{ "docId": "019dd923-622c-750b-8b98-ce8e8f2b4a97", "docSlug": "c5a10320e53e", "documentTitle": "Cintas Corp. (CTAS)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-11-13 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 37, "pageCount": 73, "prevPage": 36, "nextPage": 38, "slideType": "quote_slide", "function": "expose_contradiction", "density": "dense", "nDataPoints": 4, "notes": "The slide uses a testimonial format to challenge Cintas's claims of a stable pricing environment.", "elementsJson": [ "headline_text", "paragraph", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-ce8e8f2b4a97/37", "deckHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97#slide-37", "components": [ { "bbox": null, "kind": "callout", "text": "When we asked the same industry expert, who admittedly worked at a competitor, and was not interested in working for Cintas, to opine on industry pricing, he revealed that prices have generally gone down, but industry players have used more aggressive tactics such as pushing nebulous fees for loss and ruin higher.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2b65-734e-a97b-55dd8a1926fb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.0017 }, "kind": "paragraph", "text": "When we asked the same industry expert, who admittedly worked at a competitor, and was not interested in working for Cintas, to opine on industry pricing, he revealed that prices have generally gone down, but industry players have used more aggressive tactics such as pushing nebulous fees for loss and ruin higher.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c16ae449-b0ee-4cdb-b892-7d0bc45395a9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.95, "x": 0.05, "y": 0.0027 }, "kind": "quote", "text": "Cintas has maintained that the pricing environment hasn't changed much or been stable throughout this whole industry consolidation period? Unifirst's CEO, was commenting a year ago that basically, and I'm paraphrasing, service disruptions in the industry has created a change and allowed them to be more competitive and poach clients. So, I mean, do you take Cintas verbiage at face value that the pricing environment has been stable while they're trying to digest a huge acquisition of G&K?", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "322e1832-4076-4231-9396-03d4ec0719b2", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.35, "w": 0.95, "x": 0.05, "y": 0.004 }, "kind": "quote", "text": "And not only that, but I'll say this, the pricing environment in the rental uniform industry is, is within 10% of where it was back in the late eighties... Today that cost is more like 60 cents per man per day... it literally has gone down to the point, from competitive pressure... they'll dangle a carrot to get their foot in the door... the way they do that is by collecting those fees... I would tell them point blank. I'd say, are you aware that your uniform cost is not going to be this dollar but it's going to be a dollar about 25 to 30% higher at this dollar?", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9fb1609f-a67b-43f4-a962-be71d895d33c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.95, "x": 0.05, "y": 0.0078 }, "kind": "quote", "text": "Naturally occurring loss and ruin is around 16 to 18%... But as time evolved, and as we started hitting those numbers more and more, guess what they climbed to 28% and 30%. 30% is about the norm now. And I heard that number for years. So, I believe it's not just a single company number. I think it's pretty much an industry-wide.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e06a4e7f-ca11-4af2-b7e9-010fac729c6f", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Cintas has maintained that the pricing environment hasn't changed much or been stable throughout this whole industry consolidation period? Unifirst's CEO, was commenting a year ago that basically, and I'm paraphrasing, service disruptions in the industry has created a change and allowed them to be more competitive and poach clients. So, I mean, do you take Cintas verbiage at face value that the pricing environment has been stable while they're trying to digest a huge acquisition of G&K?\" — Spruce Point; \"And not only that, but I'll say this, the pricing environment in the rental uniform industry is, is within 10% of where it was back in the late eighties... they'll dangle a carrot to get their foot in the door... the way they do that is by collecting those fees and those fees that we're talking about is for the loss and the ruining, that 30% that I was mentioning to you earlier about, that's a cost that they just can't measure very well.\" — Industry Expert; \"Naturally occurring loss and ruin is around 16 to 18%... But as time evolved, and as we started hitting those numbers more and more, guess what they climbed to 28% and 30%. 30% is about the norm now.\" — Industry Expert", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b65-734e-a97b-5998a98105a9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Expert Weighs In On Pricing Discussion And The \"Darker Side\" Of Industry Practices", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fcc9dcde-c869-42b9-95b3-e78bf2f8b3e3", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 40, "from": 21, "beatId": "08a57d58-a3bb-413f-b60b-9f1e254d6671", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "The Struggle", "beatSlug": "overcoming-monster-the-struggle", "evidence": "The deck presents a detailed analysis of Cintas' financial struggles.", "position": 2, "confidence": 0.8, "parentBeatName": "Development", "parentBeatSlug": "development" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }