Recent Negative Free Cash FlowA shift to negative free cash flow undermines internal funding for capex, debt servicing, and dividends without drawing on reserves. If persistent, it can force financing choices, constrain reinvestment in efficiency improvements, and increase vulnerability to cost or demand shocks over the medium term.
Margin VolatilityVariable gross and net margins indicate inconsistent cost pass-through or input-cost control in the processing business. Margin volatility reduces earnings visibility, limits free cash flow predictability, and heightens sensitivity to raw-material price swings and competitive pricing pressure.
Moderate LeverageModerate leverage limits financial flexibility and raises refinancing risk if cash generation weakens. In a cyclical input-cost or demand downturn, higher leverage could force cost cuts or capital raises, constraining strategic investments and increasing execution risk over the next several quarters.