EX-99.(B) 3 a52086491ex99b.htm EXHIBIT 99(B)
Exhibit 99(b)
Page 1 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THREE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)

   
THREE MONTHS ENDED
                               
     
(2)
Amounts
  
(2)
        
Percent of Sales
   

August 4,   

July 29,   
% Over
  

August 4,   

July 29, 
     
2019
    
2018
  
(Under)
    
2019
    
2018
                                       
Net sales
  
$
74,847
      
71,473
      
4.7
%
    
100.0
%
    
100.0
%
Cost of sales
    
61,482
      
60,914
  
(1)(2)
  
0.9
%
    
82.1
%
    
85.2
%
Gross profit
    
13,365
      
10,559
      
26.6
%
    
17.9
%
    
14.8
%
                                         
Selling, general and
                                        
administrative expenses
    
10,711
      
8,033
      
33.3
%
    
14.3
%
    
11.2
%
Restructuring (credit) expense
    
(35
)
(2)
  
451
  
(2)
  
(107.8
)%
    
(0.0
)%
    
0.6
%
Income from operations
    
2,689
      
2,075
      
29.6
%
    
3.6
%
    
2.9
%
                                         
Interest expense
    
9
      
20
      
(55.0
)%
    
0.0
%
    
0.0
%
Interest income
    
(249
)
    
(150
)
    
66.0
%
    
(0.3
)%
    
(0.2
)%
Other expense
    
87
      
257
      
(66.1
)%
    
0.1
%
    
0.4
%
Income before income taxes
    
2,842
      
1,948
      
45.9
%
    
3.8
%
    
2.7
%
                                         
Income tax expense *
    
1,681
      
906
      
85.5
%
    
59.1
%
    
46.5
%
                                         
(Income) loss from investment in unconsolidated joint venture
    
(13
)
    
77
      
(116.9
)%
    
(0.0
)%
    
0.1
%
Net income
    
1,174
      
965
      
21.7
%
    
1.6
%
    
1.4
%
Net loss (income) attributable to non-controlling interest
    
164
      
(8
)
  
N.M.
      
0.2
%
    
(0.0
)%
Net income attributable to Culp Inc. common shareholders
  
$
1,338
      
957
      
39.8
%
    
1.8
%
    
1.3
%
                                         
                                         
Net income attributable to Culp Inc. common shareholders per share - basic
  
$
0.11
    
$
0.08
      
37.5
%
                
Net income attributable to Culp Inc. common shareholders per share - diluted
  
$
0.11
    
$
0.08
      
37.5
%
                
Average shares outstanding-basic
    
12,399
      
12,510
      
(0.9
)%
                
Average shares outstanding-diluted
    
12,410
      
12,600
      
(1.5
)%
                


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

Notes
(1)
Cost of sales for the three-month period ending July 29, 2018 includes a $1.6 million restructuring related charge for inventory markdowns.
 
 
(2)
See page 6 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods August 4, 2019 and July 29, 2018, that exclude the adjustments related to our recent restructuring activities.


Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
AUGUST 4, 2019, JULY 29, 2018, AND APRIL 28, 2019
Unaudited
(Amounts in Thousands)

   
Amounts
                  
         
(Condensed)
  
Increase
      
   
August 4,
  
July 29,
  
(Decrease)
  
* April 28,
   
2019
  
2018
  
Dollars
  
Percent
  
2019
                               
Current assets
                              
Cash and cash equivalents
  
$
44,236
      
8,593
      
35,643
      
414.8
%
    
40,008
  
Short-term investments - Held-To-Maturity
    
-
      
30,756
      
(30,756
)
    
(100.0
)%
    
5,001
  
Accounts receivable
    
24,090
      
23,225
      
865
      
3.7
%
    
23,751
  
Inventories
    
50,660
      
54,989
      
(4,329
)
    
(7.9
)%
    
50,860
  
Current income taxes receivable
    
776
      
-
      
776
      
100.0
%
    
776
  
Assets held for sale
    
100
      
-
      
100
      
100.0
%
    
-
  
Other current assets
    
2,578
      
3,852
      
(1,274
)
    
(33.1
)%
    
2,849
  
Total current assets
    
122,440
      
121,415
      
1,025
      
0.8
%
    
123,245
  
                                         
Property, plant & equipment, net
    
47,289
      
53,178
      
(5,889
)
    
(11.1
)%
    
48,389
  
Goodwill
    
27,222
      
27,222
      
-
      
0.0
%
    
27,222
  
Intangible assets
    
10,354
      
10,730
      
(376
)
    
(3.5
)%
    
10,448
  
Long-term investments - Rabbi Trust
    
7,347
      
7,671
      
(324
)
    
(4.2
)%
    
7,081
  
Right of use assets
    
6,530
      
-
      
6,530
      
100.0
%
    
-
  
Noncurrent income taxes receivable
    
733
      
-
      
733
      
100.0
%
    
733
  
Deferred income taxes
    
486
      
3,721
      
(3,235
)
    
(86.9
)%
    
457
  
Investment in unconsolidated joint venture
    
1,520
      
1,525
      
(5
)
    
