EX-99.(B) 3 a51995946ex99_b.htm EXHIBIT 99(B)
Exhibit 99(b)
Page 1 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME  
FOR THREE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(UNAUDITED)  
(Amounts in Thousands, Except for Per Share Data)  
                                   
                                   
   
THREE MONTHS ENDED
                                   


(4)
Amounts
 (4)
 
 
Percent of Sales
   
April 28,
      
April 29,
  
% Over
  
April 28,
  
April 29,
   
2019
      
2018
  
(Under)
  
2019
  
2018
                                           
Net sales
  
$
70,963
          
78,184
      
(9.2
)%
    
100.0
%
    
100.0
%
Cost of sales
    
58,774
          
63,424
      
(7.3
)%
    
82.8
%
    
81.1
%
Gross profit
    
12,189
          
14,760
      
(17.4
)%
    
17.2
%
    
18.9
%
                                             
Selling, general and
                                            
  administrative expenses
    
10,230
          
8,296
      
23.3
%
    
14.4
%
    
10.6
%
Income from operations
    
1,959
          
6,464
      
(69.7
)%
    
2.8
%
    
8.3
%
                                             
Interest expense
    
4
          
26
      
(84.6
)%
    
0.0
%
    
0.0
%
Interest income
    
(214
)
        
(143
)
    
49.7
%
    
(0.3
)%
    
(0.2
)%
Other expense
(1)
  
658
          
115
      
472.2
%
    
0.9
%
    
0.1
%
Income before income taxes
    
1,511
          
6,466
      
(76.6
)%
    
2.1
%
    
8.3
%
                                             
Income tax expense (benefit)*
(3)
  
3,017
    
(2)
    
(6,217
)
  
N.M.
      
199.7
%
    
(96.1
)%
                                             
Loss from investment in unconsolidated joint venture
    
5
          
17
      
(70.6
)%
    
0.0
%
    
0.0
%
Net (loss) income
    
(1,511
)
        
12,666
      
(111.9
)%
    
(2.1
)%
    
16.2
%
Plus: Net loss attributable to non-controlling interest
    
143
          
-
      
100.0
%
    
0.2
%
    
0.0
%
Net (loss) income attributable to Culp Inc. common shareholders
  
$
(1,368
)
        
12,666
      
(110.8
)%
    
(1.9
)%
    
16.2
%
                                             
                                             
Net (loss) income attributable to Culp Inc. common shareholders per share - basic
  
$ 
(0.11
)
      
$
1.02
      
(110.8
)%
                
Net (loss) income attributable to Culp Inc. common shareholders per share - diluted
  
$ 
(0.11
)
      
$
1.00
      
(111.0
)%
                
Average shares outstanding-basic
    
12,384
          
12,450
      
(0.5
)%
                
Average shares outstanding-diluted
    
12,384
          
12,611
      
(1.8
)%
                
                                             
                                             
* Percent of sales column for income taxes is calculated as a % of income before income taxes.
                  

Notes
(1)
Other expense for the three-month period ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution will be paid over a period of three years.
   
(2)
Income taxes for the three-month period ending April 29, 2018, includes a provisional income tax benefit adjustment totaling $8.0 million that represents the income tax effects of the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017.
   
(3)
No provisional adjustments associated with the TCJA were recorded for the three-month period ending April 28, 2019. Income taxes for the three-month period ending April 28, 2019, reflect the mix of income before income taxes favoring our foreign tax jurisdictions located in Canada and China that have higher income tax rates in relation to the U.S., and the siginficant decline in our U.S. income before income taxes, which was more than anticipated during our fourth quarter of fiscal 2019, resulting in a significant increase in our Global Intangible Low Taxed Income Tax. However, income taxes incurred in the U.S. on a cash basis were not significant due to the utilization of our U.S. Federal net operating loss carryforward generated in fiscal 2019.
   
(4)
See page 8 of our reconciliation of selected income statement information to adjusted results for the three-month periods April 28, 2019 and April 29, 2018, that exclude the adjustments noted in the footnotes above.


Page 2 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED STATEMENTS OF NET INCOME  
FOR TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(UNAUDITED)  
(Amounts in Thousands, Except for Per Share Data)  
                                   
                                   
   
TWELVE MONTHS ENDED
                                   
   
(7)
 Amounts 
(7)
  
   
Percent of Sales
   
April 28,
      
April 29,
  
% Over
  
April 28,
  
April 29,
   
2019
      
2018
  
(Under)
  
2019
  
2018
                                           
Net sales
  
$
296,669
          
323,725
      
(8.4
)%
    
100.0
%
    
100.0
%
Cost of sales
(1) (3)
  
246,471
          
259,092
      
(4.9
)%
    
83.1
%
    
80.0
%
Gross profit
    
50,198
          
64,633
      
(22.3
)%
    
16.9
%
    
20.0
%
                                             
Selling, general and
                                            
  administrative expenses
(3) (4)
  
38,405
          
37,172
      
3.3
%
    
12.9
%
    
11.5
%
Restructuring credit
(2)
  
(825
)
        
-
      
100.0
%
    
(0.3
)%
    
0.0
%
Income from operations
    
12,618
          
27,461
      
(54.1
)%
    
4.3
%
    
8.5
%
                                             
Interest expense
    
42
          
94
      
(55.3
)%
    
0.0
%
    
0.0
%
Interest income
    
(766
)
        
(534
)
    
43.4
%
    
(0.3
)%
    
(0.2
)%
Other expense
(5)
  
1,346
          
1,018
      
32.2
%
    
0.5
%
    
0.3
%
Income before income taxes
    
11,996
          
26,883
      
(55.4
)%
    
4.0
%
    
8.3
%
                                             
Income tax expense*
(6)
  
6,424
    
(6)
    
5,740
      
11.9
%
    
53.6
%
    
21.4
%
                                             
Loss from investment in unconsolidated joint venture
    
114
          
266
      
(57.1
)%
    
0.0
%
    
0.1
%
Net income
    
5,458
          
20,877
      
(73.9
)%
    
1.8
%
    
6.4
%
Plus: Net loss attributable to non-controlling interest
    
218
          
-
      
100.0
%
    
0.1
%
    
0.0
%
Net income attributable to Culp Inc. common shareholders
  
$
5,676
          
20,877
      
(72.8
)%
    
1.9
%
    
6.4
%
                                             
                                             
Net income attributable to Culp Inc. common shareholders per share - basic
  
$
0.46
        
$
1.68
      
(72.6
)%
                
Net income attributable to Culp Inc. common shareholders per share - diluted
  
$
0.45
        
$
1.65
      
(72.7
)%
                
Average shares outstanding-basic
    
12,462
          
12,431
      
0.2
%
                
Average shares outstanding-diluted
    
12,548
          
12,633
      
(0.7
)%
                
                                             
* Percent of sales column for income taxes is calculated as a % of income before income taxes.
          

