8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported)     August 28, 2013

Culp, Inc.

(Exact Name of Registrant as Specified in its Charter)

North Carolina	1-12597	56-1001967
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1823 Eastchester Drive

High Point, North Carolina  27265

(Address of Principal Executive Offices)

(Zip Code)

(336) 889-5161

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former name or address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INDEX

	Page
Item 2.02 – Results of Operations and Financial Condition	3	333
Item 9.01(d) - Exhibits	5
Signature	6
Exhibits	7

2

This report and the exhibits attached hereto contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 27A of the Securities and Exchange Act of 1934).  Such statements are inherently subject to risks and uncertainties.  Further, forward looking statements are intended to speak only as of the date on which they are made, and we disclaim any duty to update such statements.  Forward-looking statements are statements that include projections, expectations or beliefs about future events or results or otherwise are not statements of historical fact.  Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “estimate,” “plan” and “project” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, sales, gross profit margins, operating income, SG&A or other expenses, earnings, cash flow, and other performance measures, as well as any statements regarding future economic or industry trends or future developments. Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, consumer confidence, trends in disposable income, and general economic conditions.  Decreases in these economic indicators could have a negative effect on our business and prospects.  Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in the value of the U.S. dollar versus other currencies could affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currencies in Canada and China can have a negative impact on our sales of products produced in those places. Also, economic and political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, is included in Item 1A “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission on July 12, 2013 for the fiscal year ended April 28, 2013.

Item 2.02 – Results of Operations and Financial Condition

On August 28, 2013, we issued a news release to announce our financial results for the first quarter ended July 28, 2013.  The news release is attached hereto as Exhibit 99(a).

Also on August 28, 2013, we released a Financial Information Release containing additional financial information and disclosures about our first quarter ended July 28, 2013.  The Financial Information Release is attached hereto as Exhibit 99(b).

The news release and Financial Information Release contain disclosures about free cash flow, a non-GAAP liquidity measure that we define as net cash provided by operating activities, less cash capital expenditures, plus any proceeds from sales of equipment, plus excess tax benefits related to stock-based compensation, and plus or minus the effects of exchange rate changes on cash and cash equivalents.  Details of these calculations and a reconciliation to information from our GAAP financial statements is set forth in the Financial Information Release.  Management believes the disclosure of free cash flow provides useful information to investors because it measures our available cash flow for potential debt repayment, stock repurchases, dividends, and additions to cash and cash equivalents.  We note, however, that not all of the company’s free cash flow is available for discretionary spending, as we have mandatory debt payments and other cash requirements that must be deducted from our cash available for future use.  In operating our business, management uses free cash flow to make decisions about what commitments of cash to make for operations, such as capital expenditures (and financing arrangements for these expenditures), purchases of inventory or supplies, SG&A expenditure levels, compensation, and other commitments of cash, while still allowing for adequate cash to meet known future commitments for cash, such as debt repayment, and also for making decisions about dividend payments and share repurchases.

The news release and Financial Information Release contain disclosures about return on capital, both for the entire company and for individual business segments.  We define return on capital as operating income (on an annualized basis if at a point other than the end of the fiscal year) divided by average capital employed.  Operating income excludes certain non-recurring charges, and average capital employed is calculated over rolling two – five fiscal periods, depending on which quarter is being presented.  Details of these calculations and a reconciliation to information from our GAAP financial statements is set forth in the Financial Information Release.  We believe return on capital is an accepted measure of earnings efficiency in relation to capital employed, but it is a non-GAAP performance measure that is not defined or calculated in the same manner by all companies.  This measure should not be considered in isolation or as an alternative to net income or other performance measures, but we believe it provides useful information to investors by comparing the operating income we produce to the asset base used to generate that income.  Also, annualized operating income does not necessarily indicate results that would be expected for the full fiscal year.  We note that, particularly for return on capital measured at the segment level, not all assets and expenses are allocated to our operating segments, and there are assets and expenses at the corporate (unallocated) level that may provide support to a segment’s operations and yet are not included in the assets and expenses used to calculate that segment’s return on capital.  Thus, the average return on capital for the company’s segments will generally be different from the company’s overall return on capital.  Management uses return on capital to evaluate the company’s earnings efficiency and the relative performance of its segments.

3

The news release and Financial Information Release contain disclosures about our consolidated adjusted effective income tax rate, which is a non-GAAP liquidity measure that represents our estimated cash expenditures for income taxes.  The consolidated adjusted effective income tax rate is calculated by eliminating the non-cash items that affect our GAAP income tax expense, including adjustments to valuation allowances for deferred tax assets, reductions in income taxes due to net operating loss (NOL) carry forwards, and non-cash foreign income tax expenses.  Currently we do not pay income taxes in the U.S. due to NOL carryforward amounts, and thus the consolidated adjusted effective income tax rate represents income tax expense for our subsidiaries located in China and Canada. A reconciliation of our consolidated adjusted effective income tax rate to our consolidated effective GAAP income tax rate is set forth in the Financial Information Release.  We believe this information is useful to investors because it demonstrates the amount of cash, as a percentage of income before income taxes, expected to be required to fund our income tax liabilities incurred for the periods reported.  Our consolidated income tax expense on a GAAP basis can vary widely over different reporting periods due to the effects of non-cash items, and we believe the calculation of our consolidated adjusted effective tax rate is helpful in comparing financial reporting periods and the amount of income tax liability that we are or will be required to pay to taxing authorities in cash. We also note that, because the consolidated adjusted effective income tax rate used to calculate adjusted net income is based on annualized amounts and estimates, adjusted net income for any quarter or year-to-date period does not necessarily indicate results that could be expected for the full fiscal year. In addition, non-cash reductions in our U.S. NOL carryforwards are based on pre-tax losses in prior periods and will not be available to reduce taxes on current earnings once the NOL carryforward amounts are utilized.  Management uses the consolidated adjusted effective income rate to analyze the effect that income tax expenditures are likely to have on cash balances and overall liquidity.

