{
  "docId": "019dd923-622c-750b-8b98-ff42cd6c571b",
  "docSlug": "09bbf36d82e5",
  "documentTitle": "Avery Dennison Corporation (AVY)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-11-10 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 31,
  "pageCount": 89,
  "prevPage": 30,
  "nextPage": 32,
  "slideType": "comparison_table",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "Includes a specific callout box citing a 2015 10-K regarding accounting errors.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "callout_box",
    "comparison_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-ff42cd6c571b/31",
  "deckHref": "/decks/019dd923-622c-750b-8b98-ff42cd6c571b",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-ff42cd6c571b.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-ff42cd6c571b#slide-31",
  "components": [
    {
      "bbox": {
        "h": 0.13,
        "w": 0.94,
        "x": 0.03,
        "y": 0.27
      },
      "kind": "callout",
      "text": "Warning: Avery Has A History of Improper Accounting. In 2015, we determined that certain of our benefit plans... were not properly accounted for... Source: Avery 2015 10-K",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "87557ed4-0d67-4a10-82c4-cd7fb20c2015",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "In 2015, we determined that certain of our benefit plans (that were frozen between 1994 and 2003) were not properly accounted for since their inception between 1984 and 1988.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-e6ec-7186-b7d9-bda1212a9bf0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.94,
        "x": 0.03,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "While Avery's share price stands near all-time highs, the sell-side community and market is oblivious to many classic signs of intensifying financial strain that Spruce Point has identified. Investors should be alarmed that Avery's management has a history of allowing improper accounting and financial errors to linger for years.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "520ce44d-4aad-44a4-b3a6-c422c76f107d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"In 2015, we determined that certain of our benefit plans (that were frozen between 1994 and 2003) were not properly accounted for since their inception between 1984 and 1988. This resulted in an understatement of long-term retirement benefits and other liabilities and the cumulative historical expenses related to these benefit plans. Additionally, we identified certain liquid short-term bank drafts with maturities greater than 90 days that were improperly classified as cash and cash equivalents instead of other current assets, which resulted in an overstatement of operating cash flows, and tax effects related to certain foreign pension plans that were not properly accounted for on our consolidated financial statements.\" — Avery 2015 10-K",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-e6ec-7186-b7d9-c060f53610a0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.52,
        "w": 0.94,
        "x": 0.03,
        "y": 0.43
      },
      "kind": "table",
      "text": "Comparison table of Classic Sign of Financial Strain vs Spruce Point's Observation of Avery",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8fd066c6-d162-4c06-9596-4b55a8f55c84",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Avery Dennison Showing Multiple Classic Signs of Increasing Financial Strain",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "615a5758-1ebb-4201-bf07-7ab653f4baab",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "0cec9c37-5090-43b0-9127-c6f8bad21f01",
      "evidence": "Systematic listing of accounting and operational red flags to build a short thesis.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 40,
      "from": 16,
      "beatId": "0c899a39-e9bd-4a86-98ef-bc50704d3fda",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The deck highlights multiple signs of financial strain and improper accounting",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 45,
      "from": 30,
      "name": "Hypothesis Test",
      "slug": "42-hypothesis-test",
      "bestFor": "Strategy validation, due diligence, research presentations",
      "matchId": "68f4906a-25c3-4a6f-951c-526fc7a66652",
      "evidence": "The deck tests the hypothesis that Avery Dennison's financial performance is sustainable",
      "position": 1,
      "objective": "Is Avery Dennison's financial performance sustainable?",
      "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)",
      "confidence": 0.6,
      "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}