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 JULY 29, 2018 AND JULY 30, 2017
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts										Percent of Sales
	July 29,				July 30			% Over			July 29,			July 30
	2018				2017			(Under)			2018			2017
Net sales	$	71,473				79,533			(10.1	)%		100.0	%		100.0	%
Cost of sales		60,914		(1) (2)		63,068			(3.4	)%		85.2	%		79.3	%
Gross profit		10,559				16,465			(35.9	)%		14.8	%		20.7
Selling, general and
administrative expenses		8,033				9,501			(15.5	)%		11.2	%		11.9	%
Restructuring expense		451		(2)		-			100.0	%		0.6	%		0.0	%
Income from operations		2,075				6,964			(70.2	)%		2.9	%		8.8	%
Interest expense		20				-			100.0	%		0.0	%		0.0	%
Interest income		(150	)			(131	)		14.5	%		(0.2	)%		(0.2	)%
Other expense		257				353			(27.2	)%		0.4	%		0.4	%
Income before income taxes		1,948				6,742			(71.1	)%		2.7	%		8.5	%
Income taxes*		906				1,640			(44.8	)%		46.5	%		24.3	%
Loss from investment in unconsolidated joint venture		77				118			(34.7	)%		0.1	%		0.1	%
Net income		965				4,984			(80.6	)%		1.4	%		6.3
Less: Net income attributable to non-controlling interest		(8	)			-			(100.0	)%		(0.0	)%		0.0	%
Net income attributable to Culp Inc. common shareholders	$	957				4,984			(80.8	)%		1.3	%		6.3	%
Net income attributable to Culp Inc. common shareholders per share-basic	$	0.08			$	0.40			(80.0	)%
Net income attributable to Culp Inc. common shareholders per share-diluted	$	0.08			$	0.40			(80.0	)%
Average shares outstanding-basic		12,510				12,399			0.9	%
Average shares outstanding-diluted		12,600				12,590			0.1	%
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Notes

(1)	Cost of sales for the three-month period ending July 29, 2018 includes a $1.6 million restructuring related charge for inventory markdowns.
(2)	See page 6 for detailed description of charges and adjusted statement of operations excluding restructuring expense and restructuring related charges incurred for the three-month period ending July 29, 2018. There were no restructuring activities noted for the three-month period ending July 30, 2017.

Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
July 29, 2018, JULY 30, 2017 AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
			(Condensed)		Increase
	July 29,		July 30,		(Decrease)						* April 29,
	2018		2017		Dollars			Percent			2018
Current assets
Cash and cash equivalents	$	8,593		18,322		(9,729	)		(53.1	)%		21,228
Short-term investments - Available for Sale		-		2,469		(2,469	)		(100.0	)%		2,451
Short-term investments - Held-To-Maturity		30,756		-		30,756			100.0	%		25,759
Accounts receivable		23,225		22,140		1,085			4.9	%		26,307
Inventories		54,989		55,227		(238	)		(0.4	)%		53,454
Other current assets		3,852		3,441		411			11.9	%		2,870
Total current assets		121,415		101,599		19,816			19.5	%		132,069
Property, plant & equipment, net		53,178		52,912		266			0.5	%		51,794
Goodwill		27,222		11,462		15,760			137.5	%		13,569
Deferred income taxes		3,721		436		3,285			753.4	%		1,458
Long-term Investments - Held-To-Maturity		-		30,907		(30,907	)		(100.0	)%		5,035
Long-term Investments - Rabbi Trust		7,671		6,714		957			14.3	%		7,326
Investment in unconsolidated joint venture		1,525		1,477		48			3.2	%		1,501
Other assets		11,640		2,397		9,243			385.6	%		5,232
Total assets	$	226,372		207,904		18,468			8.9	%		217,984
Current liabilities
Accounts payable - trade	$	25,070		29,112		(4,042	)		(13.9	)%		27,237
Accounts payable - capital expenditures		862		5,647		(4,785	)		(84.7	)%		1,776
Deferred revenue		634		-		634			100.0	%		809
Accrued expenses		8,176		6,075		2,101			34.6	%		9,325
Accrued restructuring costs		445		-		445			100.0	%		-
Income taxes payable - current		1,244		884		360			40.7	%		1,437
Total current liabilities		36,431		41,718		(5,287	)		(12.7	)%		40,584
Line of credit		4,000		5,000		(1,000	)		(20.0	)%		-
Accrued expenses - long-term		749		-		749			100.0	%		763
Contingent consideration - Earn-Out Obligation		5,600		-		5,600			100.0	%		-
Income taxes payable - long-term		3,733		487		3,246			666.5	%		3,758
Deferred income taxes		2,150		4,253		(2,103	)		(49.4	)%		2,150
Deferred compensation		7,679		6,769		910			13.4	%		7,353
Total liabilities		60,342		58,227		2,115			3.6	%		54,608
Shareholders' equity
Shareholders' equity attributable to Culp Inc.		161,490		149,677		11,813			7.9	%		163,376
Non-controlling interest		4,540		-		4,540			100.0	%		-
		166,030		149,677		16,353			10.9	%		163,376
Total liabilities and
shareholders' equity	$	226,372		207,904		18,468			8.9	%		217,984
Shares outstanding		12,522		12,441		81			0.7	%		12,450