The news release and Financial Information Release contains disclosures about our adjusted net income, which is a non-GAAP performance measure that incorporates the consolidated adjusted effective income tax rate discussed in the preceding paragraph.  Adjusted net income is calculated by multiplying the consolidated adjusted effective income tax rate by the amount of income before income taxes shown on our income statement.  Because the consolidated adjusted effective income tax rate eliminates non-cash items that affect our GAAP income tax expense, adjusted net income is intended to demonstrate the amount of net income that would be generated by our operations if only the cash portions of our income tax expense are deducted from income before income taxes.  As noted above, our consolidated income tax expense on a GAAP basis can vary widely over different reporting periods due to the effect of non-cash items, and we believe the calculation of adjusted net income is useful to investors because it eliminates these items and aids in the analysis of comparable financial periods by reflecting the amount of earnings available after the deduction of tax liabilities that are paid in cash.  Adjusted net income should not be viewed in isolation by investors and should not be used as a substitute for net income calculated in accordance with GAAP.  We also note that, because the consolidated adjusted effective income tax rate used to calculate adjusted net income is based on annualized amounts and estimates, adjusted net income for any quarter or year-to-date period does not necessarily indicate results that could be expected for the full fiscal year.  In addition, the limitations on the usefulness of consolidated adjusted effective income tax rates described in the preceding paragraph also apply to the usefulness of adjusted net income, since consolidated adjusted effective income tax rates are used to calculate adjusted net income.  Management uses adjusted net income to help it analyze the company’s earnings and performance after taking certain tax matters into account when comparing comparable quarterly and year-to-date periods.

4

The news release and Financial Information Release contains disclosures about our Adjusted EBITDA, which is a non-GAAP performance measure that reflects net income excluding tax expenses and net interest expense, as well as depreciation and amortization expense and stock based compensation expense.  Details of these calculations and a reconciliation to information from our GAAP financial statements is set forth in the Financial Information Release.  We believe presentation of Adjusted EBITDA is useful to investors because earnings before interest, income taxes, depreciation and amortization, and similar performance measures that exclude certain charges from earnings, are often used by investors and financial analysts in evaluating and comparing companies in our industry.  We note, however, that such measures are not defined uniformly by various companies, with differing expenses being excluded from net income to calculate these performance measures.  For this reason, Adjusted EBITDA should not be viewed in isolation by investors and should not be used as a substitute for net income calculated in accordance with GAAP, nor should it be used for direct comparisons with similarly titled performance measures reported by other companies.  Use of Adjusted EBITDA as an analytical tool has limitations in that this measure does not reflect all expenses that are necessary to fund and operate our business, including funds required to pay taxes, service our debt, and fund capital expenditures, among others.  Management uses Adjusted EBITDA to help it analyze the company’s earnings and operating performance, by excluding the effects of expenses that depend upon capital structure and debt level, tax provisions (which can be volatile for our company as described above), and non-cash items such as depreciation, amortization and stock based compensation expense that do not require immediate uses of cash.

Item 9.01 (d) -- Exhibits

99(a) News Release dated August 28, 2013

99(b) Financial Information Release dated August 28, 2013

5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CULP, INC.
	(Registrant)
By:	/s/Kenneth R. Bowling
	Chief Financial Officer
	(principal financial officer)

By:	/s/ Thomas B. Gallagher, Jr.
	Corporate Controller
	(principal accounting officer)

Dated:  August 28, 2013

6

EXHIBIT INDEX

Exhibit Number		Exhibit
99(a)	News Release dated August 28, 2013
99(b)	Financial Information Release dated August 28, 2013

7

EX-99.A

Exhibit 99(a)

Investor Contact:	Kenneth R. Bowling	Media Contact:	Teresa A. Huffman
	Chief Financial Officer		Vice President, Human Resources
	336-881-5630		336-889-5161

CULP ANNOUNCES RESULTS FOR FIRST QUARTER FISCAL 2014

HIGH POINT, N.C. (August 28, 2013) ─ Culp, Inc. (NYSE: CFI) today reported financial and operating results for the first quarter ended July 28, 2013.

Fiscal 2014 first quarter highlights:

§ Net sales were $70.1 million, up 1.4 percent, with mattress fabric sales up 0.5 percent and upholstery fabric sales up 2.4 percent.  This is the company’s highest total sales for the first quarter in nine years.

§ Pre-tax income was $5.5 million, the highest first quarter level in the company’s history.

§ Adjusted net income (non-GAAP) was $4.7 million, or $0.38 per diluted share, for the current quarter, compared with $4.3 million, or $0.34 per diluted share, for the prior year period.  (Adjusted net income is calculated using estimated cash income tax expense.  See the reconciliation to net income on page 6).  Net income (GAAP) was $3.2 million, or $0.26 per diluted share, compared with net income of $3.5 million, or $0.28 per diluted share, in the prior year period.

§ The company’s financial position remained strong with cash and cash equivalents and short term investments of $27.6 million and total debt of $7.2 million as of July 28, 2013.

