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)    March 1, 2016

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
Signatures	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 March 1, 2016, we issued a news release to announce our financial results for our third quarter and nine months ended January 31, 2016.  The news release is attached hereto as Exhibit 99(a).

Also on March 1, 2016, we released a Financial Information Release containing additional financial information and disclosures about our third quarter and nine months ended January 31, 2016.  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, minus payments on life insurance policies, plus excess tax benefits related to stock-based compensation, minus the purchase of long-term investments, 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 may 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 March 1, 2016

99(b) Financial Information Release dated March 1, 2016

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:  March 1, 2016

6

EXHIBIT INDEX

Exhibit Number	Exhibit
99(a)	News Release dated March 1, 2016
99(b)	Financial Information Release dated March 1, 2016

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 THIRD QUARTER FISCAL 2016

Company Declares Regular Quarterly Cash Dividend of $0.07 Per Share

HIGH POINT, N.C. (March 1, 2016) ─ Culp, Inc. (NYSE: CFI) today reported financial and operating results for the third quarter and nine months ended January 31, 2016.

Fiscal 2016 Third Quarter Highlights

■ Net sales were $78.5 million, down 3.4 percent, with mattress fabric sales down 3.1 percent and upholstery fabric sales down 3.9 percent, compared with an exceptionally strong sales performance for both divisions in the third quarter last year.

■ Pre-tax income was $7.2 million, up 21 percent compared with $5.9 million in the third quarter of fiscal 2015.

■ Adjusted net income (non-GAAP) was $5.9 million, or $0.47 per diluted share, for the current quarter, compared with $5.0 million, or $0.40 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 7).

■ Net income (GAAP) was $4.9 million, or $0.39 per diluted share, compared with net income of $3.8 million, or $0.31 per diluted share, in the prior year period.

■ The company purchased 110,776 shares of Culp common stock, representing nearly 1.0 percent of outstanding shares, for $2.4 million at an average price of $23.79 per share.

■ The company’s financial position remained strong with cash and cash equivalents and short-term investments of $36.0 million, even after spending $19.6 million in dividends, capital expenditures, debt repayments and share repurchases through the first nine months of fiscal 2016.

Fiscal 2016 Year to Date Highlights

■ Year to date net sales were $235.6 million, up 1.9 percent from the same period a year ago, with mattress fabric sales up 4.5 percent and upholstery fabric sales down 1.7 percent over the same period a year ago.

■ Pre-tax income was $20.7 million, up 27 percent compared with $16.3 million for the same period last year.

■ Adjusted net income (non-GAAP) was $17.0 million, or $1.36 per diluted share, compared with $13.8 million, or $1.11 per diluted share, for the prior year period.

■ Net income (GAAP) was $13.3 million, or $1.07 per diluted share, compared with net income of $10.2 million, or $0.82 per diluted share, for the same period a year ago.

■ Consolidated return on capital was 32 percent, compared with 27 percent for the same period a year ago.

■ Capital expenditures for the year to date period totaled $7.7 million, almost all of which related to the mattress fabrics segment, compared with $8.2 million a year ago.

Guidance for Fourth Quarter and Fiscal 2016

■ The projection for the fourth quarter of fiscal 2016 is for overall sales to be comparable with the previous year’s fourth quarter. Pre-tax income for the fourth quarter of fiscal 2016 is expected to be in the range of $6.7 million to $7.2 million. Pre-tax income for the fourth quarter of fiscal 2015 was $6.7 million.

■ The projection for the full year is for overall sales to be slightly higher than last year.

■ Pre-tax income for the full year is expected to be $27.5 million to $28.0 million, compared with $23.0 million last fiscal year. The highest annual pre-tax income in the company’s history was the $23.0 million achieved last fiscal year.

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CFI Announces Results for Third Quarter Fiscal 2016

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March 1, 2016

Overview

For the third quarter ended January 31, 2016, net sales were $78.5 million, a 3.4 percent decrease compared with $81.3 million a year ago. The company reported net income of $4.9 million, or $0.39 per diluted share, for the third quarter of fiscal 2016, compared with net income of $3.8 million, or $0.31 per diluted share, for the third quarter of fiscal 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 7). 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 $33 million in U.S. net operating loss carryforwards as of the end of fiscal 2015. For the third quarter of fiscal 2016, adjusted net income was $5.9 million, or $0.47 per diluted share, compared with $5.0 million, or $0.40 per diluted share, for the third quarter of fiscal 2015. On a pre-tax basis, the company reported income of $7.2 million compared with pre-tax income of $5.9 million for the third quarter of fiscal 2015.

Commenting on the results, Frank Saxon, president and chief executive officer of Culp, Inc., said, “We continued to drive improvement in our operating performance in the third quarter. While we have achieved higher overall year-over-year sales through the first nine months of fiscal 2016, we did experience a slight drop in the third quarter compared with the prior year period, which was an exceptionally strong sales performance for both businesses. We have remained focused on our top strategic priorities – to drive product innovation and creativity throughout our company and provide a product mix that meets the demands of our customers. Our efficient and flexible manufacturing platform supports this strategy, and we continue to make the right investments to improve our operating efficiencies and overall capacity. Overall, we have seen significant improvement in our profitability this fiscal year. Importantly, we also have the financial strength to support our growth strategy as well as provide added value to shareholders through dividends and share repurchases.”

Mattress Fabric Segment

Mattress fabric sales for the third quarter were $44.3 million, down 3.1 percent compared with $45.7 million for the third quarter of fiscal 2015, while year to date sales were up 4.5 percent.

“While our sales were slightly lower than last year for the third quarter, we have continued to deliver a consistent and strong operating performance in fiscal 2016,” said Iv Culp, president of Culp’s mattress fabrics division. “Our sales for the third quarter were affected by several factors, including a significant weather event at the end of the quarter, which affected our production and shipment schedules. In addition, we experienced a timing difference related to customer roll-outs of new product lines that typically occur in our third quarter as they did the previous year. We expect to recognize that business in the fourth quarter of fiscal 2016 following the Presidents Day holiday mattress promotional events. In spite of these factors, we continued to outpace the overall mattress industry growth, and we are pleased with our ability to respond to changing customer demand trends. Our mirrored manufacturing platform, technical expertise and expanded reactive capacity support our ability to meet this demand with excellent service and delivery performance.

