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

Exhibit 99(b)

Page 1 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts										Percent of Sales
	November 1,			November 2,			% Over				November 1,				November 2,
	2009			2008			(Under)				2009				2008
Net sales	$	49,716			52,263			(4.9	)	%		100.0		%		100.0	%
Cost of sales		40,582			49,115			(17.4	)	%		81.6		%		94.0	%
Gross profit		9,134			3,148			190.2		%		18.4		%		6.0	%
Selling, general and
administrative expenses		5,385			4,439			21.3		%		10.8		%		8.5	%
Restructuring (credit) expense		(184	)		8,634		N.M.					(0.4	)	%		16.5	%
Income (loss) from operations		3,933			(9,925	)	N.M.					7.9		%		(19.0	) %
Interest expense		342			663			(48.4	)	%		0.7		%		1.3	%
Interest income		(16	)		(21	)		(23.8	)	%		(0.0	)	%		(0.0	) %
Other expense (income)		103			(250	)	N.M.					0.2		%		(0.5	) %
Income (loss) before income taxes		3,504			(10,317	)	N.M.					7.0		%		(19.7	) %
Income taxes*		625			30,551		N.M.					17.8		%	N.M.
Net income (loss)	$	2,879			(40,868	)	N.M.					5.8		%	N.M.
Net income (loss) per share-basic	$	0.23		$	(3.23	)	N.M.
Net income (loss) per share-diluted	$	0.22		$	(3.23	)	N.M.
Average shares outstanding-basic		12,671			12,650			0.2		%
Average shares outstanding-diluted		12,852			12,650			1.6		%

	SIX MONTHS ENDED
	Amounts										Percent of Sales
	November 1,			November 2,			% Over				November 1,				November 2,
	2009			2008			(Under)				2009				2008
Net sales	$	95,193			111,585			(14.7	)	%		100.0		%		100.0	%
Cost of sales		78,473			101,035			(22.3	)	%		82.4		%		90.5	%
Gross profit		16,720			10,550			58.5		%		17.6		%		9.5	%
Selling, general and
administrative expenses		10,280			9,823			4.7		%		10.8		%		8.8	%
Restructuring (credit) expense		(343	)		9,036		N.M.					(0.4	)	%		8.1	%
Income (loss) from operations		6,783			(8,309	)	N.M.					7.1		%		(7.4	) %
Interest expense		699			1,095			(36.2	)	%		0.7		%		1.0	%
Interest income		(28	)		(55	)		(49.1	)	%		(0.0	)	%		(0.0	) %
Other expense (income)		617			(236	)	N.M.					0.6		%		(0.2	) %
Income (loss) before income taxes		5,495			(9,113	)	N.M.					5.8		%		(8.2	) %
Income taxes*		740			30,975		N.M.					13.5		%	N.M.
Net income (loss)	$	4,755			(40,088	)	N.M.					5.0		%	N.M.
Net income (loss) per share-basic	$	0.38		$	(3.17	)	N.M.
Net income (loss) per share-diluted	$	0.37		$	(3.17	)	N.M.
Average shares outstanding-basic		12,662			12,649			0.1		%
Average shares outstanding-diluted		12,804			12,649			1.2		%
* Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes.

