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 29, 2017

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.        ☒  YES     ☐  NO

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).        ☒  YES     ☐  NO

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  ☐	Accelerated filer  ☒	Non-accelerated filer  ☐
	Smaller Reporting Company  ☐

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

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 29, 2017:  12,314,756

Par Value: $0.05 per share

INDEX TO FORM 10-Q

For the period ended January 29, 2017

		Page
Part I - Financial Statements
Item 1.      Financial Statements: (Unaudited)
	Consolidated Statements of Net Income — Three and Nine Months Ended January 29, 2017 and January 31, 2016	I-1
	Consolidated Statements of Comprehensive Income – Three and Nine Months Ended January 29, 2017 and January 31, 2016	I-2
	Consolidated Balance Sheets — January 29, 2017, January 31, 2016, and May 1, 2016	I-3
	Consolidated Statements of Cash Flows — Nine Months Ended January 29, 2017 and January 31, 2016	I-4
	Consolidated Statements of Shareholders’ Equity	I-5
	Notes to Consolidated Financial Statements	I-6
	Cautionary Statement Concerning Forward-Looking Information	I-28
Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations		I-29
Item 3.      Quantitative and Qualitative Disclosures About Market Risk		I-47
Item 4.      Controls and Procedures		I-47
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 6.      Exhibits		II-2
Signatures		II-3

Item 1: Financial Statements

CULP, INC.
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE THREE AND NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
UNAUDITED
(Amounts in Thousands, Except for Per Share Data)
	THREE MONTHS ENDED
	January 29,			January 31,
	2017			2016
Net sales	$	76,169			78,466
Cost of sales		59,410			61,903
Gross profit		16,759			16,563
Selling, general and
administrative expenses		9,824			9,337
Income from operations		6,935			7,226
Interest income		(124	)		(38	)
Other expense		69			85
Income before income taxes		6,990			7,179
Income taxes		643			2,317
Net income	$	6,347			4,862
Net income per share, basic	$	0.52			0.39
Net income per share, diluted		0.51			0.39
Average shares outstanding, basic		12,313			12,331
Average shares outstanding, diluted		12,544			12,486
	NINE MONTHS ENDED
	January 29,			January 31,
	2017			2016
Net sales	$	232,194			235,607
Cost of sales		180,115			187,109
Gross profit		52,079			48,498
Selling, general and
administrative expenses		29,171			27,512
Income from operations		22,908			20,986
Interest income		(164	)		(150	)
Other expense		376			405
Income before income taxes		22,696			20,731
Income taxes		6,560			7,398
Net income	$	16,136			13,333
Net income per share, basic	$	1.31			1.08
Net income per share, diluted		1.29			1.07
Average shares outstanding, basic		12,302			12,317
Average shares outstanding, diluted		12,517			12,488

See accompanying notes to consolidated financial statements.

I-1

CULP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED JANUARY 29, 2017 AND JANUARY 31, 2016
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
	THREE MONTHS ENDED
	January 29,			January 31,
	2017			2016
Net income	$	6,347		$	4,862
Other comprehensive loss
Unrealized losses on investments
Unrealized holding losses on investments		(13	)		(194	)
Reclassification adjustment for realized loss included in net income		-			71
Total other comprehensive loss		(13	)		(123	)
Comprehensive income	$	6,334		$	4,739
	NINE MONTHS ENDED
	January 29,			January 31,
	2017			2016
Net income	$	16,136		$	13,333
Other comprehensive gain (loss)
Unrealized gains (losses) on investments
Unrealized holding gains (losses) on investments		75			(312	)
Reclassification adjustment for realized loss included in net income		12			127
Total other comprehensive gain (loss)		87			(185	)
Comprehensive income	$	16,223		$	13,148

See accompanying notes to consolidated financial statements.

I-2

CULP, INC.
CONSOLIDATED BALANCE SHEETS
JANUARY 29, 2017, JANUARY 31, 2016 AND MAY 1, 2016
UNAUDITED
(Amounts in Thousands)
	January 29,			January 31,			* May 1,
	2017			2016			2016
Current assets:
Cash and cash equivalents	$	15,659			31,713			37,787
Short-term investments		2,410			4,259			4,359
Accounts receivable, net		22,726			26,784			23,481
Inventories		46,193			48,485			46,531
Income taxes receivable		-			23			155
Other current assets		2,514			2,331			2,477
Total current assets		89,502			113,595			114,790
Property, plant and equipment, net		50,333			38,157			39,973
Goodwill		11,462			11,462			11,462
Deferred income taxes		422			4,312			2,319
Long-term investments - Held-To-Maturity		30,832			-			-
Long-term investments - Rabbi Trust		5,488			3,590			4,025
Investment in unconsolidated joint venture		600			-			-
Other assets		2,417			2,435			2,573
Total assets	$	191,056			173,551			175,142
Current liabilities:
Accounts payable-trade	$	22,352			25,601			23,994
Accounts payable - capital expenditures		4,886			380			224
Accrued expenses		10,511			12,690			11,922
Income taxes payable - current		217			622			180
Total current liabilities		37,966			39,293			36,320
Accounts payable - capital expenditures		708			-
Income taxes payable - long-term		1,817			3,480			3,841
Deferred income taxes		2,924			1,209			1,483
Deferred compensation		5,327			4,495			4,686
Total liabilities		48,742			48,477			46,330
Commitments and Contingencies (Notes 15 and 16)
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
12,314,756 at January 29, 2017; 12,250,489
at January 31, 2016; and 12,265,489 at
May 1, 2016		615			613			614
Capital contributed in excess of par value		46,365			42,937			43,795
Accumulated earnings		95,391			81,804			84,547
Accumulated other comprehensive loss		(57	)		(280	)		(144	)
Total shareholders' equity		142,314			125,074			128,812
Total liabilities and shareholders' equity	$	191,056			173,551			175,142

* 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 29, 2017 AND JANUARY 31, 2016
UNAUDITED
(Amounts in Thousands)
	NINE MONTHS ENDED
	January 29,			January 31,
	2017			2016
Cash flows from operating activities:
Net income	$	16,136			13,333
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		5,304			4,888
Amortization of assets		162			123
Stock-based compensation		2,619			1,964
Excess tax benefit related to stock-based compensation		(195	)		(822	)
Deferred income taxes		3,533			1,906
Realized loss on sale of short-term investments		12			127
Gain on sale of equipment		(71	)		(66	)
Foreign currency exchange gains		(18	)		(85	)
Changes in assets and liabilities:
Accounts receivable		340			1,091
Inventories		(137	)		(6,485	)
Other current assets		90			(108	)
Other assets		51			48
Accounts payable - trade		(946	)		(1,979	)
Accrued expenses and deferred compensation		(948	)		1,406
Income taxes		(1,695	)		535
Net cash provided by operating activities		24,237			15,876
Cash flows from investing activities:
Capital expenditures		(9,253	)		(7,686	)
Investment in unconsolidated joint venture		(600	)		-
Proceeds from the sale of equipment		80			230
Payment on life insurance policy		(18	)		(18	)
Proceeds from the sale of short-term investments		2,000			5,612
Purchase of short-term investments		(8	)		(86	)
Purchase of long-term investments (Held-To-Maturity)		(31,050	)		-
Purchase of long-term investments (Rabbi Trust)		(1,431	)		(1,268	)
Net cash used in investing activities		(40,280	)		(3,216	)
Cash flows from financing activities:
Proceeds from line of credit		7,000			7,000
Payments on line of credit		(7,000	)		(7,000	)
Payments on vendor-financed capital expenditures		(1,050	)		-
Payments on long-term debt		-			(2,200	)
Excess tax benefit related to stock-based compensation		195			822
Repurchase of common stock		-			(2,397	)
Dividends paid		(5,292	)		(7,281	)
Payments on debt issuance costs		(2	)		(43	)
Proceeds from common stock issued		37			138
Net cash used in financing activities		(6,112	)		(10,961	)
Effect of exchange rate changes on cash and cash equivalents		27			289
(Decrease) increase in cash and cash equivalents		(22,128	)		1,988
Cash and cash equivalents at beginning of period		37,787			29,725
Cash and cash equivalents at end of period	$	15,659			31,713

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, May 3, 2015		12,219,121		$	611			43,159			75,752			(95	)	$	119,427
Net income		-			-			-			16,935			-			16,935
Stock-based compensation		-			-			2,742			-			-			2,742
Unrealized loss on investments		-			-			-			-			(49	)		(49	)
Excess tax benefit related to stock
based compensation		-			-			841			-			-			841
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		54,500			3			197			-			-			200
Common stock surrendered for
withholding taxes payable		(26,211	)		(1	)		(746	)		-			-			(747	)
Dividends paid		-			-			-			(8,140	)		-			(8,140	)
Balance, May 1, 2016 *		12,265,489			614			43,795			84,547			(144	)		128,812
Net income		-			-			-			16,136			-			16,136
Stock-based compensation		-			-			2,619			-			-			2,619
Unrealized gain on investments		-			-			-			-			87			87
Excess tax benefit related to stock
based compensation		-			-			195			-			-			195
Common stock issued in connection
with performance based units		49,192			2			(2	)		-			-			-
Fully vested common stock award		4,800			-			-			-			-			-
Common stock issued in connection
with exercise of stock options		5,000			-			37			-			-			37
Common stock surrendered for
withholding taxes payable		(9,725	)		(1	)		(279	)		-			-			(280	)
Dividends paid		-			-			-			(5,292	)		-			(5,292	)
Balance, January 29, 2017		12,314,756		$	615			46,365			95,391			(57	)	$	142,314

* 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 15, 2016, for the fiscal year ended May 1, 2016.

The company’s nine months ended January 29, 2017, and January 31, 2016, represent 39 week periods, respectively.

2.  Significant Accounting Policies

As of January 29, 2017, 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 1, 2016.

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.

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 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. This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently 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.

I-6

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recently Issued Accounting Pronouncements

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 15, 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.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

I-7

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact 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 updated and replaced 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.

At January 29, 2017, there were 959,942 shares available for future equity based grants under our 2015 plan.

I-8

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the through the third quarter of fiscal 2017.

At January 29, 2017, options to purchase 78,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $8.43 per share, and a weighted average contractual term of 0.6 years. At January 29, 2017, the aggregate intrinsic value for options outstanding and exercisable was $2.0 million.

The aggregate intrinsic value for options exercised for the nine months ending January 29, 2017 and January 31, 2016, was $128,000 and $1.0 million, respectively.

At January 29, 2017, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at January 29, 2017.

No compensation expense was recorded for incentive stock options for the nine months ended January 29, 2017 and January 31, 2016, respectively.

Common Stock Awards

On October 3, 2016, we granted a total of 4,800 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $29.80 per share, which represents the closing price of our common stock at the date of grant.

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.

We recorded $143,000 and $95,000 within selling, general, and administrative expense for these common stock awards for the nine months ending January 29, 2017, and January 31, 2016, respectively.

Performance Based Restricted Stock Units

Fiscal 2017 Grants

On July 14, 2016, certain key members of management were granted performance-based restricted stock units which could earn up to 107,880 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 $28 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 14, 2016, a non-employee was granted performance-based restricted stock units which could earn up to 11,549 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 29, 2017, this grant was unvested and was measured at $33.80 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.

I-9

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fiscal 2016 Grants

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 29, 2017, this grant was unvested and was measured at $33.80 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 Grants

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 29, 2017, 16,000 restricted stock units associated with this grant were unvested and were measured at $33.80 per share, which represents the closing price of the company’s common stock at the end of the reporting period. The vesting of these 16,000 restricted stock units vest over their requisite service period of 28 months. During the first quarter of fiscal 2017, 12,000 shares of common stock associated with the grant vested and had a weighted average fair value of $345,000 or $28.77 per share.

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.

I-10

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the first quarter of fiscal 2017, 37,192 shares of common stock associated with this grant vested and had a weighted average fair value of $637,000 or $17.12 per share. Our fiscal 2014 grant is fully vested.

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 first quarter of fiscal 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. Our fiscal 2013 grant is fully vested.

Overall

We recorded compensation expense of $2.5 million and $1.9 million within selling, general, and administrative expense for our performance based restricted stock unit awards for the nine month periods ending January 29, 2017 and January 31, 2016, 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 29, 2017, the remaining unrecognized compensation cost related to our performance based restricted stock unit awards was $4.8 million, which is expected to be recognized over a weighted average vesting period of 1.9 years.

Time Vested Restricted Stock Units

On July 14, 2016, an employee was granted 1,200 shares of time vested restricted stock units. This award was valued based on the fair market value on the date of grant. The fair value of this award was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of this award is over the requisite service period of 11 months.

We recorded compensation expense of $20,000 within selling, general, and administrative expense for our time vested restricted stock unit awards for the nine months ending January 29, 2017. There were not any time vested restricted stock unit awards granted or unvested during the nine months ending January 31, 2016 and, therefore, no compensation expense was recorded.

At January 29, 2017, the remaining unrecognized compensation cost related to unvested time vested restricted stock awards was $14,000, which is expected to be recognized over the next 4.5 months.

I-11

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 29, 2017			January 31, 2016			May 1, 2016
Customers	$	24,339		$	28,684		$	25,531
Allowance for doubtful accounts		(397	)		(814	)		(1,088	)
Reserve for returns and allowances and discounts		(1,216	)		(1,086	)		(962	)
	$	22,726		$	26,784		$	23,481

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

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		239			(93	)
Net write-offs, net of recoveries		452			130
Ending balance	$	(397	)	$	(814	)

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

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(2,357	)		(2,389	)
Credits issued		2,103			2,041
Ending balance	$	(1,216	)	$	(1,086	)

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 29, 2017		January 31, 2016		May 1, 2016
Raw materials	$	6,977	$	6,831	$	5,462
Work-in-process		3,161		3,365		2,972
Finished goods		36,055		38,289		38,097
	$	46,193	$	48,485	$	46,531

I-12

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Cash surrender value – life insurance	$	376	$	357	$	357
Non-compete agreement, net		847		922		903
Customer relationships, net		677		728		715
Other		517		428		598
	$	2,417	$	2,435	$	2,573

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 29, 2017, January 31, 2016 and May 1, 2016, respectively. At January 29, 2017, January 31, 2016, and May 1, 2016, accumulated amortization for our non-compete agreement was $1.2 million, $1.1 million, and $1.1 million, respectively.

Amortization expense for our non-compete agreement was $56,000 for the nine month periods ended January 29, 2017 and January 31, 2016. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $18,000; FY 2018 - $75,000; FY 2019- $75,000; FY 2020 - $75,000; FY 2021 - $75,000 and Thereafter - $529,000.

The weighted average amortization period for our non-compete agreement is 11.3 years as of January 29, 2017.

