UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM _____ TO _____
COMMISSION FILE NUMBER 000-23157
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
A. C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
A. C. MOORE ARTS & CRAFTS, INC.
500 UNIVERSITY COURT
BLACKWOOD, NJ 08012
A. C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
In 1999, A. C. Moore Arts & Crafts, Inc. (the "Employer" or the "Company")
established the A. C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan"). The
name of the issuer of the securities held pursuant to the Plan and the address
of its principal executive office is A. C. Moore Arts & Craft, Inc.,
500 University Court, Blackwood, NJ 08012.
Contributions Under the Plan. Employees may elect to contribute up to 20 percent
of their annual compensation, subject to IRS limitations. The Company made a
matching contribution of 25 percent of the first 6 percent of the employee
compensation contributed as an elective deferral subject to a maximum of $1,500
for 2003.
Administration of the Plan. An officer of the Company at its principal executive
office administers the Plan. Certain administrative functions may be delegated
to employees of the Company. Officers and employees do not receive compensation
from the Plan.
Custodian of Investments. The assets of the Plan are held in trust and managed
by the Plan's trustee Frontier Trust Company. BISYS Plan Services provides
record keeping services for the Plan's trustee.
Reports to Participating Employees: Each participant in the Plan receives
quarterly statements of their accounts each plan year.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
administrator has duly caused this annual report to be signed on behalf of the
Plan by the undersigned hereunto duly authorized.
A. C. MOORE ARTS & CRAFTS, INC. 401(K) PLAN
Date: June 28, 2004 By: /s/ LORI LUCENTE-MCKEAGE
-------------------------------
Lori Lucente-McKeage
Administrator
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) and related Prospectus pertaining to A. C. Moore Arts & Crafts, Inc. 401(k)
Plan of our report dated June 4, 2004, with respect to the financial statements
and supplementary schedule of the A. C. Moore Arts & Crafts, Inc. 401(k) Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 2003.
/s/ STOCKTON BATES, LLP
---------------------------
Stockton Bates, LLP
Philadelphia, Pennsylvania
June 4, 2004
CERTIFICATION
The undersigned hereby certifies, for the purposes of Section 1350 of
Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, in her capacity as an administrator of
the A. C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan"), that, to her
knowledge, the Annual Report for the Plan on Form 11-K for the period ended
December 31, 2003, fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that the information contained
in such report fairly presents, in all material respects the net assets
available for benefits and changes in net assets available for benefits of the
Plan. This written statement is being furnished to the Securities and Exchange
Commission as an exhibit to such Form 11-K. A signed original of this statement
has been provided to the Plan and will be retained by the Plan and furnished to
the Securities and Exchange Commission or its staff upon request.
Date: June 28, 2004 By: /s/ Lori Lucente-McKeage
-----------------------------
Lori Lucente-McKeage
VP and Treasurer
A.C. MOORE
ARTS & CRAFTS, INC.
401(K) PLAN
Financial Statements
December 31, 2003
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
DECEMBER 31, 2003
CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits
as of December 31, 2003 and 2002 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2003 3
Notes to Financial Statements 4 - 7
SUPPLEMENTARY INFORMATION:
Schedule of Assets Held for Investment Purposes
as of December 31, 2003 8
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
BLACKWOOD, NEW JERSEY
We have audited the accompanying statements of net assets available for
benefits of the A.C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan") as of
December 31, 2003 and 2002, and the related statement of changes in net assets
available for benefits for the year ended December 31, 2003. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
A.C. Moore Arts & Crafts, Inc. 401(k) Plan as of December 31, 2003 and 2002, and
the changes in net assets available for benefits for the year ended December 31,
2003, in conformity with accounting principles generally accepted in the United
States of America.
