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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 000-23157
---------
A.C. MOORE ARTS & CRAFTS, INC.
------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 22-3527763
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 University Court, Blackwood, NJ 08012
-----------------------------------------
(Address of principal executive offices)
(Zip Code)
(856) 228-6700
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Class Outstanding at November 11, 2002
- ----- --------------------------------
Common Stock, no par value 18,798,580
A.C. MOORE ARTS & CRAFTS, INC.
TABLE OF CONTENTS
Page
Number
------
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of September 30, 2002
and December 31, 2001 3
Consolidated Statements of Income for the three
and nine month periods ended September 30, 2002 and 2001 4
Consolidated Statements of Cash Flows for the nine
month periods ended September 30, 2002 and 2001 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 11
Item 4. Controls and Procedures 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 15
CERTIFICATIONS 15
2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
September 30, December 31,
2002 2001
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 39,500 $ 10,818
Inventories 107,911 85,674
Prepaid expenses and other current assets 2,349 1,526
-------- --------
149,760 98,018
Property and equipment, net 28,228 24,969
Other assets 1,844 824
-------- --------
$179,832 $123,811
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital leases $ 1,329 $ 1,329
Accounts payable to trade and others 28,445 23,322
Accrued payroll and payroll taxes 4,403 5,098
Accrued expenses 6,809 7,247
Income taxes payable 1,286 4,600
-------- --------
42,272 41,596
-------- --------
Long-term liabilities:
Capital leases 871 1,845
Deferred taxes 3,425 3,427
Other long-term liabilities 3,763 3,216
-------- --------
8,059 8,488
-------- --------
50,331 50,084
-------- --------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares
authorized, none issued
Common stock, no par value, 40,000,000 shares
authorized, 18,760,848 shares outstanding at September 30,
2002 and 14,932,012 outstanding at December 31, 2001 97,264 43,807
Retained earnings 32,237 29,920
-------- --------
129,501 73,727
-------- --------
$179,832 $123,811
======== ========
See accompanying notes to financial statements
3
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENT OF INCOME
(dollars in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------- --------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
Net sales $ 89,726 $ 76,220 $ 258,445 $ 209,774
Cost of sales (including buying and
distribution costs) 56,423 47,951 162,756 132,193
----------- ----------- ----------- -----------
Gross Margin 33,303 28,269 95,689 77,581
Selling, general and administrative expenses 31,180 26,936 90,278 75,092
Pre-opening expenses 850 625 1,888 2,074
----------- ----------- ----------- -----------
Income from operations 1,273 708 3,523 415
Net interest (income) expense (150) 297 (326) 478
----------- ----------- ----------- -----------
Income (loss) before income taxes 1,423 411 3,849 (63)
Income tax expense (benefit) 566 156 1,532 (23)
----------- ----------- ----------- -----------
Net income (loss) $ 857 $ 255 $ 2,317 $ (40)
=========== =========== =========== ===========
Basic net income (loss) per share $ 0.05 $ 0.02 $ 0.13 $ (0.00)
=========== =========== =========== ===========
Weighted average shares outstanding 18,741,640 14,875,880 17,582,762 14,859,052
=========== =========== =========== ===========
Diluted net income (loss) per share $ 0.04 $ 0.02 $ 0.12 $ (0.00)
=========== =========== =========== ===========
Weighted average shares outstanding
plus impact of stock options 19,807,463 15,575,596 18,605,664 14,859,052
=========== =========== =========== ===========
See accompanying notes to financial statements
4
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Nine Months Ended
September 30,
----------------------
2002 2001
-------- --------
Cash flows from operating activities:
Net income $ 2,317 $ (40)
Adjustments to reconcile net income (loss) to net cash
(used in) operating activities:
Depreciation and amortization 4,550 3,644
Compensation expense related to stock options - -
Changes in assets and liabilities:
Inventories (22,237) (14,078)
Prepaid expenses and other current assets (823) 132
Accounts payable, accrued payroll
payroll taxes and accrued expenses 3,990 (5,318)
Income taxes payable (3,314) (2,985)
Other long-term liabilities 547 414
Other (1,021) (385)
------- -------
Net cash (used in ) operating activities (15,991) (18,616)
------- -------
Cash flows (used in) investing activities: Capital expenditures (7,809) (7,065)
------- -------
Cash flows from financing activities:
Proceeds from sale of shares 52,130 -
Proceeds from line of credit 2,000 16,500
Repayment of line of credit (2,000) -
Exercise of stock options 1,326 304
Proceeds from capital leases - 2,791
Repayment of capital leases (974) (502)
------- -------
Net cash provided by financing activities 52,482 19,093
------- -------
Net increase (decrease) in cash 28,682 (6,588)
Cash and cash equivalents at beginning of period 10,818 10,310
------- -------
Cash and cash equivalents at end of period $ 39,500 $ 3,722
======== ========
See accompanying notes to financial statements
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Basis of Presentation
The consolidated financial statements included herein include the accounts of
A.C. Moore Arts & Crafts, Inc. and its wholly owned subsidiaries (collectively
the "Company"). The Company is a chain of 71 retail stores selling arts and
crafts merchandise. The stores are located throughout the eastern United States.