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 29, 2017, January 31, 2016, and May 1, 2016, respectively. Accumulated amortization for our customer relationships was $191,000, $140,000, and $153,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

Amortization expense for our customer relationships was $38,000 for the nine months ending January 29, 2017 and January 31, 2016. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $13,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; FY 2021 - $51,000; and Thereafter - $460,000.

The weighted average amortization period for our customer relationships is 13.3 years as of January 29, 2017.

Cash Surrender Value – Life Insurance

At January 29, 2017, January 31, 2016, and May 1, 2016 we had one life insurance contract with a death benefit of $1.4 million.

I-13

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Our cash surrender value – life insurance balances totaling $376,000, $357,000 and $357,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively, are collectible upon death of the respective insured.

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Compensation, commissions and related benefits	$	9,205	$	8,678	$	10,011
Advertising rebates		118		2,876		870
Interest		11		-		-
Other accrued expenses		1,177		1,136		1,041
	$	10,511	$	12,690	$	11,922

8.  Lines of Credit

Revolving Credit Agreement – United States

Our Credit Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) provides a revolving loan commitment of $30 million. Interest was charged at a rate (applicable interest rate of 2.23% at January 29, 2017) as a variable spread over LIBOR based on our ratio of debt to EBITDA. The Credit Agreement contains certain financial and other covenants as defined in the agreement and is set to expire on August 15, 2018.

The purposes of our revolving credit line 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 ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

Outstanding borrowings are secured by a pledge of 65% of the common stock of Culp International Holdings Ltd. (our subsidiary located in the Cayman Islands), as required by the Credit Agreement. There were no borrowings outstanding under the Credit Agreement at January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

At January 29, 2017, January 31, 2016, and May 1, 2016, there were $250,000 in outstanding letters of credit (all of which related to workers compensation) provided by the Credit Agreement.

Effective August 1, 2016, we entered into a Third Amendment to our Credit Agreement that will allow us to issue letters of credit not to exceed $7.5 million. On August 3, 2016, we issued a $5.0 million letter of credit (all of which is currently outstanding and in addition to the $250,000 letter of credit noted above) for the construction of a new building associated with our mattress fabrics segment (see Note 15 for further details). This $5.0 million letter of credit will be automatically reduced in increments of $1.25 million on August 1, 2017, November 1, 2017, February 1, 2018, and May 15, 2018, respectively.

Revolving Credit Agreement – China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit of up to 40 million Chinese Yuan Renminbi (approximately $5.8 million USD at January 29, 2017), that expires February 15, 2018. This agreement has an interest rate determined by the Chinese government and there were no borrowings outstanding as of January 29, 2017, January 31, 2016, and May 1, 2016.

I-14

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At January 29, 2017, the company was in compliance with these financial covenants.

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 measured at fair value on a recurring basis:

	Fair value measurements at January 29, 2017 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:
U.S. Corporate Bonds	$	-	$	30,682		N/A	$	30,682
Premier Money Market Fund		4,888		N/A		N/A		4,888
Low Duration Bond Fund		1,073		N/A		N/A		1,073
Intermediate Term Bond Fund		739		N/A		N/A		739
Strategic Income Fund		598		N/A		N/A		598
Large Blend Fund		343		N/A		N/A		343
Growth Allocation Fund		113		N/A		N/A		113
Moderate Allocation Fund		83		N/A		N/A		83
Other		61		N/A		N/A		61

I-15

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	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 May 1, 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	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

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 29, 2017, January 31, 2016, and May 1, 2016, our short-term investments totaled $2.4 million, $4.3 million, and $4.4 million, respectively, and consisted of short-term bond funds. 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 $68,000, $181,000, and $100,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively. At January 29, 2017, January 31, 2016, and May 1, 2016, the fair value of our short-term bond funds approximated its cost basis.

I-16

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Long- Term Investments - Held-To-Maturity

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments will be recorded as either current or noncurrent on our Consolidated Balance Sheets, based on contractual maturity date and stated at amortized cost.

At January 29, 2017, our held-to-maturity investments totaled $30.8 million and consisted of U.S. Corporate bonds. The fair value of our held-to-maturity investments totaled $30.7 million.

Long-Term Investments - Rabbi Trust

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 $5.5 million, $3.6 million, and $4.0 million at January 29, 2017, January 30, 2016, and May 1, 2016, respectively. Our long-term investments had an accumulated unrealized gain of $11,000 at January 29, 2017 and an accumulated unrealized loss of $99,000 and $44,000 at January 31, 2016 and May 1, 2016, respectively. The fair value of our long-term investments associated with our Rabbi Trust 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.

10.  Cash Flow Information

Interest and income taxes paid are as follows:

	Nine months ended
(dollars in thousands)	January 29, 2017		January 31, 2016
Interest	$	110	$	95
Income taxes		4,704		4,921

Interest costs charged to operations were $97,000 and $58,000 for the nine months ended January 29, 2017 and January 31, 2016, respectively.

I-17

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Interest costs of $97,000 and $58,000 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 29, 2017 and January 31, 2016, 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 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,313		12,331
Dilutive effect of stock-based compensation		231		155
Weighted average common shares outstanding, diluted		12,544		12,486

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended January 29, 2017 and January 31, 2016, 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 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,302		12,317
Dilutive effect of stock-based compensation		215		171
Weighted average common shares outstanding, diluted		12,517		12,488

All options to purchase shares of common stock were included in the computation of diluted net income for the nine months ended January 29, 2017 and January 31, 2016, 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.

I-18

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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, investment in an unconsolidated joint venture, 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 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	45,920		$	44,277
Upholstery Fabrics		30,249			34,189
	$	76,169		$	78,466
Gross profit:
Mattress Fabrics	$	9,758		$	8,751
Upholstery Fabrics		7,001			7,812
	$	16,759		$	16,563
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,391		$	2,953
Upholstery Fabrics		3,901			3,963
Total segment selling, general, and
administrative expenses		7,292			6,916
Unallocated corporate expenses		2,532			2,421
	$	9,824		$	9,337
Income from operations:
Mattress Fabrics	$	6,367		$	5,798
Upholstery Fabrics		3,100			3,849
Total segment income from operations		9,467			9,647
Unallocated corporate expenses		(2,532	)		(2,421	)
Total income from operations		6,935			7,226
Interest income		124			38
Other expense		(69	)		(85	)
Income before income taxes	$	6,990		$	7,179

I-19

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	141,977		$	137,522
Upholstery Fabrics		90,217			98,085
	$	232,914		$	235,607
Gross profit:
Mattress Fabrics	$	32,414		$	28,133
Upholstery Fabrics		19,665			20,365
	$	52,079		$	48,498
Selling, general, and administrative expenses:
Mattress Fabrics	$	10,185		$	8,865
Upholstery Fabrics		11,086			11,372
Total segment selling, general, and
administrative expenses		21,271			20,237
Unallocated corporate expenses		7,900			7,275
	$	29,171		$	27,512
Income from operations:
Mattress Fabrics	$	22,229		$	19,267
Upholstery Fabrics		8,579			8,994
Total segment income from operations		30,808			28,261
Unallocated corporate expenses		(7,900	)		(7,275	)
Total income from operations		22,908			20,986
Interest income		164			150
Other expense		(376	)		(405	)
Income before income taxes	$	22,696		$	20,731

I-20

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	41,498	$	44,309	$	43,472
Non-compete agreement		847		922		903
Customer relationships		677		728		715
Investment in unconsolidated joint venture		600		-		-
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		47,755		35,637		37,480
Total mattress fabrics assets		102,839		93,058		94,032
Upholstery Fabrics
Current assets (1)		27,421		30,960		26,540
Property, plant and equipment (3)		1,826		1,590		1,564
Total upholstery fabrics assets		29,247		32,550		28,104
Total segment assets		132,086		125,608		122,136
Non-segment assets:
Cash and cash equivalents		15,659		31,713		37,787
Short-term investments		2,410		4,259		4,359
Deferred income taxes		422		4,312		2,319
Income taxes receivable		-		23		155
Other current assets		2,514		2,331		2,477
Property, plant and equipment (4)		752		930		929
Long-term investments (Held-to-Maturity)		30,832		-		-
Long-term investments (Rabbi Trust)		5,488		3,590		4,025
Other assets		893		785		955
Total assets	$	191,056	$	173,551	$	175,142

	Nine months ended
(dollars in thousands)	January 29, 2017		January 31, 2016
Capital expenditures (5):
Mattress Fabrics	$	14,957	$	6,215
Upholstery Fabrics		645		481
Unallocated Corporate		72		381
Total capital expenditures	$	15,674	$	7,077
Depreciation expense:
Mattress Fabrics	$	4,673	$	4,273
Upholstery Fabrics		631		615
Total depreciation expense	$	5,304	$	4,888

I-21

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

(2) The $47.8 million at January 29, 2017, represents property, plant, and equipment of $32.6 million and $15.2 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.8 million at January 29, 2017, represents property, plant, and equipment of $1.1 million and $711 located in the U.S. and China, respectively. 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 $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $752, $930, and $929 at January 29, 2017, January 31, 2016 and May 1, 2016, 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 $6.6 million, or 28.9% of income before income taxes, for the nine month period ended January 29, 2017, compared to income tax expense of $7.4 million, or 35.7% of income before income taxes, for the nine month period ended January 31, 2016. Our effective income tax rates for the nine month periods ended January 29, 2017, and January 31, 2016, 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 currency exchange rates 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:

	2017			2016
Federal income tax rate		34.0	%		34.0	%
Tax effects of Chinese foreign exchange gains		1.9			3.5
Reversal of foreign uncertain tax position		(9.1	)		-
U.S state income tax expense		0.6			0.7
Other		1.5			(2.5	)
		28.9	%		35.7	%

I-22

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 29, 2017, we recorded a partial valuation allowance of $557,000, of which $473,000 pertained to certain U.S. state net operating loss carryforwards and credits and $84,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  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 May 1, 2016, we recorded a partial valuation allowance of $590,000, of which $518,000 pertained to certain U.S. state net operating loss carryforwards and credits and $72,000 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 29, 2017, January 31, 2016, and May 1, 2016, respectively.

The recorded valuation allowance of $557,000 at January 29, 2017, 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 29, 2017, 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 29, 2017, we had accumulated earnings and profits from our foreign subsidiaries totaling $143.2 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $405,000, which included U.S. income and foreign withholding taxes totaling $42.5 million, offset by U.S. foreign income tax credits of $42.1 million.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At January 31, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $100.9 million. At the same date, the 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 May 1, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $129.6 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $604,000, which included U.S. income and foreign withholding taxes totaling $38.5 million, offset by U.S. foreign income tax credits of $37.9 million.

Overall

At January 29, 2017, our non-current deferred tax asset of $422,000 pertains to our operations located in China. 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 May 1, 2016, our non-current deferred tax asset of $2.3 million represents $1.7 million and $572,000 from our operations located in the U.S. and China, respectively.

At January 29, 2017, our non-current deferred tax liability of $2.9 million represents $1.7 million and $1.2 million from our operations located in Canada and the U.S., respectively. Our non-current deferred tax liability balances of $1.2 million and $1.5 million at January 31, 2016 and May 1, 2016, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At January 29, 2017, we had a $13.4 million total gross unrecognized income tax benefit, of which $11.6 million and $1.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At January 31, 2016, we had a $13.2 million total gross unrecognized income 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 May 1, 2016, we had $14.9 million of total gross unrecognized income tax benefit, of which $11.1 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.

At January 29, 2017, our $13.4 million total gross unrecognized income tax benefit included $1.8 million that, if recognized, would favorably affect the income tax rate in future periods. At January 31, 2016, our $13.2 million total gross unrecognized income tax benefit, included $3.5 million that, if recognized, would favorably affect the income tax rate in future periods. At May 1, 2016, our $14.9 million total gross unrecognized income tax benefit included $3.8 million that, if recognized, would favorably affect the income tax rate in future periods.

Our gross unrecognized income tax benefit of $13.4 million at January 29, 2017, relates to tax positions for which significant change is reasonably possible within the next year. This amount primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns filed by us remain subject to examination for income tax years 2010 and subsequent. Canadian provincial (Quebec) returns filed by us remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014, and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018. During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015, and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018.

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

During the third quarter of fiscal 2017, we recognized an income tax benefit of $2.1 million for the reversal of an uncertain income tax position associated with a foreign jurisdiction in which the statute of limitations expired. This income tax benefit was treated as a discrete event in which the full income tax effects of the adjustment were recorded in the three and nine month periods ending January 29, 2017.

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 29, 2017, the company’s statutory surplus reserve was $4.5 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 $4.5 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.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Purchase Commitments

Overall

At January 29, 2017, January 31, 2016, and May 1, 2016, we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $8.2 million, $977,000, and $10.6 million, respectively. The $8.2 million and $10.6 million open purchase commitments as of January 29, 2017 and May 1, 2016, include $4.9 million (of which $4.5 million represents completed work) and $9.3 million associated with the construction of a new building noted below.

Construction of New Building

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at an current estimated cost of $11.1 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019 - $1.1 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor’s bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

The remaining $4.9 million on this commitment is required to be paid on an installment basis over the next two fiscal years as follows: Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.1 million.

This new building is currently expected to be completed and placed in service in our fourth quarter of fiscal 2017.

16.  Investment in Unconsolidated Joint Venture

Effective January 1, 2017, Culp International Holdings, Ltd. (Culp), a wholly-owned subsidiary of Culp, Inc., entered into a joint venture agreement, pursuant to which Culp owns fifty percent of CLASS International Holdings, Ltd (CLIH). CLIH will produce cut and sewn mattress covers, and its operations will be located in a modern industrial park on the northeast border of Haiti, which borders the Dominican Republic. CLIH is currently expected to commence production in the second quarter of fiscal 2018 and will complement our existing mattress fabric operations with a mirrored platform that will enhance our ability to meet customer demand while adding a lower cost operation to our platform.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Culp’s investment in CLIH will be accounted for under the equity method of accounting in accordance with ASC Topic 823 – Investments – Equity Method and Joint Ventures. The equity method of accounting is required for an investee entity (i.e. CLIH) that is not consolidated but over which the reporting entity (i.e. Culp Inc.) exercises significant influence. Whether or not a reporting entity exercises significant influence with respect to an investee depends on an evaluation of several factors, including representation on the investee’s board of directors, voting rights, and ownership level. Under the equity method of accounting, CLIH’s accounts are not reflected within our Consolidated Balance Sheets and Statements of Net Income. Our share of earnings and losses from CLIH will be reflected in the caption “Equity in net income (loss) of unconsolidated joint venture” in the Consolidated Statements of Net Income. Our carrying value in CLIH is reflected in the caption “Investment in unconsolidated joint venture” in our Consolidated Balance Sheets.

If our carrying value in CLIH is reduced to zero, no further losses will be recorded in our consolidated financial statements. However, if CLIH subsequently reports income, we will not record our share of such income until it equals the amount of its share of losses previously recognized.

