UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2001
or
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _____ to _____
Commission file number 000-23157
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
A. C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
A. C. MOORE ARTS & CRAFTS, INC.
500 University Court
Blackwood, NJ 08012
A. C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
In 1999, A. C. Moore Arts & Crafts, Inc. (the "Employer" or the "Company")
established the A. C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan"). The
name of the issuer of the securities held pursuant to the Plan and the address
of its principal executive office is A. C. Moore Arts & Craft, Inc., 500
University Court, Blackwood, NJ 08012.
Contributions Under the Plan. Employees may elect to contribute up to 20 percent
of their annual compensation, not to exceed $10,500 for 2001. The Company made a
matching contribution of 25 percent of the first 6 percent of the employee
compensation contributed as an elective deferral subject to a maximum of $1,500
for 2001.
Administration of the Plan. An officer of the Company at its principal executive
office administers the Plan. Certain administrative functions may be delegated
to employees of the Company. Officers and employees do not receive compensation
from the Plan.
Custodian of Investments. The assets of the Plan are held in trust and managed
by the Plan's trustee. During 2001, the Plan changed trustees from Merrill Lynch
Trust Services to Frontier Trust Company. Effective November 15, 2000, BISYS
Plan Services began providing record keeping services for the Plan's trustee.
Reports to Participating Employees: Each participant in the Plan receives
quarterly statements of their accounts each plan year.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
administrator has duly caused this annual report to be signed on behalf of the
Plan by the undersigned hereunto duly authorized.
A.C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
Date: June 27, 2002 By: /s/ LESLIE H. GORDON
----------------------------------------
Leslie H. Gordon
Administrator
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) and related Prospectus pertaining to A. C. Moore Arts & Crafts, Inc. 401(k)
Plan of our report dated June 3, 2002, with respect to the financial statements
and supplementary schedules of the A. C. Moore Arts & Crafts, Inc. 401(k) Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 2001.
/s/ STOCKTON BATES, LLP
--------------------------------
Stockton Bates, LLP
Philadelphia, Pennsylvania
June 3, 2002
A.C. MOORE
ARTS & CRAFTS, INC.
401(k) PLAN
Financial Statements
December 31, 2001
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
December 31, 2001
CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements:
Statement of Net Assets Available for Benefits
as of December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2001 3
Notes to Financial Statements 4 - 8
Supplementary Information:
Schedule of Assets Held for Investment Purposes
as of December 31, 2001 9
Schedule of Non-Exempt Transactions
as of December 31, 2001 10
INDEPENDENT AUDITORS' REPORT
To the Trustees
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Blackwood, New Jersey
We were engaged to audit the financial statements and supplemental
schedules of the A.C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan") as of
December 31, 2001 and 2000, and for the years then ended as listed in the
accompanying table of contents. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedules based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and supplemental schedules are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and supplemental schedules
referred to above present fairly, in all material respects, the net assets
available for benefits of the A.C. Moore Arts & Crafts, Inc. 401(k) Plan as of
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.
