{
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  "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": 73,
  "pageCount": 92,
  "prevPage": 72,
  "nextPage": 74,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 20,
  "notes": "Uses historical 1995 10-K data vs 2018 10-K data to highlight opacity and margin decline.",
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  "metadataConfidence": 1,
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  "slideHref": "/slides/019dd923-622c-750b-8b98-c3e7825e1948/73",
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  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-c3e7825e1948#slide-73",
  "components": [
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      "kind": "callout",
      "text": "Warning: CHD mysteriously stopped providing break-out financials of Armand after 1999, making the entity even more opaque. It wasn't until 2005 that CHD started disclosing intercompany sales with Armand and its invoicing for management and administrative services (2005)",
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    {
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      "kind": "callout",
      "text": "Warning: CHD mysteriously stopped providing break-out financials of Armand after 1999, making the entity even more opaque.",
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      "kind": "metric",
      "text": "profit margin: 13%",
      "attrs": null,
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      "toolName": "Quantification",
      "toolSlug": "quantification",
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      "componentId": "019dd953-1ac2-71b6-bf56-6dc5fcecbe30",
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      "kind": "paragraph",
      "text": "From the biography of Armand's president previously illustrated, we know sales are ~$100m. Yet, as of CHD's earliest 10-K available on SEC.gov we see its sales in 1994 were $47m and peaked a year later at $50m in 1995. Gross margins were 38.4%, below the corporate level at 44.7%, but Armand's net income margin was ~31% - substantially higher than consolidated profit margin that year of 1.2%. Fast forward to today, CHD reported just $9.2m of equity income in 2018, implying at least $18.4 of net income for equity affiliates. On a minimum of $100m of equity affiliated revenue, this implies a profit margin of 18%, or 13% margin contraction.(1)",
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      "kind": "source-note",
      "text": "Source: CHD 1995 10-K; Source: CHD 2018 10-K; 1) Analysis excludes Armakleen...",
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      "text": "CHD 2018 10-K Income Statement excerpt",
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      "kind": "table",
      "text": "Historical Armand financial data from 1995 10-K",
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      "kind": "title",
      "text": "Evidence of Margin Contraction",
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  "loops": [
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      "from": 1,
      "name": "Cost Of Inaction",
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      "bestFor": "Urgent budget requests, compliance, risk mitigation",
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      "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"
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