§ Consolidated return on capital was 32 percent compared with 31 percent in the prior year period.

§ Free cash flow was $1.9 million compared with ($3.0) million a year ago.

§ The company paid a cash dividend of $0.04 per share during the quarter, representing a 33 percent increase in quarterly cash dividend payments from fiscal 2013.

§ The projection for the second quarter of fiscal 2014 is for overall sales to be in the range of flat to four percent higher as compared with the same period last year.  Pre-tax income is expected to be in the range of $4.1 million to $4.7 million.  Pre-tax income for the second quarter of fiscal 2013 was $4.5 million.

§ The company expects fiscal 2014 to be another excellent year for free cash flow.

Overview

For the first quarter ended July 28, 2013, net sales were $70.1 million, compared with $69.2 million a year ago.  The company reported net income of $3.2 million, or $0.26 per diluted share, for the first quarter of fiscal 2014, compared with net income of $3.5 million, or $0.28 per diluted share, for the first quarter of fiscal 2013. Results for the first quarter of fiscal 2014 include a one-time charge of $206,000 for the tentative settlement of ongoing litigation relating to environmental claims at a closed facility.  This amount is included in the Other expense line item of the Consolidated Statements of Income.

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

Given the volatility in the income tax area during fiscal 2013 and previous years, the company is also reporting adjusted net income (non-GAAP), which is calculated using estimated cash income tax expense for its foreign subsidiaries.  The company currently does not incur cash income tax expense in the U.S., nor does it expect to for a number of years, due to approximately $50.7 million in U.S. net operating loss carryforwards.  For the first quarter of fiscal 2014, adjusted net income was $4.7 million, or $0.38 per diluted share, compared with $4.3 million, or $0.34 per diluted share, for the first quarter of fiscal 2013.  On a pre-tax basis, the company reported income of $5.5 million compared with pre-tax income of $5.4 million for the first quarter of fiscal 2013. (A presentation of adjusted net income and reconciliation to net income is set forth on page 6).

Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, “We are pleased with our first quarter performance, marking an excellent start to fiscal 2014.  These results reflect strong operating performance in both of our businesses.  We continue to experience favorable customer response to our designs and wide range of products and we are excited about the progress we are making in product innovation and creativity.  These efforts, which are our top strategic priority, are making significant contributions to our sales and profit performance, with an increasing percentage of our sales coming from recent product introductions.  We compete in a product and fashion driven business that is always changing.  As a result, our ability to sustain excellence in creating innovative fabrics season after season is a key driver to our long-term success.

“We are also pleased that our consistent financial performance, higher cash flow and sound balance sheet have enabled us to reward our shareholders with an increase in our quarterly cash dividend.  Looking ahead, we continue to expect another strong year of free cash flow for fiscal 2014,” added Saxon.

Mattress Fabrics Segment

Mattress fabric sales for the first quarter were $38.2 million, up slightly compared with $38.0 million for the first quarter of fiscal 2013.

“Our mattress fabrics business had a solid performance for the first quarter of fiscal 2014,” said Iv Culp, president of Culp’s mattress fabrics division.  “We are pleased with our consistent sales, especially when compared with unusually strong sales for the first quarter of last year.  We have continued to be on par with the industry during a more challenging business environment than we experienced a year ago.  These results reflect our ability to keep pace with changing customer demand across all price points and fabric styles in the mattress industry. With our extensive manufacturing platform, flexible capacity and exceptional design capabilities, we have the ability to produce a diverse line of products for all categories.  As a result, Culp has a strong competitive position as a full-service supplier of mattress fabrics.  Our innovative designs and new product introductions are resonating with our customers, resulting in strong future placements with the major players in the mattress industry.  Importantly, we have also remained focused on providing outstanding customer service, reliable delivery performance and the consistent quality and value that are synonymous with the Culp brand.

“We continued to make progress during the first quarter with Culp-Lava, our most recent business venture established to produce and market mattress covers.  We are pleased with the sales contribution this quarter as we have now completed most of the specialized training and development work necessary for production at our new Stokesdale, North Carolina, manufacturing facility.  We are focused on improving our operating efficiencies as we work through this transition period.  Additionally, we have the ability to adjust capacity in line with current and expected demand.  We look forward to becoming a more mature business in the cut and sew operation that can efficiently react to the seasonality of the mattress industry.  We are pleased with our results for the first quarter and look forward to the long-term growth opportunities for Culp-Lava.

“Looking ahead, we expect a normal seasonal slowdown in the second fiscal quarter, which will influence our sales and operating efficiencies.  We also do not expect overall industry demand to be as robust as it was during the second quarter last year,” Culp concluded.

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

Upholstery Fabrics Segment

Sales for this segment were $32.0 million for the first quarter, a 2.4 percent improvement compared with sales of $31.2 million in the first quarter of fiscal 2013.

“We experienced better than expected sales in our upholstery fabrics business during the first quarter of fiscal 2014,” noted Saxon.  “We were especially pleased with the sales performance as compared to last year given the strong industry demand.  These results primarily reflect continued favorable response from key customers to our innovative designs and new product introductions.

“Sales of our China produced fabrics continued to be the primary catalyst of our growth for the first quarter.  China produced fabrics accounted for 94 percent of Culp’s upholstery fabrics sales during the first quarter, reflecting our ability to offer a diverse product mix of fabric styles and price points with excellent service and quality.  Culp is uniquely positioned to meet the needs of our customers with our outstanding design capabilities and our reliable China manufacturing platform.  We are pleased with the increasing level of fabric placements with customers in the U.S., China and Europe.  Further, we have an excellent opportunity to build on this momentum, especially as the economy strengthens and the housing market makes a meaningful recovery.”

