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 (LOSS)
FOR THREE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
		THREE MONTHS ENDED
		(5)			Amounts	(5)						Percent of Sales
		January 27,				January 28,			% Over			January 27,			January 28,
		2019				2018			(Under)			2019			2018
Net sales		$	77,226				85,310			(9.5	)%		100.0	%		100.0	%
Cost of sales	(1)		63,103				67,707			(6.8	)%		81.7	%		79.4	%
Gross profit			14,123				17,603			(19.8	)%		18.3	%		20.6	%
Selling, general and
administrative expenses	(3)		10,038				9,959			0.8	%		13.0	%		11.7	%
Restructuring credit	(2)		(214	)			-			100.0	%		(0.3	)%		0.0	%
Income from operations			4,299				7,644			(43.8	)%		5.6	%		9.0	%
Interest expense			-				31			(100.0	)%		0.0	%		0.0	%
Interest income			(251	)			(132	)		90.2	%		(0.3	)%		(0.2	)%
Other expense			288				229			25.8	%		0.4	%		0.3	%
Income before income taxes			4,262				7,516			(43.3	)%		5.5	%		8.8	%
Income taxes*	(4)		1,225		(4)		8,208			(85.1	)%		28.7	%		109.2	%
(Income) loss from investment in unconsolidated joint venture			(23	)			56			(141.1	)%		(0.0	)%		0.1	%
Net income (loss)			3,060				(748	)		(509.1	)%		4.0	%		(0.9	)%
Plus: Net loss attributable to non-controlling interest			94				-			100.0	%		0.1	%		0.0	%
Net income (loss) attributable to Culp Inc. common shareholders		$	3,154				(748	)		(521.7	)%		4.1	%		(0.9	)%
Net income (loss) attributable to Culp Inc. common shareholders per share - basic		$	0.25			$	(0.06	)		(516.7	)%
Net income (loss) attributable to Culp Inc. common shareholders per share - diluted		$	0.25			$	(0.06	)		(516.7	)%
Average shares outstanding-basic			12,438				12,436			0.0	%
Average shares outstanding-diluted			12,465				12,436			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 January 27, 2019, includes a $514 restructuring related charge for operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC.
(2)	The $214 restructuring credit represents a $362 gain on the sale of the building and land associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a $148 charge for employee termination benefits.
(3)	Selling, general, and administrative expenses for the three-month period ending January 27, 2019, includes a $469 non-recurring charge associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility.
(4)	Income taxes for the three-month periods ending January 27, 2019 and January 28, 2018, include provisional adjustments related to the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017. We recorded an income tax benefit of $593 and an income tax charge of $5.9 million for the three month periods ending January 27, 2019 and January 28, 2018, respectively.
(5)	See page 8 for our reconciliation of selected income statement information to adjusted results for the three-month periods ending January 27, 2019 and January 28, 2018, that exclude the adjustments noted above.

Page 2 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR NINE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
			NINE MONTHS ENDED
			(6)			Amounts	(6)						Percent of Sales
			January 27,				January 28,			% Over			January 27,			January 28,
			2019				2018			(Under)			2019			2018
Net sales			$	225,705				245,541			(8.1	)%		100.0	%		100.0	%
Cost of sales	(1)	(3)		187,697				195,668			(4.1	)%		83.2	%		79.7	%
Gross profit				38,008				49,873			(23.8	)%		16.8	%		20.3	%
Selling, general and
administrative expenses	(3)	(4)		28,174				28,876			(2.4	)%		12.5	%		11.8	%
Restructuring credit	(2)			(825	)			-			100.0	%		(0.4	)%		0.0	%
Income from operations				10,659				20,997			(49.2	)%		4.7	%		8.6	%
Interest expense				38				69			(44.9	)%		0.0	%		0.0	%
Interest income				(552	)			(391	)		41.2	%		(0.2	)%		(0.2	)%
Other expense				688				903			(23.8	)%		0.3	%		0.4	%
Income before income taxes				10,485				20,416			(48.6	)%		4.6	%		8.3	%
Income taxes*	(5)			3,407		(5)		11,956			(71.5	)%		32.5	%		58.6	%
Loss from investment in unconsolidated joint venture				109				249			(56.2	)%		0.0	%		0.1	%
Net income				6,969				8,211			(15.1	)%		3.1	%		3.3	%
Plus: Net loss attributable to non-controlling interest				75				-			(100.0	)%		0.0	%		0.0	%
Net income attributable to Culp Inc. common shareholders			$	7,044				8,211			(14.2	)%		3.1	%		3.3	%
Net income attributable to Culp Inc. common shareholders per share - basic			$	0.56			$	0.66			(15.2	)%
Net income attributable to Culp Inc. common shareholders per share - diluted			$	0.56			$	0.65			(13.8	)%
Average shares outstanding-basic				12,488				12,425			0.5	%
Average shares outstanding-diluted				12,593				12,626			(0.3	)%

