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 NOVEMBER 3, 2019 AND OCTOBER 28, 2018

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

	THREE MONTHS ENDED
	(4)            Amounts            (4)										Percent of Sales
	November 3, 2019			October 28, 2018				% Over (Under)			November 3, 2019			October 28, 2018
Net sales	$	72,619			77,006				(5.7	)%		100.0	%		100.0	%
Cost of sales		58,516			63,680		(1)(3)		(8.1	)%		80.6	%		82.7	%
Gross profit		14,103			13,326				5.8	%		19.4	%		17.3	%
Selling, general and
administrative expenses		10,120			10,103		(3)		0.2	%		13.9	%		13.1	%
Restructuring credit		-			(1,061	)	(2)		(100.0	)%		0.0	%		(1.4	)%
Income from operations		3,983			4,284				(7.0	)%		5.5	%		5.6	%
Interest expense		30			18				66.7	%		0.0	%		0.0	%
Interest income		(240	)		(151	)			58.9	%		(0.3	)%		(0.2	)%
Other expense		87			142				(38.7	)%		0.1	%		0.2	%
Income before income taxes		4,106			4,275				(4.0	)%		5.7	%		5.6	%
Income tax expense *		1,898			1,276				48.7	%		46.2	%		29.8	%
Loss from investment in unconsolidated joint venture		16			55				(70.9	)%		0.0	%		0.1	%
Net income		2,192			2,944				(25.5	)%		3.0	%		3.8	%
Net loss (income) attributable to non-controlling interest		108			(11	)			N.M.			0.1	%		(0.0	)%
Net income attributable to Culp Inc. common shareholders	$	2,300			2,933				(21.6	)%		3.2	%		3.8	%
Net income attributable to Culp Inc. common shareholders per share - basic	$	0.19		$	0.23				(17.4	)%
Net income attributable to Culp Inc. common shareholders per share - diluted	$	0.19		$	0.23				(17.4	)%
Average shares outstanding-basic		12,408			12,515				(0.9	)%
Average shares outstanding-diluted		12,408			12,551				(1.1	)%

* 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 October 28, 2018, includes a $270 restructuring related charge for operating costs associated with our closed upholstery fabrics 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 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 total $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 Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits.

Page 2 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

	SIX MONTHS ENDED
	(4)                  Amounts                 (4)											Percent of Sales
	November 3, 2019				October 28, 2018				% Over (Under)			November 3, 2019			October 28, 2018
Net sales	$	147,466				148,479				(0.7	)%		100.0	%		100.0	%
Cost of sales		119,998				124,594		(1)(3)		(3.7	)%		81.4	%		83.9	%
Gross profit		27,468				23,885				15.0	%		18.6	%		16.1	%
Selling, general and
administrative expenses		20,831				18,136		(3)		14.9	%		14.1	%		12.2	%
Restructuring credit		(35	)	(2)		(610	)	(2)		(94.3	)%		(0.0	)%		(0.4	)%
Income from operations		6,672				6,359				4.9	%		4.5	%		4.3	%
Interest expense		39				38				2.6	%		0.0	%		0.0	%
Interest income		(490	)			(301	)			62.8	%		(0.3	)%		(0.2	)%
Other expense		174				399				(56.4	)%		0.1	%		0.3	%
Income before income taxes		6,949				6,223				11.7	%		4.7	%		4.2	%
Income tax expense *		3,580				2,182				64.1	%		51.5	%		35.1	%
Loss from investment in unconsolidated joint venture		3				132				(97.7	)%		0.0	%		0.1	%
Net income		3,366				3,909				(13.9	)%		2.3	%		2.6	%
Net loss (income) attributable to non-controlling interest		272				(19	)		N.M.				0.2	%		(0.0	)%
Net income attributable to Culp Inc. common shareholders	$	3,638				3,890				(6.5	)%		2.5	%		2.6	%
Net income attributable to Culp Inc. common shareholders per share - basic	$	0.29			$	0.31				(6.5	)%
Net income attributable to Culp Inc. common shareholders per share - diluted	$	0.29			$	0.31				(6.5	)%
Average shares outstanding-basic		12,403				12,512				(0.9	)%
Average shares outstanding-diluted		12,413				12,612				(1.6	)%

 * 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 other operating costs associated with our closed upholstery fabrics facility located in Anderson, SC.
(2)	The $35 restructuring credit for the six-month period ending November 3, 2019, represents employee termination benefits associated with the closure of our Anderson, SC facility. The $610 restructuring credit for the six-month period ending October 28, 2018, 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 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 total $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 Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits.