(0.3
)%
    
1,508
  
Other assets
    
526
      
910
      
(384
)
    
(42.2
)%
    
643
  
                                         
Total assets
  
$
224,447
      
226,372
      
(1,925
)
    
(0.9
)%
    
219,726
  
                                         
                                         
                                         
Current liabilities
                                        
Accounts payable - trade
  
$
22,628
      
25,070
      
(2,442
)
    
(9.7
)%
    
24,377
  
Accounts payable - capital expenditures
    
60
      
862
      
(802
)
    
(93.0
)%
    
78
  
Operating lease liability - current
    
2,456
      
-
      
2,456
      
100.0
%
    
-
  
Deferred revenue
    
684
      
634
      
50
      
7.9
%
    
399
  
Accrued expenses
    
8,566
      
8,176
      
390
      
4.8
%
    
9,192
  
Accrued restructuring costs
    
42
      
445
      
(403
)
    
(90.6
)%
    
124
  
Income taxes payable - current
    
1,116
      
1,244
      
(128
)
    
(10.3
)%
    
1,022
  
Total current liabilities
    
35,552
      
36,431
      
(879
)
    
(2.4
)%
    
35,192
  
                                         
Line of credit
    
-
      
4,000
      
(4,000
)
    
(100.0
)%
    
-
  
Accrued expenses - long-term
    
333
      
749
      
(416
)
    
(55.5
)%
    
333
  
Subordinated loan payable
    
925
      
-
      
925
      
100.0
%
    
675
  
Operating lease liability - long-term
    
3,955
      
-
      
3,955
      
100.0
%
    
-
  
Contingent consideration - Earn-Out Obligation
    
5,931
      
5,600
      
331
      
5.9
%
    
5,856
  
Income taxes payable - long-term
    
3,640
      
3,733
      
(93
)
    
(2.5
)%
    
3,249
  
Deferred income taxes
    
2,543
      
2,150
      
393
      
18.3
%
    
3,176
  
Deferred compensation
    
7,232
      
7,679
      
(447
)
    
(5.8
)%
    
6,998
  
                                         
Total liabilities
    
60,111
      
60,342
      
(231
)
    
(0.4
)%
    
55,479
  
                                         
Shareholders' equity
                                        
Shareholders' equity attributable to Culp Inc.
    
160,146
      
161,490
      
(1,344
)
    
(0.8
)%
    
159,933
  
Non-controlling interest
    
4,190
      
4,540
      
(350
)
    
(7.7
)%
    
4,314
  
     
164,336
      
166,030
      
(1,694
)
    
(1.0
)%
    
164,247
  
                                         
Total liabilities and
                                        
shareholders' equity
  
$
224,447
      
226,372
      
(1,925
)
    
(0.9
)%
    
219,726
  
                                         
Shares outstanding
    
12,405
      
12,522
      
(117
)
    
(0.9
)%
    
12,391
  

*  Derived from audited financial statements.


Page 3 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
SUMMARY OF CASH AND INVESTMENTS
AUGUST 4, 2019 , JULY 29, 2018 AND APRIL 28, 2019
Unaudited
(Amounts in Thousands)

   
Amounts
   
August 4,
  
July 29,
  
April 28,
   
2019
  
2018
   2019* 
                     
                     
Cash and cash equivalents
  
$
44,236
    
$
8,593
    
$
40,008
  
                         
Short-term investments - Held-To-Maturity
    
-
      
30,756
      
5,001
  
                         
Total Cash and Investments
  
$
44,236
    
$
39,349
    
$
45,009
  

* Derived from audited financial statements.


Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018
Unaudited
(Amounts in Thousands)

    
THREE MONTHS ENDED
              
    
Amounts
    
August 4,
  
July 29,
    
2019
  
2018
              
Cash flows from operating activities:
            
Net income
  
$
1,174
      
965
  
Adjustments to reconcile net income to net cash
                
provided by (used in) operating activities:
                
Depreciation
    
1,905
      
2,015
  
Amortization
    
176
      
145
  
Stock-based compensation
    
154
      
(501
)
Deferred income taxes
    
(662
)
    
(2,263
)
Realized loss on sale of short-term investments (Available for Sale)
    
-
      
94
  
(Gain) loss on sale of property, plant, and equipment
    
(17
)
    
35
  
(Income) loss from investment in unconsolidated joint venture
    
(13
)
    
77
  
Foreign currency exchange gain
    
(47
)
    
(91
)
Changes in assets and liabilities, net of effects of acquisition of businesses:
                
Accounts receivable
    
(375
)
    
2,837
  
Inventories
    
(25
)
    
(429
)
Other current assets
    
161
      
(989
)
Other assets
    
111
      
34
  
Accounts payable
    
(1,468
)
    
(2,494
)
Deferred revenue
    
285
      
(175
)
Accrued expenses and deferred compensation
    
222
      
(1,566
)
Accrued restructuring costs
    
(82
)
    
445
  
Income taxes
    
524
      
(75
)
Net cash provided by (used in) operating activities
    
2,023
      
(1,936
)
                  
