BERLIN, N.J., July 20 /PRNewswire-FirstCall/ -- 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 http://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.
Tables to Follow 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,
2006 2005 2006 2005 Net sales $129,817 $113,489 $262,735 $236,368
Cost of sales 77,023 67,800 156,788 142,551
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
Income (loss) from
operations (2,873) (21) (2,404) 2,102
Net interest
expense 73 61 126 122
Income (loss) before
income taxes (2,946) (82) (2,530) 1,980
Provision
(benefit) for
income taxes (1,178) (32) (1,012) 778
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 CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(unaudited) June 30,
2006 2005 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
209,587 201,256 Property and equipment, net 91,834 83,060
Other assets 1,797 1,398
$303,218 $285,714 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
55,992 47,543
Non-current liabilities:
Long-term debt 22,929 25,500
Deferred tax liability 7,837 8,076
Accrued lease liability 17,402 15,176
48,168 48,752
104,160 96,295 Shareholders' Equity 199,058 189,419
$303,218 $285,714
DATASOURCE: A.C. Moore Arts & Crafts, Inc.
CONTACT: Leslie Gordon, Chief Financial Officer, of A.C. Moore Arts & Crafts, Inc., +1-856-768-4930; Joe Crivelli, of Gregory FCA Communications, Inc., for A.C. Moore Arts & Crafts, Inc., +1-610-642-8253 Web site: http://www.acmoore.com/
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