e424b3
PROSPECTUS
A.C. MOORE ARTS & CRAFTS, INC.
4,127,368 Shares of Common Stock
This prospectus covers the offer and sale of up to 4,127,368 shares of common stock, no par
value per share of A.C. Moore Arts & Crafts, Inc., referred to as the Common Stock, by Glenhill
Special Opportunities Master Fund LLC, or the Selling Security Holder. Some or all of the
Common Stock may be sold from time to time in various ways by the Selling Security Holder, but the
Selling Security Holder is not required to sell any or all of these shares. The price to the
public for the shares and the proceeds to the Selling Security Holder at any time will depend on
the terms of such sale.
We will not receive any of the proceeds from the sale of the Common Stock by the Selling
Security Holder. We have agreed to pay for the expenses of this offering. The Selling Security
Holder will bear all broker or similar commissions, if any, attributable to the sales of shares.
Our Common Stock is traded on the NASDAQ Global Select Market under the symbol ACMR. On
July 31, 2009, the last reported sale price of our Common Stock on the NASDAQ Global Select Market
was $3.61.
Investing in our securities involves risks. See Risk Factors beginning on page 4 of this
prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 6, 2009.
A.C. Moore Arts & Crafts, Inc.
130 A.C. Moore Drive
Berlin, New Jersey 08009
(856) 768-4930
Table of Contents
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i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the SEC utilizing a
shelf registration process, or the Registration Statement. Under this shelf registration
process, the Selling Security Holder may from time to time sell the shares of Common Stock
described in this prospectus in one or more offerings.
You should rely only on the information contained or incorporated by reference in this
prospectus. We have not, and any underwriter, dealer, agent or other person has not, authorized any
person to provide you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. You should assume that the information
appearing in this prospectus is accurate as of the date on the front cover. Our business,
financial condition, results of operations and prospects may have changed since that date.
CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS
As used herein, unless the context otherwise requires, all references to A.C. Moore, the
Company, we, our, us and similar terms refer to A.C. Moore Arts & Crafts, Inc. together with
its subsidiaries.
Certain oral statements made by our management from time to time and certain statements
contained herein or in other reports filed by us with the Securities and Exchange Commission, or
SEC, or incorporated by reference herein or therein are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and
Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect
to our results of operations and our business. All such statements, other than statements of
historical facts, including those regarding market trends, our financial position and results of
operations, business strategy, projected costs, and plans and objectives of management for future
operations, are forward-looking statements. In general, such statements are identified by the use
of forward-looking words or phrases including, but not limited to, intended, will, should,
may, believes, expects, expected, anticipates and anticipated or the negative thereof
or variations thereon or similar terminology. These forward-looking statements are based on our
current expectations. Although we believe that the expectations reflected in forward-looking
statements are reasonable, there can be no assurance that such expectations will prove to be
correct. These forward-looking statements represent our current judgment. We disclaim any intent or
obligation to update our forward-looking statements. Because forward-looking statements involve
risks and uncertainties, our actual results could differ materially. Important factors that could
cause actual results to differ materially from our expectations, or Cautionary Statements,
include those that are discussed in Risk Factors, below, as well as Part I Item 1. Business,
" Item 1A. Risk Factors and Part II Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations in our Annual Report of Form 10-K for the year ended
January 3, 2009, and Part I Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations in our Quarterly Report on Form 10-Q for the quarter ended April 4,
2009. All subsequent written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.
1
SUMMARY
This summary provides a brief overview of the key aspects of this offering. Because it is
only a summary, it does not contain all of the detailed information contained elsewhere in this
prospectus or in the documents incorporated by reference into this prospectus or included as
exhibits to the Registration Statement. Accordingly, you are urged to carefully review this
prospectus (including all documents incorporated by reference into this prospectus) in its
entirety.
Our Company
We are a specialty retailer of arts, crafts and floral merchandise for a wide range of
customers. Our first store opened in Moorestown, New Jersey in 1985. As of April 4, 2009, we
operated 132 stores in the Eastern United States from Maine to Florida. Our stores typically range
from 20,000 to 25,000 square feet. In fiscal 2008, for stores open for the full calendar year, our
average net sales per square foot was $177 and our average net sales per store was $4.0 million. We
also serve customers nationally through our e-commerce site, www.acmoore.com. This URL is
intended to be an inactive textual reference only. Information on our website is not a part of
this prospectus.
Our mission is to be the first choice of our customers for product selection, value and
service that inspires and fulfills unlimited creative possibilities. We believe we provide our
customers with the tools and ideas for their creative endeavors through a solution-oriented arts
and crafts shopping experience that is differentiated by our broad merchandise assortment, exciting
stores, knowledgeable sales associates and competitive prices. We strive to exceed customer
expectations and encourage repeat business.
Our assortment of merchandise consists of more than 60,000 stock-keeping units, or SKUs,
with approximately 40,000 SKUs offered at each store at any one time. As of April 4, 2009, we
offered custom framing in 121 stores. In-store events and programs for children and adults provide
hands-on arts and crafts experience and encourage the creativity of our customers.
Our executive offices are located at 130 A.C. Moore Drive, Berlin, New Jersey 08009, and our
telephone number at that address is (856) 768-4930.
The Offering
This prospectus covers the offer and sale by the Selling Security Holder of up to 4,127,368
shares of Common Stock, referred to as the Offering. 4,000,000 shares of Common Stock were sold
by us to the Selling Security Holder on May 27, 2009 in a private placement that was exempt from
the registration requirements of federal and state securities laws, referred to as the
Transaction. As part of the Transaction, we also entered into a Registration Rights Agreement
with the Selling Security Holder, pursuant to which we may, upon the occurrence of certain
specified conditions, become obligated to issue up to an additional 127,368 shares of Common Stock
to the Selling Security Holder. See The Transaction below. We are also registering for resale
any additional shares of Common Stock which may become issuable to the Selling Security Holder as
an anti-dilution adjustment by reason of any stock split, dividend or other distribution,
recapitalization or similar event.