* Derived from audited financial statements.

Page 3 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
SUMMARY OF CASH AND INVESTMENTS
JULY 29, 2018, JULY 30, 2017, AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
	July 29,		July 30,		April 29,
	2018		2017		2018*
Cash and cash equivalents	$	8,593	$	18,322	$	21,228
Short-term investments - Available for Sale		-		2,469		2,451
Short-term investments - Held-To-Maturity		30,756		-		25,759
Long-term investments - Held-To-Maturity		-		30,907		5,035
Total Cash and Investments	$	39,349	$	51,698	$	54,473

* Derived from audited financial statements.

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017
Unaudited
(Amounts in Thousands)
	THREE MONTHS ENDED
	Amounts
	July 29,			July 30,
	2018			2017
Cash flows from operating activities:
Net income	$	965			4,984
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation		2,015			1,807
Amortization of assets		145			82
Stock-based compensation		(501	)		757
Deferred income taxes		(2,263	)		643
Realized loss on sale of short-term investments (Available for Sale)		94			-
Loss on sale of equipment		35			-
Loss from investment in unconsolidated joint venture		77			118
Foreign currency exchange gain (loss)		(91	)		35
Changes in assets and liabilities, net of effects of acquisition of businesses:
Accounts receivable		2,837			2,524
Inventories		(429	)		(3,539	)
Other current assets		(989	)		(467	)
Other assets		34			(47	)
Accounts payable		(2,494	)		(397	)
Deferred revenue		(175	)		-
Accrued expenses and deferrred compensation		(1,566	)		(4,704	)
Accrued restructuring costs		445			-
Income taxes		(75	)		608
Net cash (used in) provided by operating activities		(1,936	)		2,404
Cash flows from investing activities:
Capital expenditures		(757	)		(2,260	)
Net cash paid for acquistion of businesses		(11,971	)		-
Investment in unconsolidated joint venture		(100	)		(489	)
Proceeds from the sale of short-term investments (Available for Sale)		2,458			-
Purchase of short-term investments (Available for Sale)		(10	)		(12	)
Proceeds from the sale of long-term investments (Rabbi Trust)		-			49
Purchase of long-term investments (Rabbi Trust)		(302	)		(1,267	)
Net cash used in investing activities		(10,682	)		(3,979	)
Cash flows from financing activities:
Proceeds from line of credit		11,000			5,000
Payments on line of credit		(7,000	)		-
Payments on vendor-financed capital expenditures		(1,412	)		(1,250	)
Dividends paid		(1,127	)		(3,608	)
Common stock surrendered for withholding taxes payable		(1,292	)		(1,135	)
Common stock repurchased		(72	)		-
Proceeds from common stock issued		-			5
Net cash provided by (used in) financing activities		97			(988	)
Effect of exchange rate changes on cash and cash equivalents		(114	)		90
Decrease in cash and cash equivalents		(12,635	)		(2,473	)
Cash and cash equivalents at beginning of period		21,228			20,795
Cash and cash equivalents at end of period	$	8,593			18,322
Free Cash Flow (1)	$	(4,621	)		(2,723	)
(1)  Free Cash Flow reconciliation is as follows:
	FY 2019			FY 2018
A)  Net cash provided by operating activities	$	(1,936	)		2,404
B)  Minus:  Capital Expenditures		(757	)		(2,260	)
C)  Minus:  Investment in unconsolidated joint venture		(100	)		(489	)
D)  Minus:  Payments on vendor-financed capital expenditures		(1,412	)		(1,250	)
E)  Plus:       Proceeds from the sale of long-term investments (Rabbi Trust)		-			49
F)  Minus:   Purchase of long-term investments (Rabbi Trust)		(302	)		(1,267	)
G)  Effects of exchange rate changes on cash and cash equivalents		(114	)		90
	$	(4,621	)		(2,723	)