17.  Common Stock Repurchase Program

On June 15, 2016, 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 29, 2017, and January 31, 2016, we did not purchase any shares of our common stock.

At January 29, 2017, we had $5.0 million available for additional repurchases of our common stock.

18.  Dividend Program

On February 28, 2017, we announced that our board of directors approved a quarterly cash dividend of $0.08 per share. This payment will be made on or about April 17, 2017, to shareholders of record as of April 3, 2017.

During the nine months ended January 29, 2017, dividend payments totaled $5.3 million, of which $2.6 million represented a special cash dividend payment of $0.21 per share, and $2.7 million represented quarterly dividend payments ranging from $0.07 to $0.08 per share.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $2.3 million represented quarterly dividend payments ranging from $0.06 to $0.07 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 or alter such statements, whether as a result of new information, future events or otherwise.  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,” “project,” “anticipate,” “depend” and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, sales, profit margins, 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. Finally, increases in market prices for petrochemical products can significantly affect the prices we pay for raw materials, and in turn, increase our operating costs and decrease our profitability. 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, are included in Item 1A “Risk Factors” section in our Form 10-K filed with the Securities and Exchange Commission on July 15, 2016, for the fiscal year ended May 1, 2016.

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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 29, 2017, and January 31, 2016, each represent 39-week periods. 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.  Our mattress fabric operations are located in Stokesdale, NC, High Point, NC and Quebec, Canada.  Our upholstery fabric operations are located in Shanghai, China, Burlington, North Carolina, and Anderson, South Carolina.

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 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 29, 2017			January 31, 2016			Change
Net sales	$	76,169		$	78,466			(2.9	)%
Gross profit		16,759			16,563			1.2	%
Gross profit margin		22.0	%		21.1	%		90	bp
SG&A expenses		9,824			9,337			5.2	%
Income from operations		6,935			7,226			(4.0	)%
Operating margin		9.1	%		9.2	%		(10	)bp
Income before income taxes		6,990			7,179			(2.6	)%
Income taxes		643			2,317			(72.2	)%
Net income		6,347			4,862			30.5	%

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	Nine Months Ended
(dollars in thousands)	January 29, 2017			January 31, 2016			Change
Net sales	$	232,194		$	235,607			(1.4	)%
Gross profit		52,079			48,498			7.4	%
Gross profit margin		22.4	%		20.6	%		180	bp
SG&A expenses		29,171			27,512			6.0	%
Income from operations		22,908			20,986			9.2	%
Operating margin		9.9	%		8.9	%		100	bp
Income before income taxes		22,696			20,731			9.5	%
Income taxes		6,560			7,398			(11.3	)%
Net income		16,136			13,333			21.0	%

Net Sales

Overall, net sales were slightly lower in the third quarter and the year-to-date period of fiscal 2017 as compared with the same periods a year ago, as both business segments were affected by  an uncertain economic environment and soft consumer demand trends for home furnishings. Our mattress fabrics segment reported year-over-year improvement in both the third quarter and the first nine months of fiscal 2017 in spite of a more challenging marketplace. However, in addition to the uncertain economic environment and soft consumer demand trends, our upholstery fabrics net sales were also affected by the timing of the Chinese New Year holiday that started in January for fiscal 2017 compared with February in fiscal 2016.

See the Segment Analysis section below for further details.

Income Before Income Taxes

Income before income taxes decreased slightly for the third quarter of fiscal 2017 as compared with the third quarter of fiscal 2016. Our upholstery fabrics segment reported a decrease in operating income that was primarily due to the decrease in net sales noted above. However, partially offsetting the decrease in our upholstery fabrics operating income was an increase in the mattress fabrics operating income due to lower raw material costs and the operational benefits of recent capital investments. Operating income for the mattress fabrics segment was also negatively affected by non-recurring plant facility consolidation charges associated with our expansion projects located in North Carolina.

Despite the decrease in net sales for the first nine months of fiscal 2017, income before income taxes increased by 9.5% compared to the same period a year ago. This increase primarily reflects the improvement in profitability from our mattress fabrics segment, as discussed above, partially offset by lower operating income associated with our upholstery fabrics segment, and higher SG&A expenses.

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See the Segment Analysis section below for further details.

Income Taxes

Income tax expense decreased for the third quarter and nine month year-to-date period of fiscal 2017 compared with the same periods a year ago. During the third quarter of fiscal 2017, we recognized an income tax benefit of $2.1 million for the reversal of an uncertain income tax position associated with a foreign jurisdiction in which the statute of limitations expired. This income tax benefit was treated as a discrete event in which the full income tax effects of the adjustment were recorded in the three and nine month periods ending January 29, 2017.

Refer to Note 13 located in the notes to the consolidated financial statements for further details regarding our income tax provision.

Liquidity

At January 29, 2017, our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) totaled $48.9 million compared with $42.1 million at May 1, 2016. This increase from the end of fiscal 2016 was primarily due to net cash provided by operating activities of $24.2 million, partially offset by $10.3 million in capital expenditures (of which $1.0 million was vendor financed) that were mostly associated with our mattress fabric segment, $5.3 million in dividend payments, and $1.4 million in long-term investment purchases associated with our Rabbi Trust that fund our deferred compensation plan. Our net cash provided by operating activities of $24.2 million increased $8.3 million compared with $15.9 million for the nine months ending January 31, 2016. This increase is primarily due to increased earnings and improved inventory management during fiscal 2017 compared with fiscal 2016.

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity.

Currently, we do not have any borrowings outstanding under our credit agreements.  At the end of our first quarter of fiscal 2017, we had an outstanding balance of $7.0 million on our U.S. revolving line of credit.  This outstanding balance was repaid during our second quarter of fiscal 2017.

See the Liquidity section below for further details.

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Dividend and Common Stock Repurchase Programs

On February 28, 2017, we announced that our board of directors approved a quarterly cash dividend of $0.08 per share. This payment will be made on or about April 17, 2017, to shareholders of record as of April 3, 2017.

During the nine months ended January 29, 2017, dividend payments totaled $5.3 million, of which $2.6 million represented a special cash dividend payment of $0.21 per share, and $2.7 million represented quarterly dividend payments ranging from $0.07 to $0.08 per share.

During the nine months ended January 29, 2017, and January 31, 2016, we did not purchase any shares of our common stock.

At January 29, 2017, we had $5.0 million available for additional repurchases of our common stock.

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Segment Analysis

Mattress Fabrics Segment

	Three Months Ended
(dollars in thousands)	January 29, 2017			January 31, 2016			Change
Net sales	$	45,920		$	44,277			3.7	%
Gross profit		9,758			8,751			11.5	%
Gross profit margin		21.3	%		19.8	%		150	bp
SG&A expenses		3,391			2,953			14.8	%
Income from operations		6,367			5,798			9.8	%
Operating margin		13.9	%		13.1	%		80	bp

	Nine Months Ended
(dollars in thousands)	January 29, 2017			January 31, 2016			Change
Net sales	$	141,977		$	137,522			3.2	%
Gross profit		32,414			28,133			15.2	%
Gross profit margin		22.8	%		20.5	%		230	bp
SG&A expenses		10,185			8,865			14.9	%
Income from operations		22,229			19,267			15.4	%
Operating margin		15.7	%		14.0	%		170	bp

Net Sales

Overall

Our mattress fabrics segment reported year-over-year improvement in net sales for both the third quarter and the first nine months of fiscal 2017 in spite of a more challenging marketplace. Our strategic focus on design and innovation remain our top priorities and has allowed us to meet customer style preferences and changing demand trends by offering a full complement of mattress fabrics and sewn covers across all price points. Our mattress cover business, known as CLASS, has continued to perform well in fiscal 2017. The growth in CLASS allows us to design product offerings from fabric to finished covers. We also have an opportunity to expand our business with our traditional customers and also reach new market segments, especially the fast growing Internet bedding space. Our scalable and flexible manufacturing platform supports our focus on design and innovation, and we have made significant capital investments to improve our operating efficiencies and overall capacity.

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Industry disruptions and demand trends have caused some short-term uncertainty in the mattress fabrics industry. Some of these disruptions involve major customers of our mattress fabrics business, including changes to the distribution channels of at least one significant customer. As a result, we have indications from a customer that there will be reductions in orders from them, but at the same time we have indications from other large customers that our levels of business with them is expected to increase. The structure of our supply arrangements and contracts with major customers are such that it is difficult to make predictions with certainty, and this is further complicated by the just in time (JIT) order and delivery model. Nonetheless, we are cautiously optimistic that we will not experience a significant negative impact on our mattress fabrics business related to these issues. While industry disruptions and demand issues in the bedding industry may affect sales trends in the short term, we believe that challenges with certain customers will at least be partially offset by increased sales and opportunities with others.

Gross Profit and Operating Income

Overall

Our mattress fabric gross profit and operating income increased in the third quarter and the first nine months of fiscal 2017 compared with the same periods a year ago. The increase in our operating income reflects lower raw material costs and the benefits of our capital investments. However, operating income for mattress fabrics was also negatively affected by increased SG&A expenses relating to higher inventory warehousing costs, design and sales expenses, and non-recurring plant facility consolidation charges (approximately $200,000 in the third quarter) associated with the expansion projects located in North Carolina noted below.

In addition to the industry disruptions and demand trends noted above, this segment’s operating income will continue to be affected by non-recurring plant consolidation expenses associated with the expansion projects located in North Carolina during the fourth quarter of fiscal 2017.

Capital Projects

During fiscal 2017, we continued to make capital investments to enhance our operations and improve product delivery performance. Our expansion projects in North Carolina, including our new distribution center, are expected to be completed in the fourth quarter of fiscal 2017. We are underway with our planned knitted fabric plant consolidation project in North Carolina to streamline our production platform and more effectively support our continuous improvement initiatives and long-term growth strategy. Currently, we expect an annual cost savings of $1 million to $1.5 million related to our North Carolina expansion projects.

Additionally, we have made excellent progress with an expansion project at our facility located in Canada. This project includes the installation of new finishing equipment and a new distribution center, which will allow us to ship directly to customers located in Canada. The new distribution platform is expected to commence operations in the fourth quarter of fiscal 2017.

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Joint Venture

Effective January 1, 2017, Culp International Holdings, Ltd. (Culp), a wholly-owned subsidiary of Culp, Inc., entered into a joint venture agreement, pursuant to which Culp owns fifty percent of CLASS International Holdings, Ltd (CLIH). CLIH will produce cut and sewn mattress covers, and its operations will be located in a modern industrial park on the northeast border of Haiti, which borders the Dominican Republic. CLIH is currently expected to commence production in the second quarter of fiscal 2018 and will complement our existing mattress fabric operations with a mirrored platform that will enhance our ability to meet customer demand while adding a lower cost operation to our platform.

Culp’s investment in CLIH will be accounted for under the equity method of accounting in accordance with ASC Topic 823 – Investments – Equity Method and Joint Ventures. The equity method of accounting is required for an investee entity (i.e. CLIH) that is not consolidated but over which the reporting entity (i.e. Culp Inc.) exercises significant influence. Whether or not a reporting entity exercises significant influence with respect to an investee depends on an evaluation of several factors, including representation on the investee’s board of directors, voting rights, and ownership level. Under the equity method of accounting, CLIH’s accounts are not reflected within our Consolidated Balance Sheets and Statements of Net Income. Our share of earnings and losses from CLIH will be reflected in the caption “Equity in net income (loss) of unconsolidated joint venture” in the Consolidated Statements of Net Income. Our carrying value in CLIH is reflected in the caption “Investment in unconsolidated joint venture” in our Consolidated Balance Sheets.

If our carrying value in CLIH is reduced to zero, no further losses will be recorded in our consolidated financial statements. However, if CLIH subsequently reports income, we will not record our share of such income until it equals the amount of its share of losses previously recognized.

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Segment assets

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

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Accounts receivable and inventory	$	41,498	$	44,309	$	43,472
Property, plant & equipment		47,755		35,637		37,480
Goodwill		11,462		11,462		11,462
Investment in unconsolidated joint venture		600		-		-
Non-compete agreement		847		922		903
Customer Relationships		677		728		715

Accounts Receivable & Inventory

As of January 29, 2017, accounts receivable and inventory decreased $2.8 million, or 6%, compared with January 31, 2016. This decrease is due to improved inventory management and more timely cash collections on accounts receivable as customers were taking more advantage of sales discounts in the third quarter of fiscal 2017 compared with the third quarter of fiscal 2016.

As of January 29, 2017, accounts receivable and inventory decreased $2.0 million, or 5%, compared with May 1, 2016. This decrease is due to improved inventory management in fiscal 2017 compared to fiscal 2016.

Property, Plant & Equipment

The $47.8 million at January 29, 2017, represents property, plant and equipment of $32.6 million and $15.2 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

As of January 29, 2017, property, plant, and equipment increased $12.1 million, or 34%, compared with January 31, 2016. This increase is primarily due to the capital investments noted above, partially offset by depreciation expense.

As of January 29, 2017, property, plant, and equipment increased $10.3 million, or 27%, compared with May 1, 2016. This increase is due to capital expenditures of $15.0 million that primarily relate to the construction of a new building (see Note 15 to the Consolidated Financial Statements for further details) and purchases and installation of machinery and equipment, partially offset by depreciation expense of $4.7 million for the nine months of fiscal 2017.

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Upholstery Fabrics Segment

Net Sales

			Three Months Ended
(dollars in thousands)	January 29, 2017					January 31, 2016				% Change
Non U.S. Produced	$	27,696		92	%	$	31,515	92	%		(12.1	)%
U.S. Produced		2,553		8	%		2,674	8	%		(4.5	)%
Total	$	30,249		100	%	$	34,189	100	%		(11.5	)%

			Nine Months Ended
(dollars in thousands)	January 29, 2017					January 31, 2016				% Change
Non U.S. Produced	$	83,279		92	%	$	90,037	92	%		(7.5	)%
U.S. Produced		6,938		8	%		8,048	8	%		(13.8	)%
Total	$	90,217		100	%	$	98,085	100	%		(8.0	)%

The decrease in upholstery fabric net sales reflects continued soft demand trends for home furnishings and the uncertain economic environment. In addition, upholstery fabric sales were affected by the timing of the Chinese New Year holiday that started in January for fiscal 2017 as opposed to February in fiscal 2016.

In spite of the challenging demand trends, we have remained focus on our product-driven strategy. For example, we have seen positive demand trends for our latest performance line of highly durable and stain-resistant fabrics. We have also experienced meaningful sales growth for this fiscal year in the hospitality segment, which is a key area of focus in our product diversification strategy.

Our 100% owned China platform supports our marketing efforts with the manufacturing flexibility to adapt to changing furniture market trends and consumer style preferences.