Cash flows from investing activities:
                
Net cash paid for acquisition of businesses
    
-
      
(11,971
)
Capital expenditures
    
(935
)
    
(757
)
Proceeds from the sale of property, plant, and equipment
    
209
      
-
  
Investment in unconsolidated joint venture
    
-
      
(100
)
Proceeds from the sale of short-term investments (Held to Maturity)
    
5,000
      
-
  
Proceeds from the sale of short-term investments (Available for Sale)
    
-
      
2,458
  
Purchase of short-term investments (Available for Sale)
    
-
      
(10
)
Purchase of long-term investments (Rabbi Trust)
    
(259
)
    
(302
)
Net cash provided by (used in) investing activities
    
4,015
      
(10,682
)
                  
Cash flows from financing activities:
                
Proceeds from line of credit
    
-
      
11,000
  
Payments on line of credit
    
-
      
(7,000
)
Payments on vendor-financed capital expenditures
    
-
      
(1,412
)
Proceeds from subordinated loan payable
    
250
      
-
  
Cash paid for acquisition of business
    
(763
)
    
-
  
Dividends paid
    
(1,241
)
    
(1,127
)
Common stock surrendered for withholding taxes payable
    
(44
)
    
(1,292
)
Capital contribution from non-controlling interest
    
40
      
-
  
Common stock repurchased
    
-
      
(72
)
Net cash (used in) provided by financing activities
    
(1,758
)
    
97
  
                  
Effect of exchange rate changes on cash and cash equivalents
    
(52
)
    
(114
)
                  
Increase (decrease) in cash and cash equivalents
    
4,228
      
(12,635
)
                  
Cash and cash equivalents at beginning of period
    
40,008
      
21,228
  
                  
Cash and cash equivalents at end of period
  
$
44,236
      
8,593
  
                  
Free Cash Flow (1)
  
$
986
      
(4,621
)
                  
                  
(1)  Free Cash Flow reconciliation is as follows:
                
    
FY 2020
    
FY 2019
  
A)   Net cash provided by (used in) operating activities
  
$
2,023
      
(1,936
)
B)   Minus:    Capital Expenditures
    
(935
)
    
(757
)
C)   Plus:        Proceeds from the sale of property, plant, and equipment
    
209
      
-
  
D)   Minus:     Investment in unconsolidated joint venture
    
-
      
(100
)
E)   Minus:     Payments on vendor-financed capital expenditures
    
-
      
(1,412
)
F)   Minus:     Purchase of long-term investments (Rabbi Trust)
    
(259
)
    
(302
)
G)  Effects of exchange rate changes on cash and cash equivalents
    
(52
)
    
(114
)
          Free Cash Flow
  
$
986
      
(4,621
)
                 


Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018
(Unaudited)
(Amounts in thousands)

    THREE MONTHS ENDED
                               
    Amounts        
Percent of Total Sales
   
August 4,
  
July 29,
  
% Over
  
August 4,
  
July 29,
Net Sales by Segment
  
2019
  
2018
  
(Under)
  
2019
  
2018
                               
Mattress Fabrics
  
$
38,685
      
34,398
      
12.5
%
    
51.7
%
    
48.1
%
Upholstery Fabrics
    
31,860
      
34,490
      
(7.6
)%
    
42.6
%
    
48.3
%
Home Accessories
    
4,302
      
2,585
      
66.4
%
    
5.7
%
    
3.6
%
                                         
Net Sales
  
$
74,847
      
71,473
      
4.7
%
    
100.0
%
    
100.0
%
                                         
                                         
Gross Profit by Segment
                          
Gross Profit Margin
                                         
Mattress Fabrics
  
$
5,691
      
5,302
      
7.3
%
    
14.7
%
    
15.4
%
Upholstery Fabrics
    
6,721
      
6,153
      
9.2
%
    
21.1
%
    
17.8
%
Home Accessories
    
953
      
669
      
42.5
%
    
22.2
%
    
25.9
%
Subtotal
    
13,365
      
12,124
      
10.2
%
    
17.9
%
    
17.0
%
                                         
Restructuring related charges
    
-
      
(1,565
)
(1)
  
(100.0
)%
    
0.0
%
    
(2.2
)%
                                         
Gross Profit
    
13,365
      
10,559
      
26.6
%
    
17.9
%
    
14.8
%
                                         
Selling, General and Administrative Expenses by Segment
                          
Percent of Sales
                                         
Mattress Fabrics
  
$
3,071
      
2,512
      
22.3
%
    
7.9
%
    
7.3
%
Upholstery Fabrics
    
3,846
      
3,626
      
6.1
%
    
12.1
%
    
10.5
%
Home Accessories
    
1,488
      
636
      
134.0
%
    
34.6
%
    
24.6
%
Unallocated Corporate expenses
    
2,306
      
1,259
      
83.2
%
    
3.1
%
    
1.8
%
Selling, General and Administrative Expenses
  
$
10,711
      
8,033
      
33.3
%
    
14.3
%
    
11.2
%
                                         
                                         
Operating Income (loss) by Segment
                          
Operating Income (Loss) Margin
                                         
Mattress Fabrics
  
$
2,620
      
2,790
      
(6.1
)%
    
6.8
%
    
8.1
%
Upholstery Fabrics
    
2,875
      
2,527
      
13.8
%
    
9.0
%
    
7.3
%
Home Accessories
    
(535
)
    
33
    
N.M.
      
