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

Exhibit 99(b)

Page 1 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	January 31,			February 1,			% Over			January 31,			February 1,
	2016			2015			(Under)			2016			2015
Net sales	$	78,466			81,269			(3.4	)%		100.0	%		100.0	%
Cost of sales		61,903			66,867			(7.4	)%		78.9	%		82.3	%
Gross profit		16,563			14,402			15.0	%		21.1	%		17.7	%
Selling, general and
administrative expenses		9,337			8,375			11.5	%		11.9	%		10.3	%
Income from operations		7,226			6,027			19.9	%		9.2	%		7.4	%
Interest income		(38	)		(202	)		(81.2	)%		(0.0	)%		(0.2	)%
Other expense		85			307			(72.3	)%		0.1	%		0.4	%
Income before income taxes		7,179			5,922			21.2	%		9.1	%		7.3	%
Income taxes*		2,317			2,110			9.8	%		32.3	%		35.6	%
Net income	$	4,862			3,812			27.5	%		6.2	%		4.7	%
Net income per share-basic	$	0.39		$	0.31			25.8	%
Net income per share-diluted	$	0.39		$	0.31			25.8	%
Average shares outstanding-basic		12,331			12,219			0.9	%
Average shares outstanding-diluted		12,486			12,417			0.6	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts							Percent of Sales
	January 31,		February 1,		% Over			January 31,			February 1,
	2016		2015		(Under)			2016			2015
Income before income taxes (see above)	$	7,179		5,922		21.2	%		9.1	%		7.3	%
Adjusted Income taxes (2)*		1,278		906		41.1	%		17.8	%		15.3	%
Adjusted net income		5,901		5,016		17.6	%		7.5	%		6.2	%
Adjusted net income per share-basic	$	0.48	$	0.41		17.1	%
Adjusted net income per share-diluted	$	0.47	$	0.40		17.5	%
Average shares outstanding-basic		12,331		12,219		0.9	%
Average shares outstanding-diluted		12,486		12,417		0.6	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $33.3 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 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

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

Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	NINE MONTHS ENDED
	Amounts									Percent of Sales
	January 31,			February 1,			% Over			January 31,			February 1,
	2016			2015			(Under)			2016			2015
Net sales	$	235,607			231,320			1.9	%		100.0	%		100.0	%
Cost of sales		187,109			191,925			(2.5	)%		79.4	%		83.0	%
Gross profit		48,498			39,395			23.1	%		20.6	%		17.0	%
Selling, general and
administrative expenses		27,512			23,173			18.7	%		11.7	%		10.0	%
Income from operations		20,986			16,222			29.4	%		8.9	%		7.0	%
Interest expense		-			50			(100.0	)%		0.0	%		0.0	%
Interest income		(150	)		(478	)		(68.6	)%		(0.1	)%		(0.2	)%
Other expense		405			380			6.6	%		0.2	%		0.2	%
Income before income taxes		20,731			16,270			27.4	%		8.8	%		7.0	%
Income taxes*		7,398			6,113			21.0	%		35.7	%		37.6	%
Net income	$	13,333			10,157			31.3	%		5.7	%		4.4	%
Net income per share-basic	$	1.08		$	0.83			30.1
Net income per share-diluted	$	1.07		$	0.82			30.5
Average shares outstanding-basic		12,317			12,216			0.8
Average shares outstanding-diluted		12,488			12,410			0.6

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	NINE MONTHS ENDED
	Amounts							Percent of Sales
	January 31,		February 1,		% Over			January 31,			February 1,
	2016		2015		(Under)			2016			2015
Income before income taxes (see above)	$	20,731		16,270		27.4	%		8.8	%		7.0	%
Adjusted Income taxes (2)*		3,690		2,489		48.3	%		17.8	%		15.3	%
Adjusted net income		17,041		13,781		23.7	%		7.2	%		6.0	%
Adjusted net income per share-basic	$	1.38	$	1.13		22.1	%
Adjusted net income per share-diluted	$	1.36	$	1.11		22.5	%
Average shares outstanding-basic		12,317		12,216		0.8	%
Average shares outstanding-diluted		12,488		12,410		0.6	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $33.3 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 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

