  | 2008  |  | 2007 
|                               |  | (in thousands)            
|Convertible subordinated notes |  |                           |  | 1,667                    |  | 3,446 |  | 1,671

Note 3  Supplemental Cash Flow Information

Purchases of property, plant, and equipment (PP&E) and changes in accounts payable have been adjusted in the Condensed Consolidated
Statements of Cash Flows (Unaudited) to reflect PP&E amounts included in accounts payable. These increases in accounts payable were $1.7 million and $6.3 million, at June 30, 2008 and 2007, respectively. These adjustments allow for the
presentation of actual cash paid for PP&E in each year presented.



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Notes to Condensed Consolidated Financial Statements



Supplemental cash flow information is as follows:



|                                    |  |                          |        |   |      |   |      
|----------------------------------- |  | ------------------------ | ------ | - | ---- | - | -----
|                                    |  | Six Months EndedJune 30,
|                                    |  | 2008                     |        |   | 2007
|                                    |  | (in thousands)          
|Cash paid for interest              |  | $                        | 12,675 |   |      | $ | 4,371
|                                    |  |                          |        |   |      |   |      
|Cash (received) paid for taxes, net |  | $                        | (1,845 | ) |      | $ | 2,096
|                                    |  |                          |        |   |      |   |      

Note 4  Inventories, Net

The major components of inventories, net are as follows:



|                               |  |                |        |   |                  |   |        |  
|------------------------------ |  | -------------- | ------ | - | ---------------- | - | ------ | -
|                               |  | June 30,2008   |        |   | December 31,2007 |  
|                               |  | (in thousands) |       
|Raw materials                  |  | $              | 23,462 |   |                  | $ | 29,913 |  
|Work in process                |  |                | 14,429 |   |                  |   | 16,220 |  
|Finished goods                 |  |                | 27,261 |   |                  |   | 36,089 |  
|Reserve for obsolete inventory |  |                | (743   | ) |                  |   | (722   | )
|                               |  |                |        |   |                  |   |        |  
|Total                          |  | $              | 64,409 |   |                  | $ | 81,500 |  
|                               |  |                |        |   |                  |   |        |  

Note 5  Acquisitions

Tailored Laser-Welded Blank Business of Arcelor S.A.

In August 2007, the Company acquired
substantially all of the tailor laser-welded blank business conducted by ArcelorMittal and its affiliates in Europe, India, China and the United States (the Arcelor Business) in exchange for (i) 9.375 million newly-issued
shares of the Companys common stock, (ii) cash payments of $116.3 million less capitalized lease obligations, accrued taxes and adjustments for working capital at closing and (iii) $15.0 million to be paid in the form of a 6%
subordinated note maturing in 2012 (the Arcelor Transaction).

In connection with the Arcelor Transaction, ArcelorMittal, the
Company and in certain instances, Mr. Robert J. Skandalaris, the Companys chairman of the board of directors at the time of closing, entered into a number of additional agreements that address corporate governance matters and the
rights of ArcelorMittal and Mr. Skandalaris as stockholders.

Standstill and Stockholder Agreement

Under the standstill and stockholder agreement, at the closing of the Arcelor Transaction, Mr. Skandalaris and ArcelorMittal agreed for two years
from the closing of the Arcelor Transaction not to, among other things: (i) acquire any additional shares of the Company; (ii) solicit proxies or become a participant in an election contest without the other partys permission; and
(iii) enter into an arrangement with a third party with respect to voting, acquiring, holding or disposing of any of the Companys securities. In addition, the Company and ArcelorMittal agreed for two years from the closing of the Arcelor
Transaction not to: (i) acquire any additional shares of the other party; (ii) solicit proxies or become a participant in an election contest involving the other party; (iii) enter into an arrangement with a third party with respect
to voting, acquiring, holding or disposing of any of the securities of the other



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Notes to Condensed Consolidated Financial Statements



party; (iv) seek to place a representative on the other partys board of directors or seek to call a meeting of stockholders of the other party; or
(v) solicit or assist any person with respect to any business transaction involving the other party.

Under the standstill and
stockholder agreement, if ArcelorMittal were to sell 1.0 million or more shares of its common stock in the Company to a third party, then Mr. Skandalaris would have the right to sell his common stock in the Company (at the same price and
on the same terms). Similarly, Mr. Skandalaris (or his estate) would have certain put rights to ArcelorMittal following his death, disability or removal from the Companys board of directors or as the chairman thereof, but, if such rights
were not exercised following the expiration of the put term, ArcelorMittal would have certain call rights to purchase all of Mr. Skandalaris stock. In addition, if the parties disagreed regarding a strategic matter for the Company, then
ArcelorMittal would have the option to call all of Mr. Skandalaris shares at a pre-determined price. If ArcelorMittal did not exercise its call option, Mr. Skandalaris would have the option to put all of his shares to ArcelorMittal
at a pre-determined price. If ArcelorMittal declined to purchase Mr. Skandalaris shares, then the standstill provisions preventing Mr. Skandalaris from selling his shares would terminate, but the other provisions of the standstill
and stockholder agreement would remain in place. Lastly, should Mr. Skandalaris voluntarily resign from the Companys board of directors or refuse to serve as a director, the restrictions on Mr. Skandalaris to sell his shares during
the first two years following the closing of the Arcelor Transaction would no longer apply, except that ArcelorMittal would have a right of first refusal on any shares that Mr. Skandalaris determined to sell.

On March 20, 2008, the Company entered into an agreement and waiver with ArcelorMittal and the Companys former chairman of the board,
Mr. Skandalaris (the Agreement and Waiver), which waives the applicability to ArcelorMittal of the standstill provisions and other provisions of the standstill and stockholders agreement.

Registration Rights Agreement

Under the registration
rights agreement, the Company granted to ArcelorMittal and Mr. Skandalaris registration rights with respect to the common shares ArcelorMittal received in the Arcelor Transaction and that Mr. Skandalaris had previously owned. These
registration rights grant up to four demand registrations.

On March 20, 2008, the Company entered into the first amendment to the
registration rights agreement with ArcelorMittal and Mr. Skandalaris, which amended the registration rights agreement to provide that the convertible subordinated debt financing provided by Arcelor and the shares issuable upon its conversion
are included as registrable securities that ArcelorMittal may require the Company to register.

On May 5, 2008, the
Company, ArcelorMittal and Mr. Skandalaris entered into an amendment agreement terminating all rights of Mr. Skandalaris under the standstill and stockholder agreement and the registration rights agreement.



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Notes to Condensed Consolidated Financial Statements



Financial Information

Results of operations for the Arcelor Business are included in the Companys financial statements beginning September 1, 2007. The unaudited pro forma combined historical results for the three and six month
periods ended June 30, 2007, as if the Company had acquired the Arcelor Business at the beginning of 2007, are estimated to be as follows:



|                                  |  |                                          |         |                               |   |        
|--------------------------------- |  | ---------------------------------------- | ------- | ----------------------------- | - | -------
|                                  |  | Three Months EndedJune 30, 2007          |         | Six Months EndedJune 30, 2007
|                                  |  | (in thousands, except per share amounts)
|Pro Forma Information             |  |                                          |         |                               |   |        
|Net sales                         |  | $                                        | 350,467 |                               | $ | 645,830
|Net income                        |  |                                          | 9,109   |                               |   | 12,660 
|Basic earnings per common share   |  |                                          | 0.39    |                               |   | 0.54   
|Diluted earnings per common share |  |                                          | 0.39    |                               |   | 0.54   

The pro forma information includes adjustments for depreciation and the effect of the amortization
of intangible assets recognized in the acquisition, income taxes, and other accounting adjustments recognized in recording the combination. This pro forma information is not necessarily indicative of future operating results.

The Company has completed a preliminary allocation of the purchase price for its Arcelor Business acquisition pursuant to purchase accounting
requirements. The preliminary allocation was based upon initial valuations and estimates of certain assets and liabilities and is subject to adjustment as additional information is obtained. Such additional information includes, but is not limited
to, the valuation of certain contracts with ArcelorMittal, and the evaluation of plant consolidation and related exit costs. During the first half of 2008, the Company updated its preliminary purchase price allocation, and goodwill decreased by $7.7
million, primarily due to a change in the working capital adjustment of approximately $8.5 million.

