EX-99.B 3 a52135844ex99_b.htm EXHIBIT 99(B)
Exhibit 99(b)
Page 1 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)

    THREE MONTHS ENDED
   

(4)            Amounts             (4)  
      Percent of Sales  
   
November 3,
2019
 
October 28,
2018

% Over
(Under)
  
November 3,
2019
 
October 28,
2018
                                         
Net sales
  
$
72,619
      
77,006
      
(5.7
)%
    
100.0
%
    
100.0
%
Cost of sales
    
58,516
      
63,680
  
(1)(3)
  
(8.1
)%
    
80.6
%
    
82.7
%
Gross profit
    
14,103
      
13,326
      
5.8
%
    
19.4
%
    
17.3
%
                                         
Selling, general and
                                        
  administrative expenses
    
10,120
      
10,103
  
(3)
  
0.2
%
    
13.9
%
    
13.1
%
Restructuring credit
    
-
      
(1,061
)
(2)
  
(100.0
)%
    
0.0
%
    
(1.4
)%
Income from operations
    
3,983
      
4,284
      
(7.0
)%
    
5.5
%
    
5.6
%
                                         
Interest expense
    
30
      
18
      
66.7
%
    
0.0
%
    
0.0
%
Interest income
    
(240
)
    
(151
)
    
58.9
%
    
(0.3
)%
    
(0.2
)%
Other expense
    
87
      
142
      
(38.7
)%
    
0.1
%
    
0.2
%
Income before income taxes
    
4,106
      
4,275
      
(4.0
)%
    
5.7
%
    
5.6
%
                                         
Income tax expense *
    
1,898
      
1,276
      
48.7
%
    
46.2
%
    
29.8
%
                                         
Loss from investment in unconsolidated joint venture
    
16
      
55
      
(70.9
)%
    
0.0
%
    
0.1
%
Net income
    
2,192
      
2,944
      
(25.5
)%
    
3.0
%
    
3.8
%
Net loss (income) attributable to non-controlling interest
    
108
      
(11
)
    
N.M.
      
0.1
%
    
(0.0
)%
Net income attributable to Culp Inc. common shareholders
  
$
2,300
      
2,933
      
(21.6
)%
    
3.2
%
    
3.8
%
                                         
                                         
Net income attributable to Culp Inc. common shareholders per share - basic
  
$
0.19
    
$
0.23
      
(17.4
)%
                
Net income attributable to Culp Inc. common shareholders per share - diluted
  
$
0.19
    
$
0.23
      
(17.4
)%
                
Average shares outstanding-basic
    
12,408
      
12,515
      
(0.9
)%
                
Average shares outstanding-diluted
    
12,408
      
12,551
      
(1.1
)%
                

* 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 October 28, 2018, includes a $270 restructuring related charge for operating costs associated with our closed upholstery fabrics facility located in Anderson, SC.
                 
(2)
The $1.1 million restructuring credit represents a $1.1 million gain on the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.          
                 
(3) 
During the three-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the total $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively.
                 
(4)
See page 8 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits.
Page 2 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)

   
SIX MONTHS ENDED
   
(4)                  Amounts                  (4)
        

Percent of Sales
   
November 3,
2019
  
October 28,
2018
  
% Over
(Under)
  
November 3,
2019
  
October 28,
2018
                               
Net sales
  
$
147,466
      
148,479
      
(0.7
)%
    
100.0
%
    
100.0
%
Cost of sales
    
119,998
      
124,594
  
(1)(3)
  
(3.7
)%
    
81.4
%
    
83.9
%
Gross profit
    
27,468
      
23,885
      
15.0
%
    
18.6
%
    
16.1
%
                                         
Selling, general and
                                        
  administrative expenses
    
20,831
      
18,136
  
(3)
  
14.9
%
    
14.1
%
    
12.2
%
Restructuring credit
    
(35
)
(2)
  
(610
)
(2)
  
(94.3
)%
    
(0.0
)%
    
(0.4
)%
Income from operations
    
6,672
      
6,359
      
4.9
%
    
4.5
%
    
4.3
%
                                         
Interest expense
    
39
      
38
      
2.6
%
    
0.0
%
    
0.0
%
Interest income
    
(490
)
    
(301
)
    
62.8
%
    
(0.3
)%
    
(0.2
)%
Other expense
    
174
      
399
      
(56.4
)%
    
0.1
%
    
0.3
%
Income before income taxes
    
6,949
      
6,223
      
11.7
%
    
4.7
%
    
4.2
%
                                         
Income tax expense *
    
3,580
      
2,182
      
64.1
%
    
51.5
%
    
35.1
%
                                         
Loss from investment in unconsolidated joint venture
    
3
      
132
      
(97.7
)%
    
0.0
%
    
0.1
%
Net income
    
3,366
      
3,909
      
(13.9
)%
    
2.3
%
    
2.6
%
Net loss (income) attributable to non-controlling interest
    
272
      
(19
)
  
N.M.
      
0.2
%
    
(0.0
)%
Net income attributable to Culp Inc. common shareholders
  
$
3,638
      
3,890
      
(6.5
)%
    
2.5
%
    
2.6
%
                                         
                                         
Net income attributable to Culp Inc. common shareholders per share - basic
  
$
0.29
    
$
0.31
      
(6.5
)%
                
Net income attributable to Culp Inc. common shareholders per share - diluted
  
$
0.29
    
$
0.31
      
(6.5
)%
                
Average shares outstanding-basic
    
12,403
      
12,512
      
(0.9
)%
                
Average shares outstanding-diluted
    
12,413
      
12,612
      
(1.6
)%
                

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

Notes
   
(1) 

Cost of sales for the six-month period ending October 28, 2018, includes restructuring related charges totaling $1.8 million, of which $1.6 million pertains to inventory markdowns and $270 pertains to other operating costs associated with our closed upholstery fabrics facility located in Anderson, SC.
 
 
(2)
The $35 restructuring credit for the six-month period ending November 3, 2019, represents employee termination benefits associated with the closure of our Anderson, SC facility. The $610 restructuring credit for the six-month period ending October 28, 2018, represents a $1.1 million gain on the sale of equipment partially offset by a charge of $513 for employee  termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.
   
(3)

During the six-month period ending October 28, 2018, our mattress fabrics segment incurred non-recurring charges totaling $248 that pertained to employee termination benefits and other operational reorganization costs. Of the total $248 total non-recurring charge, $159 and $89 were recorded in cost of sales and selling, general, and administrative expenses, respectively.
 