“We are encouraged by the execution of our operating strategy as we continue to realize the benefits of our recent capital investments with increased capacity via newer, more efficient equipment, enhanced finishing capabilities and better overall throughput. As planned, we completed the initial phase of our expansion project in our Canadian location, and we plan to install additional new equipment and make other technological improvements throughout our manufacturing platform during the fourth quarter. These investments demonstrate Culp’s commitment to our customers, and we look forward to the opportunities to drive further operational improvement.

“Design and innovation remain our top priorities to meet customer style preferences and demand trends. As such, we are in the process of enhancing our design services and facilities to further our value proposition. Additionally, we had an excellent showing at the January Las Vegas bedding market, with strong placements, especially in the premium product lines. We are also pleased to see the continued contribution from our mattress cover business. With our complete array of innovative fabrics and mattress covers across all price points, Culp is well positioned for another solid performance in fiscal 2016,” Culp concluded.

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CFI Announces Results for Third Quarter Fiscal 2016

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March 1, 2016

Upholstery Fabric Segment

Sales for this segment were $34.2 million for the third quarter, down 3.9 percent compared with sales of $35.6 million in the third quarter of fiscal 2015. Sales for the year to date period were down 1.7 percent.

“As expected, our sales for the third quarter were slightly lower compared with the same period last year, which was an exceptionally strong quarterly performance for upholstery fabric sales,” noted Boyd Chumbley, executive vice president of Culp’s upholstery fabrics division. “However, we achieved significant improvement in our operating income and margins for the third quarter compared with the prior year period. We continue to benefit from our strategic focus on product innovation and sales diversification. Our changing product mix resulted in greater operating efficiency and capacity utilization in our China cut and sew operation.

“Customer response has been very favorable to our creative designs and diverse range of innovative products. Our flexible global platform supports our marketing efforts and allows us to quickly respond to changing market trends and consumer style preferences. Sales of China produced fabrics accounted for 92 percent of upholstery fabric sales in the third quarter.

“While the short-term outlook is challenging given the current uncertainties in the global economy, we believe we are well positioned for the long-term. An improving U.S. housing market, low interest rates, higher employment rates and lower gasoline prices are all positive economic indicators that support higher consumer spending for home furnishings. As market conditions evolve, we expect to benefit from more favorable demand trends and look forward to the opportunities ahead,” added Chumbley.

Balance Sheet

“Our strong financial position continues to be an important advantage for Culp in fiscal 2016,” added Ken Bowling, chief financial officer of Culp. “As of January 31, 2016, we reported $36.0 million in cash equivalents and short-term investments, even after spending $19.6 million in dividends, capital expenditures, debt repayments and share repurchases through the first nine months of fiscal 2016. We have the financial strength to continue to make the strategic investments to support our growth strategy and return funds to our shareholders.”

Quarterly Dividend and Share Repurchase Program

During the third quarter of fiscal 2016, the company purchased 100,776 shares of Culp common stock, representing nearly one percent of outstanding shares, for $2.4 million at an average price of $23.79 per share, pursuant to the $5.0 million share repurchase program authorized by the Board of Directors in February 2014. This leaves approximately $1.9 million available for additional share repurchases.

Since June 2011, the company has returned a total of $39 million to shareholders in the form of regular quarterly and special dividends and share repurchases.

The company announced that its Board of Directors has approved the payment of a quarterly cash dividend of $0.07 per share. This compares with $0.06 per share paid for the same period last year, reflecting an increase of 17 percent. The dividend is to be paid on or about April 15, 2016, to shareholders of record as of the close of business on April 1, 2016. The $0.07 per share is an annual indicated dividend of $0.28 per share.

Outlook

Commenting on the outlook for the fourth quarter of fiscal 2016, Saxon remarked, “At this time, we expect overall sales to be comparable with the fourth quarter of last fiscal year, which was a strong quarter. For the year, we expect overall fiscal 2016 annual sales to be slightly higher than last year’s annual sales.

“We expect fourth quarter sales in our mattress fabric business to be comparable with the same period a year ago, which was up 10 percent compared to the prior year. Operating income and margins in this segment are expected to be flat to slightly lower than the same period last year.

“For the full fiscal year, we expect mattress fabric sales to be two to four percent higher than fiscal 2015, and operating income and margins are expected to be significantly higher than last fiscal year.

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CFI Announces Results for Third Quarter Fiscal 2016

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March 1, 2016

“In our upholstery fabric business, we expect fourth quarter sales to be comparable with the previous year’s fourth quarter results. We believe the upholstery fabric segment’s operating income and margins will be moderately higher compared with the same quarter of last year.

“For the full fiscal year, we expect upholstery fabric sales to be comparable with last fiscal year.  Operating income and margins in this segment are expected to be substantially higher than last year.

“Considering these factors, the company expects to report pre-tax income for the fourth quarter in the range of $6.7 million to $7.2 million. Pre-tax income for last year’s fourth quarter was $6.7 million. For fiscal 2016 as a whole, we expect pre-tax income in the range of $27.5 million to $28.0 million, compared with $23.0 million last fiscal year, which was the highest level achieved in the company’s history.

“Looking at the full year, capital expenditures for fiscal 2016 are expected to be approximately $12.0 million, mostly related to expansion and efficiency improvement projects for mattress fabrics,” Saxon added. “Additionally, the company expects another good year of free cash flow, even with the anticipated high level of capital expenditures and modest growth in working capital.”