Note 6  Goodwill

The change in goodwill during the six months ended June 30, 2008 was as follows:



|                                |  |                     |        |                               |   |        |                    |  |       |     |  |   |         |  
|------------------------------- |  | ------------------- | ------ | ----------------------------- | - | ------ | ------------------ |  | ----- | --- |  | - | ------- | -
|                                |  | NorthAmericaSegment |        | Europe andRest ofWorldSegment |   |        | Corporateand Other |  | Total |    
|                                |  | (in thousands)      |       
|Balance, December 31, 2007      |  | $                   | 84,748 |                               | $ | 69,976 |                    |  | $     | 376 |  | $ | 155,100 |  
|Arcelor acquisition adjustments |  |                     | 236    |                               |   | (7,880 | )                  |  |       |    |  |   | (7,644  | )
|Foreign currency impact         |  |                     | 170    |                               |   | 4,686  |                    |  |       |    |  |   | 4,856   |  
|                                |  |                     |        |                               |   |        |                    |  |       |     |  |   |         |  
|Balance, June 30, 2008          |  | $                   | 85,154 |                               | $ | 66,782 |                    |  | $     | 376 |  | $ | 152,312 |  
|                                |  |                     |        |                               |   |        |                    |  |       |     |  |   |         |  

In accordance with SFAS No. 142, Goodwill and Other Intangible Assets,
management reviews the recoverability of goodwill, at least annually, as of June 30 and any other time events or circumstances indicate a potential change in recoverability. Goodwill impairment is determined using a two-step test. The first
step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the



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reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second test is unnecessary. The second step of the goodwill
impairment test is used to measure the amount of the impairment loss by comparing the implied fair value of the reporting units goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting units goodwill
exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess.

Prior to the
closing of the Arcelor Transaction on August 31, 2007, the Company determined it had one reporting unit for goodwill impairment testing purposes. As a result of the Arcelor Transaction and subsequent reorganization of its business, the Company
determined that it had two reporting units, North America and Europe and Rest of World. The Company continues to use June 30 as its annual impairment test date for its North America reporting unit and has elected to use August 31 as its
annual impairment date for its Europe and Rest of World reporting unit.

The Company utilizes two approaches to calculate the fair value of
its reporting units. The first approach uses a discounted cash flow analysis using estimates of the Companys future cash flows and weighted-average cost of capital. The Company estimates its future cash flows using internal budget information
based upon independent forecasts of future automotive volumes.

The second approach is a market value approach based upon multiples of
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) to market capitalization plus total debt (Market Enterprise Value) of a market basket of companies considered comparable to the Company. The Company
obtains the average Market Enterprise Value to EBITDA multiple for mergers and acquisition activity for the trailing twelve-month period from an independent source and also used publicly available data for a market basket of comparable companies.
These multiples are then applied to the Companys internally forecasted EBITDA to arrive at an estimated fair value of the reporting unit.

The Company is currently performing its goodwill valuation as of June 30, 2008 for its North America reporting unit and expects to complete it during the third quarter of 2008.

Note 7  Other Intangible Assets, Net

Other
intangible assets, net, consisted of the following:



|                   |  |                |        |                         |   |        |          |  |            |        |                         |   |        |          |   |        |   |  |   |       
|------------------ |  | -------------- | ------ | ----------------------- | - | ------ | -------- |  | ---------- | ------ | ----------------------- | - | ------ | -------- | - | ------ | - |  | - | ------
|                   |  | June 30, 2008  |        | December 31, 2007      
|                   |  | GrossValue     |        | AccumulatedAmortization |   |        | NetValue |  | GrossValue |        | AccumulatedAmortization |   |        | NetValue
|                   |  | (in thousands)
|Customer contracts |  | $              | 80,025 |                         | $ | (6,662 | )        |  | $          | 73,363 |                         | $ | 75,903 |          | $ | (3,857 | ) |  | $ | 72,046
|Technology         |  |                | 6,840  |                         |   | (785   | )        |  |            | 6,055  |                         |   | 6,840  |          |   | (556   | ) |  |   | 6,284 
|Other              |  |                | 290    |                         |   | (12    | )        |  |            | 278    |                         |   |       |          |   |       |   |  |   |      
|                   |  |                |        |                         |   |        |          |  |            |        |                         |   |        |          |   |        |   |  |   |       
|Total              |  | $              | 87,155 |                         | $ | (7,459 | )        |  | $          | 79,696 |                         | $ | 82,743 |          | $ | (4,413 | ) |  | $ | 78,330
|                   |  |                |        |                         |   |        |          |  |            |        |                         |   |        |          |   |        |   |  |   |       



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Notes to Condensed Consolidated Financial Statements



Amortization expense was $1.5 million and $0.6 million for the three month periods ended
June 30, 2008 and 2007, respectively, and $2.9 million and $1.1 million for the six month periods ended June 30, 2008 and 2007, respectively. Amortization expense by year is estimated to be as follows:



|     |  |                |      
|---- |  | -------------- | -----
|Year |  | (in thousands)
|2009 |  | $              | 5,928
|2010 |  |                | 5,928
|2011 |  |                | 5,928
|2012 |  |                | 5,928
|2013 |  |                | 5,836

Note 8  Long-Term Debt

ArcelorMittal Convertible Subordinated Note

On March 19, 2008, the Company entered into a
Securities Purchase Agreement (the Securities Purchase Agreement) with ArcelorMittal pursuant to which ArcelorMittal agreed to provide subordinated debt financing to the Company in the form of a convertible subordinated note with a
principal amount of $50.0 million. The convertible subordinated note was issued on March 20, 2008, bears interest at the rate of 6% per annum and matures on March 20, 2013. The conversion price is subject to reset and adjustment, as
further described below. The proceeds from the issuance of the convertible subordinated note were used as follows: $10.0 million to pay down the U.S. and Canadian revolving credit facility and $40.0 million to pay down the U.S. and Canadian term
loan. This transaction was accounted for as a debt extinguishment.

The convertible subordinated note is convertible into shares of the
Companys common stock, in whole or in part, from time to time until March 13, 2013. The convertible subordinated note initially is convertible into shares of the Companys common stock at $15.75 per share based upon the principal
amount outstanding, a price equal to a 25% premium over the simple average of each trading days volume weighted-average price (Average Price) from and including January 15, 2008 to and including February 15, 2008 (the
Initial Conversion Price), subject to adjustment as follows: On each of June 30, September 30, and December 31, 2008 and March 31, 2009 (each, a Reset Date), the conversion price will adjust to the
lower of: (a) the conversion price in effect at such Reset Date; and (b) a 30% premium over the Average Price for the 30 days ending on the last trading day immediately preceding such Reset Date (but not below a 30% premium over an Average
Price of $8.00, i.e. $10.40 per share); provided that, in the absence of approval by the Companys stockholders, in no event would the number of shares issuable upon conversion equal or exceed 20% of the Companys outstanding shares on the
date of disbursement of the loan. Accordingly, partial conversions of the loan would be permitted. As of June 30, 2008 the conversion price was reset to $10.40 per share. The conversion price also is subject to adjustment, from time to time, in
certain events, including upon any stock split, stock dividend, recapitalization or otherwise, or the issuance of shares of the Companys common stock or options or other securities convertible into or exchangeable for shares of the
Companys common stock at a price per share, or a conversion or exchange price per share, less than the conversion price of the convertible note then in effect. Upon conversion, the amount to be converted also will include accrued and unpaid
interest, if any, and late charges, if any, with respect to the principal and interest converted.

Pursuant to the Securities Purchase
Agreement, the Company agreed: (a) at its next annual meeting of stockholders, to submit for approval a proposal to allow the issuance of the shares upon conversion in accordance with NASDAQ Marketplace Rule 4350(i), to use its best efforts to
solicit its stockholders approval of such issuance and to cause the board of directors to recommend to the



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Notes to Condensed Consolidated Financial Statements



stockholders that they approve such proposal; (b) to avail itself of the controlled company exemption regarding corporate governance
requirements under the NASDAQ listing requirements at any time that ArcelorMittals beneficial ownership (including shares held by ArcelorMittals affiliates) exceeds 50% of the outstanding shares of the Companys common stock; and
(c) promptly following (i) the closing under the Securities Purchase Agreement and (ii) the designation by ArcelorMittal of nominees to serve on the board of directors and board committees (the Nominees), to use its best
efforts to cause the Nominees to be duly elected to fill vacancies on the board of directors in accordance with the standstill and stockholder agreement described above, as amended by the Agreement and Waiver.

At the Companys 2008 Annual Meeting of Shareholders held on July 17, 2008, the Companys shareholders approved the issuance of shares
upon conversion of the convertible subordinated note to the extent the number of shares issuable upon conversion equal or exceed 20% of the Companys outstanding shares on the date of disbursement of the loan.

U.S. and Canadian Credit Facility

The Company
maintains a $70.0 million term loan and a $50.0 million revolving credit facility through a syndicate of commercial banks (collectively, the U.S. and Canadian Credit Facility). On March 20, 2008, the Company entered into a sixth
amendment with the syndicate of commercial banks which modified the U.S. and Canadian Credit Facility to, among other things, (i) permit the Company to incur subordinated debt in the amount of $50.0 million as part of the convertible
subordinated debt financing with ArcelorMittal, (ii) reduce the repayment of principal amounts under the term loan from quarterly installments of $3.25 million to quarterly installments of $1.25 million each and change the maturity date of the
term loan to October 15, 2010, (iii) revise the levels of certain financial covenants and ratios, including the consolidated senior debt to EBITDA ratio and the consolidated EBITDA to interest ratio, (iv) delete a covenant to maintain
a certain minimum unused revolving credit availability, and (v) reduce the amount of investments, intercompany loans or advances and additional subordinated debt permitted without consent of the majority lenders under the U.S. and Canadian
Credit Facility. The sixth amendment also confirmed the requisite lenders waiver of any default or event of default of sections 7.11 and 7.12(b) of the U.S. and Canadian Credit Facility for the fiscal quarter ended December 31, 2007. The
sixth amendment and the modifications set forth therein were effective as of March 20, 2008.

