F9 to LL Flooring Board: Stop the Charade! LL Flooring’s Letter and Presentation Are Filled With Distortions of the Facts and Dishonest Personal Attacks
Bogus Attacks and Factual Distortions Appear to Demonstrate Board’s Efforts to Further Entrench Itself and Avoid Accountability
Urges Shareholders Vote the GOLD Proxy Card “FOR” F9’s Three Highly Qualified Director Nominees –
The letter, which highlights the Board’s flimsy attempts to avoid accountability for its clear strategic failures and significant erosion of the Company’s value, sets the record straight regarding what F9 believes are unfounded and distorted attacks against
The full text of the letter is below and available at www.LLGroove.com.
Dear Fellow LL Flooring Shareholders,
As LL Flooring’s largest shareholder owning approximately 8.85% of the Company’s stock,
We believe the Board’s personal attacks and distortions, coupled with their stubborn adherence to a failed long-term strategy, highlight the Board’s utter lack of accountability for its own failures and further demonstrate that the Board is simply out of touch with the urgent realities facing
Yet in a profound display of either lack of awareness or self-denial, LL’s Board continues to insist its plan is working. We believe shareholders recognize it clearly is not. LL has vastly underperformed its peers in virtually every metric and over a sustained period. The facts are irrefutable.
While F9 consistently responds to and refutes the Company’s mischaracterizations of our nominees’ credentials and plan, the Board has resorted to peddling outrageous personal attacks and bogus distortions of the facts rather than responding directly to F9’s critiques – because they cannot. The strategic missteps and value erosion that have occurred under their watch are undeniable, so the Board continues to promote a false narrative that only further demonstrates to us the lengths its members will go to entrench themselves and avoid accountability for their failures. Accordingly, we would like to set the record straight regarding a few of the Board’s most egregious claims:
LL Flooring’s assertion otherwise is patently absurd. If F9 is successful in this proxy contest, our nominees would constitute only 1/3 of the Board and would be powerless to “force” anything. Furthermore, were F9 to make a new offer for the Company, any F9 nominees serving on the Board would recuse themselves from consideration of the proposed transaction. Most importantly, any transaction to any buyer would be subject to shareholder approval.
F9 withdrew its 2023 bid for the Company as LL Flooring’s financial condition was rapidly deteriorating and it became clear that the Board’s so-called strategic review and sale process was disingenuous. Today, we continue to believe that upgrading LL Flooring’s Board with experienced directors, who bring a track record of success in the flooring industry, represents the best path forward to stabilize and grow the Company and restore long-term value for all shareholders.
OUR NOMINEES’ INTENTIONS ARE SIMPLE: TO HELP STABILIZE LL FLOORING’S BUSINESS AND POSITION THE COMPANY FOR LONG-TERM GROWTH, PROFITABILITY, AND SHAREHOLDER VALUE CREATION
The Board’s claim that F9’s nominees are conflicted due to their roles at
In just one example of the Board’s partial recounting of the history between the Company and F9, its materials reference Mr. Sullivan’s involvement in litigation between
Each of F9’s nominees bring deep knowledge of the flooring space and related industries, substantial corporate governance experience, and strong track records of creating value for companies – all of which we believe will be additive to the Board. We believe our nominees’ combined skillset is vitally important and necessary to stabilize the Company and bring immediate and long-term value to
SHAMELESS PERSONAL ATTACKS AGAINST MR. SULLIVAN ARE UNTRUE AND HYPOCRITICAL
In its materials, the Board criticizes the Company’s performance during Mr. Sullivan’s tenure, yet fails to mention that two of the three incumbent directors up for re-election this year were also on the Board during that same period. The Company also refuses to acknowledge that under the leadership of the current Chair of the Board,
Since the start of 2024 alone, the Company’s stock has dropped by 58%, and over the last three years it has fallen by 93%. At the time of Tom’s departure from the business,
The Board’s other personal attacks against
IT'S NOT THE ECONOMY – IT’S THE BOARD
Rather than take responsibility for its own strategic failures, the Board attempts to blame market conditions for the Company’s rapidly declining value. However, it fails to reckon honestly with the Company’s staggering underperformance relative to its peers. The facts are simple: if you invested
The Board notes that its strategic plan in part relies on waiting to “capitalize on improving market conditions” and “anticipated industry tailwinds”. Meanwhile, in the near term the Company plans to enter into a sale-leaseback commitment for its primary asset – LL Flooring’s
UNEVEN, SHAM STRATEGIC REVIEW PROCESS HAS RESULTED IN PLUMMETING OFFERS
LL Flooring’s Board claims it has been conducting a “thorough review’ of strategic alternatives to maximize shareholder value. However, despite receiving fully financed offers from F9 to buy
In 2023, F9 offered several times to enter into an NDA, but the Company refused to consider F9’s proposed standstill provisions that the Company later publicly disclosed it provided to at least one other bidder. In fact, the Board sought to have F9 sign an NDA which would have prevented F9 from making an offer for the Company during the standstill period that may have been in the best interests of all of the shareholders while granting the Company the right to terminate the NDA or refuse to provide due diligence. Indeed, the Board’s disingenuous “strategic review” and sale process have been characterized by a disturbing pattern of premium bids rejected, falling bid prices, limited transparency, and an uneven playing field for bidders – all despite the Board’s insistence that the bids received “significantly undervalued” the Company.
