Sleep Number Corporation · NASDAQ:SNBR
Sleep Number — Select Comfort — Merger or Acquisition (June 2009)
12 slides from Sleep Number's merger presentation, Jun 25, 2009
Slide 1: Sterling Partners Investment in Select Comfort
Exhibit 99.1 Sterling Partners Investment in Select Comfort June 2009 General/Forward-Looking Statements Any information contained in this PowerPoint presentation should be read in the context of and with due regard to the more detailed information provided in other documents the Company files with
Slide 2: Important Information for Investors and Stockholders
2 Important Information for Investors and Stockholders This communication is being made in respect of the proposed equity investment transaction involving Select Comfort and Sterling Partners. In connection with the proposed transaction, Select Comfort has filed a preliminary proxy statement with th
Slide 3: Transaction Summary
4 Transaction Summary Sterling Partners has agreed to invest $35 million in cash in exchange for 50 million shares of common stock at $0.70 per share Sterling to own 52.5% of Company 5 of 9 Board seats Agreement includes important minority shareholder protections Subject to shareholder approval and
Slide 4: Rationale for Sterling Partners' Investment
FY06 FY07 FY08 Q108 Q208 Q308 Q408 Q109 $0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 $(50) Uncertain outlook dictates continuing need for capital Unemployment rate projected to continue increasing Consumer confidence remains at recessionary levels Oil cost currently up 122% from December low, pre
Slide 5: Board Process Focused on Shareholder Value
Current agreement expires in June 2010, and current cash Term extended from June 2010 to Dec 2012 forecast dictates need for continued credit into 2011 or longer Uncertain ability to extend/replace Since 4Q07, SCSS has required modifications or waivers Improved operating covenants of covenants to re
Slide 6: Sterling Partners Overview
Renegotiation with lenders (without Did not provide incremental liquidity incremental investment) Dilution from associated warrants Very limited operational flexibility Inability to extend credit agreement term Other PIPE investors Dilution higher than Sterling transaction Unacceptable terms to bank
Slide 7: Sterling's Rationale for the Investment
Approximately 40 members with diverse industry and operating experience Sterling senior level operating experience will be actively involved in working with Select management to help drive growth: Chris Hoehn-Saric (Board Nominee) – retail, direct marketing, consumer, CEO and operating experience; S
Slide 8: Sterling Vision for Select Comfort
Sterling Vision for Select Comfort Revitalize brand and marketing approach Analyze consumer needs, store sales drivers and store footprint Emphasize a sales focused culture Improve overall customer service and product experience Enhance organizational effectiveness Invest in innovation and product d
Slide 9: Road Map to Completion
Appendix 16 Road Map to Completion Event Expected Timeline Board approval of transaction Completed May 19 Execute definitive agreement Completed May 22 File preliminary proxy Completed June 1 SEC review In process File definitive proxy July, pending SEC review Q209 earnings release July Special meet
Slide 10: Stock Price Trends Since September 2008
17 Stock Price Trends Since September 2008 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $- Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Closing Price 60 Day Moving Average Sterling Deal 18 Current Board of Directors Independent, Experienced and Committed to Shareholder Value Name Position B
Slide 11: Current Board of Directors
Michael A. Peel Independent Director Vice President of Human Resources and Administration at Yale University. Former Executive Vice President of Human Resources and Administrative Services at General Mills, Inc. Jean-Michel Valette Independent Director Chairman of the Board of Directors, Peet’s Coff
Slide 12: Improvement to Capital Structure
Capital lease obligations 479 479 Total indebtedness 75,071 65,271 Shareholders' deficit: Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding - - Common stock, $0.01 par value; 142,500 and 245,000 shares authorized, respectively; 452 952 45,240 and 95,240 shares i