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 NET INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 2010 AND NOVEMBER 1, 2009
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	October 31,			November 1,			% Over			October 31,			November 1,
	2010			2009			(Under)			2010			2009
Net sales	$	48,879			49,716		(1.7	)	%	100.0		%	100.0		%
Cost of sales		41,270			40,582		1.7		%	84.4		%	81.6		%
Gross profit		7,609			9,134		(16.7	)	%	15.6		%	18.4		%
Selling, general and
administrative expenses		4,202			5,385		(22.0	)	%	8.6		%	10.8		%
Restructuring credit		-			(184	)	N.M.			0.0		%	(0.4	)	%
Income from operations		3,407			3,933		(13.4	)	%	7.0		%	7.9		%
Interest expense		225			342		(34.2	)	%	0.5		%	0.7		%
Interest income		(49	)		(16	)	206.3		%	(0.1	)	%	(0.0	)	%
Other expense		30			103		(70.9	)	%	0.1		%	0.2		%
Income before income taxes		3,201			3,504		(8.6	)	%	6.5		%	7.0		%
Income taxes*		(801	)		625		N.M.			(25.0	)	%	17.8		%
Net income	$	4,002			2,879		39.0		%	8.2		%	5.8		%
Net income per share-basic	$	0.31		$	0.23		34.8		%
Net income per share-diluted	$	0.30		$	0.22		36.4		%
Average shares outstanding-basic		12,932			12,671		2.1		%
Average shares outstanding-diluted		13,167			12,852		2.5		%
	SIX MONTHS ENDED
	Amounts									Percent of Sales
	October 31,			November 1,			% Over			October 31,			November 1,
	2010			2009			(Under)			2010			2009
Net sales	$	104,791			95,193		10.1		%	100.0		%	100.0		%
Cost of sales		87,473			78,473		11.5		%	83.5		%	82.4		%
Gross profit		17,318			16,720		3.6		%	16.5		%	17.6		%
Selling, general and
administrative expenses		9,416			10,280		(8.4	)	%	9.0		%	10.8		%
Restructuring credit		(8	)		(343	)	N.M.			(0.0	)	%	(0.4	)	%
Income from operations		7,910			6,783		16.6		%	7.5		%	7.1		%
Interest expense		435			699		(37.8	)	%	0.4		%	0.7		%
Interest income		(87	)		(28	)	210.7		%	(0.1	)	%	(0.0	)	%
Other expense		83			617		(86.5	)	%	0.1		%	0.6		%
Income before income taxes		7,479			5,495		36.1		%	7.1		%	5.8		%
Income taxes*		(270	)		740		N.M.			(3.6	)	%	13.5		%
Net income	$	7,749			4,755		63.0		%	7.4		%	5.0		%
Net income per share-basic	$	0.60		$	0.38		57.9		%
Net income per share-diluted	$	0.59		$	0.37		59.5		%
Average shares outstanding-basic		12,901			12,662		1.9		%
Average shares outstanding-diluted		13,186			12,804		3.0		%
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 2 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 2010, NOVEMBER 1, 2009 AND MAY 2, 2010
Unaudited
(Amounts in Thousands)
		Amounts		Increase
		October 31,	November 1,	(Decrease)					* May 2,
		2010	2009	Dollars		Percent			2010
Current assets
Cash and cash equivalents	$	15,262	19,575	(4,313	)	(22.0	)	%	18,295
Short-term investments		4,035	-	4,035		100.0		%	3,023
Accounts receivable		14,810	16,771	(1,961	)	(11.7	)	%	19,822
Inventories		29,435	21,834	7,601		34.8		%	26,002
Deferred income taxes		176	58	118		203.4		%	150
Assets held for sale		123	160	(37	)	(23.1	)	%	123
Income taxes receivable		477	384	93		24.2		%	728
Other current assets		1,234	972	262		27.0		%	1,698
Total current assets		65,552	59,754	5,798		9.7		%	69,841