(12.4
)%
    
1.3
%
Unallocated corporate expenses
    
(2,306
)
    
(1,259
)
    
83.2
%
    
(3.1
)%
    
(1.8
)%
Subtotal
  
$
2,654
      
4,091
      
(35.1
)%
    
3.5
%
    
5.7
%
                                         
Restructuring credit (expense) and related charges
    
35
      
(2,016
)
(1)
  
(101.7
)%
    
0.0
%
    
(2.8
)%
                                         
Operating income
    
2,689
      
2,075
      
29.6
%
    
3.6
%
    
2.9
%
                                         
                                         
Return on Capital (2)
                                        
                                         
Mattress Fabrics
    
15.2
%
    
28.8
%
                        
Upholstery Fabrics
    
57.3
%
    
53.7
%
                        
Home Accessories
  
N.M.
    
N.M.
                          
Unallocated Corporate
  
N.M.
    
N.M.
                          
Consolidated
    
10.4
%
    
21.4
%
                        
                                         
Capital Employed (2) (3)
                                        
                                         
Mattress Fabrics
  
$
71,202
      
80,718
      
(11.8
)%
                
Upholstery Fabrics
    
20,104
      
19,506
      
3.1
%
                
Home Accessories
    
4,113
      
2,753
      
49.4
%
                
Unallocated Corporate
    
30,795
      
31,118
      
(1.0
)%
                
Consolidated
  
$
126,214
      
134,095
      
(5.9
)%
                
                                         
                                         
Depreciation Expense by Segment
                                        
                                         
Mattress Fabrics
  
$
1,620
      
1,762
      
(8.1
)%
                
Upholstery Fabrics
    
190
      
215
      
(11.6
)%
                
Home Accessories
    
95
      
38
      
150.0
%
                
Depreciation Expense
  
$
1,905
      
2,015
      
(5.5
)%
                

Notes
(1)
See page 6 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods August 4, 2019 and July 29, 2018, that exclude the adjustments related to our recent restructuring activities.
 
 
(2)
See pages 8 and 9 of this financial information release for calculations.
   
(3)
 The capital employed balances are as of August 4, 2019 and July 29, 2018.
 

Page 6 of 10
CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THE THREE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018

    THREE MONTHS ENDED (UNAUDITED) 
                                                                       
   
As Reported
                
August 4, 2019
        
As Reported
                
July 29, 2018
            
   
August 4,
  
% of
          
Adjusted
  
% of
  
July 29,
  
% of
          
Adjusted
  
% of
  
% Over
   
2019
  
Sales
  
Adjustments
  
Results
  
Sales
  
2018
  
Sales
  
Adjustments
  
Results
  
Sales
  
(Under)
                                                                       
Net sales
  
$
74,847
      
100.0
%
    
-
        
74,847
      
100.0
%
    
71,473
      
100.0
%
    
-
        
71,473
      
100.0
%
    
4.7
%
Cost of sales
    
61,482
      
82.1
%
    
-
        
61,482
      
82.1
%
    
60,914
      
85.2
%
    
(1,565
)
(2)
    
59,349
      
83.0
%
    
3.6
%
Gross Profit
    
13,365
      
17.9
%
    
-
        
13,365
      
17.9
%
    
10,559
      
14.8
%
    
(1,565
)
      
12,124
      
17.0
%
    
10.2
%
                                                                                             
Selling, general and
                                                                                            
administrative expenses
    
10,711
      
14.3
%
    
-
        
10,711
      
14.3
%
    
8,033
      
11.2
%
    
-
        
8,033
      
11.2
%
    
33.3
%
Restructuring (credit) expense
    
(35
)
    
0.0
%
    
35
  
(1)
    
-
      
0.0
%
    
451
      
0.6
%
    
(451
)
(3)
    
-
      
0.0
%
    
0.0
%
Income from operations
    
2,689
      
3.6
%
    
35
        
2,654
      
3.5
%
    
2,075
      
2.9
%
    
(2,016
)
      
4,091
      
5.7
%
    
-35.1
%
                                                                                             
Interest expense
    
9
      
0.0
%
    
-
        
9
      
0.0
%
    
20
      
0.0
%
    
-
        
20
      
0.0
%
    
-55.0
%
Interest income
    
(249
)
    
-0.3
%
    
-
        
(249
)
    
-0.3
%
    
(150
)
    
-0.2
%
    
-
        
(150
)
    
-0.2
%
    
66.0
%
Other expense
    
87
      
0.1
%
    
-
        
87
      
0.1
%
    
257
      
0.4
%
    
-
        
257
      
0.4
%
    
-66.1
%
Income before income taxes
    
2,842
      
3.8
%
    
35
        
2,807
      
3.8
%
    
1,948
      
2.7
%
    
(2,016
)
      
3,964
      
5.5
%
    
-29.2
%

Notes
(1)
The $35 restructuring credit represents employee termination benefits associated with the closure of our Anderson, SC plant facility.
 
