10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2016

Commission File No. 1-12597

CULP, INC.

(Exact name of registrant as specified in its charter)

NORTH CAROLINA	56-1001967
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or other organization)
1823 Eastchester Drive
High Point, North Carolina	27265-1402
(Address of principal executive offices)	(zip code)

(336) 889-5161

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to the filing requirements for at least the past 90 days.     x YES     NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period after the registrant was required to submit and post such files).     x YES     NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer, large accelerated filer, and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one);

Large accelerated filer  o	Accelerated filer  x	Non-accelerated filer  o
	Smaller Reporting Company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     o YES     NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common shares outstanding at January 31, 2016:  12,250,489

Par Value: $0.05 per share

INDEX TO FORM 10-Q

For the period ended January 31, 2016

		Page
Part I - Financial Statements
Item 1.     Financial Statements: (Unaudited)
	Consolidated Statements of Net Income — Three and Nine Months Ended January 31, 2016 and February 1, 2015	I-1
	Consolidated Statements of Comprehensive Income – Three and Nine Months Ended January 31, 2016 and February 1, 2015	I-2
	Consolidated Balance Sheets — January 31, 2016, February 1, 2015, and May 3, 2015	I-3
	Consolidated Statements of Cash Flows — Nine Months Ended January 31, 2016 and February 1, 2015	I-4
	Consolidated Statements of Shareholders’ Equity	I-5
	Notes to Consolidated Financial Statements	I-6
	Cautionary Statement Concerning Forward-Looking Information	I-26
Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations		I-27
Item 3.     Quantitative and Qualitative Disclosures About Market Risk		I-44
Item 4.     Controls and Procedures		I-45
Part II - Other Information
Item 1.     Legal Proceedings		II-1
Item 1A.  Risk Factors		II-1
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds		II-1
Item 5.     Other Information		II-2
Item 6.     Exhibits		II-3
Signatures		II-4

Item 1:  Financial Statements
CULP, INC.
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
UNAUDITED
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	January 31,			February 1,
	2016			2015
Net sales	$	78,466			81,269
Cost of sales		61,903			66,867
Gross profit		16,563			14,402
Selling, general and
administrative expenses		9,337			8,375
Income from operations		7,226			6,027
Interest income		(38	)		(202	)
Other expense		85			307
Income before income taxes		7,179			5,922
Income taxes		2,317			2,110
Net income	$	4,862			3,812
Net income per share, basic	$	0.39			0.31
Net income per share, diluted		0.39			0.31
Average shares outstanding, basic		12,331			12,219
Average shares outstanding, diluted		12,486			12,417
	NINE MONTHS ENDED
	January 31,			February 1,
	2016			2015
Net sales	$	235,607			231,320
Cost of sales		187,109			191,925
Gross profit		48,498			39,395
Selling, general and
administrative expenses		27,512			23,173
Income from operations		20,986			16,222
Interest expense		-			50
Interest income		(150	)		(478	)
Other expense		405			380
Income before income taxes		20,731			16,270
Income taxes		7,398			6,113
Net income	$	13,333			10,157
Net income per share, basic	$	1.08			0.83
Net income per share, diluted		1.07			0.82
Average shares outstanding, basic		12,317			12,216
Average shares outstanding, diluted		12,488			12,410

See accompanying notes to consolidated financial statements.

I-1

CULP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
(UNAUDITED)
(Amounts in Thousands)
	THREE MONTHS ENDED
	January 31,			February 1,
	2016			2015
Net income	$	4,862		$	3,812
Other comprehensive (loss) income
Unrealized (losses) gains on investments
Unrealized holding (losses) gains on investments		(194	)		22
Reclassification adjustment for realized loss included in net income		71			-
Total other comprehensive (loss) income		(123	)		22
Comprehensive income	$	4,739		$	3,834
	NINE MONTHS ENDED
	January 31,			February 1,
	2016			2015
Net income	$	13,333		$	10,157
Other comprehensive loss
Unrealized (losses) gains on investments
Unrealized holding losses on investments		(312	)		(6	)
Reclassification adjustment for realized loss included in net income		127			-
Total other comprehensive loss		(185	)		(6	)
Comprehensive income	$	13,148		$	10,151

See accompanying notes to consolidated financial statements.

I-2

CULP, INC.
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2016, FEBRUARY 1, 2015, AND MAY 3, 2015
UNAUDITED
(Amounts in Thousands)
	January 31,			February 1,			* May 3,
	2016			2015			2015
Current assets:
Cash and cash equivalents	$	31,713			28,772			29,725
Short-term investments		4,259			8,384			10,004
Accounts receivable, net		26,784			30,774			28,749
Inventories		48,485			38,013			42,484
Income taxes receivable		23			104			229
Other current assets		2,331			2,992			2,440
Total current assets		113,595			109,039			113,631
Property, plant and equipment, net		38,157			35,269			36,078
Goodwill		11,462			11,462			11,462
Deferred income taxes		4,312			5,020			5,169
Long-term investments		3,590			2,063			2,415
Other assets		2,435			2,505			2,545
Total assets	$	173,551			165,358			171,300
Current liabilities:
Current maturities of long-term debt	$	-			2,200			2,200
Accounts payable-trade		25,601			28,644			28,414
Accounts payable - capital expenditures		380			772			990
Accrued expenses		12,690			9,954			11,129
Income taxes payable - current		622			325			325
Total current liabilities		39,293			41,895			43,058
Income taxes payable - long-term		3,480			3,630			3,792
Deferred income taxes		1,209			927			982
Deferred compensation		4,495			3,934			4,041
Total liabilities		48,477			50,386			51,873
Commitments and Contingencies (Note 15)
Shareholders' equity
Preferred stock, $0.05 par value, authorized
10,000,000		-			-			-
Common stock, $0.05 par value, authorized
40,000,000 shares, issued and outstanding
12,250,489 at January 31, 2016; 12,219,121
at February 1, 2015; and 12,219,121 at
May 3, 2015		613			611			611
Capital contributed in excess of par value		42,937			42,856			43,159
Accumulated earnings		81,804			71,571			75,752
Accumulated other comprehensive loss		(280	)		(66	)		(95	)
Total shareholders' equity		125,074			114,972			119,427
Total liabilities and shareholders' equity	$	173,551			165,358			171,300

* Derived from audited financial statements.

See accompanying notes to consolidated financial statements.

I-3

CULP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 2016 AND FEBRUARY 1, 2015
UNAUDITED
(Amounts in Thousands)
	NINE MONTHS ENDED
	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
Excess tax benefit related to stock-based compensation		(822	)		(110	)
Deferred income taxes		1,906			3,274
Gain on sale of equipment		(66	)		(74	)
Realized loss on sale of short-term investments		127			-
Foreign currency 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 - trade		(1,979	)		2,267
Accrued expenses and deferred 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 the sale of 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 credt		(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 benefit 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

See accompanying notes to consolidated financial statements.

I-4

CULP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
UNAUDITED
(Dollars in thousands, except share data)
							Capital						Accumulated
							Contributed						Other			Total
	Common Stock						in Excess			Accumulated			Comprehensive			Shareholders’
	Shares			Amount			of Par Value			Earnings			Loss			Equity
Balance,  April 27, 2014		12,250,030		$	612			42,932			68,260			(60	)	$	111,744
Net income		-			-			-			15,071			-			15,071
Stock-based compensation		-			-			786			-			-			786
Unrealized loss on investments		-			-			-			-			(35	)		(35	)
Excess tax benefit related to stock
based compensation		-			-			109			-			-			109
Common stock repurchased		(43,014	)		(2	)		(743	)		-			-			(745	)
Fully vested common stock award		3,000			-			-			-			-			-
Common stock issued in connection														.
with exercise of stock options		10,100			1			93			-			-			94
Common stock surrendered for
withholding taxes payable		(995	)		-			(18	)		-			-			(18	)
Dividends paid		-			-			-			(7,579	)		-			(7,579	)
Balance, May 3, 2015 *		12,219,121			611			43,159			75,752			(95	)		119,427
Net income		-			-			-			13,333			-			13,333
Stock-based compensation		-			-			1,964			-			-			1,964
Unrealized loss on investments		-			-			-			-			(185	)		(185	)
Excess tax benefit related to stock
based compensation		-			-			822			-			-			822
Common stock repurchased		(100,776	)		(5	)		(2,392	)								(2,397	)
Common stock issued in connection
with performance based units		115,855			6			(6	)								-
Fully vested common stock award		3,000			-			-			-			-			-
Common stock issued in connection
with exercise of stock options		39,500			2			136									138
Common stock surrendered for
withholding taxes payable		(26,211	)		(1	)		(746	)		-			-			(747	)
Dividends paid		-						-			(7,281	)		-			(7,281	)
Balance,  January 31, 2016		12,250,489		$	613			42,937			81,804			(280	)	$	125,074

* Derived from audited financial statements.

See accompanying notes to consolidated financial statements.

I-5

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements of Culp, Inc. and subsidiaries (the “company”) include all adjustments, which are, in the opinion of management, necessary for fair presentation of the results of operations and financial position.  All of these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results.  The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are included in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 17, 2015 for the fiscal year ended May 3, 2015.

The company’s nine months ended January 31, 2016 and February 1, 2015, represent 39 and 40 week periods, respectively.

2.  Significant Accounting Policies

As of January 31, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year then ended May 3, 2015.

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity’s classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our February 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.5 million and decreased noncurrent deferred tax liabilities $2.5 million. We reclassified our current deferred income taxes to noncurrent on our May 3, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.7 million and decreased noncurrent deferred tax liabilities $68,000.

Recently Issued Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved.

I-6

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The guidance will be effective in our fiscal 2017 first quarter. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter. Currently, we do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 18, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

3.  Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan entitled the Culp, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan is intended to update and replace our 2007 Equity Incentive Plan (the “2007 Plan”) as the vehicle for granting new equity based awards substantially similar to those authorized under the 2007 Plan. In general, the 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and other equity and cash related awards as determined by our Compensation Committee. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. In connection with the approval of the 2015 Plan, no further awards will be granted under the 2007 Plan, but outstanding awards under the 2007 Plan will be settled in accordance with their terms.

I-7

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the third quarter of fiscal 2016.

At January 31, 2016, options to purchase 98,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $7.73 per share, and a weighted average contractual term of 1.7 years. At January 31, 2016, the aggregate intrinsic value for options outstanding and exercisable was $1.7 million.

The aggregate intrinsic value for options exercised for the nine months ending January 31, 2016 and February 1, 2015, was $1.0 million and $87,000, respectively.

At January 31, 2016, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at January 31, 2016.

No compensation expense was recorded on incentive stock options for the nine months ended January 31, 2016 and February 1, 2015, respectively.

Common Stock Awards

On October 1, 2015, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $31.77 per share, which represents the closing price of our common stock at the date of grant.

On October 1, 2014, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $17.95 per share, which represents the closing price of our common stock at the date of grant.

We recorded $95,000 and $54,000 of compensation expense within selling, general, and administrative expense for these common stock awards for the nine months ending January 31, 2016, and February 1, 2015, respectively.

Time Vested Restricted Stock Awards

We did not grant any time vested restricted stock awards through the third quarter of fiscal 2016.

At January 31, 2016, there were no outstanding and unvested shares of time vested restricted stock. Therefore, there was no unrecognized compensation cost related to time vested restricted stock awards at January 31, 2016.

I-8

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

No compensation expense was recorded on time vested restricted stock awards for the nine months ended January 31, 2016. We recorded $4,000 within selling, general, and administrative expense for time vested restricted stock awards for the nine months ended February 1, 2015.

During the nine month period ending February 1, 2015, 61,667 shares of time vested restricted stock vested and had a weighted average fair value of $257,000 or $4.17 per share.

Performance Based Restricted Stock Units

Fiscal 2016 Grant

On July 15, 2015, certain key members of management were granted performance based restricted stock units which could earn up to 107,554 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $32.23 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 15, 2015, a non-employee was granted performance based restricted stock units which could earn up to 10,364 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At January 31, 2016, this grant was unvested and was measured at $25.32 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

Fiscal 2015 Grant

On June 24, 2014, certain key members of management were granted performance based restricted stock units which could earn up to 102,845 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.70 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On March 3, 2015, a non-employee was granted performance based restricted stock units which could earn up to 28,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At January 31, 2016, this grant was unvested and was measured at $25.32 per share, which represents the closing price of the company’s common stock at the end of the reporting period. The vesting of these awards is over the requisite service periods of 16 months and 28 months for performance based restricted stock units which could earn up to 12,000 and 16,000 shares of common stock, respectively.

I-9

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fiscal 2014 Grant

On June 25, 2013, certain key members of management were granted performance based restricted stock units which could earn up to 72,380 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.12 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

Fiscal 2013 Grant

On July 11, 2012, certain key members of management were granted performance based restricted stock units which could earn up to 120,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $10.21 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

During the nine month period ending January 31, 2016, 115,855 shares of common stock associated with our fiscal 2013 grant vested and had a weighted average fair value of $1.2 million or $10.21 per share. As of January 31, 2016, our fiscal 2013 grant was fully vested.

Overall

We recorded compensation expense of $1.9 million and $424,000 within selling, general, and administrative expense for performance based restricted stock units for the nine month periods ending January 31, 2016 and February 1, 2015, respectively. Compensation cost is recorded based on an assessment each reporting period of the probability if certain performance goals will be met during the vesting period. If performance goals are not probable of occurrence, no compensation cost will be recognized and any recognized compensation cost would be reversed.

As of January 31, 2016, the remaining unrecognized compensation cost related to the performance based restricted stock units was $4.2 million, which is expected to be recognized over a weighted average vesting period of 2.1 years.

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 31, 2016			February 1, 2015			May 3, 2015
Customers	$	28,684		$	31,952		$	30,338
Allowance for doubtful accounts		(814	)		(449	)		(851	)
Reserve for returns and allowances and discounts		(1,086	)		(729	)		(738	)
	$	26,784		$	30,774		$	28,749

I-10

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A summary of the activity in the allowance for doubtful accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(851	)	$	(573	)
Provision for bad debts		(93	)		(20	)
Net write-offs, net of recoveries		130			144
Ending balance	$	(814	)	$	(449	)

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(738	)	$	(479	)
Provision for returns, allowances
and discounts		(2,389	)		(2,065	)
Credits issued		2,041			1,815
Ending balance	$	(1,086	)	$	(729	)

5.  Inventories

Inventories are carried at the lower of cost or market.  Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Raw materials	$	6,831	$	5,787	$	5,374
Work-in-process		3,365		2,227		2,766
Finished goods		38,289		29,999		34,344
	$	48,485	$	38,013	$	42,484

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Cash surrender value – life insurance	$	357	$	338	$	339
Non-compete agreement, net		922		998		979
Customer relationships, net		728		779		766
Other		428		390		461
	$	2,435	$	2,505	$	2,545

Non-Compete Agreement

We recorded our non-compete agreement at its fair value based on a discounted cash flow valuation model. Our non-compete agreement is amortized on a straight-line basis over the fifteen year life of the respective agreement.

I-11

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The gross carrying amount of our non-compete agreement was $2.0 million at January 31, 2016, February 1, 2015 and May 3, 2015, respectively. At January 31, 2016 and May 3, 2015, accumulated amortization for our non-compete agreement was $1.1 million. At February 1, 2015 accumulated amortization for our non-compete agreement was $1.0 million.

Amortization expense for our non-compete agreement was $56,000 for the nine month periods ended January 31, 2016 and February 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2016 - $18,000; FY 2017 - $75,000; FY 2018- $75,000; FY 2019 - $75,000; FY 2020 - $75,000 and Thereafter - $604,000.

The weighted average amortization period for our non-compete agreement is 12.3 years as of January 31, 2016.

Customer Relationships

We recorded our customer relationships at their fair value based on a multi-period excess earnings valuation model. Our customer relationships are amortized on a straight-line basis over its seventeen year useful life.

The gross carrying amount of our customer relationships was $868,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. Accumulated amortization for our customer relationships was $140,000, $89,000, and $102,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

Amortization expense for our customer relationships was $38,000 for the nine months ending January 31, 2016 and February 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2016 - $13,000; FY 2017 - $51,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; and Thereafter - $511,000.

The weighted average amortization period for our customer relationships is 14.3 years as of January 31, 2016.

Cash Surrender Value – Life Insurance

At January 31, 2016, February 1, 2015, and May 3, 2015 we had one life insurance contract with a death benefit of $1.4 million.

Our cash surrender value – life insurance balances totaling $357,000, $338,000 and $339,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively, are collectible upon death of the respective insured.

On May 16, 2014, we entered into an agreement with a former employee and his irrevocable trust (the “Trust”) dated September 7, 1995. As a result of this agreement, a previous split dollar life insurance agreement in which we purchased a policy on the life of this former employee and his spouse, in which we retained ownership of the policy, paid premiums to support the policy, had the right to receive cash surrender value of the policy upon the second to die of the former employee and his spouse, with the Trust receiving the remainder of the policy’s death benefit ($2.5 million), was terminated. In connection with the termination of the previous split dollar life insurance agreement, we transferred the life insurance policy to the Trust and received cash proceeds in the amount of the cash surrender value policy totaling $320,000 during the second quarter of fiscal 2015.

I-12

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Compensation, commissions and related benefits	$	8,678	$	6,399	$	9,081
Advertising rebates		2,876		2,522		1,002
Interest		-		81		37
Other accrued expenses		1,136		952		1,009
	$	12,690	$	9,954	$	11,129

8.  Long-Term Debt and Lines of Credit

A summary of long-term debt follows:

(dollars in thousands)	January 31, 2016		February 1, 2015			May 3, 2015
Unsecured senior term notes	$	-	$	2,200		$	2,200
Current maturities of long-term debt		-		(2,200	)		(2,200	)
Long-term debt, less current maturities
of long-term debt	$	-	$	-		$	-

Unsecured Senior Term Notes

We entered into a note agreement dated August 11, 2008 that provided for the issuance of $11.0 million of unsecured senior term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year were due on the notes beginning August 11, 2011. Any principal pre-payments would have been assessed a penalty as defined in the agreement. The agreement contained customary financial and other covenants as defined in the agreement.

On August 11, 2015, we paid our last annual payment of $2.2 million and this agreement has been paid in full.

