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  "documentTitle": "Hill-Rom Holdings, Inc. (HRC)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-10-29 00:00:00",
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  "notes": "The slide uses a 'villain' framing by accusing management of 'sweeping costs under the rug'.",
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      "text": "With Hill-Rom expected to continue to engage in M&A through the foreseeable future, why should investors permit management to continue to ignore these costs as irrelevant items? And why should management be given credit for its inflated \"core growth\" figure without being transparent about the divestment-related costs that it will incur to achieve this level of growth?",
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      "kind": "callout",
      "text": "With Hill-Rom expected to continue to engage in M&A through the foreseeable future, why should investors permit management to continue to ignore these costs as irrelevant items?",
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      "text": "EBT vs. Adjusted EBT",
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      "text": "Adjustments as a % of EBT: 50%",
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      "text": "Unfortunately (yet unsurprisingly), management not only fails to be proactive about communicating the costs of its M&A-oriented strategy to investors, but goes out of its way to sweep them under the rug. Management's non-GAAP \"adjusted net income\" adjusts Company earnings for the impact of acquisition-related costs, impairments, severance, restructuring, and the like. Over the last four years, Company adjustments have represented over 50% of adjusted income. Yet, because M&A is such a key component of Company strategy, these restructuring and acquisition-related charges are effectively recurring in nature. Spruce Point strongly believes that companies engaged in consistent M&A should not treat these charges as one-off items, and, accordingly, should not adjust them out of non-GAAP earnings.",
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      "text": "M&A-Related Costs Hidden From Investors",
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