 
(2)
The $1.6 million restructuring related charge represents inventory markdowns associated with the closure of our Anderson, SC plant facility.
   
(3)
 The $451 restructuring charge represents employee termination benefits associated with the closure of our Anderson, SC plant facility.


Page 7 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

   
Quarter Ended
      
                           
Trailing 12
                           
Months
   
10/28/2018
  
1/27/2019
  
4/28/2019
  
8/4/2019
  
8/4/2019
                               
Net income (loss)
  
$
2,944
    
$
3,060
    
$
(1,511
)
  
$
1,174
    
$
5,667
  
Income taxes
    
1,276
      
1,225
      
3,017
      
1,681
      
7,199
  
Interest income, net
    
(134
)
    
(251
)
    
(210
)
    
(240
)
    
(835
)
Other non-recurring charges
    
249
      
429
      
500
      
-
      
1,178
  
Restructuring expense (credit) and related charges
    
(791
)
    
340
      
-
      
(35
)
    
(486
)
Depreciation and amortization expense
    
2,287
      
2,232
      
2,218
      
2,081
      
8,818
  
Stock based compensation
    
395
      
479
      
(243
)
    
154
      
785
  
Adjusted EBITDA
  
$
6,226
    
$
7,514
    
$
3,771
    
$
4,815
    
$
22,326
  
                                         
% Net Sales
    
8.1
%
    
9.7
%
    
5.3
%
    
6.4
%
    
7.4
%
                                         
   
Quarter Ended
        
                                   
Trailing 12
                                   
Months
   
10/29/2017
    
1/28/2018
  
4/29/2018
  
7/29/2018
  
7/29/2018
                                         
Net income (loss)
  
$
3,976
    
$
(748
)
  
$
12,666
    
$
965
    
$
16,859
  
Income taxes
    
2,108
      
8,208
      
(6,217
)
    
906
      
5,005
  
Interest income, net
    
(91
)
    
(101
)
    
(117
)
    
(130
)
    
(439
)
Restructuring expense and related charges
    
-
      
-
      
-
      
2,016
      
2,016
  
Depreciation and amortization expense
    
1,990
      
2,048
      
2,096
      
2,160
      
8,294
  
Stock based compensation
    
801
      
864
      
(210
)
    
(501
)
    
954
  
Adjusted EBITDA
  
$
8,784
    
$
10,271
    
$
8,218
    
$
5,416
    
$
32,689
  
                                         
% Net Sales
    
10.9
%
    
12.0
%
    
10.5
%
    
7.6
%
    
10.4
%
                                         
% Over (Under)
    
-29.1
%
    
-26.8
%
    
-54.1
%
    
-11.1
%
    
-31.7
%


Page 8 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED AUGUST 4, 2019
(Amounts in Thousands)
(Unaudited)

   
Operating Income
                                                                                     
   
Twelve Months
  
Average
  
Return
on
                                                                         
   
Ended
  
Capital
  
Avg. Capital
                                                                         
   
August 4, 2019 (1)
  
Employed
(3)
  
Employed
(2)
                                                                         
                                                                                           
Mattress Fabrics
  
$
11,434
    
$
75,225
      
15.2
%
                                                                        
Upholstery Fabrics
    
11,173
      
19,487
      
57.3
%
                                                                        
Home Accessories
    
(1,300
)
    
3,390
    
N.M.
                                                                          
(less: Unallocated Corporate)
    
(7,884
)
    
31,024
    
N.M.
                                                                          
Total
  
$
13,423
    
$
129,126
      
10.4
%
                                                                        
                                                                                                 
                                                                                                 
Average Capital Employed
  
As of the three Months Ended August 4, 2019
  
As of the three Months Ended April 28, 2019
  
As of the three Months Ended January 27, 2019
   
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)
  
$
83,056
      
40,456
      
6,414
      
94,521
      
224,447
    
$
83,393
      
37,529
      
5,618
      
93,186
      
219,726
    
$
86,707
      
43,097
      
5,607
      
89,497
      
224,908
  
Total liabilities (5)
    
(11,854
)
    
(20,352
)
    
(2,301
)
    
(25,604
)
    
(60,111
)
    
(10,996
)
    
(18,114
)
    
(2,215
)
    
(24,154
)
    
(55,479
)
    
(11,604
)
    
(22,483
)
    
(2,168
)
    
(21,421
)
    
(57,676
)
                                                                                                                         
Subtotal
  
$
71,202
    
$
20,104
    
$
4,113
    
$
68,917
    
$
164,336
    
$
72,397
    
$
19,415
    
$
3,403
    
$
69,032
    
$
164,247
    
$
75,103
    
$
20,614
    
$
3,439
    
$
68,076
    
$
167,232
  
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(44,236
)
    
(44,236
)
    
-
      
-
      
-
      
(40,008
)
    
(40,008
)
    
