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

Exhibit 99(b)

Page 1 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

			THREE MONTHS ENDED
			Amounts									Percent of Sales
			October 28,			October 29,			% Over			October 28,			October 29,
			2018			2017			(Under)			2018			2017
Net sales	$			77,006			80,698			(4.6	)%		100.0	%		100.0	%
Cost of sales		(1)(3)(4)		63,680			64,894			(1.9	)%		82.7	%		80.4	%
Gross profit				13,326			15,804			(15.7	)%		17.3	%		19.6	%
Selling, general and
administrative expenses		(3)(4)		10,103			9,415			7.3	%		13.1	%		11.7	%
Restructuring credit		(2)(4)		(1,061	)		-			(100.0	)%		(1.4	)%		0.0	%
Income from operations				4,284			6,389			(32.9	)%		5.6	%		7.9	%
Interest expense				18			37			(51.4	)%		0.0	%		0.0	%
Interest income				(151	)		(128	)		18.0	%		(0.2	)%		(0.2	)%
Other expense				142			321			(55.8	)%		0.2	%		0.4	%
Income before income taxes				4,275			6,159			(30.6	)%		5.6	%		7.6	%
Income taxes*				1,276			2,108			(39.5	)%		29.8	%		34.2	%
Loss from investment in unconsolidated joint venture				55			75			(26.7	)%		0.1	%		0.1	%
Net income				2,944			3,976			(26.0	)%		3.8	%		4.9	%
Less: Net income attributable to non-controlling interest				(11	)		-			(100.0	)%		(0.0	)%		0.0	%
Net income attributable to Culp Inc. common shareholders	$			2,933			3,976			(26.2	)%		3.8	%		4.9	%
Net income attributable to Culp Inc. common shareholders per share - basic			$	0.23		$	0.32			(28.1	)%
Net income attributable to Culp Inc. common shareholders per share - diluted			$	0.23		$	0.32			(28.1	)%
Average shares outstanding-basic				12,515			12,440			0.6	%
Average shares outstanding-diluted				12,551			12,580			(0.2	)%
* 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 October 28, 2018, includes a $270 restructuring related charge for operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC.
(2)	The $1.1 million restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility.
(3)	During the three-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively.
(4)	See page 8 for our statement of operations that exclude our restructuring credit and restructuring related charges associated with our upholstery fabrics segment and non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 28, 2018. There were no restructuring activities or non-recurring charges asscociated with our mattress fabrics segment noted  for the three-month period ending October 29, 2017.

Page 2 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

			SIX MONTHS ENDED
			Amounts									Percent of Sales
			October 28,			October 29,			% Over			October 28,			October 29,
			2018			2017			(Under)			2018			2017
Net sales	$			148,479			160,230			(7.3	)%		100.0	%		100.0	%
Cost of sales		(1)(3)(4)		124,594			127,962			(2.6	)%		83.9	%		79.9	%
Gross profit				23,885			32,268			(26.0	)%		16.1	%		20.1	%
Selling, general and
administrative expenses		(3)(4)		18,136			18,916			(4.1	)%		12.2	%		11.8	%
Restructuring credit		(2)(4)		(610	)		-			(100.0	)%		(0.4	)%		0.0	%
Income from operations				6,359			13,352			(52.4	)%		4.3	%		8.3	%
Interest expense				38			37			2.7	%		0.0	%		0.0	%
Interest income				(301	)		(259	)		16.2	%		(0.2	)%		(0.2	)%
Other expense				399			674			(40.8	)%		0.3	%		0.4	%
Income before income taxes				6,223			12,900			(51.8	)%		4.2	%		8.1	%
Income taxes*				2,182			3,748			(41.8	)%		35.1	%		29.1	%
Loss from investment in unconsolidated joint venture				132			193			(31.6	)%		0.1	%		0.1	%
Net income				3,909			8,959			(56.4	)%		2.6	%		5.6	%
Less: Net income attributable to non-controlling interest				(19	)		-			(100.0	)%		(0.0	)%		0.0	%
Net income attributable to Culp Inc. common shareholders	$			3,890			8,959			(56.6	)%		2.6	%		5.6	%
Net income attributable to Culp Inc. common shareholders per share - basic			$	0.31		$	0.72			(56.9	)%
Net income attributable to Culp Inc. common shareholders per share - diluted			$	0.31		$	0.71			(56.3	)%
Average shares outstanding-basic				12,512			12,420			0.7	%
Average shares outstanding-diluted				12,612			12,613			(0.0	)%
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Notes
(1)	Cost of sales for the six-month period ending October 28, 2018, includes restructuring related charges totaling $1.8 million, of which $1.6 million pertains to inventory markdowns and $270 pertains to operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC.
(2)	The $610 restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $513 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility.
(3)	During the six-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively.
(4)	See page 9 for our statement of operations that exclude our restructuring credit and restructuring related charges associated with our upholstery fabrics segment and non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 28, 2018. There were no restructuring activities or non-recurring charges associated with our mattress fabrics segment noted  for the three-month period ending October 29, 2017.