Page 3 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED BALANCE SHEETS

NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019

Unaudited

(Amounts in Thousands)

	Amounts
	(Condensed)				Increase
	November 3,		October 28,		(Decrease)						* April 28,
	2019		2018		Dollars			Percent			2019
Current assets
Cash and cash equivalents	$	47,183		14,768		32,415			219.5	%		40,008
Short-term investments - Held-To-Maturity		-		26,719		(26,719	)		(100.0	)%		5,001
Accounts receivable		24,522		24,362		160			0.7	%		23,751
Inventories		55,228		50,601		4,627			9.1	%		50,860
Current income taxes receivable		776		-		776			100.0	%		776
Assets held for sale		150		237		(87	)		(36.7	)%		-
Other current assets		2,710		2,461		249			10.1	%		2,849
Total current assets		130,569		119,148		11,421			9.6	%		123,245
Property, plant & equipment, net		46,973		51,325		(4,352	)		(8.5	)%		48,389
Goodwill		27,222		27,222		-			0.0	%		27,222
Intangible assets		10,260		10,636		(376	)		(3.5	)%		10,448
Long-term investments - Rabbi Trust		7,575		7,851		(276	)		(3.5	)%		7,081
Right of use asset		5,879		-		5,879			100.0	%		-
Noncurrent income taxes receivable		733		-		733			100.0	%		733
Deferred income taxes		511		3,614		(3,103	)		(85.9	)%		457
Investment in unconsolidated joint venture		1,504		1,470		34			2.3	%		1,508
Other assets		496		945		(449	)		(47.5	)%		643
Total assets	$	231,722		222,211		9,511			4.3	%		219,726
Current liabilities
Accounts payable - trade	$	27,395		24,007		3,388			14.1	%		24,377
Accounts payable - capital expenditures		402		114		288			252.6	%		78
Operating lease liability - current		2,282		-		2,282			100.0	%		-
Deferred revenue		375		649		(274	)		(42.2	)%		399
Accrued expenses		8,915		8,670		245			2.8	%		9,192
Accrued restructuring costs		35		260		(225	)		(86.5	)%		124
Deferred compensation		-		714		(714	)		(100.0	)%		-
Income taxes payable - current		1,539		2,044		(505	)		(24.7	)%		1,022
Total current liabilities		40,943		36,458		4,485			12.3	%		35,192
Accrued expenses - long-term		333		-		333			100.0	%		333
Subordinated loan payable		925		-		925			100.0	%		675
Operating lease liability - long-term		3,439		-		3,439			100.0	%		-
Contingent consideration - Earn-Out Obligation		6,006		5,706		300			5.3	%		5,856
Income taxes payable - long-term		3,442		3,233		209			6.5	%		3,249
Deferred income taxes		3,283		2,225		1,058			47.6	%		3,176
Deferred compensation		7,429		7,120		309			4.3	%		6,998
Total liabilities		65,800		54,742		11,058			20.2	%		55,479
Shareholders' equity
Shareholders' equity attributable to Culp Inc.		161,520		162,918		(1,398	)		(0.9	)%		159,933
Non-controlling interest		4,402		4,551		(149	)		(3.3	)%		4,314
		165,922		167,469		(1,547	)		(0.9	)%		164,247
Total liabilities and
shareholders' equity	$	231,722		222,211		9,511			4.3	%		219,726
Shares outstanding		12,412		12,492		(80	)		(0.6	)%		12,391

*  Derived from audited financial statements.