* Percent of sales column for income taxes is calculated as a % of income before income taxes.
Notes
(1)	Cost of sales for the nine-month period ending January 27, 2019, includes restructuring related charges totaling $2.3 million, of which $1.6 million pertains to inventory markdowns and $784 pertains to operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC.
(2)	The $825 restructuring credit represents a $1.5 million gain on the sale of property, plant, and equipment associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a charge of $661 for employee termination benefits.
(3)	During the nine-month period ending January 27, 2019, 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)	Selling, general, and administrative expenses for the nine-month period ending January 27, 2019, includes a $469 non-recurring charge associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility.
(5)	Income taxes for the nine-month periods ending January 27, 2019 and January 28, 2018, include provisional adjustments related to the TCJA enacted on December 22, 2017. We recorded an income tax benefit of $593 and an income tax charge of $5.9 million for the nine month periods ending January 27, 2019 and January 28, 2018, respectively.
(6)	See page 9 for our reconciliation of selected income statement information to adjusted results for the nine-month periods ending January 27, 2019 and January 28, 2018, that exclude the adjustments noted above.

Page 3 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JANUARY 27, 2019, JANUARY 28, 2018 AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
	(Condensed)				Increase
	January 27,		January 28,		(Decrease)						* April 29,
	2019		2018		Dollars			Percent			2018
Current assets
Cash and cash equivalents	$	26,418		22,428		3,990			17.8	%		21,228
Short-term investments - Available for Sale		-		2,472		(2,472	)		(100.0	)%		2,451
Short-term investments - Held-To-Maturity		13,544		17,206		(3,662	)		(21.3	)%		25,759
Accounts receivable		26,142		26,097		45			0.2	%		26,307
Inventories		55,415		55,651		(236	)		(0.4	)%		53,454
Other current assets		2,954		3,114		(160	)		(5.1	)%		2,870
Total current assets		124,473		126,968		(2,495	)		(2.0	)%		132,069
Property, plant & equipment, net		50,129		51,838		(1,709	)		(3.3	)%		51,794
Goodwill		27,222		11,462		15,760			137.5	%		13,569
Intangible assets		10,542		1,397		9,145			654.6	%		4,275
Deferred income taxes		3,224		1,942		1,282			66.0	%		1,458
Long-term Investments - Held-To-Maturity		-		13,625		(13,625	)		(100.0	)%		5,035
Long-term Investments - Rabbi Trust		6,834		7,176		(342	)		(4.8	)%		7,326
Investment in unconsolidated joint venture		1,512		1,518		(6	)		(0.4	)%		1,501
Other assets		972		918		54			5.9	%		957
Total assets	$	224,908		216,844		8,064			3.7	%		217,984
Current liabilities
Accounts payable - trade	$	28,401		32,434		(4,033	)		(12.4	)%		27,237
Accounts payable - capital expenditures		91		1,554		(1,463	)		(94.1	)%		1,776
Deferred revenue		492		-		492			100.0	%		809
Accrued expenses		9,740		8,842		898			10.2	%		9,325
Accrued restructuring costs		228		-		228			100.0	%		-
Income taxes payable - current		642		1,580		(938	)		(59.4	)%		1,437
Total current liabilities		39,594		44,410		(4,816	)		(10.8	)%		40,584
Accrued expenses - long-term		-		-		-			0.0	%		763
Contingent consideration - Earn-Out Obligation		5,781		-		5,781			100.0	%		-
Income taxes payable - long-term		3,294		10,940		(7,646	)		(69.9	)%		3,758
Deferred income taxes		2,225		2,096		129			6.2	%		2,150
Deferred compensation		6,782		7,216		(434	)		(6.0	)%		7,353
Total liabilities		57,676		64,662		(6,986	)		(10.8	)%		54,608
Shareholders' equity
Shareholders' equity attributable to Culp Inc.		162,775		152,182		10,593			7.0	%		163,376
Non-controlling interest		4,457		-		4,457			100.0	%		-
		167,232		152,182		15,050			9.9	%		163,376
Total liabilities and
shareholders' equity	$	224,908		216,844		8,064			3.7	%		217,984
Shares outstanding		12,368		12,450		(82	)		(0.7	)%		12,450
*  Derived from audited financial statements.