In closing, Saxon remarked, “We are pleased with our ability to consistently execute our strategy in fiscal 2016 with improved profitability in both businesses. We have maintained a strong competitive position with our creative designs, innovative product offerings, and a flexible and scalable global manufacturing platform that supports our ability to deliver these products. At the same time, we have continued to invest for the future to further enhance our operations and provide outstanding service to our global customer base. We look forward to the opportunities ahead for Culp. Above all, we are committed to outstanding performance for our customers as a financially stable and trusted source for innovative fabrics.”

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CFI Announces Results for Third Quarter Fiscal 2016

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March 1, 2016

About the Company

Culp, Inc. is one of the world's largest marketers of mattress fabrics for bedding and upholstery fabrics for residential and commercial furniture.  The company markets a variety of fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced through 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 Third Quarter Fiscal 2016

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March 1, 2016

CULP, INC.

Condensed Financial Highlights

(Unaudited)

	Three Months Ended				Nine Months Ended
	January 31,		February 1,		January 31,		February 1,
	2016		2015		2016		2015
Net sales	$	78,466,000	$	81,269,000	$	235,607,000	$	231,320,000
Income before income taxes	$	7,179,000	$	5,922,000	$	20,731,000	$	16,270,000
Net income	$	4,862,000	$	3,812,000	$	13,333,000	$	10,157,000
Net income per share:
Basic	$	0.39	$	0.31	$	1.08	$	0.83
Diluted	$	0.39	$	0.31	$	1.07	$	0.82
Adjusted net income	$	5,901,000	$	5,016,000	$	17,041,000	$	13,781,000
Adjusted net income per share
Basic	$	0.48	$	0.41	$	1.38	$	1.13
Diluted	$	0.47	$	0.40	$	1.36	$	1.11
Average shares outstanding:
Basic		12,331,000		12,219,000		12,317,000		12,216,000
Diluted		12,486,000		12,417,000		12,488,000		12,410,000

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

	Three Months Ended				Nine Months Ended
	January 31,		February 1,		January 31,		February 1,
	2016		2015		2016		2015
Income before income taxes	$	7,179,000	$	5,922,000	$	20,731,000	$	16,270,000
Adjusted income taxes (2)	$	1,278,000	$	906,000	$	3,690,000	$	2,489,000
Adjusted net income	$	5,901,000	$	5,016,000	$	17,041,000	$	13,781,000

(1) Culp, Inc. currently does not incur cash income tax expense in the U.S. due to its $33.3 million in net operating loss carryforwards as of May 3, 2015.  Adjusted net income is calculated using only estimated cash 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 17.8% for fiscal 2016 and 15.3% for fiscal 2015.

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CFI Announces Results for Third Quarter Fiscal 2016

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March 1, 2016

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

For the Nine Months Ended January 31, 2016, and February 1, 2015

(Unaudited)

(Amounts in Thousands)

		NINE MONTHS ENDED
		Amounts
		January 31,			February 1,
		2016			2015
Consolidated Effective GAAP Income Tax Rate	(1)		35.7	%		37.6	%
Non-Cash U.S. Income Tax Expense			(17.9	)%		(22.1	)%
Non-Cash Foreign Income Tax Expense			0.0	%		(0.2	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		17.8	%		15.3	%

	THREE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
	2016		Adjustments			of Adjustments		2015		Adjustments			of Adjustments
Income before income taxes	$	7,179	$	-		$	7,179	$	5,922				$	5,922
Income taxes (3)		2,317	$	(1,039	)		1,278		2,110	$	(1,204	)		906
Net income	$	4,862	$	1,039		$	5,901	$	3,812	$	1,204		$	5,016
Net income per share-basic	$	0.39	$	0.08		$	0.48	$	0.31	$	0.10		$	0.41
Net income per share-diluted	$	0.39	$	0.08		$	0.47	$	0.31	$	0.10		$	0.40
Average shares outstanding-basic		12,331		12,331			12,331		12,219		12,219			12,219
Average shares outstanding-diluted		12,486		12,486			12,486		12,417		12,417			12,417
	NINE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
	2016		Adjustments			of Adjustments		2015		Adjustments			of Adjustments
Income before income taxes	$	20,731	$	-		$	20,731	$	16,270	$	-		$	16,270
Income taxes (3)		7,398	$	(3,708	)		3,690		6,113	$	(3,624	)		2,489
Net income	$	13,333	$	3,708		$	17,041	$	10,157	$	3,624		$	13,781
Net income per share-basic	$	1.08	$	0.30		$	1.38	$	0.83	$	0.30		$	1.13
Net income per share-diluted	$	1.07	$	0.30		$	1.36	$	0.82	$	0.29		$	1.11
Average shares outstanding-basic		12,317		12,317			12,317		12,216		12,216			12,216
Average shares outstanding-diluted		12,488		12,488			12,488		12,410		12,410			12,410

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

-MORE-

CFI Announces Results for Third Quarter Fiscal 2016

Page 8

March 1, 2016

Reconciliation of Free Cash Flow

For the Nine Months Ended January 31, 2016, and February 1, 2015

(Unaudited)

(Amounts in thousands)

	Nine Months Ended			Nine Months Ended
	January 31, 2016			February 1, 2015
Net cash provided by operating activities	$	15,876		$	20,699
Minus: Capital Expenditures		(7,686	)		(8,185	)
Add: Proceeds from the sale of equipment		230			625
Add: Proceeds from life insurance policies		-			320
Minus: Payments on life insurance policies		(18	)		(18	)
Minus: Purchase of long-term investments		(1,268	)		(1,298	)
Add: Excess tax benefits related to stock-based compensation		822			110
Effect of exchange rate changes on cash and cash equivalents		289			(458	)
Free Cash Flow	$	8,245		$	11,795

-MORE-

CFI Announces Results for Third Quarter Fiscal 2016

Page 9

March 1, 2016

Reconciliation of Return on Capital

For the Nine Months Ended January 31, 2016, and February 1, 2015

(Unaudited)

(Amounts in thousands)

	Nine Months Ended						Nine Months Ended
	January 31, 2016						February 1, 2015
Consolidated Income from Operations	$	20,986					$	16,222
Average Capital Employed (2)		88,275						81,065
Return on Average Capital Employed (1)		31.7	%					26.7	%
Average Capital Employed
	January 31, 2016			November 1, 2015			August 2, 2015			May 3, 2015
Total assets	$	173,551		$	168,947		$	166,879		$	171,300
Total liabilities		(48,477	)		(45,972	)		(48,154	)		(51,873	)
Subtotal	$	125,074		$	122,975		$	118,725		$	119,427
Less:
Cash and cash equivalents		(31,713	)		(31,176	)		(25,933	)		(29,725	)
Short-term investments		(4,259	)		(6,320	)		(6,336	)		(10,004	)
Long-term investments		(3,590	)		(3,279	)		(2,893	)		(2,415	)
Income taxes receivable		(23	)		(75	)		(142	)		(229	)
Deferred income taxes - non-current		(4,312	)		(3,415	)		(4,405	)		(5,169	)
Current maturities of long-term debt		-			-			2,200			2,200
Income taxes payable - current		622			305			392			325
Income taxes payable - long-term		3,480			3,655			3,634			3,792
Deferred income taxes - non-current		1,209			1,206			1,071			982
Deferred compensation		4,495			4,421			4,280			4,041
Total Capital Employed	$	90,983		$	88,297		$	90,593		$	83,225
Average Capital Employed (2)	$	88,275
	February 1, 2015			November 2, 2014			August 3, 2014			April 27, 2014
Total assets	$	165,358		$	156,163		$	154,218		$	160,928
Total liabilities		(50,386	)		(44,489	)		(45,071	)		(49,184	)
Subtotal	$	114,972		$	111,674		$	109,147		$	111,744
Less:
Cash and cash equivalents		(28,772	)		(28,953	)		(24,665	)		(29,303	)
Short-term investments		(8,384	)		(6,318	)		(6,311	)		(6,294	)
Long-term investments		(2,063	)		(1,911	)		(1,749	)		(765	)
Income taxes receivable		(104	)		-			(136	)		(121	)
Deferred income taxes - non-current		(5,020	)		(6,200	)		(7,182	)		(8,263	)
Current maturities of long-term debt		2,200			2,200			2,200			2,200
Line of credit		-			-			569			586
Income taxes payable - current		325			268			387			442
Income taxes payable - long-term		3,630			3,980			4,037			3,962
Deferred income taxes - non-current		927			896			1,019			1,006
Deferred compensation		3,934			3,794			3,632			2,644
Long-term debt, less current maturities		-			-			2,200			2,200
Total Capital Employed	$	81,645		$	79,430		$	83,148		$	80,038
Average Capital Employed (2)	$	81,065

Notes:

(1) Return on average capital employed represents operating income for the nine month period ending January 31, 2016, or February 1, 2015, divided by three quarters 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,  noncurrent deferred tax assets and liabilities, income taxes receivable and payable,

      and deferred compensation.

(2) Average capital employed used for the nine months ending January 31, 2016, was computed using the four quarterly periods ending January 31, 2016, November 1, 2015, August 2, 2015 and May 3, 2015.

      Average capital employed used for the nine months ending February 1, 2015, was computed using the four quarterly periods ending February 1, 2015, November 2, 2014, August 3, 2014, and April 27, 2014.

-END-

EX-99.B

Exhibit 99(b)

Page 1 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	Amounts									Percent of Sales
	January 31,			February 1,			% Over			January 31,			February 1,
	2016			2015			(Under)			2016			2015
Net sales	$	78,466			81,269			(3.4	)%		100.0	%		100.0	%
Cost of sales		61,903			66,867			(7.4	)%		78.9	%		82.3	%
Gross profit		16,563			14,402			15.0	%		21.1	%		17.7	%
Selling, general and
administrative expenses		9,337			8,375			11.5	%		11.9	%		10.3	%
Income from operations		7,226			6,027			19.9	%		9.2	%		7.4	%
Interest income		(38	)		(202	)		(81.2	)%		(0.0	)%		(0.2	)%
Other expense		85			307			(72.3	)%		0.1	%		0.4	%
Income before income taxes		7,179			5,922			21.2	%		9.1	%		7.3	%
Income taxes*		2,317			2,110			9.8	%		32.3	%		35.6	%
Net income	$	4,862			3,812			27.5	%		6.2	%		4.7	%
Net income per share-basic	$	0.39		$	0.31			25.8	%
Net income per share-diluted	$	0.39		$	0.31			25.8	%
Average shares outstanding-basic		12,331			12,219			0.9	%
Average shares outstanding-diluted		12,486			12,417			0.6	%

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	THREE MONTHS ENDED
	Amounts							Percent of Sales
	January 31,		February 1,		% Over			January 31,			February 1,
	2016		2015		(Under)			2016			2015
Income before income taxes (see above)	$	7,179		5,922		21.2	%		9.1	%		7.3	%
Adjusted Income taxes (2)*		1,278		906		41.1	%		17.8	%		15.3	%
Adjusted net income		5,901		5,016		17.6	%		7.5	%		6.2	%
Adjusted net income per share-basic	$	0.48	$	0.41		17.1	%
Adjusted net income per share-diluted	$	0.47	$	0.40		17.5	%
Average shares outstanding-basic		12,331		12,219		0.9	%
Average shares outstanding-diluted		12,486		12,417		0.6	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $33.3 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 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

