<SEC-DOCUMENT>0001157523-14-002099.txt : 20140512
<SEC-HEADER>0001157523-14-002099.hdr.sgml : 20140512
<ACCEPTANCE-DATETIME>20140512164823
ACCESSION NUMBER:		0001157523-14-002099
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20140512
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20140512
DATE AS OF CHANGE:		20140512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CULP INC
		CENTRAL INDEX KEY:			0000723603
		STANDARD INDUSTRIAL CLASSIFICATION:	BROADWOVEN FABRIC MILLS, COTTON [2211]
		IRS NUMBER:				561001967
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			0429

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12597
		FILM NUMBER:		14833979

	BUSINESS ADDRESS:	
		STREET 1:		1823 EASTCHESTER DRIVE
		CITY:			HIGH POINT
		STATE:			NC
		ZIP:			27265
		BUSINESS PHONE:		3368895161

	MAIL ADDRESS:	
		STREET 1:		P O BOX 2686
		CITY:			HIGH POINT
		STATE:			NC
		ZIP:			27265
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a50863845.htm
<DESCRIPTION>CULP, INC. 8-K
<TEXT>
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      <font style="font-size: 12pt"><b>UNITED STATES</b></font><font style="font-size: 12pt"><br style="font-size: 12pt"></font><font style="font-size: 12pt"><b>SECURITIES
      AND EXCHANGE COMMISSION</b></font><font style="font-size: 12pt"><br style="font-size: 12pt"></font><font style="font-size: 12pt"><b>WASHINGTON,
      DC&#160;&#160;20549</b></font><br><br><font style="font-family: Times New Roman; font-size: 16pt"><b>FORM
      8-K</b></font><br><br><font style="font-family: Times New Roman; font-size: 12pt"><b>CURRENT
      REPORT PURSUANT</b></font><br><font style="font-family: Times New Roman; font-size: 12pt"><b>TO
      SECTION 13 OR 15(d) OF THE</b></font><br><font style="font-family: Times New Roman; font-size: 12pt"><b>SECURITIES
      EXCHANGE ACT OF 1934</b></font><br><br><font style="font-family: Times New Roman; font-size: 10pt">Date
      of Report (Date of earliest event reported)&#160;&#160;&#160;&#160;</font><u><font style="font-family: Times New Roman; font-size: 10pt">May
      12, 2014</font></u><u><br></u><br><u><font style="font-family: Times New Roman; font-size: 18pt"><b>Culp,
      Inc.</b></font></u><br><font style="font-family: Times New Roman; font-size: 10pt">(Exact
      Name of Registrant as Specified in its Charter)</font><br><br><br>
    </p>
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            North Carolina
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          &#160;
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          <p style="margin-bottom: 0px; margin-top: 0px">
            1-12781
          </p>
        </td>
        <td style="width: 5%; padding-left: 0.0px; padding-bottom: 2.0px; text-align: left" valign="top">
          &#160;
        </td>
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          <p style="margin-bottom: 0px; margin-top: 0px">
            56-1001967
          </p>
        </td>
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      <tr>
        <td style="width: 30%; padding-left: 0.0px; text-align: center" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            (State or Other Jurisdiction
          </p>
          <p style="margin-bottom: 0px; margin-top: 0px">
            of Incorporation)
          </p>
        </td>
        <td style="width: 5%">

        </td>
        <td style="width: 30%; padding-left: 0.0px; text-align: center" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            (Commission File Number)
          </p>
        </td>
        <td style="width: 5%">

        </td>
        <td style="width: 30%; padding-left: 0.0px; text-align: center" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            (I.R.S. Employer
          </p>
          <p style="margin-bottom: 0px; margin-top: 0px">
            Identification No.)
          </p>
        </td>
      </tr>
    </table>
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        <td style="width: 33%">
          &#160;
        </td>
        <td style="width: 34%; padding-left: 0.0px; text-align: center; border-bottom: solid black 1.0pt" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            1823 Eastchester Drive
          </p>
          <p style="margin-bottom: 0px; margin-top: 0px">
            High Point, North Carolina&#160;&#160;27265
          </p>
        </td>
        <td style="width: 33%">

