Culp (CULP) 8-K Results of Operations and Financial Condition

Exhibit 99(b)
Page 1 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
			THREE MONTHS ENDED
			Amounts								Percent of Sales
			February 1,		January 27,			% Over			February 1,			January 27,
			2009		2008			(Under)			2009			2008
Net sales		$	44,592			60,482		(26.3	)	%	100.0		%	100.0		%
Cost of sales			38,843			53,706		(27.7	)	%	87.1		%	88.8		%
	Gross profit		5,749			6,776		(15.2	)	%	12.9		%	11.2		%
Selling, general and
administrative expenses			4,676			5,117		(8.6	)	%	10.5		%	8.5		%
Restructuring expense			402			412		(2.4	)	%	0.9		%	0.7		%
	Income from operations		671			1,247		(46.2	)	%	1.5		%	2.1		%
Interest expense			646			753		(14.2	)	%	1.4		%	1.2		%
Interest income			(20	)		(77	)	(74.0	)	%	(0.0	)	%	(0.1	)	%
Other expense (income)			28			(72	)	138.9		%	0.1		%	(0.1	)	%
	Income before income taxes		17			643		(97.4	)	%	0.0		%	1.1		%
Income taxes*			467			(260	)	N.M.			N.M.			(40.4	)	%
	Net (loss) income	$	(450	)		903		N.M.			(1.0	)	%	1.5		%
Net (loss) income per share-basic			($0.04	)	$	0.07		N.M.
Net (loss) income per share-diluted			($0.04	)	$	0.07		N.M.
Average shares outstanding-basic			12,653			12,635		0.1		%
Average shares outstanding-diluted			12,653			12,738		(0.7	)	%
			NINE MONTHS ENDED
			Amounts								Percent of Sales
			February 1,		January 27,			% Over			February 1,			January 27,
			2009		2008			(Under)			2009			2008
Net sales		$	156,176			190,048		(17.8	)	%	100.0		%	100.0		%
Cost of sales			139,879			165,794		(15.6	)	%	89.6		%	87.2		%
	Gross profit		16,297			24,254		(32.8	)	%	10.4		%	12.8		%
Selling, general and
administrative expenses			14,498			17,275		(16.1	)	%	9.3		%	9.1		%
Restructuring expense			9,438			759		N.M.			6.0		%	0.4		%
	(Loss) income from operations		(7,639	)		6,220		N.M.			(4.9	)	%	3.3		%
Interest expense			1,739			2,380		(26.9	)	%	1.1		%	1.3		%
Interest income			(75	)		(197	)	(61.9	)	%	(0.0	)	%	(0.1	)	%
Other (income) expense			(207	)		625		N.M.			(0.1	)	%	0.3		%
	(Loss) income before income taxes		(9,096	)		3,412		N.M.			(5.8	)	%	1.8		%
Income taxes*			31,442			105		N.M.			N.M.			3.1		%
	Net (loss) income	$	(40,538	)		3,307		N.M.			(26.0	)	%	1.7		%
Net (loss) income per share-basic			($3.20	)	$	0.26		N.M.
Net (loss) income per share-diluted			($3.20	)	$	0.26		N.M.
Average shares outstanding-basic			12,650			12,617		0.3		%
Average shares outstanding-diluted			12,650			12,770		(0.9	)	%

* Percent of sales column for income taxes is calculated as a % of (loss) income before income taxes.

