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, 2002
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, not to exceed $11,000 for 2002. 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 2002.
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, 2003 By: LORI LUCENTE-MCKEAGE
Lori Lucente-McKeage
Administrator
A.C. MOORE
ARTS & CRAFTS, INC.
401(k) PLAN
Financial Statements
December 31, 2002
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
December 31, 2002
CONTENTS
Page
----
Independent Auditors' Report 1
Financial Statements:
Statement of Net Assets Available for Benefits
as of December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2002 3
Notes to Financial Statements 4 - 7
Supplementary Information:
Schedule of Assets Held for Investment Purposes
as of December 31, 2002 8
INDEPENDENT AUDITORS' REPORT
To the Trustees
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Blackwood, New Jersey
We were engaged to audit the financial statements and supplemental
schedule of the A.C. Moore Arts & Crafts, Inc. 401(k) Plan (the "Plan") as of
December 31, 2002 and 2001, and for the years then ended as listed in the
accompanying table of contents. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedule 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 and supplemental schedule 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 and supplemental schedule
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, 2002 and 2001, and the changes in net assets available for benefits
for the year ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.
Stockton Bates, LLP
Certified Public Accountants
Philadelphia, Pennsylvania
May 21, 2003
Page 2
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Statement Of Net Assets Available For Benefits
December 31: 2002 2001
------------------------------------------------------------------------------
ASSETS:
Cash $ 23,025 $ 1,483
------------------------------------------------------------------------------
Investments, at fair value:
Corporate stocks - common 2,108,410 2,043,514
Common/collective trusts 699,079 508,714
Registered investment companies 2,690,934 2,443,226
Participant loans 213,203 94,427
------------------------------------------------------------------------------
Total investments 5,711,626 5,089,881
Receivables:
Employer contributions 3,983 14,935
Employees' contributions 25,395 84,801
------------------------------------------------------------------------------
29,378 99,736
------------------------------------------------------------------------------
Total assets 5,764,029 5,191,100
LIABILITIES - -
------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $5,764,029 $5,191,100
==============================================================================
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, 2002:
--------------------------------------------------------------------------------
ADDITIONS:
Additions to net assets attributable to:
Investment income:
Net depreciation in fair value of investments (See Note 4) ($1,067,441)
Interest and dividends 88,765
-------------------------------------------------------------------------------
(978,676)
Contributions:
Employer 273,192
Participants 1,802,611
--------------------------------------------------------------------------------
2,075,803
-------------------------------------------------------------------------------
Total additions 1,097,127
DEDUCTIONS:
Deductions from net assets attributed to:
Benefits paid to participants 523,416
Administrative expenses 782
--------------------------------------------------------------------------------
Total deductions 524,198
-------------------------------------------------------------------------------
Net increase 572,929
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 5,191,100
-------------------------------------------------------------------------------
End of year $5,764,029
===============================================================================
See Accompanying Notes
Page 4
A.C. Moore Arts & Crafts, Inc.
401(k) Plan
Notes To Financial Statements
December 31, 2002
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.
Employees may elect to contribute up to 20 percent of
their annual compensation, not to exceed $11,000 for 2002. 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 2002.
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. During 2001, the Plan changed trustees from Merrill
Lynch Trust Service to 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, 2002
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, 2002 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,
2002 and 2001 were reduced by $8,716 and $15,451, respectively, from
forfeited nonvested accounts. At December 31, 2002 forfeited nonvested
accounts totaled $26,442.
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
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, 2002
4. INVESTMENTS:
Investments that represents 5% or more of fair value of
the Plan's net assets are as follows:
December 31: 2002 2001
-------------------------------------------------------------------------------------------------
A.C. Moore Arts & Crafts, Inc. $2,108,410 $2,043,514
ML Retirement Preservation Trust 682,371 508,714
GM ML Bond Fund Intermediate Term Class A 565,755
Massachusetts Investors Growth Stock Fund 617,291 640,169
ML Basic Value Fund Class A 483,736
ML Basic Value Fund Class D 473,641
State Street Research Aurora Fund 585,830 525,139
ML Core Bond Fund Inter Term Class D 375,829
ML S&P 500 Index Fund Class A 216,488
During 2002, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
depreciated in value by ($1,067,441) as follows:
Registered investment companies ($631,952)
Common stock (435,489)
-----------------------------------------------------------------------------
($1,067,441)
=============================================================================
5. 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, 2002
6. 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: 2002 2001
---------------------------------------------------------------------------------------------------
Net assets available for benefits
per the financial statements $5,764,029 $5,191,100
Receivable employer contributions (3,983) (14,935)
Receivable employees' contributions (25,395) (84,801)
---------------------------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS,
PER FORM 5500 $5,734,651 $5,091,364
===================================================================================================
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, 2002:
---------------------------------------------------------------------------------------------------
Net increase in net assets available for
benefits per the financial statements $ 572,929
Difference in employer contributions 10,952
Difference in employees' contributions 59,406
--------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS,
PER FORM 5500 $ 643,287
================================================================================
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
Attached to Form 5500, Schedule H, Part IV, (i)
Schedule of Assets Held for Investment Purposes At End of Year
December 31, 2002:
-------------------------------------------------------------------------------------------------------------------
(a) (b) (e)
Par Value/ Market
Identity of Issue Units Value
-------------------------------------------------------------------------------------------------------------------
(c) Description of Investment
Common Stock:
A.C. Moore Arts & Crafts, Inc. 165,885.9 $2,108,410
-------------------------------------------------------------------------------------------------------------------
2,108,410
-------------------------------------------------------------------------------------------------------------------
Common/Collective Trusts:
ML Retirement Preservation Trust 682,370.1 682,371
GM ML Retirement Preservation Trust 16,708.1 16,708
-------------------------------------------------------------------------------------------------------------------
699,079
-------------------------------------------------------------------------------------------------------------------
Registered Investment Companies:
ML International Equity Fund Class A 21,456.0 143,326
GM ML Basic Value Fund Class A 341.5 7,951
GM ML Bond Fund Intermediate Term Class A 47,823.6 565,755
GM ML International Equity Fund Class A 389.6 2,603
Massachusetts Investors Growth Stock Fund 66,878.8 617,291
ML Basic Value Fund Class A 20,779.0 483,736
ML S&P 500 Index Fund Class C 20,374.0 219,225
PIMCO Innovation Fund Class A 6,055.4 65,217
State Street Research Aurora Fund 22,707.1 585,830
-------------------------------------------------------------------------------------------------------------------
2,690,934
-------------------------------------------------------------------------------------------------------------------
Participant Loans (71 loans at interest ranging from 4.75% to 10.5%):
Loan Fund N/A 213,203
-------------------------------------------------------------------------------------------------------------------
213,203
-------------------------------------------------------------------------------------------------------------------
TOTAL $5,711,626
===================================================================================================================