a6841574ex99b.htm

Exhibit 99(b)

Page 1 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF NET INCOME

FOR THE THREE MONTHS ENDED JULY 31, 2011 AND AUGUST 1, 2010

(Amounts in Thousands, Except for Per Share Data)


	THREE MONTHS ENDED (UNAUDITED)

	Amounts									Percent of Sales
	July 31,			August 1,			% Over			July 31,			August 1,
	2011			2010			(Under)			2011			2010

Net sales	$	60,270			55,912			7.8	%		100.0	%		100.0	%
Cost of sales		51,392			46,203			11.2	%		85.3	%		82.6	%
Gross profit		8,878			9,709			(8.6	) %		14.7	%		17.4	%

Selling, general and
administrative expenses		5,757			5,212			10.5	%		9.6	%		9.3	%
Restructuring credit		-			(6	)		(100.0	) %		0.0	%		(0.0	) %
Income from operations		3,121			4,503			(30.7	) %		5.2	%		8.1	%

Interest expense		220			210			4.8	%		0.4	%		0.4	%
Interest income		(129	)		(38	)		239.5	%		(0.2	) %		(0.1	) %
Other expense		65			53			22.6	%		0.1	%		0.1	%
Income before income taxes		2,965			4,278			(30.7	) %		4.9	%		7.7	%

Income taxes*		1,145			531			115.6	%		38.6	%		12.4	%
Net income	$	1,820			3,747			(51.4	) %		3.0	%		6.7	%

Net income per share-basic	$	0.14			0.29			(51.7	) %
Net income per share-diluted	$	0.14			0.28			(50.0	) %

Average shares outstanding-basic		13,061			12,870			1.5	%
Average shares outstanding-diluted		13,205			13,199			0.0	%

*	Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 2 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED BALANCE SHEETS

JULY 31, 2011, AUGUST 1, 2010 AND MAY 1, 2011

Unaudited

(Amounts in Thousands)

	Amounts				Increase
	July 31,		August 1,		(Decrease)						* May 1,
	2011		2010		Dollars			Percent			2011

Current assets
Cash and cash equivalents	$	14,570		14,045		525			3.7	%		23,181
Short-term investments		10,443		4,009		6,434			160.5	%		7,699
Accounts receivable		18,905		18,342		563			3.1	%		20,209
Inventories		34,858		29,687		5,171			17.4	%		28,723
Deferred income taxes		1,237		138		1,099			796.4	%		293
Assets held for sale		75		123		(48	)		(39.0	) %		75
Income taxes receivable		79		568		(489	)		(86.1	) %		79
Other current assets		2,862		1,646		1,216			73.9	%		2,376
Total current assets		83,029		68,558		14,471			21.1	%		82,635

Property, plant & equipment, net		30,615		30,471		144			0.5	%		30,296
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		2,191		245		1,946			794.3	%		3,606
Other assets		2,010		2,361		(351	)		(14.9	) %		2,052

Total assets	$	129,307		113,097		16,210			14.3	%		130,051



Current liabilities
Current maturities of long-term debt	$	2,409		194		2,215			1,141.8	%		2,412
Accounts payable - trade		25,022		22,821		2,201			9.6	%		24,871
Accounts payable - capital expenditures		342		498		(156	)		(31.3	) %		140
Accrued expenses		5,862		5,964		(102	)		(1.7	) %		7,617
Accrued restructuring		41		316		(275	)		(87.0	) %		44
Deferred income taxes		82		-		82			100.0	%		82
Income taxes payable - current		345		182		163			89.6	%		646
Total current liabilities		34,103		29,975		4,128			13.8	%		35,812

Income taxes payable - long-term		4,178		3,877		301			7.8	%		4,167
Deferred income taxes		596		666		(70	)		(10.5	) %		596
Long-term debt , less current maturities		9,079		11,453		(2,374	)		(20.7	) %		9,135

Total liabilities		47,956		45,971		1,985			4.3	%		49,710

Shareholders' equity		81,351		67,126		14,225			21.2	%		80,341

Total liabilities and
shareholders' equity	$	129,307		113,097		16,210			14.3	%		130,051

Shares outstanding		13,181		13,084		97			0.7	%		13,264

*	Derived from audited financial statements.

Page 3 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 31, 2011 AND AUGUST 1, 2010

Unaudited

(Amounts in Thousands)

		THREE MONTHS ENDED

		Amounts
		July 31,			August 1,
		2011			2010

Cash flows from operating activities:
	Net income	$	1,820		$	3,747
	Adjustments to reconcile net income to net cash
	used in operating activities:
	Depreciation		1,187			1,014
	Amortization of other assets		56			130
	Stock-based compensation		77			96
	Excess tax benefit related to stock-based compensation		(31	)		(169	)
	Deferred income taxes		502			(55	)
	Foreign currency exchange (gains) losses		(39	)		87
	Changes in assets and liabilities:
	Accounts receivable		1,322			1,475
	Inventories		(6,080	)		(3,686	)
	Other current assets		(486	)		41
	Other assets		(14	)		(27	)
	Accounts payable-trade		54			541
	Accrued expenses		(1,750	)		(3,626	)
	Accrued restructuring		(3	)		(8	)
	Income taxes		(257	)		149
	Net cash used in operating activities		(3,642	)		(291	)

Cash flows from investing activities:
	Capital expenditures		(1,304	)		(3,151	)
	Purchase of short-term investments		(4,761	)		(986	)
	Proceeds from the sale of short-term investments		2,032			-
	Net cash used in investing activities		(4,033	)		(4,137	)

Cash flows from financing activities:
	Payments on long-term debt		(53	)		(32	)
	Proceeds from common stock issued		169			170
	Common stock shares repurchased		(1,102	)		-
	Excess tax benefit related to stock-based compensation		31			169
	Net cash (used in) provided by financing activities		(955	)		307

Effect of exchange rate changes on cash and cash equivalents			19			(129	)

Decrease in cash and cash equivalents			(8,611	)		(4,250	)

Cash and cash equivalents at beginning of period			23,181			18,295

Cash and cash equivalents at end of period		$	14,570		$	14,045


Free Cash Flow (1)		$	(4,896	)	$	(3,402	)


(1) Free Cash Flow reconciliation is as follows:
		FY 2012			FY 2011
A)	Net cash used in operating activities	$	(3,642	)	$	(291	)
B)	Minus: Capital Expenditures		(1,304	)		(3,151	)
C)	Add: Excess tax benefit related to stock-based compensation		31			169
D)	Effects of exchange rate changes on cash and cash equivalents		19			(129	)
		$	(4,896	)	$	(3,402	)

Page 4 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE

STATEMENTS OF OPERATIONS BY SEGMENT

FOR THE THREE MONTHS ENDED JULY 31, 2011 AND AUGUST 1, 2010

(Amounts in thousands)

	THREE MONTHS ENDED (UNAUDITED)

	Amounts										Percent of Sales
	July 31,			August 1,				% Over			July 31,			August 1,
Net Sales by Segment	2011			2010				(Under)			2011			2010

Mattress Fabrics	$	32,170			30,918				4.0	%		53.4	%		55.3	%
Upholstery Fabrics		28,100			24,994				12.4	%		46.6	%		44.7	%

Net Sales	$	60,270			55,912				7.8	%		100.0	%		100.0	%


Gross Profit by Segment											Gross Profit Margin

Mattress Fabrics	$	5,137			5,990				(14.2	) %		16.0	%		19.4	%
Upholstery Fabrics		3,741			3,719				0.6	%		13.3	%		14.9	%

Gross Profit	$	8,878			9,709				(8.6	) %		14.7	%		17.4	%


Sales, General and Administrative expenses by Segment											Percent of Sales

Mattress Fabrics	$	1,992			1,996				(0.2	) %		6.2	%		6.5	%
Upholstery Fabrics		2,766			2,101				31.7	%		9.8	%		8.4	%
Unallocated Corporate expenses		999			1,115				(10.4	) %		1.7	%		2.0	%
Selling, General and Administrative expenses		5,757			5,212				10.5	%		9.6	%		9.3	%


Operating income (loss) by Segment											Operating Income (Loss) Margin

Mattress Fabrics	$	3,146			3,994				(21.2	) %		9.8	%		12.9	%
Upholstery Fabrics		974			1,618				(39.8	) %		3.5	%		6.5	%
Unallocated corporate expenses		(999	)		(1,115	)			(10.4	) %		(1.7	) %		(2.0	) %
Subtotal		3,121			4,497				(30.6	) %		5.2	%		8.0	%

Restructuring and related credit		-			6		(1)		(100.0	) %		0.0	%		0.0	%

Operating income	$	3,121			4,503				(30.7	) %		5.2	%		8.1	%


Return on Capital (2)

Mattress Fabrics		23.2	%		32.2	%
Upholstery Fabrics		33.2	%		51.5	%
Unallocated Corporate		N/A			N/A
Consolidated		18.9	%		29.5	%

Capital Employed (2) (3)

Mattress Fabrics		55,994			52,017				7.6	%
Upholstery Fabrics		13,176			13,289				(0.9	) %
Unallocated Corporate		350			(813	)			N/A
Consolidated		69,520			64,493				7.8	%


Depreciation Expense by Segment

Mattress Fabrics	$	1,029			877				17.3	%
Upholstery Fabrics		158			137				15.3	%
Total depreciation expense		1,187			1,014				17.1	%

Notes:

(1)	The $6 restructuring credit primarily represents a credit for employee termination benefits.

(2)	See pages 5 and 6 of this financial information release for calculations.

(3)	The capital employed balances are as of July 31, 2011 and August 1, 2010.