At June 30, 2008, the balances owed
on the term loan and revolving credit facility were $12.5 million and $22.7 million, respectively. The U.S. and Canadian Credit Facility accrues interest at either a margin to the prime rate or LIBOR, at the Companys option. At June 30,
2008, the interest rates on the term loan and revolving credit facility were 6.21% and 6.06%, respectively. The prime rate and LIBOR margins on the U.S. and Canadian Credit Facility will increase or decrease in future periods depending upon the
Companys total debt to EBITDA ratio. The Company was in compliance with all financial covenants related to this credit facility as of June 30, 2008.

European Credit Facility

The Company maintains a 78.0 million term loan (European Term Loan) and a
40.0 million revolving credit facility (European Revolver) (collectively, the European Credit Facility) through a syndicate of commercial banks. At June 30, 2008, the balance owed on the European Term Loan was
$70.3 million. No amount was owed on the European Revolver at June 30, 2008. The European Credit Facility bears interest at a floating rate equal to the Euro Interbank Offered Rate (EURIBOR) plus a margin of 1.8%. At June 30,
2008, the interest rate on the European Term Loan was 6.92%.



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Notes to Condensed Consolidated Financial Statements



The European Credit Facility is subject to customary financial and other covenants including, but not
limited to, a prohibition on the payment of dividends by the Companys subsidiary, Noble European Holdings, B.V. (Noble B.V.), and limitations on acquisitions and business combinations by Noble B.V., a total debt to EBITDA ratio and
a fixed charge coverage ratio. On March 28, 2008, the Company entered into an agreement with respect to its European Credit Facility. Pursuant to the agreement, the lenders agreed, among other things, to waive any default or event of default
arising solely from the Companys failure to comply with certain financial covenants as of December 31, 2007. This waiver was effective until May 2, 2008, at which date the Company would have been in default absent a
20.0 million prepayment on the European Term Loan. Such prepayment amount was funded on May 2, 2008 by the proceeds of a 20.0 million subordinated note provided to the Company by ArcelorMittal. The note expires 10 days
after the expiration of the European Credit Facility (currently August 31, 2012), bears interest at EURIBOR plus an initial margin of 1.8% and calls for cash interest payments at the end of every June and December. The Companys agreement
with its European lenders allowed for the prepayment to be included as of March 31, 2008 for the purpose of calculating covenants. As such, the Company was in compliance with all financial covenants related to the European Credit Facility as of
March 31, 2008 and June 30, 2008.

Mexican Credit Facility

The Company maintains a $7.9 million term loan (Mexican Term Loan) and a $4.5 million revolving credit facility (Mexican Revolver) with a commercial bank (collectively the Mexican Credit
Facility). On February 2, 2008, the Mexican Revolver was amended to increase the revolving credit facility from $4.5 million to $6.4 million. On April 29, 2008, the Mexican Revolver was amended to increase the revolving credit
facility from $6.4 million to $7.4 million.

The Mexican Term Loan accrues interest at LIBOR plus 3.5%, and the Mexican Revolver accrues
interest at the prime rate. At June 30, 2008, the interest rates on the Mexican Term Loan and Mexican Revolver were 6.30% and 6.00%, respectively. As of March 31, 2008 and June 30, 2008, the Company was not in compliance with all of
its covenants under the Mexican Credit Facility, but received waivers from the lender with respect to any defaults based on such non-compliance.

Note 9
 Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company accounts for derivative financial instruments in accordance SFAS 133. To manage interest rate risk, the Company enters into interest rate swap
contracts to adjust the proportion of total debt that is subject to variable interest rates. The contracts fix the borrowing rate on floating rate debt to provide an economic hedge against the risk of rising rates.

Cash Flow Hedges

The Company has designated the
following derivative instruments as cash flow hedges, which qualify for hedge accounting under SFAS 133. Therefore, changes in fair values are reported as a component of other comprehensive income (OCI), to the extent that the hedges are
effective, until the underlying transaction is recognized in earnings.

On April 6, 2007, the Company entered into a three-year
interest rate swap transaction with the Bank of Montreal. The swap effectively fixes the LIBOR component at 5.14% on a notional amount of $31.8 million at inception. The notional amount



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Notes to Condensed Consolidated Financial Statements



decreases over time so that it is always equal to 50% of the outstanding U.S. and Canadian term loan principal balance. As part of the March 20, 2008
amendment to the U.S. and Canadian Credit Facility, the Company was no longer required to fix the interest rate on a portion of its term loan. Therefore, on March 27, 2008, the Company terminated this interest rate swap and paid the Bank of
Montreal approximately $1.2 million. In accordance with the guidance in SFAS 133, the net loss on the interest rate swap will be reclassified from accumulated OCI to interest expense as the interest payments affect earnings through April 15,
2010.

On September 28, 2007, the Company entered into a 56-month interest rate swap transaction with BNP Paribas which was effective
after the first principal payment on the European Term Loan on December 31, 2007. The swap effectively fixes the EURIBOR component at 6.14% on a notional amount of 35.1 million at inception. The notional amount of the swap will
decrease proportionately with the outstanding balance on the loan as principal payments are made.

As of June 30, 2008, the Company
had recorded a net loss on derivative instruments of approximately $0.5 million and $0.1 million, pre-tax and after-tax, respectively, in accumulated OCI. The amount of hedge ineffectiveness recorded in the Companys Condensed Consolidated
Statements of Operations during the three and six months ended June 30, 2008 was not significant. The amounts recorded in accumulated OCI will be reclassified to interest expense as the Company accrues interest expense on the related debt
obligation. As of June 30, 2008, a $0.3 million net loss is expected to be included in interest expense within the next 12 months.

The fair value of all derivative financial instruments recorded in the Companys Condensed Consolidated Balance Sheets as assets and liabilities is as follows:



|                        |  |                |     |                   |   |    
|----------------------- |  | -------------- | --- | ----------------- | - | ---
|                        |  | June 30, 2008  |     | December 31, 2007
|                        |  | (in thousands)
|Current assets          |  | $              | 220 |                   | $ |   
|Non-current assets      |  |                | 303 |                   |   |   
|                        |  |                |     |                   |   |    
|Total assets            |  | $              | 523 |                   | $ |   
|                        |  |                |     |                   |   |    
|                        |  |               
|Current liabilities     |  | $              |    |                   | $ | 126
|Non-current liabilities |  |                |    |                   |   | 687
|                        |  |                |     |                   |   |    
|Total liabilities       |  | $              |    |                   | $ | 813
|                        |  |                |     |                   |   |    

Note 10  Investments in Affiliates and Related-Party Transactions

SET Enterprises, Inc.

SET Enterprises, Inc.
(SET) is a privately-owned, qualified minority business enterprise which provides metal processing services to original equipment manufacturers and Tier I suppliers. The Company owns 4% of the outstanding common stock of SET and 100% of
the non-convertible, non-voting, preferred stock of SET, with a face value of $10.0 million. The Company designates one member to participate on SETs board of directors, and the 96% majority owner of SET designates two members to participate.
Due to its one-third participation on SETs board of directors and its other relationships with SET, the Company concluded that it exerts significant influence on the operations of SET. Accordingly, in October 2006, the Company began to account
for its investment in SET common stock under the equity method of accounting. The Company accounts for its investment in SET preferred stock under the cost method of accounting. The Companys carrying value of both of its common stock and
preferred stock investments is zero.



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Notes to Condensed Consolidated Financial Statements



The Company also guarantees a portion of SETs senior debt. During the first half of 2008, this
guarantee was reduced from $3.0 million to $2.0 million, and it will continue to be reduced by $0.5 million each quarter until June 30, 2009, provided that SET is in compliance with its bank covenants at the end of each quarter. Pursuant to the
guidance in FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others and the Companys valuation of the guarantee, the
Company does not carry a liability for this guarantee at June 30, 2008.

SET provides the Company with blanking services, and the
Company leases certain equipment and manufacturing floor space to SET. The Company also provides SET with certain sales and marketing, operational, financial and administrative services under a services agreement with SET (the General Services
Agreement) in exchange for a fee of $0.6 million per year. In addition, in exchange for the services, the services agreement provides for the Company to be paid 15% of SETs income before taxes in excess of $1.0 million during any fiscal
year. No amounts were recognized under this additional provision during 2008 or 2007. The services agreement is cancellable at any time upon 60 days notice by SET after the Companys investment in SETs preferred stock has been repurchased
by SET or transferred to a third party. In addition, the Company provides certain information technology services to SET in exchange for an annual payment of $0.2 million. This agreement is cancellable at any time by SET.

