Underscores How LL Flooring’s Nominees Are the
Right Directors to Oversee the Company’s Strategic Direction
Thomas Sullivan Proxy Contest is Self-Serving
and Personal; Jerald Hammann Owns Few Shares and Is Not Qualified
to Serve as a Director
Urges Shareholders to Vote the Universal
WHITE Proxy Card Today “FOR” ONLY LL
Flooring’s Three Highly Qualified Director Nominees
Visit www.VoteLLFlooring.com for More
Information
LL Flooring Holdings, Inc. (“LL Flooring” or “Company”) (NYSE:
LL) today mailed a letter to shareholders in connection with the
filing of its definitive proxy statement with the Securities and
Exchange Commission (“SEC”) for its upcoming 2024 Annual Meeting of
Stockholders. The Company also launched www.VoteLLFlooring.com,
which provides additional information and resources to help
shareholders vote at the 2024 Annual Meeting of Stockholders. The
letter contains critical information for shareholders’ decision
making, including:
- LL Flooring has a highly qualified and engaged Board with the
right mix of skills and expertise to oversee the Company’s
strategic direction.
- The Company’s Board of Directors and management team have
determined a set of five strategic priorities and are taking
decisive action to deliver on those priorities to drive value
creation.
- The Board is also taking action to address near-term financing
needs.
- Through its previously announced strategic alternatives review
process, the Board has been carefully and thoroughly evaluating and
engaging with third parties regarding indications of interest and
non-binding proposals to acquire the Company.
- Thomas Sullivan has launched a proxy contest that is
self-serving, personal and not in the best interests of all
shareholders, and the Board believes he would push a personal
agenda to acquire LL Flooring at a price that may undervalue the
Company if elected to the Board.
- Jerald Hammann, who has nominated himself to the Board, only
owns a few shares of the Company’s stock, lacks a cogent plan for
LL Flooring and is not qualified to serve on LL Flooring’s
Board.
The full text of the letter follows:
Dear Fellow Shareholders,
At our upcoming 2024 Annual Meeting of
Stockholders on July 10, 2024, you will be asked to make an
important decision regarding the future of LL Flooring.
Thomas Sullivan, founder of the Company, is
attempting to take control of LL Flooring through a costly and
distracting proxy contest to install himself and two of his
hand-picked employees on your Board of Directors. Given Mr.
Sullivan’s actions during the Company’s strategic review process,
we believe he may be attempting to force a sale of the Company to
himself at a price that may undervalue the Company.
In addition to Mr. Sullivan and his nominees,
Jerald Hammann, another individual shareholder of LL Flooring, has
nominated himself to the Board. Mr. Hammann has a history of
nominating himself to corporate boards when owning only a few
shares of stock. Indeed, Mr. Hammann only owns 10 shares of LL
Flooring stock and fundamentally lacks a cogent plan for LL
Flooring along with any distinct skills or experience.
As you consider your vote, we would like to
highlight the following:
- Mr. Sullivan’s proxy contest is self-serving, personal and
not in the best interests of all shareholders and Mr.
Hammann is not qualified to serve on the Company’s Board.
- Your Board and management team have determined a set of five
strategic priorities and are taking decisive action to deliver
on those priorities to drive value creation.
- Your Board is also taking action to address near-term
financing needs.
- Through its previously announced strategic alternatives review
process, your Board has been carefully and thoroughly evaluating
and engaging with third parties regarding indications of
interest and non-binding proposals to acquire the Company.
- LL Flooring has a highly qualified and engaged Board
with the right mix of skills and expertise to oversee the Company’s
execution of its strategic priorities and the Company’s overall
strategic direction.
We urge you to support your Board by
voting the universal WHITE proxy card
today “FOR” ONLY LL Flooring’s three highly qualified director
nominees – Douglas T. Moore, Ashish Parmar and Nancy M.
Taylor.
Executing Our
Strategic Plan for Growth and Value Creation
LL Flooring’s strategy, as crafted by
management under the oversight of the Board, is the result of a
thorough analysis of LL Flooring’s business, competitive
positioning in the marketplace and current operational environment.
The broader home improvement industry continues to face numerous
headwinds driven by weaker home sales and compounded by elevated
interest rates and inflation. These structural factors have led to
softness in home improvement, remodel and big-ticket discretionary
spending, and according to independent research conducted by
Evercore ISI Research in 2024, home improvement spend by housing
units fell below its 50-year average.