Page 3 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
OCTOBER 28, 2018, OCTOBER 29, 2017 AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
	(Condensed)				Increase
	October 28,		October 29,		(Decrease)						* April 29,
	2018		2017		Dollars			Percent			2018
Current assets
Cash and cash equivalents	$	14,768		15,739		(971	)		(6.2	)%		21,228
Short-term investments - Available for Sale		-		2,478		(2,478	)		(100.0	)%		2,451
Short-term investments - Held-To-Maturity		26,719		4,015		22,704			565.5	%		25,759
Accounts receivable		24,362		24,220		142			0.6	%		26,307
Inventories		50,601		50,209		392			0.8	%		53,454
Assets held for sale		237		-		237			100.0	%		-
Other current assets		2,461		2,263		198			8.7	%		2,870
Total current assets		119,148		98,924		20,224			20.4	%		132,069
Property, plant & equipment, net		51,325		52,530		(1,205	)		(2.3	)%		51,794
Goodwill		27,222		11,462		15,760			137.5	%		13,569
Intangible assets		10,636		1,428		9,208			644.8	%		4,275
Deferred income taxes		3,614		491		3,123			636.0	%		1,458
Long-term Investments - Held-To-Maturity		-		26,853		(26,853	)		(100.0	)%		5,035
Long-term Investments - Rabbi Trust		7,851		6,921		930			13.4	%		7,326
Investment in unconsolidated joint venture		1,470		1,522		(52	)		(3.4	)%		1,501
Other assets		945		912		33			3.6	%		957
Total assets	$	222,211		201,043		21,168			10.5	%		217,984
Current liabilities
Accounts payable - trade	$	24,007		24,600		(593	)		(2.4	)%		27,237
Accounts payable - capital expenditures		114		3,209		(3,095	)		(96.4	)%		1,776
Deferred revenue		649		-		649			100.0	%		809
Accrued expenses		8,670		7,364		1,306			17.7	%		9,325
Accrued restructuring costs		260		-		260			100.0	%		-
Deferred compensation		714		-		714			100.0	%		-
Income taxes payable - current		2,044		692		1,352			195.4	%		1,437
Total current liabilities		36,458		35,865		593			1.7	%		40,584
Accrued expenses - long-term		-		-		-			0.0	%		763
Contingent consideration - Earn-Out Obligation		5,706		-		5,706			100.0	%		-
Income taxes payable - long-term		3,233		487		2,746			563.9	%		3,758
Deferred income taxes		2,225		4,641		(2,416	)		(52.1	)%		2,150
Deferred compensation		7,120		6,970		150			2.2	%		7,353
Total liabilities		54,742		47,963		6,779			14.1	%		54,608
Shareholders' equity
Shareholders' equity attributable to Culp Inc.		162,918		153,080		9,838			6.4	%		163,376
Non-controlling interest		4,551		-		4,551			100.0	%		-
		167,469		153,080		14,389			9.4	%		163,376
Total liabilities and
shareholders' equity	$	222,211		201,043		21,168			10.5	%		217,984
Shares outstanding		12,492		12,435		57			0.5	%		12,450
*  Derived from audited financial statements.

Page 4 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
SUMMARY OF CASH AND INVESTMENTS
OCTOBER 28, 2018, OCTOBER 29, 2017, AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
	October 28,		October 29,		April 29,
	2018		2017		2018*
Cash and cash equivalents	$	14,768	$	15,739	$	21,228
Short-term investments - Available for Sale		-		2,478		2,451
Short-term investments - Held-To-Maturity		26,719		4,015		25,759
Long-term investments - Held-To-Maturity		-		26,853		5,035
Total Cash and Investments	$	41,487	$	49,085	$	54,473
*  Derived from audited financial statements.