Saxon continued, “We are pleased with our progress with respect to our Culp Europe operation, especially the sales performance in the first quarter and the level of fabrics placed with key customers.  We remain optimistic about the long-term opportunities for Culp Europe to enhance our global sales.”

Balance Sheet

“Maintaining a strong financial position and generating free cash flow will continue to be top priorities for fiscal 2014,” added Saxon.  “During the quarter, we achieved $1.9 million of free cash flow, after investing $4.3 million in capital expenditures and working capital.  As of July 28, 2013, we reported $27.6 million in cash and cash equivalents and short-term investments.  This cash position also reflects $2.6 million spent on an asset purchase and consulting agreement entered into early in the quarter.  The company paid a $0.04 per share quarterly cash dividend on July 15, 2013, a 33 percent increase from the quarterly cash dividend payments in fiscal 2013.  Total debt was $7.2 million, which includes long-term debt plus current maturities of long-term debt and our line of credit.  After the end of the quarter, we made a scheduled annual principal payment of $2.2 million, thus further lowering our total debt to $5.0 million.”

Outlook

Commenting on the outlook for the second quarter of fiscal 2014, Saxon remarked, “We expect overall sales to be in the range of flat to four percent higher as compared with the second quarter of last year.

“We expect sales in our mattress fabrics segment to be flat to slightly lower than the same period a year ago.  Operating income and margin in this segment are expected to be lower than the same period a year ago.

“In our upholstery fabrics segment, we expect sales to be moderately higher as compared to the same time last year. We believe the upholstery fabric segment’s operating income and margin will be higher than the same quarter of last year.

“Considering these factors, the company expects to report pre-tax income for the second fiscal quarter of 2014 in the range of $4.1 million to $4.7 million.  Pre-tax income for last year’s second quarter was $4.5 million.”

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

In closing, Saxon remarked, “We are pleased with a strong start to fiscal 2014.  We have many reasons to be optimistic about the year ahead with our outstanding design capabilities and innovative product offerings that are resonating with customers in both businesses.  We will continue to leverage our scalable and global manufacturing platforms to deliver these products and keep pace with current and expected industry demand.  We are cautiously optimistic about an improved economic outlook for fiscal 2014, especially as the housing market gains traction and supports consumer demand for home furnishings.  We believe Culp is favorably positioned for continued growth in this environment with the financial strength to execute our strategic initiatives and reward shareholders.  Above all, we are committed to outstanding performance for our customers as a financially stable and trusted source for innovative fabrics.”

About the Company

Culp, Inc. is one of the world's largest marketers of mattress fabrics for bedding and upholstery fabrics for furniture.  The company markets a variety of innovative fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced from other suppliers.  Culp has operations located in the United States, Canada, China and Poland.

This release contains “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 27A of the Securities and Exchange Act of 1934).  Such statements are inherently subject to risks and uncertainties.  Further, forward looking statements are intended to speak only as of the date on which they are made, and we disclaim any duty to update such statements.  Forward-looking statements are statements that include projections, expectations or beliefs about future events or results or otherwise are not statements of historical fact.  Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “estimate,” “plan” and “project” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, sales, gross profit margins, operating income, SG&A or other expenses, earnings, cash flow, and other performance measures, as well as any statements regarding future economic or industry trends or future developments. Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, consumer confidence, trends in disposable income, and general economic conditions.  Decreases in these economic indicators could have a negative effect on our business and prospects.  Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in the value of the U.S. dollar versus other currencies could affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currencies in Canada and China can have a negative impact on our sales of products produced in those places. Also, economic and political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, is included in Item 1A “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission on July 12, 2013, for the fiscal year ended April 28, 2013.

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

CULP, INC.

Condensed Financial Highlights

(Unaudited)

	Three Months Ended
	July 28,		July 29,
	2013		2012
Net sales	$	70,141,000	$	69,184,000
Income before income taxes	$	5,535,000	$	5,372,000
Net income	$	3,230,000	$	3,524,000
Net income per share:
Basic	$	0.27	$	0.28
Diluted	$	0.26	$	0.28
Adjusted net income	$	4,749,000	$	4,341,000
Adjusted net income per share
Basic	$	0.39	$	0.35
Diluted	$	0.38	$	0.34
Average shares outstanding:
Basic		12,148,000		12,551,000
Diluted		12,366,000		12,711,000

Presentation of Adjusted Net Income and Adjusted Income Taxes (1)

	Three Months Ended
	July 28,		July 29,
	2013		2012
Income before income taxes	$	5,535,000	$	5,372,000
Adjusted income taxes (2)	$	786,000	$	1,031,000
Adjusted net income	$	4,749,000	$	4,341,000

(1) Culp, Inc. currently does not incur cash income tax expense in the U.S. due to its $50.7 million in net operating loss carryforwards.  Therefore, adjusted net income is calculated using only income tax expense for the company’s subsidiaries in Canada and China.

(2) Represents estimated cash income tax expense for the company’s subsidiaries in Canada and China, calculated with a consolidated adjusted effective income tax rate of 14.2% for fiscal 2014 and 19.2% for fiscal 2013.