-
      
-
      
-
      
(26,418
)
    
(26,418
)
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(5,001
)
    
(5,001
)
    
-
      
-
      
-
      
(13,544
)
    
(13,544
)
Current income taxes receivable
    
-
      
-
      
-
      
(776
)
    
(776
)
    
-
      
-
      
-
      
(776
)
    
(776
)
    
-
      
-
      
-
      
-
      
-
  
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,347
)
    
(7,347
)
    
-
      
-
      
-
      
(7,081
)
    
(7,081
)
    
-
      
-
      
-
      
(6,834
)
    
(6,834
)
Noncurrent income taxes receivable
    
-
      
-
      
-
      
(733
)
    
(733
)
    
-
      
-
      
-
      
(733
)
    
(733
)
    
-
      
-
      
-
      
-
      
-
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
(486
)
    
(486
)
    
-
      
-
      
-
      
(457
)
    
(457
)
    
-
      
-
      
-
      
(3,224
)
    
(3,224
)
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Income taxes payable - current
    
-
      
-
      
-
      
1,116
      
1,116
      
-
      
-
      
-
      
1,022
      
1,022
      
-
      
-
      
-
      
642
      
642
  
Income taxes payable - long-term
    
-
      
-
      
-
      
3,640
      
3,640
      
-
      
-
      
-
      
3,249
      
3,249
      
-
      
-
      
-
      
3,294
      
3,294
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,543
      
2,543
      
-
      
-
      
-
      
3,176
      
3,176
      
-
      
-
      
-
      
2,225
      
2,225
  
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Subordinated loan payable
    
-
      
-
      
-
      
925
      
925
      
-
      
-
      
-
      
675
      
675
      
-
      
-
      
-
      
-
      
-
  
Deferred compensation - non-current
    
-
      
-
      
-
      
7,232
      
7,232
      
-
      
-
      
-
      
6,998
      
6,998
      
-
      
-
      
-
      
6,782
      
6,782
  
Total Capital Employed
  
$
71,202
    
$
20,104
    
$
4,113
    
$
30,795
    
$
126,214
    
$
72,397
    
$
19,415
    
$
3,403
    
$
30,096
    
$
125,311
    
$
75,103
    
$
20,614
    
$
3,439
    
$
30,999
    
$
130,155
  
                                                                                                                         
                                                                                                                         
    As of the three Months Ended October 28, 2018   As of the three Months Ended July 29, 2018                                        
   
Mattress
  
Upholstery
  
Home
  
Unallocated
        
Mattress
  
Upholstery
  
Home
  
Unallocated
                                              
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                        
                                                                                                                         
Total assets (4)
  
$
86,494
      
37,442
      
5,203
      
93,072
      
222,211
    
$
93,601
      
37,386
      
4,463
      
90,922
      
226,372
                                          
Total liabilities (5)
    
(9,790
)
    
(19,646
)
    
(1,960
)
    
(23,346
)
    
(54,742
)
    
(12,883
)
    
(17,880
)
    
(1,710
)
    
(27,869
)
    
(60,342
)
                                        
                                                                                                                         
Subtotal
  
$
76,704
    
$
17,796
    
$
3,243
    
$
69,726
    
$
167,469
    
$
80,718
    
$
19,506
    
$
2,753
    
$
63,053
    
$
166,030
                                          
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(14,768
)
    
(14,768
)
    
-
      
-
      
-
      
(8,593
)
    
(8,593
)
                                        
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(26,719
)
    
(26,719
)
    
-
      
-
      
-
      
(30,756
)
    
(30,756
)
                                        
Current income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,851
)
    
(7,851
)
    
-
      
-
      
-
      
(7,671
)
    
(7,671
)
                                        
Noncurrent income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
(3,614
)
    
(3,614
)
    
-
      
-
      
-
      
(3,721
)
    
(3,721
)
                                        
Deferred compensation - current
    
-
      
-
      
-
      
714
      
714
      
-
      
-
      
-
      
-
      
-
                                          
Income taxes payable - current
    
-
      
-
      
-
      
2,044
      
2,044
      
-
      
-
      
-
      
1,244
      
1,244
                                          
Income taxes payable - long-term
    
-
      
-
      
-
      
3,233
      
3,233
      
-
      
-
      
-
      
3,733
      
3,733
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,225
      
2,225
      
-
      
-
      
-
      
2,150
      
2,150
                                          
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
4,000
      
4,000
                                          
Subordinated loan payable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred compensation - non-current
    
-
      
-
      
-
      
7,120
      
7,120
      
-
      
-
      
-
      
7,679
      
7,679
                                          
Total Capital Employed
  
$
76,704
    
$
17,796
    
$
3,243
    
$
32,110
    
$
129,853
    
$
80,718
    
$
19,506
    
$
2,753
    
$
31,118
    
$
134,095
                                          
                                                                                                                         
   
Mattress
  
Upholstery
  
Home
  
Unallocated
                                                                                      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                
Average Capital
Employed (3)
  
$
75,225
    
$
19,487
    
$
3,390
    
$
31,024
    
$
129,126
                                                                                  

Notes
(1)
See reconciliation per page 10 of this financial information release.
 