Risk Factors
For a discussion of some of the risks you should consider before purchasing shares of our
Common Stock, see Risk Factors on page 4 of this prospectus.
The Transaction
On May 27, 2009, in connection with the Transaction, we entered into a Securities Purchase
Agreement and a Registration Rights Agreement with the Selling Security Holder.
2
The Securities Purchase Agreement provided for the purchase by the Selling Security Holder of
4,000,000 shares of our Common Stock priced at $2.50 per share, referred to as the Purchased
Shares. The Securities Purchase Agreement contains terms, conditions, representations and
warranties customary for this type of transaction. For two years from the closing date, the
Selling Security Holder has the right to participate in any issuance by us up to an amount equal to
the Selling Security Holders pro rata percentage holdings of our total outstanding Common Stock on
the same terms, conditions and prices provided for in any such issuance. We also agreed that, until
the Registration Statement is declared effective (as described below), we will not issue or enter
into any agreement to issue equity, other than pursuant to employee stock incentive programs. We
issued the Purchased Shares upon reliance on an exemption from registration pursuant to Section
4(2) of the Securities Act.
Under the Registration Rights Agreement, we agreed to file the Registration Statement with the
SEC within 30 days from the closing date covering the resale of our Common Stock sold to the
Selling Security Holder. If the Registration Statement is not declared effective by the SEC within
90 calendar days after filing or ceases to be effective for more than 60 consecutive calendar days
or an aggregate of 90 calendar days in any 12-month period, then after each month of non-compliance
we are required to issue to the Selling Security Holder the number of shares of our Common Stock
equal to 2.0% of the Purchased Shares, referred to as the Additional Shares, up to 6.0%. However,
the aggregate Additional Shares together with the Purchased Shares may not exceed 19.99% of our
issued and outstanding shares of Common Stock immediately prior to the closing.
This prospectus covers the offer and sale by the Selling Security Holder of both the Purchased
Shares and the Additional Shares, as well as any shares of Common Stock which may become issuable
by reason of any stock split, dividend or other distribution, recapitalization or similar event
which results in an increase in the number of outstanding shares of Common Stock. The Selling
Security Holder may sell all, some or none of its shares in this Offering. See Plan of
Distribution.
3
RISK FACTORS
Your investment in our Common Stock involves risks. You should carefully consider the risks
described below as well as other information contained or incorporated by reference in this
prospectus, including our financial statements and the notes thereto, before making an investment
decision. The risks and uncertainties described below and incorporated by reference into this
prospectus are not the only risks we face. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also impair our business operations. If any of
these risks actually occur, our business, financial condition and results of operations could be
materially affected. In that case, the value of our Common Stock could decline substantially.
Risks Related to our Common Stock
The price and volume of our Common Stock over the last eighteen months has been volatile and may
continue to be so. This volatility may mean that, at times, the holders of our Common Stock may be
unable to resell their shares at or above the price at which they acquired them.
Our Common Stock has been subject to significant price and volume volatility, as stock markets
in general have experienced significant price and volume volatility over the last eighteen months
and as we have had operating losses during that period. The market price and volume of our Common
Stock may continue to be subject to significant fluctuations due not only to general stock market
conditions but also to any change in sentiment in the market regarding our operations or business
prospects.
The following factors could affect the market price of our Common Stock:
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worldwide economic conditions; |
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changes in our business, operations or prospects; |
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continued operating losses: |
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loss or bankruptcy of any of our distribution partners or suppliers; |
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departure of key personnel; |
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variations in our quarterly operating results; |
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announcements by our competitors of significant contracts, new products or product
enhancements, acquisitions, distribution partnerships, joint ventures or capital
commitments; |
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actions by The NASDAQ Stock Market, or NASDAQ, if we failed to satisfy NASDAQ
listing rules; |
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sales of Common Stock or other securities by us in the future; and |
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fluctuations in stock market prices and volumes. |
In the past, securities class action litigation often has been initiated against a company
following a period of volatility in the market price of the companys securities. If class action
litigation is initiated against us, we will incur substantial costs and our managements attention
will be diverted from our operations. All of these factors could cause the market price of our
stock to decline, and investors may lose some or all of the value of their investment.
4
Our stock could be delisted if we fail to satisfy the NASDAQ rules relating to minimum share price.
Our Common Stock is traded on NASDAQ. Under NASDAQ rules, our stock price must remain at or
above $1.00 per share for continued listing. If we are unable to maintain a minimum bid price of
at least $1.00 per share for a period of 30 consecutive business days, our Common Stock could be
subject to delisting. On July 31, 2009 our Common Stock closed at a price of $3.61 per share.
However, given the volatility in the price of our Common Stock, there is no guarantee that our
Common Stock will continue to comply with the NASDAQ requirements. Delisting of our Common Stock
could negatively impact us by reducing the liquidity and market price of our Common Stock, and
reducing the number of investors willing to hold or acquire our Common Stock, which could
negatively impact our ability to raise equity financing. In addition, delisting could also result
in the loss of confidence of our suppliers and current or prospective employees.
There may be future sales or other dilution of our equity, which may adversely affect the market
price of our Common Stock.
Except as described under Summary The Transaction, we are not restricted from issuing
additional Common Stock, including securities that are convertible into or exchangeable for, or
that represent the right to receive, Common Stock. Any issuance of additional shares of our Common
Stock will dilute the ownership of our existing shareholders. Additionally, if our existing
shareholders sell substantial amounts of our Common Stock in the public market, the market price of
our Common Stock could decrease significantly. The perception in the public market that our
shareholders might sell shares of Common Stock could also depress the market price of our Common
Stock.
Sales of a substantial number of shares of our Common Stock or other equity-related securities
could depress the market price of our Common Stock. The 4,127,368 shares being registered hereby,
other than the 127,368 shares which have not been, and may not be, issued to the Selling Security
Holder, will be eligible for resale in the public market as soon as the Registration Statement is
declared effective. The market price of shares of our Common Stock may decrease significantly when
the Selling Security Holder is able to sell shares of our Common Stock into the market, and again
if the remaining shares are issued to the Selling Security Holder. A decline in the price of
shares of our Common Stock could impede our ability to raise capital through the issuance of
additional shares of our Common Stock or other equity securities, and may cause you to lose part or
all of your investment in our shares of Common Stock.