Notes
(1)
Cost of sales for the year ending April 28, 2019, includes restructuring related charges totaling $2.3 million, of which $1.6 million pertains to inventory markdowns and $784 pertains to operating costs associated with our closed upholstery fabrics plant facility located in Anderson, SC.
   
(2)
The $825 restructuring credit represents a $1.5 million gain on the sale of property, plant, and equipment associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a charge of $661 for employee termination benefits.
   
(3)
During the year ending April 28, 2019, our mattress fabrics segment incurred non-recurring charges totaling $249 that pertained to employee termination benefits and other operational reorganization costs. Of the $249 total non-recurring charge, $159 and $90 were recorded in cost of sales and selling, general, and administrative expenses, respectively.
   
(4)
Selling, general, and administrative expenses for year ending April 28, 2019, includes a $469 non-recurring charge associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility.
   
(5)
Other expense for the year ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution will be paid over a period of three years.
   
(6)
Income taxes for the year ending April 28, 2019 and April 29, 2018, include provisional adjustments related to the TCJA enacted on December 22, 2017. We recorded an income tax benefit of $550 and $2.1 million for the year ending April 28, 2019 and April 29, 2018, respectively.
   
(7)
See page 9 for our reconciliation of selected income statement information to adjusted results for the year ending April 28, 2019 and April 29, 2018, that exclude the adjustments noted in the footnotes above.


Page 3 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED BALANCE SHEETS  
APRIL 28, 2019 AND APRIL 29, 2018  
Unaudited  
(Amounts in Thousands)  
                         
                         
   
Amounts
            
    (Condensed)
 
Increase
   
April 28,
  
* April 29,
  
(Decrease)
   
2019
  
2018
  
Dollars
  
Percent
                         
Current assets
                        
Cash and cash equivalents
  
$
40,008
      
21,228
      
18,780
      
88.5
%
Short-term investments - Available for Sale
    
-
      
2,451
      
(2,451
)
    
(100.0
)%
Short-term investments - Held-To-Maturity
    
5,001
      
25,759
      
(20,758
)
    
(80.6
)%
Accounts receivable
    
23,751
      
26,307
      
(2,556
)
    
(9.7
)%
Inventories
    
50,860
      
53,454
      
(2,594
)
    
(4.9
)%
Current income taxes receivable
    
776
      
-
      
776
      
100.0
%
Other current assets
    
2,849
      
2,870
      
(21
)
    
(0.7
)%
Total current assets
    
123,245
      
132,069
      
(8,824
)
    
(6.7
)%
                                 
Property, plant & equipment, net
    
48,389
      
51,794
      
(3,405
)
    
(6.6
)%
Goodwill
    
27,222
      
13,569
      
13,653
      
100.6
%
Intangible assets
    
10,448
      
4,275
      
6,173
      
144.4
%
Deferred income taxes
    
457
      
1,458
      
(1,001
)
    
(68.7
)%
Long-term Investments - Held-To-Maturity
    
-
      
5,035
      
(5,035
)
    
(100.0
)%
Long-term Investments - Rabbi Trust
    
7,081
      
7,326
      
(245
)
    
(3.3
)%
Noncurrent income taxes receivable
    
733
      
-
      
733
      
100.0
%
Investment in unconsolidated joint venture
    
1,508
      
1,501
      
7
      
0.5
%
Other assets
    
643
      
957
      
(314
)
    
(32.8
)%
                                 
Total assets
  
$
219,726
      
217,984
      
1,742
      
0.8
%
                                 
                                 
                                 
Current liabilities
                                
Accounts payable - trade
  
$
24,377
      
27,237
      
(2,860
)
    
(10.5
)%
Accounts payable - capital expenditures
    
78
      
1,776
      
(1,698
)
    
(95.6
)%
Deferred revenue
    
399
      
809
      
(410
)
    
(50.7
)%
Accrued expenses
    
9,192
      
9,325
      
(133
)
    
(1.4
)%
Accrued restructuring costs
    
124
      
-
      
124
      
100.0
%
Income taxes payable - current
    
1,022
      
1,437
      
(415
)
    
(28.9
)%
Total current liabilities
    
35,192
      
40,584
      
(5,392
)
    
(13.3
)%
                                 
Accrued expenses - long-term
    
333
      
763
      
(430
)
    
(56.4
)%
Related Party - Note Payable
    
675
      
-
      
675
      
100.0
%
Contingent consideration - Earn-Out Obligation
    
5,856
      
-
      
5,856
      
100.0
%
Income taxes payable - long-term
    
3,249
      
3,758
      
(509
)
    
(13.5
)%
Deferred income taxes
    
3,176
      
2,150
      
1,026
      
47.7
%
Deferred compensation
    
6,998
      
7,353
      
(355
)
    
(4.8
)%
                                 
Total liabilities
    
55,479
      
54,608
      
871
      
1.6
%
                                 
Shareholders' equity
                                
Shareholders' equity attributable to Culp Inc.
    
159,933
      
163,376
      
(3,443
)
    
(2.1
)%
Non-controlling interest
    
4,314
      
-
      
4,314
      
100.0
%
     
164,247
      
163,376
      
871
      
0.5
%
                                 
Total liabilities and
                                
shareholders' equity
  
$
219,726
      
217,984
      
1,742
      
0.8
%
                                 
Shares outstanding
    
12,391
      
12,450
      
(59
)
    
(0.5
)%
                                 
*  Derived from audited financial statements.
                                


Page 4 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
SUMMARY OF CASH AND INVESTMENTS  
APRIL 28, 2019 AND APRIL 29, 2018
  
Unaudited
  
(Amounts in Thousands)
  
             
             
             
             
   
April 28,
  
April 29,
   
2019
  
2018*
               
               
Cash and cash equivalents
  
$
40,008
    
$
21,228
  
                 
Short-term investments - Available for Sale
    
-
      
2,451
  
                 
Short-term investments - Held-To-Maturity
    
5,001
      
25,759
  
                 
Long-term investments - Held-To-Maturity
    
-
      
5,035
  
                 
Total Cash and Investments
  
$
45,009
    
$
54,473
  
                 
*  Derived from audited financial statements.
                