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

Page 3 or 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2016, FEBRUARY 1, 2015, AND MAY 3, 2015
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	January 31,		February 1,		(Decrease)						* May 3,
	2016		2015		Dollars			Percent			2015
Current assets
Cash and cash equivalents	$	31,713		28,772		2,941			10.2	%		29,725
Short-term investments		4,259		8,384		(4,125	)		(49.2	)%		10,004
Accounts receivable		26,784		30,774		(3,990	)		(13.0	)%		28,749
Inventories		48,485		38,013		10,472			27.5	%		42,484
Income taxes receivable		23		104		(81	)		(77.9	)%		229
Other current assets		2,331		2,992		(661	)		(22.1	)%		2,440
Total current assets		113,595		109,039		4,556			4.2	%		113,631
Property, plant & equipment, net		38,157		35,269		2,888			8.2	%		36,078
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		4,312		5,020		(708	)		(14.1	) %		5,169
Long-term Investments		3,590		2,063		1,527			74.0	%		2,415
Other assets		2,435		2,505		(70	)		(2.8	)%		2,545
Total assets	$	173,551		165,358		8,193			5.0	%		171,300
Current liabilities
Current maturities of long-term debt	$	-		2,200		(2,200	)		(100.0	)%		2,200
Accounts payable - trade		25,601		28,644		(3,043	)		(10.6	)%		28,414
Accounts payable - capital expenditures		380		772		(392	)		(50.8	)%		990
Accrued expenses		12,690		9,954		2,736			27.5	%		11,129
Income taxes payable - current		622		325		297			91.4	%		325
Total current liabilities		39,293		41,895		(2,602	)		(6.2	)%		43,058
Income taxes payable - long-term		3,480		3,630		(150	)		(4.1	)%		3,792
Deferred income taxes		1,209		927		282			30.4	%		982
Deferred compensation		4,495		3,934		561			14.3	%		4,041
Total liabilities		48,477		50,386		(1,909	)		(3.8	)%		51,873
Shareholders' equity		125,074		114,972		10,102			8.8	%		119,427
Total liabilities and
shareholders' equity	$	173,551		165,358		8,193			5.0	%		171,300
Shares outstanding		12,250		12,219		31			0.3	%		12,219

* Derived from audited financial statements.

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
Unaudited
(Amounts in Thousands)
		NINE MONTHS ENDED
		Amounts
		January 31,			February 1,
		2016			2015
Cash flows from operating activities:
	Net income	$	13,333			10,157
	Adjustments to reconcile net income to net cash
	provided by operating activities:
	Depreciation		4,888			4,244
	Amortization of other assets		123			140
	Stock-based compensation		1,964			482
	Deferred income taxes		1,906			3,274
	Gain on sale of equipment		(66	)		(74	)
	Realized loss on sale of short-term investments		127			-
	Excess tax benefits related to stock-based compensation		(822	)		(110	)
	Foreign currency exchange gains		(85	)		(6	)
	Changes in assets and liabilities:
	Accounts receivable		1,091			(3,455	)
	Inventories		(6,485	)		2,536
	Other current assets		(108	)		(739	)
	Other assets		48			(30	)
	Accounts payable		(1,979	)		2,267
	Accrued expenses and deferrred compensation		1,406			2,121
	Income taxes		535			(108	)
	Net cash provided by operating activities		15,876			20,699
Cash flows from investing activities:
	Capital expenditures		(7,686	)		(8,185	)
	Proceeds from the sale of equipment		230			625
	Proceeds from life insurance policies		-			320
	Payments on life insurance policies		(18	)		(18	)
	Proceeds from the sale of short-term investments		5,612			1,628
	Purchase of short-term investments		(86	)		(3,719	)
	Purchase of long-term investments		(1,268	)		(1,298	)
	Net cash used in investing activities		(3,216	)		(10,647	)
Cash flows from financing activities:
	Proceeds from line of credit		7,000			-
	Payments on line of credit		(7,000	)		(538	)
	Payments on long-term debt		(2,200	)		(2,200	)
	Repurchase of common stock		(2,397	)		(745	)
	Dividends paid		(7,281	)		(6,846	)
	Payments on debt issuance costs		(43	)		-
	Proceeds from common stock issued		138			94
	Excess tax benefits related to stock-based compensation		822			110
	Net cash used in financing activities		(10,961	)		(10,125	)
Effect of exchange rate changes on cash and cash equivalents			289			(458	)
Increase (decrease) in cash and cash equivalents			1,988			(531	)
Cash and cash equivalents at beginning of period			29,725			29,303
Cash and cash equivalents at end of period		$	31,713			28,772
Free Cash Flow (1)		$	8,245			11,795