We have not paid dividends on our Common Stock in the past, and we do not anticipate doing so in
the foreseeable future.
Since becoming a public company we have never declared or paid any cash dividends on our
Common Stock. We do not currently anticipate paying cash dividends on our Common Stock in the
foreseeable future, and intend to retain our future earnings, if any, to finance the expansion of
our business. Any such future dividend would be declared and paid at the discretion of our Board of
Directors and would depend on our financial condition, results of operations, capital requirements,
contractual obligations, the terms of our financing agreements at the time such a dividend is
considered and other relevant factors. If we do not declare or pay any cash dividends on our
Common Stock, you will benefit from your investment in our Common Stock only if it appreciates in
value. There is no guarantee that our Common Stock will appreciate in value or even maintain the
price at which you purchase your shares.
The issuance of any series of preferred stock could adversely affect holders of our Common Stock.
Our Board of Directors is authorized to issue classes or series of our preferred stock without
any action on the part of shareholders. Our Board of Directors also has the power, without
shareholder approval, to set the terms of any such classes or series of preferred stock that may be
issued, including voting rights, dividend rights, and preferences over our Common Stock with
respect to dividends upon our dissolution, winding up and liquidation and other terms. If we issue
preferred stock in the future that has a preference over our Common Stock with respect to any of
the foregoing, the rights of holders of our Common Stock or the market price of our Common Stock
could be adversely affected.
5
As of April 4, 2009 we had $25.4 million indebtedness outstanding under our credit facility, which
includes $6.4 million in stand-by letters of credit. Since our Common Stock is equity, any holder
of our Common Stock has subordinate rights to the holders of our existing and future indebtedness
and a greater risk of loss of the equity investment in us as compared to the equity investment in
companies comparable to us with less outstanding indebtedness.
Shares of our Common Stock are equity interests in us and do not constitute indebtedness. As
such, shares of our Common Stock will rank junior to all of our indebtedness and to other
non-equity claims against us and our assets available to satisfy claims against us, including in
our liquidation. Our right to participate in a distribution of assets upon any of our
subsidiaries liquidation or reorganization is subject to the prior claims of that subsidiarys
creditors, including holders of any preferred stock. As of April 4, 2009 we had $25.4 million
indebtedness outstanding under our credit facility, which includes $6.4 million in stand-by letters
of credit. Since our Common Stock is equity, any holder of our Common Stock has subordinate rights
to the holders of our existing and future indebtedness and a greater risk of loss of the equity
investment in us as compared to the equity investment in companies comparable to us with less
outstanding indebtedness.
Our corporate documents and Pennsylvania law will make a takeover of our company more difficult,
which may limit the market price of our Common Stock.
Our amended articles of incorporation and amended and restated bylaws and the Pennsylvania
Business Corporation Law of 1988, as amended, contain provisions that might enable our management
to resist a takeover of our company. These provisions might discourage, delay or prevent a change
in the control of our company or a change in our management. These provisions could also
discourage proxy contests and make it more difficult for you and other shareholders to elect
directors and take other corporate actions. For example, our amended articles of incorporation and
amended and restated bylaws provide for a classified Board of Directors. With our classified Board
of Directors, at least two annual meetings of shareholders, instead of one, will generally be
required to effect a change in the majority of the board. As a result, a provision relating to a
classified board may discourage proxy contests for the election of directors or purchases of a
substantial block of our Common Stock because its provisions could operate to prevent obtaining
control of the board in a relatively short period of time. Our amended articles of incorporation
also provide that our directors may be removed only for cause and upon the vote of not less than
80% of the shares of Common Stock represented at a shareholders meeting, making it more difficult
to effect a change of control in our Board of Directors. In addition, our amended and restated
bylaws may not be amended by shareholders except by a similar 80% vote. Our Board of Directors
also has the authority to fix the rights and preferences of, and to issue shares of, our preferred
stock, which may have the effect of delaying or preventing a change in control of our company
without action by our shareholders. The existence of these provisions could limit the price that
investors might be willing to pay in the future for shares of our Common Stock. See Description
of Common Stock Anti-Takeover Provisions.
Risks Related to Our Business
The current recession could have a material adverse effect on our business, revenue and
profitability.
The current recession could have a significant impact on our business. As a retailer that is
dependent upon consumer discretionary spending, we are facing an extremely challenging fiscal 2009.
Our customers may allocate less money for discretionary purchases as a result of job losses,
foreclosures, bankruptcies, reduced availability of credit and an overall decline in consumer
confidence. Any resulting decreases in customer traffic or average value per transaction negatively
impact our financial performance as reduced revenues result in sales de-leveraging which creates
additional downward pressure on margin. Further, many of the effects and consequences of the
recession are currently unknown. Any or all of these could have a material adverse effect on our
business, financial condition and results of operations, including but not limited to, our ability
to raise additional capital or draw down on our credit facility, if needed.
In addition, the impact of this crisis on our major suppliers cannot be predicted. The
inability of key suppliers to access liquidity, or the insolvency of key suppliers, could lead to
their failure to deliver merchandise. If we are unable to purchase products when needed, or if we
experience further deterioration in sales traffic in our stores over an extended period of time,
our sales and cash flows could be negatively impacted.
6
Future losses may adversely affect our financial condition and cash flows.
We had a net loss of $4.3 million for the fiscal quarter ended April 4, 2009. Our primary
sources of liquidity include borrowing under our credit facility, available cash and cash
equivalents and cash generated from operations. We believe that our primary sources of liquidity
will be sufficient to finance our working capital and capital expenditure requirements for at least
the next 12 months. However, we cannot provide any assurance that our business will return to
profitability or that we will not incur future losses.
If we are unable to comply with the terms of our credit facility, it could materially harm our
business and financial condition and restrict our operating flexibility.
