Exhibit 99.1
A.C. Moore [Logo} General Office o Distribution Center
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130 A.C. Moore Drive o Berlin, NJ 08009
PHONE: (856) 768-4930 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) 768-4930 (610) 642-8253
FOR IMMEDIATE RELEASE
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A.C. MOORE REPORTS SECOND QUARTER RESULTS
BERLIN, NEW JERSEY, JULY 20, 2006 - A.C. Moore Arts & Crafts, Inc. (Nasdaq:
ACMR) today announced results for the second quarter ended June 30, 2006.
Sales for the second quarter of 2006 grew to $129.8 million, an increase of 14%
over sales of $113.5 million during the second quarter of 2005. Same store sales
increased by 3% versus 2005. Net loss in the second quarter was $1.8 million, or
$0.09 per share, compared with a loss of $50,000 or $0.00 per share in the
second quarter of 2005. Second quarter 2006 results include pre-tax expenses of
$1.8 million related to the changes in management. These costs include severance
costs relating to departing executives as well as recruiting costs. The impact
of these costs was $0.05 per share after tax. Beginning in January 2006, the
Company started expensing stock based compensation, which resulted in a second
quarter pre-tax expense of $885,000, or $0.03 per share after-tax.
Sales for the six months ended June 30, 2006, were $262.8 million, an increase
of 11% over sales of $236.4 million in the first six months of 2005. Same store
sales increased by less than 1% for the six month period. The net loss for the
first half of 2006 was $1.5 million or $0.08 per share versus last year's net
income of $1.2 million or $0.06 per share. Results for the first half of 2006
include pre-tax expenses of $2.0 million related to the changes in management
and $1.6 million for stock based compensation.
Rick Lepley, Chief Executive Officer, stated, "We are very pleased with the 14%
total sales growth and the 3% comp store increase for the quarter. We are not
satisfied with our operating margins and our future plans are focused on
improving our merchandise margins and reducing our SG&A expenses."
A.C. Moore will host a conference call today, Thursday, July 20, 2006 at 11:00
AM Eastern Daylight time to discuss these financial results in detail. To
participate, please call 973-935-8504. If you are unable to access the live
call, please dial 973-341-3080 and enter pin number 7588167 to access the taped
digital replay. The replay will be available at approximately 1:00 PM on July
20th and will remain available until Thursday, July 27th at 11:59 PM 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 20, 2007.
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 114 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, the costs associated with a
change in senior management, the impact of the adoption of FAS 123R, 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, difficulties in implementing measures
to reduce costs and expenses, 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.
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
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2006 2005 2006 2005
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Net sales $ 129,817 $ 113,489 $ 262,735 $ 236,368
Cost of sales 77,023 67,800 156,788 142,551
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Gross Margin 52,794 45,689 105,947 93,817
Selling, general and administrative expenses 53,185 44,766 105,029 90,610
Costs related to change in management 1,811 - 2,027 -
Store pre-opening expenses 671 944 1,295 1,105
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Income (loss) from operations (2,873) (21) (2,404) 2,102
Net interest expense 73 61 126 122
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Income (loss) before income taxes (2,946) (82) (2,530) 1,980
Provision (benefit) for income taxes (1,178) (32) (1,012) 778
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Net income (loss) $ (1,768) $ (50) $ (1,518) $ 1,202
=============== =============== =============== ===============
Basic net income (loss) per share $ (0.09) $ (0.00) $ (0.08) $ 0.06
=============== =============== =============== ===============
Diluted net income (loss) per share $ (0.09) $ (0.00) $ (0.08) $ 0.06
=============== =============== =============== ===============
Weighted average shares outstanding 19,857,369 19,743,566 19,846,614 19,709,047
=============== =============== =============== ===============
Weighted average shares outstanding
plus impact of stock options 19,857,369 19,743,566 19,846,614 20,186,464
=============== =============== =============== ===============
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
June 30,
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2006 2005
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ASSETS
Current assets:
Cash and cash equivalents $ 24,716 $ 22,229
Marketable securities - 14,237
Inventories 176,068 154,019
Prepaid expenses and other current assets 8,803 10,771
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209,587 201,256
Property and equipment, net 91,834 83,060
Other assets 1,797 1,398
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$ 303,218 $ 285,714
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 2,571 $ 2,571
Trade accounts payable 41,002 34,432
Other current liabilities 12,419 10,540
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55,992 47,543
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Non-current liabilities:
Long-term debt 22,929 25,500
Deferred tax liability 7,837 8,076
Accrued lease liability 17,402 15,176
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48,168 48,752
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104,160 96,295
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Shareholders' Equity 199,058 189,419
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$ 303,218 $ 285,714
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