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 OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	October 30,			November 1,			% Over			October 30,			November 1,
	2016			2015			(Under)			2016			2015
Net sales	$	75,343			76,956			(2.1	)%		100.0	%		100.0	%
Cost of sales		58,442			61,223			(4.5	)%		77.6	%		79.6	%
Gross profit		16,901			15,733			7.4	%		22.4	%		20.4	%
Selling, general and
administrative expenses		9,602			9,433			1.8	%		12.7	%		12.3	%
Income from operations		7,299			6,300			15.9	%		9.7	%		8.2	%
Interest income		(15	)		(69	)		(78.3	)%		(0.0	)%		(0.1	)%
Other expense		155			225			(31.1	)%		0.2	%		0.3	%
Income before income taxes		7,159			6,144			16.5	%		9.5	%		8.0	%
Income taxes*		2,684			2,373			13.1	%		37.5	%		38.6	%
Net income	$	4,475			3,771			18.7	%		5.9	%		4.9	%
Net income per share-basic	$	0.36		$	0.31			16.1	%
Net income per share-diluted	$	0.36		$	0.30			20.0	%
Average shares outstanding-basic		12,308			12,343			(0.3	)%
Average shares outstanding-diluted		12,507			12,484			0.2	%
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	October 30,			November 1,			% Over			October 30,			November 1,
		2016			2015		(Under)				2016			2015
Income before income taxes (see above)	$	7,159			6,144			16.5	%		9.5	%		8.0	%
Adjusted Income taxes (2)*		1,274			965			32.0	%		17.8	%		15.7	%
Adjusted net income		5,885			5,179			13.6	%		7.8	%		6.7	%
Adjusted net income per share-basic	$	0.48		$	0.42			14.3	%
Adjusted net income per share-diluted	$	0.47		$	0.41			14.6	%
Average shares outstanding-basic		12,308			12,343			(0.3	)%
Average shares outstanding-diluted		12,507			12,484			0.2	%
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $18.0 million in net operating loss carryforwards as of May 1, 2016. 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 SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	SIX MONTHS ENDED
	Amounts									Percent of Sales
	October 30,			November 1,			% Over			October 30,			November 1,
	2016			2015			(Under)			2016			2015
Net sales	$	156,026			157,141			(0.7	)%		100.0	%		100.0	%
Cost of sales		120,705			125,206			(3.6	)%		77.4	%		79.7	%
Gross profit		35,321			31,935			10.6	%		22.6	%		20.3	%
Selling, general and
administrative expenses		19,348			18,175			6.5	%		12.4	%		11.6	%
Income from operations		15,973			13,760			16.1	%		10.2	%		8.8	%
Interest income		(40	)		(112	)		(64.3	)%		(0.0	)%		(0.1	)%
Other expense		307			320			(4.1	)%		0.2	%		0.2	%
Income before income taxes		15,706			13,552			15.9	%		10.1	%		8.6	%
Income taxes*		5,917			5,081			16.5	%		37.7	%		37.5	%
Net income	$	9,789			8,471			15.6	%		6.3	%		5.4	%
Net income per share-basic	$	0.80		$	0.69			15.9	%
Net income per share-diluted	$	0.78		$	0.68			14.7	%
Average shares outstanding-basic		12,297			12,310			(0.1	)%
Average shares outstanding-diluted		12,495			12,481			0.1	%
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	SIX MONTHS ENDED
	Amounts									Percent of Sales
	October 30,			November 1,			% Over			October 30,			November 1,
		2016			2015		(Under)				2016			2015
Income before income taxes (see above)	$	15,706			13,552			15.9	%		10.1	%		8.6	%
Adjusted Income taxes (2)*		2,796			2,128			31.4	%		17.8	%		15.7	%
Adjusted net income		12,910			11,424			13.0	%		8.3	%		7.3	%
Adjusted net income per share-basic	$	1.05		$	0.93			12.9	%
Adjusted net income per share-diluted	$	1.03		$	0.92			12.0	%
Average shares outstanding-basic		12,297			12,310			(0.1	)%
Average shares outstanding-diluted		12,495			12,481			0.1	%
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $18.0 million in net operating loss carryforwards as of May 1, 2016. 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 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
OCTOBER 30, 2016, NOVEMBER 1, 2015, AND MAY 1, 2016
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	October 30,		November 1,		(Decrease)						* May 1,
	2016		2015		Dollars			Percent			2016
Current assets
Cash and cash equivalents	$	13,910		31,176		(17,266	)		(55.4	)%		37,787
Short-term investments		2,430		6,320		(3,890	)		(61.6	)%		4,359
Accounts receivable		19,039		23,314		(4,275	)		(18.3	)%		23,481
Inventories		45,954		46,479		(525	)		(1.1	)%		46,531
Income taxes receivable		-		75		(75	)		(100.0	)%		155
Other current assets		1,675		2,614		(939	)		(35.9	)%		2,477
Total current assets		83,008		109,978		(26,970	)		(24.5	)%		114,790
Property, plant & equipment, net		45,537		38,319		7,218			18.8	%		39,973
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		581		3,415		(2,834	)		(83.0	)%		2,319
Long-term Investments - Held-To-Maturity		31,050		-		31,050			100.0	%		-
Long-term Investments - Rabbi Trust		4,994		3,279		1,715			52.3	%		4,025
Other assets		2,495		2,494		1			0.0	%		2,573
Total assets	$	179,127		168,947		10,180			6.0	%		175,142
Current liabilities
Accounts payable - trade	$	20,183		25,221		(5,038	)		(20.0	)%		23,994
Accounts payable - capital expenditures		3,000		1,269		1,731			136.4	%		224
Accrued expenses		8,878		9,895		(1,017	)		(10.3	)%		11,922
Income taxes payable - current		513		305		208			68.2	%		180
Total current liabilities		32,574		36,690		(4,116	)		(11.2	)%		36,320
Income taxes payable - long-term		3,734		3,655		79			2.2	%		3,841
Deferred income taxes		1,699		1,206		493			40.9	%		1,483
Deferred compensation		5,171		4,421		750			17.0	%		4,686
Total liabilities		43,178		45,972		(2,794	)		(6.1	)%		46,330
Shareholders' equity		135,949		122,975		12,974			10.6	%		128,812
Total liabilities and
shareholders' equity	$	179,127		168,947		10,180			6.0	%		175,142
Shares outstanding		12,312		12,350		(38	)		(0.3	)%		12,265
* Derived from audited financial statements.