These financial statements have been prepared by management without audit and
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001. Due to the seasonality of the Company's business, the
results for the interim periods are not necessarily indicative of the results
for the year. The accompanying consolidated financial statements reflect, in the
opinion of management, all adjustments necessary for a fair presentation of the
interim financial statements. In the opinion of management, all such adjustments
are of a normal and recurring nature.
(2) Common Stock and Earnings per Share
On June 25, 2002, the Company's Board of Directors declared a two-for-one stock
split to stockholders of record as of the close of business on July 15, 2002
payable on July 31, 2002. All references to the number of shares of common
stock, per share prices and earnings per share amounts in the consolidated
financial statements and accompanying notes included in this Quarterly Report on
Form 10-Q have been adjusted to reflect the split on a retroactive basis.
The weighted average shares outstanding plus impact of stock options for the
nine month period ended September 30, 2001 excludes potentially dilutive shares
as the result would be antidilutive.
(3) Management Estimates
The preparation of these consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of expenses during
the reported period and related disclosures. Significant estimates made as of
and for the three and nine month periods ended September 30, 2002 and 2001
include provisions for shrinkage, capitalized buying, warehousing and
distribution costs related to inventory and markdowns of merchandise
inventories. Actual results could differ materially from those estimates.
(4) Recent Accounting Pronouncements
Statement of Financial Accounting Standards, or SFAS, No. 143, Accounting for
Asset Retirement Obligations requires the recognition of a liability for the
estimated cost of disposal as part of the initial cost of a long-lived asset.
The Company must adopt SFAS No. 143 in 2003. The Company believes that adopting
this pronouncement will not have a material impact on its consolidated results
of operations, financial position or cash flows.
6
In June 2002, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards, or SFAS, No. 146, Accounting for
Costs Associated with Exit or Disposal Activities. This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and supercedes Emerging Issues Task Force (EITF) Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring). The
Statement requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. Under EITF 94-3,
a liability for an exit cost was recognized at the date of commitment to an exit
or disposal plan. This Statement also establishes that fair value is the
objective for initial measurement of the liability. The Company must adopt SFAS
No. 146 for all exit or disposal activities that are initiated after December
31, 2002. The Company does not believe that adopting this pronouncement will
have a material impact on its consolidated results of operations, financial
position or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis contains certain forward-looking
statements. These forward-looking statements do not constitute historical facts
and involve risks and uncertainties. Actual results could differ materially from
those referred to in the forward-looking statements due to a number of factors,
including, but not limited to, the following: customer demand, the effect of
economic conditions, the impact of competitors' locations or pricing, the
availability of acceptable real estate locations for new stores, difficulties
with respect to new information system technologies, supply constraints or
difficulties, the effectiveness of advertising strategies and the ability to
meet capital needs. For additional information concerning factors that could
cause actual results to differ materially from the information contained herein,
reference is made to the information under the heading "Cautionary Statement
Relating to Forward Looking Statements" in our Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.
Due to the importance of our peak selling season, which includes Fall/Halloween,
Thanksgiving and Christmas, the fourth quarter has historically contributed, and
we expect it will continue to contribute, disproportionately to our
profitability for the entire year. As a result, our quarterly results of
operations may fluctuate. In addition, results of a period shorter than a full
year may not be indicative of results expected for the entire year.