        </td>
      </tr>
      <tr>
        <td style="width: 33%">

        </td>
        <td style="width: 34%; padding-left: 0.0px; text-align: center" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <font style="font-family: Times New Roman; font-size: 10pt">(Address
            of Principal Executive Offices)</font>
          </p>
          <p style="margin-bottom: 0px; margin-top: 0px">
            <font style="font-family: Times New Roman; font-size: 10pt">(Zip
            Code)</font>
          </p>
        </td>
        <td style="width: 33%">

        </td>
      </tr>
    </table>
    </div>
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      <tr>
        <td style="width: 25%">
          &#160;
        </td>
        <td style="width: 50%; white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: center; border-bottom: solid black 1.0pt" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            (336) 889-5161
          </p>
        </td>
        <td style="width: 25%">

        </td>
      </tr>
      <tr>
        <td style="width: 25%">

        </td>
        <td style="width: 50%; padding-left: 0.0px; text-align: center" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <font style="font-family: Times New Roman; font-size: 10pt">(Registrant&#8217;s
            Telephone Number, Including Area Code)</font>
          </p>
        </td>
        <td style="width: 25%">

        </td>
      </tr>
    </table>
    </div>
<div style="text-align:left">
    <table style="width: 100%; font-size: 10pt; font-family: Times New Roman; margin-bottom: 10.0px" cellspacing="0">
      <tr>
        <td style="width: 22%">
          &#160;
        </td>
        <td style="width: 56%; padding-left: 0.0px; text-align: center; border-bottom: solid black 1.0pt" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Not Applicable
          </p>
        </td>
        <td style="width: 22%">

        </td>
      </tr>
      <tr>
        <td style="width: 22%">

        </td>
        <td style="width: 56%; padding-left: 0.0px; text-align: center" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            (Former name or address, if changed from last report)
          </p>
        </td>
        <td style="width: 22%">

        </td>
      </tr>
    </table>
    </div>
    <p style="text-align: center">

    </p>
    <p style="text-indent: 30.0px">
      <font style="font-family: Times New Roman; font-size: 10pt">Check the
      appropriate box below if the Form 8-K filing is intended to
      simultaneously satisfy the filing obligation of the registrant under any
      of the following provisions</font><font style="font-family: Times New Roman; font-size: 10pt">
      </font><font style="font-size: 10pt">(</font><i><font style="font-size: 10pt">see</font></i><font style="font-size: 10pt">
      General Instruction A.2. below)</font><font style="font-family: Times New Roman; font-size: 10pt">:</font>
    </p>
    <p style="font-size: 10pt; font-family: Times New Roman; text-indent: 30.0px">
      <font style="font-family: Arial Unicode MS; font-size: 10pt">&#8414;</font>
      <font style="font-family: Times New Roman; font-size: 10pt">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font>
    </p>
    <p style="font-size: 10pt; font-family: Times New Roman; text-indent: 30.0px">
      <font style="font-family: Arial Unicode MS; font-size: 10pt">&#8414;</font>
      <font style="font-family: Times New Roman; font-size: 10pt">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font>
    </p>
    <p style="font-size: 10pt; font-family: Times New Roman; text-indent: 30.0px">
      <font style="font-family: Arial Unicode MS; font-size: 10pt">&#8414;</font>
      <font style="font-family: Times New Roman; font-size: 10pt">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font>
    </p>
    <p style="font-size: 10pt; font-family: Times New Roman; text-indent: 30.0px">
      <font style="font-family: Arial Unicode MS; font-size: 10pt">&#8414;</font>
      <font style="font-family: Times New Roman; font-size: 10pt">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font>
    </p>
    <div style="margin-right: 0pt; width: 100%; margin-left: 0pt; text-indent: 0pt; margin-bottom: 10pt">
      <div>
        <div style="text-align: left">