Page 4 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
SUMMARY OF CASH AND INVESTMENTS
JANUARY 27, 2019, JANUARY 28, 2018, AND APRIL 29, 2018
Unaudited
(Amounts in Thousands)
	Amounts
	January 27,		January 28,		April 29,
	2019		2018		2018*
Cash and cash equivalents	$	26,418	$	22,428	$	21,228
Short-term investments - Available for Sale		-		2,472		2,451
Short-term investments - Held-To-Maturity		13,544		17,206		25,759
Long-term investments - Held-To-Maturity		-		13,625		5,035
Total Cash and Investments	$	39,962	$	55,731	$	54,473
*  Derived from audited financial statements.

Page 5 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
Unaudited
(Amounts in Thousands)
	NINE MONTHS ENDED
	Amounts
	January 27,			January 28,
	2019			2018
Cash flows from operating activities:
Net income	$	6,969			8,211
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		6,087			5,679
Amortization		592			248
Stock-based compensation		373			2,422
Deferred income taxes		(1,691	)		(3,020	)
Realized loss on sale of short-term investments (Available for Sale)		94			-
Gain on sale of property, plant, and equipment		(1,456	)		-
Loss from investment in unconsolidated joint venture		109			249
Foreign currency exchange loss		12			133
Changes in assets and liabilities, net of effects of acquisition of businesses:
Accounts receivable		(38	)		(923	)
Inventories		(658	)		(3,275	)
Other current assets		(43	)		(27	)
Other assets		6			(37	)
Accounts payable		486			1,715
Deferred revenue		(317	)		-
Accrued expenses and deferrred compensation		(1,513	)		(1,608	)
Accrued restructuring costs		228			-
Income taxes		(1,155	)		11,702
Net cash provided by operating activities		8,085			21,469
Cash flows from investing activities:
Net cash paid for acquistion of businesses		(12,096	)		-
Capital expenditures		(2,954	)		(6,657	)
Proceeds from the sale of property, plant, and equipment		1,894			6
Investment in unconsolidated joint venture		(120	)		(661	)
Proceeds from the sale of short-term investments (Held to Maturity)		17,150			-
Proceeds from the sale of short-term investments (Available for Sale)		2,458			-
Purchase of short-term investments (Available for Sale)		(10	)		(37	)
Proceeds from the sale of long-term investments (Rabbi Trust)		1,233			57
Purchase of long-term investments (Rabbi Trust)		(795	)		(1,699	)
Premium payment on life insurance policy		-			(18	)
Net cash provided by (used in) investing activities		6,760			(9,009	)
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	)		(3,750	)
Dividends paid		(3,493	)		(5,722	)
Common stock surrendered for withholding taxes payable		(1,303	)		(1,530	)
Common stock repurchased		(3,316	)		-
Payments of debt issuance costs		(50	)		-
Proceeds from common stock issued		-			111
Net cash used in financing activities		(9,574	)		(10,891	)
Effect of exchange rate changes on cash and cash equivalents		(81	)		64
Increase in cash and cash equivalents		5,190			1,633
Cash and cash equivalents at beginning of period		21,228			20,795
Cash and cash equivalents at end of period	$	26,418			22,428
Free Cash Flow (1)	$	5,850			8,811
(1)    Free Cash Flow reconciliation is as follows:
	FY 2019			FY 2018
A)    Net cash provided by operating activities	$	8,085			21,469
B)    Minus:   Capital Expenditures		(2,954	)		(6,657	)
C)    Plus:       Proceeds from the sale of property, plant, and equipment		1,894			6
D)    Minus:   Capital ExpendituresInvestment in unconsolidated joint venture		(120	)		(661	)
E)    Minus:   Capital ExpendituresPayments on vendor-financed capital expenditures		(1,412	)		(3,750	)
F)    Plus:       Proceeds from the sale of long-term investments (Rabbi Trust)		1,233			57
G)    Minus:    Purchase of long-term investments (Rabbi Trust)		(795	)		(1,699	)
H)    Minus:    Premium payment on life insurance policy		-			(18	)
I)     Effects of exchange rate changes on cash and cash equivalents		(81	)		64
	$	5,850			8,811

