UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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 March 31, 2003
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 charter)
Pennsylvania 22-3527763
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 University Court, Blackwood, NJ 08012
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(Address of principal executive offices)
(Zip Code)
(856) 228-6700
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if
changed since last report)
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. [X] Yes [_] No
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). [X] Yes [_] 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 May 9, 2003
--------------------------- --------------------------
Common Stock, no par value 19,022,878
A.C. MOORE ARTS & CRAFTS, INC.
TABLE OF CONTENTS
Page
Number
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PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of March 31, 2003 3
and December 31, 2002
Consolidated Statements of Income for the three 4
Months ended March 31, 2003 and 2002
Consolidated Statements of Cash Flows for the three 5
month periods ended March 31, 2003 and 2002
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About 11
Market Risk
Item 4. Controls and Procedures 11
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 14
2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31, December 31,
2003 2002
----------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 54,449 $ 61,584
Inventories 108,997 102,497
Prepaid expenses and other current assets 3,022 2,729
-------- --------
166,468 166,810
Marketable securities 1,461
Property and equipment, net 28,827 27,997
Other assets 1,841 1,851
-------- --------
$198,597 $196,658
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital leases $ 1,342 $ 1,342
Trade accounts payable 32,143 24,253
Accrued payroll and payroll taxes 3,097 5,737
Accrued expenses 7,346 8,326
Income taxes payable 457 3,341
-------- --------
44,385 42,999
-------- --------
Long-term liabilities:
Capitalized equipment leases, less current portion 164 504
Deferred tax liability 5,150 5,150
Other long-term liabilities 4,116 3,974
-------- --------
9,430 9,628
-------- --------
53,815 52,627
-------- --------
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares
authorized, none issued
Common stock, no par value, 40,000,000 shares
authorized, 18,895,879 shares outstanding at March 31,
2003 and 18,806,047 outstanding at December 31, 2002 99,985 99,654
Retained earnings 44,797 44,377
-------- --------
144,782 144,031
-------- --------
$198,597 $196,658
======== ========
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
March 31,
------------------------
2003 2002
----------- -----------
Net sales $ 91,952 $ 85,853
Cost of sales (including buying and
distribution costs) 58,417 54,162
----------- -----------
Gross Margin 33,535 31,691
Selling, general and administrative expenses 32,585 29,586
Store pre-opening expenses 379 654
----------- -----------
Income from operations 571 1,451
Net interest (income) expense (109) 11
----------- -----------
Income before income taxes 680 1,440
Provision for income taxes 260 565
----------- -----------
Net income $ 420 $ 875
=========== ===========
Basic net income per share $ 0.02 $ 0.06
=========== ===========
Weighted average shares outstanding 18,834,421 15,866,002
=========== ===========
Diluted net income per share $ 0.02 $ 0.05
=========== ===========
Weighted average shares outstanding
plus impact of stock options 19,603,345 16,936,204
=========== ===========
See accompanying notes to financial statements
4
A.C. MOORE ARTS & CRAFTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three Months Ended
March 31,
--------------------------
2003 2002
------- -------
Cash flows from operating activities:
Net income $ 420 $ 875
Adjustments to reconcile net income to net cash
(used in) operating activities:
Depreciation and amortization 1,634 1,446
Changes in assets and liabilities:
Inventories (6,500) (2,184)
Prepaid expenses and other current assets (293) (68)
Accounts payable, accrued payroll
payroll taxes and accrued expenses 4,270 (3,124)
Income taxes payable (2,884) (3,744)
Other long-term liabilities 142 171
Other assets 10 9
------- -------
Net cash (used in) operating activities (3,201) (6,619)
------- -------
Cash flows from investing activities:
Capital expenditures (2,464) (2,367)
Investment in marketable securities (1,461) -
------- -------
Net cash (used in) investing activities (3,925) (2,367)
------- -------
Cash flows from financing activities:
Proceeds from sale of shares - 52,130
Proceeds from line of credit - 2,000
Repayment of line of credit - (2,000)
Exercise of stock options 331 589
Repayment of equipment leases (340) (320)
------- -------
Net cash provided (used) by financing activities (9) 52,399
------- -------
Net increase (decrease) in cash (7,135) 43,413
Cash and cash equivalents at beginning of period 61,584 10,818
------- -------
Cash and cash equivalents at end of period $54,449 $54,231
======= =======
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 73 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, 2002. 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 shareholders 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.
(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 months ended March 31, 2003 and 2002 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) Marketable Securities
Marketable securities represent investments in fixed financial instruments with
maturities of twelve months or longer from time of purchase. They are classified
as held-to-maturity and recorded at amortized cost.
