EX-99.(B) 3 a51049269ex99b.htm EXHIBIT 99(B)

a51049269ex99b.htm

Exhibit 99(b)

Page 1 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THREE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
			THREE MONTHS ENDED
			Amounts												Percent of Sales
			February 1,				January 26,				% Over				February 1,				January 26,
			2015				2014				(Under)				2015				2014
Net sales			$	81,269				72,389			12.3		%		100.0		%		100.0		%
Cost of sales				66,867				60,552			10.4		%		82.3		%		83.6		%
Gross profit				14,402				11,837			21.7		%		17.7		%		16.4		%
Selling, general and
administrative expenses				8,375				7,041			18.9		%		10.3		%		9.7		%
Income from operations				6,027				4,796			25.7		%		7.4		%		6.6		%
Interest expense				-				91			(100.0	)	%		0.0		%		0.1		%
Interest income				(202	)			(148	)		36.5		%		(0.2	)	%		(0.2	)	%
Other expense				307				279			10.0		%		0.4		%		0.4		%
Income before income taxes				5,922				4,574			29.5		%		7.3		%		6.3		%
Income taxes*				2,110				(3,807	)		N.M.				35.6		%		(83.2	)	%
Net income			$	3,812				8,381			(54.5	)	%		4.7		%		11.6		%
Net income per share-basic			$	0.31			$	0.69			(55.1	)	%
Net income per share-diluted			$	0.31			$	0.68			(54.4	)	%
Average shares outstanding-basic				12,219				12,188			0.3		%
Average shares outstanding-diluted				12,417				12,405			0.1		%
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
			THREE MONTHS ENDED
			Amounts												Percent of Sales
			February 1,				January 26,				% Over				February 1,				January 26,
			2015					2014			(Under)				2015				2014
Income before income taxes (see above)			$	5,922				4,574			29.5		%		7.3		%		6.3		%
Adjusted Income taxes (2)*				906				709			27.8		%		15.3		%		15.5		%
Adjusted net income				5,016				3,865			29.8		%		6.2		%		5.3		%
Adjusted net income per share-basic			$	0.41			$	0.32			28.1		%
Adjusted net income per share-diluted			$	0.40			$	0.31			29.0		%
Average shares outstanding-basic				12,219				12,188			0.3		%
Average shares outstanding-diluted				12,417				12,405			0.1		%
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $44.6 million in net operating loss carryforwards. Therefore, adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.
(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 2 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF NET INCOME
FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
(UNAUDITED)
(Amounts in Thousands, Except for Per Share Data)
		NINE MONTHS ENDED
		Amounts													Percent of Sales
		February 1,				January 26,				% Over					February 1,					January 26,
		2015				2014				(Under)					2015					2014
Net sales		$	231,320				213,119				8.5		%			100.0		%			100.0		%
Cost of sales			191,925				175,974				9.1		%			83.0		%			82.6		%
Gross profit			39,395				37,145				6.1		%			17.0		%			17.4		%
Selling, general and
administrative expenses			23,173				21,340				8.6		%			10.0		%			10.0		%
Income from operations			16,222				15,805				2.6		%			7.0		%			7.4		%
Interest expense			50				330				(84.8	)	%			0.0		%			0.2		%
Interest income			(478	)			(343	)			39.4		%			(0.2	)	%			(0.2	)	%
Other expense			380				895				(57.5	)	%			0.2		%			0.4		%
Income before income taxes			16,270				14,923				9.0		%			7.0		%			7.0		%
Income taxes*			6,113				216			N.M.						37.6		%			1.4		%
Net income		$	10,157				14,707				(30.9	)	%			4.4		%			6.9		%
Net income per share-basic		$	0.83			$	1.21				(31.4	)	%
Net income per share-diluted		$	0.82			$	1.19				(31.1	)	%
Average shares outstanding-basic			12,216				12,173				0.4		%
Average shares outstanding-diluted			12,410				12,405				0.0		%
PRESENTATION OF ADJUSTED NET INCOME, ADJUSTED INCOME TAXES AND EARNINGS PER SHARE (1)
		NINE MONTHS ENDED
		Amounts													Percent of Sales
		February 1,				January 26,				% Over					February 1,					January 26,
		2015				2014				(Under)					2015					2014
Income before income taxes (see above)		$	16,270				14,923				9.0		%			7.0		%			7.0		%
Adjusted Income taxes (2)*			2,489				2,313				7.6		%			15.3		%			15.5		%
Adjusted net income			13,781				12,610				9.3		%			6.0		%			5.9		%
Adjusted net income per share-basic		$	1.13			$	1.04				8.7		%
Adjusted net income per share-diluted		$	1.11			$	1.02				8.8		%
Average shares outstanding-basic			12,216				12,173				0.4		%
Average shares outstanding-diluted			12,410				12,405				0.0		%
(1) Culp, Inc. currently does not incur cash income tax expense in the US due to its $44.6 million in net operating loss carryforwards. Therefore,  adjusted net income is calculated using only income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.
(2) Represents estimated income tax expense for our subsidiaries located in Canada and China. See reconciliation on page 10 of 10.
* Percent of sales column for income taxes is calculated as a % of income before income taxes.

