{
  "docId": "019dd923-622c-750b-8b98-a6a0f8168eeb",
  "docSlug": "e4e33ebca0cb",
  "documentTitle": "A.O. Smith Corporation (AOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-05-16 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 13,
  "pageCount": 20,
  "prevPage": 12,
  "nextPage": 14,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 24,
  "notes": "The slide uses a table to highlight discrepancies between disclosed Capex and estimated total costs, framing the spending as an anomaly.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bullet_list",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-a6a0f8168eeb/13",
  "deckHref": "/decks/019dd923-622c-750b-8b98-a6a0f8168eeb",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-a6a0f8168eeb.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-a6a0f8168eeb#slide-13",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Based on our research, we believe AOS spent nearly $174m on the project, or ~6.5% of average sales over the time period - significantly more than avg. ERP projects.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-5372-7340-8f9b-2edd339dfd43",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.6,
        "x": 0.05,
        "y": 0.28
      },
      "kind": "list",
      "text": "Average implementation time is 16.9 – 17.4 months vs 72 months at AOS\nOn average organizations spend 3.6% of annual revenues on the project vs. 6.5% at AOS",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d786699d-d9fe-49e4-99c1-140c1ab8d004",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "ERP cost as % of sales: 6.5%",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-5372-7340-8f9b-3151d3dfb103",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.9,
        "x": 0.05,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "In light of concerns about AOS's revenue recognition, we observe that it started an Enterprise Resource Planning (ERP) project in 2013, which took over 6 years to implement. Based on our research, we believe AOS spent nearly $174m on the project.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ecf0b8a2-52a9-4b84-87ce-d5888766bb8f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.5,
        "x": 0.03,
        "y": 0.92
      },
      "kind": "source-note",
      "text": "Source: AOS 10-K annual reports and conference calls\n1) Panorama Consulting Study 2018\n2) Total costs reported in SG&A (2013-17) plus 2018E amount of $17m",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "994203f9-001a-4136-b839-1479e350f6b5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.52,
        "w": 0.94,
        "x": 0.03,
        "y": 0.39
      },
      "kind": "table",
      "text": "Table showing ERP costs by year (2013-2018) across various categories including Capex, SG&A, and estimates.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ce90b879-f10f-4507-96b7-a77fc6719958",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.36,
        "x": 0.32,
        "y": 0.05
      },
      "kind": "title",
      "text": "ERP Spending Exploded",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "29b5fcac-624e-4e0e-88bb-00c451025dc9",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "7fc0a531-762f-4aea-92cc-72c6458f010f",
      "evidence": "The slide links spending patterns to revenue recognition concerns.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}