Callouts & quotes from 1,316+ activist slides

"Spruce Point believes that PLUG cannot issue equity or raise debt fast enough to support its current restricted cash build - and, therefore, cannot continue to support customer leases through operating-type leasebacks, the source of the Company's recent "inflection" to profitability."

"It is evident that if investors include acquisition related expenses when calculating the company's free cash flow, the sum of free cash flow generated from 2013 to 2018 would be $205 million, as compared to $1.1 billion if those acquisition related expenses were excluded from capex."

"If it becomes necessary, we are confident Phillips 66 could follow a similar path by: Making appropriate management changes; Closing the current $2-$3 per barrel refining EBITDA gap between Phillips 66 and Valero; and Generating $15 billion to $20 billion of after-tax cash proceeds."

"We believe the Transaction presents the Company's stockholders with a compelling opportunity to realize a substantial cash premium to the trading price of their shares and/or to retain an ongoing equity interest in the next stage of the Company's evolution alongside Pershing Square."

"We immediately encountered articles discussing GF Securities involvement in a $12.7B fraud in China, centered on one of China’s largest publicly traded pharmaceutical firms, Kangmei Pharmaceutical, which allegedly overstated its cash balance by $4.3 billion “using false documents.”"

"If Val-gan can grow organically at a high single-digit rate as Valeant management projects, and management can invest the company’s free cash flow in new acquisition targets at historical rates of return, then we believe management can achieve its goal of 15%-20% annual EPS growth"

"Because of the substantially lower risk of predicting lots sales in mature MPCs (it is effectively inevitable, although subject to macro factors in the short term), we believe one should use very low discount rates to discount future cash flows from lot sales in HHC’s mature MPCs"

"Using the Company’s 2008 statement that half of “Distributor Facing” expenses are vacation packages, one-time cash bonuses, Herbalife pins and watches, and other similar promotions that can only be gained via recruiting, $291mm of Herbalife’s SG&A in 2011 were Recruiting Rewards"

"Under the terms of the agreement, Perion acquired all the shares of CIQ for a total consideration of $73.05 million, of which $15 million in cash was paid upon closing, with an additional maximum $11 million will be paid as a retention incentive. — Perion Network Ltd. SEC Filing"

"“When the costs to manufacture the assets are greater than (predominant to) the estimated value transferred from Leasing equipment into inventory, the related cash receipt has been recorded as an inflow in net cash (used in) provided by operating activities.” — FTAI Q3 2024 10-Q"

"We strongly suspect that the vast majority of the $127.9 million cash and investments NQ reported having as of December 31, 2012 is not actually in the Company's accounts; rather, that some to all of NQ's IPO proceeds have been diverted in order to further the accounting fraud."

"Eurofins, whose BUs are often audited by firms unaffiliated with its consolidated financial auditor Deloitte, routinely has its subsidiaries report Cash & Equivalents balances in inconsistent manners, and often in ways that likely disguise that there is very little actual cash."

"The recently-enacted Business Assistance Act of 2009, which extended the carry-back period for net operating losses from two to five years, is expected to provide a significant cash refund and tax benefit to us in fiscal 2010. — Matt Appel, CFO of Zales Corp., November 24, 2009"

"During the fiscal year ended December 31, 2023, Alclear Holdings declared and paid approximately $140.9 million in cash distributions to its members (including tax distributions) to its members (including our Co-Founding Members, and our executive officers). — CLEAR SEC filings"

"MDA has consistently produced poor free cash flow. From 2012-2017 average free cash flow was C$33m (US$30m). Leading up to the DigitalGlobe deal, it even reported bank overdrafts of cash. YTD 2018 overdrafts have continued, and debt is rising through credit facility borrowing."

"Each has a similar structure: Ginkgo and its investors create and fund the entity, which then simply returns and round-trips back cash or “non-cash consideration” to Ginkgo under the guise of R&D “prepayments” or services, which it books as Foundry revenue or deferred revenue."

"CEO: "What makes WSP so unique in its ability to convert consistently higher net income into free cash flow." CFO: "Cash management will continue to be a focus, and we expect that our free cash flow will annually exceed our net earnings." — CEO and CFO, Analyst Day, March '22"

"An investor spoke with FTAI. FTAI confirmed that the new language indicates that the test to report Aerospace Products income on the Operating or Investing side of the Cash Flow Statement is determined by the amount of capitalized costs to the assets while held in Inventory."