Property, plant & equipment, net		31,225	24,795	6,430		25.9		%	28,403
Goodwill		11,462	11,462	-		0.0		%	11,462
Deferred income taxes		1,391	-	1,391		100.0		%	324
Other assets		2,278	2,769	(491	)	(17.7	)	%	2,568
Total assets	$	111,908	98,780	13,128		13.3		%	112,598
Current liabilities
Current maturities of long-term debt	$	2,396	4,863	(2,467	)	(50.7	)	%	196
Current portion of obligation under a capital lease		-	280	(280	)	(100.0	)	%	-
Accounts payable - trade		17,992	16,416	1,576		9.6		%	22,278
Accounts payable - capital expenditures		253	377	(124	)	(32.9	)	%	567
Accrued expenses		5,665	6,455	(790	)	(12.2	)	%	9,613
Accrued restructuring		287	345	(58	)	(16.8	)	%	324
Income taxes payable - current		90	329	(239	)	(72.6	)	%	224
Total current liabilities		26,683	29,065	(2,382	)	(8.2	)	%	33,202
Accounts payable - capital expenditures		-	188	(188	)	(100.0	)	%	-
Income taxes payable - long-term		3,890	3,603	287		8.0		%	3,876
Deferred income taxes		622	1,078	(456	)	(42.3	)	%	982
Long-term debt , less current maturities		9,209	11,568	(2,359	)	(20.4	)	%	11,491
Total liabilities		40,404	45,502	(5,098	)	(11.2	)	%	49,551
Shareholders' equity		71,504	53,278	18,226		34.2		%	63,047
Total liabilities and
shareholders' equity	$	111,908	98,780	13,128		13.3		%	112,598
Shares outstanding		13,199	12,888	311		2.4		%	13,052
* Derived from audited financial statements.

Page 3 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 31, 2010 AND NOVEMBER 1, 2009
Unaudited
(Amounts in Thousands)
			SIX MONTHS ENDED
			Amounts
			October 31,		November 1,
			2010		2009
Cash flows from operating activities:
Net income		$	7,749		4,755
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation			2,097		2,052
Amortization of other assets			258		286
Stock-based compensation			204		440
Deferred income taxes			(1,183	)	8
Restructuring expenses, net of gain on sale of related assets			-		(113	)
Loss on impairment of equipment			4		60
Excess tax benefits related to stock-based compensation			(270	)	-
Foreign currency exchange losses			60		554
Changes in assets and liabilities
Accounts receivable			5,110		1,356
Inventories			(3,363	)	2,147
Other current assets			477		286
Other assets			(45	)	(31	)
Accounts payable			(4,493	)	(671	)
Accrued expenses			(4,112	)	(126	)
Accrued restructuring			(37	)	(508	)
Income taxes			121		181
Net cash provided by operating activities			2,577		10,676
Cash flows from investing activities:
Capital expenditures			(5,076	)	(1,976	)
Purchase of short-term investments			(1,012	)	-
Proceeds from the sale of equipment			27		285
Net cash used in investing activities			(6,061	)	(1,691	)
Cash flows from financing activities:
Payments on vendor-financed capital expenditures			(188	)	(797	)
Payments on capital lease obligation			-		(346	)
Payments on long-term debt			(80	)	-
Debt issuance costs			(27	)	(15	)
Excess tax benefits related to stock-based compensation			270		-
Proceeds from common stock issued			511		45
Net cash provided by (used in) financing activities			486		(1,113	)
Effect of exchange rate changes on cash and cash equivalents			(35	)	(94	)