Revolving Credit Agreement – United States

As of May 3, 2015, we had an unsecured credit agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) that provided for an unsecured revolving loan commitment of $10 million to be used to finance working capital and general corporate purposes. Interest is charged at a rate (applicable interest rate of 1.93%, 1.77%, and 1.78% at January 31, 2016, February 1, 2015, and May 3, 2015, respectively) equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement. The Credit Agreement contained customary financial and other covenants as defined in the agreement and was set to expire on August 31, 2015.

Effective July 10, 2015, we amended our Credit Agreement to extend the expiration date to August 31, 2017, and maintain an annual capital expenditure limit of $12 million.

I-13

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We entered into a Second Amendment to our Credit Agreement dated March 10, 2016, which amends our Credit Agreement with Wells Fargo Bank, National Association.  The terms of the Second Amendment include, among other things, provisions that (i) increase our line of credit under the Credit Agreement to $30 million, (ii) increase the annual limit on capital expenditures by the company to $15 million, (iii) add a new financial covenant to establish a minimum level of unencumbered liquid assets, (iv) eliminate certain financial covenants, (v) amend the pricing matrix that provides for interest payable on obligations under the agreement as a variable spread over LIBOR, based upon the company's ratio of debt to EBITDA, and (vi) provide that the obligations under the Credit Agreement are to be secured by a pledge of 65% of the common stock of Culp International Holdings Ltd, our Cayman subsidiary.

The purpose of the increase in our revolving credit line with Wells Fargo is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

At January 31, 2016, February 1, 2015 and May 3, 2015 there was a $250,000 outstanding letter of credit (all of which related to workers compensation). At January 31, 2016, February 1, 2015, and May 3, 2015, there were no borrowings outstanding under the Credit Agreement.

Revolving Credit Agreement – China

We had an unsecured credit agreement associated with our operations in China that provided for a line of credit of up to 40 million RMB (approximately $6.1 million USD at January 31, 2016), that was set to expire on February 9, 2016. This agreement had an interest rate determined by the Chinese government. There were no borrowings outstanding under the agreement as of January 31, 2016, February 1, 2015, and May 3, 2015.

On March 8, 2016, we renewed our unsecured credit agreement associated with our operations located in China. The renewal extended the agreement to March 8, 2017 and maintained the line of credit up to 40 million RMB (approximately $6.1 million USD).

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At January 31, 2016, the company was in compliance with these financial covenants.

The fair value of the company’s long-term debt is estimated by discounting the future cash flows at rates currently offered to the company for similar debt instruments of comparable maturities. At February 1, 2015, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million. At May 3, 2015, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million.

9.  Fair Value of Financial Instruments

ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

I-14

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

Recurring Basis

The following table presents information about assets and liabilities measured at fair value on a recurring basis:

	Fair value measurements at January 31, 2016 using:
	Quoted prices in  active markets  for identical  assets		Significant other  observable inputs		Significant  unobservable  inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,071		N/A		N/A	$	3,071
Low Duration Bond Fund		1,592		N/A		N/A		1,592
Intermediate Term Bond Fund		1,116		N/A		N/A		1,116
Strategic Income Fund		957		N/A		N/A		957
Limited Term Bond Fund		594		N/A		N/A		594
Large Blend Fund		254		N/A		N/A		254
Growth Allocation Fund		128		N/A		N/A		128
Mid Cap Value Fund		90		N/A		N/A		90
Other		47		N/A		N/A		47

	Fair value measurements at February 1, 2015 using:
	Quoted prices in  active markets  for identical  assets		Significant other  observable inputs		Significant  unobservable  inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,112		N/A		N/A	$	3,112
Intermediate Term Bond Fund		2,188		N/A		N/A		2,188
Low Duration Bond Fund		2,084		N/A		N/A		2,084
Premier Money Market Fund		1,951		N/A		N/A		1,951
Strategic Income Fund		1,000		N/A		N/A		1,000
Growth Allocation Fund		63		N/A		N/A		63
Other		49		N/A		N/A		49

I-15

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Fair value measurements at May 3, 2015 using:
	Quoted prices in  active markets  for identical  assets		Significant other  observable inputs		Significant  unobservable  inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,107		N/A		N/A	$	3,107
Premier Money Market Fund		2,285		N/A		N/A		2,285
Intermediate Term Bond Fund		2,181		N/A		N/A		2,181
Low Duration Bond Fund		2,096		N/A		N/A		2,096
Strategic Income Fund		1,008		N/A		N/A		1,008
Growth Allocation Fund		85		N/A		N/A		85
Other		45		N/A		N/A		45

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Short-Term Investments

At January 31, 2016 and February 1, 2015, our short-term investments totaled $4.3 million and $8.4 million, respectively, and consisted of short-term bond funds. At May 3, 2015, our short-term investments totaled $10.0 million and consisted of short-term bonds of $8.4 million and a deposit account that had a maturity of more than three months of $1.6 million.

Our short-term bond funds are recorded at their fair value, are classified as available-for-sale, and their unrealized gains or losses are included in other comprehensive income (loss). Our short-term bond investments had an accumulated unrealized loss totaling $181,000, $66,000, and $95,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. At January 31, 2016, February 1, 2015, and May 3, 2015, the fair value of our short-term bond funds approximated its cost basis.

Long-Term Investments

Effective January 1, 2014, we established a Rabbi Trust to set aside funds for participants of our deferred compensation plan (the “Plan”) and enable the participants to credit their contributions to various investment options of the Plan. The investments associated with the Rabbi Trust consist of a money market fund and various mutual funds that are classified as available for sale.

Our long-term investments are recorded at their fair value of $3.6 million, $2.1 million, and $2.4 million at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. Our long-term investments had an accumulated unrealized loss of $99,000 at January 31, 2016. At February 1, 2015 and May 3, 2015, our accumulated gains or losses regarding our long-term investments were immaterial. The fair value of our long-term investments approximates its cost basis.

I-16

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Other

The carrying amount of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments.

10.  Cash Flow Information

Interest and income taxes paid are as follows:

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Interest	$	95	$	180
Income Taxes		4,921		3,005

Interest costs charged to operations and incurred on our long-term debt and lines of credit were $58,000 and $191,000 for the nine months ended January 31, 2016 and February 1, 2015, respectively.

Interest costs of $58,000 and $141,000 for the construction of qualifying fixed assets were capitalized and will be amortized over the related assets’ useful lives for the nine months ended January 31, 2016 and February 1, 2015, respectively.

11.  Net Income Per Share

Basic net income per share is computed using the weighted-average number of shares outstanding during the period.  Diluted net income per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.  Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,331		12,219
Dilutive effect of stock-based compensation		155		198
Weighted average common shares outstanding, diluted		12,486		12,417

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended January 31, 2016 and February 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

	Nine months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,317		12,216
Dilutive effect of stock-based compensation		171		194
Weighted average common shares outstanding, diluted		12,488		12,410

I-17

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

All options to purchase shares of common stock were included in the computation of diluted net income for the nine months ended January 31, 2016 and February 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

12.  Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers to bedding manufacturers.  The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges.  Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses.  Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment.  The mattress fabrics segment also includes in segment assets, goodwill, a non-compete agreement, and customer relationships associated with an acquisition.

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	44,277		$	45,683
Upholstery Fabrics		34,189			35,586
	$	78,466		$	81,269
Gross profit:
Mattress Fabrics	$	8,751		$	8,076
Upholstery Fabrics		7,812			6,326
	$	16,563		$	14,402
Selling, general, and administrative expenses:
Mattress Fabrics	$	2,953		$	2,853
Upholstery Fabrics		3,963			3,781
Total segment selling, general, and
administrative expenses		6,916			6,634
Unallocated corporate expenses		2,421			1,741
	$	9,337		$	8,375
Income from operations:
Mattress Fabrics	$	5,798		$	5,223
Upholstery Fabrics		3,849			2,545
Total segment income from operations		9,647			7,768
Unallocated corporate expenses		(2,421	)		(1,741	)
Total income from operations		7,226			6,027
Interest income		38			202
Other expense		(85	)		(307	)
Income before income taxes	$	7,179		$	5,922

I-18

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Financial information for the company’s operating segments follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	137,522		$	131,543
Upholstery Fabrics		98,085			99,777
	$	235,607		$	231,320
Gross profit:
Mattress Fabrics	$	28,133		$	22,603
Upholstery Fabrics		20,365			16,792
	$	48,498		$	39,395
Selling, general, and administrative expenses:
Mattress Fabrics	$	8,865		$	8,019
Upholstery Fabrics		11,372			10,518
Total segment selling, general, and
administrative expenses		20,237			18,537
Unallocated corporate expenses		7,275			4,636
	$	27,512		$	23,173
Income from operations:
Mattress Fabrics	$	19,267		$	14,584
Upholstery Fabrics		8,994			6,274
Total segment income from operations		28,261			20,858
Unallocated corporate expenses		(7,275	)		(4,636	)
Total income from operations		20,986			16,222
Interest expense		-			(50	)
Interest income		150			478
Other expense		(405	)		(380	)
Income before income taxes	$	20,731		$	16,270

I-19

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Balance sheet information for the company’s operating segments follow:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Segment assets:
Mattress Fabrics
Current assets (1)	$	44,309	$	36,658	$	41,328
Non-compete agreement		922		998		979
Customer relationships		728		779		766
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		35,637		33,046		33,773
Total mattress fabrics assets		93,058		82,943		88,308
Upholstery Fabrics
Current assets (1)		30,960		32,129		29,905
Property, plant and equipment (3)		1,590		1,522		1,467
Total upholstery fabrics assets		32,550		33,651		31,372
Total segment assets		125,608		116,594		119,680
Non-segment assets:
Cash and cash equivalents		31,713		28,772		29,725
Short-term investments		4,259		8,384		10,004
Deferred income taxes		4,312		5,020		5,169
Income taxes receivable		23		104		229
Other current assets		2,331		2,992		2,440
Property, plant and equipment (4)		930		701		838
Long-term investments		3,590		2,063		2,415
Other assets		785		728		800
Total assets	$	173,551	$	165,358	$	171,300

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	6,215	$	8,232
Upholstery Fabrics		481		390
Unallocated Corporate		381		62
Total capital expenditures	$	7,077	$	8,684
Depreciation expense:
Mattress Fabrics	$	4,273	$	3,692
Upholstery Fabrics		615		552
Total depreciation expense	$	4,888	$	4,244

I-20

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)   Current assets represent accounts receivable and inventory for the respective segment.

(2)   The $35.6 million at January 31, 2016, represents property, plant, and equipment of $23.0 million and $12.6 million located in the U.S. and Canada, respectively. The $33.0 million at February 1, 2015, represents property, plant, and equipment of $23.5 million and $9.5 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

(3)   The $1.6 million at January 31, 2016, represents property, plant, and equipment of $860 and $730 located in the U.S. and China, respectively. The $1.5 million at February 1, 2015, represents property, plant, and equipment of $877 and $645 located in the U.S. and China, respectively. The $1.5 million at May 3, 2015, represents property, plant, and equipment of $848 and $619 located in the U.S. and China, respectively.

(4)   The $930, $701, and $838 at January 31, 2016, February 1, 2015 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5)   Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

13.  Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $7.4 million, or 35.7% of income before income tax expense, for the nine month period ended January 31, 2016, compared to income tax expense of $6.1 million or 37.6% of income before income tax expense, for the nine month period ended February 1, 2015. Our effective income tax rates for the nine month periods ended January 31, 2016 and February 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currencies in relation to the U.S. dollar.

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2016	2015
federal income tax rate	34.0%	34.0%
foreign tax rate differential	(6.6)	(6.0)
undistributed earnings from foreign subsidiaries	1.4	4.1
increase in liability for uncertain tax positions	2.9	3.5
tax effects of Chinese foreign exchange gains	3.5	0.2
other	0.5	1.8
	35.7%	37.6%

I-21

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. Based on our assessment at January 31, 2016, we recorded a partial valuation allowance of $874,000, of which $498,000 pertained to certain U.S. state net operating loss carryforwards and credits and $376,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at February 1, 2015, we recorded a partial valuation allowance of $1.0 million, of which $596,000 pertained to certain U.S. state net operating loss carryforwards and credits and $400,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at May 3, 2015, we recorded a partial valuation allowance of $922,000, of which $561,000 pertained to certain U.S. state net operating loss carryforwards and credits and $361,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.

No valuation allowance was recorded against our net deferred tax assets associated with our operations located in China and Canada at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

The recorded valuation allowance of $874,000 at January 31, 2016, has no effect on our operations, loan covenant compliance, or the possible realization of certain U.S. state net operating loss carryforwards and credits and our loss carryforwards associated with our Culp Europe operation located in Poland. If it is determined that it is more-likely-than-not that we will realize any of these deferred tax assets, an income tax benefit will be recognized at that time.

Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Based on our assessment as of January 31, 2016, it is our intention not to permanently invest our undistributed earnings from our foreign subsidiaries. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

At January 31, 2016, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $3.3 million, which included U.S. income and foreign withholding taxes totaling $37.3 million, offset by U.S. foreign income tax credits of $34.0 million. At February 1, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $2.4 million, which included U.S. income and foreign withholding taxes totaling $32.1 million, offset by U.S. foreign income tax credits of $29.7 million. At May 3, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $1.7 million, which included U.S. income and foreign withholding taxes totaling $32.4 million, offset by U.S. foreign income tax credits of $30.7 million.

I-22

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We had accumulated earnings from our foreign subsidiaries totaling $100.9 million, $82.4 million, and $85.2 million at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

Overall

At January 31, 2016, our non-current deferred tax asset of $4.3 million represents $3.5 million and $773,000 from our operations located in the U.S. and China, respectively. At February 1, 2015, our non-current deferred tax asset of $5.0 million represents $4.2 million and $776,000 from our operations located in the U.S. and China, respectively. At May 3, 2015, our non-current deferred tax asset of $5.2 million represents $4.3 million and $868,000 from our operations located in the U.S. and China, respectively.

Our non-current deferred tax liability balances of $1.2 million, $927,000, and $982,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $3.5 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $3.6 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At May 3, 2015, we had a $14.1 million total gross unrecognized tax benefit, of which $3.8 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods.

At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $9.7 million and $3.5 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $10.3 million and $3.6 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At May 3, 2015, we had $14.1 million of total gross unrecognized tax benefit, of which $10.3 million and $3.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets.

We estimate that the amount of gross unrecognized tax benefit will decrease by approximately $120,000 for fiscal 2016. This decrease primarily relates to double taxation under applicable tax treaties with foreign tax jurisdictions.

14.  Statutory Reserves

Our subsidiaries located in China are required to transfer 10% of their net income, as determined in accordance with the People’s Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the company’s registered capital.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of January 31, 2016, the company’s statutory surplus reserve was $4.7 million, representing 10% of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Our subsidiaries located in China can transfer funds to the parent company with the exception of the statutory surplus reserve of $4.7 million to assist with debt repayment, capital expenditures, and other expenses of the company’s business.

15.  Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the financial position, results of operations, or cash flows of the company.

Purchase Commitments

At January 31, 2016, February 1, 2015, and May 3, 2015, we had open purchase commitments to acquire equipment for our mattress fabrics segment totaling $977,000, $3.8 million, and $2.3 million, respectively.

16.  Common Stock Repurchase Program

On February 25, 2014, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the nine months ended January 31, 2016, we purchased 100,776 shares of our common stock at a cost of $2.4 million, all of which was purchased during the third quarter. During fiscal 2015, we purchased 43,014 shares of our common stock at a cost of $745,000, all of which were purchased in the first and second quarters.

At January 31, 2016, we had $1.9 million available for additional repurchases of our common stock.

17.  Dividend Program

On March 1, 2016, we announced that our board of directors approved a quarterly cash dividend of $0.07 per share. This payment will be made on or about April 15, 2016, to shareholders of record as of April 1, 2016.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $2.3 million represented our regular quarterly cash dividend payments ranging from $0.06 to $0.07 per share.

During the nine months ended February 1, 2015, dividend payments totaled $6.8 million, of which $4.9 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $1.9 million represented our regular quarterly cash dividend payments ranging from $0.05 to $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

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 21E 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 or liquidity 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 can 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” section in our Form 10-K filed with the Securities and Exchange Commission on July 17, 2015, for the fiscal year ended May 3, 2015.

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ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of financial condition and results of operations should be read in conjunction with the Financial Statements and Notes and other exhibits included elsewhere in this report.

General

Our fiscal year is the 52 or 53 week period ending on the Sunday closest to April 30. The nine months ended January 31, 2016, and February 1, 2015, represent 39 and 40 week periods, respectively. Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources and sells fabrics and mattress covers to bedding manufacturers. The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges. Unallocated corporate expenses represent primarily compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses.

Executive Summary

Results of Operations

	Three Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Net sales	$	78,466		$	81,269		(3.4	)%
Gross profit		16,563			14,402		15.0	%
Gross profit margin		21.1	%		17.7	%	340	bp
SG&A expenses		9,337			8,375		11.5	%
Income from operations		7,226			6,027		19.9	%
Operating margin		9.2	%		7.4	%	180	bp
Income before income taxes		7,179			5,922		21.2	%
Income taxes		2,317			2,110		9.8	%
Net income		4,862			3,812		27.5	%

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	Nine Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Net sales	$	235,607		$	231,320		1.9	%
Gross profit		48,498			39,395		23.1	%
Gross profit margin		20.6	%		17.0	%	360	bp
SG&A expenses		27,512			23,173		18.7	%
Income from operations		20,986			16,222		29.4	%
Operating margin		8.9	%		7.0	%	190	bp
Income before income taxes		20,731			16,270		27.4	%
Income taxes		7,398			6,113		21.0	%
Net income		13,333			10,157		31.3	%

Net Sales

Overall, our net sales were slightly higher for the nine month year-to-date period of fiscal 2016 compared with the same period a year ago. However, we experienced a slight decrease in our net sales for the third quarter of fiscal 2016 compared with the prior year third quarter, which was an exceptionally strong sales performance for both our business segments. We have remained focused on our top strategic priorities of product innovation and creativity in order to provide a product mix that meets the demands of our customers. Our scalable and flexible manufacturing platform supports this strategy and we have made significant capital investments to improve our operating efficiencies and overall capacity.

