{
  "docId": "019dd923-622c-750b-8b99-a016b8cafb9e",
  "docSlug": "aeaf881b8cf7",
  "documentTitle": "Construction Partners, Inc. (ROAD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2025-01-23 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 21,
  "pageCount": 70,
  "prevPage": 20,
  "nextPage": 22,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 4,
  "notes": "Uses a 'before-after' comparison of 10-K language to highlight potential revenue manipulation.",
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  "slideHref": "/slides/019dd923-622c-750b-8b99-a016b8cafb9e/21",
  "deckHref": "/decks/019dd923-622c-750b-8b99-a016b8cafb9e",
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  "components": [
    {
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      "kind": "callout",
      "text": "However, the 10-K later revealed that ROAD now receives for a majority of contracts final payments when projects are near completion or fully completed which strikes us as an unusual and alarming change of practice.",
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      "componentId": "019dd953-25b4-767c-9bf3-376e94414b2f",
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      "kind": "paragraph",
      "text": "While the analysts cheered ROAD's \"stronger than expected\" cash flow in the recent fiscal year, the CFO pointed to timing issues. However, the 10-K later revealed that ROAD now receives for a majority of contracts final payments when projects are near completion or fully completed which strikes us as an unusual and alarming change of practice. Moreover, this could also enable ROAD to pull forward revenue which was not mentioned by the CFO on the recent quarterly call.",
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      "kind": "quote",
      "text": "I think it's some of it's just timing issues. But I think on average, you're going to see that's how we flow out year-over-year. — CFO Hoffman, Q4'24 Conf Call",
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      "kind": "source-note",
      "text": "Source: ROAD 10-K filings, broker reports and Q4'24 conference call",
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      "kind": "table",
      "text": "Comparison of 2023 vs 2024 revenue recognition language",
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      "componentId": "a78fe097-acb6-4e9b-8b99-fa17e5f74592",
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      "kind": "table",
      "text": "Comparison of analyst quotes vs CFO statements",
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      "kind": "title",
      "text": "Free Cash Flow (And Likely Revenue) Not As Strong As Promoted",
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  "frameworks": [
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      "evidence": "Contrasting 2023 and 2024 revenue recognition language to show a shift in practice.",
      "confidence": 0.95
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      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Evidence & Proof",
      "beatSlug": "consultants-gambit-evidence-proof",
      "evidence": "The deck presents a series of data points and analysis to support the author's claims, including competitive analysis, financial disclosures, and industry benchmarks.",
      "position": 3,
      "confidence": 0.8,
      "parentBeatName": "Evidence",
      "parentBeatSlug": "evidence"
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  ],
  "loops": [
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      "to": 21,
      "from": 16,
      "name": "Aha Moment",
      "slug": "03-aha-moment",
      "bestFor": "Data-heavy sections, research findings, analytical arguments",
      "matchId": "02d718d9-0449-41a4-b07b-8109a309d1e4",
      "evidence": "The deck highlights several red flags, including rising DSOs and declining ROCE.",
      "position": 1,
      "objective": "Is ROAD's financial performance sustainable?",
      "structure": "The Problem/Question -> What the Data Shows -> The Insight",
      "confidence": 0.7,
      "description": "Establish a tension, present data, then deliver the insight that changes everything"
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