Culp (CULP) 8-K Entry into a Material Definitive Agreement

Exhibit 99(b)

Page 1 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET LOSS

FOR THREE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

		THREE MONTHS ENDED
					Amount							Percent of Sales
		(6)				(6)
		May 3,				April 28,			% Over			May 3,			April 28,
		2020				2019			(Under)			2020			2019
Net sales		$	47,378				67,023			(29.3	)%		100.0	%		100.0	%
Cost of sales			(44,333	)			(55,828	)		(20.6	)%		93.6	%		83.3	%
Gross profit from continuing operations			3,045				11,195			(72.8	)%		6.4	%		16.7	%
Selling, general and administrative    expenses			(7,327	)			(8,758	)		(16.3	)%		15.5	%		13.1	%
Asset impairments	(1)		(13,712	)			—			100.0	%		28.9	%		0.0	%
(Loss) income from continuing operations			(17,994	)			2,437		N.M.				(38.0	)%		3.6	%
Interest expense			(84	)			—			100.0	%		0.2	%		0.0	%
Interest income			121				221			(45.2	)%		0.3	%		0.3	%
Other expense			(426	)	(5)		(670	)		(36.4	)%		0.9	%		1.0	%
(Loss) income before income taxes from    continuing operations			(18,383	)			1,988		N.M.				(38.8	)%		3.0	%
Income tax expense (2)			(704	)			(3,091	)		(77.2	)%		(3.8	)%		155.5	%
Loss from investment in    unconsolidated joint venture			(65	)			(5	)	N.M.				(0.1	)%		(0.0	)%
Net loss from continuing operations			(19,152	)			(1,108	)	N.M.				(40.4	)%		(1.7	)%
Loss before income taxes from discontinued    operations (4)			(8,698	)			(477	)	N.M.				(18.4	)%		(0.7	)%
Income tax benefit (3) (4)			25				74			(66.2	)%		0.3	%		15.5	%
Net loss from discontinued operations (4)			(8,673	)			(403	)	N.M.				(18.3	)%		(0.6	)%
Net loss			(27,825	)			(1,511	)	N.M.				(58.7	)%		(2.3	)%
Net loss from continuing operations per    share - basic		$	(1.56	)		$	(0.09	)	N.M.
Net loss from continuing operations per    share - diluted		$	(1.56	)		$	(0.09	)	N.M.
Net loss from discontinued operations per    share - basic		$	(0.71	)		$	(0.03	)	N.M.
Net loss from discontinued operations per    share - diluted		$	(0.71	)		$	(0.03	)	N.M.
Net loss per share - basic		$	(2.26	)		$	(0.12	)	N.M.
Net loss per share - diluted		$	(2.26	)		$	(0.12	)	N.M.
Average shares outstanding-basic			12,297				12,384			(0.7	)%
Average shares outstanding-diluted			12,297				12,384			(0.7	)%

Notes

(1) During the three-month period ending May 3, 2020, we incurred asset impairment charges totaling $13.7 million that pertained to goodwill and certain intangible assets. Of this $13.7 million, $11.5 million and $2.2 million were associated with the mattress fabrics segment and upholstery fabrics segment, respectively.

(2) Percent of sales column for income tax expense is calculated as a % of loss (income) before income taxes from continuing operations.

(3) Percent of sales column for income tax expense is calculated as a % of loss before income taxes from discontinued operations.

(4) Effective March 31, 2020, we sold our entire ownership of eLuxury, LLC to its noncontrolling interest holder, resulting in the elimination of the home accessories segment at such time.

(5) Other expense for the three-month period ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution is being paid over a period of three years.

(6) See page 10 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods ending May 3, 2020 and April 28, 2019, which exclude certain charges and credits.

