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  "docSlug": "954987ce0454",
  "documentTitle": "Mettler-Toledo International, Inc. (MTD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-07-24 00:00:00",
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  "pageNumber": 16,
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  "notes": "The slide uses a comparison table to highlight variances in cash, fixed assets, and total assets between two reporting sources.",
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      "kind": "callout",
      "text": "Here's our theory on what is happening:",
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      "kind": "disclaimer",
      "text": "1. 1998 10-K, p. 14: \"Interest income for the year ended December 31, 1995, for the period January 1, 1996 to October 14, 1996, for the period October 15, 1996 to December 31, 1996 and for the year ended December 31, 1997 was $(5,388), $(3,424), $(1,079) and $(1,832), respectively\"",
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      "text": "Through a Chinese attorney our investigators obtained the recent tax filings for Mettler's 10 China subsidiaries. Total cash is $19m (13%) less in China than in SEC filings. Fixed assets is $35m (40%) less in China than in SEC filings. Total assets are $672m (54%) less in China than in SEC filings. We cannot entirely reconcile sales and find evidence to suggest potential margin overstatement of $50m. We observe that Mettler's China business came under severe stress in 2015, thus there is the potential for cumulative profit overstatement in the range of $200m (2015-18). The amount of capital transferred to the shell entity Mettler-Toledo (Hong Kong) Ltd is also in the same range at $242m. By Mettler moving money into Hong Kong, it could potentially enable Mettler to pass an Audit by showing the cash. It would appear the flow of funds between Switzerland and Hong Kong is temporary, and not permanent, as we estimate it would have had to raise more external capital. Note: Mettler does not disclose interest income in its consolidated results, making it difficult to sanity check returns on cash. The last time it disclosed interest income was in 1998, right before current auditor PwC took control(1)",
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      "text": "Total Assets: $672m",
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      "text": "Note: Mettler does not disclose interest income in its consolidated results, making it difficult to sanity check returns on cash. The last time it disclosed interest income was in 1998, right before current auditor PwC took control(1)",
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      "kind": "source-note",
      "text": "Source: SEC and China Tax Filings",
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      "text": "Comparison table of Cash, Fixed Assets, and Total Assets for 2017 and 2018 between China Tax Filings and US SEC Filings, showing variances.",
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      "kind": "title",
      "text": "Connection Between Hong Kong Capital And China Profits",
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