Page 5 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
Unaudited  
(Amounts in Thousands)  

           
              
    
TWELVE MONTHS ENDED
    
Amounts
    
April 28,
  
April 29
    
2019
  
2018
              
Cash flows from operating activities:
            
Net income
  
$
5,458
      
20,877
  
Adjustments to reconcile net income to net cash
                
provided by operating activities:
                
Depreciation
    
8,117
      
7,672
  
Amortization
    
780
      
351
  
Stock-based compensation
    
130
      
2,212
  
Deferred income taxes
    
2,027
      
(2,482
)
Realized loss on sale of short-term investments (Available for Sale)
    
94
      
-
  
Gain on sale of property, plant, and equipment
    
(1,452
)
    
-
  
Loss from investment in unconsolidated joint venture
    
114
      
266
  
Foreign currency exchange (gain) loss
    
(17
)
    
66
  
Changes in assets and liabilities, net of effects of acquisition of businesses:  
             
Accounts receivable
    
2,339
      
(299
)
Inventories
    
3,841
      
(24
)
Other current assets
    
41
      
226
  
Other assets
    
(65
)
    
(81
)
Accounts payable
    
(3,427
)
    
(4,028
)
Deferred revenue
    
(410
)
    
(94
)
Accrued expenses and deferred compensation
    
(1,492
)
    
(1,562
)
Accrued restructuring costs
    
124
      
-
  
Income taxes
    
(2,329
)
    
4,373
  
Net cash provided by operating activities
    
13,873
      
27,473
  
                  
Cash flows from investing activities:
                
Net cash paid for acquisition of businesses
    
(12,096
)
    
(4,541
)
Capital expenditures
    
(3,261
)
    
(8,005
)
Proceeds from the sale of property, plant, and equipment
    
1,894
      
6
  
Investment in unconsolidated joint venture
    
(120
)
    
(661
)
Proceeds from the sale of short-term investments (Held to Maturity)
    
25,680
      
-
  
Proceeds from the sale of short-term investments (Available for Sale)
    
2,458
      
-
  
Purchase of short-term investments (Available for Sale)
    
(10
)
    
(49
)
Proceeds from the sale of long-term investments (Rabbi Trust)
    
1,233
      
57
  
Purchase of long-term investments (Rabbi Trust)
    
(1,011
)
    
(1,902
)
Proceeds from life insurance policy
    
394
      
-
  
Premium payment on life insurance policy
    
-
      
(18
)
Net cash provided by (used in) investing activities
    
15,161
      
(15,113
)
                  
Cash flows from financing activities:
                
Proceeds from line of credit
    
12,000
      
19,000
  
Payments on line of credit
    
(12,000
)
    
(19,000
)
Payments on vendor-financed capital expenditures
    
(1,412
)
    
(3,750
)
Proceeds from related party note payable
    
675
      
-
  
Dividends paid
    
(4,732
)
    
(6,843
)
Common stock surrendered for withholding taxes payable
    
(1,319
)
    
(1,530
)
Common stock repurchased
    
(3,323
)
    
-
  
Payments of debt issuance costs
    
(50
)
    
-
  
Proceeds from common stock issued
    
-
      
111
  
Net cash used in financing activities
    
(10,161
)
    
(12,012
)
                  
Effect of exchange rate changes on cash and cash equivalents
    
(93
)
    
85
  
                  
Increase in cash and cash equivalents
    
18,780
      
433
  
                  
Cash and cash equivalents at beginning of period
    
21,228
      
20,795
  
                  
Cash and cash equivalents at end of period
  
$
40,008
      
21,228
  
                  
Free Cash Flow (1)
  
$
11,497
      
13,285
  
                  
                  
(1)  Free Cash Flow reconciliation is as follows:
                
    
FY 2019
    
FY 2018
  
A)
Net cash provided by operating activities
  
$
13,873
      
27,473
  
B)
Minus:    Capital Expenditures
    
(3,261
)
    
(8,005
)
C)
Plus:       Proceeds from the sale of property, plant, and equipment
    
1,894
      
6
  
D)
Minus:    Investment in unconsolidated joint venture
    
(120
)
    
(661
)
E)
Minus:    Payments on vendor-financed capital expenditures
    
(1,412
)
    
(3,750
)
F)
Plus:       Proceeds from the sale of long-term investments (Rabbi Trust)
    
1,233
      
57
  
G)
Minus:    Purchase of long-term investments (Rabbi Trust)
    
(1,011
)
    
(1,902
)
H)
Plus:       Proceeds from life insurance policy
    
394
      
-
  
I)
Minus:    Premium payment on life insurance policy
    
-
      
(18
)
J)
Effects of exchange rate changes on cash and cash equivalents
    
(93
)
    
85
  
         Free Cash Flows
  
$
11,497
      
13,285
  
                  


Page 6 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
STATEMENTS OF OPERATIONS BY SEGMENT  
FOR THE THREE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(Unaudited)  
(Amounts in thousands)  

                             
                               
   
THREE MONTHS ENDED
    Amounts   
   
Percent of Total Sales
   
April 28,
  
April 29,
  
% Over
  
April 28,
  
April 29,
Net Sales by Segment
  
2019
  
2018
  
(Under)
  
2019
  
2018
                               
Mattress Fabrics
  
$
37,724
      
46,525
      
(18.9
)%
    
53.2
%
    
59.5
%
Upholstery Fabrics
    
29,042
      
31,659
      
(8.3
)%
    
40.9
%
    
40.5
%
Home Accessories
    
4,197
      
-
      
100.0
%
    
5.9
%
    
0.0
%
                                         
Net Sales
  
$
70,963
      
78,184
      
(9.2
)%
    
100.0
%
    
100.0
%
                                         
                                         
Gross Profit by Segment
                          
Gross Profit Margin
                                         
Mattress Fabrics
  
$
5,854
      
9,155
      
(36.1
)%
    
15.5
%
    
19.7
%
Upholstery Fabrics
    
5,341
      
5,605
      
(4.7
)%
    
18.4
%
    
17.7
%
Home Accessories
    
994
      
-
      
100.0
%
    
23.7
%
    
0.0
%
                                         
Gross Profit
    
12,189
      
14,760
      
(17.4
)%
    
17.2
%
    
18.9
%
                                         
                                         
Selling, General and Administrative Expenses by Segment
                          
Percent of Sales
                                         
Mattress Fabrics
  
$
3,155
      
3,067
      
2.9
%
    
8.4
%
    
6.6
%
Upholstery Fabrics
    
3,565
      
3,424
      
4.1
%
    
12.3
%
    
10.8
%
Home Accessories
    
1,473
      
-
      
100.0
%
    
35.1
%
    
0.0
%
Unallocated Corporate expenses
    
2,037
      
1,805
      
12.9
%
    
2.9
%
    
2.3
%
                                         
Selling, General, and Administrative Expenses
    
10,230
      
8,296
      
23.3
%
    
14.4
%
    
10.6
%
                                         
                                         
Operating Income (loss) by Segment
                          
Operating Income (Loss) Margin
                                         
Mattress Fabrics
  
$
2,698
      
6,088
      
(55.7
)%
    
7.2
%
    
13.1
%
Upholstery Fabrics
    
1,777
      
2,181
      
(18.5
)%
    
6.1
%
    
6.9
%
Home Accessories
    
(479
)
    
