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 29, 2017 AND JANUARY 31, 2016
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	January 29,			January 31,			% Over			January 29,			January 31,
	2017			2016			(Under)			2017			2016
Net sales	$	76,169			78,466			(2.9	)%		100.0	%		100.0	%
Cost of sales		59,410			61,903			(4.0	)%		78.0	%		78.9	%
Gross profit		16,759			16,563			1.2	%		22.0	%		21.1	%
Selling, general and
administrative expenses		9,824			9,337			5.2	%		12.9	%		11.9	%
Income from operations		6,935			7,226			(4.0	)%		9.1	%		9.2	%
Interest income		(124	)		(38	)		226.3	%		(0.2	)%		(0.0	)%
Other expense		69			85			(18.8	)%		0.1	%		0.1	%
Income before income taxes		6,990			7,179			(2.6	)%		9.2	%		9.1	%
Income taxes*		643			2,317			(72.2	)%		9.2	%		32.3	%
Net income	$	6,347			4,862			30.5	%		8.3	%		6.2	%
Net income per share-basic	$	0.52		$	0.39			33.3	%
Net income per share-diluted	$	0.51		$	0.39			30.8	%
Average shares outstanding-basic		12,313			12,331			(0.1	)%
Average shares outstanding-diluted		12,544			12,486			0.5	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts							Percent of Sales
	January 29,		January 31,		% Over			January 29,			January 31,
		2017		2016	(Under)				2017			2016
Income before income taxes (see above)	$	6,990		7,179		(2.6	)%		9.2	%		9.1	%
Adjusted Income taxes (2)*		1,160		1,278		(9.2	)%		16.6	%		17.8	%
Adjusted net income	$	5,830		5,901		(1.2	)%		7.7	%		7.5	%
Adjusted net income per share-basic	$	0.47	$	0.48		(2.1	)%
Adjusted net income per share-diluted	$	0.47	$	0.47		0.0	%
Average shares outstanding-basic		12,313		12,331		(0.1	)%
Average shares outstanding-diluted		12,544		12,486		0.5	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $19.2 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 NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	NINE MONTHS ENDED
	Amounts									Percent of Sales
	January 29,			January 31,			% Over			January 29,			January 31,
	2017			2016			(Under)			2017			2016
Net sales	$	232,194			235,607			(1.4	)%		100.0	%		100.0	%
Cost of sales		180,115			187,109			(3.7	)%		77.6	%		79.4	%
Gross profit		52,079			48,498			7.4	%		22.4	%		20.6	%
Selling, general and
administrative expenses		29,171			27,512			6.0	%		12.6	%		11.7	%
Income from operations		22,908			20,986			9.2	%		9.9	%		8.9	%
Interest income		(164	)		(150	)		9.3	%		(0.1	)%		(0.1	)%
Other expense		376			405			(7.2	)%		0.2	%		0.2	%
Income before income taxes		22,696			20,731			9.5	%		9.8	%		8.8	%
Income taxes*		6,560			7,398			(11.3	)%		28.9	%		35.7	%
Net income	$	16,136			13,333			21.0	%		6.9	%		5.7	%
Net income per share-basic	$	1.31		$	1.08			21.3	%
Net income per share-diluted	$	1.29		$	1.07			20.6	%
Average shares outstanding-basic		12,302			12,317			(0.1	)%
Average shares outstanding-diluted		12,517			12,488			0.2	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	NINE MONTHS ENDED
	Amounts							Percent of Sales
	January 29,		January 31,		% Over			January 29,			January 31,
		2017		2016	(Under)				2017			2016
Income before income taxes (see above)	$	22,696		20,731		9.5	%		9.8	%		8.8	%
Adjusted Income taxes (2)*		3,768		3,690		2.1	%		16.6	%		17.8	%
Adjusted net income	$	18,928		17,041		11.1	%		8.2	%		7.2	%
Adjusted net income per share-basic	$	1.54	$	1.38		11.6	%
Adjusted net income per share-diluted	$	1.51	$	1.36		11.0	%
Average shares outstanding-basic		12,302		12,317		(0.1	)%
Average shares outstanding-diluted		12,517		12,488		0.2	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $19.2 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
JANUARY 29, 2017, JANUARY 31, 2016, AND MAY 1, 2016
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	January 29,		January 31,		(Decrease)						* May 1,
	2017		2016		Dollars			Percent			2016
Current assets
Cash and cash equivalents	$	15,659		31,713		(16,054	)		(50.6	)%		37,787
Short-term investments		2,410		4,259		(1,849	)		(43.4	)%		4,359
Accounts receivable		22,726		26,784		(4,058	)		(15.2	)%		23,481
Inventories		46,193		48,485		(2,292	)		(4.7	)%		46,531
Income taxes receivable		-		23		(23	)		(100.0	)%		155
Other current assets		2,514		2,331		183			7.9	%		2,477
Total current assets		89,502		113,595		(24,093	)		(21.2	)%		114,790
Property, plant & equipment, net		50,333		38,157		12,176			31.9	%		39,973
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		422		4,312		(3,890	)		(90.2	)%		2,319
Long-term Investments - Held-To-Maturity		30,832		-		30,832			100.0	%		-
Long-term Investments - Rabbi Trust		5,488		3,590		1,898			52.9	%		4,025
Investment in unconsolidated joint venture		600		-		600			100.0	%		-
Other assets		2,417		2,435		(18	)		(0.7	)%		2,573
Total assets	$	191,056		173,551		17,505			10.1	%		175,142
Current liabilities
Accounts payable - trade	$	22,352		25,601		(3,249	)		(12.7	)%		23,994
Accounts payable - capital expenditures		4,886		380		4,506			1,185.8	%		224
Accrued expenses		10,511		12,690		(2,179	)		(17.2	)%		11,922
Income taxes payable - current		217		622		(405	)		(65.1	)%		180
Total current liabilities		37,966		39,293		(1,327	)		(3.4	)%		36,320
Accounts payable - capital expenditures		708		-		708			100.0	%		-
Income taxes payable - long-term		1,817		3,480		(1,663	)		(47.8	)%		3,841
Deferred income taxes		2,924		1,209		1,715			141.9	%		1,483
Deferred compensation		5,327		4,495		832			18.5	%		4,686
Total liabilities		48,742		48,477		265			0.5	%		46,330
Shareholders' equity		142,314		125,074		17,240			13.8	%		128,812
Total liabilities and
shareholders' equity	$	191,056		173,551		17,505			10.1	%		175,142
Shares outstanding		12,315		12,250		65			0.5	%		12,265
* Derived from audited financial statements.