(1)  Free Cash Flow reconciliation is as follows:
		FY 2016			FY 2015
A)	Net cash provided by operating activities	$	15,876			20,699
B)	Minus:  Capital Expenditures		(7,686	)		(8,185	)
C)	Add:     Proceeds from the sale of equipment		230			625
D)	Add:     Proceeds from life insurance policies		-			320
E)	Minus:  Payments on life insurance policies		(18	)		(18	)
F)	Add:     Excess tax benefits related to stock-based compensation		822			110
G)	Minus:  Purchase of long-term investments		(1,268	)		(1,298	)
H)	Effects of exchange rate changes on cash and cash equivalents		289			(458	)
		$	8,245			11,795

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 31,			February 1,			% Over			January 31,			February 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	44,277			45,683			(3.1	)%		56.4	%		56.2	%
Upholstery Fabrics		34,189			35,586			(3.9	)%		43.6	%		43.8	%
Net Sales	$	78,466			81,269			(3.4	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	8,751			8,076			8.4	%		19.8	%		17.7	%
Upholstery Fabrics		7,812			6,326			23.5	%		22.8	%		17.8	%
Gross Profit	$	16,563			14,402			15.0	%		21.1	%		17.7	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	2,953			2,853			3.5	%		6.7	%		6.2	%
Upholstery Fabrics		3,963			3,781			4.8	%		11.6	%		10.6	%
Unallocated Corporate expenses		2,421			1,741			39.1	%		3.1	%		2.1	%
Selling, General and Administrative Expenses	$	9,337			8,375			11.5	%		11.9	%		10.3	%
Operating Income (loss) by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	5,798			5,223			11.0	%		13.1	%		11.4	%
Upholstery Fabrics		3,849			2,545			51.2	%		11.3	%		7.2	%
Unallocated corporate expenses		(2,421	)		(1,741	)		39.1	%		(3.1	)%		(2.1	) %
Operating income	$	7,226			6,027			19.9	%		9.2	%		7.4	%
Depreciation by Segment
Mattress Fabrics	$	1,490			1,244			19.8	%
Upholstery Fabrics		215			188			14.4	%
Depreciation	$	1,705			1,432			19.1	%

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(Unaudited)
(Amounts in thousands)
	NINE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 31,			February 1,			% Over			January 31,			February 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	137,522			131,543			4.5	%		58.4	%		56.9	%
Upholstery Fabrics		98,085			99,777			(1.7	)%		41.6	%		43.1	%
Net Sales	$	235,607			231,320			1.9	%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	28,133			22,603			24.5	%		20.5	%		17.2	%
Upholstery Fabrics		20,365			16,792			21.3	%		20.8	%		16.8	%
Gross Profit	$	48,498			39,395			23.1	%		20.6	%		17.0	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	8,865			8,019			10.5	%		6.4	%		6.1	%
Upholstery Fabrics		11,372			10,518			8.1	%		11.6	%		10.5	%
Unallocated Corporate expenses		7,275			4,636			56.9	%		3.1	%		2.0	%
Selling, General, and Administrative Expenses	$	27,512			23,173			18.7	%		11.7	%		10.0	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	19,267			14,584			32.1	%		14.0	%		11.1
Upholstery Fabrics		8,994			6,274			43.4	%		9.2	%		6.3
Unallocated corporate expenses		(7,275	)		(4,636	)		56.9	%		(3.1	)%		(2.0	)%
Operating income	$	20,986			16,222			29.4	%		8.9	%		7.0	%
Return on Capital (1)
Mattress Fabrics		35.9	%		30.7	%
Upholstery Fabrics		68.9	%		48.2	%
Unallocated Corporate		N/A			N/A
Consolidated		31.7	%		26.7	%
Capital Employed (2)
Mattress Fabrics		72,644			65,178			11.5	%
Upholstery Fabrics		19,623			16,834			16.6	%
Unallocated Corporate		(1,284	)		(367	)		N/A
Consolidated		90,983			81,645			11.4	%
Depreciation by Segment
Mattress Fabrics	$	4,273			3,692			15.7	%
Upholstery Fabrics		615			552			11.4	%
Depreciation	$	4,888			4,244			15.2	%