Page 6 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(Unaudited)
(Amounts in thousands)
		THREE MONTHS ENDED
		Amounts									Percent of Total Sales
		January 27,			January 28,			% Over			January 27,			January 28,
Net Sales by Segment		2019			2018			(Under)			2019			2018
Mattress Fabrics		$	35,732			49,042			(27.1	)%		46.3	%		57.5	%
Upholstery Fabrics			37,104			36,268			2.3	%		48.0	%		42.5	%
Home Accessories			4,390			-			100.0	%		5.7	%		0.0	%
Net Sales		$	77,226			85,310			(9.5	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics		$	5,963			10,146			(41.2	)%		16.7	%		20.7	%
Upholstery Fabrics			7,624			7,457			2.2	%		20.5	%		20.6	%
Home Accessories			1,050			-			100.0	%		23.9	%		0.0	%
Subtotal			14,637			17,603			(16.8	)%		19.0	%		20.6	%
Restructuring related charges	(1)		(514	)		-			100.0	%		(0.7	)%		0.0	%
Gross Profit			14,123			17,603			(19.8	)%		18.3	%		20.6	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics		$	2,755			3,309			(16.7	)%		7.7	%		6.7	%
Upholstery Fabrics			3,825			3,947			(3.1	)%		10.3	%		10.9	%
Home Accessories			1,361			-			100.0	%		31.0	%		0.0	%
Unallocated Corporate expenses			1,628			2,703			(39.8	)%		2.1	%		3.2	%
Subtotal			9,569			9,959			(3.9	)%		12.4	%		11.7	%
Other non-recurring charges	(1)		429			-			100.0	%		0.6	%		0.0	%
Restructuring related charges	(1)		40			-			100.0	%		0.1	%		0.0	%
Selling, General and Administrative Expenses		$	10,038			9,959			0.8	%		13.0	%		11.7	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics		$	3,208			6,837			(53.1	)%		9.0	%		13.9	%
Upholstery Fabrics			3,799			3,510			8.2	%		10.2	%		9.7	%
Home Accessories			(311	)		-			100.0	%		(7.1	)%		0.0	%
Unallocated corporate expenses			(1,628	)		(2,703	)		(39.8	)%		(2.1	)%		(3.2	)%
Subtotal		$	5,068			7,644			(33.7	)%		6.6	%		9.0	%
Other non-recurring charges	(1)		(429	)		-			100.0	%		(0.6	)%		0.0	%
Restructuring credit and related charges	(1)		(340	)		-			100.0	%		(0.4	)%		0.0	%
Operating income			4,299			7,644			(43.8	)%		5.6	%		9.0	%
Depreciation Expense by Segment
Mattress Fabrics		$	1,752			1,757			(0.3	)%
Upholstery Fabrics			182			209			(12.9	)%
Home Accessories			97			-			100.0	%
Depreciation Expense		$	2,031			1,966			3.3	%

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 NINE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(Unaudited)
(Amounts in thousands)
		NINE MONTHS ENDED
		Amounts									Percent of Total Sales
		January 27,			January 28,			% Over			January 27,			January 28,
Net Sales by Segment		2019			2018			(Under)			2019			2018
Mattress Fabrics		$	107,335			146,072			(26.5	)%		47.6	%		59.5	%
Upholstery Fabrics			106,611			99,469			7.2	%		47.2	%		40.5	%
Home Accessories			11,759			-			100.0	%		5.2	%		0.0	%
Net Sales		$	225,705			245,541			(8.1	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics		$	17,050			29,641			(42.5	)%		15.9	%		20.3	%
Upholstery Fabrics			20,031			20,232			(1.0	)%		18.8	%		20.3	%
Home Accessories			3,435			-			100.0	%		29.2	%		0.0	%
Subtotal			40,516			49,873			(18.8	)%		18.0	%		20.3	%
Other non-recurring charges	(1)		(159	)		-			100.0	%		(0.1	)%		0.0	%
Restructuring related charges	(1)		(2,349	)		-			100.0	%		(1.0	)%		0.0	%
Gross Profit			38,008			49,873			(23.8	)%		16.8	%		20.3	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics		$	8,141			9,868			(17.5	)%		7.6	%		6.8	%
Upholstery Fabrics			10,985			11,458			(4.1	)%		10.3	%		11.5	%
Home Accessories			3,690			-			100.0	%		3.5	%		0.0	%
Unallocated Corporate expenses			4,800			7,550			(36.4	)%		2.1	%		3.1	%
Subtotal			27,616			28,876			(4.4	)%		12.2	%		11.8	%
Other non-recurring charges	(1)		518			-			100.0	%		0.2	%		0.0	%
Restructuring related charges	(1)		40			-			100.0	%		0.0	%		0.0	%
Selling, General and Administrative Expenses		$	28,174			28,876			(2.4	)%		12.5	%		11.8	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics		$	8,910			19,774			(54.9	)%		8.3	%		13.5	%
Upholstery Fabrics			9,044			8,773			3.1	%		8.5	%		8.8	%
Home Accessories			(254	)		-			100.0	%		(2.2	)%		0.0	%
Unallocated corporate expenses			(4,800	)		(7,550	)		(36.4	)%		(2.1	)%		(3.1	)%
Subtotal		$	12,900			20,997			(38.6	)%		5.7	%		8.6	%
Other non-recurring charges	(1)		(678	)		-			(100.0	)%		(0.3	)%		0.0	%
Restructuring credit and related charges	(1)		(1,563	)		-			(100.0	)%		(0.7	)%		0.0	%
Operating income			10,659			20,997			(49.2	)%		4.7	%		8.6	%
Return on Capital (2)
Mattress Fabrics			19.4	%		36.7	%
Upholstery Fabrics			56.3	%		61.1	%
Home Accessories			N.M.			N/A
Unallocated Corporate			N/A			N/A
Consolidated			15.7	%		26.9	%
Capital Employed (2) (3)
Mattress Fabrics		$	75,103			75,409			(0.4	)%
Upholstery Fabrics			20,614			20,677			(0.3	)%
Home Accessories			3,439			-		N.M.
Unallocated Corporate			30,999			13,079			137.0	%
Consolidated		$	130,155			109,165			19.2	%
Depreciation Expense by Segment
Mattress Fabrics		$	5,265			5,068			3.9	%
Upholstery Fabrics			595			611			(2.6	)%
Home Accessories			227			-			100.0	%
Depreciation Expense		$	6,087			5,679			7.2	%

