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 NET INCOME
FOR THE THREE MONTHS ENDED AUGUST 2, 2015, AND AUGUST 3, 2014
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	August 2,			August 3,			% Over			August 2,			August 3,
	2015			2014			(Under)			2015			2014
Net sales	$	80,185			76,060			5.4	%		100.0	%		100.0	%
Cost of sales		63,983			63,345			1.0	%		79.8	%		83.3	%
Gross profit		16,202			12,715			27.4	%		20.2	%		16.7	%
Selling, general and
administrative expenses		8,741			7,419			17.8	%		10.9	%		9.8	%
Income from operations		7,461			5,296			40.9	%		9.3	%		7.0	%
Interest expense		24			68			(64.7	) %		0.0	%		0.1	%
Interest income		(66	)		(142	)		(53.5	) %		(0.1	)%		(0.2	) %
Other expense (income)		95			(89	)	N.M.				0.1	%		(0.1	) %
Income before income taxes		7,408			5,459			35.7	%		9.2	%		7.2	%
Income taxes*		2,707			2,115			28.0	%		36.5	%		38.7	%
Net income	$	4,701			3,344			40.6	%		5.9	%		4.4	%
Net income per share-basic	$	0.38		$	0.27			40.7	%
Net income per share-diluted	$	0.38		$	0.27			40.7	%
Average shares outstanding-basic		12,277			12,212			0.5	%
Average shares outstanding-diluted		12,456			12,404			0.4	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts							Percent of Sales
	August 2,		August 3,		% Over			August 2,			August 3,
	2015		2014		(Under)			2015			2014
Income before income taxes (see above)	$	7,408		5,459		35.7	%		9.2	%		7.2	%
Adjusted Income taxes (2)*		1,163		912		27.5	%		15.7	%		16.7	%
Adjusted net income		6,245		4,547		37.3	%		7.8	%		6.0	%
Adjusted net income per share-basic	$	0.51	$	0.37		37.8	%
Adjusted net income per share-diluted	$	0.50	$	0.37		35.1	%
Average shares outstanding-basic		12,277		12,212		0.5	%
Average shares outstanding-diluted		12,456		12,404		0.4	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $32.2 million in net operating loss carryforwards as of May 3, 2015. Therefore, adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 8 of 8.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China.  See reconciliation on page 8 of 8.

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

Page 2 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
AUGUST 2, 2015, AUGUST 3, 2014, AND MAY 3, 2015
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	August 2,		August 3,		(Decrease)						* May 3,
	2015		2014		Dollars			Percent			2015
Current assets
Cash and cash equivalents	$	25,933		24,665		1,268			5.1	%		29,725
Short-term investments		6,336		6,311		25			0.4	%		10,004
Accounts receivable		25,707		24,239		1,468			6.1	%		28,749
Inventories		46,544		41,688		4,856			11.6	%		42,484
Deferred income taxes		6,986		6,203		783			12.6	%		4,790
Income taxes receivable		142		136		6			4.4	%		229
Other current assets		3,502		2,308		1,194			51.7	%		2,440
Total current assets		115,150		105,550		9,600			9.1	%		118,421
Property, plant & equipment, net		37,480		31,891		5,589			17.5	%		36,078
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		412		973		(561	)		(57.7	) %		447
Long-term Investments		2,893		1,749		1,144			65.4	%		2,415
Other assets		2,475		2,587		(112	)		(4.3	) %		2,545
Total assets	$	169,872		154,212		15,660			10.2	%		171,368
Current liabilities
Current maturities of long-term debt	$	2,200		2,200		-			0.0	%		2,200
Accounts payable - trade		28,233		24,458		3,775			15.4	%		28,414
Accounts payable - capital expenditures		613		204		409			200.5	%		990
Accrued expenses		7,731		6,365		1,366			21.5	%		11,129
Income taxes payable - current		392		387		5			1.3	%		325
Total current liabilities		39,169		33,614		5,555			16.5	%		43,058
Income taxes payable - long-term		3,634		4,037		(403	)		(10.0	) %		3,792
Deferred income taxes		4,064		1,013		3,051			301.2	%		1,050
Line of credit		-		569		(569	)		(100.0	) %		-
Deferred compensation		4,280		3,632		648			17.8	%		4,041
Long-term debt , less current maturities		-		2,200		(2,200	)		(100.0	) %		-
Total liabilities		51,147		45,065		6,082			13.5	%		51,941
Shareholders' equity		118,725		109,147		9,578			8.8	%		119,427
Total liabilities and
shareholders' equity	$	169,872		154,212		15,660			10.2	%		171,368
Shares outstanding		12,339		12,217		122			1.0	%		12,219
*  Derived from audited financial statements.

