A.C. Moore Arts & Crafts, Inc. (NASDAQ: ACMR) (the “Company” or “A.C. Moore”) today announced results for the three and six month periods ended July 3, 2010.

Sales for the second quarter of 2010 were $99.9 million, a decrease of 4.3% compared to sales of $104.4 million during the second quarter of 2009. This decline was primarily due to a decrease in comparable store sales of 5.9% partially offset by the operation of two additional stores compared to the second quarter of last year. Net loss for the quarter was $9.7 million, or $0.40 per share, compared to a net loss of $8.1 million, or $0.38 per share in the second quarter of last year.

Sales for the six months ended July 3, 2010 were $205.2 million, a decrease of 3.7% compared to sales of $213.1 million during the comparable period of 2009. This decline is primarily attributable to a 5.3% decrease in comparable store sales partially offset by the operation of two additional stores compared to the same period of last year. Net loss was $17.2 million, or $0.71 per share, for the six months ended July 3, 2010, compared to a net loss of $12.5 million, or $0.60 for the comparable period last year.

Joseph A. Jeffries, Chief Executive Officer, stated, “We will not be satisfied until we return to sustained profitability. I am confident that we have both the right team and strategy in place. We will continue to focus on our merchandise plan, remodel program, and store level execution to drive improved performance.”

The Company will host a conference call beginning at 8:30 a.m., Eastern Time, on Tuesday, August 10, 2010 to discuss second quarter 2010 results. To participate in the conference call, please dial 877-397-0272 and provide the operator with passcode #8604679. If you are unable to access the live call, please dial 888-203-1112 and enter #8604679 to access the taped digital replay. The replay will be available at approximately 9:30 a.m. ET on Tuesday, August 10, 2010 and will remain available until Tuesday, August 24, 2010 at 11:59 p.m. ET.

A simultaneous webcast of the conference call may be accessed at www.acmoore.com. Go to “About Us” and click on “Corporate Profile.” To listen to the live call via webcast, please go to the Company’s website at least 15 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 on the Company’s website.

About A.C. Moore:

A.C. Moore is a specialty retailer of arts, crafts and floral merchandise for a wide range of customers. The Company currently serves customers through its 135 stores located in the Eastern United States and nationally via its e-commerce site, www.acmoore.com. For more information about A.C. Moore, 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. 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 failure to consummate our identified strategic objectives, the effect of economic conditions and fuel prices, our ability to implement our business and operating initiatives to improve sales and profitability, our ability to maintain liquidity and preserve cash, our ability to comply with the terms of our credit facility, changes in the labor market and our ability to hire and retain associates and members of senior management, the impact of existing or future government regulation, execution and results of our real estate strategy, competitive pressures, customer demand and trends in the arts and crafts industry, our failure to accurately respond to inventory and merchandise requirements, the impact of unfavorable weather conditions, disruption in our operations or supply chain, changes in our relationships with suppliers, difficulties with respect to new system technologies, difficulties in implementing measures to reduce costs and expenses and improve margins, supply constraints or difficulties, the effectiveness of and changes to advertising and marketing strategies and other risks detailed in the Company’s Securities and Exchange Commission (“SEC”) filings. A.C. Moore undertakes no obligation to update or revise any forward-looking statement whether as the result of new developments or otherwise.
     
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited)
 
July 3, January 2, July 4,
2010 2010 2009
ASSETS
 
Current assets:
Cash and cash equivalents $ 31,414 $ 45,952 $ 55,981
Inventories 118,360 122,058 118,671
Prepaid expenses and other current assets   10,116   13,288   12,405
  159,890   181,298   187,057
Non-current assets:
Property and equipment, net 79,592 81,938 89,831
Other assets   1,718   2,233   2,782
$ 241,199 $ 265,469 $ 279,670
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Short-term debt $ 19,000 $ 19,000 $ 19,000
Trade accounts payable 33,096 37,047 44,094
Other current liabilities   26,833   28,624   23,448
  78,929   84,671   86,542
Non-current liabilities:
Long-term debt - - -
Deferred tax liability and other 2,322 3,344 3,371
Accrued lease liability   16,246   17,380   17,128
  18,569   20,724   20,499
  97,498   105,395   107,041
 
Shareholders' equity   143,700   160,074   172,629
$ 241,199 $ 265,469 $ 279,670
 
       
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
 
Second Quarter Ended Six months ended
July 3, July 4, July 3, July 4,
2010 2009 2010 2009
 
Net sales $ 99,850 $ 104,442 $ 205,219 $ 213,089
Cost of sales (including buying and distribution costs)   56,296     60,978     116,197     123,078  
Gross margin 43,554 43,464 89,022 90,011
Selling, general and administrative expenses 51,542 51,211 104,209 101,044
Store pre-opening and closing expenses   970     284     1,083     682  
Loss from operations (8,958 ) (8,031 ) (16,270 ) (11,715 )
Net interest expense   219     96     446     694  
Loss before income taxes (9,177 ) (8,127 ) (16,716 ) (12,409 )
Provisions for (benefit of) income taxes   485     22     509     48  
Net loss $ (9,662 ) $ (8,149 ) $ (17,225 ) $ (12,457 )
 
Basic net loss per share $ (0.40 ) $ (0.38 ) $ (0.71 ) $ (0.60 )
 
Diluted net loss per share $ (0.40 ) $ (0.38 ) $ (0.71 ) $ (0.60 )
 
Basic weighted average shares outstanding   24,419,174     21,313,000     24,378,754     20,881,000  
 
 
Diluted weighted average shares outstanding   24,419,174     21,313,000     24,378,754     20,881,000  
 

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