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts										Percent of Total Sales
	July 29,				July 30,			% Over			July 29,			July 30,
Net Sales by Segment	2018				2017			(Under)			2018			2017
Mattress Fabrics	$	36,983				48,429			(23.6	)%		51.7	%		60.9	%
Upholstery Fabrics		34,490				31,104			10.9	%		48.3	%		39.1	%
Net Sales	$	71,473				79,533			(10.1	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics	$	5,971				9,760			(38.8	)%		16.1	%		20.2	%
Upholstery Fabrics		6,153				6,705			(8.2	)%		17.8	%		21.6	%
Subtotal		12,124				16,465			(26.4	)%		17.0	%		20.7	%
Restructuring related charges		(1,565	)	(1)		-			100.0	%		(2.2	)%		0.0	%
Gross Profit	$	10,559				16,465			(35.9	)%		14.8	%		20.7	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics	$	3,148				3,391			(7.2	)%		8.5	%		7.0	%
Upholstery Fabrics		3,626				3,811			(4.9	)%		10.5	%		12.3	%
Unallocated Corporate expenses		1,259				2,299			(45.2	)%		1.8	%		2.9	%
Selling, General and Administrative Expenses	$	8,033				9,501			(15.5	)%		11.2	%		11.9	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics	$	2,823				6,368			(55.7	)%		7.6	%		13.1	%
Upholstery Fabrics		2,527				2,895			(12.7	)%		7.3	%		9.3	%
Unallocated corporate expenses		(1,259	)			(2,299	)		(45.2	)%		(1.8	)%		(2.9	)%
Subtotal	$	4,091				6,964			(41.3	)%		5.7	%		8.8	%
Restructuring expense and related charges		(2,016	)	(1)		-			100.0	%		(2.8	)%		0.0	%
Operating income		2,075				6,964			(70.2	)%		2.9	%		8.8	%
Return on Capital (2)
Mattress Fabrics		28.6	%			40.3	%
Upholstery Fabrics		53.7	%			61.6	%
Unallocated Corporate		N/A				N/A
Consolidated		21.4	%			28.8	%
Capital Employed (2) (3)
Mattress Fabrics	$	83,471				74,913			11.4	%
Upholstery Fabrics		19,506				19,508			(0.0	)%
Unallocated Corporate		31,118				13,801			125.5	%
Consolidated	$	134,095				108,222			23.9	%
Depreciation Expense by Segment
Mattress Fabrics	$	1,800				1,612			11.7	%
Upholstery Fabrics		215				195			10.3	%
Depreciation Expense	$	2,015				1,807			11.5	%

Notes

(1)	See page 6 for detailed description of charges.
(2)	See pages 8 and 9 of this financial information release for calculations.
(3)	The capital employed balances are as of July 29, 2018 and July 30, 2017.