-
      
100.0
%
    
(11.4
)%
    
0.0
%
Unallocated corporate expenses
    
(2,037
)
    
(1,805
)
    
12.9
%
    
(2.9
)%
    
(2.3
)%
                                         
Operating Income
  
$
1,959
      
6,464
      
(69.7
)%
    
2.8
%
    
8.3
%
                                         
                                         
Depreciation Expense by Segment
                                        
                                         
Mattress Fabrics
  
$
1,742
      
1,781
      
(2.2
)%
                
Upholstery Fabrics
    
191
      
211
      
(9.5
)%
                
Home Accessories
    
97
      
-
      
100.0
%
                
                                         
Depreciation Expense
  
$
2,030
      
1,992
      
1.9
%
                


Page 7 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
STATEMENTS OF OPERATIONS BY SEGMENT  
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(Unaudited)  
(Amounts in thousands)  

                             
                               
   
TWELVE MONTHS ENDED
                               
    Amounts        
Percent of Total Sales
   
April 28,
  
April 29,
  
% Over
  
April 28,
  
April 29,
Net Sales by Segment
  
2019
  
2018
  
(Under)
  
2019
  
2018
                               
Mattress Fabrics
  
$
145,059
      
192,597
      
(24.7
)%
    
48.9
%
    
59.5
%
Upholstery Fabrics
    
135,654
      
131,128
      
3.5
%
    
45.7
%
    
40.5
%
Home Accessories
    
15,956
      
-
      
100.0
%
    
5.4
%
    
0.0
%
                                         
Net Sales
  
$
296,669
      
323,725
      
(8.4
)%
    
100.0
%
    
100.0
%
                                         
Gross Profit by Segment
                          
Gross Profit Margin
                                         
Mattress Fabrics
  
$
22,904
      
38,797
      
(41.0
)%
    
15.8
%
    
20.1
%
Upholstery Fabrics
    
25,374
      
25,836
      
(1.8
)%
    
18.7
%
    
19.7
%
Home Accessories
    
4,428
      
-
      
100.0
%
    
27.8
%
    
0.0
%
Subtotal
    
52,706
      
64,633
      
(18.5
)%
    
17.8
%
    
20.0
%
                                         
Other non-recurring charges
(1)
  
(159
)
    
-
      
100.0
%
    
(0.1
)%
    
0.0
%
Restructuring related charges
(1)
  
(2,349
)
    
-
      
100.0
%
    
(0.8
)%
    
0.0
%
                                         
Gross Profit
    
50,198
      
64,633
      
(22.3
)%
    
16.9
%
    
20.0
%
                                         
Selling, General and Administrative Expenses by Segment
                          
Percent of Sales
                                         
Mattress Fabrics
  
$
11,296
      
12,935
      
(12.7
)%
    
7.8
%
    
6.7
%
Upholstery Fabrics
    
14,551
      
14,881
      
(2.2
)%
    
10.7
%
    
11.3
%
Home Accessories
    
5,163
      
-
      
100.0
%
    
32.4
%
    
0.0
%
Unallocated Corporate expenses
    
6,837
      
9,356
      
(26.9
)%
    
2.3
%
    
2.9
%
Subtotal
    
37,847
      
37,172
      
1.8
%
    
12.8
%
    
11.5
%
                                         
Other non-recurring charges
(1)
  
518
      
-
      
100.0
%
    
0.2
%
    
0.0
%
Restructuring related charges
(1)
  
40
      
-
      
100.0
%
    
0.0
%
    
0.0
%
Selling, General and Administrative Expenses
  
$
38,405
      
37,172
      
3.3
%
    
12.9
%
    
11.5
%
                                         
                                         
Operating Income (loss) by Segment
                          
Operating Income (Loss) Margin
                                         
Mattress Fabrics
  
$
11,608
      
25,861
      
(55.1
)%
    
8.0
%
    
13.4
%
Upholstery Fabrics
    
10,823
      
10,956
      
(1.2
)%
    
8.0
%
    
8.4
%
Home Accessories
    
(735
)
    
-
      
100.0
%
    
(4.6
)%
    
0.0
%
Unallocated corporate expenses
    
(6,837
)
    
(9,356
)
    
(26.9
)%
    
(2.3
)%
    
(2.9
)%
Subtotal
  
$
14,859
      
27,461
      
(45.9
)%
    
5.0
%
    
8.5
%
                                         
Other non-recurring charges
(1)
  
(678
)
    
-
      
(100.0
)%
    
(0.2
)%
    
0.0
%
Restructuring credit and related charges
(1)
  
(1,563
)
    
-
      
(100.0
)%
    
(0.5
)%
    
0.0
%
                                         
Operating income
    
12,618
      
27,461
      
(54.1
)%
    
4.3
%
    
8.5
%
                                         
                                         
Return on Capital (2)
                                        
                                         
Mattress Fabrics
    
15.2
%
    
34.3
%
                        
Upholstery Fabrics
    
55.0
%
    
58.1
%
                        
Home Accessories
  
N.M.
    
N.M.
                          
Unallocated Corporate
  
N.M.
    
N.M.
                          
Consolidated
    
11.7
%
    
25.4
%
                        
                                         
Capital Employed (2) (3)
                                        
                                         
Mattress Fabrics
  
$
72,397
      
77,726
      
(6.9
)%
                
Upholstery Fabrics
    
19,415
      
20,370
      
(4.7
)%
                
Home Accessories
    
3,403
      
-
    
N.M.
                  
Unallocated Corporate
    
30,096
      
16,721
      
80.0
%
                
Consolidated
  
$
125,311
      
114,817
      
9.1
%
                
                                         
Depreciation Expense by Segment
                                        
                                         
Mattress Fabrics
  
$
7,008
      
6,850
      
2.3
%
                
Upholstery Fabrics
    
787
      
822
      
(4.3
)%
                
Home Accessories
    
322
      
-
      
100.0
%
                
Depreciation Expense
  
$
8,117
      
7,672
      
5.8
%
                

Notes
(1)
See page 9 for detailed description of charges.
   
