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

EXHIBIT 99(b)
Page 1 of 5

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008
(Amounts in Thousands, Except for Per Share Data)
			THREE MONTHS ENDED (UNAUDITED)
			Amounts							Percent of Sales
			August 2,		August 3,		% Over			August 2,			August 3,
			2009		2008		(Under)			2009			2008
Net sales		$	45,478		59,321		(23.3	)	%	100.0		%	100.0		%
Cost of sales			37,891		51,919		(27.0	)	%	83.3		%	87.5		%
	Gross profit		7,587		7,402		2.5		%	16.7		%	12.5		%
Selling, general and
administrative expenses			4,895		5,384		(9.1	)	%	10.8		%	9.1		%
Restructuring (credit) expense			(158	)	402		N.M.			(0.3	)	%	0.7		%
	Income from operations		2,850		1,616		76.4		%	6.3		%	2.7		%
Interest expense			357		431		(17.2	)	%	0.8		%	0.7		%
Interest income			(12	)	(34	)	(64.7	)	%	(0.0	)	%	(0.1	)	%
Other expense			514		14		N.M.			1.1		%	0.0		%
	Income before income taxes		1,991		1,205		65.2		%	4.4		%	2.0		%
Income taxes*			115		424		(72.9	)	%	5.8		%	35.2		%
	Net income	$	1,876		781		140.2		%	4.1		%	1.3		%
Net income per share-basic		$	0.15		0.06		150.0		%
Net income per share-diluted		$	0.15		0.06		150.0		%
Average shares outstanding-basic			12,653		12,648		0.0		%
Average shares outstanding-diluted			12,751		12,736		0.1		%
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 2 of 5

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
AUGUST 2, 2009, AUGUST 3, 2008 AND MAY 3, 2009
Unaudited
(Amounts in Thousands)
				Amounts		Increase
				August 2,	August 3,	(Decrease)					* May 3,
				2009	2008	Dollars		Percent			2009
Current assets
	Cash and cash equivalents		$	15,481	6,352	9,129		143.7		%	11,797
	Accounts receivable			13,837	20,164	(6,327	)	(31.4	)	%	18,116
	Inventories			21,717	34,862	(13,145	)	(37.7	)	%	23,978
	Deferred income taxes			52	4,472	(4,420	)	(98.8	)	%	54
	Assets held for sale			1,037	5,610	(4,573	)	(81.5	)	%	1,209
	Income taxes receivable			396	160	236		147.5		%	210
	Other current assets			1,531	1,627	(96	)	(5.9	)	%	1,264
		Total current assets		54,051	73,247	(19,196	)	(26.2	)	%	56,628
Property, plant & equipment, net				24,013	33,950	(9,937	)	(29.3	)	%	24,253
Goodwill				11,462	4,114	7,348		178.6		%	11,593
Deferred income taxes				-	29,144	(29,144	)	(100.0	)	%	-
Other assets				2,885	2,335	550		23.6		%	2,820
		Total assets	$	92,411	142,790	(50,379	)	(35.3	)	%	95,294
Current liabilities
	Current maturities of long-term debt		$	4,817	7,378	(2,561	)	(34.7	)	%	4,764
	Current portion of obligation under a capital lease			452	692	(240	)	(34.7	)	%	626
	Accounts payable - trade			13,592	17,249	(3,657	)	(21.2	)	%	17,030
	Accounts payable - capital expenditures			725	1,020	(295	)	(28.9	)	%	923
	Accrued expenses			5,215	5,534	(319	)	(5.8	)	%	6,504
	Accrued restructuring			584	1,495	(911	)	(60.9	)	%	853
	Income taxes payable - current			72	33	39		118.2		%	83
		Total current liabilities		25,457	33,401	(7,944	)	(23.8	)	%	30,783
Accounts payable - capital expenditures				550	1,275	(725	)	(56.9	)	%	638
Income taxes payable - long-term				3,538	5,069	(1,531	)	(30.2	)	%	3,264
Deferred income taxes				1,072	1,363	(291	)	(21.3	)	%	974
Obligation under capital lease				-	458	(458	)	(100.0	)	%	-
Long-term debt , less current maturities				11,618	13,980	(2,362	)	(16.9	)	%	11,604
		Total liabilities		42,235	55,546	(13,311	)	(24.0	)	%	47,263
Shareholders' equity				50,176	87,244	(37,068	)	(42.5	)	%	48,031
		Total liabilities and
		shareholders' equity	$	92,411	142,790	(50,379	)	(35.3	)	%	95,294
Shares outstanding				12,848	12,648	200		1.6		%	12,768
	* Derived from audited financial statements.