"Noncash charges associated with [Riot's 2024] onetime grant of approximately $25 million per quarter will drop to approximately $8 million in Q3 2026 and thereafter roll off entirely, significantly reducing noncash stock-based compensation. — Jason Chung, Riot's incoming CFO"

"Moreover, we believe that there is a material risk that any insurance covering potential claw backs may be void if there is a determination of tax fraud, which could subject RUN and the tax equity investors to significant liabilities, and ABS holders to reduced cash flows."

"Xylem is trying to pass off $70 million of transaction costs in Q2 2023 as an addition to Adjusted Free Cash Flow. However, we take issue with this figure because it appears to be on a pre-tax basis when added to operating cash flow, which is an after-tax financial result."

"Our view is that most to all of the cash transfer never happened, and that by purporting to have somehow circumvented China's capital controls in order to transfer the money directly to the VIE, it makes it easier for NQ to carry out its fraud by forging its cash balances."

"ROAD initially touted its “Attractive Financial Profile with High Return on Capital” by showing Free Cash Flow (FCF) Conversion and Return on Capital Employed (ROCE). By 2023, ROAD’s FCF Conversion definition markedly changed, and it ceased to provide a chart showing ROCE."

"The sell side values VRNT on a P/E basis against Non-GAAP EPS. This approach fails to take into account Verint's poor organic growth, the widening disparity between GAAP EPS and (low-quality) Non-GAAP EPS, and the Company's failure to grow cash flow despite a flood of M&A."

"AOL has used the valuable cash flows generated by its declining Access and Search businesses to fund what we believe are massive losses of more than $500 million per year in its Display advertising business in pursuit of its goal of becoming a premium online media company."

"A close look at Nuvei's working capital and balance sheet reveals that payables are being increased at a faster rate than receivables. Working capital is turning more negative. We believe this is helping to generate cash flow in the near term which may not be sustainable."

"SMCI working capital stress is near all-time highs, some of which can be explained by the pandemic, supply chain challenges and having to carry more inventory. SMCI stopped highlighting its working capital measure (which includes cash and short-term debt) post pandemic."

"Now, betting on an electric future is a popular thing to do. While we don’t know the winners or the losers, the market loves all these stocks, which trade at multiples that seem ambitious to people like me, who try to tie a value to boring things like future cash flows."

"Shareholders question operating controls as recent executive compensation leaves more questions than answers: [R]ecent disclosure indicates the CEO was erroneously overpaid and the error led to a $10MM cash bonus in 2014. — Jonathan Bock, Wells Fargo Research 11/5/2015"

"Even under management's wellness center ramp-up assumptions – which we consider overly-ambitious – PetIQ's new wellness centers would fail to generate positive cash flow until FY22, and would not generate a positive return on total investment until the following year."

"Warning: Although CHD runs its equity income through the income statement below the line as non-operating, and claims not to control it, but in 2005, started attributing more of its cash from operations as coming from these entities. So then why isn’t it consolidated?"

"IQE sells to CSC at purportedly arms-length / market valuations (e.g., PP&E transferred at 4.6x estimated carrying value), but IQE buys from CSC at non arms-length / market prices - at cash cost, with no profit margin or reimbursement for depreciation and amortization"

"Ströer's year-end cash flow statements wrongly show that Ströer had no borrowings during the year. In fact, Ströer draws down tens of millions euro on its credit facility each of the first three quarters of the year, which it then repays before the end of the quarter."

"Cash flows from operating activities increased $43.0 million in the first 13 weeks of 2018 compared to the first 13 weeks of 2017. Higher profits, lower inventories and lower management incentive payouts accounted for the increase in cash provided. — Weis Markets MD&A"

"Current FND investors should carefully evaluate the insider selling behavior. FND's two private equity sponsors, Freeman Spogli and Ares, completely cashed out before it even reached 160 stores or ~30% of the 500 stores that the Company currently claims it can reach."

"We observe that Axon just reported its worst Q1 cash burn in its public history. Management is claiming this is due to the Taser 7 ramp, and trade-in credit terms. However, we believe there are other factors at work that will cause cash flow to remain under pressure."

"Hence, a fraudster is trapped by double-entry bookkeeping and the interdependence between the income statement, balance sheet, and cash flow statement – they cannot overstate profits on the income statement without also overstating assets or understating liabilities."

"Though Herbalife’s SG&A disclosure is limited, we estimate a meaningful portion of Distributor Facing expenses are dedicated to vacation packages, one-time cash bonuses, Herbalife pins and watches, and other similar promotions that can only be gained via recruiting"

"BR’s balance sheet displays a worrisome trend of rapidly expanding deferred client conversion costs. The costs being added to the balance sheet are much higher than the cash spent on new client conversions being presented by its investor presentation (prior slide)."