Page 3 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED BALANCE SHEETS
FEBRUARY 1, 2015, JANUARY 26, 2014, AND APRIL 27, 2014
Unaudited
(Amounts in Thousands)
		Amounts								Increase
		February 1,				January 26,				(Decrease)								* April 27,
		2015				2014				Dollars				Percent				2014
Current assets
Cash and cash equivalents		$	28,772				23,293				5,479				23.5	%			29,303
Short-term investments			8,384				7,077				1,307				18.5	%			6,294
Accounts receivable			30,774				26,392				4,382				16.6	%			27,409
Inventories			38,013				43,687				(5,674	)			(13.0	) %			40,674
Deferred income taxes			6,995				7,503				(508	)			(6.8	) %			6,230
Income taxes receivable			104				-				104				100.0	%			121
Other current assets			2,992				2,999				(7	)			(0.2	) %			2,344
Total current assets			116,034				110,951				5,083				4.6	%			112,375
Property, plant & equipment, net			35,269				30,115				5,154				17.1	%			31,376
Goodwill			11,462				11,462				-				0.0	%			11,462
Deferred income taxes			482				1,227				(745	)			(60.7	) %			2,040
Long-term Investments			2,063				-				2,063				100.0	%			765
Other assets			2,505				2,923				(418	)			(14.3	) %			2,917
Total assets		$	167,815				156,678				11,137				7.1	%			160,935
Current liabilities
Current maturities of long-term debt		$	2,200				2,200				-				0.0	%			2,200
Accounts payable - trade			28,644				25,187				3,457				13.7	%			26,686
Accounts payable - capital expenditures			772				235				537				228.5	%			277
Accrued expenses			9,954				11,812				(1,858	)			(15.7	) %			9,181
Income taxes payable - current			325				130				195				150.0	%			442
Total current liabilities			41,895				39,564				2,331				5.9	%			38,786
Income taxes payable - long-term			3,630				3,953				(323	)			(8.2	) %			3,962
Deferred income taxes			3,384				945				2,439				258.1	%			1,013
Line of credit			-				573				(573	)			(100.0	) %			586
Deferred compensation			3,934				-				3,934				100.0	%			2,644
Long-term debt , less current maturities			-				2,200				(2,200	)			(100.0	) %			2,200
Total liabilities			52,843				47,235				5,608				11.9	%			49,191
Shareholders' equity			114,972				109,443				5,529				5.1	%			111,744
Total liabilities and
shareholders' equity		$	167,815				156,678				11,137				7.1	%			160,935
Shares outstanding			12,219				12,250				(31	)			(0.3	) %			12,250
* Derived from audited financial statements.