 
(2)
Return on average capital employed represents the last twelve months operating income as of August 4, 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, subordinated loan payable, and current and noncurrent deferred compensation.
   
(3)
 Average capital employed was computed using the quarterly five periods ending August 4, 2019, April 28, 2019, January 27, 2019, October 28, 2018, and July 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 corporate 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 9 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED JULY 29, 2018
(Amounts in Thousands)
(Unaudited)
   
Operating Income
                                                                                     
   
Twelve Months
  
Average
  
Return
on
                                                                         
   
Ended
  
Capital
  
Avg. Capital
                                                                         
   
July 29,
2018 (1)
  
Employed
(3)
  
Employed
(2)
                                                                         
                                                                                           
Mattress Fabrics
  
$
22,277
    
$
77,448
      
28.8
%
                                                                        
Upholstery Fabrics
    
10,592
      
19,715
      
53.7
%
                                                                        
Home Accessories
    
33
      
551
    
N.M.
                                                                          
(less: Unallocated Corporate)
    
(8,314
)
    
17,421
    
N.M.
                                                                          
Total
  
$
24,588
    
$
115,134
      
21.4
%
                                                                        
                                                                                                 
                                                                                                 
Average Capital Employed
   As of the three Months Ended July 29, 2018   As of the three Months Ended April 29, 2018   As of the three Months Ended January 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)
  
$
93,601
      
37,386
      
4,463
      
90,922
      
226,372
    
$
95,061
      
39,812
      
-
      
83,111
      
217,984
    
$
93,827
      
43,458
      
-
      
79,559
      
216,844
  
Total liabilities (5)
    
(12,883
)
    
(17,880
)
    
(1,710
)
    
(27,869
)
    
(60,342
)
    
(17,335
)
    
(18,679
)
    
-
      
(18,594
)
    
(54,608
)
    
(18,418
)
    
(22,781
)
    
-
      
(23,463
)
    
(64,662
)
                                                                                                                         
Subtotal
  
$
80,718
    
$
19,506
    
$
2,753
    
$
63,053
    
$
166,030
    
$
77,726
    
$
21,133
    
$
-
    
$
64,517
    
$
163,376
    
$
75,409
    
$
20,677
    
$
-
    
$
56,096
    
$
152,182
  
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(8,593
)
    
(8,593
)
    
-
      
-
      
-
      
(21,228
)
    
(21,228
)
    
-
      
-
      
-
      
(22,428
)
    
(22,428
)
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,451
)
    
(2,451
)
    
-
      
-
      
-
      
(2,472
)
    
(2,472
)
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(30,756
)
    
(30,756
)
    
-
      
-
      
-
      
(25,759
)
    
(25,759
)
    
-
      
-
      
-
      
(17,206
)
    
(17,206
)
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(5,035
)
    
(5,035
)
    
-
      
-
      
-
      
(13,625
)
    
(13,625
)
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,671
)
    
(7,671
)
    
-
      
-
      
-
      
(7,326
)
    
(7,326
)
    
-
      
-
      
-
      
(7,176
)
    
(7,176
)
Deferred income taxes - non-current
    
-
      
-
      
-
      
(3,721
)
    
(3,721
)
    
-
      
-
      
-
      
(1,458
)
    
(1,458
)
    
-
      
-
      
-
      
(1,942
)
    
(1,942
)
Income taxes payable - current
    
-
      
-
      
-
      
1,244
      
1,244
      
-
      
-
      
-
      
1,437
      
1,437
      
-
      
-
      
-
      
1,580
      
1,580
  
Income taxes payable - long-term
    
-
      
-
      
-
      
3,733
      
3,733
      
-
      
-
      
-
      
3,758
      
3,758
      
-
      
-
      
-
      
10,940
      
10,940
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,150
      
2,150
      
-
      
-
      
-
      
2,150
      
2,150
      
-
      
-
      
-
      
2,096
      
2,096
  
Line of credit
    
-
      
-
      
-
      
4,000
      
4,000
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Deferred compensation - non-current
    
-
      
-
      
-
      
7,679
      
7,679
      
-
      
-
      
-
      
7,353
      
7,353
      
-
      
-
      
-
      
7,216
      
7,216
  
Total Capital Employed
  
$
80,718
    
$
19,506
    
$
2,753
    
$
31,118
    
$
134,095
    
$
77,726
    
$
21,133
    
$
-
    
$
15,958
    
$
114,817
    
$
75,409
    
$
20,677
    
$
-
    
$
13,079
    
$
109,165
  
                                                                                                                         
                                                                                                                         
    As of the three Months Ended October 29, 2017
   As of the three Months Ended July 30, 2017
                                        
   
Mattress
  
Upholstery
  
Home
  
Unallocated
        
Mattress
  
Upholstery
  
Home
  
Unallocated
                                              
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                        
                                                                                                                         
Total assets (4)
  
$
94,626
      
34,974
      
-
      
71,443
      
201,043
    
$
99,190
      
34,491
      
-
      
74,223
      
207,904
                                          
Total liabilities (5)
    
