A.C. Moore Secures New $50 Million Revolving Credit Agreement; New Line of Credit Doubles Company's Current Facility.

Business Editors/Retail Writers

BLACKWOOD, N.J.--(BUSINESS WIRE)--Aug. 7, 2001

A.C. Moore Arts & Crafts, Inc. (NASDAQ:ACMR) today announced that it has closed on a $50 million Revolving Credit Agreement. This new agreement will replace the Company's current $25 million Revolving Credit Agreement, which was to expire on April 1, 2002. The new line of credit, which doubles the current facility, will be used primarily to finance its growth plans.

The lender group under this Agreement is led by KeyBank and includes First Union National Bank. Borrowings under the credit agreement will bear interest rates that will vary between LIBOR plus 150 basis points and LIBOR plus 200 basis points, depending on the fixed charge coverage ratio, and will mature on August 1, 2004.

Jack Parker, Chief Executive Officer, commented, "We are extremely pleased to announce this new agreement with KeyBank. With this additional financing now in place, we have the financial resources to proceed with our store opening plans for the next three years. We have had a long history with KeyBank who has supported us is the past and continues to do so. The inclusion of First Union builds upon another long-term operational relationship.

Richard Kulbieda, Senior Vice President and District President of KeyBank said, "We are very pleased to have been a part of A.C. Moore's success from very early in its development to its position as the premier retailer for arts and crafts on the Eastern seaboard. A large part of the Company's success is due to the dedication of its employees and the vision of its management. We at Key greatly value our partnership with A.C. Moore and we look forward to assisting the Company in realizing its full potential which this facility makes possible."

A.C. Moore operates arts and crafts stores that offer a vast assortment of traditional and contemporary arts and crafts merchandise for a wide range of customers. The Company operates 57 stores in the eastern United States.

KeyCorp (NYSE:KEY) is one of the nation's largest multi-line financial services companies with assets exceeding $87 billion. Ranked 224 in the Fortune 500 based on annual revenues, Key is one of the nation's largest domestic bank holding companies with operations in 46 states and 922 Key Centers. Its professionals meet the multiple and often complex financial needs of individuals, companies or other institutions by bringing together high quality products and services in an expeditious manner.

This press release contains statements that are forward-looking within the meaning of applicable federal securities laws and are based on A.C. Moore's current expectations and assumptions as of this date. The Company undertakes no obligation to update or revise any forward-looking statement whether the result of new developments or otherwise. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Factors that could cause actual results to differ from those anticipated include, but are not limited to, customer demand and trends in the arts and crafts industry, related inventory risks due to shifts in customer demand, the effect of economic conditions, weather, the impact of competitors' locations or pricing, the availability of acceptable real estate locations for new stores, difficulties with respect to new system technologies, supply constraints or difficulties, the effectiveness of advertising strategies and other risks detailed in the Company's Securities and Exchange Commission filings.