Page 4 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE  MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
Unaudited
(Amounts in Thousands)
			NINE MONTHS ENDED
			Amounts
			February 1,				January 26,
			2015				2014
Cash flows from operating activities:
	Net income		$	10,157			$	14,707
	Adjustments to reconcile net income  to net cash
	provided by operating activities:
	Depreciation			4,244				3,964
	Amortization of other assets			140				123
	Stock-based compensation			482				551
	Excess tax benefit related to stock-based compensation			(110	)			(143	)
	Deferred income taxes			3,274				(2,255	)
	Gain on sale of equipment			(74	)			(108	)
	Foreign currency exchange (gains) losses			(6	)			353
	Changes in assets and liabilities, net of effects of acquisition of assets:
	Accounts receivable			(3,455	)			(2,844	)
	Inventories			2,536				(5,081	)
	Other current assets			(739	)			(882	)
	Other assets			(30	)			(53	)
	Accounts payable-trade			2,267				2,487
	Accrued expenses and deferred compensation			2,121				13
	Income taxes			(108	)			162
	Net cash provided by operating activities			20,699				10,994
Cash flows from investing activities:
	Capital expenditures			(8,185	)			(2,656	)
	Net cash paid for acquisition of assets			-				(2,640	)
	Proceeds from the sale of equipment			625				188
	Proceeds from life insurance policies			320				-
	Payments on life insurance policies			(18	)			(30	)
	Proceeds from the sale of short-term investments			1,628				-
	Purchase of short-term investments			(3,719	)			(1,916	)
	Purchase of long-term investments			(1,298	)			-
	Net cash used in investing activities			(10,647	)			(7,054	)
Cash flows from financing activities:
	Payments on lines of credit			(538	)			-
	Payments on long-term debt			(2,200	)			(2,200	)
	Proceeds from common stock issued			94				194
	Common stock shares repurchased			(745	)			-
	Dividends paid			(6,846	)			(1,592	)
	Debt issance costs			-				(62	)
	Excess tax benefit related to stock-based compensation			110				143
	Net cash used in financing activities			(10,125	)			(3,517	)
Effect of exchange rate changes on cash and cash equivalents				(458	)			(660	)
Decrease in cash and cash equivalents				(531	)			(237	)
Cash and cash equivalents at beginning of period				29,303				23,530
Cash and cash equivalents at end of period			$	28,772			$	23,293
Free Cash Flow (1)			$	11,795			$	7,979

(1)	Free Cash Flow reconciliation is as follows:
			FY 2015				FY 2014
A)	Net cash provided by operating activities		$	20,699			$	10,994
B)	Minus:  Capital Expenditures			(8,185	)			(2,656	)
C)	Add: Proceeds from the sale of equipment			625				188
D)	Add: Proceeds from life insurance policies			320				-
E)	Minus:  Payments on life insurance policies			(18	)			(30	)
F)	Minus:  Purchase of long-term investments			(1,298	)			-
G)	Add: Excess tax benefit related to stock-based compensation			110				143
H)	Effect of exchange rate changes on cash and cash equivalents			(458	)			(660	)
			$	11,795			$	7,979

Page 5 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE THREE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
(Unaudited)
(Amounts in thousands)
		THREE MONTHS ENDED
		Amounts													Percent of Total Sales
		February 1,				January 26,				% Over					February 1,					January 26,
Net Sales by Segment		2015				2014				(Under)					2015					2014
Mattress Fabrics		$	45,683				38,541				18.5		%			56.2		%			53.2		%
Upholstery Fabrics			35,586				33,848				5.1		%			43.8		%			46.8		%
Net Sales		$	81,269				72,389				12.3		%			100.0		%			100.0		%
Gross Profit by Segment															Gross Profit Margin
Mattress Fabrics		$	8,076				5,599				44.2		%			17.7		%			14.5		%
Upholstery Fabrics			6,326				6,238				1.4		%			17.8		%			18.4		%
Gross Profit		$	14,402				11,837				21.7		%			17.7		%			16.4		%
Selling, General and Administrative Expenses by Segment															Percent of Sales
Mattress Fabrics		$	2,853				2,286				24.8		%			6.2		%			5.9		%
Upholstery Fabrics			3,781				3,572				5.9		%			10.6		%			10.6		%
Unallocated Corporate expenses			1,741				1,183				47.2		%			2.1		%			1.6		%
Selling, General and Administrative Expenses		$	8,375				7,041				18.9		%			10.3		%			9.7		%
Operating Income (loss) by Segment															Operating Income (Loss) Margin
Mattress Fabrics		$	5,223				3,313				57.7		%			11.4		%			8.6		%
Upholstery Fabrics			2,545				2,666				(4.5	)	%			7.2		%			7.9		%
Unallocated corporate expenses			(1,741	)			(1,183	)			47.2		%			(2.1	)	%			(1.6	)	%
Operating income		$	6,027				4,796				25.7		%			7.4		%			6.6		%
Depreciation by Segment
Mattress Fabrics		$	1,244				1,180				5.4		%
Upholstery Fabrics			188				149				26.2		%
Depreciation		$	1,432				1,329				7.8		%