Page 5 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
Unaudited
(Amounts in Thousands)
	SIX MONTHS ENDED
	Amounts
	October 28,			October 29,
	2018			2017
Cash flows from operating activities:
Net income	$	3,909			8,959
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		4,056			3,713
Amortization		391			166
Stock-based compensation		(106	)		1,558
Deferred income taxes		(2,081	)		976
Realized loss on sale of short-term investments (Available for Sale)		94			-
Gain on sale of equipment		(1,079	)		-
Loss from investment in unconsolidated joint venture		132			193
Foreign currency exchange gain (loss)		(102	)		42
Changes in assets and liabilities, net of effects of acquisition of businesses:
Accounts receivable		1,639			561
Inventories		3,767			1,597
Other current assets		379			723
Other assets		(10	)		(35	)
Accounts payable		(3,264	)		(5,074	)
Deferred revenue		(160	)		-
Accrued expenses and deferrred compensation		(1,472	)		(3,607	)
Accrued restructuring costs		260			-
Income taxes		247			406
Net cash provided by operating activities		6,600			10,178
Cash flows from investing activities:
Net cash paid for acquistion of businesses		(12,096	)		-
Capital expenditures		(2,096	)		(4,978	)
Proceeds from the sale of equipment		1,280			6
Investment in unconsolidated joint venture		(100	)		(609	)
Proceeds from the sale of short-term investments (Held to Maturity)		4,000			-
Proceeds from the sale of short-term investments (Available for Sale)		2,458			-
Purchase of short-term investments (Available for Sale)		(10	)		(24	)
Proceeds from the sale of long-term investments (Rabbi Trust)		-			54
Purchase of long-term investments (Rabbi Trust)		(526	)		(1,457	)
Net cash used in investing activities		(7,090	)		(7,008	)
Cash flows from financing activities:
Proceeds from line of credit		12,000			10,000
Payments on line of credit		(12,000	)		(10,000	)
Payments on vendor-financed capital expenditures		(1,412	)		(2,500	)
Dividends paid		(2,253	)		(4,603	)
Common stock surrendered for withholding taxes payable		(1,292	)		(1,147	)
Common stock repurchased		(844	)		-
Proceeds from common stock issued		-			5
Net cash used in financing activities		(5,801	)		(8,245	)
Effect of exchange rate changes on cash and cash equivalents		(169	)		19
Decrease in cash and cash equivalents		(6,460	)		(5,056	)
Cash and cash equivalents at beginning of period		21,228			20,795
Cash and cash equivalents at end of period	$	14,768			15,739
Free Cash Flow (1)	$	3,577			713
(1)  Free Cash Flow reconciliation is as follows:
	FY 2019			FY 2018
A)  Net cash provided by operating activities	$	6,600			10,178
B)  Minus:   Capital Expenditures		(2,096	)		(4,978	)
C)  Plus:      Proceeds from the sale of equipment		1,280			6
D)  Minus:   Investment in unconsolidated joint venture		(100	)		(609	)
E)  Minus:   Payments on vendor-financed capital expenditures		(1,412	)		(2,500	)
F)  Plus:       Proceeds from the sale of long-term investments (Rabbi Trust)		-			54
G)  Minus:   Purchase of long-term investments (Rabbi Trust)		(526	)		(1,457	)
H)  Effects of exchange rate changes on cash and cash equivalents		(169	)		19
	$	3,577			713