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
Unaudited
(Amounts in Thousands)
	SIX MONTHS ENDED
	Amounts
	October 30,			November 1,
	2016			2015
Cash flows from operating activities:
Net income	$	9,789			8,471
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		3,511			3,184
Amortization of other assets		80			86
Stock-based compensation		1,657			1,339
Deferred income taxes		2,121			2,816
Realized loss on sale of short-term investments		12			56
Loss (gain) on sale of equipment		9			(60	)
Excess tax benefits related to stock-based compensation		(167	)		(838	)
Foreign currency exchange gains		(53	)		(13	)
Changes in assets and liabilities:
Accounts receivable		4,142			4,892
Inventories		219			(4,135	)
Other current assets		751			(302	)
Other assets		-			8
Accounts payable		(3,274	)		(2,921	)
Accrued expenses and deferrred compensation		(2,749	)		(1,547	)
Income taxes		554			168
Net cash provided by operating activities		16,602			11,204
Cash flows from investing activities:
Capital expenditures		(6,308	)		(5,255	)
Proceeds from the sale of equipment		-			225
Proceeds from the sale of short-term investments		2,000			3,612
Purchase of short-term investments		(23	)		(46	)
Purchase of long-term investments (Held-To-Maturity)		(31,050	)		-
Purchase of long-term investments (Rabbi Trust)		(929	)		(864	)
Net cash used in investing activities		(36,310	)		(2,328	)
Cash flows from financing activities:
Proceeds from line of credit		7,000			-
Payments on line of credit		(7,000	)		-
Payments on long-term debt		-			(2,200	)
Excess tax benefits related to stock-based compensation		167			838
Dividends paid		(4,307	)		(6,417	)
Payments on debt issuance costs		(2	)		(43	)
Proceeds from common stock issued		11			126
Net cash used in financing activities		(4,131	)		(7,696	)
Effect of exchange rate changes on cash and cash equivalents		(38	)		271
(Decrease) increase in cash and cash equivalents		(23,877	)		1,451
Cash and cash equivalents at beginning of period		37,787			29,725
Cash and cash equivalents at end of period	$	13,910			31,176
Free Cash Flow (1)	$	9,494			6,419

(1)  Free Cash Flow reconciliation is as follows:
		FY 2017			FY 2016
A)	Net cash provided by operating activities	$	16,602			11,204
B)	Minus:  Capital Expenditures		(6,308	)		(5,255	)
C)	Add:     Proceeds from the sale of equipment		-			225
D)	Add:     Excess tax benefits related to stock-based compensation		167			838
E)	Minus:  Purchase of long-term investments (Rabbi Trust)		(929	)		(864	)
F)	Effects of exchange rate changes on cash and cash equivalents		(38	)		271
		$	9,494			6,419