Page 2 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME

FOR TWELVE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

(UNAUDITED)

(Amounts in Thousands, Except for Per Share Data)

		TWELVE MONTHS ENDED
					Amounts							Percent of Sales
		(12)				(12)
		May 3,				April 28,			% Over			May 3,			April 28,
		2020				2019			(Under)			2020			2019
Net sales		$	256,166				281,325			(8.9	)%		100.0	%		100.0	%
Cost of sales			(215,668	)	(6) (7)		(235,556	)		(8.4	)%		84.2	%		83.7	%
Gross profit from continuing operations			40,498				45,769			(11.5	)%		15.8	%		16.3	%
Selling, general and administrative    expenses			(34,424	)	(7) (8)		(33,243	)		3.6	%		13.4	%		11.8	%
Asset impairments	(1)		(13,712	)			—			100.0	%		5.4	%		0.0	%
Restructuring credit	(2)		70		(9)		825			(91.5	)%		0.0	%		0.3	%
(Loss) income from continuing operations			(7,568	)			13,351		N.M.				(3.0	)%		4.7	%
Interest expense			(106	)			(35	)		202.9	%		0.0	%		0.0	%
Interest income			897				789			13.7	%		0.4	%		0.3	%
Other expense			(902	)	(10)		(1,383	)		(34.8	)%		0.4	%		0.5	%
(Loss) income before income taxes from    continuing operations			(7,679	)			12,722		N.M.				(3.0	)%		4.5	%
Income tax expense  (3)			(3,354	)	(11)		(6,537	)		(48.7	)%		(43.7	)%		51.4	%
Loss from investment in    unconsolidated joint venture			(125	)			(114	)		9.6	%		(0.0	)%		(0.0	)%
Net (loss) income from continuing operations			(11,158	)			6,071		N.M.				(4.4	)%		2.2	%
Loss before income taxes from discontinued    operations (5)			(17,577	)			(726	)	N.M.				(6.9	)%		(0.3	)%
Income tax benefit (4) (5)			68				113			(39.8	)%		0.4	%		15.6	%
Net loss from discontinued operations (5)			(17,509	)			(613	)	N.M.				(6.8	)%		(0.2	)%
Net (loss) income			(28,667	)			5,458		N.M.				(11.2	)%		1.9	%
Net (loss) income from continuing operations per    share - basic		$	(0.90	)		$	0.49		N.M.
Net (loss) income from continuing operations per    share - diluted		$	(0.90	)		$	0.48		N.M.
Net loss from discontinued operations per    share - basic		$	(1.41	)		$	(0.05	)	N.M.
Net loss from discontinued operations per    share - diluted		$	(1.41	)		$	(0.05	)	N.M.
Net (loss) income per share - basic		$	(2.32	)		$	0.44		N.M.
Net (loss) income per share - diluted		$	(2.32	)		$	0.43		N.M.
Average shares outstanding-basic			12,378				12,462			(0.7	)%
Average shares outstanding-diluted			12,378				12,548			(1.4	)%

Notes

(1) During the year ending May 3, 2020, we incurred asset impairment charges totaling $13.7 million that pertained to goodwill and certain intangible assets. Of this $13.7 million, $11.5 million and $2.2 million were associated with the mattress fabrics segment and upholstery fabrics segment, respectively.

(2) The $70 restructuring credit pertains to employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.

(3) Percent of sales column for income tax expense is calculated as a % of (loss) income before income taxes from continuing operations.

(4) Percent of sales column for income tax expense is calculated as a % of loss before income taxes from discontinued operations.

(5) Effective March 31, 2020, we sold our entire ownership of eLuxury, LLC to its noncontrolling interest holder, resulting in the elimination of the home accessories segment at such time.

Page 3 of 12

(6) Cost of sales for the year ending April 28, 2019, includes restructuring and 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.

(7) During the year ending April 28, 2019, our mattress fabrics segment incurred non-recurring charges totaling $249 that were associated with employee termination benefits and other operational reorganization costs. Of this $249 total non-recurring charge, $159 and $90 were recorded in cost of sales and selling, general, administrative expenses, respectively.

(8) Selling, general, and administrative expenses for the year ending April 28, 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 facility.

(9) 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 facility, partially offset by a charge of $661 for employee termination benefits.

(10) Other expense for the year ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution is being paid over a period of three years.

(11) Income taxes for the year ending April 28, 2019, included provisional adjustments related to the Tax Cuts and Jobs Act enacted on December 22, 2017. We recorded an income tax benefit of $550 for the year-end April 28, 2019.

(12) See page 11 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the twelve-month periods ending May 3, 2020 and April 28, 2019, which exclude certain charges and credits

Page 4 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED BALANCE SHEETS

MAY 3, 2020 AND APRIL 28, 2019

Unaudited

(Amounts in Thousands)

	Amounts					��
	(Condensed)
	May 3,		* April 28,		Increase (Decrease)
	2020		2019		Dollars			Percent
Current assets
Cash and cash equivalents	$	69,790		40,008		29,782			74.4	%
Short-term investments - Held-To-Maturity		4,271		5,001		(730	)		(14.6	)%
Short-term investments - Available for Sale		923		—		923			100.0	%
Accounts receivable		25,093		23,373		1,720			7.4	%
Inventories		47,907		47,564		343			0.7	%
Current income taxes receivable		1,585		776		809			104.3	%
Current assets held for sale - Discontinued operation		—		3,707		(3,707	)		(100.0	)%
Other current assets		2,116		2,816		(700	)		(24.9	)%
Total current assets		151,685		123,245		28,440			23.1	%
Property, plant & equipment, net		43,147		46,479		(3,332	)		(7.2	)%
Goodwill		—		13,569		(13,569	)		(100.0	)%
Intangible assets		3,380		3,899		(519	)		(13.3	)%
Long-term investments - Rabbi Trust		7,834		7,081		753			10.6	%
Long-term investments - Held-To-Maturity		2,076		—		2,076			100.0	%
Right of use asset		3,903		—		3,903			100.0	%
Noncurrent income taxes receivable		—		733		(733	)		(100.0	)%
Deferred income taxes		793		457		336			73.5	%
Investment in unconsolidated joint venture		1,602		1,508		94			6.2	%
Long-term note receivable affiliated with    discontinued operation		—		830		(830	)		(100.0	)%
Noncurrent assets held for sale - Discontinued operation		—		22,112		(22,112	)		(100.0	)%
Other assets		664		643		21			3.3	%
Total assets	$	215,084		220,556		(5,472	)		(2.5	)%
Current liabilities
Line of credit - China operations	$	1,015		-		1,015			100.0	%
Paycheck Protection Plan Loan		7,606		-		7,606			100.0	%
Accounts payable - trade		23,002		22,734		268			1.2	%
Accounts payable - capital expenditures		107		68		39			57.4	%
Operating lease liability - current		1,805		—		1,805			100.0	%
Deferred revenue		502		399		103			25.8	%
Accrued expenses		5,687		8,632		(2,945	)		(34.1	)%
Accrued restructuring costs		—		124		(124	)		(100.0	)%
Current liabilities held for sale - Discontinued operation		—		2,213		(2,213	)		(100.0	)%
Income taxes payable - current		395		1,022		(627	)		(61.4	)%
Total current liabilities		40,119		35,192		4,927			14.0	%
Line of credit - U.S. operations		29,750		—		29,750			100.0	%
Accrued expenses - long-term		167		333		(166	)		(49.8	)%
Operating lease liability - long-term		2,016		—		2,016			100.0	%
Contingent consideration affiliated with    discontinued operation		—		5,856		(5,856	)		(100.0	)%
Income taxes payable - long-term		3,796		3,249		547			16.8	%
Deferred income taxes		1,818		3,176		(1,358	)		(42.8	)%
Deferred compensation		7,720		6,998		722			10.3	%
Noncurrent liabilities held for sale - Discontinued operation		—		1,505		(1,505	)		(100.0	)%
Total liabilities		85,386		56,309		29,077			51.6	%
Shareholders' equity
Shareholders' equity attributable to Culp Inc.		129,698		159,933		(30,235	)		(18.9	)%
Non-controlling interest - Discontinued Operation		-		4,314		(4,314	)		(100.0	)%
		129,698		164,247		(34,549	)		(21.0	)%
Total liabilities and    shareholders' equity	$	215,084		220,556		(5,472	)		(2.5	)%
Shares outstanding		12,285		12,391		(106	)		(0.9	)%

* Derived from audited financial statements.