Page 6 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(Unaudited)
(Amounts in thousands)
		THREE MONTHS ENDED
		Amounts									Percent of Total Sales
		October 28,			October 29,			% Over			October 28,			October 29,
Net Sales by Segment		2018			2017			(Under)			2018			2017
Mattress Fabrics		$	41,989			48,601			(13.6	)%		54.5	%		60.2	%
Upholstery Fabrics			35,017			32,097			9.1	%		45.5	%		39.8	%
Net Sales		$	77,006			80,698			(4.6	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics		$	7,498			9,730			(22.9	)%		17.9	%		20.0	%
Upholstery Fabrics			6,257			6,074			3.0	%		17.9	%		18.9	%
Subtotal			13,755			15,804			(13.0	)%		17.9	%		19.6	%
Other non-recurring charges	(1)		(159	)		-			(100.0	)%		(0.2	)%		0.0	%
Restructuring related charges	(1)		(270	)		-			(100.0	)%		(0.4	)%		0.0	%
Gross Profit			13,326			15,804			(15.7	)%		17.3	%		19.6	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics		$	4,566			3,168			44.1	%		10.9	%		6.5	%
Upholstery Fabrics			3,535			3,700			(4.5	)%		10.1	%		11.5	%
Subtotal			8,101			6,868			18.0	%		10.5	%		8.5	%
Other non-recurring charges	(1)		89			-			100.0	%		0.1	%		0.0	%
Unallocated Corporate expenses			1,913			2,547			(24.9	)%		2.5	%		3.2	%
Selling, General and Administrative Expenses		$	10,103			9,415			7.3	%		13.1	%		11.7	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics		$	2,932			6,562			(55.3	)%		7.0	%		13.5	%
Upholstery Fabrics			2,722			2,374			14.7	%		7.8	%		7.4	%
Subtotal		$	5,654			8,936			(36.7	)%		7.3	%		11.1	%
Unallocated corporate expenses			(1,913	)		(2,547	)		(24.9	)%		(2.5	)%		(3.2	)%
Other non-recurring charges	(1)		(248	)		-			(100.0	)%		(0.3	)%		0.0	%
Restructuring credit and related charges	(1)		791			-			100.0	%		1.0	%		0.0	%
Operating income			4,284			6,389			(32.9	)%		5.6	%		7.9	%
Depreciation Expense by Segment
Mattress Fabrics		$	1,844			1,698			8.6	%
Upholstery Fabrics			197			207			(4.8	)%
Depreciation Expense		$	2,041			1,905			7.1	%

Notes
(1)	See page 8 for detailed description of charges.

Page 7 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(Unaudited)
(Amounts in thousands)
		SIX MONTHS ENDED
		Amounts									Percent of Total Sales
		October 28,			October 29,			% Over			October 28,			October 29,
Net Sales by Segment		2018			2017			(Under)			2018			2017
Mattress Fabrics		$	78,972			97,030			(18.6	)%		53.2	%		60.6	%
Upholstery Fabrics			69,507			63,200			10.0	%		46.8	%		39.4	%
Net Sales		$	148,479			160,230			(7.3	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics		$	13,470			19,495			(30.9	)%		17.1	%		20.1	%
Upholstery Fabrics			12,410			12,773			(2.8	)%		17.9	%		20.2	%
Subtotal			25,880			32,268			(19.8	)%		17.4	%		20.1	%
Other non-recurring charges	(1)		(159	)		-			(100.0	)%		(0.1	)%		0.0	%
Restructuring related charges	(1)		(1,836	)		-			(100.0	)%		(1.2	)%		0.0	%
Gross Profit			23,885			32,268			(26.0	)%		16.1	%		20.1	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics		$	7,714			6,559			17.6	%		9.8	%		6.8	%
Upholstery Fabrics			7,161			7,511			(4.7	)%		10.3	%		11.9	%
Subtotal			14,875			14,070			5.7	%		10.0	%		8.8	%
Other non-recurring charges	(1)		89			-			100.0	%		0.1	%		0.0	%
Unallocated Corporate expenses			3,172			4,846			(34.5	)%		2.1	%		3.0	%
Selling, General and Administrative Expenses		$	18,136			18,916			(4.1	)%		12.2	%		11.8	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics		$	5,755			12,936			(55.5	)%		7.3	%		13.3	%
Upholstery Fabrics			5,249			5,262			(0.2	)%		7.6	%		8.3	%
Subtotal		$	11,004			18,198			(39.5	)%		7.4	%		11.4	%
Unallocated corporate expenses			(3,172	)		(4,846	)		(34.5	)%		(2.1	)%		(3.0	)%
Other non-recurring charges	(1)		(248	)		-			(100.0	)%		(0.2	)%		0.0	%
Restructuring credit and related charges	(1)		(1,225	)		-			(100.0	)%		(0.8	)%		0.0	%
Operating income			6,359			13,352			(52.4	)%		4.3	%		8.3	%
Return on Capital (2)
Mattress Fabrics			23.6	%		37.3	%
Upholstery Fabrics			56.5	%		60.5	%
Unallocated Corporate			N/A			N/A
Consolidated			18.4	%		27.0	%
Capital Employed (2) (3)
Mattress Fabrics		$	79,947			78,476			1.9	%
Upholstery Fabrics			17,796			17,749			0.3	%
Unallocated Corporate			32,110			13,148			144.2	%
Consolidated		$	129,853			109,373			18.7	%
Depreciation Expense by Segment
Mattress Fabrics		$	3,644			3,310			10.1	%
Upholstery Fabrics			412			403			2.2	%
Depreciation Expense		$	4,056			3,713			9.2	%

Notes
(1)	See page 9 for detailed description of charges.
(2)	See pages 11 and 12 of this financial information release for calculations.
(3)	The capital employed balances are as of October 28, 2018 and October 29, 2017.