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	October 30,			November 1,			% Over			October 30,			November 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	45,527			45,436			0.2	%		60.4	%		59.0	%
Upholstery Fabrics		29,816			31,520			(5.4	)%		39.6	%		41.0	%
Net Sales	$	75,343			76,956			(2.1	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	10,756			9,456			13.7	%		23.6	%		20.8	%
Upholstery Fabrics		6,145			6,277			(2.1	)%		20.6	%		19.9	%
Gross Profit	$	16,901			15,733			7.4	%		22.4	%		20.4	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics	$	3,296			2,989			10.3	%		7.2	%		6.6	%
Upholstery Fabrics		3,652			3,813			(4.2	)%		12.2	%		12.1	%
Unallocated Corporate expenses		2,654			2,631			0.9	%		3.5	%		3.4	%
Selling, General and Administrative Expenses	$	9,602			9,433			1.8	%		12.7	%		12.3	%
Operating Income (loss) by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	7,460			6,467			15.4	%		16.4	%		14.2	%
Upholstery Fabrics		2,493			2,464			1.2	%		8.4	%		7.8	%
Unallocated corporate expenses		(2,654	)		(2,631	)		0.9	%		(3.5	)%		(3.4	)%
Operating income	$	7,299			6,300			15.9	%		9.7	%		8.2	%
Depreciation by Segment
Mattress Fabrics	$	1,545			1,424			8.5	%
Upholstery Fabrics		206			205			0.5	%
Depreciation	$	1,751			1,629			7.5	%

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
(Unaudited)
(Amounts in thousands)
	SIX MONTHS ENDED
	Amounts									Percent of Total Sales
	October 30,			November 1,			% Over			October 30,			November 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	96,057			93,245			3.0	%		61.6	%		59.3	%
Upholstery Fabrics		59,969			63,896			(6.1	)%		38.4	%		40.7	%
Net Sales	$	156,026			157,141			(0.7	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	22,657			19,381			16.9	%		23.6	%		20.8	%
Upholstery Fabrics		12,664			12,554			0.9	%		21.1	%		19.6	%
Gross Profit	$	35,321			31,935			10.6	%		22.6	%		20.3	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics	$	6,795			5,912			14.9	%		7.1	%		6.3	%
Upholstery Fabrics		7,185			7,409			(3.0	)%		12.0	%		11.6	%
Unallocated Corporate expenses		5,368			4,854			10.6	%		3.4	%		3.1	%
Selling, General, and Administrative Expenses	$	19,348			18,175			6.5	%		12.4	%		11.6	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	15,862			13,468			17.8	%		16.5	%		14.4	%
Upholstery Fabrics		5,479			5,146			6.5	%		9.1	%		8.1	%
Unallocated corporate expenses		(5,368	)		(4,854	)		10.6	%		(3.4	)%		(3.1	)%
Operating income	$	15,973			13,760			16.1	%		10.2	%		8.8	%
Return on Capital (1)
Mattress Fabrics		41.8	%		37.9	%
Upholstery Fabrics		62.7	%		61.7	%
Unallocated Corporate		N/A			N/A
Consolidated		34.3	%		31.5	%
Capital Employed (2)
Mattress Fabrics		76,201			71,502			6.6	%
Upholstery Fabrics		18,181			17,058			6.6	%
Unallocated Corporate		(281	)		(263	)		N/A
Consolidated		94,101			88,297			6.6	%
Depreciation by Segment
Mattress Fabrics	$	3,101			2,783			11.4	%
Upholstery Fabrics		410			401			2.2	%
Depreciation	$	3,511			3,184			10.3	%
Notes:
(1) See pages 8 and 9 of this financial information release for calculations.
(2) The capital employed balances are as of October 30, 2016 and November 1, 2015.

Page 7 of 10

CULP, INC.  FINANCIAL INFORMATION RELEASE

       CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015

(UNAUDITED)

(AMOUNTS IN THOUSANDS)

	Quarter Ended
													Trailing 12
													Months
	1/31/2016			5/1/2016			7/31/2016			10/30/2016			10/30/2016
Net income	$	4,862		$	3,601		$	5,313		$	4,475		$	18,251
Income taxes		2,317			3,566			3,233			2,684			11,800
Interest income, net		(38	)		(26	)		(25	)		(15	)		(104	)
Depreciation and amortization expense		1,741			1,830			1,813			1,778			7,162
Stock based compensation		625			778			761			896			3,060
Adjusted EBITDA	$	9,507		$	9,749		$	11,095		$	9,818		$	40,169
	Quarter Ended
													Trailing 12
													Months
	2/1/2015			5/3/2015			8/2/2015			11/1/2015			11/1/2015
Net income	$	3,812		$	4,913		$	4,701		$	3,771		$	17,197
Income taxes		2,110			1,772			2,707			2,373			8,962
Interest income, net		(202	)		(128	)		(42	)		(69	)		(441	)
Depreciation and amortization expense		1,478			1,576			1,602			1,668			6,324
Stock based compensation		191			304			265			1,074			1,834
Adjusted EBITDA	$	7,389		$	8,437		$	9,233		$	8,817		$	33,876
% Over (Under)		28.7	%		15.6	%		20.2	%		11.4	%		18.6	%

