EX-99.1 2 w30841exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
     
(A.C.MOORE LOGO)   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