Page 6 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE
STATEMENTS OF OPERATIONS BY SEGMENT
FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
(Unaudited)
(Amounts in thousands)
		NINE MONTHS ENDED
		Amounts													Percent of Total Sales
		February 1,				January 26,				% Over					February 1,					January 26,
Net Sales by Segment		2015				2014				(Under)					2015					2014
Mattress Fabrics		$	131,543				117,035				12.4		%			56.9		%			54.9		%
Upholstery Fabrics			99,777				96,084				3.8		%			43.1		%			45.1		%
Net Sales		$	231,320				213,119				8.5		%			100.0		%			100.0		%
Gross Profit by Segment															Gross Profit Margin
Mattress Fabrics		$	22,603				20,312				11.3		%			17.2		%			17.4		%
Upholstery Fabrics			16,792				16,833				(0.2	)	%			16.8		%			17.5		%
Gross Profit		$	39,395				37,145				6.1		%			17.0		%			17.4		%
Selling, General and Administrative Expenses by Segment															Percent of Sales
Mattress Fabrics		$	8,019				7,280				10.2		%			6.1		%			6.2		%
Upholstery Fabrics			10,518				10,007				5.1		%			10.5		%			10.4		%
Unallocated Corporate expenses			4,636				4,053				14.4		%			2.0		%			1.9		%
Selling, General, and Administrative Expenses		$	23,173				21,340				8.6		%			10.0		%			10.0		%
Operating Income (loss)  by Segment															Operating Income (Loss) Margin
Mattress Fabrics		$	14,584				13,033				11.9		%			11.1		%			11.1		%
Upholstery Fabrics			6,274				6,825				(8.1	)	%			6.3		%			7.1		%
Unallocated corporate expenses			(4,636	)			(4,053	)			14.4		%			(2.0	)	%			(1.9	)	%
Operating income		$	16,222				15,805				2.6		%			7.0		%			7.4		%
Return on Capital (1)
Mattress Fabrics			30.7	%			29.4	%
Upholstery Fabrics			48.2	%			44.7	%
Unallocated Corporate			N/A				N/A
Consolidated			27.9	%			27.3	%
Capital Employed (2)
Mattress Fabrics			65,178				59,699				9.2		%
Upholstery Fabrics			16,834				23,558				(28.5	)	%
Unallocated Corporate			(4,301	)			(2,913	)			N/A
Consolidated			77,711				80,344				(3.3	)	%
Depreciation by Segment
Mattress Fabrics		$	3,692				3,510				5.2		%
Upholstery Fabrics			552				454				21.6		%
Depreciation		$	4,244				3,964				7.1		%
Notes:
(1) See pages 8 and 9 of this financial information release for calculations.
(2) The capital employed balances are as of February 1, 2015 and January 26, 2014.

Page 7 of 10

CULP, INC.  FINANCIAL INFORMATION RELEASE
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA
FOR THE TWELVE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
		Quarter Ended
																			Trailing 12
																			Months
		4/27/2014				8/3/2014					11/2/2014				2/1/2015				2/1/2015
Net income		$	2,740			$	3,344				$	3,001			$	3,812			$	12,897
Income taxes			1,380				2,115					1,889				2,110				7,494
Interest income, net			(43	)			(74	)				(153	)			(202	)			(472	)
Depreciation and amortization expense			1,394				1,446					1,460				1,478				5,778
Stock based compensation			159				46					245				191				641
Adjusted EBITDA		$	5,630			$	6,877				$	6,442			$	7,389			$	26,338
		Quarter Ended
																			Trailing 12
																			Months
		4/28/2013				7/28/2013					10/27/2013				1/26/2014				1/26/2014
Net income		$	3,702			$	3,230				$	3,096			$	8,381			$	18,409
Income taxes			2,161				2,305					1,718				(3,807	)			2,377
Interest expense (income), net			50				48					(3	)			(57	)			38
Depreciation and amortization expense			1,354				1,344					1,373				1,370				5,441
Stock based compensation			254				152					224				175				805
Adjusted EBITDA		$	7,521			$	7,079				$	6,408			$	6,062			$	27,070
% Over (Under)			-25.1	%			-2.9	%				0.5	%			21.9	%			-2.7	%