Time is short. All
VOTE ON THE GOLD PROXY CARD TODAY “FOR” F9’S NOMINEES
Shareholders must act decisively to safeguard their investment. YOUR VOTE MATTERS, NO MATTER HOW MANY SHARES YOU OWN. We urge all shareholders to protect the value of their investment by voting for F9’s nominees today using the GOLD proxy card.
You can cast your vote online at www.ProxyVote.com or by completing, signing and dating the GOLD proxy card or GOLD voting instruction form and mailing it in the postage paid envelope provided.
If you have not received the GOLD proxy card from F9 and have only received a WHITE proxy card sent to you by the Company, you can still support F9’s nominees using the WHITE proxy card. You can do so by checking the “WITHHOLD” boxes on all of the Company nominees and
If you have any questions about how to vote your shares, please contact our proxy solicitor, Campaign Management, by telephone 1-(855) 264-1527 (shareholders) or (212) 632-8422 (banks & brokerages) or by email at info@campaign-mgmt.com.
For more information about F9 and detailed voting instructions, visit our website at www.LLGroove.com.
With your vote, we will be one step closer to ensuring
We thank you for your support.
Sincerely,
DISCLAIMER
Except as otherwise set forth in this press release, the views expressed in this press release reflect the opinions of
This press release is provided merely as information and is not intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy any security nor as a recommendation to purchase or sell any security. Certain of the Participants (as defined below) currently beneficially own shares of the Company. The Participants and their affiliates may from time to time sell all or a portion of their holdings of the Company in open market transactions or otherwise, buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls, swaps or other derivative instruments relating to such shares.
Some of the materials in this press release contain forward-looking statements. All statements contained herein that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words “anticipate,” “believe,” “expect,” “potential,” “could,” “opportunity,” “estimate,” “plan,” “once again,” “achieve,” and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained herein that are not historical facts are based on current expectations, speak only as of the date of these materials and involve risks, uncertainties and other factors that may cause actual results, performances or achievements to be materially different from any future results, performances or achievements expressed or implied by such projected results and statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of F9.
The estimates, projections and potential impact of the opportunities identified by F9 herein are based on assumptions that F9 believes to be reasonable as of the date of this press release, but there can be no assurance or guarantee (i) that any of the proposed actions set forth in this press release will be completed, (ii) that the actual results or performance of the Company will not differ, and such differences may be material, or (iii) that any of the assumptions provided in this press release are accurate.
F9 has neither sought nor obtained the consent from any third party to use any statements or information contained herein that have been obtained or derived from statements made or published by such third parties, nor has it paid for any such statements. Any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein. F9 does not endorse third-party estimates or research which are used herein solely for illustrative purposes.
Important Information
THE PARTICIPANTS STRONGLY ADVISE ALL STOCKHOLDERS OF THE COMPANY TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER PROXY MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT WWW.SEC.GOV AND F9’S WEBSITE AT WWW.LLGROOVE.COM. THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING PROXY CARD WILL BE FURNISHED TO SOME OR ALL OF THE COMPANY’S STOCKHOLDERS. STOCKHOLDERS MAY ALSO DIRECT A REQUEST TO F9’S PROXY SOLICITOR, CAMPAIGN MANAGEMENT, 15 WEST 38TH STREET, SUITE #747,
Information about the Participants and a description of their direct or indirect interests by security holdings or otherwise can be found in the Definitive Proxy Statement.
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INVESTOR AND MEDIA CONTACTS
Investors:
Campaign Management
(212) 632-8422
michael.fein@campaign-mgmt.com
Media:
(212) 257-4170
F9Investments@gasthalter.com
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