Our quarterly results of operations also may fluctuate based upon such factors
as the length of holiday seasons, the date on which holidays fall, the number
and timing of new store openings, the amount of store pre-opening expenses, the
amount of net sales contributed by new and existing stores, the mix of products
sold, the amount of sales returns, the timing and level of markdowns and other
competitive factors.
7
Results of Operations
The following table sets forth, for the periods indicated, selected statement of
operations data expressed as a percentage of net sales and the number of stores
open at the end of each such period:
Three months ended Nine months ended
September 30, September 30,
---------------- ----------------
2002 2001 2002 2001
----- ----- ----- -----
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 62.9% 62.9% 63.0% 63.0%
----- ----- ----- -----
Gross margin 37.1% 37.1% 37.0% 37.0%
Selling, general and administrative expenses 34.8% 35.3% 34.9% 35.8%
Store pre-opening expenses 0.9% 0.8% 0.7% 1.0%
----- ----- ----- -----
Income from operations 1.4% 0.9% 1.4% 0.2%
Net interest expense (income) (0.2)% 0.4% (0.1)% 0.2%
----- ----- ----- -----
Income (loss) before income taxes 1.6% 0.5% 1.5% (0.0)%
Income tax expense (benefit) 0.6% 0.2% 0.6% (0.0)%
----- ----- ----- -----
Net income (loss) 1.0% 0.3% 0.9% (0.0)%
===== ===== ===== =====
Number of stores open at end of period 70 58
8
Three Months Ended September 30, 2002 Compared to Three Months Ended
September 30, 2001
Net Sales. Net sales increased $13.5 million, or 17.7%, to $89.7 million
in the three months ended September 30, 2002 from $76.2 million in the
comparable 2001 period. This increase resulted from (i) net sales of $8.2
million from 10 new stores opened in 2002, (ii) net sales of $2.5 million from
stores opened in 2001 which were not included in the 2001 comparable store base,
and (iii) a comparable store sales increase of $2.8 million, or 4%. Stores are
added to the comparable store base at the beginning of the fourteenth full month
of operation.
Gross Margin. Gross margin is net sales minus the cost of merchandise
and certain distribution and purchasing costs. The gross margin was 37.1% of net
sales in both the three month periods ended September 30, 2002 and September 30,
2001.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses include (a) direct store level expenses, including rent
and related operating costs, payroll, advertising, depreciation and other direct
costs, and (b) corporate level costs not directly associated with or allocable
to cost of sales including executive salaries, accounting and finance, corporate
information systems, office facilities and other corporate expenses. Selling,
general and administrative expenses increased $4.3 million, or 15.8%, in the
three months ended September 30, 2002 to $31.2 million from $26.9 million in the
three months ended September 30, 2001. Of the increase, $4.0 million was
attributable to the stores opened in 2002 which were not open during 2001 and
the stores opened in 2001 which were not included in the 2001 comparable store
base, offset by $400,000 in reductions to expenses in comparable stores. The
remainder of the increase, $700,000, was attributable to the increase in
corporate costs to support our growth. As a percentage of sales, selling,
general and administrative costs decreased to 34.8% of net sales in the three
months ended September 30, 2002 from 35.3% of net sales in the three months
ended September 30, 2001. This decrease is primarily due to leveraging store and
central costs over a greater sales base.
Store Pre-Opening Expenses. We expense store pre-opening expenses as
incurred. Pre-opening expenses for the six new stores opened in the third
quarter of 2002 amounted to $850,000. In the third quarter of 2001, we incurred
store pre-opening expenses of $625,000 related to the three stores opened in
that quarter and one store which opened in October 2001.
Net Interest (Income) Expense. In the third quarter of 2002, we had net
interest income of $150,000 compared with interest expense of $297,000 in the
third quarter of 2001. The change is due to interest earned from the proceeds of
our sale of shares in March 2002.
Income Taxes. Our effective income tax rate was 39.8% for the third
quarter ended September 30, 2002 and 38.0% for the third quarter ended September
30, 2001. The increase in the effective tax rate is the result of additional
state income taxes on the higher level of income.