Page 8 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE SIX MONTHS ENDED OCTOBER 30, 2016
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Six Months			Average			Return on
	Ended			Capital			Avg. Capital
	October 30, 2016 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	15,862		$	75,828			41.8	%
Upholstery Fabrics		5,479			17,476			62.7	%
(less: Unallocated Corporate)		(5,368	)		(285	)		N/A
Total	$	15,973		$	93,019			34.3	%

Average Capital Employed	As of the three Months Ended October 30, 2016												As of the three Months Ended July 31, 2016												As of the three Months Ended May 1, 2016
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		94,700			29,361			55,066			179,127			92,959			33,550			56,851			183,360			94,878			29,463			50,801			175,142
Total liabilities		(18,499	)		(11,180	)		(13,499	)		(43,178	)		(16,313	)		(16,329	)		(19,283	)		(51,925	)		(20,241	)		(12,438	)		(13,651	)		(46,330	)
Subtotal	$	76,201		$	18,181		$	41,567		$	135,949		$	76,646		$	17,221		$	37,568		$	131,435		$	74,637		$	17,025		$	37,150		$	128,812
Less:
Cash and cash equivalents		-			-			(13,910	)		(13,910	)		-			-			(45,549	)		(45,549	)		-			-			(37,787	)		(37,787	)
Short-term investments		-			-			(2,430	)		(2,430	)		-			-			(2,434	)		(2,434	)		-			-			(4,359	)		(4,359	)
Long-term investments - Held-To-Maturity		-			-			(31,050	)		(31,050	)		-			-			-			-			-			-			-			-
Long-term investments - Rabbi Trust								(4,994	)		(4,994	)		-			-			(4,611	)		(4,611	)		-			-			(4,025	)		(4,025	)
Income taxes receivable		-			-			-			-			-			-			-			-			-			-			(155	)		(155	)
Deferred income taxes - non-current		-			-			(581	)		(581	)		-			-			(1,942	)		(1,942	)		-			-			(2,319	)		(2,319	)
Income taxes payable - current		-			-			513			513			-			-			358			358			-			-			180			180
Income taxes payable - long-term		-			-			3,734			3,734			-			-			3,779			3,779			-			-			3,841			3,841
Deferred income taxes - non-current		-			-			1,699			1,699			-			-			1,532			1,532			-			-			1,483			1,483
Line of credit		-			-			-			-			-			-			7,000			7,000			-			-			-			-
Deferred compensation		-			-			5,171			5,171			-			-			5,031			5,031			-			-			4,686			4,686
Total Capital Employed	$	76,201		$	18,181		$	(281	)	$	94,101		$	76,646		$	17,221		$	732		$	94,599		$	74,637		$	17,025		$	(1,305	)	$	90,357
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	75,828		$	17,476		$	(285	)	$	93,019
Notes:
(1) See reconciliation per page 6 of this financial information release.
(2) Return on average capital employed represents operating income for the six month period ending October 30, 2016 times two 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 - Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred tax assets and liabilities,
income taxes receivable and payable, line of credit, and deferred compensation.
(3) Average capital employed was computed using the three periods ending October 30, 2016, July 31, 2016 and May 1, 2016.

Page 9 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE SIX MONTHS ENDED NOVEMBER 1, 2015
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Six Months				Average				Return on
	Ended				Capital				Avg. Capital
	November 1, 2015 (1)				Employed (3)				Employed (2)
Mattress Fabrics		$	13,468			$	71,108			37.9	%
Upholstery Fabrics			5,146				16,677			61.7	%
(less: Unallocated Corporate)			(4,854	)			(413	)		N/A
Total		$	13,760			$	87,372			31.5	%