Page 5 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

SUMMARY OF CASH, INVESTMENTS, AND DEBT

MAY 3, 2020 AND APRIL 28, 2019

Unaudited

(Amounts in Thousands)

	Amounts
	May 3,		April 28,
	2020		2019*
Cash and Investments
Cash and cash equivalents	$	69,790	$	40,008
Short-term investments - Available for Sale		923		—
Short-term investments - Held-To-Maturity		4,271		5,001
Long-term investments - Held-To-Maturity		2,076		—
Total Cash and Investments	$	77,060	$	45,009
Debt
Line of credit - China operations	$	1,015	$	—
Paycheck Protection Plan Loan		7,606		—
Line of credit - U.S. operations		29,750		—
Total debt	$	38,371	$	—
Net Cash Position	$	38,689	$	45,009

* Derived from audited financial statements.

Page 6 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE TWELVE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

Unaudited

(Amounts in Thousands)

	TWELVE MONTHS ENDED
	Amounts
	May 3,			April 28,
	2020			2019
Cash flows from operating activities:
Net (loss) income	$	(28,667	)	$	5,458
Adjustments to reconcile net (loss) income to net cash provided by    operating activities:
Depreciation		7,827			8,117
Amortization		647			780
Asset impairments		33,914			—
Reversal of contingent consideration associated with discontinued operation		(6,081	)		—
Loss on disposal of discontinued operation		1,606			—
Stock-based compensation		614			130
Deferred income taxes		(1,694	)		2,027
Realized loss on sale of short-term investments (Available for Sale)		10			94
Gain on sale of property, plant, and equipment		(238	)		(1,452	)
Loss from investment in unconsolidated joint venture		125			114
Foreign currency exchange loss (gain)		109			(17	)
Changes in assets and liabilities, net of effects of acquisition and disposal of business:
Accounts receivable		(1,994	)		2,339
Inventories		(837	)		3,841
Other current assets		342			41
Other assets		(48	)		(65	)
Accounts payable		499			(3,427	)
Deferred revenue		103			(410	)
Accrued expenses and deferred compensation		(1,017	)		(1,492	)
Accrued restructuring costs		(124	)		124
Income taxes		(126	)		(2,329	)
Net cash provided by operating activities		4,970			13,873
Cash flows from investing activities:
Net cash paid for acquisition of businesses		—			(12,096	)
Capital expenditures		(4,585	)		(3,261	)
Proceeds from the sale of property, plant, and equipment		672			1,894
Proceeds from long-term note receivable associated with discontinued operation		1,523			—
Investment in unconsolidated joint venture		(220	)		(120	)
Proceeds from the sale of short-term investments (Held to Maturity)		6,100			25,680
Purchase of short-term and long-term investments (Held to Maturity)		(7,465	)		—
Proceeds from the sale of short-term investments (Available for Sale)		6,606			2,458
Purchase of short-term investments (Available for Sale)		(7,555	)		(10	)
Proceeds from the sale of long-term investments (Rabbi Trust)		—			1,233
Purchase of long-term investments (Rabbi Trust)		(788	)		(1,011	)
Proceeds from life insurance policy		—			394
Net cash (used in) provided by investing activities		(5,712	)		15,161
Cash flows from financing activities:
Proceeds from lines of credit		30,765			12,000
Payments associated with lines of credit		—			(12,000	)
Proceeds from Paycheck Protection Plan loan		7,606			—
Payments on vendor-financed capital expenditures		—			(1,412	)
Proceeds from subordinated loan payable associated with the    noncontrolling interest of discontinued operation		250			675
Cash paid for acquisition of businesses		(1,532	)		—
Dividends paid		(5,075	)		(4,732	)
Common stock repurchased		(1,680	)		(3,323	)
Common stock surrendered for withholding taxes payable		(51	)		(1,319	)
Capital contribution associated with the noncontrolling interest    of discontinued operation		360			—
Payments of debt issuance costs		—			(50	)
Net cash provided by (used in) financing activities		30,643			(10,161	)
Effect of exchange rate changes on cash and cash equivalents		(119	)		(93	)
Increase in cash and cash equivalents		29,782			18,780
Cash and cash equivalents at beginning of year		40,008			21,228
Cash and cash equivalents at end of year	$	69,790		$	40,008
Free Cash Flow (1)	$	1,453		$	11,497

