{ "docId": "019dd923-622c-750b-8b98-c6f1577ed5e1", "docSlug": "97e66c73c118", "documentTitle": "Hill-Rom Holdings, Inc. (HRC)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-10-29 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 42, "pageCount": 80, "prevPage": 41, "nextPage": 43, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 7, "notes": "Uses a bar chart with an estimated Q4 bar to highlight the gap between management guidance and implied performance.", "elementsJson": [ "headline_text", "paragraph", "bar_chart_vertical", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-c6f1577ed5e1/42", "deckHref": "/decks/019dd923-622c-750b-8b98-c6f1577ed5e1", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-c6f1577ed5e1.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c6f1577ed5e1#slide-42", "components": [ { "bbox": { "h": 0.08, "w": 0.15, "x": 0.58, "y": 0.59 }, "kind": "callout", "text": "Implied Q4 New Product Sales Guidance: ~$90-125M", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5961da0d-5ae0-41ba-9f01-102ec5513aad", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.22, "x": 0.43, "y": 0.46 }, "kind": "callout", "text": "New Product Sales Through Q3: \"More than $300M\"", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a1f0667a-dd3c-41e2-b4bb-9f7450b3c9c7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.24, "x": 0.74, "y": 0.57 }, "kind": "callout", "text": "Implied YoY New Product Sales Growth Guidance for Q4: -26% to 2%", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ac143a52-a41d-4818-ab17-a155807251ab", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.22, "x": 0.43, "y": 0.4 }, "kind": "callout", "text": "FY19 New Product Sales Guidance as of Q3: \"More than $400M\"", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c2eb4d34-3588-4524-b872-73ab16af8ce2", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "With Hill-Rom already having posted new product revenue of \"more than $300M\" through Q3, management guidance of \"more than $400M\" of new product revenue for FY19 implies a Q4 new product revenue guide of just ~$90-125M, which would render YoY new product growth flat at best for the quarter.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-203c-716b-be79-0ef2a8ba66f1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.68, "x": 0.05, "y": 0.35 }, "kind": "chart", "text": "New Product Revenue Contribution, Est.", "attrs": null, "subkind": "bar-vertical", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f0933639-f9c0-47d3-9f6a-8d69e91041ef", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "New Product Revenue: -26% to 2%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-203c-716b-be79-1246d76f8aee", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.16 }, "kind": "paragraph", "text": "The implied cadence of new product sales reveals that sequential growth has already plateaued. From management's statements regarding the year-to-date contribution of new products to total revenue, we observe that growth in sales from new products has been roughly flat for two straight quarters, and is down from an unexpectedly strong Q4 FY18 which drove it to top $300M for the year after management first guided to only “more than $200M.” Management was evasive when asked whether strong new product growth in Q4 FY18 was attributable to lumpy capital goods (Centrella) sales, suggesting to us that it in fact was, which will challenge new product sales growth in Q4 FY19. Even after this tough comp passes, the slower growth which has been visible on a sequential basis will begin to weigh on annual growth as well, pressuring Company-wide growth.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "05258946-d2bc-4591-bf18-34007e496469", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.9, "x": 0.05, "y": 0.89 }, "kind": "paragraph", "text": "With Hill-Rom already having posted new product revenue of “more than $300M” through Q3, management guidance of “more than $400M” of new product revenue for FY19 implies a Q4 new product revenue guide of just ~$90-125M, which would render YoY new product growth flat at best for the quarter.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "441ab894-ccde-4fd2-b5cd-2e89800dc703", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.65, "x": 0.305, "y": 0.02 }, "kind": "title", "text": "New Product Sales Growth Already Plateauing Ahead of Difficult Q4 Comp", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7c5954e0-8953-4162-a06c-04d28674d7dc", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "74872d92-a7ae-4bf3-b30c-77c1df561451", "evidence": "Exposing management's evasiveness and implied weak guidance vs public statements.", "confidence": 0.8 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }