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)    September 2, 2015

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
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, profit margins, profitability, operating income, capital expenditures, income taxes, SG&A or other expenses, pre-tax income, 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 17, 2015 for the fiscal year ended May 3, 2015.

Item 2.02 – Results of Operations and Financial Condition

On September 2, 2015, we issued a news release to announce our financial results for our first quarter ended August 2, 2015.  The news release is attached hereto as Exhibit 99(a).

Also on September 2, 2015, we released a Financial Information Release containing additional financial information and disclosures about first quarter ended August 2, 2015.  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 any proceeds from life insurance policies, plus excess tax benefits related to stock-based compensation, minus the purchase of long-term investments, minus any payments on life insurance policies, 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) carryforwards, 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.

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.

4

Item 9.01 (d) -- Exhibits

99(a) News Release dated September 2, 2015

99(b) Financial Information Release dated September 2, 2015

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: September 2, 2015

6

EXHIBIT INDEX

Exhibit Number	Exhibit
99(a)	News Release dated September 2, 2015
99(b)	Financial Information Release dated September 2, 2015

7

EX-99.(A)

Exhibit 99(a)

NEWS RELEASE

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 2016

HIGH POINT, N.C. (September 2, 2015) ─ Culp, Inc. (NYSE: CFI) today reported financial and operating results for the first quarter ended August 2, 2015.

Fiscal 2016 first quarter highlights:

■ Net sales were $80.2 million, up 5.4 percent, with mattress fabrics sales up 11.6 percent and upholstery fabrics sales down 2.6 percent.  The first quarter of fiscal 2016 had 13 weeks compared with 14 weeks for the first quarter of fiscal 2015.

■ Pre-tax income was $7.4 million, compared with $5.5 million for the prior year period.

■ Adjusted net income (non-GAAP) was $6.2 million, or $0.50 per diluted share, for the current quarter, compared with $4.5 million, or $0.37 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 $4.7 million, or $0.38 per diluted share, compared with net income of $3.3 million, or $0.27 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 $32.3 million and total debt of $2.2 million as of August 2, 2015.  Following the end of the first quarter, the company paid the final installment on its term loan with no remaining debt on the balance sheet at this time.

■ Consolidated return on capital was 34 percent compared with 26 percent in the prior year period.

■ The company paid a cash dividend of $0.06 per share and a special cash dividend of $0.40 per share during the quarter, totaling $5.7 million. Since June 2011, the company has returned a total of $35.0 million to shareholders in the form of regular quarterly and special dividends and share repurchases.

■ The projection for the second quarter of fiscal 2016 is for overall sales to be in the range of three percent to six percent higher as compared with the same period last year.  Pre-tax income is expected to be in the range of $5.5 million to $6.0 million.  Pre-tax income for the second quarter of fiscal 2015 was $4.9 million.

■ The company expects fiscal 2016 to be a good year for free cash flow even after the planned $8.0 to $9.0 million in capital expenditures.

Overview

For the first quarter ended August 2, 2015, net sales were $80.2 million, compared with $76.1 million a year ago.  The company reported net income of $4.7 million, or $0.38 per diluted share, for the first quarter of fiscal 2016, compared with net income of $3.3 million, or $0.27 per diluted share, for the first quarter of fiscal 2015. The first quarter of fiscal 2016 had 13 weeks compared with 14 weeks for the first quarter of fiscal 2015.

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CFI Announces Results for First Quarter Fiscal 2016

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September 2, 2015

Given the volatility in the income tax area during fiscal 2015 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.  (A presentation of adjusted net income and reconciliation to net income is set forth on page 6). The company currently does not incur cash income tax expense in the U.S., nor does it expect to for a few more years, due to approximately $32 million in U.S. net operating loss carryforwards as of the end of fiscal 2015.  For the first quarter of fiscal 2016, adjusted net income was $6.2 million, or $0.50 per diluted share, compared with $4.5 million, or $0.37 per diluted share, for the first quarter of fiscal 2015.  On a pre-tax basis, the company reported income of $7.4 million compared with $5.5 million for the first quarter of fiscal 2015.

Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, “We are pleased to report a solid start to fiscal 2016, with our first quarter sales and operating results better than expected, driven by strong performances in both of our businesses.  Overall, our total sales were up 5.4 percent compared with a year ago.  These results reflect favorable demand trends and positive customer response to our creative designs and diverse product offering.  Our strategic focus on innovation and product excellence continues to be the key driver of our performance in both businesses, and we intend to follow this same strategy in fiscal 2016.  Importantly, we have a scalable and global manufacturing platform that supports our ability to deliver these products and meet changing customer demand with exceptional service.  We also have the financial strength to continue making the strategic investments to support our growth.  Finally, we are especially pleased that Culp is now debt-free for the first time in our 43-year history.”

Mattress Fabrics Segment

Mattress fabrics sales for the first quarter were $47.8 million, up 11.6 percent compared with $42.8 million for the first quarter of fiscal 2015.

“Our mattress fabrics business continued to gain momentum in the first quarter of fiscal 2016 with better than expected results,” said Iv Culp, president of Culp’s mattress fabrics division.  “The higher sales for the quarter reflect favorable demand trends through the busy summer selling season.  Importantly, we continued to outpace overall industry growth as our outstanding designs and innovative product offering provide a strong competitive advantage in today’s mattress fabric marketplace.  From design to final delivery, we are doing an exceptional job in executing our vision to offer a full complement of fabrics and sewn covers across all price points and style trends, backed by excellent service.  Our products are resonating with customers who are embracing today’s more fashionable and decorative look, and we are well positioned to capitalize on these demand trends and expand our sales.  Culp has a strong value proposition that combines outstanding design capabilities with an expanded manufacturing platform focused on mirrored manufacturing and reactive capacity.

“Our improved operating results reflect solid execution of the strategic plan that we laid out at the beginning of last fiscal year, with consistent growth and progress since we began our $9.5 million capital project.  We are realizing the benefits of this expanded capacity and new equipment with greater operating efficiencies, enhanced finishing capabilities and better overall throughput.  Additionally, we benefited from some lower input costs during the quarter.

“We have completed the major work at our two North Carolina facilities, and we are now focused on expanding our operations and installing additional new equipment in our Canadian location during fiscal 2016.  Through our continued capital investments, we remain dedicated to our product delivery performance and strive to offer the best possible service to our customers.

“Overall, the fundamentals of our mattress fabrics business are strong, and we have created a strategic infrastructure that will support our continued growth and innovation.  We are also pleased with the increasing contribution from our latest venture in sewn mattress covers, which further supports our diversification strategy and enhances our strong value proposition.  We remain confident in our ability to execute our strategy with continued success in the year ahead,” Culp concluded.

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CFI Announces Results for First Quarter Fiscal 2016

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September 2, 2015

Upholstery Fabrics Segment

Sales for this segment were $32.4 million for the first quarter, compared with sales of $33.2 million in the first quarter of fiscal 2015.

“Our upholstery fabrics sales were in line with our expectations for the first quarter of fiscal 2016, while our operating results improved significantly,” noted Boyd Chumbley, executive vice president of Culp’s upholstery fabrics division.  “Overall, we are pleased with our consistent execution of a product-driven strategy with a focus on creative designs and product innovation.  We have also pursued marketing strategies to diversify our customer base and expand our geographic reach.  Together, these efforts have been the key drivers of our sales and operating performance, both with existing customers and new customers.  We have continued to enhance our product mix with favorable results, and we are pleased with our recent success in reaching additional end-user markets, including increased sales with the hospitality and “lifestyle” retail markets.

“Our global platform supports these marketing efforts with the flexibility to adapt to changing furniture market trends and consumer style preferences.  China produced fabrics accounted for 93 percent of Culp’s upholstery fabrics sales during the first quarter.  This unique platform has allowed us to more effectively reach new customers, with the ability to offer a diverse product mix of fabric styles and price points with outstanding service and quality.  Our results for the first quarter also reflect a more stable cost environment in China.

“We are proud of our growing reputation as an innovative and trusted industry leader and our ability to meet the demands of our customers.  Looking ahead, we believe our strategies will continue to drive profitable growth in upholstery fabrics for fiscal 2016, especially as the overall economy and the U.S. housing market continue to strengthen,” added Chumbley.