The following table summarizes the transactions that occurred with SET:



|                                      |  |                           |       |                         |   |       |  |      |       |  |   |      
|------------------------------------- |  | ------------------------- | ----- | ----------------------- | - | ----- |  | ---- | ----- |  | - | -----
|                                      |  | Three MonthsEndedJune 30, |       | Six MonthsEndedJune 30,
|                                      |  | 2008                      |       | 2007                    |   | 2008  |  | 2007
|                                      |  | (thousands)              
|Purchases  blanking services         |  | $                         | 770   |                         | $ | 1,724 |  | $    | 1,924 |  | $ | 3,073
|Preferred stock dividend income       |  |                           | 1,272 |                         |   | 848   |  |      | 1,272 |  |   | 1,152
|Management fee income                 |  |                           | 307   |                         |   | 461   |  |      | 307   |  |   | 461  
|Lease income  equipment and building |  |                           | 276   |                         |   | 301   |  |      | 552   |  |   | 598  
|Services income                       |  |                           | 60    |                         |   | 60    |  |      | 120   |  |   | 120  
|Other expenses invoiced to SET        |  |                           | 649   |                         |   | 241   |  |      | 1,009 |  |   | 433  

The following table summarizes the balances outstanding with SET:



|                    |  |                |     |                  |   |      
|------------------- |  | -------------- | --- | ---------------- | - | -----
|                    |  | June 30,2008   |     | December 31,2007
|                    |  | (in thousands)
|Accounts receivable |  | $              | 405 |                  | $ | 1,041
|Accounts payable    |  |                | 906 |                  |   | 740  



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Notes to Condensed Consolidated Financial Statements



ArcelorMittal

In conjunction with the Arcelor Transaction, ArcelorMittal received shares of the Companys common stock representing approximately 40% of the Companys outstanding shares. ArcelorMittal subsequently
purchased additional shares of the Companys common stock which brought its ownership interest to approximately 49.95%. As part of the Arcelor Transaction, ArcelorMittal agreed to provide the Company with transition services, steel supply and
related services. The following table summarizes the transactions that occurred with ArcelorMittal:



|                   |  |                                |         |                              |   |        
|------------------ |  | ------------------------------ | ------- | ---------------------------- | - | -------
|                   |  | Three MonthsEndedJune 30, 2008 |         | Six MonthsEndedJune 30, 2008
|                   |  | (in thousands)                
|Sales              |  | $                              | 156,469 |                              | $ | 292,368
|Purchases of steel |  |                                | 94,427  |                              |   | 185,069
|Other expenses     |  |                                | 7,637   |                              |   | 11,776 

The following table summarizes the balances outstanding with ArcelorMittal:



|                    |  |                |        |                  |   |       
|------------------- |  | -------------- | ------ | ---------------- | - | ------
|                    |  | June 30,2008   |        | December 31,2007
|                    |  | (in thousands)
|Accounts receivable |  | $              | 71,691 |                  | $ | 42,527
|Accounts payable    |  |                | 41,465 |                  |   | 34,870

Note 11  Income Taxes

The Company files U.S. federal, U.S. state and foreign tax returns. For U.S. federal and state tax returns, the statute of limitations remains open for 2004 and following years. The major foreign
jurisdictions in which the Company operates include Canada, Mexico, Australia, Belgium, Germany, France, United Kingdom, Slovakia and Spain. The statute of limitations remains open in these jurisdictions from 2003 onwards. Additionally,
Mexico may have an additional five years open for entities with reported losses.

The Companys gross unrecognized tax benefits as of
June 30, 2008 included $0.5 million which represented tax positions that, if recognized, would impact its effective tax rate. Also included in the balance of unrecognized tax benefits at June 30, 2008 are $4.3 million of tax benefits that,
if recognized, would result in a decrease to goodwill recorded in purchase business combinations. The unrecognized tax benefit will be recognized as a reduction of goodwill if it is realized in tax year 2008, or it will be recognized as a reduction
of income tax expense if it is recognized after 2008 (after the adoption of SFAS 141(R)) and will affect the Companys effective tax rate.

The Company has accrued interest and penalties related to unrecognized tax benefits based upon the statutes as outlined in the applicable government regulations. The accrued interest and penalties were recorded as interest expense
consistent with the Companys policy.

The Internal Revenue Service has started to examine the Companys 2006 U.S. income tax
return. At this time it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions. Although it is not possible to predict the timing of the conclusion of the audit, we anticipate that it will be
completed by the end of 2009. It is reasonably possible that a change in the unrecognized tax benefits may occur, however, quantification of an estimated range cannot be made at this time.



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Notes to Condensed Consolidated Financial Statements



Note 12  Share-Based Compensation

Under SFAS No. 123(R), Share-Based Payment (SFAS 123(R)), the fair value of share-based payment arrangements are
recognized in the financial statements as period expenses, generally over the vesting period. Share-based compensation expense was not material for the three month period ended June 30, 2008 and was $0.4 million ($0.2 million net of tax) for
the three month period ended June 30, 2007. The Company recorded $0.2 million ($0.1 million net of tax) and $0.4 million ($0.2 million net of tax) of share-based compensation expense for the six month periods ended June 30, 2008 and 2007,
respectively. These income tax benefits were recognized as a result of permanent differences related to stock option exercises.

2006 Executive Stock
Appreciation Rights Plan

The board of directors approved and adopted the 2006 Executive Stock Appreciation Rights Plan (2006 SAR
Plan) effective as of March 1, 2006. The purpose of the 2006 SAR Plan is to provide incentive for business performance, to reward contributions toward goals consistent with the Companys business strategy and to enable the Company to
attract and retain highly qualified, motivated and experienced employees. The 2006 SAR Plan provides for the grant of cash awards based upon the increase in the value of the Companys common stock from the date of grant through the date of
exercise. There are 750,000 stock appreciation rights (SARs) authorized under the 2006 SAR Plan, and as of June 30, 2008, 350,000 SARs are available for issuance. The SARs expire ten years after the expiration of each graded vesting
period.

The Company classifies the SARs as a liability and measures the liability for the award each period until settlement. Compensation
cost for each period is based upon the change in the fair value of the SARs for each period and the percentage of the award that is vested. The weighted-average fair value of these SARs was estimated using the Hull-White Enhanced SFAS
No. 123(R) Model. The estimated volatility is based upon the Companys historical volatility. The expected term is based upon a four-year graded vesting period and the assumption that SARs will be exercised when the Companys stock
price is at a 20% premium to the exercise price. The following weighted-average assumptions were used to estimate the fair values listed below:



|                      |  |              |       |   |                  |   |       |  
|--------------------- |  | ------------ | ----- | - | ---------------- | - | ----- | -
|                      |  | June 30,2008 |       |   | December 31,2007 |  
|Assumptions           |  |              |       |   |                  |   |       |  
|Risk-free rate        |  |              | 4.3   | % |                  |   | 4.3   | %
|Dividend yield        |  |              | 7.2   | % |                  |   | 2.0   | %
|Estimated volatility  |  |              | 50.1  | % |                  |   | 48.8  | %
|Expected term (years) |  |              | 9.9   |   |                  |   | 4.7   |  
|Exercise price        |  | $            | 17.16 |   |                  | $ | 17.16 |  
|                      |  |             
|Estimated fair value  |  | $            | 0.30  |   |                  | $ | 4.00  |  

The fair value of the SARs is amortized to compensation expense on a straight-line basis over the
four year vesting period. The Company reversed $0.5 million of previously recognized compensation expense for the SARs for the six month period ended June 30, 2008 due to a decline in the fair value of the SARs at June 30, 2008. The
Company recognized $0.4 million and $0.3 million of



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Notes to Condensed Consolidated Financial Statements



compensation expense for the SARs for the three and six month periods ended June 30, 2007, respectively. A liability for the SARs of $0.1 million and
$0.6 million was recorded at June 30, 2008 and December 31, 2007, respectively, in other long-term liabilities. Additional compensation expense of $0.1 million will be recognized over the remaining vesting period of approximately three
years, based upon the fair value at June 30, 2008. A summary of the 2006 SAR Plan is as follows:



|                     |  |         |  |                              |       |                                        |   |    
|-------------------- |  | ------- |  | ---------------------------- | ----- | -------------------------------------- | - | ---
|                     |  | SARs    |  | WeightedAverageExercisePrice |       | AggregateIntrinsic Value(in thousands)
|Outstanding 12/31/07 |  | 400,000 |  | $                            | 17.16 |                                        | $ | 144
|Exercisable 12/31/07 |  | 100,000 |  |                              | 17.16 |                                        |   | 36 
|                     |  |         | 
|Outstanding 6/30/08  |  | 400,000 |  |                              | 17.16 |                                        |   |   
|Exercisable 6/30/08  |  | 162,500 |  |                              | 16.74 |                                        |   |   

2001 Stock Incentive Plans

In 2001, the board of directors adopted, and stockholders approved, the Employee Stock Incentive Plan and the Non-Employee Director Stock Incentive Plan (collectively, the 2001 Stock Incentive Plans). The
purpose of the 2001 Stock Incentive Plans is to advance the interests of the Company to attract and retain persons of ability to perform services for the Company by providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by the Company of its economic objectives. The 2001 Stock Incentive Plans are administered by the Compensation Committee of the board of directors, which has the authority,
subject to certain limitations, to make grants and modify the 2001 Stock Incentive Plans. The 2001 Stock Incentive Plans allow for the issuance of up to an aggregate of 900,000 shares of the Companys common stock. As of June 30, 2008,
583,898 shares are eligible to be granted under the 2001 Stock Incentive Plans. The Company recognized $0.1 million and $0.05 million of compensation expense for common stock issued or amortized under the 2001 Stock Incentive Plans for the six month
periods ended June 30, 2008 and 2007, respectively.