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

	Three Months Ended
(dollars in thousands)	January 29, 2017			January 31, 2016			Change
Gross profit	$	7,001		$	7,812			(10.4	)%
Gross profit margin		23.1	%		22.8	%		30	bp
SG&A expenses		3,901			3,963			(1.6	)%
Income from operations		3,100			3,849			(19.5	)%
Operating margin		10.2	%		11.3	%		(110	)bp

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	Nine Months Ended
(dollars in thousands)	January 29, 2017			January 31, 2016			Change
Gross profit	$	19,665		$	20,365			(3.4	)%
Gross profit margin		21.8	%		20.8	%		100	bp
SG&A expenses		11,086			11,372			(2.5	)%
Income from operations		8,579			8,994			(4.6	)%
Operating margin		9.5	%		9.2	%		30	bp

Our gross profit and operating income for the third quarter and first nine months of fiscal 2017 decreased in comparison to the same periods a year ago. This trend reflects the decline in net sales noted above, partially offset by lower raw material costs and operating expenses due to more favorable currency exchange rates in China.

Culp Europe

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 interested in developing business in Europe, and we are pursuing alternatives for selling upholstery fabric into this market.

Segment Assets

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

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Accounts receivable  and inventory	$	27,421	$	30,960	$	26,540
Property, plant & equipment		1,826		1,590		1,564

Accounts Receivable & Inventory

As of January 29, 2017, accounts receivable and inventory decreased $3.5 million, or 11%, compared with January 31, 2016. This decrease is primarily due to a decrease in accounts receivable. Accounts receivable decreased as a result of lower business volume in the third quarter of fiscal 2017 due to the timing of the Chinese New Year holiday that started in January for fiscal 2017 as opposed to February in fiscal 2016.

As of January 29, 2017, accounts receivable and inventory modestly increased 3% compared with May 1, 2016.

Property, Plant & Equipment

The $1.8 million at January 29, 2017, represents property, plant, and equipment of $1.1 million and $711,000 located in the U.S. and China, respectively. 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 $1.6 million at May 1, 2016, represents property, plant, and equipment of $893,000 and $671,000 located in the U.S. and China, respectively.

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Other Income Statement Categories

	Three Months Ended
(dollars in thousands)	January 29, 2017		January 31, 2016		% Change
SG&A expenses	$	9,824	$	9,337		5.2	%
Interest expense		-		-		-
Interest income		124		38		226.3	%
Other expense		69		85		(18.8	)%

	Nine Months Ended
(dollars in thousands)	January 29, 2017		January 31, 2016		% Change
SG&A expenses	$	29,171	$	27,512		6.0	%
Interest expense		-		-		-
Interest income		164		150		9.3	%
Other expense		376		405		(7.2	)%

Selling, General and Administrative Expenses

The increases in SG&A expenses for third quarter and the first nine months of fiscal 2017 compared with the same periods a year ago, were due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets. The increases in SG&A expenses were also due to higher inventory warehousing costs, design and sales expenses, and non-recurring plant facility consolidation charges (approximately $200,000 in the third quarter) associated with our mattress fabrics segment.

Interest Expense

Interest costs charged to operations were $52,000 and $9,000 for the third quarter of fiscal 2017 and 2016, respectively. Interest costs charged to operations were $97,000 and $58,000 for the nine months ended January 29, 2017 and January 31, 2016, respectively. The interest costs charged to operations were fully offset by interest costs for the construction of qualifying fixed assets that were capitalized and will be amortized over the related assets’ useful lives.

Interest Income

Interest income increased in the third quarter and the nine month year-to-date period of fiscal 2017 compared with the same periods a year ago. The increases in interest income were due to management's decision at the end of the second quarter of fiscal 2017 to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity.

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Other Expense

Other expenses in the third quarter and the year-to-date period of fiscal 2017 were comparable to the same periods a year ago.

Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $6.6 million, or 28.9% of income before income taxes, for the nine month period ended January 29, 2017, compared to income tax expense of $7.4 million, or 35.7% of income before income taxes, for the nine month period ended January 31, 2016. Our effective income tax rates for the nine month periods ended January 29, 2017, and January 31, 2016, 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 currency exchange rates 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:

	2017			2016
Federal income tax rate		34.0	%		34.0	%
Tax effects of Chinese foreign exchange gains		1.9			3.5
Reversal of foreign uncertain tax position		(9.1	)		-
U.S state income tax expense		0.6			0.7
Other		1.5			(2.5	)
		28.9	%		35.7	%

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.

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Refer to Note 13 located in the notes to the consolidated financial statements for disclosures regarding our assessments of our recorded valuation allowance as of January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

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. 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.

Refer to Note 13 located in the notes to the consolidated financial statements for disclosures regarding our assessments of our recorded deferred income tax liability balances associated with undistributed earnings from our foreign subsidiaries as of January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

Uncertainty In Income Taxes

Our gross unrecognized income tax benefit of $13.4 million at January 29, 2017, relates to tax positions for which significant change is reasonably possible within the next year. This amount primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns filed by us remain subject to examination for income tax years 2010 and subsequent. Canadian provincial (Quebec) returns filed by us remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014, and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018. During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015 and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018.

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

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During the third quarter of fiscal 2017, we recognized an income tax benefit of $2.1 million for the reversal of an uncertain income tax position associated with a foreign jurisdiction in which the statute of limitations expired. This income tax benefit was treated as a discrete event in which the full income tax effects of the adjustment were recorded in the three and nine month periods ending January 29, 2017.

Income Taxes Paid

We reported income tax expense of $6.6 million and $7.4 million for the nine month periods ending January 29, 2017 and January 31, 2016, respectively. Currently, we are not paying income taxes in the United States as we have $19.2 million in operating loss carryforwards as of May 1, 2016. However, we did have income tax payments of $4.7 million and $4.9 million for the nine month periods ending January 29, 2017 and January 31, 2016, respectively. These income tax payments are associated with our subsidiaries located in China and Canada.

Liquidity and Capital Resources

Liquidity

Overall

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 $18.1 million at January 29, 2017, cash flow from operations, and the current availability ($35.8 million as of January 29, 2017) under our revolving credit lines will be sufficient to fund our foreseeable business needs and contractual obligations.

At January 29, 2017, our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) totaled $48.9 million compared with $42.1 million at May 1, 2016. This increase from the end of fiscal 2016 was primarily due to net cash provided by operating activities of $24.2 million, partially offset by $10.3 million in capital expenditures (of which $1.0 million was vendor financed) that were mostly associated with our mattress fabric segment, $5.3 million in dividend payments, and $1.4 million in long-term investment purchases associated with our Rabbi Trust that fund our deferred compensation plan. Our net cash provided by operating activities of $24.2 million increased $8.3 million compared with $15.9 million for the nine months ending January 31, 2016. This increase is primarily due to increased earnings and improved inventory management during fiscal 2017 compared to fiscal 2016.

Currently, we do not have any borrowings outstanding under our credit agreements.  At the end of our first quarter of fiscal 2017, we had an outstanding balance of $7.0 million on our U.S. revolving line of credit.  This outstanding balance was repaid during our second quarter of fiscal 2017.

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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By Geographic Area

We currently hold cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) in the U.S. and our foreign jurisdictions to support our operational requirements, mitigate our risk to foreign exchange rate fluctuations, and U.S. and foreign income tax planning purposes.

A summary of our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) by geographic area follows:

	January 29,		January 31,		May 1,
(dollars in thousands)		2017	2016		2016
Cayman Islands	$	35,416	$	20,077	$	25,762
China		8,624		6,479		8,454
Canada		4,560		6,570		6,844
United States		301		2,846		1,086
	$	48,901	$	35,972	$	42,146

We have had a significant shift from cash and cash equivalents and investments held in China to the Cayman Islands. Since April 2016 through the end of our third quarter of fiscal 2017, we distributed earnings and profits totaling $39.2 million from our subsidiaries located in China to our international holding company located in the Cayman Islands. This shift was primarily due to our strategy of mitigating our risk to foreign exchange rate fluctuations for assets and liabilities denominated in Chinese Yuan Renminbi. By limiting 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 of 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 ultimately repatriate these earnings and profits to the U.S. for various strategic purposes. Currently, we do not intend to repatriate any earnings and profits to the U.S. until after our U.S. loss carryforwards are fully utilized, which we currently expect to be approximately two years.

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity.

Dividend Program

On February 28, 2017, we announced that our board of directors approved a quarterly cash dividend of $0.08 per share. This payment will be made on or about April 17, 2017, to shareholders of record as of April 3, 2017.

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During the nine months ended January 29, 2017, dividend payments totaled $5.3 million, of which $2.6 million represented a special cash dividend payment of $0.21 per share, and $2.7 million represented quarterly dividend payments ranging from $0.07 to $0.08 per share.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $2.3 million represented quarterly dividend payments ranging from $0.06 to $0.07 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 June 15, 2016, 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 29, 2017, and January 31, 2016, we did not purchase any shares of our common stock.

At January 29, 2017, we had $5.0 million available for additional repurchases of our common stock.

Working Capital

Accounts receivable at January 29, 2017, were $22.7 million, a decrease of $4.1 million, or 15%, compared with $26.8 million at January 31, 2016. This decrease is primarily due to lower business volume associated with our upholstery fabrics segment as a result of the timing of the Chinese New Year holiday that started in January for fiscal 2017 as opposed to February for fiscal 2016. In addition, this decrease is also due to improved cash collections as customers associated with our mattress fabrics segment were taking more advantage of sales discounts in the third quarter of fiscal 2017 compared with the third quarter of fiscal 2016. Days’ sales outstanding were 27 days for the third quarter of fiscal 2017 compared with 31 days for the third quarter of fiscal 2016.

Inventories as of January 29, 2017, were $46.2 million, a decrease of $2.3 million, or 5%, compared with $48.5 million at January 31, 2016. The decrease in inventory is primarily due to improved inventory management. Inventory turns were 5.2 for the third quarter of fiscal 2017 compared with 5.1 for the third quarter of fiscal 2016.

Accounts payable-trade as of January 29, 2017, were $22.4 million, a decrease of $3.2 million, or 13%, compared with $25.6 million at January 31, 2016.  This decrease is primarily due to lower business volume associated with our upholstery fabrics segment as a result of the timing of the Chinese New Year holiday as noted above.

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Operating working capital (accounts receivable and inventories, less accounts payable-trade and accounts payable-capital expenditures) was $41.0 million at January 29, 2017, compared with $49.3 million at January 31, 2016. Operating working capital turnover was 7.0 during the third quarter of fiscal 2017 compared with 7.2 during the third quarter of fiscal 2016.

Financing Arrangements

Currently, we have revolving credit agreements with banks for our U.S parent company and our operations located in China. The purposes of our revolving lines of credit are to support potential short term cash needs in different jurisdictions, mitigate our risk associated with foreign currency exchange rate fluctuations, and ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes. Our revolving credit agreements require us to maintain compliance with certain financial covenants as defined in the respective agreements.

At January 29, 2017, we were in compliance with all our financial covenants.

Refer to Note 8 located in the notes to the consolidated financial statements for further details of our revolving credit agreements.

Capital Expenditures and Depreciation

Overall

Capital expenditures on a cash basis were $10.3 million (of which $1.0 million was vendor financed) for the nine month period ending January 29, 2017, compared with $7.7 million for the same period a year ago. Capital expenditures for fiscal 2017 and 2016 mostly related to our mattress fabrics segment.

Depreciation expense was $5.3 million for the nine month period ending January 29, 2017 compared with $4.9 million for the same period a year ago. Depreciation expense for fiscal 2017 and 2016 mostly related to the mattress fabrics segment.

For fiscal 2017, we are projecting capital expenditures for the company as a whole to be in the range of $12.0 million to $15.0 million. Depreciation expense for the company as a whole is projected to be approximately $7.0 million in fiscal 2017. The estimated capital expenditures and depreciation expense mostly relate to the mattress fabrics segment.

We have incurred a higher than normal level of capital spending in fiscal 2017 on expansion projects to support our growth strategy and provide flexibility to meet expected demand trends. We expect capital spending to be somewhat lower in fiscal 2018 as compared to fiscal 2017.

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.

Accounts Payable – Capital Expenditures

At January 29, 2017, we had total amounts due regarding capital expenditures totaling $5.6 million, of which $4.5 million is financed and pertains to completed work for the construction of a new building (see below). Of the total amount due of $5.6 million, $4.9 million is required to be paid within one year from the end of our third quarter of fiscal 2017, with a remaining amount of $708,000 due in May 2018.

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Purchase Commitments – Capital Expenditures

At January 29, 2017 we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $8.2 million. The $8.2 million includes $4.9 million (of which $4.5 million represents completed work) associated with the construction of a new building noted below.

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at an current estimated cost of $11.1 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019 - $1.1 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor’s bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

The remaining $4.9 million on this commitment is required to be paid on an installment basis over the next two fiscal years as follows: Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.1 million.

This new building is currently expected to be completed and placed in service in our fourth quarter of fiscal 2017.

Critical Accounting Policies and Recent Accounting Developments

At January 29, 2017, 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 1, 2016.

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 1, 2016.

Contractual Obligations

As of January 29, 2017, there were no significant or new contractual obligations from those reported in our annual report on Form 10-K for the year ended May 1, 2016, with the exception of the joint venture agreement disclosed in the mattress fabrics segment analysis section of the Results of Operations.

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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 29, 2017, our U.S. revolving credit agreement requires interest to be charged at a rate (applicable interest rate of 2.23% at January 29, 2017) as a variable spread over LIBOR 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 29, 2017, 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 29, 2017, would not have had a significant impact on our results of operations or financial position.

ITEM 4.     CONTROLS AND PROCEDURES

We have conducted an evaluation of the effectiveness of our disclosure controls and procedures as of January 29, 2017, 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 29, 2017, 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 29, 2017. Our legal proceedings are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016 for the fiscal year ended May 1, 2016.

Item 1A.  Risk Factors

There have not been any material changes to our risk factors during the nine months ended January 29, 2017. Our risk factors are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016 for the fiscal year ended May 1, 2016.

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)
October 31, 2016  to December 4, 2016		-		-		-	$	5,000,000
December 5, 2016  to January 1, 2017		-		-		-	$	5,000,000
January 2, 2017 to January 29, 2017		-		-		-	$	5,000,000
Total		-		-		-	$	5,000,000

(1) On June 15, 2016, we announced that our board of directors increased the authorization for us to acquire up to $5.0 million of our common stock.

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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	Written description of non-employee compensation was filed as Exhibit 10.1 to the company’s Form 10-Q dated December 9, 2016 (Commission File No. 001-12597), and incorporated herein by reference.
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 10, 2017	By:	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
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-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 10, 2017

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 10, 2017

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 29, 2017 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 10, 2017

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 29, 2017 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 10, 2017

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.

