{ "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": 39, "pageCount": 73, "prevPage": 38, "nextPage": 40, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "The slide uses a 'villain' framing by highlighting how the acquisition of G&K Services increased exposure to a declining sector.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-ce8e8f2b4a97/39", "deckHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97#slide-39", "components": [ { "bbox": null, "kind": "callout", "text": "Cintas took on more exposure to the oil, gas and mining sectors with the acquisition of G&K Services. This may turn out to hurt it as pressures continue to rise with layoffs in the oil field as prices remain subdued and production falls.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2b65-734e-a97a-fb04b11476da", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.94, "x": 0.03, "y": 0.19 }, "kind": "paragraph", "text": "Cintas took on more exposure to the oil, gas and mining sectors with the acquisition of G&K Services. This may turn out to hurt it as pressures continue to rise with layoffs in the oil field as prices remain subdued and production falls. Various news outlets are suggesting that the oil and gas market will shed all its job gains this year and next.(1,2)", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "77e84533-ae6a-41b7-9c09-52e81d6a0d95", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Oil and gas was an important segment for all of us, not just hard-core center of oil and gas but the collateral, the related businesses to it, and everybody knows that story.\" — G&K Baird Conf June 2016; \"We continue to see significant wearer losses with oil and gas and other mining customers, and there is clearly some spillover into related markets.\" — G&K Q3 2016 Earnings Call April 2016; \"What I was referring to was our customers in the oil, gas, mining areas that generally, when you see the prices of the gas at the pump come down in the past, when we've seen those prices really come down, it kind of hurts that business here in the U.S. And so -- we saw some benefit in that price at the pump, as we said, 25 basis points in rental. But we also saw a little bit of softening in the business side of it from a customer perspective. And so that's what we're keeping our eyes on.\" — Cintas Q1 2020 Earnings Call Sept 24, 2019; \"One area of caution with respect to growth relates to ware accounts within our existing customers. Additions versus reductions as we commonly refer to it, which slid some in our fourth quarter, partially due to some weakening in the oil and gas sector.\" — Unifirst Q4 2019 Earnings Call Oct 23, 2019", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b65-734e-a97a-fe0df81d1efc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.55, "x": 0.03, "y": 0.92 }, "kind": "source-note", "text": "1) Houston Oil and Gas Jobs Set To Decline Through 2020 - Oct 28, 2019\n2) Employment in Texas Oil Fields Falls As Industry Contracts, San Antonia Journal, Sept 27, 2019", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "755d7d07-124d-4b4d-b6fe-0665c72769ac", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.55, "w": 0.94, "x": 0.03, "y": 0.33 }, "kind": "table", "text": "Quotes from G&K and Cintas earnings calls regarding oil and gas sector exposure.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "af6e77ee-1915-47d6-a6a6-e3a0e194f356", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Cintas Increased Exposure To Oil And Gas And Mining Post G&K Acquisition", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c997a4f7-0cf4-4eec-83a5-6c4462609756", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "c86ada25-51af-4158-a863-ef5899c8a8e3", "evidence": "Uses historical quotes to expose business risk and potential management missteps.", "confidence": 0.9 } ], "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 }