High Total Debt RemainsDespite improvements, elevated total debt still creates leverage risk that can strain interest coverage and cash allocation. Over 2–6 months a leveraged balance sheet reduces strategic flexibility, increases refinancing and interest-rate sensitivity, and heightens vulnerability if revenue growth or margins stall.
Negative Free Cash FlowNegative free cash flow limits the company's ability to internally fund capex, debt repayment, or working-capital needs. Even with solid operating cash versus net income, persistent negative FCF over months may force reliance on external financing, increasing cost of capital and operational risk.
Thin Net ProfitabilityA net margin of roughly 2.8% is modest for absorbing input-cost shocks, adverse FX moves, or pricing pressure from buyers. Over the medium term this thin profitability constrains retained earnings, reduces buffer for investment, and makes the business sensitive to small adverse changes in costs or sales mix.