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Document and Entity Information	9 Months Ended
	Jan. 29, 2017 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 29, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Trading Symbol	CFI
Entity Registrant Name	CULP INC
Entity Central Index Key	0000723603
Current Fiscal Year End Date	--04-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	12,314,756

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CONSOLIDATED STATEMENTS OF NET INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	Jan. 29, 2017	Jan. 31, 2016
Income Statement [Abstract]
Net sales	$ 76,169	$ 78,466	$ 232,194	$ 235,607
Cost of sales	59,410	61,903	180,115	187,109
Gross profit	16,759	16,563	52,079	48,498
Selling, general and administrative expenses	9,824	9,337	29,171	27,512
Income from operations	6,935	7,226	22,908	20,986
Interest income	(124)	(38)	(164)	(150)
Other expense	69	85	376	405
Income before income taxes	6,990	7,179	22,696	20,731
Income taxes	643	2,317	6,560	7,398
Net income	$ 6,347	$ 4,862	$ 16,136	$ 13,333
Net income per share, basic	$ 0.52	$ 0.39	$ 1.31	$ 1.08
Net income per share, diluted	$ 0.51	$ 0.39	$ 1.29	$ 1.07
Average shares outstanding, basic	12,313	12,331	12,302	12,317
Average shares outstanding, diluted	12,544	12,486	12,517	12,488

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	Jan. 29, 2017	Jan. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 6,347	$ 4,862	$ 16,136	$ 13,333
Unrealized gains (losses) on investments
Unrealized holding gains (losses) on investments	(13)	(194)	75	(312)
Reclassification adjustment for realized loss included in net income		71	12	127
Total other comprehensive income (loss)	(13)	(123)	87	(185)
Comprehensive income	$ 6,334	$ 4,739	$ 16,223	$ 13,148

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016	[1]	Jan. 31, 2016
Current assets:
Cash and cash equivalents	$ 15,659	$ 37,787		$ 31,713
Short-term investments	2,410	4,359		4,259
Accounts receivable, net	22,726	23,481		26,784
Inventories	46,193	46,531		48,485
Income taxes receivable		155		23
Other current assets	2,514	2,477		2,331
Total current assets	89,502	114,790		113,595
Property, plant and equipment, net	50,333	39,973		38,157
Goodwill	11,462	11,462		11,462
Deferred income taxes	422	2,319		4,312
Long-term investments - Held-To-Maturity	30,832
Long-term investments - Rabbi Trust	5,488	4,025		3,590
Investment in unconsolidated joint venture	600
Other assets	2,417	2,573		2,435
Total assets	191,056	175,142		173,551
Current liabilities:
Accounts payable-trade	22,352	23,994		25,601
Accounts payable - capital expenditures	4,886	224		380
Accrued expenses	10,511	11,922		12,690
Income taxes payable - current	217	180		622
Total current liabilities	37,966	36,320		39,293
Accounts payable - capital expenditures	708
Income taxes payable - long-term	1,817	3,841		3,480
Deferred income taxes	2,924	1,483		1,209
Deferred compensation	5,327	4,686		4,495
Total liabilities	48,742	46,330		48,477
Commitments and Contingencies (Notes 15 and 16)
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 12,314,756 at January 29, 2017; 12,250,489 at January 31, 2016; and 12,265,489 at May 1, 2016	615	614		613
Capital contributed in excess of par value	46,365	43,795		42,937
Accumulated earnings	95,391	84,547		81,804
Accumulated other comprehensive loss	(57)	(144)		(280)
Total shareholders' equity	142,314	128,812		125,074
Total liabilities and shareholders' equity	$ 191,056	$ 175,142		$ 173,551

[1] Derived from audited financial statements.

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jan. 29, 2017	May 01, 2016	[1]	Jan. 31, 2016
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	12,314,756	12,265,489		12,250,489
Common stock, outstanding	12,314,756	12,265,489		12,250,489

[1] Derived from audited financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Jan. 29, 2017		Jan. 31, 2016
Cash flows from operating activities:
Net income	$ 16,136		$ 13,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	5,304		4,888
Amortization of assets	162		123
Stock-based compensation	2,619		1,964
Excess tax benefit related to stock-based compensation	(195)		(822)
Deferred income taxes	3,533		1,906
Realized loss on sale of short-term investments	12		127
Gain on sale of equipment	(71)		(66)
Foreign currency exchange gains	(18)		(85)
Changes in assets and liabilities:
Accounts receivable	340		1,091
Inventories	(137)		(6,485)
Other current assets	90		(108)
Other assets	51		48
Accounts payable - trade	(946)		(1,979)
Accrued expenses and deferred compensation	(948)		1,406
Income taxes	(1,695)		535
Net cash provided by operating activities	24,237		15,876
Cash flows from investing activities:
Capital expenditures	(9,253)		(7,686)
Investment in unconsolidated joint venture	(600)
Proceeds from the sale of equipment	80		230
Payment on life insurance policy	(18)		(18)
Proceeds from the sale of short-term investments	2,000		5,612
Purchase of short-term investments	(8)		(86)
Purchase of long-term investments (Held-To-Maturity)	(31,050)
Purchase of long-term investments (Rabbi Trust)	(1,431)		(1,268)
Net cash used in investing activities	(40,280)		(3,216)
Cash flows from financing activities:
Proceeds from line of credit	7,000		7,000
Payments on line of credit	(7,000)		(7,000)
Payments on vendor-financed capital expenditures	(1,050)
Payments on long-term debt			(2,200)
Excess tax benefit related to stock-based compensation	195		822
Repurchase of common stock			(2,397)
Dividends paid	(5,292)		(7,281)
Payments on debt issuance costs	(2)		(43)
Proceeds from common stock issued	37		138
Net cash used in financing activities	(6,112)		(10,961)
Effect of exchange rate changes on cash and cash equivalents	27		289
(Decrease) increase in cash and cash equivalents	(22,128)		1,988
Cash and cash equivalents at beginning of period	37,787	[1]	29,725
Cash and cash equivalents at end of period	$ 15,659		$ 31,713

[1] Derived from audited financial statements.

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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 May. 03, 2015		$ 119,427	$ 611	$ 43,159	$ 75,752	$ (95)
Balance (in shares) at May. 03, 2015			12,219,121
Net income		13,333
Unrealized gain (loss) on investments		(185)
Balance at Jan. 31, 2016		125,074
Balance at May. 03, 2015		119,427	$ 611	43,159	75,752	(95)
Balance (in shares) at May. 03, 2015			12,219,121
Net income		16,935			16,935
Stock-based compensation		2,742		2,742
Unrealized gain (loss) on investments		(49)				(49)
Excess tax benefit related to stock based compensation		841		841
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)			54,500
Common stock issued in connection with exercise of stock options		200	$ 3	197
Common stock surrendered for withholding taxes payable		(747)	$ (1)	(746)
Common stock surrendered for withholding taxes payable (in shares)			(26,211)
Dividends paid		(8,140)			(8,140)
Balance at May. 01, 2016	[1]	128,812	$ 614	43,795	84,547	(144)
Balance (in shares) at May. 01, 2016	[1]		12,265,489
Net income		16,136			16,136
Stock-based compensation		2,619		2,619
Unrealized gain (loss) on investments		87				87
Excess tax benefit related to stock based compensation		195		195
Common stock issued in connection with performance based units (in shares)			49,192
Common stock issued in connection with performance based units			$ 2	(2)
Fully vested common stock award			4,800
Common stock issued in connection with exercise of stock options (in shares)			5,000
Common stock issued in connection with exercise of stock options		37		37
Common stock surrendered for withholding taxes payable		(280)	$ (1)	(279)
Common stock surrendered for withholding taxes payable (in shares)			(9,725)
Dividends paid		(5,292)			(5,292)
Balance at Jan. 29, 2017		$ 142,314	$ 615	$ 46,365	$ 95,391	$ (57)
Balance (in shares) at Jan. 29, 2017			12,314,756

[1] Derived from audited financial statements.

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Basis of Presentation

9 Months Ended

Jan. 29, 2017

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 15, 2016, for the fiscal year ended May 1, 2016.

The company’s nine months ended January 29, 2017, and January 31, 2016, represent 39 week periods, respectively.

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Significant Accounting Policies

9 Months Ended

Jan. 29, 2017

Accounting Policies [Abstract]

Significant Accounting Policies

2.  Significant Accounting Policies

As of January 29, 2017, 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 1, 2016.

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.

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 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. This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently 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.

Recently Issued Accounting Pronouncements

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 15, 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.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.

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Stock-Based Compensation

9 Months Ended

Jan. 29, 2017

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 updated and replaced 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.

At January 29, 2017, there were 959,942 shares available for future equity based grants under our 2015 plan.

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the through the third quarter of fiscal 2017.

At January 29, 2017, options to purchase 78,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $8.43 per share, and a weighted average contractual term of 0.6 years. At January 29, 2017, the aggregate intrinsic value for options outstanding and exercisable was $2.0 million.

The aggregate intrinsic value for options exercised for the nine months ending January 29, 2017 and January 31, 2016, was $128,000 and $1.0 million, respectively.

At January 29, 2017, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at January 29, 2017.

No compensation expense was recorded for incentive stock options for the nine months ended January 29, 2017 and January 31, 2016, respectively.

Common Stock Awards

On October 3, 2016, we granted a total of 4,800 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $29.80 per share, which represents the closing price of our common stock at the date of grant.

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.

We recorded $143,000 and $95,000 within selling, general, and administrative expense for these common stock awards for the nine months ending January 29, 2017, and January 31, 2016, respectively.

Performance Based Restricted Stock Units

Fiscal 2017 Grants

On July 14, 2016, certain key members of management were granted performance-based restricted stock units which could earn up to 107,880 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 $28 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 14, 2016, a non-employee was granted performance-based restricted stock units which could earn up to 11,549 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 29, 2017, this grant was unvested and was measured at $33.80 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 2016 Grants

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 29, 2017, this grant was unvested and was measured at $33.80 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 Grants

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 29, 2017, 16,000 restricted stock units associated with this grant were unvested and were measured at $33.80 per share, which represents the closing price of the company’s common stock at the end of the reporting period. The vesting of these 16,000 restricted stock units vest over their requisite service period of 28 months. During the first quarter of fiscal 2017, 12,000 shares of common stock associated with the grant vested and had a weighted average fair value of $345,000 or $28.77 per share.

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.

During the first quarter of fiscal 2017, 37,192 shares of common stock associated with this grant vested and had a weighted average fair value of $637,000 or $17.12 per share. Our fiscal 2014 grant is fully vested.

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 first quarter of fiscal 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. Our fiscal 2013 grant is fully vested.

Overall

We recorded compensation expense of $2.5 million and $1.9 million within selling, general, and administrative expense for our performance based restricted stock unit awards for the nine month periods ending January 29, 2017 and January 31, 2016, 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 29, 2017, the remaining unrecognized compensation cost related to our performance based restricted stock unit awards was $4.8 million, which is expected to be recognized over a weighted average vesting period of 1.9 years.

Time Vested Restricted Stock Units

On July 14, 2016, an employee was granted 1,200 shares of time vested restricted stock units. This award was valued based on the fair market value on the date of grant. The fair value of this award was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of this award is over the requisite service period of 11 months.

We recorded compensation expense of $20,000 within selling, general, and administrative expense for our time vested restricted stock unit awards for the nine months ending January 29, 2017. There were not any time vested restricted stock unit awards granted or unvested during the nine months ending January 31, 2016 and, therefore, no compensation expense was recorded.

At January 29, 2017, the remaining unrecognized compensation cost related to unvested time vested restricted stock awards was $14,000, which is expected to be recognized over the next 4.5 months.

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Accounts Receivable

9 Months Ended

Jan. 29, 2017

Receivables [Abstract]

Accounts Receivable

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 29, 2017			January 31, 2016			May 1, 2016
Customers	$	24,339		$	28,684		$	25,531
Allowance for doubtful accounts		(397	)		(814	)		(1,088	)
Reserve for returns and allowances and discounts		(1,216	)		(1,086	)		(962	)
	$	22,726		$	26,784		$	23,481

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

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		239			(93	)
Net write-offs, net of recoveries		452			130
Ending balance	$	(397	)	$	(814	)

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

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(2,357	)		(2,389	)
Credits issued		2,103			2,041
Ending balance	$	(1,216	)	$	(1,086	)

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Inventories

9 Months Ended

Jan. 29, 2017

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 29, 2017		January 31, 2016		May 1, 2016
Raw materials	$	6,977	$	6,831	$	5,462
Work-in-process		3,161		3,365		2,972
Finished goods		36,055		38,289		38,097
	$	46,193	$	48,485	$	46,531

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Other Assets

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Other Assets

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Cash surrender value – life insurance	$	376	$	357	$	357
Non-compete agreement, net		847		922		903
Customer relationships, net		677		728		715
Other		517		428		598
	$	2,417	$	2,435	$	2,573

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 29, 2017, January 31, 2016 and May 1, 2016, respectively. At January 29, 2017, January 31, 2016, and May 1, 2016, accumulated amortization for our non-compete agreement was $1.2 million, $1.1 million, and $1.1 million, respectively.

Amortization expense for our non-compete agreement was $56,000 for the nine month periods ended January 29, 2017 and January 31, 2016. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $18,000; FY 2018 - $75,000; FY 2019- $75,000; FY 2020 - $75,000; FY 2021 - $75,000 and Thereafter - $529,000.

The weighted average amortization period for our non-compete agreement is 11.3 years as of January 29, 2017.

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 29, 2017, January 31, 2016, and May 1, 2016, respectively. Accumulated amortization for our customer relationships was $191,000, $140,000, and $153,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

Amortization expense for our customer relationships was $38,000 for the nine months ending January 29, 2017 and January 31, 2016. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $13,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; FY 2021 - $51,000; and Thereafter - $460,000.

The weighted average amortization period for our customer relationships is 13.3 years as of January 29, 2017.

Cash Surrender Value – Life Insurance

At January 29, 2017, January 31, 2016, and May 1, 2016 we had one life insurance contract with a death benefit of $1.4 million.

Our cash surrender value – life insurance balances totaling $376,000, $357,000 and $357,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively, are collectible upon death of the respective insured.

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Accrued Expenses

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Accrued Expenses

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Compensation, commissions and related benefits	$	9,205	$	8,678	$	10,011
Advertising rebates		118		2,876		870
Interest		11		-		-
Other accrued expenses		1,177		1,136		1,041
	$	10,511	$	12,690	$	11,922

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Lines of Credit

9 Months Ended

Jan. 29, 2017

Debt Disclosure [Abstract]

Lines of Credit

8. Lines of Credit

Revolving Credit Agreement – United States

Our Credit Agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) provides a revolving loan commitment of $30 million. Interest was charged at a rate (applicable interest rate of 2.23% at January 29, 2017) as a variable spread over LIBOR based on our ratio of debt to EBITDA. The Credit Agreement contains certain financial and other covenants as defined in the agreement and is set to expire on August 15, 2018.