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

Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
	NINE MONTHS ENDED
	Amounts									Percent of Sales
	January 31,			February 1,			% Over			January 31,			February 1,
	2016			2015			(Under)			2016			2015
Net sales	$	235,607			231,320			1.9	%		100.0	%		100.0	%
Cost of sales		187,109			191,925			(2.5	)%		79.4	%		83.0	%
Gross profit		48,498			39,395			23.1	%		20.6	%		17.0	%
Selling, general and
administrative expenses		27,512			23,173			18.7	%		11.7	%		10.0	%
Income from operations		20,986			16,222			29.4	%		8.9	%		7.0	%
Interest expense		-			50			(100.0	)%		0.0	%		0.0	%
Interest income		(150	)		(478	)		(68.6	)%		(0.1	)%		(0.2	)%
Other expense		405			380			6.6	%		0.2	%		0.2	%
Income before income taxes		20,731			16,270			27.4	%		8.8	%		7.0	%
Income taxes*		7,398			6,113			21.0	%		35.7	%		37.6	%
Net income	$	13,333			10,157			31.3	%		5.7	%		4.4	%
Net income per share-basic	$	1.08		$	0.83			30.1
Net income per share-diluted	$	1.07		$	0.82			30.5
Average shares outstanding-basic		12,317			12,216			0.8
Average shares outstanding-diluted		12,488			12,410			0.6

PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
	NINE MONTHS ENDED
	Amounts							Percent of Sales
	January 31,		February 1,		% Over			January 31,			February 1,
	2016		2015		(Under)			2016			2015
Income before income taxes (see above)	$	20,731		16,270		27.4	%		8.8	%		7.0	%
Adjusted Income taxes (2)*		3,690		2,489		48.3	%		17.8	%		15.3	%
Adjusted net income		17,041		13,781		23.7	%		7.2	%		6.0	%
Adjusted net income per share-basic	$	1.38	$	1.13		22.1	%
Adjusted net income per share-diluted	$	1.36	$	1.11		22.5	%
Average shares outstanding-basic		12,317		12,216		0.8	%
Average shares outstanding-diluted		12,488		12,410		0.6	%

(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $33.3 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 10 of 10.

(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.

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

Page 3 or 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2016, FEBRUARY 1, 2015, AND MAY 3, 2015
Unaudited
(Amounts in Thousands)
	Amounts				Increase
	January 31,		February 1,		(Decrease)						* May 3,
	2016		2015		Dollars			Percent			2015
Current assets
Cash and cash equivalents	$	31,713		28,772		2,941			10.2	%		29,725
Short-term investments		4,259		8,384		(4,125	)		(49.2	)%		10,004
Accounts receivable		26,784		30,774		(3,990	)		(13.0	)%		28,749
Inventories		48,485		38,013		10,472			27.5	%		42,484
Income taxes receivable		23		104		(81	)		(77.9	)%		229
Other current assets		2,331		2,992		(661	)		(22.1	)%		2,440
Total current assets		113,595		109,039		4,556			4.2	%		113,631
Property, plant & equipment, net		38,157		35,269		2,888			8.2	%		36,078
Goodwill		11,462		11,462		-			0.0	%		11,462
Deferred income taxes		4,312		5,020		(708	)		(14.1	) %		5,169
Long-term Investments		3,590		2,063		1,527			74.0	%		2,415
Other assets		2,435		2,505		(70	)		(2.8	)%		2,545
Total assets	$	173,551		165,358		8,193			5.0	%		171,300
Current liabilities
Current maturities of long-term debt	$	-		2,200		(2,200	)		(100.0	)%		2,200
Accounts payable - trade		25,601		28,644		(3,043	)		(10.6	)%		28,414
Accounts payable - capital expenditures		380		772		(392	)		(50.8	)%		990
Accrued expenses		12,690		9,954		2,736			27.5	%		11,129
Income taxes payable - current		622		325		297			91.4	%		325
Total current liabilities		39,293		41,895		(2,602	)		(6.2	)%		43,058
Income taxes payable - long-term		3,480		3,630		(150	)		(4.1	)%		3,792
Deferred income taxes		1,209		927		282			30.4	%		982
Deferred compensation		4,495		3,934		561			14.3	%		4,041
Total liabilities		48,477		50,386		(1,909	)		(3.8	)%		51,873
Shareholders' equity		125,074		114,972		10,102			8.8	%		119,427
Total liabilities and
shareholders' equity	$	173,551		165,358		8,193			5.0	%		171,300
Shares outstanding		12,250		12,219		31			0.3	%		12,219

* Derived from audited financial statements.

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
Unaudited
(Amounts in Thousands)
		NINE MONTHS ENDED
		Amounts
		January 31,			February 1,
		2016			2015
Cash flows from operating activities:
	Net income	$	13,333			10,157
	Adjustments to reconcile net income to net cash
	provided by operating activities:
	Depreciation		4,888			4,244
	Amortization of other assets		123			140
	Stock-based compensation		1,964			482
	Deferred income taxes		1,906			3,274
	Gain on sale of equipment		(66	)		(74	)
	Realized loss on sale of short-term investments		127			-
	Excess tax benefits related to stock-based compensation		(822	)		(110	)
	Foreign currency exchange gains		(85	)		(6	)
	Changes in assets and liabilities:
	Accounts receivable		1,091			(3,455	)
	Inventories		(6,485	)		2,536
	Other current assets		(108	)		(739	)
	Other assets		48			(30	)
	Accounts payable		(1,979	)		2,267
	Accrued expenses and deferrred compensation		1,406			2,121
	Income taxes		535			(108	)
	Net cash provided by operating activities		15,876			20,699
Cash flows from investing activities:
	Capital expenditures		(7,686	)		(8,185	)
	Proceeds from the sale of equipment		230			625
	Proceeds from life insurance policies		-			320
	Payments on life insurance policies		(18	)		(18	)
	Proceeds from the sale of short-term investments		5,612			1,628
	Purchase of short-term investments		(86	)		(3,719	)
	Purchase of long-term investments		(1,268	)		(1,298	)
	Net cash used in investing activities		(3,216	)		(10,647	)
Cash flows from financing activities:
	Proceeds from line of credit		7,000			-
	Payments on line of credit		(7,000	)		(538	)
	Payments on long-term debt		(2,200	)		(2,200	)
	Repurchase of common stock		(2,397	)		(745	)
	Dividends paid		(7,281	)		(6,846	)
	Payments on debt issuance costs		(43	)		-
	Proceeds from common stock issued		138			94
	Excess tax benefits related to stock-based compensation		822			110
	Net cash used in financing activities		(10,961	)		(10,125	)
Effect of exchange rate changes on cash and cash equivalents			289			(458	)
Increase (decrease) in cash and cash equivalents			1,988			(531	)
Cash and cash equivalents at beginning of period			29,725			29,303
Cash and cash equivalents at end of period		$	31,713			28,772
Free Cash Flow (1)		$	8,245			11,795