In June 2007, the Company instituted a stock matching program which provided
executives with grants of restricted stock under the 2001 Employee Stock Incentive Plan. In connection with the restricted stock awards, each of the executives entered into a Restricted Stock Award Agreement with the Company. Each Restricted Stock
Award Agreement, in addition to certain other provisions, provides that the executive receive one share of common stock (the Matched Shares) for every two shares of common stock that the executive purchases under the 2001 Employee Stock
Incentive Plan, subject to certain maximums. During the year ended December 31, 2007, there were 35,536 Matched Shares awarded, which, among other things, are subject to a two-year vesting period that requires that the executive remain employed
by the Company. In February 2008, the Compensation Committee of the board of directors approved the acceleration of the vesting period, and the Company recognized the remaining unamortized compensation expense of $0.5 million.

1997 Stock Option Plan

In 1997, the Company adopted
the 1997 Stock Option Plan, which provided for the grant of non-qualified stock options to employees, officers, directors, consultants and independent contractors, as well as for the grant to employees of qualified stock options. The 1997 Stock
Option Plan expired on November 24, 2007; therefore, no options are eligible for grant under this plan. All stock options granted under the 1997 Stock Option Plan are fully vested. A summary of the 1997 Stock Option Plan is as follows:



|                                          |  |         |   |  |               |      |                                       |   |    
|----------------------------------------- |  | ------- | - |  | ------------- | ---- | ------------------------------------- | - | ---
|                                          |  | Shares  |   |  | ExercisePrice |      | AggregateIntrinsicValue(in thousands)
|Outstanding 12/31/07 (34,999 exercisable) |  | 34,999  |   |  | $             | 5.33 |                                       | $ | 384
|Exercised                                 |  | (34,999 | ) |  |               | 5.33 |                                       |   | 42 
|                                          |  |         |   |  |               |      |                                       |   |    
|Outstanding 6/30/08                       |  |        |   |  |               |     |                                       |   |   
|                                          |  |         |   |  |               |      |                                       |   |    



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Notes to Condensed Consolidated Financial Statements



The Company received $0.2 million from the issuance of new shares for stock options exercised during
the six month period ended June 30, 2008.

2007 Stock Option Plan

In August 2007, the Companys stockholders approved the 2007 Stock Option Plan. Under the 2007 Stock Option Plan, the Company may grant options to purchase shares of its common stock to full-time key employees
and non-employee directors whose judgment, initiative and efforts are, or are expected to be, important to the successful conduct of the Companys business. The Company anticipates that approximately 400 individuals will be eligible to
participate in the 2007 Stock Option Plan, including non-employee directors. The maximum aggregate number of shares of common stock that may be made subject to awards under the 2007 Stock Option Plan is 1.0 million. Any shares that are subject to an
award but are (i) not issued because the terms and conditions of the award are not met, (ii) used for payment of the exercise price of an option or (iii) withheld by us to satisfy tax withholding will become available again for use
under the 2007 Stock Option Plan. No participant in the 2007 Stock Option Plan may be granted options with respect to more than 100,000 shares of common stock in any calendar year. The 2007 Stock Option Plan has a ten-year term.

The grant-date fair values of the options granted in 2008 were determined using the Hull-White Enhanced SFAS No. 123(R) Model and the following
assumptions:



|                      |  |   |       |  
|--------------------- |  | - | ----- | -
|Assumptions           |  |   |       |  
|Risk-free rate        |  |   | 3.2   | %
|Dividend yield        |  |   | 2.2   | %
|Estimated volatility  |  |   | 41    | %
|Expected term (years) |  |   | 4.3   |  
|Exercise price        |  | $ | 14.70 |  
|                      | 
|Estimated fair value  |  | $ | 3.38  |  

The Company recognized $0.1 million of compensation expense for the stock options for the six
month period ended June 30, 2008. Additional compensation expense of $0.7 million will be recognized over the remaining vesting period of approximately three years. Stock options outstanding at June 30, 2008 had a contractual life of
approximately five years.



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NOBLE INTERNATIONAL, LTD.

Notes to Condensed Consolidated Financial Statements



A summary of the 2007 Stock Option Plan is as follows:



|                                       |  |         |  |               |       |                                       |   |  
|-------------------------------------- |  | ------- |  | ------------- | ----- | ------------------------------------- | - | -
|                                       |  | Shares  |  | ExercisePrice |       | AggregateIntrinsicValue(in thousands)
|Outstanding 12/31/07                   |  |        |  | $             |      |                                       |   |  
|Granted                                |  | 250,000 |  |               | 14.70 |                                       |   |  
|                                       |  |         |  |               |       |                                       |   |  
|Outstanding 6/30/08 (none exercisable) |  | 250,000 |  |               | 14.70 |                                       | $ | 
|                                       |  |         |  |               |       |                                       |   |  

Note 13  Employee Benefit Plans

The Company provides noncontributory defined benefit lump sum payments, in accordance with local statutory requirements, to certain employees when they
cease employment at the Companys Mexican facilities. The Company also provides a benefit at retirement to employees in its France facility and to certain salaried employees in its Genk and Gent facilities in Belgium. These plans are considered
defined benefit plans under SFAS No. 87, Employers Accounting for Pensions, as amended. The components of net periodic benefit cost were as follows:



|                               |  |                                 |    |   |                               |   |     |  
|------------------------------ |  | ------------------------------- | -- | - | ----------------------------- | - | --- | -
|                               |  | Three Months EndedJune 30, 2008 |    |   | Six Months EndedJune 30, 2008 |  
|                               |  | (in thousands)                  |   
|Service cost                   |  | $                               | 58 |   |                               | $ | 115 |  
|Interest cost                  |  |                                 | 34 |   |                               |   | 68  |  
|Expected return on plan assets |  |                                 | (4 | ) |                               |   | (8  | )
|                               |  |                                 |    |   |                               |   |     |  
|Net periodic benefit cost      |  | $                               | 88 |   |                               | $ | 175 |  
|                               |  |                                 |    |   |                               |   |     |  

Note 14  Restructuring Charges

On November 7, 2007, the Company announced to its employees its decision to close two of its manufacturing facilities, one located in Holt, Michigan
employing approximately 50 employees and one located in South Haven, Michigan employing approximately 200 employees. Both facilities are included in the Companys North America segment. The Company will relocate certain production from
these facilities to other existing facilities. The closing of these facilities is intended to optimize synergies among product lines, reduce excess capacities across the Companys facilities and improve logistical efficiencies. Each of these
facilities was acquired in connection with acquisitions completed in the past 18 months. The Company completed the closure of the Holt facility during the second quarter of 2008 and classified the building and land as assets held for sale. An active
program to sell the building and land has been initiated. The Company expects to complete the closure of the South Haven (West) facility during the fourth quarter of 2008.

In connection with these plant closings, the Company estimates that it will incur employee termination costs of $1.1 million, which consists of $0.3
million for employees at its Holt facility and $0.8 million for employees at its South Haven (West) facility. The affected employees are required to render service until they are terminated. Therefore, the expense is recognized ratably over the
employees future service period.