 
(4)
 See page 9 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018, which exclude certain charges and credits.

Page 3 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019
Unaudited
(Amounts in Thousands)

                               
                               
   
Amounts
                  
   
(Condensed)
  
Increase
      
   
November 3,
  
October 28,
  
(Decrease)
  
* April 28,
   
2019
  
2018
  
Dollars
  
Percent
  
2019
                               
Current assets
                              
Cash and cash equivalents
  
$
47,183
      
14,768
      
32,415
      
219.5
%
    
40,008
  
Short-term investments - Held-To-Maturity
    
-
      
26,719
      
(26,719
)
    
(100.0
)%
    
5,001
  
Accounts receivable
    
24,522
      
24,362
      
160
      
0.7
%
    
23,751
  
Inventories
    
55,228
      
50,601
      
4,627
      
9.1
%
    
50,860
  
Current income taxes receivable
    
776
      
-
      
776
      
100.0
%
    
776
  
Assets held for sale
    
150
      
237
      
(87
)
    
(36.7
)%
    
-
  
Other current assets
    
2,710
      
2,461
      
249
      
10.1
%
    
2,849
  
Total current assets
    
130,569
      
119,148
      
11,421
      
9.6
%
    
123,245
  
                                         
Property, plant & equipment, net
    
46,973
      
51,325
      
(4,352
)
    
(8.5
)%
    
48,389
  
Goodwill
    
27,222
      
27,222
      
-
      
0.0
%
    
27,222
  
Intangible assets
    
10,260
      
10,636
      
(376
)
    
(3.5
)%
    
10,448
  
Long-term investments - Rabbi Trust
    
7,575
      
7,851
      
(276
)
    
(3.5
)%
    
7,081
  
Right of use asset
    
5,879
      
-
      
5,879
      
100.0
%
    
-
  
Noncurrent income taxes receivable
    
733
      
-
      
733
      
100.0
%
    
733
  
Deferred income taxes
    
511
      
3,614
      
(3,103
)
    
(85.9
)%
    
457
  
Investment in unconsolidated joint venture
    
1,504
      
1,470
      
34
      
2.3
%
    
1,508
  
Other assets
    
496
      
945
      
(449
)
    
(47.5
)%
    
643
  
                                         
Total assets
  
$
231,722
      
222,211
      
9,511
      
4.3
%
    
219,726
  
                                         
                                         
                                         
Current liabilities
                                        
Accounts payable - trade
  
$
27,395
      
24,007
      
3,388
      
14.1
%
    
24,377
  
Accounts payable - capital expenditures
    
402
      
114
      
288
      
252.6
%
    
78
  
Operating lease liability - current
    
2,282
      
-
      
2,282
      
100.0
%
    
-
  
Deferred revenue
    
375
      
649
      
(274
)
    
(42.2
)%
    
399
  
Accrued expenses
    
8,915
      
8,670
      
245
      
2.8
%
    
9,192
  
Accrued restructuring costs
    
35
      
260
      
(225
)
    
(86.5
)%
    
124
  
Deferred compensation
    
-
      
714
      
(714
)
    
(100.0
)%
    
-
  
Income taxes payable - current
    
1,539
      
2,044
      
(505
)
    
(24.7
)%
    
1,022
  
Total current liabilities
    
40,943
      
36,458
      
4,485
      
12.3
%
    
35,192
  
                                         
Accrued expenses - long-term
    
333
      
-
      
333
      
100.0
%
    
333
  
Subordinated loan payable
    
925
      
-
      
925
      
100.0
%
    
675
  
Operating lease liability - long-term
    
3,439
      
-
      
3,439
      
100.0
%
    
-
  
Contingent consideration - Earn-Out Obligation
    
6,006
      
5,706
      
300
      
5.3
%
    
5,856
  
Income taxes payable - long-term
    
3,442
      
3,233
      
209
      
6.5
%
    
3,249
  
Deferred income taxes
    
3,283
      
2,225
      
1,058
      
47.6
%
    
3,176
  
Deferred compensation
    
7,429
      
7,120
      
309
      
4.3
%
    
6,998
  
                                         
Total liabilities
    
65,800
      
54,742
      
11,058
      
20.2
%
    
55,479
  
                                         
Shareholders' equity
                                        
Shareholders' equity attributable to Culp Inc.
    
161,520
      
162,918
      
(1,398
)
    
(0.9
)%
    
159,933
  
Non-controlling interest
    
4,402
      
4,551
      
(149
)
    
(3.3
)%
    
4,314
  
     
165,922
      
167,469
      
(1,547
)
    
(0.9
)%
    
164,247
  
                                         
Total liabilities and
                                        
shareholders' equity
  
$
231,722
      
222,211
      
9,511
      
4.3
%
    
219,726
  
                                         
Shares outstanding
    
12,412
      
12,492
      
(80
)
    
(0.6
)%
    
12,391
  

*  Derived from audited financial statements.
Page 4 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
SUMMARY OF CASH AND INVESTMENTS
NOVEMBER 3, 2019, OCTOBER 28, 2018, AND APRIL 28, 2019
Unaudited
(Amounts in Thousands)

                   
                   
                   
    Amounts
   
November 3,
  
October 28,
  
April 28,
   
2019
  
2018
  
2019*
                     
                     
Cash and cash equivalents
  
$
47,183
    
$
14,768
    
$
40,008
  
                         
Short-term investments - Held-To-Maturity
    
-
      
26,719
      
5,001
  
                         
Total Cash and Investments
  
$
47,183
    
$
41,487
    
$
45,009
  

* Derived from audited financial statements.
Page 5 of 13

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
Unaudited
(Amounts in Thousands)

   
SIX MONTHS ENDED
   
Amounts
   
November 3,
  
October 28,
   
2019
  
2018
             
Cash flows from operating activities:
            
Net income
  
$
3,366
      
3,909
  
Adjustments to reconcile net income to net cash
                
provided by operating activities:
                
Depreciation
    
3,893
      
4,056
  
Amortization
    
353
      
391
  
Stock-based compensation
    
467
      
(106
)
Deferred income taxes
    
53
      
(2,081
)
Realized loss on sale of short-term investments (Available for Sale)
    
-
      
94
  
Gain on sale of equipment
    
(93
)
    
(1,079
)
Loss from investment in unconsolidated joint venture
    
3
      
132
  
Foreign currency exchange gain
    
(106
)
    
(102
)
Changes in assets and liabilities, net of effects of acquisition of businesses:
                
