(All amounts in thousands)

See notes to the condensed consolidated financial statements.

1.   The condensed consolidated financial statements include the accounts of Burlington Coat Factory Warehouse Corporation and all its subsidiaries in which it has the controlling financial interest through direct ownership of a majority voting interest or a controlling managerial interest ("the Company"). All subsidiaries are wholly owned except two. The Company maintains a ninety percent interest and a seventy-five percent interest, respectively, in two investments. These investments are consolidated net of their minority interests. All significant intercompany accounts and transactions have been eliminated. Previously, the Company had maintained a fifty percent interest in a third investment in a partnership in which it maintained managerial and financial control. During the third quarter of fiscal 2005, the partnership was dissolved and all assets were distributed to the partners. The accompanying financial statements are unaudited, but in the opinion of management reflect al l adjustments (which are of a normal and recurring nature) necessary for a fair presentation of the results of operations for the interim periods. The balance sheet at May 29, 2004 has been derived from the audited financial statements in Amendment No. 3 to the Company's Annual Report on Form 10-K/A for the fiscal year ended May 29, 2004. Because the Company's business is seasonal in nature, the operating results for the nine and three months ended February 26, 2005 and the corresponding periods ended February 28, 2004 are not necessarily indicative of results for the fiscal year.

2. Restatement of Financial Statements

     Subsequent to the Company's issuance of its condensed consolidated financial statements for the three and nine month periods ended February 28, 2004, the Company's management reviewed its application of generally accepted accounting principles for lease accounting. Based on this review and discussions that the Company had with the Audit Committee of the Company's Board of Directors, the Company concluded to restate its previously issued financial statements for the three and nine month periods ended February 28, 2004 related to its computation of depreciation/amortization, straight-line rent expense and the related deferred rent liability.

Historically, when accounting for leases with renewal options, the Company recorded rent expense on a straight-line basis over the fixed initial term, with the term commencing when rental payments actually began, and computed depreciation/amortization on the related leasehold improvements and other long-lived assets located on these properties over their useful lives. The Company has restated the financial statements to recognize rent expense on a straight-line basis over the expected lease term, including rent holidays and option periods where exercise of such option periods is reasonably assured. In addition, the commencement date of the period over which rental expense is recognized is the earlier of the date on which the Company becomes legally obligated for rental payments or the date on which the Company takes possession of the property. The resulting adjustments have no effect on historical or future cash flows or timing of payments under pertinent leases.

In addition, the Company previously netted lease incentives received from the lessor for the reimbursement of costs of leasehold improvements against the incurred capital expenditures. The Company has restated its financial statements for the nine and three month periods ended February 28, 2004 to account for these lease incentives by recording them as deferred rent and amortizing them over the lease term.

Also, the Company concluded to reclassify its other income items, including investment income, gains or losses on disposition of fixed assets and other miscellaneous income items under the caption Other Income, Net, previously reported under the caption Other Revenue, in its condensed consolidated statements of operations for the nine and three month periods ended February 28, 2004. These adjustments are collectively referred to as the "Restatement."

Also, the Company previously included restricted cash and cash equivalents as part of cash and cash equivalents in the condensed consolidated statements of cash flows. The Company has restated the condensed consolidated statement of cash flows for the nine month period ended February 28, 2004 to treat only unrestricted amounts as cash and cash equivalents. Cash and cash equivalents changed from $36,730 to $27,904 at the beginning of the nine month period ended February 28, 2004 and from $158,464 to $149,266 at the end of the same period as a result of the Restatement.

The condensed consolidated financial statements for the three and nine month periods ended February 28, 2004 included in this Form 10-Q have been restated to reflect the adjustments described above. The effects of the Restatement have also been set forth, for the periods presented therein, in Amendment No. 3 to the Company's Annual Report on Form 10-K/A for the fiscal year ended May 29, 2004 filed with the Securities and Exchange Commission.

The following is a summary of the impact of the Restatement on the Company's condensed consolidated statements of operations for the nine and three month periods ended February 28, 2004.

(all amounts in thousands, except per share data)
Nine Months Ended February 28, 2004

* The Company did not previously report income from continuing operations as discontinued operations were immaterial during the three and nine month periods ended February 28, 2004.

3.   Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in Amendment No. 3 to the Company's Annual Report on Form 10-K/A filed with the Securities and Exchange Commission concurrently with this filing, along with any amendments thereto.

4.   Restricted cash and cash equivalents consist of $0.4 million of compensating cash balances at two of the Company's banks, $7.5 million pledged as collateral for certain insurance contracts and $2.5 million contractually restricted and related to the acquisition and maintenance of a building related to a store operated by the Company.

5.   Merchandise inventories as of February 26, 2005 and May 29, 2004 are valued at the lower of cost, on a First In First Out (FIFO) basis, or market, as determined by the retail inventory method. The Company records its cost of merchandise (net of purchase discounts and certain vendor allowances), certain merchandise acquisition costs (primarily commissions and import fees), inbound freight, warehouse outbound freight, and freight on internally transferred merchandise in the line item "Cost of Sales" in the Company's Condensed Consolidated Statement of Operations. Costs associated with the Company's warehousing, distribution, buying, and store receiving functions are included in the line items "Selling and Administrative Expenses" and "Depreciation" in the Company's Condensed Consolidated Statement of Operations. Warehousing and purchasing costs included in Selling and Administrative Expenses amounted to $33.9 million and $11.4 million for the nine and three months ended February 26, 20 05, respectively, and $32.0 million and $10.3 million for the similar periods of fiscal 2004. Depreciation related to the warehousing and purchasing functions amounted to $6.6 million and $2.2 million for the nine and three months ended February 26, 2005 and $6.3 million and $2.2 million for the similar periods of fiscal 2004. Also included in Selling and Administrative Expenses are payroll and payroll related expenses, occupancy related expenses, advertising expenses, store operating expenses and corporate overhead expenses.

