Buyout
I doubt anyone would buy the company in its entirety given the US transportation business isn't that good (hoping it gets better). That said, the rest of the business could be split up by business line (industrial and transportation) and geography and perhaps sold off in pieces. The industrial businesses are actually in a very good position and are performing admirably under the new management. Those could potentially be sold to ENS, which has the financial firepower (either cash or stock) to do a deal and I bet it would be highly accretive to them. Perhaps the European transportation business could be sold to JCI or another player. You have to factor in potential buyers from China and India too, but I'm not that familiar with specific companies that would be interested.
What they would do with the US transportation business is an interesting question to ponder. Despite all the hassles that Vernon presented, the restructuring guys running the company managed to hold the operating loss flat in the September quarter despite revenues declining 13%. That's really impressive in my view. Unfortunately, it's still a loss and the other segments are all above breakeven. Moreover, they are spending the most capex on the US segment (though I imagine Vernon had a lot to do with that). All in all, the restructuing guys seem to be doing a great job cutting losses and capex, which is good for all stakeholders. For instance, capex was down $13mm ytd and that includes upgrades for Vernon.
Lead is a huge part of COGS (45-50%) and for some reason XIDEQ has done a really poor job managing that cost item versus competitors. Fortunately, lead is down y/y in the low single digits and the comps for the March quarter should be very good as it's unlikely that lead spikes like it did last year (hard to forecast, but supplies don't seem as tight). So that should help margins. We're having a much colder winter y/y and that should help battery demand too and industrial activity is picking up in virtually every geography that I know of. So demand is there. That needs to be translated into EBITDA and free cash flow.
You asked about other facilities that could be problematic. The only one I'm aware of is Frisco, TX. That facility was shut down a while ago, but there's been a back and forth tug of war on cleanup. This has caused the funds that XIDEQ would have received by now to be tied up (another reason for the liquidity problem and subsequent BK). The press is very negative as you would imagine, but hopefully they can get this situation figured out and get those funds (I believe it's ~$30mm but need to double check).