(5) Recent Accounting Pronouncements
In November 2002, the Emerging Issues Task Force reached consensus on Issue
02-16, Accounting by a Customer (including a Reseller) for Cash Consideration
Received from a Vendor. EITF Issue 02-16 addresses the accounting for cash
consideration received by a customer from a vendor (e.g., slotting fees,
cooperative advertising payments, buydowns) and rebates or refunds from a vendor
that is payable only if the customer completes a specified cumulative level of
purchases or remains a customer for a specified time period. The EITF is
effective for agreements modified or entered into after January 1, 2003. We are
currently evaluating the impact of EITF Issue 02-16, and have not determined
whether or not the adoption of the provisions of EITF Issue 02-16 will have a
material impact on our consolidated operating results or financial position.
6
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure an amendment of FASB Statement No.
123". SFAS 148 amends SFAS 123 to provide alternative methods of transition for
an entity that voluntarily changes to the fair value based method of accounting
for stock-based employee compensation. It also amends the disclosure provisions
of SFAS 123 to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation. It also amends APB Opinion No. 28, "Interim Financial
Reporting", to require disclosure about those effects in interim financial
information. The Company adopted the disclosure requirements of SFAS 148 for the
fiscal year ended December 31, 2002.
The Company accounts for its employee stock options using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25). Compensation cost for stock options is
measured as the excess of the quoted market price of the Company's stock at the
date of grant over the amount an employee must pay to acquire the stock.
Had compensation cost for the Company's stock-based compensation plan been
determined based on the fair value at the grant date for awards under those
plans, consistent with the requirements of SFAS No. 123, "Accounting for
Stock-Based Compensation," net income and earnings per share would have been
reduced to the following pro-forma amounts:
Three Months Ended
March 31,
---------------------
2003 2002
-------- --------
Net income........................... As reported $420,000 $875,000
Compensation cost, net 277,000 139,000
Pro forma 143,000 736,000
Basic earnings per share............. As reported $ .02 $ .06
Pro forma .01 .05
Diluted earnings per share........... As reported $ .02 $ .05
Pro forma .01 .04
The pro forma results may not be representative of the effects on reported
operations for future years. The fair value of the options was calculated using
a Black-Scholes options pricing model with the following weighted-average
assumptions: risk-free interest rate of 4.1% for 2002, 5.1% for 2001, 6.3% for
2000 and; no dividend yield; and a weighted average expected life of the options
of seven years. In accordance with the provisions of SFAS No. 123 the expected
stock price volatility was 45.2% for 2002, 48.4% for 2001, and 46.6% for 2000.
7
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 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 information system
technologies, supply constraints or difficulties, the effectiveness of
advertising strategies and the impact of the threat of terrorist attacks and
war. 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.
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
March 31,
--------------------
2003 2002
------ --------
Net sales.................................... 100.0% 100.0%
Cost of Sales................................ 63.5% 63.1%
------ --------
Gross margin................................. 36.5% 36.9%
Selling, general and administrative expenses. 35.4% 34.5%
Store pre-opening expenses................... 0.4% 0.7%
------ --------
Income from operations....................... 0.7% 1.7%
Net interest (income) expense................ (0.1)% 0.0%
------ --------
Income before income taxes................... 0.8% 1.7%
Income tax expense........................... 0.3% 0.7%
------ --------
Net income................................... 0.5% 1.0%
====== ========
Number of stores open at end of period....... 73 63
Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002
8
Net Sales. Net sales increased $6.1 million, or 7.1%, to $92.0 million
in the three months ended March 31, 2003 from $85.9 million in the comparable
2002 period. This increase is comprised of (i) net sales of $500,000 from two
new stores opened in 2003, (ii) net sales of $7.6 million from stores opened in
2002 not included in the comparable store base, and (iii) a comparable store
sales decrease of $2.0 million, or 2%. Sales during the quarter were
significantly impacted by severe weather conditions throughout our trading area.
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 decreased to
36.5% of net sales in the three months ended March 31, 2003 from 36.9% in the
three months ended March 31, 2002. The decrease is due to more aggressive
promotions in response to the difficult sales environment and to a change in
sales mix resulting from the weather and a later Easter.
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 $3.0 million, or 10.1%, in the
three months ended March 31, 2003 to $32.6 million from $29.6 million in the
three months ended March 31, 2002. The increase is principally accountable from
stores opened in 2003 which were not open during 2002 and the stores opened in
2002 not in the comparable store base. These increases were partially offset by
a decrease in net advertising expense from higher vendor co-op advertising
allowances compared to the first quarter of 2002. As a percentage of sales,
selling, general and administrative costs increased to 35.4% of net sales in the
three months ended March 31, 2003 from 34.5% of net sales in the three months
ended March 31, 2002. This increase is primarily due to de-leveraging store and
central costs from the decline in sales in our comparable store base.
