{ "docId": "019dd923-622c-750b-8b98-e7fa892a99b5", "docSlug": "6ceec0b99264", "documentTitle": "WD-40 Company (WDFC)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2020-04-02 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 26, "pageCount": 68, "prevPage": 25, "nextPage": 27, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 5, "notes": "Uses a combination of channel check photo evidence and transcript excerpts to undermine management's explanation for regional underperformance.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "screenshot", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-e7fa892a99b5/26", "deckHref": "/decks/019dd923-622c-750b-8b98-e7fa892a99b5", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-e7fa892a99b5.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-e7fa892a99b5#slide-26", "components": [ { "bbox": { "h": 0.08, "w": 0.96, "x": 0.02, "y": 0.31 }, "kind": "callout", "text": "Spruce Point: “What are some of the challenges faced by WD-40 in emerging markets” Response: “Well ya know, in some countries they use home-made lubricants or cheaper solutions.”", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b86835b8-c7bd-4cbd-8762-1a52da84ecee", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "callout", "text": "The fact of the matter is that WD-40 is an expensive product in some countries where the locals may seek cheaper alternatives.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0936-7173-ab20-6ec6ce97b775", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.48, "x": 0.02, "y": 0.43 }, "kind": "image", "text": "Latin American Channel Check: Uruguay (Dec 2019)", "attrs": null, "subkind": "photo", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "746bae7f-94c6-496d-b315-d509a369886f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.96, "x": 0.02, "y": 0.17 }, "kind": "paragraph", "text": "WD-40 blamed Latin American challenges on Argentina, citing sales down 10%. We conducted a channel check at a major home improvement chain that sells in Argentina, Peru, Uruguay, Columbia and Mexico and Brazil. At the low end, a 5.5oz container cost over $6.00 or more than 2x the price available in the U.S. The fact of the matter is that WD-40 is an expensive product in some countries where the locals may seek cheaper alternatives.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ba66ff3f-9d91-4e66-8fd1-d08b959d1c25", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.46, "x": 0.52, "y": 0.43 }, "kind": "paragraph", "text": "Analyst G. Research Q4 2019: “And in Latin America, obviously, maintenance was down 10%. You mentioned some economic challenges that exist in this region. Can you break that down specifically by country where you may have an outsized impact? Is there any sort of specific disruption that's affecting you more so than, I guess, other regions in that area?”", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ec90c750-71d1-469b-981f-a3473bddac53", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.24, "w": 0.46, "x": 0.52, "y": 0.67 }, "kind": "paragraph", "text": "WD-40 COO Steve Brass: “We had -- we suffered from the Argentinian economic situation. We had some phasing issues in Mexico with orders. And then our business in Central America and the Caribbean was phased based upon price increases that happened last year, and there was pre-price increase buying last year, so the comparison wasn't favorable. So they were the main three areas that caused the Latin America business to be down. It's the first time we've seen Latin America fail to grow since 2012 and we certainly expect normal service to be resumed in 2020.”", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f9ccc6a9-01d9-460b-bd51-2a6e0eec003e", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“Well ya know, in some countries they use home-made lubricants or cheaper solutions.” — Former WD-40 Employee. “We had -- we suffered from the Argentinian economic situation. We had some phasing issues in Mexico with orders... It's the first time we've seen Latin America fail to grow since 2012 and we certainly expect normal service to be resumed in 2020.” — WD-40 COO Steve Brass", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0936-7173-ab20-711a9c6bbcd1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.25, "x": 0.02, "y": 0.94 }, "kind": "source-note", "text": "Source: Sodimac Homecenter Converted at 38 peso per US$", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a0fd0738-d5dd-4a89-a80a-64751576f3b5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.48, "x": 0.02, "y": 0.86 }, "kind": "table", "text": "Price points for various WD-40 sizes in Uruguay", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "495c2b3d-4071-49d4-b0eb-72a53b3bc550", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.38, "x": 0.305, "y": 0.05 }, "kind": "title", "text": "Latin America Challenges", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "cf76a24f-78a3-4821-9d52-b24a16745539", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "3c084a6e-d3c9-425b-aff8-397fc4715b6f", "evidence": "Contrasts management's explanation of sales decline with channel check evidence.", "confidence": 0.9 } ], "arcBeats": [ { "to": 64, "from": 9, "beatId": "5e962958-907a-481e-a341-ae36245a2e9e", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The document spends most of its pages exposing contradictions in WD-40's claims, financials, and operations.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null }, { "to": 34, "from": 14, "beatId": "7e19016a-1c30-40da-8e17-e72518e075e7", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Villain Critique", "beatSlug": null, "evidence": "The document critiques WD-40's management, industry, and market position, portraying them as weaknesses.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }