Event Brief of Q4 2003 Cost Plus Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Murray Dashe, Cost Plus, Chairman, CEO, President . Steve Higgins, Cost Plus, SVP Merchandising . John Luttrell, Cost Plus, SVP, CFO

. Chris Miller, Cost Plus, VP, Controller

OVERVIEW

Co. reported 4Q03 net income of $26.7m or $1.18 per diluted share with $312.5m in sales. Guidance is provided in the press release. Q&A focus: promotions, new stores, margins, and expenses.

FINANCIAL DATA

A. Key Data From Call 1. 4Q03 sales = $312.5m 2. 4Q03 net income = $26.7m 3. 4Q03 diluted EPS = $1.18 4. 4Q03 cash = $61m 5. FY03 sales = $801.6m 6. FY03 net income = $33m 7. FY03 diluted EPS = $1.48 8. FY03 capex = $26.6m

PRESENTATION SUMMARY

S1. Overview (M.D.) 1. Comments: 1. 15.9% sales increase for 4Q03 to $312.6m in sales along with 3.1% same store sales increase.

2. 4Q earnings of $26.7m or $1.18 per share at upper end of

revised guidance, compared to $25.3m or $1.14 per share for

last year's comparable period. 3. 2003 net income up 17% to $33m or $1.48 per share on top of 40.6% increase last year.

4. For quarter and year, sales increases generated by increases

in average dollar amount of a sale to $35.03 while transaction

counts down from 2002 record setting levels. 5. Additional shopping day between Thanksgiving and Christmas, consumables stronger led by beverages, drink mixes and candy. 1. Home furnishings side, furniture, window coverings, bedding, bath and baskets drove sales increases. 6. Inventory levels at year end 22% above last year. 1. Due to prep for new store openings, buildup of furniture

inventories, earlier introduction of spring furniture. 7. 10 new stores opened in 4Q03. 1. Four more opened so far in 1Q04.

2. Now operate 208 stores. 3. Pleased with sales results of new stores. 4. Anticipate 2003-class of stores will achieve average first year sales of approx. $3.5m. 1. Five years ago, average store opened at $3m in first year sales. 8. All outstanding borrowing was repaid by mid-December. 9. Ended year with $61m cash balance. 10. Repurchased 110,000 shares of stock under 500,000 stock authorization since end of fiscal year. 1. To offset increase in shares as result of stock options exercised. 11. During quarter saw margins impacted by other weaker retailers.

1. Also impacted by increased sales of beverages and other lower margin consumable products. 2. 3.1% positive same store sales increase reveals successful season. 12. 4Q earnings results less than expected, but at record levels. 1. Confirming co.'s belief that the years of infrastructure investments have created efficiencies which bring increased earnings capacity. 13. Cash flow usage to buy back stock at value prices is co.'s statement of conviction in co's strength. 14. Sales so far in 1Q04 are consistent with guidance provided. 15. For balance of FY04 with steady economy, co. should be able to achieve sales and earnings levels indicated in press release.

S2. Merchandising (S.H.) 1. Comments: 1. Strong consumables sales led home furnishing sales in 4Q. 1. Extended gifts-to-go assortments, including candy, beverage and non-alcoholic drinks, were strong among consumables. 2. Consumables sales accelerated throughout quarter, deeper sell-through of holiday categories. 3. Introduced Spring Valentine and Easter shops in January. 2. Home furnishings driven by dining furniture, floor coverings, and bedding. 1. All three categories accelerated throughout 4Q. 2. In last six weeks of quarter, sales fueled by new deliveries and opportunity buys. 3. Successful with strong post-Christmas tabloid newspaper

insert. 3. Strong sales in bath and baskets led performance, bath …