8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 16, 2007

A.C. Moore Arts & Crafts, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	000-23157	22-3527763
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

130 A.C. Moore Drive, Berlin, NJ	08009
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (856) 768-4930

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On February 22, 2007, A.C. Moore Arts & Crafts, Inc. (the “Company”) issued a press release. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 16, 2007, the Company’s Board of Directors appointed Neil A. McLachlan and Thomas S. Rittenhouse to serve as directors of the Company effective as of that date. Mr. McLachlan will serve as a Class B director to hold office until the 2007 annual meeting of shareholders. Mr. Rittenhouse will serve as a Class A director to hold office until the 2009 annual meeting of shareholders. Mr. McLachlan has been named to serve on the Nominating and Corporate Governance Committee of the Board of Directors. Mr. Rittenhouse has been named to serve on the Board’s Audit Committee. Their committee appointments are effective as of February 18, 2007.

On February 19, 2007, Richard J. Bauer, Richard J. Drake and Richard G. Lesser, members of the Company’s Board of Directors, each retired effective as of that date.

On February 19, 2007, the Company’s Board of Directors adopted the 2007 Annual Incentive Plan (the “2007 Incentive Plan”) for the Company’s officers. Participants in the 2007 Incentive Plan are eligible to receive a cash payment of a percentage multiple of base salary depending on both the Company’s performance related to pre-tax income targets and the individual’s achievement of pre-set financially measurable performance goals. For the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, the 2007 Incentive Plan provides for cash payment of a percentage multiple of base salary depending solely on the Company’s performance related to pre-tax income targets. The pre-tax income targets and individual performance goals are based on the Company’s budget and operating plan approved by the Board. Outside compensation consultants assisted the Compensation Committee and the Board in developing the 2007 Incentive Plan.

Item 7.01 Regulation FD Disclosure.

On February 22, 2007, the Company issued a press release announcing the above-described changes to the Board of Directors. A copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release issued February 22, 2007.
99.2	Press release issued February 22, 2007.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	A.C. MOORE ARTS & CRAFTS, INC.
Date: February 22, 2007	By:	/s/ Amy Rhoades
		Name:	Amy Rhoades
		Title:	Vice President and General Counsel

Exhibit Index

Exhibit No.	Description
99.1	Press release issued February 22, 2007.
99.2	Press release issued February 22, 2007.

EX-99.1

Exhibit 99.1

	General Office . Distribution Center
	130 A.C. Moore Drive . Berlin, NJ 08009 PHONE: (856) 768-4930 . FAX: (856) 753-4723

For:	From:
A.C. Moore Arts & Crafts, Inc.	Gregory FCA Communications, Inc.
For More Information Contact:	For More Information Contact:
Marc Katz, Chief Financial Officer	Joe Crivelli
(856) 768-4957	(610) 642-8253

A.C. Moore Reports Fourth Quarter and 2006 Results

• 14% Reduction in Inventory on a Per Store Basis

• Cash Net of Debt Improved $15.7 Million versus 2005

Berlin, New Jersey, February 22, 2007 — A.C. Moore Arts & Crafts, Inc. (Nasdaq: ACMR) today announced results for the fourth quarter and year ended December 31, 2006.

Sales for the fourth quarter of 2006 grew to $197.8 million, an increase of 5.0% over sales of $188.0 million during the fourth quarter of 2005. Same store sales decreased by 3.0% versus 2005. Net income was $6.6 million, or $0.33 per share, compared with net income of $10.7 million, or $0.53 per share, in the fourth quarter of 2005. Fourth quarter 2006 results include costs of $1.4 million, or $0.04 per share, related to the closure of one store location and a lease termination. Fourth quarter results also include $524,000, or $0.01 per share, in expense for stock-based compensation, and $461,000, $0.01 per share, in management change costs.

Sales for the year ended December 31, 2006 were $589.5 million, an increase of 9.0% over sales of $539.4 million in the same period in 2005. Same store sales were flat for the twelve month period. The net income for the year ended December 31, 2006 was $2.4 million, or $0.12 per share, versus net income of $10.0 million, or $0.50 per share, for 2005. Results for the year ended December 31, 2006 include costs of $3.4 million related to management changes and $2.8 million for stock-based compensation expense, or $0.09 per share and $0.07 per share, respectively.

Rick A. Lepley, Chief Executive Officer, stated, “During the last quarter we focused on reducing our out of line inventory condition and improving our year end cash position and we are gratified with those results. In 2007, we are continuing to focus on expense control and working on improving our operational efficiencies to lay the ground work for improved profitability.”