Page 8 of 13

CULP, INC.
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(UNAUDITED)
	THREE MONTHS ENDED
																				(4)
	As Reported													October 28, 2018						As Reported
	October 28,			% of							% of			Adjusted			% of			October 29,			% of			% Over
	2018			Sales				Adjustments			Sales			Results			Sales			2017			Sales			(Under)
Net sales	$	77,006			100.0	%			-			0.0	%		77,006			100.0	%		80,698			100.0	%		-4.6	%
Cost of sales		63,680			82.7	%	(1)		(429	)		-0.6	%		63,251			82.1	%		64,894			80.4	%		-2.5	%
Gross profit		13,326			17.3	%			(429	)		-0.6	%		13,755			17.9	%		15,804			19.6	%		-13.0	%
Selling, general and
administrative expenses		10,103			13.1	%	(3)		(89	)		-0.1	%		10,014			13.0	%		9,415			11.7	%		6.4	%
Restructuring credit		(1,061	)		-1.4	%	(2)		1,061			1.4	%		-			0.0	%		-			0.0	%		0.0	%
Income from operations		4,284			5.6	%			543			0.7	%		3,741			4.9	%		6,389			7.9	%		-41.4	%
Interest expense		18			0.0	%			-			0.0	%		18			0.0	%		37			0.0	%		-51.4	%
Interest income		(151	)		-0.2	%			-			0.0	%		(151	)		-0.2	%		(128	)		-0.2	%		18.0	%
Other expense		142			0.2	%			-			0.0	%		142			0.2	%		321			0.4	%		-55.8	%
Income before income taxes		4,275			5.6	%			543			0.7	%		3,732			4.8	%		6,159			7.6	%		-39.4	%

Notes
(1)	The $429 represents a restructuring related charge of $270 for other operating costs associated with our closed Anderson, SC upholstery fabrics plant facility and a non-recurring charge of $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(2)	The $1.1 million restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility.
(3)	The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(4)	Actual reported results were used for comparative purposes as there were no restructuring activities or non-recurring charges associated with our mattress fabrics segment for the three-month period ending October 29, 2017.

Page 9 of 13

CULP, INC.
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(UNAUDITED)
	SIX MONTHS ENDED
																				(4)
	As Reported													October 28, 2018						As Reported
	October 28,			% of							% of			Adjusted			% of			October 29,			% of			% Over
	2018			Sales				Adjustments			Sales			Results			Sales			2017			Sales			(Under)
Net sales	$	148,479			100.0	%			-			0.0	%		148,479			100.0	%		160,230			100.0	%		-7.3	%
Cost of sales		124,594			83.9	%	(1)		(1,995	)		-1.3	%		122,599			82.6	%		127,962			79.9	%		-4.2	%
Gross profit		23,885			16.1	%			(1,995	)		-1.3	%		25,880			17.4	%		32,268			20.1	%		-19.8	%
Selling, general and
administrative expenses		18,136			12.2	%	(3)		(89	)		-0.1	%		18,047			12.2	%		18,916			11.8	%		-4.6	%
Restructuring credit		(610	)		-0.4	%	(2)		610			0.4	%		-			0.0	%		-			0.0	%		0.0	%
Income from operations		6,359			4.3	%			(1,474	)		-1.0	%		7,833			5.3	%		13,352			8.3	%		-41.3	%
Interest expense		38			0.0	%			-			0.0	%		38			0.0	%		37			0.0	%		2.7	%
Interest income		(301	)		-0.2	%			-			0.0	%		(301	)		-0.2	%		(259	)		-0.2	%		16.2	%
Other expense		399			0.3	%			-			0.0	%		399			0.3	%		674			0.4	%		-40.8	%
Income before income taxes		6,223			4.2	%			(1,474	)		-1.0	%		7,697			5.2	%		12,900			8.1	%		-40.3	%

Notes
(1)	The $2.0 million represents a restructuring related charge of $1.6 million for inventory markdowns and $270 for operating costs associated with the closure of our Anderson, SC plant upholstery fabrics plant facility and $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(2)	The $610 restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $513 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics plant facility.
(3)	The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(4)	Actual reported results were used for comparative purposes as there were no restructuring activities or non-recurring charges associated with our mattress fabrics segment for the six-month period ending October 29, 2017.