        </div>
      </div>
      <div style="page-break-after: always">
        <div style="text-align: center">

        </div>
        <div style="text-align: center">
          <hr style="color: black; height: 1.5pt">

        </div>
      </div>
      <div>
        <div style="text-align: right">

        </div>
      </div>
    </div>
    <p>

    </p>
    <p style="white-space: nowrap; text-align: justify">
      <b>Item 2.02.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Results of Operations and Financial Condition.</b>
    </p>
    <p>

    </p>
    <p style="text-align: justify">
      &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;On May 12, 2014, Culp, Inc. (the &#8220;Company&#8221;) issued a news
      release regarding revised expectations about its financial results for
      the fourth quarter of the Company&#8217;s fiscal 2014.&#160;&#160;A copy of the news
      release is attached hereto as Exhibit 99.1.
    </p>
    <p>

    </p>
    <p style="text-align: justify">
      &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The news release contains disclosures about free cash flow, a
      non-GAAP liquidity measure that we define as net cash provided by
      operating activities, less cash capital expenditures, plus any proceeds
      from sales of equipment, plus excess tax benefits related to stock-based
      compensation, and plus or minus the effects of exchange rate changes on
      cash and cash equivalents.&#160;&#160;Details of these calculations and a
      reconciliation to information from our GAAP financial statements is set
      forth in the news release.&#160;&#160;Management believes the disclosure of free
      cash flow provides useful information to investors because it measures
      our available cash flow for potential debt repayment, acquisitions,
      stock repurchases, dividends, and additions to cash and cash
      equivalents.&#160;&#160;We note, however, that not all of the company&#8217;s free cash
      flow is available for discretionary spending, as we have mandatory debt
      payments and other cash requirements that must be deducted from our cash
      available for future use.&#160;&#160;In operating our business, management uses
      free cash flow to make decisions about what commitments of cash to make
      for operations, such as capital expenditures (and financing arrangements
      for these expenditures), purchases of inventory or supplies, SG&amp;A
      expenditure levels, compensation, and other commitments of cash, while
      still allowing for adequate cash to meet known future commitments for
      cash, such as debt repayment, and also for making decisions about
      acquisitions, dividend payments and share repurchases.
    </p>
    <p>

    </p>
    <p style="white-space: nowrap; text-align: justify">
      <b>Item 9.01.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial Statements and Exhibits.</b>
    </p>
    <p>

    </p>
<div style="text-align:left">
    <table style="width: 100%; font-size: 10pt; font-family: Times New Roman; margin-bottom: 10.0px" cellspacing="0">
      <tr>
        <td style="width: 5%; padding-left: 0.0px" valign="top">
          (d)
        </td>
        <td style="width: 95%; padding-left: 0.0px" valign="top">
          Exhibits
        </td>
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      <tr>
        <td style="width: 5%">

        </td>
        <td style="width: 95%">
          &#160;
        </td>
      </tr>
      <tr>
        <td style="width: 5%">

        </td>
        <td style="width: 95%; padding-left: 0.0px" valign="top">
          Exhibit 99.1 &#8211; News Release dated May 12, 2014
        </td>
      </tr>
    </table>
    </div>
    <p style="text-align: justify; text-indent: 60.0px">

    </p>
    <div style="margin-right: 0pt; width: 100%; margin-left: 0pt; text-indent: 0pt; margin-bottom: 10pt">
      <div>
        <div style="text-align: left">

        </div>
      </div>
      <div style="page-break-after: always">
        <div style="text-align: center">

        </div>
        <div style="text-align: center">
          <hr style="color: black; height: 1.5pt">

