{
  "docId": "019dd923-622c-750b-8b98-a3d302cd2d9a",
  "docSlug": "2692179b6d0b",
  "documentTitle": "PetIQ, Inc. (PETQ)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": null,
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-04-30 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 86,
  "pageCount": 96,
  "prevPage": 85,
  "nextPage": 87,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 24,
  "notes": "The slide uses a snippet from a 10-K and a table from the cash flow statement to highlight the accounting treatment.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "callout_box",
    "screenshot",
    "data_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-a3d302cd2d9a/86",
  "deckHref": "/decks/019dd923-622c-750b-8b98-a3d302cd2d9a",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-a3d302cd2d9a.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-a3d302cd2d9a#slide-86",
  "components": [
    {
      "bbox": {
        "h": 0.04,
        "w": 0.3,
        "x": 0.35,
        "y": 0.3
      },
      "kind": "callout",
      "text": "PETQ FY18 10-K",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "164e0ca4-f307-44a0-a45d-9b4d2d28f733",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "operating cas",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-64d2-7657-bbe2-10bd2da5a046",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.3,
        "w": 0.95,
        "x": 0.05,
        "y": 0.35
      },
      "kind": "paragraph",
      "text": "Our principal asset is our interest in HoldCo, and, accordingly, we depend on distributions from HoldCo to pay our taxes and expenses. HoldCo’s ability to make such distributions may be subject to various limitations and restrictions. We are a holding company and have no material assets other than our ownership of LLC Interests of HoldCo. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of HoldCo and its subsidiaries and distributions we receive from HoldCo. There can be no assurance that our subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including negative covenants in our debt instruments, will permit such distributions. HoldCo is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to any entity-level U.S. federal income tax. Instead, taxable income is allocated to holders of LLC Interests, including us. Accordingly, we incur income taxes on our allocable share of any net taxable income of HoldCo. Under the terms of the HoldCo Agreement, HoldCo will be obligated to make tax distributions to holders of LLC Interests, including us. These tax distributions are funded from available cash of HoldCo and its subsidiaries. These tax distributions will be computed, for us, based on our",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7ab10b30-6575-4083-ae7c-238ff50f721b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.95,
        "x": 0.05,
        "y": 0.0016799999999999999
      },
      "kind": "paragraph",
      "text": "The Company is structured as a holding company with ownership of underlying LLC interests. Accordingly, it incurs tax liabilities on distributions of taxable income from the LLC. However, management treats “Tax Distributions to Continuing LLC Owners” as a financing cash outflow rather than an operating cash outflow. These tax distributions represent tax owed on the normal operation of the business and, as such, should be treated as an operating cash outflow. As a result, FY 2018 operating cash burn would have increased from ($12.5)M to ($14.0)M.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "92b527cf-5664-4add-9054-a8895d1b597b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.28,
        "w": 0.85,
        "x": 0.12,
        "y": 0.68
      },
      "kind": "table",
      "text": "Cash flow statement snippet showing financing activities and tax distributions",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "40f0d02b-1822-46e0-bc11-21e7c6f1274c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.65,
        "x": 0.31,
        "y": 0.05
      },
      "kind": "title",
      "text": "Tax Distributions A Financing Item?",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "bc7fc9c2-d854-4a5a-93e5-d35dbdb3de11",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "2b54725c-7f68-48cb-ab7d-33be1a172c22",
      "evidence": "The slide identifies a specific accounting classification choice that misrepresents operating cash flow.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 95,
      "from": 6,
      "beatId": "96b19703-73d7-4b02-a51b-72443d554cee",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "Detailed critique of PetIQ's business practices, financials, and valuation",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}