Steep Revenue DeclineA roughly two-thirds decline in revenue signals severe loss of sales scale or market share. Such a structural top-line contraction weakens fixed-cost absorption, undermines pricing power, and reduces operating leverage, making margin recovery and cash generation harder without meaningful market or product repositioning over the coming months.
Negative Operating And Free Cash FlowPersistent negative operating and free cash flow erode internal funding for working capital and capex, forcing reliance on external financing. Even with low leverage today, continued cash burn can deplete liquidity buffers, constrain investment, and raise refinancing or solvency risk if operations do not quickly return to positive cash generation.
Declining Margins And ProfitabilityFalling gross margins and negative EBIT/EBITDA reflect structural cost or pricing pressures and operational inefficiencies. Sustained unprofitability reduces retained earnings, weakens ROE, and limits the firm's ability to self-fund improvements or compete on price, posing a durable impediment to recovery absent operational fixes.