Page 7 of 12

(1) Free Cash Flow reconciliation is as follows:
	FY 2020			FY 2019
A) Net cash provided by operating activities	$	4,970			13,873
B) Minus: Capital Expenditures		(4,585	)		(3,261	)
C) Plus: Proceeds from the sale of property, plant, and equipment		672			1,894
D) Plus: Proceeds from long-term note receivable associated with    discontinued operation		1,523			—
E) Minus: Investment in unconsolidated joint venture		(220	)		(120	)
F) Plus: 'Proceeds from life insurance policy		—			394
G) Minus: Payments on vendor-financed capital expenditures		—			(1,412	)
H) Plus: Proceeds from the sale of long-term investments (Rabbi Trust)		—			1,233
I) Minus: Purchase of long-term investments (Rabbi Trust)		(788	)		(1,011	)
J) Effects of exchange rate changes on cash and cash equivalents		(119	)		(93	)
Free Cash Flow	$	1,453			11,497

Page 8 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE THREE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

(Unaudited)

(Amounts in thousands)

		THREE MONTHS ENDED
		Amounts									Percent of Total Sales
		May 3,			April 28,			% Over			May 3,			April 28,
Net Sales by Segment		2020			2019			(Under)			2020			2019
Mattress Fabrics		$	23,354			37,981			(38.5	)%		49.3	%		56.7	%
Upholstery Fabrics			24,024			29,042			(17.3	)%		50.7	%		43.3	%
Net Sales		$	47,378			67,023			(29.3	)%		100.0	%		100.0	%
Gross Profit (Loss) from Continuing											Gross Profit
Operations by Segment											(Loss) Margin
Mattress Fabrics		$	(270	)		5,854			(104.6	)%		(1.2	)%		15.4	%
Upholstery Fabrics			3,315			5,341			(37.9	)%		13.8	%		18.4	%
Gross Profit From Continuing Operations		$	3,045			11,195			(72.8	)%		6.4	%		16.7	%
Selling, General and Administrative Expenses
by segment											Percent of Sales
Mattress Fabrics		$	2,494			3,155			(21.0	)%		10.7	%		8.3	%
Upholstery Fabrics			2,825			3,565			(20.8	)%		11.8	%		12.3	%
Unallocated Corporate expenses			2,008			2,038			(1.5	)%		4.2	%		3.0	%
Selling, General and Administrative Expenses		$	7,327			8,758			(16.3	)%		15.5	%		13.1	%
(Loss) Income from Continuing											Operating (Loss)
Operations by Segment											Income Margin
Mattress Fabrics		$	(2,764	)		2,698			(202.4	)%		(11.8	)%		7.1	%
Upholstery Fabrics			490			1,777			(72.4	)%		2.0	%		6.1	%
Unallocated corporate expenses			(2,008	)		(2,038	)		(1.5	)%		(4.2	)%		(3.0	)%
Subtotal			(4,282	)		2,437			(275.7	)%		(9.0	)%		3.6	%
Asset Impairments	(1)		(13,712	)		—			100.0	%		(28.9	)%		0.0	%
(Loss) Income From Continuing Operations		$	(17,994	)		2,437		N.M.				(38.0	)%		3.6	%
Depreciation Expense by Segment
Mattress Fabrics		$	1,695			1,742			(2.7	)%
Upholstery Fabrics			187			191			(2.1	)%
Discontinued Operation			64			97			(34.0	)%
Depreciation Expense		$	1,946			2,030			(4.1	)%

Notes

(1) See page 10 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods ending May 3, 2020 and April 28, 2019, for a description of this asset impairment.