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

Consolidated Adjusted Effective Income Tax Rate, Net Income and Earnings Per Share

For the Three Months Ended July 28, 2013, and July 29, 2012

(Unaudited)

(Amounts in Thousands)

			THREE MONTHS ENDED
			Amounts
			July 28,			July 29,
			2013			2012
Consolidated Effective GAAP Income Tax Rate	(1	)		41.6	%		34.4	%
Non-Cash U.S. Income Tax Expense				(27.0	)%		(15.0	)%
Non-Cash Foreign Income Tax Expense				(0.4	)%		(0.2	)%
Consolidated Adjusted Effective Income Tax Rate	(2	)		14.2	%		19.2	%

	THREE MONTHS ENDED
	As reported					As Adjusted		As reported					As Adjusted
	July 28,					July 28,		July 29,					July 29,
	2013		Adjustments			2013		2012		Adjustments			2012
Income before income taxes	$	5,535				$	5,535	$	5,372				$	5,372
Income taxes (3)		2,305	$	(1,519	)		786		1,848	$	(817	)		1,031
Net income	$	3,230	$	1,519		$	4,749	$	3,524	$	817		$	4,341
Net income per share-basic	$	0.27	$	(0.13	)	$	0.39	$	0.28	$	(0.07	)	$	0.35
Net income per share-diluted	$	0.26	$	(0.12	)	$	0.38	$	0.28	$	(0.06	)	$	0.34
Average shares outstanding-basic		12,148		12,148			12,148		12,551		12,551			12,551
Average shares outstanding-diluted		12,366		12,366			12,366		12,711		12,711			12,711

(1) Calculated by dividing consolidated income tax expense by

      consolidated income before income taxes.

(2) Represents estimated cash income tax expense for our subsidiaries located

  in Canada and China divided by consolidated income before income taxes.

(3) As adjusted income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.

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CFI Announces Results for First Quarter Fiscal 2014

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August 28, 2013

Reconciliation of Free Cash Flow and Return on Capital

For the Three Months Ended July 28, 2013, and July 29, 2012

(Unaudited)

(Amounts in thousands)

Free Cash Flow Reconciliation
	Three Months Ended			Three Months Ended
	July 28, 2013			July 29, 2012
Net cash provided by (used in) operating activities	$	2,675		$	(1,962	)
Minus: Capital Expenditures		(884	)		(1,008	)
Add: Proceeds from the sale of equipment		104			-
Add: Excess tax benefits related to stock-based compensation		114			55
Effects of exchange rate changes on cash and cash equivalents		(109	)		(88	)
Free Cash Flow	$	1,900		$	(3,003	)

Return on Capital Reconciliation
	Three Months Ended			Three Months Ended
	July 28, 2013			July 29, 2012
Consolidated Income from Operations	$	5,974		$	5,479
Average Capital Employed (2)		75,494			71,532
Return on Average Capital Employed (1)		31.7	%		30.6	%
Average Capital Employed

	July 28, 2013			April 28, 2013			July 29, 2012			April 29, 2012
Total assets	$	151,101		$	144,706		$	143,160		$	144,716
Total liabilities		(52,516	)		(49,123	)		(51,329	)		(55,716	)
Subtotal	$	98,585		$	95,583		$	91,831		$	89,000
Less:
Cash and cash equivalents		(21,423	)		(23,530	)		(21,889	)		(25,023	)
Short-term investments		(6,174	)		(5,286	)		(5,200	)		(5,941	)
Income taxes receivable		(292	)		(318	)		-			-
Deferred income taxes - current		(7,747	)		(7,709	)		(2,337	)		(2,467	)
Deferred income taxes - non-current		(651	)		(753	)		(2,715	)		(3,205	)
Current maturities of long-term debt		2,200			2,200			2,400			2,404
Line of credit		560			561			834			889
Income taxes payable - current		320			285			751			642
Income taxes payable - long-term		4,176			4,191			4,131			4,164
Deferred income taxes - non-current		4,335			3,075			705			705
Long-term debt, less current maturities		4,400			4,400			6,666			6,719
Total Capital Employed	$	78,289		$	72,699		$	75,177		$	67,887
Average Capital Employed (2)	$	75,494					$	71,532

Notes:

(1) Return on average capital employed represents operating income for the three month period ending July 28, 2013 or July 29, 2012 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, line of credit,  current and noncurrent deferred tax assets and liabilities, and

       income taxes receivable and payable.

(2) Average capital employed used for the three months ending July 28, 2013 was computed using the two quarterly periods ending July 28, 2013 and April 28, 2013.

       Average capital employed used for the three months ending July 29, 2012 was computed using the two quarterly periods ending July 29, 2012 and April 29, 2012

-END-

EX-99.B

Exhibit 99(b)