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Notes to Condensed Consolidated Financial Statements



A summary of the Companys restructuring liability is as follows:



|                          |  |                          |      |  
|------------------------- |  | ------------------------ | ---- | -
|                          |  | EmployeeTerminationCosts |     
|                          |  | (in thousands)           |     
|Balance December 31, 2007 |  | $                        | 326  |  
|Charges                   |  |                          | 752  |  
|Payments                  |  |                          | (302 | )
|                          |  |                          |      |  
|Balance June 30, 2008     |  | $                        | 776  |  
|                          |  |                          |      |  

The Company also expects to incur approximately $2.3 million for capital expenditures at the
facilities that will absorb production from Holt and $0.1 million for equipment relocation and infrastructure costs. In addition, the Company expects to incur approximately $1.7 million for capital expenditures at the facilities that will absorb
production from South Haven (West), $0.9 million for manufacturing costs primarily related to inventory build-up and $1.6 million for equipment relocation and infrastructure costs. As of June 30, 2008, the Company has incurred $2.7 million of
capital expenditures and $0.9 million of equipment relocation and infrastructure costs. All capital expenditures were recorded as fixed assets and depreciated in accordance with the Companys policies while the remainder of the costs were
expensed as incurred.

Pursuant to the terms of the Share Purchase Agreement dated as of March 15, 2007 between the Company and
ArcelorMittal, the Company expects to be reimbursed by ArcelorMittal for up to $1.3 million of the foregoing costs relating to the closure of the Holt facility. As of June 30, 2008, no reimbursement has been recognized in the Companys
consolidated financial statements.

Note 15  Segment Information

Prior to the closing of the Arcelor Transaction on August 31, 2007, the Company had historically classified its operations into one industry segment operating in the automotive industry. As a result of the
Arcelor Transaction and subsequent reorganization of its business, the Company identified the following two operating segments, which are based upon geographical areas (region of production):



| |  |  | North America, which includes the Companys operations in the United States, Canada and Mexico.
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Europe and Rest of World, which includes the Companys operations in Europe, Australia and Asia.
| | - |  | ------------------------------------------------------------------------------------------------



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Notes to Condensed Consolidated Financial Statements



Both segments perform laser-welding and metal processing activities for the automotive industry. The
following table lists the Companys segment information and reconciliation to the Companys consolidated financial statement amounts. The grouping Corporate and Other below does not meet the definition of an operating segment
as it contains the Companys headquarters costs and the elimination of certain intercompany balances; however, it is included below for reconciliation purposes only.



|                                 |  |                |         |                        |   |                    |  |   |         |   |  |   |        
|-------------------------------- |  | -------------- | ------- | ---------------------- | - | ------------------ |  | - | ------- | - |  | - | -------
|                                 |  | NorthAmerica   |         | Europe andRest ofWorld |   | Corporateand Other |  |   | Total  
|                                 |  | (in thousands)
|Three Months Ended June 30, 2008 |  |                |         |                        |   |                    |  |   |         |   |  |   |        
|Sales                            |  | $              | 143,668 |                        | $ | 170,288            |  | $ | 993     |   |  | $ | 314,949
|Operating profit (loss)          |  |                | 1,545   |                        |   | 14,751             |  |   | (4,367  | ) |  |   | 11,929 
|                                 |  |                |         |                       
|Six Months Ended June 30, 2008   |  |                |         |                        |   |                    |  |   |         |   |  |   |        
|Sales                            |  |                | 311,876 |                        |   | 315,633            |  |   | 1,538   |   |  |   | 629,047
|Operating profit (loss)          |  |                | 4,466   |                        |   | 20,628             |  |   | (10,140 | ) |  |   | 14,954 
|                                 |  |                |         |                       
|As of June 30, 2008              |  |                |         |                        |   |                    |  |   |         |   |  |   |        
|Total assets                     |  |                | 355,030 |                        |   | 442,542            |  |   | 17,169  |   |  |   | 814,741

Note 16  Commitments and Contingencies

The Company is subject to ordinary, routine, legal proceedings, as well as demands, claims and threatened litigation, that arise in the course of its
business. The ultimate outcome of any litigation is uncertain. Unfavorable outcomes could have adverse effects on the Companys business, results of operations and financial condition. However, the Company does not believe that any of
these pending proceedings would have effects that are materially adverse to its business, results of operations or financial condition if ultimately decided adversely to it.

Note 17  Subsequent Events

In July 2008, the Company consummated a transaction with SET
pursuant to which SET agreed to redeem all of the common and preferred shares held by the Company for $1.9 million. As a result of this transaction, the Company was released from its guarantee of SETs senior debt and relinquished its rights to
appoint a representative on SETs board of directors. The General Services Agreement was also terminated as a result of the transaction.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

General

Noble International, Ltd.
(we, us, our, Noble or the Company), through its subsidiaries, is a full-service provider of 21stCentury Auto Body Solutions®primarily to the automotive industry. We utilize laser-welding, roll-forming, and other technologies
to produce flat, tubular, shaped and enclosed formed structures used by original equipment manufacturers (OEMs) or their suppliers in automobile applications including doors, fenders, body side panels, pillars, bumpers, door beams, load
floors, windshield headers, door tracks, door frames, and glass channels.

In August 2007, we completed the purchase of
ArcelorMittals Tailored Laser-Welded Blank operations (the Arcelor Business). Results of operations for the Arcelor Business are included in our financial statements beginning September 1, 2007.

Results of Operations

The following
Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the MD&A section included in our Annual Report on Form 10-K, as amended by Form 10-K/A, for the
year ended December 31, 2007 as filed with the Securities and Exchange Commission.

Net Sales.Net sales for the three months
ended June 30, 2008 were $314.9 million, an increase of $132.3 million, or 72.4%, compared to the same period in 2007. Net sales for the six months ended June 30, 2008 were $629.0 million, an increase of $286.3 million, or 83.5%, compared
to the same period in 2007. The increase in sales for the three-month period ended June 30, 2008 was attributable primarily to the acquisition of the Arcelor Business in the third quarter of 2007, which contributed $166.2 million to net sales.
The remaining $33.9 million decrease in net sales consisted of a $37.8 million reduction due to significantly depressed North American light vehicle production offset by $1.2 million of increased steel pass through pricing, $0.9 million of increased
prototype and tooling sales, and a $1.8 million increase related to foreign exchange translation. The increase in sales for the six-month period ended June 30, 2008 was attributable primarily to the acquisition of the Arcelor Business in the
third quarter of 2007, which contributed $314.6 million to net sales. The remaining $28.3 million decrease in net sales consisted of a $45.5 million reduction due to significantly depressed North American light vehicle production and a $2.0 million
reduction resulting from the resolution of commercial pricing negotiations with certain customers. These reductions were partially offset by $2.5 million of increased steel pass through pricing, $11.4 million of increased prototype and tooling
sales, and a $5.3 million increase related to foreign exchange translation.

Cost of Sales.Cost of sales for the three-month period
ended June 30, 2008 was $283.8 million, an increase of $115.1 million, or 68.3%, compared to the same period in 2007. Cost of sales for the six-month period ended June 30, 2008 was $574.0 million, an increase of $258.8 million, or 82.1%,
compared to the same period in 2007. The increase in cost of sales for the three-month period ended June 30, 2008 was attributable primarily to the acquisition of the Arcelor Business in the third quarter of 2007, which contributed $144.3
million to cost of sales. The remaining $29.2 million decrease in cost of sales was primarily the result of a $31.9 million reduction due to significantly depressed North American light vehicle production and $2.5 million related to reduced product
launch activity in our roll-forming facilities. These reductions were offset by $1.2 million of increased steel pass through pricing, $1.2 million of increased prototype and tooling cost, $0.6 million of increased fixed overhead costs, $0.6 million
of additional direct labor health benefit expense, and a $1.6 million increase related to foreign exchange translation. The increase in cost of sales for the



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six-month period ended June 30, 2008 was attributable primarily to the acquisition of the Arcelor Business in the third quarter of 2007, which
contributed $278.7 million to cost of sales. The remaining $19.9 million decrease in cost of sales was primarily the result of a $36.3 million reduction due to significantly depressed North American light vehicle production and $5.5 million related
to reduced product launch activity in our roll-forming facilities. These reductions were offset by $2.5 million of increased steel pass through pricing, $10.2 million of increased prototype and tooling cost, $1.5 million of increased fixed overhead
costs, $1.0 million of additional direct labor health benefit expense, $1.1 million of additional variable costs primarily related to new program launches in our Mexican operations, $0.7 million of severance costs related to our previously announced
North American plant closures and a $4.9 million increase related to foreign exchange translation. Cost of sales as a percentage of net sales decreased to 90.1% for the three-month period ended June 30, 2008 from 92.3% in the same period in
2007. Cost of sales as a percentage of sales decreased to 91.2% for the six-month period ended June 30, 2008 from 91.9% for the same period in 2007.

Gross Margin.Gross margin for the three-month period ended June 30, 2008 was $31.2 million, an increase of $17.2 million, or 122.6%, compared to the same period in 2007. Gross margin for the six-month
period ended June 30, 2008 was $55.1 million, an increase of $27.5 million, or 99.5%, compared to the same period in 2007. Gross margin as a percentage of net sales increased to 9.9% for the three-month period ended June 30, 2008 from 7.7%
in the same period in 2007. Gross margin as a percentage of net sales increased to 8.8% for the six-month period ended June 30, 2008 from 8.1% in the same period in 2007. The reasons for the changes in gross margin for the three- and six-month
periods ended June 30, 2008 are due to the factors discussed above in Net Sales and Cost of Sales.

