EXHIBIT 99.1
[GRAPHIC OMITTED]
A.C. MOORE [GRAPHIC OMITTED] General Office o Distribution Center
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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.
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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
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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
========= ========= ========= =========
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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
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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
======== ========
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