Page 4 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

SUMMARY OF CASH AND INVESTMENTS

NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019

Unaudited

(Amounts in Thousands)

	Amounts
	November 3,		October 28,		April 28,
	2019		2018		2019*
Cash and cash equivalents	$	47,183	$	14,768	$	40,008
Short-term investments - Held-To-Maturity		-		26,719		5,001
Total Cash and Investments	$	47,183	$	41,487	$	45,009

* Derived from audited financial statements.

Page 5 of 13

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

Unaudited

(Amounts in Thousands)

	SIX MONTHS ENDED
	Amounts
	November 3,			October 28,
	2019			2018
Cash flows from operating activities:
Net income	$	3,366			3,909
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		3,893			4,056
Amortization		353			391
Stock-based compensation		467			(106	)
Deferred income taxes		53			(2,081	)
Realized loss on sale of short-term investments (Available for Sale)		-			94
Gain on sale of equipment		(93	)		(1,079	)
Loss from investment in unconsolidated joint venture		3			132
Foreign currency exchange gain		(106	)		(102	)
Changes in assets and liabilities, net of effects of acquisition of businesses:
Accounts receivable		(835	)		1,639
Inventories		(4,797	)		3,767
Other current assets		(31	)		379
Other assets		133			(10	)
Accounts payable		3,564			(3,264	)
Deferred revenue		(24	)		(160	)
Accrued expenses and deferred compensation		1,620			(1,472	)
Accrued restructuring costs		(89	)		260
Income taxes		770			247
Net cash provided by operating activities		8,247			6,600
Cash flows from investing activities:
Net cash paid for acquisition of businesses		-			(12,096	)
Capital expenditures		(2,410	)		(2,096	)
Proceeds from the sale of property, plant, and equipment		363			1,280
Investment in unconsolidated joint venture		-			(100	)
Proceeds from the sale of short-term investments (Held to Maturity)		5,000			4,000
Proceeds from the sale of short-term investments (Available for Sale)		-			2,458
Purchase of short-term investments (Available for Sale)		-			(10	)
Purchase of long-term investments (Rabbi Trust)		(479	)		(526	)
Net cash provided by (used in) investing activities		2,474			(7,090	)
Cash flows from financing activities:
Proceeds from line of credit		-			12,000
Payments on line of credit		-			(12,000	)
Payments on vendor-financed capital expenditures		-			(1,412	)
Proceeds from subordinated loan payable		250			-
Cash paid for acquisition of businesses		(1,532	)		-
Dividends paid		(2,482	)		(2,253	)
Common stock surrendered for withholding taxes payable		(51	)		(1,292	)
Capital contribution from non-controlling interest		360			-
Common stock repurchased		-			(844	)
Net cash used in financing activities		(3,455	)		(5,801	)
Effect of exchange rate changes on cash and cash equivalents		(91	)		(169	)
Increase (decrease) in cash and cash equivalents		7,175			(6,460	)
Cash and cash equivalents at beginning of period		40,008			21,228
Cash and cash equivalents at end of period	$	47,183			14,768
Free Cash Flow (1)	$	5,630			3,577

(1)  Free Cash Flow reconciliation is as follows:
	FY 2020			FY 2019
A) Net cash provided by operating activities	$	8,247			6,600
B) Minus:  Capital Expenditures		(2,410	)		(2,096	)
C) Plus:     Proceeds from the sale of property, plant, and equipment		363			1,280
D) Minus:  Investment in unconsolidated joint venture		-			(100	)
E) Minus:  Payments on vendor-financed capital expenditures		-			(1,412	)
F) Minus:   Purchase of long-term investments (Rabbi Trust)		(479	)		(526	)
G) Effects of exchange rate changes on cash and cash equivalents		(91	)		(169	)
Free Cash Flow	$	5,630			3,577

Page 6 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

           FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

        (Unaudited)

           (Amounts in thousands)