(2)
See pages 11 and 12 of this financial information  release for calculations.
   
(3)
The capital employed balances are as of April 28, 2019 and April 29, 2018.


Page 8 of 13

CULP, INC.  
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
  
FOR THE THREE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(UNAUDITED)  
                             
                             
 
THREE MONTHS ENDED
  
                             
                             
 
As Reported
        
Adjusted
   As Reported        
Adjusted
  
 
April 28,
        
April 28,
  
April 29,
        
April 29,
  
 
2019
    
Adjustments
  
2019
  
2018
    
Adjustments
  
2018
  
                             
Gross profit
  
$
12,189
      
-
      
12,189
      
14,760
      
-
      
14,760
  
                                                 
Selling, general and
                                                
  administrative expenses
    
10,230
      
-
      
10,230
      
8,296
      
-
      
8,296
  
Income from operations
    
1,959
      
-
      
1,959
      
6,464
      
-
      
6,464
  
                                                 
Other expense
    
658
  
(1)
  
(500
)
    
158
      
115
      
-
      
115
  
                                                 
Income before income taxes
    
1,511
      
500
      
2,011
      
6,466
      
-
      
6,466
  
                                                 
Income Taxes
    
3,017
      
-
      
3,017
      
(6,217
)
(2)
  
7,988
      
1,771
  
                                                 
Net (loss) income
    
(1,511
)
    
-
      
(1,511
)
    
12,666
      
(7,988
)
    
4,678
  
Plus: Net loss attributable to non-controlling interest
    
143
      
-
      
143
      
-
      
-
      
-
  
Net (loss) income attributable to Culp Inc. common shareholders
  
$
(1,368
)
    
-
      
(1,368
)
    
12,666
      
(7,988
)
    
4,678
  

Notes
(1)
Other expense for the three-month period ending April 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution will be paid over a period of three years.
   
(2)
Income taxes for the three-month period ending April 29, 2018, include provisional adjustments that represent the income tax effects of the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017, of which an income tax benefit of $9.1 million pertains to a reduction in our U.S. Federal income tax rate pursuant to the TCJA on the effective settlement on an IRS exam and the mandatory repatriation of undistributed earnings and profits associated with our foreign subsidiaries, partially offset by a $1.1 million charge that relates to the revaluation of our U.S. deferred income taxes as a result of the reduction in our annual effective income tax rate pursuant to the TCJA.


Page 9 of 13

CULP, INC.  
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
  
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(UNAUDITED)  
                                     
                                     
   
TWELVE MONTHS ENDED
                                     
                                     
    As Reported        
Adjusted
   As Reported        
Adjusted
   
April 28,
        
April 28,
  
April 29,
        
April 29,
   
2019
  
Adjustments
  
2019
  
2018
  
Adjustments
  
2018
                                     
Gross profit
  
$
50,198
  
(1)
  
2,508
      
52,706
      
64,633
      
-
      
64,633
  
                                                 
Selling, general and
                                                
  administrative expenses
    
38,405
  
(3)
  
(558
)
    
37,847
      
37,172
      
-
      
37,172
  
Restructuring credit
    
(825
)
(2)
  
825
      
-
      
-
      
-
      
-
  
Income from operations
    
12,618
      
2,241
      
14,859
      
27,461
      
-
      
27,461
  
                                                 
Other expense
    
1,346
  
(4)
  
(500
)
    
846
      
1,018
      
-
      
1,018
  
                                                 
Income before income taxes
    
11,996
      
2,741
      
14,737
      
26,883
      
-
      
26,883
  
                                                 
Income Taxes
    
6,424
  
(5)
  
550
      
6,974
      
5,740
  
(5)
  
2,049
      
7,789
  
                                                 
Net income
    
5,458
      
(550
)
    
4,908
      
20,877
      
(2,049
)
    
18,828
  
Plus: Net loss attributable to non-controlling interest
    
218
      
-
      
218
      
-
      
-
      
-
  
Net income attributable to Culp Inc. common shareholders
  
$
5,676
      
(550
)
    
5,126
      
20,877
      
(2,049
)
    
18,828
  

Notes
(1)
The $2.5 million represents a restructuring related charge of $1.6 million for inventory markdowns, $784 for other operating costs associated with our closed Anderson, SC plant facility, and $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
   
(2)
The $825 restructuring credit represents a $1.5 million gain on the sale of property, plant, and equipment associated with our closed Anderson, SC upholstery fabrics plant facility, partially offset by a charge of $661 for employee termination benefits.
   
(3)
 The $558 consists of a non-recurring charge totaling $469 that was associated with the accelerated vesting of certain stock-based compensation agreements. Of this $469 non-recurring charge, $429 and $40 pertain to unallocated corporate expenses and a restructuring related charge associated with our closed Anderson, SC upholstery fabrics plant facility. Additionally, the $558 consists of a non-recurring charge of $89 for employee termination benefits and operational reorganization costs associated with our mattress fabrics segment.
   
(4)
 Other expense for the year ending Apri 28, 2019, included a $500 non-recurring charge for an endowed scholarship to the University of North Carolina at Chapel Hill in honor of our Co-Founder and former Chairman of the Board. This charitable contribution will be paid over a period of three years.
   
(5)
 Amounts represent provisional adjustments associated with the TCJA enacted on December 22, 2017.


Page 10 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
 
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018
 
(UNAUDITED)
 
(AMOUNTS IN THOUSANDS)
 

                             
                               
   
Quarter Ended
      
                           
Trailing 12
                           
Months
   
7/29/2018
  
10/28/2018
  
1/27/2019
  
4/28/2019
  
4/28/2019
                               
Net income (loss)
  
$
965
    
$
2,944
    
$
3,060
    
$
(1,511
)
  
$
5,458
  
Income taxes
    
906
      
1,276
      
1,225
      
3,017
      
6,424
  
Interest income, net
    
(129
)
    
(134
)
    
(251
)
    
(210
)
    
(724
)
Other non-recurring charges
    
-
      
249
      
429
      
500
      
1,178
  
Restructuring expense (credit) and related charges
    
2,014
      
(791
)
    
340
      
-
      
1,563
  
Depreciation and amortization expense
    
2,160
      
2,287
      
2,232
      
2,218
      
8,897
  
Stock based compensation
    
(501
)
    
395
      
479
      
(243
)
    
130
  
Adjusted EBITDA
  
$
5,415
    
$
6,226
    
$
7,514
    
$
3,771
    
$
22,926
  
                                         
% Net Sales
    
7.6
%
    
8.1
%
    
9.7
%
    
5.3
%
    
7.7
%
                                         
   
Quarter Ended
        
                                   
Trailing 12
                                   
Months
   
7/30/2017
  
10/29/2017
  
1/28/2018
  
4/29/2018
  
4/29/2018
                                         
Net income (loss)
  