Our audit was made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year included on page 8 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
STOCKTON BATES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
PHILADELPHIA, PENNSYLVANIA
JUNE 4, 2004
Page 2
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statement Of Net Assets Available For Benefits
December 31: 2003 2002
============================================================================================================================
ASSETS:
Cash $ 1,695 $ 23,025
------------------------------------------------------------------------------------------------------------------------------
Investments, at fair value:
Corporate stocks - common 2,867,496 2,108,410
Common/collective trusts 1,315,775 699,079
Registered investment companies 4,906,296 2,690,934
Participant loans 281,328 213,203
------------------------------------------------------------------------------------------------------------------------------
Total investments 9,370,895 5,711,626
Receivables:
Employer contributions 4,784 3,983
Participants' contributions 29,306 25,395
------------------------------------------------------------------------------------------------------------------------------
34,090 29,378
------------------------------------------------------------------------------------------------------------------------------
Total assets 9,406,680 5,764,029
LIABILITIES - -
------------------------------------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 9,406,680 $5,764,029
==============================================================================================================================
See Accompanying Notes
Page 3
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statement Of Changes In Net Assets Available For Benefits
Year Ended December 31, 2003:
============================================================================================================================
ADDITIONS:
Additions to net assets attributable to:
Investment income:
Net appreciation in fair value of investments (See Note 4) $ 2,219,294
Interest and dividends 98,299
----------------------------------------------------------------------------------------------------------------------------
2,317,593
Contributions:
Employer 309,316
Participants 1,973,453
----------------------------------------------------------------------------------------------------------------------------
2,282,769
----------------------------------------------------------------------------------------------------------------------------
Total additions 4,600,362
DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants 957,711
----------------------------------------------------------------------------------------------------------------------------
Total deductions 957,711
----------------------------------------------------------------------------------------------------------------------------
Net increase 3,642,651
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,764,029
----------------------------------------------------------------------------------------------------------------------------
End of year $ 9,406,680
============================================================================================================================
See Accompanying Notes
PAGE 4
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
1. DESCRIPTION OF PLAN:
The following description of the A.C. Moore Arts & Crafts, Inc.
401(k) Plan provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's
provisions.
The A.C. Moore Arts & Crafts, Inc. 401(k) Plan (the Plan) was
established in 1999 by A.C. Moore Arts & Crafts, Inc. (the Company) to
provide for retirement income and financial protection in the event of
death or retirement of covered employees and to provide for the financial
protection and compensation of employees in the event of permanent
disability. The Plan is subject to the Employee Retirement Income Security
Act of 1974 (ERISA). Substantially all administrative expenses are paid
directly by the Company.
All employees of the employer and participating affiliates who
are at least 21 years of age and have completed 1/4 year of service are
eligible to participate in this Plan, except non-resident aliens, and
employees who are members of a union who bargained separately for
retirement benefits during negotiations. Employees will become a
participant in the Plan on the entry date coincident with or next following
the date they meet the participation requirements. The entry dates for the
Plan are the first day of each month.
Participants may elect to contribute up to 20 percent of their
annual compensation, subject to IRS limitations. The Company made a
matching contribution of 25 percent of the first 6 percent of the employee
compensation contributed as an elective deferral subject to a maximum of
$1,500 for 2003.
Each participant's account is credited with the participant's and
employer's contribution and related plan earnings, transfer contributions
and rollovers. Allocations are based on participant earnings or account
balances. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's account.
BISYS Plan Services provides record keeping services for the
Plan's Trustee, Frontier Trust Company, FSB. The employees' and employer's
contributions were deposited in a fund held by the Trustee during the year.
Participants may direct the investment of their account balances
among alternative investment funds provided under the Plan.
Participants are immediately vested in their voluntary
contributions and any transfers or rollovers plus actual earnings thereon.
Vesting in the remainder of their accounts is based on years of continuous
service. A participant is 100 percent vested after 3 years of credited
service.
On termination of service, the normal form of payment to a
participant is a lump sum. An optional form of payment is installments
payable in cash or in kind, or part cash and part in kind over a period not
to exceed the participant's expected lifetime, or the joint future lifetime
of the participant and spouse.
PAGE 5
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING:
The accompanying financial statements have been prepared on the
accrual basis of accounting.
VALUATION OF INVESTMENTS:
The Plan's investments at December 31, 2003 consist of shares in
pooled investment funds and common stock of A.C. Moore Arts & Crafts, Inc.
(plan sponsor) held and managed by Frontier Trust Company, FSB. Security
transactions in these funds and common stock are recorded on a trade date
basis. The value of the funds and common stock fluctuate to reflect the
fair market values of the securities held in these funds.
USE OF ESTIMATES:
Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities
and the reported revenues and expenses. Actual results could differ from
those estimates.
FORFEITURES:
Employer contributions for the years ended December 31, 2003 and
2002 were reduced by $26,289 and $8,716, respectively, from forfeited
non-vested accounts. At December 31, 2003 forfeited non-vested accounts
totaled $23,465.
LOANS:
Loans are available to all participants in the Plan on a uniform
and nondiscriminatory basis. Loans must bear a reasonable rate of interest
and be adequately secured. A participant may borrow any amount up to 50% of
their vested account balance, subject to a maximum of $50,000 minus their
highest outstanding loan amount during the prior twelve months. Repayment
of a loan must be made at least quarterly, on an after-tax basis, in level
payments of principal and interest, and repaid within five years, except
for the purchase of a primary residence.