Page 4 to 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
Unaudited
(Amounts in Thousands)
	NINE MONTHS ENDED
	Amounts
	January 29,			January 31,
	2017			2016
Cash flows from operating activities:
Net income	$	16,136			13,333
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		5,304			4,888
Amortization of assets		162			123
Stock-based compensation		2,619			1,964
Deferred income taxes		3,533			1,906
Realized loss on sale of short-term investments		12			127
Gain on sale of equipment		(71	)		(66	)
Excess tax benefits related to stock-based compensation		(195	)		(822	)
Foreign currency exchange gains		(18	)		(85	)
Changes in assets and liabilities:
Accounts receivable		340			1,091
Inventories		(137	)		(6,485	)
Other current assets		90			(108	)
Other assets		51			48
Accounts payable		(946	)		(1,979	)
Accrued expenses and deferrred compensation		(948	)		1,406
Income taxes		(1,695	)		535
Net cash provided by operating activities		24,237			15,876
Cash flows from investing activities:
Capital expenditures		(9,253	)		(7,686	)
Investment in unconsolidated joint venture		(600	)		-
Proceeds from the sale of equipment		80			230
Payment on life insurance policy		(18	)		(18	)
Proceeds from the sale of short-term investments		2,000			5,612
Purchase of short-term investments		(8	)		(86	)
Purchase of long-term investments (Held-To-Maturity)		(31,050	)		-
Purchase of long-term investments (Rabbi Trust)		(1,431	)		(1,268	)
Net cash used in investing activities		(40,280	)		(3,216	)
Cash flows from financing activities:
Proceeds from line of credit		7,000			7,000
Payments on line of credit		(7,000	)		(7,000	)
Payments on vendor-financed capital expenditures		(1,050	)		-
Payments on long-term debt		-			(2,200	)
Excess tax benefits related to stock-based compensation		195			822
Repurchase of common stock		-			(2,397	)
Dividends paid		(5,292	)		(7,281	)
Proceeds from common stock issued		37			138
Payments on debt issuance costs		(2	)		(43	)
Net cash used in financing activities		(6,112	)		(10,961	)
Effect of exchange rate changes on cash and cash equivalents		27			289
(Decrease) increase in cash and cash equivalents		(22,128	)		1,988
Cash and cash equivalents at beginning of period		37,787			29,725
Cash and cash equivalents at end of period	$	15,659			31,713
Free Cash Flow (1)	$	12,187			8,245

