Exhibit 99.1

The Company reports for the quarter ended December 31, 2005 diluted earnings per share of $0.09 on net income of $6.3 million compared to same quarter 2004 diluted earnings per share of $0.12 on net income of $8.7 million. For the nine months ended December 31, 2005, the Company reports diluted earnings per share of $0.18 on net income of $12.4 million, compared to the nine months ended December 31, 2004 diluted earnings per share of $0.25 on net income of $17.6 million. An analysis of the Company’s financial condition and results of operations is included below.

Eric Schiffer, CEO of the Company, said, "We are glad to have completed the filing of our 2005 Form 10-Qs. We are gaining traction with the fundamental changes that we believe will position us for profitable expansion. Pressure on our operating margins has continued due to the interim costs of building management infrastructure and efforts to meet Sarbanes-Oxley requirements and due to the resulting diversion of management from day-to-day operations. Our focus on sales has shown some initial success and we are moving forward on short and long term projects to improve costs, inventory management, and ultimately earnings per share and our return on invested capital.

The Company’s previously announced conference call to discuss these preliminary financial results is scheduled for 8 a.m. Pacific Time tomorrow, Thursday, June 1, 2006. If you would like to participate in the Company’s conference call, please phone the Link conference call operator at 1-206-315-1857 (U.S. and Canada) about nine minutes before the call is scheduled to begin and hold for an operator to assist you. Please inform the operator that you are calling in for 99¢ Only Stores’ December 2005 Earnings Release and 10-Q Filings conference call, and be prepared to provide the operator with your name, company name, and position if requested. A recorded version of the call will be made available about four hours after completion of the call and will remain available for seven days after the call. To access the recorded version, dial 1-314-255-1301, PASSCODE: 4071. A copy of this press release and any other financial and statistical information about the period to be presented in the conference call will be available prior to the call at the section of the Company’s website entitled “Investor Relations” at www.99only.com.

Eric Schiffer commented, “We have made progress with our sales and marketing initiatives and in improving our warehouse shipping fulfillment rates. However, in addition to the ongoing Sarbanes-Oxley compliance costs, the implementation of short and long term projects, which we expect will improve our overall cost structure and inventory management, have not yet had a chance to yield a positive financial impact. At the same time, these projects increase short term costs and divert management time and attention from operations.”

“Our growth plans for fiscal 2007 are to increase our store growth rate to approximately 10% by opening appropriately sized stores in our current markets, mainly in California. We also expect to grow revenue by increasing our customers’ frequency and average ticket through better execution, enhanced merchandise selection and promotional efforts. We believe that the graying of America and expansion of a pressured lower to middle class who live paycheck-to-paycheck appear to be strong trends for the growth of our customer base.

“We also plan to initiate tighter control on our corporate SG&A and are moving forward with the automation and streamlining of various corporate functions. We plan to make investments in our existing systems to improve expense analysis and budgetary control and to automate certain SOX compliance control processes and human resources transactions and record keeping. At the same time, we continue to make major investments in integrated systems for the long term.

The Company previously released preliminary results for the quarters ended March 31, 2005, June 30, 2005, and September 30, 2005. Although the Company announced at the times these releases were made that it would not update these preliminary results, the following discussion of the unaudited results reported in our 10-Q reports versus the previously released preliminary results is provided to assist investors in understanding the nature of the variances between the prior releases and these 10-Q reports.

Adjustments between preliminary releases and Form 10-Q filings for March 31, June 30 and September 30, 2005 quarters reduced reported net income for the nine month period ending September 30, 2005 from $8.3 to $7.0 million. Adjustments are reflected in the Form 10-Q reports as a result of applying hindsight as required by Generally Accepted Accounting Principles (“GAAP”) and refined cut-off and accounting procedures, and as a result of revising estimates in these prior quarters based on the knowledge of actual results and changes in strategy and events occurring through the date of these reports.

Adjustments for the March 31, 2005 period resulted in a reduction of reported net income from $3.7 to $0.8 million, resulting in earnings per share of $.01 as reported in the 10-Q for that period. The reduction was partially due to a stockholder suit settlement reached in early calendar 2006 (although still subject to final documentation and court approval) that was required to be reported in hindsight in the March 31, 2005 quarter because the suit was initiated prior to that period. The settlement amount was unknown at the time the preliminary results were reported and resulted in additional expense of $2.2 million. The Company recorded additional inventory reserves in this quarter of $3.3 million including excess and obsolete reserves, price valuation allowances, and a special reserve for plans made in calendar 2006 to use markdowns to promote and accelerate the sale of certain products applied with hindsight to this quarter. This net expense, including various other expenses, was partially offset by a favorable adjustment in workers’ compensation reserves for the quarter based on actuarial estimates as of December 31, 2005.

Certain procedures required for the annual audit of the Company’s new fiscal year ended March 31, 2006 have been delayed as a result of the delay in filing the Company’s 2005 Form 10-Qs. The Company and its auditors are now commencing work on audit procedures which were not feasible to complete in parallel with quarterly reviews of the 2005 Form 10-Qs. The Company is committed to completing the audit of its three month transition period ended March 31, 2005 and its fiscal year ended March 31, 2006 as quickly as possible, but it will not be possible to complete this work and file its Form 10-K on June 14, 2006, the date required for accelerated filers. The Company will provide an update on the anticipated timing of the Form 10-K report when it files a Form 12b-25 on or before June 15, 2006.

For the purposes of this release, management has undertaken a special marginal cash contribution analysis of its Texas operations on a geographical basis. The Texas region does not comprise a separate business segment in accordance with GAAP, but certain investors have raised the question during quarterly earnings conference calls as to whether the Texas operations impose a significant cash drain on the Company. Management understands that, to certain investors, this question may be important in evaluating the potential for long term Company growth.

In a desire to respond to this question for the purposes of this release with more than a verbal explanation, management prepared a special marginal analysis of the after-tax impact of its Texas operations on corporate cash flow for the twelve months ended December 31, 2005. Readers should be aware that this special marginal analysis results in a non-GAAP measure because the geographic area does not comprise a stand-alone business segment under GAAP, and the Company does not have accounting procedures in place to provide complete financial statements for this geographic region (reference is made to the reconciliation to net income in accordance with GAAP at the end of this press release, following the December 31, 2005 financial statements). The marginal cash contribution analysis includes all direct expenses of Texas operations: distribution center, retail store, and Bargain Wholesale operations expenses and freight expense associated with moving merchandise from California to Texas. The analysis does not include an allocation of California corporate SG&A costs or other California costs. These direct expenses of the Texas operations were offset by depreciation and certain non-cash expenses incurred in Texas, to estimate marginal cash flow, and were offset against the revenues of the Texas operations and the marginal taxes that would be incurred by the Company in the absence of the net losses incurred in Texas. The conclusion of this marginal cash contribution analysis is that the Company believes that its Texas operation cash contribution was neutral to slightly positive on an after-tax basis during the 2005 calendar year.

Eric Schiffer commented, “Texas same-store-sales have continued to trend positive through May 2006, and we were pleased with the sales results of our recent “999 Days in Texas” promotion that occurred in late March and early April of 2006. We continue to believe that by having the right products on the shelf at the right time in appropriately sized stores, we will be able to turn Texas into a profitable growth market. We intend to open approximately three stores in Texas during fiscal 2007 and will continue to evaluate the potential of this market.

We have included statements in this release that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act and Section 27A of the Securities Act. The words "expect," "estimate," "anticipate," "predict," "believe" and similar expressions and variations thereof are intended to identify forward-looking statements. Such statements appear in this release and include statements regarding the intent, belief or current expectations of the Company, its directors or officers with respect to, among other things, trends affecting the financial condition or results of operations of the Company, the business and growth strategies of the Company, the anticipated results for the quarter ended March 31, 2006, the timing of filing the Company’s Form 10-K for 2006, anticipated future reductions in costs and improvements in results of operations, expectations for marginal cash and profit performance in its Texas operations, and expected general improvements in operations. The shareholders of the Company and other readers are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected in this release for the reasons, among others, discussed in the reports and other documents the Company files from time to time with the Securities and Exchange Commission, including the risk factors contained in the Section - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

	December 31,			March 31,			December 31,
	2005			2005			2004
CURRENT ASSETS:	(Unaudited)			(Unaudited)
Cash	$	9,169		$	2,116		$	884
Short-term investments		119,706			99,610			92,645
Accounts receivable, net of allowance for doubtful accounts of $191, $189, and $268 as of December 31, 2005, March 31, 2005, and December 31, 2004, respectively		2,080			4,751			3,463
Income tax receivable		780			-			-
Deferred income taxes		29,579			29,579			28,845
Inventories, net		147,609			133,023			155,836
Other		9,655			5,310			5,946
Total current assets		318,578			274,389			287,619
PROPERTY AND EQUIPMENT, at cost:
Land		58,766			43,154			41,240
Buildings		83,638			70,082			68,833
Building improvements		31,732			31,093			28,587
Leasehold improvements		111,665			108,360			106,482
Fixtures and equipment		78,824			73,780			71,577
Transportation equipment		4,116			3,891			3,847
Construction in progress		7,915			17,213			22,835
Total properties, fixtures and equipment		376,656			347,573			343,401
Accumulated depreciation and amortization		(125,017	)		(102,988	)		(95,482	)
Total net property and equipment		251,639			244,585			247,919

OTHER ASSETS:
Long-term deferred income taxes		4,837			4,777			3,574
Long-term investments in marketable securities		41,047			50,271			50,764
Deposits and other assets		13,510			14,396			10,328
Total other assets		59,394			69,444			64,666
TOTAL ASSETS	$	629,611		$	588,418		$	600,204

	December 31,			March 31,			December 31,
	2005			2005			2004
CURRENT LIABILITIES:	(Unaudited)			(Unaudited)
Accounts payable	$	38,061		$	21,917		$	39,094
Accrued expenses:
Payroll and payroll-related		7,533			5,862			4,959
Sales tax		5,393			4,306			5,098
Other		15,069			13,651			12,074
Workers’ compensation		44,324			38,358			36,445
Income tax payable		-			2,743			2,495
Current portion of capital lease obligation		96			48			37
Construction loan		5,954			-			-
Total current liabilities		116,430			86,885			100,202

LONG-TERM LIABILITIES:
Deferred rent		7,425			8,465			8,097
Deferred compensation liability		3,268			2,908			2,847
Capital lease obligation, net of current portion		713			752			774
Total long-term liabilities		11,406			12,125			11,718

COMMITMENTS AND CONTINGENCIES:		-			-			-

SHAREHOLDERS’ EQUITY:
Preferred stock, no par value
Authorized - 1,000,000 shares
Issued and outstanding-none		-			-			-
Common stock, no par value
Authorized - 200,000,000 shares
Issued and outstanding 69,552,150, 69,548,761, and 69,517,185 shares at December 31, 2005, March 31, 2005, and December 31, 2004		212,957			212,938			212,606
Retained earnings		288,915			276,477			275,678
Other comprehensive loss		(97	)		(7	)		-
Total shareholders’ equity		501,775			489,408			488,284
Total liabilities and shareholders’ equity	$	629,611		$	588,418		$	600,204