Accounts receivable
    
(835
)
    
1,639
  
Inventories
    
(4,797
)
    
3,767
  
Other current assets
    
(31
)
    
379
  
Other assets
    
133
      
(10
)
Accounts payable
    
3,564
      
(3,264
)
Deferred revenue
    
(24
)
    
(160
)
Accrued expenses and deferred compensation
    
1,620
      
(1,472
)
Accrued restructuring costs
    
(89
)
    
260
  
Income taxes
    
770
      
247
  
Net cash provided by operating activities
    
8,247
      
6,600
  
                 
Cash flows from investing activities:
                
Net cash paid for acquisition of businesses
    
-
      
(12,096
)
Capital expenditures
    
(2,410
)
    
(2,096
)
Proceeds from the sale of property, plant, and equipment
    
363
      
1,280
  
Investment in unconsolidated joint venture
    
-
      
(100
)
Proceeds from the sale of short-term investments (Held to Maturity)
    
5,000
      
4,000
  
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)
    
(479
)
    
(526
)
Net cash provided by (used in) investing activities
    
2,474
      
(7,090
)
                 
Cash flows from financing activities:
                
Proceeds from line of credit
    
-
      
12,000
  
Payments on line of credit
    
-
      
(12,000
)
Payments on vendor-financed capital expenditures
    
-
      
(1,412
)
Proceeds from subordinated loan payable
    
250
      
-
  
Cash paid for acquisition of businesses
    
(1,532
)
    
-
  
Dividends paid
    
(2,482
)
    
(2,253
)
Common stock surrendered for withholding taxes payable
    
(51
)
    
(1,292
)
Capital contribution from non-controlling interest
    
360
      
-
  
Common stock repurchased
    
-
      
(844
)
Net cash used in financing activities
    
(3,455
)
    
(5,801
)
                 
Effect of exchange rate changes on cash and cash equivalents
    
(91
)
    
(169
)
                 
Increase (decrease) in cash and cash equivalents
    
7,175
      
(6,460
)
                 
Cash and cash equivalents at beginning of period
    
40,008
      
21,228
  
                 
Cash and cash equivalents at end of period
  
$
47,183
      
14,768
  
                 
Free Cash Flow (1)
  
$
5,630
      
3,577
  


             
(1)  Free Cash Flow reconciliation is as follows:
            
   
FY 2020
    
FY 2019
  
A) Net cash provided by operating activities
  
$
8,247
      
6,600
  
B) Minus:  Capital Expenditures
    
(2,410
)
    
(2,096
)
C) Plus:     Proceeds from the sale of property, plant, and equipment
    
363
      
1,280
  
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)
    
(479
)
    
(526
)
G) Effects of exchange rate changes on cash and cash equivalents
    
(91
)
    
(169
)
Free Cash Flow
  
$
5,630
      
3,577
  
                 


Page 6 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
           FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
        (Unaudited)
           (Amounts in thousands)

   
THREE MONTHS ENDED
        
   
Amounts
        
Percent of Total Sales
   
November 3,
  
October 28,
  
% Over
  
November 3,
  
October 28,
Net Sales by Segment
  
2019
  
2018
  
(Under)
  
2019
  
2018
                               
Mattress Fabrics
  
$
35,459
      
37,205
      
(4.7
)%
    
48.8
%
    
48.3
%
Upholstery Fabrics
    
33,884
      
35,017
      
(3.2
)%
    
46.7
%
    
45.5
%
Home Accessories
    
3,276
      
4,784
      
(31.5
)%
    
4.5
%
    
6.2
%
                                         
Net Sales
  
$
72,619
      
77,006
      
(5.7
)%
    
100.0
%
    
100.0
%
                                         
                                         
Gross Profit by Segment
                          
Gross Profit Margin
                                         
Mattress Fabrics
  
$
6,247
      
5,781
      
8.1
%
    
17.6
%
    
15.5
%
Upholstery Fabrics
    
7,279
      
6,257
      
16.3
%
    
21.5
%
    
17.9
%
Home Accessories
    
577
      
1,717
      
(66.4
)%
    
17.6
%
    
35.9
%
Subtotal
    
14,103
      
13,755
      
2.5
%
    
19.4
%
    
17.9
%
                                         
Other non-recurring charges
    
-
      
(159
)
(1)
  
(100.0
)%
    
0.0
%
    
(0.2
)%
Restructuring related charges
    
-
      
(270
)
(1)
  
(100.0
)%
    
0.0
%
    
(0.4
)%
                                         
Gross Profit
  
$
14,103
      
13,326
      
5.8
%
    
19.4
%
    
17.3
%
                                         
Selling, General and Administrative Expenses by Segment
                          Percent of Sales
                                         
Mattress Fabrics
  
$
2,953
      
2,872
      
2.8
%
    
8.3
%
    
7.7
%
Upholstery Fabrics
    
3,806
      
3,535
      
7.7
%
    
11.2
%
    
10.1
%
Home Accessories
    
928
      
1,694
      
(45.2
)%
    
28.3
%
    
35.4
%
Unallocated Corporate expenses
    
2,433
      
1,913
      
27.2
%
    
3.4
%
    
2.5
%
Subtotal
    
10,120
      
10,014
      
1.1
%
    
13.9
%
    
13.0
%
                                         
Other non-recurring charges
    
-
      
89
      
(100.0
)%
    
0.0
%
    
0.1
%
                                         
Selling, General and Administrative Expenses
  
$
10,120
      
10,103
      
0.2
%
    
13.9
%
    
13.1
%
                                         
Operating Income (loss) by Segment
                          
Operating Income (Loss) Margin
                                         
Mattress Fabrics
  
$
3,293
      
2,909
      
13.2
%
    
9.3
%
    
7.8
%
Upholstery Fabrics
    
3,473
      
2,722
      
27.6
%
    
10.2
%
    
7.8
%
Home Accessories
    
(350
)
    
23
    
N.M.
      