Page 2 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
FEBRUARY 1, 2009, JANUARY 27, 2008 AND APRIL 27, 2008
Unaudited
(Amounts in Thousands)
				Amounts		Increase
				February 1,	January 27,	(Decrease)					* April 27,
				2009	2008	Dollars		Percent			2008
Current assets
	Cash and cash equivalents		$	15,809	15,500	309		2.0		%	4,914
	Accounts receivable			14,219	23,370	(9,151	)	(39.2	)	%	27,073
	Inventories			25,376	37,923	(12,547	)	(33.1	)	%	35,394
	Deferred income taxes			-	5,376	(5,376	)	(100.0	)	%	4,380
	Assets held for sale			1,681	4,972	(3,291	)	(66.2	)	%	5,610
	Income taxes receivable			-	423	(423	)	(100.0	)	%	438
	Other current assets			1,493	995	498		50.1		%	1,328
		Total current assets		58,578	88,559	(29,981	)	(33.9	)	%	79,137
Property, plant & equipment, net				24,763	32,218	(7,455	)	(23.1	)	%	32,939
Goodwill				11,593	4,114	7,479		181.8		%	4,114
Deferred income taxes				-	25,993	(25,993	)	(100.0	)	%	29,430
Other assets				2,922	2,442	480		19.7		%	2,409
		Total assets	$	97,856	153,326	(55,470	)	(36.2	)	%	148,029
Current liabilities
	Current maturities of long-term debt		$	7,180	8,569	(1,389	)	(16.2	)	%	7,375
	Current portion of obligation under a capital lease			692	-	692		100.0		%	-
	Lines of credit			-	2,783	(2,783	)	(100.0	)	%	-
	Accounts payable - trade			10,947	18,312	(7,365	)	(40.2	)	%	21,103
	Accounts payable - capital expenditures			725	724	1		0.1		%	1,547
	Accrued expenses			5,592	10,422	(4,830	)	(46.3	)	%	8,300
	Accrued restructuring			1,215	1,875	(660	)	(35.2	)	%	1,432
	Income taxes payable - current			1,469	-	1,469		100.0		%	150
		Total current liabilities		27,820	42,685	(14,865	)	(34.8	)	%	39,907
Accounts payable - capital expenditures				912	-	912		100.0		%	1,449
Income taxes payable - long-term				747	4,497	(3,750	)	(83.4	)	%	4,802
Deferred income taxes				1,213	-	1,213		100.0		%	1,464
Obligation under capital lease				107	-	107		100.0		%	-
Long-term debt, less current maturities				20,933	22,026	(1,093	)	(5.0	)	%	14,048
		Total liabilities		51,732	69,208	(17,476	)	(25.3	)	%	61,670
Shareholders' equity				46,124	84,118	(37,994	)	(45.2	)	%	86,359
		Total liabilities and
		shareholders' equity	$	97,856	153,326	(55,470	)	(36.2	)	%	148,029
Shares outstanding				12,768	12,635	133		1.1		%	12,648

* Derived from audited financial statements.

Page 3 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
Unaudited
(Amounts in Thousands)
							NINE MONTHS ENDED
							Amounts
							February 1,		January 27,
							2009		2008
Cash flows from operating activities:
	Net (loss) income					$	(40,538	)	3,307
	Adjustments to reconcile net (loss) income to net cash
		provided by operating activities:
			Depreciation				5,756		4,264
			Amortization of other assets				350		280
			Stock-based compensation				306		520
			Excess tax benefit related to stock options exercised				-		(21	)
			Deferred income taxes				33,573		73
			(Gain) loss on sale of equipment				(51	)	256
			Restructuring expenses, net of gain on sale of related assets				7,960		123
			Changes in assets and liabilities, net of effects of acquisition of business:
				Accounts receivable			12,854		6,140
				Inventories			11,457		2,707
				Other current assets			(183	)	829
				Other assets			26		(128	)
				Accounts payable			(11,448	)	(3,716	)
				Accrued expenses			(2,746	)	1,651
				Accrued restructuring			(217	)	(1,483	)
				Income taxes			(2,298	)	16
					Net cash provided by operating activities		14,801		14,818
Cash flows from investing activities:
	Capital expenditures						(1,719	)	(4,303	)
	Net cash paid for acquisition of business						(11,365	)	-
	Proceeds from the sale of buildings and equipment						4,148		2,336
					Net cash used in investing activities		(8,936	)	(1,967	)
Cash flows from financing activities:
	Proceeds from lines of credit						-		1,339
	Payments on lines of credit						-		(1,149	)
	Proceeds from the issuance of long-term debt						11,000		-
	Payments on vendor-financed capital expenditures						(962	)	(571	)
	Payments on capital lease obligation						(586	)	-
	Payments on long-term debt						(4,310	)	(7,565	)
	Debt issuance costs						(133	)	-
	Proceeds from common stock issued						21		405
	Excess tax benefit related to stock options exercised						-		21
					Net cash provided by (used in) financing activities		5,030		(7,520	)
Increase in cash and cash equivalents							10,895		5,331
Cash and cash equivalents at beginning of period							4,914		10,169
Cash and cash equivalents at end of period						$	15,809		15,500
Free Cash Flow (1)						$	15,682		12,301
(1)	Free Cash Flow reconciliation is as follows:						3rd Qtr		3rd Qtr
							FY 2009		FY 2008
A)	Net cash provided by operating activities					$	14,801		14,818
B)	Minus: Capital Expenditures						(1,719	)	(4,303	)
C)	Add: Proceeds from the sale of buildings and equipment						4,148		2,336
D)	Minus: Payments on vendor-financed capital expenditures						(962	)	(571	)
E)	Minus: Payments on capital lease obligation						(586	)	-
F)	Add: Excess tax benefit related to stock options exercised						-		21
						$	15,682		12,301