Page 8 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015

(Amounts in Thousands)

(Unaudited)

		Operating Income
		Nine Months				Average				Return on
		Ended				Capital				Avg. Capital
		February 1, 2015 (1)				Employed (3)				Employed (2)
Mattress Fabrics		$	14,584			$	63,361				30.7	%
Upholstery Fabrics			6,274				17,344				48.2	%
(less: Unallocated Corporate)			(4,636	)			(3,141	)			N/A
Total		$	16,222			$	77,564				27.9	%
Average Capital Employed		As of the three Months Ended February 1, 2015																As of the three Months Ended November 2, 2014																As of the three Months Ended August 3, 2014
		Mattress				Upholstery				Unallocated								Mattress				Upholstery				Unallocated								Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total				Fabrics				Fabrics				Corporate				Total				Fabrics				Fabrics				Corporate				Total
Total assets			83,648				35,761				48,406				167,815				80,121				30,916				45,625				156,662				81,400				30,520				42,292				154,212
Total liabilities			(18,470	)			(18,927	)			(15,446	)			(52,843	)			(17,247	)			(14,847	)			(12,894	)			(44,988	)			(18,464	)			(11,468	)			(15,133	)			(45,065	)
Subtotal		$	65,178			$	16,834			$	32,960			$	114,972			$	62,874			$	16,069			$	32,731			$	111,674			$	62,936			$	19,052			$	27,159			$	109,147
Less:
Cash and cash equivalents			-				-				(28,772	)			(28,772	)			-				-				(28,953	)			(28,953	)			-				-				(24,665	)			(24,665	)
Short-term investments			-				-				(8,384	)			(8,384	)			-				-				(6,318	)			(6,318	)			-				-				(6,311	)			(6,311	)
Long-term investments			-				-				(2,063	)			(2,063	)											(1,911	)			(1,911	)											(1,749	)			(1,749	)
Income taxes receivable			-				-				(104	)			(104	)			-				-				-				-				-				-				(136	)			(136	)
Deferred income taxes - current			-				-				(6,995	)			(6,995	)			-				-				(6,191	)			(6,191	)			-				-				(6,203	)			(6,203	)
Deferred income taxes - non-current			-				-				(482	)			(482	)			-				-				(508	)			(508	)			-				-				(973	)			(973	)
Current maturities of long-term debt			-				-				2,200				2,200				-				-				2,200				2,200				-				-				2,200				2,200
Line of credit			-				-				-				-				-				-				-				-				-				-				569				569
Income taxes payable - current			-				-				325				325				-				-				268				268				-				-				387				387
Income taxes payable - long-term			-				-				3,630				3,630				-				-				3,980				3,980				-				-				4,037				4,037
Deferred income taxes - non-current			-				-				3,384				3,384				-				-				1,395				1,395				-				-				1,013				1,013
Long-term debt, less current maturities			-				-				-				-				-				-				-				-				-				-				2,200				2,200
Total Capital Employed		$	65,178			$	16,834			$	(4,301	)		$	77,711			$	62,874			$	16,069			$	(3,307	)		$	75,636			$	62,936			$	19,052			$	(2,472	)		$	79,516
		As of the three Months Ended April 27, 2014
		Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total
Total assets			79,055				34,987				46,893				160,935
Total liabilities			(16,598	)			(17,568	)			(15,025	)			(49,191	)
Subtotal		$	62,457			$	17,419			$	31,868			$	111,744
Less:
Cash and cash equivalents			-				-				(29,303	)			(29,303	)
Short-term investments			-				-				(6,294	)			(6,294	)
Long-term investments											(765	)			(765	)
Income taxes receivable			-				-				(121	)			(121	)
Deferred income taxes - current			-				-				(6,230	)			(6,230	)
Deferred income taxes - non-current			-				-				(2,040	)			(2,040	)
Current maturities of long-term debt			-				-				2,200				2,200
Line of credit											586				586
Income taxes payable - current			-				-				442				442
Income taxes payable - long-term			-				-				3,962				3,962
Deferred income taxes - non-current			-				-				1,013				1,013
Long-term debt, less current maturities			-				-				2,200				2,200
Total Capital Employed		$	62,457			$	17,419			$	(2,482	)		$	77,394
		Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total
Average Capital Employed (3)		$	63,361			$	17,344			$	(3,141	)		$	77,564

Notes:
(1)	See reconciliation per page 6 of this financial information release.
(2)	Return on average capital employed represents operating income for the nine month period ending February 1, 2015 divided by 3 quarters times 4 quartersto arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term investments, long-term debt, including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, and income taxes payable and receivable.
(3)	Average capital employed was computed using the four periods ending February 1, 2015, November 2, 2014, August 3, 2014 and April 27, 2014.