(10.7
)%
    
0.5
%
Unallocated corporate expenses
    
(2,433
)
    
(1,913
)
    
27.2
%
    
(3.4
)%
    
(2.5
)%
Subtotal
    
3,983
      
3,741
      
6.5
%
    
5.5
%
    
4.9
%
                                         
Other non-recurring charges
    
-
      
(248
)
(1)
  
(100.0
)%
    
0.0
%
    
(0.3
)%
Restructuring credit and related charges
    
-
      
791
  
(1)
  
(100.0
)%
    
0.0
%
    
1.0
%
                                         
Operating income
  
$
3,983
      
4,284
      
(7.0
)%
    
5.5
%
    
5.6
%
                                         
                                         
Depreciation Expense by Segment
                                        
                                         
Mattress Fabrics
  
$
1,701
      
1,752
      
(2.9
)%
                
Upholstery Fabrics
    
192
      
197
      
(2.5
)%
                
Home Accessories
    
95
      
92
      
3.3
%
                
Depreciation Expense
  
$
1,988
      
2,041
      
(2.6
)%
                


Notes
   
(1)
 See page 8 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the three-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits.
                                                                 
Page 7 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
           FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
        (Unaudited)
           (Amounts in thousands)

    SIX MONTHS ENDED      
     
    Amounts
         Percent of Total Sales  
   
November 3,
    
October 28,
    
% Over
  
November 3,
  
October 28,
Net Sales by Segment
  
2019
    
2018
    
(Under)
  
2019
  
2018
                                 
Mattress Fabrics
  
$
74,145
      
71,603
      
3.6
%
    
50.3
%
    
48.2
%
Upholstery Fabrics
    
65,744
      
69,507
      
(5.4
)%
    
44.6
%
    
46.8
%
Home Accessories
    
7,577
      
7,369
      
2.8
%
    
5.1
%
    
5.0
%
                                         
Net Sales
  
$
147,466
      
148,479
      
(0.7
)%
    
100.0
%
    
100.0
%
                                         
                                         
Gross Profit by Segment
                          
Gross Profit Margin
                                         
Mattress Fabrics
  
$
11,940
      
11,084
      
7.7
%
    
16.1
%
    
15.5
%
Upholstery Fabrics
    
14,000
      
12,410
      
12.8
%
    
21.3
%
    
17.9
%
Home Accessories
    
1,528
      
2,385
      
(35.9
)%
    
20.2
%
    
32.4
%
Subtotal
    
27,468
      
25,879
      
6.1
%
    
18.6
%
    
17.4
%
                                         
Other non-recurring charges
    
-
      
(159
)
(1)
  
(100.0
)%
    
0.0
%
    
(0.1
)%
Restructuring related charges
    
-
      
(1,835
)
(1)
  
(100.0
)%
    
0.0
%
    
(1.2
)%
                                         
Gross Profit
  
$
27,468
      
23,885
      
15.0
%
    
18.6
%
    
16.1
%
                                         
Selling, General and Administrative Expenses by Segment
                          Percent of Sales     
                                         
Mattress Fabrics
  
$
6,024
      
5,384
      
11.9
%
    
8.1
%
    
7.5
%
Upholstery Fabrics
    
7,652
      
7,161
      
6.9
%
    
11.6
%
    
10.3
%
Home Accessories
    
2,416
      
2,330
      
3.7
%
    
31.9
%
    
31.6
%
Unallocated Corporate expenses
    
4,739
      
3,172
      
49.4
%
    
3.2
%
    
2.1
%
Subtotal
    
20,831
      
18,047
      
15.4
%
    
14.1
%
    
12.2
%
                                         
                                         
Other non-recurring charges
    
-
      
89
  
(1)
  
(100.0
)%
    
0.0
%
    
0.1
%
                                         
Selling, General and Administrative Expenses
  
$
20,831
      
18,136
      
14.9
%
    
14.1
%
    
12.2
%
                                         
                                         
Operating Income (loss) by Segment
                          
Operating Income (Loss) Margin
                                         
Mattress Fabrics
  
$
5,916
      
5,699
      
3.8
%
    
8.0
%
    
8.0
%
Upholstery Fabrics
    
6,348
      
5,249
      
20.9
%
    
9.7
%
    
7.6
%
Home Accessories
    
(888
)
    
56
    
N.M.
      
(11.7
)%
    
0.8
%
Unallocated corporate expenses
    
(4,739
)
    
(3,172
)
    
49.4
%
    
(3.2
)%
    
(2.1
)%
Subtotal
  
$
6,637
      
7,832
      
(15.3
)%
    
4.5
%
    
5.3
%
                                         
Other non-recurring charges
    
-
      
(248
)
(1)
  
(100.0
)%
    
0.0
%
    
(0.2
)%
Restructuring credit (expense) and related charges
    
35
      
(1,225
)
(1)
  
(102.9
)%
    
0.0
%
    
(0.8
)%
                                         
Operating income
    
6,672
      
6,359
      
4.9
%
    
4.5
%
    
4.3
%
                                         
                                         
Return on Capital (2)
                                        
                                         
Mattress Fabrics
    
16.2
%
    
23.9
%
                        
Upholstery Fabrics
    
61.2
%
    
56.5
%
                        
Home Accessories
  
N.M.
    
N.M.
                          
Unallocated Corporate
  
N.M.
    
N.M.
                          
Consolidated
    
10.7
%
    
18.4
%
                        
                                         
Capital Employed (2) (3)
                                        
                                         
Mattress Fabrics
  
$
70,394
      
76,704
      
(8.2
)%
                
Upholstery Fabrics
    
19,411
      
17,796
      
9.1
%
                
Home Accessories
    
4,548
      
3,243
      
40.2
%
                
Unallocated Corporate
    
31,409
      
32,110
      
(2.2
)%
                
Consolidated
  
$
125,762
      
129,853
      
(3.2
)%
                
                                         
                                         
Depreciation Expense by Segment
                                        
                                         
Mattress Fabrics
  
$
3,321
      
3,514
      
(5.5
)%
                
Upholstery Fabrics
    
382
      
412
      
(7.3
)%
                
Home Accessories
    
190
      
130
      
46.2
%
                
Depreciation Expense
  
$
3,893
      
4,056
      
(4.0
)%
                


Notes 
   
(1)
 See page 9 for our Reconciliation of Selected Income Statement Information to Adjusted Results for the six-month periods November 3, 2019 and October 28, 2018 for descriptions of these charges and credits.
 
 
(2)
See pages 11 and 12 of this financial information release for calculations.
 
 
(3)
The capital employed balances are as of November 3, 2019 and October 28, 2018.