(1)  Free Cash Flow reconciliation is as follows:
		FY 2017			FY 2016
A)	Net cash provided by operating activities	$	24,237			15,876
B)	Minus:  Capital Expenditures		(9,253	)		(7,686	)
C)	Minus:  Investment in unconsolidated joint venture		(600	)		-
D)	Add:     Proceeds from the sale of equipment		80			230
E)	Minus:  Payment on life insurance policy		(18	)		(18	)
F)	Minus:  Payments on vendor-financed capital expenditures		(1,050	)		-
G)	Minus:  Purchase of long-term investments (Rabbi Trust)		(1,431	)		(1,268	)
H)	Add:     Excess tax benefits related to stock-based compensation		195			822
I)	Effects of exchange rate changes on cash and cash equivalents		27			289
		$	12,187			8,245

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 29,			January 31,			% Over			January 29,			January 31,
Net Sales by Segment	2017			2016			(Under)			2017			2016
Mattress Fabrics	$	45,920			44,277			3.7	%		60.3	%		56.4	%
Upholstery Fabrics		30,249			34,189			(11.5	)%		39.7	%		43.6	%
Net Sales	$	76,169			78,466			(2.9	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	9,758			8,751			11.5	%		21.3	%		19.8	%
Upholstery Fabrics		7,001			7,812			(10.4	)%		23.1	%		22.8	%
Gross Profit	$	16,759			16,563			1.2	%		22.0	%		21.1	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	3,391			2,953			14.8	%		7.4	%		6.7	%
Upholstery Fabrics		3,901			3,963			(1.6	)%		12.9	%		11.6	%
Unallocated Corporate expenses		2,532			2,421			4.6	%		3.3	%		3.1	%
Selling, General and Administrative Expenses	$	9,824			9,337			5.2	%		12.9	%		11.9	%
Operating Income (loss) by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	6,367			5,798			9.8	%		13.9	%		13.1	%
Upholstery Fabrics		3,100			3,849			(19.5	)%		10.2	%		11.3	%
Unallocated corporate expenses		(2,532	)		(2,421	)		4.6	%		(3.3	)%		(3.1	)%
Operating income	$	6,935			7,226			(4.0	)%		9.1	%		9.2	%
Depreciation by Segment
Mattress Fabrics	$	1,573			1,490			5.6	%
Upholstery Fabrics		220			215			2.3	%
Depreciation	$	1,793			1,705			5.2	%

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
(Unaudited)
(Amounts in thousands)
	NINE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 29,			January 31,			% Over			January 29,			January 31,
Net Sales by Segment	2017			2016			(Under)			2017			2016
Mattress Fabrics	$	141,977			137,522			3.2	%		61.1	%		58.4	%
Upholstery Fabrics		90,217			98,085			(8.0	)%		38.9	%		41.6	%
Net Sales	$	232,194			235,607			(1.4	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	32,414			28,133			15.2	%		22.8	%		20.5	%
Upholstery Fabrics		19,665			20,365			(3.4	)%		21.8	%		20.8	%
Gross Profit	$	52,079			48,498			7.4	%		22.4	%		20.6	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	10,185			8,865			14.9	%		7.2	%		6.4	%
Upholstery Fabrics		11,086			11,372			(2.5	)%		12.3	%		11.6	%
Unallocated Corporate expenses		7,900			7,275			8.6	%		3.4	%		3.1	%
Selling, General, and Administrative Expenses	$	29,171			27,512			6.0	%		12.6	%		11.7	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	22,229			19,267			15.4	%		15.7	%		14.0	%
Upholstery Fabrics		8,579			8,994			(4.6	)%		9.5	%		9.2	%
Unallocated corporate expenses		(7,900	)		(7,275	)		8.6	%		(3.4	)%		(3.1	)%
Operating income	$	22,908			20,986			9.2	%		9.9	%		8.9	%
Return on Capital (1)
Mattress Fabrics		38.5	%		35.9	%
Upholstery Fabrics		64.6	%		68.9	%
Unallocated Corporate		N/A			N/A
Consolidated		32.4	%		31.7	%
Capital Employed (2)
Mattress Fabrics		80,656			72,644			11.0	%
Upholstery Fabrics		18,420			19,623			(6.1	)%
Unallocated Corporate		(1,288	)		(1,284	)		N/A
Consolidated		97,788			90,983			7.5	%
Depreciation by Segment
Mattress Fabrics	$	4,673			4,273			9.4	%
Upholstery Fabrics		631			615			2.6	%
Depreciation	$	5,304			4,888			8.5	%
Notes:
(1) See pages 8 and 9 of this financial information release for calculations.
(2) The capital employed balances are as of January 29, 2017 and January 31, 2016.

