EX-99.(C)(3) 14 dex99c3.htm PRESENTATION MATERIALS, DATED NOVEMBER 7, 2007. Presentation Materials, dated November 7, 2007.
Project Jefferson
November 7, 2007
Presentation to the Independent Committee of the
Board of Directors
STRICTLY CONFIDENTIAL
Exhibit (c)(3)

1
Disclaimer
The accompanying material was compiled on a confidential basis for use solely by the Independent Committee of the Board of
Directors of Jefferson (the “Committee”) in evaluating the proposed transaction described therein.  This material is not intended to
provide the sole basis for evaluating the transaction, does not purport to contain all information that may be required and should not be
considered a recommendation with respect to the transaction.  This material was prepared for a specific use by specific persons and
was not prepared with a view to public disclosure or to conform with any disclosure standards under securities laws or otherwise. 
Nothing contained in the accompanying material is, or shall be relied upon as, a promise or representation as to the past, the present
or the future.  UBS Securities LLC (“UBS”) undertakes no obligation to update or revise the accompanying material.
It should be understood that any estimates, valuations and/or projections contained in the accompanying material were prepared or
derived from information supplied by Jefferson and public sources without the assumption by UBS of responsibility for any
independent
verification
thereof.
Accordingly,
neither
UBS
nor
any
of
its
officers,
directors, employees,
affiliates,
advisors,
agents
or
representatives
warrants
the
accuracy
or
completeness
of
any
such
information,
including
without
limitation,
the
accuracy
or
achievability of any such estimates, valuations, and/or projections.  Actual results may vary from such estimates, valuations and/or
projections and such variations may be material.  This material must not be copied, reproduced, distributed or passed to others at any
time without the prior written consent of UBS.

2
Project Jefferson: Catterton
Final Offer
Based on the current contract as of November 6, 2007:
Consideration
$6.70 per share in cash, without interest
Closing Conditions; MAE
No lease condition
No financing condition; BOA consent and waiver agreement has been signed
Rollover shareholders must perform their commitments
MAE language has
been negotiated
Go-Shop
35 days with open go-shop provision (i.e., Topps)
Fiduciary-out Termination
Right
Subject to matching rights
–
Catterton
will have 5 business days to match
Break-up Fee
2.50%
of
equity
value
(plus
expense
reimbursement
not
to
exceed
0.50%)
during
go-shop
period
or
if
deal
is
signed
with
an
"excluded
party";
4.00%
(plus
expense
reimbursement)
otherwise
Reverse
Break-up Fee
4.00% of equity value (plus expense reimbursement)
Fund guarantee of obligations
No Vote Break-up Fee
1% of equity value
Shareholder Rollover
8.0
million shares (20.6%
of basic shares outstanding)
Potential rollover shareholders:
Shares (mm)
($mm)
–
Gary Friedman
1.0
$6.7
–
Glenhill
Advisors
3.6
24.1
–
Reservoir Capital
2.1
14.1
–
Palo Alto Investors
1.3
8.7
–
Total
8.0
$53.6
Vardon
Capital
to
agree
to
a
cash
investment
equal
in
value
to
the
value
of
3.45mm
shares

3
Financial Summary—Actual & Management Forecasts
Management
($ in millions)
Fiscal Year¹
2004A
2005A
2006A
2007E
2008E
2009E
2010E
Total Revenue
$525.8
$581.7
$712.8
$744.9
$746.8
$812.6
$866.4
Revenue Growth
10.6%
22.5%
4.5%
0.3%
8.8%
6.6%
EBIT
$4.1
$0.9
$10.6
($4.6)
$2.4
$17.4
$27.3
EBIT Margin
0.8%
0.2%
1.5%
(0.6%)
0.3%
2.1%
3.2%
EBITDA
$20.0
$20.5
$32.3
$17.9
$27.2
$42.0
$51.3
EBITDA Margin
3.8%
3.5%
4.5%
2.0%
3.6%
5.2%
5.9%
Net Income
$1.7
($29.3)
3.3
($9.3)
($4.5)
$4.4
$10.4
Net Income Margin
0.3%
(5.0%)
0.5%
(1.2%)
(0.6%)
0.5%
1.2%
Capital Expenditures
$13.4
$29.7
$15.2
$11.8
$21.5
$11.1
$11.5
Capital Expenditures/ Depreciation
74.4%
186.8%
70.4%
52.4%
87.0%
46.4%
50.4%
Notes:
1
Fiscal
Year
Ending
January
31
of
the
following
year

4
0.00
2.00
4.00
6.00
8.00
10.00
11/6/06
1/18/07
4/1/07
6/13/07
8/25/07
11/6/07
At Offer = $6.70
Stock Price Performance
As of November 6, 2007, Jefferson’s stock price closed at $2.60
Source:     FactSet
Moving Averages:
Premium at $6.70:
Current Price:  
$2.60
157.7%
30-Trading Days:   $3.10
116.4%
60-Trading Days:
$3.20
109.6%
90-Trading Days:
$3.72
80.0%