Page 8 of 13

CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THE THREE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

                                                                   
   
THREE MONTHS ENDED (UNAUDITED)
        
                                                                   
                                                     
              
     As Reported               November 3, 2019
         As Reported                 October 28, 2018             
     November 3,    % of           Adjusted    % of    October 28,    % of          Adjusted    % of    % Over
     2019    Sales
   Adjustments    Results    Sales    2018
   Sales    Adjustments    Results
   Sales
   (Under)
                                                                   
Net sales
  
$
72,619
      
100.0
%
    
-
      
72,619
      
100.0
%
    
77,006
      
100.0
%
    
-
      
77,006
      
100.0
%
    
-5.7
%
Cost of sales
    
58,516
      
80.6
%
    
-
      
58,516
      
80.6
%
    
63,680
      
82.7
%
(1)
  
(429
)
    
63,251
      
82.1
%
    
-7.5
%
Gross Profit
    
14,103
      
19.4
%
    
-
      
14,103
      
19.4
%
    
13,326
      
17.3
%
    
(429
)
    
13,755
      
17.9
%
    
2.5
%
                                                                                         
Selling, general and
                                                                                        
  administrative expenses
    
10,120
      
13.9
%
    
-
      
10,120
      
13.9
%
    
10,103
      
13.1
%
(2)
  
(89
)
    
10,014
      
13.0
%
    
1.1
%
Restructuring credit
    
-
      
0.0
%
    
-
      
-
      
0.0
%
    
(1,061
)
    
-1.4
%
(3)
  
1,061
      
-
      
0.0
%
    
0.0
%
Income from operations
    
3,983
      
5.5
%
    
-
      
3,983
      
5.5
%
    
4,284
      
5.6
%
    
543
      
3,741
      
4.9
%
    
6.5
%
                                                                                         
Interest expense
    
30
      
0.0
%
    
-
      
30
      
0.0
%
    
18
      
0.0
%
    
-
      
18
      
0.0
%
    
66.7
%
Interest income
    
(240
)
    
-0.3
%
    
-
      
(240
)
    
-0.3
%
    
(151
)
    
-0.2
%
    
-
      
(151
)
    
-0.2
%
    
58.9
%
Other expense
    
87
      
0.1
%
    
-
      
87
      
0.1
%
    
142
      
0.2
%
    
-
      
142
      
0.2
%
    
-38.7
%
Income before income taxes
    
4,106
      
5.7
%
    
-
      
4,106
      
5.7
%
    
4,275
      
5.6
%
    
543
      
3,732
      
4.8
%
    
10.0
%


Notes
   
(1)
The $429 represents a restructuring related charge of $270 for other operating costs associated with our closed Anderson, SC upholstery fabrics facility and a non-recurring charge of $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
 
 
(2)
The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
   
(3)
The $1.1 million restructuring credit represents a $1.1 million gain for the sale of equipment partially offset by a charge of $63 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.

          Page 9 of 13

CULP, INC.
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
FOR THE SIX MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018

                                                                   
                                                                   
                     
SIX MONTHS ENDED (UNAUDITED)
                          
                                                                   
                                                                   
    As Reported                November 3, 2019
        As Reported                October 28, 2018             
   
November 3,
  
% of
        
Adjusted
  
% of
  
October 28,
  
% of
        
Adjusted
  
% of
  
% Over
   
2019
  
Sales
  
Adjustments
  
Results
  
Sales
  
2018
  
Sales
  
Adjustments
  
Results
  
Sales
  
(Under)
                                                                   
Net sales
  
$
147,466
      
100.0
%
    
-
      
147,466
      
100.0
%
    
148,479
      
100.0
%
    
-
      
148,479
      
100.0
%
    
-0.7
%
Cost of sales
    
119,998
      
81.4
%
    
-
      
119,998
      
81.4
%
    
124,594
      
83.9
%
(2)
  
(1,994
)
    
122,600
      
82.6
%
    
-2.1
%
Gross Profit
    
27,468
      
18.6
%
    
-
      
27,468
      
18.6
%
    
23,885
      
16.1
%
    
(1,994
)
    
25,879
      
17.4
%
    
6.1
%
                                                                                         
Selling, general and
                                                                                        
  administrative expenses
    
20,831
      
14.1
%
    
-
      
20,831
      
14.1
%
    
18,136
      
12.2
%
(3)
  
(89
)
    
18,047
      
12.2
%
    
15.4
%
Restructuring credit
    
(35
)
    
0.0
%
(1)
  
35
      
-
      
0.0
%
    
(610
)
    
-0.4
%
(4)
  
610
      
-
      
0.0
%
    
0.0
%
Income from operations
    
6,672
      
4.5
%
    
35
      
6,637
      
4.5
%
    
6,359
      
4.3
%
    
(1,473
)
    
7,832
      
5.3
%
    
-15.3
%
                                                                                         
Interest expense
    
39
      
0.0
%
    
-
      
39
      
0.0
%
    
38
      
0.0
%
    
-
      
38
      
0.0
%
    
2.6
%
Interest income
    
(490
)
    
-0.3
%
    
-
      
(490
)
    
-0.3
%
    
(301
)
    
-0.2
%
    
-
      
(301
)
    
-0.2
%
    
62.8
%
Other expense
    
174
      
0.1
%
    
-
      
174
      
0.1
%
    
399
      
0.3
%
    
-
      
399
      
0.3
%
    
-56.4
%
Income before income taxes
    
6,949
      
4.7
%
    
35
      
6,914
      
4.7
%
    
6,223
      
4.2
%
    
(1,473
)
    
7,696
      
5.2
%
    
-10.2
%


Notes
   
(1)
The $35 restructuring credit represents employee termination benefits associated with the closure of our Anderson, SC facility.
 
  
(2)
The $2.0 million represents a restructuring related charge of $1.6 million for inventory markdowns and $270 for operating costs associated with the closure of our Anderson, SC upholstery fabrics facility, as well as $159 for employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
 
  
(3)
The $89 represents employee termination benefits and other operational reorganization costs associated with our mattress fabrics segment.
 
