A.C. Moore Arts & Crafts, Inc. (NASDAQ: ACMR) (the “Company” or “A.C. Moore”) today announced results for the fourth quarter and 2010 fiscal year ended January 1, 2011. In addition, the Company announced that on March 4, 2011 it renewed its asset-based credit facility for an additional five-year term.

Sales for the fourth quarter of fiscal 2010 were $143.2 million, a decrease of 4.4% compared to sales of $149.7 million during the fourth quarter of last year. This decline was primarily attributable to a decrease in comparable store sales of 4.3% during the quarter. Pre-tax loss for the quarter was $4.9 million, compared to a pre-tax loss of $6.3 million for the fourth quarter of last year. Net loss was $4.8 million, or $0.20 per share, compared to a net loss of $0.5 million, or $0.02 per share, in the fourth quarter of fiscal 2009.

Fourth quarter fiscal 2010 results included a non-cash fixed asset impairment of $0.04 per share and closed store expenses of $0.03 per share. Fourth quarter fiscal 2009 results included a non-cash fixed asset impairment of $0.17 per share, closed store expenses of $0.14 per share and an income tax benefit of $0.24 per share.

Sales for fiscal 2010 were $448.1 million, a decrease of 4.4%, compared to sales of $468.9 million for fiscal 2009. This decline was primarily due to a decrease in comparable store sales of 5.4% during the year. Pre-tax loss for fiscal 2010 was $29.7 million, compared to a pre-tax loss of $31.6 million for fiscal 2009. The net loss for fiscal 2010 was $30.2 million, or $1.23 per share, versus a net loss of $25.9 million, or $1.15 per share, in fiscal 2009.

Fiscal 2010 results included a non-cash fixed asset impairment of $0.04 per share, closed store expenses of $0.09 per share and income tax expense of $0.02 per share. Fiscal 2009 results included a non-cash fixed asset impairment of $0.19 per share, closed store expenses of $0.18 per share and an income tax benefit of $0.25 per share.

Joseph A. Jeffries, Chief Executive Officer, stated, “The entire organization is focused on executing our strategic and merchandising plans. With our improved inventory composition and merchandising strategy, we believe that A.C. Moore is positioned for better execution and results in fiscal 2011.”

The Company will host a conference call beginning at 8:30 a.m., Eastern Time, on Tuesday, March 29, 2011 to discuss fourth quarter and full year 2010 results. To participate in the conference call, please dial 800-946-0783 and provide the operator with passcode #9220201. If you are unable to access the live call, please dial 888-203-1112 and enter pin #9220201 to access the taped digital replay. The replay will be available at approximately 9:30 a.m. ET on Tuesday, March 29, 2011 and will remain available until Tuesday, April 12, 2011 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 on the Company’s website approximately two hours after the conference call ends.

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 136 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, failure of our planned strategies, the effect of future losses on our financial condition and cash flows, the outcome of the strategic alternatives process, the availability of future capital and our ability to comply with the terms of our credit facility, the effect of economic conditions, competitive pressures, further declines in total sales and comparable store sales, failure to realize anticipated results from our real estate strategy, changes in estimates, assumptions or judgments related to store closure reserves or impairments, higher costs associated with or failure to achieve anticipated results through the implementation of new programs or initiatives, weakness in fourth quarter results, fluctuation in quarterly results due to the seasonality of our business, changes in merchandise trends and consumer demands and any failure by us to anticipate such changes successfully, failure to manage inventory and merchandise requirements, unfavorable consumer response to our promotional strategies, material adverse events in the regions in which we operate, including but not limited to, weather conditions, disruption in our operations or supply chain due to disaster or other events that might cause a delay in our business, changes in our relationships with key suppliers, disruption or increased costs that impact our reliance on imported merchandise, inadequacies in our information technology or systems, changes in the labor market or our ability to hire and retain associates and members of senior management, increases or fluctuations in fuel or oil costs, the impact of existing or future government regulation, volatility in the price or volume of our common stock and other risks detailed in the Company’s Securities and Exchange Commission 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
(In thousands)
 
 
January 1, January 2,
2011 2010
ASSETS
 
Current assets:
Cash and cash equivalents $ 39,970 $ 45,952
Inventories 111,266 122,058
Prepaid expenses and other current assets   11,257   13,288
  162,493   181,298
Non-current assets:
Property and equipment, net 73,771 81,938
Other assets   1,192   2,233
$ 237,456 $ 265,469
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Short-term debt $ 19,000 $ 19,000
Trade accounts payable 43,131 37,047
Other current liabilities   27,517   28,624
  89,648   84,671
Non-current liabilities:
Deferred tax liability and other 1,920 3,344
Accrued lease liability   14,475   17,380
  16,395   20,724
  106,043   105,395
 
Shareholders' equity   131,413   160,074
$ 237,456 $ 265,469
 
       
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
 
 
Quarter Ended Twelve Months ended
January 1, January 2, January 1, January 2,
2011 2010 2011 2010
 
Net sales $ 143,170 $ 149,717 $ 448,058 $ 468,889
Cost of sales (including buying and distribution costs)   89,206     93,186     262,838     281,614  
Gross margin 53,964 56,531 185,220 187,275
Selling, general and administrative expenses 57,592 59,047 211,390 213,268
Store pre-opening and closing expenses   968     3,545     2,613     4,477  
Loss from operations (4,596 ) (6,061 ) (28,783 ) (30,470 )
Net interest expense   269     213     946     1,098  
Loss before income taxes (4,865 ) (6,274 ) (29,729 ) (31,568 )
Provisions for (benefit from) income taxes   (58 )   (5,737 )   451     (5,665 )
Net loss $ (4,807 ) $ (537 ) $ (30,180 ) $ (25,903 )
 
Basic net loss per share $ (0.20 ) $ (0.02 ) $ (1.23 ) $ (1.15 )
 
Diluted net loss per share $ (0.20 ) $ (0.02 ) $ (1.23 ) $ (1.15 )
 
Basic weighted average shares outstanding   24,531,026     24,324,860     24,443,014     22,470,346  
 
Diluted weighted average shares outstanding   24,531,026     24,324,860     24,443,014     22,470,346  
 

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