	THREE MONTHS ENDED
	Amounts										Percent of Total Sales
	November 3,			October 28,				% Over			November 3,			October 28,
Net Sales by Segment	2019			2018				(Under)			2019			2018
Mattress Fabrics	$	35,459			37,205				(4.7	)%		48.8	%		48.3	%
Upholstery Fabrics		33,884			35,017				(3.2	)%		46.7	%		45.5	%
Home Accessories		3,276			4,784				(31.5	)%		4.5	%		6.2	%
Net Sales	$	72,619			77,006				(5.7	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics	$	6,247			5,781				8.1	%		17.6	%		15.5	%
Upholstery Fabrics		7,279			6,257				16.3	%		21.5	%		17.9	%
Home Accessories		577			1,717				(66.4	)%		17.6	%		35.9	%
Subtotal		14,103			13,755				2.5	%		19.4	%		17.9	%
Other non-recurring charges		-			(159	)	(1)		(100.0	)%		0.0	%		(0.2	)%
Restructuring related charges		-			(270	)	(1)		(100.0	)%		0.0	%		(0.4	)%
Gross Profit	$	14,103			13,326				5.8	%		19.4	%		17.3	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics	$	2,953			2,872				2.8	%		8.3	%		7.7	%
Upholstery Fabrics		3,806			3,535				7.7	%		11.2	%		10.1	%
Home Accessories		928			1,694				(45.2	)%		28.3	%		35.4	%
Unallocated Corporate expenses		2,433			1,913				27.2	%		3.4	%		2.5	%
Subtotal		10,120			10,014				1.1	%		13.9	%		13.0	%
Other non-recurring charges		-			89				(100.0	)%		0.0	%		0.1	%
Selling, General and Administrative Expenses	$	10,120			10,103				0.2	%		13.9	%		13.1	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics	$	3,293			2,909				13.2	%		9.3	%		7.8	%
Upholstery Fabrics		3,473			2,722				27.6	%		10.2	%		7.8	%
Home Accessories		(350	)		23			N.M.				(10.7	)%		0.5	%
Unallocated corporate expenses		(2,433	)		(1,913	)			27.2	%		(3.4	)%		(2.5	)%
Subtotal		3,983			3,741				6.5	%		5.5	%		4.9	%
Other non-recurring charges		-			(248	)	(1)		(100.0	)%		0.0	%		(0.3	)%
Restructuring credit and related charges		-			791		(1)		(100.0	)%		0.0	%		1.0	%
Operating income	$	3,983			4,284				(7.0	)%		5.5	%		5.6	%
Depreciation Expense by Segment
Mattress Fabrics	$	1,701			1,752				(2.9	)%
Upholstery Fabrics		192			197				(2.5	)%
Home Accessories		95			92				3.3	%
Depreciation Expense	$	1,988			2,041				(2.6	)%

Notes
(1)	See page 8 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits.

                                                                 

Page 7 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

           FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

        (Unaudited)

           (Amounts in thousands)