Balance Sheet

“Maintaining a strong financial position, generating free cash flow and investing in our strategic initiatives will continue to be top priorities for fiscal 2016,” added Ken Bowling, chief financial officer of Culp, Inc.  “As of the end of the first quarter, we reported $32.3 million in cash and cash equivalents and short-term investments compared with $31.0 million a year ago.  Consistent with our capital allocation strategy, the company paid a $0.40 per share special dividend during the first quarter, along with the regular quarterly dividend of $0.06 per share, totaling $5.7 million.  Total debt was $2.2 million at the end of the first quarter of fiscal 2016, which represented the final installment on our term loan.  After the end of the quarter, we made this scheduled debt payment on August 11, with no other debt remaining on the company’s balance sheet at this time.”

Dividends and Share Repurchases

The company also announced that the Board of Directors approved the payment of the company’s quarterly cash dividend of $0.06 per share.  This payment will be made on October 15, 2015, to shareholders of record as of October 1, 2015.  Future dividend payments are subject to Board approval and may be adjusted at the Board’s discretion as business needs or market conditions change.

Since June 2011, the company has returned approximately $35 million to shareholders in the form of regular quarterly and special dividends and share repurchases.

Outlook

Commenting on the outlook for the second quarter of fiscal 2016, Saxon remarked, “We expect overall sales to be three percent to six percent higher as compared with the second quarter of last year.

“We expect sales in our mattress fabrics segment to be four percent to eight percent higher compared with a strong second quarter in fiscal 2015.  Operating income and margin in this segment are expected to be moderately higher than the same period a year ago.

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CFI Announces Results for First Quarter Fiscal 2016

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September 2, 2015

“In our upholstery fabrics segment, we expect sales to be flat to slightly higher than the second quarter of fiscal 2015. We believe the upholstery fabric segment’s operating income and margin will be moderately higher than the same period last year.

“Considering these factors, the company expects to report pre-tax income for the second fiscal quarter of 2016 in the range of $5.5 million to $6.0 million.  Pre-tax income for last year’s second quarter was $4.9 million.

“With respect to the full year, capital expenditures for fiscal 2016 are expected to be approximately $8.0 million to $9.0 million, mostly related to expansion and efficiency improvement projects for mattress fabrics.  Additionally, the company expects a good year of free cash flow, even with the anticipated high level of capital expenditures and modest growth in working capital. Finally, although there is always uncertainty with longer term forecasts, we currently expect sales and operating performance for the second half of this fiscal year to be comparable or slightly better than the strong results achieved during the second half of last fiscal year.”

In closing, Saxon remarked, “We are pleased with a solid start to fiscal 2016.  Going forward, we are well positioned to capitalize on our core strengths – our outstanding design capabilities, innovative product offerings and a scalable and global manufacturing platform that enables us to provide exceptional service to our worldwide customers.  At the same time, we have a strong balance sheet and the financial flexibility to continue to drive innovation, enhance our operations and pursue strategic initiatives.  We are excited about the opportunities before us as we look ahead to the rest of fiscal 2016 and beyond.”

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, and China.

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, profit margins, profitability, operating income, capital expenditures, income taxes, SG&A or other expenses, pre-tax income, 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 17, 2015, for the fiscal year ended May 3, 2015.  In addition, please note that the company is not responsible for changes made to this release by wire services, internet services, or other media.

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CFI Announces Results for First Quarter Fiscal 2016

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September 2, 2015

CULP, INC.

Condensed Financial Highlights

(Unaudited)

	ThreeMonthsEnded
	August 2,		August 3,
	2015		2014
Net sales	$	80,185,000	$	76,060,000
Income before income taxes	$	7,408,000	$	5,459,000
Net income	$	4,701,000	$	3,344,000
Net income per share:
Basic	$	0.38	$	0.27
Diluted	$	0.38	$	0.27

Adjusted net income	$	6,245,000	$	4,547,000
Adjusted net income per share
Basic	$	0.51	$	0.37
Diluted	$	0.50	$	0.37

Average shares outstanding:
Basic	12,277,000	12,212,000
Diluted	12,456,000	12,404,000

Presentation ofAdjusted Net Income andAdjusted Income Taxes(1)

	ThreeMonthsEnded
	August 2,		August 3,
	2015		2014
Income before income taxes	$	7,408,000	$	5,459,000
Adjusted income taxes (2)	$	1,163,000	$	912,000
Adjusted net income	$	6,245,000	$	4,547,000

(1)   Culp, Inc. currently does not incur cash income tax expense in the U.S. due to its $32 million in net operating loss carryforwards as of May 3, 2015. 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 15.7% for fiscal 2016 and 16.7% for fiscal 2015.