In January 2009, we entered into an asset-based senior secured revolving credit facility. In
addition to customary terms and conditions, we are required to maintain greater than $90.0 million
in book value of inventory and have excess availability of more than 10 percent of the borrowing
base or $6.0 million, whichever is less. As of April 4, 2009, we had $25.4 million outstanding
under this facility, which includes $6.4 million in stand-by letters of credit. In the event we
are required to draw down further on this facility, our debt will increase and may become
substantial relative to our cash position. In the event that we have substantial indebtedness, then
our business may be negatively impacted. For example, we may become more vulnerable to general
adverse economic and industry conditions; our ability to fund future working capital, capital
expenditures and other general corporate requirements may be limited; a substantial portion of our
cash flow from operations may be required to service our debt; and our flexibility to react to
changes in our business and the industry in which we operate may be limited. If we are unable to
satisfy our debt service requirements, we may default under this facility. If we default or breach
our obligations, the lender may take actions that include increasing the interest rate on
outstanding obligations, discontinuing making advances and accelerating our obligations.
We are a retailer that is dependent on attracting and retaining a large number of quality
associates in entry level or part-time positions. Since our ability to meet our labor needs is
subject to factors we cannot control, the performance of our business could be negatively impacted
by changes in these factors and our cost of doing business could increase as a result of changes in
federal, state or local regulations.
Our performance is dependent on attracting and retaining a large number of quality associates.
Many of those associates are in entry level or part-time positions with historically high rates of
turnover. Our ability to meet our labor needs while controlling our costs is subject to factors we
cannot control such as unemployment levels, prevailing wage rates, minimum wage legislation,
workers compensation costs and changing demographics. Changes that adversely impact our ability to
attract and retain quality associates could adversely affect our performance. In addition, changes
in the federal or state minimum wage, living wage requirements or changes in other wage or
workplace regulations, including, for example, health care, employee leave or unionization
regulations, could increase our costs and adversely affect our financial condition and operating
results.
The recently enacted Consumer Product Safety Improvement Act and other existing or future
government regulation could harm our business or may cause us to incur additional costs associated
with compliance.
We are subject to various federal, state and local laws and regulations, including but not
limited to, laws and regulations relating to labor and employment, U.S. customs and consumer
product safety, including the recently enacted Consumer Product Safety Improvement Act, or the
CPSIA. The CPSIA created more stringent safety requirements related to lead and phthalates
content in childrens products. The CPSIA regulates the future manufacture of these items and
existing inventories and may cause us to incur losses if we offer for sale or sell any
non-compliant items. Failure to comply with the various regulations applicable to us may result in
damage to our reputation, civil and criminal liability, fines and penalties and increased cost of
regulatory compliance. These current and any future laws and regulations could harm our business,
results of operation and financial condition.
7
An increase in our sales, profitability and cash flow will depend on our ability to increase the
number of stores we operate and increase the productivity and profitability of our existing stores.
If we are unable to increase the number of stores we operate and increase the productivity and
profitability of existing stores, our ability to increase sales, profitability and cash flow could
be significantly impaired. To the extent we are unable to open new stores as we planned, our sales
growth would come only from increases in comparable store sales. There can be no assurance that we
will be able to increase our comparable store sales, improve our margin or reduce costs as a
percentage of sales. Growth in profitability in that case would depend significantly on our ability
to increase margin or reduce costs as a percentage of sales. Further, as we implement new
initiatives to reduce the cost of operating our stores, sales and profitability may be negatively
impacted.
There are many factors, some of which are beyond our control, which could impact our ability
to increase the number of stores we operate and increase store productivity and profitability.
These factors include, but are not limited to:
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our ability to identify suitable markets in which to expand, |
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the availability of suitable sites for additional stores, |
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our ability to negotiate acceptable lease terms for sites we identify, |
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the availability of acceptable financing to support our growth, and |
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our ability to hire, train and retain a sufficient number of qualified general
managers and other store personnel. |
Our success will depend on how well we manage growth.
Even if we are able to expand our store base and increase the productivity and profitability
of existing stores, we may experience problems relating to growth, which may prevent any
significant increase in profitability or negatively impact our cash flow. For example:
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The costs of opening and operating new stores, especially in new markets, may offset
the increased sales generated by the additional stores. |
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The opening of additional stores in an existing market could reduce net sales from
existing stores in that market. |
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The opening of stores in new markets may present competitive and merchandising
challenges that are different than those we face in existing markets. |
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The closing or relocation of under-performing stores may result in us retaining
liability for outstanding lease obligations. |
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Our growth may outpace our ability to expand, upgrade and improve administrative,
operational and management systems, controls and resources. |
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Our suppliers may be unable to meet increased demand for merchandise as a result of
the additional stores and increased productivity of our existing stores. |
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We may be unable to expand existing distribution capabilities, or employ third-party
distribution services on a cost-effective basis, to provide sufficient merchandise for
sale by our new stores. |
8
Our real estate strategy may not result in improved profitability.
In June 2008, we announced results of our real estate portfolio review. We continue to review
our portfolio. As a result of this ongoing review, and in light of the macro-environment for
retailing, we may determine to exit certain markets where we cannot achieve operating efficiencies
and may reduce new store openings in the future. The estimated costs and charges associated with
these actions that we may incur may vary materially based on various factors, including but not
limited to, timing in execution, the outcome of negotiations with landlords and other third parties
and changes in managements assumptions and projections. As a result of these events and
circumstances, delays and unexpected costs may occur, which could result in our not realizing any
or all of the anticipated benefits of this strategy. There is no assurance that changes in our real
estate strategy will lead to improved operating results.
A weak fourth quarter would have a material adverse effect on our operating results for the
year.
Our business is highly seasonal. Due to the importance of our peak selling season, which
includes the Fall and Winter holiday seasons, the fourth quarter has historically contributed, and
is expected to continue to contribute, a significant portion of our net income for the entire year.