The purposes of our revolving credit line 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 ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

Outstanding borrowings are secured by a pledge of 65% of the common stock of Culp International Holdings Ltd. (our subsidiary located in the Cayman Islands), as required by the Credit Agreement. There were no borrowings outstanding under the Credit Agreement at January 29, 2017, January 31, 2016, and May 1, 2016, respectively.

At January 29, 2017, January 31, 2016, and May 1, 2016, there were $250,000 in outstanding letters of credit (all of which related to workers compensation) provided by the Credit Agreement.

Effective August 1, 2016, we entered into a Third Amendment to our Credit Agreement that will allow us to issue letters of credit not to exceed $7.5 million. On August 3, 2016, we issued a $5.0 million letter of credit (all of which is currently outstanding and in addition to the $250,000 letter of credit noted above) for the construction of a new building associated with our mattress fabrics segment (see Note 15 for further details). This $5.0 million letter of credit will be automatically reduced in increments of $1.25 million on August 1, 2017, November 1, 2017, February 1, 2018, and May 15, 2018, respectively.

Revolving Credit Agreement – China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit of up to 40 million Chinese Yuan Renminbi (approximately $5.8 million USD at January 29, 2017), that expires February 15, 2018. This agreement has an interest rate determined by the Chinese government and there were no borrowings outstanding as of January 29, 2017, January 31, 2016, and May 1, 2016.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At January 29, 2017, the company was in compliance with these financial covenants.

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Fair Value of Financial Instruments

9 Months Ended

Jan. 29, 2017

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 measured at fair value on a recurring basis:

	Fair value measurements at January 29, 2017 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:
U.S. Corporate Bonds	$	-	$	30,682		N/A	$	30,682
Premier Money Market Fund		4,888		N/A		N/A		4,888
Low Duration Bond Fund		1,073		N/A		N/A		1,073
Intermediate Term Bond Fund		739		N/A		N/A		739
Strategic Income Fund		598		N/A		N/A		598
Large Blend Fund		343		N/A		N/A		343
Growth Allocation Fund		113		N/A		N/A		113
Moderate Allocation Fund		83		N/A		N/A		83
Other		61		N/A		N/A		61

	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 May 1, 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	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

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 29, 2017, January 31, 2016, and May 1, 2016, our short-term investments totaled $2.4 million, $4.3 million, and $4.4 million, respectively, and consisted of short-term bond funds. 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 $68,000, $181,000, and $100,000 at January 29, 2017, January 31, 2016, and May 1, 2016, respectively. At January 29, 2017, January 31, 2016, and May 1, 2016, the fair value of our short-term bond funds approximated its cost basis.

Long- Term Investments - Held-To-Maturity

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments will be recorded as either current or noncurrent on our Consolidated Balance Sheets, based on contractual maturity date and stated at amortized cost.

At January 29, 2017, our held-to-maturity investments totaled $30.8 million and consisted of U.S. Corporate bonds. The fair value of our held-to-maturity investments totaled $30.7 million.

Long-Term Investments - Rabbi Trust

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 $5.5 million, $3.6 million, and $4.0 million at January 29, 2017, January 30, 2016, and May 1, 2016, respectively. Our long-term investments had an accumulated unrealized gain of $11,000 at January 29, 2017 and an accumulated unrealized loss of $99,000 and $44,000 at January 31, 2016 and May 1, 2016, respectively. The fair value of our long-term investments associated with our Rabbi Trust 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. 29, 2017

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 29, 2017		January 31, 2016
Interest	$	110	$	95
Income taxes		4,704		4,921

Interest costs charged to operations were $97,000 and $58,000 for the nine months ended January 29, 2017 and January 31, 2016, respectively.

Interest costs of $97,000 and $58,000 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 29, 2017 and January 31, 2016, respectively.

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Net Income Per Share

9 Months Ended

Jan. 29, 2017

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 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,313		12,331
Dilutive effect of stock-based compensation		231		155
Weighted average common shares outstanding, diluted		12,544		12,486

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended January 29, 2017 and January 31, 2016, 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 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,302		12,317
Dilutive effect of stock-based compensation		215		171
Weighted average common shares outstanding, diluted		12,517		12,488

All options to purchase shares of common stock were included in the computation of diluted net income for the nine months ended January 29, 2017 and January 31, 2016, 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. 29, 2017

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, investment in an unconsolidated joint venture, 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 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	45,920		$	44,277
Upholstery Fabrics		30,249			34,189
	$	76,169		$	78,466
Gross profit:
Mattress Fabrics	$	9,758		$	8,751
Upholstery Fabrics		7,001			7,812
	$	16,759		$	16,563
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,391		$	2,953
Upholstery Fabrics		3,901			3,963
Total segment selling, general, and
administrative expenses		7,292			6,916
Unallocated corporate expenses		2,532			2,421
	$	9,824		$	9,337
Income from operations:
Mattress Fabrics	$	6,367		$	5,798
Upholstery Fabrics		3,100			3,849
Total segment income from operations		9,467			9,647
Unallocated corporate expenses		(2,532	)		(2,421	)
Total income from operations		6,935			7,226
Interest income		124			38
Other expense		(69	)		(85	)
Income before income taxes	$	6,990		$	7,179

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	141,977		$	137,522
Upholstery Fabrics		90,217			98,085
	$	232,914		$	235,607
Gross profit:
Mattress Fabrics	$	32,414		$	28,133
Upholstery Fabrics		19,665			20,365
	$	52,079		$	48,498
Selling, general, and administrative expenses:
Mattress Fabrics	$	10,185		$	8,865
Upholstery Fabrics		11,086			11,372
Total segment selling, general, and
administrative expenses		21,271			20,237
Unallocated corporate expenses		7,900			7,275
	$	29,171		$	27,512
Income from operations:
Mattress Fabrics	$	22,229		$	19,267
Upholstery Fabrics		8,579			8,994
Total segment income from operations		30,808			28,261
Unallocated corporate expenses		(7,900	)		(7,275	)
Total income from operations		22,908			20,986
Interest income		164			150
Other expense		(376	)		(405	)
Income before income taxes	$	22,696		$	20,731

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

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	41,498	$	44,309	$	43,472
Non-compete agreement		847		922		903
Customer relationships		677		728		715
Investment in unconsolidated joint venture		600		-		-
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		47,755		35,637		37,480
Total mattress fabrics assets		102,839		93,058		94,032
Upholstery Fabrics
Current assets (1)		27,421		30,960		26,540
Property, plant and equipment (3)		1,826		1,590		1,564
Total upholstery fabrics assets		29,247		32,550		28,104
Total segment assets		132,086		125,608		122,136
Non-segment assets:
Cash and cash equivalents		15,659		31,713		37,787
Short-term investments		2,410		4,259		4,359
Deferred income taxes		422		4,312		2,319
Income taxes receivable		-		23		155
Other current assets		2,514		2,331		2,477
Property, plant and equipment (4)		752		930		929
Long-term investments (Held-to-Maturity)		30,832		-		-
Long-term investments (Rabbi Trust)		5,488		3,590		4,025
Other assets		893		785		955
Total assets	$	191,056	$	173,551	$	175,142

	Nine months ended
(dollars in thousands)	January 29, 2017		January 31, 2016
Capital expenditures (5):
Mattress Fabrics	$	14,957	$	6,215
Upholstery Fabrics		645		481
Unallocated Corporate		72		381
Total capital expenditures	$	15,674	$	7,077
Depreciation expense:
Mattress Fabrics	$	4,673	$	4,273
Upholstery Fabrics		631		615
Total depreciation expense	$	5,304	$	4,888

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

(2) The $47.8 million at January 29, 2017, represents property, plant, and equipment of $32.6 million and $15.2 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.8 million at January 29, 2017, represents property, plant, and equipment of $1.1 million and $711 located in the U.S. and China, respectively. 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 $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $752, $930, and $929 at January 29, 2017, January 31, 2016 and May 1, 2016, 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. 29, 2017

Income Tax Disclosure [Abstract]

Income Taxes

13.  Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $6.6 million, or 28.9% of income before income taxes, for the nine month period ended January 29, 2017, compared to income tax expense of $7.4 million, or 35.7% of income before income taxes, for the nine month period ended January 31, 2016. Our effective income tax rates for the nine month periods ended January 29, 2017, and January 31, 2016, 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 currency exchange rates 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:

	2017			2016
Federal income tax rate		34.0	%		34.0	%
Tax effects of Chinese foreign exchange gains		1.9			3.5
Reversal of foreign uncertain tax position		(9.1	)		-
U.S state income tax expense		0.6			0.7
Other		1.5			(2.5	)
		28.9	%		35.7	%

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 29, 2017, we recorded a partial valuation allowance of $557,000, of which $473,000 pertained to certain U.S. state net operating loss carryforwards and credits and $84,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  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 May 1, 2016, we recorded a partial valuation allowance of $590,000, of which $518,000 pertained to certain U.S. state net operating loss carryforwards and credits and $72,000 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 29, 2017, January 31, 2016, and May 1, 2016, respectively.

The recorded valuation allowance of $557,000 at January 29, 2017, 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 29, 2017, 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 29, 2017, we had accumulated earnings and profits from our foreign subsidiaries totaling $143.2 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $405,000, which included U.S. income and foreign withholding taxes totaling $42.5 million, offset by U.S. foreign income tax credits of $42.1 million.

At January 31, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $100.9 million. At the same date, the 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 May 1, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $129.6 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $604,000, which included U.S. income and foreign withholding taxes totaling $38.5 million, offset by U.S. foreign income tax credits of $37.9 million.

Overall

At January 29, 2017, our non-current deferred tax asset of $422,000 pertains to our operations located in China. 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 May 1, 2016, our non-current deferred tax asset of $2.3 million represents $1.7 million and $572,000 from our operations located in the U.S. and China, respectively.

At January 29, 2017, our non-current deferred tax liability of $2.9 million represents $1.7 million and $1.2 million from our operations located in Canada and the U.S., respectively. Our non-current deferred tax liability balances of $1.2 million and $1.5 million at January 31, 2016 and May 1, 2016, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At January 29, 2017, we had a $13.4 million total gross unrecognized income tax benefit, of which $11.6 million and $1.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At January 31, 2016, we had a $13.2 million total gross unrecognized income 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 May 1, 2016, we had $14.9 million of total gross unrecognized income tax benefit, of which $11.1 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.

At January 29, 2017, our $13.4 million total gross unrecognized income tax benefit included $1.8 million that, if recognized, would favorably affect the income tax rate in future periods. At January 31, 2016, our $13.2 million total gross unrecognized income tax benefit, included $3.5 million that, if recognized, would favorably affect the income tax rate in future periods. At May 1, 2016, our $14.9 million total gross unrecognized income tax benefit included $3.8 million that, if recognized, would favorably affect the income tax rate in future periods.

Our gross unrecognized income tax benefit of $13.4 million at January 29, 2017, relates to tax positions for which significant change is reasonably possible within the next year. This amount primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns filed by us remain subject to examination for income tax years 2010 and subsequent. Canadian provincial (Quebec) returns filed by us remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014, and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018. During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015, and no adjustments have been proposed at this time. We currently expect this examination to be completed during fiscal 2018.

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

During the third quarter of fiscal 2017, we recognized an income tax benefit of $2.1 million for the reversal of an uncertain income tax position associated with a foreign jurisdiction in which the statute of limitations expired. This income tax benefit was treated as a discrete event in which the full income tax effects of the adjustment were recorded in the three and nine month periods ending January 29, 2017.

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Statutory Reserves

9 Months Ended

Jan. 29, 2017

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 29, 2017, the company’s statutory surplus reserve was $4.5 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 $4.5 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. 29, 2017

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

Overall

At January 29, 2017, January 31, 2016, and May 1, 2016, we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $8.2 million, $977,000, and $10.6 million, respectively. The $8.2 million and $10.6 million open purchase commitments as of January 29, 2017 and May 1, 2016, include $4.9 million (of which $4.5 million represents completed work) and $9.3 million associated with the construction of a new building noted below.

Construction of New Building

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at an current estimated cost of $11.1 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019 - $1.1 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor’s bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

The remaining $4.9 million on this commitment is required to be paid on an installment basis over the next two fiscal years as follows: Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.1 million.

This new building is currently expected to be completed and placed in service in our fourth quarter of fiscal 2017.

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Investment in Unconsolidated Joint Venture

9 Months Ended

Jan. 29, 2017

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Joint Venture

16.  Investment in Unconsolidated Joint Venture

Effective January 1, 2017, Culp International Holdings, Ltd. (Culp), a wholly-owned subsidiary of Culp, Inc., entered into a joint venture agreement, pursuant to which Culp owns fifty percent of CLASS International Holdings, Ltd (CLIH). CLIH will produce cut and sewn mattress covers, and its operations will be located in a modern industrial park on the northeast border of Haiti, which borders the Dominican Republic. CLIH is currently expected to commence production in the second quarter of fiscal 2018 and will complement our existing mattress fabric operations with a mirrored platform that will enhance our ability to meet customer demand while adding a lower cost operation to our platform.

Culp’s investment in CLIH will be accounted for under the equity method of accounting in accordance with ASC Topic 823 – Investments – Equity Method and Joint Ventures. The equity method of accounting is required for an investee entity (i.e. CLIH) that is not consolidated but over which the reporting entity (i.e. Culp Inc.) exercises significant influence. Whether or not a reporting entity exercises significant influence with respect to an investee depends on an evaluation of several factors, including representation on the investee’s board of directors, voting rights, and ownership level. Under the equity method of accounting, CLIH’s accounts are not reflected within our Consolidated Balance Sheets and Statements of Net Income. Our share of earnings and losses from CLIH will be reflected in the caption “Equity in net income (loss) of unconsolidated joint venture” in the Consolidated Statements of Net Income. Our carrying value in CLIH is reflected in the caption “Investment in unconsolidated joint venture” in our Consolidated Balance Sheets.

If our carrying value in CLIH is reduced to zero, no further losses will be recorded in our consolidated financial statements. However, if CLIH subsequently reports income, we will not record our share of such income until it equals the amount of its share of losses previously recognized.

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Common Stock Repurchase Program

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Common Stock Repurchase Program

17.  Common Stock Repurchase Program

On June 15, 2016, 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 29, 2017, and January 31, 2016, we did not purchase any shares of our common stock.

At January 29, 2017, we had $5.0 million available for additional repurchases of our common stock.

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Dividend Program

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Dividend Program

18.  Dividend Program

On February 28, 2017, we announced that our board of directors approved a quarterly cash dividend of $0.08 per share. This payment will be made on or about April 17, 2017, to shareholders of record as of April 3, 2017.

During the nine months ended January 29, 2017, dividend payments totaled $5.3 million, of which $2.6 million represented a special cash dividend payment of $0.21 per share, and $2.7 million represented quarterly dividend payments ranging from $0.07 to $0.08 per share.

During the nine months ended January 31, 2016, dividend payments totaled $7.3 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $2.3 million represented quarterly dividend payments ranging from $0.06 to $0.07 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. 29, 2017

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.