  Page 1 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
		THREE MONTHS ENDED
		Amounts				Percent of Sales
		July 28,	July 29,	% Over		July 28,		July 29,
		2013	2012	(Under)		2013		2012
Net sales	$	70,141	69,184	1.4	%	100.0	%	100.0	%
Cost of sales		57,067	56,064	1.8	%	81.4	%	81.0	%
Gross profit		13,074	13,120	(0.4)	%	18.6	%	19.0	%
Selling, general and
administrative expenses		7,100	7,641	(7.1)	%	10.1	%	11.0	%
Income from operations		5,974	5,479	9.0	%	8.5	%	7.9	%
Interest expense		140	190	(26.3)	%	0.2	%	0.3	%
Interest income		(92)	(127)	(27.6)	%	(0.1)	%	(0.2)	%
Other expense		391	44	788.6	%	0.6	%	0.1	%
Income before income taxes		5,535	5,372	3.0	%	7.9	%	7.8	%
Income taxes*		2,305	1,848	24.7	%	41.6	%	34.4	%
Net income	$	3,230	3,524	(8.3)	%	4.6	%	5.1	%
Net income per share-basic		$0.27	$0.28	(3.6)	%
Net income per share-diluted		$0.26	$0.28	(7.1)	%
Average shares outstanding-basic		12,148	12,551	(3.2)	%
Average shares outstanding-diluted		12,366	12,711	(2.7)	%
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
		THREE MONTHS ENDED
		Amounts				Percent of Sales
		July 28	July 29,	% Over		July 28		July 29,
		2013	2012	(Under)		2013		2012
Income before income taxes (see above)	$	5,535	5,372	3.0	%	7.9	%	7.8	%
Adjusted Income taxes (2)*		786	1,031	(23.8)	%	14.2	%	19.2	%
Adjusted net income		4,749	4,341	9.4	%	6.8	%	6.3	%
Adjusted net income per share-basic		$0.39	$0.35	11.4	%
Adjusted net income per share-diluted		$0.38	$0.34	11.8	%
Average shares outstanding-basic		12,148	12,551	(3.2)	%
Average shares outstanding-diluted		12,366	12,711	(2.7)	%
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $50.7 million in net operating loss carryforwards. Therefore,
adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on
page 8 of 8.
(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 8 of 8.
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 2 of  8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JULY 28, 2013, JULY 29, 2012 AND APRIL 28, 2013
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	July 28,		July 29,		(Decrease)						* April 28,
	2013		2012		Dollars			Percent			2013
Current assets
Cash and cash equivalents	$	21,423		21,889		(466	)		(2.1	) %		23,530
Short-term investments		6,174		5,200		974			18.7	%		5,286
Accounts receivable		24,493		20,021		4,472			22.3	%		23,392
Inventories		41,770		44,052		(2,282	)		(5.2	) %		38,418
Deferred income taxes		7,747		2,337		5,410			231.5	%		7,709
Assets held for sale		-		15		(15	)		(100.0	) %		-
Income taxes receivable		292		-		292			100.0	%		318
Other current assets		3,408		2,563		845			33.0	%		2,093
Total current assets		105,307		96,077		9,230			9.6	%		100,746
Property, plant & equipment, net		30,808		31,016		(208	)		(0.7	) %		30,594
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		651		2,715		(2,064	)		(76.0	) %		753
Other assets		2,873		1,890		983			52.0	%		1,151
Total assets	$	151,101		143,160		7,941			5.5	%		144,706
Current liabilities
Current maturities of long-term debt	$	2,200		2,400		(200	)		(8.3	) %		2,200
Line of credit		-		834		(834	)		(100.0	) %		561
Accounts payable - trade		27,821		27,284		537			2.0	%		22,357
Accounts payable - capital expenditures		-		152		(152	)		(100.0	) %		225
Accrued expenses		8,704		8,366		338			4.0	%		11,829
Accrued restructuring		-		40		(40	)		(100.0	) %		-
Income taxes payable - current		320		751		(431	)		(57.4	) %		285
Total current liabilities		39,045		39,827		(782	)		(2.0	) %		37,457
Income taxes payable - long-term		4,176		4,131		45			1.1	%		4,191
Deferred income taxes		4,335		705		3,630			514.9	%		3,075
Line of credit		560		-		560			100.0	%		-
Long-term debt , less current maturities		4,400		6,666		(2,266	)		(34.0	) %		4,400
Total liabilities		52,516		51,329		1,187			2.3	%		49,123
Shareholders' equity		98,585		91,831		6,754			7.4	%		95,583
Total liabilities and
shareholders' equity	$	151,101		143,160		7,941			5.5	%		144,706
Shares outstanding		12,241		12,656		(415	)		(3.3	) %		12,225
* Derived from audited financial statements.

Page 3 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012

Unaudited

(Amounts in Thousands)

		THREE MONTHS ENDED
		Amounts
		July 28,			July 29,
		2013			2012
Cash flows from operating activities:
	Net income	$	3,230			3,524
	Adjustments to reconcile net income to net cash
	provided by (used in) operating activities:
	Depreciation		1,305			1,254
	Amortization of other assets		39			60
	Stock-based compensation		152			70
	Deferred income taxes		1,438			675
	Gain on sale of equipment		(74	)		-
	Excess tax benefits related to stock-based compensation		(114	)		(55	)
	Foreign currency exchange losses (gains)		96			(80	)
	Changes in assets and liabilities, net of effects of acquisition of assets:
	Accounts receivable		(1,049	)		4,985
	Inventories		(3,271	)		(7,710	)
	Other current assets		(1,300	)		(572	)
	Other assets		(11	)		(43	)
	Accounts payable		5,284			(3,288	)
	Accrued expenses		(3,131	)		(930	)
	Income taxes		81			148
	Net cash provided by (used in) operating activities		2,675			(1,962	)
Cash flows from investing activities:
	Capital expenditures		(884	)		(1,008	)
	Net cash paid for acquisition of assets		(2,640	)		-
	Purchase of short-term investments		(1,023	)		(25	)
	Proceeds from the sale of short-term investments		-			795
	Proceeds from the sale of equipment		104			-
	Net cash used in investing activities		(4,443	)		(238	)
Cash flows from financing activities:
	Payments on long-term debt		-			(50	)
	Excess tax benefits related to stock-based compensation		114			55
	Repurchase of common stock		-			(470	)
	Dividends paid		(489	)		(381	)
	Proceeds from common stock issued		145			-
	Net cash used in financing activities		(230	)		(846	)
Effect of exchange rate changes on cash and cash equivalents			(109	)		(88	)
Decrease in cash and cash equivalents			(2,107	)		(3,134	)
Cash and cash equivalents at beginning of period			23,530			25,023
Cash and cash equivalents at end of period		$	21,423			21,889
Free Cash Flow (1)		$	1,900			(3,003	)