In anticipation of increased sales activity during the fourth quarter, we incur significant
additional expense both prior to and during the fourth quarter. These expenses may include
acquisition of additional inventory, advertising, in-store promotions, seasonal staffing needs and
other similar items. As a result, any factors negatively affecting us during the fourth quarter of
any year, including adverse weather and unfavorable economic conditions, would have a material
adverse effect on our results of operations for the entire year.
Our quarterly results fluctuate due to a variety of factors and are not necessarily a meaningful
indicator of future performance.
Our quarterly results have fluctuated in the past and may fluctuate significantly in the
future depending upon a variety of factors, including, but not limited to:
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the mix of merchandise sold, |
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the timing and level of markdowns, |
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promotional events and changes in advertising, |
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adverse weather conditions (particularly on weekends), |
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store openings, closings, remodels or relocations, |
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length and timing of the holiday seasons, |
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merchandise in-stock positions, |
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competitive factors, and |
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general economic and political conditions. |
We believe that period-to-period comparisons of past operating results cannot be relied upon
as indicators of future performance. If our operating results fall below the expectations of
securities analysts and investors, the market price of our securities would likely decline.
9
Our success depends on Rick A. Lepley, our Chief Executive officer, Joseph A. Jeffries, our Chief
Operating Officer, David Abelman, our Chief Marketing and Merchandising Officer and David Stern,
our Chief Financial Officer and the loss of any of them could have a negative impact on our ability
to execute on our business and operating strategy.
We are dependent on the services, abilities and experience of our executive officers,
including Rick A. Lepley, our Chief Executive Officer, Joseph A. Jeffries, our Chief Operating
Officer, David Abelman, our Chief Marketing and Merchandising Officer and David Stern, our Chief
Financial Officer. The loss of the services of any of these senior executives and any general
instability in the composition of our senior management team could have a negative impact on our
ability to execute on our business and operating strategy. In addition, success in the future is
dependent upon our ability to attract and retain other qualified personnel, including store general
managers. Any inability to do so may have a material adverse impact on our business and operating
results.
Competition could negatively impact our operations.
The arts and crafts industry is highly competitive. We currently compete against a diverse
group of retailers, including multi-store arts and crafts retailers, mass merchandisers, small
local specialty retailers, mail order vendors and a variety of other retailers. Almost all of our
stores face aggressive competition in their market area from one or more of our major competitors.
Some of our competitors have substantially greater financial resources and operate more stores than
we do. We compete with these and other retailers for customers, suitable retail locations,
suppliers and qualified associates. Moreover, alternative methods of selling crafts, such as
through e-commerce or direct marketing, result in additional competitors and increased price
competition because our customers can comparison shop more readily. In addition, we ultimately
compete for our customers against alternative sources of entertainment and leisure independent of
the arts and crafts industry. This competition could result in price reductions or a loss of market
share.
We may not be able to successfully anticipate changes in merchandise trends and consumer demands
and our failure to do so may lead to lost sales.
Our success depends, in large part, on our ability to anticipate and respond in a timely
manner to changing merchandise trends and consumer demand. Accordingly, any delay or failure by us
in identifying and correctly responding to changing merchandise trends and consumer demand could
adversely affect consumer acceptance of the merchandise in our stores. In addition, we make
decisions regarding merchandise well in advance of each of the seasons in which such merchandise
will be sold. Significant deviations from projected demand for merchandise would have a material
adverse effect on our results of operations and financial condition, either from lost sales due to
insufficient inventory or lower margin due to the need to mark down excess inventory.
The failure to accurately respond to inventory requirements may have a material adverse impact on
our results from operations.
While our buyers place initial orders of our merchandise, we depend upon our in-store
department managers to reorder the majority of our merchandise. The failure of our buyers or
department managers to accurately respond to inventory requirements could adversely affect consumer
acceptance of the merchandise in our stores and negatively impact sales, which could have a
material adverse effect on our results of operations and financial condition. If we misjudge the
market, we may significantly overstock unpopular products and be forced to take significant
inventory markdowns, which would have a negative impact on our operating results and cash flow.
Conversely, shortages of key items could have a material adverse impact on our operating results.
Unfavorable consumer response to our promotional strategy could materially and adversely affect our
sales, profitability and cash flow.
Advertising promotions, price, quality and value have a significant impact on consumers
shopping decisions. If we misjudge consumer response to our promotional strategies, our financial
condition and operating results could be materially and adversely impacted.
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Adverse events could have a greater impact on us than if we had a larger store base in different
geographical regions.
As of April 4, 2009, we operated a chain of 132 stores. Because our current and planned stores
are located in the Eastern United States, the effect on us of adverse events in this region (such
as weather or unfavorable regional economic conditions) may be greater than if our stores were more
geographically dispersed. Because overhead costs are spread over a smaller store base, increases in
our selling, general and administrative expenses could affect our profitability more negatively
than if we had a larger store base. One or more unsuccessful new stores, or a decline in sales at
an existing store, will have a more significant effect on our results of operations than if we had
a larger store base.
A disruption in our operations could have a material adverse effect on our financial condition and
results of operations.
Although we have a crisis management plan, we do not have a formal disaster recovery or
business continuity plan, and could therefore experience a significant business interruption in the
event of a natural disaster, catastrophic event or other similar event. The occurrence of such
events or other unanticipated problems could cause interruptions or delays in our business, supply
chain or infrastructure which would have a material adverse effect on our financial condition and
results of operations. In fiscal 2008, approximately 38 percent of our merchandise units sold were
fulfilled through our distribution centers. In addition, our vendors may also be subject to
business interruptions from such events. Significant changes to our supply chain or other
operations could have a material adverse impact on our results. Our back-up operations and business
interruption insurance may not be adequate to cover or compensate us for losses that may occur.
Significant changes in our relationships with key suppliers may adversely impact our business.