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CFI Announces Results for First Quarter Fiscal 2016

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September 2, 2015

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

For the Three Months Ended August 2, 2015, and August 3, 2014

(Unaudited)

(Amounts in Thousands)

		THREE MONTHS ENDED
		Amounts
		August 2,			August 3,
		2015			2014
Consolidated Effective GAAP Income Tax Rate	(1)		36.5	%		38.7	%
Non-Cash U.S. Income Tax Expense			(20.5	)%		(21.2	)%
Non-Cash Foreign Income Tax Expense			(0.3	)%		(0.8	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		15.7	%		16.7	%

	THREE MONTHS ENDED
	As reported					As Adjusted		As reported					As Adjusted
	August 2,					August 2,		August 3,					August 3,
	2015		Adjustments			2015		2014		Adjustments			2014
Income before income taxes	$	7,408				$	7,408	$	5,459				$	5,459
Income taxes (3)		2,707	$	(1,544	)		1,163		2,115	$	(1,203	)		912
Net income	$	4,701	$	1,544		$	6,245	$	3,344	$	1,203		$	4,547
Net income per share-basic	$	0.38	$	0.13		$	0.51	$	0.27	$	0.10		$	0.37
Net income per share-diluted	$	0.38	$	0.12		$	0.50	$	0.27	$	0.10		$	0.37
Average shares outstanding-basic		12,277		12,277			12,277		12,212		12,212			12,212
Average shares outstanding-diluted		12,456		12,456			12,456		12,404		12,404			12,404

(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)	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 2016

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September 2, 2015

Reconciliation of Free Cash Flow and Return on Capital

For the Three Months Ended August 2, 2015, and August 3, 2014

(Unaudited)

(Amounts in thousands)

Free Cash Flow Reconciliation
	Three Months Ended			Three Months Ended
	August 2, 2015			August 3, 2014
Net cash provided by operating activities	$	1,055		$	4,051
Minus: Capital Expenditures		(3,336	)		(2,333	)
Add: Proceeds from the sale of equipment		104			391
Add: Excess tax benefits related to stock-based compensation		788			99
Minus: Purchase of long-term investments		(478	)		(984	)
Effects of exchange rate changes on cash and cash equivalents		116			223
Free Cash Flow	$	(1,751	)	$	1,447
Return on Capital Reconciliation
	Three Months Ended						Three Months Ended
	August 2, 2015						August 3, 2014
Consolidated Income from Operations	$	7,461					$	5,296
Average Capital Employed (2)		86,909						81,593
Return on Average Capital Employed (1)		34.3	%					26.0	%
Average Capital Employed
	August 2, 2015			May 3, 2015			August 3, 2014			April 27, 2014
Total assets	$	169,872		$	171,368		$	154,212		$	160,935
Total liabilities		(51,147	)		(51,941	)		(45,065	)		(49,191	)
Subtotal	$	118,725		$	119,427		$	109,147		$	111,744
Less:
Cash and cash equivalents		(25,933	)		(29,725	)		(24,665	)		(29,303	)
Short-term investments		(6,336	)		(10,004	)		(6,311	)		(6,294	)
Long-term investments		(2,893	)		(2,415	)		(1,749	)		(765	)
Income taxes receivable		(142	)		(229	)		(136	)		(121	)
Deferred income taxes - current		(6,986	)		(4,790	)		(6,203	)		(6,230	)
Deferred income taxes - non-current		(412	)		(447	)		(973	)		(2,040	)
Current maturities of long-term debt		2,200			2,200			2,200			2,200
Line of credit		-			-			569			586
Income taxes payable - current		392			325			387			442
Income taxes payable - long-term		3,634			3,792			4,037			3,962
Deferred income taxes - non-current		4,064			1,050			1,013			1,013
Deferred compensation		4,280			4,041			3,632			2,644
Long-term debt, less current maturities		-			-			2,200			2,200
Total Capital Employed	$	90,593		$	83,225		$	83,148		$	80,038
Average Capital Employed (2)	$	86,909					$	81,593
Notes:

(1)

Return on average capital employed represents operating income for the three month period ending August 2, 2015, or August 3, 2014, 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 investments, long-term debt, including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.