Income Before Income Taxes

The increase in income before income taxes primarily reflects the significant improvement in our operating results for both business segments. We continued to realize the benefits of our recent capital investments in our mattress fabrics business, with increased capacity via newer and more efficient equipment, enhanced finishing capabilities and better overall throughput. We also incurred lower raw material costs and operating expenses (primarily more favorable currency exchange rates) in both our business segments during fiscal 2016 compared with fiscal 2015. Partially offsetting the improvement in income before income taxes was the increase in SG&A expenses due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets.

See the Segment Analysis section located in the Results of Operations for further details.

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Liquidity

At January 31, 2016, our cash and cash equivalents and short-term investments totaled $36.0 million compared with $39.7 million at May 3, 2015. This decrease was primarily due to capital expenditures mostly associated with our mattress fabric segment of $7.7 million, dividend payments of $7.3 million, repurchases of our common stock of $2.4 million, a long-term debt payment of $2.2 million, and long-term investment purchases of $1.3 million associated with our Rabbi Trust. This spending was partially offset by net cash provided by operating activities of $15.9 million.

Net cash provided by operating activities was $15.9 million for the nine months ending January 31, 2016, a decrease of $4.8 million compared with $20.7 million for the nine months ending February 1, 2015. This decrease reflects an increase in inventory purchases, as well as higher annual bonus payments made in fiscal 2016 compared with those made in fiscal 2015. This spending was partially offset by cash flow from earnings and improved cash collections from customers in fiscal 2016 compared with fiscal 2015.

On August 11, 2015, we paid our last annual payment of $2.2 million on our unsecured term notes, and we currently do not have any long-term debt or balances due on our revolving credit lines.

On March 10, 2016, we amended our Credit Agreement with Wells Fargo to increase our borrowing capacity from $10 million to $30 million. The purpose of the increase in our revolving credit line with Wells Fargo is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

Dividend Program

On March 1, 2016, we announced that our board of directors approved a quarterly cash dividend of $0.07 per share. This payment will be made on or about April 15, 2016, to shareholders of record as of April 1, 2016.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $2.3 million represented our regular quarterly cash dividend payments ranging from $0.06 to $0.07 per share.

During the nine months ended February 1, 2015, dividend payments totaled $6.8 million, of which $4.9 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $1.9 million represented our regular quarterly cash dividend payments ranging from $0.05 to $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

Common Stock Repurchase Program

On February 25, 2014, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

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During the nine months ended January 31, 2016, we purchased 100,776 shares of our common stock at a cost of $2.4 million, all of which were purchased during the third quarter. During fiscal 2015, we purchased 43,014 shares of our common stock at a cost of $745,000, all of which were purchased in the first and second quarters.

At January 31, 2016, we had $1.9 million available for additional repurchases of our common stock.

Segment Analysis

Mattress Fabrics Segment

	Three Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Net sales	$	44,277		$	45,683		(3.1	)%
Gross profit		8,751			8,076		8.4	%
Gross profit margin		19.8	%		17.7	%	210	bp
SG&A expenses		2,953			2,853		3.5	%
Income from operations		5,798			5,223		11.0	%
Operating margin		13.1	%		11.4	%	170	bp

	Nine Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Net sales	$	137,522		$	131,543		4.5	%
Gross profit		28,133			22,603		24.5	%
Gross profit margin		20.5	%		17.2	%	330	bp
SG&A expenses		8,865			8,019		10.5	%
Income from operations		19,267			14,584		32.1	%
Operating margin		14.0	%		11.1	%	290	bp

Net Sales

Our net sales for mattress fabrics were slightly higher for the nine month year-to-date period of fiscal 2016 compared with the same period a year ago. However, we experienced a slight decrease in our net sales for the third quarter of fiscal 2016 compared with the prior year third quarter. Our net 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 this business in our fourth quarter of fiscal 2016 following the Presidents Day holiday mattress promotional events.

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Design and innovation remain our top strategic priorities to meet customer style preferences and demand trends. As such, we are in the process of enhancing our design services and facilities. In addition, our mirrored manufacturing platform, technical expertise, and expanded reactive capacity support our strategic priorities that focus on customer demand trends and style preferences.

Our mattress fabric net sales also were affected by increased customer pricing pressures and the fact that the nine month year-to-date period of fiscal 2016 contained one less week compared with the same period a year ago.

Gross Profit and Operating Income

Our mattress fabric gross profit and operating income increased in the third quarter and the nine month year-to-date period of fiscal 2016 compared with the same periods a year ago. These results reflect the benefits of our recent capital investments, which include increased production capacity via newer and more efficient equipment, enhanced finishing capabilities, and improved overall efficiency and throughput. As planned, we completed the initial phase of our expansion project at our facility located in Canada during the third quarter, and we plan to install additional new equipment and make other technological improvements to our manufacturing platform during the fourth quarter. This project is expected to improve our production capacity and operating efficiency at this location. We also experienced lower raw material costs and operating expenses due to more favorable exchange rates in Canada for fiscal 2016 compared with fiscal 2015.

Partially offsetting the improvement in operating income was an increase in SG&A expenses, due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets and increased customer pricing pressures as noted above.

Segment assets

Segment assets consist of accounts receivable, inventory, property, plant and equipment, goodwill, a non-compete agreement and customer relationships associated with an acquisition.

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Accounts receivable and inventory	$	44,309	$	36,658	$	41,328
Property, plant & equipment		35,637		33,046		33,773
Goodwill		11,462		11,462		11,462
Non-compete agreement		922		998		979
Customer Relationships		728		779		766

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Accounts Receivable & Inventory

As of January 31, 2016, accounts receivable and inventory increased $7.7 million or 21%, compared with February 1, 2015. This increase is due to an increase in inventory of $9.8 million, as a result of customers requiring us to hold higher inventory levels of key products. This increase in inventory was partially offset by a decrease in accounts receivable of $2.1 million, due to lower net sales and improved cash collections in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015.

As of January 31, 2016, accounts receivable and inventory increased $3.0 million or 7%, compared with May 3, 2015. This increase is due to an increase in inventory of $4.4 million, as a result of customers requiring us to hold higher inventory levels of key products. This was partially offset by a decrease in accounts receivable of $1.4 million due to improved cash collections in the third quarter of fiscal 2016 compared with the fourth quarter of fiscal 2015.

Property, Plant & Equipment

The $35.6 million at January 31, 2016, represents property, plant and equipment of $23.0 million and $12.6 million located in the U.S. and Canada, respectively. The $33.0 million at February 1, 2015, represents property, plant, and equipment of $23.5 million and $9.5 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

As of January 31, 2016, property, plant, and equipment increased $2.6 million, or 8% compared with February 1, 2015. This increase is primarily due to the capital investments noted above, partially offset by depreciation expense.

As of January 31, 2016, property, plant, and equipment increased $1.9 million, or 6%, compared with May 3, 2015. This increase is due to capital expenditures of $6.2 million that primarily relate to the purchases and installation of machinery and equipment associated with our operation located in Canada, partially offset by depreciation expense of $4.3 million for the nine month year-to-date period of fiscal 2016.

Upholstery Fabrics Segment

Net Sales

	Three Months Ended
(dollars in thousands)	January 31,  2016				February 1,  2015				% Change
Non U.S. Produced	$	31,515	92	%	$	32,584	92	%	(3.3	)%
U.S. Produced		2,674	8	%		3,002	8	%	(10.9	)%
Total	$	34,189	100	%	$	35,586	100	%	(3.9	)%

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	Nine Months Ended
(dollars in thousands)	January 31,  2016				February 1,  2015				% Change
Non U.S. Produced	$	90,037	92	%	$	91,603	92	%	(1.7	)%
U.S. Produced		8,048	8	%		8,174	8	%	(1.5	)%
Total	$	98,085	100	%	$	99,777	100	%	(1.7	)%

Our net sales for upholstery fabrics were lower for the third quarter and nearly flat for the nine month year-to-date period of fiscal 2016 compared with the same periods a year ago. The third quarter of fiscal 2015 was an exceptionally strong quarterly performance for upholstery fabric sales.

Our upholstery fabric net sales also were affected by the fact that the nine month year-to-date period of fiscal 2016 contained one less week compared with the same period a year ago, the closure of our finished goods warehouse and distribution facility located in Poznan, Poland, in the third quarter of fiscal 2015, and some pricing pressures from key customers.

Design and product innovation remain our top strategic priorities. This strategy has allowed us to offer a diverse range of products that meet changing market trends and style preferences. As a result, we have extended our market reach to a more diverse customer base, enhanced our product mix with profitable results, and increased our net sales with the hospitality and lifestyle retail markets. Our 100% owned China platform supports our marketing efforts with the manufacturing flexibility to adapt to changing furniture market trends and consumer style preferences. This 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.

Gross Profit, Selling, General & Administrative Expenses, and Operating Income

	Three Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Gross profit	$	7,812		$	6,326		23.5	%
Gross profit margin		22.8	%		17.8	%	500	bp
SG&A expenses		3,963			3,781		4.8	%
Income from operations		3,849			2,545		51.2	%
Operating margin		11.3	%		7.2	%	410	bp

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	Nine Months Ended
(dollars in thousands)	January 31, 2016			February 1, 2015			% Change
Gross profit	$	20,365		$	16,792		21.3	%
Gross profit margin		20.8	%		16.8	%	400	bp
SG&A expenses		11,372			10,518		8.1	%
Income from operations		8,994			6,274		43.4	%
Operating margin		9.2	%		6.3	%	290	bp

Our upholstery fabric gross profit and operating income increased in the third quarter and the nine month year-to-date period of fiscal 2016 compared with the same periods a year ago. These results reflect the benefits from our strategic focus on product innovation and sales diversification. The benefits include an enhanced product mix that has resulted in greater operating efficiency and capacity utilization in our cut and sew operation located in China. We also experienced lower raw material costs and operating expenses due to more favorable exchange rates in China for fiscal 2016 compared with fiscal 2015. Partially offsetting the improvement in income from operations was an increase in SG&A expenses due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets, and some pricing pressures from key customers as noted above.

Also, our profitability for the nine month year-to-date period of fiscal 2015 was affected by non-recurring charges of approximately $200,000 during the second quarter that related to the closure of our Culp Europe operation. No corresponding charge was recorded during the nine month year-to-date period of fiscal 2016.

Culp Europe

As previously announced at the end of the third quarter of fiscal 2015, we closed our finished goods warehouse and distribution facility located in Poznan, Poland, primarily as a result of ongoing economic weakness in Europe. We remain very interested in developing business in Europe, and we are assessing the best strategy for selling upholstery fabric into this market as business conditions improve.

Segment Assets

Segment assets consist of accounts receivable, inventory, and property, plant, and equipment.

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Accounts receivable  and inventory	$	30,960	$	32,129	$	29,905
Property, plant & equipment		1,590		1,522		1,467

Accounts Receivable & Inventory

As of January 31, 2016, accounts receivable and inventory for this segment decreased $1.2 million or 4% compared with February 1, 2015. This decrease was primarily due to a decrease in accounts receivable as a result of lower net sales and improved cash collections in the third quarter of fiscal 2016 compared with the third quarter of fiscal 2015.

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As of January 31, 2016, accounts receivable and inventory increased $1.0 million, or 4%, compared with May 3, 2015. This increase was primarily due to an increase in inventory as a result of holding higher inventory levels to better service our customers.

Property, Plant & Equipment

The $1.6 million at January 31, 2016, represents property, plant, and equipment of $860,000 and $730,000 located in the U.S. and China, respectively. The $1.5 million at February 1, 2015, represents property, plant, and equipment of $877,000 and $645,000 located in the U.S. and China, respectively. The $1.5 million at May 3, 2015, represents property, plant, and equipment of $848,000 and $619,000 located in the U.S. and China, respectively.

Other Income Statement Categories

	Three Months Ended
(dollars in thousands)	January 31, 2016		February 1, 2015		% Change
SG&A expenses	$	9,337	$	8,375	11.5	%
Interest income		38		202	(81.2	)%
Other expense		85		307	(72.3	)%

	Nine Months Ended
(dollars in thousands)	January 31, 2016		February 1, 2015		% Change
SG&A expenses	$	27,512	$	23,173	18.7	%
Interest expense		-		50	(100.0	)%
Interest income		150		478	(68.6	)%
Other expense		405		380	6.6	%

Selling, General and Administrative Expenses

SG&A expenses have increased in the third quarter and the nine month year-to-date period of fiscal 2016 compared with the same periods a year ago. This trend is primarily due to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets.

Interest Expense

Interest expense decreased for the nine month year-to-date period of fiscal 2016 compared with the same period a year ago. This trend primarily reflects lower outstanding balances of long-term debt, and interest costs that were capitalized in connection with our capital investments associated with our mattress fabrics segment. Interest costs charged to operations and incurred on our long-term debt and lines of credit were $58,000 and $191,000 for the nine month year-to-date periods of fiscal 2016 and 2015, respectively. Interest costs charged to operations were reduced by of $58,000 and $141,000 for capitalized interest costs for the nine month year-to-date periods of fiscal 2016 and 2015, respectively. These capitalized interest costs will be amortized over the related assets’ useful lives.

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Interest Income

Interest income decreased in the third quarter and the nine month year-to-date period of fiscal 2016 compared with the same periods a year ago. This trend reflects higher cash and cash equivalent and short-term investment balances held in U.S. dollar denominated account balances during fiscal 2016 compared with fiscal 2015. Cash and cash equivalents and short-term investment balances held in U.S. dollar denominated account balances earn lower interest rates as compared to our cash and cash equivalents and short-term investment balances denominated in the local currency of our foreign subsidiaries. During fiscal 2016, we implemented a strategy of substantially reducing the amount of cash we hold in Chinese Yuan Renminbi. Although this action has resulted in lower interest income as compared to last year, the strategy has mitigated our foreign currency exchange rate exposure in China. See discussion in “Other Expense” below.

Other Expense

The decrease in other expense for the third quarter of fiscal 2016 compared with the third quarter of fiscal 2015 resulted from our ability to better mitigate the effects of foreign currency exchange rate fluctuations associated with our operations located in China. This was achieved by transferring the amount of cash held in Chinese Yuan Renminbi to U.S. dollars as noted above. As a result, we were able to mitigate the effects of foreign currency exchange rate fluctuations associated with our China operations by acheiving a balance of assets and liabilities denominated in Chinese Yuan Renminbi. Our operations located in China reported a foreign exchange gain of $48,000 for the third quarter of fiscal 2016 compared with a foreign exchange loss of $136,000 for the same period a year ago.

Other expenses remained flat for the nine month year-to-date period of fiscal 2016 compared with the same period a year ago. This result reflects our ability to mitigate the effects of foreign currency exchange rate fluctuations associated with our subsidiaries domiciled in Canada and China through maintenance of a natural hedge by keeping a balance of assets and liabilities denominated in foreign currencies other than the U.S. dollar. Although we will continue to try and maintain this natural hedge, there is no assurance that we will be able to continue to do so in future reporting periods.

Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $7.4 million, or 35.7% of income before income tax expense, for the nine month period ended January 31, 2016, compared to income tax expense of $6.1 million or 37.6% of income before income tax expense, for the nine month period ended February 1, 2015. Our effective income tax rates for the nine month periods ended January 31, 2016 and February 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currencies in relation to the U.S. dollar.

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The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2016	2015
federal income tax rate	34.0%	34.0%
foreign tax rate differential	(6.6)	(6.0)
undistributed earnings from foreign subsidiaries	1.4	4.1
increase in liability for uncertain tax positions	2.9	3.5
tax effects of Chinese foreign exchange gains	3.5	0.2
other	0.5	1.8
	35.7%	37.6%

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. Based on our assessment at January 31, 2016, we recorded a partial valuation allowance of $874,000, of which $498,000 pertained to certain U.S. state net operating loss carryforwards and credits and $376,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at February 1, 2015, we recorded a partial valuation allowance of $1.0 million, of which $596,000 pertained to certain U.S. state net operating loss carryforwards and credits and $400,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at May 3, 2015, we recorded a partial valuation allowance of $922,000, of which $561,000 pertained to certain U.S. state net operating loss carryforwards and credits and $361,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.

No valuation allowance was recorded against our net deferred tax assets associated with our operations located in China and Canada at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

The recorded valuation allowance of $874,000 at January 31, 2016, has no effect on our operations, loan covenant compliance, or the possible realization of certain U.S. state net operating loss carryforwards and credits and our loss carryforwards associated with our Culp Europe operation located in Poland. If it is determined that it is more-likely-than-not that we will realize any of these deferred tax assets, an income tax benefit will be recognized at that time.

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Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Based on our assessment as of January 31, 2016, it is our intention not to permanently invest our undistributed earnings from our foreign subsidiaries. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

At January 31, 2016, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $3.3 million, which included U.S. income and foreign withholding taxes totaling $37.3 million, offset by U.S. foreign income tax credits of $34.0 million. At February 1, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $2.4 million, which included U.S. income and foreign withholding taxes totaling $32.1 million, offset by U.S. foreign income tax credits of $29.7 million. At May 3, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $1.7 million, which included U.S. income and foreign withholding taxes totaling $32.4 million, offset by U.S. foreign income tax credits of $30.7 million.

We had accumulated earnings from our foreign subsidiaries totaling $100.9 million, $82.4 million, and $85.2 million at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

Overall

At January 31, 2016, our non-current deferred tax asset of $4.3 million represents $3.5 million and $773,000 from our operations located in the U.S. and China, respectively. At February 1, 2015, our non-current deferred tax asset of $5.0 million represents $4.2 million and $776,000 from our operations located in the U.S. and China, respectively. At May 3, 2015, our non-current deferred tax asset of $5.2 million represents $4.3 million and $868,000 from our operations located in the U.S. and China, respectively.

Our non-current deferred tax liability balances of $1.2 million, $927,000, and $982,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $3.5 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $3.6 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At May 3, 2015, we had a $14.1 million total gross unrecognized tax benefit, of which $3.8 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future period.

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At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $9.7 million and $3.5 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $10.3 million and $3.6 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At May 3, 2015, we had $14.1 million of total gross unrecognized tax benefit, of which $10.3 million and $3.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets.

We estimate that the amount of gross unrecognized tax benefits will decrease by approximately $120,000 for fiscal 2016. This decrease primarily relates to double taxation under applicable tax treaties with foreign tax jurisdictions.