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 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. This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently 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.

Recently Issued Accounting Pronouncements

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 15, 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.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.

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Accounts Receivable (Tables)

9 Months Ended

Jan. 29, 2017

Receivables [Abstract]

Summary of Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	January 29, 2017			January 31, 2016			May 1, 2016
Customers	$	24,339		$	28,684		$	25,531
Allowance for doubtful accounts		(397	)		(814	)		(1,088	)
Reserve for returns and allowances and discounts		(1,216	)		(1,086	)		(962	)
	$	22,726		$	26,784		$	23,481

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 29, 2017			January 31, 2016
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		239			(93	)
Net write-offs, net of recoveries		452			130
Ending balance	$	(397	)	$	(814	)

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 29, 2017			January 31, 2016
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(2,357	)		(2,389	)
Credits issued		2,103			2,041
Ending balance	$	(1,216	)	$	(1,086	)

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Inventories (Tables)

9 Months Ended

Jan. 29, 2017

Inventory Disclosure [Abstract]

Summary of Inventories

A summary of inventories follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Raw materials	$	6,977	$	6,831	$	5,462
Work-in-process		3,161		3,365		2,972
Finished goods		36,055		38,289		38,097
	$	46,193	$	48,485	$	46,531

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Other Assets (Tables)

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Summary of Other Assets

A summary of other assets follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Cash surrender value – life insurance	$	376	$	357	$	357
Non-compete agreement, net		847		922		903
Customer relationships, net		677		728		715
Other		517		428		598
	$	2,417	$	2,435	$	2,573

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Accrued Expenses (Tables)

9 Months Ended

Jan. 29, 2017

Text Block [Abstract]

Summary of Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Compensation, commissions and related benefits	$	9,205	$	8,678	$	10,011
Advertising rebates		118		2,876		870
Interest		11		-		-
Other accrued expenses		1,177		1,136		1,041
	$	10,511	$	12,690	$	11,922

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Jan. 29, 2017

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

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

	Fair value measurements at January 29, 2017 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:
U.S. Corporate Bonds	$	-	$	30,682		N/A	$	30,682
Premier Money Market Fund		4,888		N/A		N/A		4,888
Low Duration Bond Fund		1,073		N/A		N/A		1,073
Intermediate Term Bond Fund		739		N/A		N/A		739
Strategic Income Fund		598		N/A		N/A		598
Large Blend Fund		343		N/A		N/A		343
Growth Allocation Fund		113		N/A		N/A		113
Moderate Allocation Fund		83		N/A		N/A		83
Other		61		N/A		N/A		61

	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 May 1, 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	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

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Cash Flow Information (Tables)

9 Months Ended

Jan. 29, 2017

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 29, 2017		January 31, 2016
Interest	$	110	$	95
Income taxes		4,704		4,921

XML

Net Income Per Share (Tables)

9 Months Ended

Jan. 29, 2017

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 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,313		12,331
Dilutive effect of stock-based compensation		231		155
Weighted average common shares outstanding, diluted		12,544		12,486

	Nine months ended
(amounts in thousands)	January 29, 2017		January 31, 2016
Weighted average common shares outstanding, basic		12,302		12,317
Dilutive effect of stock-based compensation		215		171
Weighted average common shares outstanding, diluted		12,517		12,488

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Segment Information (Tables)

9 Months Ended

Jan. 29, 2017

Segment Reporting [Abstract]

Schedule of Operating Segments Information

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	45,920		$	44,277
Upholstery Fabrics		30,249			34,189
	$	76,169		$	78,466
Gross profit:
Mattress Fabrics	$	9,758		$	8,751
Upholstery Fabrics		7,001			7,812
	$	16,759		$	16,563
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,391		$	2,953
Upholstery Fabrics		3,901			3,963
Total segment selling, general, and
administrative expenses		7,292			6,916
Unallocated corporate expenses		2,532			2,421
	$	9,824		$	9,337
Income from operations:
Mattress Fabrics	$	6,367		$	5,798
Upholstery Fabrics		3,100			3,849
Total segment income from operations		9,467			9,647
Unallocated corporate expenses		(2,532	)		(2,421	)
Total income from operations		6,935			7,226
Interest income		124			38
Other expense		(69	)		(85	)
Income before income taxes	$	6,990		$	7,179

	Nine months ended
(dollars in thousands)	January 29, 2017			January 31, 2016
Net sales:
Mattress Fabrics	$	141,977		$	137,522
Upholstery Fabrics		90,217			98,085
	$	232,914		$	235,607
Gross profit:
Mattress Fabrics	$	32,414		$	28,133
Upholstery Fabrics		19,665			20,365
	$	52,079		$	48,498
Selling, general, and administrative expenses:
Mattress Fabrics	$	10,185		$	8,865
Upholstery Fabrics		11,086			11,372
Total segment selling, general, and
administrative expenses		21,271			20,237
Unallocated corporate expenses		7,900			7,275
	$	29,171		$	27,512
Income from operations:
Mattress Fabrics	$	22,229		$	19,267
Upholstery Fabrics		8,579			8,994
Total segment income from operations		30,808			28,261
Unallocated corporate expenses		(7,900	)		(7,275	)
Total income from operations		22,908			20,986
Interest income		164			150
Other expense		(376	)		(405	)
Income before income taxes	$	22,696		$	20,731

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

(dollars in thousands)	January 29, 2017		January 31, 2016		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	41,498	$	44,309	$	43,472
Non-compete agreement		847		922		903
Customer relationships		677		728		715
Investment in unconsolidated joint venture		600		-		-
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		47,755		35,637		37,480
Total mattress fabrics assets		102,839		93,058		94,032
Upholstery Fabrics
Current assets (1)		27,421		30,960		26,540
Property, plant and equipment (3)		1,826		1,590		1,564
Total upholstery fabrics assets		29,247		32,550		28,104
Total segment assets		132,086		125,608		122,136
Non-segment assets:
Cash and cash equivalents		15,659		31,713		37,787
Short-term investments		2,410		4,259		4,359
Deferred income taxes		422		4,312		2,319
Income taxes receivable		-		23		155
Other current assets		2,514		2,331		2,477
Property, plant and equipment (4)		752		930		929
Long-term investments (Held-to-Maturity)		30,832		-		-
Long-term investments (Rabbi Trust)		5,488		3,590		4,025
Other assets		893		785		955
Total assets	$	191,056	$	173,551	$	175,142

	Nine months ended
(dollars in thousands)	January 29, 2017		January 31, 2016
Capital expenditures (5):
Mattress Fabrics	$	14,957	$	6,215
Upholstery Fabrics		645		481
Unallocated Corporate		72		381
Total capital expenditures	$	15,674	$	7,077
Depreciation expense:
Mattress Fabrics	$	4,673	$	4,273
Upholstery Fabrics		631		615
Total depreciation expense	$	5,304	$	4,888

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

(2) The $47.8 million at January 29, 2017, represents property, plant, and equipment of $32.6 million and $15.2 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.8 million at January 29, 2017, represents property, plant, and equipment of $1.1 million and $711 located in the U.S. and China, respectively. 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 $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $752, $930, and $929 at January 29, 2017, January 31, 2016 and May 1, 2016, 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.

XML

Income Taxes (Tables)

9 Months Ended

Jan. 29, 2017

Income Tax Disclosure [Abstract]

Summary of Differences 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:

	2017			2016
Federal income tax rate		34.0	%		34.0	%
Tax effects of Chinese foreign exchange gains		1.9			3.5
Reversal of foreign uncertain tax position		(9.1	)		-
U.S state income tax expense		0.6			0.7
Other		1.5			(2.5	)
		28.9	%		35.7	%

XML

Stock-Based Compensation - Narrative (Detail) - USD ($)									3 Months Ended			9 Months Ended
	Oct. 03, 2016	Jul. 14, 2016	Oct. 01, 2015	Jul. 15, 2015	Mar. 03, 2015	Jun. 24, 2014	Jun. 25, 2013	Jul. 11, 2012	Jan. 29, 2017	Jul. 31, 2016	Aug. 02, 2015	Jan. 29, 2017	Jan. 31, 2016	Sep. 16, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted									0			0
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
Number of shares available for future equity based grants									959,942			959,942
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
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining unrecognized compensation cost									$ 4,800,000			$ 4,800,000
Weighted average period over which unrecognized compensation cost is expected to be recognized												1 year 10 months 24 days
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												$ 2,500,000	$ 1,900,000
Performance Based Restricted Stock Units [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years		3 years		3 years	3 years	3 years
Closing price of common stock		$ 28		$ 32.23		$ 17.70	$ 17.12	$ 10.21
Performance Based Restricted Stock Units [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years		3 years
Closing price of common stock												$ 33.80
Number of shares unvested									16,000			16,000
Performance Based Restricted Stock Units [Member] | Requisite Service Period for 16,000 Restricted Stock Units [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] | Fiscal Year 2015 [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested										12,000
Weighted average fair value of vested shares										$ 345,000
Weighted average fair value of vested shares, per share										$ 28.77
Performance Based Restricted Stock Units [Member] | Fiscal Year 2014 [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested										37,192
Weighted average fair value of vested shares										$ 637,000
Weighted average fair value of vested shares, per share										$ 17.12
Performance Based Restricted Stock Units [Member] | Fiscal Year 2013 [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
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
Performance Based Restricted Stock Units [Member] | Maximum [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted		107,880		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]
Maximum number of shares granted		11,549		10,364	28,000
Incentive Stock Option Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options to purchase common stock outstanding									78,600			78,600
Number of options exercisable									78,600			78,600
Weighted average exercise price for options outstanding									$ 8.43			$ 8.43
Weighted average exercise price for options exercisable									$ 8.43			$ 8.43
Weighted average contractual term for options outstanding												7 months 6 days
Weighted average contractual term for options exercisable												7 months 6 days
Aggregate intrinsic value for options outstanding									$ 2,000,000			$ 2,000,000
Aggregate intrinsic value for options exercisable									$ 2,000,000			2,000,000
Aggregate intrinsic value for options exercised												$ 128,000.0	1,000,000
Number of unvested stock option									0			0
Unrecognized stock based compensation cost									$ 0			$ 0
Share-based compensation expense												0	0
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												$ 143,000	95,000
Common Stock Awards [Member] | Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted	4,800		3,000
Vesting period	0 days		0 days
Closing price of common stock	$ 29.80		$ 31.77
Time Vested Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense													$ 0
Vesting period												4 months 15 days
Unrecognized stock based compensation cost									$ 14,000			$ 14,000
Time Vested 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												$ 20,000
Time Vested Restricted Stock Units [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted		1,200											0
Vesting period		11 months
Closing price of common stock		$ 28

XML

Accounts Receivable (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016	May 03, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Customers	$ 24,339	$ 25,531		$ 28,684
Accounts receivable, net	22,726	23,481	[1]	26,784
Allowance for doubtful accounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	(397)	(1,088)		(814)	$ (851)
Reserve for returns and allowances and discounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	$ (1,216)	$ (962)		$ (1,086)	$ (738)

[1] Derived from audited financial statements.

XML

Accounts Receivable - Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts [Member] - USD ($) $ in Thousands	9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (1,088)	$ (851)
Provision for bad debts	239	(93)
Net write-offs, net of recoveries	452	130
Ending balance	$ (397)	$ (814)

XML

Accounts Receivable - Allowance for Returns and Allowances and Discounts Accounts (Detail) - Reserve for returns and allowances and discounts [Member] - USD ($) $ in Thousands	9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (962)	$ (738)
Provision for returns, allowances and discounts	(2,357)	(2,389)
Credits issued	2,103	2,041
Ending balance	$ (1,216)	$ (1,086)

XML

Inventories (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 6,977	$ 5,462		$ 6,831
Work-in-process	3,161	2,972		3,365
Finished goods	36,055	38,097		38,289
Inventories	$ 46,193	$ 46,531	[1]	$ 48,485

[1] Derived from audited financial statements.

XML

Other Assets (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Other Assets, Noncurrent [Abstract]
Cash surrender value - life insurance	$ 376	$ 357		$ 357
Non-compete agreement, net	847	903		922
Customer relationships, net	677	715		728
Other	517	598		428
Other assets	$ 2,417	$ 2,573	[1]	$ 2,435

[1] Derived from audited financial statements.

XML

Other Assets - Narrative (Detail)	9 Months Ended
	Jan. 29, 2017 USD ($) Contract	Jan. 31, 2016 USD ($) Contract	May 01, 2016 USD ($) Contract
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	$ 376,000	357,000	357,000
Non-compete Agreement [Member]
Other Assets [Line Items]
Useful life	15 years
Accumulated amortization	$ 1,200,000	1,100,000	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	$ 529,000
Weighted average remaining amortization period	11 years 3 months 18 days
Customer Relationships [Member]
Other Assets [Line Items]
Useful life	17 years
Accumulated amortization	$ 191,000	140,000	$ 153,000
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	$ 460,000
Weighted average remaining amortization period	13 years 3 months 18 days

XML

Accrued Expenses (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Payables and Accruals [Abstract]
Compensation, commissions and related benefits	$ 9,205	$ 10,011		$ 8,678
Advertising rebates	118	870		2,876
Interest	11
Other accrued expenses	1,177	1,041		1,136
Accrued expenses	$ 10,511	$ 11,922	[1]	$ 12,690

[1] Derived from audited financial statements.