Page 3 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
Unaudited
(Amounts in Thousands)
	THREE MONTHS ENDED
	Amounts
	August 2,			August 3,
	2015			2014
Cash flows from operating activities:
Net income	$	4,701			3,344
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		1,555			1,399
Amortization of other assets		47			47
Stock-based compensation		265			46
Deferred income taxes		1,641			1,193
Gain on sale of equipment		(46	)		(45	)
Excess tax benefits related to stock-based compensation		(788	)		(99	)
Foreign currency exchange gains		(57	)		(201	)
Changes in assets and liabilities:
Accounts receivable		2,774			3,168
Inventories		(4,068	)		(1,021	)
Other current assets		(1,149	)		40
Other assets		23			283
Accounts payable		(132	)		(2,224	)
Accrued expenses and deferrred compensation		(3,870	)		(1,855	)
Income taxes		159			(24	)
Net cash provided by operating activities		1,055			4,051
Cash flows from investing activities:
Capital expenditures		(3,336	)		(2,333	)
Proceeds from the sale of equipment		104			391
Proceeds from the sale of short-term investments		3,612			-
Purchase of short-term investments		(33	)		(27	)
Purchase of long-term investments		(478	)		(984	)
Net cash used in investing activities		(131	)		(2,953	)
Cash flows from financing activities:
Excess tax benefits related to stock-based compensation		788			99
Repurchase of common stock		-			(556	)
Dividends paid		(5,676	)		(5,502	)
Proceeds from common stock issued		56			-
Net cash used in financing activities		(4,832	)		(5,959	)
Effect of exchange rate changes on cash and cash equivalents		116			223
Decrease in cash and cash equivalents		(3,792	)		(4,638	)
Cash and cash equivalents at beginning of period		29,725			29,303
Cash and cash equivalents at end of period	$	25,933			24,665
Free Cash Flow (1)	$	(1,751	)		1,447

(1) Free Cash Flow reconciliation is as follows:
		FY 2016			FY 2015
A)	Net cash provided by operating activities	$	1,055			4,051
B)	Minus:  Capital Expenditures		(3,336	)		(2,333	)
C)	Add:     Proceeds from the sale of equipment		104			391
D)	Add:     Excess tax benefits related to stock-based compensation		788			99
E)	Minus:  Purchase of long-term investments		(478	)		(984	)
F)	Effects of exchange rate changes on cash and cash equivalents		116			223
		$	(1,751	)		1,447

Page 4 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	August 2,			August 3,			% Over			August 2,			August 3,
Net Sales by Segment	2015			2014			(Under)			2015			2014
Mattress Fabrics	$	47,808			42,822			11.6	%		59.6	%		56.3	%
Upholstery Fabrics		32,377			33,238			(2.6	) %		40.4	%		43.7	%
Net Sales	$	80,185			76,060			5.4	%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	9,925			7,202			37.8	%		20.8	%		16.8	%
Upholstery Fabrics		6,277			5,513			13.9	%		19.4	%		16.6	%
Gross Profit		16,202			12,715			27.4	%		20.2	%		16.7	%
Selling, General and Administrative expenses by Segment										Percent of Sales
Mattress Fabrics	$	2,923			2,574			13.6	%		6.1	%		6.0	%
Upholstery Fabrics		3,595			3,452			4.1	%		11.1	%		10.4	%
Unallocated Corporate expenses		2,223			1,393			59.6	%		2.8	%		1.8	%
Selling, General and Administrative Expenses		8,741			7,419			17.8	%		10.9	%		9.8	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	7,003			4,629			51.3	%		14.6	%		10.8	%
Upholstery Fabrics		2,681			2,060			30.1	%		8.3	%		6.2	%
Unallocated corporate expenses		(2,223	)		(1,393	)		59.6	%		(2.8	) %		(1.8	) %
Operating Income		7,461			5,296			40.9	%		9.3	%		7.0	%
Return on Capital (1)
Mattress Fabrics		39.5	%		29.5	%
Upholstery Fabrics		65.0	%		45.2	%
Unallocated Corporate		N/A			N/A
Consolidated		34.3	%		26.0	%
Capital Employed (2)
Mattress Fabrics		71,349			62,936			13.4	%
Upholstery Fabrics		18,946			19,052			(0.6	) %
Unallocated Corporate		298			1,160			N/A
Consolidated		90,593			83,148			9.0	%
Depreciation expense by Segment
Mattress Fabrics	$	1,359			1,219			11.5	%
Upholstery Fabrics		196			180			8.9	%
Depreciation expense		1,555			1,399			11.2	%
Notes:
(1) See pages 6 and 7 of this financial information release for calculations.
(2) The capital employed balances are as of August 2, 2015 and August 3, 2014.