Income Taxes Paid

We reported income tax expense of $7.4 million and $6.1 million for the nine month periods ending January 31, 2016, and February 1, 2015, respectively. Currently, we are not paying income taxes in the United States, nor do we expect to for a few more years, due to our loss carryforwards that totaled $33.3 million as of May 3, 2015. As a result, we had income tax payments of $4.9 million and $3.0 million for the nine month periods ending January 31, 2016 and February 1, 2015, respectively. Our income tax payments are associated with our subsidiaries located in China and Canada.

Liquidity and Capital Resources

Liquidity

Currently, our sources of liquidity include cash and cash equivalents, short-term investments, cash flow from operations, and amounts available under our revolving credit lines. These sources have been adequate for day-to-day operations, capital expenditures, debt payments, common stock repurchases, and dividend payments. We believe our present cash and cash equivalents and short-term investment balance of $36.0 million at January 31, 2016, cash flow from operations, and the current availability under our revolving credit lines will be sufficient to fund our foreseeable business needs and contractual obligations.

On August 11, 2015, we paid our last annual payment of $2.2 million on our unsecured senior term notes, and we currently do not have any long-term debt or balances due on our revolving credit lines.

On March 10, 2016, we amended our Credit Agreement with Wells Fargo to increase our borrowing capacity from $10 million to $30 million. The purpose of the increase in our revolving credit line with Wells Fargo is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

We currently hold cash and cash equivalents and short-term investments in foreign jurisdictions to support the operational requirements of our foreign operations and for U.S. and foreign income tax planning purposes.

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A summary of our cash and cash equivalents and short-term investments by geographic area follows:

	January 31,		May 3,
(dollars in thousands)	2016		2015
Cayman Islands	$	20,077	$	8,591
Canada		6,570		12,511
China		6,479		14,630
United States		2,846		3,977
Poland		-		20
	$	35,972	$	39,729

At January 31, 2016, our cash and cash equivalents and short-term investments totaled $36.0 million compared with $39.7 million at May 3, 2015. This decrease was primarily due to capital expenditures mostly associated with our mattress fabric segment of $7.7 million, dividend payments of $7.3 million, repurchases of our common stock of $2.4 million, a long-term debt payment of $2.2 million, and long-term investment purchases of $1.3 million  associated with our Rabbi Trust. This spending was partially offset by net cash provided by operating activities of $15.9 million.

Our net cash provided by operating activities was $15.9 million for the nine months ending January 31, 2016, a decrease of $4.8 million compared with $20.7 million for the nine months ending February 1, 2015. This decrease reflects an increase in inventory purchases, as well as higher annual bonus payments made in fiscal 2016 compared with those made in fiscal 2015. This spending was partially offset by cash flow from earnings and improved cash collections in fiscal 2016 compared with fiscal 2015.

We have had a significant shift in cash and cash equivalents and short-term investments held in China and the Cayman Islands. During the third quarter of fiscal 2016, we distributed earnings and profits totaling $13.6 million from our subsidiaries located in China to our international holding company located in the Cayman Islands. This shift is primarily due to our strategy of ultimately repatriating earnings and profits from our subsidiaries located in China to the U.S. and mitigating our risk to foreign exchange rate fluctuations for assets and liabilities denominated in Chinese Yuan Renminbi. By reducing the amount of cash and cash equivalents held in Chinese Yuan Renminbi, we are able to obtain a better balance of assets and liabilities denominated in Chinese Yuan Renminbi, and therefore mitigate the risk against foreign currency exchange rate fluctuations in China. In addition, by transferring earnings and profits from China to the Cayman Islands, it provides increased flexibility to repatriate these earnings and profits to the U.S. for various strategic purposes.

Our cash and cash equivalents and short-term investment balance may be adversely affected by factors beyond our control, such as lower net sales due to weakening industry demand and delays in receipt of payment on accounts receivable.

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Dividend Program

On March 1, 2016, we announced that our board of directors approved a quarterly cash dividend of $0.07 per share. This payment will be made on or about April 15, 2016, to shareholders of record as of April 1, 2016.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $2.3 million represented our regular quarterly cash dividend payments ranging from $0.06 to $0.07 per share.

During the nine months ended February 1, 2015, dividend payments totaled $6.8 million, of which $4.9 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $1.9 million represented our regular quarterly cash dividend payments ranging from $0.05 to $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

Common Stock Repurchase Program

On February 25, 2014, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the nine months ended January 31, 2016, we purchased 100,776 shares of our common stock at a cost of $2.4 million, all of which were purchased during the third quarter. During fiscal 2015, we purchased 43,014 shares of our common stock at a cost of $745,000, all of which were purchased in the first and second quarters.

At January 31, 2016, we had $1.9 million available for additional repurchases of our common stock.

Working Capital

Accounts receivable at January 31, 2016, were $26.8 million, a decrease of $4.0 million, or 13%, compared with $30.8 million at February 1, 2015. This decrease is primarily due to lower net sales and improved cash collections with customers associated with both our business segments in the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015. Days’ sales outstanding were 31 days for the third quarter of fiscal 2016 compared with 34 days for the third quarter of fiscal 2015.

Inventories as of January 31, 2016, were $48.5 million, an increase of $10.5 million, or 28%, compared with $38.0 million at February 1, 2015. This increase is primarily due to customers requiring us to hold higher inventory levels of key products. Inventory turns were 5.1 for the third quarter of fiscal 2016 compared with 7.0 for the third quarter of fiscal 2015.

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Accounts payable-trade as of January 31, 2016, were $25.6 million, a decrease of $3.0 million, or 11%, compared with $28.6 million at February 1, 2015.  This decrease is primarily due to the timing of payments to suppliers associated with operations located in China as a result of the Chinese New Year holiday.

Operating working capital (accounts receivable and inventories, less accounts payable-trade and accounts payable-capital expenditures) was $49.3 million at January 31, 2016, compared with $39.4 million at February 1, 2015. Operating working capital turnover was 7.2 during the third quarter of fiscal 2016, compared with 7.5 during the third quarter of fiscal 2015.

Financing Arrangements

Unsecured Senior Term Notes

We entered into a note agreement dated August 11, 2008 that provided for the issuance of $11.0 million of unsecured senior term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year were due on the notes beginning August 11, 2011. Any principal pre-payments would have been assessed a penalty as defined in the agreement. The agreement contained customary financial and other covenants as defined in the agreement.

On August 11, 2015, we paid our last annual payment of $2.2 million and this agreement has been paid in full.

Revolving Credit Agreement – United States

As of May 3, 2015, we had an unsecured credit agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) that provided for an unsecured revolving loan commitment of $10 million to be used to finance working capital and general corporate purposes. Interest is charged at a rate (applicable interest rate of 1.93%, 1.77%, and 1.78% at January 31, 2016, February 1, 2015, and May 3, 2015, respectively) equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement. The Credit Agreement contained customary financial and other covenants as defined in the agreement and was set to expire on August 31, 2015.

Effective July 10, 2015, we amended our Credit Agreement to extend the expiration date to August 31, 2017, and maintain an annual capital expenditure limit of $12 million.

We entered into a Second Amendment to our Credit Agreement dated March 10, 2016, which amends our Credit Agreement with Wells Fargo Bank, National Association.  The terms of the Second Amendment include, among other things, provisions that (i) increase our line of credit under the Credit Agreement to $30 million, (ii) increase the annual limit on capital expenditures by the company to $15 million, (iii) add a new financial covenant to establish a minimum level of unencumbered liquid assets, (iv) eliminate certain financial covenants, (v) amend the pricing matrix that provides for interest payable on obligations under the agreement as a variable spread over LIBOR, based upon the company's ratio of debt to EBITDA, and (vi) provide that the obligations under the Credit Agreement are to be secured by a pledge of 65% of the common stock of Culp International Holdings Ltd, our Cayman subsidiary.

The purpose of the increase in our revolving credit line with Wells Fargo is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

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At January 31, 2016, February 1, 2015 and May 3, 2015 there was a $250,000 outstanding letter of credit (all of which related to workers compensation). At January 31, 2016, February 1, 2015, and May 3, 2015, there were no borrowings outstanding under the Credit Agreement.

Revolving Credit Agreement – China

We had an unsecured credit agreement associated with our operations in China that provided for a line of credit of up to 40 million RMB (approximately $6.1 million USD at January 31, 2016), that was set to expire on February 9, 2016. This agreement had an interest rate determined by the Chinese government. There were no borrowings outstanding under the agreement as of January 31, 2016, February 1, 2015, and May 3, 2015.

On March 8, 2016, we renewed our unsecured credit agreement associated with our operations located in China. The renewal extended the agreement to March 8, 2017 and maintained the line of credit up to 40 million RMB (approximately $6.1 million USD).

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At January 31, 2016, the company was in compliance with these financial covenants.

Capital Expenditures and Depreciation

Capital expenditures on a cash basis were $7.7 million for the nine month year-to-date period for fiscal 2016 compared with $8.2 million for the same period a year ago. Capital expenditures for the nine month year-to-date periods of fiscal 2016 and 2015 were primarily related to our mattress fabrics segment.

Depreciation expense was $4.9 million for the nine month year-to-date period of fiscal 2016 compared with $4.2 million for the same period a year ago. Depreciation expense for the nine month year-to-date periods of fiscal 2016 and 2015 primarily related to the mattress fabrics segment.

For fiscal 2016, we are projecting capital expenditures for the company as a whole to be approximately $12.0 million. Depreciation expense for the company as a whole is projected to be approximately $7.0 million in fiscal 2016. The estimated capital expenditures and depreciation expense primarily relate to the mattress fabrics segment. For fiscal 2017, our preliminary estimate for capital expenditures is in the range of $11 million to $12 million, as we continue to invest in our mattress fabrics business. These are management’s current expectations only, and changes in our business needs could cause changes in plans for capital expenditures and expectations for related depreciation expense.

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Critical Accounting Policies and Recent Accounting Developments

At January 31, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year ended May 3, 2015.

Refer to Note 2 located in the notes to the consolidated financial statements for recently adopted and issued accounting pronouncements since the filing of our Form 10-K for the year ended May 3, 2015.

Contractual Obligations

As of January 31, 2016, there were no significant or new contractual obligations from those reported in our annual report on Form 10-K for the year ended May 3, 2015.

Inflation

Any significant increase in our raw material costs, utility/energy costs and general economic inflation could have a material adverse impact on the company, because competitive conditions have limited our ability to pass significant operating increases on to customers.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates on our revolving credit lines.

At January 31, 2016, our U.S. revolving credit agreement had an interest rate equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement. Our revolving credit line associated with our China subsidiaries bears interest at a rate determined by the Chinese government. At January 31, 2016, there were no borrowings outstanding under any of our revolving credit lines.

We are exposed to market risk from changes in the value of foreign currencies for our subsidiaries domiciled in Canada and China. We try to maintain a natural hedge by keeping a balance of our assets and liabilities denominated in the local currency of our subsidiaries domiciled in Canada and China, although there is no assurance that we will be able to continually maintain this natural hedge. Our foreign subsidiaries use the United States dollar as their functional currency. A substantial portion of the company’s imports purchased outside the United States are denominated in U.S. dollars. A 10% change in the above exchange rates at January 31, 2016, would not have had a significant impact on our results of operations or financial position.

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ITEM 4.   CONTROLS AND PROCEDURES

We have conducted an evaluation of the effectiveness of our disclosure controls and procedures as of January 31, 2016, the end of the period covered by this report. This evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, we have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports filed by us and submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported as and when required. Further, we concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, in a manner to allow timely decisions regarding the required disclosures.

There has been no change in our internal control over financial reporting that occurred during the quarter ended January 31, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II – Other Information

Item 1.  Legal Proceedings

There have not been any material changes to our legal proceedings during the nine months ended January 31, 2016. Our legal proceedings are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 17, 2015 for the fiscal year ended May 3, 2015.

Item 1A.  Risk Factors

There have not been any material changes to our risk factors during the nine months ended January 31, 2016. Our risk factors are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 17, 2015 for the fiscal year ended May 3, 2015.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
November 2, 2015 to December 6, 2015		-		-		-	$	4,256,235
December 7, 2015 to January 3, 2016		-		-		-	$	4,256,235
January 4, 2016 to January 31, 2016		100,776	$	23.79		100,776	$	1,859,274
Total		100,776	$	23.79		100,776	$	1,859,274

(1) On February 25, 2014, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock.

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Item 5.  Other Information

We entered into a Second Amendment to our Credit Agreement dated March 10, 2016, which amends our Credit Agreement with Wells Fargo Bank, National Association.  The terms of the Second Amendment include, among other things, provisions that (i) increase our line of credit under the Credit Agreement to $30 million, (ii) increase the annual limit on capital expenditures by the company to $15 million, (iii) add a new financial covenant to establish a minimum level of unencumbered liquid assets, (iv) eliminate certain financial covenants, (v) amend the pricing matrix that provides for interest payable on obligations under the agreement as a variable spread over LIBOR, based upon the company's ratio of debt to EBITDA, and (vi) provide that the obligations under the Credit Agreement are to be secured by a pledge of 65% of the common stock of Culp International Holdings Ltd, our Cayman subsidiary. This description of the Second Amendment is qualified in its entirety by reference to the terms of the Second Amendment, a copy of which is filed as Exhibit 10.1 hereto.

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Item 6.  Exhibits

The following exhibits are submitted as part of this report.
3(i)	Articles of Incorporation of the company, as amended, were filed as Exhibit 3(i) to the company’s Form 10-Q for the quarter ended July 28, 2002, filed September 11, 2002 (Commission File No. 001-12597), and incorporated herein by reference.
3 (ii)	Restated and Amended Bylaws of the company, as amended November 12, 2007, were filed as Exhibit 3.1 to the company’s Form 8-K dated November 12, 2007 (Commission File No. 001-12597), and incorporated herein by reference.
10.1	Second Amendment to the Credit Agreement dated as of March 10, 2016, by and between Culp, Inc and Wells Fargo. N.A.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

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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 thereunto duly authorized.

		CULP, INC.
		(Registrant)
Date: March 11, 2016	By:	/s/ Kenneth R. Bowling
		Kenneth R. Bowling
		Vice President and Chief Financial Officer
		(Authorized to sign on behalf of the registrant
		and also signing as principal financial officer)
	By:	/s/ Thomas B. Gallagher, Jr.
		Thomas B. Gallagher, Jr.
		Corporate Controller
		(Authorized to sign on behalf of the registrant
		and also signing as principal accounting officer)

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EXHIBIT INDEX

Exhibit Number	Exhibit
10.1	Second Amendment to the Credit Agreement dated as of March 10, 2016, by and between Culp, Inc. and Wells Fargo, N.A.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

EX-10.1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of, March 10th, 2016 by and between CULP, INC., a North Carolina corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of August 13, 2013, as amended by a First Amendment to Credit Agreement between Borrower and Bank dated as of July 10, 2015, and as further amended from time to time ("Credit Agreement").

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Amendments to Credit Agreement.  The Credit Agreement is hereby amended as set forth in this Section 1.

1.1         The following amendments are hereby made to Article I (“Definitions”) of the Credit Agreement:

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(a)         The definition of “Applicable Margin” is hereby amended and restated in its entirety to read as follows:

“(a)  “Applicable Margin” shall be shall be 1.45% until the first Rate Determination Date (hereafter defined) after March 1, 2016, and as of and after such first Rate Determination Date after March 1, 2016 shall be determined based on the pricing grid set forth below and tied to the Consolidated Total Debt to Consolidated EBITDA ratio determined as set forth in Section 5.9(b):

Price Level	Consolidated Total Debt to Consolidated EBITDA Ratio	Applicable Margin
I	Less than 0.75 to 1.00	1.45%
II	Greater than or equal to 0.75 to 1.00 but less than 1.50 to 1.00	1.90%
III	Greater than or equal to 1.50 to 1.00 but less than 2.25 to 1.00	2.35%

The Applicable Margin shall be determined effective as of the date (herein, the “Rate Determination Date”) which is 10 days after receipt by the Bank of the annual (in the case of the fourth Fiscal Quarter) and quarterly financial statements of the Borrower pursuant to the provisions of Section 5.3 for the Fiscal Quarter as of the end of which the foregoing ratio is being determined, based on such quarterly or annual financial statements, as the case may be, for the Fiscal Quarter then ended, and the Applicable Margin so determined shall remain effective from such Rate Determination Date until the date which is 10 days after receipt by the Bank of the financial statements for the next Fiscal Quarter (which latter date shall be a new Rate Determination Date); provided that if the Borrower shall have failed to deliver to the Bank the financial statements required to be delivered pursuant to the provisions of Section 5.3 with respect to the Fiscal Quarter most recently ended within the time period specified herein, then for the period beginning on the day which is 10 days after the required delivery date of such financial statements and ending on the earlier of (A) 10 days after the date on which the Borrower shall deliver to the Bank the financial statements to be delivered pursuant to the provisions of Section 5.3 with respect to such Fiscal Quarter or any subsequent Fiscal Quarter, or (B)10 days after the date on which the Borrower shall deliver to the Bank annual financial statements required to be delivered pursuant to the provisions of Section 5.3(a) with respect to the Fiscal Year which includes such Fiscal Quarter or any subsequent Fiscal Year, the Applicable Margin shall be determined at Pricing Level III set forth above.  Any change in the Applicable Margin as of any Rate Determination Date shall result in a corresponding change, effective on and as of such Rate Determination Date, in the interest rate applicable to the Loans outstanding on such Rate Determination Date.”

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(b)           The definition of “LIBOR” is hereby amended by adding the following sentence at the end thereof: “Notwithstanding anything in this Agreement to the contrary, if LIBOR determined as provided above would be less than zero percent (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).”