3. TAX STATUS:
The Plan has not yet received a determination letter. However,
the plan's administrator and advisors believe that the plan and trust are
currently designed and are operating in compliance with the applicable
sections of the Internal Revenue Code. Therefore, they believe that the
plan was qualified and the related trust was tax exempt as of the financial
statement date.
PAGE 6
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
4. INVESTMENTS:
Investments that represents 5% or more of fair value of the
Plan's net assets are as follows:
December 31: 2003 2002
---------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. $2,867,496 $2,108,410
ML Retirement Preservation Trust 1,315,775 699,079
ML Bond Fund Intermediate Term Class A 882,591 565,755
Massachusetts Investors Growth Stock Fund 1,025,664 617,291
ML Basic Value Fund Class A 862,080 483,736
State Street Research Aurora Fund 1,283,123 585,830
During 2003, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $2,219,294 as follows:
Registered investment companies $ 902,412
Common stock 1,316,882
-----------------------------------------------------------
$2,219,294
===========================================================
5. RISKS AND UNCERTAINTIES:
The Plan provides for various investment options in any
combination of stocks, bonds, fixed income securities, mutual funds, and
other investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect participant's account balances and the amounts reported in the
statement of net assets available for benefits and the statement of changes
in net assets available for benefits.
6. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company
has the right under the Plan to terminate the Plan subject to the
provisions of ERISA. In the event the Plan is terminated, participants will
become 100 percent vested in their accounts.
PAGE 7
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
A reconciliation of net assets available for benefits as reported
on the financial statements to that reported on the Form 5500 follows:
December 31: 2003 2002
----------------------------------------------------------------------------------------------------
Net assets available for benefits
per the financial statements $9,406,680 $5,764,029
Receivable employer contributions (4,784) (3,983)
Receivable participants' contributions (29,306) (25,395)
----------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS,
PER FORM 5500 $9,372,590 $5,734,651
====================================================================================================
A reconciliation of net increase in net assets available for
benefits as reported on the financial statements to that reported on Form
5500 follows:
Year Ended December 31, 2003:
--------------------------------------------------------------------------------
Net increase in net assets available for
benefits per the financial statements $3,642,651
Difference in employer contributions (801)
Difference in participants' contributions (3,911)
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS,
PER FORM 5500 $3,637,939
================================================================================
The above differences are attributable to the financial
statements being reported on the accrual basis of accounting, while certain
items on Form 5500 are being reported on the cash basis, namely
contributions. In addition, unrealized appreciation (depreciation) and
dividend income are combined for Form 5500 reporting purposes.
8. SUBSEQUENT EVENT:
In 2004, the Plan was amended whereby participants may elect to
contribute up to 100% of their annual compensation, subject to IRS
limitations.
SUPPLEMENTARY INFORMATION
Page 8
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Plan 001 EI# 22-3527763
Attached to Form 5500, Schedule H, Part IV, (i)
Schedule of Assets Held for Investment Purposes At End of Year
December 31, 2003:
===============================================================================================================================
(a) (b) (e)
Par Value/ Market
Identity of Issue Units Value
-------------------------------------------------------------------------------------------------------------------------------
(c) Description of Investment
Common Stock:
A.C. Moore Arts & Crafts, Inc. 1,702,834.0 $ 2,867,496
-------------------------------------------------------------------------------------------------------------------------------
2,867,496
-------------------------------------------------------------------------------------------------------------------------------
Common/Collective Trusts:
ML Retirement Preservation Trust 1,315,775.4 1,315,775
-------------------------------------------------------------------------------------------------------------------------------
Registered Investment Companies:
ML International Equity Fund Class A 28,321.0 240,614
ML Basic Value Fund Class A 28,302.0 862,080
ML Bond Fund Intermediate Term Class A 33,918.9 882,591
Massachusetts Investors Growth Stock Fund 90,606.3 1,025,664
ML S&P 500 Index Fund Class C 385.3 5,255
PIMCO Innovation Fund Class A 10,964.2 186,939
State Street Research Aurora Fund 33,232.9 1,283,123
Evergreen Health Care Fund Class A 10.9 199
ML S&P 500 Index Fund Class I 30,547.0 416,661
Stock Pending Settlement Fund N/A 3,170
-------------------------------------------------------------------------------------------------------------------------------
4,906,296
-------------------------------------------------------------------------------------------------------------------------------
Participant Loans (98 loans at interest ranging from 4.25% to 10.5%):
Loan Fund N/A 281,328
-------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 9,370,895
===============================================================================================================================