Page 2 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
NOVEMBER 1, 2009, NOVEMBER 2, 2008 AND MAY 3, 2009
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	November 1,		November 2,		(Decrease)						* May 3,
	2009		2008		Dollars			Percent			2009
Current assets
Cash and cash equivalents	$	19,575		8,522		11,053			129.7	%		11,797
Accounts receivable		16,771		18,801		(2,030	)		(10.8	) %		18,116
Inventories		21,834		36,307		(14,473	)		(39.9	) %		23,978
Deferred income taxes		58		-		58			100.0	%		54
Assets held for sale		160		4,827		(4,667	)		(96.7	) %		1,209
Income taxes receivable		384		-		384			100.0	%		210
Other current assets		972		1,100		(128	)		(11.6	) %		1,264
Total current assets		59,754		69,557		(9,803	)		(14.1	) %		56,628
Property, plant & equipment, net		24,795		26,802		(2,007	)		(7.5	) %		24,253
Goodwill		11,462		11,593		(131	)		(1.1	) %		11,593
Other assets		2,769		2,975		(206	)		(6.9	) %		2,820
Total assets	$	98,780		110,927		(12,147	)		(11.0	) %		95,294
Current liabilities
Current maturities of long-term debt	$	4,863		7,383		(2,520	)		(34.1	) %		4,764
Current portion of obligation under a capital lease		280		692		(412	)		(59.5	) %		626
Accounts payable - trade		16,416		19,192		(2,776	)		(14.5	) %		17,030
Accounts payable - capital expenditures		377		1,020		(643	)		(63.0	) %		923
Accrued expenses		6,455		5,259		1,196			22.7	%		6,504
Accrued restructuring		345		1,790		(1,445	)		(80.7	) %		853
Income taxes payable - current		329		1,074		(745	)		(69.4	) %		83
Total current liabilities		29,065		36,410		(7,345	)		(20.2	) %		30,783
Accounts payable - capital expenditures		188		1,000		(812	)		(81.2	) %		638
Income taxes payable - long-term		3,603		742		2,861			385.6	%		3,264
Deferred income taxes		1,078		1,185		(107	)		(9.0	) %		974
Obligation under capital lease		-		280		(280	)		(100.0	) %		-
Long-term debt , less current maturities		11,568		24,803		(13,235	)		(53.4	) %		11,604
Total liabilities		45,502		64,420		(18,918	)		(29.4	) %		47,263
Shareholders' equity		53,278		46,507		6,771			14.6	%		48,031
Total liabilities and
shareholders' equity	$	98,780		110,927		(12,147	)		(11.0	) %		95,294
Shares outstanding		12,888		12,653		235			1.9	%		12,768
* Derived from audited financial statements.

Page 3 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008

Unaudited

(Amounts in Thousands)

	SIX MONTHS ENDED
	Amounts
	November 1,			November 2,
	2009			2008 (2)
Cash flows from operating activities:
Net income (loss)	$	4,755			(40,088	)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation		2,052			4,723
Amortization of other assets		286			208
Stock-based compensation		440			219
Deferred income taxes		8			33,761
Restructuring expenses, net of gain on sale of related assets		(113	)		7,812
Loss on impairment of equipment		60			-
Foreign currency exchange losses (gains)		554			(289	)
Changes in assets and liabilities, net of effects of acquisition of business:
Accounts receivable		1,356			8,237
Inventories		2,147			522
Other current assets		286			196
Other assets		(31	)		88
Accounts payable		(671	)		(3,112	)
Accrued expenses		(126	)		(2,981	)
Accrued restructuring		(508	)		358
Income taxes		181			(2,702	)
Net cash provided by operating activities		10,676			6,952
Cash flows from investing activities:
Capital expenditures		(1,976	)		(1,333	)
Net cash paid for acquisition of business		-			(11,365	)
Proceeds from the sale of equipment		285			-
Net cash used in investing activities		(1,691	)		(12,698	)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt		-			11,000
Payments on vendor-financed capital expenditures		(797	)		(874	)
Payments on capital lease obligation		(346	)		(412	)
Payments on long-term debt		-			(237	)
Debt issuance costs		(15	)		(106	)
Proceeds from common stock issued		45			21
Net cash (used in) provided by financing activities		(1,113	)		9,392
Effect of exchange rate changes on cash and cash equivalents		(94	)		(38	)
Increase in cash and cash equivalents		7,778			3,608
Cash and cash equivalents at beginning of period		11,797			4,914
Cash and cash equivalents at end of period	$	19,575			8,522
Free Cash Flow (1)	$	7,748			4,295