	Three months ended December 31,						Nine months ended December 31,
	2005			2004			2005			2004
NET SALES:
99¢ Only Stores	$	269,311		$	255,089		$	739,662		$	711,084
Bargain Wholesale		9,473			10,823			29,825			31,039
Total sales		278,784			265,912			769,487			742,123
COST OF SALES (excluding depreciation and amortization expense shown below)		172,964			156,816			479,949			454,754
Gross profit		105,820			109,096			289,538			287,369
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
Operating expenses (includes asset impairment of $0.8 million for three and nine months ended December 31, 2005)		89,316			90,692			254,107			241,223
Depreciation and amortization		7,851			8,164			23,488			22,226
Total Selling, General and Administrative Expenses		97,167			98,856			277,595			263,449
Operating income		8,653			10,240			11,943			23,920
OTHER (INCOME) EXPENSE:
Interest income		(1,143	)		(577	)		(3,396	)		(1,699	)
Interest expense		14			(28	)		44			32
Other		(124	)		4			(4,347	)		4
Total other (income)		(1,253	)		(601	)		(7,699	)		(1,663	)
Income before provision for income tax		9,906			10,841			19,642			25,583
Provision for income taxes		3,633			2,183			7,204			7,956

NET INCOME	$	6,273		$	8,658		$	12,438		$	17,627

EARNINGS PER COMMON SHARE:
Basic	$	0.09		$	0.12		$	0.18		$	0.25
Diluted	$	0.09		$	0.12		$	0.18		$	0.25

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic		69,552			69,507			69,551			70,148
Diluted		69,719			69,778			69,733			71,016

	Nine months Ended December 31,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,438		$	17,627
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,488			22,226
Loss on disposal of fixed assets (includes asset impairment of $0.8 million for nine months ended December 31, 2005)		938			1,156
Tax benefit from exercise of non qualified employee stock options		6			354
Deferred income taxes		-			(12,094	)
Changes in asset and liabilities associated with operating activities:
Sales of trading securities, net		36,041			56,137
Accounts receivable		2,671			(1,279	)
Inventories		(14,360	)		(39,647	)
Other assets		(1,164	)		(3,467	)
Deposits		169			(69	)
Accounts payable		16,144			24,205
Accrued expenses		4,176			2,579
Accrued workers’ compensation		5,966			20,116
Income taxes		(3,523	)		(1,760	)
Deferred rent		(1,040	)		2,510
Net cash provided by operating activities		81,950			88,594
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(33,547	)		(50,635	)
Purchases of available for sale securities		(94,724	)		-
Sale and maturity of available for sale securities		47,661			-
Net cash used in investing activities		(80,610	)		(50,635	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of capital lease obligation		(254	)		(36	)
Proceeds from exercise of stock options		13			782
Repurchases of Company stock		-			(38,214	)
Proceeds from the consolidation of construction loan		5,954			-
Net cash provided (used in) by financing activities		5,713			(37,468	)
NET INCREASE IN CASH		7,053			491
CASH, beginning of period		2,116			393
CASH, end of period	$	9,169		$	884

Net Sales: Net sales increased $12.9 million, or 4.8%, to $278.8 million for the three months ended December 31, 2005 compared to $265.9 million for the three months ended December 31, 2004. Retail sales increased $14.2 million, or 5.6%, to $269.3 million for the three months ended December 31, 2005 compared to $255.1 million for the three months ended December 31, 2004. The effect of seven new stores opened during the nine months ended December 31, 2005 increased retail sales by $6.1 million and the full quarter effect of three new stores opened after the second quarter ending September 30, 2004 increased sales by $0.8 million for the three months ended December 31, 2005. In addition, same-store-sales increased by 2.5% for the three months ended December 31, 2005 compared to the three months ended December 31, 2004, due to the increases in average transaction size in both Texas and non-Texas stores. Bargain Wholesale net sales decreased $1.4 million, or 12.5%, to $9.5 million for the three months ended December 31, 2005 compared to $10.8 million for the three months ended December 31, 2004.

