{
  "docId": "019dd923-622c-750b-8b98-c3e7825e1948",
  "docSlug": "8b6a62f49fba",
  "documentTitle": "Church & Dwight Co., Inc. (CHD)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-09-05 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 27,
  "pageCount": 92,
  "prevPage": 26,
  "nextPage": 28,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 20,
  "notes": "Includes specific citations from 10-K filings and critiques of Bloomberg/analyst methodologies.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "data_table",
    "screenshot",
    "kpi_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-c3e7825e1948/27",
  "deckHref": "/decks/019dd923-622c-750b-8b98-c3e7825e1948",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-c3e7825e1948.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c3e7825e1948#slide-27",
  "components": [
    {
      "bbox": {
        "h": 0.05,
        "w": 0.5,
        "x": 0.48,
        "y": 0.65
      },
      "kind": "callout",
      "text": "Analysts Just Take EBIT And Add-Back D&A To Calculate EBITDA",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "10e33e8b-4fb1-414b-a1f5-5b6af3eafae4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.5,
        "x": 0.48,
        "y": 0.45
      },
      "kind": "callout",
      "text": "The life of the amortizable intangible assets recognized from the Agro Acquisition ranges from 5 - 15 years... The reduction was recorded in SG&A in the SPD segment.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "1f8f832b-258a-4cd1-802b-c359a9477fbe",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.5,
        "x": 0.48,
        "y": 0.26
      },
      "kind": "callout",
      "text": "On April 1, 2018, the Company changed its method of accounting for inventories... The cumulative effect of the change in accounting principle of approximately $4.0 pre-tax was recorded as a decrease to cost of goods sold...",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "56701e5e-8e24-48be-8d9a-468f41c10595",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "We believe the Street has failed to capture accounting gimmicks to boost CHD’s 2018 EBITDA. Analysts simply take CHD’s recent annual results at face value, and use it as a base-line for future year EBITDA growth and margin expansion.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-64d3-706e-a460-594f9031fda8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.5,
        "x": 0.48,
        "y": 0.72
      },
      "kind": "chart",
      "text": "Key Metrics (FYE Dec) and Financial Estimates table",
      "attrs": null,
      "subkind": "table",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b5f8d8ff-e114-4485-84db-60bc2f4984a5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "EBITDA: 933",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-64d3-706e-a460-639315bb560f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.96,
        "x": 0.02,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "We believe the Street has failed to capture accounting gimmicks to boost CHD's 2018 EBITDA. Analysts simply take CHD's recent annual results at face value, and use it as a base-line for future year EBITDA growth and margin expansion.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9906fbc5-0d9b-42b6-8563-32a904470422",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "On April 1, 2018, the Company changed its method of accounting for inventories from last-in-first-out (“LIFO”) to first-in-first-out (“FIFO”) for the approximately 17% of consolidated inventory not previously valued using FIFO. — 2018 10-K, p. 55",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-64d3-706e-a460-5d7cef252b8a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.96,
        "x": 0.02,
        "y": 0.88
      },
      "kind": "source-note",
      "text": "Source: 2018 10-K, Bloomberg, JP Morgan, Jefferies",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e6dc1f40-ac76-4c04-a26e-2ed592eb75d2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.6,
        "w": 0.45,
        "x": 0.02,
        "y": 0.26
      },
      "kind": "table",
      "text": "Filing History for EBITDA (Adjusted) and Calculation of EBITDA components",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7aeb9c56-4997-4572-8539-e7ffeba4c756",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.305,
        "y": 0.02
      },
      "kind": "title",
      "text": "Historical EBITDA Inflation Used As A Base-Line For Future Estimates",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "66d4a6a0-0d1d-47e0-bbaa-9c0674bee219",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "3eecc000-f2a6-41f4-94ad-e6808f6ef348",
      "evidence": "The slide explicitly identifies 'accounting gimmicks' and 'unexplained adjustment' to expose financial manipulation.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 40,
      "from": 6,
      "beatId": "dc0cfcc3-81fd-40c2-a4f5-79587852e3d7",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The document extensively details the problems with CHD, including rising debt, low-quality EBITDA, worrisome strategy shifts, and concerning CEO history.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 92,
      "from": 1,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "d8d41695-ad33-43d2-9478-d227476d9e68",
      "evidence": "The overall thesis implies that failing to act on Spruce Point's analysis could lead to significant financial losses for investors holding onto CHD stock.",
      "position": 2,
      "objective": "The cost of not selling CHD",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.6,
      "description": "Quantify what happens if the audience does nothing"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}