Page 5 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	11/2/2014			2/1/2015			5/3/2015			8/2/2015			8/2/2015
Net income	$	3,001		$	3,812		$	4,913		$	4,701		$	16,427
Income taxes		1,889			2,110			1,772			2,707			8,478
Interest income, net		(153	)		(202	)		(128	)		(42	)		(525	)
Depreciation and amortization expense		1,460			1,478			1,576			1,602			6,116
Stock based compensation		245			191			304			265			1,005
Adjusted EBITDA	$	6,442		$	7,389		$	8,437		$	9,233		$	31,501
	Quarter Ended
													Trailing 12
													Months
	10/27/2013			1/26/2014			4/27/2014			8/3/2014			8/3/2014
Net income	$	3,096		$	8,381		$	2,740		$	3,344		$	17,561
Income taxes		1,718			(3,807	)		1,380			2,115			1,406
Interest income, net		(3	)		(57	)		(43	)		(74	)		(177	)
Depreciation and amortization expense		1,373			1,370			1,394			1,446			5,583
Stock based compensation		224			175			159			46			604
Adjusted EBITDA	$	6,408		$	6,062		$	5,630		$	6,877		$	24,977
% Over (Under)		0.5	%		21.9	%		49.9	%		34.3	%		26.1	%

Page 6 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 2, 2015
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Three Months			Average			Return on
	Ended			Capital			Avg. Capital
	August 2, 2015 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	7,003		$	70,911			39.5	%
Upholstery Fabrics		2,681			16,486			65.0	%
(less: Unallocated Corporate)		(2,223	)		(488	)		N/A
Total	$	7,461		$	86,909			34.3	%

Average Capital Employed	As of the three Months Ended August 2, 2015												As of the three Months Ended May 3, 2015
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		91,614			33,795			44,463			169,872			89,066			32,838			49,464			171,368
Total liabilities		(20,265	)		(14,849	)		(16,033	)		(51,147	)		(18,594	)		(18,812	)		(14,535	)		(51,941	)
Subtotal	$	71,349		$	18,946		$	28,430		$	118,725		$	70,472		$	14,026		$	34,929		$	119,427
Less:
Cash and cash equivalents		-			-			(25,933	)		(25,933	)		-			-			(29,725	)		(29,725	)
Short-term investments		-			-			(6,336	)		(6,336	)		-			-			(10,004	)		(10,004	)
Long-term investments		-			-			(2,893	)		(2,893	)		-			-			(2,415	)		(2,415	)
Income taxes receivable		-			-			(142	)		(142	)		-			-			(229	)		(229	)
Deferred income taxes - current		-			-			(6,986	)		(6,986	)		-			-			(4,790	)		(4,790	)
Deferred income taxes - non-current		-			-			(412	)		(412	)		-			-			(447	)		(447	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Income taxes payable - current		-			-			392			392			-			-			325			325
Income taxes payable - long-term		-			-			3,634			3,634			-			-			3,792			3,792
Deferred income taxes - non-current		-			-			4,064			4,064			-			-			1,050			1,050
Deferred compensation		-			-			4,280			4,280			-			-			4,041			4,041
Total Capital Employed	$	71,349		$	18,946		$	298		$	90,593		$	70,472		$	14,026		$	(1,273	)	$	83,225

	Mattress		Upholstery		Unallocated
	Fabrics		Fabrics		Corporate			Total
Average Capital Employed (3)	$	70,911	$	16,486	$	(488	)	$	86,909

Notes:
(1)	See reconciliation per page 4 of this financial information release.
(2)	Return on average capital employed represents operating income for the three month period ending August 2, 2015 times four quarters 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 investments, current maturities of long-term debt, current and noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.
(3)	Average capital employed was computed using the two periods ending August 2, 2015 and May 3, 2015.