Page 7 to 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
	FOR THE TWELVE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
	(UNAUDITED)
	(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	5/1/2016			7/31/2016			10/30/2016			1/29/2017			1/29/2017
Net income	$	3,601		$	5,313		$	4,475		$	6,347		$	19,736
Income taxes		3,566			3,233			2,684			643			10,126
Interest income, net		(26	)		(25	)		(15	)		(124	)		(190	)
Depreciation and amortization expense		1,830			1,813			1,778			1,875			7,296
Stock based compensation		778			761			896			962			3,397
Adjusted EBITDA	$	9,749		$	11,095		$	9,818		$	9,703		$	40,365
	Quarter Ended
													Trailing 12
													Months
	5/3/2015			8/2/2015			11/1/2015			01/31/16			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
% Over (Under)		15.6	%		20.2	%		11.4	%		2.1	%		12.1	%

Page 8 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE NINE MONTHS ENDED JANUARY 29, 2017
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Nine Months			Average			Return on
	Ended			Capital			Avg. Capital
	January 29, 2017 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	22,229		$	77,035			38.5	%
Upholstery Fabrics		8,579			17,712			64.6	%
(less: Unallocated Corporate)		(7,900	)		(536	)		N/A
Total	$	22,908		$	94,211			32.4	%

Average Capital Employed	As of the three Months Ended January 29, 2017												As of the three Months Ended October 30, 2016												As of the three Months Ended July 31, 2016
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets	$	103,782		$	30,380		$	56,894		$	191,056		$	94,700		$	29,361		$	55,066		$	179,127		$	92,959		$	33,550		$	56,851		$	183,360
Total liabilities		(23,126	)		(11,960	)		(13,656	)		(48,742	)		(18,499	)		(11,180	)		(13,499	)		(43,178	)		(16,313	)		(16,329	)		(19,283	)		(51,925	)
Subtotal	$	80,656		$	18,420		$	43,238		$	142,314		$	76,201		$	18,181		$	41,567		$	135,949		$	76,646		$	17,221		$	37,568		$	131,435
Less:
Cash and cash equivalents		-			-			(15,659	)		(15,659	)		-			-			(13,910	)		(13,910	)		-			-			(45,549	)		(45,549	)
Short-term investments		-			-			(2,410	)		(2,410	)		-			-			(2,430	)		(2,430	)		-			-			(2,434	)		(2,434	)
Long-term investments - Held-To-Maturity		-			-			(30,832	)		(30,832	)		-			-			(31,050	)		(31,050	)		-			-			-			-
Long-term investments - Rabbi Trust		-			-			(5,488	)		(5,488	)		-			-			(4,994	)		(4,994	)		-			-			(4,611	)		(4,611	)
Income taxes receivable		-			-			-			-			-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(422	)		(422	)		-			-			(581	)		(581	)		-			-			(1,942	)		(1,942	)
Income taxes payable - current		-			-			217			217			-			-			513			513			-			-			358			358
Income taxes payable - long-term		-			-			1,817			1,817			-			-			3,734			3,734			-			-			3,779			3,779
Deferred income taxes - non-current		-			-			2,924			2,924			-			-			1,699			1,699			-			-			1,532			1,532
Line of credit		-			-			-			-			-			-			-			-			-			-			7,000			7,000
Deferred compensation		-			-			5,327			5,327			-			-			5,171			5,171			-			-			5,031			5,031
Total Capital Employed	$	80,656		$	18,420		$	(1,288	)	$	97,788		$	76,201		$	18,181		$	(281	)	$	94,101		$	76,646		$	17,221		$	732		$	94,599