$
4,983
    
$
3,976
    
$
(748
)
  
$
12,666
    
$
20,877
  
Income taxes
    
1,641
      
2,108
      
8,208
      
(6,217
)
    
5,740
  
Interest income, net
    
(131
)
    
(91
)
    
(101
)
    
(117
)
    
(440
)
Other non-recurring charges
    
-
      
-
      
-
      
-
      
-
  
Restructuring expense (credit) and related charges
    
-
      
-
      
-
      
-
      
-
  
Depreciation and amortization expense
    
1,889
      
1,990
      
2,048
      
2,096
      
8,023
  
Stock based compensation
    
757
      
801
      
864
      
(210
)
    
2,212
  
Adjusted EBITDA
  
$
9,139
    
$
8,784
    
$
10,271
    
$
8,218
    
$
36,412
  
                                         
% Net Sales
    
11.5
%
    
10.9
%
    
12.0
%
    
10.5
%
    
11.2
%
                                         
% Over (Under)
    
-40.7
%
    
-29.1
%
    
-26.8
%
    
-54.1
%
    
-37.0
%


Page 11 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
RETURN ON CAPITAL EMPLOYED BY SEGMENT  
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019  
(Amounts in Thousands)  
(Unaudited)  
                                                                                                 
    Operating Income                                                                                         
   
Twelve Months
Average
   Return on                                                                         
   
Ended
Capital
   Avg. Capital                                                                         
   
April 28, 2019 (1)
Employed (3)
   Employed (2)                                                                         
                                                                                           
Mattress Fabrics
  
$
11,608
    
$
76,530
      
15.2
%
                                                                        
Upholstery Fabrics
    
10,823
      
19,693
      
55.0
%
                                                                        
Home Accessories
    
(735
)
    
2,568
    
N.M.
                                                                          
(less: Unallocated Corporate)
    
(6,837
)
    
28,056
    
N.M.
                                                                          
Total
  
$
14,859
    
$
126,846
      
11.7
%
                                                                        
                                                                                                 
                                                                                                 
Average Capital Employed
   As of the three Months Ended April 28, 2019   As of the three Months Ended January 27, 2019    As of the three Months Ended October 28, 2018
   
Mattress
  
Upholstery
  
Home
   Unallocated        
Mattress
  
Upholstery
  
Home
   Unallocated        
Mattress
  
Upholstery
  
Home
   Unallocated      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                                 
Total assets (4)
  
$
83,393
      
37,529
      
5,618
      
93,186
      
219,726
    
$
86,707
      
43,097
      
5,607
      
89,497
      
224,908
    
$
86,494
      
37,442
      
5,203
      
93,072
      
222,211
  
Total liabilities (5)
    
(10,996
)
    
(18,114
)
    
(2,215
)
    
(24,154
)
    
(55,479
)
    
(11,604
)
    
(22,483
)
    
(2,168
)
    
(21,421
)
    
(57,676
)
    
(9,790
)
    
(19,646
)
    
(1,960
)
    
(23,346
)
    
(54,742
)
                                                                                                                         
Subtotal
  
$
72,397
    
$
19,415
    
$
3,403
    
$
69,032
    
$
164,247
    
$
75,103
    
$
20,614
    
$
3,439
    
$
68,076
    
$
167,232
    
$
76,704
    
$
17,796
    
$
3,243
    
$
69,726
    
$
167,469
  
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(40,008
)
    
(40,008
)
    
-
      
-
      
-
      
(26,418
)
    
(26,418
)
    
-
      
-
      
-
      
(14,768
)
    
(14,768
)
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(5,001
)
    
(5,001
)
    
-
      
-
      
-
      
(13,544
)
    
(13,544
)
    
-
      
-
      
-
      
(26,719
)
    
(26,719
)
Current income taxes receivable
    
-
      
-
      
-
      
(776
)
    
(776
)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,081
)
    
(7,081
)
    
-
      
-
      
-
      
(6,834
)
    
(6,834
)
    
-
      
-
      
-
      
(7,851
)
    
(7,851
)
Noncurrent income taxes receivable
    
-
      
-
      
-
      
(733
)
    
(733
)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
(457
)
    
(457
)
    
-
      
-
      
-
      
(3,224
)
    
(3,224
)
    
-
      
-
      
-
      
(3,614
)
    
(3,614
)
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
714
      
714
  
Income taxes payable - current
    
-
      
-
      
-
      
1,022
      
1,022
      
-
      
-
      
-
      
642
      
642
      
-
      
-
      
-
      
2,044
      
2,044
  
Income taxes payable - long-term
    
-
      
-
      
-
      
3,249
      
3,249
      
-
      
-
      
-
      
3,294
      
3,294
      
-
      
-
      
-
      
3,233
      
3,233
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
3,176
      
3,176
      
-
      
-
      
-
      
2,225
      
2,225
      
-
      
-
      
-
      
2,225
      
2,225
  
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Related Party - Note Payable
    
-
      
-
      
-
      
675
      
675
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Deferred compensation - non-current
    
-
      
-
      
-
      
6,998
      
6,998
      
-
      
-
      
-
      
6,782
      
6,782
      
-
      
-
      
-
      
7,120
      
7,120
  
                                                                                                                         
Total Capital Employed
  
$
72,397
    
$
19,415
    
$
3,403
    
$
30,096
    
$
125,311
    
$
75,103
    
$
20,614
    
$
3,439
    
$
30,999
    
$
130,155
    
$
76,704
    
$
17,796
    
$
3,243
    
$
32,110
    
$
129,853
  
                                                                                                                         
                                                                                                                         
    As of the three Months Ended July 29, 2018   As of the three Months Ended April 29, 2018                                        
   
Mattress
  
Upholstery
  
Home
   Unallocated        
Mattress
  
Upholstery
  
Home
   Unallocated                                              
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                        
                                                                                                                         
Total assets (4)
  
$
93,601
      
37,386
      
4,463
      
90,922
      
226,372
    
$
95,061
      
39,812
      
-
      
83,111
      
217,984
                                          
Total liabilities (5)
    
(12,883
)
    
(17,880
)
    
(1,710
)
    
(27,869
)
    
(60,342
)
    
(17,335
)
    
(18,679
)
    
-
      
(18,594
)
    
(54,608
)
                                        