The Company will host a conference call today, Thursday, February 22, 2007 at 5:00 p.m., Eastern Time, to discuss fourth quarter and 2006 results. To participate in the conference call, please call 973-935-8512 and provide the operator with passcode #8425775. If you are unable to access the live call, please dial 973-341-3080 and enter pin #8425775 to access the taped digital replay. The replay will be available at approximately 7:00 PM ET on February 22, 2007 and will remain available until March 1, 2007 at 11:59 p.m.

A simultaneous webcast of the conference call may be accessed at www.acmoore.com. Go to “Investor Relations” and click on “Corporate Profile.” To listen to the live call via webcast, please go to the Company’s website at least 15 minutes early to register, download and install any necessary audio software. An archive of the conference call will be available approximately two hours after the conference call ends on the Company’s website.

About A.C. Moore:

A.C. Moore operates arts and crafts stores that offer a vast assortment of traditional and contemporary arts and crafts merchandise for a wide range of customers. The Company operates 122 stores in the Eastern United States. For more information about the Company, visit our website at www.acmoore.com.

# # #

This press release contains statements that are forward-looking within the meaning of applicable federal securities laws and are based on A.C. Moore’s current expectations and assumptions as of this date. The Company undertakes no obligation to update or revise any forward-looking statement whether the result of new developments or otherwise. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could cause actual results to differ from those anticipated include, but are not limited to, customer demand and trends in the arts and crafts industry, inventory risks, the effect of economic conditions and gasoline prices, the impact of unfavorable weather conditions, the impact of competitors’ locations or pricing, the availability of acceptable real estate locations for new stores, difficulties with respect to new system technologies, including the recent POS conversion, difficulties in implementing measures to reduce costs and expenses and improve margins, supply constraints or difficulties, the effectiveness of and changes to advertising strategies, the costs associated with a change in management, difficulties in determining the outcome and impact of litigation, the impact of the adoption of FAS 123R, the impact of the threat of terrorist attacks and war, the Company’s ability to maintain an effective system of internal control over financial reporting and other risks detailed in the Company’s Securities and Exchange Commission filings.

A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)

	December 31,
	2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	76,120	$	57,748
Marketable securities		—		5,224
Inventories		146,751		152,646
Prepaid expenses and other current assets		10,433		7,634
		233,304		223,252
Non-current assets:
Property and equipment, net		95,268		88,098
Other assets		1,409		1,407
	$	329,981	$	312,757
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	2,571	$	2,571
Trade accounts payable		48,703		46,445
Other current liabilities		23,107		15,804
		74,381		64,820
Non-current liabilities:
Long-term debt		21,643		24,215
Deferred tax liability		6,749		8,039
Accrued lease liability		19,430		17,174
		47,822		49,428
		122,203		114,248
Shareholders’ Equity		207,778		198,509
	$	329,981	$	312,757

A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)

	Three months ended					Year Ended
	December 31,					December 31,
	2006			2005		2006		2005
Net sales	$	197,839		$	187,974	$	589,506	$	539,436
Cost of sales		125,986			115,628		358,725		326,581
Gross Margin		71,853			72,346		230,781		212,855
Selling, general and administrative expenses		58,912			53,842		219,298		192,878
Costs related to change in management		461			—		3,376		—
Store pre-opening expenses		1,016			1,160		3,241		3,459
Income (loss) from operations		11,464			17,344		4,866		16,518
Net interest expense (income)		(20	)		126		323		450
Income (loss) before income taxes		11,484			17,218		4,543		16,068
Provisions for income taxes		4,889			6,478		2,109		6,026
Net income (loss)	$	6,595		$	10,740	$	2,434	$	10,042
Basic net income (loss) per share	$	0.33		$	0.54	$	0.12	$	0.51
Diluted net income (loss) per share	$	0.33		$	0.53	$	0.12	$	0.50
Weighted average shares outstanding		20,167,098			19,816,074		19,929,185		19,757,988
Weighted average shares outstanding plus impact of stock options		20,191,580			20,104,802		20,019,314		20,149,184

EX-99.2

Exhibit 99.2

	General Office . Distribution Center
	130 A.C. Moore Drive . Berlin, NJ 08009 PHONE: (856) 768-4930 . FAX: (856) 753-4723

For:	From:
A.C. Moore Arts & Crafts, Inc.	Gregory FCA Communications, Inc.
For More Information Contact:	For More Information Contact:
Amy Rhoades, General Counsel	Joe Crivelli
(856) 768-4936	(610) 642-8253

A.C. Moore Announces Changes to the Company’s Board of Directors

• Richard J. Bauer, Richard J. Drake and Richard G. Lesser Retire from Board

• Neil A. McLachlan and Thomas S. Rittenhouse Join Board

Berlin, New Jersey, February 22, 2007 — A.C. Moore Arts & Crafts, Inc. (Nasdaq: ACMR) announced that Richard J. Bauer, Richard J. Drake and Richard G. Lesser each retired from the Company’s Board of Directors effective February 19, 2007. Mr. Bauer, 81, has served as a member of the Board since September 1990. Mr. Drake, 73, has served as a member of the Board since the Company’s inception in June 1984. Mr. Lesser, 72, has served as a member of the Board since March 1993.