(Decrease) increase in cash and cash equivalents			(3,033	)	7,778
Cash and cash equivalents at beginning of period			18,295		11,797
Cash and cash equivalents at end of period		$	15,262		19,575
Free Cash Flow (1)		$	(2,425	)	7,748
(1) Free Cash Flow reconciliation is as follows:			2nd Qtr		2nd Qtr
			FY 2011		FY 2010
A)	Net cash provided by operating activities	$	2,577		10,676
B)	Minus: Capital Expenditures		(5,076	)	(1,976	)
C)	Add: Proceeds from the sale of buildings and equipment		27		285
D)	Minus: Payments on vendor-financed capital expenditures		(188	)	(797	)
E)	Minus: Payments on capital lease obligation		-		(346	)
F)	Add: Excess tax benefits related to stock-based compensation		270		-
G)	Effects of exchange rate changes on cash and cash equivalents		(35	)	(94	)
		$	(2,425	)	7,748

Page 4 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED OCTOBER 31, 2010 AND NOVEMBER 1, 2009
(Unaudited)
(Amounts in thousands)
		THREE MONTHS ENDED
		Amounts									Percent of Total Sales
		October 31,		November 1,				% Over			October 31,			November 1,
Net Sales by Segment		2010		2009				(Under)			2010			2009
Mattress Fabrics	$	28,335		28,202				0.5		%	58.0		%	56.7		%
Upholstery Fabrics		20,544		21,514				(4.5	)	%	42.0		%	43.3		%
Net Sales	$	48,879		49,716				(1.7	)	%	100.0		%	100.0		%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics	$	5,030		5,896				(14.7	)	%	17.8		%	20.9		%
Upholstery Fabrics		2,579		3,281				(21.4	)	%	12.6		%	15.3		%
Subtotal		7,609		9,177				(17.1	)	%	15.6		%	18.5		%
Restructuring related charges		-		(43	)	(1	)	(100.0	)	%	0.0		%	(0.1	)	%
Gross Profit	$	7,609		9,134				(16.7	)	%	15.6		%	18.4		%
Selling, General and Administrative expenses by Segment											Percent of Sales
Mattress Fabrics	$	1,704		1,856				(8.2	)	%	6.0		%	6.6		%
Upholstery Fabrics		1,777		2,183				(18.6	)	%	8.6		%	10.1		%
Unallocated Corporate expenses		721		1,346				(46.4	)	%	1.5		%	2.7		%
Selling, General and Administrative expenses		4,202		5,385				(22.0	)	%	8.6		%	10.8		%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics	$	3,326		4,041				(17.7	)	%	11.7		%	14.3		%
Upholstery Fabrics		802		1,097				(26.9	)	%	3.9		%	5.1		%
Unallocated corporate expenses		(721	)	(1,346	)			(46.4	)	%	(1.5	)	%	(2.7	)	%
Subtotal		3,407		3,792				(10.2	)	%	7.0		%	7.6		%
Restructuring and related credit		-		141		(2	)	(100.0	)	%	0.0		%	0.3		%
Operating income	$	3,407		3,933				(13.4	)	%	7.0		%	7.9		%
Depreciation by Segment
Mattress Fabrics	$	944		880				7.3		%
Upholstery Fabrics		139		240				(42.1	)	%
Subtotal		1,083		1,120				(3.3	)	%
Notes:
(1) The $43 restructuring related charge represents other operating costs associated with a closed plant facility.
(2) The $141 restructuring and related credit represents a credit of $200 for employee termination benefits, offset by a charge of $43 for other operating costs associated with a closed plant facility, and a charge of $16 for lease termination and other exit costs. Of this total credit, a credit of $184 was recorded in restructuring credit and a charge of $43 was recorded in cost of sales.