(2)

Average capital employed used for the three months ending August 2, 2015, was computed using the two quarterly periods ending August 2, 2015, and May 3, 2015. Average capital employed used for the three months ending August 3, 2014, was computed using the two quarterly periods ending August 3, 2014, and April 27,2014.

-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 AUGUST 2, 2015, AND AUGUST 3, 2014
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	August 2,			August 3,			% Over			August 2,			August 3,
	2015			2014			(Under)			2015			2014
Net sales	$	80,185			76,060			5.4	%		100.0	%		100.0	%
Cost of sales		63,983			63,345			1.0	%		79.8	%		83.3	%
Gross profit		16,202			12,715			27.4	%		20.2	%		16.7	%
Selling, general and
administrative expenses		8,741			7,419			17.8	%		10.9	%		9.8	%
Income from operations		7,461			5,296			40.9	%		9.3	%		7.0	%
Interest expense		24			68			(64.7	) %		0.0	%		0.1	%
Interest income		(66	)		(142	)		(53.5	) %		(0.1	)%		(0.2	) %
Other expense (income)		95			(89	)	N.M.				0.1	%		(0.1	) %
Income before income taxes		7,408			5,459			35.7	%		9.2	%		7.2	%
Income taxes*		2,707			2,115			28.0	%		36.5	%		38.7	%
Net income	$	4,701			3,344			40.6	%		5.9	%		4.4	%
Net income per share-basic	$	0.38		$	0.27			40.7	%
Net income per share-diluted	$	0.38		$	0.27			40.7	%
Average shares outstanding-basic		12,277			12,212			0.5	%
Average shares outstanding-diluted		12,456			12,404			0.4	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts							Percent of Sales
	August 2,		August 3,		% Over			August 2,			August 3,
	2015		2014		(Under)			2015			2014
Income before income taxes (see above)	$	7,408		5,459		35.7	%		9.2	%		7.2	%
Adjusted Income taxes (2)*		1,163		912		27.5	%		15.7	%		16.7	%
Adjusted net income		6,245		4,547		37.3	%		7.8	%		6.0	%
Adjusted net income per share-basic	$	0.51	$	0.37		37.8	%
Adjusted net income per share-diluted	$	0.50	$	0.37		35.1	%
Average shares outstanding-basic		12,277		12,212		0.5	%
Average shares outstanding-diluted		12,456		12,404		0.4	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $32.2 million in net operating loss carryforwards as of May 3, 2015. 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
AUGUST 2, 2015, AUGUST 3, 2014, AND MAY 3, 2015
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	August 2,		August 3,		(Decrease)						* May 3,
	2015		2014		Dollars			Percent			2015
Current assets
Cash and cash equivalents	$	25,933		24,665		1,268			5.1	%		29,725
Short-term investments		6,336		6,311		25			0.4	%		10,004
Accounts receivable		25,707		24,239		1,468			6.1	%		28,749
Inventories		46,544		41,688		4,856			11.6	%		42,484
Deferred income taxes		6,986		6,203		783			12.6	%		4,790
Income taxes receivable		142		136		6			4.4	%		229
Other current assets		3,502		2,308		1,194			51.7	%		2,440
Total current assets		115,150		105,550		9,600			9.1	%		118,421
Property, plant & equipment, net		37,480		31,891		5,589			17.5	%		36,078
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		412		973		(561	)		(57.7	) %		447
Long-term Investments		2,893		1,749		1,144			65.4	%		2,415
Other assets		2,475		2,587		(112	)		(4.3	) %		2,545
Total assets	$	169,872		154,212		15,660			10.2	%		171,368
Current liabilities
Current maturities of long-term debt	$	2,200		2,200		-			0.0	%		2,200
Accounts payable - trade		28,233		24,458		3,775			15.4	%		28,414
Accounts payable - capital expenditures		613		204		409			200.5	%		990
Accrued expenses		7,731		6,365		1,366			21.5	%		11,129
Income taxes payable - current		392		387		5			1.3	%		325
Total current liabilities		39,169		33,614		5,555			16.5	%		43,058
Income taxes payable - long-term		3,634		4,037		(403	)		(10.0	) %		3,792
Deferred income taxes		4,064		1,013		3,051			301.2	%		1,050
Line of credit		-		569		(569	)		(100.0	) %		-
Deferred compensation		4,280		3,632		648			17.8	%		4,041
Long-term debt , less current maturities		-		2,200		(2,200	)		(100.0	) %		-
Total liabilities		51,147		45,065		6,082			13.5	%		51,941
Shareholders' equity		118,725		109,147		9,578			8.8	%		119,427
Total liabilities and
shareholders' equity	$	169,872		154,212		15,660			10.2	%		171,368
Shares outstanding		12,339		12,217		122			1.0	%		12,219
*  Derived from audited financial statements.