5
Market Trading Data For Selected Publicly Traded Retailers
1
Enterprise Value/
Enterprise Value/
Market
Enterprise
LTM
FY07E
FY08E
LTM
FY07E
FY08E
P/E
P/E/G
LT EPS
LTM EBITDA
Cap
Value
Sales
Sales
Sales
EBITDA
EBITDA
EBITDA
FY07E
FY08E
FY07E
FY08E
Growth
Margin
Company
($mm)
($mm)
(x)
(x)
(x)
(x)
(x)
(x)
(x)
(x)
(x)
(x)
(%)
(%)
Jefferson
(Wall Street)
@ Market
²
102
205
0.28
0.27
0.25
12.5
8.7
4.8
nm
nm
nm
nm
33.8
2.3
Jefferson
(Management
)
@ Market
³
102
205
0.28
0.28
0.27
12.5
11.5
7.5
nm
nm
nm
nm
33.8
2.3
Jefferson
(Wall Street
)
@ $6.70
Bid²
267
371
0.51
0.49
0.44
22.5
15.6
8.6
nm
nm
nm
nm
33.8
2.3
Jefferson
(Management
)
@ $6.70
Bid³
267
371
0.51
0.50
0.50
22.5
20.7
13.6
nm
nm
nm
nm
33.8
2.3
Home Furnishings / Improvement
Home Depot
50,801
59,420
0.66
0.75
0.74
5.5
6.3
6.2
11.6
12.5
0.9
1.0
12.4
12.1
Lowe's
36,566
40,845
0.85
0.83
0.77
6.3
6.5
6.1
12.4
12.0
0.8
0.8
15.1
13.5
Bed Bath & Beyond
8,604
8,020
1.16
1.12
1.01
7.7
7.7
7.0
14.4
13.4
1.0
0.9
15.1
15.0
Williams-Sonoma
3,224
3,194
0.84
0.80
0.76
6.8
6.7
6.3
15.6
14.3
1.1
1.0
14.4
12.4
Ethan Allen
898
967
0.96
0.93
0.89
6.6
6.5
6.3
11.5
10.8
1.3
1.2
8.7
14.6
Mean
0.89
0.89
0.83
6.6
6.7
6.4
13.1
12.6
1.0
1.0
13.1
13.5
Median
0.85
0.83
0.77
6.6
6.5
6.3
12.4
12.5
1.0
1.0
14.4
13.5
Other Specialty Retail -
Large Cap
Best Buy
19,989
20,493
0.54
0.52
0.47
8.1
7.3
6.7
14.2
13.2
0.9
0.9
15.3
6.7
Staples
16,389
16,057
0.85
0.82
0.75
8.5
8.2
7.4
16.0
14.2
1.0
0.9
16.3
10.0
OfficeMax
2,047
2,367
4
0.26
0.26
0.25
5.1
5.0
4.6
11.5
10.2
0.7
0.7
15.4
5.1
Mean
0.55
0.53
0.49
7.2
6.9
6.2
13.9
12.5
0.9
0.8
15.6
7.3
Median
0.54
0.52
0.47
8.1
7.3
6.7
14.2
13.2
0.9
0.9
15.4
6.7
Other Specialty Retail -
Mid Cap
Cabela's
1,220
1,667
0.74
0.70
0.58
8.4
7.3
6.0
12.9
11.0
0.9
0.7
15.1
8.9
Conn's
572
529
0.67
0.64
0.57
7.0
6.7
6.0
13.1
11.9
1.0
0.9
12.8
9.5
Jo-Ann Stores
426
568
0.30
0.30
0.29
7.9
6.3
5.5
27.4
17.8
1.8
1.2
15.0
3.8
hhgregg
545
683
0.61
0.55
0.44
9.2
9.0
7.5
17.9
13.5
0.9
0.6
20.8
6.7
A.C. Moore
333
310
0.53
0.52
0.47
10.9
10.1
7.3
28.2
17.1
1.3
0.8
22.2
4.9
Mean
0.57
0.54
0.47
8.7
7.9
6.5
19.9
14.2
1.2
0.9
17.2
6.8
Median
0.61
0.55
0.47
8.4
7.3
6.0
17.9
13.5
1.0
0.8
15.1
6.7
Overall High
1.16
1.12
1.01
10.9
10.1
7.5
28.2
17.8
1.8
1.2
22.2
15.0
Overall Mean
0.69
0.67
0.62
7.5
7.2
6.4
15.9
13.2
1.0
0.9
15.3
9.5
Overall Median
0.67
0.70
0.58
7.7
6.7
6.3
14.2
13.2
1.0
0.9
15.1
9.5
Overall Low
0.26
0.26
0.25
5.1
5.0
4.6
11.5
10.2
0.7
0.6
8.7
3.8
Source:  Company filings, press releases, earnings call transcripts, Jefferson Management Team and IBES mean estimates
Notes:
1    As of 11/6/07
2    Estimates are IBES mean estimates
3    Estimates provided by Jefferson Management Team
4   Adjusted to not include Securitized Timber Notes