To best drive growth and value creation
against this backdrop, your Board and management team have
identified and begun executing on five clear strategic
initiatives:
- Investing in growing the Pro business
- Driving customer engagement through CRM rollout
- Increasing brand awareness
- Driving product innovation and carpet growth
- Ensuring consistent customer experience
We strongly believe that the execution of our
strategic initiatives, including our CRM and Pro initiatives, will
improve the customer experience and help drive traffic to stores.
Additionally, we are focused on unlocking cost savings, and have a
number of active work streams underway to further rationalize
costs. In addition to actions taken last year with respect to
payroll and other cost reduction, we have taken actions in the
first quarter of the current fiscal year to restructure and curtail
expenses, which quarter-to-date have totaled approximately $4
million. In addition, the Company’s supply chain teams have been
carefully managing inventory to improve working capital while still
maintaining appropriate levels of in-stock quality product
assortment for customers. As a result, the Company is well
positioned in the marketplace when the cycle for home improvement
spending normalizes and long-term tailwinds driven by aging housing
stock, increased household formation, and rising home values, begin
to take shape.
In an effort to obtain the financial runway
to execute on our strategic plan, in Q1 2024 we announced plans to
pursue a sale of our approximately one million square foot
distribution center in Sandston, Virginia, in order to put us in a
position to achieve our goals and provide us with liquidity as we
weather the current operating environment. We also retained
Houlihan Lokey to pursue additional financing alternatives.
Despite the cyclical factors, we remain
focused on our execution and believe our strategy to increase brand
awareness and deliver a more consistent end-to-end customer
experience across our omnichannel network will gain traction and
drive profitability.
Conducting a
Thorough Strategic Alternatives Process
Your Board and management regularly evaluate
the Company’s strategic direction and ongoing business plans and
review potential alternatives with a view toward enhancing value.
As announced in August 2023, your Board is undertaking an
exploration of strategic alternatives in response to receipt of
multiple inbound expressions of interest regarding a potential
transaction with the Company.
As part of this process, the Board and
management team have worked diligently with the Company’s
independent financial and legal advisors to consider and evaluate,
among other things:
- Technology and marketing investments;
- Diversification into new product lines;
- A potential sale of the Company’s Sandston distribution
center;
- Potential strategic business combinations; and
- Other transactions with third parties, including indications of
interest and non-binding proposals from several financial sponsors,
many including multiple rounds of negotiations and proposals.
Your Board assembled to discuss these
alternatives and to determine the best path forward for the Company
20 times in 2023 and five times in the first five months of 2024.
Throughout this process, your Board has remained focused on
ensuring LL Flooring is taking all possible actions to drive value
creation.
As part of the strategic alternatives review
process, in April 2024, the Company received a non-binding
unsolicited proposal from Live Ventures to acquire all of the
Company’s outstanding shares of common stock for $2.50 per share in
cash. Your Board is committed to a fair process for all interested
parties and will continue to thoroughly review any credible
proposal received to determine the course of action that it
believes maximizes value.
LL Flooring’s Highly
Qualified and Engaged Director Nominees
Your LL Flooring Board has the right mix of
skills and experience to oversee the execution of the Company’s
five core growth strategies, support the team’s delivery of
high-touch service for our customers and drive value. Your LL
Flooring Board comprises nine highly qualified and engaged
directors, eight of whom are independent. At the 2024 Annual
Meeting of Stockholders, Douglas T. Moore, Ashish Parmar and Nancy
M. Taylor are standing for election.
- Douglas T. Moore Current Chairman and CEO of CleanCore
Solutions, Inc. More than 25 years of retail experience, including
as CEO of two public companies
- Ashish Parmar Current Chief Information Officer of
Standard Industries, Inc. More than 20 years of leadership and
technology experience across luxury retail, logistics, and consumer
electronics
- Nancy M. Taylor Current LL Flooring Independent Board
Chair; Former CEO of Tredegar Corporation More than 25 years of
business, finance, and leadership experience; brings strong
corporate governance knowledge as public company director at
TopBuild Corp. and Malibu Boats, Inc.
Messrs. Moore and Parmar and Ms. Taylor have
made significant contributions to your Board and the Company over
their respective tenures, including overseeing the development of
the Company’s five core growth strategies, collectively serving on
all four Board Committees, and proactively refreshing the
management team with four new corporate leaders added in the last
two years to bring fresh perspectives to the Company during a
period of industry and market pressure.