Page 5 of 7

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE SIX MONTHS ENDED OCTOBER 31, 2010 AND NOVEMBER 1, 2009
(Unaudited)
(Amounts in thousands)
		SIX MONTHS ENDED
		Amounts											Percent of Total Sales
		October 31,				November 1,				% Over			October 31,			November 1,
Net Sales by Segment		2010				2009				(Under)			2010			2009
Mattress Fabrics	$	59,253				54,476				8.8		%	56.5		%	57.2		%
Upholstery Fabrics		45,538				40,717				11.8		%	43.5		%	42.8		%
Net Sales	$	104,791				95,193				10.1		%	100.0		%	100.0		%
Gross Profit by Segment													Gross Profit Margin
Mattress Fabrics	$	11,020				10,658				3.4		%	18.6		%	19.6		%
Upholstery Fabrics		6,298				6,076				3.7		%	13.8		%	14.9		%
Subtotal		17,318				16,734				3.5		%	16.5		%	17.6		%
Restructuring related charges		-				(14	)	(2	)	(100.0	)	%	0.0		%	(0.0	)	%
Gross Profit	$	17,318				16,720				3.6		%	16.5		%	17.6		%
Selling, General and Administrative expenses by Segment													Percent of Sales
Mattress Fabrics	$	3,701				3,665				1.0		%	6.2		%	6.7		%
Upholstery Fabrics		3,878				4,216				(8.0	)	%	8.5		%	10.4		%
Unallocated Corporate expenses		1,837				2,399				(23.4	)	%	1.8		%	2.5		%
Subtotal		9,416				10,280				(8.4	)	%	9.0		%	10.8		%
Operating Income (loss) by Segment													Operating Income (Loss) Margin
Mattress Fabrics	$	7,319				6,993				4.7		%	12.4		%	12.8		%
Upholstery Fabrics		2,420				1,860				30.1		%	5.3		%	4.6		%
Unallocated corporate expenses		(1,837	)			(2,399	)			(23.4	)	%	(1.8	)	%	(2.5	)	%
Subtotal		7,902				6,454				22.4		%	7.5		%	6.8		%
Restructuring and related credit		8		(1	)	329		(3	)	97.6		%	0.0		%	0.3		%
Operating income	$	7,910				6,783				16.6		%	7.5		%	7.1		%
Return on Capital (4)
Mattress Fabrics		28.5	%			29.8	%
Upholstery Fabrics		39.1	%			38.9	%
Unallocated Corporate		N/A				N/A
Consolidated		25.2	%			23.2	%
Capital Employed (4)
Mattress Fabrics		51,357				46,983				9.3		%
Upholstery Fabrics		12,384				9,558				29.6		%
Unallocated Corporate		(1,021	)			(966	)			N/A
Consolidated		62,720				55,575				12.9		%
Depreciation by Segment
Mattress Fabrics	$	1,822				1,779				2.4		%
Upholstery Fabrics		275				273				0.7		%
Subtotal		2,097				2,052				2.2		%
Notes:
(1) The $8 restructuring credit primarily represents a credit of $15 for employee termination benefits and a charge of $7 for lease termination and other exit costs.
(2) The $14 restructuring related charge represents a charge of $64 for other operating costs associated with a closed plant facility offset by a credit of $50 for the sale of inventory previously reserved for.
(3) The $329 restructuring and related credit represents a credit of $169 for employee termination benefits, a credit of $113 for sales proceeds received on equipment with no carrying value, a credit of $61 for lease termination and other exit costs, a credit of $50 for the sale of inventory previously reserved for, offset by a charge of $64 for other operating costs associated with a closed plant facility.
(4) See pages 6 and 7 of this financial information release for calculations.