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 January 27, 2019 and January 28, 2018.

Page 8 of 13

CULP, INC
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THE THREE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
	THREE MONTHS ENDED
	As Reported							Adjusted		As Reported							Adjusted
	January 27,							January 27,		January 28,							January 28,
	2019				Adjustments			2019		2018				Adjustments			2018
Gross profit		14,123		(1)		514			14,637		17,603				-			17,603
Selling, general and
administrative expenses		10,038		(3)		(469	)		9,569		9,959				-			9,959
Restructuring credit		(214	)	(2)		214			-		-				-			-
Income from operations		4,299				769			5,068		7,644				-			7,644
Income before income taxes		4,262				769			5,031		7,516				-			7,516
Income Taxes		1,225		(4)		593			1,818		8,208		(4)		(5,939	)		2,269
Net income (loss)		3,060				176			3,236		(748	)			5,939			5,191
Plus: Net loss attributable to non-controlling interest		94				-			94		-				-			-
Net income (loss) attributable to Culp Inc. common shareholders	$	3,154				176			3,330		(748	)			5,939			5,191
Net income (loss) attributable to Culp Inc. common shareholders per share - basic	$	0.25			$	0.01		$	0.27	$	(0.06	)		$	0.48		$	0.42
Net income (loss) attributable to Culp Inc. common shareholders per share - diluted	$	0.25			$	0.01		$	0.27	$	(0.06	)		$	0.48		$	0.42
Average shares outstanding-basic		12,438				12,438			12,438		12,436				12,436			12,436
Average shares outstanding-diluted		12,465				12,465			12,465		12,436				12,436			12,436

Notes
(1)	The $514 represents restructuring related charges for other operating costs associated with our closed Anderson, SC upholstery fabrics plant facility.
(2)	The $214 restructuring credit represents a $362 gain on the sale of the building and land associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a charge of $148 for employee termination benefits.
(3)	The $469 respresents a non-recurring charge associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility.
(4)	Amounts represent provisional adjustments associated with the TCJA enacted on December 22, 2017.

Page 9 of 13

CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THE NINE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
	NINE MONTHS ENDED
	As Reported							Adjusted		As Reported						Adjusted
	January 27,							January 27,		January 28,						January 28,
	2019				Adjustments			2019		2018			Adjustments			2018
Gross profit		38,008		(1)		2,508			40,516		49,873			-			49,873
Selling, general and
administrative expenses		28,174		(3)		(558	)		27,616		28,876			-			28,876
Restructuring credit		(825	)	(2)		825			-		-			-			-
Income from operations		10,659				2,241			12,900		20,997			-			20,997
Income before income taxes		10,485				2,241			12,726		20,416			-			20,416
Income Taxes		3,407		(4)		593			4,000		11,956	(4)		(5,939	)		6,017
Loss from investment in unconsolidated joint venture		109				-			109		249			-			249
Net income		6,969				1,648			8,617		8,211			5,939			14,150
Plus: Net loss attributable to non-controlling interest		75				-			75		-			-			-
Net income attributable to Culp Inc. common shareholders	$	7,044				1,648			8,692		8,211			5,939			14,150
Net income attributable to Culp Inc. common shareholders per share - basic	$	0.56			$	0.13		$	0.70	$	0.66		$	0.48		$	1.14
Net income attributable to Culp Inc. common shareholders per share - diluted	$	0.56			$	0.13		$	0.69	$	0.65		$	0.47		$	1.12
Average shares outstanding-basic		12,488				12,488			12,488		12,425			12,425			12,425
Average shares outstanding-diluted		12,593				12,593			12,593		12,626			12,626			12,626