Notes:

(1) See pages 8 and 9 of this financial information release for calculations.

(2) The capital employed balances are as of January 31, 2016 and February 1, 2015.

Page 7 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
	FOR THE TWELVE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
	(UNAUDITED)
	(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	5/3/2015			8/2/2015			11/1/2015			1/31/2016			1/31/2016
Net income	$	4,913		$	4,701		$	3,771		$	4,862		$	18,247
Income taxes		1,772			2,707			2,373			2,317			9,169
Interest income, net		(128	)		(42	)		(69	)		(38	)		(277	)
Depreciation and amortization expense		1,576			1,602			1,668			1,741			6,587
Stock based compensation		304			265			1,074			625			2,268
Adjusted EBITDA	$	8,437		$	9,233		$	8,817		$	9,507		$	35,994
	Quarter Ended
													Trailing 12
													Months
	4/27/2014			8/3/2014			11/2/2014			2/1/2015			2/1/2015
Net income	$	2,740		$	3,344		$	3,001		$	3,812		$	12,897
Income taxes		1,380			2,115			1,889			2,110			7,494
Interest income, net		(43	)		(74	)		(153	)		(202	)		(472	)
Depreciation and amortization expense		1,394			1,446			1,460			1,478			5,778
Stock based compensation		159			46			245			191			641
Adjusted EBITDA	$	5,630		$	6,877		$	6,442		$	7,389		$	26,338
% Over (Under)		49.9	%		34.3	%		36.9	%		28.7	%		36.7	%

Page 8 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE NINE MONTHS ENDED JANUARY 31, 2016
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Nine Months			Average			Return on
	Ended			Capital			Avg. Capital
	January 31, 2016 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	19,267		$	71,492			35.9	%
Upholstery Fabrics		8,994			17,413			68.9	%
(less: Unallocated Corporate)		(7,275	)		(631	)		N/A
Total	$	20,986		$	88,275			31.7	%