Page 6 of 10

CULP, INC.
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017
	THREE MONTHS ENDED (UNAUDITED)
																				(3)
	As Reported													July 29, 2018						As Reported
	July 29,			% of						% of				Adjusted			% of			July 30,			% of			% Over
	2018			Sales			Adjustments			Sales				Results			Sales			2017			Sales			(Under)
Net sales	$	71,473			100.0	%		-			0.0	%			71,473			100.0	%		79,533			100.0	%		-10.1	%
Cost of sales		60,914			85.2	%		(1,565	)		-2.2	%	(1)		59,349			83.0	%		63,068			79.3	%		-5.9	%
Gross profit		10,559			14.8	%		(1,565	)		-2.2	%			12,124			17.0	%		16,465			20.7	%		-26.4	%
Selling, general and
administrative expenses		8,033			11.2	%		-			0.0	%			8,033			11.2	%		9,501			11.9	%		-15.5	%
Restructuring expense		451			0.6	%		(451	)		-0.6	%	(2)		-			0.0	%		-			0.0	%		0.0	%
Income from operations		2,075			2.9	%		(2,016	)		-2.8	%			4,091			5.7	%		6,964			8.8	%		-41.3	%
Interest expense		20			0.0	%		-			0.0	%			20			0.0	%		-			0.0	%		100.0	%
Interest income		(150	)		-0.2	%		-			0.0	%			(150	)		-0.2	%		(131	)		-0.2	%		14.5	%
Other expense		257			0.4	%		-			0.0	%			257			0.4	%		353			0.4	%		-27.2	%
Income before income taxes		1,948			2.7	%		(2,016	)		-2.8	%			3,964			5.5	%		6,742			8.5	%		-41.2	%

Notes

(1)	The $1.6 million restructuring related charge represents inventory markdowns associated with the closure of our Anderson, SC plant facility.
(2)	The $451 restructuring charge represents employee termination benefits associated with the closure of our Anderson, SC plant facility.
(3)	Actual reported results were used for comparative purposes as there were no restructuring activities for the three month period ending July 30, 2017.

Page 7 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	10/29/2017			1/28/2018			4/29/2018			7/29/2018			7/29/2018
Net income (loss)	$	3,976		$	(748	)	$	12,666		$	957		$	16,851
Income taxes		2,108			8,208			(6,217	)		906			5,005
Interest income, net		(91	)		(101	)		(117	)		(130	)		(439	)
Restructuring expense and related charges		-			-			-			2,016			2,016
Depreciation and amortization expense		1,990			2,048			2,096			2,160			8,294
Stock based compensation		801			864			(210	)		(501	)		954
Adjusted EBITDA	$	8,784		$	10,271		$	8,218		$	5,408		$	32,681
	Quarter Ended
													Trailing 12
													Months
	10/30/2016			1/29/2017			4/30/2017			7/30/2017			7/30/2017
Net income	$	4,475		$	6,347		$	6,198		$	4,984		$	22,004
Income taxes		2,684			643			778			1,640			5,745
Interest income, net		(15	)		(124	)		(134	)		(131	)		(404	)
Restructuring expense and related charges		-			-			-			-			-
Depreciation and amortization expense		1,778			1,875			1,863			1,889			7,405
Stock based compensation		896			962			739			757			3,354
Adjusted EBITDA	$	9,818		$	9,703		$	9,444		$	9,139		$	38,104
% Over (Under)		-10.5	%		5.9	%		-13.0	%		-40.8	%		-14.2	%