        </div>
      </div>
      <div>
        <div style="text-align: right">

        </div>
      </div>
    </div>
    <p>

    </p>
    <p style="text-align: center">
      <font style="font-family: Times New Roman; font-size: 10pt">SIGNATURES</font>
    </p>
    <p style="text-align: justify; text-indent: 30.0px">
      Pursuant to the requirements of the Securities Exchange Act of 1934, the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned hereunto duly authorized.
    </p>
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        <td style="width: 6%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Date:
          </p>
        </td>
        <td style="width: 44%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            May 12, 2014
          </p>
        </td>
        <td colspan="2" style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            &#160;
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%">

        </td>
        <td style="width: 44%">

        </td>
        <td colspan="2" style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            &#160;
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%">

        </td>
        <td style="width: 44%">

        </td>
        <td colspan="2" style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Culp, Inc.
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%">

        </td>
        <td style="width: 44%">

        </td>
        <td colspan="2" style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            &#160;
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            &#160;
          </p>
        </td>
        <td style="width: 44%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            &#160;
          </p>
        </td>
        <td style="width: 5%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            By:
          </p>
        </td>
        <td style="width: 45%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <u>/s/ Kenneth R. Bowling</u>
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%">

        </td>
        <td style="width: 44%">

        </td>
        <td style="width: 5%">

        </td>
        <td style="width: 45%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Kenneth R. Bowling
          </p>
        </td>
      </tr>
      <tr>
        <td style="width: 6%">

        </td>
        <td style="width: 44%">

        </td>
        <td style="width: 5%">

        </td>
        <td style="width: 45%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Chief Financial Officer
          </p>
        </td>
      </tr>
    </table>
    </div>
    <p>

    </p>
    <div style="margin-right: 0pt; width: 100%; margin-left: 0pt; text-indent: 0pt; margin-bottom: 10pt">
      <div>
        <div style="text-align: left">

        </div>
      </div>
      <div style="page-break-after: always">
        <div style="text-align: center">

        </div>
        <div style="text-align: center">
          <hr style="color: black; height: 1.5pt">

        </div>
      </div>
      <div>
        <div style="text-align: right">

        </div>
      </div>
    </div>
    <p>

    </p>
    <p style="text-align: center">
      <b>EXHIBIT&#160;INDEX</b><br><br>
    </p>
<div style="text-align:left">
    <table style="width: 100%; font-size: 10pt; font-family: Times New Roman; margin-bottom: 10.0px" cellspacing="0">
      <tr>
        <td style="width: 25%; padding-left: 0.0px; text-align: center" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <u>Exhibit Number</u>
          </p>
        </td>
        <td style="width: 10%; padding-left: 0.0px; text-align: left" valign="top">
          &#160;
        </td>
        <td style="width: 55%; padding-left: 0.0px; text-align: center" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <u>Exhibit</u>
          </p>
        </td>
        <td style="width: 10%">

        </td>
      </tr>
      <tr>
        <td style="width: 25%">

        </td>
        <td style="width: 10%">

        </td>
        <td style="width: 55%">

        </td>
        <td style="width: 10%; padding-left: 0.0px; text-align: left" valign="top">
          &#160;
        </td>
      </tr>
      <tr>
        <td style="width: 25%; white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: center" valign="top">
          99.1
        </td>
        <td style="width: 10%">

        </td>
        <td style="width: 55%; padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            News Release dated May 12, 2014
          </p>
        </td>
        <td style="width: 10%">