Page 10 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	1/28/2018			4/29/2018			7/29/2018			10/28/2018			10/28/2018
Net income (loss)	$	(748	)	$	12,666		$	965		$	2,944		$	15,827
Income taxes		8,208			(6,217	)		906			1,276			4,173
Interest income, net		(101	)		(117	)		(130	)		(133	)		(481	)
Other non-recurring charges		-			-			-			248			248
Restructuring expense (credit) and related charges		-			-			2,016			(791	)		1,225
Depreciation and amortization expense		2,048			2,096			2,160			2,287			8,591
Stock based compensation		864			(210	)		(501	)		395			548
Adjusted EBITDA	$	10,271		$	8,218		$	5,416		$	6,226		$	30,131
	Quarter Ended
													Trailing 12
													Months
	1/29/2017			4/30/2017			7/30/2017			10/29/2017			10/29/2017
Net income	$	6,347		$	6,198		$	4,984		$	3,976		$	21,505
Income taxes		643			778			1,640			2,108			5,169
Interest income, net		(124	)		(134	)		(131	)		(91	)		(480	)
Other non-recurring charges		-			-			-			-			-
Restructuring expense (credit) and related charges		-			-			-			-			-
Depreciation and amortization expense		1,875			1,863			1,889			1,990			7,617
Stock based compensation		962			739			757			801			3,259
Adjusted EBITDA	$	9,703		$	9,444		$	9,139		$	8,784		$	37,070
% Over (Under)		5.9	%		-13.0	%		-40.7	%		-29.1	%		-18.7	%

Page 11 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018

(Amounts in Thousands)

(Unaudited)

	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	October 28, 2018 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	18,680		$	79,006			23.6	%
Upholstery Fabrics		10,940			19,372			56.5	%
(less: Unallocated Corporate)		(7,680	)		21,083			N/A
Total	$	21,940		$	119,461			18.4	%
Average Capital Employed	As of the three Months Ended October 28, 2018												As of the three Months Ended July 29, 2018												As of the three Months Ended April 29, 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)	$	91,697			37,442			93,072			222,211		$	98,064			37,386			90,922			226,372		$	95,061			39,812			83,111			217,984
Total liabilities (5)		(11,750	)		(19,646	)		(23,346	)		(54,742	)		(14,593	)		(17,880	)		(27,869	)		(60,342	)		(17,335	)		(18,679	)		(18,594	)		(54,608	)
Subtotal	$	79,947		$	17,796		$	69,726		$	167,469		$	83,471		$	19,506		$	63,053		$	166,030		$	77,726		$	21,133		$	64,517		$	163,376
Less:
Cash and cash equivalents		-			-			(14,768	)		(14,768	)		-			-			(8,593	)		(8,593	)		-			-			(21,228	)		(21,228	)
Short-term investments - Available-For-Sale		-			-			-			-			-			-			-			-			-			-			(2,451	)		(2,451	)
Short-term investments - Held-To-Maturity		-			-			(26,719	)		(26,719	)		-			-			(30,756	)		(30,756	)		-			-			(25,759	)		(25,759	)
Long-term investments - Held-To-Maturity		-			-			-			-			-			-			-			-			-			-			(5,035	)		(5,035	)
Long-term investments - Rabbi Trust		-			-			(7,851	)		(7,851	)		-			-			(7,671	)		(7,671	)		-			-			(7,326	)		(7,326	)
Deferred income taxes - non-current		-			-			(3,614	)		(3,614	)		-			-			(3,721	)		(3,721	)		-			-			(1,458	)		(1,458	)
Deferred compensation - current		-			-			714			714			-			-			-			-			-			-			-			-
Income taxes payable - current		-			-			2,044			2,044			-			-			1,244			1,244			-			-			1,437			1,437
Income taxes payable - long-term		-			-			3,233			3,233			-			-			3,733			3,733			-			-			3,758			3,758
Deferred income taxes - non-current		-			-			2,225			2,225			-			-			2,150			2,150			-			-			2,150			2,150
Line of credit		-			-			-			-			-			-			4,000			4,000			-			-			-			-
Deferred compensation - non-current		-			-			7,120			7,120			-			-			7,679			7,679			-			-			7,353			7,353
Total Capital Employed	$	79,947		$	17,796		$	32,110		$	129,853		$	83,471		$	19,506		$	31,118		$	134,095		$	77,726		$	21,133		$	15,958		$	114,817
	As of the three Months Ended January 28, 2018												As of the three Months Ended October 29, 2017
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	93,827			43,458			79,559			216,844		$	94,626			34,974			71,443			201,043
Total liabilities (5)		(18,418	)		(22,781	)		(23,463	)		(64,662	)		(16,150	)		(17,225	)		(14,588	)		(47,963	)
Subtotal	$	75,409		$	20,677		$	56,096		$	152,182		$	78,476		$	17,749		$	56,855		$	153,080
Less:
Cash and cash equivalents		-			-			(22,428	)		(22,428	)		-			-			(15,739	)		(15,739	)
Short-term investments - Available-For-Sale		-			-			(2,472	)		(2,472	)		-			-			(2,478	)		(2,478	)
Short-term investments - Held-To-Maturity		-			-			(17,206	)		(17,206	)		-			-			(4,015	)		(4,015	)
Long-term investments - Held-To-Maturity		-			-			(13,625	)		(13,625	)		-			-			(26,853	)		(26,853	)
Long-term investments - Rabbi Trust		-			-			(7,176	)		(7,176	)		-			-			(6,921	)		(6,921	)
Deferred income taxes - non-current		-			-			(1,942	)		(1,942	)		-			-			(491	)		(491	)
Deferred compensation - current		-			-			-			-			-			-			-			-
Income taxes payable - current		-			-			1,580			1,580			-			-			692			692
Income taxes payable - long-term		-			-			10,940			10,940			-			-			487			487
Deferred income taxes - non-current		-			-			2,096			2,096			-			-			4,641			4,641
Line of credit		-			-			-			-			-			-			-			-
Deferred compensation - non-current		-			-			7,216			7,216			-			-			6,970			6,970
Total Capital Employed	$	75,409		$	20,677		$	13,079		$	109,165		$	78,476		$	17,749		$	13,148		$	109,373
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	79,006		$	19,372		$	21,083		$	119,461

