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  "docSlug": "8ac2fd285d6b",
  "documentTitle": "Axon Enterprise (formerly TASER) (AAXN)",
  "authorId": "54_Spruce_Point_Capital",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-06-19 00:00:00",
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  "pageNumber": 42,
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  "nDataPoints": 18,
  "notes": "Uses financial data from 2015-2018 to highlight a spike in inventory provisions, specifically calling out the VIEVU acquisition as a justification for the increase.",
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      "kind": "callout",
      "text": "Worrisome Increase Every Single Year",
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      "text": "Provision % of Inventory: 11.3%",
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      "kind": "paragraph",
      "text": "Spruce Point's skepticism about Axon's gross margins being inflated are further supported by its inventory accounting practices. We observe that it is now disclosing “optimization efforts” after slowly phasing in higher provisions.",
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      "text": "\"Operating cash flows were also impacted by decreased inventory of $14.8 million resulting from continued inventory optimization efforts. These increases were offset by increased accounts and notes receivable of $67.6 million and prepaid expenses and other assets of $12.7 million during 2018\" — Axon Financial Statements",
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      "text": "Source: Axon financial statements. Includes 1.8m of inventory reserve charges, 0.9m of deal costs, and 1.2m of purchase commitments = $3.8m on $17.6m of total deal costs. See 10-K p. 88",
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      "text": "VIEVU Purchase Allocation table",
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      "text": "Ending Inventory, Provision, Provision % of Inventory for 2015-2018",
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      "kind": "title",
      "text": "Rapidly Escalating Inventory Provisions A Problematic Development",
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