	SIX MONTHS ENDED
	Amounts										Percent of Total Sales
	November 3,			October 28,				% Over			November 3,			October 28,
Net Sales by Segment	2019			2018				(Under)			2019			2018
Mattress Fabrics	$	74,145			71,603				3.6	%		50.3	%		48.2	%
Upholstery Fabrics		65,744			69,507				(5.4	)%		44.6	%		46.8	%
Home Accessories		7,577			7,369				2.8	%		5.1	%		5.0	%
Net Sales	$	147,466			148,479				(0.7	)%		100.0	%		100.0	%
Gross Profit by Segment											Gross Profit Margin
Mattress Fabrics	$	11,940			11,084				7.7	%		16.1	%		15.5	%
Upholstery Fabrics		14,000			12,410				12.8	%		21.3	%		17.9	%
Home Accessories		1,528			2,385				(35.9	)%		20.2	%		32.4	%
Subtotal		27,468			25,879				6.1	%		18.6	%		17.4	%
Other non-recurring charges		-			(159	)	(1)		(100.0	)%		0.0	%		(0.1	)%
Restructuring related charges		-			(1,835	)	(1)		(100.0	)%		0.0	%		(1.2	)%
Gross Profit	$	27,468			23,885				15.0	%		18.6	%		16.1	%
Selling, General and Administrative Expenses by Segment											Percent of Sales
Mattress Fabrics	$	6,024			5,384				11.9	%		8.1	%		7.5	%
Upholstery Fabrics		7,652			7,161				6.9	%		11.6	%		10.3	%
Home Accessories		2,416			2,330				3.7	%		31.9	%		31.6	%
Unallocated Corporate expenses		4,739			3,172				49.4	%		3.2	%		2.1	%
Subtotal		20,831			18,047				15.4	%		14.1	%		12.2	%
Other non-recurring charges		-			89		(1)		(100.0	)%		0.0	%		0.1	%
Selling, General and Administrative Expenses	$	20,831			18,136				14.9	%		14.1	%		12.2	%
Operating Income (loss) by Segment											Operating Income (Loss) Margin
Mattress Fabrics	$	5,916			5,699				3.8	%		8.0	%		8.0	%
Upholstery Fabrics		6,348			5,249				20.9	%		9.7	%		7.6	%
Home Accessories		(888	)		56			N.M.				(11.7	)%		0.8	%
Unallocated corporate expenses		(4,739	)		(3,172	)			49.4	%		(3.2	)%		(2.1	)%
Subtotal	$	6,637			7,832				(15.3	)%		4.5	%		5.3	%
Other non-recurring charges		-			(248	)	(1)		(100.0	)%		0.0	%		(0.2	)%
Restructuring credit (expense) and related charges		35			(1,225	)	(1)		(102.9	)%		0.0	%		(0.8	)%
Operating income		6,672			6,359				4.9	%		4.5	%		4.3	%
Return on Capital (2)
Mattress Fabrics		16.2	%		23.9	%
Upholstery Fabrics		61.2	%		56.5	%
Home Accessories	N.M.			N.M.
Unallocated Corporate	N.M.			N.M.
Consolidated		10.7	%		18.4	%
Capital Employed (2) (3)
Mattress Fabrics	$	70,394			76,704				(8.2	)%
Upholstery Fabrics		19,411			17,796				9.1	%
Home Accessories		4,548			3,243				40.2	%
Unallocated Corporate		31,409			32,110				(2.2	)%
Consolidated	$	125,762			129,853				(3.2	)%
Depreciation Expense by Segment
Mattress Fabrics	$	3,321			3,514				(5.5	)%
Upholstery Fabrics		382			412				(7.3	)%
Home Accessories		190			130				46.2	%
Depreciation Expense	$	3,893			4,056				(4.0	)%

Notes
(1)	See page 9 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits.
(2)	See pages 11 and 12 of this financial information release for calculations.
(3)	The capital employed balances are as of November 3, 2019 and October 28, 2018.

Page 8 of 13

CULP, INC.

RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS

FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

	THREE MONTHS ENDED (UNAUDITED)
	As Reported								November 3, 2019						As Reported										October 28, 2018
	November 3,			% of					Adjusted			% of			October 28,			% of							Adjusted			% of			% Over
	2019			Sales			Adjustments		Results			Sales			2018			Sales				Adjustments			Results			Sales			(Under)
Net sales	$	72,619			100.0	%		-		72,619			100.0	%		77,006			100.0	%			-			77,006			100.0	%		-5.7	%
Cost of sales		58,516			80.6	%		-		58,516			80.6	%		63,680			82.7	%	(1)		(429	)		63,251			82.1	%		-7.5	%
Gross Profit		14,103			19.4	%		-		14,103			19.4	%		13,326			17.3	%			(429	)		13,755			17.9	%		2.5	%
Selling, general and
administrative expenses		10,120			13.9	%		-		10,120			13.9	%		10,103			13.1	%	(2)		(89	)		10,014			13.0	%		1.1	%
Restructuring credit		-			0.0	%		-		-			0.0	%		(1,061	)		-1.4	%	(3)		1,061			-			0.0	%		0.0	%
Income from operations		3,983			5.5	%		-		3,983			5.5	%		4,284			5.6	%			543			3,741			4.9	%		6.5	%
Interest expense		30			0.0	%		-		30			0.0	%		18			0.0	%			-			18			0.0	%		66.7	%
Interest income		(240	)		-0.3	%		-		(240	)		-0.3	%		(151	)		-0.2	%			-			(151	)		-0.2	%		58.9	%
Other expense		87			0.1	%		-		87			0.1	%		142			0.2	%			-			142			0.2	%		-38.7	%
Income before income taxes		4,106			5.7	%		-		4,106			5.7	%		4,275			5.6	%			543			3,732			4.8	%		10.0	%

Notes
(1)	The $429 represents a restructuring related charge of $270 for other operating costs associated with our closed Anderson, SC upholstery fabrics 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 $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(3)	The $1.1 million restructuring credit represents a $1.1 million gain for 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 facility.