1.2         Section 2.1(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(a)           Line of Credit.  Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time to time up to and including August 15, 2018, not to exceed at any time the aggregate principal amount of THIRTY MILLION AND NO/100 DOLLARS ($30,000,000.00) ("Line of Credit"), the proceeds of which shall be used to provide working capital and for general corporate purposes; provided, however, that no portion of the proceeds of the Line of Credit will be used by the Borrower or any Subsidiary (i) in connection with, whether directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation, unless such tender offer or other acquisition is to be made on a negotiated basis with the approval of the board of directors of the corporation to be acquired, and the provisions of Section 6.6 would not be violated, (ii) directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock (as hereinafter defined), or (iii) for any purpose in violation of any applicable law or regulation.  Borrower's obligation to repay advances under the Line of Credit shall be evidenced by a promissory note dated as of the date hereof (as amended from time to time, the "Line of Credit Note"), all terms of which are incorporated herein by this reference.”

-3-

1.3         Section 5.9(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(a)           Liquidity.  Unencumbered Liquid Assets with an aggregate fair market value not at any time less than Twenty Million and No/100 Dollars ($20,000,000.00).  As used herein, “Unencumbered Liquid Assets” shall mean cash, cash equivalents and/or publicly traded marketable securities acceptable to Bank in its sole discretion, free of any lien or other encumbrance.  Retirement account assets held in a fiduciary capacity by Borrower shall not qualify as Unencumbered Liquid Assets.”

1.4.        Section 5.9(c) of the Credit Agreement is hereby deleted.

1.5         Section 6.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“SECTION 6.2.    CAPITAL EXPENDITURES.  Make, and will not permit any of its Subsidiaries to make, capital expenditures in excess of $15,000,000.00 in the aggregate (combined for Borrower and its Subsidiaries) during any Fiscal Year.”

1.6.        The Compliance Checklist attached to the Form of Compliance Certificate attached at Exhibit A to the Credit Agreement is hereby deleted and replaced by the Compliance Checklist attached as Exhibit A to this Amendment.

2.           Conditions to Effectiveness.  The effectiveness of this Amendment is subject to the fulfillment to Bank’s satisfaction of the following conditions:

(a) Documentation.  Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly executed:

(i) This Amendment;

(ii) A Second Modification to Revolving Line of Credit Note;

-4-

(iii) A Pledge Agreement by Borrower of not less than 65% of the voting stock of Culp International Holdings Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, and a share transfer certificate executed in blank; and

(iv) Such other documentation as Bank may reasonably require in connection with this Amendment.

(b) Financial Condition.  There shall have been no material adverse change, as determined by Bank, in the financial condition or business of Borrower, nor any material decline, as determined by Bank, in the market value of any substantial or material portion of the assets of Borrower.

(c) Amendment Fee.  In consideration of the changes set forth herein and as a condition to the effectiveness hereof, immediately upon signing this Amendment Borrower shall pay to Bank a non-refundable fee of $60,000.00.

-5-

3.           No Further Amendment.  Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement shall be read together, as one document.

4.           Representations and Warranties.  Borrower hereby remakes all representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice or the passage of time or both would constitute any such Event of Default.

5.           Costs.  Borrower agrees to pay all costs and expenses of the Bank in connection with the preparation, execution and delivery of this Amendment, including without limitation the fees and expenses of the Bank’s legal counsel (including Lender’s North Carolina counsel and Cayman Islands local counsel).

6.           Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and all of which when taken together shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, with the intention that it constitute an instrument under seal, as of the day and year first written above.

CULP, INC.	WELLS FARGO BANK,
	NATIONAL ASSOCIATION
By: /s/ Kenneth R. Bowling	By: /s/ Timothy Sechrest
Name: Kenneth R. Bowling	Name: Timothy Sechrest
Title: Chief Financial Officer	Title: Senior Vice President

-6-

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Franklin N. Saxon, certify that:

1. I have reviewed this Form 10-Q of Culp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Franklin N. Saxon

Franklin N. Saxon

President and Chief Executive Officer

(Principal Executive Officer)

Date:  March 11, 2016

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kenneth R. Bowling, certify that:

1. I have reviewed this Form 10-Q of Culp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kenneth R. Bowling

Kenneth R. Bowling

Vice President and Chief Financial Officer

(Principal Financial Officer)

Date:  March 11, 2016

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Franklin N. Saxon, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Franklin N. Saxon

Franklin N. Saxon

President and Chief Executive Officer

March 11, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended January 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth R. Bowling, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Kenneth R. Bowling

Kenneth R. Bowling

Vice President and Chief Financial Officer

March 11, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	9 Months Ended
	Jan. 31, 2016 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	CFI
Entity Registrant Name	CULP INC
Entity Central Index Key	0000723603
Current Fiscal Year End Date	--05-01
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	12,250,489

XML

CONSOLIDATED STATEMENTS OF NET INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	Jan. 31, 2016	Feb. 01, 2015
Income Statement [Abstract]
Net sales	$ 78,466	$ 81,269	$ 235,607	$ 231,320
Cost of sales	61,903	66,867	187,109	191,925
Gross profit	16,563	14,402	48,498	39,395
Selling, general and administrative expenses	9,337	8,375	27,512	23,173
Income from operations	7,226	6,027	20,986	16,222
Interest expense				50
Interest income	(38)	(202)	(150)	(478)
Other expense	85	307	405	380
Income before income taxes	7,179	5,922	20,731	16,270
Income taxes	2,317	2,110	7,398	6,113
Net income	$ 4,862	$ 3,812	$ 13,333	$ 10,157
Net income per share, basic	$ 0.39	$ 0.31	$ 1.08	$ 0.83
Net income per share, diluted	$ 0.39	$ 0.31	$ 1.07	$ 0.82
Average shares outstanding, basic	12,331	12,219	12,317	12,216
Average shares outstanding, diluted	12,486	12,417	12,488	12,410

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	Jan. 31, 2016	Feb. 01, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 4,862	$ 3,812	$ 13,333	$ 10,157
Unrealized (losses) gains on investments
Unrealized holding (losses) gains on investments	(194)	22	(312)	(6)
Reclassification adjustment for realized loss included in net income	71		127
Total other comprehensive (loss) income	(123)	22	(185)	(6)
Comprehensive income	$ 4,739	$ 3,834	$ 13,148	$ 10,151

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015	[1]	Feb. 01, 2015
Current assets:
Cash and cash equivalents	$ 31,713	$ 29,725		$ 28,772
Short-term investments	4,259	10,004		8,384
Accounts receivable, net	26,784	28,749		30,774
Inventories	48,485	42,484		38,013
Income taxes receivable	23	229		104
Other current assets	2,331	2,440		2,992
Total current assets	113,595	113,631		109,039
Property, plant and equipment, net	38,157	36,078		35,269
Goodwill	11,462	11,462		11,462
Deferred income taxes	4,312	5,169		5,020
Long-term investments	3,590	2,415		2,063
Other assets	2,435	2,545		2,505
Total assets	173,551	171,300		165,358
Current liabilities:
Current maturities of long-term debt		2,200		2,200
Accounts payable-trade	25,601	28,414		28,644
Accounts payable - capital expenditures	380	990		772
Accrued expenses	12,690	11,129		9,954
Income taxes payable - current	622	325		325
Total current liabilities	39,293	43,058		41,895
Income taxes payable - long-term	3,480	3,792		3,630
Deferred income taxes	1,209	982		927
Deferred compensation	4,495	4,041		3,934
Total liabilities	$ 48,477	$ 51,873		$ 50,386
Commitments and Contingencies (Note 15)
Shareholders' equity
Preferred stock, $0.05 par value, authorized 10,000,000
Common stock, $0.05 par value, authorized 40,000,000 shares, issued and outstanding 12,250,489 at January 31, 2016; 12,219,121 at February 1, 2015; and 12,219,121 at May 3, 2015	$ 613	$ 611		$ 611
Capital contributed in excess of par value	42,937	43,159		42,856
Accumulated earnings	81,804	75,752		71,571
Accumulated other comprehensive loss	(280)	(95)		(66)
Total shareholders' equity	125,074	119,427		114,972
Total liabilities and shareholders' equity	$ 173,551	$ 171,300		$ 165,358

[1] Derived from audited financial statements.

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jan. 31, 2016	May. 03, 2015	[1]	Feb. 01, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.05	$ 0.05		$ 0.05
Preferred stock, authorized shares	10,000,000	10,000,000		10,000,000
Common stock, par value	$ 0.05	$ 0.05		$ 0.05
Common stock, authorized shares	40,000,000	40,000,000		40,000,000
Common stock, issued	12,250,489	12,219,121		12,219,121
Common stock, outstanding	12,250,489	12,219,121		12,219,121

[1] Derived from audited financial statements.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2016		Feb. 01, 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
Excess tax benefit related to stock-based compensation	(822)		(110)
Deferred income taxes	1,906		3,274
Gain on sale of equipment	(66)		(74)
Realized loss on sale of short-term investments	127
Foreign currency 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 - trade	(1,979)		2,267
Accrued expenses and deferred 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 the sale of 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 benefit 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	[1]	29,303
Cash and cash equivalents at end of period	$ 31,713		$ 28,772

[1] Derived from audited financial statements.

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands		Total	Common Stock	Capital Contributed in Excess of Par Value	Accumulated Earnings	Accumulated Other Comprehensive Loss
Balance at Apr. 27, 2014		$ 111,744	$ 612	$ 42,932	$ 68,260	$ (60)
Balance (in shares) at Apr. 27, 2014			12,250,030
Net income		10,157
Unrealized loss on investments		(6)
Balance at Feb. 01, 2015		114,972
Balance at Apr. 27, 2014		111,744	$ 612	42,932	68,260	(60)
Balance (in shares) at Apr. 27, 2014			12,250,030
Net income		15,071			15,071
Stock-based compensation		786		786
Unrealized loss on investments		(35)				(35)
Excess tax benefit related to stock based compensation		109		109
Common stock repurchased		(745)	$ (2)	(743)
Common stock repurchased (in shares)			(43,014)
Fully vested common stock award			3,000
Common stock issued in connection with exercise of stock options (in shares)			10,100
Common stock issued in connection with exercise of stock options		94	$ 1	93
Common stock surrendered for withholding taxes payable		(18)		(18)
Common stock surrendered for withholding taxes payable (in shares)			(995)
Dividends paid		(7,579)			(7,579)
Balance at May. 03, 2015	[1]	119,427	$ 611	43,159	75,752	(95)
Balance (in shares) at May. 03, 2015	[1]		12,219,121
Net income		13,333			13,333
Stock-based compensation		1,964		1,964
Unrealized loss on investments		(185)				(185)
Excess tax benefit related to stock based compensation		822		822
Common stock repurchased		(2,397)	$ (5)	(2,392)
Common stock repurchased (in shares)			(100,776)
Common stock issued in connection with performance based units (in shares)			115,855
Common stock issued in connection with performance based units			$ 6	(6)
Fully vested common stock award			3,000
Common stock issued in connection with exercise of stock options (in shares)			39,500
Common stock issued in connection with exercise of stock options		138	$ 2	136
Common stock surrendered for withholding taxes payable		(747)	$ (1)	(746)
Common stock surrendered for withholding taxes payable (in shares)			(26,211)
Dividends paid		(7,281)			(7,281)
Balance at Jan. 31, 2016		$ 125,074	$ 613	$ 42,937	$ 81,804	$ (280)
Balance (in shares) at Jan. 31, 2016			12,250,489

[1] Derived from audited financial statements.

XML

Basis of Presentation

9 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements of Culp, Inc. and subsidiaries (the “company”) include all adjustments, which are, in the opinion of management, necessary for fair presentation of the results of operations and financial position.  All of these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results.  The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are included in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 17, 2015 for the fiscal year ended May 3, 2015.

The company’s nine months ended January 31, 2016 and February 1, 2015, represent 39 and 40 week periods, respectively.

XML

Significant Accounting Policies

9 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

As of January 31, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year then ended May 3, 2015.

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity’s classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our February 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.5 million and decreased noncurrent deferred tax liabilities $2.5 million. We reclassified our current deferred income taxes to noncurrent on our May 3, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.7 million and decreased noncurrent deferred tax liabilities $68,000.

Recently Issued Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The guidance will be effective in our fiscal 2017 first quarter. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter. Currently, we do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 18, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

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Stock-Based Compensation

9 Months Ended

Jan. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

3.  Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan entitled the Culp, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan is intended to update and replace our 2007 Equity Incentive Plan (the “2007 Plan”) as the vehicle for granting new equity based awards substantially similar to those authorized under the 2007 Plan. In general, the 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and other equity and cash related awards as determined by our Compensation Committee. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. In connection with the approval of the 2015 Plan, no further awards will be granted under the 2007 Plan, but outstanding awards under the 2007 Plan will be settled in accordance with their terms.

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the third quarter of fiscal 2016.

At January 31, 2016, options to purchase 98,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $7.73 per share, and a weighted average contractual term of 1.7 years. At January 31, 2016, the aggregate intrinsic value for options outstanding and exercisable was $1.7 million.

The aggregate intrinsic value for options exercised for the nine months ending January 31, 2016 and February 1, 2015, was $1.0 million and $87,000, respectively.

At January 31, 2016, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at January 31, 2016.

No compensation expense was recorded on incentive stock options for the nine months ended January 31, 2016 and February 1, 2015, respectively.

Common Stock Awards

On October 1, 2015, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $31.77 per share, which represents the closing price of our common stock at the date of grant.

On October 1, 2014, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $17.95 per share, which represents the closing price of our common stock at the date of grant.

We recorded $95,000 and $54,000 of compensation expense within selling, general, and administrative expense for these common stock awards for the nine months ending January 31, 2016, and February 1, 2015, respectively.

Time Vested Restricted Stock Awards

We did not grant any time vested restricted stock awards through the third quarter of fiscal 2016.

At January 31, 2016, there were no outstanding and unvested shares of time vested restricted stock. Therefore, there was no unrecognized compensation cost related to time vested restricted stock awards at January 31, 2016.

No compensation expense was recorded on time vested restricted stock awards for the nine months ended January 31, 2016. We recorded $4,000 within selling, general, and administrative expense for time vested restricted stock awards for the nine months ended February 1, 2015.

During the nine month period ending February 1, 2015, 61,667 shares of time vested restricted stock vested and had a weighted average fair value of $257,000 or $4.17 per share.

Performance Based Restricted Stock Units

Fiscal 2016 Grant

On July 15, 2015, certain key members of management were granted performance based restricted stock units which could earn up to 107,554 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $32.23 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 15, 2015, a non-employee was granted performance based restricted stock units which could earn up to 10,364 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At January 31, 2016, this grant was unvested and was measured at $25.32 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

Fiscal 2015 Grant

On June 24, 2014, certain key members of management were granted performance based restricted stock units which could earn up to 102,845 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.70 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On March 3, 2015, a non-employee was granted performance based restricted stock units which could earn up to 28,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At January 31, 2016, this grant was unvested and was measured at $25.32 per share, which represents the closing price of the company’s common stock at the end of the reporting period. The vesting of these awards is over the requisite service periods of 16 months and 28 months for performance based restricted stock units which could earn up to 12,000 and 16,000 shares of common stock, respectively.

Fiscal 2014 Grant

On June 25, 2013, certain key members of management were granted performance based restricted stock units which could earn up to 72,380 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.12 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

Fiscal 2013 Grant

On July 11, 2012, certain key members of management were granted performance based restricted stock units which could earn up to 120,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $10.21 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

During the nine month period ending January 31, 2016, 115,855 shares of common stock associated with our fiscal 2013 grant vested and had a weighted average fair value of $1.2 million or $10.21 per share. As of January 31, 2016, our fiscal 2013 grant was fully vested.

Overall

We recorded compensation expense of $1.9 million and $424,000 within selling, general, and administrative expense for performance based restricted stock units for the nine month periods ending January 31, 2016 and February 1, 2015, respectively. Compensation cost is recorded based on an assessment each reporting period of the probability if certain performance goals will be met during the vesting period. If performance goals are not probable of occurrence, no compensation cost will be recognized and any recognized compensation cost would be reversed.

As of January 31, 2016, the remaining unrecognized compensation cost related to the performance based restricted stock units was $4.2 million, which is expected to be recognized over a weighted average vesting period of 2.1 years.

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Accounts Receivable

9 Months Ended

Jan. 31, 2016

Receivables [Abstract]

Accounts Receivable

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 31, 2016			February 1, 2015			May 3, 2015
Customers	$	28,684		$	31,952		$	30,338
Allowance for doubtful accounts		(814	)		(449	)		(851	)
Reserve for returns and allowances and discounts		(1,086	)		(729	)		(738	)
	$	26,784		$	30,774		$	28,749

A summary of the activity in the allowance for doubtful accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(851	)	$	(573	)
Provision for bad debts		(93	)		(20	)
Net write-offs, net of recoveries		130			144
Ending balance	$	(814	)	$	(449	)

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(738	)	$	(479	)
Provision for returns, allowances
and discounts		(2,389	)		(2,065	)
Credits issued		2,041			1,815
Ending balance	$	(1,086	)	$	(729	)

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Inventories

9 Months Ended

Jan. 31, 2016

Inventory Disclosure [Abstract]

Inventories

5.  Inventories

Inventories are carried at the lower of cost or market.  Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Raw materials	$	6,831	$	5,787	$	5,374
Work-in-process		3,365		2,227		2,766
Finished goods		38,289		29,999		34,344
	$	48,485	$	38,013	$	42,484

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Other Assets

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Other Assets

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Cash surrender value – life insurance	$	357	$	338	$	339
Non-compete agreement, net		922		998		979
Customer relationships, net		728		779		766
Other		428		390		461
	$	2,435	$	2,505	$	2,545

Non-Compete Agreement

We recorded our non-compete agreement at its fair value based on a discounted cash flow valuation model. Our non-compete agreement is amortized on a straight-line basis over the fifteen year life of the respective agreement.

The gross carrying amount of our non-compete agreement was $2.0 million at January 31, 2016, February 1, 2015 and May 3, 2015, respectively. At January 31, 2016 and May 3, 2015, accumulated amortization for our non-compete agreement was $1.1 million. At February 1, 2015 accumulated amortization for our non-compete agreement was $1.0 million.

Amortization expense for our non-compete agreement was $56,000 for the nine month periods ended January 31, 2016 and February 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2016 - $18,000; FY 2017 - $75,000; FY 2018- $75,000; FY 2019 - $75,000; FY 2020 - $75,000 and Thereafter - $604,000.

The weighted average amortization period for our non-compete agreement is 12.3 years as of January 31, 2016.