"We refer to calculation with no credit for ongoing price increases as AFFO methodology (i.e., free cash flow will continue to grow by level of price increases), and calculation which adds back for price increases as bond methodology (i.e., true fixed income yield)."

"IRBT has historically reported positive operating cash flow (OCF) in its first quarter results. However, in Q1 2014, IRBT reported its first ever Q1 OCF burn in over 8 years (and the only time its GAAP Net Income has been positive, while its OCF has been negative!)"

"However, in our view, management failed to effectively communicate the financial rationale behind the strategic pivot, as the profitability guidance has not changed while the change in strategy put significant stress on Disney’s balance sheet and cash flow profile"

"In short, Vitek extracted cash loans and appears to have repaid with much less valuable interests in partially completed apartments and villas, conveying more in unfunded obligations than cash equity—and new CEO David Greenbaum sought to gloss over this behavior."

"FBHS currently trades ~9.7x LTM EBITDA and ~16.5x LTM cash earnings. If no recovery occurs, FBHS is trading at ~10x our estimate of cash earnings. If a recovery occurs, FBHS trades at ~4x to 7x our estimates of cash earnings, depending on the strength of recovery"

"In summary, the author believes IULs are complex instruments that contain features that are hard for the average consumer to understand; many of these features ultimately come with very high fees, which can threaten a policy's cash value during market downturns."

"Carvana not only trades at nosebleed levels relative to its closest peers, even on consensus revenue growth expectations we regard as too high, Carvana now trades at a premium to leading tech players, all of whom enjoy better margins and generate free cash flow."

"On March 1, 2011, the Company acquired 100% of the outstanding shares of a company that owned 650 communications sites in Brazil for $583.7 million, of which $543.3 million was paid using cash on hand during the six months ended June 30, 2011. — AMT Q2 2011 10-Q"

"During the years ended December 31, 2023, 2022 and 2021, the Company received cash proceeds of $1,404 million, $1,496 million and $1,504 million, respectively, from the sales of accounts receivables under its factoring arrangements. — Zebra 10-K and 10-Q filings"

"“sitting on over $200 million of take or pay offtake agreements, and we had customers like PepsiCo, Nestlé, Bacardi, you know, expecting us to be able to grow our capacity, so we had to find a way to find a lot of cash fast.” — Stephen Croskrey, CEO (via CNBC)"

"PBH reports “non-GAAP adjusted free cash flow.” Spruce Point believes this is particularly egregious and aggressive, as the Company adds back integration and transition costs, therefore ignoring the costs of M&A but wanting to show investors all the benefits."

"ADT expects to have the ability to accelerate certain tax deductions that would allow us to minimize our cash tax rate for a period of time beyond the full utilization of the initial deferred tax assets — The ADT Corporation Investor Day Presentation, 9/18/12"

"Because the JV transaction can generate such large cash proceeds, which significantly decreases Macy's current debt burden, the pro forma Macy's OpCo alone is worth more than Macy's current stock price, while Macy still owns 85% of the JV and its cash flows."

"Being forced to accept payments from end users over time, while at the same time being restricted from up-front cash payments from sale/leasebacks, represents a material deterioration of PLUG's economics that should NOT be adjusted out of Company financials."

"Based on our analysis, we find multiple data providers and sell-side analyst reports provide an inaccurate representation of Lightspeed's cash and shares outstanding, and do not account for the Company's two most recent acquisitions and equity capital raise."

""These factors were partially offset by the collection of $35.0 million of cash in the three months ended June 30, 2018, as a result of the modification in June 2018 to the AR1 Other Transaction Agreement ("OTA") with the U.S. Air Force." — Q2'18 10-Q, p. 41"

"Spruce Point believes it is a major red flag when a company stops being able to provide Free Cash Flow (FCF) guidance. We observe this happened after the departure of CFO Young in mid 2020. In the year he left, BR missed FCF guidance by an astounding 15.3%."

"Spruce Point believes there is significant downside risk to MSCI’s share price as its premium multiple is reconsidered by institutional investors in the face of intensifying competition, moderating cash flow and dividend growth, and lower earnings quality."

"Spruce Point believes there is significant downside risk to PERI’s share price as the Company is signaling financial strain and will have difficulty in hitting lofty growth targets while cash flow is starting to contract and it accrues for severance costs."

"We derive 59.8% from two figures. An expert in structuring renewable investments described the Tax Equity Partner's benefit to us as an ITC of 30% of project value and 14% in the form of depreciation, combined with a typical ~8% cash return. — Footnote 66"

"Generac recently increased its cash rebate incentives from $600 to $1,000 to sign-up for first time installers. Why would Generac increase incentives if it were having no issues recruiting installers? Even with increased incentives, dealer growth slowed."