7.   The Company records revenue at the time of sale and delivery of merchandise. The Company records revenue net of allowances for estimated future returns. The Company accounts for layaway sales and leased department revenue in compliance with Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements. Layaway sales are recognized upon delivery of merchandise to the customer. The amount of cash received upon initiation of the layaway is recorded as a deposit liability within other current liabilities. Gift cards are recorded as a liability at the time of issuance, and upon redemption the related sale is recorded.

8.   As of February 26, 2005, the Company had a current deferred tax asset of $19.8 million and a non-current deferred tax asset of $13.1million. As of May 29, 2004, the Company had a current deferred tax asset of $19.7 million and a non-current deferred tax asset of $13.6 million. Income taxes are provided on an interim basis based upon the Company's estimate of the effective annual income tax rate.

9.   The Company accounts for intangible assets in compliance with SFAS No. 142, Goodwill and Other Intangible Assets. The Company's intangible assets primarily represent costs incurred to acquire long term store leases. These leasehold purchases are recorded at cost, which approximates fair value, and, in accordance with SFAS No. 142, are amortized over the minimum lease term, including option periods where the exercise of the option period can be reasonably assured, which approximates the leasehold's useful life. Amortization of intangibles is included in Selling and Administrative Expenses in the Company's Condensed Consolidated Statement of Operations. Intangible assets as of February 26, 2005 and May 29, 2004 are as follows (in thousands):

Amortization expense amounted to $3.2 million and $0.9 million for the nine and three months ended February 26, 2005, respectively, compared with $3.0 million and $1.0 million for the nine and three months ended February 28, 2004, respectively. Amortization expense for each of the next five fiscal years is estimated to be as follows: fiscal 2006 - $3.6 million; fiscal 2007 - $3.5 million; fiscal 2008 - $3.5 million; fiscal 2009 - $3.3 million; fiscal 2010 - $3.2 million. Amortization for the remainder of fiscal 2005 is expected to be approximately $0.9 million.

10.  Other assets consist primarily of notes receivable.

11.  Other current liabilities primarily consists of sales tax payable, unredeemed store credits and gift certificates, accrued payroll costs, accrued insurance costs, accrued operating expenses, layaway deposits, payroll taxes payable, dividend accrual, current portion of deferred rents and other miscellaneous items.

12.  In May 2003, the Company established a reserve of $0.4 million covering lease obligations of closed stores extending beyond May 31, 2003. Scheduled rent and rent related payments for each of the fiscal years 2004 and 2005 amount to $0.2 million. During the nine months ended February 26, 2005, $0.1 million of payments were applied against this reserve. The remaining $0.1 million will be paid during the remainder of fiscal 2005.

In November 2003, additions to the Company's reserve for lease related obligations of closed stores amounted to $1.5 million. Payments applied against this reserve during the nine months ended February 26, 2005 amounted to $0.6 million. At February 26, 2005, the reserve amounted to $0.8 million. Scheduled rent related payments over the next five years are as follows: fiscal 2005 - $0.1 million; fiscal 2006 - $0.2 million; fiscal 2007 - $0.2 million; fiscal 2008 - $0.2 million; and fiscal 2009 - $0.1 million. The Company believes these reserves are adequate to cover the expected contractual lease payments and other ancillary costs associated with these closings.

13. Other liabilities primarily consist of deferred lease incentives and the net accumulation of straight line rent expense in excess of actual rental expenditures. Deferred lease incentives are funds received from landlords used primarily to offset the costs of store remodelings. These deferred lease incentives are amortized over the expected lease term including rent holiday periods and option periods where the exercise of the option can be reasonably assured.

	February 26, 2005		May 29, 2004
Senior Notes, 4.06% due in annual payments of   various amounts from September 30, 2006 to   September 30, 2010	$36,000		$36,000
Senior Notes, 4.67% due in annual payments of   various amounts from September 30, 2007 to   September 30, 2013	64,000		64,000
Industrial Revenue Bonds, 6.0% due in semi-annual   payments of various amounts from September 1,   2005 to September 1, 2010	5,735		6,400
Promissory Note, non-interest bearing, due in   monthly payments of $17 through January 1, 2012	1,383		1,534
Capital Lease Obligations	26,530		26,651
Subtotal	133,648		134,585
Less Current Portion	(1,185)		(1,047)
Long-Term Debt and Obligations Under Capital Leases	$132,463		$133,538

15.  On August 5, 2004, the Board of Directors of the Company declared a cash dividend in the amount of four cents ($0.04) per share payable on December 15, 2004 to stockholders of record on November 22, 2004. The paid dividend amounted to $1.8 million. On January 10, 2005 the Board of Directors of the Company declared a special dividend of fifty-six cents ($0.56) per share payable on February 21, 2005 to stockholders of record on January 20, 2005. The dividend amounted to $26.8 million. The special dividend was declared as a result of the Company's cash position being in excess of its expected requirements for the remainder of the fiscal year.*

16.  The Company presents comprehensive income as a component of stockholders' equity in accordance with SFAS No. 130, Reporting Comprehensive Income. For the nine and three months ended February 26, 2005 and the nine and three months ended February 28, 2004, comprehensive income consisted of net income and net unrealized gains (loss) on available-for-sale investments.

17.  The Company has one reportable segment operating within the United States. Sales by major product categories are as follows (in thousands):

18. Rental income from leased departments, included in Other Revenue, amounted to $7.2 million and $2.9 million for the nine and three months ended February 26, 2005 compared with $7.1 million and $2.9 million in the similar periods of last year.

*Forward Looking Statement. See Safe Harbor Statement on Page 26.