          Page 9 of 13

CULP, INC.

RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS

FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

										SIX MONTHS ENDED (UNAUDITED)
	As Reported									November 3, 2019						As Reported										October 28, 2018
	November 3,			% of						Adjusted			% of			October 28,			% of							Adjusted			% of			% Over
	2019			Sales				Adjustments		Results			Sales			2018			Sales				Adjustments			Results			Sales			(Under)
Net sales	$	147,466			100.0	%			-		147,466			100.0	%		148,479			100.0	%			-			148,479			100.0	%		-0.7	%
Cost of sales		119,998			81.4	%			-		119,998			81.4	%		124,594			83.9	%	(2)		(1,994	)		122,600			82.6	%		-2.1	%
Gross Profit		27,468			18.6	%			-		27,468			18.6	%		23,885			16.1	%			(1,994	)		25,879			17.4	%		6.1	%
Selling, general and
administrative expenses		20,831			14.1	%			-		20,831			14.1	%		18,136			12.2	%	(3)		(89	)		18,047			12.2	%		15.4	%
Restructuring credit		(35	)		0.0	%	(1)		35		-			0.0	%		(610	)		-0.4	%	(4)		610			-			0.0	%		0.0	%
Income from operations		6,672			4.5	%			35		6,637			4.5	%		6,359			4.3	%			(1,473	)		7,832			5.3	%		-15.3	%
Interest expense		39			0.0	%			-		39			0.0	%		38			0.0	%			-			38			0.0	%		2.6	%
Interest income		(490	)		-0.3	%			-		(490	)		-0.3	%		(301	)		-0.2	%			-			(301	)		-0.2	%		62.8	%
Other expense		174			0.1	%			-		174			0.1	%		399			0.3	%			-			399			0.3	%		-56.4	%
Income before income taxes		6,949			4.7	%			35		6,914			4.7	%		6,223			4.2	%			(1,473	)		7,696			5.2	%		-10.2	%

Notes
(1)	The $35 restructuring credit represents employee termination benefits associated with the closure of our Anderson, SC facility.
(2)	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 upholstery fabrics facility, as well as $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(3)	The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
(4)	The $610 restructuring credit represents a $1.1 million gain for 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 facility.

Page 10 of 13

CULP, INC.  FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

(UNAUDITED)

(AMOUNTS IN THOUSANDS)

	Quarter Ended
													Trailing 12
													Months
	1/27/2019			4/28/2019			8/4/2019			11/3/2019			11/3/2019
Net income (loss)	$	3,060		$	(1,511	)	$	1,174		$	2,192		$	4,915
Income taxes		1,225			3,017			1,682			1,898			7,822
Interest income, net		(251	)		(210	)		(241	)		(210	)		(912	)
Other non-recurring charges		429			500			-			-			929
Restructuring expense (credit) and related charges		340			-			(35	)		-			305
Depreciation and amortization expense		2,232			2,218			2,081			2,165			8,696
Stock based compensation		479			(243	)		154			313			703
Adjusted EBITDA	$	7,514		$	3,771		$	4,815		$	6,358		$	22,458
% Net Sales		9.7	%		5.3	%		6.4	%		8.8	%		7.6	%
	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 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
% Net Sales		12.0	%		10.5	%		7.6	%		8.1	%		9.7	%
% Over (Under)		-26.8	%		-54.1	%		-11.1	%		2.1	%		-25.5	%

Page 11 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019

(Amounts in Thousands)

(Unaudited)