Customer Relationships

We recorded our customer relationships at their fair value based on a multi-period excess earnings valuation model. Our customer relationships are amortized on a straight-line basis over its seventeen year useful life.

The gross carrying amount of our customer relationships was $868,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. Accumulated amortization for our customer relationships was $140,000, $89,000, and $102,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

Amortization expense for our customer relationships was $38,000 for the nine months ending January 31, 2016 and February 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2016 - $13,000; FY 2017 - $51,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; and Thereafter - $511,000.

The weighted average amortization period for our customer relationships is 14.3 years as of January 31, 2016.

Cash Surrender Value – Life Insurance

At January 31, 2016, February 1, 2015, and May 3, 2015 we had one life insurance contract with a death benefit of $1.4 million.

Our cash surrender value – life insurance balances totaling $357,000, $338,000 and $339,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively, are collectible upon death of the respective insured.

On May 16, 2014, we entered into an agreement with a former employee and his irrevocable trust (the “Trust”) dated September 7, 1995. As a result of this agreement, a previous split dollar life insurance agreement in which we purchased a policy on the life of this former employee and his spouse, in which we retained ownership of the policy, paid premiums to support the policy, had the right to receive cash surrender value of the policy upon the second to die of the former employee and his spouse, with the Trust receiving the remainder of the policy’s death benefit ($2.5 million), was terminated. In connection with the termination of the previous split dollar life insurance agreement, we transferred the life insurance policy to the Trust and received cash proceeds in the amount of the cash surrender value policy totaling $320,000 during the second quarter of fiscal 2015.

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Accrued Expenses

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Accrued Expenses

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Compensation, commissions and related benefits	$	8,678	$	6,399	$	9,081
Advertising rebates		2,876		2,522		1,002
Interest		-		81		37
Other accrued expenses		1,136		952		1,009
	$	12,690	$	9,954	$	11,129

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Long-Term Debt and Lines of Credit

9 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

Long-Term Debt and Lines of Credit

8. Long-Term Debt and Lines of Credit

A summary of long-term debt follows:

(dollars in thousands)	January 31, 2016		February 1, 2015			May 3, 2015
Unsecured senior term notes	$	-	$	2,200		$	2,200
Current maturities of long-term debt		-		(2,200	)		(2,200	)
Long-term debt, less current maturities
of long-term debt	$	-	$	-		$	-

Unsecured Senior Term Notes

We entered into a note agreement dated August 11, 2008 that provided for the issuance of $11.0 million of unsecured senior term notes with a fixed interest rate of 8.01% and a term of seven years. Principal payments of $2.2 million per year were due on the notes beginning August 11, 2011. Any principal pre-payments would have been assessed a penalty as defined in the agreement. The agreement contained customary financial and other covenants as defined in the agreement.

On August 11, 2015, we paid our last annual payment of $2.2 million and this agreement has been paid in full.

Revolving Credit Agreement – United States

As of May 3, 2015, we had an unsecured credit agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) that provided for an unsecured revolving loan commitment of $10 million to be used to finance working capital and general corporate purposes. Interest is charged at a rate (applicable interest rate of 1.93%, 1.77%, and 1.78% at January 31, 2016, February 1, 2015, and May 3, 2015, respectively) equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement. The Credit Agreement contained customary financial and other covenants as defined in the agreement and was set to expire on August 31, 2015.

Effective July 10, 2015, we amended our Credit Agreement to extend the expiration date to August 31, 2017, and maintain an annual capital expenditure limit of $12 million.

We entered into a Second Amendment to our Credit Agreement dated March 10, 2016, which amends our Credit Agreement with Wells Fargo Bank, National Association. The terms of the Second Amendment include, among other things, provisions that (i) increase our line of credit under the Credit Agreement to $30 million, (ii) increase the annual limit on capital expenditures by the company to $15 million, (iii) add a new financial covenant to establish a minimum level of unencumbered liquid assets, (iv) eliminate certain financial covenants, (v) amend the pricing matrix that provides for interest payable on obligations under the agreement as a variable spread over LIBOR, based upon the company's ratio of debt to EBITDA, and (vi) provide that the obligations under the Credit Agreement are to be secured by a pledge of 65% of the common stock of Culp International Holdings Ltd, our Cayman subsidiary.

The purpose of the increase in our revolving credit line with Wells Fargo is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

At January 31, 2016, February 1, 2015 and May 3, 2015 there was a $250,000 outstanding letter of credit (all of which related to workers compensation). At January 31, 2016, February 1, 2015, and May 3, 2015, there were no borrowings outstanding under the Credit Agreement.

Revolving Credit Agreement – China

We had an unsecured credit agreement associated with our operations in China that provided for a line of credit of up to 40 million RMB (approximately $6.1 million USD at January 31, 2016), that was set to expire on February 9, 2016. This agreement had an interest rate determined by the Chinese government. There were no borrowings outstanding under the agreement as of January 31, 2016, February 1, 2015, and May 3, 2015.

On March 8, 2016, we renewed our unsecured credit agreement associated with our operations located in China. The renewal extended the agreement to March 8, 2017 and maintained the line of credit up to 40 million RMB (approximately $6.1 million USD).

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At January 31, 2016, the company was in compliance with these financial covenants.

The fair value of the company’s long-term debt is estimated by discounting the future cash flows at rates currently offered to the company for similar debt instruments of comparable maturities. At February 1, 2015, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million. At May 3, 2015, the carrying value of the company’s long-term debt was $2.2 million and the fair value was $2.3 million.

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Fair Value of Financial Instruments

9 Months Ended

Jan. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

9. Fair Value of Financial Instruments

ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and

Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.

Recurring Basis

The following table presents information about assets and liabilities measured at fair value on a recurring basis:

	Fair value measurements at January 31, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,071		N/A		N/A	$	3,071
Low Duration Bond Fund		1,592		N/A		N/A		1,592
Intermediate Term Bond Fund		1,116		N/A		N/A		1,116
Strategic Income Fund		957		N/A		N/A		957
Limited Term Bond Fund		594		N/A		N/A		594
Large Blend Fund		254		N/A		N/A		254
Growth Allocation Fund		128		N/A		N/A		128
Mid Cap Value Fund		90		N/A		N/A		90
Other		47		N/A		N/A		47

	Fair value measurements at February 1, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,112		N/A		N/A	$	3,112
Intermediate Term Bond Fund		2,188		N/A		N/A		2,188
Low Duration Bond Fund		2,084		N/A		N/A		2,084
Premier Money Market Fund		1,951		N/A		N/A		1,951
Strategic Income Fund		1,000		N/A		N/A		1,000
Growth Allocation Fund		63		N/A		N/A		63
Other		49		N/A		N/A		49

	Fair value measurements at May 3, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,107		N/A		N/A	$	3,107
Premier Money Market Fund		2,285		N/A		N/A		2,285
Intermediate Term Bond Fund		2,181		N/A		N/A		2,181
Low Duration Bond Fund		2,096		N/A		N/A		2,096
Strategic Income Fund		1,008		N/A		N/A		1,008
Growth Allocation Fund		85		N/A		N/A		85
Other		45		N/A		N/A		45

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Short-Term Investments

At January 31, 2016 and February 1, 2015, our short-term investments totaled $4.3 million and $8.4 million, respectively, and consisted of short-term bond funds. At May 3, 2015, our short-term investments totaled $10.0 million and consisted of short-term bonds of $8.4 million and a deposit account that had a maturity of more than three months of $1.6 million.

Our short-term bond funds are recorded at their fair value, are classified as available-for-sale, and their unrealized gains or losses are included in other comprehensive income (loss). Our short-term bond investments had an accumulated unrealized loss totaling $181,000, $66,000, and $95,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. At January 31, 2016, February 1, 2015, and May 3, 2015, the fair value of our short-term bond funds approximated its cost basis.

Long-Term Investments

Effective January 1, 2014, we established a Rabbi Trust to set aside funds for participants of our deferred compensation plan (the “Plan”) and enable the participants to credit their contributions to various investment options of the Plan. The investments associated with the Rabbi Trust consist of a money market fund and various mutual funds that are classified as available for sale.

Our long-term investments are recorded at their fair value of $3.6 million, $2.1 million, and $2.4 million at January 31, 2016, February 1, 2015, and May 3, 2015, respectively. Our long-term investments had an accumulated unrealized loss of $99,000 at January 31, 2016. At February 1, 2015 and May 3, 2015, our accumulated gains or losses regarding our long-term investments were immaterial. The fair value of our long-term investments approximates its cost basis.

Other

The carrying amount of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments.

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Cash Flow Information

9 Months Ended

Jan. 31, 2016

Supplemental Cash Flow Elements [Abstract]

Cash Flow Information

10.  Cash Flow Information

Interest and income taxes paid are as follows:

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Interest	$	95	$	180
Income taxes		4,921		3,005

Interest costs charged to operations and incurred on our long-term debt and lines of credit were $58,000 and $191,000 for the nine months ended January 31, 2016 and February 1, 2015, respectively.

Interest costs of $58,000 and $141,000 for the construction of qualifying fixed assets were capitalized and will be amortized over the related assets’ useful lives for the nine months ended January 31, 2016 and February 1, 2015, respectively.

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Net Income Per Share

9 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

Net Income Per Share

11.  Net Income Per Share

Basic net income per share is computed using the weighted-average number of shares outstanding during the period.  Diluted net income per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.  Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,331		12,219
Dilutive effect of stock-based compensation		155		198
Weighted average common shares outstanding, diluted		12,486		12,417

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended January 31, 2016 and February 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

	Nine months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,317		12,216
Dilutive effect of stock-based compensation		171		194
Weighted average common shares outstanding, diluted		12,488		12,410

All options to purchase shares of common stock were included in the computation of diluted net income for the nine months ended January 31, 2016 and February 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

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Segment Information

9 Months Ended

Jan. 31, 2016

Segment Reporting [Abstract]

Segment Information

12. Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers to bedding manufacturers. The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges. Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses. Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment. The mattress fabrics segment also includes in segment assets, goodwill, a non-compete agreement, and customer relationships associated with an acquisition.

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	44,277		$	45,683
Upholstery Fabrics		34,189			35,586
	$	78,466		$	81,269
Gross profit:
Mattress Fabrics	$	8,751		$	8,076
Upholstery Fabrics		7,812			6,326
	$	16,563		$	14,402
Selling, general, and administrative expenses:
Mattress Fabrics	$	2,953		$	2,853
Upholstery Fabrics		3,963			3,781
Total segment selling, general, and
administrative expenses		6,916			6,634
Unallocated corporate expenses		2,421			1,741
	$	9,337		$	8,375
Income from operations:
Mattress Fabrics	$	5,798		$	5,223
Upholstery Fabrics		3,849			2,545
Total segment income from operations		9,647			7,768
Unallocated corporate expenses		(2,421	)		(1,741	)
Total income from operations		7,226			6,027
Interest income		38			202
Other expense		(85	)		(307	)
Income before income taxes	$	7,179		$	5,922

Financial information for the company’s operating segments follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	137,522		$	131,543
Upholstery Fabrics		98,085			99,777
	$	235,607		$	231,320
Gross profit:
Mattress Fabrics	$	28,133		$	22,603
Upholstery Fabrics		20,365			16,792
	$	48,498		$	39,395
Selling, general, and administrative expenses:
Mattress Fabrics	$	8,865		$	8,019
Upholstery Fabrics		11,372			10,518
Total segment selling, general, and
administrative expenses		20,237			18,537
Unallocated corporate expenses		7,275			4,636
	$	27,512		$	23,173
Income from operations:
Mattress Fabrics	$	19,267		$	14,584
Upholstery Fabrics		8,994			6,274
Total segment income from operations		28,261			20,858
Unallocated corporate expenses		(7,275	)		(4,636	)
Total income from operations		20,986			16,222
Interest expense		-			(50	)
Interest income		150			478
Other expense		(405	)		(380	)
Income before income taxes	$	20,731		$	16,270

Balance sheet information for the company’s operating segments follow:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Segment assets:
Mattress Fabrics
Current assets (1)	$	44,309	$	36,658	$	41,328
Non-compete agreement		922		998		979
Customer relationships		728		779		766
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		35,637		33,046		33,773
Total mattress fabrics assets		93,058		82,943		88,308
Upholstery Fabrics
Current assets (1)		30,960		32,129		29,905
Property, plant and equipment (3)		1,590		1,522		1,467
Total upholstery fabrics assets		32,550		33,651		31,372
Total segment assets		125,608		116,594		119,680
Non-segment assets:
Cash and cash equivalents		31,713		28,772		29,725
Short-term investments		4,259		8,384		10,004
Deferred income taxes		4,312		5,020		5,169
Income taxes receivable		23		104		229
Other current assets		2,331		2,992		2,440
Property, plant and equipment (4)		930		701		838
Long-term investments		3,590		2,063		2,415
Other assets		785		728		800
Total assets	$	173,551	$	165,358	$	171,300

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	6,215	$	8,232
Upholstery Fabrics		481		390
Unallocated Corporate		381		62
Total capital expenditures	$	7,077	$	8,684
Depreciation expense:
Mattress Fabrics	$	4,273	$	3,692
Upholstery Fabrics		615		552
Total depreciation expense	$	4,888	$	4,244

(1) Current assets represent accounts receivable and inventory for the respective segment.

(2) The $35.6 million at January 31, 2016, represents property, plant, and equipment of $23.0 million and $12.6 million located in the U.S. and Canada, respectively. The $33.0 million at February 1, 2015, represents property, plant, and equipment of $23.5 million and $9.5 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

(3) The $1.6 million at January 31, 2016, represents property, plant, and equipment of $860 and $730 located in the U.S. and China, respectively. The $1.5 million at February 1, 2015, represents property, plant, and equipment of $877 and $645 located in the U.S. and China, respectively. The $1.5 million at May 3, 2015, represents property, plant, and equipment of $848 and $619 located in the U.S. and China, respectively.

(4) The $930, $701, and $838 at January 31, 2016, February 1, 2015 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes

9 Months Ended

Jan. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $7.4 million, or 35.7% of income before income tax expense, for the nine month period ended January 31, 2016, compared to income tax expense of $6.1 million or 37.6% of income before income tax expense, for the nine month period ended February 1, 2015. Our effective income tax rates for the nine month periods ended January 31, 2016 and February 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currencies in relation to the U.S. dollar.

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2016	2015
federal income tax rate	34.0%	34.0%
foreign tax rate differential	(6.6)	(6.0)
undistributed earnings from foreign subsidiaries	1.4	4.1
increase in liability for uncertain tax positions	2.9	3.5
tax effects of Chinese foreign exchange gains	3.5	0.2
other	0.5	1.8
	35.7%	37.6%

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. Based on our assessment at January 31, 2016, we recorded a partial valuation allowance of $874,000, of which $498,000 pertained to certain U.S. state net operating loss carryforwards and credits and $376,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland. Based on our assessment at February 1, 2015, we recorded a partial valuation allowance of $1.0 million, of which $596,000 pertained to certain U.S. state net operating loss carryforwards and credits and $400,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland. Based on our assessment at May 3, 2015, we recorded a partial valuation allowance of $922,000, of which $561,000 pertained to certain U.S. state net operating loss carryforwards and credits and $361,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.

No valuation allowance was recorded against our net deferred tax assets associated with our operations located in China and Canada at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

The recorded valuation allowance of $874,000 at January 31, 2016, has no effect on our operations, loan covenant compliance, or the possible realization of certain U.S. state net operating loss carryforwards and credits and our loss carryforwards associated with our Culp Europe operation located in Poland. If it is determined that it is more-likely-than-not that we will realize any of these deferred tax assets, an income tax benefit will be recognized at that time.

Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Based on our assessment as of January 31, 2016, it is our intention not to permanently invest our undistributed earnings from our foreign subsidiaries. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

At January 31, 2016, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $3.3 million, which included U.S. income and foreign withholding taxes totaling $37.3 million, offset by U.S. foreign income tax credits of $34.0 million. At February 1, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $2.4 million, which included U.S. income and foreign withholding taxes totaling $32.1 million, offset by U.S. foreign income tax credits of $29.7 million. At May 3, 2015, the net deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $1.7 million, which included U.S. income and foreign withholding taxes totaling $32.4 million, offset by U.S. foreign income tax credits of $30.7 million.

We had accumulated earnings from our foreign subsidiaries totaling $100.9 million, $82.4 million, and $85.2 million at January 31, 2016, February 1, 2015, and May 3, 2015, respectively.

Overall

At January 31, 2016, our non-current deferred tax asset of $4.3 million represents $3.5 million and $773,000 from our operations located in the U.S. and China, respectively. At February 1, 2015, our non-current deferred tax asset of $5.0 million represents $4.2 million and $776,000 from our operations located in the U.S. and China, respectively. At May 3, 2015, our non-current deferred tax asset of $5.2 million represents $4.3 million and $868,000 from our operations located in the U.S. and China, respectively.

Our non-current deferred tax liability balances of $1.2 million, $927,000, and $982,000 at January 31, 2016, February 1, 2015, and May 3, 2015, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $3.5 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $3.6 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods. At May 3, 2015, we had a $14.1 million total gross unrecognized tax benefit, of which $3.8 million represents the amount of gross unrecognized tax benefit that, if recognized, would favorably affect the income tax rate in future periods.

At January 31, 2016, we had a $13.2 million total gross unrecognized tax benefit, of which $9.7 million and $3.5 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At February 1, 2015, we had a $13.9 million total gross unrecognized tax benefit, of which $10.3 million and $3.6 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At May 3, 2015, we had $14.1 million of total gross unrecognized tax benefit, of which $10.3 million and $3.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets.

We estimate that the amount of gross unrecognized tax benefit will decrease by approximately $120,000 for fiscal 2016. This decrease primarily relates to double taxation under applicable tax treaties with foreign tax jurisdictions.

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Statutory Reserves

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Statutory Reserves

14.  Statutory Reserves

Our subsidiaries located in China are required to transfer 10% of their net income, as determined in accordance with the People’s Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the company’s registered capital.

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of January 31, 2016, the company’s statutory surplus reserve was $4.7 million, representing 10% of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Our subsidiaries located in China can transfer funds to the parent company with the exception of the statutory surplus reserve of $4.7 million to assist with debt repayment, capital expenditures, and other expenses of the company’s business.