Gross Profit: Gross profit decreased $3.3 million, or 3.0%, to $105.8 million for the three months ended December 31, 2005 compared to $109.1 million for the three months ended December 31, 2004. As a percentage of net sales, overall gross margin decreased to 38.0% for the three months ended December 31, 2005 compared to 41.0% for the three months ended December 31, 2004. As a percentage of retail sales, retail gross margin decreased to 38.6% for the three months ended December 31, 2005 compared to 41.9% for the three months ended December 31, 2004. The decrease in retail gross margin was due to an increase in spoilage/shrink from 2.9% in the quarter ended December 31, 2004 to 3.6% in the same quarter of 2005 as identified by physical inventory counts and an increase in product cost for retail from 55.1% to 56.5% for the same periods, primarily due to product cost changes and a shift in the sales mix to more lower margin, primarily grocery items. In addition a 0.5% reserve for special markdowns was recorded in the December 31, 2005 quarter as a result of new management plans to accelerate the movement of certain products. The Bargain Wholesale margin decreased slightly to 19.9% for the three months ended December 31, 2005 compared to 20.1% for the three months ended December 31, 2004. The remaining change was made up of increases and decreases in other less significant items included in cost of sales.

Operating Expenses: Operating expenses decreased by $1.4 million, or 1.5%, to $89.3 million for the three months ended December 31, 2005 compared to $90.7 million for the three months ended December 31, 2004. As a percentage of net sales, operating expenses decreased to 32.1% for the three months ended December 31, 2005 from 34.0% for the three months ended December 31, 2004. Operating expenses decreased due to lower workers’ compensation expenses which decreased by $10.2 million driven by the stabilization of reserve requirements and improvements in claims handling, accident reporting and an unusually large increase in the reserve in the quarter ended December 31, 2004. However, the decrease in operating expenses was partially offset by higher retail store operating expenses of $3.3 million between the three months ended December 31, 2005 and 2004, primarily as a result of an increase in retail store labor and benefit costs of $4.1 million due to the opening of seven new stores during the nine months December 31, 2005, the full quarter effect of three new stores opened after the second quarter ended September 30, 2004 and costs increases in existing stores. The decrease in operating expenses was also partially offset due to an increase in distribution and transportation costs of $2.6 million, primarily as a result of higher fuel costs and increased delivery costs due to additional new store locations. In addition, retail store operating expenses increased disproportionately compared to retail sales increases due to the underperformance of Texas stores. Finally, the decrease in operating expenses was partially offset by the increase in accounting and consulting fees of $1.8 million and an asset impairment charge of $0.8 million relating to one underperforming store in Texas. The remaining change was made up of increases and decreases in other less significant items included in operating expenses.

Depreciation and Amortization: Depreciation and amortization decreased $0.3 million, or 3.8%, to $7.9 million for the three months ended December 31, 2005 compared to $8.2 million for the three months ended December 31, 2004 due to the disposal of certain store fixed assets and fully depreciated assets that was partially offset by an increase in depreciation as a result of seven new stores opened during the nine months ended December 31, 2005, the full quarter effect of three new stores opened after the second quarter ended September 30, 2004, and additions to existing stores and distribution centers.

Operating Income: Operating income decreased $1.6 million, to $8.7 million for the three months ended December 31, 2005 compared to $10.2 million for the three months ended December 31, 2004. Operating income as a percentage of net sales decreased from 3.9% for the three months ended December 31, 2004 to 3.1% for the three months ended December 31, 2005 primarily due to lower gross profit for the three months ended December 31, 2005 compared to the three months ended December 31, 2004.

Other Income (Expense): Other income increased by $0.7 million, to $1.3 million for the three months ended December 31, 2005 compared to $0.6 million for the three months ended December 31, 2004. The increase in other income was primarily due to an increase in interest income from $0.6 million for the three months ended December 31, 2004 compared to $1.1 million for the three months ended December 31, 2005 as a result of increasing interest rates enhanced by a $17.9 million increase in cash and investments in 2005. However, the increase in interest income was partially offset by the adjustment of certain bond values due to increasing market interest rates during the three months ended December 31, 2005.