(1)  Free Cash Flow reconciliation is as follows:
		FY 2016			FY 2015
A)	Net cash provided by operating activities	$	15,876			20,699
B)	Minus:  Capital Expenditures		(7,686	)		(8,185	)
C)	Add:     Proceeds from the sale of equipment		230			625
D)	Add:     Proceeds from life insurance policies		-			320
E)	Minus:  Payments on life insurance policies		(18	)		(18	)
F)	Add:     Excess tax benefits related to stock-based compensation		822			110
G)	Minus:  Purchase of long-term investments		(1,268	)		(1,298	)
H)	Effects of exchange rate changes on cash and cash equivalents		289			(458	)
		$	8,245			11,795

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(Unaudited)
(Amounts in thousands)
	THREE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 31,			February 1,			% Over			January 31,			February 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	44,277			45,683			(3.1	)%		56.4	%		56.2	%
Upholstery Fabrics		34,189			35,586			(3.9	)%		43.6	%		43.8	%
Net Sales	$	78,466			81,269			(3.4	)%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	8,751			8,076			8.4	%		19.8	%		17.7	%
Upholstery Fabrics		7,812			6,326			23.5	%		22.8	%		17.8	%
Gross Profit	$	16,563			14,402			15.0	%		21.1	%		17.7	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	2,953			2,853			3.5	%		6.7	%		6.2	%
Upholstery Fabrics		3,963			3,781			4.8	%		11.6	%		10.6	%
Unallocated Corporate expenses		2,421			1,741			39.1	%		3.1	%		2.1	%
Selling, General and Administrative Expenses	$	9,337			8,375			11.5	%		11.9	%		10.3	%
Operating Income (loss) by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	5,798			5,223			11.0	%		13.1	%		11.4	%
Upholstery Fabrics		3,849			2,545			51.2	%		11.3	%		7.2	%
Unallocated corporate expenses		(2,421	)		(1,741	)		39.1	%		(3.1	)%		(2.1	) %
Operating income	$	7,226			6,027			19.9	%		9.2	%		7.4	%
Depreciation by Segment
Mattress Fabrics	$	1,490			1,244			19.8	%
Upholstery Fabrics		215			188			14.4	%
Depreciation	$	1,705			1,432			19.1	%

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(Unaudited)
(Amounts in thousands)
	NINE MONTHS ENDED
	Amounts									Percent of Total Sales
	January 31,			February 1,			% Over			January 31,			February 1,
Net Sales by Segment	2016			2015			(Under)			2016			2015
Mattress Fabrics	$	137,522			131,543			4.5	%		58.4	%		56.9	%
Upholstery Fabrics		98,085			99,777			(1.7	)%		41.6	%		43.1	%
Net Sales	$	235,607			231,320			1.9	%		100.0	%		100.0	%
Gross Profit by Segment										Gross Profit Margin
Mattress Fabrics	$	28,133			22,603			24.5	%		20.5	%		17.2	%
Upholstery Fabrics		20,365			16,792			21.3	%		20.8	%		16.8	%
Gross Profit	$	48,498			39,395			23.1	%		20.6	%		17.0	%
Selling, General and Administrative Expenses by Segment										Percent of Sales
Mattress Fabrics	$	8,865			8,019			10.5	%		6.4	%		6.1	%
Upholstery Fabrics		11,372			10,518			8.1	%		11.6	%		10.5	%
Unallocated Corporate expenses		7,275			4,636			56.9	%		3.1	%		2.0	%
Selling, General, and Administrative Expenses	$	27,512			23,173			18.7	%		11.7	%		10.0	%
Operating Income (loss)  by Segment										Operating Income (Loss) Margin
Mattress Fabrics	$	19,267			14,584			32.1	%		14.0	%		11.1
Upholstery Fabrics		8,994			6,274			43.4	%		9.2	%		6.3
Unallocated corporate expenses		(7,275	)		(4,636	)		56.9	%		(3.1	)%		(2.0	)%
Operating income	$	20,986			16,222			29.4	%		8.9	%		7.0	%
Return on Capital (1)
Mattress Fabrics		35.9	%		30.7	%
Upholstery Fabrics		68.9	%		48.2	%
Unallocated Corporate		N/A			N/A
Consolidated		31.7	%		26.7	%
Capital Employed (2)
Mattress Fabrics		72,644			65,178			11.5	%
Upholstery Fabrics		19,623			16,834			16.6	%
Unallocated Corporate		(1,284	)		(367	)		N/A
Consolidated		90,983			81,645			11.4	%
Depreciation by Segment
Mattress Fabrics	$	4,273			3,692			15.7	%
Upholstery Fabrics		615			552			11.4	%
Depreciation	$	4,888			4,244			15.2	%

Notes:

(1) See pages 8 and 9 of this financial information release for calculations.

(2) The capital employed balances are as of January 31, 2016 and February 1, 2015.