Our performance depends on our ability to purchase merchandise and services at sufficient
levels at competitive prices. Our future success is dependent upon our ability to maintain a good
relationship with our suppliers. SBARS, one of our suppliers, accounted for approximately 18
percent of the aggregate dollar volume of our purchases in fiscal 2008. Generally, we do not have
any long-term purchase agreements or other contractual assurances of continued supply, pricing or
access to new products, and any vendor could discontinue selling to us at any time. We may not be
able to acquire desired merchandise in sufficient quantities or on terms acceptable to us in the
future, or be able to develop relationships with new vendors to replace discontinued vendors. Our
inability to acquire suitable merchandise or services in the future or the loss of one or more key
vendors and our failure to replace any one or more of them may have a material adverse effect on
our business, results of operations and financial condition. Our smaller vendors generally have
limited resources, production capacities and operating histories, and some of our vendors have
limited the distribution of their merchandise in the past. These vendors may be susceptible to cash
flow problems, downturns in economic conditions, production difficulties, quality control issues
and difficulty delivering agreed-upon quantities on schedule. We also cannot assure you that we
would be able, if necessary, to return product to these vendors, obtain refunds of our purchase
price or obtain reimbursement or indemnification from any of our vendors if their products prove
defective. In addition, any significant change in the payment terms that we have with our key
suppliers could adversely affect our financial condition and liquidity.
Our reliance on imported merchandise may negatively impact our business in the event of disruptions
or increased costs associated with obtaining such merchandise.
We have in recent years placed increased emphasis on obtaining floral, seasonal and other
items from overseas vendors, with approximately 13 percent of all of our merchandise being
purchased directly by us from overseas vendors in fiscal 2008. In addition, many of our domestic
suppliers purchase their merchandise from foreign sources. China is the source of a substantial
majority of our imported merchandise. Because a large percentage of our merchandise is manufactured
or sourced abroad, we are required to order these products further in advance than would be the
case if these products were manufactured domestically. Risks associated with our reliance on
imported merchandise include, but are not limited to:
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Disruptions in the flow of imported goods because of factors such as: |
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Raw material shortages, factory consolidations, work stoppages, strikes and
political unrest; |
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The inability of vendors to secure adequate credit facilities; |
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Problems with trans-ocean shipping, including storage of shipping containers; and |
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Global or international economic uncertainties, crises or disputes. |
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Increases in the cost of purchasing or shipping imported merchandise that may result
from: |
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Increases in shipping rates imposed by trans-ocean carriers; |
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Changes in currency exchange rates and local economic conditions, including
inflation; |
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Failure of the United States to maintain normal trade relations with China; and |
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Import duties, quotas and other trade sanctions. |
A disruption in supply of our imported merchandise, or the imposition of additional costs of
purchasing or shipping imported merchandise, could have a material adverse effect on our business,
financial condition and results of operations unless and until alternative supply arrangements are
secured. Products from alternative sources may be of lesser quality or more expensive than those we
currently purchase, resulting in a loss of sales or profit.
Our information technology may prove inadequate.
We depend on our information technology systems for many aspects of our business. Some of our
key software has been developed by our own programmers and this software may not be easily
integrated with other software and systems. Our business will be materially and adversely affected
if our systems are disrupted or if we are unable to improve, upgrade, integrate or expand upon our
existing systems. Moreover, we may not be able to implement automated replenishment or realize any
benefits from this system in the anticipated timeframe. We may fail to properly optimize the
effectiveness of these systems, or to adequately implement, support and maintain the systems, which
could have a material adverse impact on our financial condition and operating results.
An increase in the cost of fuel oil and oil-based products could impact our earnings and margin.
Prices for oil have fluctuated dramatically throughout fiscal 2008 and into fiscal 2009. These
fluctuations impact our distribution costs and the distribution costs of our vendors. If the price
of fuel increases, our distribution costs will increase which could impact our earnings. In
addition, many of the products we sell, such as paints, are oil-based. If the price of oil
continues to increase, the price of the oil-based products we purchase and sell may increase, which
could impact our margin.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the Selling Security Holder of the shares of
Common Stock offered by this prospectus.
SELLING SECURITY HOLDER
We agreed to file the Registration Statement with the SEC for the benefit of Glenhill Special
Opportunities Master Fund LLC as the Selling Security Holder. The shares of Common Stock are being
registered to permit public secondary trading of the shares. The Selling Security Holder or its
pledgees, donees, transferees or other successors in interest may offer the shares for resale from
time to time.
The Transaction was exempt from the registration requirements of the Securities Act as set
forth in Section 4(2) thereof and the rules and regulations thereunder. The Transaction was made
only to an accredited investor, as
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such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act, who represented its intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution thereof. The Selling
Security Holder and affiliates, officers, directors or owners of more than 5% of the equity
securities of the Selling Security Holder have not held any position with us within the past three
years other than as a shareholder. The Selling Security Holder is neither a broker-dealer nor an
affiliate of a broker-dealer. Glenn J. Krevlin has the ultimate voting and investment control over
the shares held by the Selling Security Holder.
The following table provides certain information with respect to the Selling Security Holder,
including the Selling Security Holders beneficial ownership of our Common Stock prior to and after
the Offering, and the percentage of shares of our Common Stock beneficially owned by the Selling
Security Holder, assuming all of the shares covered hereby are sold. Beneficial ownership has been
determined in accordance with Rule 13d-3(d) under the Exchange Act.