	As of the three Months Ended May 1, 2016
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Total assets	$	94,878		$	29,463		$	50,801		$	175,142
Total liabilities		(20,241	)		(12,438	)		(13,651	)		(46,330	)
Subtotal	$	74,637		$	17,025		$	37,150		$	128,812
Less:
Cash and cash equivalents		-			-			(37,787	)		(37,787	)
Short-term investments		-			-			(4,359	)		(4,359	)
Long-term investments - Held-To-Maturity		-			-			-			-
Long-term investments - Rabbi Trust		-			-			(4,025	)		(4,025	)
Income taxes receivable		-			-			(155	)		(155	)
Deferred income taxes - non-current		-			-			(2,319	)		(2,319	)
Income taxes payable - current		-			-			180			180
Income taxes payable - long-term		-			-			3,841			3,841
Deferred income taxes - non-current		-			-			1,483			1,483
Line of credit		-			-			-			-
Deferred compensation		-			-			4,686			4,686
Total Capital Employed	$	74,637		$	17,025		$	(1,305	)	$	90,357

	Mattress		Upholstery		Unallocated
	Fabrics		Fabrics		Corporate			Total
Average Capital Employed (3)	$	77,035	$	17,712	$	(536	)	$	94,211

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 29, 2017 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 - 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 four periods ending January 29, 2017, 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 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 - Rabbi Trust		-			-			(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 - Rabbi Trust		-			-			(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 - 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 four periods ending January 31, 2016, 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 NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
Unaudited
(Amounts in Thousands)
		NINE MONTHS ENDED
					Amounts
		January 29,				January 31,
		2017				2016
Consolidated Effective GAAP Income Tax Rate	(1)		28.9	%			35.7	%
Non-Cash U.S. Income Tax Expense			(20.9	)%			(17.9	)%
Reversal of Foreign Uncertain Income Tax Position			9.1	%			0.0	%
Other Non-Cash Foreign Income Tax Expense			(0.5	)%			0.0	%
Consolidated Adjusted Effective Income Tax Rate	(2)		16.6	%			17.8	%

	THREE MONTHS ENDED
	As reported					January 29, 2017		As reported					January 31, 2016
	January 29,					Proforma Net		January 31,					Proforma Net
	2017		Adjustments			of Adjustments		2016		Adjustments			of Adjustments
Income before income taxes	$	6,990	$	-		$	6,990	$	7,179				$	7,179
Income taxes (3)		643	$	517			1,160		2,317	$	(1,039	)		1,278
Net income	$	6,347	$	(517	)	$	5,830	$	4,862	$	1,039		$	5,901
Net income per share-basic	$	0.52	$	(0.04	)	$	0.47	$	0.39	$	0.08		$	0.48
Net income per share-diluted	$	0.51	$	(0.04	)	$	0.47	$	0.39	$	0.08		$	0.47
Average shares outstanding-basic		12,313		12,313			12,313		12,331		12,331			12,331
Average shares outstanding-diluted		12,544		12,544			12,544		12,486		12,486			12,486
	NINE MONTHS ENDED
	As reported					January 29, 2017		As reported					January 31, 2016
	January 29,					Proforma Net		January 31,					Proforma Net
		2017	Adjustments			of Adjustments		2016		Adjustments			of Adjustments
Income before income taxes	$	22,696	$	-		$	22,696	$	20,731	$	-		$	20,731
Income taxes (3)		6,560	$	(2,792	)		3,768		7,398	$	(3,708	)		3,690
Net income	$	16,136	$	2,792		$	18,928	$	13,333	$	3,708		$	17,041
Net income per share-basic	$	1.31	$	0.23		$	1.54	$	1.08	$	0.30		$	1.38
Net income per share-diluted	$	1.29	$	0.22		$	1.51	$	1.07	$	0.30		$	1.36
Average shares outstanding-basic		12,302		12,302			12,302		12,317		12,317			12,317
Average shares outstanding-diluted		12,517		12,517			12,517		12,488		12,488			12,488

(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.