{
  "docId": "019dd923-622c-750b-8b99-8e3ed32b40dc",
  "docSlug": "5a3c61f9c8f5",
  "documentTitle": "Zebra Technologies Corp. (ZBRA)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-08-08 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 94,
  "pageCount": 109,
  "prevPage": 93,
  "nextPage": 95,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 2,
  "notes": "The slide links the reporting change to a former CFO who later faced financial reporting issues at another company.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "comparison_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-8e3ed32b40dc/94",
  "deckHref": "/decks/019dd923-622c-750b-8b99-8e3ed32b40dc",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-8e3ed32b40dc.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-8e3ed32b40dc#slide-94",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Zebra made an unusual change to its organic revenue reporting at the end of 2019 which management did not draw attention to on the year end conference call.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0931-74b9-a323-8247babe12a0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.35,
        "w": 0.96,
        "x": 0.02,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "Zebra made an unusual change to its organic revenue reporting at the end of 2019 which management did not draw attention to on the year end conference call. We observe that instead of excluding the impact of foreign currency hedges, Zebra now includes the impact of hedges. Spruce Point believes this is a non-standard reporting practice that makes its organic revenue reporting more difficult to compare with peers. Zebra’s sales outside of North America are ~47% and its foreign currency hedging program frequently has notional cash flow hedges over $500 million. As a result, we believe that foreign currency impacts are important to evaluating Zebra’s organic growth and should be presented in a manner consistent with generally accepted corporate reporting practices. We note that this change was made under the leadership of the previous CFO Olivier Leonetti who later joined Johnson Controls (JCI) in September 2020 and resigned in January 2024 after JCI delayed its 10-K, reported a material weakness of internal controls over financial reporting, and received SEC Comment letters questioning its financial reporting.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a5766775-9da1-4d50-88dc-8c832630b9ae",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.8,
        "x": 0.02,
        "y": 0.96
      },
      "kind": "source-note",
      "text": "Source: Q3'19 10-Q, 2019 10-K, 2019 Conference Call, JCI 10-K Delay, Material Weakness, SEC Comment Letter, Leonetti Resignation",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5249c89f-27bd-4d6d-ab17-1e7e9492adf7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.45,
        "w": 0.96,
        "x": 0.02,
        "y": 0.48
      },
      "kind": "table",
      "text": "Organic Revenue Footnote Explanation: Q3 2019 vs Full Year 2019",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "062c99b9-5e27-4243-8aab-a52690126552",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.65,
        "x": 0.318,
        "y": 0.05
      },
      "kind": "title",
      "text": "Unusual Change To Organic Revenue Reporting",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d42d45e8-d696-4a31-a49c-48bc9dccaac9",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "9c3a32ce-b76b-482c-8ae6-03bd686f97f6",
      "evidence": "Linking accounting changes to specific executive behavior and subsequent failures at other firms.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 109,
      "from": 8,
      "beatId": "4cbc18df-e399-4c42-aa2d-07d690208cbf",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Expose Contradictions",
      "beatSlug": null,
      "evidence": "The document is filled with slides exposing contradictions in Zebra's statements, financial reports, and business practices.",
      "position": 0,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    },
    {
      "to": 105,
      "from": 23,
      "beatId": "f95882a7-a8c3-4a10-af43-4f165fbd4b19",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Preempt Rebuttals",
      "beatSlug": null,
      "evidence": "The document anticipates and counters potential rebuttals to its thesis.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [
    {
      "to": 109,
      "from": 5,
      "name": "Logic Chain",
      "slug": "01-logic-chain",
      "bestFor": "Skeptical audiences, controversial recommendations, rigorous analysis",
      "matchId": "87880212-cbbe-4e05-9d94-1053e50417ab",
      "evidence": "The document presents a series of logical arguments and evidence to support its thesis.",
      "position": 0,
      "objective": "To present a logical chain of evidence supporting the short-selling thesis",
      "structure": "Premise 1 (Accepted truth) -> Premise 2 (Observed fact) -> Therefore... (Inevitable conclusion)",
      "confidence": 0.8,
      "description": "Build an airtight chain of logic where each premise leads inevitably to the conclusion"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}