(1)    Free Cash Flow reconciliation is as follows:
		FY 2014			FY 2013
A)	Net cash provided by operating activities	$	2,675			(1,962	)
B)	Minus:  Capital Expenditures		(884	)		(1,008	)
C)	Add:     Proceeds from the sale of equipment		104			-
D)	Add:     Excess tax benefits related to stock-based compensation		114			55
E)	Effects of exchange rate changes on cash and cash equivalents		(109	)		(88	)
		$	1,900			(3,003	)

Page 4 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	July 28,			July 29,			% Over			July 28,			July 29,
Net Sales by Segment	2013			2012			(Under)			2013			2012
Mattress Fabrics	$	38,164			37,964			0.5	%		54.4	%		54.9	%
Upholstery Fabrics		31,977			31,220			2.4	%		45.6	%		45.1	%
Net Sales	$	70,141			69,184			1.4	%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	7,392			7,622			(3.0	) %		19.4	%		20.1	%
Upholstery Fabrics		5,682			5,498			3.3	%		17.8	%		17.6	%
Gross Profit		13,074			13,120			(0.4	) %		18.6	%		19.0	%
Selling, General and Administrative expenses  by Segment										Percent of Sales
Mattress Fabrics	$	2,374			2,391			(0.7	) %		6.2	%		6.3	%
Upholstery Fabrics		3,266			3,340			(2.2	) %		10.2	%		10.7	%
Unallocated Corporate expenses		1,460			1,910			(23.6	) %		2.1	%		2.8	%
Selling, General and Administrative Expenses		7,100			7,641			(7.1	) %		10.1	%		11.0	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	5,018			5,230			(4.1	) %		13.1	%		13.8	%
Upholstery Fabrics		2,416			2,159			11.9	%		7.6	%		6.9	%
Unallocated corporate expenses		(1,460	)		(1,910	)		(23.6	) %		(2.1	) %		(2.8	) %
Operating Income		5,974			5,479			9.0	%		8.5	%		7.9	%
Return on Capital (1)
Mattress Fabrics		34.2	%		37.8	%
Upholstery Fabrics		51.5	%		51.6	%
Unallocated Corporate		N/A			N/A
Consolidated		31.7	%		30.6	%
Capital Employed (2)
Mattress Fabrics		59,590			56,803			4.9	%
Upholstery Fabrics		20,209			18,967			6.5	%
Unallocated Corporate		(1,510	)		(593	)		N/A
Consolidated		78,289			75,177			4.1	%
Depreciation expense by Segment
Mattress Fabrics	$	1,149			1,092			5.2	%
Upholstery Fabrics		156			162			(3.7	) %
Depreciation expense		1,305			1,254			4.1	%
Notes:
(1) See pages 6 and 7 of this financial information release for calculations.
(2) The capital employed balances are as of July 28, 2013 and July 29, 2012

Page 5 of 8

CULP, INC.  FINANCIAL INFORMATION RELEASE

CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA

FOR THE TWELVE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012

(UNAUDITED)

(AMOUNTS IN THOUSANDS)

	Quarter Ended
										Trailing 12
										Months
	10/28/12			1/27/13		4/28/2013		7/28/2013		7/28/2013
Net income	$	8,268		$	2,823	$	3,702	$	3,230	$	18,023
Income taxes		(3,736	)		1,700		2,161		2,305		2,430
Interest expense, net		60			40		50		48		198
Depreciation and amortization expense		1,344			1,338		1,354		1,344		5,380
Stock based compensation		127			111		254		152		644
Adjusted EBITDA	$	6,063		$	6,012	$	7,521	$	7,079	$	26,675
	Quarter Ended
										Trailing 12
										Months
	10/30/11			1/29/12		4/29/2012		7/29/2012		7/29/2012
Net income	$	6,252		$	1,802	$	3,423	$	3,524	$	15,001
Income taxes		(3,389	)		1,075		2,071		1,848		1,605
Interest expense, net		78			33		69		63		243
Depreciation and amortization expense		1,270			1,270		1,325		1,314		5,179
Stock based compensation		101			80		91		70		342
Adjusted EBITDA	$	4,312		$	4,260	$	6,979	$	6,819	$	22,370