Page 3 of 5

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008
Unaudited
(Amounts in Thousands)
				THREE MONTHS ENDED
				Amounts
				August 2,		August 3,
				2009		2008
Cash flows from operating activities:
	Net income		$	1,876		781
	Adjustments to reconcile net income to net cash
	provided by operating activities:
	Depreciation			933		1,258
	Amortization of other assets			157		79
	Stock-based compensation			208		98
	Deferred income taxes			100		90
	Restructuring expenses, net of gain on sale of related assets			(112	)	-
	Changes in assets and liabilities:
		Accounts receivable		4,279		6,909
		Inventories		2,261		532
		Other current assets		(267	)	(299	)
		Other assets		(15	)	(5	)
		Accounts payable - trade		(3,371	)	(3,854	)
		Accrued expenses		(1,289	)	(2,757	)
		Accrued restructuring		(269	)	63
		Income taxes		77		428
		Net cash provided by operating activities		4,568		3,323
Cash flows from investing activities:
	Capital expenditures			(892	)	(986	)
	Proceeds from the sale of equipment			284		-
		Net cash used in investing activities		(608	)	(986	)
Cash flows from financing activities:
	Payments on vendor-financed capital expenditures			(87	)	(599	)
	Payments on long-term debt			-		(65	)
	Debt issuance costs			(15	)	-
	Payments on capital lease obligation			(174	)	(235	)
		Net cash used in financing activities		(276	)	(899	)
Increase in cash and cash equivalents				3,684		1,438
Cash and cash equivalents at beginning of period				11,797		4,914
Cash and cash equivalents at end of period			$	15,481		6,352
Free Cash Flow (1)			$	3,699		1,503
(1) Free Cash Flow reconciliation is as follows:
				FY 2010		FY 2009
A) Net cash provided by operating activities			$	4,568		3,323
B) Minus: Capital Expenditures				(892	)	(986	)
C) Add: Proceeds from the sale of buildings and equipment				284		-
D) Minus: Payments on vendor-financed capital expenditures				(87	)	(599	)
E) Minus: Payments on capital lease obligation				(174	)	(235	)
			$	3,699		1,503

Page 4 of 5

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008
(Amounts in thousands)
		THREE MONTHS ENDED (UNAUDITED)
		Amounts									Percent of Sales
		August 2,			August 3,			% Over			August 2,			August 3,
Net Sales by Segment		2009			2008			(Under)			2009			2008
Mattress Fabrics	$	26,275			35,561			(26.1	)	%	57.8		%	59.9		%
Upholstery Fabrics		19,203			23,760			(19.2	)	%	42.2		%	40.1		%
Net Sales	$	45,478			59,321			(23.3	)	%	100.0		%	100.0		%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics	$	4,761			6,344			(25.0	)	%	18.1		%	17.8		%
Upholstery Fabrics		2,797			1,070			161.4		%	14.6		%	4.5		%
Subtotal		7,558			7,414			1.9		%	16.6		%	12.5		%
Restructuring related (credit) charge		29		(1)	(12	)	(1)	N.M.			0.1		%	(0.0	)	%
Gross Profit	$	7,587			7,402			2.5		%	16.7		%	12.5		%
Sales, General and Administrative expenses by Segment											Percent of Sales
Mattress Fabrics	$	1,809			2,128			(15.0	)	%	6.9		%	6.0		%
Upholstery Fabrics		2,033			2,484			(18.2	)	%	10.6		%	10.5		%
Unallocated Corporate expenses		1,053			770			36.8		%	2.3		%	1.3		%
Subtotal		4,895			5,382			(9.0	)	%	10.8		%	9.1		%
Restructuring related charges		-		(1)	2		(1)	(100.0	)	%	0.0		%	0.0		%
Selling, General and Administrative expenses	$	4,895			5,384			(9.1	)	%	10.8		%	9.1		%
Operating income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics	$	2,952			4,216			(30.0	)	%	11.2		%	11.9		%
Upholstery Fabrics		764			(1,414	)		N.M.			4.0		%	(6.0	)	%
Unallocated corporate expenses		(1,053	)		(770	)		(36.8	)	%	(2.3	)	%	(1.3	)	%
Subtotal		2,663			2,032			31.1		%	5.9		%	3.4		%
Restructuring and related (credit) charge		187		(1)	(416	)	(1)	N.M.			0.4		%	(0.7	)	%
Operating income	$	2,850			1,616			76.4		%	6.3		%	2.7		%
Depreciation Expense by Segment
Mattress Fabrics	$	900			758			18.7		%
Upholstery Fabrics		33		(2)	500			(93.4	)	%
Total depreciation expense		933			1,258			(25.8	)	%
Notes:
(1) See page 5 for detailed explanations of restructuring and restructuring related (credits) charges.
(2) Upholstery fabric depreciation expense represents allocation of corporate departments shared by both the mattress and upholstery fabric segments.