                                                                                                                         
Subtotal
  
$
80,718
    
$
19,506
    
$
2,753
    
$
63,053
    
$
166,030
    
$
77,726
    
$
21,133
    
$
-
    
$
64,517
    
$
163,376
                                          
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(8,593
)
    
(8,593
)
    
-
      
-
      
-
      
(21,228
)
    
(21,228
)
                                        
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,451
)
    
(2,451
)
                                        
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(30,756
)
    
(30,756
)
    
-
      
-
      
-
      
(25,759
)
    
(25,759
)
                                        
Current income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(5,035
)
    
(5,035
)
                                        
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,671
)
    
(7,671
)
    
-
      
-
      
-
      
(7,326
)
    
(7,326
)
                                        
Noncurrent income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
(3,721
)
    
(3,721
)
    
-
      
-
      
-
      
(1,458
)
    
(1,458
)
                                        
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Income taxes payable - current
    
-
      
-
      
-
      
1,244
      
1,244
      
-
      
-
      
-
      
1,437
      
1,437
                                          
Income taxes payable - long-term
    
-
      
-
      
-
      
3,733
      
3,733
      
-
      
-
      
-
      
3,758
      
3,758
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,150
      
2,150
      
-
      
-
      
-
      
2,150
      
2,150
                                          
Line of credit
    
-
      
-
      
-
      
4,000
      
4,000
      
-
      
-
      
-
      
-
      
-
                                          
Related Party - Note Payable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred compensation - non-current
    
-
      
-
      
-
      
7,679
      
7,679
      
-
      
-
      
-
      
7,353
      
7,353
                                          
                     
-
                                                                                                  
Total Capital Employed
  
$
80,718
    
$
19,506
    
$
2,753
    
$
31,118
    
$
134,095
    
$
77,726
    
$
21,133
    
$
-
    
$
15,958
    
$
114,817
                                          
                                                                                                                         
   
Mattress
  
Upholstery
  
Home
   Unallocated                                                                                      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                
Average Capital Employed (3)
  
$
76,530
    
$
19,693
    
$
2,568
    
$
28,056
    
$
126,846
                                                                                  

Notes:
(1)
See reconciliation per page 13 of this financial information release.
   
(2)
Return on average capital employed represents the last twelve months operating income as of April 28, 2019, divided by average capital employed. Average capital employed does not include cash and cash equivalents,  short-term investments - Available- For-Sale, short-term investments Held-To-Maturity, long-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, line of credit, related party - note payable, and current and noncurrent deferred compensation.
   
(3)
Average capital employed was computed using the quarterly five periods ending April 28, 2019, January 27, 2019, October 28, 2018, July 29, 2018, and April 29, 2018.
   
(4)
Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, have no affect on the capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments.
 
(5)
Accrued restructuring costs and certain obligations associated with our acquisitions are included in unallocated coporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for our mattress fabrics, upholstery fabrics, and home accessories segments.


Page 12 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
RETURN ON CAPITAL EMPLOYED BY SEGMENT  
FOR THE TWELVE MONTHS ENDED APRIL 29, 2018  
(Amounts in Thousands)  
(Unaudited)  
                                                                               
    Operating Income                                                                      
   
Twelve Months
Average
  
Return on
                                                      
   
Ended
Capital
   Avg. Capital                                                       
   
April 29, 2018 (1)
Employed (3)
   Employed (2)                                                         
                                                                         
Mattress Fabrics
  
$
25,861
    
$
75,398
      
34.3
%
                                                      
Upholstery Fabrics
    
10,956
      
18,862
      
58.1
%
                                                      
(less: Unallocated Corporate)
    
(9,356
)
    
13,741
    
N.M
                                                        
Total
  
$
27,461
    
$
108,001
      
25.4
%
                                                      
                                                                               
                                                                               
                                                                               
Average Capital Employed
  
As of the three Months Ended April 29, 2018
  
As of the three Months Ended January 28, 2018
  
As of the three Months Ended October 29, 2017
   
Mattress
  
Upholstery
   Unallocated        
Mattress
  
Upholstery
   Unallocated        
Mattress
  
Upholstery
   Unallocated      
   
Fabrics
  
Fabrics
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Corporate
  
Total
                                                                               
Total assets (4)
  
$
95,061
      
39,812
      
83,111
    
$
217,984
    
$
93,827
      
43,458
      
79,559
    
$
216,844
    
$
94,626
      
34,974
      
71,443
    
$
201,043
  
Total liabilities
    
(17,335
)
    
(19,442
)
    
(17,831
)
    
(54,608
)
    
(18,418
)
    
(22,781
)
    
(23,463
)
    
(64,662
)
    
(16,150
)
    
(17,225
)
    
(14,588
)
    
(47,963
)
                                                                                                 
Subtotal
  
$
77,726
    
$
20,370
    
$
65,280
    
$
163,376
    
$
75,409
    
$
20,677
    
$
56,096
    
$
152,182
    
$
78,476
    
$
17,749
    
$
56,855
    
$
153,080
  
Less:
                                                                                                
Cash and cash equivalents
    
-
      
-
      
(21,228
)
    
(21,228
)
    
-
      
-
      
(22,428
)
    
(22,428
)
    
-
      
-
      
(15,739
)
    
(15,739
)
Short-term investments - Available-For-Sale
    
-
      
-
      
(2,451
)
    
(2,451
)
    
-
      
-
      
(2,472
)
    
(2,472
)
    
-
      
-
      
(2,478
)
    
(2,478
)
Short-term investments - Held-To-Maturity
    
-
      
-
      
(25,759
)
    
(25,759
)
    
-
      
-
      
(17,206
)
    
(17,206
)
    
-
      
-
      
(4,015
)
    
(4,015
)
Long-term investments - Held-To-Maturity
    
-
      
-
      
(5,035
)
    
(5,035
)
    
-
      
-
      
(13,625
)
    
(13,625
)
    
-
      
-
      
(26,853
)
    
(26,853
)
Long-term investments - Rabbi Trust
    
-
      
-
      
(7,326
)
    
(7,326
)
    
-
      
-
      
(7,176
)
    
(7,176
)
    
-
      
-
      
(6,921
)
    
(6,921
)
Deferred income taxes - non-current
    
-
      
-
      
(1,458
)
    
(1,458
)
    
-
      
-
      
(1,942
)
    
(1,942
)
    
-
      
-
      
(491
)
    