/s/ Stockton Bates, LLP
Certified Public Accountants
Philadelphia, Pennsylvania
June 3, 2002
Page 2
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statement Of Net Assets Available For Benefits
December 31: 2001 2000
- -------------------------------------------------------------------------------
ASSETS:
Cash $ 1,483 $ 2,003
- -------------------------------------------------------------------------------
Investments, at fair value:
Corporate stocks - common 2,043,514 390,707
Common/collective trusts 508,714 321,032
Registered investment companies 2,443,226 1,608,882
Participant loans 94,427 45,121
- -------------------------------------------------------------------------------
Total investments 5,089,881 2,365,742
Receivables:
Accrued income receivable - 1,018
Employer contributions 14,935 10,511
Employees' contributions 84,801 66,821
- -------------------------------------------------------------------------------
99,736 78,350
- -------------------------------------------------------------------------------
Total assets 5,191,100 2,446,095
LIABILITIES - -
- -------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $5,191,100 $2,446,095
===============================================================================
See Accompanying Notes
Page 3
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statement Of Changes In Net Assets Available For Benefits
Year Ended December 31, 2001:
- -------------------------------------------------------------------------------
ADDITIONS:
Additions to net assets attributable to:
Investment income:
Net appreciation in fair value
of investments (See Note 4) $1,141,184
- -------------------------------------------------------------------------------
Interest and dividends 97,794
- -------------------------------------------------------------------------------
1,238,978
Contributions:
Employer 209,713
- -------------------------------------------------------------------------------
Participants 1,430,296
- -------------------------------------------------------------------------------
1,640,009
- -------------------------------------------------------------------------------
Total additions 2,878,987
DEDUCTIONS:
Deductions from net assets attributed to:
- -------------------------------------------------------------------------------
Benefits paid to participants 132,732
Administrative expenses 1,250
Total deductions 133,982
- -------------------------------------------------------------------------------
Net increase 2,745,005
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,446,095
- -------------------------------------------------------------------------------
End of year $5,191,100
===============================================================================
See Accompanying Notes
Page 4
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2001
1. DESCRIPTION OF PLAN:
The following description of the A.C. Moore Arts & Crafts, Inc. 401(k)
Plan provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
The A.C. Moore Arts & Crafts, Inc. 401(k) Plan (the Plan) was
established in 1999 by A.C. Moore Arts & Crafts, Inc. (the Company) to provide
for retirement income and financial protection in the event of death or
retirement of covered employees and to provide for the financial protection and
compensation of employees in the event of permanent disability. The Plan is
subject to the Employee Retirement Income Security Act of 1974 (ERISA).
Substantially all administrative expenses are paid directly by the Company.
For the period January 1, 2000 to August 31, 2000, all employees of the
employer and participating affiliates who are at least 21 years of age and have
completed one year of service of at least 1,000 hours were eligible to
participate in this Plan, except non-resident aliens, and employees who are
members of a union who bargained separately for retirement benefits during
negotiations. Effective September 1, 2000, the Plan was amended whereby
employees are eligible to participate upon attaining 21 years of age and
completing 1/4 year of service (not subject to any minimum hours requirement).
Employees will become a participant in the Plan on the entry date coincident
with or next following the date they meet the participation requirements. The
entry dates for the Plan are the first day of each month.
Employees may elect to contribute up to 20 percent of their annual
compensation, not to exceed $10,500 for 2001. The Company made a matching
contribution of 25 percent of the first 6 percent of the employee compensation
contributed as an elective deferral subject to a maximum of $1,500 for 2001.
Each participant's account is credited with the participant's and
employer's contribution and related plan earnings, transfer contributions and
rollovers. Allocations are based on participant earnings or account balances.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account.
Effective December 1, 2000, BISYS Plan Services began providing record
keeping services for the Plan's Trustee. During 2001, the Plan changed trustees
from Merrill Lynch Trust Service to Frontier Trust Company, FSB. The employees'
and employer's contributions were deposited in a fund held by the Trustee during
the year.
Participants may direct the investment of their account balances among
alternative investment funds provided under the Plan.
Participants are immediately vested in their voluntary contributions
and any transfers or rollover plus actual earnings thereon. Vesting in the
remainder of their accounts is based on years of continuous service. A
participant is 100 percent vested after 3 years of credited service.
On termination of service, the normal form of payment to a participant
is a lump sum. An optional form of payment is installments payable in cash or in
kind, or part cash and part in kind over a period not to exceed the
participant's expected lifetime, or the joint future lifetime of the participant
and spouse.
Page 5
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2001
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting:
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Valuation of Investments:
The Plan's investments at December 31, 2001 consist of shares in pooled
investment funds and common stock of A.C. Moore Arts & Crafts, Inc. (plan
sponsor) held and managed by Frontier Trust Company, FSB. Security transactions
in these funds and common stock are recorded on a trade date basis. The value of
the funds and common stock fluctuate to reflect the fair market values of the
securities held in these funds.
Use of Estimates:
Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities and
the reported revenues and expenses. Actual results could differ from those
estimates.
Forfeitures:
Employer contributions for the years ended December 31, 2001 and 2000
were reduced by $15,451 and $3,965, respectively, from forfeited nonvested
accounts. At December 31, 2001 forfeited nonvested accounts totaled $8,716.