Notes
(1)	The $2.5 million represents a restructuring related charge of $1.6 million for inventory markdowns and $784 for other operating costs associated with our closed Anderson, SC plant facility and $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(2)	The $825 restructuring credit represents a $1.5 million gain on the sale of property, plant, and equipment associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a charge of $661 for employee termination benefits.
(3)	The $558 consists of a non-recurring charge totaling $469 that was associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility. Additionally, the $558 consists of a non-recurring charge of $89 for employee termination benefits and operational reorganization costs associated with our mattress fabrics segment.
(4)	Amounts represent provisional adjustments associated with the TCJA enacted on December 22, 2017.

Page 10 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	4/29/2018			7/29/2018			10/28/2018			1/27/2019			1/27/2019
Net income	$	12,666		$	965		$	2,944		$	3,060		$	19,635
Income taxes		(6,217	)		906			1,276			1,225			(2,810	)
Interest income, net		(117	)		(128	)		(134	)		(251	)		(630	)
Other non-recurring charges		-			-			249			429			678
Restructuring expense (credit) and related charges		-			2,014			(791	)		340			1,563
Depreciation and amortization expense		2,096			2,160			2,287			2,232			8,775
Stock based compensation		(210	)		(501	)		395			479			163
Adjusted EBITDA	$	8,218		$	5,416		$	6,226		$	7,514		$	27,374
% Net sales		10.5	%		7.6	%		8.1	%		9.7	%		9.0	%
	Quarter Ended
													Trailing 12
													Months
	4/30/2017			7/30/2017			10/29/2017			1/28/2018			1/28/2018
Net income (loss)	$	6,198		$	4,984		$	3,976		$	(748	)	$	14,410
Income taxes		778			1,640			2,108			8,208			12,734
Interest income, net		(134	)		(131	)		(91	)		(101	)		(457	)
Other non-recurring charges		-			-			-			-			-
Restructuring expense (credit) and related charges		-			-			-			-			-
Depreciation and amortization expense		1,863			1,889			1,990			2,048			7,790
Stock based compensation		739			757			801			864			3,161
Adjusted EBITDA	$	9,444		$	9,139		$	8,784		$	10,271		$	37,638
% Net sales		12.2	%		11.5	%		10.9	%		12.0	%		11.7	%
% Over (Under)		-13.0	%		-40.7	%		-29.1	%		-26.8	%		-27.3	%