Selling, General
and Administrative Expenses.Selling, general and administrative expenses (SG&A) for the three-month period ended June 30, 2008 was $19.2 million, an increase of $11.5 million, or 148.6%, compared to the same period
in 2007. SG&A for the six-month period ended June 30, 2008 was $40.1 million, an increase of $24.9 million, or 163.0%, compared to the same period in 2007. For the three- and six-month periods ended June 30, 2008, SG&A as a
percentage of net sales (6.1% and 6.4%, respectively) increased compared to the three- and six-month periods ended June 30, 2007 (4.2% and 4.5%, respectively). The increase in SG&A was mainly due to the inclusion of the Arcelor Business in
our results of operations for the three- and six-month periods ended June 30, 2008 of $7.5 million and $16.1 million, respectively, of which $0.5 million and $1.2 million, respectively, were expenses related to professional fees associated with
establishing the stand-alone accounting and finance functions in Europe. The remaining $4.0 million increase for the three-month period ended June 30, 2008 was driven primarily by a $1.4 million increase in salaries and health benefits due to
additional headcount to support our growth and $1.9 million of incremental audit, tax, legal, severance, and other fees associated with the convertible debt transaction with ArcelorMittal and certain ongoing litigation. The remaining $8.8 million
increase for the six-month period ended June 30, 2008 was driven primarily by a $2.8 million increase in salaries and health benefits due to additional headcount to support our growth and $4.5 million of incremental professional fees, severance
costs, and other fees associated with the convertible debt transaction with ArcelorMittal.

Operating Profit.Operating
profit for the three-month period ended June 30, 2008 was $11.9 million, an increase of $5.7 million, or 90.4%, compared to the same period in 2007. Operating profit for the six-month period ended June 30, 2008 was $15.0 million, an
increase of $2.6 million, or 21.2%, compared to the same period in 2007. Operating profit as a percentage of net sales for the three months ended June 30, 2008 was 3.8% compared to 3.4% for the same period in 2007. Operating profit as a
percentage of net sales for the six months ended June 30, 2008 was 2.4% as compared to 3.6% for the same period in 2007. The reasons for the changes in operating profit for the three- and six-month periods ended June 30, 2008 are due to
the factors discussed above in Cost of Sales and Selling, General and Administrative Expenses.



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The Europe/Rest of World segment reported operating profit of $14.8 million for the three-month period
ended June 30, 2008. This represents an increase of $8.9 million compared to the three-month period ended March 31, 2008. The increase in operating profit was driven primarily by margin on higher volumes, operational
efficiencies, improved scrap pricing, timing of steel price increases and a reduction in professional fees.

Interest Income.Interest income for the three-month period ended June 30, 2008 was $0.2 million, an increase of $0.1 million compared to the same period in 2007. Interest income for the six-month period ended June 30, 2008 was $0.3 million, an
increase of $0.1 million compared to the same period in 2007. Interest income increased due to the additional cash available in our European operations.

Interest Expense.Interest expense for the three-month period ended June 30, 2008 was $5.8 million, an increase of $2.6 million compared to the same period in 2007. Interest expense for the six-month
period ended June 30, 2008 was $11.8 million, an increase of $5.6 million compared to the same period in 2007. The higher interest expense was primarily related to the additional debt incurred pursuant to the Arcelor Business acquisition.

Loss on Extinguishment of Debt. As a result of the convertible debt transaction with ArcelorMittal during the first quarter of
2008, we determined that a debt extinguishment had occurred and recognized a loss on debt extinguishment of approximately $0.9 million for the three-month and six-month periods ended June 30, 2008. As a result of the amendments made to our
convertible subordinated notes during the first quarter of 2007, we determined that a debt extinguishment had occurred and recognized a loss on debt extinguishment of approximately $3.3 million during the six-month period ended June 30, 2007.

Net Loss on Derivative Instruments.During the second quarter of 2007, we entered into three derivative transactions, two of which
were contingent upon the acquisition of the Arcelor Business. We determined that while our contingent interest rate swap provided economic hedges, they did not qualify for hedge accounting treatment. Accordingly, we recorded a loss of approximately
$1.8 million in the second quarter of 2007 as a result of recording these instruments at fair value as of June 30, 2007.

Other
Income, Net.Other income, net for the three-month period ended June 30, 2008 was $2.5 million, an increase of $1.0 million compared to the same period in 2007. Other income, net for the six-month period ended June 30, 2008 was $3.0
million, an increase of $1.8 million compared to the same period in 2007. Other income, net for the three-month period ended June 30, 2008 was primarily driven by dividend income of $1.3 million and management fee income of $0.3 million from
SET Enterprises, Inc. (SET), foreign currency gains of $0.5 million, and commission income from our joint venture in Shanghai, China of $0.6 million. Other income, net for the three-month period ended June 30, 2007 included dividend
income of $0.8 million and management fee income of $0.5 million from SET and foreign currency gains of $0.4 million. Other income, net for the six-month period ended June 30, 2008 was primarily driven by dividend income of $1.3 million and
management fee income of $0.3 million from SET, foreign currency gains of $0.7 million, and commission income from our joint venture in Shanghai, China of $0.9 million. Other income, net for the six-month period ended June 30, 2007 included
dividend income of $1.1 million and management fee income of $0.5 million from SET offset by foreign currency losses of $0.4 million.

Income Tax (Benefit) Expense.Income tax (benefit) expense for the three-month periods ended June 30, 2008 and 2007 was ($1.3) million and $0.7 million, respectively. Income tax (benefit) expense for the six-month periods ended
June 30, 2008



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and 2007 was ($2.0) million and $0.1 million, respectively. A tax benefit of $1.4 million was recorded on the loss from extinguishment of debt during the
first quarter of 2007. Excluding this tax benefit, the effective tax rate for the three-month period ended June 30, 2007 was 26% compared to (16%) for the same period in 2008. The effective tax rate for the six-month period ended
June 30, 2007 was 28% (excluding the tax benefit for the loss from extinguishment of debt) compared to (36%) for the same period in 2008. The decrease in the effective tax rate for the three and six-month periods ended June 30, 2008
was due to a local country profits exemption realized by a foreign subsidiary offset by an increase in taxes due to the introduction of the new Mexican flat tax regime and an increase in valuation allowances at certain foreign subsidiaries.

Minority Interest, Net of tax.Minority interest represents our partners 49% share of the net earnings from our facility in
Silao, Mexico. Minority interest for the three- and six-month periods ended June 30, 2008 was $0.2 million and $0.5 million, respectively. Minority interest for the three- and six-month periods ended June 30, 2007 was $0.3 million and $0.5
million, respectively.

Equity Loss, Net of Tax. Equity loss for the three- and six-month periods ended June 30, 2008 was
$0.006 million and $0.03 million, respectively. Equity loss for the three- and six-month periods ended June 30, 2007 was $0.1 million and $0.3 million, respectively. For both periods, the decrease is primarily a result of discontinuing the
application of the equity method of accounting for our investment in SET in January 2008, as our investment in SET was previously reduced to zero.

Net Earnings.As a result of the foregoing factors, our net earnings for the three-month period ended June 30, 2008 were $9.0 million, an increase of $7.1 million, or 385.0%, compared to the same period in 2007. Net earnings for
the six-month period ended June 30, 2008 were $7.0 million, an increase of $5.3 million, or 319.9%, compared to the same period in 2007.

Liquidity
and Capital Resources

Our cash requirements have historically been satisfied through a combination of cash flow from operations, equity
issuances and debt financings. Working capital needs and capital equipment requirements have increased as a result of our growth and are expected to continue to increase as a result of anticipated growth. Anticipated increases in required working
capital and capital equipment expenditures are expected to be met primarily from cash flow from operations, equity issuances and debt financing. As of June 30, 2008, we had net working capital of $44.1 million.

Cash Flows

Net cash provided by operating activities
increased $41.2 million to $63.9 million for the six-month period ended June 30, 2008 from $22.7 million for the six-month period ended June 30, 2007. This $41.2 million increase was driven by $17.3 million of additional cash provided by
our net income adjusted for non-cash items and by $24.0 million of additional cash provided by changes in net working capital. The increase in cash provided by our net income adjusted for non-cash items was driven by our growth activities in the
latter half of 2007, primarily the Arcelor Business acquisition. The increase in cash provided by changes in net working capital in the six month period ended June 30, 2008 was primarily driven by a reduction of inventory levels.

Net cash used in investing activities increased $2.0 million to $15.9 million for the six-month period ended June 30, 2008 from $13.9 million for
the six-month period ended June 30, 2007. The increase is primarily due to a $2.4 million increase in purchases of property, plant and equipment and $0.6 million of increased investments in joint ventures, offset by $1.0 million of additional
proceeds from the sale of certain property, plant and equipment.



