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  "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",
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  "pageNumber": 45,
  "pageCount": 73,
  "prevPage": 44,
  "nextPage": 46,
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  "notes": "Uses a red-box callout to highlight the discrepancy between management's guidance and the calculated amortization based on the 10-K.",
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  "slideHref": "/slides/019dd923-622c-750b-8b98-ce8e8f2b4a97/45",
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  "components": [
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      "kind": "callout",
      "text": "Our guidance includes the following assumptions related to the acquired G&K business... purchase price amortization expense related to intangible assets of $50 million...",
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      "kind": "callout",
      "text": "Increase in annual amortization only $38.9m which is very close to our estimate of $40.3m, and well below the original $68m (then $50m) guidance issued by management",
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    {
      "bbox": null,
      "kind": "callout",
      "text": "Thus, we can say with confidence that management issued an inaccurate measure of amortization expense, potentially to misguide investors to optically deliver better results.",
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      "kind": "metric",
      "text": "amortization expense: $0.24",
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      "kind": "paragraph",
      "text": "Four months later on the conference call, Cintas offered guidance of $50m of intangible amortization expenses... The net benefit to FY 2018 EPS from this expense mismanagement was $0.24, or approximately 3.5%.",
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      "kind": "quote",
      "text": "\"Our guidance includes the following assumptions related to the acquired G&K business: no transaction and integration expenses; revenue of $870 million to $900 million, compared to a prior year run rate of $965 million; synergies of approximately $50 million to $55 million; purchase price amortization expense related to intangible assets of $50 million; interest expense on G&K acquisition debt of about $65 million; and an EPS contribution of $0.15 to $0.17.\" — CFO Q4 2017 Earnings Call, July 20, 2017",
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      "kind": "table",
      "text": "Cash flows from operating activities: Net income... Depreciation... Amortization of intangible assets 63,940 25,030 15,588",
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      "kind": "table",
      "text": "Service Contracts $519 15 $34.6; Trade Names $17 3 $5.7; Total $536 $40.3",
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      "kind": "title",
      "text": "Evidence Suggests Cintas Misguided Expenses To Inflate EPS",
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      "evidence": "Contrasts management guidance with actual financial data to allege manipulation.",
      "confidence": 0.9
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      "evidence": "The deck concludes with a clear call to action for investors and a valuation analysis.",
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  "loops": [
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      "evidence": "The deck presents evidence that Cintas' 'beat and raise' story is not justified.",
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      "objective": "Is Cintas' 'beat and raise' story justified?",
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