Page 7 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 3, 2014
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Three Months			Average		Return on
	Ended			Capital		Avg. Capital
	August 3, 2014 (1)			Employed (3)		Employed (2)
Mattress Fabrics	$	4,629		$	62,697		29.5	%
Upholstery Fabrics		2,060			18,236		45.2	%
(less: Unallocated Corporate)		(1,393	)		661		N/A
Total	$	5,296		$	81,593		26.0	%

Average Capital Employed	As of the three Months Ended August 3, 2014												As of the three Months Ended April 27, 2014
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		81,400			30,520			42,292			154,212			79,055			34,987			46,893			160,935
Total liabilities		(18,464	)		(11,468	)		(15,133	)		(45,065	)		(16,598	)		(17,568	)		(15,025	)		(49,191	)
Subtotal	$	62,936		$	19,052		$	27,159		$	109,147		$	62,457		$	17,419		$	31,868		$	111,744
Less:
Cash and cash equivalents		-			-			(24,665	)		(24,665	)		-			-			(29,303	)		(29,303	)
Short-term investments		-			-			(6,311	)		(6,311	)		-			-			(6,294	)		(6,294	)
Long-term investments		-			-			(1,749	)		(1,749	)		-			-			(765	)		(765	)
Income taxes receivable		-			-			(136	)		(136	)		-			-			(121	)		(121	)
Deferred income taxes - current		-			-			(6,203	)		(6,203	)		-			-			(6,230	)		(6,230	)
Deferred income taxes - non-current		-			-			(973	)		(973	)		-			-			(2,040	)		(2,040	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			569			569									586			586
Income taxes payable - current		-			-			387			387			-			-			442			442
Income taxes payable - long-term		-			-			4,037			4,037			-			-			3,962			3,962
Deferred income taxes - non-current		-			-			1,013			1,013			-			-			1,013			1,013
Deferred compensation		-			-			3,632			3,632			-			-			2,644			2,644
Long-term debt, less current maturities		-			-			2,200			2,200			-			-			2,200			2,200
Total Capital Employed	$	62,936		$	19,052		$	1,160		$	83,148		$	62,457		$	17,419		$	162		$	80,038

	Mattress		Upholstery		Unallocated
	Fabrics		Fabrics		Corporate		Total
Average Capital Employed (3)	$	62,697	$	18,236	$	661	$	81,593

Notes:
(1)	See reconciliation per page 4 of this financial information release.
(2)	Return on average capital employed represents operating income for the three month period ending August 3, 2014 times four quarters 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 investments, long-term debt, including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.
(3)	Average capital employed was computed using the two periods ending August 3, 2014 and April 27, 2014.

Page 8 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
Unaudited
(Amounts in Thousands)
		THREE MONTHS ENDED
		Amounts
		August 2,			August 3,
		2015			2014
Consolidated Effective GAAP Income Tax Rate	(1)		36.5	%		38.7	%
Non-Cash U.S. Income Tax Expense			(20.5	)%		(21.2	)%
Non-Cash Foreign Income Tax Expense			(0.3	)%		(0.8	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		15.7	%		16.7	%

	THREE MONTHS ENDED
	As reported					As Adjusted		As reported					As Adjusted
	August 2,					August 2,		August 3,					August 3,
	2015		Adjustments			2015		2014		Adjustments			2014
Income before income taxes	$	7,408				$	7,408	$	5,459				$	5,459
Income taxes (3)		2,707	$	(1,544	)		1,163		2,115	$	(1,203	)		912
Net income	$	4,701	$	1,544		$	6,245	$	3,344	$	1,203		$	4,547
Net income per share-basic	$	0.38	$	0.13		$	0.51	$	0.27	$	0.10		$	0.37
Net income per share-diluted	$	0.38	$	0.12		$	0.50	$	0.27	$	0.10		$	0.37
Average shares outstanding-basic		12,277		12,277			12,277		12,212		12,212			12,212
Average shares outstanding-diluted		12,456		12,456			12,456		12,404		12,404			12,404

(1)	Calculated by dividing consolidated income tax expense by consolidated income before income taxes.
(2)	Represents estimated cash income tax expense for our subsidiaries located in Canada and China divided by consolidated income before income taxes.
(3)	Adjusted income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.