9
Nine Months Ended September 30, 2002 Compared to Nine Months Ended
September 30, 2001.
Net Sales. Net sales increased $48.7 million, or 23.2%, to $258.4
million in the nine months ended September 30, 2002 from $209.8 million in the
comparable 2001 period. This increase resulted from (i) net sales of $13.0
million from 10 new stores opened in 2002, (ii) net sales of $17.4 million from
stores opened in 2001 which were not included in the 2001 comparable store base,
and (iii) a comparable store sales increase of $18.3 million, or 9%.
Gross Margin. The gross margin was 37.0% of net sales in both the nine
month periods ended September 30, 2002 and September 30, 2001.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $15.2 million, or 20.2% in the nine months
ended September 30, 2002 to $90.3 million from $75.1 million in the nine months
ended September 30, 2001. Of the increase, $11.9 million was attributable to the
stores opened in 2002 which were not open during 2001 and the stores opened in
2001 which were not included in the 2001 comparable store base. Of the
remainder, $1.7 million is due to increases in the comparable stores and $1.6
million is attributable to the increase in corporate costs to support our
growth. As a percentage of sales, selling, general and administrative costs
decreased to 34.9% of net sales in the nine months ended September 30, 2002 from
35.8% of net sales in the nine months ended September 30, 2001. This decrease is
primarily due to leveraging store and central costs over a greater sales base.
Store Pre-Opening Expenses. Pre-opening expenses for the 10 new stores
opened in the first nine months of 2002 amounted to $1.9 million. In the first
nine months of 2001, we opened eight new stores, relocated two stores, and
incurred pre-opening expenses of $2.1 million.
Net Interest (Income) Expense. In the first nine months of 2002, we had
net interest income of $326,000 compared with interest expense of $478,000 in
the first nine months of 2001. The change is due to interest earned from the
proceeds of our sale of shares in March 2002.
Income Taxes. Our effective income tax rate was 39.8% for the nine
months ended September 30, 2002 and 37.0% for the nine months ended September
30, 2001. The increase in the effective tax rate is the result of additional
state income taxes on the higher level of income.
Liquidity and Capital Resources
Our cash is used primarily for working capital to support inventory
requirements and capital expenditures, pre-opening expenses and beginning
inventory for new stores. In recent years, we have financed our operations and
new store openings primarily with cash from operations, the net proceeds we
received from our initial public offering in 1997 and with borrowing under bank
financing agreements. In March 2002 we completed a secondary offering in which
we sold 3,500,000 new post-split shares, with net cash proceeds of $52,130,000.
At September 30, 2002 and December 31, 2001 our working capital was
$107.5 million and $56.4 million, respectively. Cash used in operations was
$16.0 million for the nine months ended September 30, 2002 as a result of an
increase in inventory of $22.2 million to support the new stores, the increase
of accounts payable and accrued payroll in the amount of $4.0 million and a
reduction in income taxes payable of $3.3 million.
10
Net cash used in investing activities during the nine months ended
September 30, 2002 was $7.8 million. This use of cash was for capital
expenditures, primarily related to new stores. In 2002, we expect to spend
approximately $10.0 million on capital expenditures, which includes
approximately $7.0 million for new store openings, and the remainder for
remodeling existing stores, upgrading systems in existing stores, warehouse
equipment and corporate systems development.
We are currently negotiating to build a new distribution center and
office complex which we plan to open in 2004. We anticipate that this new
facility, which will be located near our existing distribution center, will be
700,000 square feet for distribution plus 30,000 square feet of office space.
The total cost of the land and building for this facility is expected to be
financed by long-term debt. We will use our working capital to pay for systems
and equipment.
Net cash provided by financing activities includes the $52.1 million
proceeds from our sale of shares in March 2002.
On July 11, 2002 we signed a new $25 million one year line of credit
agreement with First Union National Bank. With the successful completion of the
sale of shares in March 2002, we no longer required the existing $50 million
revolving credit agreement which contained several restrictive covenants and was
more expensive to maintain. Borrowing under this new line will bear interest at
LIBOR plus 125 basis points. We believe the cash generated from operations
during the year and available borrowings under the new financing agreement will
be sufficient to finance our working capital and capital expenditures
requirements for at least the next 12 months.