Store Pre-Opening Expenses. We expense store pre-opening expenses as
incurred. Pre-opening expenses for the two new stores opened in the first
quarter of 2003 amounted to $379,000. In the first quarter of 2002, we incurred
store pre-opening expenses of $654,000 related to the two stores opened in that
quarter and the two stores which opened in the second quarter.
Net Interest (Income) Expense. In the first quarter of 2003, we had net
interest income of $109,000 compared with net interest expense of $11,000 in
2002. 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 38.2% for the first
quarter ended March 31, 2003 and 39.2% for the first quarter ended March 31,
2002. The decrease in the effective tax rate is principally the result of tax
free interest income in 2003.
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.
9
At March 31, 2003 and December 31, 2002 our working capital was $122.1
million and $123.8 million, respectively. Cash used in operations was $3.2
million for the three months ended March 31, 2003 as a result of an increase in
inventory of $6.5 million due to sales being below plan and to support the new
stores and a reduction in income tax payables of $2.9 million offset by an
increase of $4.3 million in accounts payable and accrued payroll.
Net cash used in investing activities during the three months ended
March 31, 2002 was $3.9 million. This included $1.4 million for investments in
marketable securities with a maturity of over one year and $2.5 million for
capital expenditures. In 2003, we expect to spend approximately $44.0 million on
capital expenditures, which includes approximately $34.0 million for land,
building, equipment and systems for our new distribution center, $5.0 million
for new store openings, and the remainder for remodeling existing stores,
upgrading systems in existing stores, warehouse equipment, and corporate systems
development. The total cost of the new distribution center is estimated to be
between $40.0 and $42.0 million. We expect to finance two-thirds of this project
through long-term debt.
In the year ended December 31, 2002, net cash provided by financing
activities was principally the $52.1 million proceeds from our sale of shares in
March 2002.
The Company currently has a $25.0 million one year line of credit
agreement with First Union National Bank, which expires on July 11, 2003.
Borrowing under this line will bear interest at LIBOR plus 125 basis points. We
believe the cash generated from operations during the year, funds received
through the financing of the new distribution center and available borrowings
under the credit agreement (which we intend to renew) will be sufficient to
finance our working capital and capital expenditure requirements for at least
the next 12 months.
Recent Accounting Pronouncements
In November 2002, the Emerging Issues Task Force reached consensus on
Issue 02-16, Accounting by a Customer (including a Reseller) for Cash
Consideration Received from a Vendor. EITF Issue 02-16 addresses the accounting
for cash consideration received by a customer from a vendor (e.g., slotting
fees, cooperative advertising payments, buydowns) and rebates or refunds from a
vendor that is payable only if the customer completes a specified cumulative
level of purchases or remains a customer for a specified time period. The EITF
is effective for agreements modified or entered into after January 1, 2003. We
are currently evaluating the impact of EITF Issue 02-16, and have not determined
whether or not the adoption of the provisions of EITF Issue 02-16 will have a
material impact on our consolidated operating results or financial position.
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure an amendment of FASB
Statement No. 123". SFAS 148 amends SFAS 123 to provide alternative methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation. It also amends the
disclosure provisions of SFAS 123 to require prominent disclosure about the
effects on reported net income of an entity's accounting policy decisions with
respect to stock-based employee compensation. It also amends APB Opinion No. 28,
"Interim Financial Reporting", to require disclosure about those effects in
interim financial information. The Company adopted the disclosure requirements
of SFAS 148 for the fiscal year ended December 31, 2002.
10
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
advertising costs.
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.
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.
The costs incurred for advertising are expensed the first time the
advertising takes place, and are offset by re-imbursements received under
cooperative advertising programs with certain vendors. Co-op advertising funds
are only recognized when we have performed our contractual obligation under a
co-op advertising agreement.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
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.
11
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
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
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.
99.3 Separation Agreement dated January 31, 2003 between Rex Rambo
and the Company.
(b) Reports on Form 8-K filed in the quarter ended March 31, 2003:
o 8-K, Item 9, filed on January 9, 2003 regarding a Company
conference call in which the Company addressed its sales for 2002, reaffirmed
its 2002 earnings guidance and provided a brief outlook for 2003.
12
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: May 14, 2003 By: Leslie H. Gordon
----------------------------
Leslie H. Gordon
Executive Vice President and
Chief Financial Officer
(duly authorized officer and
principal financial officer)
13
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 am 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: May 14, 2003 John E. Parker
-----------------------------
John E. Parker
Chief Executive Officer
(principal executive officer)
14
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 am 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: May 14, 2003 Leslie H. Gordon
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Leslie H. Gordon
Executive Vice President and
Chief Financial Officer
(principal financial officer)
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