Page 9 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE TWELVE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

(Unaudited)

(Amounts in thousands)

		TWELVE MONTHS ENDED
		Amounts										Percent of Total Sales
		May 3,				April 28,			% Over			May 3,			April 28,
Net Sales by Segment		2020				2019			(Under)			2020			2019
Mattress Fabrics		$	131,412				145,671			(9.8	)%		51.3	%		51.8	%
Upholstery Fabrics			124,754				135,654			(8.0	)%		48.7	%		48.2	%
Net Sales		$	256,166				281,325			(8.9	)%		100.0	%		100.0	%
Gross Profit from Continuing
Operations by Segment												Gross Profit Margin
Mattress Fabrics		$	16,278				22,904			(28.9	)%		12.4	%		15.7	%
Upholstery Fabrics			24,220				25,373			(4.5	)%		19.4	%		18.7	%
Subtotal			40,498				48,277			(16.1	)%		15.8	%		17.2	%
Other non-recurring charges			—		(1)		(159	)		(100.0	)%		0.0	%		(0.1	)%
Restructuring related charges			—		(1)		(2,349	)		(100.0	)%		0.0	%		(0.8	)%
Gross Profit		$	40,498				45,769			(11.5	)%		15.8	%		16.3	%
Selling, General and Administrative Expenses
by Segment												Percent of Sales
Mattress Fabrics		$	11,354				11,296			0.5	%		8.6	%		7.8	%
Upholstery Fabrics			14,353				14,551			(1.4	)%		11.5	%		10.7	%
Unallocated Corporate expenses			8,717				6,838			27.5	%		3.4	%		2.4	%
Subtotal			34,424				32,685			5.3	%		13.4	%		11.6	%
Other non-recurring charges			—		(1)		518			(100.0	)%		0.0	%		0.2	%
Restructuring related charges			—		(1)		40			(100.0	)%		0.0	%		0.0	%
Selling, General and Administrative Expenses		$	34,424				33,243			3.6	%		13.4	%		11.8	%
(Loss) Income from Continuing												Operating (Loss)
Operations by Segment												Income Margin
Mattress Fabrics		$	4,924				11,607			(57.6	)%		3.7	%		8.0	%
Upholstery Fabrics			9,867				10,823			(8.8	)%		7.9	%		8.0	%
Unallocated corporate expenses			(8,717	)			(6,838	)		27.5	%		(3.4	)%		(2.4	)%
Subtotal		$	6,074				15,592			(61.0	)%		2.4	%		5.5	%
Asset Impairments	(1)		(13,712	)			—			100.0	%		(5.4	)%		0.0	%
Other non-recurring charges			—		(1)		(678	)		(100.0	)%		0.0	%		(0.2	)%
Restructuring credit and related charges	(1)		70		(1)		(1,563	)	N.M.				0.0	%		(0.6	)%
(Loss) income from continuing operations			(7,568	)			13,351		N.M.				(3.0	)%		4.7	%
Depreciation Expense by Segment
Mattress Fabrics		$	6,712				7,008			(4.2	)%
Upholstery Fabrics			765				787			(2.8	)%
Discontinued Operation			350				322			8.7	%
Depreciation Expense		$	7,827				8,117			(3.6	)%

Notes

(1) See page 11 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the twelve-month periods enidng May 3, 2020 and April 28, 2019, for descriptions of these charges and credits.