Page 6 of 7

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE SIX MONTHS ENDED OCTOBER 31, 2010
	(UNAUDITED)
	Operating Income
	Six Months			Average			Return on
	Ended			Capital			Avg. Capital
	October 31, 2010 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	7,319		$	51,357			28.5	%
Upholstery Fabrics		2,420			12,384			39.1	%
(less: Unallocated Corporate)		(1,837	)		(1,021	)		N/A
Total	$	7,902		$	62,720			25.2	%
Average Capital Employed	As of the three Months Ended October 31, 2010												As of the three Months Ended August 1, 2010												As of the three Months Ended May 2, 2010
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		65,485			22,277			24,146			111,908			66,919			24,415			21,763			113,097			61,922			25,420			25,256			112,598
Total liabilities		(10,634	)		(10,275	)		(19,495	)		(40,404	)		(14,902	)		(11,126	)		(19,943	)		(45,971	)		(14,720	)		(13,559	)		(21,272	)		(49,551	)
Subtotal	$	54,851		$	12,002		$	4,651		$	71,504		$	52,017		$	13,289		$	1,820		$	67,126		$	47,202		$	11,861		$	3,984		$	63,047
Less:
Cash and cash equivalents		-			-			(15,262	)		(15,262	)		-			-			(14,045	)		(14,045	)		-			-			(18,295	)		(18,295	)
Short-term investments		-			-			(4,035	)		(4,035	)		-			-			(4,009	)		(4,009	)								(3,023	)		(3,023	)
Deferred income taxes - current		-			-			(176	)		(176	)		-			-			(138	)		(138	)		-			-			(150	)		(150	)
Income taxes receivable		-			-			(477	)		(477	)		-			-			(568	)		(568	)		-			-			(728	)		(728	)
Deferred income taxes - non-current		-			-			(1,391	)		(1,391	)		-			-			(245	)		(245	)		-			-			(324	)		(324	)
Current maturities of long-term debt		-			-			2,396			2,396			-			-			194			194			-			-			196			196
Income taxes payable - current		-			-			90			90			-			-			182			182			-			-			224			224
Income taxes payable - long-term		-			-			3,890			3,890			-			-			3,877			3,877			-			-			3,876			3,876
Deferred income taxes - non-current		-			-			622			622			-			-			666			666			-			-			982			982
Long-term debt, less current maturities		-			-			9,209			9,209			-			-			11,453			11,453			-			-			11,491			11,491
Total Capital Employed	$	54,851		$	12,002		$	(483	)	$	66,370		$	52,017		$	13,289		$	(813	)	$	64,493		$	47,202		$	11,861		$	(1,767	)	$	57,296
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	51,357		$	12,384		$	(1,021	)	$	62,720
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 October 31, 2010 times 2 to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term debt, including current maturities, current and noncurrent deferred tax assets and liabilities, current and long-term income taxes payable, and income taxes receivable.
(3) Average capital employed computed using the three periods ending May 2,2010, August 1,2010, October 31, 2010.

Page 7 of 7

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE SIX MONTHS ENDED NOVEMBER 1, 2009
	(UNAUDITED)
	Operating Income
	Six Months			Average			Return on
	Ended			Capital			Avg. Capital
	November 1, 2009 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	6,993		$	46,983			29.8	%
Upholstery Fabrics		1,860			9,558			38.9	%
(less: Unallocated Corporate)		(2,399	)		(966	)		N/A
Total	$	6,454		$	55,575			23.2	%
Average Capital Employed	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	)
Deferred income taxes - current		-			-			(58	)		(58	)		-			-			(52	)		(52	)		-			-			(54	)		(54	)
Income taxes receivable		-			-			(384	)		(384	)		-			-			(396	)		(396	)		-			-			(210	)		(210	)
Current maturities of long-term debt		-			-			4,863			4,863			-			-			4,817			4,817			-			-			4,764			4,764
Income taxes payable - current		-			-			329			329			-			-			72			72			-			-			83			83
Income taxes payable - long-term		-			-			3,603			3,603			-			-			3,538			3,538			-			-			3,264			3,264
Deferred income taxes - non-current		-			-			1,078			1,078			-			-			1,072			1,072			-			-			974			974
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		$	(496	)	$	54,702		$	47,634		$	8,458		$	(728	)	$	55,364		$	47,254		$	11,079		$	(1,674	)	$	56,659
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	46,983		$	9,558		$	(966	)	$	55,575
Notes:
(1) Operating income excludes restructuring and related credits--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 times 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, current and noncurrent deferred tax assets and liabilities, current and long-term income taxes payable, and income taxes receivable.
(3) Average capital employed computed using the three periods ending May 3,2009, August 2,2009, and November 1, 2009.