{
  "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": 40,
  "pageCount": 73,
  "prevPage": 39,
  "nextPage": 41,
  "slideType": "preempt_rebuttal",
  "function": "preempt_rebuttal",
  "density": "overcrowded",
  "nDataPoints": 120,
  "notes": "Uses a table to adjust cash and debt figures to derive an 'Adjusted Net Debt/EBITDAR' ratio.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "callout_box",
    "data_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-ce8e8f2b4a97/40",
  "deckHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-ce8e8f2b4a97#slide-40",
  "components": [
    {
      "bbox": {
        "h": 0.11,
        "w": 0.83,
        "x": 0.15,
        "y": 0.29
      },
      "kind": "callout",
      "text": "The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c7abf22a-f01e-42bb-9761-010e225b38fa",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.13,
        "w": 0.83,
        "x": 0.15,
        "y": 0.43
      },
      "kind": "callout",
      "text": "Cash and cash equivalents. Cintas considers all highly liquid domestic investments with a maturity of three months or less, at date of purchase, to be cash equivalents. At May 31, 2019 and 2018, cash and cash equivalents includes $31.4 million and $30.9 million, respectively, of restricted cash used as collateral associated with the general insurance program. Cash and cash equivalents as of May 31, 2019 and 2018 include $28.5 million and $33.9 million, respectively, that is located outside of the United States.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e803b20d-598b-4ca7-8a09-609b1a7dafc0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "We believe its leverage is even higher than optically being portrayed.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-2b65-734e-a97b-11daea91e8fe",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Adj. Net Debt/EBITDAR: 2.0x",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-2b65-734e-a97b-1b6b9e7a0064",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.96,
        "x": 0.02,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "As Cintas financial strain rises, it's leverage is now at a multi-year high with increasing need for short-term borrowing. We believe its leverage is even higher than optically being portrayed. Cintas' $102m of cash on the balance sheet should not be considered freely available to pay down debt. $57m of it is restricted and domiciled in foreign jurisdictions.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8b1f9566-3af8-4245-81be-0dbbec182ed5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan of up to $250.0 million in the aggregate, subject to customary conditions — Cintas Corp. SEC Filing",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-2b65-734e-a97b-1569cf4b12f8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.25,
        "x": 0.02,
        "y": 0.96
      },
      "kind": "source-note",
      "text": "Source: Spruce Point analysis and Cintas financials",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f9680988-e9cf-46f1-856f-d63772f9e454",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.38,
        "w": 0.96,
        "x": 0.02,
        "y": 0.57
      },
      "kind": "table",
      "text": "Financial table showing adjustments to cash and debt from FY 2013 to 8/31/19.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "348e7afb-eea5-4c3e-8c00-b4988a714e1e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.02
      },
      "kind": "title",
      "text": "Leverage Rising And Slightly More Levered Than It Appears",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "590e9409-0020-49ce-9f20-6f9097ed79c4",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "3dc9a438-5cd9-42f6-abca-c9eb243cdf9d",
      "evidence": "Argues that reported cash is not freely available and leverage is understated.",
      "confidence": 0.8
    }
  ],
  "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": [
    {
      "to": 50,
      "from": 40,
      "name": "Hypothesis Test",
      "slug": "42-hypothesis-test",
      "bestFor": "Strategy validation, due diligence, research presentations",
      "matchId": "419bea6a-e653-4797-aa13-d8f59b9ebe1e",
      "evidence": "The deck presents evidence that Cintas' 'beat and raise' story is not justified.",
      "position": 2,
      "objective": "Is Cintas' 'beat and raise' story justified?",
      "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)",
      "confidence": 0.8,
      "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}