(16,150
)
    
(17,225
)
    
-
      
(14,588
)
    
(47,963
)
    
(24,277
)
    
(14,983
)
    
-
      
(18,967
)
    
(58,227
)
                                        
                                                                                                                         
Subtotal
  
$
78,476
    
$
17,749
    
$
-
    
$
56,855
    
$
153,080
    
$
74,913
    
$
19,508
    
$
-
    
$
55,256
    
$
149,677
                                          
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(15,739
)
    
(15,739
)
    
-
      
-
      
-
      
(18,322
)
    
(18,322
)
                                        
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
(2,478
)
    
(2,478
)
    
-
      
-
      
-
      
(2,469
)
    
(2,469
)
                                        
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(4,015
)
    
(4,015
)
    
-
      
-
      
-
      
-
      
-
                                          
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(26,853
)
    
(26,853
)
    
-
      
-
      
-
      
(30,907
)
    
(30,907
)
                                        
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(6,921
)
    
(6,921
)
    
-
      
-
      
-
      
(6,714
)
    
(6,714
)
                                        
Deferred income taxes - non-current
    
-
      
-
      
-
      
(491
)
    
(491
)
    
-
      
-
      
-
      
(436
)
    
(436
)
                                        
Income taxes payable - current
    
-
      
-
      
-
      
692
      
692
      
-
      
-
      
-
      
884
      
884
                                          
Income taxes payable - long-term
    
-
      
-
      
-
      
487
      
487
      
-
      
-
      
-
      
487
      
487
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
4,641
      
4,641
      
-
      
-
      
-
      
4,253
      
4,253
                                          
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
5,000
      
5,000
                                          
Deferred compensation - non-current
    
-
      
-
      
-
      
6,970
      
6,970
      
-
      
-
      
-
      
6,769
      
6,769
                                          
Total Capital Employed
  
$
78,476
    
$
17,749
    
$
-
    
$
13,148
    
$
109,373
    
$
74,913
    
$
19,508
    
$
-
    
$
13,801
    
$
108,222
                                          
                                                                                                                         
   
Mattress
  
Upholstery
  
Home
  
Unallocated
                                                                                      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                
Average Capital
Employed (3)
  
$
77,448
    
$
19,715
    
$
551
    
$
17,421
    
$
115,134
                                                                                  

Notes
(1)
See reconciliation per page 10 of this financial information release.
 
 
(2)
Return on average capital employed represents the last twelve months operating income as of July 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 quarterly five periods ending July 29, 2018, April 29, 2018, January 28, 2018, October 29, 2017, and July 30, 2017.
   
(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 corporate 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 10 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATING INCOME (LOSS)
FOR THE TWELVE MONTHS ENDED AUGUST 4, 2019 AND JULY 29, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

   
Quarter Ended
      
                           
Trailing 12
                           
Months
   
10/28/2018
  
1/27/2019
  
4/28/2019
  
8/4/2019
  
8/4/2019
                               
Mattress Fabrics
  
$
2,908
    
$
3,208
    
$
2,698
    
$
2,620
    
$
11,434
  
Upholstery Fabrics
    
2,722
      
3,799
      
1,777
      
2,875
      
11,173
  
Home Accessories
    
25
      
(311
)
    
(479
)
    
(535
)
    
(1,300
)
Unallocated Corporate
    
(1,913
)
    
(1,628
)
    
(2,037
)
    
(2,306
)
    
(7,884
)
Subtotal
    
3,742
      
5,068
      
1,959
      
2,654
      
13,423
  
Other non-recurring charges
    
(249
)
    
(429
)
    
-
      
-
      
(678
)
Restructuring (expense) credit and related charges
    
791
      
(340
)
    
-
      
35
      
486
  
                                         
Operating income
  
$
4,284
    
$
4,299
    
$
1,959
    
$
2,689
    
$
13,231
  
                                         
                                         
   
Quarter Ended
        
                                   
Trailing 12
                                   
Months
   
10/29/2017
  
1/28/2018
  
4/29/2018
  
7/29/2018
  
7/29/2018
                                         
Mattress Fabrics
  
$
6,562
    
$
6,837
    
$
6,088
    
$
2,790
    
$
22,277
  
Upholstery Fabrics
    
2,374
      
3,510
      
2,181
      
2,527
      
10,592
  
Home Accessories
    
-
      
-
      
-
      
33
      
33
  
Unallocated Corporate
    
(2,547
)
    
(2,703
)
    
(1,805
)
    
(1,259
)
    
(8,314
)
Subtotal
  
$
6,389
    
$
7,644
    
$
6,464
    
$
4,091
    
$
24,588
  
Restructuring expense and related charges
    
-
      
-
      
-
      
(2,016
)
    
(2,016
)
                                         
Operating income
  
$
6,389
    
$
7,644
    
$
6,464
    
$
2,075
    
$
22,572
  
                                         
% Over (Under)
    
-32.9
%
    
-43.8
%
    
-69.7
%
    
29.6
%
    
-41.4
%