Average Capital Employed	As of the three Months Ended January 31, 2016												As of the three Months Ended November 1, 2015												As of the three Months Ended August 2, 2015
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		93,779			33,975			45,797			173,551			90,730			32,187			46,030			168,947			91,614			33,795			41,470			166,879
Total liabilities	��	(21,135	)		(14,352	)		(12,990	)		(48,477	)		(19,228	)		(15,129	)		(11,615	)		(45,972	)		(20,265	)		(14,849	)		(13,040	)		(48,154	)
Subtotal	$	72,644		$	19,623		$	32,807		$	125,074		$	71,502		$	17,058		$	34,415		$	122,975		$	71,349		$	18,946		$	28,430		$	118,725
Less:
Cash and cash equivalents		-			-			(31,713	)		(31,713	)		-			-			(31,176	)		(31,176	)		-			-			(25,933	)		(25,933	)
Short-term investments		-			-			(4,259	)		(4,259	)		-			-			(6,320	)		(6,320	)		-			-			(6,336	)		(6,336	)
Long-term investments		-			-			(3,590	)		(3,590	)		-			-			(3,279	)		(3,279	)		-			-			(2,893	)		(2,893	)
Income taxes receivable		-			-			(23	)		(23	)		-			-			(75	)		(75	)		-			-			(142	)		(142	)
Deferred income taxes - non-current		-			-			(4,312	)		(4,312	)		-			-			(3,415	)		(3,415	)		-			-			(4,405	)		(4,405	)
Current maturities of long-term debt		-			-			-			-			-			-			-			-			-			-			2,200			2,200
Income taxes payable - current		-			-			622			622			-			-			305			305			-			-			392			392
Income taxes payable - long-term		-			-			3,480			3,480			-			-			3,655			3,655			-			-			3,634			3,634
Deferred income taxes - non-current		-			-			1,209			1,209			-			-			1,206			1,206			-			-			1,071			1,071
Deferred compensation		-			-			4,495			4,495			-			-			4,421			4,421			-			-			4,280			4,280
Total Capital Employed	$	72,644		$	19,623		$	(1,284	)	$	90,983		$	71,502		$	17,058		$	(263	)	$	88,297		$	71,349		$	18,946		$	298		$	90,593
	As of the three Months Ended May 3, 2015
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Total assets		89,066			32,838			49,396			171,300
Total liabilities		(18,594	)		(18,812	)		(14,467	)		(51,873	)
Subtotal	$	70,472		$	14,026		$	34,929		$	119,427
Less:
Cash and cash equivalents		-			-			(29,725	)		(29,725	)
Short-term investments		-			-			(10,004	)		(10,004	)
Long-term investments		-			-			(2,415	)		(2,415	)
Income taxes receivable		-			-			(229	)		(229	)
Deferred income taxes - non-current		-			-			(5,169	)		(5,169	)
Current maturities of long-term debt		-			-			2,200			2,200
Income taxes payable - current		-			-			325			325
Income taxes payable - long-term		-			-			3,792			3,792
Deferred income taxes - non-current		-			-			982			982
Deferred compensation		-			-			4,041			4,041
Total Capital Employed	$	70,472		$	14,026		$	(1,273	)	$	83,225
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	71,492		$	17,413		$	(631	)	$	88,275

Notes:

(1) See reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for the nine month period ending January 31, 2016 divided by three quarters 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, noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.

(3) Average capital employed was computed using the four periods ending January 31, 2016, November 1, 2015, August 2, 2015 and May 3, 2015.

Page 9 of 10

	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Nine Months			Average		Return on
	Ended			Capital		Avg. Capital
	February 1, 2015 (1)			Employed (3)		Employed (2)
Mattress Fabrics	$	14,584		$	63,361		30.7	%
Upholstery Fabrics		6,274			17,344		48.2	%
(less: Unallocated Corporate)		(4,636	)		361		N/A
Total	$	16,222		$	81,065		26.7	%

Average Capital Employed	As of the three Months Ended February 1, 2015												As of the three Months Ended November 2, 2014												As of the three Months Ended August 3, 2014
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		83,648			35,761			45,949			165,358			80,121			30,916			45,126			156,163			81,400			30,520			42,298			154,218
Total liabilities		(18,470	)		(18,927	)		(12,989	)		(50,386	)		(17,247	)		(14,847	)		(12,395	)		(44,489	)		(18,464	)		(11,468	)		(15,139	)		(45,071	)
Subtotal	$	65,178		$	16,834		$	32,960		$	114,972		$	62,874		$	16,069		$	32,731		$	111,674		$	62,936		$	19,052		$	27,159		$	109,147
Less:
Cash and cash equivalents		-			-			(28,772	)		(28,772	)		-			-			(28,953	)		(28,953	)		-			-			(24,665	)		(24,665	)
Short-term investments		-			-			(8,384	)		(8,384	)		-			-			(6,318	)		(6,318	)		-			-			(6,311	)		(6,311	)
Long-term investments		-			-			(2,063	)		(2,063	)								(1,911	)		(1,911	)								(1,749	)		(1,749	)
Income taxes receivable		-			-			(104	)		(104	)		-			-			-			-			-			-			(136	)		(136	)
Deferred income taxes - non-current		-			-			(5,020	)		(5,020	)		-			-			(6,200	)		(6,200	)		-			-			(7,182	)		(7,182	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			-			-			-			-			-			-			-			-			569			569
Income taxes payable - current		-			-			325			325			-			-			268			268			-			-			387			387
Income taxes payable - long-term		-			-			3,630			3,630			-			-			3,980			3,980			-			-			4,037			4,037
Deferred income taxes - non-current		-			-			927			927			-			-			896			896			-			-			1,019			1,019
Long-term debt, less current maturities		-			-			-			-			-			-			-			-			-			-			2,200			2,200
Deferred compensation		-			-			3,934			3,934			-			-			3,794			3,794			-			-			3,632			3,632
Total Capital Employed	$	65,178		$	16,834		$	(367	)	$	81,645		$	62,874		$	16,069		$	487		$	79,430		$	62,936		$	19,052		$	1,160		$	83,148