Page 4 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
(Amounts in thousands)
		THREE MONTHS ENDED (UNAUDITED)
		Amounts							Percent of Total Sales
		February 1,		January 27,		% Over			February 1,			January 27,
Net Sales by Segment		2009		2008		(Under)			2009			2008
Mattress Fabrics	$	25,198		30,880		(18.4	)	%	56.5		%	51.1		%
Upholstery Fabrics		19,394		29,602		(34.5	)	%	43.5		%	48.9		%
Net Sales	$	44,592		60,482		(26.3	)	%	100.0		%	100.0		%
Gross Profit by Segment									Gross Profit Margin
Mattress Fabrics	$	4,176		4,200		(0.6	)	%	16.6		%	13.6		%
Upholstery Fabrics		1,931		3,181		(39.3	)	%	10.0		%	10.7		%
Subtotal		6,107		7,381		(17.3	)	%	13.7		%	12.2		%
Loss on impairment of equipment		-		(256	)	(100.0	)	%	0.0		%	(0.4	)	%
Restructuring related charges		(358	)	(349	)	2.6		%	(0.8	)	%	(0.6	)	%
Gross Profit	$	5,749		6,776		(15.2	)	%	12.9		%	11.2		%
Selling, General and Administrative expenses by Segment									Percent of Sales
Mattress Fabrics	$	1,941		1,571		23.6		%	7.7		%	5.1		%
Upholstery Fabrics		1,880		2,787		(32.5	)	%	9.7		%	9.4		%
Unallocated Corporate		838		746		12.3		%	1.9		%	1.2		%
		4,659		5,104		(8.7	)	%	10.4		%	8.4		%
Restructuring related charges		17		13		30.8		%	0.0		%	0.0		%
Selling, General and Administrative expenses	$	4,676		5,117		(8.6	)	%	10.5		%	8.5		%
Operating Income (loss) by Segment									Operating Income (Loss) Margin
Mattress Fabrics	$	2,235		2,628		(15.0	)	%	8.9		%	8.5		%
Upholstery Fabrics		51		395		(87.1	)	%	0.3		%	1.3		%
Unallocated Corporate		(838	)	(746	)	12.3		%	(1.9	)	%	(1.2	)	%
Subtotal		1,448		2,277		(36.4	)	%	3.2		%	3.8		%
Loss on impairment of equipment		-		(256	)	(100.0	)	%	0.0		%	(0.4	)	%
Restructuring expense and restructuring related charges		(777	)	(774	)	0.4		%	(1.7	)	%	(1.3	)	%
Operating income	$	671		1,247		46.2		%	1.5		%	2.1		%
Depreciation by Segment
Mattress Fabrics	$	941		874		7.7		%
Upholstery Fabrics		92		497		(81.5	)	%
Total Depreciation		1,033		1,371		(24.7	)	%

Notes:

See Page 6 for detailed explanations of restructuring and related charges and loss on impairment of equipment.