Page 8 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED JULY 29, 2018
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Twelve						Return on Avg. Capital Employed (2)
	Months Ended			Average Capital Employed (3)
	July 29, 2018 (1)
Mattress Fabrics	$	22,310		$	77,999			28.6	%
Upholstery Fabrics		10,592			19,715			53.7	%
(less: Unallocated Corporate)		(8,314	)		17,421			N/A
Total	$	24,588		$	115,134			21.4	%
Average Capital Employed	As of the three Months Ended July 29, 2018												As of the three Months Ended April 29, 2018												As of the three Months Ended January 28, 2018
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	98,064			37,386			90,922			226,372		$	95,061			39,812			83,111			217,984		$	93,827			43,458			79,559			216,844
Total liabilities (5)		(14,593	)		(17,880	)		(27,869	)		(60,342	)		(17,335	)		(18,679	)		(18,594	)		(54,608	)		(18,418	)		(22,781	)		(23,463	)		(64,662	)
Subtotal	$	83,471		$	19,506		$	63,053		$	166,030		$	77,726		$	21,133		$	64,517		$	163,376		$	75,409		$	20,677		$	56,096		$	152,182
Less:
Cash and cash equivalents		-			-			(8,593	)		(8,593	)		-			-			(21,228	)		(21,228	)		-			-			(22,428	)		(22,428	)
Short-term investments - Available-For-Sale		-			-			-			-			-			-			(2,451	)		(2,451	)		-			-			(2,472	)		(2,472	)
Short-term investments - Held-To-Maturity		-			-			(30,756	)		(30,756	)		-			-			(25,759	)		(25,759	)		-			-			(17,206	)		(17,206	)
Long-term investments - Held-To-Maturity		-			-			-			-			-			-			(5,035	)		(5,035	)		-			-			(13,625	)		(13,625	)
Long-term investments - Rabbi Trust		-			-			(7,671	)		(7,671	)		-			-			(7,326	)		(7,326	)		-			-			(7,176	)		(7,176	)
Deferred income taxes - non-current		-			-			(3,721	)		(3,721	)		-			-			(1,458	)		(1,458	)		-			-			(1,942	)		(1,942	)
Income taxes payable - current		-			-			1,244			1,244			-			-			1,437			1,437			-			-			1,580			1,580
Income taxes payable - long-term		-			-			3,733			3,733			-			-			3,758			3,758			-			-			10,940			10,940
Deferred income taxes - non-current		-			-			2,150			2,150			-			-			2,150			2,150			-			-			2,096			2,096
Line of credit		-			-			4,000			4,000			-			-			-			-			-			-			-			-
Deferred compensation		-			-			7,679			7,679			-			-			7,353			7,353			-			-			7,216			7,216
Total Capital Employed	$	83,471		$	19,506		$	31,118		$	134,095		$	77,726		$	21,133		$	15,958		$	114,817		$	75,409		$	20,677		$	13,079		$	109,165
	As of the three Months Ended October 29, 2017												As of the three Months Ended July 30, 2017
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	94,626			34,974			71,443			201,043		$	99,190			34,491			74,223			207,904
Total liabilities (5)		(16,150	)		(17,225	)		(14,588	)		(47,963	)		(24,277	)		(14,983	)		(18,967	)		(58,227	)
Subtotal	$	78,476		$	17,749		$	56,855		$	153,080		$	74,913		$	19,508		$	55,256		$	149,677
Less:
Cash and cash equivalents		-			-			(15,739	)		(15,739	)		-			-			(18,322	)		(18,322	)
Short-term investments - Available-For-Sale		-			-			(2,478	)		(2,478	)		-			-			(2,469	)		(2,469	)
Short-term investments - Held-To-Maturity		-			-			(4,015	)		(4,015	)		-			-			-			-
Long-term investments - Held-To-Maturity		-			-			(26,853	)		(26,853	)		-			-			(30,907	)		(30,907	)
Long-term investments - Rabbi Trust		-			-			(6,921	)		(6,921	)		-			-			(6,714	)		(6,714	)
Deferred income taxes - non-current		-			-			(491	)		(491	)		-			-			(436	)		(436	)
Income taxes payable - current		-			-			692			692			-			-			884			884
Income taxes payable - long-term		-			-			487			487			-			-			487			487
Deferred income taxes - non-current		-			-			4,641			4,641			-			-			4,253			4,253
Line of credit		-			-			-			-			-			-			5,000			5,000
Deferred compensation		-			-			6,970			6,970			-			-			6,769			6,769
Total Capital Employed	$	78,476		$	17,749		$	13,148		$	109,373		$	74,913		$	19,508		$	13,801		$	108,222
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	77,999		$	19,715		$	17,421		$	115,134