	Operating Income
	Twelve Months			Average			Return on
	Ended			Capital			Avg. Capital
	November 3, 2019 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	11,822		$	73,160			16.2	%
Upholstery Fabrics		11,924			19,468			61.2	%
Home Accessories		(1,678	)		3,749		N.M.
(less: Unallocated Corporate)		(8,404	)		31,082		N.M.
Total	$	13,664		$	127,459			10.7	%
Average Capital Employed	As of the three Months Ended November 3, 2019															As of the three Months Ended August 4, 2019																As of the three Months Ended April 28, 2019
	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)	$	84,473			42,122			7,280			97,847			231,722		$	83,056			40,456			6,414			94,521				224,447		$	83,393			37,529			5,618			93,186			219,726
Total liabilities (5)		(14,079	)		(22,711	)		(2,732	)		(26,278	)		(65,800	)		(11,854	)		(20,352	)		(2,301	)		(25,604	)			(60,111	)		(10,996	)		(18,114	)		(2,215	)		(24,154	)		(55,479	)
Subtotal	$	70,394		$	19,411		$	4,548		$	71,569		$	165,922		$	71,202		$	20,104		$	4,113		$	68,917			$	164,336		$	72,397		$	19,415		$	3,403		$	69,032		$	164,247
Less:
Cash and cash equivalents		-			-			-			(47,183	)		(47,183	)		-			-			-			(44,236	)			(44,236	)		-			-			-			(40,008	)		(40,008	)
Short-term investments - Held-To-Maturity		-			-			-			-			-			-			-			-			-				-			-			-			-			(5,001	)		(5,001	)
Current income taxes receivable		-			-			-			(776	)		(776	)		-			-			-			(776	)			(776	)		-			-			-			(776	)		(776	)
Long-term investments - Rabbi Trust		-			-			-			(7,575	)		(7,575	)		-			-			-			(7,347	)			(7,347	)		-			-			-			(7,081	)		(7,081	)
Noncurrent income taxes receivable		-			-			-			(733	)		(733	)		-			-			-			(733	)			(733	)		-			-			-			(733	)		(733	)
Deferred income taxes - non-current		-			-			-			(511	)		(511	)		-			-			-			(486	)			(486	)		-			-			-			(457	)		(457	)
Deferred compensation - current		-			-			-			-			-			-			-			-			-				-			-			-			-			-			-
Income taxes payable - current		-			-			-			1,539			1,539			-			-			-			1,116				1,116			-			-			-			1,022			1,022
Income taxes payable - long-term		-			-			-			3,442			3,442			-			-			-			3,640				3,640			-			-			-			3,249			3,249
Deferred income taxes - non-current		-			-			-			3,283			3,283			-			-			-			2,543				2,543			-			-			-			3,176			3,176
Subordinated loan payable		-			-			-			925			925			-			-			-			925				925			-			-			-			675			675
Deferred compensation - non-current		-			-			-			7,429			7,429			-			-			-			7,232				7,232			-			-			-			6,998			6,998
Total Capital Employed	$	70,394		$	19,411		$	4,548		$	31,409		$	125,762		$	71,202		$	20,104		$	4,113		$	30,795			$	126,214		$	72,397		$	19,415		$	3,403		$	30,096		$	125,311
	As of the three Months Ended January 27, 2019															As of the three Months Ended October 28, 2018
	Mattress			Upholstery			Home			Unallocated						Mattress			Upholstery			Home			Unallocated
	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
Total liabilities (5)		(11,604	)		(22,483	)		(2,168	)		(21,421	)		(57,676	)		(9,790	)		(19,646	)		(1,960	)		(23,346	)			(54,742	)
Subtotal	$	75,103		$	20,614		$	3,439		$	68,076		$	167,232		$	76,704		$	17,796		$	3,243		$	69,726			$	167,469
Less:
Cash and cash equivalents		-			-			-			(26,418	)		(26,418	)		-			-			-			(14,768	)			(14,768	)
Short-term investments - Held-To-Maturity		-			-			-			(13,544	)		(13,544	)		-			-			-			(26,719	)			(26,719	)
Current income taxes receivable		-			-			-			-			-			-			-			-			-		��		-
Long-term investments - Rabbi Trust		-			-			-			(6,834	)		(6,834	)		-			-			-			(7,851	)			(7,851	)
Noncurrent income taxes receivable		-			-			-			-			-			-			-			-			-				-
Deferred income taxes - non-current		-			-			-			(3,224	)		(3,224	)		-			-			-			(3,614	)			(3,614	)
Deferred compensation - current		-			-			-			-			-			-			-			-			714				714
Income taxes payable - current		-			-			-			642			642			-			-			-			2,044				2,044
Income taxes payable - long-term		-			-			-			3,294			3,294			-			-			-			3,233				3,233
Deferred income taxes - non-current		-			-			-			2,225			2,225			-			-			-			2,225				2,225
Subordinated loan payable		-			-			-			-			-			-			-			-			-				-
Deferred compensation - non-current		-			-			-			6,782			6,782			-			-			-			7,120				7,120
Total Capital Employed	$	75,103		$	20,614		$	3,439		$	30,999		$	130,155		$	76,704		$	17,796		$	3,243		$	32,110			$	129,853
	Mattress			Upholstery			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total
Average Capital Employed (3)	$	73,160		$	19,468		$	3,749		$	31,082		$	127,459