Page 3 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
Unaudited
(Amounts in Thousands)
	THREE MONTHS ENDED
	Amounts
	August 2,			August 3,
	2015			2014
Cash flows from operating activities:
Net income	$	4,701			3,344
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		1,555			1,399
Amortization of other assets		47			47
Stock-based compensation		265			46
Deferred income taxes		1,641			1,193
Gain on sale of equipment		(46	)		(45	)
Excess tax benefits related to stock-based compensation		(788	)		(99	)
Foreign currency exchange gains		(57	)		(201	)
Changes in assets and liabilities:
Accounts receivable		2,774			3,168
Inventories		(4,068	)		(1,021	)
Other current assets		(1,149	)		40
Other assets		23			283
Accounts payable		(132	)		(2,224	)
Accrued expenses and deferrred compensation		(3,870	)		(1,855	)
Income taxes		159			(24	)
Net cash provided by operating activities		1,055			4,051
Cash flows from investing activities:
Capital expenditures		(3,336	)		(2,333	)
Proceeds from the sale of equipment		104			391
Proceeds from the sale of short-term investments		3,612			-
Purchase of short-term investments		(33	)		(27	)
Purchase of long-term investments		(478	)		(984	)
Net cash used in investing activities		(131	)		(2,953	)
Cash flows from financing activities:
Excess tax benefits related to stock-based compensation		788			99
Repurchase of common stock		-			(556	)
Dividends paid		(5,676	)		(5,502	)
Proceeds from common stock issued		56			-
Net cash used in financing activities		(4,832	)		(5,959	)
Effect of exchange rate changes on cash and cash equivalents		116			223
Decrease in cash and cash equivalents		(3,792	)		(4,638	)
Cash and cash equivalents at beginning of period		29,725			29,303
Cash and cash equivalents at end of period	$	25,933			24,665
Free Cash Flow (1)	$	(1,751	)		1,447

(1) Free Cash Flow reconciliation is as follows:
		FY 2016			FY 2015
A)	Net cash provided by operating activities	$	1,055			4,051
B)	Minus:  Capital Expenditures		(3,336	)		(2,333	)
C)	Add:     Proceeds from the sale of equipment		104			391
D)	Add:     Excess tax benefits related to stock-based compensation		788			99
E)	Minus:  Purchase of long-term investments		(478	)		(984	)
F)	Effects of exchange rate changes on cash and cash equivalents		116			223
		$	(1,751	)		1,447

Page 4 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	August 2,			August 3,			% Over			August 2,			August 3,
Net Sales by Segment	2015			2014			(Under)			2015			2014
Mattress Fabrics	$	47,808			42,822			11.6	%		59.6	%		56.3	%
Upholstery Fabrics		32,377			33,238			(2.6	) %		40.4	%		43.7	%
Net Sales	$	80,185			76,060			5.4	%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	9,925			7,202			37.8	%		20.8	%		16.8	%
Upholstery Fabrics		6,277			5,513			13.9	%		19.4	%		16.6	%
Gross Profit		16,202			12,715			27.4	%		20.2	%		16.7	%
Selling, General and Administrative expenses by Segment										Percent of Sales
Mattress Fabrics	$	2,923			2,574			13.6	%		6.1	%		6.0	%
Upholstery Fabrics		3,595			3,452			4.1	%		11.1	%		10.4	%
Unallocated Corporate expenses		2,223			1,393			59.6	%		2.8	%		1.8	%
Selling, General and Administrative Expenses		8,741			7,419			17.8	%		10.9	%		9.8	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	7,003			4,629			51.3	%		14.6	%		10.8	%
Upholstery Fabrics		2,681			2,060			30.1	%		8.3	%		6.2	%
Unallocated corporate expenses		(2,223	)		(1,393	)		59.6	%		(2.8	) %		(1.8	) %
Operating Income		7,461			5,296			40.9	%		9.3	%		7.0	%
Return on Capital (1)
Mattress Fabrics		39.5	%		29.5	%
Upholstery Fabrics		65.0	%		45.2	%
Unallocated Corporate		N/A			N/A
Consolidated		34.3	%		26.0	%
Capital Employed (2)
Mattress Fabrics		71,349			62,936			13.4	%
Upholstery Fabrics		18,946			19,052			(0.6	) %
Unallocated Corporate		298			1,160			N/A
Consolidated		90,593			83,148			9.0	%
Depreciation expense by Segment
Mattress Fabrics	$	1,359			1,219			11.5	%
Upholstery Fabrics		196			180			8.9	%
Depreciation expense		1,555			1,399			11.2	%
Notes:
(1) See pages 6 and 7 of this financial information release for calculations.
(2) The capital employed balances are as of August 2, 2015 and August 3, 2014.