Notes:

(1)	See reconciliation per page 10 of this financial information release.
(2)	Return on average capital employed represents the last twelve months operating income as of July 29, 2018, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments - Available- For-Sale, short-term investments Held-To-Maturity, long-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, line of credit, and deferred compensation.
(3)	Average capital employed was computed using the quarterly five periods ending July 29, 2018, April 29, 2018, January 28, 2018, October 29, 2017, and July 30, 2017.
(4)	Intangible assets and goodwill are included in unallocated corporate for all periods presented and therfore, have no affect on the capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments.
(5)	Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated coporate for all periods presented and therfore, have no affect on capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments.

Page 9 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED JULY 30, 2017
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Twelve Months			Average Capital Employed (3)			Return on Avg. Capital Employed (2)
	Ended July 30,
	2017 (1)
Mattress Fabrics	$	27,348		$	67,847			40.3	%
Upholstery Fabrics		10,998			17,867			61.6	%
(less: Unallocated Corporate)		(9,978	)		12,914			N/A
Total	$	28,368		$	98,628			28.8	%
Average Capital Employed	As of the three Months Ended July 30, 2017												As of the three Months Ended April 30, 2017												As of the three Months Ended January 29, 2017
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	99,190			34,491			74,223		$	207,904		$	98,087		$	32,255		$	75,292		$	205,634		$	90,197		$	30,380		$	70,479		$	191,056
Total liabilities		(24,277	)		(14,983	)		(18,967	)		(58,227	)		(27,619	)		(16,249	)		(13,136	)		(57,004	)		(23,126	)		(11,960	)		(13,656	)		(48,742	)
Subtotal	$	74,913		$	19,508		$	55,256		$	149,677		$	70,468		$	16,006		$	62,156		$	148,630		$	67,071		$	18,420		$	56,823		$	142,314
Less:
Cash and cash equivalents		-			-			(18,322	)		(18,322	)		-			-			(20,795	)		(20,795	)		-			-			(15,659	)		(15,659	)
Short-term investments - Available-For-Sale		-			-			(2,469	)		(2,469	)		-			-			(2,443	)		(2,443	)		-			-			(2,410	)		(2,410	)
Long-term investments - Held-To-Maturity		-			-			(30,907	)		(30,907	)		-			-			(30,945	)		(30,945	)		-			-			(30,832	)		(30,832	)
Long-term investments - Rabbi Trust		-			-			(6,714	)		(6,714	)		-			-			(5,466	)		(5,466	)		-			-			(5,488	)		(5,488	)
Income taxes receivable		-			-			-			-			-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(436	)		(436	)		-			-			(419	)		(419	)		-			-			(422	)		(422	)
Income taxes payable - current		-			-			884			884			-			-			287			287			-			-			217			217
Income taxes payable - long-term		-			-			487			487			-			-			467			467			-			-			1,817			1,817
Deferred income taxes - non-current		-			-			4,253			4,253			-			-			3,593			3,593			-			-			2,924			2,924
Line of credit		-			-			5,000			5,000			-			-			-			-			-			-			-			-
Deferred compensation		-			-			6,769			6,769			-			-			5,520			5,520			-			-			5,327			5,327
Total Capital Employed	$	74,913		$	19,508		$	13,801		$	108,222		$	70,468		$	16,006		$	11,955		$	98,429		$	67,071		$	18,420		$	12,297		$	97,788
	As of the three Months Ended October 30, 2016												As of the three Months Ended July 31, 2016
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	81,683		$	29,361		$	68,083		$	179,127		$	79,911		$	33,550		$	69,899		$	183,360
Total liabilities		(18,499	)		(11,180	)		(13,499	)		(43,178	)		(16,313	)		(16,329	)		(19,283	)		(51,925	)
Subtotal	$	63,184		$	18,181		$	54,584		$	135,949		$	63,598		$	17,221		$	50,616		$	131,435
Less:
Cash and cash equivalents		-			-			(13,910	)		(13,910	)		-			-			(45,549	)		(45,549	)
Short-term investments - Available-For-Sale		-			-			(2,430	)		(2,430	)		-			-			(2,434	)		(2,434	)
Long-term investments - Held-To-Maturity		-			-			(31,050	)		(31,050	)		-			-			-			-
Long-term investments - Rabbi Trust		-			-			(4,994	)		(4,994	)		-			-			(4,611	)		(4,611	)
Income taxes receivable		-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(581	)		(581	)		-			-			(1,942	)		(1,942	)
Income taxes payable - current		-			-			513			513			-			-			358			358
Income taxes payable - long-term		-			-			3,734			3,734			-			-			3,779			3,779
Deferred income taxes - non-current		-			-			1,699			1,699			-			-			1,532			1,532
Line of credit		-			-			-			-			-			-			7,000			7,000
Deferred compensation		-			-			5,171			5,171			-			-			5,031			5,031
Total Capital Employed	$	63,184		$	18,181		$	12,736		$	94,101		$	63,598		$	17,221		$	13,780		$	94,599
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	67,847		$	17,867		$	12,914		$	98,628