Provision for Income Taxes: The provision for income taxes increased to $3.6 million for the three months ended December 31, 2005 compared to $2.2 million for the three months ended December 31, 2004 due to accumulated over-provision for taxes during the first nine months of 2004, and due to the release during this period of provisions no longer required for certain income tax contingencies. The release of the contingency is a discrete item for the quarter ended December 31, 2004 of approximately $1.0 million. Pre-tax income for the year ended December 31, 2004 was lower than the estimates used to record tax provisions during the first nine months of that year, and the true-up of the tax rate for the year and the release of contingencies resulted in an effective tax rate of 20.1% for the quarter ended December 31, 2004 compared to the 36.7% tax provision estimated for the three months ended December 31, 2005. The quarter ended December 31, 2005 is now the third quarter of the Company’s new fiscal year ended March 31, 2006, and did not include any true-up of prior tax provisions.

Net Sales: Net sales increased $27.4 million, or 3.7%, to $769.5 million for the nine months ended December 31, 2005 compared to $742.1 million for the nine months ended December 31, 2004. Retail sales increased $28.6 million, or 4.0%, to $739.7 million for the nine months ended December 31, 2005 compared to $711.1 million for the nine months ended December 31, 2004. The effect of seven new stores opened during the nine months ended December 31, 2005 increased retail sales by $9.0 million and the full period effect of 23 new stores opened during the nine months ended December 31, 2004 increased sales by $17.6 million for the nine months ended December 31, 2005. However, same-store-sales were down 0.2% for the nine months ended December 31, 2005 compared to the nine months ended December 31, 2004 partly due to operational issues and the effects of higher gasoline prices. Bargain Wholesale net sales decreased $1.2 million, or 3.9%, to $29.8 million for the nine months ended December 31, 2005 compared to $31.0 million for the nine months ended December 31, 2004.

Gross Profit: Gross profit increased $2.2 million, or 0.8%, to $289.5 million for the nine months ended December 31, 2005 compared to $287.4 million for the nine months ended December 31, 2004. As a percentage of net sales, overall gross margin decreased to 37.6% for the nine months ended December 31, 2005 compared to 38.7% for the nine months ended December 31, 2004. As a percentage of retail sales, retail gross margin decreased to 38.3% for the nine months ended December 31, 2005 compared to 39.5% for the nine months ended December 31, 2004. The increase in gross profit dollars was partly due to a decrease in spoilage/shrink from 4.2% for the nine months ended December 31, 2004 to 3.6% for the nine months ended December 31, 2005 as a result of lower shrink recorded based on physical inventories. However, the increase in gross profit dollars was partially offset by a 0.2% reserve for special markdowns recorded in the nine months ended December 31, 2005 in anticipation of management’s plan to use price promotions to accelerate the sale of certain products. There was also an increase in product cost for retail from 55.9% for the nine months ended December 31, 2004 to 57.4% for the nine months ended December 31, 2005, primarily due to product cost changes and a shift in the sales mix to more grocery items. The Bargain Wholesale margin increased slightly to 20.0% for the nine months ended December 31, 2005 compared to 19.9% for the nine months ended December 31, 2004. The remaining change was made up of increases and decreases in other less significant items included in cost of sales.

