Rising Total LiabilitiesAn upward trend in total liabilities can strain liquidity over the medium term, especially in a business with lumpy, milestone-driven receipts. If liability growth outpaces cash generation, the company may face tighter working capital, higher financing needs, or delayed project execution.
Volatility In Operating MarginsVariable EBIT margins reduce predictability of earnings and free cash flow, complicating investment and bidding decisions for long multi-year contracts. Margin swings may reflect input-cost pass-through limits, execution inefficiencies, or contract mix shifts that could pressure long-run profitability.
Concentration In Government Defense ContractsHeavy reliance on government procurement creates structural revenue concentration and timing risk tied to defense budgets and procurement cycles. Delays, policy shifts, or slower awards can produce lumpy revenues and underutilized capacity, limiting revenue diversification and medium-term growth visibility.