  
(4)
The $610 restructuring credit represents a $1.1 million gain for the sale of equipment partially offset by a charge of $513 for employee termination benefits associated with the closure of our Anderson, SC upholstery fabrics facility.
Page 10 of 13

CULP, INC.  FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

                       
   
Quarter Ended
    
                              

Trailing 12
                              

Months
    1/27/2019
  4/28/2019 
  8/4/2019 
  11/3/2019 
  11/3/2019
                                     
Net income (loss)
  
$
3,060
    
$
(1,511
)
  
$
1,174
    
$
2,192
    
$
4,915
  
Income taxes
    
1,225
      
3,017
      
1,682
      
1,898
      
7,822
  
Interest income, net
    
(251
)
    
(210
)
    
(241
)
    
(210
)
    
(912
)
Other non-recurring charges
    
429
      
500
      
-
      
-
      
929
  
Restructuring expense (credit) and related charges
    
340
      
-
      
(35
)
    
-
      
305
  
Depreciation and amortization expense
    
2,232
      
2,218
      
2,081
      
2,165
      
8,696
  
Stock based compensation
    
479
      
(243
)
    
154
      
313
      
703
  
Adjusted EBITDA
  
$
7,514
    
$
3,771
    
$
4,815
    
$
6,358
    
$
22,458
  
                                         
% Net Sales
    
9.7
%
    
5.3
%
    
6.4
%
    
8.8
%
    
7.6
%
                                         
   
Quarter Ended
        
                                 

Trailing 12
                                 

Months
    1/28/2018
    4/29/2018
    7/29/2018
    10/28/2018
   10/28/2018
                                         
Net income (loss)
  
$
(748
)
  
$
12,666
    
$
965
    
$
2,944
    
$
15,827
  
Income taxes
    
8,208
      
(6,217
)
    
906
      
1,276
      
4,173
  
Interest income, net
    
(101
)
    
(117
)
    
(130
)
    
(133
)
    
(481
)
Other non-recurring charges
    
-
      
-
      
-
      
248
      
248
  
Restructuring expense and related charges
    
-
      
-
      
2,016
      
(791
)
    
1,225
  
Depreciation and amortization expense
    
2,048
      
2,096
      
2,160
      
2,287
      
8,591
  
Stock based compensation
    
864
      
(210
)
    
(501
)
    
395
      
548
  
Adjusted EBITDA
  
$
10,271
    
$
8,218
    
$
5,416
    
$
6,226
    
$
30,131
  
                                         
% Net Sales
    
12.0
%
    
10.5
%
    
7.6
%
    
8.1
%
    
9.7
%
                                         
% Over (Under)
    
-26.8
%
    
-54.1
%
    
-11.1
%
    
2.1
%
    
-25.5
%


Page 11 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019
(Amounts in Thousands)
(Unaudited)

   
Operating Income
                                                                                   
   
Twelve Months
Average
  
Return on
                                                                         
   
Ended
  
Capital
  
Avg. Capital
                                                                         
   
November 3, 2019 (1)
  
Employed
(3)
  
Employed
(2)
                                                                         
                                                                                           
Mattress Fabrics
  
$
11,822
    
$
73,160
      
16.2
%
                                                                        
Upholstery Fabrics
    
11,924
      
19,468
      
61.2
%
                                                                        
Home Accessories
    
(1,678
)
    
3,749
    
N.M.
                                                                          
(less: Unallocated Corporate)
    
(8,404
)
    
31,082
    
N.M.
                                                                          
Total
  
$
13,664
    
$
127,459
      
10.7
%
                                                                        
                                                                                                 
                                                                                                 
Average Capital Employed
   As of the three Months Ended November 3, 2019   As of the three Months Ended August 4, 2019   As of the three Months Ended April 28, 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)
  
$
84,473
      
42,122
      
7,280
      
97,847
      
231,722
    
$
83,056
      
40,456
      
6,414
      
94,521
      
224,447
    
$
83,393
      
37,529
      
5,618
      
93,186
      
219,726
  
Total liabilities (5)
    
(14,079
)
    
(22,711
)
    
(2,732
)
    
(26,278
)
    
(65,800
)
    
(11,854
)
    
(20,352
)
    
(2,301
)
    
(25,604
)
    
(60,111
)
    
(10,996
)
    
(18,114
)
    
(2,215
)
    
(24,154
)
    
(55,479
)
                                                                                                                         
Subtotal
  
$
70,394
    
$
19,411
    
$
4,548
    
$
71,569
    
$
165,922
    
$
71,202
    
$
20,104
    
$
4,113
    
$
68,917
    
$
164,336
    
$
72,397
    
$
19,415
    
$
3,403
    
$
69,032
    
$
164,247
  
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(47,183
)
    
(47,183
)
    
-
      
-
      
-
      
(44,236
)
    
(44,236
)
    
-
      
-
      
-
      
(40,008
)
    
(40,008
)
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(5,001
)
    
(5,001
)
Current income taxes receivable
    
-
      
-
      
-
      
(776
)
    
(776
)
    
-
      
-
      
-
      
(776
)
    
(776
)
    
-
      
-
      
-
      
(776
)
    
(776
)
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,575
)
    
(7,575
)
    
-
      
-
      
-
      
(7,347
)
    
(7,347
)
    
-
      
-
      
-
      
(7,081
)
    
(7,081
)
Noncurrent income taxes receivable
    
-
      
-
      
-
      
(733
)
    
(733
)
    
-
      
-
      
-
      
(733
)
    
(733
)
    
-
      
-
      
-
      
(733
)
    
(733
)
Deferred income taxes - non-current
    
-
      
-
      
-
      
(511
)
    
(511
)
    
-
      
-
      
-
      
(486
)
    
(486
)
    
-
      
-
      
-
      
(457
)
    
(457
)
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Income taxes payable - current
    
-
      
-
      
-
      
1,539
      
1,539
      
-
      
-
      
-
      
1,116
      
1,116
      
-
      
-
      
-
      
1,022
      
1,022
  
Income taxes payable - long-term
    
-
      
-
      
-
      
3,442
      
3,442
      
-
      
-
      
-
      
3,640
      
3,640
      
-
      
-
      
-
      
3,249
      
3,249
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
3,283
      
3,283
      
-
      
-
      
-
      
2,543
      
2,543
      
-
      
-
      
-
      
3,176
      
3,176
  
Subordinated loan payable
    
-
      
-
      
-
      
925
      
925
      
-
      
-
      
-
      
925
      
925
      
-
      
-
      
-
      
675
      
675
  
Deferred compensation - non-current
    
-
      
-
      
-
      
7,429
      
7,429
      
-
      
-
      
-
      
7,232
      
7,232
      
-
      
-
      
-
      
6,998
      
6,998
  
                                                                                                                         
Total Capital Employed
  
$
70,394
    
$
19,411
    
$
4,548
    
$
31,409
    
$
125,762
    
$
71,202
    
$
20,104
    
$
4,113
    
$
30,795
    
$
126,214
    
$
72,397
    
$
19,415
    
$
3,403
    
$
30,096
    
$
125,311
  
                                                                                                                         
                                                                                                                         
    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
                                              
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                        
                                                                                                                         
Total assets (4)
  