        </td>
      </tr>
    </table>
    </div>
    <p>

    </p>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a50863845_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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    <title></title>
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    <p style="text-align: right">
      <b>Exhibit 99.1</b>
    </p>
    <p style="text-align: center">
      <font style="font-family: Times New Roman; font-size: 12pt"><b>Culp
      Announces Revised Expectations for Fourth Quarter Fiscal 2014</b></font>
    </p>
    <p>
      HIGH POINT, N.C.--(BUSINESS WIRE)--May 12, 2014--Culp, Inc. (NYSE: CFI),
      today announced that, based on unaudited preliminary results and current
      estimates, the company<i> </i>expects pre-tax income to be in the range
      of $4.0 million to $4.3&#160;million for the fourth quarter of fiscal 2014.
      These projected results are lower than the company&#8217;s previously
      announced expectation of $5.0 million to $5.9 million in pre-tax income
      for the quarter. Overall sales for the fourth quarter of fiscal 2014 are
      expected to be up approximately 5 percent, with mattress fabrics sales
      up approximately 7 percent and upholstery fabrics sales up approximately
      3 percent. These sales results are in line with previously announced
      expectations.
    </p>
    <p>
      Commenting on the announcement, Frank Saxon, president and chief
      executive officer of Culp, Inc., said, &#8220;While our overall sales for the
      fourth quarter were in line with our projected range, our operating
      profit and margins were affected by several factors, most of which
      related to the mattress fabrics division. The adverse weather conditions
      experienced in many parts of the country this winter affected our
      mattress fabrics locations with at least a week of lost production. The
      strain from these weather events forced some extraordinary operational
      measures to meet the ongoing sales demand. During the quarter, we also
      had higher than expected demand for our premium decorative knitted
      mattress fabrics, which created additional pressures on our production
      throughput and operating efficiencies. In order to meet the growing
      demand and to address efficiency challenges, we are increasing knitted
      fabric production at both our U.S. and Canadian facilities. In addition,
      we are expanding our Stokesdale, North Carolina, building in order to
      increase and enhance our finishing capabilities and improve our
      production flow. This capacity expansion is expected to be completed by
      the end of November 2014. We also experienced continued growth in demand
      for new mattress covers, with major placements from key customers. While
      our margins in this business showed significant improvement compared
      with the fiscal third quarter, we experienced short-term production
      challenges due to absorbing new product placements. Overall, we are
      pleased with the demand trends in our mattress fabrics business as we
      continue to outpace the industry, and believe we are taking the
      necessary steps to address our recent production-related issues.
    </p>
    <p>
      &#8220;In our upholstery fabrics division, operating results were affected by
      a couple of factors. We experienced very strong shipments in the third
      quarter, with a 20 percent year over year sales increase, as our
      customers anticipated the Chinese New Year holiday shutdown. As a
      result, we had a much slower than expected start to the fourth quarter.
      Adverse weather conditions in the U.S. also affected our operating
      results early in the quarter because of weak customer demand. During the
      quarter, we also experienced lower than anticipated sales for our Culp
      Europe operation, which contributed to the division&#8217;s lower gross
      profit. However, we are encouraged that our sales demand and operating
      margins, except for Culp Europe, returned to normal levels later in the
      fourth quarter.
    </p>
    <div style="margin-right: 0pt; width: 100%; margin-left: 0pt; text-indent: 0pt; margin-bottom: 10pt">
      <div>
        <div style="text-align: left">

        </div>
      </div>
      <div style="page-break-after: always">
        <div style="text-align: center">

        </div>
        <div style="text-align: center">
          <hr style="color: black; height: 1.5pt">