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Net cash used in financing activities increased $32.4 million to $36.3 million for the six-month period
ended June 30, 2008 from $3.9 million for the six-month period ended June 30, 2007. The increase was primarily driven by $110.3 million of net payments on term loans, revolving credit facilities and other debt agreements partially offset
by $81.2 million of proceeds from the issuance of a convertible subordinated note and a subordinated note. We had increased dividends paid of $1.5 million due to the additional common shares issued as a result of the Arcelor Business acquisition and
increased financing fees of $0.8 million related to amendments of existing credit agreements and the issuance of the convertible subordinated note. We also had a $1.0 million reduction in the proceeds from the issuance of common stock.

Primary Credit Facilities

We maintain a $70.0
million term loan and a $50.0 million revolving credit facility through a syndicate of commercial banks (collectively, the U.S. and Canadian Credit Facility). The U.S. and Canadian Credit Facility is subject to customary financial and
other covenants including, but not limited to, limitations on debt, consolidations, mergers, and sales of assets, and bank approval on acquisitions over $15.0 million. On February 15, 2008, we entered into a limited waiver letter with respect
to our compliance with certain financial covenants as of December 31, 2007. On March 20, 2008, we entered into a sixth amendment with the syndicate of commercial banks to, among other things, permit us to incur $50.0 million of
subordinated debt as part of a convertible debt financing with ArcelorMittal, revise the levels of certain financial covenants and ratios and reduce the amount of scheduled principal payments. See Item 1. Financial Statements; Note 8 
Long-Term Debt for additional information regarding the modifications to our U.S. and Canadian Credit Facility.

On March 19,
2008, we entered into a Securities Purchase Agreement (the Securities Purchase Agreement) with ArcelorMittal pursuant to which ArcelorMittal agreed to provide subordinated debt financing to us in the form of a convertible subordinated
note with a principal amount of $50.0 million. The convertible subordinated note was issued on March 20, 2008, bears interest at the rate of 6% per annum and matures on March 20, 2013. The conversion price is subject to reset and
adjustment. The proceeds from the issuance of the convertible subordinated note were used as follows: $10.0 million to pay down the U.S. and Canadian revolving credit facility and $40.0 million to pay down the U.S. and Canadian term loan. See
Item 1. Financial Statements; Note 8  Long-Term Debt for additional information on the terms of this debt financing.

We
maintain a 78.0 million term loan (European Term Loan) and a 40.0 million revolving credit facility (European Revolver) (collectively, the European Credit Facility) with a syndicate of banks.
On March 28, 2008, we entered into an agreement with respect to our European Credit Facility. Pursuant to the agreement, the lenders agreed, among other things, to waive any default or event of default arising solely from our failure to comply
with certain financial covenants as of December 31, 2007. This waiver is effective until May 2, 2008, at which date we would have been in default absent a 20.0 million prepayment on the European Term Loan. The prepayment was
funded on May 2, 2008 by the proceeds of a 20.0 million subordinated note provided to us by ArcelorMittal. The convertible subordinated note expires 10 days after the expiration of the European Credit Facility (currently
August 31, 2012), bears interests at EURIBOR plus an initial margin of 1.80% and requires interest payments at the end of every June and December. Our agreement with our European lenders allowed for the prepayment to be included as of
March 31, 2008 for the purpose of calculating covenants. As such, we were in compliance with all of our financial covenants related to the European Credit Facility as of March 31, 2008 and June 30, 2008.



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The liquidity provided by our existing and anticipated credit facilities, combined with cash flow from
operations is expected to be sufficient to meet currently anticipated working capital and capital expenditure needs and for existing debt service for at least twelve 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 us to obtain additional financing prior to the end of such twelve-month period. In addition, as part of our business strategy we continue to evaluate,
and may pursue, future growth through opportunistic acquisitions of assets or companies which may involve the expenditure of significant funds. Depending upon the nature, size, and timing of future acquisitions, we may be required to obtain
additional debt or equity financing. There can be no assurance, however, that additional financing will be available, when and if needed, on acceptable terms or at all.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Foreign Currency Risk

We are exposed to the impact of foreign currency fluctuations. International revenues from our
foreign subsidiaries were approximately 64% of net sales for the six months ended June 30, 2008. Our primary foreign currency exposures are the Canadian Dollar, Mexican Peso, Euro, UK Sterling and Australian Dollar. In general, where possible,
we manage our exposures to foreign currency assets, liabilities and earnings primarily by funding certain foreign currency denominated assets with liabilities in the same currency and matching revenues with expenses in the same currency, and as
such, certain exposures are naturally offset. However, as of June 30, 2008, our Mexico operations, whose functional currency is the Mexican Peso, had net U.S. Dollar liability exposure of approximately $15.4 million. Based upon this
exposure, for every one percent increase (decrease) in the value of the Mexican Peso versus the U.S. Dollar, we would recognize a foreign currency transaction gain (loss) of approximately $0.2 million. We recognized a foreign exchange
transaction gain of $0.5 million and $0.1 million for the three-month periods ended June 30, 2008 and 2007, respectively and a foreign exchange transaction gain (loss) of $0.7 million and ($0.6) million for the six-month periods ended
June 30, 2008 and 2007, respectively.

Interest Rate Sensitivity

Our financial results are affected by changes in U.S. and foreign interest rates due primarily to our various credit facilities containing variable interest rates when we borrow under these credit facilities. The
balance of our variable interest rate debt as of June 30, 2008 was $99.1 million. Based upon this exposure, and including the effects of our interest rate swap, for every annualized one percent increase (decrease) in the U.S. and foreign
interest rates, we would recognize an additional annualized interest expense (benefit) of $1.0 million.

We invest any excess cash balances
in overnight and other short-term investments that may be impacted by changes in interest rates. We do not hold any other financial instruments that are subject to market risk (interest rate risk and foreign exchange rate risk).



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|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure Controls and Procedures

Our Chief Executive Officer and our Chief Financial Officer, with the participation of management, have reviewed and evaluated the
effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended as of the end of the period covered by this Report. Based upon this evaluation, we have
concluded that our disclosure controls and procedures were not effective as of June 30, 2008 due to the fact that one of the material weaknesses reported in our Annual Report on Form 10-K and on Form 10-K/A for the period ended
December 31, 2007 has not been remediated as of the date of this Report.

Changes in Internal Control over Financial Reporting

Effective May 5, 2008, three new directors were appointed to our board, two of which also became members of our audit committee. Concurrently, the
board set the authorized number of directors to seven, and there are no vacant positions on our board or audit committee.

To address the
quantity of accounting personnel at our roll-forming business headquarters location during the quarter ended June 30, 2008, we have continued to perform additional reviews and analyses, but as of the date of this Report, the material weakness
has not been fully remediated.

Except as described above, there have been no other changes in our internal control over financial
reporting during the quarter ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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Part II  Other Information



|Item 1. | Legal Proceedings
|------- | -----------------

We are subject to ordinary,
routine, legal proceedings, as well as demands, claims and threatened litigation, that arise in the course of our business. The ultimate outcome of any litigation is uncertain. Unfavorable outcomes could have adverse effects on our business,
results of operations and financial condition. However, we do not believe that any of these pending proceedings would have effects that are materially adverse to our business, results of operations or financial condition if ultimately decided
adversely to us.



|Item 1A. | Risk Factors
|-------- | ------------

There were no material changes from
the risk factors previously disclosed in Item 1A. Risk Factors, included in our Annual Report on Form 10-K, as amended by Form 10-K/A, for the year ended December 31, 2007.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Not applicable.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

Not applicable.



|Item 5. | Other Information
|------- | -----------------

Not applicable.



|Item 6. | Exhibits
|------- | --------



|               |  |                                                                                                                                                                                      
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Description                                                                                                                                                                  
|10.1           |  | Severance and Release Agreement dated as of May 14, 2008 between Noble International, Ltd. and Michael C. Azar.                                                                      
|               | 
|10.2           |  | Stock Redemption Agreement dated as of June 20, 2008 among Noble International, Ltd., Noble Manufacturing Group, Inc. and SET Enterprises, Inc.                                      
|               | 
|10.3           |  | Severance and Release Agreement dated July 31, 2008 between Noble International, Ltd. and James Orchard.                                                                             
|               | 
|31.1           |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.



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|               |  |                                                                                                                                                                                      
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Exhibit Description                                                                                                                                                                  
|31.2           |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|               | 
|32.1           |  | Written Statement of the Chief Executive Office (Principal Executive Officer) and the Chief Financial Officer (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350.      



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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: August 7, 2008 |  | By:                       |  | /S/ DAVID J. FALLON    
|                      |  |                           |  | David J. Fallon        
|                      |  |                           |  | Chief Financial Officer



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