$
86,707
      
43,097
      
5,607
      
89,497
      
224,908
    
$
86,494
      
37,442
      
5,203
      
93,072
      
222,211
                                          
Total liabilities (5)
    
(11,604
)
    
(22,483
)
    
(2,168
)
    
(21,421
)
    
(57,676
)
    
(9,790
)
    
(19,646
)
    
(1,960
)
    
(23,346
)
    
(54,742
)
                                        
                                                                                                                         
Subtotal
  
$
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
    
-
      
-
      
-
      
(26,418
)
    
(26,418
)
    
-
      
-
      
-
      
(14,768
)
    
(14,768
)
                                        
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(13,544
)
    
(13,544
)
    
-
      
-
      
-
      
(26,719
)
    
(26,719
)
                                        
Current income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(6,834
)
    
(6,834
)
    
-
      
-
      
-
      
(7,851
)
    
(7,851
)
                                        
Noncurrent income taxes receivable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
(3,224
)
    
(3,224
)
    
-
      
-
      
-
      
(3,614
)
    
(3,614
)
                                        
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
714
      
714
                                          
Income taxes payable - current
    
-
      
-
      
-
      
642
      
642
      
-
      
-
      
-
      
2,044
      
2,044
                                          
Income taxes payable - long-term
    
-
      
-
      
-
      
3,294
      
3,294
      
-
      
-
      
-
      
3,233
      
3,233
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,225
      
2,225
      
-
      
-
      
-
      
2,225
      
2,225
                                          
Subordinated loan payable
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred compensation - non-current
    
-
      
-
      
-
      
6,782
      
6,782
      
-
      
-
      
-
      
7,120
      
7,120
                                          
                                                                                                                         
Total Capital Employed
  
$
75,103
    
$
20,614
    
$
3,439
    
$
30,999
    
$
130,155
    
$
76,704
    
$
17,796
    
$
3,243
    
$
32,110
    
$
129,853
                                          
                                                                                                                         
   
Mattress
  
Upholstery
  
Home
  
Unallocated
                                                                                      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                
Average Capital Employed (3)
  
$
73,160
    
$
19,468
    
$
3,749
    
$
31,082
    
$
127,459
                                                                                  

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 November 3, 2019, divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments Held-To-Maturity, long-term investments - Rabbi Trust, noncurrent deferred income tax assets and liabilities, income taxes receivable and payable, subordinated loan payable, and current and noncurrent deferred compensation.
 
(3)
Average capital employed was computed using the five quarterly periods ending November 3, 2019, August 4, 2019, April 28, 2019, January 27, 2019, and October 28, 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 12 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
RETURN ON CAPITAL EMPLOYED BY SEGMENT
FOR THE TWELVE MONTHS ENDED OCTOBER 28, 2018
(Amounts in Thousands)
(Unaudited)

    Operating Income                                                                                   
   
Twelve Months
Average
  
Return on
                                                                         
   
Ended
  
Capital
  
Avg. Capital
                                                                         
   
October 28, 2018 (1)
  
Employed
(3)
  
Employed
(2)
                                                                         
                                                                                           
Mattress Fabrics
  
$
18,624
    
$
77,807
      
23.9
%
                                                                        
Upholstery Fabrics
    
10,940
      
19,372
      
56.5
%
                                                                        
Home Accessories
    
56
      
1,199
    
N.M.
                                                                          
(less: Unallocated Corporate)
    
(7,680
)
    
21,083
    
N.M.
                                                                          
Total
  
$
21,940
    
$
119,461
      
18.4
%
                                                                        
                                                                                                 
                                                                                                 
Average Capital Employed
   As of the three Months Ended October 28, 2018
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
        
Mattress
  
Upholstery
  
Home
  
Unallocated
      
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
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
    
$
95,061
      
39,812
      
-
      
83,111
      
217,984
  
Total liabilities (5)
    
(9,790
)
    
(19,646
)
    
(1,960
)
    
(23,346
)
    
(54,742
)
    
(12,883
)
    
(17,880
)
    
(1,710
)
    
(27,869
)
    
(60,342
)
    
(17,335
)
    
(18,679
)
    
-
      
(18,594
)
    
(54,608
)
                                                                                                                         
Subtotal
  
$
76,704
    
$
17,796
    
$
3,243
    
$
69,726
    
$
167,469
    
$
80,718
    
$
19,506
    
$
2,753
    
$
63,053
    
$
166,030
    
$
77,726
    
$
21,133
    
$
-
    
$
64,517
    
$
163,376
  
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(14,768
)
    
(14,768
)
    
-
      
-
      
-
      
(8,593
)
    
(8,593
)
    
-
      
-
      
-
      
(21,228
)
    
(21,228
)
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,451
)
    
(2,451
)
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(26,719
)
    
(26,719
)
    
-
      
-
      
-
      
(30,756
)
    
(30,756
)
    
-
      
-
      
-
      
(25,759
)
    
(25,759
)
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(5,035
)
    
(5,035
)
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,851
)
    
(7,851
)
    
-
      
-
      
-
      
(7,671
)
    
(7,671
)
    
-
      
-
      
-
      
(7,326
)
    
(7,326
)
Deferred income taxes - non-current
    
-
      
-
      
-
      
(3,614
)
    
(3,614
)
    
-
      
-
      
-
      
(3,721
)
    
(3,721
)
    
-
      
-
      
-
      
(1,458
)
    
(1,458
)
Deferred compensation - current
    
-
      
-
      
-
      
714
      
714
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Income taxes payable - current
    
-
      
-
      
-
      
2,044
      
2,044
      
-
      
-
      
-
      
1,244
      
1,244
      
-
      
-
      
-
      
1,437
      
1,437
  
Income taxes payable - long-term
    
-
      
-
      
-
      
3,233
      
3,233
      
-
      
-
      
-
      
3,733
      
3,733
      
-
      
-
      
-
      
3,758
      
3,758
  
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,225
      
2,225
      
-
      
-
      
-
      
2,150
      
2,150
      
-
      
-
      
-
      
2,150
      
2,150
  
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
4,000
      
4,000
      
-
      
-
      
-
      
-
      
-
  
Deferred compensation - non-current
    
-
      
-
      
-
      
7,120
      
7,120
      
-
      
-
      
-
      
7,679
      
7,679
      
-
      
-
      
-
      
7,353
      
7,353
  
                                                                                                                         
Total Capital Employed
  
$
76,704
    
$
17,796
    
$
3,243
    
$
32,110
    
$
129,853
    
$
80,718
    
$
19,506
    
$
2,753
    
$
31,118
    
$
134,095
    
$
77,726
    
$
21,133
    
$
-
    
$
15,958
    
$
114,817
  
                                                                                                                         
                                                                                                                         