Mr. Bauer is the Chairman and Chief Executive Officer of Eastern Alloys, Inc., an independent zinc alloyer, which he founded in 1965. Mr. Bauer is the co-founder and current Chairman of the Board of Service Aluminum Corporation, an aluminum trading company.

Mr. Drake is a member of Drake, Loeb, Heller, Kennedy, Gogerty, Gaba & Rodd, P.L.L.C, a professional limited liability company which renders legal services.

Mr. Lesser is a director of The TJX Companies, Inc., a New York Stock Exchange-listed retail company, and Dollar Tree Stores, Inc., a Nasdaq-listed retail company.

Michael J. Joyce, Chairman of the Board, said, “The Board of Directors and A.C. Moore are deeply grateful to Dick Bauer, Dick Drake and Dick Lesser for their many years of service and contribution to the Company. We will miss their insights and counsel and wish them all the very best in their retirement.”

On behalf of the retiring directors, Mr. Lesser said, “We are very proud of A.C. Moore and have enjoyed being part of its growth and success. We are pleased to see the Company enter a new phase of its development under the leadership of Rick Lepley as Chief Executive Officer.”

A.C. Moore also announced that the Board of Directors appointed Neil A. McLachlan and Thomas S. Rittenhouse to serve on the Company’s Board of Directors effective February 16, 2007.

Mr. McLachlan, 50, is President of the Consumer & Office Products Group of MeadWestvaco Corporation, a manufacturer of packaging, consumer and office products, specialty chemicals and specialty papers. As President of the Consumer & Office Products Group, a position which he has held since March 1999, Mr. McLachlan is responsible for the group’s approximately $1.1 billion in sales, 4,200 employees and 12 manufacturing and distribution locations. Before joining MeadWestvaco, Mr. McLachlan served as Senior Vice President, International of Fisher-Price, Inc., overseeing the development of Mattel’s infant and preschool business around the world.

Mr. Rittenhouse, 65, has a 37-year career in the retail and global supply chain industries. From July 1965 through January 1997, Mr. Rittenhouse was employed by Strawbridge & Clothier Inc., a Philadelphia-based department and discount store chain, where he held various key officer positions overseeing both operations and finance, including as President of Strawbridge & Clover. From January 1997 to his retirement in January 2004, he served as President and Chief Executive Officer of the Uniform Code Council, Inc., a global organization which sets standards for bar-coding and electronic commerce. He is currently Managing Director of Ralston Center, a not-for-profit organization which develops programs and services that address the medical, mental health and quality of life needs of older adults.

Mr. Joyce stated, “As A.C. Moore transitions to a new phase as an organization, we are delighted to welcome Neil McLachlan and Tom Rittenhouse to the Board. Neil and Tom each bring an extensive knowledge of retail operations that will benefit the Company as it continues to grow.”

About A.C. Moore:

A.C. Moore operates arts and crafts stores that offer a vast assortment of traditional and contemporary arts and crafts merchandise for a wide range of customers. The Company operates 122 stores in the Eastern United States. For more information about the Company, visit our website at www.acmoore.com.

# # #

This press release contains statements that are forward-looking within the meaning of applicable federal securities laws and are based on A.C. Moore’s current expectations and assumptions as of this date. The Company undertakes no obligation to update or revise any forward-looking statement whether the result of new developments or otherwise. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could cause actual results to differ from those anticipated include, but are not limited to, customer demand and trends in the arts and crafts industry, related inventory risks due to shifts in customer demand, the effect of economic conditions and gasoline prices, the impact of unfavorable weather conditions, the impact of competitors’ locations or pricing, the availability of acceptable real estate locations for new stores, difficulties with respect to new system technologies, including the recent POS conversion, difficulties in implementing measures to reduce costs and expenses and improve margins, supply constraints or difficulties, the effectiveness of and changes to advertising strategies, the costs associated with a change in management, difficulties in determining the outcome and impact of litigation, the impact of the adoption of FAS 123R, the impact of the threat of terrorist attacks and war, the Company’s ability to maintain an effective system of internal control over financial reporting and other risks detailed in the Company’s Securities and Exchange Commission filings.