Page 5 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED AUGUST 2, 2015 AND AUGUST 3, 2014
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	11/2/2014			2/1/2015			5/3/2015			8/2/2015			8/2/2015
Net income	$	3,001		$	3,812		$	4,913		$	4,701		$	16,427
Income taxes		1,889			2,110			1,772			2,707			8,478
Interest income, net		(153	)		(202	)		(128	)		(42	)		(525	)
Depreciation and amortization expense		1,460			1,478			1,576			1,602			6,116
Stock based compensation		245			191			304			265			1,005
Adjusted EBITDA	$	6,442		$	7,389		$	8,437		$	9,233		$	31,501
	Quarter Ended
													Trailing 12
													Months
	10/27/2013			1/26/2014			4/27/2014			8/3/2014			8/3/2014
Net income	$	3,096		$	8,381		$	2,740		$	3,344		$	17,561
Income taxes		1,718			(3,807	)		1,380			2,115			1,406
Interest income, net		(3	)		(57	)		(43	)		(74	)		(177	)
Depreciation and amortization expense		1,373			1,370			1,394			1,446			5,583
Stock based compensation		224			175			159			46			604
Adjusted EBITDA	$	6,408		$	6,062		$	5,630		$	6,877		$	24,977
% Over (Under)		0.5	%		21.9	%		49.9	%		34.3	%		26.1	%

Page 6 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 2, 2015
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Three Months			Average			Return on
	Ended			Capital			Avg. Capital
	August 2, 2015 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	7,003		$	70,911			39.5	%
Upholstery Fabrics		2,681			16,486			65.0	%
(less: Unallocated Corporate)		(2,223	)		(488	)		N/A
Total	$	7,461		$	86,909			34.3	%

Average Capital Employed	As of the three Months Ended August 2, 2015												As of the three Months Ended May 3, 2015
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		91,614			33,795			44,463			169,872			89,066			32,838			49,464			171,368
Total liabilities		(20,265	)		(14,849	)		(16,033	)		(51,147	)		(18,594	)		(18,812	)		(14,535	)		(51,941	)
Subtotal	$	71,349		$	18,946		$	28,430		$	118,725		$	70,472		$	14,026		$	34,929		$	119,427
Less:
Cash and cash equivalents		-			-			(25,933	)		(25,933	)		-			-			(29,725	)		(29,725	)
Short-term investments		-			-			(6,336	)		(6,336	)		-			-			(10,004	)		(10,004	)
Long-term investments		-			-			(2,893	)		(2,893	)		-			-			(2,415	)		(2,415	)
Income taxes receivable		-			-			(142	)		(142	)		-			-			(229	)		(229	)
Deferred income taxes - current		-			-			(6,986	)		(6,986	)		-			-			(4,790	)		(4,790	)
Deferred income taxes - non-current		-			-			(412	)		(412	)		-			-			(447	)		(447	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Income taxes payable - current		-			-			392			392			-			-			325			325
Income taxes payable - long-term		-			-			3,634			3,634			-			-			3,792			3,792
Deferred income taxes - non-current		-			-			4,064			4,064			-			-			1,050			1,050
Deferred compensation		-			-			4,280			4,280			-			-			4,041			4,041
Total Capital Employed	$	71,349		$	18,946		$	298		$	90,593		$	70,472		$	14,026		$	(1,273	)	$	83,225

	Mattress		Upholstery		Unallocated
	Fabrics		Fabrics		Corporate			Total
Average Capital Employed (3)	$	70,911	$	16,486	$	(488	)	$	86,909

Notes:
(1)	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 2, 2015 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 investments, current maturities of long-term debt, current and noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.
(3)	Average capital employed was computed using the two periods ending August 2, 2015 and May 3, 2015.