Page 9 of 10

CULP, INC. FINANCIAL INFORMATION RELEASE

RETURN ON CAPITAL EMPLOYED BY SEGMENT

FOR THE NINE MONTHS ENDED JANUARY 26, 2014

(Amounts in Thousands)

(Unaudited)

		Operating Income
		Nine Months				Average				Return on
		Ended				Capital				Avg. Capital
		January 26, 2014 (1)				Employed (3)				Employed (2)
Mattress Fabrics		$	13,033			$	59,046				29.4	%
Upholstery Fabrics			6,825				20,345				44.7	%
(less: Unallocated Corporate)			(4,053	)			(2,291	)			N/A
Total		$	15,805			$	77,100				27.3	%
Average Capital Employed		As of the three Months Ended January 26, 2014																As of the three Months Ended October 27, 2013																As of the three Months Ended July 28, 2013
		Mattress				Upholstery				Unallocated								Mattress				Upholstery				Unallocated								Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total				Fabrics				Fabrics				Corporate				Total				Fabrics				Fabrics				Corporate				Total
Total assets			78,503				37,147				41,028				156,678				79,444				35,881				40,917				156,242				78,217				34,381				38,503				151,101
Total liabilities			(18,804	)			(13,589	)			(14,842	)			(47,235	)			(20,500	)			(15,581	)			(18,646	)			(54,727	)			(18,627	)			(14,172	)			(19,717	)			(52,516	)
Subtotal		$	59,699			$	23,558			$	26,186			$	109,443			$	58,944			$	20,300			$	22,271			$	101,515			$	59,590			$	20,209			$	18,786			$	98,585
Less:
Cash and cash equivalents			-				-				(23,293	)			(23,293	)			-				-				(24,267	)			(24,267	)			-				-				(21,423	)			(21,423	)
Short-term investments			-				-				(7,077	)			(7,077	)			-				-				(6,220	)			(6,220	)			-				-				(6,174	)			(6,174	)
Income taxes receivable			-				-				-				-				-				-				-				-				-				-				(292	)			(292	)
Deferred income taxes - current			-				-				(7,503	)			(7,503	)			-				-				(7,745	)			(7,745	)			-				-				(7,747	)			(7,747	)
Deferred income taxes - non-current			-				-				(1,227	)			(1,227	)			-				-				(661	)			(661	)			-				-				(651	)			(651	)
Current maturities of long-term debt			-				-				2,200				2,200				-				-				2,200				2,200				-				-				2,200				2,200
Line of credit			-				-				573				573				-				-				585				585				-				-				560				560
Income taxes payable - current			-				-				130				130				-				-				304				304				-				-				320				320
Income taxes payable - long-term			-				-				3,953				3,953				-				-				4,141				4,141				-				-				4,176				4,176
Deferred income taxes - non-current			-				-				945				945				-				-				5,016				5,016				-				-				4,335				4,335
Long-term debt, less current maturities			-				-				2,200				2,200				-				-				2,200				2,200				-				-				4,400				4,400
Total Capital Employed		$	59,699			$	23,558			$	(2,913	)		$	80,344			$	58,944			$	20,300			$	(2,176	)		$	77,068			$	59,590			$	20,209			$	(1,510	)		$	78,289
		As of the three Months Ended April 28, 2013
		Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total
Total assets			73,954				30,995				39,757				144,706
Total liabilities			(16,004	)			(13,682	)			(19,437	)			(49,123	)
Subtotal		$	57,950			$	17,313			$	20,320			$	95,583
Less:
Cash and cash equivalents			-				-				(23,530	)			(23,530	)
Short-term investments			-				-				(5,286	)			(5,286	)
Income taxes receivable			-				-				(318	)			(318	)
Deferred income taxes - current			-				-				(7,709	)			(7,709	)
Deferred income taxes - non-current			-				-				(753	)			(753	)
Current maturities of long-term debt			-				-				2,200				2,200
Line of credit											561				561
Income taxes payable - current			-				-				285				285
Income taxes payable - long-term			-				-				4,191				4,191
Deferred income taxes - non-current			-				-				3,075				3,075
Long-term debt, less current maturities			-				-				4,400				4,400
Total Capital Employed		$	57,950			$	17,313			$	(2,564	)		$	72,699
		Mattress				Upholstery				Unallocated
		Fabrics				Fabrics				Corporate				Total
Average Capital Employed (3)		$	59,046			$	20,345			$	(2,291	)		$	77,100