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Commitments and Contingencies

9 Months Ended

Jan. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the financial position, results of operations, or cash flows of the company.

Purchase Commitments

At January 31, 2016, February 1, 2015, and May 3, 2015, we had open purchase commitments to acquire equipment for our mattress fabrics segment totaling $977,000, $3.8 million, and $2.3 million, respectively.

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Common Stock Repurchase Program

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Common Stock Repurchase Program

16.  Common Stock Repurchase Program

On February 25, 2014, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the nine months ended January 31, 2016, we purchased 100,776 shares of our common stock at a cost of $2.4 million, all of which was purchased during the third quarter. During fiscal 2015, we purchased 43,014 shares of our common stock at a cost of $745,000, all of which were purchased in the first and second quarters.

At January 31, 2016, we had $1.9 million available for additional repurchases of our common stock.

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Dividend Program

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Dividend Program

17.  Dividend Program

On March 1, 2016, we announced that our board of directors approved a quarterly cash dividend of $0.07 per share. This payment will be made on or about April 15, 2016, to shareholders of record as of April 1, 2016.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $2.3 million represented our regular quarterly cash dividend payments ranging from $0.06 to $0.07 per share.

During the nine months ended February 1, 2015, dividend payments totaled $6.8 million, of which $4.9 million represented a special cash dividend payment in the first quarter of $0.40 per share, and $1.9 million represented our regular quarterly cash dividend payments ranging from $0.05 to $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

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Significant Accounting Policies (Policies)

9 Months Ended

Jan. 31, 2016

Accounting Policies [Abstract]

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity’s classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our February 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.5 million and decreased noncurrent deferred tax liabilities $2.5 million. We reclassified our current deferred income taxes to noncurrent on our May 3, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $4.7 million and decreased noncurrent deferred tax liabilities $68,000.

Recently Issued Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The guidance will be effective in our fiscal 2017 first quarter. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter. Currently, we do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 18, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

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Accounts Receivable (Tables)

9 Months Ended

Jan. 31, 2016

Receivables [Abstract]

Summary of Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 31, 2016			February 1, 2015			May 3, 2015
Customers	$	28,684		$	31,952		$	30,338
Allowance for doubtful accounts		(814	)		(449	)		(851	)
Reserve for returns and allowances and discounts		(1,086	)		(729	)		(738	)
	$	26,784		$	30,774		$	28,749

Summary of the Activity in the Allowance for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(851	)	$	(573	)
Provision for bad debts		(93	)		(20	)
Net write-offs, net of recoveries		130			144
Ending balance	$	(814	)	$	(449	)

Summary of the Activity in the Allowance for Returns and Allowances and Discounts Accounts

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Beginning balance	$	(738	)	$	(479	)
Provision for returns, allowances
and discounts		(2,389	)		(2,065	)
Credits issued		2,041			1,815
Ending balance	$	(1,086	)	$	(729	)

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Inventories (Tables)

9 Months Ended

Jan. 31, 2016

Inventory Disclosure [Abstract]

Summary of Inventories

A summary of inventories follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Raw materials	$	6,831	$	5,787	$	5,374
Work-in-process		3,365		2,227		2,766
Finished goods		38,289		29,999		34,344
	$	48,485	$	38,013	$	42,484

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Other Assets (Tables)

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Summary of Other Assets

A summary of other assets follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Cash surrender value – life insurance	$	357	$	338	$	339
Non-compete agreement, net		922		998		979
Customer relationships, net		728		779		766
Other		428		390		461
	$	2,435	$	2,505	$	2,545

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Accrued Expenses (Tables)

9 Months Ended

Jan. 31, 2016

Text Block [Abstract]

Summary of Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Compensation, commissions and related benefits	$	8,678	$	6,399	$	9,081
Advertising rebates		2,876		2,522		1,002
Interest		-		81		37
Other accrued expenses		1,136		952		1,009
	$	12,690	$	9,954	$	11,129

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Long-Term Debt and Lines of Credit (Tables)

9 Months Ended

Jan. 31, 2016

Debt Disclosure [Abstract]

Summary of Long-Term Debt

A summary of long-term debt follows:

(dollars in thousands)	January 31, 2016		February 1, 2015			May 3, 2015
Unsecured senior term notes	$	-	$	2,200		$	2,200
Current maturities of long-term debt		-		(2,200	)		(2,200	)
Long-term debt, less current maturities
of long-term debt	$	-	$	-		$	-

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Jan. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about assets and liabilities measured at fair value on a recurring basis:

	Fair value measurements at January 31, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,071		N/A		N/A	$	3,071
Low Duration Bond Fund		1,592		N/A		N/A		1,592
Intermediate Term Bond Fund		1,116		N/A		N/A		1,116
Strategic Income Fund		957		N/A		N/A		957
Limited Term Bond Fund		594		N/A		N/A		594
Large Blend Fund		254		N/A		N/A		254
Growth Allocation Fund		128		N/A		N/A		128
Mid Cap Value Fund		90		N/A		N/A		90
Other		47		N/A		N/A		47

	Fair value measurements at February 1, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,112		N/A		N/A	$	3,112
Intermediate Term Bond Fund		2,188		N/A		N/A		2,188
Low Duration Bond Fund		2,084		N/A		N/A		2,084
Premier Money Market Fund		1,951		N/A		N/A		1,951
Strategic Income Fund		1,000		N/A		N/A		1,000
Growth Allocation Fund		63		N/A		N/A		63
Other		49		N/A		N/A		49

	Fair value measurements at May 3, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Limited Term Bond Fund	$	3,107		N/A		N/A	$	3,107
Premier Money Market Fund		2,285		N/A		N/A		2,285
Intermediate Term Bond Fund		2,181		N/A		N/A		2,181
Low Duration Bond Fund		2,096		N/A		N/A		2,096
Strategic Income Fund		1,008		N/A		N/A		1,008
Growth Allocation Fund		85		N/A		N/A		85
Other		45		N/A		N/A		45

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Cash Flow Information (Tables)

9 Months Ended

Jan. 31, 2016

Supplemental Cash Flow Elements [Abstract]

Schedule of Interest and Income Taxes Paid

Interest and income taxes paid are as follows:

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Interest	$	95	$	180
Income taxes		4,921		3,005

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Net Income Per Share (Tables)

9 Months Ended

Jan. 31, 2016

Earnings Per Share [Abstract]

Schedule of Weighted Average Shares Used in the Computation of Basic and Diluted Net Income Per Share

Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,331		12,219
Dilutive effect of stock-based compensation		155		198
Weighted average common shares outstanding, diluted		12,486		12,417

	Nine months ended
(amounts in thousands)	January 31, 2016		February 1, 2015
Weighted average common shares outstanding, basic		12,317		12,216
Dilutive effect of stock-based compensation		171		194
Weighted average common shares outstanding, diluted		12,488		12,410

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Segment Information (Tables)

9 Months Ended

Jan. 31, 2016

Segment Reporting [Abstract]

Schedule of Operating Segments Information

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	44,277		$	45,683
Upholstery Fabrics		34,189			35,586
	$	78,466		$	81,269
Gross profit:
Mattress Fabrics	$	8,751		$	8,076
Upholstery Fabrics		7,812			6,326
	$	16,563		$	14,402
Selling, general, and administrative expenses:
Mattress Fabrics	$	2,953		$	2,853
Upholstery Fabrics		3,963			3,781
Total segment selling, general, and
administrative expenses		6,916			6,634
Unallocated corporate expenses		2,421			1,741
	$	9,337		$	8,375
Income from operations:
Mattress Fabrics	$	5,798		$	5,223
Upholstery Fabrics		3,849			2,545
Total segment income from operations		9,647			7,768
Unallocated corporate expenses		(2,421	)		(1,741	)
Total income from operations		7,226			6,027
Interest income		38			202
Other expense		(85	)		(307	)
Income before income taxes	$	7,179		$	5,922

Financial information for the company’s operating segments follows:

	Nine months ended
(dollars in thousands)	January 31, 2016			February 1, 2015
Net sales:
Mattress Fabrics	$	137,522		$	131,543
Upholstery Fabrics		98,085			99,777
	$	235,607		$	231,320
Gross profit:
Mattress Fabrics	$	28,133		$	22,603
Upholstery Fabrics		20,365			16,792
	$	48,498		$	39,395
Selling, general, and administrative expenses:
Mattress Fabrics	$	8,865		$	8,019
Upholstery Fabrics		11,372			10,518
Total segment selling, general, and
administrative expenses		20,237			18,537
Unallocated corporate expenses		7,275			4,636
	$	27,512		$	23,173
Income from operations:
Mattress Fabrics	$	19,267		$	14,584
Upholstery Fabrics		8,994			6,274
Total segment income from operations		28,261			20,858
Unallocated corporate expenses		(7,275	)		(4,636	)
Total income from operations		20,986			16,222
Interest expense		-			(50	)
Interest income		150			478
Other expense		(405	)		(380	)
Income before income taxes	$	20,731		$	16,270

Balance sheet information for the company’s operating segments follow:

(dollars in thousands)	January 31, 2016		February 1, 2015		May 3, 2015
Segment assets:
Mattress Fabrics
Current assets (1)	$	44,309	$	36,658	$	41,328
Non-compete agreement		922		998		979
Customer relationships		728		779		766
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		35,637		33,046		33,773
Total mattress fabrics assets		93,058		82,943		88,308
Upholstery Fabrics
Current assets (1)		30,960		32,129		29,905
Property, plant and equipment (3)		1,590		1,522		1,467
Total upholstery fabrics assets		32,550		33,651		31,372
Total segment assets		125,608		116,594		119,680
Non-segment assets:
Cash and cash equivalents		31,713		28,772		29,725
Short-term investments		4,259		8,384		10,004
Deferred income taxes		4,312		5,020		5,169
Income taxes receivable		23		104		229
Other current assets		2,331		2,992		2,440
Property, plant and equipment (4)		930		701		838
Long-term investments		3,590		2,063		2,415
Other assets		785		728		800
Total assets	$	173,551	$	165,358	$	171,300

	Nine months ended
(dollars in thousands)	January 31, 2016		February 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	6,215	$	8,232
Upholstery Fabrics		481		390
Unallocated Corporate		381		62
Total capital expenditures	$	7,077	$	8,684
Depreciation expense:
Mattress Fabrics	$	4,273	$	3,692
Upholstery Fabrics		615		552
Total depreciation expense	$	4,888	$	4,244

(1) Current assets represent accounts receivable and inventory for the respective segment.

(2) The $35.6 million at January 31, 2016, represents property, plant, and equipment of $23.0 million and $12.6 million located in the U.S. and Canada, respectively. The $33.0 million at February 1, 2015, represents property, plant, and equipment of $23.5 million and $9.5 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

(3) The $1.6 million at January 31, 2016, represents property, plant, and equipment of $860 and $730 located in the U.S. and China, respectively. The $1.5 million at February 1, 2015, represents property, plant, and equipment of $877 and $645 located in the U.S. and China, respectively. The $1.5 million at May 3, 2015, represents property, plant, and equipment of $848 and $619 located in the U.S. and China, respectively.

(4) The $930, $701, and $838 at January 31, 2016, February 1, 2015 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes (Tables)

9 Months Ended

Jan. 31, 2016

Income Tax Disclosure [Abstract]

Summary of Difference in Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2016	2015
federal income tax rate	34.0%	34.0%
foreign tax rate differential	(6.6)	(6.0)
undistributed earnings from foreign subsidiaries	1.4	4.1
increase in liability for uncertain tax positions	2.9	3.5
tax effects of Chinese foreign exchange gains	3.5	0.2
other	0.5	1.8
	35.7%	37.6%

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Significant Accounting Policies (Detail) - Accounting Standards Update 2015-17 [Member] - USD ($)	May. 03, 2015	Feb. 01, 2015
Summary Of Significant Accounting Policies [Line Items]
Increased noncurrent deferred income taxes	$ 4,700,000	$ 4,500,000
Decreased noncurrent deferred tax liabilities	$ (68,000)	$ (2,500,000)

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Stock-Based Compensation - Narrative (Detail) - USD ($)								9 Months Ended
	Oct. 01, 2015	Jul. 15, 2015	Mar. 03, 2015	Oct. 01, 2014	Jun. 24, 2014	Jun. 25, 2013	Jul. 11, 2012	Jan. 31, 2016	Feb. 01, 2015	Sep. 16, 2015
2015 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized for issuance										1,200,000
2007 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future equity based grants										0
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted								0
Number of options to purchase common stock outstanding								98,600
Number of options exercisable								98,600
Weighted average exercise price for options outstanding								$ 7.73
Weighted average exercise price for options exercisable								$ 7.73
Weighted average contractual term for options outstanding								1 year 8 months 12 days
Weighted average contractual term for options exercisable								1 year 8 months 12 days
Aggregate intrinsic value for options outstanding								$ 1,700,000
Aggregate intrinsic value for options exercisable								1,700,000
Aggregate intrinsic value for options exercised								$ 1,000,000	$ 87,000
Number of unvested stock option								0
Unrecognized stock based compensation cost								$ 0
Share-based compensation expense								0	0
Common Stock Awards [Member] | Outside Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	3,000			3,000
Vesting period	0 days			0 days
Closing price of common stock	$ 31.77			$ 17.95
Common Stock Awards [Member] | Selling, general and administrative expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense								$ 95,000	$ 54,000
Time Vested Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted								0
Number of shares outstanding and unvested								0
Remaining unrecognized compensation cost								$ 0
Number of shares vested									61,667
Weighted average fair value of vested shares									$ 257,000
Weighted average fair value of vested shares, per share									$ 4.17
Time Vested Restricted Stock Awards [Member] | Selling, general and administrative expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense								0	$ 4,000
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years			3 years	3 years	3 years
Closing price of common stock		$ 32.23			$ 17.70	$ 17.12	$ 10.21
Remaining unrecognized compensation cost								$ 4,200,000
Number of shares vested								115,855
Weighted average fair value of vested shares								$ 1,200,000
Weighted average fair value of vested shares, per share								$ 10.21
Weighted average period over which unrecognized compensation cost is expected to be recognized								2 years 1 month 6 days
Performance Based Restricted Stock Units [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Closing price of common stock								$ 25.32
Performance Based Restricted Stock Units [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted		107,554			102,845	72,380	120,000
Performance Based Restricted Stock Units [Member] | Maximum [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted		10,364	28,000
Performance Based Restricted Stock Units [Member] | Selling, general and administrative expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense								$ 1,900,000	$ 424,000
Performance Based Restricted Stock Units [Member] | First Requisite Service Period [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			16 months
Performance Based Restricted Stock Units [Member] | First Requisite Service Period [Member] | Maximum [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			12,000
Performance Based Restricted Stock Units [Member] | Second Requisite Service Period [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			28 months
Performance Based Restricted Stock Units [Member] | Second Requisite Service Period [Member] | Maximum [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			16,000

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Accounts Receivable (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015	Apr. 27, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Customers	$ 28,684	$ 30,338		$ 31,952
Accounts receivable, net	26,784	28,749	[1]	30,774
Allowance for doubtful accounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	(814)	(851)		(449)	$ (573)
Reserve for returns and allowances and discounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	$ (1,086)	$ (738)		$ (729)	$ (479)

[1] Derived from audited financial statements.

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Accounts Receivable - Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts [Member] - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (851)	$ (573)
Provision for bad debts	(93)	(20)
Net write-offs, net of recoveries	130	144
Ending balance	$ (814)	$ (449)

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Accounts Receivable - Allowance for Returns and Allowances and Discounts (Detail) - Reserve for returns and allowances and discounts [Member] - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (738)	$ (479)
Provision for returns, allowances and discounts	(2,389)	(2,065)
Credits issued	2,041	1,815
Ending balance	$ (1,086)	$ (729)

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Inventories (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 6,831	$ 5,374		$ 5,787
Work-in-process	3,365	2,766		2,227
Finished goods	38,289	34,344		29,999
Inventories	$ 48,485	$ 42,484	[1]	$ 38,013

[1] Derived from audited financial statements.

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Other Assets (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Other Assets, Noncurrent [Abstract]
Cash surrender value - life insurance	$ 357	$ 339		$ 338
Non-compete agreement, net	922	979		998
Customer relationships, net	728	766		779
Other	428	461		390
Other assets	$ 2,435	$ 2,545	[1]	$ 2,505

[1] Derived from audited financial statements.

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Other Assets - Narrative (Detail)	3 Months Ended	9 Months Ended
	Nov. 02, 2014 USD ($)	Jan. 31, 2016 USD ($) Contract	Feb. 01, 2015 USD ($) Contract	May. 03, 2015 USD ($) Contract	May. 16, 2014 USD ($)
Other Assets [Line Items]
Gross carrying amount of non-compete agreement		$ 2,000,000	$ 2,000,000	$ 2,000,000
Gross carrying amount of customer relationships		$ 868,000	$ 868,000	$ 868,000
Number of life insurance contracts owned | Contract		1	1	1
Life insurance contracts, death benefits to insured		$ 1,400,000	$ 1,400,000	$ 1,400,000
Life insurance contracts, cash surrender value		$ 357,000	338,000	339,000
Death benefits to beneficiary of insured on terminated life insurance agreement					$ 2,500,000
Collection of cash surrender value from termination of split dollar life insurance agreement	$ 320,000		320,000
Non-compete Agreement [Member]
Other Assets [Line Items]
Useful life		15 years
Accumulated amortization		$ 1,100,000	1,000,000	1,100,000
Amortization expense		56,000	56,000
Remaining amortization expense for the fiscal year		18,000
Remaining amortization expense for the second fiscal year		75,000
Remaining amortization expense for the third fiscal year		75,000
Remaining amortization expense for the fourth fiscal year		75,000
Remaining amortization expense for the fifth fiscal year		75,000
Remaining amortization expense for the fiscal year thereafter		$ 604,000
Weighted average remaining amortization period		12 years 3 months 18 days
Customer Relationships [Member]
Other Assets [Line Items]
Useful life		17 years
Accumulated amortization		$ 140,000	89,000	$ 102,000
Amortization expense		38,000	$ 38,000
Remaining amortization expense for the fiscal year		13,000
Remaining amortization expense for the second fiscal year		51,000
Remaining amortization expense for the third fiscal year		51,000
Remaining amortization expense for the fourth fiscal year		51,000
Remaining amortization expense for the fifth fiscal year		51,000
Remaining amortization expense for the fiscal year thereafter		$ 511,000
Weighted average remaining amortization period		14 years 3 months 18 days

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Accrued Expenses (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Payables and Accruals [Abstract]
Compensation, commissions and related benefits	$ 8,678	$ 9,081		$ 6,399
Advertising rebates	2,876	1,002		2,522
Interest		37		81
Other accrued expenses	1,136	1,009		952
Accrued expenses	$ 12,690	$ 11,129	[1]	$ 9,954

[1] Derived from audited financial statements.

