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, 2004
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.
130 A. C. MOORE DRIVE
BERLIN, NJ 08009
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., 130 A. C.
Moore Drive, Berlin, NJ 08009.
Contributions Under the Plan. Employees may elect to contribute up to 100
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 2004.
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 27, 2005 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 14, 2005, with respect to the financial statements
and supplementary schedules 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, 2004.
/s/ STOCKTON BATES, LLP
-----------------------------
Stockton Bates, LLP
Philadelphia, Pennsylvania
June 27, 2005
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, 2004, 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 27, 2005 By: /s/ Lori Lucente-McKeage
----------------------------------
Lori Lucente-McKeage
VP and Treasurer
A.C. MOORE
ARTS & CRAFTS, INC.
401(K) PLAN
Financial Statements
December 31, 2004
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
DECEMBER 31, 2004
CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of December 31, 2004 and 2003 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2004 3
Notes to Financial Statements 4 - 7
SUPPLEMENTARY INFORMATION:
Schedule of Assets Held for Investment Purposes
as of December 31, 2004 8
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
BERLIN, 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, 2004 and 2003, and the related statement of changes
in net assets available for benefits for the year ended December 31, 2004. 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, 2004 and
2003, and the changes in net assets available for benefits for the year ended
December 31, 2004, in conformity with accounting principles generally accepted
in the United States of America.
Our audits were 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. This supplemental
information is the responsibility of the Plan's management. 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 14, 2005
Page 2
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statements Of Net Assets Available For Benefits
December 31: 2004 2003
--------------------------------------------------------------------------------
ASSETS:
Cash $ 8,704 $ 1,695
--------------------------------------------------------------------------------
Investments, at fair value:
Corporate stocks - common 4,952,922 2,867,496
Common/collective trusts 1,223,807 1,315,775
Registered investment companies 5,932,478 4,906,296
Participant loans 467,726 281,328
--------------------------------------------------------------------------------
TOTAL INVESTMENTS 12,576,933 9,370,895
Receivables:
Employer contributions 10,044 4,784
Participants' contributions 67,080 29,306
--------------------------------------------------------------------------------
77,124 34,090
--------------------------------------------------------------------------------
TOTAL ASSETS 12,662,761 9,406,680
LIABILITIES -- --
--------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $12,662,761 $ 9,406,680
================================================================================
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, 2004:
------------------------------------------------------------------------------------------
ADDITIONS:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments (See Note 4) $ 2,025,077
Interest and dividends 56,777
------------------------------------------------------------------------------------------
2,081,854
Contributions:
Employer 330,218
Participants 2,234,232
------------------------------------------------------------------------------------------
2,564,450
------------------------------------------------------------------------------------------
TOTAL ADDITIONS 4,646,304
DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants 1,390,223
------------------------------------------------------------------------------------------
TOTAL DEDUCTIONS 1,390,223
------------------------------------------------------------------------------------------
NET INCREASE 3,256,081
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 9,406,680
------------------------------------------------------------------------------------------
End of year $12,662,761
==========================================================================================
See Accompanying Notes
PAGE 4
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
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 participants 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 100 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 2004.
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, 2004
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 are stated at fair value and
consist of shares in mutual funds and common stock of A.C. Moore Arts &
Crafts, Inc. (plan sponsor). The investments are 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 mutual
funds 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,
2004 and 2003 were reduced by $14,044 and $26,289, respectively, from
forfeited non-vested accounts. At December 31, 2004, forfeited
non-vested accounts totaled $16,203.
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 Internal Revenue Service has determined and informed
the Company by a letter dated June 14, 2005, that the Plan and related
trust are designed in accordance with applicable sections of the
Internal Revenue Code.
PAGE 6
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
4. INVESTMENTS:
Investments that represents 5% or more of fair value of
the Plan's net assets are as
follows:
December 31: 2004 2003
--------------------------------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. $4,952,922 $2,867,496
ML Retirement Preservation Trust 1,223,807 1,315,775
ML Bond Fund Intermediate Term Class A 929,290 882,591
Massachusetts Investors Growth Stock Fund 1,119,930 1,025,664
ML Basic Value Fund Class A 1,068,010 862,080
Black Rock (formerly State Street Research)
Aurora Portfolio A 1,525,224 1,283,123
During 2004, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated in value by $2,025,077 as follows:
Registered investment companies (Mutual Funds) $ 517,840
Common stock 1,507,237
-------------------------------------------------------------------------
$2,025,077
=========================================================================
5. RISKS AND UNCERTAINTIES:
The Plan provides for investment options in any
combination of stocks and mutual funds. 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, 2004
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: 2004 2003
------------------------------------------------------------------------------------
Net assets available for benefits
per the financial statements $12,662,761 $9,406,680
Receivable - employer contributions ( 10,044) ( 4,784)
Receivable - participants' contributions ( 67,080) ( 29,306)
------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS,
PER FORM 5500 $12,585,637 $9,372,590
====================================================================================
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, 2004:
----------------------------------------------------------------------------
Net increase in net assets available for
benefits per the financial statements $3,256,081
Difference in employer contributions ( 5,260)
Difference in participants' contributions ( 37,774)
----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS,
PER FORM 5500 $3,213,047
============================================================================
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.
SUPPLEMENTARY INFORMATION
Page 8
A.C. MOORE ARTS & CRAFTS, INC.
401(K) PLAN
PLAN 001 EI# 22-3527763
ATTACHMENT TO FORM 5500, SCHEDULE H, PART IV, (I)
Schedule of Assets Held for Investment Purposes At End of Year
December 31, 2004:
--------------------------------------------------------------------------------------------------------------------------------
(A) (B) (E)
PAR VALUE/ MARKET
IDENTITY OF ISSUE UNITS VALUE
--------------------------------------------------------------------------------------------------------------------------------
(C) DESCRIPTION OF INVESTMENT
COMMON STOCK:
* A.C. Moore Arts & Crafts, Inc. 171,916.7 $ 4,952,922
--------------------------------------------------------------------------------------------------------------------------------
4,952,922
--------------------------------------------------------------------------------------------------------------------------------
COMMON/COLLECTIVE TRUSTS:
ML Retirement Preservation Trust 1,223,803.2 1,223,807
--------------------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES:
ML International Equity Value Fund Class A 11,389.0 303,403
ML Basic Value Fund Class A 33,691.2 1,068,010
ML Bond Fund Intermediate Term Class A 77,570.0 929,290
Massachusetts Investors Growth Stock Fund 90,609.2 1,119,930
ML S&P 500 Index Fund Class I 37,388.1 554,890
ALLIANZ Innovation Fund Class A 12,184.8 195,149
Black Rock Aurora Portfolio A 37,678.7 1,525,224
Evergreen Health Care Fund Class A 6,429.3 119,136
Eaton Vance Utilities Fund Class A 9,434.1 91,469
The Oakmark Equity and Income Fund 1,091.3 25,570
Stock Pending Settlement Fund N/A 407
--------------------------------------------------------------------------------------------------------------------------------
5,932,478
--------------------------------------------------------------------------------------------------------------------------------
PARTICIPANT LOANS (94 LOANS AT INTEREST RANGING FROM 4.00% TO 10.5%, MATURING THROUGH 2009):
Loan Fund N/A 467,726
--------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 12,576,933
================================================================================================================================
* Represents a party-in-interest to the Plan.