Loans:
Loans are available to all participants in the Plan on a uniform and
nondiscriminatory basis. Loans must bear a reasonable rate of interest and be
adequately secured. A participant may borrow any amount up to 50% of their
vested account balance, subject to a maximum of $50,000 minus their highest
outstanding loan amount during the prior twelve months. Repayment of a loan must
be made at least quarterly, on an after-tax basis, in level payments of
principal and interest, and repaid within five years, except for the purchase of
a primary residence.
3. TAX STATUS:
The Plan has not yet received a determination letter. However, the
plan's administrator and advisors believe that the plan and trust are currently
designed and are operating in compliance with the Internal Revenue Code.
Therefore, they believe that the plan was qualified and the related trust was
tax exempt as of the financial statement date.
Page 6
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2001
4. INVESTMENTS:
Common Stock:
December 31, 2001:
- ---------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ---------------------------------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. 69,271.7 $659,019 $2,043,514*
- ---------------------------------------------------------------------------------------------------
$659,019 $2,043,514
===================================================================================================
December 31, 2000:
- ---------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ---------------------------------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. 47,722.8 $300,120 $390,707*
- ---------------------------------------------------------------------------------------------------
$300,120 $390,707
===================================================================================================
Common/Collective Trusts:
December 31, 2001:
- ---------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ---------------------------------------------------------------------------------------------------
ML Ret Preservation Trust 508,713.8 $508,714 $508,714*
- ---------------------------------------------------------------------------------------------------
$508,714 $508,714
===================================================================================================
December 31, 2000:
- ---------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ---------------------------------------------------------------------------------------------------
ML Ret Preservation Trust 321,031.7 $321,032 $321,032*
- ---------------------------------------------------------------------------------------------------
$321,032 $321,032
===================================================================================================
Page 7
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2001
4. INVESTMENTS: (Continued)
Registered Investment Companies:
December 31, 2001:
- ----------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ----------------------------------------------------------------------------------------------------
ML Int'l Equity Fund Class D 16,804.0 $ 160,162 $ 135,776
Mass Investors Growth Stock Fund 49,664.0 818,556 640,169*
ML Basic Value Fund Class D 16,226.1 550,653 473,641*
ML Core Bond Fund Inter Term Class D 33,288.6 371,809 375,829*
ML S&P 500 Index Fund Class A 15,375.5 244,039 216,488
PIMCO Innovation Fund Class A 3,369.5 98,359 76,184
State Street Aurora Fund 16,233.1 407,280 525,139*
- ----------------------------------------------------------------------------------------------------
$2,650,858 $2,443,226
====================================================================================================
December 31, 2000:
- ---------------------------------------------------------------------------------------------------
Number
of Shares Market
or Units Cost Value
- ---------------------------------------------------------------------------------------------------
ML Int'l Equity Fund Class D 9,574.9 $ 100,820 $ 94,600
Mass Investors Growth Stock Fund 29,714.4 565,292 509,305*
ML Basic Value Fund Class D 9,067.8 336,691 296,699*
ML Core Bond Fund Inter Term Class D 21,034.0 232,817 234,530*
ML S&P 500 Index Fund Class A 9,694.1 164,954 156,850*
PIMCO Innovation Fund Class A 362.1 23,261 14,908
State Street Aurora Fund 10,812.4 235,319 301,990*
- ----------------------------------------------------------------------------------------------------
$1,659,154 $1,608,882
===================================================================================================
*Investments that represent 5% or more of fair value of
the Plan assets.
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $1,141,184 as follows:
-----------------------------------------------------------
Registered investment companies ($ 183,353)
Common stock 1,324,537
-----------------------------------------------------------
$1,141,184
===========================================================
Page 8
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2001
5. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan subject to the provisions of ERISA.
In the event the Plan is terminated, participants will become 100 percent vested
in their accounts.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
A reconciliation of net assets available for benefits as reported on
the financial statements to that reported on the Form 5500 follows:
December 31: 2001 2000
- -------------------------------------------------------------------------------
Net assets available for benefits
per the financial statements $5,191,100 $2,446,095
Receivable employer contributions (14,935) (10,511)
Receivable employees' contributions (84,801) (66,821)
- -------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS,
PER FORM 5500 $5,091,364 $2,368,763
===============================================================================
A reconciliation of net increase in net assets available for benefits
as reported on the financial statements to that reported on Form 5500 follows:
Year Ended December 31, 2001:
- -------------------------------------------------------------------------------
Net increase in net assets available for
benefits per the financial statements $2,745,005
Difference in employer contributions (4,424)
Difference in employees' contributions (17,980)
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS, PER FORM 5500 $2,722,601
===============================================================================
The above differences are attributable to the financial statements
being reported on the accrual basis of accounting, while certain items on Form
5500 are being reported on the cash basis, namely contributions. In addition,
unrealized appreciation (depreciation) and dividend income are combined for Form
5500 reporting purposes.
