A.C. Moore Arts & Crafts Inc. (ACMR, Financial) filed Quarterly Report for the period ended 2011-04-02.
A.c. Moore Arts & Crafts Inc. has a market cap of $66.5 million; its shares were traded at around $2.65 with and P/S ratio of 0.1.
Selling, general and administrative expenses were $50.7 million in the first quarter of fiscal 2011, a decrease of $1.6 million compared to the $52.3 million in the first quarter of fiscal 2010. This decrease was primarily attributable to a decrease in advertising expenses and severance benefits related to the retirement of the Companys Chief Executive Officer, partially offset by an increase in store payroll. As a percent of sales, selling, general and administrative expenses decreased 0.3 percent to 49.3 percent from 49.6 percent.
Store Pre-Opening and Closing Expenses. We expense store pre-opening costs as they are incurred, which includes lease costs prior to a store opening. Store closing costs include severance, inventory liquidation costs, asset related charges, lease termination payments and the net present value of future rent obligations less estimated sub-lease income. Store pre-opening expenses of $0.3 million include costs related to the two stores that opened in the first quarter of fiscal 2011. Store closing costs of $0.3 million include costs related to the one store closed in the first quarter of fiscal 2011 and ongoing operating costs for stores previously closed. In the first quarter of fiscal 2010, we incurred store pre-opening expenses of $0.1 million for the one store that opened in that quarter. There were no stores closed during the first quarter of fiscal 2010.
The WFRF loan agreement, as amended, is an asset-based senior secured revolving credit facility in an aggregate principal amount of up to $60.0 million, with a $15.0 million sub-limit for letters of credit. Prior to the WFRF amendment, interest was calculated at either adjusted LIBOR or WFRFs base rate plus a margin of between 1.75 and 2.50 percent per annum, depending upon the level of excess availability as defined in the loan agreement. In addition, the Company paid an annual fee of between 0.25 and 0.50 percent per annum on the amount of unused availability, also dependent on the level of excess availability. As a result of the amendment, interest is calculated at either adjusted LIBOR or WFRFs base rate plus a margin of between 2.25 and 2.75 percent per annum, depending upon the level of excess availability, and WFRFs base rate has a floor equal to the adjusted LIBOR rate plus 1.00 percent per annum. In addition, the Company will pay an annual fee between 0.375 and 0.50 percent per annum on the amount of unused availability, also dependent on the level of excess availability. At closing of the WFRF amendment, the Company paid or incurred deferred financing costs of approximately $0.4 million that will be amortized over the term of the facility.
At April 2, 2011 and January 1, 2011, our working capital was $67.1 million and $72.8 million, respectively. Cash used in operations was $11.3 million for the three months ended April 2, 2011. This was principally the result of a $9.2 million increase in the net investment in inventory (change in inventory net of change in accounts payable). For the three months ended April 3, 2010, cash used in operations was $11.6 million which was primarily the result of a $7.5 million increase in the net investment in inventory.
Net cash used in investing activities during the three months ended April 2, 2011 was $2.0 million, all of which related to capital expenditures. In fiscal 2011, we expect to spend approximately $8.0 to $9.0 million on capital expenditures, which includes approximately $3.5 million for new and relocated stores, $2.6 million for store maintenance capital and the remainder used for information technology and distribution center equipment. For the three months ended April 2, 2010, we invested $2.4 million, all of which related to capital expenditures.
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A.c. Moore Arts & Crafts Inc. has a market cap of $66.5 million; its shares were traded at around $2.65 with and P/S ratio of 0.1.
Highlight of Business Operations:
Net Sales. Net sales decreased $2.6 million, or 2.5 percent, to $102.7 million in the three months ended April 2, 2011 from $105.4 million during the three months ended April 3, 2010. This decrease is comprised of (i) a comparable store sales decrease of $2.6 million, or 2.6 percent, (ii) a net increase of $1.7 million from new stores not included in the comparable store base and e-commerce sales, and (iii) a decrease in sales of $1.7 million from stores closed since April 3, 2010. The decline in comparable store sales was primarily due to weak sales in seasonal and home decor. Seasonal sales were negatively impacted due to the Easter holiday occurring later in fiscal 2011 than in fiscal 2010. Categories that had an increase in comparable store sales for the quarter include celebrations, checkout/ impulse and everyday floral. Stores are added to the comparable store base at the beginning of the fourteenth full month of operation. Comparable stores that are relocated or remodeled remain in the comparable store base. Stores that close are removed from the comparable store base as of the beginning of the month of closure.Selling, general and administrative expenses were $50.7 million in the first quarter of fiscal 2011, a decrease of $1.6 million compared to the $52.3 million in the first quarter of fiscal 2010. This decrease was primarily attributable to a decrease in advertising expenses and severance benefits related to the retirement of the Companys Chief Executive Officer, partially offset by an increase in store payroll. As a percent of sales, selling, general and administrative expenses decreased 0.3 percent to 49.3 percent from 49.6 percent.
Store Pre-Opening and Closing Expenses. We expense store pre-opening costs as they are incurred, which includes lease costs prior to a store opening. Store closing costs include severance, inventory liquidation costs, asset related charges, lease termination payments and the net present value of future rent obligations less estimated sub-lease income. Store pre-opening expenses of $0.3 million include costs related to the two stores that opened in the first quarter of fiscal 2011. Store closing costs of $0.3 million include costs related to the one store closed in the first quarter of fiscal 2011 and ongoing operating costs for stores previously closed. In the first quarter of fiscal 2010, we incurred store pre-opening expenses of $0.1 million for the one store that opened in that quarter. There were no stores closed during the first quarter of fiscal 2010.
The WFRF loan agreement, as amended, is an asset-based senior secured revolving credit facility in an aggregate principal amount of up to $60.0 million, with a $15.0 million sub-limit for letters of credit. Prior to the WFRF amendment, interest was calculated at either adjusted LIBOR or WFRFs base rate plus a margin of between 1.75 and 2.50 percent per annum, depending upon the level of excess availability as defined in the loan agreement. In addition, the Company paid an annual fee of between 0.25 and 0.50 percent per annum on the amount of unused availability, also dependent on the level of excess availability. As a result of the amendment, interest is calculated at either adjusted LIBOR or WFRFs base rate plus a margin of between 2.25 and 2.75 percent per annum, depending upon the level of excess availability, and WFRFs base rate has a floor equal to the adjusted LIBOR rate plus 1.00 percent per annum. In addition, the Company will pay an annual fee between 0.375 and 0.50 percent per annum on the amount of unused availability, also dependent on the level of excess availability. At closing of the WFRF amendment, the Company paid or incurred deferred financing costs of approximately $0.4 million that will be amortized over the term of the facility.
At April 2, 2011 and January 1, 2011, our working capital was $67.1 million and $72.8 million, respectively. Cash used in operations was $11.3 million for the three months ended April 2, 2011. This was principally the result of a $9.2 million increase in the net investment in inventory (change in inventory net of change in accounts payable). For the three months ended April 3, 2010, cash used in operations was $11.6 million which was primarily the result of a $7.5 million increase in the net investment in inventory.
Net cash used in investing activities during the three months ended April 2, 2011 was $2.0 million, all of which related to capital expenditures. In fiscal 2011, we expect to spend approximately $8.0 to $9.0 million on capital expenditures, which includes approximately $3.5 million for new and relocated stores, $2.6 million for store maintenance capital and the remainder used for information technology and distribution center equipment. For the three months ended April 2, 2010, we invested $2.4 million, all of which related to capital expenditures.
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