Page 7 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
	FOR THE TWELVE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
	(UNAUDITED)
	(AMOUNTS IN THOUSANDS)
	Quarter Ended
													Trailing 12
													Months
	5/3/2015			8/2/2015			11/1/2015			1/31/2016			1/31/2016
Net income	$	4,913		$	4,701		$	3,771		$	4,862		$	18,247
Income taxes		1,772			2,707			2,373			2,317			9,169
Interest income, net		(128	)		(42	)		(69	)		(38	)		(277	)
Depreciation and amortization expense		1,576			1,602			1,668			1,741			6,587
Stock based compensation		304			265			1,074			625			2,268
Adjusted EBITDA	$	8,437		$	9,233		$	8,817		$	9,507		$	35,994
	Quarter Ended
													Trailing 12
													Months
	4/27/2014			8/3/2014			11/2/2014			2/1/2015			2/1/2015
Net income	$	2,740		$	3,344		$	3,001		$	3,812		$	12,897
Income taxes		1,380			2,115			1,889			2,110			7,494
Interest income, net		(43	)		(74	)		(153	)		(202	)		(472	)
Depreciation and amortization expense		1,394			1,446			1,460			1,478			5,778
Stock based compensation		159			46			245			191			641
Adjusted EBITDA	$	5,630		$	6,877		$	6,442		$	7,389		$	26,338
% Over (Under)		49.9	%		34.3	%		36.9	%		28.7	%		36.7	%

Page 8 of 10

	CULP, INC. FINANCIAL INFORMATION RELEASE
	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE NINE MONTHS ENDED JANUARY 31, 2016
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Nine Months			Average			Return on
	Ended			Capital			Avg. Capital
	January 31, 2016 (1)			Employed (3)			Employed (2)
Mattress Fabrics	$	19,267		$	71,492			35.9	%
Upholstery Fabrics		8,994			17,413			68.9	%
(less: Unallocated Corporate)		(7,275	)		(631	)		N/A
Total	$	20,986		$	88,275			31.7	%

Average Capital Employed	As of the three Months Ended January 31, 2016												As of the three Months Ended November 1, 2015												As of the three Months Ended August 2, 2015
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		93,779			33,975			45,797			173,551			90,730			32,187			46,030			168,947			91,614			33,795			41,470			166,879
Total liabilities		(21,135	)		(14,352	)		(12,990	)		(48,477	)		(19,228	)		(15,129	)		(11,615	)		(45,972	)		(20,265	)		(14,849	)		(13,040	)		(48,154	)
Subtotal	$	72,644		$	19,623		$	32,807		$	125,074		$	71,502		$	17,058		$	34,415		$	122,975		$	71,349		$	18,946		$	28,430		$	118,725
Less:
Cash and cash equivalents		-			-			(31,713	)		(31,713	)		-			-			(31,176	)		(31,176	)		-			-			(25,933	)		(25,933	)
Short-term investments		-			-			(4,259	)		(4,259	)		-			-			(6,320	)		(6,320	)		-			-			(6,336	)		(6,336	)
Long-term investments		-			-			(3,590	)		(3,590	)		-			-			(3,279	)		(3,279	)		-			-			(2,893	)		(2,893	)
Income taxes receivable		-			-			(23	)		(23	)		-			-			(75	)		(75	)		-			-			(142	)		(142	)
Deferred income taxes - non-current		-			-			(4,312	)		(4,312	)		-			-			(3,415	)		(3,415	)		-			-			(4,405	)		(4,405	)
Current maturities of long-term debt		-			-			-			-			-			-			-			-			-			-			2,200			2,200
Income taxes payable - current		-			-			622			622			-			-			305			305			-			-			392			392
Income taxes payable - long-term		-			-			3,480			3,480			-			-			3,655			3,655			-			-			3,634			3,634
Deferred income taxes - non-current		-			-			1,209			1,209			-			-			1,206			1,206			-			-			1,071			1,071
Deferred compensation		-			-			4,495			4,495			-			-			4,421			4,421			-			-			4,280			4,280
Total Capital Employed	$	72,644		$	19,623		$	(1,284	)	$	90,983		$	71,502		$	17,058		$	(263	)	$	88,297		$	71,349		$	18,946		$	298		$	90,593
	As of the three Months Ended May 3, 2015
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Total assets		89,066			32,838			49,396			171,300
Total liabilities		(18,594	)		(18,812	)		(14,467	)		(51,873	)
Subtotal	$	70,472		$	14,026		$	34,929		$	119,427
Less:
Cash and cash equivalents		-			-			(29,725	)		(29,725	)
Short-term investments		-			-			(10,004	)		(10,004	)
Long-term investments		-			-			(2,415	)		(2,415	)
Income taxes receivable		-			-			(229	)		(229	)
Deferred income taxes - non-current		-			-			(5,169	)		(5,169	)
Current maturities of long-term debt		-			-			2,200			2,200
Income taxes payable - current		-			-			325			325
Income taxes payable - long-term		-			-			3,792			3,792
Deferred income taxes - non-current		-			-			982			982
Deferred compensation		-			-			4,041			4,041
Total Capital Employed	$	70,472		$	14,026		$	(1,273	)	$	83,225
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	71,492		$	17,413		$	(631	)	$	88,275

Notes:

(1) See reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for the nine month period ending January 31, 2016 divided by three quarters 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, noncurrent deferred tax assets and liabilities, income taxes receivable and payable, and deferred compensation.

(3) Average capital employed was computed using the four periods ending January 31, 2016, November 1, 2015, August 2, 2015 and May 3, 2015.

Page 9 of 10

	RETURN ON CAPITAL EMPLOYED BY SEGMENT
	FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015
	(Amounts in Thousands)
	(Unaudited)
	Operating Income
	Nine Months			Average		Return on
	Ended			Capital		Avg. Capital
	February 1, 2015 (1)			Employed (3)		Employed (2)
Mattress Fabrics	$	14,584		$	63,361		30.7	%
Upholstery Fabrics		6,274			17,344		48.2	%
(less: Unallocated Corporate)		(4,636	)		361		N/A
Total	$	16,222		$	81,065		26.7	%

