Elevated LeverageHigh debt relative to equity leaves the company exposed to cyclical downturns and limits strategic flexibility. Leverage amplifies returns but increases refinancing and covenant risk, reducing the firm's ability to invest in new program wins without stronger cash flow consistency.
Weakening Revenue MomentumDeclining top‑line reduces scale economies and threatens per‑unit fixed cost absorption. Without a sustained recovery or new program awards, weaker sales can pressure margins and cash flow, making growth restoration dependent on successful program wins.
Profitability Volatility & Thin Net MarginsYear‑to‑year margin swings and recent thin net margins reduce earnings predictability. Combined with high leverage, margin volatility heightens the risk that temporary volume or pricing pressures could rapidly erode free cash flow and impair deleveraging plans.