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Long-Term Debt and Lines of Credit (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Debt Disclosure [Abstract]
Unsecured senior term notes		$ 2,200		$ 2,200
Current maturities of long-term debt		(2,200)	[1]	(2,200)
Long-term debt, less current maturities of long-term debt	$ 0	$ 0		$ 0

[1] Derived from audited financial statements.

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Long-Term Debt and Lines of Credit - Long-Term Debt - Narrative (Detail) - USD ($) $ in Thousands		9 Months Ended
	Aug. 11, 2015	Jan. 31, 2016	May. 03, 2015	Feb. 01, 2015	Aug. 11, 2008
Debt Instrument [Line Items]
Long-term debt			$ 2,200	$ 2,200
Unsecured senior term notes [Member]
Debt Instrument [Line Items]
Issuance of unsecured senior term notes					$ 11,000
Fixed interest rate					8.01%
Term of the note agreement		7 years
Required amount of principal payment installments		$ 2,200
Required debt payment frequency		Annual
Date of first required principal payment		Aug. 11, 2011
Last annual payment paid	$ 2,200
Long-term debt, fair value			$ 2,300	$ 2,300

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Long-Term Debt and Lines of Credit - Lines of Credit - Narrative (Detail)				9 Months Ended	12 Months Ended
	Mar. 10, 2016 USD ($)	Mar. 08, 2016 USD ($)	Jul. 10, 2015 USD ($)	Jan. 31, 2016 USD ($)	May. 03, 2015 USD ($)	Mar. 08, 2016 CNY (¥)	Jan. 31, 2016 CNY (¥)	Feb. 01, 2015 USD ($)
United States [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 10,000,000	$ 10,000,000
Interest rate description				Interest is charged at a rate equal to the one-month LIBOR rate plus a spread based on our ratio of debt to EBITDA as defined in the agreement.
Expiration date			Aug. 31, 2017		Aug. 31, 2015
Reference rate on which the interest rate is based				One-month LIBOR rate
Applicable interest rate at end of period				1.93%	1.78%		1.93%	1.77%
Annual capital expenditures limit			$ 12,000,000
Letter of credit, outstanding amount				$ 250,000	$ 250,000			$ 250,000
Outstanding amount				0	0			0
China [Member] | Revolving credit agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 6,100,000			¥ 40,000,000
Interest rate description				This agreement had an interest rate determined by the Chinese government.
Expiration date				Feb. 09, 2016
Outstanding amount				$ 0	$ 0		¥ 0	$ 0
China [Member] | Subsequent Event [Member] | Revolving credit agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 6,100,000				¥ 40,000,000
Expiration date		Mar. 08, 2017
Second Amendment [Member] | United States [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 30,000,000
Interest rate description	Variable spread over LIBOR, based upon the company's ratio of debt to EBITDA
Reference rate on which the interest rate is based	LIBOR
Annual capital expenditures limit	$ 15,000,000
Percentage of common stock in subsidiary pledge as collateral	65.00%

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Fair Value of Financial Instruments - Recurring Basis (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015	Feb. 01, 2015
Premier Money Market Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 3,071	$ 2,285	$ 1,951
Low Duration Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,592	2,096	2,084
Intermediate Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,116	2,181	2,188
Strategic Income Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	957	1,008	1,000
Limited Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	594	3,107	3,112
Large Blend Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	254
Growth Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	128	85	63
Mid Cap Value Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	90
Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	47	45	49
Quoted prices in active markets for identical assets - Level 1 [Member] | Premier Money Market Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	3,071	2,285	1,951
Quoted prices in active markets for identical assets - Level 1 [Member] | Low Duration Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,592	2,096	2,084
Quoted prices in active markets for identical assets - Level 1 [Member] | Intermediate Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,116	2,181	2,188
Quoted prices in active markets for identical assets - Level 1 [Member] | Strategic Income Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	957	1,008	1,000
Quoted prices in active markets for identical assets - Level 1 [Member] | Limited Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	594	3,107	3,112
Quoted prices in active markets for identical assets - Level 1 [Member] | Large Blend Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	254
Quoted prices in active markets for identical assets - Level 1 [Member] | Growth Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	128	85	63
Quoted prices in active markets for identical assets - Level 1 [Member] | Mid Cap Value Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	90
Quoted prices in active markets for identical assets - Level 1 [Member] | Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 47	$ 45	$ 49

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Fair Value of Financial Instruments - Narrative (Detail) - USD ($)	12 Months Ended
	May. 03, 2015		Jan. 31, 2016	Feb. 01, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments	$ 10,004,000	[1]	$ 4,259,000	$ 8,384,000
Long-term investments	$ 2,415,000	[1]	3,590,000	2,063,000
Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments, deposit account maturity period	3 months
Bank Deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deposit account	$ 1,600,000
Short-term Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term bond funds	8,400,000		4,300,000	8,400,000
Unrealized gain (loss) on investments	$ (95,000)		(181,000)	$ (66,000)
Long-term Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Unrealized gain (loss) on investments			$ (99,000)

[1] Derived from audited financial statements.

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Cash Flow Information - Interest and Income Taxes Paid (Detail) - USD ($) $ in Thousands	9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015
Supplemental Cash Flow Elements [Abstract]
Interest	$ 95	$ 180
Income taxes	$ 4,921	$ 3,005

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Cash Flow Information - Narrative (Detail) - USD ($)	9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015
Supplemental Cash Flow Elements [Abstract]
Interest costs incurred on long-term debt and lines of credit	$ 58,000	$ 191,000
Interest cost capitalized	$ 58,000	$ 141,000

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Net Income Per Share - Weighted Average Shares (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	Jan. 31, 2016	Feb. 01, 2015
Earnings Per Share [Abstract]
Weighted average common shares outstanding, basic	12,331	12,219	12,317	12,216
Dilutive effect of stock-based compensation	155	198	171	194
Weighted average common shares outstanding, diluted	12,486	12,417	12,488	12,410

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Segment Information - Narrative (Detail)	9 Months Ended
	Jan. 31, 2016 Segment
Segment Reporting [Abstract]
Number of business segments	2

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Segment Information - Financial Information for Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	Jan. 31, 2016	Feb. 01, 2015
Segment Reporting Information [Line Items]
Net sales	$ 78,466	$ 81,269	$ 235,607	$ 231,320
Gross profit	16,563	14,402	48,498	39,395
Selling, general, and administrative expenses	9,337	8,375	27,512	23,173
Income from operations	7,226	6,027	20,986	16,222
Interest expense				(50)
Interest income	38	202	150	478
Other expense	(85)	(307)	(405)	(380)
Income before income taxes	7,179	5,922	20,731	16,270
Operating Segments [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	6,916	6,634	20,237	18,537
Income from operations	9,647	7,768	28,261	20,858
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	44,277	45,683	137,522	131,543
Gross profit	8,751	8,076	28,133	22,603
Selling, general, and administrative expenses	2,953	2,853	8,865	8,019
Income from operations	5,798	5,223	19,267	14,584
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	34,189	35,586	98,085	99,777
Gross profit	7,812	6,326	20,365	16,792
Selling, general, and administrative expenses	3,963	3,781	11,372	10,518
Income from operations	3,849	2,545	8,994	6,274
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	2,421	1,741	7,275	4,636
Income from operations	$ (2,421)	$ (1,741)	$ (7,275)	$ (4,636)

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Segment Information - Balance Sheet Information by Operating Segments (Detail) - USD ($) $ in Thousands		Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015	Apr. 27, 2014
Segment Reporting Information [Line Items]
Non-compete agreement		$ 922	$ 979		$ 998
Customer relationships		728	766		779
Goodwill		11,462	11,462	[1]	11,462
Property, plant and equipment		38,157	36,078	[1]	35,269
Total assets		173,551	171,300	[1]	165,358
Cash and cash equivalents		31,713	29,725	[1]	28,772	$ 29,303
Short-term investments		4,259	10,004	[1]	8,384
Income taxes receivable		23	229	[1]	104
Other current assets		2,331	2,440	[1]	2,992
Long-term investments		3,590	2,415	[1]	2,063
Other assets		2,435	2,545	[1]	2,505
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets		125,608	119,680		116,594
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[2]	930	838		701
Cash and cash equivalents		31,713	29,725		28,772
Short-term investments		4,259	10,004		8,384
Deferred income taxes		4,312	5,169		5,020
Income taxes receivable		23	229		104
Other current assets		2,331	2,440		2,992
Long-term investments		3,590	2,415		2,063
Other assets		785	800		728
Mattress Fabrics [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Current assets	[3]	44,309	41,328		36,658
Non-compete agreement		922	979		998
Customer relationships		728	766		779
Goodwill		11,462	11,462		11,462
Property, plant and equipment	[4]	35,637	33,773		33,046
Total assets		93,058	88,308		82,943
Upholstery Fabrics [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Current assets	[3]	30,960	29,905		32,129
Property, plant and equipment	[5]	1,590	1,467		1,522
Total assets		$ 32,550	$ 31,372		$ 33,651

[1] Derived from audited financial statements.

[2] The $930, $701, and $838 at January 31, 2016, February 1, 2015 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

[3] Current assets represent accounts receivable and inventory for the respective segment.

[4] The $35.6 million at January 31, 2016, represents property, plant, and equipment of $23.0 million and $12.6 million located in the U.S. and Canada, respectively. The $33.0 million at February 1, 2015, represents property, plant, and equipment of $23.5 million and $9.5 million located in the U.S. and Canada, respectively. The $33.8 million at May 3, 2015, represents property, plant, and equipment of $23.8 million and $10.0 million located in the U.S. and Canada, respectively.

[5] The $1.6 million at January 31, 2016, represents property, plant, and equipment of $860 and $730 located in the U.S. and China, respectively. The $1.5 million at February 1, 2015, represents property, plant, and equipment of $877 and $645 located in the U.S. and China, respectively. The $1.5 million at May 3, 2015, represents property, plant, and equipment of $848 and $619 located in the U.S. and China, respectively.

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Segment Information - Capital Expenditures and Depreciation Expense By Operating Segments (Detail) - USD ($) $ in Thousands		9 Months Ended
		Jan. 31, 2016	Feb. 01, 2015
Segment Reporting Information [Line Items]
Capital expenditures	[1]	$ 7,077	$ 8,684
Depreciation expense		4,888	4,244
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Capital expenditures		6,215	8,232
Depreciation expense		4,273	3,692
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Capital expenditures		481	390
Depreciation expense		615	552
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Capital expenditures		$ 381	$ 62

[1] Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Segment Information - Balance Sheet Information by Operating Segments (Parenthetical) (Detail) - USD ($) $ in Thousands		Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Segment Reporting Information [Line Items]
Property, plant and equipment		$ 38,157	$ 36,078	[1]	$ 35,269
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[2]	930	838		701
United States [Member] | Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		930	838		701
Mattress Fabrics [Member] | United States [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		23,000	23,800		23,500
Mattress Fabrics [Member] | Canada [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		12,600	10,000		9,500
Upholstery Fabrics [Member] | United States [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		860	848		877
Upholstery Fabrics [Member] | China [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		$ 730	$ 619		$ 645

[1] Derived from audited financial statements.

[2] The $930, $701, and $838 at January 31, 2016, February 1, 2015 and May 3, 2015, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

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Income Taxes - Effective Income Tax Rate - Narrative (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	Jan. 31, 2016	Feb. 01, 2015
Income Tax Disclosure [Abstract]
Income taxes	$ 2,317	$ 2,110	$ 7,398	$ 6,113
Effective income tax rate			35.70%	37.60%

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Income Taxes - Difference Between Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate (Detail)	9 Months Ended
	Jan. 31, 2016	Feb. 01, 2015
Income Tax Disclosure [Abstract]
federal income tax rate	34.00%	34.00%
foreign tax rate differential	(6.60%)	(6.00%)
undistributed earnings from foreign subsidiaries	1.40%	4.10%
increase in liability for uncertain tax positions	2.90%	3.50%
tax effects of Chinese foreign exchange gains	3.50%	0.20%
other	0.50%	1.80%
Effective income tax rate	35.70%	37.60%

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Income Taxes - Deferred Income Taxes - Valuation Allowance - Narrative (Detail) - USD ($)	Jan. 31, 2016	May. 03, 2015	Feb. 01, 2015
U.S. Tax Authorities and Poland Tax Authorities [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	$ 874,000	$ 922,000	$ 1,000,000
U.S. State Tax [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	498,000	561,000	596,000
Poland [Member] | Valuation Allowance, Operating Loss Carryforwards [Member] | Culp Europe [Member]
Income Taxes [Line Items]
Valuation allowance	376,000	361,000	400,000
Canada and China [Member]
Income Taxes [Line Items]
Valuation allowance	$ 0	$ 0	$ 0

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Income Taxes - Deferred Income Taxes - Undistributed Earnings - Narrative (Detail) - USD ($) $ in Millions	9 Months Ended		12 Months Ended
	Jan. 31, 2016	Feb. 01, 2015	May. 03, 2015
Income Tax Disclosure [Abstract]
Deferred tax liability, undistributed earnings from foreign subsidiaries	$ 3.3	$ 2.4	$ 1.7
U.S. income and foreign withholding taxes	37.3	32.1	32.4
U.S. foreign income tax credits	34.0	29.7	30.7
Undistributed earnings from our foreign subsidiaries that will not be reinvested indefinitely	$ 100.9	$ 82.4	$ 85.2

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Income Taxes - Deferred Income Taxes - Narrative (Detail) - USD ($) $ in Thousands	Jan. 31, 2016	May. 03, 2015		Feb. 01, 2015
Income Taxes [Line Items]
Non-current deferred tax asset	$ 4,312	$ 5,169	[1]	$ 5,020
Non-current deferred tax liability	1,209	982	[1]	927
U.S. Tax Authorities [Member]
Income Taxes [Line Items]
Non-current deferred tax asset	3,500	4,300		4,200
China [Member]
Income Taxes [Line Items]
Non-current deferred tax asset	773	868		776
Canada [Member]
Income Taxes [Line Items]
Non-current deferred tax liability	$ 1,200	$ 982		$ 927

[1] Derived from audited financial statements.

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Income Taxes - Uncertainty in Income Taxes - Narrative (Detail) - USD ($)	Jan. 31, 2016	May. 03, 2015	Feb. 01, 2015
Income Taxes [Line Items]
Unrecognized tax benefits	$ 13,200,000	$ 14,100,000	$ 13,900,000
Unrecognized tax benefits that would favorably impact effective income tax rate if recognized	3,500,000	3,800,000	3,600,000
Expected decrease in unrecognized tax benefits related to double taxation under applicable tax treaties with foreign tax jurisdictions	(120,000)
Non-current Deferred Income Taxes [Member]
Income Taxes [Line Items]
Unrecognized tax benefits	9,700,000	10,300,000	10,300,000
Income Taxes Payable - Long-Term [Member]
Income Taxes [Line Items]
Unrecognized tax benefits	$ 3,500,000	$ 3,800,000	$ 3,600,000

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Statutory Reserves (Detail) - Subsidiaries [Member] - China [Member] $ in Millions	9 Months Ended
	Jan. 31, 2016 USD ($)
Statutory Reserve [Line Items]
Percentage of net income required to be transferred to a statutory surplus reserve fund	10.00%
Maximum required percentage of statutory surplus reserve fund to registered capital	50.00%
Statutory surplus reserve fund balance	$ 4.7
Percentage of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations	10.00%
Minimum threshold percentage for statutory surplus reserve fund as percentage of registered capital, below which certain capital transactions are prohibited	25.00%

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Commitments and Contingencies (Detail) - USD ($)	Jan. 31, 2016	May. 03, 2015	Feb. 01, 2015
Mattress Fabrics [Member] | Capital Addition Purchase Commitments [Member]
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments	$ 977,000	$ 2,300,000	$ 3,800,000

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Common Stock Repurchase Program (Detail) - USD ($)	9 Months Ended	12 Months Ended
	Jan. 31, 2016	May. 03, 2015	Feb. 25, 2014
Stockholders Equity Note [Line Items]
Cost of common stock repurchased	$ 2,397,000	$ 745,000
Common Stock
Stockholders Equity Note [Line Items]
Common stock repurchased	100,776	43,014
Cost of common stock repurchased	$ 5,000	$ 2,000
Common Stock Repurchase Program February 25, 2014 [Member] | Common Stock
Stockholders Equity Note [Line Items]
Authorization amount for repurchase of common stock			$ 5,000,000
Common stock repurchased	100,776	43,014
Cost of common stock repurchased	$ 2,397,000	$ 745,000
Remaining authorized repurchase amount	$ 1,900,000

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Dividend Program (Detail) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Mar. 01, 2016	Aug. 02, 2015	Aug. 03, 2014	Jan. 31, 2016	Feb. 01, 2015
Dividends [Line Items]
Cash dividends paid				$ 7,281	$ 6,846
Quarterly Dividend [Member]
Dividends [Line Items]
Cash dividends paid				$ 2,300	$ 1,900
Quarterly Dividend [Member] | Minimum [Member]
Dividends [Line Items]
Cash dividend payment, per share				$ 0.06	$ 0.05
Quarterly Dividend [Member] | Maximum [Member]
Dividends [Line Items]
Cash dividend payment, per share				$ 0.07	$ 0.06
Special Dividend [Member]
Dividends [Line Items]
Cash dividends paid		$ 5,000	$ 4,900
Cash dividend payment, per share		$ 0.40	$ 0.40
Subsequent Event [Member] | Quarterly Dividend [Member]
Dividends [Line Items]
Cash dividend declared, per share	$ 0.07
Date of payment to shareholders entitled to dividends	Apr. 15, 2016
Date of record of shareholders entitled to dividends	Apr. 01, 2016