If Elected,
Mr. Sullivan’s Focus Would be to Acquire the Company
If elected to the Board, we believe the focus
of Mr. Sullivan would be to push a personal agenda to acquire LL
Flooring at a price that may undervalue the Company. The two
additional candidates being put forth by Mr. Sullivan have
longstanding relationships with him, and currently work for F9
Investments or Cabinets To Go.
The LL Flooring Nominating and Corporate
Governance Committee considers a number of factors in appointing a
director to the Board, including the ability of the prospective
nominees to represent the interests of all shareholders, the extent
to which the prospective nominees contribute to the range of
talent, skills and expertise appropriate for the Board and the
extent to which the prospective nominees help the Board reflect the
diversity of the Company’s shareholders, employees, customers and
the communities in which it operates. All of the directors
currently serving on your Board meet these criteria. While some of
Mr. Sullivan’s candidates have industry experience, none except for
Mr. Sullivan himself have any prior experience serving on the board
of a public company, or strong corporate governance knowledge.
In accordance with the Company’s guidelines,
two members of the Nominating and Corporate Governance Committee,
who are not themselves nominees, interviewed Mr. Sullivan and his
nominees along with Mr. Hammann. Subsequently, the Board determined
none of Mr. Sullivan’s candidates nor Mr. Hammann offered
experience or skills that were not already represented by the
Company’s current directors. In an effort to avoid a distracting
and costly proxy contest and given the industry experience of Mr.
Sullivan’s candidate, John Jason Delves, the Board proposed to Mr.
Sullivan that Mr. Delves could be appointed to the Board. However,
Mr. Sullivan rejected this proposed compromise and has chosen to
proceed with his unnecessary and self-serving proxy contest.
We firmly believe that LL Flooring’s current
directors are the right directors with the right experience and
skillsets to oversee the Company’s strategic direction and to
maximize value.
Vote today “FOR” ONLY LL
Flooring’s three highly qualified and engaged director nominees on
the universal WHITE proxy card
Your Board unanimously recommends that you
vote “FOR” the election of each of the three nominees proposed by
your Board, Messrs. Moore and Parmar and Ms. Taylor, on your
universal WHITE proxy card.
Your Board does not endorse Mr. Sullivan and
his other two nominees or Mr. Hammann, and strongly urges you to
DISCARD and NOT vote using any gold proxy card that may be sent to
you by Mr. Sullivan or any proxy card that may be sent to you by
Mr. Hammann. If you have already voted using a gold proxy card or
other proxy card sent to you by either Mr. Sullivan or Mr. Hammann,
respectively, you have every right to change your vote and we
strongly encourage you to revoke that proxy by using the
WHITE proxy card to vote in
favor of ONLY the three nominees recommended by your Board ‐ by
Internet or by signing, dating and returning the enclosed
WHITE proxy card in the
postage‐paid envelope provided. Only the latest validly executed
proxy that you submit will be counted ‐ any proxy may be revoked at
any time prior to its exercise at the Annual Meeting.
Your vote is very important. Even if you
plan to attend the Annual Meeting, we request that you read the
proxy statement and vote your shares by signing and dating the
enclosed universal WHITE proxy card
and returning it in the postage‐paid envelope provided or by voting
via the Internet by following the instructions provided on the
enclosed universal WHITE proxy
card.
If you have any questions or
require
any assistance with voting
your
shares, please contact our
proxy
solicitor, Saratoga, at (888)
368‐0379
or (212) 257‐1311 or by email
at
info@saratogaproxy.com.
About LL Flooring
LL Flooring is one of the country’s leading specialty retailers
of hard-surface flooring with more than 435 stores nationwide. The
Company seeks to offer the best customer experience online and in
stores, with more than 500 varieties of hard-surface floors
featuring a range of quality styles and on-trend designs. LL
Flooring's online tools also help empower customers to find the
right solution for the space they've envisioned. LL Flooring's
extensive selection includes waterproof hybrid resilient,
waterproof vinyl plank, solid and engineered hardwood, laminate,
bamboo, porcelain tile, and cork, with a wide range of flooring
enhancements and accessories to complement. LL Flooring stores are
staffed with flooring experts who provide advice, Pro partnership
services and installation options for all of LL Flooring's
products, the majority of which is in stock and ready for
delivery.