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 November 3, 2019, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, subordinated loan payable, and current and noncurrent deferred compensation.
(3)	Average capital employed was computed using the five quarterly periods ending November 3, 2019, August 4, 2019, April 28, 2019, January 27, 2019, and October 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 our mattress fabrics, upholstery fabrics, and home accessories segments.
(5)	Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated corporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments.

Page 12 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	$	18,624		$	77,807			23.9	%																						��
Upholstery Fabrics		10,940			19,372			56.5	%
Home Accessories		56			1,199		N.M.
(less: Unallocated Corporate)		(7,680	)		21,083		N.M.
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			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)	$	86,494			37,442			5,203			93,072			222,211		$	93,601			37,386			4,463			90,922			226,372		$	95,061			39,812			-		83,111			217,984
Total liabilities (5)		(9,790	)		(19,646	)		(1,960	)		(23,346	)		(54,742	)		(12,883	)		(17,880	)		(1,710	)		(27,869	)		(60,342	)		(17,335	)		(18,679	)		-		(18,594	)		(54,608	)
Subtotal	$	76,704		$	17,796		$	3,243		$	69,726		$	167,469		$	80,718		$	19,506		$	2,753		$	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	$	76,704		$	17,796		$	3,243		$	32,110		$	129,853		$	80,718		$	19,506		$	2,753		$	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			Home			Unallocated						Mattress			Upholstery			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total			Fabrics			Fabrics			Accessories			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			Home			Unallocated
	Fabrics			Fabrics			Accessories			Corporate			Total
Average Capital Employed (3)	$	77,807		$	19,372		$	1,199		$	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 payable, line of credit, and current and noncurrent deferred compensation.
(3)	Average capital employed was computed using the five quarterly 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 therefore, have no affect on the capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments.
(5)	Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated corporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments.

Page 13 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF OPERATING INCOME (LOSS)

FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

(UNAUDITED)

(AMOUNTS IN THOUSANDS)

	Quarter Ended
													Trailing 12
													Months
	1/27/2019			4/28/2019			8/4/2019			11/3/2019			11/3/2019
Mattress Fabrics	$	3,208		$	2,698		$	2,623		$	3,293		$	11,822
Upholstery Fabrics		3,799			1,777			2,875			3,473			11,924
Home Accessories		(311	)		(479	)		(538	)		(350	)		(1,678	)
Unallocated Corporate		(1,628	)		(2,037	)		(2,306	)		(2,433	)		(8,404	)
Subtotal		5,068			1,959			2,654			3,983			13,664
Other non-recurring charges		(429	)		-			-			-			(429	)
Restructuring (expense) credit and related charges		(340	)		-			35			-			(305	)
Operating income	$	4,299		$	1,959		$	2,689		$	3,983		$	12,930
	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		$	2,790		$	2,909		$	18,624
Upholstery Fabrics		3,510			2,181			2,527			2,722			10,940
Home Accessories		-			-			33			23			56
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
% Over (Under)		-43.8	%		-69.7	%		29.6	%		-7.0	%		-36.8	%