	As of the three Months Ended April 27, 2014
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Total assets		79,055			34,987			46,886			160,928
Total liabilities		(16,598	)		(17,568	)		(15,018	)		(49,184	)
Subtotal	$	62,457		$	17,419		$	31,868		$	111,744
Less:
Cash and cash equivalents		-			-			(29,303	)		(29,303	)
Short-term investments		-			-			(6,294	)		(6,294	)
Long-term investments								(765	)		(765	)
Income taxes receivable		-			-			(121	)		(121	)
Deferred income taxes - non-current		-			-			(8,263	)		(8,263	)
Current maturities of long-term debt		-			-			2,200			2,200
Line of credit								586			586
Income taxes payable - current		-			-			442			442
Income taxes payable - long-term		-			-			3,962			3,962
Deferred income taxes - non-current		-			-			1,006			1,006
Long-term debt, less current maturities		-			-			2,200			2,200
Deferred compensation		-			-			2,644			2,644
Total Capital Employed	$	62,457		$	17,419		$	162		$	80,038
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	63,361		$	17,344		$	361		$	81,065

Notes:

(1) See reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for the nine month period ending February 1, 2015 divided by 3 quarters times 4 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, noncurrent deferred tax assets and liabilities, and income taxes payable and receivable.

(3) Average capital employed was computed using the four periods ending February 1, 2015, November 2, 2014, August 3, 2014 and April 27, 2014.

Page 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
Unaudited
(Amounts in Thousands)
		NINE MONTHS ENDED
		Amounts
		January 31,			February 1,
		2016			2015
Consolidated Effective GAAP Income Tax Rate	(1)		35.7	%		37.6	%
Non-Cash U.S. Income Tax Expense			(17.9	)%		(22.1	)%
Non-Cash Foreign Income Tax Expense			0.0	%		(0.2	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		17.8	%		15.3	%

	THREE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
	2016		Adjustments			of Adjustments		2015		Adjustments			of Adjustments
Income before income taxes	$	7,179	$	-		$	7,179	$	5,922				$	5,922
Income taxes (3)		2,317	$	(1,039	)		1,278		2,110	$	(1,204	)		906
Net income	$	4,862	$	1,039		$	5,901	$	3,812	$	1,204		$	5,016
Net income per share-basic	$	0.39	$	0.08		$	0.48	$	0.31	$	0.10		$	0.41
Net income per share-diluted	$	0.39	$	0.08		$	0.47	$	0.31	$	0.10		$	0.40
Average shares outstanding-basic		12,331		12,331			12,331		12,219		12,219			12,219
Average shares outstanding-diluted		12,486		12,486			12,486		12,417		12,417			12,417
	NINE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
		2016	Adjustments			of Adjustments			2015	Adjustments			of Adjustments
Income before income taxes	$	20,731	$	-		$	20,731	$	16,270	$	-		$	16,270
Income taxes (3)		7,398	$	(3,708	)		3,690		6,113	$	(3,624	)		2,489
Net income	$	13,333	$	3,708		$	17,041	$	10,157	$	3,624		$	13,781
Net income per share-basic	$	1.08	$	0.30		$	1.38	$	0.83	$	0.30		$	1.13
Net income per share-diluted	$	1.07	$	0.30		$	1.36	$	0.82	$	0.29		$	1.11
Average shares outstanding-basic		12,317		12,317			12,317		12,216		12,216			12,216
Average shares outstanding-diluted		12,488		12,488			12,488		12,410		12,410			12,410

(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) Proforma income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.