(1) Free Cash Flow reconciliation is as follows:		2nd Qtr			2nd Qtr
		FY 2010			FY 2009
A)	Net cash provided by operating activities	$	10,676			6,952
B)	Minus:  Capital Expenditures		(1,976	)		(1,333	)
C)	Add:     Proceeds from the sale of buildings and equipment		285			-
D)	Minus:  Payments on vendor-financed capital expenditures		(797	)		(874	)
E)	Minus:  Payments on capital lease obligation		(346	)		(412	)
F)	Effects of exchange rate changes on cash and cash equivalents		(94	)		(38	)
		$	7,748			4,295

 (2)  Certain prior year amounts have been reclassified to conform to current year presentation to reflect the effects of foreign exchange losses and gains on operating cash flows and cash and cash equivalents held as of November 1, 2009 and November 2, 2008. Reclassifications are not material to total net cash provided by operating activities, total net cash used in investing activities, and total total net cash (used in) provided by financing activities.

Page 4 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

           FOR THE THREE MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008

(Amounts in thousands)

	THREE MONTHS ENDED (UNAUDITED)
	Amounts											Percent of Total Sales
	November 1,				November 2,				% Over			November 1,				November 2,
Net Sales by Segment	2009				2008				(Under)			2009				2008
Mattress Fabrics	$	28,202				28,048				0.5	%		56.7		%		53.7	%
Upholstery Fabrics		21,514				24,215				(11.2	) %		43.3		%		46.3	%
Net Sales	$	49,716				52,263				(4.9	) %		100.0		%		100.0	%
Gross Profit by Segment												Gross Profit Margin
Mattress Fabrics	$	5,896				5,084				16.0	%		20.9		%		18.1	%
Upholstery Fabrics		3,281				1,277				156.9	%		15.3		%		5.3	%
Subtotal		9,177				6,361				44.3	%		18.5		%		12.2	%
Restructuring related charges		(43	)	(1)		(3,213	)	(1)	N.M.				(0.1	)	%		(6.1	) %
Gross Profit	$	9,134				3,148				190.2	%		18.4		%		6.0	%
Selling, General and Administrative expenses  by Segment												Percent of Sales
Mattress Fabrics	$	1,856				1,833				1.3	%		6.6		%		6.5	%
Upholstery Fabrics		2,183				2,081				4.9	%		10.1		%		8.6	%
Unallocated Corporate expenses		1,346				523				157.4	%		2.7		%		1.0	%
Subtotal		5,385				4,437				21.4	%		10.8		%		8.5	%
Restructuring related charges		-		(1)		2		(1)		(100.0	) %		0.0		%		0.0	%
Selling, General and Administrative expenses	$	5,385				4,439				21.3	%		10.8		%		8.5	%
Operating Income (loss)  by Segment												Operating Income (Loss) Margin
Mattress Fabrics	$	4,041				3,251				24.3	%		14.3		%		11.6	%
Upholstery Fabrics		1,097				(804	)		N.M.				5.1		%		(3.3	) %
Unallocated corporate expenses		(1,346	)			(523	)			(157.4	) %		(2.7	)	%		(1.0	) %
Subtotal		3,792				1,924				97.1	%		7.6		%		3.7	%
Restructuring credit (expense) and restructuring related charges		141		(1)		(11,849	)	(1)	N.M.				0.3		%		(22.7	) %
Operating income (loss)	$	3,933				(9,925	)		N.M.				7.9		%		(19.0	) %
Depreciation by Segment
Mattress Fabrics	$	880				935				(5.9	) %
Upholstery Fabrics		240				439				(45.3	) %
Subtotal		1,120				1,374				(18.5	) %
Accelerated depreciation - Upholstery Fabrics		-				2,090				(100.0	) %
Total Depreciation		1,120				3,464				(67.7	) %
Notes:
(1) See page 6 for detailed explanations of restructuring and related (credits) charges.