Page 11 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED JANUARY 27, 2019
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	January 27, 2019 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	14,993		$	77,132			19.4	%
Upholstery Fabrics		11,229			19,945			56.3	%
Home Accessories		(254	)		1,887			N.M.
(less: Unallocated Corporate)		(6,605	)		24,653			N/A
Total	$	19,363		$	123,617			15.7	%
Average Capital Employed	As of the three Months Ended January 27, 2019															As of the three Months Ended October 28, 2018															As of the three Months Ended July 29, 2018
	Mattress			Upholstery			Home			Unallocated						Mattress			Upholstery			Home			Unallocated						Mattress			Upholstery			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total			Fabrics			Fabrics			Accessories			Corporate			Total			Fabrics			Fabrics			Accessories			Corporate			Total
Total assets (4)	$	86,707			43,097			5,607			89,497			224,908		$	86,494			37,442			5,203			93,072			222,211		$	93,601			37,386			4,463			90,922			226,372
Total liabilities (5)		(11,604	)		(22,483	)		(2,168	)		(21,421	)		(57,676	)		(9,790	)		(19,646	)		(1,960	)		(23,346	)		(54,742	)		(12,883	)		(17,880	)		(1,710	)		(27,869	)		(60,342	)
Subtotal	$	75,103		$	20,614		$	3,439		$	68,076		$	167,232		$	76,704		$	17,796		$	3,243		$	69,726		$	167,469		$	80,718		$	19,506		$	2,753		$	63,053		$	166,030
Less:
Cash and cash equivalents		-			-						(26,418	)		(26,418	)		-			-						(14,768	)		(14,768	)		-			-						(8,593	)		(8,593	)
Short-term investments - Available-For-Sale		-			-						-			-			-			-						-			-			-			-						-			-
Short-term investments - Held-To-Maturity		-			-						(13,544	)		(13,544	)		-			-						(26,719	)		(26,719	)		-			-						(30,756	)		(30,756	)
Long-term investments - Held-To-Maturity		-			-						-			-			-			-						-			-			-			-						-			-
Long-term investments - Rabbi Trust		-			-						(6,834	)		(6,834	)		-			-						(7,851	)		(7,851	)		-			-						(7,671	)		(7,671	)
Deferred income taxes - non-current		-			-						(3,224	)		(3,224	)		-			-						(3,614	)		(3,614	)		-			-						(3,721	)		(3,721	)
Deferred compensation - current		-			-						-			-			-			-						714			714			-			-						-			-
Income taxes payable - current		-			-						642			642			-			-						2,044			2,044			-			-						1,244			1,244
Income taxes payable - long-term		-			-						3,294			3,294			-			-						3,233			3,233			-			-						3,733			3,733
Deferred income taxes - non-current		-			-						2,225			2,225			-			-						2,225			2,225			-			-						2,150			2,150
Line of credit		-			-						-			-			-			-						-			-			-			-						4,000			4,000
Deferred compensation - non-current		-			-						6,782			6,782			-			-						7,120			7,120			-			-						7,679			7,679
Total Capital Employed	$	75,103		$	20,614		$	3,439		$	30,999		$	130,155		$	76,704		$	17,796		$	3,243		$	32,110		$	129,853		$	80,718		$	19,506		$	2,753		$	31,118		$	134,095
	As of the three Months Ended April 29, 2018															As of the three Months Ended January 28, 2018
	Mattress			Upholstery			Home			Unallocated						Mattress			Upholstery			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total			Fabrics			Fabrics			Accessories			Corporate			Total
Total assets (4)	$	95,061			39,812			-			83,111			217,984		$	93,827			43,458			-			79,559			216,844
Total liabilities (5)		(17,335	)		(18,679	)		-			(18,594	)		(54,608	)		(18,418	)		(22,781	)		-			(23,463	)		(64,662	)
Subtotal	$	77,726		$	21,133		$	-		$	64,517		$	163,376		$	75,409		$	20,677		$	-		$	56,096		$	152,182
Less:
Cash and cash equivalents		-			-						(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		-			-						(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		-			-						(7,326	)		(7,326	)		-			-						(7,176	)		(7,176	)
Deferred income taxes - non-current		-			-						(1,458	)		(1,458	)		-			-						(1,942	)		(1,942	)
Deferred compensation - current		-			-						-			-			-			-						-			-
Income taxes payable - current		-			-						1,437			1,437			-			-						1,580			1,580
Income taxes payable - long-term		-			-						3,758			3,758			-			-						10,940			10,940
Deferred income taxes - non-current		-			-						2,150			2,150			-			-						2,096			2,096
Line of credit		-			-						-			-			-			-						-			-
Deferred compensation - non-current		-			-						7,353		��	7,353			-			-						7,216			7,216
Total Capital Employed	$	77,726		$	21,133		$	-		$	15,958		$	114,817		$	75,409		$	20,677		$	-		$	13,079		$	109,165
	Mattress			Upholstery			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total
Average Capital Employed (3)	$	77,132		$	19,945		$	1,887		$	24,653		$	123,617

