EX-99 2 ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 [GRAPHIC OMITTED] A.C. MOORE [GRAPHIC OMITTED] General Office o Distribution Center -------------------------------------------------------------------------------- 130 A.C. Moore Drive o Berlin, NJ 08009 PHONE: (856) 228-6700 o FAX: (856) 753-4723 FOR: FROM: A.C. Moore Arts & Crafts, Inc. Gregory FCA Communications, Inc. Leslie Gordon For More Information Contact: Chief Financial Officer Joe Crivelli (856) 228-6700 (610) 642-8253 For Immediate Release A.C. MOORE REPORTS THIRD QUARTER NET INCOME OF $0.05 PER SHARE BERLIN, NEW JERSEY, OCTOBER 20, 2004. A.C. Moore Arts & Crafts, Inc. (Nasdaq: ACMR) sales for the third quarter ended September 30, 2004, grew to $107.7 million, an increase of 9.2% over sales of $98.6 million for the third quarter of 2003. Same store sales increased 0.3%. Net income for the third quarter was $986,000, compared with income of $1.26 million for the third quarter of 2003. Income per fully-diluted share was $0.05 versus income of $0.06 per fully-diluted share in the prior comparable period. The 2004 results include a cost of $0.04 per share as the result of the impact of our change in accounting for cooperative advertising pursuant to Emerging Issues Task Force Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration received by a Vendor." Excluding that cost, our earnings would have been $0.09 per share as compared with the $0.06 per share in 2003. Third quarter results also include management's estimate of the insurance recovery for lost merchandise in excess of cost and other expenses related to the July 27, 2004 roof collapse in the Company's Blackwood facility in the amount of $0.04 per share. The Company insures its warehouse inventory at selling value. The insurance proceeds are an offset to sales that the Company lost as a result of the incident. Sales for the nine months ended September 30, 2004, were $320.4 million, an increase of 12.7% over 2003 nine month sales of $284.2 million. Same store sales grew by 3%. Net income for the first nine months of 2004 was $2.57 million or $0.13 per fully-diluted share versus income of $2.73 million or $0.14 per fully-diluted share in the prior comparable period. The results for 2004 include a cost of $0.12 as the result of the accounting change. Excluding that cost, our earnings would have been $0.25 per share as compared with the $0.14 per share in 2003. 3 Jack Parker, Chief Executive Officer, stated, "We knew that we would be challenged with the move to a new distribution center that had been planned for this time; however that process was made more difficult when the roof collapsed in our Blackwood facility. Our organization had to deal with numerous issues including the inability to ship merchandise from our warehouses for over one week. In addition, key merchandise was unavailable for several weeks and we lost significant amounts of imported fall ribbon, flags and fall seasonal and basic floral merchandise that could not be replaced. Due to the unavailable merchandise, we curtailed two key promotions in August and September. Service levels to our stores and in-stock positions for our customers are now almost back to normal. We know that the fourth quarter will still be a challenge but we believe that our merchandise plans will enable us to achieve our expectations." A.C. Moore will host a conference call today, Wednesday, October 20, 2004 at 5:00 PM Eastern Daylight Time to discuss these financial results in detail. To participate, please call 1-719-457-2728. If you are unable to access the live call, please dial 1-719-457-0820 and enter pin number 997976 to access the taped digital replay. The replay will be available at approximately 7:00 PM on October 20th and will remain available until Wednesday, October 27th at 11:59 PM. A simultaneous webcast of the conference call may be accessed at http://www.acmoore.com. Go to "Investor Relations" and click on "Corporate Profile." To listen to the live call, please go to the web site at least fifteen 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 and will remain available on the company's website until October 20, 2005. 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 93 stores in the eastern United States. # # # 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, the impact of the adoption of EITF Issue 02-16, customer demand and trends in the arts and crafts industry, related inventory risks due to shifts in customer demand, the effect of economic conditions, the impact of adverse 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, supply constraints or difficulties, the effectiveness of advertising strategies, the impact of the threat of terrorist attacks and war, the uncertainty of the final resolution of the insurance claim relating to the roof collapse, and other risks detailed in the Company's Securities and Exchange Commission filings. Tables to Follow 4
A.C. MOORE ARTS & CRAFTS, INC. CONSOLIDATED STATEMENT OF INCOME (amounts in thousands, except per share data) (unaudited) Three months ended Nine months ended September 30, September 30, ------------------------ ------------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Net sales $ 107,713 $ 98,600 $ 320,376 $ 284,238 Cost of sales 64,010 61,987 195,401 179,297 --------- --------- --------- --------- Gross Margin 43,703 36,613 124,975 104,941 Selling, general and administrative expenses 40,857 33,842 118,986 99,266 Pre-opening expenses 1,229 821 2,048 1,571 --------- --------- --------- --------- Income from operations 1,617 1,950 3,941 4,104 Net interest (income) 14 (92) (229) (319) --------- --------- --------- --------- Income before income taxes 1,603 2,042 4,170 4,423 Income tax expense 617 780 1,605 1,690 --------- --------- --------- --------- Net income $ 986 $ 1,262 $ 2,565 $ 2,733 ========= ========= ========= ========= Basic net income per share $ 0.05 $ 0.07 $ 0.13 $ 0.14 ========= ========= ========= ========= Diluted net income per share $ 0.05 $ 0.06 $ 0.13 $ 0.14 ========= ========= ========= ========= Weighted average shares outstanding 19,491 19,248 19,435 19,043 ========= ========= ========= ========= Weighted average shares outstanding plus impact of stock options 20,114 19,980 20,055 19,656 ========= ========= ========= =========
5 A.C. MOORE ARTS & CRAFTS, INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) (unaudited) September 30, ---------------------- 2004 2003 -------- -------- ASSETS Current assets: Cash and marketable securities $ 41,098 $ 24,989 Inventories 137,976 125,084 Prepaid expenses and other current assets 10,266 5,654 -------- -------- 189,340 155,727 Marketable securities - 14,161 Property and equipment, net 76,588 36,524 Other assets 1,742 1,873 -------- -------- $267,670 $208,285 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 2,571 $ 815 Trade accounts payable 40,594 34,042 Other current liabilities 12,333 11,316 -------- -------- 55,498 46,173 -------- -------- Long-term liabilities: Long-term debt 27,429 - Deferred tax liability 8,027 6,019 Other long-term liabilities 5,500 4,496 -------- -------- 40,956 10,515 -------- -------- 96,454 56,688 -------- -------- Shareholders' Equity 171,216 151,597 -------- -------- $267,670 $208,285 ======== ======== 6