General
On June 25, 2002, our Board of Directors approved a two-for-one stock
split to shareholders of record as of the close of business on July 15, 2002.
The shares were distributed on July 31, 2002.
Critical Accounting Policies
Our critical accounting policies relate to merchandise inventories and
also the recognition of co-op advertising funds. We value our inventories at
stores at the lower of cost or market as determined using the retail inventory
method. Because we do not have perpetual inventory records for inventory in our
stores, we perform complete physical inventories in each of our stores at the
end of each year. The actual physical count of merchandise is made principally
by third party inventory counting service firms. We believe our process results
in reasonable estimates of our retail inventory on hand at year end. Co-op
advertising funds are recognized when we have performed our obligations under a
co-op advertising agreement.
Inventory valuation methods also require certain management estimates
and judgments. These include estimates of net realizable value on product
designated for clearance or on slow moving merchandise. The accuracy of our
estimates can be affected by many factors, some of which are outside of our
control, including changes in economic conditions and consumer buying trends.
Historically, we have not experienced significant differences in our estimates
of recovery compared with actual results.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
11
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on their
evaluation of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a date within 90 days of the
filing date of this Quarterly Report on Form 10-Q, the Company's principal
executive officer and principal financial officer have concluded that the
Company's disclosure controls and procedures are effective to timely alert
management to material information relating to the Company during the period
when its periodic reports are being prepared.
(b) Changes in internal controls. There were no significant changes in
the Company's internal controls or in other factors that could significantly
affect these controls subsequent to the date of the principal executive
officer's and principal financial officer's evaluation referred to above,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
12
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Pre-Approval of Non-Audit Services
----------------------------------
On August 22, 2002, the Company's Audit Committee pre-approved the
engagement of PricewaterhouseCoopers LLP, the Company's auditors, to provide tax
services to the Company.
Composition of the Board of Directors
-------------------------------------
On August 22, 2002, Patricia A. Parker resigned from the Company's
board of directors. The board of directors elected Lawrence Fine, the Company's
president, as a director to fill Ms. Parker's vacant seat. The Company's
directors are divided into three classes. Ms. Parker served as a Class C
director and accordingly Mr. Fine will become a Class C director and will serve
until 2005 and until his successor is elected and qualified.
In addition, on the same date, the Company's board of directors
increased the size of the board to seven directors and elected Eli J. Segal as a
director of the Company. Mr. Segal will serve as a Class C director and will
serve until 2005 and until his successor is elected and qualified. Mr. Segal was
a former assistant to President Clinton. In addition Mr. Segal currently serves
on the board of directors of Hasbro, Inc., Hotel Reservations Network, Citizens
Financial Group and Stonebridge International, as well as being the Chairman of
the Board of SchoolSports, a magazine covering the world of high school sports.
Mr. Segal also serves on the boards of several nonprofit organizations,
including The John F. Kennedy Library and Foundation, City Year, The Heller
School of Brandeis University and The National Alliance to End Homelessness,
which he co-chairs. Prior to his public service career, Mr. Segal was the Chief
Executive Officer of several companies related to the crafts industry.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
13
99.1 Certification of the Company's Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of the Company's Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) There were no reports on Form 8-K filed during the quarter
ended September 30, 2002.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
A.C. MOORE ARTS & CRAFTS,
INC.
Date: November 13, 2002 By: /s/ Leslie H. Gordon
------------------------------------
Executive Vice President and
Chief Financial Officer (duly
authorized officer and principal
financial officer)
CERTIFICATIONS
I, John E. Parker, certify that:
1. I have reviewed this quarterly report on Form 10-Q of A.C. Moore Arts &
Crafts, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002 /s/ John E. Parker
---------------------------
John E. Parker
Chief Executive Officer
(principal executive officer)
15
I, Leslie H. Gordon, certify that:
1. I have reviewed this quarterly report on Form 10-Q of A.C. Moore Arts &
Crafts, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002 /s/ Leslie H. Gordon
---------------------------
Leslie H. Gordon
Executive Vice President
and Chief Financial Officer
(principal financial
officer)
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