Average Capital Employed	As of the three Months Ended February 1, 2015												As of the three Months Ended November 2, 2014												As of the three Months Ended August 3, 2014
	Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated						Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total			Fabrics			Fabrics			Corporate			Total
Total assets		83,648			35,761			45,949			165,358			80,121			30,916			45,126			156,163			81,400			30,520			42,298			154,218
Total liabilities		(18,470	)		(18,927	)		(12,989	)		(50,386	)		(17,247	)		(14,847	)		(12,395	)		(44,489	)		(18,464	)		(11,468	)		(15,139	)		(45,071	)
Subtotal	$	65,178		$	16,834		$	32,960		$	114,972		$	62,874		$	16,069		$	32,731		$	111,674		$	62,936		$	19,052		$	27,159		$	109,147
Less:
Cash and cash equivalents		-			-			(28,772	)		(28,772	)		-			-			(28,953	)		(28,953	)		-			-			(24,665	)		(24,665	)
Short-term investments		-			-			(8,384	)		(8,384	)		-			-			(6,318	)		(6,318	)		-			-			(6,311	)		(6,311	)
Long-term investments		-			-			(2,063	)		(2,063	)								(1,911	)		(1,911	)								(1,749	)		(1,749	)
Income taxes receivable		-			-			(104	)		(104	)		-			-			-			-			-			-			(136	)		(136	)
Deferred income taxes - non-current		-			-			(5,020	)		(5,020	)		-			-			(6,200	)		(6,200	)		-			-			(7,182	)		(7,182	)
Current maturities of long-term debt		-			-			2,200			2,200			-			-			2,200			2,200			-			-			2,200			2,200
Line of credit		-			-			-			-			-			-			-			-			-			-			569			569
Income taxes payable - current		-			-			325			325			-			-			268			268			-			-			387			387
Income taxes payable - long-term		-			-			3,630			3,630			-			-			3,980			3,980			-			-			4,037			4,037
Deferred income taxes - non-current		-			-			927			927			-			-			896			896			-			-			1,019			1,019
Long-term debt, less current maturities		-			-			-			-			-			-			-			-			-			-			2,200			2,200
Deferred compensation		-			-			3,934			3,934			-			-			3,794			3,794			-			-			3,632			3,632
Total Capital Employed	$	65,178		$	16,834		$	(367	)	$	81,645		$	62,874		$	16,069		$	487		$	79,430		$	62,936		$	19,052		$	1,160		$	83,148

	As of the three Months Ended April 27, 2014
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Total assets		79,055			34,987			46,886			160,928
Total liabilities		(16,598	)		(17,568	)		(15,018	)		(49,184	)
Subtotal	$	62,457		$	17,419		$	31,868		$	111,744
Less:
Cash and cash equivalents		-			-			(29,303	)		(29,303	)
Short-term investments		-			-			(6,294	)		(6,294	)
Long-term investments								(765	)		(765	)
Income taxes receivable		-			-			(121	)		(121	)
Deferred income taxes - non-current		-			-			(8,263	)		(8,263	)
Current maturities of long-term debt		-			-			2,200			2,200
Line of credit								586			586
Income taxes payable - current		-			-			442			442
Income taxes payable - long-term		-			-			3,962			3,962
Deferred income taxes - non-current		-			-			1,006			1,006
Long-term debt, less current maturities		-			-			2,200			2,200
Deferred compensation		-			-			2,644			2,644
Total Capital Employed	$	62,457		$	17,419		$	162		$	80,038
	Mattress			Upholstery			Unallocated
	Fabrics			Fabrics			Corporate			Total
Average Capital Employed (3)	$	63,361		$	17,344		$	361		$	81,065

Notes:

(1) See reconciliation per page 6 of this financial information release.

(2) Return on average capital employed represents operating income for the nine month period ending February 1, 2015 divided by 3 quarters times 4 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, noncurrent deferred tax assets and liabilities, and income taxes payable and receivable.

(3) Average capital employed was computed using the four periods ending February 1, 2015, November 2, 2014, August 3, 2014 and April 27, 2014.

Page 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
Unaudited
(Amounts in Thousands)
		NINE MONTHS ENDED
		Amounts
		January 31,			February 1,
		2016			2015
Consolidated Effective GAAP Income Tax Rate	(1)		35.7	%		37.6	%
Non-Cash U.S. Income Tax Expense			(17.9	)%		(22.1	)%
Non-Cash Foreign Income Tax Expense			0.0	%		(0.2	)%
Consolidated Adjusted Effective Income Tax Rate	(2)		17.8	%		15.3	%

	THREE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
	2016		Adjustments			of Adjustments		2015		Adjustments			of Adjustments
Income before income taxes	$	7,179	$	-		$	7,179	$	5,922				$	5,922
Income taxes (3)		2,317	$	(1,039	)		1,278		2,110	$	(1,204	)		906
Net income	$	4,862	$	1,039		$	5,901	$	3,812	$	1,204		$	5,016
Net income per share-basic	$	0.39	$	0.08		$	0.48	$	0.31	$	0.10		$	0.41
Net income per share-diluted	$	0.39	$	0.08		$	0.47	$	0.31	$	0.10		$	0.40
Average shares outstanding-basic		12,331		12,331			12,331		12,219		12,219			12,219
Average shares outstanding-diluted		12,486		12,486			12,486		12,417		12,417			12,417
	NINE MONTHS ENDED
	As reported					January 31, 2016		As reported					February 1, 2015
	January 31,					Proforma Net		February 1,					Proforma Net
		2016	Adjustments			of Adjustments			2015	Adjustments			of Adjustments
Income before income taxes	$	20,731	$	-		$	20,731	$	16,270	$	-		$	16,270
Income taxes (3)		7,398	$	(3,708	)		3,690		6,113	$	(3,624	)		2,489
Net income	$	13,333	$	3,708		$	17,041	$	10,157	$	3,624		$	13,781
Net income per share-basic	$	1.08	$	0.30		$	1.38	$	0.83	$	0.30		$	1.13
Net income per share-diluted	$	1.07	$	0.30		$	1.36	$	0.82	$	0.29		$	1.11
Average shares outstanding-basic		12,317		12,317			12,317		12,216		12,216			12,216
Average shares outstanding-diluted		12,488		12,488			12,488		12,410		12,410			12,410

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