Page 10 of 12

CULP, INC.

RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS

FOR THE THREE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

		THREE MONTHS ENDED (UNAUDITED)
		As						May 3,			As						April 28,
		Reported						2020			Reported						2019
		May 3,						Adjusted			April 28,						Adjusted
		2020				Adjustments		Results			2019				Adjustments		Results
Gross profit from continuing operations	$		3,045				—		3,045			11,195				—		11,195
Selling, general and administrative    expenses			(7,327	)			—		(7,327	)		(8,758	)			—		(8,758	)
Asset impairments			(13,712	)	(1)		13,712		—			—				—		—
(Loss) income from continuing operations			(17,994	)			13,712		(4,282	)		2,437				-		2,437
Other expense			(426	)			—		(426	)		(670	)	(2)		500		(170	)
(Loss) income before income taxes from    continuing operations	$		(18,383	)			13,712		(4,671	)		1,988				500		2,488

Notes

(1) During the three-month period ending May 3, 2020, we incurred asset impairment charges totaling $13.7 million that pertained to goodwill and certain intangible assets. Of this $13.7 million, $11.5 million and $2.2 million were associated with the mattress fabrics segment and upholstery fabrics segment, respectively.

(2) Other expense for the three-month period ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution is being paid over a period of three years.

Page 11 of 12

CULP, INC.

RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS

FOR THE TWELVE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

		TWELVE MONTHS ENDED (UNAUDITED)
		As							May 3,			As							April 28,
		Reported							2020			Reported							2019
		May 3,							Adjusted			April 28,							Adjusted
		2020				Adjustments			Results			2019				Adjustments			Results
Gross profit from continuing operations	$		40,498				—			40,498			45,769		(3)		2,508			48,277
Selling, general and administrative    expenses			(34,424	)			—			(34,424	)		(33,243	)	(4)		558			(32,685	)
Asset impairments			(13,712	)	(1)		13,712			—			—				—			—
Restructuring credit			70		(2)		(70	)		—			825		(5)		(825	)		—
(Loss) income from continuing operations			(7,568	)			13,642			6,074			13,351				2,241			15,592
Other expense			(902	)			—			(902	)		(1,383	)	(6)		500			(883	)
(Loss) income before income taxes from    continuing operations	$		(7,679	)			13,642			5,963			12,722				2,741			15,463

Notes

(1) During the year ending May 3, 2020, we incurred asset impairment charges totaling $13.7 million that pertained to goodwill and certain intangible assets. Of this $13.7 million, $11.5 million and $2.2 million were associated with the mattress fabrics segment and upholstery fabrics segment, respectively.

(2) The $70 restructuring credit pertains to employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.

(3) The $2.5 million represents a restructuring related charge of $1.6 million for inventory markdowns, $784 for other operating costs associated with closed Anderson, SC upholstery fabrics facility, and $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.

(4) 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 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.

(5) The $825 restructuring credit represents a $1.5 million gain on sale of property, plant, and equipment associated with our closed Anderson, SC upholstery fabrics facility, partially offset by a charge of $661 for employee termination benefits.

(6) Other expense for the year ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. The charitable contribution is being paid over a period of three years.

Page 12 of 12

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED MAY 3, 2020 AND APRIL 28, 2019

(UNAUDITED)

(AMOUNTS IN THOUSANDS)

	Amounts
	May 3,			April 28,
	2020			2019
Net (loss) income	$	(28,667	)	$	5,458
Loss before income taxes from discontinued operations		17,577			726
Income tax expense from continuing operations		3,354			6,537
Interest income, net		(791	)		(754	)
Asset impairments from continuing operations		13,712			—
Restructuring credit and related charges		(70	)		1,563
Other non-recurring charges		—			1,178
Depreciation expense - continuing operations		7,477			7,795
Amortization expense		647			780
Stock based compensation		614			130
Adjusted EBITDA	$	13,853		$	23,413
% Net Sales		5.4	%		8.3	%