Page 6 of 8

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE THREE MONTHS ENDED JULY 28, 2013
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Three Months			Average			Return on
	Ended			Capital			Avg. Capital
	July 28, 2013 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	5,018		$	58,770			34.2	%
Upholstery Fabrics		2,416			18,761			51.5	%
(less: Unallocated Corporate)		(1,460	)		(2,037	)		N/A
Total	$	5,974		$	75,494			31.7	%
Average Capital Employed	As of the three Months Ended July 28, 2013												As of the three Months Ended April 28, 2013
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		78,217			34,381			38,503			151,101			73,954			30,995			39,757			144,706
Total liabilities		(18,627	)		(14,172	)		(19,717	)		(52,516	)		(16,004	)		(13,682	)		(19,437	)		(49,123	)
Subtotal	$	59,590		$	20,209		$	18,786		$	98,585		$	57,950		$	17,313		$	20,320		$	95,583
Less:
Cash and cash equivalents		-			-			(21,423	)		(21,423	)		-			-			(23,530	)		(23,530	)
Short-term investments		-			-			(6,174	)		(6,174	)		-			-			(5,286	)		(5,286	)
Income taxes receivable		-			-			(292	)		(292	)		-			-			(318	)		(318	)
Deferred income taxes - current		-			-			(7,747	)		(7,747	)		-			-			(7,709	)		(7,709	)
Deferred income taxes - non-current		-			-			(651	)		(651	)		-			-			(753	)		(753	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			560			560									561			561
Income taxes payable - current		-			-			320			320			-			-			285			285
Income taxes payable - long-term		-			-			4,176			4,176			-			-			4,191			4,191
Deferred income taxes - non-current		-			-			4,335			4,335			-			-			3,075			3,075
Long-term debt, less current maturities		-			-			4,400			4,400			-			-			4,400			4,400
Total Capital Employed	$	59,590		$	20,209		$	(1,510	)	$	78,289		$	57,950		$	17,313		$	(2,564	)	$	72,699
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	58,770		$	18,761		$	(2,037	)	$	75,494

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 28, 2013 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, line of credit, current and noncurrent deferred tax assets and liabilities, and
	income taxes receivable and payable.
(3)	Average capital employed was computed using the two periods ending July 28, 2013 and April 28, 2013.

Page 7 of 8

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE THREE MONTHS ENDED JULY 29, 2012
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Three Months			Average			Return on
	Ended			Capital			Avg. Capital
	July 29, 2012 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	5,230		$	55,357			37.8	%
Upholstery Fabrics		2,159			16,743			51.6	%
(less: Unallocated Corporate)		(1,910	)		(567	)		N/A
Total	$	5,479		$	71,532			30.6	%
Average Capital Employed	As of the three Months Ended July 29, 2012												As of the three Months Ended April 29, 2012
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		78,098			29,973			35,089			143,160			71,563			33,641			39,512			144,716
Total liabilities		(21,295	)		(11,006	)		(19,028	)		(51,329	)		(17,653	)		(19,123	)		(18,940	)		(55,716	)
Subtotal	$	56,803		$	18,967		$	16,061		$	91,831		$	53,910		$	14,518		$	20,572		$	89,000
Less:
Cash and cash equivalents		-			-			(21,889	)		(21,889	)		-			-			(25,023	)		(25,023	)
Short-term investments		-			-			(5,200	)		(5,200	)		-			-			(5,941	)		(5,941	)
Deferred income taxes - current		-			-			(2,337	)		(2,337	)		-			-			(2,467	)		(2,467	)
Deferred income taxes - non-current		-			-			(2,715	)		(2,715	)		-			-			(3,205	)		(3,205	)
Current maturities of long-term debt		-			-			2,400			2,400			-			-			2,404			2,404
Line of credit		-			-			834			834									889			889
Income taxes payable - current		-			-			751			751			-			-			642			642
Income taxes payable - long-term		-			-			4,131			4,131			-			-			4,164			4,164
Deferred income taxes - non-current		-			-			705			705			-			-			705			705
Long-term debt, less current maturities		-			-			6,666			6,666			-			-			6,719			6,719
Total Capital Employed	$	56,803		$	18,967		$	(593	)	$	75,177		$	53,910		$	14,518		$	(541	)	$	67,887
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	55,357		$	16,743		$	(567	)	$	71,532

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 29, 2012 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, line of credit, current and noncurrent deferred tax assets and liabilities, and
	income taxes payable.
(3)	Average capital employed was computed using the two periods ending July 29, 2012 and April 29, 2012.

Page 8 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012
Unaudited
(Amounts in Thousands)
		THREE MONTHS ENDED
		Amounts
		July 28,			July 29,
		2013			2012
Consolidated Effective GAAP Income Tax Rate	(1)		41.6	%		34.4	%
Non-Cash U.S. Income Tax Expense			(27.0	)%		(15.0	)%
Non-Cash Foreign Income Tax Expense			(0.4	)%		(0.2	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		14.2	%		19.2	%
		THREE MONTHS ENDED
		As reported						As adjusted		As reported					As adjusted
		July 28,						July 28,		July 29,					July 29,
			2013		Adjustments			2013		2012		Adjustments			2012
Income before income taxes		$	5,535					$	5,535	$	5,372				$	5,372
Income taxes (3)			2,305		$	(1,519	)		786		1,848	$	(817	)		1,031
Net income		$	3,230		$	1,519		$	4,749	$	3,524	$	817		$	4,341
Net income per share-basic		$	0.27		$	(0.13	)	$	0.39	$	0.28	$	(0.07	)	$	0.35
Net income per share-diluted		$	0.26		$	(0.12	)	$	0.38	$	0.28	$	(0.06	)	$	0.34
Average shares outstanding-basic			12,148			12,148			12,148		12,551		12,551			12,551
Average shares outstanding-diluted			12,366			12,366			12,366		12,711		12,711			12,711
(1) Calculated by dividing consolidated income tax expense by
consolidated income before income taxes.
(2) Represents estimated cash income tax expense for our subsidiaries located
in Canada and China divided by consolidated income before income taxes.
(3) Proforma taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.