Learn More about LL Flooring
- Our commitment to quality, compliance, the communities we serve
and corporate giving: https://llflooring.com/corp/quality.html
- Follow us on social media: Facebook, Instagram and
Twitter.
Forward Looking Statements
Certain statements in this press release may include statements
of the Company’s expectations, intentions, plans and beliefs that
constitute “forward-looking statements” within the meanings of the
Private Securities Litigation Reform Act of 1995. These statements,
which may be identified by words such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “assumes,”
“believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,”
“projects,” “targets,” “potential,” “will likely result,” and other
similar terms and phrases, are based on the beliefs of the
Company’s management, as well as assumptions made by, and
information currently available to, the Company’s management as of
the date of such statements.
These statements are subject to risks and uncertainties, all of
which are difficult to predict and many of which are beyond the
Company’s control. These risks include, without limitation, the
impact of any of the following: reduced consumer spending due to
slower growth, economic recession, inflation, higher interest
rates, and consumer sentiment; our advertising and overall
marketing strategy, including anticipating consumer trends and
increasing brand awareness; the results of our ongoing strategic
review; a sustained period of inflation impacting consumer
spending; our inability to execute on our key initiatives or if
such key initiatives do not yield desired results; stock price
volatility; competition, including alternative e-commerce
offerings; liquidity and/or capital resources changes and the
impact of any changes or limitations, including, without
limitation, ability to borrow funds and/or renew or roll over
existing indebtedness; transportation availability and costs,
including the impact of the war in Ukraine and the conflict in the
middle east on the Company’s European and Asian suppliers;
potential disruptions to supply chain and product availability
related to forced labor and other trade regulations; including with
respect to the Uyghur Forced Labor Prevention Act; inability to
hire and/or retain employees; inability to staff stores due to
overall pressures in the labor market; the outcomes of legal
proceedings, and the related impact on liquidity; reputational
harm; inability to open new stores with acceptable financial
returns, find suitable locations for our new stores, and fund other
capital expenditures; managing growth; disruption in our ability to
distribute our products, including due to severe weather; operating
an office in China; managing third-party installers and product
delivery companies; renewing store, warehouse, or other corporate
leases; maintaining optimal inventory for consumer demand; our and
our suppliers’ compliance with complex and evolving rules,
regulations, and laws at the federal, state, and local levels
having an overreliance on limited or sole-source suppliers; damage
to our assets; availability of suitable hardwood, carpet and other
products, including disruptions from the impacts of severe weather
and supply chain constraints; product liability claims, marketing
substantiation claims, wage and hour claims, and other labor and
employment claims; sufficient insurance coverage, including
cybersecurity insurance; disruptions due to cybersecurity threats,
including any impacts from a network security incident; the
handling of confidential customer information, including the
impacts from the California Consumer Privacy Act, California
Privacy Rights Act and other applicable data privacy laws and
regulations; management information systems and customer
relationship management system disruptions; obtaining products
domestically and from abroad, including tariffs, the effects of
antidumping and countervailing duties, and delays in shipping and
transportation whether due to international events, such as the Red
Sea shipping crisis, or scenarios outside of the Company’s control;
impact of changes in accounting guidance, including implementation
guidelines and interpretations related to Environmental, Social,
and Governance matters; deficiencies or weaknesses in internal
controls; and anti-takeover provisions.
The Company specifically disclaims any obligation to update
these statements, which speak only as of the dates on which such
statements are made, except as may be required under the federal
securities laws.
Additional factors are set forth in the Company’s Annual Report
on Form 10-K and Form 10-K/A for the year ended December 31, 2023,
under the captions “Risk Factors”, the Company’s quarterly report
on Form 10-Q for the quarter ended March 31, 2024, and subsequent
filings with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240602958250/en/
For further information: LL Flooring Investor Relations
ICR Bruce Williams ir@llflooring.com Tel: 804-420-9801
For media inquiries: Leigh Parrish / Ed Trissel Joele
Frank, Wilkinson Brimmer Katcher 212-355-4449
Saratoga Proxy Consulting LLC: John Ferguson
info@saratogaproxy.com Tel: 212-257-1311
LL Flooring (NYSE:LL)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
LL Flooring (NYSE:LL)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024