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Number of |
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Number of Shares of |
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Percent of Outstanding |
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Total Shares of |
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Shares of |
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Common Stock |
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Common Stock |
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Common Stock |
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Common Stock |
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Owned Upon |
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Owned Upon |
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Owned Prior |
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Offered Under |
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Completion of |
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Completion of |
Name and Address of Selling Security Holder |
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to the Offering |
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this Prospectus |
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the Offering |
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the Offering |
Glenhill Special Opportunities Master Fund LLC
c/o Glenhill Capital
598 Madison Avenue, 12th Floor
New York, New York 10022
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6,127,368(1)(2)
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4,127,368 |
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2,000,000(2)
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8.1%(3) |
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(1) |
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Assumes the issuance of all Additional Shares. |
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(2) |
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Includes shares held by the Selling Security Holder directly and indirectly. The Selling
Security Holders interest includes 682,329 shares of Common Stock held by Glenhill Capital
LP, 997,559 shares of Common Stock held by Glenhill Capital Overseas Master Fund LP, and
320,112 shares of Common Stock held by Glenhill Concentrated Long Master Fund LLC. 2,000,000
shares of the 6,127,368 shares set forth in the table were acquired in open market purchases. |
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Based on 24,809,531 shares outstanding at June 17, 2009, which assumes all Additional Shares
have been issued and resold. |
PLAN OF DISTRIBUTION
The Selling Security Holder and any of its pledgees, assignees and successors-in-interest may,
from time to time, sell any or all of their shares of Common Stock covered hereby on the NASDAQ
Global Select Market or any other stock exchange, market or trading facility on which the shares
are traded or in private transactions. These sales may be at fixed or negotiated prices. The
Selling Security Holder may use any one or more of the following methods when selling shares:
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ordinary brokerage transactions and transactions in which the broker dealer solicits
purchasers; |
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block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its
account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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settlement of short sales entered into after the effective date of the Registration
Statement; |
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transactions through broker-dealers that agree with the Selling Security Holder to
sell a specified number of such shares at a stipulated price per share; |
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through the writing or settlement of options or other hedging transactions, whether
through an options exchange or otherwise; |
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a combination of any such methods of sale; or |
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any other method permitted pursuant to applicable law. |
The Selling Security Holder may also sell shares under Rule 144 under the Securities Act, if
available, rather than under this prospectus.
Broker-dealers engaged by the Selling Security Holder may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the Selling
Security Holder (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this
prospectus, in the case of an agency transaction not in excess of a customary brokerage commission
in compliance with Financial Industry Regulatory Authority, or FINRA, Rule 2440; and in the case
of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale of the Common Stock or interests therein, the Selling Security
Holder may enter into hedging transactions with broker-dealers or other financial institutions,
which may in turn engage in short sales of the Common Stock in the course of hedging the positions
they assume. The Selling Security Holder may also sell shares of the Common Stock short and
deliver these securities to close out their short positions, or loan or pledge the Common Stock to
broker-dealers that in turn may sell these securities. The Selling Security Holder may also enter
into option or other transactions with broker-dealers or other financial institutions or create one
or more derivative securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The Selling Security Holder and any broker-dealers or agents that are involved in selling the
shares may be deemed to be underwriters within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. The Selling Security Holder has informed the Company that
it does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the Common Stock. In no event shall any broker-dealer receive fees,
commissions and markups which, in the aggregate, would exceed eight percent (8%).
The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the Selling Security Holder
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.
Because the Selling Security Holder may be deemed to be an underwriter within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements of the Securities
Act including Rule 172 thereunder. The Selling Security Holder has advised us that there is no
underwriter or coordinating broker acting in connection with the proposed sale of the resale shares
by the Selling Security Holder.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by the Selling Security Holder without registration and without regard to any
volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company
to be in compliance with the current public information under Rule 144 under the Securities Act or
any other rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale
shares will be sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale shares of Common Stock
covered hereby may not be
sold unless they have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is complied with.
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Under applicable rules and regulations under the Exchange Act, any person engaged in the
distribution of the resale shares may not simultaneously engage in market making activities with
respect to the Common Stock for the applicable restricted period, as defined in Regulation M, prior
to the commencement of the distribution. In addition, the Selling Security Holder will be subject
to applicable provisions of the Exchange Act and the rules and regulations thereunder, including
Regulation M, which may limit the timing of purchases and sales of shares of the Common Stock by
the Selling Security Holder or any other person. We will make copies of this prospectus available
to the Selling Security Holder and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).
DESCRIPTION OF COMMON STOCK
General
Our amended articles of incorporation, or Articles, currently authorize the issuance of
40,000,000 shares of common stock, no par value per share. As of June 17, 2009, we had 24,682,163
shares of Common Stock issued and outstanding, held of record by 102 shareholders.
The following description of our Common Stock summarizes general terms and provisions that
apply to our Common Stock. You should keep in mind, however, that it is our Articles and amended
and restated bylaws, or Bylaws, and the Pennsylvania Business Corporation Law of 1988, as
amended, or the BCL, and not this summary, which define your rights as a shareholder. There may
be other provisions in these documents which are also important to you. You should read these
documents for a full description of the terms of our Common Stock. Our Articles and Bylaws are
incorporated by reference as exhibits to the Registration Statement. See Where You Can Find More
Information for information on how to obtain copies of these documents.
Trading; Transfer Agent and Registrar. Our Common Stock is traded on the NASDAQ Global Select
Market under the symbol ACMR. The registrar and transfer agent is StockTrans, Ardmore,
Pennsylvania.
Voting Rights. Except as set forth below under Anti-Takeover Provisions, each holder of
record of our Common Stock is entitled to one vote for each share of our Common Stock held on all
matters submitted to a vote of the shareholders, including election of directors. Holders of our
Common Stock do not have cumulative voting rights with respect to the election of directors.
Dividend Rights. The holders of our Common Stock may receive cash dividends, if and when
declared by our board of directors out of funds legally available for that purpose, and subject to
preferential rights of the holders of preferred stock or other special classes of stock.
Liquidation Rights. In the event of a liquidation, dissolution or winding up, holders of our
Common Stock will be entitled to share ratably in all assets remaining after payments to creditors
and after satisfaction of the liquidation preference, if any, of the holders of any preferred stock
that may at the time be outstanding.
Preemptive Rights. Holders of our Common Stock do not have any preemptive or similar equity
rights solely by ownership of our Common Stock. The Selling Security Holder was granted a
preemptive right to participate in any issuance by us for two years from the closing date pursuant
to the terms of the Securities Purchase Agreement. See Summary The Transaction.