Page 5 of 5

CULP, INC.
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 2, 2009 AND AUGUST 3, 2008
(Amounts in Thousands, Except for Per Share Data)
		THREE MONTHS ENDED (UNAUDITED)
		As Reported								August 2, 2009				As Reported									August 3, 2008				Adjusted
		August 2,		% of			% of			Adjusted		% of		August 3,		% of				% of			Adjusted		% of		% Over
		2009		Sales		Adjustments	Sales			Results		Sales		2008		Sales		Adjustments		Sales			Results		Sales		(Under)
Net sales	$	45,478		100.0	%	-	0.0	%		45,478		100.0	%	59,321		100.0	%	-		0.0	%		59,321		100.0	%	-23.3	%
Cost of sales		37,891		83.3	%	29	0.1	%	(1)	37,920		83.4	%	51,919		87.5	%	(12	)	0.0	%	(3)	51,907		87.5	%	-26.9	%
Gross profit		7,587		16.7	%	29	0.1	%		7,558		16.6	%	7,402		12.5	%	(12	)	0.0	%		7,414		12.5	%	1.9	%
Selling, general and
administrative expenses		4,895		10.8	%	-	0.0	%		4,895		10.8	%	5,384		9.1	%	(2	)	0.0	%	(3)	5,382		9.1	%	-9.0	%
Restructuring (credit) expense		(158	)	-0.3	%	158	0.3	%	(2)	-		0.0	%	402		0.7	%	(402	)	-0.7	%	(4)	-		0.0	%	0.0	%
Income from operations		2,850		6.3	%	187	0.4	%		2,663		5.9	%	1,616		2.7	%	(416	)	-0.7	%		2,032		3.4	%	31.1	%
Interest expense		357		0.8	%	-	0.0	%		357		0.8	%	431		0.7	%	-		0.0	%		431		0.7	%	-17.2	%
Interest income		(12	)	0.0	%	-	0.0	%		(12	)	0.0	%	(34	)	-0.1	%	-		0.0	%		(34	)	-0.1	%	64.7	%
Other expense		514		1.1	%	-	0.0	%		514		1.1	%	14		0.0	%	-		0.0	%		14		0.0	%	N.M.
Income before income taxes		1,991		4.4	%	187	0.4	%	(5)	1,804		4.0	%	1,205		2.0	%	(416	)	-0.7	%	(6)	1,621		2.7	%	11.3	%
Notes:
(1) The $29 restructuring related credit represents a credit of $50 for inventory markdowns and a charge of $21 for other operating costs associated with a closed plant facility.
(2) The $158 restructuring credit represents a credit of $112 for sales proceeds received on equipment with no carrying value, a credit of $78 for lease termination and other exit costs, and a charge of $32 for employee termination benefits.
(3) The $12 represents other operating costs associated with a closed plant facility. The $2 represents other operating costs associated with a closed plant facility.
(4) The $402 represents $414 for employee termination benefits and a credit of $12 for lease termination and other exit costs.
(5) Of this total credit, $137 and $50 represent cash and non-cash credits, respectively.
(6) The $416 represents a cash charge.