6
Selected Precedent Transaction Statistics
Source:  Company filings, press releases and Jefferson Management Team
Notes:
1
Enterprise Value equal to diluted equity at transaction value plus total debt and minority interest minus cash and cash equivalents (all at book value)
2
Ares
acquired
19.9%
of
the
equity;
precedent
assumes
exercise
of
option
for
additional
30.2%
equity
stake
at
$126.8mm,
with
equity
value
grossed
up
to
100%
and
enterprise
value
including
revolver, CMBS and seller note to Sears
3
Offer price for Brookstone was revised from $20.50 down to $20.00 in July 2005 prior to closing due to weak financial results post transaction announcement; transaction reflects $20.00 price
Announcement
Date
Acquiror
Target
Enterprise
Value1
($mm)
LTM
Sales
(x)
LTM EBITDA
(x)
LTM
EBITDA
Margin (%)
Nov-06
Dick’s Sporting Goods
Golf Galaxy
210
0.84
10.9
7.7
Jul-06
Leonard Green, Texas Pacific Group
PETCO
1,815
0.89
8.9
10.0
Jun-06
Bain Capital, Blackstone
Michaels Stores
5,604
1.52
11.0
13.8
May-06
PPR
Sportsman Guide
256
0.88
14.3
6.1
Jan-06
Leonard Green & Partners
The Sports Authority
1,372
0.55
8.3
6.7
Dec-05
Best Buy
Pacific Sales Kitchen and Bath Centers
410
1.28
na
na
Nov-05
Ares Management
Orchard Supply Hardware
2
776
2
na
na
na
Nov-05
Apollo Management
Linens 'n Things
1,284
0.48
9.1
5.3
Sep-05
Berkshire Partners, Weston Presido
Party City
363
0.72
13.1
5.5
Apr
-05
J.W.
Childs,
Osim
International,
Temasek
Holdings
Brookstone
3
402
0.80
8.5
9.4
Jun-03
Bed Bath & Beyond
Christmas Tree Shops
200
0.54
na
na
High
5,604
1.52
14.3
13.8
Mean
1,15
4
0.85
10.
5
8.1
Median
410
0.82
10.0
7.2
Low
200
0.4
8
8.
3
5.3
Jefferson
@ $6.70
Bid
371
0.51
22.5
2.3

7
Discounted Cash Flow Analysis
Key Assumptions
Free cash flow through 2010 calculated from Jefferson
management projections
Discounted end-year cash flows
Assumed transaction date of 11/1/07
Terminal value calculated based on a multiple of 2010 EBITDA
Tax rate of 40.0%
Price Per Share
Enterprise Value
Implied TEV/2007E EBITDA Multiple
Discount
Terminal Multiple
Rate
7.0x
8.0x
9.0x
16.0%
$4.18
$5.00
$5.81
17.0%
$4.00
$4.79
$5.59
18.0%
$3.82
$4.60
$5.37
Discount
Terminal Multiple
Rate
7.0x
8.0x
9.0x
16.0%
16.5x
18.2x
20.0x
17.0%
16.1x
17.8x
19.5x
18.0%
15.7x
17.4x
19.0x
Discount
Terminal Multiple
Rate
7.0x
8.0x
9.0x
16.0%
$294
$326
$358
17.0%
$287
$318
$349
18.0%
$281
$311
$341

8
Discounted Cash Flow Summary
Discounted Cash Flows¹
Projected FYE²
($mm)
2007 Q4E
2008E
2009E
2010E
EBITDA
$29.7
$27.2
$42.0
$51.3
Less: Depreciation & Amortization
5.9
24.8
24.6
24.0
EBIT
$23.9
$2.4
$17.4
$27.3
Less: Taxes @ 40.0%
9.6
1.0
7.0
10.9
NOPAT
$14.3
$1.5
$10.5
$16.4
Plus: Depreciation & Amortization
5.9
24.8
24.6
24.0
Less: Capital Expenditures
(1.0)
(21.5)
(11.1)
(11.5)
Plus: Changes in Deferred Taxes³
--
--
4.0
--
(Increase) / Decrease in Working Capital
15.9
0.2
(3.9)
(0.1)
UNLEVERED FREE CASH FLOW
$35.0
$4.9
$24.0
$28.8
Notes:
1    Calculated from Jefferson management projections
2    Fiscal Year Ending January 31 of the following year
3
$4
million
($10mm
*
40%)
tax
benefit
based
on
$10
million
in
NOLs
from
prior
years

9
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