XML

Lines of Credit - Narrative (Detail)	9 Months Ended
	Jan. 29, 2017 USD ($)	May 15, 2018 USD ($)	Feb. 01, 2018 USD ($)	Nov. 01, 2017 USD ($)	Aug. 01, 2017 USD ($)	Jan. 29, 2017 CNY (¥)	Aug. 03, 2016 USD ($)	Aug. 01, 2016 USD ($)	May 01, 2016 USD ($)	Jan. 31, 2016 USD ($)
United States [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 30,000,000
Interest rate description	Interest was charged at a rate as a variable spread over LIBOR based on our ratio of debt to EBITDA.
Applicable interest rate at end of period	2.23%					2.23%
Expiration date	Aug. 15, 2018
Reference rate on which the interest rate is based	LIBOR
Percentage of common stock in subsidiary pledge as collateral	65.00%
Outstanding amount	$ 0								$ 0	$ 0
Letters of credit, outstanding amount	250,000								250,000	250,000
China [Member] | Revolving credit agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 5,800,000					¥ 40,000,000
Interest rate description	This agreement has an interest rate determined by the Chinese government
Expiration date	Feb. 15, 2018
Outstanding amount	$ 0					¥ 0			$ 0	$ 0
Third Amendment to Credit Agreement [Member] | United States [Member]
Line of Credit Facility [Line Items]
Maximum amount of letters of credit								$ 7,500,000
Letters of credit outstanding, additional amount							$ 5,000,000
Third Amendment to Credit Agreement [Member] | United States [Member] | Scenario, Forecast [Member]
Line of Credit Facility [Line Items]
Amount of the required periodic reduction applied to principal		$ 1,250,000	$ 1,250,000	$ 1,250,000	$ 1,250,000

XML

Fair Value of Financial Instruments - Recurring Basis (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016	Jan. 31, 2016
U.S. Corporate Bonds [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 30,682
U.S. Corporate Bonds [Member] | Significant other observable inputs - Level 2 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	30,682
Premier Money Market Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	4,888	$ 3,404	$ 3,071
Premier Money Market Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	4,888	3,404	3,071
Low Duration Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,073	1,604	1,592
Low Duration Bond Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,073	1,604	1,592
Intermediate Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	739	1,154	1,116
Intermediate Term Bond Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	739	1,154	1,116
Strategic Income Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	598	999	957
Strategic Income Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	598	999	957
Limited Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		602	594
Limited Term Bond Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		602	594
Large Blend Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	343	289	254
Large Blend Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	343	289	254
Growth Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	113	148	128
Growth Allocation Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	113	148	128
Mid Cap Value Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		102	90
Mid Cap Value Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		102	90
Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	61	82	47
Other [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	61	$ 82	$ 47
Moderate Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	83
Moderate Allocation Fund [Member] | Quoted prices in active markets for identical assets - Level 1 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 83

XML

Fair Value of Financial Instruments - Narrative (Detail) - USD ($)	3 Months Ended
	Oct. 30, 2016	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments		$ 2,410,000	$ 4,359,000	[1]	$ 4,259,000
Held to maturity investments	$ 31,000,000	30,832,000
Long-term investments (Rabbi Trust)		5,488,000	4,025,000	[1]	3,590,000
Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term investments, maturity period	2 years
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term investments, maturity period	2 years 6 months
Short-term Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Accumulated unrealized gain (loss) on long-term investments		68,000	100,000		181,000
U.S. Corporate Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity investments		30,800,000
Held to maturity investments, fair value		30,700,000
Long-term investments (Rabbi Trust) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Accumulated unrealized gain (loss) on long-term investments		$ 11,000	$ (44,000)		$ (99,000)

[1] Derived from audited financial statements.

XML

Cash Flow Information - Interest and Income Taxes Paid (Detail) - USD ($) $ in Thousands	9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Interest	$ 110	$ 95
Income taxes	$ 4,704	$ 4,921

XML

Cash Flow Information - Narrative (Detail) - USD ($)	9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Interest costs	$ 97,000	$ 58,000
Interest cost capitalized	$ 97,000	$ 58,000

XML

Net Income Per Share - Weighted Average Shares (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	Jan. 29, 2017	Jan. 31, 2016
Earnings Per Share [Abstract]
Weighted average common shares outstanding, basic	12,313	12,331	12,302	12,317
Dilutive effect of stock-based compensation	231	155	215	171
Weighted average common shares outstanding, diluted	12,544	12,486	12,517	12,488

XML

Segment Information - Narrative (Detail)	9 Months Ended
	Jan. 29, 2017 Segment
Segment Reporting [Abstract]
Number of business segments	2

XML

Segment Information - Financial Information for Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	Jan. 29, 2017	Jan. 31, 2016
Segment Reporting Information [Line Items]
Net sales	$ 76,169	$ 78,466	$ 232,194	$ 235,607
Gross profit	16,759	16,563	52,079	48,498
Selling, general, and administrative expenses	9,824	9,337	29,171	27,512
income from operations	6,935	7,226	22,908	20,986
Interest income	124	38	164	150
Other expense	(69)	(85)	(376)	(405)
Income before income taxes	6,990	7,179	22,696	20,731
Operating Segments [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	7,292	6,916	21,271	20,237
income from operations	9,467	9,647	30,808	28,261
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	45,920	44,277	141,977	137,522
Gross profit	9,758	8,751	32,414	28,133
Selling, general, and administrative expenses	3,391	2,953	10,185	8,865
income from operations	6,367	5,798	22,229	19,267
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	30,249	34,189	90,217	98,085
Gross profit	7,001	7,812	19,665	20,365
Selling, general, and administrative expenses	3,901	3,963	11,086	11,372
income from operations	3,100	3,849	8,579	8,994
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	2,532	2,421	7,900	7,275
income from operations	$ (2,532)	$ (2,421)	$ (7,900)	$ (7,275)

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Segment Information - Balance Sheet Information by Operating Segments (Detail) - USD ($) $ in Thousands		9 Months Ended
		Jan. 29, 2017	Jan. 31, 2016	Oct. 30, 2016	May 01, 2016		May 03, 2015
Segment Reporting Information [Line Items]
Non-compete agreement		$ 847	$ 922		$ 903
Customer relationships		677	728		715
Investment in unconsolidated joint venture		600
Goodwill		11,462	11,462		11,462	[1]
Property, plant and equipment		50,333	38,157		39,973	[1]
Total assets		191,056	173,551		175,142	[1]
Cash and cash equivalents		15,659	31,713		37,787	[1]	$ 29,725
Short-term investments		2,410	4,259		4,359	[1]
Deferred income taxes		422	4,312		2,319	[1]
Income taxes receivable			23		155	[1]
Other current assets		2,514	2,331		2,477	[1]
Long-term investments (Held-to-Maturity)		30,832		$ 31,000
Long-term investments (Rabbi Trust)		5,488	3,590		4,025	[1]
Other assets		2,417	2,435		2,573	[1]
Capital expenditures	[2]	15,674	7,077
Depreciation expense		5,304	4,888
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[3]	752	930		929
Cash and cash equivalents		15,659	31,713		37,787
Short-term investments		2,410	4,259		4,359
Deferred income taxes		422	4,312		2,319
Income taxes receivable			23		155
Other current assets		2,514	2,331		2,477
Long-term investments (Held-to-Maturity)		30,832
Long-term investments (Rabbi Trust)		5,488	3,590		4,025
Other assets		893	785		955
Capital expenditures		72	381
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets		132,086	125,608		122,136
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Current assets	[4]	41,498	44,309		43,472
Non-compete agreement		847	922		903
Customer relationships		677	728		715
Investment in unconsolidated joint venture		600
Goodwill		11,462	11,462		11,462
Property, plant and equipment	[5]	47,755	35,637		37,480
Total assets		102,839	93,058		94,032
Capital expenditures		14,957	6,215
Depreciation expense		4,673	4,273
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Current assets	[4]	27,421	30,960		26,540
Property, plant and equipment	[6]	1,826	1,590		1,564
Total assets		29,247	32,550		$ 28,104
Capital expenditures		645	481
Depreciation expense		$ 631	$ 615

[1] Derived from audited financial statements.

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

[3] The $752, $930, and $929 at January 29, 2017, January 31, 2016 and May 1, 2016, 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.

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

[5] The $47.8 million at January 29, 2017, represents property, plant, and equipment of $32.6 million and $15.2 million located in the U.S. and Canada, respectively. 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 $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

[6] The $1.8 million at January 29, 2017, represents property, plant, and equipment of $1.1 million and $711 located in the U.S. and China, respectively. 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 $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

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Segment Information - Balance Sheet Information by Operating Segments (Parenthetical) (Detail) - USD ($) $ in Thousands		Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Segment Reporting Information [Line Items]
Property, plant and equipment		$ 50,333	$ 39,973	[1]	$ 38,157
United States [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		32,600	24,800		23,000
United States [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		1,100	893		860
Canada [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		15,200	12,700		12,600
China [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		711	671		730
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[2]	$ 752	$ 929		$ 930

[1] Derived from audited financial statements.

[2] The $752, $930, and $929 at January 29, 2017, January 31, 2016 and May 1, 2016, 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. 29, 2017	Jan. 31, 2016	Jan. 29, 2017	Jan. 31, 2016
Income Tax Disclosure [Abstract]
Income taxes	$ 643	$ 2,317	$ 6,560	$ 7,398
Effective income tax rate			28.90%	35.70%

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Income Taxes - Differences Between Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate (Detail)	9 Months Ended
	Jan. 29, 2017	Jan. 31, 2016
Income Tax Disclosure [Abstract]
Federal income tax rate	34.00%	34.00%
Tax effects of Chinese foreign exchange gains	1.90%	3.50%
Reversal of foreign uncertain tax position	(9.10%)
U.S state income tax expense	0.60%	0.70%
Other	1.50%	(2.50%)
Effective income tax rate	28.90%	35.70%

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Income Taxes - Deferred Income Taxes - Valuation Allowance - Narrative (Detail) - USD ($)	Jan. 29, 2017	May 01, 2016	Jan. 31, 2016
U.S. Tax Authorities and Poland Tax Authorities [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	$ 557,000	$ 590,000	$ 874,000
U.S. State Tax [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	473,000	518,000	498,000
Poland [Member] | Valuation Allowance, Operating Loss Carryforwards [Member] | Culp Europe [Member]
Income Taxes [Line Items]
Valuation allowance	84,000	72,000	376,000
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 ($)	9 Months Ended		12 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	May 01, 2016
Income Tax Disclosure [Abstract]
Undistributed earnings from our foreign subsidiaries that will not be reinvested indefinitely	$ 143,200,000	$ 100,900,000	$ 129,600,000
Deferred tax liability, undistributed earnings from foreign subsidiaries	405,000	3,300,000	604,000
U.S. income and foreign withholding taxes	42,500,000	37,300,000	38,500,000
U.S. foreign income tax credits	$ 42,100,000	$ 34,000,000	$ 37,900,000

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Income Taxes - Deferred Income Taxes - Narrative (Detail) - USD ($) $ in Thousands	Jan. 29, 2017	May 01, 2016		Jan. 31, 2016
Income Taxes [Line Items]
Non-current deferred tax asset	$ 422	$ 2,319	[1]	$ 4,312
Non-current deferred tax liability	2,924	1,483	[1]	1,209
U.S. Tax Authorities [Member]
Income Taxes [Line Items]
Non-current deferred tax asset		1,700		3,500
Non-current deferred tax liability	1,200
China [Member]
Income Taxes [Line Items]
Non-current deferred tax asset	422	572		773
Canada [Member]
Income Taxes [Line Items]
Non-current deferred tax liability	$ 1,700	$ 1,500		$ 1,200

[1] Derived from audited financial statements.

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Income Taxes - Uncertainty in Income Taxes - Narrative (Detail) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jan. 29, 2017	Jan. 29, 2017	May 01, 2016	Jan. 31, 2016
Income Taxes [Line Items]
Unrecognized tax benefits	$ 13.4	$ 13.4	$ 14.9	$ 13.2
Unrecognized tax benefits that would favorably impact effective income tax rate if recognized	1.8	1.8	3.8	3.5
Unrecognized tax benefits for which significant change is reasonably possible	13.4	13.4
Income tax benefit recognized from reversal of uncertain income tax position	2.1	$ 2.1
Canadian Federal Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2010
Canadian Provincial (Quebec) Returns [Member]
Income Taxes [Line Items]
Statute of limitations for 2009 income tax, expiration month and year		2017-04
Canadian Provincial (Quebec) Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2009
Income tax examination, year under examination		2013
Canadian Provincial (Quebec) Returns [Member] | Maximum [Member]
Income Taxes [Line Items]
Income tax examination, year under examination		2015
China Income Tax Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2011
Internal Revenue Service (IRS) [Member]
Income Taxes [Line Items]
Income tax examination, year under examination		2014
United States Federal and State Income Tax [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2005
Non-current Deferred Income Taxes [Member]
Income Taxes [Line Items]
Unrecognized tax benefits	11.6	$ 11.6	11.1	9.7
Income Taxes Payable - Long-Term [Member]
Income Taxes [Line Items]
Unrecognized tax benefits	$ 1.8	$ 1.8	$ 3.8	$ 3.5

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Statutory Reserves (Detail) - Subsidiaries [Member] - China [Member] $ in Millions	9 Months Ended
	Jan. 29, 2017 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	$ 4.5
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) - Mattress Fabrics [Member] - Capital Addition Purchase Commitments [Member] - USD ($)		9 Months Ended	12 Months Ended
	May 16, 2016	Jan. 29, 2017	May 01, 2016	Jan. 31, 2016
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments		$ 8,200,000	$ 10,600,000	$ 977,000
Buildings and Improvements [Member]
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments		4,900,000	$ 9,300,000
Open purchase commitments, completed work		4,500,000
Contractual obligation	$ 11,100,000	4,900,000
Contractual Obligation due in fiscal 2016	1,900,000
Contractual obligation due in fiscal 2017	4,300,000
Contractual obligation due in fiscal 2018	3,800,000	3,800,000
Contractual obligation due in fiscal 2019	1,100,000	$ 1,100,000
Buildings and Improvements [Member] | London Interbank Offered Rate (LIBOR) [Member]
Commitments and Contingencies Disclosure [Line Items]
Percentage rate added to variable rate		2.25%
Variable interest rate		30 day LIBOR rate
Buildings and Improvements [Member] | Letter of Credit [Member]
Commitments and Contingencies Disclosure [Line Items]
Letter of credit	$ 5,000,000
Unused fee calculated on letter of credit	0.10%

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Investment in Unconsolidated Joint Venture - Additional Information (Detail)	Jan. 01, 2017
Equity Method Investments and Joint Ventures [Abstract]
Equity method investment, ownership percentage	50.00%

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Common Stock Repurchase Program (Detail) - Common Stock - USD ($)	9 Months Ended		12 Months Ended
	Jan. 29, 2017	Jan. 31, 2016	May 01, 2016	Jun. 15, 2016
Stockholders Equity Note [Line Items]
Common stock repurchased			100,776
Common Stock Repurchase Program June 15, 2016 [Member]
Stockholders Equity Note [Line Items]
Authorization amount for repurchase of common stock				$ 5,000,000
Common stock repurchased	0	0
Remaining authorized repurchase amount	$ 5,000,000

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Dividend Program (Detail) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Feb. 28, 2017	Jan. 29, 2017	Jan. 31, 2016
Dividends [Line Items]
Cash dividends paid		$ 5,292	$ 7,281
Special Dividend [Member]
Dividends [Line Items]
Cash dividends paid		$ 2,600	$ 5,000
Cash dividend payment, per share		$ 0.21	$ 0.40
Quarterly Dividend [Member]
Dividends [Line Items]
Cash dividends paid		$ 2,700	$ 2,300
Quarterly Dividend [Member] | Minimum [Member]
Dividends [Line Items]
Cash dividend payment, per share		$ 0.07	$ 0.06
Quarterly Dividend [Member] | Maximum [Member]
Dividends [Line Items]
Cash dividend payment, per share		$ 0.08	$ 0.07
Subsequent Event [Member] | Quarterly Dividend [Member]
Dividends [Line Items]
Cash dividend declared, per share	$ 0.08
Cash dividend declared, payment date	Apr. 17, 2017
Cash dividend declared, date of record	Apr. 03, 2017