Natuzzi SpA — financial distress indicators
Financial-health summary
Natuzzi SpA's reported numbers place it in the 'Very weak' financial-health band (distress score 100/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 97% and the market-implied (Merton) default probability is 97.1%.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Interest coverage (EBIT / interest) is -2.94×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -1.90 σ → PD 97%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Debt is 38% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
O-score 3.54 → model probability 97%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.85.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Cash covers ~20 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
2 severe and 0 moderate distress-related headlines in the last 6 months.
Headlines are corroborating evidence only; they are weighted lightly and never drive a flag alone.
Short-term debt is 3.9× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Price is -75% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- No material mitigating factors found in the available data.
📰 Recent news scan
- delistNatuzzi (NYSE: NTZ) faces delisting after NYSE suspends ADSs - Stock TitanGoogle News · 2026-08-27
- delist, restructurNatuzzi Launches Deep Restructuring as Q1 2026 Losses Mount and NYSE Delisting Risk Looms - The Globe and MailGoogle News · 2026-08-06
- Natuzzi (NTZ) Close: Declines 4.96% to $1.15 in the Latest Session; the Near-Term Reference Band Stretches From $1.09 to $1.21 under the Current Snapshot - SuperTrend Flip - siam.inGoogle News · 2026-08-23
- Natuzzi (NYSE: NTZ) lines up veteran turnaround CEO, name to come - Stock TitanGoogle News · 2026-08-20
- Natuzzi S.p.A. (NTZ) Rises 1.42% to $1.34, Holding Above Key Support - IV Rank - dars.gov.etGoogle News · 2026-08-16
- Natuzzi Signs Commitment Letter With a Candidate for Chief Executive Officer Role - Yahoo FinanceGoogle News · 2026-08-10
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Natuzzi SpA's financial-health indicators show?
As of 2026-10-09, Natuzzi SpA's public financial data places it in the 'Very weak' band with a distress score of 100/100, driven by operating profit does not cover interest, market-implied default probability >20% and losses in each of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Natuzzi SpA's financial distress score?
100/100 ('Very weak'). Ohlson O-score 3.54 (model 1-year failure probability 97%). Merton distance-to-default -1.9 σ (model default probability 97.1%).
What works in Natuzzi SpA's favour?
No material mitigating factors were found in the available data.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Consumer Discretionary companies with distress indicators
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- Polestar Automotive Holding UK PLC (PSNYW)Very weak 100/100
- Reborn Coffee, Inc. (REBN)Very weak 100/100
- Sports Entertainment Gaming Global Corporation (SEGG)Very weak 100/100
- TH International Limited (THCH)Very weak 100/100
All Consumer Discretionary companies with distress indicators →
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.