Page 5 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE THREE MONTHS ENDED JULY 31, 2011

(Amounts in Thousands)

(Unaudited)

	Operating
	Income
	Three
	Months
	Ended			Average			Return on
	July 31, 2011 (1)			Capital Employed (3)			Avg. Capital Employed (2)

Mattress Fabrics	$	3,146		$	54,313			23.2	%
Upholstery Fabrics		974			11,747			33.2	%
(less: Unallocated Corporate)		(999	)		(39	)		N/A
Total	$	3,121		$	66,021			18.9	%




Average Capital Employed	As of the three Months Ended July 31, 2011												As of the three Months Ended May 1, 2011
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		71,325			26,683			31,299			129,307			66,637			25,929			37,485			130,051
Total liabilities		(15,331	)		(13,507	)		(19,118	)		(47,956	)		(14,005	)		(15,612	)		(20,093	)		(49,710	)

Subtotal	$	55,994		$	13,176		$	12,181		$	81,351		$	52,632		$	10,317		$	17,392		$	80,341
Less:
Cash and cash equivalents		-			-			(14,570	)		(14,570	)		-			-			(23,181	)		(23,181	)
Short-term investments		-			-			(10,443	)		(10,443	)		-			-			(7,699	)		(7,699	)
Deferred income taxes - current		-			-			(1,237	)		(1,237	)		-			-			(1,381	)		(1,381	)
Income taxes receivable		-			-			(79	)		(79	)		-			-			(79	)		(79	)
Deferred income taxes - non-current		-			-			(2,191	)		(2,191	)		-			-			(2,518	)		(2,518	)
Current maturities of long-term debt		-			-			2,409			2,409			-			-			2,412			2,412
Deferred income taxes - current								82			82									82			82
Income taxes payable - current		-			-			345			345			-			-			646			646
Income taxes payable - long-term		-			-			4,178			4,178			-			-			4,167			4,167
Deferred income taxes - non-current		-			-			596			596			-			-			596			596
Long-term debt, less current maturities		-			-			9,079			9,079			-			-			9,135			9,135
Total Capital Employed	$	55,994		$	13,176		$	350		$	69,520		$	52,632		$	10,317		$	(428	)	$	62,521



	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total

Average Capital Employed (3)	$	54,313		$	11,747		$	(39	)	$	66,021

Notes:

(1)	Operating income excludes restructuring and related charges--see reconciliation per page 4 of this financial information release.

(2)

Return on average capital employed represents operating income for the three month period ending July 31, 2011 times four quarters to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term debt, including current maturities, current and noncurrent deferred tax assets and liabilities, income taxes payable, and income taxes receivable.

(3)	Average capital employed was computed using the two periods ending July 31, 2011 and May 1, 2011.

Page 6 of 6

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 1, 2010
	(UNAUDITED)

	Operating Income Three
	Months
	Ended			Average			Return on
	August 1, 2010 (1)			Capital Employed (3)			Avg. Capital Employed (2)

Mattress Fabrics	$	3,994		$	49,610			32.2	%
Upholstery Fabrics		1,618			12,575			51.5	%
(less: Unallocated Corporate)		(1,115	)		(1,290	)		N/A
Total	$	4,497		$	60,895			29.5	%


Average Capital Employed	As of the three Months Ended August 1, 2010												As of the three Months Ended May 2, 2010
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total

Total assets		66,919			24,415			21,763			113,097			61,922			25,420			25,256			112,598
Total liabilities		(14,902	)		(11,126	)		(19,943	)		(45,971	)		(14,720	)		(13,559	)		(21,272	)		(49,551	)

Subtotal	$	52,017		$	13,289		$	1,820		$	67,126		$	47,202		$	11,861		$	3,984		$	63,047
Less:
Cash and cash equivalents		-			-			(14,045	)		(14,045	)		-			-			(18,295	)		(18,295	)
Short-term investments		-			-			(4,009	)		(4,009	)								(3,023	)		(3,023	)
Deferred income taxes - current		-			-			(138	)		(138	)		-			-			(150	)		(150	)
Income taxes receivable		-			-			(568	)		(568	)		-			-			(728	)		(728	)
Deferred income taxes - non-current		-			-			(245	)		(245	)		-			-			(324	)		(324	)
Current maturities of long-term debt		-			-			194			194			-			-			196			196
Income taxes payable - current		-			-			182			182			-			-			224			224
Income taxes payable - long-term		-			-			3,877			3,877			-			-			3,876			3,876
Deferred income taxes - non-current		-			-			666			666			-			-			982			982
Long-term debt, less current maturities		-			-			11,453			11,453			-			-			11,491			11,491
Total Capital Employed	$	52,017		$	13,289		$	(813	)	$	64,493		$	47,202		$	11,861		$	(1,767	)	$	57,296




	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total

Average Capital Employed (3)	$	49,610		$	12,575		$	(1,290	)	$	60,895

Notes:

(1)	Operating income excludes restructuring and related charges--see reconciliation per page 4 of this financial information release.

(2)

Return on average capital employed represents operating income for the three month period ending August 1, 2010 times four quarters to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term debt, including current maturities, current and noncurrent deferred tax assets and liabilities, current and long-term income taxes payable, and income taxes receivable.

(3)	Average capital employed computed using the two periods ending August 1, 2010 and May 2, 2010.