Anti-Takeover Provisions
Our Articles and Bylaws contain several provisions intended to limit the possibility of, or
make more difficult, a takeover of the Company. In addition to providing for a classified Board of
Directors and the issuance of Preferred Stock having terms established by the Board of Directors
without shareholder approval, our Articles and Bylaws provide that: (i) at least 80% of the votes
entitled to be cast by shareholders is required to approve
amendments to the Bylaws, unless at least a majority of the incumbent directors on the Board
of Directors has voted in favor of the amendment, in which case only a majority of the votes cast
by shareholders is required to approve the amendment; (ii) directors can be removed only for cause
and only by a vote of at least 80% of the votes entitled to
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be cast by shareholders; and (iii) the
shareholders of the Company are not entitled to call special meetings of the shareholders. In
addition, our Articles provide that actions by shareholders without a meeting must receive the
unanimous written consent of all shareholders, unless such action has been previously approved by
our Board of Directors. The Articles also permit the Board of Directors to oppose, in its sole
discretion, a tender offer or other offer for the Companys securities and to take into
consideration all pertinent issues. Should the Board of Directors determine to reject such an
offer, it may take any lawful action to accomplish its purpose, including, among other things,
advising shareholders not to accept the offer and commencing litigation against the offeror. Our
Bylaws establish procedures for the nomination of directors by shareholders and the proposal by
shareholders of matters to be considered at meetings of the shareholders, including the submission
of certain information within the times prescribed in the Bylaws.
In addition, under the BCL, subject to certain exceptions, a business combination between a
Pennsylvania corporation and a person owning 20% or more of such corporations voting stock, or an
interested person, may be accomplished only if: (i) the business combination is approved by the
corporations directors prior to the date on which such person acquired 20% or more of such stock,
or if the board approved such persons acquisition of 20% or more of such stock, prior to such
acquisition; (ii) the business combination is approved by the vote of shareholders entitled to cast
a majority of votes that all shareholders would be entitled to cast in an election of directors
(excluding shares held by the interested person), if the interested person owns shares entitled to
cast at least 80% of the votes all shareholders would otherwise be entitled to cast in the election
of directors, which vote may occur no earlier than three months after the interested person
acquired its 80% ownership, and the consideration received by shareholders in the business
combination satisfies certain minimum conditions; (iii) the business combination is approved by the
affirmative vote of all outstanding shares of common stock; or (iv) the business combination is
approved by the vote of shareholders entitled to cast a majority of the votes that all shareholders
would be entitled to cast in the election of directors (excluding shares held by the interested
person), which vote may occur no earlier than five years after the interested person became an
interested person. A corporation may exempt itself from this provision by an amendment to its
articles of incorporation that requires shareholder approval. Our Articles do not provide an
exemption from this provision. Pennsylvania has also adopted other anti-takeover legislation from
which we have elected to exempt the Company in our Articles.
The existence of the foregoing provisions of our Articles and Bylaws and the BCL may
discourage other persons or companies from making a tender offer for, or seeking to acquire
substantial amounts of our Common Stock.
LEGAL MATTERS
The validity of the shares of Common Stock offered by this prospectus has been passed upon for
us by Blank Rome LLP.
EXPERTS
The financial statements and managements assessment of the effectiveness of internal control
over financial reporting (which is included in Managements Report on Internal Control Over
Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K
for the year ended January 3, 2009 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information and
documents with the SEC. You may read and copy any document we file with the SEC:
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in the public reference room maintained by the SEC in Washington, D.C. (100 F
Street, N.E., Room 1580, Washington, D.C. 20549). Copies of such materials can be
obtained from the SECs public reference section at prescribed rates. You may obtain
information on the operation of the public reference room by calling the SEC at (800)
SEC-0330, or |
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on the SEC website located at www.sec.gov. |
This prospectus is part of a Registration Statement filed on Form S-3 with the SEC under the
Securities Act. This prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules to the Registration Statement. For further
information concerning us and the securities, you should read the entire Registration Statement and
the additional information described under Documents Incorporated by Reference below. The
Registration Statement has been filed electronically and may be obtained in any manner listed
above. Any statements contained in this prospectus concerning the provisions of any document are
not necessarily complete, and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the SEC. Each such
statement is qualified in its entirety by such reference.
Information about us is also available on our website at http://www.acmoore.com. This URL and
the SECs URL above are intended to be inactive textual references only. Information on our or the
SECs website is not a part of this prospectus.
DOCUMENTS INCORPORATED BY REFERENCE
The SECs rules allow us to incorporate by reference information into this prospectus. This
means that we can disclose important information to you by referring you to another document. Any
information referred to in this way is considered part of this prospectus from the date we file
that document. Any reports filed by us with the SEC after the date of this prospectus and before
the date that the offering of the securities by means of this prospectus is terminated will
automatically update and, where applicable, supersede any information contained in this prospectus
or incorporated by reference in this prospectus.
We incorporate by reference into this prospectus the following documents or information filed
(File No. 000-23157) with the SEC (other than, in each case, information deemed to have been
furnished or not filed in accordance with the SEC rules):
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Our Annual Report on Form 10-K for the fiscal year ended January 3, 2009; |
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Amendment No. 1 to our Annual Report on Form 10-K/A for the fiscal year ended
January 3, 2009; |
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Our Quarterly Report on Form 10-Q for the fiscal quarter ended April 4, 2009; |
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Our Current Reports on Form 8-K filed with the SEC on January 22, 2009, April 10,
2009, May 18, 2009, and May 27, 2009; and |
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The description of our Common Stock contained in Form 8-A (File No. 000-23157) filed
with the SEC on October 1, 1997, including any amendments or reports filed for the
purpose of updating that description. |
Each document filed subsequent to the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters all securities then
remaining unsold (including without limitation such
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documents filed prior to effectiveness of this Registration Statement), shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof from the date of
the filing of such documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein (or in any other
subsequently filed document which also is or is deemed to be incorporated by reference herein)
modifies or supersedes such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this Registration Statement.
We will provide without charge to each person to whom this prospectus is delivered, upon the
written or oral request of such person, a copy of the documents incorporated by reference as
described above (other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents). Please direct your oral or written request to:
Amy Rhoades
Vice President and General Counsel
A.C. Moore Arts & Crafts, Inc.
130 A.C. Moore Drive
Berlin, New Jersey 08009
(856)768-4930
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