Notes
(1)	See reconciliation per page 13 of this financial information release.
(2)	Return on average capital employed represents the last twelve months operating income as of October 28, 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 current and noncurrent deferred compensation.
(3)	Average capital employed was computed using the quarterly five periods ending October 28, 2018, July 29, 2018, April 29, 2018, January 28, 2018, and October 29, 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 12 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE TWELVE MONTHS ENDED OCTOBER 29, 2017

(Amounts in Thousands)

(Unaudited)

	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	October 29, 2017 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	26,450		$	70,822			37.3	%
Upholstery Fabrics		10,879			17,973			60.5	%
(less: Unallocated Corporate)		(9,871	)		12,787			N/A
Total	$	27,458		$	101,583			27.0	%
Average Capital Employed	As of the three Months Ended October 29, 2017												As of the three Months Ended July 30, 2017												As of the three Months Ended April 30, 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)	$	94,626			34,974			71,443		$	201,043		$	99,190			34,491			74,223		$	207,904		$	98,087		$	32,255		$	75,292		$	205,634
Total liabilities		(16,150	)		(17,225	)		(14,588	)		(47,963	)		(24,277	)		(14,983	)		(18,967	)		(58,227	)		(27,619	)		(16,249	)		(13,136	)		(57,004	)
Subtotal	$	78,476		$	17,749		$	56,855		$	153,080		$	74,913		$	19,508		$	55,256		$	149,677		$	70,468		$	16,006		$	62,156		$	148,630
Less:
Cash and cash equivalents		-			-			(15,739	)		(15,739	)		-			-			(18,322	)		(18,322	)		-			-			(20,795	)		(20,795	)
Short-term investments - Available-For-Sale		-			-			(2,478	)		(2,478	)		-			-			(2,469	)		(2,469	)		-			-			(2,443	)		(2,443	)
Short-term investments - Held-To-Maturity		-			-			(4,015	)		(4,015	)		-			-			-			-			-			-			-			-
Long-term investments - Held-To-Maturity		-			-			(26,853	)		(26,853	)		-			-			(30,907	)		(30,907	)		-			-			(30,945	)		(30,945	)
Long-term investments - Rabbi Trust		-			-			(6,921	)		(6,921	)		-			-			(6,714	)		(6,714	)		-			-			(5,466	)		(5,466	)
Income taxes receivable		-			-			-			-			-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(491	)		(491	)		-			-			(436	)		(436	)		-			-			(419	)		(419	)
Income taxes payable - current		-			-			692			692			-			-			884			884			-			-			287			287
Income taxes payable - long-term		-			-			487			487			-			-			487			487			-			-			467			467
Deferred income taxes - non-current		-			-			4,641			4,641			-			-			4,253			4,253			-			-			3,593			3,593
Line of credit		-			-			-			-			-			-			5,000			5,000			-			-			-			-
Deferred compensation		-			-			6,970			6,970			-			-			6,769			6,769			-			-			5,520			5,520
Total Capital Employed	$	78,476		$	17,749		$	13,148		$	109,373		$	74,913		$	19,508		$	13,801		$	108,222		$	70,468		$	16,006		$	11,955		$	98,429
	As of the three Months Ended January 29, 2017												As of the three Months Ended October 30, 2016
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	90,197		$	30,380		$	70,479		$	191,056		$	81,683		$	29,361		$	68,083		$	179,127