Page 5 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE SIX MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008

(Amounts in thousands)

	SIX MONTHS ENDED (UNAUDITED)
	Amounts											Percent of Total Sales
	November 1,				November 2,				% Over			November 1,			November 2,
Net Sales by Segment	2009				2008				(Under)			2009			2008
Mattress Fabrics	$	54,476				63,610				(14.4	) %		57.2	%		57.0	%
Upholstery Fabrics		40,717				47,975				(15.1	) %		42.8	%		43.0	%
Net Sales	$	95,193				111,585				(14.7	) %		100.0	%		100.0	%
Gross Profit by Segment												Gross Profit Margin
Mattress Fabrics	$	10,658				11,428				(6.7	) %		19.6	%		18.0	%
Upholstery Fabrics		6,076				2,347				158.9	%		14.9	%		4.9	%
Subtotal		16,734				13,775				21.5	%		17.6	%		12.3	%
Restructuring related charges		(14	)	(1)		(3,225	)	(1)	N.M.				(0.0	) %		(2.9	) %
Gross Profit	$	16,720				10,550				58.5	%		17.6	%		9.5	%
Selling, General and Administrative expenses  by Segment												Percent of Sales
Mattress Fabrics	$	3,665				3,961				(7.5	) %		6.7	%		6.2	%
Upholstery Fabrics		4,216				4,565				(7.6	) %		10.4	%		9.5	%
Unallocated Corporate expenses		2,399				1,293				85.5	%		2.5	%		1.2	%
Subtotal		10,280				9,819				4.7	%		10.8	%		8.8	%
Restructuring related charges		-		(1)		4		(1)		(100.0	) %		0.0	%		0.0	%
Selling, General and Administrative expenses	$	10,280				9,823				4.7	%		10.8	%		8.8	%
Operating Income (loss)  by Segment												Operating Income (Loss) Margin
Mattress Fabrics	$	6,993				7,467				(6.3	) %		12.8	%		11.7	%
Upholstery Fabrics		1,860				(2,218	)		N.M.				4.6	%		(4.6	) %
Unallocated corporate expenses		(2,399	)			(1,293	)			(85.5	) %		(2.5	) %		(1.2	) %
Subtotal		6,454				3,956				63.1	%		6.8	%		3.5	%
Restructuring credit (expense) and restructuring related charges		329		(1)		(12,265	)	(1)	N.M.				0.3	%		(11.0	) %
Operating income (loss)	$	6,783				(8,309	)		N.M.				7.1	%		(7.4	) %
Depreciation by Segment
Mattress Fabrics	$	1,779				1,693				5.1	%
Upholstery Fabrics		273				940				(71.0	) %
Subtotal		2,052				2,633				(22.1	) %
Accelerated depreciation		-				2,090				(100.0	) %
Total depreciation		2,052				4,723				(56.6	) %
Notes:
(1) See page 7 for detailed explanations of restructuring and related (credits) charges.

Page 6 of 8

CULP, INC.

ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008

(Amounts in Thousands)