Page 5 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
(Amounts in thousands)
		NINE MONTHS ENDED (UNAUDITED)
		Amounts							Percent of Total Sales
		February 1,		January 27,		% Over			February 1,			January 27,
Net Sales by Segment		2009		2008		(Under)			2009			2008
Mattress Fabrics	$	88,808		103,426		(14.1	)	%	56.9		%	54.4		%
Upholstery Fabrics		67,368		86,622		(22.2	)	%	43.1		%	45.6		%
Net Sales	$	156,176		190,048		(17.8	)	%	100.0		%	100.0		%
Gross Profit by Segment									Gross Profit Margin
Mattress Fabrics	$	15,603		16,043		(2.7	)	%	17.6		%	15.5		%
Upholstery Fabrics		4,277		9,922		(56.9	)	%	6.3		%	11.5		%
Subtotal		19,880		25,965		(23.4	)	%	12.7		%	13.7		%
Loss on impairment of equipment		-		(256	)	(100.0	)	%	0.0		%	(0.1	)	%
Restructuring related charges		(3,583	)	(1,455	)	146.3		%	(2.3	)	%	(0.8	)	%
Gross Profit	$	16,297		24,254		(32.8	)	%	10.4		%	12.8		%
Selling, General and Administrative expenses by Segment									Percent of Sales
Mattress Fabrics	$	5,902		5,779		2.1		%	6.6		%	5.6		%
Upholstery Fabrics		6,444		8,877		(27.4	)	%	9.6		%	10.2		%
Unallocated Corporate		2,131		2,554		(16.6	)	%	1.4		%	1.3		%
Subtotal		14,477		17,210		(15.9	)	%	9.3		%	9.1		%
Restructuring related charges		21		65		(67.7	)	%	0.0		%	0.0		%
Selling, General and Administrative expenses	$	14,498		17,275		(16.1	)	%	9.3		%	9.1		%
Operating Income (loss) by Segment									Operating Income (Loss) Margin
Mattress Fabrics	$	9,702		10,264		(5.5	)	%	10.9		%	9.9		%
Upholstery Fabrics		(2,168	)	1,045		(307.5	)	%	(3.2	)	%	1.2		%
Unallocated Corporate		(2,131	)	(2,554	)	(16.6	)	%	(1.4	)	%	(1.3	)	%
Subtotal		5,403		8,755		(38.3	)	%	3.5		%	4.6		%
Loss on impairment of equipment		-		(256	)	(100.0	)	%	0.0		%	(0.1	)	%
Restructuring expense and restructuring related charges		(13,042	)	(2,279	)	472.3		%	(8.4	)	%	(1.2	)	%
Operating (loss) income	$	(7,639	)	6,220		N.M.			(4.9	)	%	3.3		%
Depreciation by Segment
Mattress Fabrics	$	2,617		2,668		(1.9	)	%
Upholstery Fabrics		1,049		1,596		(34.3	)	%
Subtotal		3,666		4,264		(14.0	)	%
Accelerated Depreciation		2,090		-		100.0		%
Total Depreciation		5,756		4,264		35.0		%

Notes:

See page 7 for detailed explanations of restructuring and related charges and loss on impairment of equipment.

Page 6 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
(Unaudited)
(Amounts in Thousands, Except for Per Share Data)
			THREE MONTHS ENDED
			As Reported February 1, 2009		% of Sales		Adjustments		% of Sales				February 1, 2009 Proforma Net of Adjustments		% of Sales		As Reported January 27, 2008		% of Sales		Adjustments		% of Sales				January 27, 2008 Proforma Net of Adjustments		% of Sales		Proforma % Over (Under)
Net sales		$	44,592		100.0	%	-						44,592		100.0	%	60,482		100.0	%	-						60,482		100.0	%	-26.3	%
Cost of sales			38,843		87.1	%	(358	)	-0.8	%	(1	)	38,485		86.3	%	53,706		88.8	%	(349	)	-0.6	%	(3	)	53,357		88.2	%	-27.9	%
	Gross profit		5,749		12.9	%	(358	)	-0.8	%			6,107		13.7	%	6,776		11.2	%	(349	)	-0.6	%			7,125		11.8	%	-14.3	%
Selling, general and
administrative expenses			4,676		10.5	%	(17	)	0.0	%	(1	)	4,659		10.4	%	5,117		8.5	%	(13	)	0.0	%	(3	)	5,104		8.4	%	-8.7	%
Restructuring expense			402		0.9	%	(402	)	-0.9	%	(2	)	-		0.0	%	412		0.7	%	(412	)	-0.7	%	(4	)	-		0.0	%	0.0	%
	Income from operations		671		1.5	%	(777	)	-1.7	%			1,448		3.2	%	1,247		2.1	%	(774	)	-1.3	%			2,021		3.3	%	-28.4	%
Interest expense			646		1.4	%	-		0.0	%			646		1.4	%	753		1.2	%	-		0.0	%			753		1.2	%	-14.2	%
Interest income			(20	)	0.0	%	-		0.0	%			(20	)	0.0	%	(77	)	-0.1	%	-		0.0	%			(77	)	-0.1	%	-74.0	%
Other expense (income)			28		0.1	%	-		0.0	%			28		0.1	%	(72	)	-0.1	%	-		0.0	%			(72	)	-0.1	%	-138.9	%
	Income before income taxes	$	17		0.0	%	(777	)	-1.7	%	(5	)	794		1.8	%	643		1.1	%	(774	)	-1.3	%	(6	)	1,417		2.3	%	-44.0	%