        </div>
      </div>
      <div>
        <div style="text-align: right">

        </div>
      </div>
    </div>
    <p>
      &#8220;Overall, even though our fourth quarter profitability was lower than
      anticipated, we expect to report another solid annual performance for
      Culp in fiscal 2014. Total sales for fiscal 2014 are expected to be up
      approximately 7 percent over last fiscal year, with mattress fabrics
      sales and upholstery fabrics sales expected to be up approximately 4
      percent and 10 percent, respectively. Pre-tax income for fiscal 2014 is
      expected to be $19.0 million to $19.3 million, which compares to $20.3
      million for fiscal 2013. While we have experienced some recent
      short-term production challenges, we continue to see favorable demand
      trends in both businesses as we head into the new fiscal year, and
      believe our competitive position has strengthened considerably during
      the year. Further, our products have been very well received at recent
      home furnishings markets with strong placements. We have a solid
      financial position to support our growth strategy, with free cash flow
      for the year expected to be slightly higher than the $13.1 million
      achieved in fiscal 2013. (See reconciliation on page 3). We expect to
      end fiscal 2014 with approximately $35 million in cash and cash
      equivalents and short-term investments, up from $30.4 million at the end
      of the third quarter. Given our $5 million in total debt, our net cash
      position is expected to be approximately $30 million. We continue to be
      excited about the opportunities ahead for Culp in fiscal 2015,&#8221; added
      Saxon.
    </p>
    <p>
      The company expects to report financial and operating results for the
      fourth quarter and fiscal 2014 in mid-June 2014.
    </p>
    <p>
      <b>About the Company</b>
    </p>
    <p>
      Culp, Inc. is one of the world's largest marketers of mattress fabrics
      for bedding and upholstery fabrics for residential and commercial
      furniture. The company markets a variety of fabrics to its global
      customer base of leading bedding and furniture companies, including
      fabrics produced at Culp&#8217;s manufacturing facilities and fabrics sourced
      through other suppliers. Culp has operations located in the United
      States, Canada, China and Poland.
    </p>
    <p>
      <i>This release contains &#8220;forward-looking statements&#8221; within the meaning
      of the federal securities laws, including the Private Securities
      Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933
      and Section 27A of the Securities and Exchange Act of 1934).</i> <i>Such
      statements are inherently subject to risks and uncertainties.</i> <i>Further,
      forward looking statements are intended to speak only as of the date on
      which they are made, and we disclaim any duty to update such statements.</i>
      <i>Forward-looking statements are statements that include projections,
      expectations or beliefs about future events or results or otherwise are
      not statements of historical fact.</i> <i>Such statements are often but
      not always characterized by qualifying words such as &#8220;expect,&#8221;
      &#8220;believe,&#8221; &#8220;estimate,&#8221; &#8220;plan&#8221; and &#8220;project&#8221; and their derivatives, and
      include but are not limited to statements about expectations for our
      future operations, production levels, sales, gross profit margins,
      operating income, SG&amp;A or other expenses, earnings, cash flow, and other
      performance measures, as well as any statements regarding future
      economic or industry trends or future developments. Factors that could
      influence the matters discussed in such statements include the level of
      housing starts and sales of existing homes, consumer confidence, trends
      in disposable income, and general economic conditions.</i> <i>Decreases
      in these economic indicators could have a negative effect on our
      business and prospects.</i> <i>Likewise, increases in interest rates,
      particularly home mortgage rates, and increases in consumer debt or the
      general rate of inflation, could affect&#160;us adversely. Changes in
      consumer tastes or preferences toward products not produced by us could
      erode demand for our products. Changes in the value of the U.S. dollar
      versus other currencies could affect our financial results because a
      significant portion of our operations are located outside the United
      States. Strengthening of the U.S. dollar against other currencies could
      make our products less competitive on the basis of price in markets
      outside the United States, and strengthening of currencies in Canada and
      China can have a negative impact on our sales of products produced in
      those places. Also, economic and political instability in international
      areas could affect our operations or sources of goods in those areas, as
      well as demand for our products in international markets. Further
      information about these factors, as well as other factors that could
      affect our future operations or financial results and the matters
      discussed in forward-looking statements, is included in Item 1A &#8220;Risk
      Factors&#8221; in our Form 10-K filed with the Securities and Exchange
      Commission on July&#160;12, 2013 for the fiscal year ended April 28, 2013.</i>
    </p>
    <div style="margin-right: 0pt; width: 100%; margin-left: 0pt; text-indent: 0pt; margin-bottom: 10pt">
      <div>
        <div style="text-align: left">

        </div>
      </div>
      <div style="page-break-after: always">
        <div style="text-align: center">

        </div>
        <div style="text-align: center">
          <hr style="color: black; height: 1.5pt">

        </div>
      </div>
      <div>
        <div style="text-align: right">

        </div>
      </div>
    </div>
<div style="text-align:left">
    <table style="width: 100%; font-size: 8pt; font-family: Times New Roman; margin-bottom: 10.0px" cellspacing="0">
      <tr>
        <td>