Notes:

(1)	See reconciliation per page 10 of this financial information release.
(2)	Return on average capital employed represents the last twelve months operating income as of July 30, 2018 divided by average capital employed. Average capital employed does not included cash and cash equivalents, short-term investments - Available-For-Sale, long-term investments - Held-To-Maturity, long-term investments - Rabbie 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 five quarterly periods ending July 30, 2017, April 30, 2017 January 29, 2017, October 30, 2016, and July 31, 2016.
(4)	Intangible assets and goodwill are included in unallocated corporate for all periods presented and therfore, have no affect on capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments.

Page 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATING INCOME
FOR THE TWELVE MONTHS ENDED JULY 29, 2018 AND JULY 30, 2017
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	10/29/2017			1/28/2018			4/29/2018			7/29/2018			7/29/2018
Mattress Fabrics	$	6,562		$	6,837		$	6,088		$	2,823		$	22,310
Upholstery Fabrics		2,374			3,510			2,181			2,527			10,592
Unallocated Corporate		(2,547	)		(2,703	)		(1,805	)		(1,259	)		(8,314	)
Subtotal		6,389			7,644			6,464			4,091			24,588
Restructuring expense and related charges		-			-			-			(2,016	)		(2,016	)
Operating income	$	6,389		$	7,644		$	6,464		$	2,075		$	22,572
	Quarter Ended (1)												(1)
													Trailing 12
													Months
	10/30/2016			1/29/2017			4/30/2017			7/30/2017			7/30/2017
Mattress Fabrics	$	7,460		$	6,367		$	7,153		$	6,368		$	27,348
Upholstery Fabrics		2,493			3,100			2,510			2,895			10,998
Unallocated Corporate		(2,654	)		(2,532	)		(2,493	)		(2,299	)		(9,978	)
Operating income	$	7,299		$	6,935		$	7,170		$	6,964		$	28,368
% Over (Under)		-12.5	%		10.2	%		-9.8	%		-70.2	%		-20.4	%

Notes

(1) We did not have any restructuring activities for the three month periods ending October 30, 2016, January 29, 2017, April 30, 2017, and July 30, 2017.