	THREE MONTHS ENDED (UNAUDITED)
	As Reported											November 1, 2009					As Reported											November 2, 2008					Adjusted
	November 1,		% of						% of			Adjusted			% of		November 2,			% of					% of			Adjusted			% of		% Over
	2009		Sales			Adjustments			Sales			Results			Sales		2008			Sales		Adjustments			Sales			Results			Sales		(Under)
Net sales	$	49,716		100.0	%		-						49,716		100.0	%		52,263		100.0	%		-						52,263		100.0	%		-4.9	%
Cost of sales		40,582		81.6	%		(43	)	-0.1	%	(1)		40,539		81.5	%		49,115		94.0	%		(3,213	)	-6.1	%	(3)		45,902		87.8	%		-11.7	%
Gross Profit		9,134		18.4	%		(43	)	-0.1	%			9,177		18.5	%		3,148		6.0	%		(3,213	)	-6.1	%			6,361		12.2	%		44.3	%
Selling, general and
administrative expenses		5,385		10.8	%		-		0.0	%			5,385		10.8	%		4,439		8.5	%		(2	)	0.0	%	(3)		4,437		8.5	%		21.4	%
Restructuring (credit) expense		(184	)	-0.4	%		184		0.4	%	(2)		-		0.0	%		8,634		16.5	%		(8,634	)	-16.5	%	(4)		-		0.0	%		0.0	%
Income (loss) from operations		3,933		7.9	%		141		0.3	%			3,792		7.6	%		(9,925	)	-19.0	%		(11,849	)	-22.7	%			1,924		3.7	%		97.1	%
Interest expense		342		0.7	%		-		0.0	%			342		0.7	%		663		1.3	%		-		0.0	%			663		1.3	%		-48.4	%
Interest income		(16	)	0.0	%		-		0.0	%			(16	)	0.0	%		(21	)	0.0	%		-		0.0	%			(21	)	0.0	%		-23.8	%
Other expense (income)		103		0.2	%		-		0.0	%			103		0.2	%		(250	)	-0.5	%		-		0.0	%			(250	)	-0.5	%		141.2	%
Income (loss) before income taxes	$	3,504		7.0	%		141		0.3	%	(5)		3,363		6.8	%		(10,317	)	-19.7	%		(11,849	)	-22.7	%	(6)		1,532		2.9	%		119.5	%

Notes:

(1)   The $43 restructuring related charge represents other operating costs associated with a closed plant facility.

(2)   The $184 restructuring credit represents a credit for employee termination benefits of $200 offset by a charge for lease termination and other exit costs of $16.

(3)   The $3.2 million restructuring related charge represents $2.1 million for accelerated depreciation, $1.1 million for inventory markdowns, and $15 for other operating costs associated with closed plant facilities. The $2 restructuring related charge represents other operating costs associated with closed plant facilities.

(4)   The $8.6 million represents $7.8 million for write-downs of  a building and equipment, $460 for lease termination and other exit costs, and $362 for employee termination benefits.

(5)   This $141 represents a cash credit.

(6)   Of this total charge, $839 and $11.0 million represent cash and non-cash charges, respectively.

Page 7 of 8

CULP, INC.

ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED NOVEMBER 1, 2009 AND NOVEMBER 2, 2008

(Amounts in Thousands)

	SIX MONTHS ENDED (UNAUDITED)
	As Reported													November 1, 2009						As Reported													November 2, 2008						Adjusted
	November 1,			% of						% of				Adjusted			% of			November 2,			% of						% of				Adjusted			% of			% Over
	2009			Sales			Adjustments			Sales				Results			Sales			2008			Sales			Adjustments			Sales				Results			Sales			(Under)
Net sales	$	95,193			100.0	%		-							95,193			100.0	%		111,585			100.0	%		-							111,585			100.0	%		-14.7	%
Cost of sales		78,473			82.4	%		(14	)		0.0	%	(1)		78,459			82.4	%		101,035			90.5	%		(3,225	)		-2.9	%	(3)		97,810			87.7	%		-19.8	%
Gross Profit		16,720			17.6	%		(14	)		0.0	%			16,734			17.6	%		10,550			9.5	%		(3,225	)		-2.9	%			13,775			12.3	%		21.5	%
Selling, general and
administrative expenses		10,280			10.8	%		-			0.0	%			10,280			10.8	%		9,823			8.8	%		(4	)		0.0	%	(3)		9,819			8.8	%		4.7	%
Restructuring (credit) expense		(343	)		-0.4	%		343			0.4	%	(2)		-			0.0	%		9,036			8.1	%		(9,036	)		-8.1	%	(4)		-			0.0	%		0.0	%
Income (loss) from operations		6,783			7.1	%		329			0.3	%			6,454			6.8	%		(8,309	)		-7.4	%		(12,265	)		-11.0	%			3,956			3.5	%		63.1	%
Interest expense		699			0.7	%		-			0.0	%			699			0.7	%		1,095			1.0	%		-			0.0	%			1,095			1.0	%		-36.2	%
Interest income		(28	)		0.0	%		-			0.0	%			(28	)		0.0	%		(55	)		0.0	%		-			0.0	%			(55	)		0.0	%		-49.1	%
Other expense (income)		617			0.6	%		-			0.0	%			617			0.6	%		(236	)		-0.2	%		-			0.0	%			(236	)		-0.2	%		361.4	%
Income (loss) before income taxes	$	5,495			5.8	%		329			0.3	%	(5)		5,166			5.4	%		(9,113	)		-8.2	%		(12,265	)		-11.0	%	(6)		3,152			2.8	%		63.9	%