Average Capital Employed	As of the three Months Ended November 1, 2015												As of the three Months Ended August 2, 2015												As of the three Months Ended May 3, 2015
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		90,730			32,187			46,030			168,947			91,614			33,795			41,471			166,880			89,066			32,838			49,396			171,300
Total liabilities		(19,228	)		(15,129	)		(11,615	)		(45,972	)		(20,265	)		(14,849	)		(13,041	)		(48,155	)		(18,594	)		(18,812	)		(14,467	)		(51,873	)
Subtotal	$	71,502		$	17,058		$	34,415		$	122,975		$	71,349		$	18,946		$	28,430		$	118,725		$	70,472		$	14,026		$	34,929		$	119,427
Less:
Cash and cash equivalents		-			-			(31,176	)		(31,176	)		-			-			(25,933	)		(25,933	)		-			-			(29,725	)		(29,725	)
Short-term investments		-			-			(6,320	)		(6,320	)		-			-			(6,336	)		(6,336	)		-			-			(10,004	)		(10,004	)
Long-term investments- Rabbi Trust		-			-			(3,279	)		(3,279	)		-			-			(2,893	)		(2,893	)		-			-			(2,415	)		(2,415	)
Income taxes receivable		-			-			(75	)		(75	)		-			-			(142	)		(142	)		-			-			(229	)		(229	)
Deferred income taxes - non-current		-			-			(3,415	)		(3,415	)		-			-			(4,406	)		(4,406	)		-			-			(5,169	)		(5,169	)
Current maturities of long-term debt		-			-			-			-			-			-			2,200			2,200			-			-			2,200			2,200
Income taxes payable - current		-			-			305			305			-			-			392			392			-			-			325			325
Income taxes payable - long-term		-			-			3,655			3,655			-			-			3,634			3,634			-			-			3,792			3,792
Deferred income taxes - non-current		-			-			1,206			1,206			-			-			1,072			1,072			-			-			982			982
Deferred compensation		-			-			4,421			4,421			-			-			4,280			4,280			-			-			4,041			4,041
Total Capital Employed	$	71,502		$	17,058		$	(263	)	$	88,297		$	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)	$	71,108		$	16,677		$	(413	)	$	87,372
Notes:
(1) See reconciliation per page 6 of this financial information release.
(2) Return on average capital employed represents operating income for the six month period ending November 1, 2015 times two 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 - Rabbi Trust, 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 three periods ending November 1, 2015, August 2, 2015 and May 3, 2015.

Page 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE
FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015
Unaudited
(Amounts in Thousands)
			SIX MONTHS ENDED
			Amounts
			October 30,			November 1,
			2016			2015
Consolidated Effective GAAP Income Tax Rate	(1	)		37.7	%		37.5	%
Non-Cash U.S. Income Tax Expense				(19.6	)%		(21.5	)%
Non-Cash Foreign Income Tax Expense				(0.3	)%		(0.3	)%
Consolidated Adjusted Effective Income Tax Rate	(2	)		17.8	%		15.7	%

			��
	THREE MONTHS ENDED
	As reported					October 30, 2016		As reported					November 1, 2015
	October 30,					Proforma Net		November 1,					Proforma Net
		2016	Adjustments			of Adjustments			2015	Adjustments			of Adjustments
Income before income taxes	$	7,159	$	-		$	7,159	$	6,144				$	6,144
Income taxes (3)		2,684	$	(1,410	)		1,274		2,373	$	(1,408	)		965
Net income	$	4,475	$	1,410		$	5,885	$	3,771	$	1,408		$	5,179
Net income per share-basic	$	0.36	$	0.11		$	0.48	$	0.31	$	0.11		$	0.42
Net income per share-diluted	$	0.36	$	0.11		$	0.47	$	0.30	$	0.11		$	0.41
Average shares outstanding-basic		12,308		12,308			12,308		12,343		12,343			12,343
Average shares outstanding-diluted		12,507		12,507			12,507		12,484		12,484			12,484
	SIX MONTHS ENDED
	As reported					October 30, 2016		As reported					November 1, 2015
	October 30,					Proforma Net		November 1,					Proforma Net
		2016	Adjustments			of Adjustments			2015	Adjustments			of Adjustments
Income before income taxes	$	15,706	$	-		$	15,706	$	13,552	$	-		$	13,552
Income taxes (3)		5,917	$	(3,121	)		2,796		5,081	$	(2,953	)		2,128
Net income	$	9,789	$	3,121		$	12,910	$	8,471	$	2,953		$	11,424
Net income per share-basic	$	0.80	$	0.25		$	1.05	$	0.69	$	0.24		$	0.93
Net income per share-diluted	$	0.78	$	0.25		$	1.03	$	0.68	$	0.24		$	0.92
Average shares outstanding-basic		12,297		12,297			12,297		12,310		12,310			12,310
Average shares outstanding-diluted		12,495		12,495			12,495		12,481		12,481			12,481
(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.