Page 7 of 8

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 3, 2014
(Amounts in Thousands)
(Unaudited)
	Operating Income
	Three Months			Average		Return on
	Ended			Capital		Avg. Capital
	August 3, 2014 (1)			Employed (3)		Employed (2)
Mattress Fabrics	$	4,629		$	62,697		29.5	%
Upholstery Fabrics		2,060			18,236		45.2	%
(less: Unallocated Corporate)		(1,393	)		661		N/A
Total	$	5,296		$	81,593		26.0	%

Average Capital Employed	As of the three Months Ended August 3, 2014												As of the three Months Ended April 27, 2014
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		81,400			30,520			42,292			154,212			79,055			34,987			46,893			160,935
Total liabilities		(18,464	)		(11,468	)		(15,133	)		(45,065	)		(16,598	)		(17,568	)		(15,025	)		(49,191	)
Subtotal	$	62,936		$	19,052		$	27,159		$	109,147		$	62,457		$	17,419		$	31,868		$	111,744
Less:
Cash and cash equivalents		-			-			(24,665	)		(24,665	)		-			-			(29,303	)		(29,303	)
Short-term investments		-			-			(6,311	)		(6,311	)		-			-			(6,294	)		(6,294	)
Long-term investments		-			-			(1,749	)		(1,749	)		-			-			(765	)		(765	)
Income taxes receivable		-			-			(136	)		(136	)		-			-			(121	)		(121	)
Deferred income taxes - current		-			-			(6,203	)		(6,203	)		-			-			(6,230	)		(6,230	)
Deferred income taxes - non-current		-			-			(973	)		(973	)		-			-			(2,040	)		(2,040	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			569			569									586			586
Income taxes payable - current		-			-			387			387			-			-			442			442
Income taxes payable - long-term		-			-			4,037			4,037			-			-			3,962			3,962
Deferred income taxes - non-current		-			-			1,013			1,013			-			-			1,013			1,013
Deferred compensation		-			-			3,632			3,632			-			-			2,644			2,644
Long-term debt, less current maturities		-			-			2,200			2,200			-			-			2,200			2,200
Total Capital Employed	$	62,936		$	19,052		$	1,160		$	83,148		$	62,457		$	17,419		$	162		$	80,038

	Mattress		Upholstery		Unallocated
	Fabrics		Fabrics		Corporate		Total
Average Capital Employed (3)	$	62,697	$	18,236	$	661	$	81,593

Notes:
(1)	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 3, 2014 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 investments, long-term debt, including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.
(3)	Average capital employed was computed using the two periods ending August 3, 2014 and April 27, 2014.

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 AUGUST 2, 2015 AND AUGUST 3, 2014
Unaudited
(Amounts in Thousands)
		THREE MONTHS ENDED
		Amounts
		August 2,			August 3,
		2015			2014
Consolidated Effective GAAP Income Tax Rate	(1)		36.5	%		38.7	%
Non-Cash U.S. Income Tax Expense			(20.5	)%		(21.2	)%
Non-Cash Foreign Income Tax Expense			(0.3	)%		(0.8	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		15.7	%		16.7	%

	THREE MONTHS ENDED
	As reported					As Adjusted		As reported					As Adjusted
	August 2,					August 2,		August 3,					August 3,
	2015		Adjustments			2015		2014		Adjustments			2014
Income before income taxes	$	7,408				$	7,408	$	5,459				$	5,459
Income taxes (3)		2,707	$	(1,544	)		1,163		2,115	$	(1,203	)		912
Net income	$	4,701	$	1,544		$	6,245	$	3,344	$	1,203		$	4,547
Net income per share-basic	$	0.38	$	0.13		$	0.51	$	0.27	$	0.10		$	0.37
Net income per share-diluted	$	0.38	$	0.12		$	0.50	$	0.27	$	0.10		$	0.37
Average shares outstanding-basic		12,277		12,277			12,277		12,212		12,212			12,212
Average shares outstanding-diluted		12,456		12,456			12,456		12,404		12,404			12,404

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