SUPPLEMENTARY INFORMATION
A.C. Moore Arts & Crafts, Inc. 401(k) Plan Page 9
Schedule of Assets Held for Investment Purposes
December 31, 2001
EI #22-3527763
Plan Number 001
Attached to form 5500, Schedule H, Part IV, (i)
(a) (b & c) (d) (e)
Share
Units Investment Category Price Cost/Book Value Market Value
------- ------------------- ----- --------------- ------------
CASH EQUIVALENTS
2,958.4 GM ML Retirement Preservation Trust 1.0000 2,959 2,959
505,755.4 ML Retirement Preservation Trust 1.0000 505,755 505,755
1,483.0 Contribution Account 1.0000 1,483 1,483
------------------------------------
TOTAL CASH EQUIVALENTS 510,197 510,197
====================================
BOND FUND
557.0 GM ML Bond Fd Intermediate Term Portfolio D 11.2900 6,216 6,289
32,731.6 ML Bond Fd Intermediate Term Portfolio D 11.2900 365,593 369,540
------------------------------------
TOTAL BOND FUND 371,809 375,829
====================================
EQUITY FUND
186.2 GM ML Basic Value Fund Cl A 29.1900 6,075 5,436
187.1 GM State Street Research Aurora Fund A 32.3500 5,398 6,051
16,039.9 ML Basic Value Fund Cl D 29.1900 544,578 468,205
16,046.0 State Street Research Aurora Fund A 32.3500 401,882 519,088
------------------------------------
TOTAL EQUITY FUND 957,933 998,780
====================================
GROWTH FUND
5.4 GM ML S&P 500 Index Fund Cl A 14.0800 76 75
271.9 GM ML International Equity Fund D 8.0800 2,518 2,197
488.9 GM Massachusetts Investors Growth A 12.8900 7,611 6,302
15,370.2 ML S&P 500 Index Fund Cl A 14.0800 243,963 216,413
16,532.1 ML International Equity Fund D 8.0800 157,644 133,579
49,175.1 Massachusetts Investors Growth A 12.8900 810,945 633,867
3,369.5 PIMCO Innovation Fund A 22.6100 98,359 76,184
------------------------------------
TOTAL GROWTH FUND 1,321,116 1,068,617
====================================
(*) QUALIFIED EMPLOYER SECURITIES
69,271.7 A.C. Moore Arts & Craft Stock 29.5000 659,019 2,043,514
------------------------------------
(*) TOTAL QUALIFIED EMPLOYER SECURITIES 659,019 2,043,514
====================================
OTHER
94,426.9 Loans 94,427
Low to high interest rate
6.5% - 10.5%
Maturity date - December, 2006
------------------------------------
TOTAL OTHER 94,427
====================================
------------------------------------
TOTAL ASSETS 3,820,074 5,091,364
====================================
A.C. Moore Arts & Crafts, Inc. 401(k) Plan Page 10
Schedule of Non-Exempt Transactions
December 31, 2001
EI #22-3527763
Plan Number 001
Relationship to Plan,
Identity of Employer or Other
Party Involved Party-In-Interest Description of Transactions
- ----------------------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. Plan Sponsor Contributions of $100,662 for the
payroll period ended March 15,
2001 were deposited May 8, 2001
A.C. Moore Arts & Crafts, Inc. Plan Sponsor Contributions of $4,366 for the
payroll period ended March 15,
2001 were deposited July 27, 2001
A.C. Moore Arts & Crafts, Inc. Plan Sponsor Contributions of $24,640 for the
payroll period ended November
18, 2001 were deposited
December 26, 2001
A.C. Moore Arts & Crafts, Inc. Plan Sponsor Contributions of $24,415 for the
payroll period ended November
25, 2001 were deposited
December 27, 2001