Notes:
(1)	See reconciliation per page 6 of this financial information release.
(2)	Return on average capital employed represents operating income for the nine month period ending January 26, 2014 divided by 3 quarters times 4 quarters to arrive at an annualized value then divided by average capital employed. Average capital employed does not include cash and cash equivalents, short-term investments, long-term debt, including current maturities, line of credit, current and noncurrent deferred tax assets and liabilities, and income taxes payable and receivable.
(3)	Average capital employed was computed using the four periods ending January 26, 2014, October 27, 2013, July 28, 2013 and April 28, 2013.

Page 10 of 10

CULP FINANCIAL INFORMATION RELEASE

CONSOLIDATED ADJUSTED EFFECTIVE INCOME TAX RATE, NET INCOME AND EARNINGS PER SHARE

FOR THE NINE MONTHS ENDED FEBRUARY 1, 2015 AND JANUARY 26, 2014

Unaudited

(Amounts in Thousands)

				NINE MONTHS ENDED
				Amounts
				February 1,				January 26,
				2015				2014
Consolidated Effective GAAP Income Tax Rate		(1)			37.6	%			1.4	%
Undistributed Earnings From Foreign Subsidiaries					-				34.2	%
Non-Cash U.S. Income Tax Expense					(22.1	)%			(20.0	)%
Non-Cash Foreign Income Tax Expense					(0.2	)%			(0.1	)%
Consolidated Adjusted Effective Income Tax Rate		(2)			15.3	%			15.5	%

		THREE MONTHS ENDED
		As reported								February 1, 2015				As reported								January 26, 2014
		February 1,								Proforma Net				January 26,								Proforma Net
		2015				Adjustments				of Adjustments				2014				Adjustments				of Adjustments
Income before income taxes		$	5,922			$	-			$	5,922			$	4,574							$	4,574
Income taxes (3)			2,110			$	(1,204	)			906				(3,807	)		$	4,516				709
Net income		$	3,812			$	1,204			$	5,016			$	8,381			$	(4,516	)		$	3,865
Net income per share-basic		$	0.31			$	0.10			$	0.41			$	0.69			$	(0.37	)		$	0.32
Net income per share-diluted		$	0.31			$	0.10			$	0.40			$	0.68			$	(0.36	)		$	0.31
Average shares outstanding-basic			12,219				12,219				12,219				12,188				12,188				12,188
Average shares outstanding-diluted			12,417				12,417				12,417				12,405				12,405				12,405
		NINE MONTHS ENDED
		As reported								February 1, 2015				As reported								January 26, 2014
		February 1,								Proforma Net				January 26,								Proforma Net
		2015				Adjustments				of Adjustments				2014				Adjustments				of Adjustments
Income before income taxes		$	16,270			$	-			$	16,270			$	14,923			$	-			$	14,923
Income taxes (3)			6,113			$	(3,624	)			2,489				216			$	2,097				2,313
Net income		$	10,157			$	3,624			$	13,781			$	14,707			$	(2,097	)		$	12,610
Net income per share-basic		$	0.83			$	0.30			$	1.13			$	1.21			$	(0.17	)		$	1.04
Net income per share-diluted		$	0.82			$	0.29			$	1.11			$	1.19			$	(0.17	)		$	1.02
Average shares outstanding-basic			12,216				12,216				12,216				12,173				12,173				12,173
Average shares outstanding-diluted			12,410				12,410				12,410				12,405				12,405				12,405

(1)	Calculated by dividing consolidated income tax expense by consolidated income before income taxes.
(2)	Represents estimated cash income tax expense for our subsidiaries located in Canada and China divided by consolidated income before income taxes.
(3)	Proforma income taxes calculated using the Consolidated Adjusted Effective Income Tax Rate as reflected above.