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  "documentTitle": "Mettler-Toledo International, Inc. (MTD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-07-24 00:00:00",
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  "notes": "Uses a combination of financial table data and job opening statistics to build a case against the company's reported profitability in China.",
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      "text": "\"Our products are sold through a variety of distribution channels. Generally, more technically sophisticated products are sold through our direct sales force, while less complicated products are sold through indirect channels. Our sales through direct channels exceed our sales through indirect channels.\" 2018 10-K p.8",
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      "text": "This would support the view that Mettler China may not be as profitable as it claims",
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      "text": "Mettler has some internal sales engineers... Mettler uses regional distributors... Our investigative research indicates... Distributors can capture 20% - 45% of the margin... By Mettler's own admission... This would support the view...",
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      "text": "service revenue mix: 10%",
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      "text": "Spruce Point observes that for the first time in 2018, Mettler provided detail on its product and service mix by geographic region. Historically, service revenue as % of total external revenue has been consistent at 21% - 22%. We observe that the only region where this doesn't hold true is in China. The service and product mix is closer to 10% / 90%. Services are high margin, recurring revenue. Job openings on Mettler's career sight indicate that 21% of openings are service and support. Thus, it's possible Mettler earns lower service revenue, but still absorbs the cost in China, resulting in lower margins. In addition, it uses distributors to cover the country, which even it admits, is for \"less complicated products\". Shouldn't less complicated products make lower margin?",
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      "text": "Our products are sold through a variety of distribution channels. Generally, more technically sophisticated products are sold through our direct sales force, while less complicated products are sold through indirect channels. Our sales through indirect channels exceed our sales through indirect channels. — 2018 10-K p.8",
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      "text": "Source: Mettler career search as of 7/14/19",
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      "text": "China Job Opening breakdown by department.",
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      "text": "More Evidence That China May Not Be As Profitable As Claimed.....",
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