        </td>
        <td>
          &#160;
        </td>
        <td colspan="10">

        </td>
      </tr>
      <tr>
        <td colspan="12" style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: center" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <b>Reconciliation of Free Cash Flow</b><br><b>For the Twelve
            Months Ended April 28, 2013</b><br><i>(Amounts in thousands)</i>
          </p>
        </td>
      </tr>
      <tr>
        <td>

        </td>
        <td>

        </td>
        <td colspan="10">
          &#160;
        </td>
      </tr>
      <tr>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>
          &#160;
        </td>
        <td>
          &#160;
        </td>
        <td colspan="7" style="padding-left: 0.0px; text-align: right; border-bottom: solid black 1.0pt" valign="top">
          <b>FY 2013</b>
        </td>
      </tr>
      <tr>
        <td colspan="3" style="padding-left: 0.0px; text-align: left" valign="top">
          Net cash provided by operating activities
        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <b>$</b>
          </p>
        </td>
        <td>
          &#160;
        </td>
        <td>
          &#160;
        </td>
        <td>
          &#160;
        </td>
        <td>
          &#160;
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <b>17,075</b>
        </td>
        <td>

        </td>
      </tr>
      <tr>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Minus:
          </p>
        </td>
        <td>

        </td>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Capital Expenditures
          </p>
        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <b>(4,400</b>
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: left" valign="bottom">
          <b>)</b>
        </td>
      </tr>
      <tr>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Add:
          </p>
        </td>
        <td>

        </td>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Proceeds from life insurance policies
          </p>
        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <b>716</b>
        </td>
        <td>

        </td>
      </tr>
      <tr>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Minus:
          </p>
        </td>
        <td>

        </td>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Payments on life insurance policies
          </p>
        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <b>(19</b>
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: left" valign="bottom">
          <b>)</b>
        </td>
      </tr>
      <tr>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Add:
          </p>
        </td>
        <td>

        </td>
        <td style="padding-left: 0.0px; text-align: left" valign="top">
          <p style="margin-bottom: 0px; margin-top: 0px">
            Excess tax benefits related to stock-based compensation
          </p>
        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right" valign="bottom">
          <b>76</b>
        </td>
        <td>

        </td>
      </tr>
      <tr>
        <td colspan="3" style="padding-left: 0.0px; padding-bottom: 2.0px; text-align: left" valign="top">
          Effects of exchange rate changes on cash and cash equivalents
        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="border-bottom: solid black 1.0pt">
          &#160;
        </td>
        <td style="border-bottom: solid black 1.0pt">
          &#160;
        </td>
        <td style="border-bottom: solid black 1.0pt">
          &#160;
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right; border-bottom: solid black 1.0pt" valign="bottom">
          <b>(381</b>
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: left; border-bottom: solid black 1.0pt" valign="bottom">
          <b>)</b>
        </td>
      </tr>
      <tr>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td>

        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; padding-bottom: 4.0px; text-align: right" valign="bottom">
          <p style="margin-bottom: 0px; margin-top: 0px">
            <b>$</b>
          </p>
        </td>
        <td>

        </td>
        <td style="border-bottom: double black 2.25pt">
          &#160;
        </td>
        <td style="border-bottom: double black 2.25pt">
          &#160;
        </td>
        <td style="border-bottom: double black 2.25pt">
          &#160;
        </td>
        <td style="white-space: nowrap; padding-right: 0.0px; padding-left: 0.0px; text-align: right; border-bottom: double black 2.25pt" valign="bottom">
          <b>13,067</b>
        </td>
        <td style="border-bottom: double black 2.25pt">
          &#160;
        </td>
      </tr>
    </table>
    </div>
    <p>

    </p>
    <p>
      CONTACT:<br>Culp, Inc.<br>Kenneth R. Bowling, 336-881-5630<br>Chief
      Financial Officer
    </p>
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