Total liabilities		(23,126	)		(11,960	)		(13,656	)		(48,742	)		(18,499	)		(11,180	)		(13,499	)		(43,178	)
Subtotal	$	67,071		$	18,420		$	56,823		$	142,314		$	63,184		$	18,181		$	54,584		$	135,949
Less:
Cash and cash equivalents		-			-			(15,659	)		(15,659	)		-			-			(13,910	)		(13,910	)
Short-term investments - Available-For-Sale		-			-			(2,410	)		(2,410	)		-			-			(2,430	)		(2,430	)
Short-term investments - Held-To-Maturity		-			-			-			-			-			-			-			-
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	)
Income taxes receivable		-			-			-			-			-			-			-			-
Deferred income taxes - non-current		-			-			(422	)		(422	)		-			-			(581	)		(581	)
Income taxes payable - current		-			-			217			217			-			-			513			513
Income taxes payable - long-term		-			-			1,817			1,817			-			-			3,734			3,734
Deferred income taxes - non-current		-			-			2,924			2,924			-			-			1,699			1,699
Line of credit		-			-			-			-			-			-			-			-
Deferred compensation		-			-			5,327			5,327			-			-			5,171			5,171
Total Capital Employed	$	67,071		$	18,420		$	12,297		$	97,788		$	63,184		$	18,181		$	12,736		$	94,101
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	70,822		$	17,973		$	12,787		$	101,583

Notes
(1)	See reconciliation per page 13 of this financial information release.
(2)	Return on average capital employed represents the last twelve months operating income as of October 29, 2017, 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 noncurrent deferred compensation.
(3)	Average capital employed was computed using the five quarterly periods ending October 29, 2017, July 30, 2017 April 30, 2017, January 29, 2017, and October 30, 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 13 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATING INCOME
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018 AND OCTOBER 29, 2017
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	1/28/2018			4/29/2018			7/29/2018			10/28/2018			10/28/2018
Mattress Fabrics	$	6,837		$	6,088		$	2,823		$	2,932		$	18,680
Upholstery Fabrics		3,510			2,181			2,527			2,722			10,940
Unallocated Corporate		(2,703	)		(1,805	)		(1,259	)		(1,913	)		(7,680	)
Subtotal		7,644			6,464			4,091			3,741			21,940
Other non-recurring charges		-			-			-			(248	)		(248	)
Restructuring (expense) credit and related charges		-			-			(2,016	)		791			(1,225	)
Operating income	$	7,644		$	6,464		$	2,075		$	4,284		$	20,467
	Quarter Ended (1)												(1)
													Trailing 12
													Months
	1/29/2017			4/30/2017			7/30/2017			10/29/2017			10/29/2017
Mattress Fabrics	$	6,367		$	7,153		$	6,368		$	6,562		$	26,450
Upholstery Fabrics		3,100			2,510			2,895			2,374			10,879
Unallocated Corporate		(2,532	)		(2,493	)		(2,299	)		(2,547	)		(9,871	)
Operating income	$	6,935		$	7,170		$	6,964		$	6,389		$	27,458
% Over (Under)		10.2	%		-9.8	%		-70.2	%		-32.9	%		-25.5	%

Notes
(1)	We did not have any restructuring activities or non-recurring charges associated with our mattress fabrics segment for the three-month periods ending January 29, 2017, April 30, 2017, July 30, 2017, and October 29, 2017.