Operating Expenses: Operating expenses increased by $12.9 million, or 5.3%, to $254.1 million for the nine months ended December 31, 2005 compared to $241.2 million for the nine months ended December 31, 2004. As a percentage of net sales, operating expenses increased to 32.9% for the nine months ended December 31, 2005 from 32.5% for the nine months ended December 31, 2004. The dollar increase was primarily due to higher retail store operating expenses of $13.7 million between the nine months ended December 31, 2005 and 2004, primarily as a result of an increase in retail store labor and benefit costs of $10.6 million and an increase in utility costs of $1.8 million primarily due to the opening of seven new stores during the nine months ended December 31, 2005, the full period effect of 23 new stores opened during the nine months ended December 31, 2004 and cost increases in existing stores. In addition, retail store operating expenses increased disproportionately compared to retail sales increases due to the underperformance of Texas stores. The increase in operating expenses was also due to an increase in distribution and transportation costs of $4.7 million, primarily as a result of higher fuel costs and increased delivery costs due to additional new store locations. Operating expenses also increased due to an increase in accounting and consulting fees of $4.4 million. Finally, the Company recorded an asset impairment charge of $0.8 million relating to one underperforming store in Texas. However, the increase in operating expenses was partially offset by a decrease in workers’ compensation expenses of $12.1 million due to stabilization of reserve requirements and improvements in claims handling and accident reporting, and an unusually large increase in the reserve in the quarter ended December 31, 2004. The increase in operating expenses was also partially offset by a decrease in legal costs of $2.0 million primarily due to reduced outside legal costs in the nine months ended December 31, 2005 compared to the nine months ended December 31, 2004. The remaining change was made up of increases and decreases in other less significant items included in operating expenses.

Depreciation and Amortization: Depreciation and amortization increased $1.3 million, or 5.7%, to $23.5 million for the nine months ended December 31, 2005 compared to $22.2 million for the nine months ended December 31, 2004 as a result of seven new stores opened during the nine months ended December 31, 2005, the full period effect of 23 new stores opened during the nine months ended December 31, 2004, and additions to existing stores and distribution centers. The increase was partially offset due to disposal of certain store fixed assets and fully depreciated assets during the three months ended December 31, 2005.

Other Income (Expense): Other income increased $6.0 million to $7.7 million for the nine months ended December 31, 2005 compared to $1.7 million for the nine months ended December 31, 2004. The primary reason for the increase in other income was recognition in the 2005 period of $4.2 million of compensation for a forced store closure due a local government eminent domain action. Also, interest income earned on the Company’s investments increased from $1.7 million for the nine months ended December 31, 2004 to $3.4 million for the nine months ended December 31, 2005 as a result of increasing interest rates enhanced by a $17.9 million increase in cash and investments in 2005, and the net effect of market interest rate fluctuations during both periods on interest income and the valuation losses recognized on certain of its bonds in 2004.

Provision for Income Taxes: The provision for income taxes decreased to $7.2 million for the nine months ended December 31, 2005 compared to $8.0 million for the nine months ended December 31, 2004. The lower tax rate in 2004 compared to 2005 is due to the release of provisions no longer required for certain income tax contingencies. The release of the contingency is a discrete item for the quarter ended December 31, 2004 of approximately $1.0 million. Pre-tax income for the year ended December 31, 2004 was lower than the estimates used to record tax provisions during the first nine months of that year, and the true-up of the tax rate for the year and the release of contingencies resulted in an effective tax rate of 31.1% for the nine months ended December 31, 2004 compared to the 36.7% tax provision estimated for the nine months ended December 31, 2005.

	12 Months Ended Dec. 31, 2005									Reconciliation to Form 10-Q
	Texas Operations			All-Other			Consolidated			Subtract: 3 Months Ended March 31,2005			Form 10-Q 9 Months Ended December 31, 2005

Total Sales	$	84.9		$	927.2		$	1,012.1		$	242.6		$	769.5
Cost of Sales and Operating Expenses		(90.6	)		(877.5	)		(968.1	)		(234.1	)		(734.0	)
Depreciation and Amortization		(9.8	)		(21.5	)		(31.3	)		(7.8	)		(23.5	)
Operating Income		(15.5	)		28.2			12.7			0.8			11.9
Total Other Income		-			8.0			8.0			0.3			7.7
Income Tax Benefit (Expense)		5.4			(12.9	)		(7.5	)		(0.3	)		(7.2	)
Marginal and Total Net Income	$	(10.1	)	$	23.3		$	13.2		$	0.8		$	12.4

Marginal Adjustments to Net Income:
Depreciation and Amortization		9.8
Texas Impairment (included in Operating Expenses)		0.8
Marginal Cash Contribution from Texas	$	0.5