{
  "docId": "019dd923-622c-750b-8b98-dbf69e8285f9",
  "docSlug": "c97bc876ffb7",
  "documentTitle": "LHC Group, Inc. (LHCG)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-01-15 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 17,
  "pageCount": 41,
  "prevPage": 16,
  "nextPage": 18,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 24,
  "notes": "The slide uses a red-bordered table to highlight the 'Spruce Point Estimate' which contradicts management's claims.",
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  "slideHref": "/slides/019dd923-622c-750b-8b98-dbf69e8285f9/17",
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  "components": [
    {
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      "kind": "callout",
      "text": "Spruce Point estimates that, by excluding the contribution of Almost Family from organic growth, LHCG has inflated its reported organic growth by close to 500 bps in both Q2 and Q3.",
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    {
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      "kind": "metric",
      "text": "organic growth: 500 bps",
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      "subkind": "primary",
      "toolName": "Quantification",
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      "componentId": "019dd953-2b66-7100-895a-a8bb844d49e9",
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    {
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      "kind": "paragraph",
      "text": "Whether AFAM's poor performance can be attributed to mismanagement or underlying flaws, Spruce Point believes that management's omission of AFAM from LHCG organic sales after the merger's anniversary date presents a severely skewed view of LHCG organic growth.",
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      "kind": "paragraph",
      "text": "Whereas management reports that LHCG has grown organic sales by 6.1% and 7.5% in Q2 and Q3 FY19, respectively, its true organic growth rate is less than 2% when AFAM locations are included in the organic sales base - as they should be, with the acquisition having anniversaried in April of this year. Spruce Point estimates that, by excluding the contribution of Almost Family from organic growth, LHCG has inflated its reported organic growth by close to 500 bps in both Q2 and Q3.",
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      "kind": "source-note",
      "text": "Source: LHCG SEC Filings and Spruce Point Estimates",
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      "bbox": {
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      "kind": "table",
      "text": "LHC Group Organic Growth Comparison Table",
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      "kind": "title",
      "text": "Organic Growth Vastly Overstated Due To Omission Of Almost Family",
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      "evidence": "The slide explicitly claims management is inflating growth metrics by omitting data.",
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      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The expose contradiction slides detail various issues with LHCG's financials and management practices.",
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      "confidence": 0.8,
      "parentBeatName": "Development",
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  "loops": [
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      "name": "Cost Of Inaction",
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      "evidence": "The deck implies that investors will suffer financial losses if they do not heed Spruce Point's warning.",
      "position": 0,
      "objective": "The cost of inaction for investors who fail to recognize LHCG's true financial performance.",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
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      "evidence": "The expose contradiction slides test this hypothesis and present evidence.",
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      "objective": "Testing the hypothesis that LHCG's financial practices are aggressive and misleading.",
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