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 January 27, 2019, 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 payable, line of credit, and current and noncurrent deferred compensation.
(3)	Average capital employed was computed using the quarterly five periods ending January 27, 2019, October 28, 2018, July 29, 2018, April 29, 2018, and January 28, 2018.
(4)	Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, 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 therefore, 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 JANUARY 28, 2018
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	January 28, 2018 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	26,920		$	73,267			36.7	%
Upholstery Fabrics		11,289			18,472			61.1	%
(less: Unallocated Corporate)		(10,042	)		12,856			N/A
Total	$	28,167		$	104,595			26.9	%
Average Capital Employed	As of the three Months Ended January 28, 2018												As of the three Months Ended October 29, 2017												As of the three Months Ended July 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)	$	93,827			43,458			79,559		$	216,844		$	94,626			34,974			71,443		$	201,043		$	99,190			34,491			74,223		$	207,904
Total liabilities		(18,418	)		(22,781	)		(23,463	)		(64,662	)		(16,150	)		(17,225	)		(14,588	)		(47,963	)		(24,277	)		(14,983	)		(18,967	)		(58,227	)
Subtotal	$	75,409		$	20,677		$	56,096		$	152,182		$	78,476		$	17,749		$	56,855		$	153,080		$	74,913		$	19,508		$	55,256		$	149,677
Less:
Cash and cash equivalents		-			-			(22,428	)		(22,428	)		-			-			(15,739	)		(15,739	)		-			-			(18,322	)		(18,322	)
Short-term investments - Available-For-Sale		-			-			(2,472	)		(2,472	)		-			-			(2,478	)		(2,478	)		-			-			(2,469	)		(2,469	)
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	)		-			-			(30,907	)		(30,907	)
Long-term investments - Rabbi Trust		-			-			(7,176	)		(7,176	)		-			-			(6,921	)		(6,921	)		-			-			(6,714	)		(6,714	)
Deferred income taxes - non-current		-			-			(1,942	)		(1,942	)		-			-			(491	)		(491	)		-			-			(436	)		(436	)
Income taxes payable - current		-			-			1,580			1,580			-			-			692			692			-			-			884			884
Income taxes payable - long-term		-			-			10,940			10,940			-			-			487			487			-			-			487			487
Deferred income taxes - non-current		-			-			2,096			2,096			-			-			4,641			4,641			-			-			4,253			4,253
Line of credit		-			-			-			-			-			-			-			-			-			-			5,000			5,000
Deferred compensation		-			-			7,216			7,216			-			-			6,970			6,970			-			-			6,769			6,769
Total Capital Employed	$	75,409		$	20,677		$	13,079		$	109,165		$	78,476		$	17,749		$	13,148		$	109,373		$	74,913		$	19,508		$	13,801		$	108,222
	As of the three Months Ended April 30, 2017												As of the three Months Ended January 29, 2017
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets (4)	$	98,087		$	32,255		$	75,292		$	205,634		$	90,197		$	30,380		$	70,479		$	191,056
Total liabilities		(27,619	)		(16,249	)		(13,136	)		(57,004	)		(23,126	)		(11,960	)		(13,656	)		(48,742	)
Subtotal	$	70,468		$	16,006		$	62,156		$	148,630		$	67,071		$	18,420		$	56,823		$	142,314
Less:
Cash and cash equivalents		-			-			(20,795	)		(20,795	)		-			-			(15,659	)		(15,659	)
Short-term investments - Available-For-Sale		-			-			(2,443	)		(2,443	)		-			-			(2,410	)		(2,410	)
Short-term investments - Held-To-Maturity		-			-			-			-			-			-			-			-
Long-term investments - Held-To-Maturity		-			-			(30,945	)		(30,945	)		-			-			(30,832	)		(30,832	)
Long-term investments - Rabbi Trust		-			-			(5,466	)		(5,466	)		-			-			(5,488	)		(5,488	)
Deferred income taxes - non-current		-			-			(419	)		(419	)		-			-			(422	)		(422	)
Income taxes payable - current		-			-			287			287			-			-			217			217
Income taxes payable - long-term		-			-			467			467			-			-			1,817			1,817
Deferred income taxes - non-current		-			-			3,593			3,593			-			-			2,924			2,924
Line of credit		-			-			-			-			-			-			-			-
Deferred compensation		-			-			5,520			5,520			-			-			5,327			5,327
Total Capital Employed	$	70,468		$	16,006		$	11,955		$	98,429		$	67,071		$	18,420		$	12,297		$	97,788
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	73,267		$	18,472		$	12,856		$	104,595

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 January 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 payable, line of credit, and deferred compensation.
(3)	Average capital employed was computed using the five quarterly periods ending January 28, 2018, October 29, 2017, July 30, 2017, April 30, 2017, and January 29, 2017.
(4)	Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, 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 (LOSS)
FOR THE TWELVE MONTHS ENDED JANUARY 27, 2019 AND JANUARY 28, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	4/29/2018			7/29/2018			10/28/2018			1/27/2019			1/27/2019
Mattress Fabrics	$	6,088		$	2,798		$	2,899		$	3,208		$	14,993
Upholstery Fabrics		2,181			2,527			2,722			3,799			11,229
Home Accessories		-			23			34			(311	)		(254	)
Unallocated Corporate		(1,805	)		(1,259	)		(1,913	)		(1,628	)		(6,605	)
Subtotal		6,464			4,089			3,742			5,068			19,363
Other non-recurring charges		-			-			(249	)		(429	)		(678	)
Restructuring (expense) credit and related charges		-			(2,014	)		791			(340	)		(1,563	)
Operating income	$	6,464		$	2,075		$	4,284		$	4,299		$	17,122
	Quarter Ended (1)												(1)
													Trailing 12
													Months
	4/30/2017			7/30/2017			10/29/2017			1/28/2018			1/28/2018
Mattress Fabrics	$	7,153		$	6,368		$	6,562		$	6,837		$	26,920
Upholstery Fabrics		2,510			2,895			2,374			3,510			11,289
Unallocated Corporate		(2,493	)		(2,299	)		(2,547	)		(2,703	)		(10,042	)
Operating income	$	7,170		$	6,964		$	6,389		$	7,644		$	28,167
% Over (Under)		-9.8	%		-70.2	%		-32.9	%		-43.8	%		-39.2	%

Notes
(1)	We did not have any restructuring activities or non-recurring charges associated for the three-month periods ending April 30, 2017, July 30, 2017, October 29, 2017, and January 28, 2018.