Notes:

(1)   The $14 restructuring related charge represents a charge of $64 for other operating costs associated with closed plant facilities offset by a credit of $50 for inventory markdowns.

(2)   The $343 restructuring credit represents a credit of $169 for employee termination benefits, a credit of $113 for sales proceeds received on equipment with no carrying value, and a credit of $61 for lease termination and other exit costs.

(3)   The $3.2 million represents restructuring related charges of $2.1 million for accelerated depreciation, $1.1 million for inventory markdowns, and $27 for other operating costs associated with closed plant facilities. The $4 represents restructuring related charges for other operating costs associated with closed plant facilities.

(4)   The $9.0 million represents $7.8 million for write-downs of a building and equipment, $776 for employee termination benefits, and $447 for lease termination and other exit costs.

(5)   Of this total credit, $279 and $50 represent cash and non-cash credits, respectively.

(6)   Of this total charge, $1.3 million and $11.0 million represent cash and non-cash charges, respectively.

Page 8 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE SIX MONTHS ENDED NOVEMBER 1, 2009
(UNAUDITED)
	Operating Income
	Six Months						Return on
	Ended			Average			Avg.
	November			Capital			Capital
	1,			Employed			Employed
	2009 (1)			(3)			(2)
Mattress Fabrics	$	6,993		$	46,983			29.8	%
Upholstery Fabrics		1,860			9,558			38.9	%
(less: Unallocated Corporate)		(2,399	)		(5,252	)		N/A
Total	$	6,454		$	51,289			25.2	%
	As of the three Months Ended November 1, 2009												As of the three Months Ended August 2, 2009												As of the three Months Ended May 3, 2009
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		56,686			19,598			22,496			98,780			57,772			16,128			18,511			92,411			58,626			22,078			14,590			95,294
Total liabilities		(10,625	)		(10,461	)		(24,416	)		(45,502	)		(10,138	)		(7,670	)		(24,427	)		(42,235	)		(11,372	)		(10,999	)		(24,892	)		(47,263	)
Subtotal	$	46,061		$	9,137		$	(1,920	)	$	53,278		$	47,634		$	8,458		$	(5,916	)	$	50,176		$	47,254		$	11,079		$	(10,302	)	$	48,031
Less:
Cash and cash equivalents		-						(19,575	)	$	(19,575	)		-						(15,481	)	$	(15,481	)		-						(11,797	)	$	(11,797	)
Current maturities of long-term debt		-						4,863			4,863			-						4,817			4,817			-						4,764			4,764
Long-term debt, less current maturities								11,568			11,568									11,618			11,618									11,604			11,604
Total Capital Employed	$	46,061		$	9,137		$	(5,064	)	$	50,134		$	47,634		$	8,458		$	(4,962	)	$	51,130		$	47,254		$	11,079		$	(5,731	)	$	52,602
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	46,983		$	9,558		$	(5,252	)	$	51,289

Notes:

(1)   Operating income excludes restructuring and related charges--see reconciliation per page 5 of this financial information release.

(2)   Return on average capital employed represents operating income for the 6 month period ending November 1, 2009 multiplied by 2 to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, long-term debt, including current maturities and shareholders' equity.

(3)   Average capital employed computed using the three periods ending May 3, August 2, and November 1, 2009.