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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 SECOND QUARTER NET INCOME OF $0.02
Blackwood, NJ, July 21, 2004. A.C. Moore Arts & Crafts, Inc. (Nasdaq: ACMR)
sales for the second quarter ended June 30, 2004, grew to $101.2 million, an
increase of 8.0% over sales of $93.7 million for the second quarter of 2003.
Same store sales decreased 1%. Net income for the second quarter was $0.4
million, compared with income of $1.05 million for the second quarter of 2003.
Income per fully-diluted share was $0.02 versus income of $0.05 per
fully-diluted share in the prior comparable period. The 2004 results include a
cost of $0.03 per share as the result of the impact of our change in accounting
for cooperative advertising pursuant to Emerging Issues Talk 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 $0.05 per share.
Sales for the six months ended June 30, 2004, were $212.7 million, an increase
of 14.6% over 2003 first half sales of $185.6 million. Same store sales grew by
4%. Net income for the first half of 2004 was $1.58 million or $0.08 per
fully-diluted share versus a profit of $1.47 million or $0.07 per fully-diluted
share in the prior comparable period. The results for 2004 include a cost of
$0.08 as the result of the accounting change. Excluding that cost, our earnings
would have been $0.16 per share.
Jack Parker, Chief Executive Officer, stated, "The second quarter was one of
significant change and accomplishment as we re-merchandised several key
departments. We are encouraged with the positive sales results we have generated
since the start of the third quarter. Our inventories are in very good shape and
we are confident of our sales and marketing plans for the balance of the year.
We are maintaining our earnings forecast for the year in the range of $0.94 to
$0.97 per fully diluted share. We also continue to be pleased with the progress
we are making in the new distribution center. The facility is open, we are
stocking and shipping merchandise and we are on schedule to be fully operational
by the end of August."
Mr. Parker also commented, "As our Company grows, we are constantly improving
the infrastructure to support our stores. Therefore, I am pleased to announce
the promotion of Jason Cesare to Senior Vice President, Finance. Jason joined us
in 1997 and was most recently Vice President, Controller. He will continue to
report to Les Gordon our CFO."
A.C. Moore will host a conference call today, Wednesday, July 21 at 5:00 p.m.
Eastern Daylight Time to discuss these financial results in detail. To
participate, please call 1-973-317-5319 for domestic and international callers.
If you are unable to access the Conference Call at 5:00 p.m.,
please call 1-800-428-6051 and enter pin number 365059 to access the taped
digital replay. Callers from outside North America please call 1-973-709-2089
and enter the same reservation number. The replay will be available at
approximately 7:00 p.m. on July 21st and will remain available until Wednesday,
July 28th at 11:59 p.m. Eastern Daylight Time.
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 July 21, 2005.
The Company plans to release its third quarter 2004 sales results on Thursday,
October 7, 2004. The Company also plans to release its third quarter 2004
earnings on Wednesday, October 20, 2004, and will host a conference call at 5:00
PM EDT on that date to discuss the results.
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 84 stores on 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, 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, and other risks detailed in
the Company's Securities and Exchange Commission filings.
Tables to Follow
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENT OF INCOME
(dollars in thousands, except per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------------- ----------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net sales $ 101,194 $ 93,686 $ 212,663 $ 185,638
Cost of sales 61,852 58,893 131,391 117,310
------------ ------------ ------------ ------------
Gross Margin 39,342 34,793 81,272 68,328
Selling, general and administrative expenses 38,603 32,838 78,129 65,424
Pre-opening expenses 253 372 819 750
------------ ------------ ------------ ------------
Income from operations 486 1,583 2,324 2,154
Net interest (income) (123) (118) (243) (227)
------------ ------------ ------------ ------------
Income before income taxes 609 1,701 2,567 2,381
Income tax expense 234 650 988 910
------------ ------------ ------------ ------------
Net income $ 375 $ 1,051 $ 1,579 $ 1,471
============ ============ ============ ============
Basic net income per share $ 0.02 $ 0.06 $ 0.08 $ 0.08
============ ============ ============ ============
Diluted net income per share $ 0.02 $ 0.05 $ 0.08 $ 0.07
============ ============ ============ ============
Weighted average shares outstanding 19,438,837 19,033,158 19,407,541 18,939,205
============ ============ ============ ============
Weighted average shares outstanding
plus impact of stock options 20,108,417 19,762,411 20,044,554 19,620,269
============ ============ ============ ============
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
June 30,
-------------------------
2004 2003
-------- --------
ASSETS
Current assets:
Cash and marketable securities $ 47,409 $ 36,503
Inventories 123,416 108,883
Prepaid expenses and other current assets 5,592 4,589
-------- --------
176,417 149,975
Marketable securities -- 14,189
Property and equipment, net 72,746 30,459
Other assets 1,768 1,821
-------- --------
$250,931 $196,444
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,930 $ 1,161
Trade accounts payable 27,537 26,966
Other current liabilities 13,120 9,914
-------- --------
42,587 38,041
-------- --------
Long-term liabilities:
Long-term debt 28,070 --
Deferred tax liability 5,367 5,850
Other long-term liabilities 5,241 4,292
-------- --------
38,678 10,142
-------- --------
81,265 48,183
-------- --------
Shareholders' Equity 169,666 148,261
-------- --------
$250,931 $196,444
======== ========
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