Notes:
(1)	The $358 restructuring related charge represents $322 for inventory markdowns and $36 for other operating costs associated with closed plant facilities. The $17 restructuring related charge represents other operating costs associated with closed plant facilities.
(2)	The $402 restructuring charge represents $234 for lease termination and other exit costs, $148 for write-downs of equipment, and $20 for employee termination benefits. The lease termination and other exit costs of $234 primarily relate to the sale of the company's corporate headquarters.
(3)	The $349 restructuring related charge represents $218 for other operating costs associated with closed plant facilities and $131 for inventory markdowns. The $13 restructuring related charge represents other operating costs associated with closed plant facilities.
(4)	The $412 restructuring charge represents $238 for employee termination benefits, $93 for a write-down of a building, $68 for lease termination and other exit costs, $57 for asset movement costs, and a credit of $44 for sales proceeds received on equipment with no carrying value.
(5)	Of this total charge, $273 and $504 represent cash and non-cash charges, respectively.
(6)	Of this total charge, $550 and $224 represent cash and non-cash charges, respectively.

Page 7 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED FEBRUARY 1, 2009 AND JANUARY 27, 2008
(Unaudited)
(Amounts in Thousands, Except for Per Share Data)
			NINE MONTHS ENDED
			As Reported February 1, 2009		% of Sales		Adjustments		% of Sales				February 1, 2009 Proforma Net of Adjustments		% of Sales		As Reported January 27, 2008		% of Sales		Adjustments		% of Sales				January 27, 2008 Proforma Net of Adjustments		% of Sales		Proforma % Over (Under)
Net sales		$	156,176		100.0	%	-						156,176		100.0	%	190,048		100.0	%	-						190,048		100.0	%	-17.8	%
Cost of sales			139,879		89.6	%	(3,583	)	-2.3	%	(1	)	136,296		87.3	%	165,794		87.2	%	(1,455	)	-0.8	%	(3	)	164,339		86.5	%	-17.1	%
	Gross profit		16,297		10.4	%	(3,583	)	-2.3	%			19,880		12.7	%	24,254		12.8	%	(1,455	)	-0.8	%			25,709		13.5	%	-22.7	%
Selling, general and
administrative expenses			14,498		9.3	%	(21	)	0.0	%	(1	)	14,477		9.3	%	17,275		9.1	%	(65	)	0.0	%	(3	)	17,210		9.1	%	-15.9	%
Restructuring expense			9,438		6.0	%	(9,438	)	-6.0	%	(2	)	-		0.0	%	759		0.4	%	(759	)	-0.4	%	(4	)	-		0.0	%	0.0	%
	(Loss) income from operations		(7,639	)	-4.9	%	(13,042	)	-8.4	%			5,403		3.5	%	6,220		3.3	%	(2,279	)	-1.2	%			8,499		4.5	%	-36.4	%
Interest expense			1,739		1.1	%	-		0.0	%			1,739		1.1	%	2,380		1.3	%	-		0.0	%			2,380		1.3	%	-26.9	%
Interest income			(75	)	0.0	%	-		0.0	%			(75	)	0.0	%	(197	)	-0.1	%	-		0.0	%			(197	)	-0.1	%	-61.9	%
Other (income) expense			(207	)	-0.1	%	-		0.0	%			(207	)	-0.1	%	625		0.3	%	-		0.0	%			625		0.3	%	-133.1	%
	(Loss) income before income taxes	$	(9,096	)	-5.8	%	(13,042	)	-8.4	%	(5	)	3,946		2.5	%	3,412		1.8	%	(2,279	)	-1.2	%	(6	)	5,691		3.0	%	-30.7	%

Notes:
(1)	The $3.6 million restructuring related charge represents $2.1 million for accelerated depreciation, $1.4 million for inventory markdowns, and $63 for other operating costs associated with closed plant facilities. The $21 restructuring related charge represents other operating costs associated with closed plant facilities.
(2)	The $9.4 million restructuring charge represents $8.0 million for write-downs of equipment and buildings, $797 for employee termination benefits, and $681 for lease termination and other exit costs.
(3)	The $1.4 million restructuring related charge represents $920 for other operating costs associated with closed plant facilities and $535 for inventory markdowns. The $65 restructuring related charge represents other operating costs associated with closed plant facilities.
(4)	The $759 restructuring charge represents $612 for lease termination and other exit costs, $482 for write-downs of buildings and equipment, $184 for asset movement costs, a credit of $160 for employee termination benefits, and a credit of $359 for sales proceeds received on equipment with no carrying value.
(5)	Of this total charge, $1.5 million and $11.5 million represent cash and non-cash charges, respectively.
(6)	Of this total charge, $1.3 million and $1.0 million represent cash and non-cash charges, respectively.