    As of the three Months Ended January 28, 2018   As of the three Months Ended October 29, 2017                                        
   
Mattress
  
Upholstery
  
Home
  
Unallocated
        
Mattress
  
Upholstery
  
Home
  
Unallocated
                                              
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
  
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                        
                                                                                                                         
Total assets (4)
  
$
93,827
      
43,458
      
-
      
79,559
      
216,844
    
$
94,626
      
34,974
      
-
      
71,443
      
201,043
                                          
Total liabilities (5)
    
(18,418
)
    
(22,781
)
    
-
      
(23,463
)
    
(64,662
)
    
(16,150
)
    
(17,225
)
    
-
      
(14,588
)
    
(47,963
)
                                        
                                                                                                                         
Subtotal
  
$
75,409
    
$
20,677
    
$
-
    
$
56,096
    
$
152,182
    
$
78,476
    
$
17,749
    
$
-
    
$
56,855
    
$
153,080
                                          
Less:
                                                                                                                        
Cash and cash equivalents
    
-
      
-
      
-
      
(22,428
)
    
(22,428
)
    
-
      
-
      
-
      
(15,739
)
    
(15,739
)
                                        
Short-term investments - Available-For-Sale
    
-
      
-
      
-
      
(2,472
)
    
(2,472
)
    
-
      
-
      
-
      
(2,478
)
    
(2,478
)
                                        
Short-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(17,206
)
    
(17,206
)
    
-
      
-
      
-
      
(4,015
)
    
(4,015
)
                                        
Long-term investments - Held-To-Maturity
    
-
      
-
      
-
      
(13,625
)
    
(13,625
)
    
-
      
-
      
-
      
(26,853
)
    
(26,853
)
                                        
Long-term investments - Rabbi Trust
    
-
      
-
      
-
      
(7,176
)
    
(7,176
)
    
-
      
-
      
-
      
(6,921
)
    
(6,921
)
                                        
Deferred income taxes - non-current
    
-
      
-
      
-
      
(1,942
)
    
(1,942
)
    
-
      
-
      
-
      
(491
)
    
(491
)
                                        
Deferred compensation - current
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Income taxes payable - current
    
-
      
-
      
-
      
1,580
      
1,580
      
-
      
-
      
-
      
692
      
692
                                          
Income taxes payable - long-term
    
-
      
-
      
-
      
10,940
      
10,940
      
-
      
-
      
-
      
487
      
487
                                          
Deferred income taxes - non-current
    
-
      
-
      
-
      
2,096
      
2,096
      
-
      
-
      
-
      
4,641
      
4,641
                                          
Line of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
                                          
Deferred compensation - non-current
    
-
      
-
      
-
      
7,216
      
7,216
      
-
      
-
      
-
      
6,970
      
6,970
                                          
                                                             
-
                                                          
Total Capital Employed
  
$
75,409
    
$
20,677
    
$
-
    
$
13,079
    
$
109,165
    
$
78,476
    
$
17,749
    
$
-
    
$
13,148
    
$
109,373
                                          
                                                                                                                         
   
Mattress
  
Upholstery
  
Home
  
Unallocated
                                                                                       
   
Fabrics
  
Fabrics
  
Accessories
  
Corporate
  
Total
                                                                                
Average Capital Employed (3)
  
$
77,807
    
$
19,372
    
$
1,199
    
$
21,083
    
$
119,461
                                                                                  

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 October 28, 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 current and noncurrent deferred compensation.
 
(3)
Average capital employed was computed using the five quarterly periods ending October 28, 2018, July 29, 2018, April 29, 2018, January 28, 2018, and October 29, 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 13 of 13

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF OPERATING INCOME (LOSS)
FOR THE TWELVE MONTHS ENDED NOVEMBER 3, 2019 AND OCTOBER 28, 2018
(UNAUDITED)
(AMOUNTS IN THOUSANDS)

                               

 
Quarter Ended
      
                           
Trailing 12
                           
Months
   
1/27/2019
  
4/28/2019
  
8/4/2019
  
11/3/2019
  
11/3/2019
                               
Mattress Fabrics
  
$
3,208
    
$
2,698
    
$
2,623
    
$
3,293
    
$
11,822
  
Upholstery Fabrics
    
3,799
      
1,777
      
2,875
      
3,473
      
11,924
  
Home Accessories
    
(311
)
    
(479
)
    
(538
)
    
(350
)
    
(1,678
)
Unallocated Corporate
    
(1,628
)
    
(2,037
)
    
(2,306
)
    
(2,433
)
    
(8,404
)
Subtotal
    
5,068
      
1,959
      
2,654
      
3,983
      
13,664
  
Other non-recurring charges
    
(429
)
    
-
      
-
      
-
      
(429
)
Restructuring (expense) credit and related charges
    
(340
)
    
-
      
35
      
-
      
(305
)
                                         
Operating income
  
$
4,299
    
$
1,959
    
$
2,689
    
$
3,983
    
$
12,930
  
                                         
                                         
   
Quarter Ended
        
                                   
Trailing 12
                                   
Months
   
1/28/2018
  
4/29/2018
  
7/29/2018
  
10/28/2018
  
10/28/2018
                                         
Mattress Fabrics
  
$
6,837
    
$
6,088
    
$
2,790
    
$
2,909
    
$
18,624
  
Upholstery Fabrics
    
3,510
      
2,181
      
2,527
      
2,722
      
10,940
  
Home Accessories
    
-
      
-
      
33
      
23
      
56
  
Unallocated Corporate
    
(2,703
)
    
(1,805
)
    
(1,259
)
    
(1,913
)
    
(7,680
)
Subtotal
  
$
7,644
    
$
6,464
    
$
4,091
    
$
3,741
    
$
21,940
  
Other non-recurring charges
    
-
      
-
      
-
      
(248
)
    
(248
)
Restructuring (expense) credit and related charges
    
-
      
-
      
(2,016
)
    
791
      
(1,225
)
                                         
Operating income
  
$
7,644
    
$
6,464
    
$
2,075
    
$
4,284
    
$
20,467
  
                                         
% Over (Under)
    
-43.8
%
    
-69.7
%
    
29.6
%
    
-7.0
%
    
-36.8
%