(491
)
Income taxes payable - current
    
-
      
-
      
1,437
      
1,437
      
-
      
-
      
1,580
      
1,580
      
-
      
-
      
692
      
692
  
Income taxes payable - long-term
    
-
      
-
      
3,758
      
3,758
      
-
      
-
      
10,940
      
10,940
      
-
      
-
      
487
      
487
  
Deferred income taxes - non-current
    
-
      
-
      
2,150
      
2,150
      
-
      
-
      
2,096
      
2,096
      
-
      
-
      
4,641
      
4,641
  
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Deferred compensation
    
-
      
-
      
7,353
      
7,353
      
-
      
-
      
7,216
      
7,216
      
-
      
-
      
6,970
      
6,970
  
                                                                                                 
Total Capital Employed
  
$
77,726
    
$
20,370
    
$
16,721
    
$
114,817
    
$
75,409
    
$
20,677
    
$
13,079
    
$
109,165
    
$
78,476
    
$
17,749
    
$
13,148
    
$
109,373
  
                                                                                                 
   
As of the three Months Ended July 30, 2017
  
As of the three Months Ended April 30, 2017
                                
   
Mattress
  
Upholstery
   Unallocated        
Mattress
  
Upholstery
   Unallocated                                      
   
Fabrics
  
Fabrics
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Corporate
  
Total
                                
                                                                                                 
Total assets (4)
  
$
99,190
      
34,491
      
74,223
    
$
207,904
    
$
98,087
    
$
32,255
    
$
75,292
    
$
205,634
                                  
Total liabilities
    
(24,277
)
    
(14,983
)
    
(18,967
)
    
(58,227
)
    
(27,619
)
    
(16,249
)
    
(13,136
)
    
(57,004
)
                                
                                                                                                 
Subtotal
  
$
74,913
    
$
19,508
    
$
55,256
    
$
149,677
    
$
70,468
    
$
16,006
    
$
62,156
    
$
148,630
                                  
Less:
                                                                                                
Cash and cash equivalents
    
-
      
-
      
(18,322
)
    
(18,322
)
    
-
      
-
      
(20,795
)
    
(20,795
)
                                
Short-term investments - Available-For-Sale
    
-
      
-
      
(2,469
)
    
(2,469
)
    
-
      
-
      
(2,443
)
    
(2,443
)
                                
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                  
Long-term investments - Held-To-Maturity
    
-
      
-
      
(30,907
)
    
(30,907
)
    
-
      
-
      
(30,945
)
    
(30,945
)
                                
Long-term investments - Rabbi Trust
    
-
      
-
      
(6,714
)
    
(6,714
)
    
-
      
-
      
(5,466
)
    
(5,466
)
                                
Deferred income taxes - non-current
    
-
      
-
      
(436
)
    
(436
)
    
-
      
-
      
(419
)
    
(419
)
                                
Income taxes payable - current
    
-
      
-
      
884
      
884
      
-
      
-
      
287
      
287
                                  
Income taxes payable - long-term
    
-
      
-
      
487
      
487
      
-
      
-
      
467
      
467
                                  
Deferred income taxes - non-current
    
-
      
-
      
4,253
      
4,253
      
-
      
-
      
3,593
      
3,593
                                  
Line of credit
    
-
      
-
      
5,000
      
5,000
      
-
      
-
      
-
      
-
                                  
Deferred compensation
    
-
      
-
      
6,769
      
6,769
      
-
      
-
      
5,520
      
5,520
                                  
                                                                                                 
Total Capital Employed
  
$
74,913
    
$
19,508
    
$
13,801
    
$
108,222
    
$
70,468
    
$
16,006
    
$
11,955
    
$
98,429
                                  
                                                                                                 
   
Mattress
  
Upholstery
   Unallocated                                                                      
   
Fabrics
  
Fabrics
  
Corporate
  
Total
                                                                
Average Capital Employed (3)
  
$
75,398
    
$
18,862
    
$
13,741
    
$
108,001
                                                                  

Notes:
(1)
See reconciliation per page 13 of this financial information release.
   
(2)
Return on average capital employed represents the last twelve months operating income as of April 29, 2018, divided by average capital employed. Average capital employed does not include cash and cash equivalents,  short-term investments - Available- For-Sale, short-term investments Held-To-Maturity, long-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes payable, line of credit, and deferred compensation.
   
(3)
Average capital employed was computed using the five quarterly periods ending April 29, 2018, January 28, 2018, October 29, 2017, July 30, 2017, and April 30, 2017.
   
(4)
Intangible assets and goodwill are included in unallocated corporate for all periods presented and therefore, have no affect on capital employed and return on capital employed for both our mattress fabrics and upholstery fabrics segments.


Page 13 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
  
CONSOLIDATED STATEMENTS OF OPERATING INCOME (LOSS)  
FOR THE TWELVE MONTHS ENDED APRIL 28, 2019 AND APRIL 29, 2018  
(UNAUDITED)  
(AMOUNTS IN THOUSANDS)
                               
                               
   
Quarter Ended
      
                           
Trailing 12
                           
Months
   
7/29/2018
  
10/28/2018
  
1/27/2019
  
4/28/2019
  
4/28/2019
                               
Mattress Fabrics
  
$
2,803
    
$
2,899
    
$
3,208
    
$
2,698
    
$
11,608
  
Upholstery Fabrics
    
2,525
      
2,722
      
3,799
      
1,777
      
10,823
  
Home Accessories
    
21
      
34
      
(311
)
    
(479
)
    
(735
)
Unallocated Corporate
    
(1,259
)
    
(1,913
)
    
(1,628
)
    
(2,037
)
    
(6,837
)
Subtotal
    
4,090
      
3,742
      
5,068
      
1,959
      
14,859
  
Other non-recurring charges
    
-
      
(249
)
    
(429
)
    
-
      
(678
)
Restructuring (expense) credit and related charges
    
(2,014
)
    
791
      
(340
)
    
-
      
(1,563
)
                                         
Operating income
  
$
2,076
    
$
4,284
    
$
4,299
    
$
1,959
    
$
12,618
  
                                         
                                         
   
Quarter Ended
        
                                   
Trailing 12
                                   
Months
   
7/30/2017
  
10/29/2017
  
1/28/2018
  
4/29/2018
  
4/29/2018
                                         
Mattress Fabrics
  
$
6,374
    
$
6,562
    
$
6,837
    
$
6,088
    
$
25,861
  
Upholstery Fabrics
    
2,891
      
2,374
      
3,510
      
2,181
      
10,956
  
Unallocated Corporate
    
(2,301
)
    
(2,547
)
    
(2,703
)
    
(1,805
)
    
(9,356
)
Operating income
  
$
6,964
    
$
6,389
    
$
7,644
    
$
6,464
    
$
27,461
  
                                         
% Over (Under)
    
-70.2
%
    
-32.9
%
    
-43.8
%
    
-69.7
%
    
-54.1
%